Extends income eligibility requirement for state pharmacy assistance program to           per cent of the federal poverty level. Removes requirement for DHS to provide enrollment assistance. Requires DHS to pay for drugs not on the plan's formulary. (SD2)

A BILL FOR AN ACT

SECTION 1. Section 346-341, Hawaii Revised Statutes, is amended by repealing the definition of "asset test".

[""Asset test" means the asset limits for eligibility in the state pharmacy assistance program as defined by the Medicare Modernization Act and any amendments thereto."]

SECTION 2. Section 346-341, Hawaii Revised Statutes, is amended by repealing the definition of "full coverage prescription drug benefit".

[""Full coverage prescription drug benefit" means a federally approved prescription drug plan that offers a zero co-payment benefit for medicaid dual eligibles under the medicare part D drug benefit."]

SECTION 3. Section 346-341, Hawaii Revised Statutes, is amended by repealing the definition of "liquid assets".

[""Liquid assets" means assets used in the eligibility determination process as defined by the Medicare Modernization Act."]

SECTION 4. Section 346-342, Hawaii Revised Statutes, is amended to read as follows:

[[]§346-342[]] State pharmacy assistance program. (a) There is established within the department the state pharmacy assistance program. [Provided that there are no federally approved prescription drug plans available in the State that provide a full coverage prescription drug benefit, the] The state pharmacy assistance program may coordinate the prescription drug coverage with the federal medicare part D prescription drug benefit, including related supplies, as determined by the department, to each resident who meets the eligibility requirements as outlined in section 346-343.

[(b) The department may provide enrollment assistance to eligible individuals into the state pharmacy assistance program. Enrollment for medicaid dual eligible persons shall begin no later than October 1, 2005.

(c)] (b) The department shall allow any willing prescription drug plan approved by the federal Centers for Medicare and Medicaid Services to provide the coordination of benefits between the State's medicare prescription drug program and the medicare part D drug benefit.

[(d)] (c) The department may administer the state pharmacy assistance program or contract with a third party or parties in accordance with chapter 103F to administer any single component or combination of components of the state pharmacy assistance program, including outreach, eligibility, enrollment, claims, administration, rebate negotiations and recovery, and redistribution, in order to coordinate the prescription drug benefits of the state pharmacy assistance program and the federal medicare part D drug benefit.

[(e)] (d) Any contract with third parties to administer any component of the state pharmacy assistance program shall be established either at no cost to the State, or on a contingency-fee basis and with no up-front costs to the State, as may be negotiated by the department.

[(f)] (e) Any contract with third parties to administer any component of the state pharmacy assistance program shall prohibit the contractor from receiving any compensation or other benefits from any pharmaceutical manufacturer participating in the state pharmacy assistance program.

[(g)] (f) A prescription drug manufacturer or labeler that sells prescription drugs in the State may enter into a rebate agreement with the department[.]; provided that it does not conflict with federal law. The rebate agreement may be agreed upon by the manufacturer or the labeler to make rebate payments to the department each calendar quarter or according to a schedule established by the department.

[(h)] (g) The department or contractor may negotiate the amount of the rebate required from a manufacturer or labeler in accordance with this part.

[(i)] (h) The department or contractor may take into consideration the rebate calculated under the medicaid rebate program pursuant to Title 42 United States Code Section 1396r-8, the average wholesale price of prescription drugs, and any other cost data related to prescription drug prices and price discounts.

[(j)] (i) The department or contractor shall use their best efforts to obtain the best possible rebate amount.

[(k)] (j) The department may prescribe the application and enrollment procedures for prospective enrollees.

[(l)] (k) The department shall conduct ongoing quality assurance activities similar to those used in the State's medicaid program."

SECTION 5. Section 346-343, Hawaii Revised Statutes, is amended to read as follows:

"[[]§346-343[]] Eligibility. (a) All residents of the State shall be eligible to participate in the state pharmacy assistance program; provided that the applicant:

(b) State pharmacy assistance program applicants who are enrolled in any other public assistance program providing pharmaceutical benefits, other than the Medicare Modernization [Act,] Act and medicaid, shall be ineligible for the state pharmacy assistance program as long as they receive pharmaceutical benefits from that other public assistance program, unless the applicant is eligible for medicare. Residents who qualify for, or are enrolled in, the [[]Rx plus program[]] shall be eligible for the state pharmacy assistance program; provided that they meet all other state pharmacy assistance program requirements.

(c) State pharmacy assistance program applicants who are enrolled in a private sector plan or insurance providing payments for prescription drugs shall be ineligible to receive benefits from the state pharmacy assistance program.

(d) State pharmacy assistance program applicants shall apply for the federal medicare part D pharmacy benefit program, apply for and accept all subsidies available under the federal medicare part D pharmacy drug benefit, and authorize the department to request eligibility, coverage, and formulary exceptions on the beneficiary's behalf and to appeal adverse determinations relating to medicare prescription drug plan enrollment, eligibility, subsidy eligibility and benefit levels, coverage, and formulary exceptions."

SECTION 6. Section 346-344, Hawaii Revised Statutes, is amended to read as follows:

"[[]§346-344[]] Benefits. (a) For persons meeting the eligibility requirements in section [346-343,] 346-343 with household incomes of not more than             per cent of the federal poverty level, the state pharmacy assistance program [may pay all or some of the co-payments required under the federal medicare part D pharmacy benefit program, subject to receipt of sufficient rebates pursuant to section 346-342(g), as determined by the department.] shall pay:

(b) The state pharmacy assistance program is the payor of last [resort, subject to receipt of sufficient rebates pursuant to section 346-342(g), as determined by the department.] resort.

(c) The state pharmacy assistance program shall be funded with state appropriations, including funds derived from revenues to the State from rebates paid by pharmaceutical manufacturers pursuant to section 346-342(g), [which may affect the level of benefits to program enrollees pursuant to subsection (a) depending on the amount of the rebates received by the State to cover all program benefits and costs of administering the program.] and with savings resulting from medicare prescription drug coverage for the medicaid dual eligible population."

SECTION 7. Section 346-345, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Moneys in the state pharmacy assistance program special fund may be used for:

All interest on special fund balances shall accrue to the special fund. Upon dissolution of the state pharmacy assistance program special fund, any unencumbered moneys in the fund shall lapse to the general fund."

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2050.