HOUSE OF REPRESENTATIVES	H.B. NO.	1181
TWENTY-NINTH LEGISLATURE, 2017		H.D. 2
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO WORKERS' COMPENSATION PRESCRIPTION DRUG REIMBURSEMENT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  This Act further amends Act 231, Session Laws of Hawaii 2014, which enacted a new statutory section with the purpose of curtailing alarming cost increases of prescription drugs and compounds in the workers' compensation system.  Since Act 231 was enacted, further analysis of other states shows that of the thirty-seven states that reimburse prescription drugs on the basis of a percentage of average wholesale price, the reimbursement rates range widely.  Notably, Hawaii has the highest reimbursement rate for brand name and generic drugs at forty per cent over average wholesale price.

     The national average reimbursement rate is three per cent below average wholesale price plus a $4.32 dispensing fee for brand name drugs and four per cent below average wholesale price plus a $4.94 dispensing fee for generic drugs.  More specifically, California reimburses at a rate of seventeen per cent below average wholesale price with a $7.25 dispensing fee for both brand name and generic drugs.  Oregon reimburses at 16.5 per cent below average wholesale price with a $2 dispensing fee for both brand name and generic drugs.  Both these states are considered progressive workers' compensation states and have worked on their systems extensively.  Louisiana has the next highest rate at ten per cent over average wholesale price with a $10.51 dispensing fee for brand name drugs.

     The purpose of this Act is to bring Hawaii closer to the rest of the nation in terms of its dispensing policies and reimbursement rates for prescription drugs and compounds in the workers' compensation system.

     SECTION 2.  Section 386-21.7, Hawaii Revised Statutes, is amended by amending subsections (a) through (d) to read as follows:

     "(a) Notwithstanding any other provision to the contrary, immediately after a work injury is sustained by an employee and so long as reasonably needed, the employer shall furnish to the employee all prescription drugs as the nature of the injury requires[.]; except that physician-dispensed prescription drugs shall only be provided during the first      days from the date of injury.  The liability for the prescription drugs shall be subject to the deductible under section 386-100.

     (b)  Payment for all forms of prescription drugs including repackaged and relabeled drugs shall be [one hundred forty] per cent of the average wholesale price set by the original manufacturer of the dispensed prescription drug as identified by its National Drug Code and as published in the Red Book:  Pharmacy's Fundamental Reference as of the date of dispensing, except where the employer or carrier, or any entity acting on behalf of the employer or carrier, directly contracts with the provider or the provider's assignee for a lower amount.

     (c)  Payment for compounded prescription drugs shall be the sum of [one hundred forty] per cent of the average wholesale price by gram weight of each underlying prescription drug contained in the compounded prescription drug.  For compounded prescription drugs, the average wholesale price shall be that set by the original manufacturer of the underlying prescription drug as identified by its National Drug Code and as published in the Red Book:  Pharmacy's Fundamental Reference as of the date of compounding, except where the employer or carrier, or any entity acting on behalf of the employer or carrier, directly contracts with the provider or provider's assignee for a lower amount.

     (d)  All pharmaceutical claims submitted for repackaged, relabeled, or compounded prescription drugs shall include the National Drug Code of the original manufacturer.  If the original manufacturer of the underlying drug product used in repackaged, relabeled, or compounded prescription drugs is not provided or is unknown, then reimbursement shall be [one hundred forty] per cent of the average wholesale price for the original manufacturer's National Drug Code number as listed in the Red Book: Pharmacy's Fundamental Reference of the prescription drug that is most closely related to the underlying drug product."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2050.

Report Title:

Workers' Compensation; Prescription Drugs; Reimbursement; Limitation

Description:

Decrease the reimbursement rate for prescription drugs in the workers' compensation system based on a percentage of the average wholesale price.  Restricts the provision of physician-dispensed prescription drugs to a specified time following injury.  (HB1181 HD2)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.