HCS HB 1711 -- PRESCRIPTION DRUG COSTS FOR MEDICARE RECIPIENTS
(Abel)

This substitute sets a limit on what pharmacies participating in
the Medicaid program can charge Medicare recipients who are
residents of Missouri for their legend drug prescriptions.  Such
charges are limited to the current Medicaid reimbursement rate
for the prescription drug, plus an amount established by the
Division of Medical Services to cover the costs to pharmacies
for claims transmission, any adjudication costs incurred by the
division, and an additional pharmacy administration charge.  The
division is required to collect the cost of adjudication from
the reimbursement paid to enrolled Title XIX providers.  The
division is also required to use the same reimbursement rate for
all pharmacies participating in the Medicaid program on a fee--
for-service basis.  The total charge to Missouri Medicare
recipients will approximate the pharmacies' cost to dispense a
prescription. The provisions of the substitute do not apply to
over-the-counter medications or over-the-counter medications
which are written as prescriptions.

The administrative charge will be determined by consulting the
most recent publication of NCPA-Searle Digest or, if the digest
or a successor publication is no longer published, through a
dispensing cost survey conducted by the division at least once
every 2 years.  The division is responsible for determining the
manner in which to transmit information and the rate charged for
a prescription to the community pharmacy.  Pharmacies are
prohibited from charging a patient an aggregate rate greater
than the usual and customary rate for patients who pay by cash.
The division is required to submit an annual report to the
General Assembly by January 1, describing the participation
rates, the number of pharmacies terminating their participation
in the Medicaid program, and the reasons given for such
termination.

The substitute also provides that the health care utilization
review process outlined in existing statutes does not apply to
this program.  If a prescription drug benefit is added to the
federal Medicare program, the appropriate committees within the
General Assembly are required to evaluate whether to continue
providing Medicare prescriptions at the Medicaid rate.  The
provisions of the substitute are effective January 1, 2001.

The substitute contains provisions which prohibit policies,
contracts, and plans from mandating differences in coverages or
imposing different conditions concerning co-payments,
deductibles, co-insurance, or the number of days for the supply
of medications when a patient submits a prescription for
medications at a pharmacy or the medications are obtained from a
mail order pharmacy.  The provider is required to be a
participant in the plan involved.

The substitute also prohibits individual or group health
insurance policies providing coverage on an expense incurred
basis, specified indemnity contracts, specified individual or
group service contracts issued by health maintenance
organizations, and other specified insurance policies which are
delivered, continued, or renewed after August 28, 2000, from
reimbursing any pharmacist or pharmacy for dispensing any
prescription or providing any service at a rate lower than the
rate paid by the Department of Social Services if the pharmacist
or the pharmacy is a Medicaid provider in Missouri.

Eligible persons who receive medical assistance under Section
208.151, RSMo, are authorized to receive prescription drug
coverage of non-systemic drugs for the treatment of obesity
which are approved by the federal Food and Drug Administration.
Eligibility requirements will be developed according to
appropriate criteria established by the Department of Health.
The drug coverage may be subject to a prior authorization and a
retrospective drug utilization process.  The eligibility
criteria must include a body mass index and the presence of a
specified risk factor which include diabetes, hypertension, or
cardiovascular disease.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$3,373,509 in FY 2001, $4,383,865 in FY 2002, and $3,940,929 in
FY 2003.  Estimated Net Income to Insurance Dedicated Fund of
$10,050 in FY 2001, $0 in FY 2002, and $0 in FY 2003.

HCS HB 1711 -- PRESCRIPTION DRUG COST FOR MEDICARE RECIPIENTS

SPONSOR:  Ladd Stokan (Abel)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Public
Health by a vote of 15 to 0.

This substitute sets a limit on what pharmacies participating in
the Medicaid program can charge Medicare recipients who are
residents of Missouri for their legend drug prescriptions.  Such
charges are limited to the current Medicaid reimbursement rate
for the prescription drug, plus an amount established by the
Division of Medical Services within the Department of Social
Services to cover the costs to pharmacies for claims
transmission, any adjudication costs incurred by the division,
and an additional pharmacy administration charge.  The total
charge to Missouri Medicare recipients will approximate the
pharmacies' cost to dispense a prescription.

The administrative charge will be determined by consulting the
most recent publication of NCPA-Searle Digest or, if the digest
or a successor publication is no longer published, through a
dispensing cost survey conducted by the division at least once
every 2 years.  The division is responsible for determining the
manner in which to transmit information and the rate charged for
a prescription to the community pharmacy.  Pharmacies are
prohibited from charging a patient an aggregate rate greater
than the usual and customary rate for patients who pay by cash.
The division is required to submit an annual report to the
General Assembly by January 1, describing the participation
rates, the number of pharmacies terminating their participation
in the Medicaid program, and the reasons given for such
termination.

The substitute also provides that the health care utilization
review process outlined in existing statutes does not apply to
this program.  If the new prescription drug benefit is added to
the federal Medicare program, the appropriate committees within
the General Assembly are to evaluate whether to continue
providing Medicare prescriptions at the Medicaid rate.  The
provisions of the substitute are effective January 1, 2001, and
terminate on December 31, 2002.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$459,499 in FY 2001, $887,053 in FY 2002, and $444,117 in FY
2003.

PROPONENTS:  Supporters say that this legislation is an
effective way to provide cost savings to Medicare recipients who
are taking prescription medication.  The cost savings to
Medicare recipients who have commonly prescribed medications
refilled could amount to 15%.  Finally, supporters also indicate
that if the pending prescription drug benefit is added to the
federal Medicare program, this bill requires the Division of
Medical Services to prepare and submit an annual report to the
General Assembly.  Appropriate committees of the General
Assembly are required to evaluate the continuing need of the
prescription program.

Testifying for the bill were Representative Abel; and AARP.

OPPONENTS:  There was no opposition voiced to the committee.

Joseph Deering, Legislative Analyst

HB 1711 -- Prescription Drug Costs for Medicare Recipients

Co-Sponsors:  Abel, McKenna, Davis (122), Relford, Selby, Riley,
Hollingsworth

This bill sets a limit that pharmacies participating in the
Medicaid program may charge Medicare recipients for their
prescriptions.  Such charges are limited to the current Medicaid
reimbursement rate for the prescription drug, plus an amount
established by the Division of Medical Services within the
Department of Social Services to cover the costs to pharmacies
of claims transmission and to cover any adjudication costs
incurred by the division.  The rate is to be determined by
consulting the most recent publication of NCPA-Searle Digest or,
if the digest is no longer published, through a dispensing cost
survey conducted by the division at least once every 2 years.
The division is to determine the manner in which to transmit
information on the rate for a prescription to the pharmacy.  The
division is also to submit an annual report to the General
Assembly by January 1, describing the participation rates, the
number of pharmacies terminating their participation in the
Medicaid program, and the reasons given for such termination.
The bill also provides that the health care utilization review
process outlined in existing statutes does not apply to this
program.  If new prescription drugs are added to the Medicare
program, the appropriate committees within the General Assembly
are to evaluate whether to continue providing Medicare
prescriptions at the Medicaid rate.  The provisions of the bill
are effective January 1, 2001, and terminate on December 31,
2002.