PRIOR PRINTER'S NOS. 1704, 1868 PRINTER'S NO. 1910
No. 1188 Session of 2006
INTRODUCED BY VANCE, BROWNE, ORIE, ARMSTRONG, BOSCOLA, CONTI,
CORMAN, COSTA, EARLL, ERICKSON, FONTANA, GORDNER, GREENLEAF,
JUBELIRER, KITCHEN, LAVALLE, LOGAN, MADIGAN, MELLOW, MUSTO,
O'PAKE, PILEGGI, PIPPY, RAFFERTY, REGOLA, RHOADES, SCARNATI,
STACK, WAUGH, WENGER, D. WHITE, M. WHITE, C. WILLIAMS,
WONDERLING, WOZNIAK, FERLO AND TOMLINSON, APRIL 17, 2006
AS AMENDED ON THIRD CONSIDERATION, JUNE 21, 2006
AN ACT
1 Amending the act of August 26, 1971 (P.L.351, No.91), entitled
2 "An act providing for a State Lottery and administration
3 thereof; authorizing the creation of a State Lottery
4 Commission; prescribing its powers and duties; disposition of
5 funds; violations and penalties therefor; exemption of prizes
6 from State and local taxation and making an appropriation,"
7 further providing for definitions, for physician, certified
8 registered nurse practitioner and pharmacy participation, for
9 reduced assistance, for program generally, for restricted
10 formulary, for reimbursement, for income verification, for
11 contracts and for the pharmaceutical assistance contract for
12 the elderly needs enhancement tier, for pharmacy best
13 practices and cost controls review; further providing for
14 penalties; establishing the coordination of Federal and State
15 benefits; PROVIDING FOR CONTINUED ELIGIBILITY UNDER CERTAIN <--
16 CIRCUMSTANCES; and making editorial changes.
17 The General Assembly of the Commonwealth of Pennsylvania
18 hereby enacts as follows:
19 Section 1. Chapter 5 of the act of August 26, 1971 (P.L.351,
20 No.91), known as the State Lottery Law, is amended by adding a
21 subchapter heading to read:
22 SUBCHAPTER A
23 PRELIMINARY PROVISIONS
1 Section 1.1. The definitions of "eligible claimant,"
2 "maximum annual income" and "program" in section 502 of the act,
3 amended or added November 21, 1996 (P.L.741, No.134) and
4 November 26, 2003 (P.L.212, No.37), are amended and the section
5 is amended by adding definitions to read:
6 Section 502. Definitions.
7 The following words and phrases when used in this chapter
8 shall have the meanings given to them in this section unless the
9 context clearly indicates otherwise:
10 * * *
11 "Claimant." An eligible person who is enrolled in the
12 program.
13 * * *
14 "Eligible [claimant] person." A resident of the Commonwealth
15 for no less than 90 days, who is 65 years of age [and over] or
16 older, whose annual income is less than the maximum annual
17 income and who is not otherwise qualified for public assistance
18 under the act of June 13, 1967 (P.L.31, No.21), known as the
19 Public Welfare Code.
20 * * *
21 "Maximum annual income." For PACE eligibility, the term
22 shall mean annual income which shall not exceed $14,500 in the
23 case of single persons nor $17,700 in the case of the combined
24 annual income of persons married to each other. For PACENET
25 eligibility, the term shall mean the annual income limits
26 established under section 519. Persons may, in reporting income
27 to the Department of Aging, round the amount of each source of
28 income and the income total to the nearest whole dollar, whereby
29 any amount which is less than 50¢ is eliminated.
30 "Medicare advantage." A plan of health benefits coverage
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1 offered under a policy, contract or plan by an organization
2 certified under 42 U.S.C. § 1395w-26 (relating to establishment
3 of standards) and formerly referred to as Medicare+Choice.
4 * * *
5 "Part D." A Federal program to offer voluntary prescription
6 drug benefits to Medicare enrollees, as set forth in the
7 Medicare Prescription Drug, Improvement, and Modernization Act
8 of 2003 (Public Law 108-173, 117 Stat. 2066).
9 "Part D plan" or "PDP." A prescription drug plan approved
10 under the Medicare Prescription Drug, Improvement, and
11 Modernization Act of 2003 (Public Law 108-173, 117 Stat. 2066)
12 in the PDP region that includes this Commonwealth, and approved
13 by the Department of Aging of the Commonwealth and the Centers
14 for Medicare and Medicaid Services of the United States for
15 coordination of benefits with the programs established under
16 this chapter.
17 * * *
18 "Program." The Pharmaceutical Assistance Contract for the
19 Elderly (PACE) and the Pharmaceutical Assistance Contract for
20 the Elderly Needs Enhancement Tier (PACENET) as established by
21 this chapter[, unless otherwise specified].
22 * * *
23 "Regional benchmark premium." The average Part D premium
24 calculated annually by the Centers for Medicare and Medicaid
25 Services of the United States for PDPs in the PDP region that
26 includes this Commonwealth.
27 Section 1.2. Chapter 5 of the act is amended by adding a
28 subchapter heading to read:
29 SUBCHAPTER B
30 PROGRAMS
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1 Section 2. Section 504 of the act, amended November 26, 2003
2 (P.L.212, No.37), is amended to read:
3 Section 504. Physician, certified registered nurse practitioner
4 and pharmacy participation.
5 Any physician, certified registered nurse practitioner,
6 pharmacist, pharmacy or corporation owned in whole or in part by
7 a physician, certified registered nurse practitioner or
8 pharmacist enrolled as a provider in the program or who has
9 prescribed medication for a claimant [in the program] who is
10 precluded or excluded for cause from the Department of Public
11 Welfare's Medical Assistance Program shall be precluded or
12 excluded from participation in the program. No physician or
13 certified registered nurse practitioner precluded or excluded
14 from the Department of Public Welfare's Medical Assistance
15 Program shall have claims resulting from prescriptions paid for
16 by the program.
17 Section 3. Section 506 of the act, added November 21, 1996
18 (P.L.741, No.134), is amended to read:
19 Section 506. Reduced assistance.
20 Any [eligible] claimant whose prescription drug costs are
21 covered in part by any other plan of assistance or insurance,
22 including Part D, may be required to receive reduced assistance
23 under the provisions of this [chapter] subchapter or be subject
24 to coordination of benefits under this chapter.
25 Section 4. Section 509 of the act, amended November 26, 2003
26 (P.L.212, No.37), is amended to read:
27 Section 509. Program generally.
28 The program shall include the following:
29 (1) Participating pharmacies shall be paid within 21
30 days of the contracting firm receiving the appropriate
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1 substantiation of the transaction. Pharmacies shall be
2 entitled to interest for payment not made within the 21-day
3 period at a rate approved by the board.
4 (2) Collection of the copayment by pharmacies shall be
5 mandatory.
6 (3) [Senior citizens participating in the program]
7 Claimants are not required to maintain records of each
8 transaction.
9 (4) A system of rebates or reimbursements to [eligible]
10 claimants for pharmaceutical expenses shall be prohibited.
11 (5) PACE shall include participant copayment schedules
12 for each prescription, including a copayment for generic or
13 multiple-source drugs that is less than the copayment for
14 single-source drugs. The department shall annually calculate
15 the copayment schedules based on the Prescription Drugs and
16 Medical Supplies Consumer Price Index. When the aggregate
17 impact of the Prescription Drugs and Medical Supplies
18 Consumer Price Index equals or exceeds $1, the department
19 shall adjust the copayment schedules. Each copayment schedule
20 shall not be increased by more than $1 in a calendar year.
21 (6) The program payment shall be the lower of the
22 following amounts determined as follows:
23 (i) 90% of the average wholesale cost of the
24 prescription drug dispensed:
25 (A) with the addition of a dispensing fee of the
26 greater of:
27 (I) $4 per prescription; or
28 (II) the amount set by the department by
29 regulation;
30 (B) the subtraction of the copayment; and
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1 (C) if required, the subtraction of the generic
2 differential; or
3 (ii) the pharmacy's usual charge for the drug
4 dispensed with the subtraction of the copayment and, if
5 required, the subtraction of the generic differential; or
6 (iii) if a generic drug, the most current Federal
7 upper payment limits established in the Medicaid Program
8 under 42 CFR § 447.332 (relating to upper limits for
9 multiple source drugs), plus a dispensing fee of $4 or
10 the amount set by the department by regulation, whichever
11 is greater minus the copayment. The department shall
12 update the average wholesale costs and the Federal upper
13 payment limits at least every 30 days.
14 (7) In no case shall the Commonwealth or any [person
15 enrolled in the program] claimant be charged more than the
16 price of the drug at the particular pharmacy on the date of
17 the sale.
18 (8) The Governor may, based upon certified State Lottery
19 Fund revenue that is provided to both the chairman and
20 minority chairman of the Appropriations Committee of the
21 Senate and the chairman and minority chairman of the
22 Appropriations Committee of the House of Representatives, and
23 after consultation with the board, decrease the eligibility
24 limits established in this [chapter] subchapter.
25 Section 5. Section 510 of the act, amended or added November
26 21, 1996 (P.L.741, No.134) and November 30, 2004 (P.L.1722,
27 No.219), is amended to read:
28 Section 510. Generic drugs.
29 (a) In general.--Notwithstanding any other statute or
30 regulation, a brand name product shall be dispensed and not
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1 substituted with an A-rated generic therapeutically equivalent
2 drug if it is less expensive to the program. If a less expensive
3 A-rated generic therapeutically equivalent drug is available for
4 dispensing to a claimant, the provider shall dispense the A-
5 rated generic therapeutically equivalent drug to the claimant.
6 The department shall reimburse providers based upon the most
7 current listing of Federal upper payment limits established in
8 the Medicaid Program under 42 CFR § 447.332 (relating to upper
9 limits for multiple source drugs), plus a dispensing fee as set
10 forth in section 509(6). The department shall update the average
11 wholesale costs and the Federal upper payment limits on a
12 regular basis, at least every 30 days. The department shall not
13 reimburse providers for brand name products except in the
14 following circumstances:
15 (1) There is no A-rated generic therapeutically
16 equivalent drug available on the market. This paragraph does
17 not apply to the lack of availability of an A-rated generic
18 therapeutically equivalent drug in the providing pharmacy
19 unless it can be shown to the department that the provider
20 made reasonable attempts to obtain the A-rated generic
21 therapeutically equivalent drug or that there was an
22 unforeseeable demand and depletion of the supply of the A-
23 rated generic therapeutically equivalent drug. In either
24 case, the department shall reimburse the provider for 90% of
25 the average wholesale cost plus a dispensing fee based on the
26 least expensive A-rated generic therapeutically equivalent
27 drug for the brand drug dispensed.
28 (2) An A-rated generic therapeutically equivalent drug
29 is deemed by the department, in consultation with a
30 utilization review committee, to have too narrow a
20060S1188B1910 - 7 -
1 therapeutic index for safe and effective dispensing in the
2 community setting. The department shall notify providing
3 pharmacies of A-rated generic therapeutically equivalent
4 drugs that are identified pursuant to this paragraph on a
5 regular basis.
6 (3) The Department of Health has determined that a drug
7 shall not be recognized as an A-rated generic therapeutically
8 equivalent drug for purpose of substitution under section
9 5(b) of the act of November 24, 1976 (P.L.1163, No.259),
10 referred to as the Generic Equivalent Drug Law.
11 (4) At the time of dispensing, the provider has a
12 prescription on which the brand name drug dispensed is billed
13 to the program by the provider at a usual and customary
14 charge which is equal to or less than the least expensive
15 usual and customary charge of any A-rated generic
16 therapeutically equivalent drug reasonably available on the
17 market to the provider.
18 (5) The brand name drug is less expensive to the
19 program.
20 (b) Generic not accepted.--If a claimant chooses not to
21 accept the A-rated generic therapeutically equivalent drug
22 required by subsection (a), the claimant shall be liable for the
23 copayment and 70% of the average wholesale cost of the brand
24 name drug.
25 (c) Generic drugs not deemed incorrect substitution.--The
26 dispensing of an A-rated generic therapeutically equivalent drug
27 in accordance with this [chapter] subchapter shall not be deemed
28 incorrect substitution under section 6(a) of the Generic
29 Equivalent Drug Law.
30 (d) Medical exception.--A medical exception process shall be
20060S1188B1910 - 8 -
1 established by the department, which shall be published as a
2 notice in the Pennsylvania Bulletin and distributed to providers
3 and recipients in the program.
4 Section 6. Sections 512 and 515 of the act, amended November
5 26, 2003 (P.L.212, No.37), are amended to read:
6 Section 512. Restricted formulary.
7 The department may establish a restricted formulary of the
8 drugs which will not be reimbursed by the program. This
9 formulary shall include only experimental drugs and drugs on the
10 Drug Efficacy Study Implementation List prepared by CMS. A
11 medical exception may be permitted by the department for
12 reimbursement of a drug on the Drug Efficacy Study
13 Implementation List upon declaration of its necessity on the
14 prescription by the treating physician or certified registered
15 nurse practitioner, except that, for DESI drugs for which the
16 FDA has issued a Notice for Opportunity Hearing (NOOH) for the
17 purpose of withdrawing the New Drug Application approved for
18 that drug, reimbursement coverage shall be discontinued under
19 the provisions of this [chapter] subchapter.
20 Section 515. Reimbursement.
21 For-profit third-party insurers, health maintenance
22 organizations, preferred provider organizations [and], not-for-
23 profit prescription plans, Medicare advantage plans and PDPs
24 shall be responsible for any payments made to a providing
25 pharmacy on behalf of a claimant covered by such a third party.
26 Final determination as to the existence of third-party coverage
27 shall be the responsibility of the department.
28 Section 7. Sections 517 and 518 of the act, added November
29 21, 1996 (P.L.741, No.134), are amended to read:
30 Section 517. Income verification.
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1 (a) Procedure.--The department shall annually verify the
2 income of [eligible] claimants. The department shall verify the
3 income of [eligible] claimants by requiring income documentation
4 from the claimants. An application for benefits under this
5 [chapter] subchapter shall constitute a waiver to the department
6 of all relevant confidentiality requirements relating to the
7 claimant's Pennsylvania State income tax information in the
8 possession of the Department of Revenue. The Department of
9 Revenue shall provide the department with the necessary income
10 information shown on the claimant's Pennsylvania State income
11 tax return solely for income verification purposes.
12 (b) Information confidential.--It shall be unlawful for any
13 officer, agent or employee of the department to divulge or make
14 known in any manner whatsoever any information gained through
15 access to the Department of Revenue information except for
16 official income verification purposes under this [chapter]
17 subchapter or as authorized under section 535.
18 (c) Penalty.--A person who violates this [act] section
19 commits a misdemeanor and shall, upon conviction, be sentenced
20 to pay a fine of not more than $1,000 or to imprisonment for not
21 more than one year, or both, together with the cost of
22 prosecution, and, if the offender is an officer or employee of
23 the Commonwealth, he shall be dismissed from office or
24 discharged from employment.
25 (d) Coordination with Department of Public Welfare.--To the
26 extent possible, the department and the Department of Public
27 Welfare shall coordinate efforts to facilitate the application
28 and enrollment of eligible older people in the Medicaid Healthy
29 Horizons Program by processing these applications at senior
30 citizens centers and other appropriate facilities providing
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1 services to the elderly.
2 Section 518. Contract.
3 The department is authorized to enter into a contract
4 providing for prescription drugs to [eligible persons] claimants
5 pursuant to this [chapter] subchapter. The department shall
6 select a proposal that includes, but is not limited to, the
7 criteria set forth in this [chapter] subchapter.
8 Section 8. Section 519 of the act, amended November 26, 2003
9 (P.L.212, No.37), is amended to read:
10 Section 519. The Pharmaceutical Assistance Contract for the
11 Elderly Needs Enhancement Tier.
12 (a) Establishment.--There is hereby established within the
13 department a program to be known as the Pharmaceutical
14 Assistance Contract for the Elderly Needs Enhancement Tier
15 [(PACENET)].
16 (b) PACENET eligibility.--A [claimant] person with an annual
17 income of not less than $14,500 and not more than $23,500 in the
18 case of a single person and of not less than $17,700 and not
19 more than $31,500 in the case of the combined income of persons
20 married to each other shall be eligible for enhanced
21 pharmaceutical assistance under this section. A person may, in
22 reporting income to the department, round the amount of each
23 source of income and the income total to the nearest whole
24 dollar, whereby any amount which is less than 50¢ is eliminated.
25 [(c) Deductible.--Upon enrollment in PACENET, eligible
26 claimants in the income ranges set forth in subsection (b) shall
27 be required to meet a deductible in unreimbursed prescription
28 drug expenses of $40 per person per month. The $40 monthly
29 deductible shall be cumulative and shall be applied to
30 subsequent months to determine eligibility. The cumulative
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1 deductible shall be determined on an enrollment year basis for
2 an annual total deductible not to exceed $480 in a year. To
3 qualify for the deductible set forth in this subsection the
4 prescription drug must be purchased for the use of the eligible
5 claimant from a provider as defined in this chapter. The
6 department, after consultation with the board, may approve an
7 adjustment in the deductible on an annual basis.]
8 (c.1) Premium.--In those instances in which a PACENET
9 claimant does not enroll in Part D, the claimant shall be
10 required to pay a monthly premium equivalent to the regional
11 benchmark premium.
12 (d) Copayment.--
13 (1) For [eligible] claimants under this section, the
14 copayment schedule shall be:
15 (i) eight dollars for noninnovator multiple source
16 drugs as defined in section 702; or
17 (ii) fifteen dollars for single-source drugs and
18 innovator multiple-source drugs as defined in section
19 702.
20 (2) The department shall annually calculate the
21 copayment schedules based on the Prescription Drugs and
22 Medical Supplies Consumer Price Index. When the aggregate
23 impact of the Prescription Drugs and Medical Supplies
24 Consumer Price Index equals or exceeds $1, the department
25 shall adjust the copayment schedules. Each copayment schedule
26 shall not be increased by more than $1 in a calendar year.
27 Section 9. Section 520.1 of the act, added November 26, 2003
28 (P.L.212, No.37), is amended to read:
29 [Section 520.1. Pharmacy best practices and cost controls
30 review.
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1 (a) Review process.--The secretary shall review and
2 recommend pharmacy best practices and cost control mechanisms
3 that maintain high quality in prescription drug therapies but
4 are designed to reduce the cost of providing prescription drugs
5 for PACE and PACENET enrollees, including:
6 (1) A list of covered prescription drugs with
7 recommended copayment schedules. In developing the schedules,
8 the department shall take into account the standards
9 published in the United States Pharmacopeia Drug Information.
10 (2) A drug utilization review procedure, incorporating a
11 prescription review process for copayment schedules.
12 (3) A step therapy program that safely and effectively
13 utilizes in a sequential manner the least costly
14 pharmacological therapy to treat the symptoms of or effect a
15 cure for the medical condition or illness for which the
16 therapy is prescribed.
17 (4) Education programs designed to provide information
18 and education on the therapeutic and cost-effective
19 utilization of prescription drugs to physicians, pharmacists,
20 certified registered nurse practitioners and other health
21 care professionals authorized to prescribe and dispense
22 prescription drugs.
23 (b) Report and recommendations.--No later than two years
24 from the effective date of this section, the department shall
25 submit a report with recommendations to the Aging and Youth
26 Committee, the Appropriations Committee and the Public Health
27 and Welfare Committee of the Senate and the Aging and Older
28 Adult Services Committee, the Appropriations Committee and the
29 Health and Human Services Committee of the House of
30 Representatives. The report shall include information regarding
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1 the efficacy of the pharmacy best practices and control
2 mechanisms set forth in subsection (a), including recommended
3 copayment schedules with impacted classes of drugs, exceptions,
4 cost effectiveness, improved drug utilization and therapies,
5 movement of market share and increased utilization of generic
6 drugs.]
7 Section 10. Section 521 of the act, amended or added
8 November 21, 1996 (P.L.741, No.134) and November 26, 2003
9 (P.L.212, No.37), is amended to read:
10 Section 521. Penalties.
11 (a) Prohibited acts.--It shall be unlawful for any person to
12 submit a false or fraudulent claim or application under this
13 [chapter] subchapter, including, but not limited to:
14 (1) aiding or abetting another in the submission of a
15 false or fraudulent claim or application;
16 (2) receiving benefits or reimbursement under a private,
17 Federal or State program for prescription assistance and
18 claiming or receiving duplicative benefits hereunder;
19 (3) soliciting, receiving, offering or paying any
20 kickback, bribe or rebate, in cash or in kind, from or to any
21 person in connection with the furnishing of services under
22 this [chapter] subchapter;
23 (4) engaging in a pattern of submitting claims that
24 repeatedly uses incorrect National Drug Code numbers [for the
25 purpose of obtaining wrongful enhanced reimbursement]; or
26 (5) otherwise violating any provision of this [chapter]
27 subchapter.
28 (b) Civil penalty.--In addition to any appropriate criminal
29 penalty for prohibited acts under this [chapter] subchapter
30 whether or not that act constitutes a crime under 18 Pa.C.S.
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1 (relating to crimes and offenses), a provider who violates this
2 section may be liable for a civil penalty in an amount not less
3 than $500 and not more than $10,000 for each violation of this
4 act which shall be collected by the department. Each violation
5 constitutes a separate offense. If the department collects three
6 or more civil penalties against the same provider, the provider
7 shall be ineligible to participate in either PACE or PACENET for
8 a period of one year. If more than three civil penalties are
9 collected from any provider, the department may determine that
10 the provider is permanently ineligible to participate in PACE or
11 PACENET.
12 (c) Suspension of license.--The license of any provider who
13 has been found guilty under this [chapter] subchapter shall be
14 suspended for a period of one year. The license of any provider
15 who has committed three or more violations of this [chapter]
16 subchapter may be suspended for a period of one year.
17 (d) Reparation.--Any provider, [recipient] claimant or other
18 person who is found guilty of a crime for violating this
19 [chapter] subchapter shall repay three times the value of the
20 material gain received. In addition to the civil penalty
21 authorized pursuant to subsection (b), the department may
22 require the provider, [recipient] claimant or other person to
23 repay up to three times the value of any material gain to PACE
24 or PACENET.
25 Section 11. Chapter 5 of the act is amended by adding a
26 subchapter to read:
27 SUBCHAPTER C
28 COORDINATION OF FEDERAL AND STATE BENEFITS
29 Section 531. Definitions.
30 The following words and phrases when used in this subchapter
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1 shall have the meanings given to them in this section unless the
2 context clearly indicates otherwise:
3 "LIS." Low-income subsidy assistance from Part D provided by
4 the Medicare Prescription Drug, Improvement, and Modernization
5 Act of 2003 (Public Law 108-173, 117 Stat. 2066) to help pay for
6 annual premiums, deductibles and copayments charged to
7 individuals enrolled in Part D by prescription plans approved
8 under that act.
9 "Medicare Advantage Prescription Drug Plan." A Medicare
10 advantage plan that provides qualified prescription drug
11 coverage as set forth in the Medicare Prescription Drug,
12 Improvement, and Modernization Act of 2003 (Public Law 108-173,
13 117 Stat. 2066).
14 "Noncoverage phase." The deductible phase or the difference
15 between Part D initial coverage and catastrophic coverage for
16 certain Part D enrollees, as set forth in section 1860D-2 of the
17 Medicare Prescription Drug, Improvement, and Modernization Act
18 of 2003 (Public Law 108-173, 117 Stat. 2066).
19 "Part D eligible individual." An eligible person who is
20 entitled to benefits under Part A of Medicare, or enrolled in
21 Part B of Medicare, as specified in section 1860D-1 of the
22 Medicare Prescription Drug, Improvement, and Modernization Act
23 of 2003 (Public Law 108-173, 117 Stat. 2066).
24 "Part D enrollee." A claimant enrolled in a Part D plan.
25 "Part D provider." A pharmacy or other prescription drug
26 dispenser authorized by a Part D enrollee's Part D plan.
27 Section 532. Purpose.
28 The benefits available to a claimant enrolled in the program
29 under Subchapter B shall be a supplement to the benefits
30 available under Part D. The department may require claimants to
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1 utilize Part D benefits prior to utilizing benefits provided
2 under either program and shall coordinate the benefits of the
3 programs with those provided under Part D.
4 Section 533. Powers of the department; notifications.
5 (a) Powers.--The department may:
6 (1) Identify the Part D plan or plans with which the
7 department has entered into a contract under section 534 that
8 meet the prescription drug needs and pharmacy preferences of
9 a claimant.
10 (2) Recommend that the claimant enroll in the Part D
11 plan that meets the prescription drug needs and pharmacy
12 preferences of the claimant in the most cost-effective manner
13 for the Commonwealth.
14 (3) Initiate enrollment on behalf of the claimant in the
15 Part D plan recommended by the department unless the claimant
16 notifies the department that the claimant does not wish to
17 enroll in the Part D plan.
18 (4) File and pursue appeals with a claimant's Part D
19 plan to convert noncovered drugs to covered drugs or
20 nonpreferred brand drugs to preferred drugs.
21 (5) Assist claimants the department believes to be
22 eligible for the LIS in making an application to the Social
23 Security Administration.
24 (b) Notifications.--When recommending enrollment in a Part D
25 plan to claimants, the department shall provide at least ten
26 days for the claimant to decline enrollment and shall notify
27 claimants of:
28 (1) The ability to decline enrollment in a Part D plan.
29 (2) The ability to file and pursue appeals to a Part D
30 plan on their own behalf.
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1 (3) The possibility that enrollment may eliminate THEIR <--
2 CHOICE OF PLAN MAY AFFECT their medical coverage if they are
3 enrolled in a Medicare Advantage Plan.
4 Section 534. Coordination of benefits.
5 (a) General coordination.--In addition to the specific
6 provisions of subsection (b), the department shall establish
7 standards and minimum requirements it deems necessary to allow
8 for the coordination of benefits between the program and Part D.
9 (b) Specific coordination provisions.--The following
10 provisions shall apply to claimants who are also Part D
11 enrollees:
12 (1) The primary payor shall be the PDP or the Medicare
13 Advantage Prescription Drug Plan, as appropriate.
14 (2) Part D enrollees shall be required to utilize
15 providers authorized by their PDPs or Medicare Advantage
16 Prescription Drug Plans.
17 (3) The program shall pay the premium assessed by a PACE
18 enrollee's PDP or, with respect to the prescription drug
19 plan, Medicare Advantage Prescription Drug Plan in an amount
20 not to exceed the regional benchmark premium and any
21 copayments in excess of those set forth in section 509.
22 (4) Part D enrollees enrolled in PACENET shall pay the
23 Part D premiums charged by their PDP or, with respect to the
24 prescription drug plan, Medicare Advantage Prescription Drug
25 Plan and the program shall pay any copayments in excess of
26 those set forth in section 519.
27 (5) For Part D enrollees enrolled in PACE who are not
28 eligible for LIS, PACE shall reimburse Part D providers for
29 prescription drugs in any noncoverage phase of Part D. For
30 Part D enrollees enrolled in PACENET, PACENET shall reimburse
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1 Part D providers for prescription drugs in any noncoverage
2 phase of Part D.
3 (6) The provisions of Chapter 7 shall apply to all
4 payments made by the program in the noncoverage phase.
5 (7) The department shall advise a claimant on the
6 various benefits and drugs provided by each PDP approved by
7 the department as follows:
8 (i) Analyze the claimant's eligibility for and
9 assist the claimant in applying for LIS.
10 (ii) Identify the claimant's prescription drug needs
11 and preferred pharmacy.
12 (iii) Assist the claimant in enrolling in the PDP
13 that best fits the claimant's prescription drug needs.
14 (iv) File and pursue appeals with the claimant's PDP
15 to convert noncovered drugs to covered drugs or
16 nonpreferred brand drugs to preferred drugs.
17 (c) Contracts.--The department is authorized to enter into
18 contracts with Part D plans to provide for prescription drugs to
19 Part D enrollees through Part D pursuant to this subchapter. A
20 Part D plan selected by the department shall meet all of the
21 following requirements:
22 (1) The Part D plan's formulary shall contain at least <--
23 94 of the top 100 drugs used by seniors as determined by CMS.
24 (2) (1) The Part D plan has a retail pharmacy network <--
25 that includes at least 90% of the pharmacies in the PACE
26 network.
27 (3) (2) The Part D plan has a premium at or below the <--
28 regional benchmark premium.
29 (d) Rebates.--The department may only receive rebates as
30 provided in Chapter 7 where the program is the only payor for a
20060S1188B1910 - 19 -
1 Part D enrollee's covered prescription drugs.
2 Section 535. Financial resource information.
3 (a) Procedure.--The department may obtain information on the
4 financial resources of a Part D eligible individual for the
5 purpose of determining the individual's potential eligibility
6 for the LIS. The authority granted under this subsection shall
7 be exercised only with respect to a Part D eligible individual
8 who has income which is below the applicable threshold
9 established by the Medicare Prescription Drug, Improvement, and
10 Modernization Act of 2003 (Public Law 108-173, 117 Stat. 2066)
11 for qualification under the LIS.
12 (b) Waiver.--An application by a Part D eligible individual
13 for enrollment in the program shall constitute a waiver to the
14 department of relevant confidentiality requirements relating to
15 the prospective claimant's financial resources in the possession
16 of any Commonwealth agency or third party when the information
17 is required for the purposes listed under subsection (a). This
18 waiver shall extend to the application phase and throughout the
19 entire time the claimant is in the program.
20 (c) Information confidential.--
21 (1) It shall be unlawful for an officer, agent or
22 employee of the department to divulge or make known
23 information obtained from a Commonwealth agency or third
24 party except for the purposes under subsection (a).
25 (2) A person that violates this subsection commits a
26 misdemeanor of the third degree and shall, upon conviction,
27 be sentenced to pay a fine of not more than $1,000 or to
28 imprisonment for not more than one year, or both, and to pay
29 the cost of prosecution. If the offender is an officer or
30 employee of the Commonwealth, the offender shall be dismissed
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1 from office or discharged from employment.
2 Section 536. Reimbursement.
3 For-profit insurers, health maintenance organizations,
4 preferred provider organizations, not-for-profit prescription
5 plans, Medicare Advantage plans and PDPs shall be responsible
6 for any payments made to a pharmacy on behalf of a Part D
7 enrollee covered by any such third party. Final determination as
8 to the existence of third-party coverage shall be the
9 responsibility of the department.
10 Section 12. Section 706 of the act, added November 21, 1996
11 (P.L.741, No.134), is amended to read:
12 Section 706. Excessive pharmaceutical price inflation discount.
13 (a) General rule.--A discount shall be provided to the
14 department for all covered prescription drugs except those
15 excluded under subsection (d). The discount shall be calculated
16 as follows:
17 (1) For each quarter for which a rebate under section
18 705(a) and (b) is to be paid after December 31, 1991, and
19 before January 1, 1997, the average manufacturer price for
20 each dosage form and strength of a covered prescription drug
21 shall be compared to the average manufacturer price for the
22 same form and strength in the previous calendar year, and a
23 percentage increase shall be calculated.
24 (2) For each quarter under paragraph (1), the average
25 percentage increase in the Producer Price Index for
26 Pharmaceuticals over the same quarter in the previous
27 calendar year shall be calculated.
28 (3) If the calculation under paragraph (1) is greater
29 than the calculation under paragraph (2), the discount amount
30 for each quarter shall be equal to the product of:
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1 (i) the difference between the calculations under
2 paragraphs (1) and (2); and
3 (ii) the total number of units of each dosage form
4 and strength reimbursed by PACE and General Assistance
5 and the average manufacturer price reported by the
6 manufacturer under section 704(c)(1).
7 (b) Revised general rule.--A discount shall be provided to
8 the department for all covered prescription drugs. The discount
9 shall be calculated as follows:
10 (1) For each quarter for which a rebate under section
11 705(a) and (c) is to be paid after December 31, 1996, the
12 average manufacturer price for each dosage form and strength
13 of a covered prescription drug shall be compared to the
14 average manufacturer price for the same form and strength in
15 the previous calendar year and a percentage increase shall be
16 calculated.
17 (2) For each quarter under paragraph (1), the average
18 percentage increase in the Consumer Price Index-Urban over
19 the same quarter in the previous calendar year shall be
20 calculated.
21 (3) If the calculation under paragraph (1) is greater
22 than the calculation under paragraph (2), the discount amount
23 for each quarter shall be equal to the product of:
24 (i) the difference between the calculations under
25 paragraphs (1) and (2); and
26 (ii) the total number of units of each dosage form
27 and strength reimbursed by PACE, PACENET and designated
28 pharmaceutical programs and the average manufacturer
29 price reported by the manufacturer under section
30 704(c)(1).
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1 (c) New bimarketed drugs.--For covered prescription drugs
2 that have not been marketed for a full calendar year, subsection
3 (a) shall apply after the covered prescription drug has been on
4 the market for four consecutive quarters. The drug's initial
5 average manufacturer price shall be based on the first day of
6 the first quarter that the drug was marketed.
7 (d) Applicability.--This section shall not apply to a
8 noninnovator multiple-source prescription drug or generic
9 prescription drug.
10 Section 13. Section 2103 of the act, added November 26, 2003
11 (P.L.212, No.37), is amended to read:
12 Section 2103. Federal programs.
13 If the Federal Government enacts pharmacy programs similar to
14 PACE or PACENET, the State programs shall be construed to only
15 supplement the Federal pharmacy programs.[, and all] All persons
16 qualified for coverage under [the] a Federal pharmacy program
17 [shall], including the prescription drug benefit program
18 provided by the Medicare Prescription Drug, Improvement, and
19 Modernization Act of 2003 (Public Law 108-173, 117 Stat. 2066),
20 may be required by the department to utilize [that] the Federal
21 program before utilizing any State program.
22 SECTION 14. (A) NOTWITHSTANDING ANY OTHER PROVISION OF LAW <--
23 TO THE CONTRARY, PERSONS WHO, AS OF DECEMBER 31, 2004, ARE
24 ENROLLED IN THE PACE OR PACENET PROGRAM AS DEFINED IN SECTION
25 502 OF THE ACT SHALL REMAIN ELIGIBLE FOR THE PACE OR PACENET
26 PROGRAM IF THE MAXIMUM INCOME LIMIT IS EXCEEDED DUE SOLELY TO A
27 SOCIAL SECURITY COST-OF-LIVING ADJUSTMENT.
28 (B) FUNDING, TO THE EXTENT AUTHORIZED BY SECTION
29 306(B)(1)(VII) OF THE ACT OF JUNE 26, 2001 (P.L.755, NO.77),
30 KNOWN AS THE TOBACCO SETTLEMENT ACT, SHALL CONTINUE TO BE
20060S1188B1910 - 23 -
1 APPROPRIATED TO THE PHARMACEUTICAL ASSISTANCE CONTRACT FOR THE
2 ELDERLY FUND TO SUPPORT THE PROGRAM EXPANSIONS CONTAINED IN THIS
3 SECTION. THE DEPARTMENT OF AGING SHALL ALSO DESIGNATE FUNDS FROM
4 THE FUND TO CONTINUE ELIGIBILITY UNDER THIS SECTION; HOWEVER,
5 THESE FUNDS SHALL NOT EXCEED THE FUNDING DESIGNATED UNDER
6 SECTION 306(B)(1)(VII) OF THE TOBACCO SETTLEMENT ACT. IF
7 ELIGIBILITY UNDER THIS SECTION REQUIRES THAT FUNDS FROM THE FUND
8 EXCEED THOSE FROM SECTION 306(B)(1)(VII) OF THE TOBACCO
9 SETTLEMENT ACT, THEN THE DEPARTMENT OF AGING IS AUTHORIZED TO
10 DETERMINE ELIGIBILITY REQUIREMENTS.
11 (C) ELIGIBILITY IN THE PACE AND PACENET PROGRAMS PURSUANT TO
12 THIS SECTION SHALL EXPIRE DECEMBER 31, 2007.
13 Section 14 15. This act shall take effect immediately. <--
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