HOUSE AMENDED
PRIOR PRINTER'S NOS. 358, 595, 794 PRINTER'S NO. 1176
No. 334 Session of 1987
INTRODUCED BY LOEPER, SALVATORE, RHOADES, SHAFFER, TILGHMAN,
GREENLEAF, GREENWOOD, SHUMAKER, CORMAN, FISHER, PETERSON,
BELL, JUBELIRER, MADIGAN, WENGER, O'PAKE, HELFRICK,
ARMSTRONG, HESS, MOORE, STAUFFER, BRIGHTBILL, ROCKS, MELLOW,
ANDREZESKI, REIBMAN, AFFLERBACH AND HOPPER, FEBRUARY 11, 1987
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 22, 1987
AN ACT
1 Amending the act of November 4, 1983 (P.L.217, No.63), entitled
2 "An act establishing a program of limited pharmaceutical
3 assistance for the elderly; granting powers to and imposing
4 duties on the Department of Aging; establishing a payment
5 system; making provisions for funding; providing for reports;
6 and fixing penalties for violations of the pharmaceutical
7 assistance program," changing the definitions of
8 "prescription drug" and "private contractor"; further
9 providing for eligible claimants who receive other
10 assistance, for funding and for reports by the Department of
11 Aging; further providing for the continuation of the program
12 by receiving additional proposals for the purpose of
13 providing pharmaceutical assistance for the elderly; further
14 providing for program criteria AND FOR REPORTS BY THE <--
15 PHARMACEUTICAL ASSISTANCE REVIEW BOARD; and further providing
16 for the penalty for violation of the act.
17 The General Assembly of the Commonwealth of Pennsylvania
18 hereby enacts as follows:
19 Section 1. The definitions of "prescription drug" and
20 "private contractor" in section 3 of the act of November 4, 1983
21 (P.L.217, No.63), known as the Pharmaceutical Assistance
22 Contract for the Elderly Act, are amended to read:
1 Section 3. Definitions.
2 The following words and phrases when used in this act shall
3 have the meanings given to them in this section unless the
4 context clearly indicates otherwise:
5 * * *
6 "Prescription drug." [All legend drugs, insulin, insulin
7 syringes and insulin needles.] All drugs requiring a
8 prescription in this Commonwealth, insulin, insulin syringes and
9 insulin needles. Experimental drugs are prohibited.
10 "Private contractor." [A person, partnership or corporate
11 entity who designs and submits a proposal to provide
12 pharmaceutical assistance as established under the provisions of
13 this act.] A person, partnership or corporate entity who enters
14 into a contract with the Commonwealth to provide services under
15 the provisions of this act.
16 * * *
17 Section 2. Section 4 of the act, amended June 26, 1985
18 (P.L.74, No.27), is amended to read:
19 Section 4. Responsibilities of Department of Aging.
20 (a) Determination of eligibility.--The department shall
21 adopt regulations relating to the determination of eligibility
22 of prospective claimants and providers, including dispensing <--
23 physicians, and the determination and elimination of program <--
24 abuse. TO THIS END, THE DEPARTMENT SHALL ESTABLISH A COMPLIANCE <--
25 UNIT STAFFED SUFFICIENTLY TO FULFILL THIS RESPONSIBILITY. The
26 department shall have the power to declare ineligible any
27 claimant OR PROVIDER who abuses or misuses the established <--
28 prescription plan. The department shall have the power to
29 investigate cases of suspected provider or recipient fraud.
30 (A.1) PHYSICIAN AND PHARMACY PARTICIPATION.--ANY PHYSICIAN, <--
19870S0334B1176 - 2 -
1 PHARMACIST, PHARMACY OR CORPORATION OWNED IN WHOLE OR IN PART BY
2 A PHYSICIAN OR PHARMACIST ENROLLED AS A PROVIDER IN THE PROGRAM,
3 OR WHO HAS PRESCRIBED MEDICATION FOR A CLAIMANT IN THE PROGRAM,
4 WHO IS PRECLUDED OR EXCLUDED FOR CAUSE FROM THE DEPARTMENT OF
5 PUBLIC WELFARE'S MEDICAL ASSISTANCE PROGRAM SHALL BE PRECLUDED
6 OR EXCLUDED FROM PARTICIPATION IN THE PROGRAM. NO PHYSICIAN
7 PRECLUDED OR EXCLUDED FROM THE DEPARTMENT OF PUBLIC WELFARE'S
8 MEDICAL ASSISTANCE PROGRAM SHALL HAVE CLAIMS RESULTING FROM
9 PRESCRIPTIONS PAID FOR BY THE PROGRAM.
10 (A.2) DRUG UTILIZATION REVIEW SYSTEM.--THE DEPARTMENT SHALL
11 ENSURE THAT A STATE-OF-THE-ART THERAPEUTIC DRUG UTILIZATION
12 REVIEW SYSTEM IS ESTABLISHED TO MONITOR AND CORRECT
13 MISUTILIZATION OF DRUG THERAPIES.
14 (b) Reduced assistance.--Any eligible claimant [not
15 otherwise qualified for payment of drugs under any public
16 assistance program] whose prescription drug costs are covered in
17 part by any other plan of assistance or insurance may be
18 required to receive reduced assistance under the provisions of
19 this act at the discretion of the department.
20 (c) Rebates for expenses prohibited.--A system of rebates or
21 reimbursements to the [participant for pharmaceutical expenses]
22 claimant for prescription drugs shall be prohibited.
23 (d) Request for proposal.--The department shall prepare a
24 request for proposal for the purpose of providing pharmaceutical
25 assistance for the elderly within this Commonwealth. The request
26 for proposal shall require private contractors to submit a
27 three-year proposal not to exceed $300,000,000. Upon the
28 adoption of the General Fund Budget, the Department of Revenue
29 shall be authorized to transmit the appropriated funds in the
30 State Lottery Fund to the State Treasurer to be deposited in the
19870S0334B1176 - 3 -
1 Pharmaceutical Assistance Contract for the Elderly Fund [to].
2 This fund shall consist of appropriations and interest and shall
3 be created by the State Treasurer to fund the operations of the
4 program by the department and the private contractor. Funds not
5 expended in the fiscal year in which they were appropriated
6 shall not lapse and be available for use in the next fiscal
7 year.
8 (d.1) Additional requests for proposals.--To provide for the
9 continued operation of the program, the department shall
10 prepare, as needed, requests for proposals in addition to that
11 set forth in subsection (d), for the purpose of providing
12 pharmaceutical assistance for the elderly within this
13 Commonwealth. A request for proposal shall require POTENTIAL <--
14 private contractors to submit a proposal for a period of time
15 and with monetary limitations as determined by the department.
16 Upon the enactment of an appropriation from the State Lottery
17 Fund, the Department of Revenue shall be authorized to transmit
18 the appropriated amount to the State Treasurer to be deposited
19 in the Pharmaceutical Assistance Contract for the Elderly Fund.
20 Funds not expended in the fiscal year in which they were
21 appropriated shall not lapse and shall be available for use in
22 the next fiscal year.
23 (e) Program criteria.--The program shall include the
24 following criteria:
25 (1) Participating pharmacies are to be paid within 21
26 days of the contracting firm receiving the appropriate
27 substantiation of the transaction. Pharmacies shall be
28 entitled to interest for payment not made within the 21-day
29 period at a rate approved by the Pharmaceutical Assistance
30 Review Board.
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1 (2) Collection of the copayment by pharmacies shall be
2 mandatory.
3 (3) Senior citizens participating in the program are not
4 required to maintain records of each transaction.
5 (4) A system of rebates or reimbursements to [the
6 participant] eligible claimants for pharmaceutical expenses
7 shall be prohibited.
8 (5) The system established shall include a participant
9 copayment schedule of $4 for each prescription for the first
10 year of the contract. The copayment shall increase or
11 decrease on the annual basis by the average percent change of
12 ingredient costs for all prescription drugs plus a
13 differential to raise the copayment to the next highest 25¢
14 increment. In addition, the department may approve a request
15 for increase or decrease in the level of copayment based upon
16 the financial experience and projections of the program and
17 after consultation with the Pharmaceutical Assistance Review
18 Board. The department is prohibited from approving
19 adjustments to the copayment on more than a semiannual basis.
20 (6) The program shall consist of payments to pharmacies
21 on behalf of eligible claimants for the average wholesale
22 cost of [legend] drugs, insulin, insulin syringes and insulin <--
23 needles which exceed the copayment [and] PLUS a dispensing <--
24 fee of at least $2.50 or the dispensing fee required by 1he
25 Department of Welfare under its medical assistance program
26 under the act of June 13, 1967 (P.L.31, No.21), known as the
27 Public Welfare Code, whichever is greater. [In no case shall <--
28 the Commonwealth be charged more than the price of the drug
29 at the particular pharmacy on the date of the sale. For the
30 purpose of this act, the eligible claimant shall be liable to
19870S0334B1176 - 5 -
1 pay the difference between the brand name drug and the
2 generically equivalent drug as approved under the provisions
3 of the act of November 24, 1976 (P.L.1163, No.259), referred
4 to as the Generic Equivalent Drug Law. Only the physician may
5 prescribe a nongeneric medication.] <--
6 (6.1) THE AVERAGE WHOLESALE COST SHALL BE BASED ON A <--
7 PACKAGE SIZE OF NOT LESS THAN 500, AS ESTABLISHED BY THE
8 DEPARTMENT. THE DEPARTMENT WILL INSTITUTE A PROCEDURE
9 ALLOWING FOR EXCEPTION TO THE 500 PACKAGE SIZE PAYMENT
10 FORMULA UPON THE REQUEST OF ANY PROVIDING PHARMACY WITH
11 ANNUAL PRESCRIPTION SALES OF LESS THAN $100,000.
12 (6.2) THE DEPARTMENT SHALL SELECT A REIMBURSEMENT SIZE
13 FOR ANY DRUG NOT AVAILABLE IN A PACKAGE SIZE OF 500.
14 (6.3) IN NO CASE SHALL THE COMMONWEALTH BE CHARGED MORE
15 THAN THE PRICE OF THE DRUG AT THE PARTICULAR PHARMACY ON THE
16 DATE OF THE SALE.
17 (6.4) FOR PURPOSES OF THIS ACT, THE ELIGIBLE CLAIMANT
18 SHALL BE LIABLE TO PAY A FIXED DIFFERENTIAL WHENEVER A MORE
19 EXPENSIVE BRAND NAME DRUG IS DISPENSED WHEN THE PHYSICIAN
20 PERMITTED SUBSTITUTION OF A LESS EXPENSIVE GENERICALLY
21 EQUIVALENT DRUG APPROVED UNDER THE PROVISIONS OF THE ACT OF
22 NOVEMBER 24, 1976 (P.L.1163, NO.259), REFERRED TO AS THE
23 GENERIC EQUIVALENT DRUG LAW.
24 (6.5) ONLY THE PHYSICIAN MAY PRESCRIBE A NONGENERIC
25 MEDICATION.
26 (6.6) THE DIFFERENTIAL WILL BE CHARGED REGARDLESS OF THE
27 AVAILABILITY OF A LESS EXPENSIVE GENERIC EQUIVALENT IN THE
28 PROVIDING PHARMACY.
29 (6.7) THE DEPARTMENT SHALL ESTABLISH AN EXPERIMENTAL
30 PHARMACIST CONSULTATION REIMBURSEMENT PROGRAM FOR A PERIOD
19870S0334B1176 - 6 -
1 NOT TO EXCEED SIX MONTHS. THIS PROGRAM SHALL PROVIDE AN
2 ADDITIONAL $1 SUPPLEMENTAL DISPENSING FEE WHENEVER A
3 PHARMACY'S DOCUMENTED INTERVENTION RESULTED IN A PHYSICIAN
4 CHANGING A PRESCRIPTION FOR A MORE EXPENSIVE BRAND NAME
5 PRODUCT TO A PRESCRIPTION ALLOWING SUBSTITUTION OF A LESS
6 EXPENSIVE GENERICALLY EQUIVALENT DRUG. PHARMACIES ELIGIBLE
7 FOR THE CONSULTATION REIMBURSEMENT MUST PROVIDE PATIENT
8 CONSULTATION, PROVIDE 24-HOUR EMERGENCY SERVICE, PROVIDE
9 HOME-DELIVERY SERVICE AND MAINTAIN PATIENT DRUG PROFILES. IN
10 NO CASE SHALL PAYMENT OF THIS SUPPLEMENT EXCEED THE TOTAL FEE
11 ALLOWED BY CLAUSE (6.3).
12 (7) [Prescription benefits for any single prescription
13 shall be limited to a 30-day supply of the prescription drug
14 or 100 doses, whichever is less, except that in the case of
15 acute drugs the limitation shall be a 15-day supply.]
16 Prescription benefits for any single prescription shall be
17 limited to a 30-day supply of the prescription drug or 100
18 doses UNITS, whichever is less, except that in the case of <--
19 diagnosis for acute conditions the limitation shall be a 15-
20 day supply.
21 [(8) Experimental drugs are to be excluded from the <--
22 program.] <--
23 (8) THE DEPARTMENT MAY ESTABLISH A RESTRICTED FORMULARY <--
24 OF THE DRUGS WHICH WILL NOT BE REIMBURSED BY THE PROGRAM.
25 THIS FORMULARY WILL INCLUDE EXPERIMENTAL DRUGS AND DRUGS ON
26 DRUG EFFICACY STUDY IMPLEMENTATION LIST PREPARED BY THE
27 HEALTH CARE FINANCE ADMINISTRATION. A MEDICAL EXCEPTION MAY
28 BE PERMITTED BY THE DEPARTMENT FOR REIMBURSEMENT OF A DRUG ON
29 THE DRUG EFFICACY STUDY IMPLEMENTATION LIST UPON
30 CERTIFICATION OF ITS NECESSITY BY THE TREATING PHYSICIAN.
19870S0334B1176 - 7 -
1 (9) The department may not enter into a contract with a
2 private contractor for an exclusive mail order system for the
3 delivery of prescription drugs under this program. Only mail
4 order pharmacy services provided by pharmacies which are
5 licensed by the Commonwealth and which have their principal
6 place of business within this Commonwealth may participate as
7 providers under the program. Within a period of six months
8 following the effective date of this amendatory act, the
9 department shall develop and promulgate specific regulations
10 governing the practice of mail order pharmacy and other
11 enrolled providers to include the following minimum standards
12 of practice to ensure the health, safety and welfare of
13 program participants:
14 (i) The appropriate method or methods by which such
15 pharmacies shall verify the identity of the program
16 recipient and the authenticity of prescriptions received.
17 (ii) The appropriate method or methods by which such
18 pharmacies shall mail or deliver prescription drugs to
19 program recipients ensuring, to the maximum extent
20 possible, that the intended program recipient is the
21 actual ultimate recipient of any prescription dispensed
22 by such pharmacies.
23 (iii) The appropriate method or methods by which
24 such pharmacies shall communicate with program
25 participants in emergency situations.
26 (10) The program must be in place and operational within
27 90 days of the effective date of the contract.
28 (11) For-profit third party insurers and not-for-profit
29 prescription plans shall reimburse the department for any
30 payments made to a providing pharmacy on behalf of a claimant
19870S0334B1176 - 8 -
1 covered by such a third party.
2 (12) Any health care professional rendering service as a
3 member of a utilization review committee for this program
4 shall not be liable for any civil damages as a result of any
5 acts or omissions in rendering the service as a member of any
6 such committee except any acts or omissions intentionally
7 designed to harm or any grossly negligent acts or omissions
8 which result in harm to the person receiving such service.
9 (f) Reports by department.--The department shall maintain
10 monthly statistical records on the program to effectively
11 determine the cost of the program, level of participation and
12 any patterns of unusual drug usage. Based on this information,
13 the department shall submit a report every [three] six months to
14 the Aging and Youth Committee in the Senate, the Health and
15 Welfare Committee in the House and the Pharmaceutical Assistance
16 Review Board. The [quarterly] SEMIANNUAL report shall contain, <--
17 but is not limited to, all information relating to the number of
18 persons served by the program, their counties of residence, a
19 breakdown of the numbers and kinds of pharmaceuticals used, the
20 cost of prescriptions and an estimate of actual expenses
21 incurred by pharmacists participating in the program.
22 (g) Adjustments to program.--The department is authorized to
23 enter into discussions with the private contractor pursuant to
24 section 6(c).
25 Section 3. Section SECTIONS 6(C) AND 7(a) of the act is ARE <--
26 amended to read:
27 SECTION 6. PHARMACEUTICAL ASSISTANCE REVIEW BOARD. <--
28 * * *
29 (C) REVIEW.--USING THE [QUARTERLY] SEMIANNUAL REPORTS
30 SUBMITTED BY THE DEPARTMENT PURSUANT TO SECTION 4(F) AND OTHER
19870S0334B1176 - 9 -
1 APPROPRIATE DATA SOURCES, THE BOARD WILL CONDUCT A [QUARTERLY]
2 SEMIANNUAL REVIEW. THE BOARD SHALL DEVELOP RECOMMENDATIONS
3 CONCERNING ANY CHANGES IN THE LEVEL OF COPAYMENT OR IN THE LEVEL
4 OF FEES PAID TO PARTICIPATING PHARMACISTS. THE BOARD MAY ALSO
5 RECOMMEND OTHER CHANGES IN THE STRUCTURE OF THE PROGRAM AND
6 DIRECT THE DEPARTMENT TO ENTER INTO DISCUSSIONS WITH THE PRIVATE
7 CONTRACTOR CONCERNING AMENDMENTS TO THE CONTRACT. THE COPAYMENT
8 SCHEDULE SHALL ONLY BE ADJUSTED ON A SEMIANNUAL BASIS.
9 Section 7. Penalties.
10 [(a) Criminal penalties.--Any person who submits a false or <--
11 fraudulent claim under this act, or who aids or abets another in
12 the submission of a false or fraudulent claim, or who is
13 eligible under a private, State or Federal program for
14 prescription assistance and who claims or receives duplicative
15 benefits hereunder or who otherwise violates any provisions of
16 this act, commits a misdemeanor of the [third] second degree.] <--
17 (A) PROHIBITED ACTS AND CRIMINAL PENALTIES.--IT SHALL BE <--
18 UNLAWFUL FOR ANY PERSON TO SUBMIT A FALSE OR FRAUDULENT CLAIM OR
19 APPLICATION UNDER THIS ACT; TO AID OR ABET ANOTHER IN THE
20 SUBMISSION OF A FALSE OR FRAUDULENT CLAIM OR APPLICATION; TO
21 RECEIVE BENEFITS OR REIMBURSEMENT UNDER A PRIVATE, STATE OR
22 FEDERAL PROGRAM FOR PRESCRIPTION ASSISTANCE AND CLAIM OR RECEIVE
23 DUPLICATIVE BENEFITS HEREUNDER; TO SOLICIT, RECEIVE, OFFER OR
24 PAY ANY KICKBACK, BRIBE OR REBATE, IN CASH OR IN-KIND, FROM OR
25 TO ANY PERSON IN CONNECTION WITH THE FURNISHING OF SERVICES
26 UNDER THIS ACT; OR TO OTHERWISE VIOLATE ANY PROVISION OF THIS
27 ACT. ANY PERSON WHO COMMITS A PROHIBITED ACT SHALL BE CHARGED
28 WITH A CRIMINAL OFFENSE PURSUANT TO THE PROVISIONS OF TITLE 18
29 OF THE PENNSYLVANIA CONSOLIDATED STATUTES (RELATING TO CRIMES
30 AND OFFENSES).
19870S0334B1176 - 10 -
1 * * *
2 Section 4. This act shall take effect immediately.
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