PRINTER'S NO. 3792
No. 2548 Session of 2006
INTRODUCED BY GERGELY, WHEATLEY, EACHUS, NICKOL, WALKO, BEBKO-
JONES, BELARDI, BELFANTI, BEYER, BIANCUCCI, BISHOP,
BLACKWELL, BUXTON, CALTAGIRONE, COHEN, CORRIGAN, CURRY,
DALLY, DERMODY, DeWEESE, DIVEN, D. EVANS, FABRIZIO, FRANKEL,
GEORGE, GERBER, GRUCELA, HALUSKA, HANNA, JAMES, JOSEPHS,
KOTIK, LaGROTTA, LEACH, LEVDANSKY, MANDERINO, MARKOSEK,
McCALL, McGEEHAN, MELIO, MICOZZIE, MUNDY, PALLONE, PARKER,
PETRONE, RAMALEY, RAYMOND, READSHAW, ROEBUCK, RUFFING,
SAINATO, SANTONI, SCHRODER, SHAPIRO, SIPTROTH, SOLOBAY,
STABACK, STETLER, STURLA, SURRA, J. TAYLOR, THOMAS, TIGUE,
VEON, VITALI, WANSACZ, WOJNAROSKI, YEWCIC, YOUNGBLOOD,
YUDICHAK, HARHAI, FREEMAN, COSTA AND PISTELLA, APRIL 3, 2006
REFERRED TO COMMITTEE ON AGING AND OLDER ADULT SERVICES,
APRIL 3, 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 determination of
8 eligibility, for physician, certified registered nurse
9 practitioner and pharmacy participation, for reduced
10 assistance, for rebates for expenses prohibited, for program
11 generally, for generic drugs, for restricted formulary, for
12 reimbursement, for income verification, for contracts and for
13 the pharmaceutical assistance contract for the elderly needs
14 enhancement tier, for pharmacy best practices and cost
15 controls review; further providing for penalties; and
16 establishing the coordination of Federal and State benefits.
17 The General Assembly of the Commonwealth of Pennsylvania
18 hereby enacts as follows:
19 Section 1. The definitions of "department," "eligible
1 claimant" and "program" in section 502 of the act of August 26,
2 1971 (P.L.351, No.91), known as the State Lottery Law, added
3 November 21, 1996 (P.L.741, No.134), are amended and the section
4 is amended by adding definitions to read:
5 Section 502. Definitions.
6 The following words and phrases when used in this chapter
7 shall have the meanings given to them in this section unless the
8 context clearly indicates otherwise:
9 * * *
10 "Department." The Department of Aging of the Commonwealth or
11 its designee.
12 "Eligible claimant." A resident of the Commonwealth for no
13 less than 90 days, who is 65 years of age [and] or over, whose
14 annual income is less than the maximum annual income and who is
15 not otherwise qualified for public assistance under the act of
16 June 13, 1967 (P.L.31, No.21), known as the Public Welfare
17 Code[.], and who has enrolled in one of the programs established
18 under this chapter.
19 * * *
20 "Medicare advantage." A plan of health benefits coverage
21 offered under a policy, contract or plan by an organization
22 certified under 42 U.S.C. § 1395w-26 (relating to establishment
23 of standards) and formerly referred to as Medicare+Choice.
24 * * *
25 "Part D" or "Medicare prescription drug program." A Federal
26 program to offer voluntary prescription drug benefits to
27 Medicare enrollees, as set forth in the Medicare Prescription
28 Drug, Improvement, and Modernization Act of 2003 (Public Law
29 108-173, 117 Stat. 2066).
30 "Part D plan" or "PDP." A prescription drug plan approved
20060H2548B3792 - 2 -
1 under the Medicare Prescription Drug, Improvement, and
2 Modernization Act of 2003 (Public Law 108-173, 117 Stat. 2066)
3 in the PDP region that includes this Commonwealth, and approved
4 by the Department of Aging of the Commonwealth and the Centers
5 for Medicare and Medicaid Services of the United States for
6 coordination of benefits with the programs established under
7 this chapter.
8 "PDP region." The service area for a PDP as determined by
9 the Centers for Medicare and Medicaid Services of the United
10 States and set forth in § 1860D-11(a)(2) of the Medicare
11 Prescription Drug, Improvement and Modernization Act of 2003
12 (Public Law 108-173, 117 Stat. 2066).
13 * * *
14 "Program." The Pharmaceutical Assistance Contract for the
15 Elderly (PACE) and the Pharmaceutical Assistance Contract for
16 the Elderly Needs Enhancement Tier (PACENET) as established by
17 this chapter[, unless otherwise specified].
18 * * *
19 "Regional benchmark Part D premium." The average Part D
20 premium calculated annually by the Centers for Medicare and
21 Medicaid Services of the United States for PDPs in the PDP
22 region that includes this Commonwealth.
23 Section 2. Sections 503 and 504 of the act, amended November
24 26, 2003 (P.L.212, No.37), are amended to read:
25 Section 503. Determination of eligibility.
26 The department shall adopt regulations relating to the
27 determination of eligibility of prospective [claimants]
28 participants in the program and providers, including dispensing
29 physicians and certified registered nurse practitioners when
30 acting in accordance with rules and regulations promulgated by
20060H2548B3792 - 3 -
1 the State Board of Nursing as required by the act of May 22,
2 1951 (P.L.317, No.69), known as The Professional Nursing Law,
3 and the State Board of Pharmacy minimum standards of practice,
4 and the determination and elimination of program abuse. To this
5 end, the department shall establish a compliance unit staffed
6 sufficiently to fulfill this responsibility. The department
7 shall have the power to declare ineligible any eligible claimant
8 or provider who abuses or misuses the established prescription
9 plan. The department shall have the power to investigate cases
10 of suspected provider or recipient fraud.
11 Section 504. Physician, certified registered nurse practitioner
12 and pharmacy participation.
13 Any physician, certified registered nurse practitioner,
14 pharmacist, pharmacy or corporation owned in whole or in part by
15 a physician, certified registered nurse practitioner or
16 pharmacist enrolled as a provider in the program or who has
17 prescribed medication for [a claimant in the program] an
18 eligible claimant who is precluded or excluded for cause from
19 the Department of Public Welfare's Medical Assistance Program
20 shall be precluded or excluded from participation in the
21 program. No physician or certified registered nurse practitioner
22 precluded or excluded from the Department of Public Welfare's
23 Medical Assistance Program shall have claims resulting from
24 prescriptions paid for by the program.
25 Section 3. Sections 506 and 507 of the act, added November
26 21, 1996 (P.L.741, No.134), are amended to read:
27 Section 506. Reduced assistance.
28 Any eligible claimant whose prescription drug costs are
29 covered in part by any other plan of assistance or insurance,
30 including Part D, may be required to receive reduced assistance
20060H2548B3792 - 4 -
1 under the provisions of this chapter or be subject to
2 coordination of benefits under the provisions of Chapter 10 and
3 this chapter.
4 Section 507. Rebates for expenses prohibited.
5 A system of rebates or reimbursements to [the] an eligible
6 claimant for prescription drugs shall be prohibited.
7 Section 4. Section 509 of the act, amended November 26, 2003
8 (P.L.212, No.37), is amended to read:
9 Section 509. Program generally.
10 The program shall include the following:
11 (1) Participating pharmacies shall be paid within 21
12 days of the contracting firm receiving the appropriate
13 substantiation of the transaction. Pharmacies shall be
14 entitled to interest for payment not made within the 21-day
15 period at a rate approved by the board.
16 (2) Collection of the copayment by pharmacies shall be
17 mandatory.
18 (3) [Senior citizens participating in the program]
19 Eligible claimants are not required to maintain records of
20 each transaction.
21 (4) A system of rebates or reimbursements to eligible
22 claimants for pharmaceutical expenses shall be prohibited.
23 (5) PACE shall include participant copayment schedules
24 for each prescription, including a copayment for generic or
25 multiple-source drugs that is less than the copayment for
26 single-source drugs. The department shall annually calculate
27 the copayment schedules based on the Prescription Drugs and
28 Medical Supplies Consumer Price Index. When the aggregate
29 impact of the Prescription Drugs and Medical Supplies
30 Consumer Price Index equals or exceeds $1, the department
20060H2548B3792 - 5 -
1 shall adjust the copayment schedules. Each copayment schedule
2 shall not be increased by more than $1 in a calendar year.
3 (6) The program payment shall be the lower of the
4 following amounts determined as follows:
5 (i) [90%] 84% of the average wholesale cost of the
6 prescription drug dispensed:
7 (A) with the addition of a dispensing fee of the
8 greater of:
9 (I) $4; or
10 (II) the amount set by the department by
11 regulation;
12 (B) the subtraction of the copayment; and
13 (C) if required, the subtraction of the generic
14 differential; or
15 (ii) the pharmacy's usual charge for the drug
16 dispensed with the subtraction of the copayment and, if
17 required, the subtraction of the generic differential; or
18 (iii) if a generic drug, the most current Federal
19 upper payment limits established in the Medicaid Program
20 under 42 CFR § 447.332 (relating to upper limits for
21 multiple source drugs), plus a dispensing fee of $4 or
22 the amount set by the department by regulation, whichever
23 is greater minus the copayment. The department shall
24 update the average wholesale costs and the Federal upper
25 payment limits at least every 30 days.
26 (7) In no case shall the Commonwealth or any [person
27 enrolled in the program] eligible claimant be charged more
28 than the price of the drug at the particular pharmacy on the
29 date of the sale.
30 (8) The Governor may, based upon certified State Lottery
20060H2548B3792 - 6 -
1 Fund revenue that is provided to both the chairman and
2 minority chairman of the Appropriations Committee of the
3 Senate and the chairman and minority chairman of the
4 Appropriations Committee of the House of Representatives, and
5 after consultation with the board, decrease the eligibility
6 limits established in this chapter.
7 Section 5. Section 510 of the act, amended or added November
8 21, 1996 (P.L.741, No.134) and November 30, 2004 (P.L.1722,
9 No.219), is amended to read:
10 Section 510. Generic drugs.
11 (a) In general.--Notwithstanding any other statute or
12 regulation, a brand name product shall be dispensed and not
13 substituted with an A-rated generic therapeutically equivalent
14 drug if it is less expensive to the program. If a less expensive
15 A-rated generic therapeutically equivalent drug is available for
16 dispensing to [a] an eligible claimant, the provider shall
17 dispense the A-rated generic therapeutically equivalent drug to
18 the eligible claimant. The department shall reimburse providers
19 based upon the most current listing of Federal upper payment
20 limits established in the Medicaid Program under 42 CFR §
21 447.332 (relating to upper limits for multiple source drugs),
22 plus a dispensing fee as set forth in section 509(6). The
23 department shall update the average wholesale costs and the
24 Federal upper payment limits on a regular basis, at least every
25 30 days. The department shall not reimburse providers for brand
26 name products except in the following circumstances:
27 (1) There is no A-rated generic therapeutically
28 equivalent drug available on the market. This paragraph does
29 not apply to the lack of availability of an A-rated generic
30 therapeutically equivalent drug in the providing pharmacy
20060H2548B3792 - 7 -
1 unless it can be shown to the department that the provider
2 made reasonable attempts to obtain the A-rated generic
3 therapeutically equivalent drug or that there was an
4 unforeseeable demand and depletion of the supply of the A-
5 rated generic therapeutically equivalent drug. In either
6 case, the department shall reimburse the provider for [90%]
7 84% of the average wholesale cost plus a dispensing fee based
8 on the least expensive A-rated generic therapeutically
9 equivalent drug for the brand drug dispensed.
10 (2) An A-rated generic therapeutically equivalent drug
11 is deemed by the department, in consultation with a
12 utilization review committee, to have too narrow a
13 therapeutic index for safe and effective dispensing in the
14 community setting. The department shall notify providing
15 pharmacies of A-rated generic therapeutically equivalent
16 drugs that are identified pursuant to this paragraph on a
17 regular basis.
18 (3) The Department of Health has determined that a drug
19 shall not be recognized as an A-rated generic therapeutically
20 equivalent drug for purpose of substitution under section
21 5(b) of the act of November 24, 1976 (P.L.1163, No.259),
22 referred to as the Generic Equivalent Drug Law.
23 (4) At the time of dispensing, the provider has a
24 prescription on which the brand name drug dispensed is billed
25 to the program by the provider at a usual and customary
26 charge which is equal to or less than the least expensive
27 usual and customary charge of any A-rated generic
28 therapeutically equivalent drug reasonably available on the
29 market to the provider.
30 (5) The brand name drug is less expensive to the
20060H2548B3792 - 8 -
1 program.
2 (b) Generic not accepted.--If [a] an eligible claimant
3 chooses not to accept the A-rated generic therapeutically
4 equivalent drug required by subsection (a), the eligible
5 claimant shall be liable for the copayment and 70% of the
6 average wholesale cost of the brand name drug.
7 (c) Generic drugs not deemed incorrect substitution.--The
8 dispensing of an A-rated generic therapeutically equivalent drug
9 in accordance with this chapter shall not be deemed incorrect
10 substitution under section 6(a) of the Generic Equivalent Drug
11 Law.
12 (d) Medical exception.--A medical exception process shall be
13 established by the department, which shall be published as a
14 notice in the Pennsylvania Bulletin and distributed to providers
15 and recipients in the program.
16 Section 6. Sections 512 and 515 of the act, amended November
17 26, 2003 (P.L.212, No.37), are amended to read:
18 Section 512. Restricted formulary.
19 The department may establish a restricted formulary of the
20 drugs which will not be reimbursed by the program. This
21 formulary shall include [only] experimental drugs and drugs on
22 the Drug Efficacy Study Implementation List prepared by CMS. A
23 medical exception may be permitted by the department for
24 reimbursement of a drug on the Drug Efficacy Study
25 Implementation List upon declaration of its necessity on the
26 prescription by the treating physician or certified registered
27 nurse practitioner, except that, for DESI drugs for which the
28 FDA has issued a Notice for Opportunity Hearing (NOOH) for the
29 purpose of withdrawing the New Drug Application approved for
30 that drug, reimbursement coverage shall be discontinued under
20060H2548B3792 - 9 -
1 the provisions of this chapter.
2 Section 515. Reimbursement.
3 For-profit third-party insurers, health maintenance
4 organizations, preferred provider organizations [and], not-for-
5 profit prescription plans, Medicare advantage plans and PDPs
6 shall be responsible for any payments made to a providing
7 pharmacy on behalf of [a] an eligible claimant covered by such a
8 third party. Final determination as to the existence of third-
9 party coverage shall be the responsibility of the department.
10 Section 7. Sections 517 and 518 of the act, added November
11 21, 1996 (P.L.741, No.134), are amended to read:
12 Section 517. Income verification.
13 (a) Procedure.--The department shall [annually] verify the
14 income and may also verify the financial resources of
15 prospective participants in the program upon application for
16 enrollment in the program and, once enrolled, of eligible
17 claimants annually thereafter. [The department shall verify the
18 income of eligible claimants by requiring income documentation
19 from the claimants.] An application for benefits under this
20 chapter shall constitute a waiver to the department of all
21 relevant confidentiality requirements relating to the
22 [claimant's] applicant's Pennsylvania State income tax
23 information in the possession of the Department of Revenue[.]
24 and other relevant information in the possession of any
25 Commonwealth agency or third party relating to the applicant's
26 financial resources. This waiver shall extend to both the
27 application phase and throughout the entire time the applicant
28 is enrolled in the program. The Department of Revenue shall
29 provide the department with the necessary income information
30 shown on the [claimant's] person's Pennsylvania State income tax
20060H2548B3792 - 10 -
1 return solely for income verification purposes.
2 (b) Information confidential.--It shall be unlawful for any
3 officer, agent or employee of the department to divulge or make
4 known in any manner whatsoever any information [gained through
5 access to] obtained from the Department of Revenue [information]
6 and any other Commonwealth agency or third party except for
7 official income verification purposes under this chapter.
8 (c) Penalty.--A person who violates [this act] the
9 provisions of subsection (b) commits a misdemeanor and shall,
10 upon conviction, be sentenced to pay a fine of not more than
11 $1,000 or to imprisonment for not more than one year, or both,
12 together with the cost of prosecution, and, if the offender is
13 an officer or employee of the Commonwealth, he shall be
14 dismissed from office or discharged from employment.
15 (d) Coordination with Department of Public Welfare.--To the
16 extent possible, the department and the Department of Public
17 Welfare shall coordinate efforts to facilitate the application
18 and enrollment of eligible older people in the Medicaid Healthy
19 Horizons Program by processing these applications at senior
20 citizens centers and other appropriate facilities providing
21 services to the elderly.
22 Section 518. [Contract] Contracts.
23 The department is authorized to enter into [a contract]
24 contracts providing for prescription drugs to eligible [persons]
25 claimants pursuant to this chapter. The department shall select
26 [a proposal] proposals that [includes] include, but [is] are not
27 limited to, the criteria set forth in this chapter.
28 Section 8. Section 519 of the act, amended November 26, 2003
29 (P.L.212, No.37), is amended to read:
30 Section 519. The Pharmaceutical Assistance Contract for the
20060H2548B3792 - 11 -
1 Elderly Needs Enhancement Tier.
2 (a) Establishment.--There is hereby established within the
3 department a program to be known as the Pharmaceutical
4 Assistance Contract for the Elderly Needs Enhancement Tier
5 [(PACENET)].
6 (b) PACENET eligibility.--A [claimant] person with an annual
7 income of not less than $14,500 and not more than $23,500 in the
8 case of a single person and of not less than $17,700 and not
9 more than $31,500 in the case of the combined income of persons
10 married to each other shall be eligible for enhanced
11 pharmaceutical assistance under this section. A person may, in
12 reporting income to the department, round the amount of each
13 source of income and the income total to the nearest whole
14 dollar, whereby any amount which is less than 50¢ is eliminated.
15 [(c) Deductible.--Upon enrollment in PACENET, eligible
16 claimants in the income ranges set forth in subsection (b) shall
17 be required to meet a deductible in unreimbursed prescription
18 drug expenses of $40 per person per month. The $40 monthly
19 deductible shall be cumulative and shall be applied to
20 subsequent months to determine eligibility. The cumulative
21 deductible shall be determined on an enrollment year basis for
22 an annual total deductible not to exceed $480 in a year. To
23 qualify for the deductible set forth in this subsection the
24 prescription drug must be purchased for the use of the eligible
25 claimant from a provider as defined in this chapter. The
26 department, after consultation with the board, may approve an
27 adjustment in the deductible on an annual basis.]
28 (c.1) Premium.--In those instances in which a PACENET-
29 eligible claimant does not enroll in Part D, the eligible
30 claimant shall be required to pay an annual premium equivalent
20060H2548B3792 - 12 -
1 to the regional benchmark Part D premium.
2 (d) Copayment.--
3 (1) For eligible claimants under this section, the
4 copayment schedule shall be:
5 (i) eight dollars for noninnovator multiple source
6 drugs as defined in section 702; or
7 (ii) fifteen dollars for single-source drugs and
8 innovator multiple-source drugs as defined in section
9 702.
10 (2) The department shall annually calculate the
11 copayment schedules based on the Prescription Drugs and
12 Medical Supplies Consumer Price Index. When the aggregate
13 impact of the Prescription Drugs and Medical Supplies
14 Consumer Price Index equals or exceeds $1, the department
15 shall adjust the copayment schedules. Each copayment schedule
16 shall not be increased by more than $1 in a calendar year.
17 Section 9. Section 520.1 of the act, added November 26, 2003
18 (P.L.212, No.37), is amended to read:
19 [Section 520.1. Pharmacy best practices and cost controls
20 review.
21 (a) Review process.--The secretary shall review and
22 recommend pharmacy best practices and cost control mechanisms
23 that maintain high quality in prescription drug therapies but
24 are designed to reduce the cost of providing prescription drugs
25 for PACE and PACENET enrollees, including:
26 (1) A list of covered prescription drugs with
27 recommended copayment schedules. In developing the schedules,
28 the department shall take into account the standards
29 published in the United States Pharmacopeia Drug Information.
30 (2) A drug utilization review procedure, incorporating a
20060H2548B3792 - 13 -
1 prescription review process for copayment schedules.
2 (3) A step therapy program that safely and effectively
3 utilizes in a sequential manner the least costly
4 pharmacological therapy to treat the symptoms of or effect a
5 cure for the medical condition or illness for which the
6 therapy is prescribed.
7 (4) Education programs designed to provide information
8 and education on the therapeutic and cost-effective
9 utilization of prescription drugs to physicians, pharmacists,
10 certified registered nurse practitioners and other health
11 care professionals authorized to prescribe and dispense
12 prescription drugs.
13 (b) Report and recommendations.--No later than two years
14 from the effective date of this section, the department shall
15 submit a report with recommendations to the Aging and Youth
16 Committee, the Appropriations Committee and the Public Health
17 and Welfare Committee of the Senate and the Aging and Older
18 Adult Services Committee, the Appropriations Committee and the
19 Health and Human Services Committee of the House of
20 Representatives. The report shall include information regarding
21 the efficacy of the pharmacy best practices and control
22 mechanisms set forth in subsection (a), including recommended
23 copayment schedules with impacted classes of drugs, exceptions,
24 cost effectiveness, improved drug utilization and therapies,
25 movement of market share and increased utilization of generic
26 drugs.]
27 Section 10. Section 521 of the act, amended or added
28 November 21, 1996 (P.L.741, No.134) and November 26, 2003
29 (P.L.212, No.37), is amended to read:
30 Section 521. Penalties.
20060H2548B3792 - 14 -
1 (a) Prohibited acts.--It shall be unlawful for any person to
2 submit a false or fraudulent claim or application under this
3 chapter, including, but not limited to:
4 (1) aiding or abetting another in the submission of a
5 false or fraudulent claim or application;
6 (2) receiving benefits or reimbursement under a private,
7 Federal or State program for prescription assistance and
8 claiming or receiving duplicative benefits hereunder;
9 (3) soliciting, receiving, offering or paying any
10 kickback, bribe or rebate, in cash or in kind, from or to any
11 person in connection with the furnishing of services under
12 this chapter;
13 (4) engaging in a pattern of submitting claims that
14 repeatedly uses incorrect National Drug Code numbers [for the
15 purpose of obtaining wrongful enhanced reimbursement]; or
16 (5) otherwise violating any provision of this chapter.
17 (b) Civil penalty.--In addition to any appropriate criminal
18 penalty for prohibited acts under this chapter whether or not
19 that act constitutes a crime under 18 Pa.C.S. (relating to
20 crimes and offenses), a provider who violates this section may
21 be liable for a civil penalty in an amount not less than $500
22 and not more than $10,000 for each violation of this act which
23 shall be collected by the department. Each violation constitutes
24 a separate offense. If the department collects three or more
25 civil penalties against the same provider, the provider shall be
26 ineligible to participate in either PACE or PACENET for a period
27 of one year. If more than three civil penalties are collected
28 from any provider, the department may determine that the
29 provider is permanently ineligible to participate in PACE or
30 PACENET.
20060H2548B3792 - 15 -
1 (c) Suspension of license.--The license of any provider who
2 has been found guilty under this chapter shall be suspended for
3 a period of one year. The license of any provider who has
4 committed three or more violations of this chapter may be
5 suspended for a period of one year.
6 (d) Reparation.--Any provider, recipient or other person who
7 is found guilty of a crime for violating this chapter shall
8 repay three times the value of the material gain received. In
9 addition to the civil penalty authorized pursuant to subsection
10 (b), the department may require the provider, recipient or other
11 person to repay up to three times the value of any material gain
12 to PACE or PACENET.
13 Section 11. The act is amended by adding a chapter to read:
14 CHAPTER 10
15 COORDINATION OF FEDERAL AND STATE BENEFITS
16 Section 1001. Definitions.
17 The following words and phrases when used in this chapter
18 shall have the meanings given to them in this section unless the
19 context clearly indicates otherwise:
20 "CMS." The Centers for Medicare and Medicaid Services of the
21 United States.
22 "Coverage gap" or "noncoverage phase." The deductible phase
23 or the difference between Part D initial coverage and
24 catastrophic coverage for certain Part D enrollees, as set forth
25 in section 1860D-2 of the Medicare Prescription Drug,
26 Improvement and Modernization Act of 2003 (Public Law 108-173,
27 117 Stat. 2066).
28 "Department." The Department of Aging of the Commonwealth or
29 its designee.
30 "Eligible claimant." A resident of this Commonwealth for no
20060H2548B3792 - 16 -
1 less than 90 days who is 65 years of age or older, whose annual
2 income is less than the maximum annual income and who is not
3 otherwise qualified for public assistance under the act of June
4 13, 1967 (P.L.31, No.21), known as the Public Welfare Code, and
5 who has enrolled in one of the programs established under
6 Chapter 5.
7 "Income." All income from whatever source derived,
8 including, but not limited to, salaries, wages, bonuses,
9 commissions, income from self-employment, alimony, support
10 money, cash public assistance and relief, the gross amount of
11 any pensions or annuities, including railroad retirement
12 benefits, all non-Medicare benefits received under the Social
13 Security Act (49 Stat. 620, 42 U.S.C. § 301 et seq.), all
14 benefits received under State unemployment insurance laws and
15 veterans' disability payments, all interest received from the
16 Federal Government, a state government or any instrumentality or
17 political subdivision thereof, realized capital gains, income
18 from rentals, workers' compensation and the gross amount of loss
19 of time insurance benefits, life insurance benefits and
20 proceeds, except the first $10,000 of the total of death benefit
21 payments and gifts of cash or property, other than transfers by
22 gift between members of a household, in excess of a total value
23 of $300, but shall not include surplus food or other relief in
24 kind supplied by a government agency or property tax rebate.
25 "LIS." Low-income subsidy assistance from the Medicare
26 prescription drug program provided by the Medicare Prescription
27 Drug, Improvement, and Modernization Act of 2003 (Public Law
28 108-173, 117 Stat. 2066) to help pay for annual premiums,
29 deductibles, coverage gaps and copayments charged to individuals
30 enrolled in Part D by prescription plans approved under that
20060H2548B3792 - 17 -
1 act.
2 "Maximum annual income." For PACE eligibility, the term
3 shall mean annual income which shall not exceed $14,500 in the
4 case of single persons nor $17,700 in the case of the combined
5 annual income of persons married to each other. For PACENET
6 eligibility, the term shall mean annual income not less than
7 $14,500 and not more than $23,500 in the case of a single person
8 and of not less than $17,700 and not more than $31,500 in the
9 case of the combined income of persons married to each other.
10 Persons may, in reporting income to the Department of Aging,
11 round the amount of each source of income and the income total
12 to the nearest whole dollar, whereby any amount which is less
13 than 50¢ is eliminated.
14 "MMA." The Medicare Prescription Drug, Improvement and
15 Modernization Act of 2003 (Public Law 108-173, 117 Stat, 2066).
16 "PACE." The Pharmaceutical Assistance Contract for the
17 Elderly program established under Chapter 5.
18 "PACENET." The Pharmaceutical Assistance Contract for the
19 Elderly Needs Enhancement Tier established under Chapter 5.
20 "Part D" or "Medicare prescription drug program." A Federal
21 program to provide voluntary prescription drug benefits to
22 Medicare enrollees, as set forth in the Medicare Prescription
23 Drug, Improvement and Modernization Act of 2003 (Public Law 108-
24 173, 117 Stat. 2066).
25 "Part D eligible individual." An eligible claimant who is
26 entitled to benefits under Part A of Medicare, or enrolled in
27 Part B of Medicare, as specified in section 1860D-1 of the
28 Medicare Prescription Drug, Improvement and Modernization Act of
29 2003 (Public Law 108-173, 117 Stat. 2066.).
30 "Part D enrollee." A person enrolled in one of the programs
20060H2548B3792 - 18 -
1 established under Chapter 5 who also enrolls in a Part D plan.
2 "Part D formulary." Those prescription drugs covered by a
3 Part D enrollee's Part D plan.
4 "Part D plan" or "PDP." A prescription drug approved under
5 the Medicare Prescription Drug, Improvement and Modernization
6 Act of 2003 (Public Law 108-173, 117 Stat. 2066) in the PDP
7 region that includes the Commonwealth, and approved by the
8 Department of Aging of the Commonwealth and the Centers for
9 Medicare and Medicaid Services of the United States for
10 coordination of benefits with the program established under
11 Chapter 5.
12 "Part D provider." A pharmacy or other prescription drug
13 dispenser authorized by a Part D enrollee's Part D plan.
14 "Prescription drugs excluded or limited." The prescription
15 drugs listed or identified in section 1860D-2(e)(2) of the
16 Medicare Prescription Drug, Improvement and Modernization Act of
17 2003 (Public Law 108-173, 117 Stat. 2066).
18 "Program." The Pharmaceutical Assistance Contract for the
19 Elderly and the Pharmaceutical Assistance Contract for the
20 Elderly Needs Enhancement Tier established under Chapter 5.
21 "Provider." A pharmacy, dispensing physician or certified
22 registered nurse practitioner enrolled as a provider in the
23 program.
24 "Regional benchmark Part D premium." The average Part D
25 premium, calculated annually by the Centers for Medicare and
26 Medicaid Services of the United States for Part D plans in the
27 PDP region that includes this Commonwealth.
28 Section 1002. Purpose.
29 (a) General rule.--The General Assembly intends for persons
30 enrolled in a program established under Chapter 5 who are also
20060H2548B3792 - 19 -
1 enrolled in Part D that the benefits of the programs established
2 under Chapter 5 shall be construed only as a supplement to Part
3 D benefits. Persons who are enrolled in either of such programs
4 who are eligible for coverage under Part D may be required by
5 the department to utilize the Part D benefits before utilizing
6 benefits provided under either State program.
7 (b) Coordination with Part D.--The General Assembly further
8 intends to continue a State pharmaceutical assistance program
9 for persons enrolled in one of the programs established under
10 Chapter 5 who are also enrolled in Part D. In addition, the
11 General Assembly authorizes the department to coordinate the
12 benefits of the State program with those provided under Part D
13 in order to provide the most efficient and cost-effective
14 program for those persons.
15 Section 1003. Coordination of benefits.
16 (a) General coordination.--In addition to the specific
17 provisions of subsection (b), the department shall establish
18 standards and minimum requirements it deems necessary to allow
19 for the coordination of benefits between the program and Part D.
20 (b) Specific coordination provisions.--The following
21 provisions shall apply to eligible claimants who are also Part D
22 enrollees:
23 (1) The primary payor shall be the PDP.
24 (2) The program shall not reimburse providers for
25 prescription drugs not on Part D enrollees' PDPs'
26 formularies, except for those prescription drugs excluded or
27 limited by the MMA.
28 (3) Part D enrollees shall be required to utilize
29 providers authorized by their PDPs.
30 (4) For Part D enrollees enrolled in PACE, PACE shall
20060H2548B3792 - 20 -
1 pay the premium assessed by the Part D enrollee's PDP in an
2 amount not to exceed the regional benchmark Part D premium,
3 and any copayments in excess of those set forth in section
4 509. Part D enrollees enrolled in PACENET shall be
5 responsible for payment of the Part D premiums charged by
6 their PDP.
7 (5) For Part D enrollees enrolled in PACE who are not
8 eligible for LIS, PACE shall reimburse Part D providers for
9 prescription drugs in any coverage gaps or noncoverage phase
10 of Part D. For Part D enrollees enrolled in PACENET, PACENET
11 shall reimburse Part D providers for prescription drugs in
12 any coverage gaps or noncoverage phase of Part D.
13 (6) The provisions of Chapter 7 shall apply to all
14 payments made by either program under the provisions of this
15 chapter.
16 (7) The department shall be authorized to act as an
17 eligible claimant's authorized representative for the
18 following purposes:
19 (i) Analyzing the eligible claimant's eligibility
20 for and assisting him in applying for LIS.
21 (ii) Evaluating an eligible claimant's prescription
22 drug needs and the Part D formularies as well as Part D
23 providers.
24 (iii) Assisting an eligible claimant in enrolling in
25 the PDP that best fits his prescription drug needs.
26 (iv) Filing and pursuing appeals with an eligible
27 claimant's PDP to convert noncovered drugs to covered
28 drugs or nonpreferred brand drugs to preferred drugs.
29 (c) Contracts.--The department is authorized to enter into
30 contracts providing for prescription drugs to Part D enrollees
20060H2548B3792 - 21 -
1 through Part D pursuant to this chapter. The department shall
2 select proposals that include, but are not limited to, the
3 criteria set forth in this chapter.
4 Section 1004. Financial verification.
5 (a) Procedure.--The department shall verify the income and
6 may also verify the financial resources of Part D eligible
7 individuals upon their application for enrollment in the program
8 and, once enrolled, annually thereafter. The department may also
9 require verification of resources for Part D or LIS eligibility.
10 An application by a Part D eligible individual for enrollment in
11 the program shall constitute a waiver to the department of all
12 relevant confidentiality requirements relating to the
13 applicant's Pennsylvania State income tax information in the
14 possession of the Department of Revenue and other relevant
15 information in the possession of any Commonwealth agency or
16 third party relating to the applicant's financial resources.
17 This waiver shall extend to both the application phase and
18 throughout the entire time the applicant is enrolled in the
19 program. The Department of Revenue shall provide the department
20 with the necessary income information shown on the person's
21 Pennsylvania State income tax return solely for income
22 verification purposes.
23 (b) Information confidential.--It shall be unlawful for any
24 officer, agent or employee of the department to divulge or make
25 known in any manner whatsoever any information obtained from the
26 Department of Revenue, any other Commonwealth agency or third
27 party except for financial verification purposes under this
28 chapter.
29 (c) Penalty.--A person who violates the provisions of
30 subsection (b) commits a misdemeanor and shall, upon conviction,
20060H2548B3792 - 22 -
1 be sentenced to pay a fine of not more than $1,000 or to
2 imprisonment for not more than one year, or both, together with
3 the cost of prosecution and, if the offender is an officer or
4 employee of the Commonwealth, he shall be dismissed from office
5 or discharged from employment.
6 Section 1005. Nonliability.
7 Any employee of the department rendering service to a Part D
8 eligible individual, as the Part D eligible individual's
9 designated representative, by providing assistance in completing
10 LIS or Part D applications, in selection of a PDP or by
11 appealing to a Part D enrollee's PDP to convert noncovered drugs
12 or nonpreferred brand drugs to preferred drugs covered under the
13 PDP formulary, shall not be liable for any civil damages as a
14 result of any such acts or omissions or any determinations made
15 by the Social Security Administration, CMS or a PDP.
16 Section 1006. Reimbursement.
17 For-profit insurers, health maintenance organizations,
18 preferred provider organizations, not-for-profit prescription
19 plans, Medicare Advantage plans and PDPs shall be responsible
20 for any payments made to a pharmacy on behalf of a Part D
21 enrollee covered by any such third party. Final determination as
22 to the existence of third-party coverage shall be the
23 responsibility of the department.
24 Section 12. Section 2103 of the act, added November 26, 2003
25 (P.L.212, No.37), is amended to read:
26 Section 2103. Federal programs.
27 If the Federal Government enacts pharmacy programs similar to
28 PACE or PACENET, the State programs shall be construed to only
29 supplement the Federal pharmacy programs.[, and all] All persons
30 qualified for coverage under [the] a Federal pharmacy program
20060H2548B3792 - 23 -
1 [shall], including the prescription drug benefit program
2 provided by the Medicare Prescription Drug, Improvement, and
3 Modernization Act of 2003 (Public Law 108-173, 117 Stat. 2066),
4 may be required by the department to utilize [that] the Federal
5 program before utilizing any State program.
6 Section 13. This act shall take effect in 60 days.
B15L72JKL/20060H2548B3792 - 24 -