Bill S1267A-2011

Relates to the amount of dispensing fees paid to pharmacies in EPIC and Medicaid

Relates to the amount of dispensing fees paid to pharmacies in EPIC and Medicaid; establishes the dispensing fee at eight dollars per prescription for patients in long term care facilities, intermediate care facilities for the developmentally disabled, assisted living programs and any other residential care facilities in which prescriptions are dispensed in unit-of-use packaging.

Details

Actions

  • Jan 9, 2012: PRINT NUMBER 1267A
  • Jan 9, 2012: AMEND AND RECOMMIT TO AGING
  • Jan 4, 2012: REFERRED TO AGING
  • Jan 6, 2011: REFERRED TO AGING

Memo

BILL NUMBER:S1267A

TITLE OF BILL: An act to amend the elder law and the social services law, in relation to dispensing fees paid to pharmacies in EPIC and Medicaid

PURPOSE OR GENERAL IDEA OF BILL: This bill provides for the dispensing fee paid per prescription.

SUMMARY OF SPECIFIC PROVISIONS: Section One of the bill amends paragraph (c) of subdivision 1 of section 250 of elder law related to the dispensing fee paid to pharmacies for every prescription filled under EPIC program. This bill adds a new provision related to the dispensing fee paid to pharmacies required to dispense medications in unit-of-use packaging.

Section two of the bill amends subparagraphs (i) and (ii) of paragraph (d) of subdivision 9 of section 367-a of the social services law, as amended by chapter 19 of the laws of 1998 related to the dispensing fee paid to pharmacies for every prescription filled for persons eligible to participate in the Medicaid program. The bill adds a new subparagraph (iii) related to the dispensing fee paid to pharmacies required to dispense medications in unit-of-use packaging.

JUSTIFICATION: Given the high costs of doing business in this state, publicly-financed prescription benefit programs such as Medicaid and EPIC should not reimburse pharmacies at a rate lower than every other state that has enacted deeply discounted product reimbursement policies.

The actual cost of dispensing a prescription to a beneficiary in the New York Medicaid program ranges between $8.79 and $14.04 according to the survey conducted by Grant Thorton released in January, 2007. We apply the same survey results to dispensing fees paid under EPIC. With the high costs of living and doing business, New York's Medicaid and EPIC programs should not reimburse pharmacies at the very lowest level in the country. Doing so may reduce the pharmacy provider network to unacceptable levels. Should that occur, both programs will fail in their primary objective, to deliver medically necessary healthcare of acceptable quality cost containment parameters.

Although the legislature has restored millions to the cuts proposed by the executive over the course of the past decade, every state budget has nevertheless left pharmacy providers with less reimbursement than in the previous year. Virtually every health care provider in the Medicaid program has faced regular decreases in reimbursement, but no other provider category has been subject to the cumulative percentage reductions as have the state's pharmacies.

Pharmacies that provide prescription services for residents in long-term care facilities and other forms of residential care incur additional expense associated with preparing "blister packs" and other forms of unit-of-use packaging that are required by regulation.

This special packaging provides additional security against misuse or overuse and enhances patient compliance that in turn reduces unnecessary Medicaid spending associated with medication errors or inappropriate use. The differential in the legislation is also based on policies adopted by other states.

PRIOR LEGISLATIVE HISTORY: 2009-2010: S.3901 - Committed to Finance 2008: S.8216 - Committed to Finance

FISCAL IMPLICATIONS: None. The changes proposed in this legislation are possible in the context of the funds appropriated for spending on the pharmacy benefit.

First of all, national trends suggest that the rate of growth in spending for prescription drugs has slowed. The proposed 6% increase in the cost of the benefit is likely to be much lower.

Second, the proposed spending on prescription drugs does not take into account the additional supplemental rebates generated by preferred drug programs. In 2006 when the PDP was first implemented, the program generated $30.5 million.

Third, although the dispensing fees in this bill appear to be the same for brands and generics, differences in co-payments actually provide pharmacy with a slight higher fee for dispensing generic drugs.

EFFECTIVE DATE: April 1, 2013, with provisions.


Text

STATE OF NEW YORK ________________________________________________________________________ 1267--A 2011-2012 Regular Sessions IN SENATE January 6, 2011 ___________
Introduced by Sens. ADDABBO, ESPAILLAT, LITTLE -- read twice and ordered printed, and when printed to be committed to the Committee on Aging -- recommitted to the Committee on Aging in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the elder law and the social services law, in relation to dispensing fees paid to pharmacies in EPIC and Medicaid THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph (c) of subdivision 1 of section 250 of the elder law, as amended by section 3-m of part A of chapter 59 of the laws of 2011, is amended to read as follows: (c) As required by paragraphs (a) and (b) of this subdivision, a dispensing fee of [four] SEVEN dollars [fifty] AND TWENTY-FIVE cents [will apply to generic drugs and a dispensing fee of three dollars fifty cents will apply to brand name drugs] PER PRESCRIPTION SHALL APPLY, PROVIDED, HOWEVER, THAT FOR PRESCRIPTION DRUGS DISPENSED FOR PATIENTS IN LONG TERM CARE FACILITIES, INTERMEDIATE CARE FACILITIES FOR THE DEVELOP- MENTALLY DISABLED, ASSISTED LIVING PROGRAMS, AND ANY OTHER RESIDENTIAL CARE FACILITIES IN WHICH PRESCRIPTIONS ARE DISPENSED IN UNIT-OF-USE PACKAGING, A DISPENSING FEE OF EIGHT DOLLARS PER PRESCRIPTION SHALL APPLY. S 2. Subparagraphs (i) and (ii) of paragraph (d) of subdivision 9 of section 367-a of the social services law, subparagraph (i) as amended by section 10-a of part H of chapter 59 of the laws of 2011 and subpara- graph (ii) as amended by section 48 of part C of chapter 58 of the laws of 2009, are amended and a new subparagraph (iii) is added to read as follows: (i) for prescription drugs categorized as generic by the prescription drug pricing service used by the department, [three] SEVEN dollars and [fifty] TWENTY-FIVE cents per prescription; and
(ii) for prescription drugs categorized as brand-name prescription drugs by the prescription drug pricing service used by the department, [three] SEVEN dollars and [fifty] TWENTY-FIVE cents per prescription, provided, however, that for brand name prescription drugs reimbursed pursuant to subparagraph (ii) of paragraph (a-1) of subdivision four of section three hundred sixty-five-a of this title, the dispensing fee shall be [four] EIGHT dollars and [fifty] TWENTY-FIVE cents per prescription[.]; AND (III) FOR PRESCRIPTION DRUGS CATEGORIZED AS BRAND OR GENERIC BY THE PRESCRIPTION DRUG PRICING SERVICE USED BY THE DEPARTMENT AND DISPENSED FOR PATIENTS IN LONG TERM CARE FACILITIES, INTERMEDIATE CARE FACILITIES FOR THE DEVELOPMENTALLY DISABLED, ASSISTED LIVING PROGRAMS, AND ANY OTHER RESIDENTIAL CARE FACILITIES IN WHICH PRESCRIPTIONS ARE DISPENSED IN UNIT-OF-USE PACKAGING, EIGHT DOLLARS PER PRESCRIPTION. S 3. This act shall take effect April 1, 2013, provided, however, that the amendments to subdivision 9 of section 367-a of the social services law made by section two of this act shall not affect the repeal of such subdivision and shall be deemed to be repealed therewith.

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