Establishes a Medicaid drug rebate remittance demonstration program to authorize the department of health to work collaboratively with third party vendors to validate existing Medicaid drug rebate claims and the data contains duplicate claims or claims on which rebates may have already been paid all or in part to Medicare Part D plans or some other third parties in order to rectify disputed claims.
Ayes (52): Adams, Addabbo, Alesi, Ball, Bonacic, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Duane, Farley, Flanagan, Fuschillo, Gallivan, Gianaris, Golden, Griffo, Grisanti, Hannon, Huntley, Johnson, Klein, Kruger, Lanza, Larkin, LaValle, Libous, Little, Marcellino, Martins, Maziarz, McDonald, Nozzolio, O'Mara, Oppenheimer, Ranzenhofer, Ritchie, Rivera, Robach, Saland, Sampson, Savino, Serrano, Seward, Skelos, Squadron, Stavisky, Stewart-Cousin, Valesky, Young, Zeldin
Nays (9): Avella, Espaillat, Hassell-Thomps, Kennedy, Krueger, Montgomery, Parker, Peralta, Perkins
Absent (1): Smith
TITLE OF BILL: An act to amend the public health law, in relation to establishing a medicaid drug rebate remittance demonstration program
PURPOSE OR GENERAL IDEA OF BILL: This bill will establish a Medicaid drug rebate remittance demonstration program within the Department of Health for the purpose of working collaboratively with the pharmaceutical industry and third party vendors to validate drug rebate claims and rectify disputed claims.
SUMMARY OF SPECIFIC PROVISIONS: This bill adds a new section 276-b to the Public Health Law.
Subdivision 1 establishes the Medicaid drug rebate remittance demonstration program to work collaboratively with third party vendors to validate existing Medicaid drug rebate claims to determine whether the data contains duplicate claims or claims on which rebates may already have been paid all or in part to Medicare Part D plans or some other third parties in order to rectify disputed claims.
Subdivision 2 sets forth the parameters of the demonstration program and the information required to be shared with drug manufacturers and third party vendors. It states that the Department of Health shall provide prescription drug utilization information to participating drug manufacturers who have entered into a rebate agreement with the Department and third party data vendors at no cost to the Department.
Subdivision 3 sets forth reporting requirements and recommendation options by the Department of Health. The Department shall report on the results of the program to the Governor, the Director of the Division of the Budget, the state Comptroller, and the Legislature on or before December 31, 2012.
JUSTIFICATION: In August 2004, the U.S. Department of Health & Human Services (HHS) Office of Inspector General released an audit of New York's Medicaid Drug Rebate Program billings, collections and dispute resolutions. HHS determined that "the processes and controls for rebate billings, collections, and dispute resolutions were not always coordinated effectively, did not maximize savings and did not produce accurate and complete records of rebate activities." Among its findings, HHS identified an estimated balance of $351 million in total outstanding rebates, including $32 million in unresolved disputes, as of June 30, 2002.
Medicaid programs in over 45 states boost their Medicaid drug rebate collections by disclosing prescription-level data to third party vendors with expertise in providing standardized databases to validate Medicaid rebate invoices and expedite the resolution of disputed claims, in an unbiased, objective manner. According to the Centers for Medicare and Medicaid Services (CMS), "data vendors can be invaluable for the purpose of validation drug rebate data, identifying potential errors and
achieving dispute resolution between States and pharmaceutical manufacturers." The California Department of Health Services noted that since providing claims detail data to a third party data vendor, "the percentage paid of the invoiced amount has increased" and "companies pay a larger amount within the initial payment timeframe."
This bill will require NYSDOH to share information and work cooperatively with third party data vendors in a demonstration program to determine the extent to which such collaboration will maximize Medicaid drug rebate revenues to the State.
PRIOR LEGISLATIVE HISTORY: Similar to S.5835/A.8869 of 2005. Vetoed.
FISCAL IMPLICATIONS: No cost to the State. Potential increase in revenues based upon resolution of disputed rebate amounts.
EFFECTIVE DATE: Immediately upon enactment.
STATE OF NEW YORK ________________________________________________________________________ 5043--A 2011-2012 Regular Sessions IN SENATE May 3, 2011 ___________Introduced by Sen. HANNON -- read twice and ordered printed, and when printed to be committed to the Committee on Health -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the public health law, in relation to establishing a medicaid drug rebate remittance demonstration program THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The public health law is amended by adding a new section 276-b to read as follows: S 276-B. MEDICAID DRUG REBATE REMITTANCE DEMONSTRATION PROGRAM. 1. THE DEPARTMENT SHALL ESTABLISH A MEDICAID DRUG REBATE REMITTANCE DEMON- STRATION PROGRAM FOR THE PURPOSE OF WORKING COLLABORATIVELY WITH THIRD PARTY VENDORS TO VALIDATE THE EXISTING MEDICAID DRUG REBATE CLAIMS AND DETERMINE WHETHER THE DATA CONTAINS DUPLICATE CLAIMS OR CLAIMS ON WHICH REBATES MAY ALREADY HAVE BEEN PAID ALL OR IN PART TO MEDICARE PART D PLANS OR SOME OTHER THIRD PARTIES IN ORDER TO RECTIFY DISPUTED CLAIMS. 2. FOR THE PURPOSES OF THIS DEMONSTRATION PROGRAM, THE DEPARTMENT SHALL PROVIDE UTILIZATION INFORMATION TYING TO INVOICES SENT TO PHARMA- CEUTICAL MANUFACTURERS, WHICH HAVE ENTERED INTO A REBATE AGREEMENT WITH THE DEPARTMENT OR WITH THE FEDERAL SECRETARY OF HEALTH AND HUMAN SERVICES ON BEHALF OF THE DEPARTMENT UNDER SECTION 1927 OF THE FEDERAL SOCIAL SECURITY ACT, AND TO THIRD PARTY DATA VENDORS, FOR THE PURPOSE OF VALIDATING CLAIMS SUBMITTED UNDER SUCH REBATE AGREEMENT OR PROGRAM INCLUDING BUT NOT LIMITED TO, THE PROGRAM FOR ELDERLY PHARMACEUTICAL INSURANCE COVERAGE, AND THE MEDICAID DRUG REBATE PROGRAM IN GENERAL FOR THE PERIOD FROM JANUARY FIRST, TWO THOUSAND NINE THROUGH JUNE THIRTIETH, TWO THOUSAND TWELVE. SUCH UTILIZATION INFORMATION SHALL INCLUDE, BUT NOT BE LIMITED TO: PRESCRIPTION NUMBERS, NATIONAL DRUG CODES, NUMBER OF UNITS DISPENSED, CLAIMS PAID DATE, DATE OF SERVICE, PRESCRIBING PHYSI- CIAN STATE IDENTIFICATION NUMBER, AMOUNT BILLED FOR EACH PRESCRIPTION,EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11186-02-1 S. 5043--A 2
AMOUNT OF REIMBURSEMENT RECEIVED FOR EACH PRESCRIPTION (INCLUDING ANY ADJUSTMENT CODES), DISPENSING PHARMACY'S STATE IDENTIFICATION NUMBER, DISPENSING FEE, ANY APPLICABLE THIRD-PARTY PAYMENTS, APPLICABLE CO-PAY- MENTS, REFILL CODE, INTERNAL CLAIM NUMBER OF THE SCRIPT, DAYS SUPPLY, J-CODE CLAIMS INCLUDING SINGLE SOURCE AND MULTISOURCE PHYSICIAN ADMINIS- TERED DRUGS, NPI NUMBERS, MCO PLAN IDENTIFIER, MCO PLAN NAME, AND THE NAME, ADDRESS, CITY, STATE AND ZIP CODE OF THE PRESCRIBING PRACTITIONER AND PHARMACY. THE PRESCRIPTION DRUG UTILIZATION INFORMATION SHALL BE PROVIDED TO THE THIRD PARTY DATA VENDORS AS SOON AS PRACTICABLE FOLLOW- ING ESTABLISHMENT OF THIS PROGRAM. THERE SHALL BE NO COST TO THE DEPART- MENT FOR SERVICES PERFORMED BY THIRD PARTY DATA VENDORS. ANY PRESCRIPTION DRUG UTILIZATION DATA PROVIDED TO THIRD PARTY DATA VENDORS UNDER THIS DEMONSTRATION PROGRAM SHALL NOT BE SHARED WITH OTHER PARTIES, EXCEPT PARTICIPATING DRUG MANUFACTURERS WHO HAVE ENTERED INTO A REBATE AGREEMENT WITH THE DEPARTMENT OR WITH THE FEDERAL SECRETARY OF HEALTH AND HUMAN SERVICES ON BEHALF OF THE DEPARTMENT UNDER SECTION 1927 OF THE FEDERAL SOCIAL SECURITY ACT. UTILIZATION DATA PROVIDED UNDER THIS SECTION SHALL BE USED FOR THE FOLLOWING PURPOSE: REBATE VALIDATION SERVICES FOR THE BENEFIT OF DRUG COMPANIES AND STATE/FEDERAL AGENCIES INCLUDING DRUG USE TREND REVIEW. INDIVIDUAL PATIENT IDENTIFYING INFORMA- TION SHALL BE KEPT CONFIDENTIAL BY ANY PERSON OR ENTITY TO WHOM OR TO WHICH IT IS PROVIDED UNDER THIS SECTION. THE DISCLOSURE OF THE FOREGOING DATA BY THE DEPARTMENT SHALL BE CONSIDERED, FOR PURPOSES OF SECTION THREE HUNDRED SIXTY-NINE OF THE SOCIAL SERVICES LAW, TO BE DIRECTLY CONNECTED WITH THE ADMINISTRATION OF MEDICAL ASSISTANCE FOR NEEDY PERSONS. 3. THE DEPARTMENT SHALL PROVIDE A REPORT ON THE RESULTS OF THE DEMON- STRATION PROGRAM, WITH INPUT FROM STAKEHOLDERS, TO THE GOVERNOR, THE DIRECTOR OF THE DIVISION OF BUDGET, THE STATE COMPTROLLER AND THE LEGIS- LATURE ON OR BEFORE DECEMBER THIRTY-FIRST, TWO THOUSAND TWELVE. THE REPORT SHALL INCLUDE FINDINGS AS TO THE DEMONSTRATION PROGRAM'S CONTRIB- UTION TO IMPROVING THE ABILITY OF THE DEPARTMENT TO VALIDATE DRUG REBATE CLAIMS AND RECTIFY DISPUTED CLAIMS. IN THE REPORT, THE DEPARTMENT SHALL OFFER RECOMMENDATIONS AS TO WHETHER THE DEMONSTRATION PROGRAM SHOULD BE EXTENDED, MODIFIED, ELIMINATED OR MADE PERMANENT. S 2. This act shall take effect immediately, provided, however, that the amendments to article 2-A of the public health law made by section one of this act shall survive the repeal of such article as provided in section 79 of part C of chapter 58 of the laws of 2005, as amended.