KPhA Weekly Pharmacist Legislative Update
Kentucky Legislative Update
February 10,2012
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Grassroots activities continue

Be sure to continue your contacts with your legislators regarding bills that will directly impact you as a pharmacist. For information on the bills and contact information for your legislators, refer to the KPhA Grassroots Advocacy Alert from 2/8/2012. Like us on Facebook for updates.

 

Legislative Update

Redistricting still is the issue of the day in Frankfort. Earlier this week the Franklin Circuit Court ruled that the redistricting plan adopted earlier this Session was unconstitutional. The Court also extended the filing deadline for legislative office until today. Yesterday, the Legislative Research Commission announced that they would appeal the ruling so the status of redistricting is still up in the air.

 

The issue of prescription drug abuse is heating up as well. Last Thursday, House Speaker Greg Stumbo (D-Prestonsburg) filed a comprehensive anti-prescription abuse bill (HB 4). On Monday, Governor Beshear held a press conference to announce his support for the proposal. He was joined by legislators of both parties as well as the Attorney General. The House is expected to act on the measure quickly, possibly beginning hearings as early as next week.

 

House Passes Amended Copayment Bill

The House passed an amended version of HB 262 which requires Medicaid managed care organizations (MCOs) to charge copayments for drugs. As originally written, the bill would have required Medicaid and the MCOs to charge specified copayments and add the amount of the copayment to pharmacy reimbursement. The bill was amended by the committee after it was discovered that federal law does not allow Medicaid to add the copayment amount to pharmacy reimbursement. The House Banking and Insurance Committee also amended the bill to exempt PASSPORT, the managed care organization serving Jefferson County and 16 nearby counties, since that organization is operating under a federal waiver and has established its own copayment structure. The amended bill also exempts any MCO that was charging a copayment as of January 1 of this year.

 

The bill as it passed the House requires any MCO that was not requiring a copayment for drugs as of January 1, 2012 to implement a copayment structure of at least $1 for generics, $2 for preferred name brand drugs and $3 for non-preferred products. The copayment would be retained by the pharmacy in addition to the current reimbursement paid by the MCO.

 

HB 262 also contains a provision to exempt inter-pharmacy transfers of drugs from the state's drug wholesaling rules. This provision is identical to another bill introduced this session (HB 116).

 

The bill contains emergency clause to the measure making it effective immediately upon the Governor's signature should it pass both the House and the Senate. The bill now moves to the Senate for consideration.

The Senate Health and Welfare Committee began consideration of a similar measure this week (SB 137). The Senate proposal, however, contains a provision that requires managed care organizations (MCOs) providing Medicaid services to provide separate contracts to each pharmacy in their network. This language is designed to give pharmacies leverage in negotiating contracts with the MCOs. In the transition to managed care last year, two of the MCOs serving Medicaid "folded in" pharmacy providers into existing contracts. As a result of this action, pharmacies were not given the opportunity to opt out or to negotiate the terms of the contract. The committee did not vote on the measure.

 

Panel Approves Generic Drug Pricing Bill

The Senate Health and Welfare Committee approved SB 125 at its Wednesday meeting. The bill addresses the use of "maximum allowable cost" (MAC) pricing methodologies by pharmacy benefit managers (PBMs). SB 125 specifies that PBMs may only use MAC pricing when three or more generic products are available in the market. It requires PBMs to notify pharmacies how MACs are calculated and provides for notification when MACs are implemented or discontinued.

 

A key provision of SB 125 is a requirement that PBMs update their MAC prices weekly. This provision ensures that pharmacies will be adequately reimbursed for generic drugs as prices change in the marketplace. PBMs will also be required to establish an appeals process and respond to appeals in a timely manner.

 

SB 125 also establishes that PBMs must provide pharmacies with a "generic effective rate" in their contracts. This rate would provide a benchmark for pharmacies to evaluate the contract and to make decisions on whether or not to participate.

 

Finally, the bill requires managed care organizations (MCOs) serving Medicaid recipients to disclose their MAC prices to pharmacies in their networks. Fee-for-service Medicaid has historically made MAC price lists available to pharmacies but the MCOs have been reluctant to disclose pricing even to contracted pharmacies.

 

House Poised to Hear Prescription Drug Abuse Bill

It appears that HB 4, a comprehensive anti-prescription drug abuse bill, is on the fast track in the House. House leaders gave the bill "readings" on the floor this week signaling their desire to take quick action on the measure. Hearings in the House Judiciary Committee could begin as early as next week.

 

The bill, sponsored by House Speaker Greg Stumbo (D-Prestonsburg), makes significant changes to the state's electronic prescription drug reporting system (KASPER). It transfers the responsibility for maintaining the KASPER system from the Cabinet for Health and Family Services to the Office of the Attorney General. The bill calls for funding of the system with a fee levied on all entities that have the authority to dispense controlled substances which would include most prescribers and all pharmacies. HB 4 also requires pharmacies to report data to KASPER daily as opposed to the current weekly reporting interval.

 

The bill grants the Attorney General broad authority with regard to the use of KASPER data and allows the data to be shared with law enforcement agencies to a much larger extent than currently permitted and imposes restrictions on pain clinics.

 

The pharmacy community has submitted written comments on the proposal and will take an active role as action begins on the bill.

 

Electronic Prescribing Bill Introduced

A bill designed to provide guidelines for e-prescribing was introduced this week by Senate Health and Welfare Committee Chairman Julie Denton (R-Louisville). SB 144 requires that within 24 months of the development of standards for electronic prior authorization, e-prescribing systems shall have the capability for a prescriber to obtain prior authorizations electronically. It also prohibits e-prescribing systems from precluding a prescriber from selecting a particular pharmacy or drug product. The bill contains a provision preventing the use of an e-prescribing system that would limit the patient's choice of pharmacy.

 

Pharmacy Briefs:

 

  • Representative Addia Wuchner (R- Florence) filedHB 377 on Wednesday. The bill restricts the substitution of "tamper-proof" opioid drugs.
  • A bill to restructure the Cabinet for Health and Family Services was filed this week by Senator Julie Denton (R-Louisville).SB 146 creates a Board to oversee the Cabinet and calls for the Board to employ the cabinet secretary and deputies.

Kentucky Pharmacists Association
1228 US 127 South

Frankfort, KY 40601

502-227-2303

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