Legislature(2001 - 2002)
02/01/2002 03:20 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 318-UNIFORM PRESCRIPTION DRUG CARD Number 0884 CHAIR MURKOWSKI announced that the next order of business would be HOUSE BILL NO. 318, "An Act relating to a health insurance uniform prescription drug information card; and providing for an effective date." AMY ERICKSON, Staff to Representative Lisa Murkowski, Alaska State Legislature, speaking as the committee aide, presented HB 318 on behalf of the House Labor and Commerce Standing Committee, sponsor. Ms. Erickson informed the committee that HB 318 was introduced at the request of the Alaska Pharmaceutical Association. Similar legislation has been enacted in 19 other states, and is in progress in several other states. This legislation is intended to provide practical guidelines for organizations producing member identification (ID) cards, and to provide consistent standards for those using IDs. She added that the waiting time for consumers in pharmacies will be reduced, and pharmacists will have the information they need at their fingertips. MS. ERICKSON said the card contains basic but essential information such as the name or logo of the card issuer. Implementation of the uniform card will greatly aid pharmacists and improve patient care by minimizing confusion. She offered that the uniform card will also eliminate unnecessary paperwork and decrease administrative burdens and processing claims. Number 1002 MS. ERICKSON informed the House Labor and Commerce Standing Committee that there is a proposed committee substitute (CS), Version J. Number 1067 REPRESENTATIVE ROKEBERG moved to adopt the proposed CS for HB 318, version 22-LS1061\J, Ford, 1/21/02, as a work draft. There being no objection, Version J was before the committee. REPRESENTATIVE ROKEBERG asked for an explanation of the differences [between the proposed uniform card and the current prescription cards]. Number 1090 MS. ERICKSON explained that the card has been fine-tuned to look similar to the National Council for Prescription Drug Program's pharmacy card. Number 1180 GUY BELL, Director, Division of Retirement & Benefits, Department of Administration, said that his division administers the health insurance for Select Benefits for approximately 5,000 state employees, and for approximately 23,000 retirees from the public employees' and teachers' retirement systems. He stated that the Division of Retirement & Benefits uses a prescription drug card. He said, "Based on conversations we've had with ... the staff, we believe our prescription drug card complies with the standards, and we have submitted a zero fiscal note associated with the legislation." REPRESENTATIVE HAYES asked Mr. Bell if he sees any downside to HB 318. Number 1122 MR. BELL replied in the negative. REPRESENTATIVE ROKEBERG said that he is surprised to hear that. He asked whether "the card we have that we carry around with us," although it looks different, meets the requirements. Number 1240 MR. BELL said yes. REPRESENTATIVE ROKEBERG asked what the outcome would be if the state decided to make a change in the formulary. MR. BELL deferred to a member of his staff. Number 1270 JANET PARKER, Deputy Director, Division of Retirement & Benefits, Department of Administration, asked if the question was in regard to what would happen if there were any formulary changes. REPRESENTATIVE ROKEBERG restated his question: What if the third-party administrator under the direction of the state changed the formulary? MS. PARKER said that the state doesn't actually use a formulary, so "you're allowed to use any drugs you want, and maybe that's the issue...." She said that over 90 percent of the pharmacies participate in the state's card program. She asked whether this is designed to address formularies. REPRESENTATIVE ROKEBERG said that he eventually wants to address that issue, but if the state doesn't have a formulary, then it's moot. Number 1344 ERIN CAREY BYRNE, Executive Director, Alaska Pharmaceutical Association, testified via teleconference. She said that the Alaska Pharmaceutical Association wants to become uniform throughout the Lower 48. She said that similar legislation has been enacted quickly in 19 other states in order to achieve the uniformity. She said, "We are just simply complying with ... different language that's already been drafted in other states ... to keep the model and the template uniform." Number 1388 MS. BYRNE stated that she thought Ms. Erickson did an excellent job of summarizing the intent of HB 318. She said that everyone can appreciate the time spent waiting behind the counter [at a pharmacy], not waiting for a prescription to be filled but waiting while the pharmacist is gathering simple information that should be on the front of the card. She indicated that statistically 70 percent of a pharmacist's time is spent trying to gather information. REPRESENTATIVE ROKEBERG asked Ms. Byrne if she could verify that the state's card is consistent with the ID card that would be required for [HB 318]. He specified that he was referring to the current card that's issued by Aetna as a third-party administrator to the Select Benefits group of Alaskan employees and to retirees. MS. BYRNE said that she would have to look at the Aetna card specifically, but most of the major [insurance] carriers already have that information on the card. Number 1480 ROGER PENROD, President, Alaska Pharmaceutical Association, testified via teleconference. He responded to Representative Rokeberg's question and said that the Aetna card does contain all of the necessary information that is required by the proposed legislation, as do most of the Blue Cross of Washington and Alaska cards. He said that difficulties arise when pharmacists run into people from "Outside" who have cards from [an insurance] carrier that does not have the required information on its cards. MR. PENROD said that there is a nationwide trend showing that [a uniform prescription drug card] is "a viable aspect," and allowing [the Alaska Pharmaceutical Association] to have this type of legislation will only make its job easier. He added, "The real winner is the guy on the other side of the counter because it reduces their wait time. It does allow us to provide for them that pharmaceutical care which has become so prominent in this last decade." MR. PENROD added that historically pharmacy has primarily been a "cash-and-carry thing," and only in the last 15 years has insurance become a big player. He said, "Ten or twelve years ago, it might have made up 10 percent of our business, whereas today it makes up in excess of 80 percent." He said that because of the increase, from time to time a pharmacist may run into billing problems, and that is what [he hopes] HB 318 will help to alleviate. Number 1603 REPRESENTATIVE ROKEBERG asked Mr. Penrod, "What if there's a change in the formulary on an annualized basis? How would that be impacted by the card?" MR. PENROD said that it would not affect the card because the formulary is an agreement between "your insurer, which is the state, and the third-party carrier." He said, "If they want to try to minimize dollar amounts by reducing the choices of, for example, non-steroidal anti-inflammatory agents, ... they might want to ... phase those out and say, 'Let's use these other drugs.' But it doesn't affect the card at all." Number 1650 REPRESENTATIVE ROKEBERG inquired as to whether the numbers on the card would indicate what type of formulary existed. MR. PENROD said no. REPRESENTATIVE ROKEBERG asked how a pharmacist would know whether or not an insurance company's formulary would cover the prescription being written. He clarified that he was referring to one of the number of companies that are licensed to do health insurance in Alaska. MR. PENROD said that's when they begin to "practice medicine", which is a little beyond their scope. He explained that a pharmacist gets a rejected claim back through his/her computer saying that the particular drug - the "NDC, meaning National Drug Code, which is an identifier for that drug" - is not covered, "and they don't give any explanation." Or, in some cases, there are those drugs that have limits as to the amount that is covered. REPRESENTATIVE ROKEBERG asked Mr. Penrod if he is a pharmacist. MR. PENROD said yes. REPRESENTATIVE ROKEBERG asked Mr. Penrod if he is aware that almost every company has a different formulary. Number 1721 MR. PENROD said that fortunately Alaska has not been affected by that too much. REPRESENTATIVE ROKEBERG said that he doesn't understand why this particular card is going to make that kind of difference. MR. PENROD stated that sometimes he gets a card without an individual identification number or a group plan on it, and the card says, "For pharmacy claims call this 800 number." REPRESENTATIVE ROKEBERG asked how the communication time would be reduced from the current average of 20 minutes [for phone verification]. MR. PENROD said that [the pharmacist] wouldn't have to make any phone calls because that information would already be on the card. Number 1805 REPRESENTATIVE ROKEBERG asked Mr. Penrod if he has run into any difficulties as far as the different formularies from different health insurance underwriters. MR. PENROD said that he hasn't had many problems with formularies. REPRESENTATIVE ROKEBERG said that some companies will cover a certain drug that another company won't. He asked, "How do you know the distinction? Is that when you make that contact with them, or [do] you know because of prior experience?" MR. PENROD said that sometimes a pharmacist will know from prior experience. He added that when an electronically submitted claim comes back and says [a specific drug] is not covered, the pharmacist tells the patient that this particular drug is not covered, and asks, "How would you like us to proceed?" REPRESENTATIVE ROKEBERG asked if the electronically submitted claim is done through the Internet. MR. PENROD said, "Just through the telephone lines." Number 1850 MS. BYRNE said this card is simply a uniform identification card for insurance carriers. She stated that "the electronic transmittal will take place closed-circuit." She compared the proposed uniform prescription card to a state driver's license where each state has a driver's license number somewhere on the front of the license; in other words, it provides uniformity. She said that the formulary is completely specific to the carrier itself and that's all handled electronically. Those [pharmacists] who have been around for a while certainly know some of the major carriers and what they will cover and will not cover. She said, "The smaller carrier that we don't see often up here ... presents a problem." Number 1902 REPRESENTATIVE ROKEBERG asked what happens when there is a tourist or visitor from outside [Alaska] and he or she doesn't have the uniform card. MR. PENROD said that if he or she doesn't have an insurance card, then it's pretty cut and dried; the person gets to pay cash. If the person has an insurance card with inadequate information, then it requires a telephone call. Number 1926 CHAIR MURKOWSKI asked if she understood correctly that right now there are 19 states that have signed on to some kind of uniform template, with the goal being that one could travel from Wisconsin to Alaska and would pretty much have the same basic information on the front of the card. MR. PENROD said that was correct. Number 1950 LIS MERTEN, Director, North West Region, National Association of Chain Drug Stores, testified via teleconference. She addressed the question regarding formularies and said that having the card in Alaska and having it standardized will cut down on the amount of time that the pharmacists in Alaska are going to have to spend with someone from a state that hasn't passed a law and doesn't have a standardized card. She said that currently pharmacists have to deal with multiple people coming in, and the pharmacists have to stop and make phone calls. She asked if this answers Representative Rokeberg's question. REPRESENTATIVE ROKEBERG said yes. Number 2000 MS. MERTEN thanked the committee for introducing HB 318, and said that [the members of the National Association of Chain Drug Stores] support HB 318 with some minor changes. She said that currently in Alaska, [43 percent] of all prescriptions are paid for by a third party. [Ms. Merten later clarified by phone that this does not include Medicaid.] She said that pharmacists currently spend 20 percent of each working day dealing with problems just related to processing prescription drug claims. She said that the pharmacists would much rather be spending their time dealing directly with patients doing counseling and helping them comply with their drug regimen. She noted that the bill asks simply that the information needed to process the claim be included on the card, and she said that is all her organization is asking for. She complimented the committee and the drafters for having the director of [the Division of] Insurance be a big part of the implementation of the legislation. MS. MERTEN said that [the National Association of Chain Drug Stores] would like to see a couple of changes as [HB 318] goes through the process. She said, "We'd like the bill clarifying who has to comply with this law, and we'd also like to clarify some language for the insurance (indisc.)." She said that she doesn't anticipate that [insurance companies] would have to issue new cards every time there is a little change. She offered her understanding that in Alaska a sticker is used on the driver's license [to note changes], for example. Ms. Merten said this certainly would be an acceptable format that the pharmacists would be very comfortable with if the information were to change. She added, "We're trying to make this as easy on the insurance as possible and not make this ... tough for them to comply." Number 2096 CHAIR MURKOWSKI thanked Ms. Merten for her testimony and explained to her that it is the policy of the House Labor and Commerce Standing Committee to have legislation "practically perfect" before moving it from committee. She inquired whether one could just put a sticker on a card and have it be reissued, or if that would be problematic. In terms of who has to comply, she thought it was any health benefit plan that provides for prescription drugs or devices and that issues or uses cards. She said she thought that was relatively clear. She asked how Ms. Merten would make that more specific. Number 2140 MS. MERTEN apologized for not knowing the insurance laws in Alaska and said, "If these are included, then [it's] fine the way it is." She emphasized the need to ensure that included in that broad language [describing health care insurers] are health benefit plans, health care insurance plans, managed care entities, and third-party administrators. CHAIR MURKOWSKI said that she doesn't have the answer in terms of whether a health benefit plan in fact includes all those mentioned. She said that the committee should ask one of the experts waiting to testify. MS. MERTEN said she had hoped that when that language was added it would be broad enough to incorporate all of those entities, and she isn't sure that it is. Number 2190 BARRY CHRISTENSEN, Chair, Legislative Committee, Alaska Pharmaceutical Association (AKPhA), testified via teleconference. He stated that both he and his father are practicing pharmacists, and one of the most frustrating things they deal with in the day-to-day pharmacy practice is someone handing them a card that has information on different areas of the card. He expressed that this is a standardization that [he thinks] is going to be the standard for the United States across the line, and it would be nice to have Alaska [adopt] it sooner rather than later. Number 2226 REPRESENTATIVE HAYES said that it sounds as if this type of legislation is going through one state at a time; he asked why the people who introduced this legislation first didn't introduce it at the federal level. He commented that it would have been a lot easier to pass it on the federal level instead of going state by state. CHAIR MURKOWSKI said that she will direct the question to Mr. Christensen because in his letter he stated that new federal guidelines issued under the Health Insurance Portability [and Accountability] Act (HIPAA) will require insurers to issue new prescription cards in the very near future. MR. CHRISTENSEN said it is his understanding that the pharmacy associations have tried to work with the insurers and the [National Council for Prescription Drug Programs (NCPDP)] to try to get the insurers online so [a uniform card] is voluntary rather than a state or federal mandate, but it just hasn't happened very fast. He mentioned that it has been in the works for about four years. Mr. Christensen said that "HIPAA really doesn't ... require the issuance of prescription cards with the fact that they're out there." He said that currently most of the prescription drug cards are identified by a social security number (SSN) and he has been told that in the future the SSN will probably not be on the card anymore due to patient privacy protection. He said, "I wish that it would come down federally - we wouldn't have to be here - but the fact is that it hasn't come down, so state by state, ... it seems like ... we're working through it." Number 2304 REPRESENTATIVE ROKEBERG said that states have primacy on insurance and this is a health insurance issue. Number 2334 MIKE WIGGINS, Vice President, National Accounts, Aetna, testified via teleconference. He said that he's glad to hear that there's no problem with the State of Alaska ID card and it appears to be working. He said that he has unfortunately spent most of his time working on the prior version of HB 318 and not Version J because he was told it was the most current. He said: Based on our review of that, we have some questions about the bill; and we're not sure that the current ID card, as it stands today, will meet that because [of] the bill. We spent most of today also working with the health care identification card pharmacy ID ... paper put out by the National Council for Prescription Drug Programs. First of all, just a couple of general ... comments. The ID card that goes out is not just specifically for prescription drugs. It is for medical. It is a piece of document that [has] some pretty pertinent information that is not just specific to prescription drug plans but is also our medical card. MR. WIGGINS said that many people have two ID cards and the state has a single ID card. He again apologized for not working off of Version J and commented that in the state of Alaska it appears that the card would not apply to federally funded plans that have (indisc.) prescription drug management programs, like Medicaid. So as it's written today, it's very narrowly defined as to whom it would actually affect. He said although many states have adopted this [type of legislation], it's been different in every single state. He expressed that Aetna does support a standardized ID card, but feels that it can it only be done at the federal level. Mr. Wiggins explained that having these different bills passed in several states is making Aetna have to comply with [those laws] and make identification cards, for both medical and prescription drugs, for 19 different states. MR. WIGGINS said that Aetna is currently processing claims for approximately 60,000 members in all 50 states and a number of foreign countries; [the members] don't seem to be having any problems with the card, which [Aetna thinks] doesn't comply with the current bill. Number 2481 CHAIR MURKOWSKI asked how the card doesn't comply. MR. WIGGINS asked if the committee would like to hear an item- by-item description. CHAIR MURKOWSKI said yes. TAPE 02-9, SIDE B Number 2448 MR. WIGGINS offered to submit written comments after he had received Version J. CHAIR MURKOWSKI said that would be helpful. She asked him for his fax number so that he could receive a copy of Version J quickly. CHAIR MURKOWSKI asked how radically the various state requirements differ. Number 2401 JACK McRAE, Blue Cross Blue Shield of Alaska, testified via teleconference. He said that Blue Cross Blue Shield has worked with both Washington and Oregon on similar legislation. It has not been specific regarding what should be on the card; rather, it has given the authority [to] the regulatory agencies - "which you have in your bill, 'the director shall' regulate" - to then work with the pharmacy groups and the carriers to establish what should be on the card. MR. McRAE said that he isn't working off of Version J either, and mentioned that [Blue Cross Blue Shield] has some concerns regarding what is listed as definitions for different items. He informed the committee that Blue Cross Blue Shield is not opposed to [HB 318] and just wants to make sure that what happens is as uniform as possible in Washington, Oregon, and Alaska. He stated that [Blue Cross Blue Shield] has 85,000 members in Alaska; if [HB 318] would change the [prescription] card, it would require sending out 85,000 new cards. He said, "We would like to work with the committee on ... this issue. But we're not opposed to the bill itself; we're just concerned about some of the definitions themselves in the bill." Number 2331 CHAIR MURKOWSKI requested that Mr. McRae do the same thing that Mr. Wiggins is doing, which is get a copy of Version J and send the committee his written comments. CHAIR MURKOWSKI said that she is going to hold HB 318 over until the committee receives the written comments. REPRESENTATIVE ROKEBERG addressed the issue of who is to qualify. He said it seems to him that even Medicaid recipients should have a card, but right now he isn't sure "a health benefit plan" is defined in the statute. He addressed this issue to Katie Campbell. Number 2282 KATIE CAMPBELL, Actuary L/H, Division of Insurance, Department of Community & Economic Development, said that she also does not have a copy of Version J. REPRESENTATIVE ROKEBERG said, "A health benefit plan that provides" is what is in [HB 318] right now. He asked if there is currently a definition of that in statute. MS. CAMPBELL noted that "health benefit plan" is defined in Chapter 54 [AS 21.54.500], which applies generally, and it's one of the definitions that went in "when we made all of the HIPAA changes." Number 2253 REPRESENTATIVE ROKEBERG asked if that would include any Medicaid recipients. MS. CAMPBELL said that the definition is written in terms of employee welfare benefit plans, so it's very general, and Medicaid probably wouldn't qualify. REPRESENTATIVE ROKEBERG said that Medicaid should be included. He referred to page 1, lines 5-7, Version J, which read in part, "A health benefit plan that provides coverage for prescription drugs or devices and that issues, uses, requires, or reissues a card". He indicated that if [Medicaid] didn't use a card, then it wouldn't be subject to this provision. Number 2234 REPRESENTATIVE ROKEBERG asked Mr. Wiggins if there would be any impacts relating to the privacy issue and if he was familiar with the so-called Alaska patient's bill of rights [which he had sponsored]. MR. WIGGINS said that he has recently been working with the State of California on the privacy issue, and [California] has basically eliminated the [social security] number. He said, "That's going to make a requirement for major re-writes of eligibility systems that are coming off the payroll systems. It's going to cause a big change in the software for doctors [office's] who use [social security numbers] as identifiers - plus we're going to have to come up with ... encrypted software to work with that." Mr. Wiggins emphasized that privacy is a big issue nationwide regarding ID cards. He said that ID cards are being looked at for confidentiality, and those same cards are being used for prescriptions, "so they kind of compound the issues." Number 2167 REPRESENTATIVE ROKEBERG asked Mr. Wiggins to "check with our benefits people up here ... because there's several bills that have been floating around about social security numbers ... that I'm concerned about, as well as the patient's bill of rights and the other privacy issues." MR. WIGGINS said that [Aetna] is not against a standardized card; it's just that it is having to comply with a lot of different bills being enacted in different states. He asked, "Who regulates them? Who's compliant?" He requested further explanation of the bill. Number 2115 MR. McRAE said, "At one time under the HIPAA rules there was going to be a unique identifier for every individual that had health care throughout the nation, and that's been thrown out now." He said that it was decided to not do this at a congressional level. He offered that in the future there might be a different identifier other than social security numbers. REPRESENTATIVE HAYES asked, "Why haven't any other companies looked at federal legislation and then just had the legislation do a reciprocity format like the bills that we were looking at last year?" He said that this would have been the easiest way to go about doing this. MR. WIGGINS said that [Aetna] insures 18 million people throughout the country and is presently using a somewhat standard card for all 18 million people throughout the country. Number 2057 MR. McRAE commented that Blue Cross Blue Shield's card in all the states, generally speaking, fulfills the requirements of what's in the legislation. He said his concern is that if it changes a little bit, the company will have to send out another 85,000 new cards. He restated his willingness to work through some of the definitions pertaining to the legislation. CHAIR MURKOWSKI said she doesn't think that every time there's a change in the program, a new card has to be reissued. She offered that when it's time for the card to be reissued, then the appropriate changes would be made. She said, "We'll make sure that it basically says everything that we think you want it to say." Number 2012 MR. McRAE stated that Blue Cross Blue Shield does not reissue at any set time, but rather when the data changes on the card for information purposes. MR. WIGGINS said that Aetna does the same. He stated that Aetna has created a member service whereby people can request cards when they lose them. New members receive a new ID card. Number 1984 CHAIR MURKOWSKI announced that she is going to hold [HB 318] over until the committee receives the written comments from Aetna, Blue Cross, and anybody else who would care to weigh in on Version J.