HOUSE BILL NO. 134 "An Act requiring Medicaid payment for scheduled unit dose prescription drug packaging and dispensing services for specified recipients." 8:37:21 AM Co-Chair Stoltze discussed housekeeping. Representative Costello pointed out to the committee a letter from Jason Hooley, Special Assistant, Department of Health and Social Services that addressed the fiscal note (copy on file). 8:38:16 AM WILLIAM STREUR, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES (via teleconference), summarized the letter. He relayed that the requirement for the department to pay for the delivery of the medisets on a weekly basis had been eliminated. He shared that the delivery costs had been a challenge for the department because they were formidable; if the providers of medisets decided to expand out into urban areas like Fairbanks or Juneau the costs would be very large. By removing the requirement and allowing for bi-weekly distribution the department was able to take the cost of the service down to zero. He said that the bill put in statute the requirement to continue to pay for medisets. He spoke to the proven efficiency and efficacy of medisets. He said that the program helped patients maintain integrity by ensuring proper dosage of medications. 8:41:28 AM Co-Chair Austerman asked whether any expansion in dollar value that the state could pay was included in the current Medicaid budget. Commissioner Streur replied yes. He noted that the growth factor was built in and assumed in the fiscal note. He believed that the growth could be sustained by the department. 8:42:53 AM Co-Chair Austerman asked if the regulations that controlled mediset confined the places where it could be distributed. He wondered if mediset was confined to Anchorage by regulation or because of the operational cost of doing business. Commissioner Streur replied that there would need to be enough of a market for the pharmacy to produce mediset because it required an additional cost to the business. He noted that some smaller pharmacies did provide the service for a small fee or none at all. He believed that it was a question on volume and the cost of setting up the capabilities to do mass medisets. 8:44:42 AM Co-Chair Austerman understood that the state and Medicaid split the cost of the medisets 50/50. Commissioner Streur replied that certain prescriptions were covered at a higher percentage. The fiscal note accounted for the departments acknowledgement that the bill. 8:45:39 AM Representative Wilson asked if the bill would cover all seniors with two or more prescriptions. Commissioner Streur replied that it would cover anyone who was eligible. The person had to have a requirement for a mediset and had to be thoroughly vetted. Representative Wilson understood that people who were not on Medicaid would have to pay for the program themselves. Commissioner Streur agreed. 8:46:53 AM Vice-Chair Neuman asked how much the program was currently costing the state. Commissioner Streur deferred to the Director of Healthcare Services. MARGARET BRODIE, DIRECTOR, HEALTH CARE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES (via teleconference), replied that the state currently paid $375 thousand annually for mediset packaging. Vice-Chair Neuman asked if the fee was a fee that was typically covered in nationwide dispensing fees. Commissioner Streur replied no. Vice-Chair Neuman surmised that the program would be unique to Alaska. Commissioner Streur replied other states were beginning to address the issue. Vice-Chair Neuman asked if the department had the ability to manage the cost fees and structures of the program. Commissioner Streur yes. Vice- Chair Neuman concluded that if it were to be written in statue the state would have the same ability. Commissioner Streur said that the current bill version reinstated management to the department. Vice-Chair Neuman queried the current dispensing fee per month. Ms. Brodie replied that the current dispensing fee per person, per month was $12.12. Vice-Chair Neuman asked what the mediset fee was per prescription. Commissioner Streur replied $5 per person, per month. Vice-Chair Neuman expressed concern regarding expanding healthcare costs. Commissioner Streur countered that if the program would save the state the additional costs caused by someone improperly using medications. Vice-Chair Neuman understood that by putting it into statute, instead of regulation, the legislature would not be able to reduce the cost of the program. Commissioner Streur replied that the legislature could potentially make cuts in the department's budget. He believed that if the department was asked to make cuts, medisets would not be a priority. He highlighted that the way that the legislation was written did not change anything that the department was currently doing. 8:52:33 AM Representative Munoz understood that mediset was paid only to certain pharmacies that reached a certain volume in dispensing; the bill would open up payment to all pharmacies. Commissioner Streur replied that the bill did not speak to the issue. He noted that the regulations required that 75 percent of prescriptions must be mediset before they would qualify for the mediset fee. He relayed that the bill did not speak to a minimum number or percentage. Representative Munoz asked if the $5 fee remained for the new pharmacies that were dispensing, in addition to the $12 fee. Commissioner Streur reiterated that that was in regulation. The bill did not speak to the issue. 8:54:23 AM Co-Chair Austerman understood that there could be restrictions on businesses based on the percentage of mediset business it generated. Commissioner Streur replied in the affirmative. Co-Chair Austerman asked whether the regulation was being proposed or if was already active. Commissioner Streur replied that it was under proposal. Co- Chair Austerman queried any concerns held by the department on the issue. 8:55:25 AM Commissioner Streur stated that the department believed that medisets were an important part of health and safety for vulnerable adults and children; therefore, it was the departments believe that they should be accessible on a statewide basis to a wider variety of pharmacies. He admitted that the rate structure needed further examination before he could provide a conclusive answer. He said that he would report back to the committee in order to clarify further. Co-Chair Austerman felt that the regulation would be a way to control cost; only larger pharmacies in large communities would benefit. Representative Guttenberg shared that there were two pharmacies in Fairbanks that provided medisets, but that medisets were not their primary business. He said that the 75 percent limit would prevent some pharmacies from expanding even marginally. He wondered if that had been the intent of the regulation. 8:57:09 AM Commissioner Streur thought that he needed to study the intent of the regulation more deeply. He said that the regulation was not restricting any pharmacy from dispensing a mediset rather it would restrict a pharmacy from receiving a mediset fee. He thought if the efficacy and safety was apparent, it was incumbent of the state to look to expanding mediset to the extent that it could. Representative Guttenberg relayed that under the description of a qualifying pharmacy, the last qualifier, number 5: "Delivering prescriptions using the most cost effective method…" Representative Guttenberg thought that pharmacies could be using the most cost effective method while not charging the least amount of money. He thought the language gave the department a lot of authority for regulation. Commissioner Streur stated that the language spoke only with regard to the delivery of the medisets. 8:59:22 AM Vice-Chair Neuman asked about the 75 percent rule. He understood that the rule benefited smaller communities because it would allow more pharmacies to participate in the program. He asked whether the 75 percent rule had been removed, and if so, why it was removed. Commissioner Streur offered to provide the information at a later date. He added that the 75 percent rule was already in the proposed regulation, but was not yet in statute. 9:00:56 AM Representative Costello understood that currently and pharmacy that wanted to provide the service could, the question was whether or not they would be reimbursed for the service. She believed that the regulation review process could be followed. She asserted that the bill was intended to be a cost savings measure. She appreciated the home setting as a less expensive solution to the rising cost of medical care. A registered nurse dispensing the medication was more costly to the state. She saw the bill as a compassionate method to allow more individuals to receive in-home care, surrounded by their family. 9:04:10 AM Vice-Chair Neuman MOVED to REPORT CSHB 134 (FIN) out of committee with individual recommendations and the accompanying fiscal note. Co-Chair Stoltze OBJECTED for discussion. Vice-Chair Neuman appreciated the effects of the mediset program even if having the medisets delivered did not ensure that the medications would be taken correctly. He expressed concern with the growing cost of healthcare in the state. He believed that in 10 years the state's Medicare costs would be $3 billion or higher. He feared that the state would be unable to continue to pay for the program in the future and believed that the costs would need to be measured against other senior benefits when creating future budget. He warned that the cost of pharmaceuticals would be determined by the pharmaceutical companies and not the state, which meant the state would have trouble controlling the cost of the program. 9:08:05 AM Representative Wilson pointed out Page 2, line 13, which laid out the 5 eligibility standards. She understood that a person living in their home would not be covered. She believed that the program was a good idea but thought that it should be open to all seniors and include all pharmacies. 9:09:55 AM Representative Guttenberg thought that the medisets could inform paramedics on a scene as to which medications a patient had, or had not, taken. He believed that the small cost containment efforts could make a huge difference in the big picture. 9:11:48 AM Representative Gara shared his introduction to the mediset program while visiting a senior center. He stressed that the fiscal note could not reflect the savings to the state from someone not having to be hospitalized because that could not be predicted. He believed that Commissioner Streur had worked harder than any other commissioner in the state at trying to find ways to save money. He had faith that the zero fiscal note would prove to be true. 9:14:09 AM Representative Thompson thought that there should be further discussion on the 75 percent rule. He said that pharmacies in the smaller areas were providing the service for zero cost. Representative Costello replied that the 75 percent requirement was in regulation and was currently under by the commissioner. She said that the bill would put into statute a program that was valuable to the citizens of Alaska in terms of cost savings and quality of life. The regulation being considered by the department was not a part of the legislation. 9:16:59 AM Representative Thompson thought that the 75 percent rule would drive the business to one pharmacy. He reiterated discomfort with the regulation. Co-Chair Stoltze appreciated the process that the bill had traveled through to its current iteration. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. CSHB 134 (HSS) was REPORTED out of committee with a "do pass" recommendation and with one previously published zero fiscal note: FN 1 (DHS). 9:21:09 AM AT EASE 9:23:08 AM RECONVENED