HB 134-MEDICAID PAYMENT FOR MEDISET PRESCRIPTION  4:37:55 PM CHAIR HIGGINS announced that the final order of business would be HOUSE BILL NO. 134, "An Act requiring Medicaid payment for scheduled unit dose prescription drug packaging and dispensing services for specified recipients." [In front of the committee was Version 28-LS0303\Y, adopted as the working document on March 28, 2013.] REPRESENTATIVE KELLER moved to adopt the proposed committee substitute (CS) for HB 134, labeled 28-LS0303\R, Mischel, 4/1/13 as the working document. REPRESENTATIVE PRUITT objected for discussion. 4:38:24 PM CHARLES GUINCHARD, Staff, Representative Mia Costello, Alaska State Legislature, explained that the changes for Version R included: Section 1 AS 47.01.031(a). This section has been amended by adding legislative intent language guiding the department's eligibility regulations for this program. This language was added to ensure that in the event that Medicaid services were to expand, the scope of individuals eligible for this program would remain the same. This language appears as (1)-(5) in paragraph (a), page 1, line 12. MR. GUINCHARD referenced his earlier testimony for the bulleted list of current regulations, and pointed out that similar language had been requested for this change. He noted the second change: Section 1 AS 47.01.031(c). This section has been amended by adding language to clarify that non-local transportation of medication compliance packaging is by mail or package delivery service. MR. GUINCHARD explained that this addressed concerns for the earlier limitation to USPS. He commented on the third change for Version R: Section 1 AS 47.01.031(e)(2). The definitions of "units of use" has replaced the previous definition of "medication compliance packaging". MR. GUINCHARD said that the proposed bill had been updated accordingly to reflect this new definition. He declared that this concluded the changes for proposed Version R. 4:41:27 PM REPRESENTATIVE KELLER said that he was "painfully aware of the rising costs of health care." He declared that he would find it difficult to vote for any expansion of Medicaid services. JON SHERWOOD, Medicaid Special Projects, Office of the Commissioner, Department of Health and Social Services, said that dispensing fees and mediset fees were already being paid by Medicaid. He stated that the proposed bill provided a statutory requirement to continue with this payment, and that the increased costs had been noted in the fiscal note. He said that criteria in the proposed legislation defined qualified providers, which were somewhat different than current regulation. He declared that it was unclear whether this would expand the number of qualified providers. 4:43:32 PM The committee took a brief at-ease. 4:45:23 PM REPRESENTATIVE KELLER asked if there was intent to hold the bill. CHAIR HIGGINS replied that he intended to hold it until Thursday [April 4]. REPRESENTATIVE KELLER emphasized that he wanted a fiscal note for the cost increases. He declared that it was necessary to be cautious of increases because of the rising health care costs. He asked if there would be a re-evaluated fiscal note. MR. SHERWOOD said that the changes to Version R would not significantly alter the fiscal note. 4:46:59 PM REPRESENTATIVE KELLER asked if the proposed changes would make it easier for smaller pharmacies to qualify as mediset pharmacies. MR. SHERWOOD replied that, currently the requirement was for a percentage of volume to qualify, and that the current proposed bill did not require that volume. He shared that he was not aware if the other requirements were equally limiting. 4:48:10 PM REPRESENTATIVE KELLER asked for assurance that the fee would reflect in statute, so that businesses could respond. MR. SHERWOOD, in response to Chair Higgins, explained that the fiscal note for $414,000 was for the partial year in 2014, which was then increased to $1,657,000 for the following fiscal years, 2015-2019. He pointed out that federal funding would pay half. 4:50:03 PM CHAIR HIGGINS asked to clarify that Version R would not change the cost estimate. MR. SHERWOOD said that he would provide any necessary fiscal note updates on Thursday, April 4. 4:50:44 PM REPRESENTATIVE KELLER asked if the mediset program would continue to be paid regardless of passage of the proposed bill, and he asked to clarify the cost increase. MR. SHERWOOD explained that the language of the proposed bill would increase the frequency of the dispensing fee, or an equivalent increase in the combined dispensing and mediset fee. 4:51:59 PM REPRESENTATIVE TARR asked if it was possible to address the proposed amendment. 4:52:42 PM REPRESENTATIVE PRUITT removed his objection to Version R. 4:52:58 PM REPRESENTATIVE TARR moved to adopt Amendment 1, labeled 28- LS0303\Y.1, Mischel, 3/28/13, which read: Page 2, following line 21: Insert a new subsection to read: "(e) The department may apply a volume discount to a fee established under (b) of this section (1) if a qualified pharmacy dispenses a high volume, as defined by the department, of prescriptions that require medication compliance packaging for an individual patient; or (2) based on the total number of prescriptions requiring medication compliance packaging annually dispensed by the pharmacy." Reletter the following subsection accordingly. REPRESENTATIVE KELLER objected for discussion. REPRESENTATIVE TARR said that, as cost containment was a priority for Medicaid programs, she had concerns with the fiscal note. She reflected that, as the current dispensing fee was billed per prescription, if a fee cap were placed on the dispensing fee, then the pharmacist cost would still be covered, and the fiscal note could be reduced. As discussion with the sponsor and the department had indicated the difficulty with a volume limitation or a fee cap, she withdrew proposed Amendment 1. 4:55:07 PM REPRESENTATIVE TARR asked that Department of Health and Social Services respond to the difficulty for a fee cap. MR. SHERWOOD agreed that there had been discussion for a limit to the fees for multiple prescriptions in the same mediset package. He said that it was not practical as the prescriptions were processed one at a time at the point of sale, pointing out the difficulty for overseeing this. Commenting on proposed Amendment 1, he opined that it would allow a discount for the mediset fee for a pharmacy which dispensed a high volume of medisets. He reported that DHSS had assumed there was this latitude should the cost survey data support this fee structure. He stated that it would not be problematic to state this authority, as well. 4:57:38 PM CHAIR HIGGINS asked if Representative Tarr still wanted to withdraw proposed Amendment 1. REPRESENTATIVE TARR replied that her decision would reflect the will of the committee. She declared her desire for DHSS to pursue every opportunity for cost containment, while still providing medisets. She offered her belief that the pharmacies would have covered all costs at some point in filling an individual mediset, and that all prescriptions for that mediset beyond that were being paid at a much higher profit. 4:59:03 PM CHAIR HIGGINS asked to clarify whether proposed Amendment 1 would decrease the fiscal note. MR. SHERWOOD offered his belief that it would not affect the fiscal note. He declared that DHSS had assumed that the latitude to lower the dispensing fee for higher volume dispensing had already existed; therefore, this would not decrease the fiscal note. He stated that DHSS did not object to any language that clearly described the DHSS permission to discount. 5:00:37 PM REPRESENTATIVE KELLER asked if it was the doctor or the patient who selected the pharmacy. He opined that a group contracting with a pharmacy would bring a lower cost than an individual. MR. SHERWOOD, in response, stated that this was determined by the Medicaid services as "any willing provider." He detailed that the qualifications for being a provider and a pharmacy could result in enrollment as a pharmacy provider. He declared that the recipient made the decision for pharmacy selection. He stated that prices were set using national data for the drug price, and that the department had sent a cost survey to the participating Medicaid pharmacies to determine the best, most reasonable way to approximate the dispensing fees. He said that this data allowed distinctions to be made for volume. 5:03:34 PM REPRESENTATIVE KELLER requested that Representative Tarr withdraw the proposed amendment. REPRESENTATIVE TARR withdrew proposed Amendment 1, stating that she had primarily wanted to have the conversation. She declared that, as it was a complex issue, she would keep reviewing alternatives. 5:04:12 PM MR. SHERWOOD clarified that the fiscal note reflected $657,000 for an anticipated expansion of mediset service into Fairbanks, as determined by the bill sponsor. He declared that, although it was unclear whether that expansion would happen, it would serve as a proxy for that service. 5:05:38 PM CHAIR HIGGINS said that HB 134 would be held over.