WSR 04-19-109

PROPOSED RULES

DEPARTMENT OF

SOCIAL AND HEALTH SERVICES
(Medical Assistance Administration)

[ Filed September 21, 2004, 11:14 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 04-09-035.

Title of Rule and Other Identifying Information: Amending WAC 388-530-1050 Definitions, 388-530-1100 Covered drugs, devices, and pharmaceutical supplies, 388-530-1125 Drug rebate program, 388-530-1150 Noncovered drugs and pharmaceutical supplies and reimbursement limitations, 388-530-1200 Prior authorization program, 388-530-1250 Prior authorization process, 388-530-1260 Therapeutic consultation service, 388-530-1270 Mail order services, 388-530-1400 Maximum allowable cost, 388-530-1900 Drug use and claims review and 388-530-1950 Point-of-sale (POS) system/prospective drug use review; and new sections WAC 388-530-1280 Preferred drug list(s) and 388-530-1290 Therapeutic interchange program.

Hearing Location(s): Blake Office Park East (behind Goodyear Courtesy Tire), Rose Room, 4500 10th Avenue S.E., Lacey, WA, on November 9, 2004, at 10:00 a.m.

Date of Intended Adoption: Not sooner than November 10, 2004.

Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504, delivery 4500 10th Avenue S.E., Lacey, WA, e-mail fernaax@dshs.wa.gov, fax (360) 664-6185, by 5:00 p.m., November 9, 2004.

Assistance for Persons with Disabilities: Contact Fred Swenson, DSHS Rules Consultant, by November 5, 2004, TTY (360) 664-6178 or (360) 664-6097.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rules implement SB 6088 (chapter 29, Laws of 2003) which directs state agencies to establish an evidence-based prescription drug program that identifies preferred drugs, develop programs to provide prescription drugs at a reasonable price to those in need, and increase public awareness regarding their safe and cost-effective use. To fulfill this legislative mandate, the proposed rules establish new sections within chapter 388-530 WAC, Pharmacy services, for preferred drug list(s) and the therapeutic interchange program (TIP). The proposed rules also amend the sections in chapter 388-530 WAC listed above to update, clarify, and make them consistent with the new sections.

Statutory Authority for Adoption: RCW 74.08.090, 70.14.050.

Statute Being Implemented: RCW 70.14.050, 69.41.150, 69.41.190, chapter 41.05 RCW.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Department of Social and Health Services, governmental.

Name of Agency Personnel Responsible for Drafting: Ann Myers, 905 Plum Street S.E., Olympia, WA 98501, (360) 725-1345; Implementation and Enforcement: Siri Childs, 805 Plum Street S.E., Olympia, WA 98501, (360) 725-1564.

A small business economic impact statement has been prepared under chapter 19.85 RCW.

Small Business Economic Impact Statement

SUMMARY OF PROPOSED RULES: The Department of Social and Health Services' Medical Assistance Administration (MAA) is proposing to amend chapter 388-530 WAC, Pharmacy services. The 2003 state legislature directed state agencies to implement SB 6088 (chapter 29, Laws of 2003) which directs the establishment of an evidence-based prescription drug program that identifies preferred drugs, develop programs to provide prescription drugs at a reasonable price to those in need, and increase public awareness regarding their safe and cost-effective use. The proposed amendments:

Establish rules for preferred drug list(s);
Establish rules for the therapeutic interchange program (TIP);
Update program-related definitions; and
Clarify and update other sections in the chapter for consistency with the new sections.
SMALL BUSINESS ECONOMIC IMPACT STATEMENT: Chapter 19.85 RCW, the Regulatory Fairness Act, requires that the economic impact of proposed regulations be analyzed in relation to small businesses and outlines the information that must be included in a small business economic impact statement (SBEIS). Preparation of an SBEIS is required when a proposed rule has the potential of placing a more than minor economic impact on business.

The proposed rule changes will have an impact on providers who prescribe drugs for Medicaid clients and pharmacists who fill those prescriptions. The degree of impact will be determined by whether or not a prescriber enrolls as "an endorsing practitioner."

The therapeutic interchange program (TIP) allows prescribers to endorse a Washington preferred drug list (PDL). These "endorsing practioners" will find that TIP reduces the necessity for prior authorization for nonpreferred drugs. When these endorsing practitioners write a prescription for a drug that is not on the Washington PDL and indicate that substitution is permitted, the filling pharmacist substitutes a therapeutically equivalent drug from the preferred drug list for the prescribed drug and informs the prescriber. In those cases where the endorsing practitioner determines that it is medically necessary for the client to receive a drug that is not on the preferred drug list, and indicates "dispense as written (DAW)" on the prescription, the pharmacist may dispense the nonpreferred drug without obtaining prior authorization from MAA.

A pharmacist who receives a DAW prescription for a nonpreferred drug from a nonendorsing practitioner must obtain prior authorization from MAA prior to dispensing the drug. For these nonendorsing practitioners, TIP may result in an increase in the number of times that prior authorization is required. In these circumstances, the telephone calls and staff time required to communicate with the prescriber and obtain prior authorization may increase.

MAA is currently unable to determine what it may cost pharmacists for the telephone calls and staff time used to contact prescribers or contact MAA for prior authorization. Nor does MAA have specific information regarding the costs to the prescriber for telephone calls and staff time used in consultations with pharmacists. MAA concludes that some new costs may be imposed on the small businesses affected by them, but is unable to determine the extent of those costs at this time. If information about increased costs becomes available after adoption of the rule, MAA will analyze that information and consider possible mitigation measures.

PRELIMINARY ANALYSIS OF PROBABLE COSTS: The department anticipates that providers who are nonendorsing practitioners will experience an increase in the number of times that prior authorization is required to fill a prescription for a nonpreferred drug, thereby increasing the staff time necessary to handle these situations. It is also likely that pharmacists will experience an increase in the number of times they must obtain prior authorization to fill a prescription for a nonpreferred drug from a nonendorsing practitioner. While the department anticipates the provider's administrative tasks associated with obtaining prior authorization may increase, it is unable to determine specific costs for tasks such as telephone calls and staff time. The department also expects the number of providers who enroll as endorsing practitioners will increase substantially as the program is implemented, thereby reducing the probable increase in the administrative tasks mentioned above.

PRELIMINARY ANALYSIS OF PROBABLE BENEFITS: As more endorsing practitioners participate in the therapeutic interchange program (TIP), less prior authorization will be required by the prescriber and the dispensing pharmacist. Prescribers determine which nonpreferred drugs are medically necessary for the client by writing "Dispense as written (DAW)" on the prescription, and the pharmacist will dispense those nonpreferred drugs without prior authorization being required. The department is unable to quantify specific reductions in administrative burden (such as telephone calls), but anticipates that any associated costs of this program will be exceeded by the benefits that result from a significantly reduced need for prior authorization as TIP is implemented.

CONCLUSION: RCW 34.05.328 requires the administration to demonstrate that the probable benefits of a proposed exceed its probable costs. Based on the statements above, MAA concludes that the probable benefits of this proposed rule exceed the probable costs.

A copy of the statement may be obtained by contacting Siri Childs, P.O. Box 45506, Olympia, WA 98504, phone (360) 725-1564, fax (360) 586-8827, e-mail childsa@dshs.wa.gov.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Siri Childs, P.O. Box 45506, Olympia, WA 98504, phone (360) 725-1564, fax (360) 586-8827, e-mail childsa@dshs.wa.gov.

September 15, 2004

Brian H. Lindgren, Manager

Rules and Policies Assistance Unit

Reviser's note: The material contained in this filing exceeded the page-count limitations of WAC 1-21-040 for appearance in this issue of the Register. It will appear in the 04-20 issue of the Register.

Legislature Code Reviser 

Register

Washington State Code Reviser's Office