S‑1976.2   _____________________________________________

 

SUBSTITUTE SENATE BILL 5030

 

           _____________________________________________

 

State of Washington      57th Legislature     2001 Regular Session

 

By Senate Committee on Health & Long‑Term Care (originally sponsored by Senators Thibaudeau, Franklin, Kohl‑Welles, Prentice, Deccio, Eide, Winsley, Regala and Fraser)

 

READ FIRST TIME 02/28/01. 

_1      AN ACT Relating to the Washington pharmacy access program;

_2  amending RCW 41.05.021, 41.05.026, and 70.14.050; adding new

_3  sections to chapter 74.09 RCW; creating new sections; and making

_4  an appropriation.

     

_5  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

     

_6      NEW SECTION.  Sec. 1.  The legislature finds that access to

_7  prescription drugs is vital to the health of many Washington

_8  residents.  However, increased cost and utilization of such drugs is

_9  straining the resources of many individuals, and public and

10  private entities.  The legislature therefore creates this pharmacy

11  access program with the intention of implementing strategies to

12  reduce the cost of prescription drugs to the state and assuring

13  state residents of continued access to necessary, appropriate, and

14  affordable medications.

     

15      NEW SECTION.  Sec. 2.  (1) The department shall award

16  prescription drug information and education grants to local

17  government or nonprofit organizations for the design and

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_1  implementation of programs intended to inform and train persons

_2  age sixty-five and older in the safe and appropriate use of

_3  prescription and nonprescription medications.

_4      (2) The grants shall be awarded on a competitive basis, using

_5  the following criteria:

_6      (a) The demonstrated ability of the applicant organization to

_7  effectively administer such a program, including appropriate

_8  outreach and follow-up;

_9      (b) The financial and in-kind resources that the applicant

10  organization will bring to the program in addition to those funded

11  by the grant;

12      (c) The extent to which the proposed program design reflects a

13  comprehensive understanding of issues related to the safe and

14  appropriate use of prescription drugs by seniors, and how to

15  effectively communicate with the target audience;

16      (d) The extent to which the proposed program reflects a

17  collaborative effort between the applicant organization and other

18  health care providers and programs in the location to be served,

19  including doctors, pharmacists, and long-term care providers;

20      (e) The extent to which the proposed program will serve as a

21  model that can be replicated by other organizations around the

22  state; and

23      (f) Any other criteria deemed appropriate by the department to

24  ensure the quality and cost-effectiveness of the programs funded.

25      In awarding the grants, the department shall make every effort

26  to ensure that the programs are geographically dispersed around

27  the state.  No single program shall be awarded more than twenty-five

28  thousand dollars annually.

     

29      NEW SECTION.  Sec. 3.  The Washington medications outreach

30  initiative is created within the department.  The initiative shall:

31      (1) Identify and assist eligible persons age sixty-five and

32  older in enrolling in the state medical assistance program under

33  this chapter; and

34      (2) Assist persons in procuring free or low-cost medications

35  from the drug assistance programs of pharmaceutical manufacturers

36  by:

SSB 5030                       p. 2

 

_1      (a) Evaluating the likelihood of success of a person obtaining

_2  free or low-cost medications from a participating manufacturer

_3  under the guidelines formulated;

_4      (b) Assisting persons with the preparation of an application

_5  for medications to a participating manufacturer;

_6      (c) Coordinating and assisting physicians and others authorized

_7  to prescribe medications with communications, including

_8  applications, made on behalf of a person to a participating

_9  manufacturer for the purpose of obtaining approval of the person

10  in any voluntary drug assistance program; and

11      (d) Working with participating manufacturers to simplify the

12  system whereby eligible persons access voluntary drug assistance

13  programs.

     

14      NEW SECTION.  Sec. 4.  The department may implement any senior

15  prescription drug assistance program authorized and funded by the

16  federal government in accordance with the standards established

17  under that authorization.

     

18      NEW SECTION.  Sec. 5.  The department shall submit and, upon

19  approval, implement a section 1115 demonstration waiver request to

20  the federal health care financing administration to establish a

21  prescription drug assistance program.  The program must create an

22  expanded coverage group composed of any medicare-covered

23  individual with no medicare supplement policy or retiree health

24  benefit plan that covers drugs, and other individuals with

25  household incomes up to three hundred percent of the federal

26  poverty level, as adjusted annually by the federal department of

27  health and human services, who do not have insurance coverage or

28  other health benefits for prescription drugs.  Individuals in this

29  expanded coverage group will receive a financial subsidy for

30  prescription drugs equal to the average rebate paid to the

31  medicaid program under Title XIX of the federal social security

32  act by pharmaceutical manufacturers.

     

33      Sec. 6.  RCW 41.05.021 and 1999 c 372 s 4 are each amended to read

34  as follows:

35      (1) The Washington state health care authority is created

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_1  within the executive branch.  The authority shall have an

_2  administrator appointed by the governor, with the consent of the

_3  senate.  The administrator shall serve at the pleasure of the

_4  governor.  The administrator may employ up to seven staff members,

_5  who shall be exempt from chapter 41.06 RCW, and any additional

_6  staff members as are necessary to administer this chapter.  The

_7  administrator may delegate any power or duty vested in him or her

_8  by this chapter, including authority to make final decisions and

_9  enter final orders in hearings conducted under chapter 34.05 RCW.

10  The primary duties of the authority shall be to:  Administer state

11  employees' insurance benefits and retired or disabled school

12  employees' insurance benefits; administer the basic health plan

13  pursuant to chapter 70.47 RCW; study state-purchased health care

14  programs in order to maximize cost containment in these programs

15  while ensuring access to quality health care; and implement state

16  initiatives, joint purchasing strategies, and techniques for

17  efficient administration that have potential application to all

18  state-purchased health services.  The authority's duties include,

19  but are not limited to, the following:

20      (a) To administer health care benefit programs for employees

21  and retired or disabled school employees as specifically

22  authorized in RCW 41.05.065 and in accordance with the methods

23  described in RCW 41.05.075, 41.05.140, and other provisions of

24  this chapter;

25      (b) To analyze state-purchased health care programs and to

26  explore options for cost containment and delivery alternatives for

27  those programs that are consistent with the purposes of those

28  programs, including, but not limited to:

29      (i) Creation of economic incentives for the persons for whom

30  the state purchases health care to appropriately utilize and

31  purchase health care services, including the development of

32  flexible benefit plans to offset increases in individual financial

33  responsibility;

34      (ii) Utilization of provider arrangements that encourage cost

35  containment, including but not limited to prepaid delivery

36  systems, utilization review, and prospective payment methods, and

37  that ensure access to quality care, including assuring reasonable

SSB 5030                       p. 4

_1  access to local providers, especially for employees residing in

_2  rural areas;

_3      (iii) Coordination of state agency efforts to purchase drugs

_4  effectively, including the development of a drug formulary as

_5  provided in RCW 70.14.050, the development of consolidated

_6  prescription drug purchasing strategies, and more effective use of

_7  pharmacy-based services in the delivery of any prescription drug

_8  benefit;

_9      (iv) Development of recommendations and methods for purchasing

10  medical equipment and supporting services on a volume discount

11  basis; and

12      (v) Development of data systems to obtain utilization data from

13  state-purchased health care programs in order to identify cost

14  centers, utilization patterns, provider and hospital practice

15  patterns, and procedure costs, utilizing the information obtained

16  pursuant to RCW 41.05.031;

17      (c) To analyze areas of public and private health care

18  interaction;

19      (d) To provide information and technical and administrative

20  assistance to the board;

21      (e) To review and approve or deny applications from counties,

22  municipalities, and other political subdivisions of the state to

23  provide state-sponsored insurance or self-insurance programs to

24  their employees in accordance with the provisions of RCW

25  41.04.205, setting the premium contribution for approved groups as

26  outlined in RCW 41.05.050;

27      (f) To appoint a health care policy technical advisory

28  committee as required by RCW 41.05.150;

29      (g) To establish billing procedures and collect funds from

30  school districts and educational service districts under RCW

31  28A.400.400 in a way that minimizes the administrative burden on

32  districts; and

33      (h) To promulgate and adopt rules consistent with this chapter

34  as described in RCW 41.05.160.

35      (2) On and after January 1, 1996, the public employees'

36  benefits board may implement strategies to promote managed

37  competition among employee health benefit plans.  Strategies may

38  include but are not limited to:

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_1      (a) Standardizing the benefit package;

_2      (b) Soliciting competitive bids for the benefit package;

_3      (c) Limiting the state's contribution to a percent of the

_4  lowest priced qualified plan within a geographical area;

_5      (d) Monitoring the impact of the approach under this subsection

_6  with regards to:  Efficiencies in health service delivery, cost

_7  shifts to subscribers, access to and choice of managed care plans

_8  state-wide, and quality of health services.  The health care

_9  authority shall also advise on the value of administering a

10  benchmark employer-managed plan to promote competition among

11  managed care plans.

     

12      Sec. 7.  RCW 41.05.026 and 1991 c 79 s 1 are each amended to read

13  as follows:

14      (1) When soliciting proposals for the purpose of awarding

15  contracts for goods or services, the administrator shall, upon

16  written request by the bidder, exempt from public inspection and

17  copying such proprietary data, trade secrets, or other information

18  contained in the bidder's proposal that relate to the bidder's

19  unique methods of conducting business or of determining prices or

20  premium rates to be charged for services under terms of the

21  proposal.

22      (2) Actuarial formulas, statistics, cost and utilization data,

23  or other proprietary information submitted upon request of the

24  administrator or board by a contracting insurer, health care

25  service contractor, health maintenance organization, or vendor may

26  be withheld at any time from public inspection when necessary to

27  preserve trade secrets or prevent unfair competition.

28      (3) Proprietary information submitted upon request of the

29  administrator by any insurer, vendor, or other person or entity

30  for the purpose of analyzing and developing cost containment

31  options, delivery alternatives, and consolidated purchasing for

32  state-purchased health care programs may be withheld at any time

33  from public inspection when necessary to preserve trade secrets or

34  prevent unfair competition.

35      (4) The board may hold an executive session during any regular

36  or special meeting to discuss information submitted in accordance

37  with subsection (1) or (2) of this section.

 

SSB 5030                       p. 6

     

_1      Sec. 8.  RCW 70.14.050 and 1986 c 303 s 10 are each amended to read

_2  as follows:

_3      (1) Each agency listed in ((RCW 70.14.010)) subsection (5) of

_4  this section shall individually or in cooperation with other

_5  agencies take any necessary actions to control costs without

_6  reducing the quality of care when reimbursing for or purchasing

_7  drugs.  To accomplish this purpose, each agency shall investigate

_8  the feasibility of and may establish a drug formulary designating

_9  which drugs may be paid for through their health care programs.

10  For purposes of this section, a drug formulary means a list of

11  drugs, either inclusive or exclusive, that defines which drugs are

12  eligible for reimbursement by the agency.

13      (2) In developing the drug formulary authorized by this

14  section, agencies:

15      (a) Shall prohibit reimbursement for drugs that are determined

16  to be ineffective by the United States food and drug

17  administration;

18      (b) Shall adopt rules in order to ensure that less expensive

19  generic drugs will be substituted for brand name drugs in those

20  instances where the quality of care is not diminished;

21      (c) Where possible, may authorize reimbursement for drugs only

22  in economical quantities;

23      (d) May limit the prices paid for drugs by such means as

24  central purchasing, volume contracting, or setting maximum prices

25  to be paid;

26      (e) Shall consider the approval of drugs with lower abuse

27  potential in substitution for drugs with significant abuse

28  potential; and

29      (f) May take other necessary measures to control costs of drugs

30  without reducing the quality of care.

31      (3) Agencies may provide for reasonable exceptions to the drug

32  formulary required by this section.

33      (4) Agencies may establish medical advisory committees, or

34  utilize committees already established, to assist in the

35  development of the drug formulary required by this section.

36      (5) This section applies to the department of social and health

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_1  services, the health care authority, the department of health, the

_2  department of labor and industries, the department of veterans

_3  affairs, and the department of corrections.

     

_4      NEW SECTION.  Sec. 9.  No later than January 1, 2002, the

_5  administrator of the health care authority shall submit to the

_6  governor and the legislature a progress report regarding the

_7  implementation of efforts to coordinate state agency drug

_8  purchasing pursuant to RCW 41.05.021(1)(b)(iii), including an

_9  explanation of and rationale for the strategies developed, and the

10  timeline for implementation.

     

11      NEW SECTION.  Sec. 10.  (1) The sum of one hundred twenty-five

12  thousand  dollars, or as much thereof as may be necessary, is

13  appropriated for the fiscal year ending June 30, 2002, from the

14  general fund to the department of social and health services, all

15  of which the department of social and health services must award

16  to local governments and nonprofit organizations under section 2

17  of this act.

18      (2) The sum of one hundred twenty-five thousand dollars, or as

19  much thereof as may be necessary, is appropriated for the fiscal

20  year ending June 30, 2003, from the general fund to the department

21  of social and health services, all of which the department of

22  social and health services must award to local governments and

23  nonprofit organizations under section 2 of this act.

     

24      NEW SECTION.  Sec. 11.  Sections 2 through 5 of this act are each

25  added to chapter 74.09 RCW.

 

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