Background:

The Health Care Authority (Authority) administers the state's Medicaid program which provides health care for eligible low-income residents. The Authority purchases health care services either on a fee-for-service basis or under a managed care arrangement. In a fee-for-service system, health care providers are paid by the Authority for each service that is delivered to an eligible client. Under a managed care program, the Authority contracts with a health care plan to provide a comprehensive set of medical care services to Medicaid enrollees pursuant to a capitated monthly premium for each covered individual. Managed care is currently provided for eligible families, children under age 19, pregnant women, and certain blind or disabled individuals.

In contracts with managed health care systems providing services to recipients of Temporary Assistance for Needy Families, the Authority's contracts must include several specified arrangements. These provisions relate to: (1) standards for the quality of services; (2) financial integrity; (3) provider reimbursement methods that incentivize chronic care management within health homes; (4) provider reimbursement methods that reward health homes that use chronic care management to reduce emergency department and inpatient use; and (5) the promotion of provider participation in the Department of Health's training program for caring for people with chronic conditions. The Authority may apply these provisions to contracts with managed health care systems for other Medicaid eligibility categories.

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Summary of Amended Bill:

The Health Care Authority (Authority) must include in its Medicaid contracts with managed health care systems providing services to recipients of Temporary Assistance for Needy Families a provision regarding reimbursement methods to incentivize pharmacists or other qualified providers to deliver comprehensive medication management services. Comprehensive medication management services are to be provided by pharmacists or other qualified providers to patients with multiple chronic conditions. The services must be provided as described in the federal Patient Protection and Affordable Care Act as part of a collaborative approach to the treatment of chronic diseases for targeted individuals to improve care and reduce cost. Pharmacists may not be reimbursed for a dispensing fee if comprehensive medication management services are performed at the same time that a medication is dispensed.

The comprehensive medication management services provisions must be included in contracts issued or renewed after January 1, 2014, unless a state plan amendment is required. The Authority may apply this provision to contracts with managed health care systems for other Medicaid eligibility categories.

Legislative findings are made regarding the importance of chronic care management, including comprehensive medication management services, as a collaborative approach to treating chronic disease to improve care and reduce cost in treating chronic diseases.

Amended Bill Compared to Second Substitute Bill:

The amended bill adds legislative findings that chronic care management, including comprehensive medication management services, is a critical component of a collaborative approach to treating chronic disease to improve care and reduce cost.

The definition of "comprehensive medication management services" is removed. It is specified that the provision of comprehensive medication management services must: (1) meet the description of medication management services as described in the federal Patient Protection and Affordable Care Act; and (2) be provided to patients with multiple chronic conditions as part of a collaborative approach to the treatment of chronic diseases to improve care and reduce cost of treatment.

Pharmacists must forego payment of a dispensing fee if comprehensive medication management services are performed at the same time that a medication is dispensed.

It is specified that the comprehensive medication management provisions must be included in Medicaid managed care contracts by 2014 unless a state plan amendment in required.

Staff Summary of Public Testimony:

(In support) This bill is a good way to review patient medications for adverse reactions. It makes sense to have a health care professional doing a periodic review of the medications of patients taking at least five different drugs to make sure that the drugs are compatible. There are many over-the-counter products that can interact negatively with prescription drugs and this bill will help them all be reviewed. This bill will address preventable problems by looking at all of the medications that a patient is taking at a single time. This bill will align incentives for providers to spend time with patients to help them understand the drugs that they are using. This concept is also being looked at on a national level. This bill encourages health plans to establish incentives to have pharmacists and providers choose to conduct comprehensive medication management services with their patients. This bill is designed to be permissive for providers. This bill does not mandate anything that is inconsistent with Medicare requirements.

Figures show that $290 billion are spent annually on non-adherence to drug therapy and medication misuse. This bill will save money by preventing adverse drug outcomes. This approach has saved money in other states through reductions in unnecessary emergency department visits and physician visits.

(With concerns) The goals of reducing costs through avoiding adverse drug interactions are worthwhile; however, there is concern about how managed care will reimburse for these additional services. This process may capture some patients who are being managed well on their medications and do not need this intervention. This could increase managed care rates. This new process may be duplicative of health reform requirements. The threshold for the number of medications should be increased to 10, not five. Medication management is an evolving concept and should not be defined in the bill. The bill creates competing requirements for people who qualify for both Medicare and Medicaid.

(Opposed) Health plans have specialized care management programs that provide comprehensive care for people with chronic conditions and this bill would require that medications be pulled out of that process for a new, separate review to be layered on top of the existing program. This bill will add to administration and cost. Any savings that the bill could create will be offset by the number of Medicaid patients who would be receiving these services, resulting in higher Medicaid rates.

Persons Testifying: (In support) Senator Becker, prime sponsor; Jeff Rochon, Washington State Pharmacy Association; and Lisa Thatcher, GlaxoSmithKline.

(With concerns) Leslie Emerick, Association of Advanced Practice Psychiatric Nurses; Melissa Johnson, ARNPs United; and Mary Clogston, Academy of Family Physicians.

(Opposed) Sydney Smith Zvara, Association of Washington Healthcare Plans.