S-4044

AN ACT Relating to the Washington pharmacy access program; amending RCW 41.05.021, 41.05.026, and 70.14.050; adding new sections to chapter 74.09 RCW; creating new sections; and making an appropriation.

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

NEW SECTION. Sec. 1. The legislature finds that access to prescription drugs is vital to the health of many Washington residents. However, increased cost and utilization of such drugs is straining the resources of many individuals, and public and private entities. Studies suggest that the elderly in particular are at risk for inappropriate drug utilization, leading to unnecessary costs and adverse outcomes. The legislature therefore intends to implement strategies to reduce the state's prescription drug expenditures, and assist state residents in accessing necessary, appropriate, and affordable medications.

NEW SECTION. Sec. 2. (1) The department shall award prescription drug information and education grants to local government or nonprofit organizations for the design and implementation of programs intended to inform and train persons age sixty-five and older in the safe, appropriate, and cost-effective use of prescription and nonprescription medications.

(2) The grants shall be awarded on a competitive basis, using the following criteria:

(a) The demonstrated ability of the applicant organization to effectively administer such a program, including appropriate outreach and follow-up;

(b) The financial and in-kind resources that the applicant organization will bring to the program in addition to those funded by the grant;

(c) The extent to which the proposed program design reflects a comprehensive understanding of issues related to the safe and appropriate use of prescription drugs by seniors, and how to effectively communicate with the target audience;

(d) The extent to which the proposed program reflects a collaborative effort between the applicant organization and other health care providers and programs in the location to be served, including doctors, pharmacists, and long-term care providers;

(e) The extent to which the proposed program will serve as a model that can be replicated by other organizations around the state; and

(f) Any other criteria deemed appropriate by the department to ensure the quality and cost-effectiveness of the programs funded.

In awarding the grants, the department shall make every effort to ensure that the programs are geographically dispersed around the state. No single program shall be awarded more than twenty-five thousand dollars annually.

The department may solicit and accept gifts, grants, bequests, devises, and other funds from public and private sources to fund the prescription drug information and education grants authorized under this section.

NEW SECTION. Sec. 3. The department may implement any senior prescription drug assistance program authorized and funded by the federal government in accordance with the standards established under that authorization.

Sec. 4. RCW 41.05.021 and 1999 c 372 s 4 are each amended to read as follows:

(1) The Washington state health care authority is created within the executive branch. The authority shall have an administrator appointed by the governor, with the consent of the senate. The administrator shall serve at the pleasure of the governor. The administrator may employ up to seven staff members, who shall be exempt from chapter 41.06 RCW, and any additional staff members as are necessary to administer this chapter. The administrator may delegate any power or duty vested in him or her by this chapter, including authority to make final decisions and enter final orders in hearings conducted under chapter 34.05 RCW. The primary duties of the authority shall be to: Administer state employees' insurance benefits and retired or disabled school employees' insurance benefits; administer the basic health plan pursuant to chapter 70.47 RCW; study state-purchased health care programs in order to maximize cost containment in these programs while ensuring access to quality health care; and implement state initiatives, joint purchasing strategies, and techniques for efficient administration that have potential application to all state-purchased health services. The authority's duties include, but are not limited to, the following:

(a) To administer health care benefit programs for employees and retired or disabled school employees as specifically authorized in RCW 41.05.065 and in accordance with the methods described in RCW 41.05.075, 41.05.140, and other provisions of this chapter;

(b) To analyze state-purchased health care programs and to explore options for cost containment and delivery alternatives for those programs that are consistent with the purposes of those programs, including, but not limited to:

(i) Creation of economic incentives for the persons for whom the state purchases health care to appropriately utilize and purchase health care services, including the development of flexible benefit plans to offset increases in individual financial responsibility;

(ii) Utilization of provider arrangements that encourage cost containment, including but not limited to prepaid delivery systems, utilization review, and prospective payment methods, and that ensure access to quality care, including assuring reasonable access to local providers, especially for employees residing in rural areas;

(iii) Coordination of state agency efforts to purchase drugs effectively, including the development of a preferred drug list as provided in RCW 70.14.050, the development of consolidated prescription drug purchasing strategies, and more effective use of pharmacy-based services in the delivery of any prescription drug benefit;

(iv) Development of recommendations and methods for purchasing medical equipment and supporting services on a volume discount basis; and

(v) Development of data systems to obtain utilization data from state-purchased health care programs in order to identify cost centers, utilization patterns, provider and hospital practice patterns, and procedure costs, utilizing the information obtained pursuant to RCW 41.05.031;

(d) To provide information and technical and administrative assistance to the board;

(e) To review and approve or deny applications from counties, municipalities, and other political subdivisions of the state to provide state-sponsored insurance or self-insurance programs to their employees in accordance with the provisions of RCW 41.04.205, setting the premium contribution for approved groups as outlined in RCW 41.05.050;

(f) To appoint a health care policy technical advisory committee as required by RCW 41.05.150;

(g) To establish billing procedures and collect funds from school districts and educational service districts under RCW 28A.400.400 in a way that minimizes the administrative burden on districts; and

(h) To promulgate and adopt rules consistent with this chapter as described in RCW 41.05.160.

(2) On and after January 1, 1996, the public employees' benefits board may implement strategies to promote managed competition among employee health benefit plans. Strategies may include but are not limited to:

(a) Standardizing the benefit package;

(b) Soliciting competitive bids for the benefit package;

(d) Monitoring the impact of the approach under this subsection with regards to: Efficiencies in health service delivery, cost shifts to subscribers, access to and choice of managed care plans statewide, and quality of health services. The health care authority shall also advise on the value of administering a benchmark employer-managed plan to promote competition among managed care plans.

Sec. 5. RCW 41.05.026 and 1991 c 79 s 1 are each amended to read as follows:

(1) When soliciting proposals for the purpose of awarding contracts for goods or services, the administrator shall, upon written request by the bidder, exempt from public inspection and copying such proprietary data, trade secrets, or other information contained in the bidder's proposal that relate to the bidder's unique methods of conducting business or of determining prices or premium rates to be charged for services under terms of the proposal.

(2) Actuarial formulas, statistics, cost and utilization data, or other proprietary information submitted upon request of the administrator or board by a contracting insurer, health care service contractor, health maintenance organization, or vendor may be withheld at any time from public inspection when necessary to preserve trade secrets or prevent unfair competition.

(3) Proprietary information submitted upon request of the administrator by any insurer, vendor, or other person or entity for the purpose of analyzing and developing cost containment options, delivery alternatives, and consolidated purchasing for state-purchased health care programs may be withheld at any time from public inspection when necessary to preserve trade secrets or prevent unfair competition.

(4) The board may hold an executive session during any regular or special meeting to discuss information submitted in accordance with subsection (1) or (2) of this section.

Sec. 6. RCW 70.14.050 and 1986 c 303 s 10 are each amended to read as follows:

(1) Each agency listed in ((~~RCW 70.14.010~~)) subsection (5) of this section shall individually or in cooperation with other agencies take any necessary actions to control costs without reducing the quality of care when reimbursing for or purchasing drugs. To accomplish this purpose, each agency shall investigate the feasibility of and may establish a ((~~drug formulary~~)) preferred drug list designating which drugs may be paid for through their health care programs. For purposes of this section, a ((~~drug formulary~~)) preferred drug list means a list of drugs, either inclusive or exclusive, that defines which drugs are eligible for reimbursement by the agency.

(2) In developing the ((~~drug formulary~~)) preferred drug list authorized by this section, agencies:

(a) Shall prohibit reimbursement for drugs that are determined to be ineffective by the United States food and drug administration;

(b) Shall adopt rules in order to ensure that less expensive generic drugs will be substituted for brand name drugs in those instances where the quality of care is not diminished;

(d) May limit the prices paid for drugs by such means as central purchasing, volume contracting, or setting maximum prices to be paid;

(e) Shall consider the approval of drugs with lower abuse potential in substitution for drugs with significant abuse potential; and

(f) May take other necessary measures to control costs of drugs without reducing the quality of care.

(3) Agencies may provide for reasonable exceptions to the ((~~drug formulary~~)) preferred drug list required by this section.

(4) Agencies may establish medical advisory committees, or utilize committees already established, to assist in the development of the ((~~drug formulary~~)) preferred drug list required by this section.

(5) This section applies to the department of social and health services, the health care authority, the department of health, the department of labor and industries, the department of veterans affairs, and the department of corrections.

NEW SECTION. Sec. 7. No later than January 1, 2003, the administrator of the health care authority shall submit to the governor and the legislature a progress report regarding the implementation of efforts to coordinate state agency drug purchasing pursuant to RCW 41.05.021(1)(b)(iii), including an explanation of and rationale for the strategies developed, and the timeline for implementation.

NEW SECTION. Sec. 8. The sum of forty-nine thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2003, from the general fund to the department of social and health services, all of which the department of social and health services must award to local governments and nonprofit organizations under section 2 of this act.

NEW SECTION. Sec. 9. Sections 2 and 3 of this act are each added to chapter 74.09 RCW.