2002 Session

Budget Amendments - HB30 (Committee Approved)

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Restore Pharmacy Reduction to AWP-10% (language only)

Item 325 #44h

Item 325 #44h

Health And Human Resources
Medical Assistance Services, Department of

Page 256, line 38, after "FF.", insert "1."
Page 256, line 44, strike "11" and insert "10".
Page 256, after line 47, insert:
"2.  Changes to the Medicaid reimbursement methodology for pharmacy services shall include
pharmaceutical expenditure management initiatives which shall generate savings estimated at $3,050,000 from the general fund and $3,144,151 from nongeneral funds the first year and $3,350,000 from the general funds and $3,421,781 from nongeneral funds the second year which shall be used to implement the changes to the Medicaid reimbursement methodology for pharmacy services.  The following pharmaceutical expenditure management initiatives shall be implemented to achieve these savings:  (i) drug utilization review messaging for all brand name medically necessary pharmaceuticals, particularly those which are identified as high-use and high-cost items; (ii) implementation of utilization management strategies, including increasing the recipient copayment to $2.00 for brand name prescription drugs; and (iii) implementation of a prescription drugs fraud and abuse prevention program.
3.  All savings realized in excess of the anticipated cost containment projections contained in paragraph GG 2 above and in excess of the estimated at $10,400,000 that the department is expected to realize from its expanded disease management initiatives proposed in this act, shall be applied to the pharmacy budget.  A portion of the savings shall be applied to provide increased reimbursements to health care provider participating in disease management initiatives."

(This amendment adds language to restore a portion of pharmacy reimbursement rate reduction that was contained in the introduced budget through the use of several pharmaceutical expenditure management activities. The introduced budget proposed to decrease the maximum reimbursement for pharmaceutical products from the Average Wholesale Price (AWP) minus 9 percent to the AWP minus 11 percent. This amendment would partially restore reimbursement to AWP minus 10 percent. Language is added to apply additional cost savings realized from pharmaceutical expenditure management activities to increase Medicaid reimbursement to providers participating in disease management initiatives.)