HB 1599

The bill establishes a prescription drug payment assistance program. The program is to be administered by the department and the commissioner is granted rulemaking authority for such purpose.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Chapter; Prescription Drug Payment Assistance Program. Amend RSA by inserting after chapter 126-M the following new chapter:

126-N:1 Purpose. The purpose of this chapter is to provide payment assistance for prescription drugs to New Hampshire's low-income senior and disabled citizens who are ineligible for, or do not have, prescription drug benefits or coverage through federal, state, or private sources.

I. "Commissioner" means the commissioner of the department of health and human services.

III. "Eligible person" means a person eligible for the program pursuant to RSA 126-N:3.

IV. "Prescription drugs" means drugs and supplies that have been approved as safe and effective by the Federal Food and Drug Administration or are otherwise legally marketed in the United States, including items related to diabetes management, if not covered by Medicare, that a physician has deemed medically necessary for the diagnosis or treatment, or both, of the patient. For the purposes of this chapter, prescription drugs shall not include experimental drugs and drugs used for lifestyle modification, but may include cost-effective over-the-counter pharmaceutical products if prescribed by a health care provider authorized to prescribe prescription drugs as an alternative to more costly drugs. Prescription drugs covered under this chapter shall be limited and subject to the provisions of RSA 126-N:4 and the rules adopted pursuant to it.

126-N:3 Eligibility. To be eligible for payment assistance for prescription drugs a person shall:

II. Have income that is less than 200 percent of the federal poverty level (FPL) or have prescription drug expenses that exceed 40 percent of his or her annual income.

V. Be ineligible for and/or not receiving a prescription drug benefit through a Medicare supplemental policy or any other third party payer prescription benefit.

VI. Be an individual aged 65 or over or be an individual between the ages 19 and 64 who is otherwise eligible for benefits under Title II of the Social Security Act (Federal Old Age, Survivors, and Disability Insurance Benefits).

I.(a) The program shall be administered by the department. The department shall implement the program in a cost-effective manner and ensure that the program is the payer of last resort for prescription drugs. Payment assistance shall not exceed $2,500 per state fiscal year to assist each eligible person in the purchase of prescription drugs.

(b) The department shall restrict prescription drugs covered under the program to those manufactured by pharmaceutical companies that agree to provide manufacturer rebates. The department shall establish a rebate program to collect rebates to offset the costs of this program.

(c) The department shall develop a co-payment requirement which shall not exceed 25 percent of the acquisition cost but shall be no lower than $5. Co-payment amounts may vary to promote the purchase of generic drugs by eligible persons in the program.

(d) The department shall provide a clear, written explanation defining the scope of the program's coverage, the amount of the cost-sharing requirements, and any limitations on access to covered prescription drugs. The department shall provide notice, at least 45 days prior to any dollar cap being reached. The department shall notify persons of the process to appeal a decision denying reimbursement of prescription drugs or denying a person's eligibility for the program. Services shall begin on the first day of the month, following the month that eligibility is determined. Eligible individuals shall receive an identification card for the program.

(f) No system of administration shall make a direct cash payment to any eligible person.

(g) The department shall require a mandatory point-of-sale claims submission within 14 days unless extenuating circumstances, as defined by the department, exist.

(d) Form and content of forms and the identification card required under this chapter.

126-N:5 Semi-Annual Report. The commissioner shall maintain data to evaluate the cost and effectiveness of the program and shall submit a semi-annual report to the speaker of the house of representatives, the president of the senate, and the governor summarizing participant demographics, utilization, utilization review results, and such other available information as may be needed to evaluate the costs and benefits of the program.

2 Appropriation. The sum of $1 for the fiscal year ending June 30, 2001, is hereby appropriated to the department of health and human services, for the purposes of section 1 of this act. The governor is authorized to draw a warrant for said sum out of any moneys in the treasury not otherwise appropriated.

3 Applicability; Federal Program. If the federal government institutes a prescription drug program for low-income, elderly, and disabled persons, the provisions of this act shall be null and void.

The Department of Health and Human Services states this bill will increase state expenditures by an indeterminable amount in FY 2001 with continued expenditures increasing at an annual rate of 5% each year thereafter. There will be no fiscal impact on county and local expenditures or on state, county and local revenues.

The Department could not estimate the total impact of the bill but was able to provide the following information.

The Department does not have data on residents between the ages of 19 and 64 entitled to Title II Social Security benefits. The Department also does not have data on the number of residents over 65 years of age with income less than 200 percent of the federal poverty level who are not eligible for prescription benefits under Medicaid, Medicare, or another third party plan. The Department, however, assumed the population over 65 years of age with income between $5,000 and $20,000 approximated the group with incomes less than 200% of the federal poverty level and ineligible for prescription benefits. The Department assumed that the population between the ages of 19-64 with incomes less than 200% of the federal poverty level approximated residents between the ages of 19 and 64 that were entitled to Title II Social Security benefits. This approach yielded 116,428 eligible residents and the Department assumed full participation. The maximum annual benefit of $2,500 provided to this population would be $291,070,000. In addition to direct benefits, the Department would require system enhancements to the New Heights and MMIS systems, two additional staff and funds to support a Pharmacy Benefits Management contract. The Department expects co-payments and manufacturer's rebates to offset a portion of these costs.

Resident over 65 with income $5,000 - $20,000 84,428

Residents 19-64 with income less than 200% of federal poverty level 32,000

Total Eligible Population 116,428

Maximum Benefit per resident x $2,500 Maximum benefit cost assuming full participation $291,070,000

Computer System Enhancements 1,000,000

Pharmacy Benefits Management 5,064,616

($.75 per Rx / 116,428 recipients / 58 Rx per year each based on EDS data )

Two Staff at LG 25 w/benefits, supplies and equipment 122,000

Total Cost $297,256,616

Less: Co-pay (116,428 x $ 5 x 58) (33,764,015)

Manufacturer's Rebates ( Medicaid rebate is 12%) (34,928,291)

Net Cost $228,564,310