HB 0735

This bill requires the department of health and human services to establish the Medicaid Rx senior eligibility expansion program. The bill establishes a new PAU in the 2003 operating budget for the purposes of funding such program.

This bill requires the department of health and human services to encourage health plans and health care systems participating in the medicaid program to use case management incorporating evidence-based practice guidelines.

The bill also establishes a 3-year task force to study increasing access to prescription drug medicines.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.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; Medicaid Rx Senior Eligibility Expansion Program. Amend RSA by inserting after chapter 161-J the following new chapter:

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

III. "Division" means the division of elderly and adult services, department of health and human services.

IV. "Qualified medicare beneficiaries" means medicare beneficiaries with incomes equal to or below 100 percent of the federal poverty level who are eligible for Medicaid assistance for the part A and part B medicare premiums and for medicare deductibles and co-insurance requirements as set forth in section 1905(p)(1) of Title XIX of the Social Security Act.

V. "Specified low-income medicare beneficiaries" means medicare beneficiaries who have incomes greater than 100 percent of the federal poverty level and less than and equal to 120 percent of the federal poverty level and meet the requirements set forth in section 1902(a)(10)(E)(iii) of Title 19 of the Social Security Act.

I. There is hereby established the Medicaid Rx senior eligibility expansion program. To be eligible for the program, an individual shall:

(c) Be at least 65 years of age or an individual between the ages of 19 and 64 who is otherwise eligible for benefits under Title II of the Social Security Act (Federal Old Age, Survivors, and Disability Insurance);

(d) Meet the definition of a qualified medicare beneficiary or a specified low-income medicare beneficiary as set forth in subparagraph (c); and

(e) Be ineligible for and/or not receiving a prescription drug benefit through a medicare supplemental policy or any other third party payer prescription benefit.

II. Individuals eligible for the Medicaid Rx senior eligibility expansion program shall be entitled to the Medicaid prescription drug coverage as provided to Medicaid recipients as set forth in Title XIX of the Social Security Act.

III. Individuals eligible for the program established under this chapter shall be provided a benefit of not more than $2,000 per year and shall be subject to a $5 copayment per prescription.

I. The Medicaid Rx senior eligibility expansion program shall be administered by the division. The department shall apply for a federal Medicare 1115 demonstration waiver from the Secretary of Health and Human Services to expand Medicaid eligibility for the purposes of prescription drug coverage to qualified medicare beneficiaries and specified low-income medicare beneficiaries under the Medicaid Rx senior eligibility expansion program.

II. The commissioner shall attempt to obtain and shall accept in the name of the state any and all donations, grants, or fees, both real and personal, from any governmental unit or public agency, or third-party payors, or from any institution, person, firm, or corporation given specifically for the purpose of funding this program.

III. The commissioner shall make an annual report beginning one year after the effective date of this chapter to the general court relative to the effectiveness of the Medicaid Rx senior disability eligibility program.

2 New Subdivision; Medicaid Best Practices. Amend RSA 167 by inserting after section 97 the following new subdivision:

I. The department of health and human services shall identify medicaid patients who require ongoing and expensive care and develop interventions to improve their health, functional status and independence in an effort to promote adherence to best medical practices. The department shall encourage health plans and health care systems participating in the medicaid program to:

II. The department shall make an annual report beginning one year after the effective date of this section to the oversight committee established in RSA 126-A:13, relative to the effectiveness of this subdivision.

3 Task Force Established. There is established a task force to study the feasibility of establishing a New Hampshire Rx patient assistance program.

(a) Three members of the house of representatives, appointed by the speaker of the house.

II. The members of the task force shall serve without compensation, however, legislative members of the task force shall receive mileage at the legislative rate when attending to the duties of the task force.

5 Duties. The task force shall study the feasibility of establishing a New Hampshire Rx patient assistance program. The committee shall consider eligibility guidelines and enrollment fees.

6 Chairperson; Quorum. The members of the task force shall elect a chairperson from among the members. The first meeting of the task force shall be called by the first-named house member. The first meeting of the task force shall be held within 45 days of the effective date of this section. Six members of the task force shall constitute a quorum.

7 Report. The task force shall report its findings and any recommendations for proposed legislation to the speaker of the house of representatives, the senate president, the house clerk, the senate clerk, the governor, and the state library on or before November 1, 2006.

8 Funding for Medicaid Rx Service Eligibility Expansion Program; New PAU. Amend HB 1-A of the 2003 legislative session by inserting after PAU 05-01-10-03-12 the following new PAU:

I. RSA 161-K:1 - 161-K:3, relative to the Medicaid Rx senior eligibility expansion program.

II. Section 8 of this act shall take effect at 11:59 p.m. on the day before a federal prescription drug plan takes effect.

The Department of Health and Human Services stated this bill, as amended by the House (House Amendment #2003-1106h), will increase state expenditures and revenue by an indeterminable amount in FY 2004 and in each year thereafter. There will be no fiscal impact on county and local revenue or expenditures.

This bill appropriates $1 in general funds, $1 in federal funds and $1 in gifts and grants in each year of the biennium ending June 30, 2005 for the purpose of funding the Medicaid Rx Service Expansion Program.

The Department indicated this bill requires the Department to apply for a federal Medicaid demonstration waiver to include qualified Medicare beneficiaries (QMBs) and specified low-income Medicare beneficiaries (SLMBs) as individuals eligible for Medicaid prescription drug benefits. This bill also requires the Department to implement Medicaid best practices. The Department stated a federal waiver is not likely without adequate and sustainable state funding, and assumed donations, grants or fees will not satisfy this requirement. In order to provide an estimate of the fiscal impact of this bill, the Department made the following assumptions:

· State funding would be obtained to support the program.

· Approval of a waiver will be received in early FY 2004.

· Approximately 2,101 individuals would be eligible and participate based on data from December 2002. (1,063 QMBs and 1,038 SLMBs)

· Enrollment in the program would be limited to the current number of QMB and SLMB participants, and a waiting list would be established in order to limit expansion of the program or additional Medicare cost-sharing costs to the Medicaid program from new applicants attracted by the pharmacy benefit.

· The prescription drug cost per person was estimated based on experience with similar populations inflated by 19.8% for FY 2003, 22.6% for FY 2004, and 22.5% for FY 2005 through FY 2007.

· 100% of the enrollees would incur costs greater than the $2,000 annual benefit limit.

· The $5 co-payment would be paid at the point of sale and would not impact program costs since all enrollees are assumed to require the full $2,000 benefit.

· Manufacturer rebates are expected to be 22%.

· Medicaid best practices refers to chronic disease management. Savings from disease management of asthma and diabetes are included in the operating budget in the amount of $400,000 in FY 2004 and FY 2005, and assumed to offset provider payment costs. Additional savings may be possible through outsourcing to a disease management contractor, but these savings will continue to be dedicated to provider payments.

Based on these assumptions the program revenues and expenditures would be as follows:

FY 2004 FY 2005 FY 2006 FY 2007

QMB & SLMB Enrollees 2,101 2,101 2,101 2,101

Rx costs per enrollee per year $ 3,552 $ 4,356 $ 5,328 $ 6,528

Impact of $2,000 annual

benefit limit 2,000 2,000 2,000 2,000

Enrollee Co-payments 0 0 0 0

Annual Rx Costs

(enrollees x 2,000) 4,202,000 4,202,000 4,202,000 4,202,000

Total cost after manufacturer

rebates @ 22% $,3,327,560 $3,277,560 $3,277,560 $3,277,560

State Cost - 50% $1,638,780 $1,638,780 $1,638,780 $1,638,780

Federal Cost - 50% $1,638,780 $1,638,780 $1,638,780 $1,638,780