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| To enact new sections 5111.07 and 5111.071 and | 1 |
| sections 5111.072 and 5111.085, to repeal sections | 2 |
| 5111.07 and 5111.071 of the Revised Code, and to | 3 |
| repeal Section 309.30.76 of Am. Sub. H.B. 1 of the | 4 |
| 128th General Assembly regarding the Medicaid | 5 |
| reimbursement rate for estimated acquisition cost | 6 |
| pharmaceuticals, the Medicaid dispensing fee, and | 7 |
| the number of brand name drugs available at one | 8 |
| time under the Medicaid program without prior | 9 |
| authorization. | 10 |
| Section 1. That new sections 5111.07 and 5111.071 and | 11 |
| sections 5111.072 and 5111.085 of the Revised Code be enacted to | 12 |
| read as follows: | 13 |
| Sec. 5111.07. (A) As used in this section and sections | 14 |
| 5111.071 and 5111.072 of the Revised Code: | 15 |
| (1) "Pharmacy provider" means a terminal distributor of | 16 |
| dangerous drugs, as defined in section 4729.01 of the Revised | 17 |
| Code, that has all of the following: | 18 |
| (a) A valid drug enforcement agency number; | 19 |
| (b) A licensed pharmacist in full and actual charge of a | 20 |
| pharmacy; | 21 |
| (c) A valid medicaid provider agreement. | 22 |
| (2) "Prescribed drugs" has the same meaning as in 42 C.F.R. | 23 |
| 440.120(a). | 24 |
| (B) Once every two years, the department of job and family | 25 |
| services shall contract with a research organization that is | 26 |
| associated with an educational institution for the research | 27 |
| organization to perform a survey or assessment of the costs that | 28 |
| pharmacy providers incur in dispensing prescribed drugs under the | 29 |
| fee-for-service component of the medicaid program. The research | 30 |
| organization selected for the contract shall be mutually agreed to | 31 |
| by the department and entities that represent pharmacy providers. | 32 |
| The contract with a research organization shall require the | 33 |
| organization to do all of the following in conducting the survey | 34 |
| or assessment: | 35 |
| (1) Use a standard template that the department shall develop | 36 |
| in consultation with entities that represent pharmacy providers; | 37 |
| (2) Use data from a representative sample of pharmacy | 38 |
| providers; | 39 |
| (3) Determine the average cost per prescription for pharmacy | 40 |
| providers to dispense prescribed drugs under the fee-for-service | 41 |
| component of the medicaid program by reviewing all of the | 42 |
| following pharmacy provider costs: | 43 |
| (a) Operational and overhead costs; | 44 |
| (b) Costs of providing professional counseling in the course | 45 |
| of dispensing prescribed drugs; | 46 |
| (c) Salaries and other related administrative costs; | 47 |
| (d) All other costs associated with operating a pharmacy and | 48 |
| dispensing prescribed drugs under the fee-for-service component, | 49 |
| including costs relating to coordination of benefits, bad debt, | 50 |
| uncollected copayments, payment lag times, and rejected claims. | 51 |
| (4) If the director of job and family services, under section | 52 |
| 5111.071 of the Revised Code, establishes a higher dispensing fee | 53 |
| for generic prescribed drugs than brand name prescribed drugs, | 54 |
| make separate per prescription average cost determinations under | 55 |
| division (B)(3) of this section for dispensing generic prescribed | 56 |
| drugs and dispensing brand name prescribed drugs. | 57 |
| Sec. 5111.071. Not later than ninety days after the | 58 |
| completion of the initial survey or assessment for which the | 59 |
| department of job and family services contracts under section | 60 |
| 5111.07 of the Revised Code, the director of job and family | 61 |
| services shall adopt rules under section 5111.02 of the Revised | 62 |
| Code establishing a dispensing fee for pharmacy providers who | 63 |
| dispense prescribed drugs under the fee-for-service component of | 64 |
| the medicaid program. In establishing the dispensing fee, the | 65 |
| director shall ensure that the dispensing fee equals the average | 66 |
| cost per prescription that pharmacy providers incur in dispensing | 67 |
| prescribed drugs under the fee-for-service component of the | 68 |
| medicaid program as determined by the survey or assessment. The | 69 |
| dispensing fee for generic prescribed drugs may be higher than the | 70 |
| dispensing fee for brand name prescribed drugs. | 71 |
| The director shall amend the rules regarding the dispensing | 72 |
| fee not later than ninety days following the completion of each | 73 |
| subsequent survey or assessment for which the department contracts | 74 |
| under section 5111.07 of the Revised Code. The amendments shall | 75 |
| revise the dispensing fee to reflect changes in the average cost | 76 |
| per prescription that pharmacy providers incur in dispensing | 77 |
| prescribed drugs under the fee-for-service component of the | 78 |
| medicaid program as determined by the subsequent survey or | 79 |
| assessment. | 80 |
| Sec. 5111.072. A medicaid recipient eligible for the | 81 |
| prescribed drugs benefit under the fee-for-service component of | 82 |
| the medicaid program may obtain up to four brand name prescribed | 83 |
| drugs at one time under the fee-for-service component without | 84 |
| receiving prior authorization. To obtain more than four brand name | 85 |
| prescribed drugs at one time under the fee-for-service component, | 86 |
| the recipient must receive prior authorization from the department | 87 |
| of job and family services or another entity with which the | 88 |
| department contracts to provide prior authorization services. The | 89 |
| director of job and family services shall adopt rules under | 90 |
| section 5111.02 of the Revised Code as necessary to implement this | 91 |
| section. | 92 |
| Sec. 5111.085. (A) As used in this section: | 93 |
| (1) "Estimated acquisition cost pharmaceutical" means a | 94 |
| prescribed drug, as defined in 42 C.F.R. 440.120(a), that is | 95 |
| covered by the fee-for-service component of the medicaid program | 96 |
| but not included in the state maximum allowable cost program | 97 |
| established under section 5111.082 of the Revised Code. | 98 |
| (2) "Pharmacy provider" means a terminal distributor of | 99 |
| dangerous drugs, as defined in section 4729.01 of the Revised | 100 |
| Code, that has all of the following: | 101 |
| (a) A valid drug enforcement agency number; | 102 |
| (b) A licensed pharmacist in full and actual charge of a | 103 |
| pharmacy; | 104 |
| (c) A valid medicaid provider agreement. | 105 |
| (3) "Wholesale acquisition cost" has the same meaning as in | 106 |
| 42 U.S.C. 1395w-3a(c)(6)(B). | 107 |
| (B) The director of job and family services shall revise the | 108 |
| amount that the fee-for-service component of the medicaid program | 109 |
| reimburses a pharmacy provider for an estimated acquisition cost | 110 |
| pharmaceutical not later than one business day after the wholesale | 111 |
| acquisition cost for the pharmaceutical is revised. The revision | 112 |
| to the reimbursement rate for the estimated acquisition cost | 113 |
| pharmaceutical shall be based on the full amount of the | 114 |
| pharmaceutical's revised wholesale acquisition cost. | 115 |
| Section 2. That sections 5111.07 and 5111.071 of the Revised | 116 |
| Code are hereby repealed. | 117 |
| Section 3. That Section 309.30.76 of Am. Sub. H.B. 1 of the | 118 |
| 128th General Assembly is hereby repealed. | 119 |
| Section 4. Until a Medicaid dispensing fee is established | 120 |
| pursuant to section 5111.071 of the Revised Code, as enacted by | 121 |
| this act, the Medicaid dispensing fee for each noncompounded drug | 122 |
| covered by the fee-for-service component of the Medicaid program | 123 |
| shall be the amount of the dispensing fee in effect on December | 124 |
| 31, 2009. | 125 |