To enact new sections 5111.07 and 5111.071 and sections 5111.072 and 5111.085, to repeal sections 5111.07 and 5111.071 of the Revised Code, and to repeal Section 309.30.76 of Am. Sub. H.B. 1 of the 128th General Assembly regarding the Medicaid reimbursement rate for estimated acquisition cost pharmaceuticals, the Medicaid dispensing fee, and the number of brand name drugs available at one time under the Medicaid program without prior authorization.

Section 1.  That new sections 5111.07 and 5111.071 and sections 5111.072 and 5111.085 of the Revised Code be enacted to read as follows:

Sec. 5111.07.  (A) As used in this section and sections 5111.071 and 5111.072 of the Revised Code:

(1) "Pharmacy provider" means a terminal distributor of dangerous drugs, as defined in section 4729.01 of the Revised Code, that has all of the following:

(a) A valid drug enforcement agency number;

(b) A licensed pharmacist in full and actual charge of a pharmacy;

(c) A valid medicaid provider agreement.

(2) "Prescribed drugs" has the same meaning as in 42 C.F.R. 440.120(a).

(B) Once every two years, the department of job and family services shall contract with a research organization that is associated with an educational institution for the research organization to perform a survey or assessment of the costs that pharmacy providers incur in dispensing prescribed drugs under the fee-for-service component of the medicaid program. The research organization selected for the contract shall be mutually agreed to by the department and entities that represent pharmacy providers. The contract with a research organization shall require the organization to do all of the following in conducting the survey or assessment:

(1) Use a standard template that the department shall develop in consultation with entities that represent pharmacy providers;

(2) Use data from a representative sample of pharmacy providers;

(3) Determine the average cost per prescription for pharmacy providers to dispense prescribed drugs under the fee-for-service component of the medicaid program by reviewing all of the following pharmacy provider costs:

(a) Operational and overhead costs;

(b) Costs of providing professional counseling in the course of dispensing prescribed drugs;

(c) Salaries and other related administrative costs;

(d) All other costs associated with operating a pharmacy and dispensing prescribed drugs under the fee-for-service component, including costs relating to coordination of benefits, bad debt, uncollected copayments, payment lag times, and rejected claims.

(4) If the director of job and family services, under section 5111.071 of the Revised Code, establishes a higher dispensing fee for generic prescribed drugs than brand name prescribed drugs, make separate per prescription average cost determinations under division (B)(3) of this section for dispensing generic prescribed drugs and dispensing brand name prescribed drugs.

Sec. 5111.071.  Not later than ninety days after the completion of the initial survey or assessment for which the department of job and family services contracts under section 5111.07 of the Revised Code, the director of job and family services shall adopt rules under section 5111.02 of the Revised Code establishing a dispensing fee for pharmacy providers who dispense prescribed drugs under the fee-for-service component of the medicaid program. In establishing the dispensing fee, the director shall ensure that the dispensing fee equals the average cost per prescription that pharmacy providers incur in dispensing prescribed drugs under the fee-for-service component of the medicaid program as determined by the survey or assessment. The dispensing fee for generic prescribed drugs may be higher than the dispensing fee for brand name prescribed drugs.

The director shall amend the rules regarding the dispensing fee not later than ninety days following the completion of each subsequent survey or assessment for which the department contracts under section 5111.07 of the Revised Code. The amendments shall revise the dispensing fee to reflect changes in the average cost per prescription that pharmacy providers incur in dispensing prescribed drugs under the fee-for-service component of the medicaid program as determined by the subsequent survey or assessment.

Sec. 5111.072.  A medicaid recipient eligible for the prescribed drugs benefit under the fee-for-service component of the medicaid program may obtain up to four brand name prescribed drugs at one time under the fee-for-service component without receiving prior authorization. To obtain more than four brand name prescribed drugs at one time under the fee-for-service component, the recipient must receive prior authorization from the department of job and family services or another entity with which the department contracts to provide prior authorization services. The director of job and family services shall adopt rules under section 5111.02 of the Revised Code as necessary to implement this section.

Sec. 5111.085.  (A) As used in this section:

(1) "Estimated acquisition cost pharmaceutical" means a prescribed drug, as defined in 42 C.F.R. 440.120(a), that is covered by the fee-for-service component of the medicaid program but not included in the state maximum allowable cost program established under section 5111.082 of the Revised Code.

(2) "Pharmacy provider" means a terminal distributor of dangerous drugs, as defined in section 4729.01 of the Revised Code, that has all of the following:

(a) A valid drug enforcement agency number;

(b) A licensed pharmacist in full and actual charge of a pharmacy;

(c) A valid medicaid provider agreement.

(3) "Wholesale acquisition cost" has the same meaning as in 42 U.S.C. 1395w-3a(c)(6)(B).

(B) The director of job and family services shall revise the amount that the fee-for-service component of the medicaid program reimburses a pharmacy provider for an estimated acquisition cost pharmaceutical not later than one business day after the wholesale acquisition cost for the pharmaceutical is revised. The revision to the reimbursement rate for the estimated acquisition cost pharmaceutical shall be based on the full amount of the pharmaceutical's revised wholesale acquisition cost.

Section 2.  That sections 5111.07 and 5111.071 of the Revised Code are hereby repealed.

Section 3.  That Section 309.30.76 of Am. Sub. H.B. 1 of the 128th General Assembly is hereby repealed.

Section 4.  Until a Medicaid dispensing fee is established pursuant to section 5111.071 of the Revised Code, as enacted by this act, the Medicaid dispensing fee for each noncompounded drug covered by the fee-for-service component of the Medicaid program shall be the amount of the dispensing fee in effect on December 31, 2009.