Senate Bill No. 551
(By Senators Walker, Bailey, Schoonover, Sharpe, Minard,
Hunter, Snyder, Bowman, Mitchell, Ball, Love and Minear)
____________
[Introduced February 17, 1999; referred to the Committee on
Health and Human Resources; and then to the Committee on
Finance.]
____________
A BILL to amend chapter nine of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article four-d, relating
to the West Virginia medicaid prescription drug prior
authorization act; providing legislative findings;
definitions; creating the West Virginia medicaid prior
authorization advisory board; defining the purpose,
composition, duties and powers of the board; and providing
that the board make recommendations to the state medicaid
agency.
Be it enacted by the Legislature of West Virginia:
That chapter nine of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, be amended by adding thereto
a new article, designated article four-d, to read as follows:
ARTICLE 4D. MEDICAID PRESCRIPTION DRUG PRIOR AUTHORIZATION ACT.
§9-4D-1. Legislative findings.
The Legislature finds that it is in the best interest of the
citizens of the state of West Virginia, as consumers of health
care products and services, to provide a health care delivery
system that is effective and efficient, recognizing that
prescription drugs are a cost-effective component of total
patient care as it relates to any and all health care programs
administered by the West Virginia state medicaid agency.
The medicaid prescription drug study group, was established
by Executive Order No. 16-97 of Governor Cecil H. Underwood on
the first day of November, one thousand nine hundred ninety- seven, for the purpose of evaluating strategies and options
available to provide cost efficient and clinically effective
pharmaceutical services to beneficiaries of the West Virginia
medicaid program. Consistent with the final report issued by the
medicaid prescription drug study group, dated the twenty-ninth
day of September, one thousand nine hundred ninety-eight, the
Legislature finds that mandatory prior authorization of
prescription drugs can impose severe hardships on both recipients
and providers if not implemented with due consideration of
alternatives and development of procedures to alleviate any
potential hardships. Before implementation, of any prior
authorization programs, the state medicaid agency should: Review all alternatives, including education of patients and providers;
provide for input by all affected parties; adopt steps to
mitigate the impact on beneficiaries currently receiving the
targeted medications; ensure adequate notice to beneficiaries and
providers to allow for a smooth transition; and try other
interventions, including education of patients and providers,
before implementing prior authorization.
The Legislature further finds that in order for prior
authorization requirements of prescription drugs to work
effectively and efficiently, the safeguards and oversight set
forth in this article must be established.
§9-4D-2. Definitions.
(a) "Board" means the medicaid drug prior authorization
advisory board established pursuant to this article.
(b) "Commissioner" means the individual designated by the
department of health and human resources to be in charge of the
state medicaid agency.
(c) "Community pharmacist" is a pharmacist who practices in
a free-standing store not located in a larger complex such as a
mall.
(d) "Department" means the department of health and human
resources.
(e) "Drug" means a drug, as defined in subsection (v),
section one-b, article five, chapter thirty of this code, which has been prescribed by a duly authorized health care
professional.
(f) "Drug utilization review" means both retrospective and
prospective drug utilization review. Such programs are designed
to educate physicians and pharmacists and thereby ensure that
prescriptions are: (1) Appropriate; (2) medically necessary;
and (3) not likely to have adverse medical results. Prospective
drug utilization review screens for such problems as therapeutic
duplication, drug-disease contraindications, drug-drug
interactions, incorrect dosage or duration of treatment, drug
allergy interactions and clinical abuse/misuse. Retrospective
drug utilization review is the periodic examination of medicaid
pharmacy claims data and other information sources to find
patterns of fraud, abuse, gross overuse, or inappropriate or
medically unnecessary care on part of physicians, pharmacists and
patients.
(g) "Manufacturer" means the person who performs the
operations necessary to produce a drug, as set forth in the
United States food and drug administration's regulation,
currently at 21 Code of Federal Regulations 201.1.
(h) "Prescription drug" means a drug, as defined in
subsection (v), section one-b, article five, chapter thirty of
this code, which has been prescribed by a duly authorized health
care professional.
(i) "Prior authorization" means the administrative process
of obtaining approval from a designated authority as to the
appropriateness of a service or medication in order for the
service or medication to be dispensed or reimbursed.
(j) "State medicaid agency" means the division of the
department of health and human resources that is the federally
designated single state agency charged with administration and
supervision of the state medicaid program.
(k) "State plan" means the medicaid state plan as proposed
by the state medicaid agency and approved by the federal agency
authorized to approve such plans.
§9-4D-3. Medicaid drug prior authorization advisory board
created; composition, appointment, term, compensation and
immunity.
(a) There is hereby created a medicaid prior authorization
advisory board, comprised of ten members to be appointed by the
commissioner. Five members shall be physicians, at least three
of whom shall care for a significant number of medicaid patients;
three shall be pharmacists, at least two of whom shall be
community pharmacists who serve a significant number of medicaid
patients; one member shall be a representative of the
pharmaceutical manufacturers; and one member shall be a medicaid
beneficiary. All members shall be residents of the state of West
Virginia. When making appointments to the board, with the exception of the medicaid beneficiary, all appointments shall be
made from nominations made by the West Virginia medical
association, West Virginia academy of family practice physicians,
the West Virginia pharmacists association, West Virginia
osteopathic medicine society and the pharmaceutical research and
manufacturers of America.
The commissioner, or his or her designee, shall be an ex
officio member of the board without vote and shall serve as
secretary of the board without additional compensation.
The members of the board, shall be appointed for overlapping
terms of four years, except that the original appointments shall
be for terms of one, two, three and four years, respectively.
Any member whose term expires may be reappointed by the
commissioner.
Each member of the committee shall receive reimbursement for
reasonable and necessary travel expenses for each day actually
served in attendance at meetings of the council in accordance
with the state's travel regulations. Requisitions for the
expenses shall be accompanied by an itemized statement, which
shall be filed with the auditor and preserved as a public record.
From its membership, the board shall elect a physician as a
chairman of the board.
(b) The members of the board shall be immune, individually
and jointly, from civil liability for any act, decision, or omission done or made in performance of their duties pursuant to
this article while serving as a member of such board, provided
that such act, decision, or omission is not done or made in bad
faith or with malicious intent.
§9-4D-4. Board meetings, duties and powers generally.
(a) The board shall establish its own procedural rules and
meet at such times and places as are designated by the secretary
or at the written request of two board members, but in no event
shall the board meet less than four times per year. A quorum for
action by the board consists of six members. Except as set forth
in this article, all proceedings of the board are subject to the
West Virginia open government proceedings act.
(b) In addition to other powers and duties expressly set
forth elsewhere in this article, the board shall make
recommendations to the state medicaid agency regarding drugs that
are presently subject to prior authorization and drugs or drug
categories to be subject to prior authorization and prior
authorization requirements for prescription drug coverage under
the state plan, as well as any subsequent amendments to or
revisions of such prior authorization requirements from time to
time.
The state medicaid agency may accept or reject such
recommendations, in whole or in part, and may amend or add to
such recommendations, except that the state medicaid agency may not add to the recommendation of drugs and categories of drugs to
be subject to prior authorization. Any drug identified by a
state agency for possible inclusion for prior authorization shall
likewise be received by the state medicaid agency and dealt with
in accordance with the same process provided for any other drug.
(c) In formulating its recommendations to the state medicaid
agency, the board shall conduct public hearings prior to making
such recommendations to the state medicaid agency. The state
medicaid agency shall give thirty days' written notice by mail of
the time and place of its hearings and meetings to any
manufacturer whose product is being reviewed by the board and to
any interested persons who request the board in writing that they
be informed of such hearings and meetings. Such persons shall be
afforded a reasonable opportunity to be heard and present
information. Thirty days prior to the public hearing, the board
shall publish a notice in the Saturday Charleston newspapers and
the state register. The notice shall identify the specific
subject of the public hearing and the time date and place of the
hearing.
§9-4D-5. Prior authorization of prescription drug products.
(a) The board shall review prescription drug products to
recommend for prior authorization under the state plan in
accordance with this article and regulations promulgated by the
state medicaid agency in accordance with the provisions of chapter twenty-nine-a of this code. Such review may be initiated
by the board itself, or by written request of the state medicaid
agency. The board shall complete its recommendations to the
state medicaid agency within no more than six months from receipt
of any such request. Before recommending that a drug or category
of drugs be subject to prior authorization, the state medicaid
agency shall review all other alternatives; provided for input
from beneficiaries; and try other interventions, such as provider
and patient education.
In formulating its recommendations to the state medicaid
agency the board shall consider the potential impact on patient
care and the potential fiscal impact of prior authorization on
pharmacy, physician, hospitalization and outpatient costs. Any
proposed regulation making a drug or category of drugs subject to
prior authorization shall be accompanied by a statement of the
estimated impact of such action on pharmacy, physician,
hospitalization and outpatient costs.
(b) The board may not recommend that a new drug or category
be subject to prior authorization, until twelve months of drug
utilization review data is available to review.
(c) The committee shall review immediately any prescription
drug which became subject to prior authorization on or after the
first day of January, one thousand nine hundred ninety-eight.
The prescription drug shall be available without prior authorization until this review is completed.
(d) Except as part of its initial action to review
prescription drugs subject to prior authorization on or after the
first day of January, one thousand nine hundred ninety-eight, the
board may not review any drug for which it has recommended or the
state medicaid agency has required prior authorization within the
previous twelve months, unless new or previously unavailable
relevant and objective information is presented.
(c) After receiving a recommendation from the board that a
drug is recommended for prior authorization, the bureau shall
notify the manufacturer of any such drug that the same has been
so recommended. Such notice shall inform the manufacturer of the
results of the clinical findings and any pertinent evidence from
the evaluation conducted by the board that demonstrates
prescribing or dispensing patterns indicative of abuse, misuse or
inappropriate use. Such notice shall further inform the
manufacturer that it may, within one hundred eighty days of the
date of the notice, appear before the board to propose a plan of
drug utilization instruction to be implemented to instruct
prescribers and pharmacists in criteria and standards designed to
identify the potential abuse, misuse or inappropriate use of the
drug and to prevent such abuse, misuse, or inappropriate use.
Development of an acceptable plan for educational intervention of
patients and providers shall stay the requirement of prior authorization of such drug. In the event that a plan is not
submitted by the affected manufacturer within such one hundred
eighty days, or a plan is submitted but found not to be
acceptable, the drug recommended for prior authorization may be
so required with the approval for payment granted only when the
drug is prescribed for a medically accepted indication, as
required by section 1927 of the Social Security Act.
§9-4D-6. System performance requirements.
(a) From and after the effective date of this article, the
state medicaid agency shall not subject prescription drugs or
category of drugs to prior authorization requirements until:
(1) The state medicaid agency has in place administrative
systems and protocols that accept telephonic and facsimile
requests for authorization from all health care providers
qualified to prescribe or dispense prescription drugs, on a
continuous basis, twenty-four hours a day, seven days a week,
with staff and system resources sufficient to provide responses
to requests for prior authorization within four hours of the
submission of the requests.
Further, if the state medicaid agency fails to provide a
response to a request for prior authorization within the time
limits established, the health care provider or person qualified
to dispense prescription drugs making the request, shall be
authorized to dispense or provide the patient with a supply of medication for which the request was made sufficient to cover the
patient's need for a seventy-two hour period, or such lesser
period of time as prescribed by the health care provider, and the
bureau shall cover the cost of such a drug or medication, and
further, if no response is received within twenty-four hours of
the time so made, the prescription shall be deemed to have been
authorized as written by the prescriber.
The state medicaid agency shall provide physicians with an
appeals process which is transparent, open, and offers a timely
response to any decision which results in the denial of care for
patients.
The state medicaid agency shall provide patients with access
to a grievance appeals process.
§9-4D-7. Avoidance of interfering with the practice of medicine.
Except as hereinafter provided, the state medicaid agency
may not use a system of prior authorization for the purchase of
drugs to restrict payment of a drug prescribed for a medically
accepted indication, as that term is defined under federal law,
by requiring the prescribing physician to alter the prescribed
therapy or demonstrate use of any treatment other than that
which, in the said physician's professional judgment, is what the
patient needs or requires.
§9-4D-8. Confidential proprietary information.
Confidential proprietary information identified as such by a manufacturer or supplier in writing in advance and furnished to
the board or the bureau, may not be subject to the disclosure
requirements of the West Virginia Open Government Proceedings
Act. The department shall promulgate rules and regulations in
accordance with the provisions of chapter twenty-nine-a of this
code to establish the manner by which such confidential
information shall be protected.
§9-4D-9. Medical practice concerns and minimization of patent
burdens.
The board, in cooperation with physicians, other
prescribers, pharmacists, patients and drug manufacturers, shall
observe a policy of avoidance of prior authorization, except to
address problems of abuse, misuse or inappropriate use. The
board shall periodically recommend to the state medicaid agency
that it remove drugs from the prior authorization category
consistent with current data regarding and dispensing patterns as
annually evaluated. The board shall adopt policies to ensure
that the administrative cost and burden of complying with prior
authorization requirements is not imposed on health care
providers who treat patients for a particular disease or
condition that involves the utilization of a drug that is subject
to prior authorization. In no event shall the majority of drugs
in a particular therapeutic category or subcategory be subject to
prior authorization absent compelling evidence of systematic and consistent abuse, misuse or inappropriate use.
The state medicaid agency shall further propose rules for
legislative promulgation, pursuant to chapter twenty-nine-a of
this code, that provide for the timely approval of the dispensing
and payment for any drug required to have prior authorization.
The proposed rules shall contain provisions for the prompt review
of any decision to withhold dispensing or payment, to avoid
delaying care ordered by a patient's health care provider as
medically necessary.
§9-4D-10. Annual report to joint commission; legislative
oversight.
(a) The board shall report annually to the legislative
oversight commission on health and human resources accountability
regarding its recommendations for prior authorization of drug
products.
(b) The medicaid prior authorization advisory board shall
annually submit a report to the Legislature detailing information
for the preceding year as follows:
(1) The number of requests received during the year for
prior authorization by drug;
(2) A listing of the drugs and drug categories that were
placed under prior authorization along with a written statement
of the rationale for the prior authorization of the drug;
(3) The average administrative cost to the department for each such call, factoring, among other things, staff salaries and
benefits, telephone service, management information systems,
consulting fees, office expenses and overhead;
(4) The total administrative cost to the board and relevant
state agencies for maintaining a prior authorization program;
(5) The approximate time spent by health care providers in
complying with prior authorization requirements, including time
spent on hold and attempting to secure an open phone line;
(6) The number of prior authorization requests that resulted
in an approval and permitting the dispensing of the prescription
as written;
(7) The number of negative responses to requests for prior
authorization that were appealed, the number of appeals that
resulted in a reversal of the negative response and the number of
appeals that sustained the negative response;
(8) The number and nature of complaints lodged by consumer;
and
(9) The number and nature of complaints lodged by health
care providers, including pharmacists.
NOTE: The purpose of this bill is to create the West
Virginia medicaid prescription drug prior authorization act;
provide legislative findings; provide definitions; create the
West Virginia medicaid prior authorization advisory board; define
the purpose, composition, duties and powers of the board; and
provide that the board make recommendations to the state medicaid agency.
This article is new; therefore, strike-throughs and
underscoring have been omitted.