FISCAL NOTE
Date Requested: January 31, 2022
Time Requested: 02:18 PM |
| Agency: |
Health and Human Resources, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1999 |
Introduced |
SB511 |
|
|---|
| CBD Subject: |
Insurance |
|---|
|
FUND(S):
0403 - DIV OF HUMAN SERVICES GENERAL ADMINISTRATION FUND; 8722 - CONS FEDERAL FUNDS DIV HUMAN SERVICES GEN ADMN FD
Sources of Revenue:
Other Fund General & Federal
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to prohibit insurers from denying prescription drugs for the mitigation of opioid withdrawal symptoms.
Under the bill, a Medicaid managed care organization contracted to provide Medicaid benefits pursuant to Chapter 9 of this code may not retrospectively deny coverage for health care services provided to a covered person when prior approval has been obtained from the insurer or its designee for those services, unless the approval was based upon fraudulent, materially inaccurate, or misrepresented information submitted by the covered person, authorized person, or the provider for health benefit plans issued or renewed on or after the effective date of the section.
It also provides that a Medicaid managed care organization may not require or conduct a prospective or concurrent review for a prescription drug that is used in the treatment of alcohol or opioid use disorder; and that contains Methadone, Buprenorphine, or Naltrexone; or that was approved before the effective date of this section by the United States Food and Drug Administration for the mitigation of opioid withdrawal symptoms.
It is estimated that the State Medicaid pharmacy spend would increase by at least $12 million per year ($8,902,200 federal and $3,087,800 state based on 74.185 FMAP) due to the loss of supplemental rebates, as well as the absence of drug utilization controls. It should be noted that per federal regulations exact rebate amounts are confidential and may not be disclosed.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2022
Increase/Decrease
(use"-") |
2023
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
12,000,000 |
12,000,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
12,000,000 |
12,000,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
If this bill were to pass, WV Medicaid would no longer be able to enforce the preferred and non-preferred status of covered medication assisted treatment (MAT) drugs. Substantial savings are created through the supplemental drug rebate program, where drugs are given preferred status based on a combination of clinical factors and overall cost (determined by the manufacturer's price minus the combination of the federal rebate plus any negotiated supplemental rebates).
This bill would prevent Medicaid from honoring our negotiated manufacturer supplemental rebate agreements therefore causing the state to forfeit these rebate savings. The loss of supplemental rebate alone has been estimated to be as much as $3 million per quarter ($12M yearly) by Change HealthCare (CHC is WV Medicaid's rebate negotiator).
It is also likely that without utilization controls in place, more expensive products which are currently non-preferred would gain market share.
Memorandum
The 1990 Omnibus Budget Reconciliation Act (OBRA '90) established the Drug Utilization Review (DUR), which was implemented by state Medicaid outpatient prescription programs in 1993. Pharmacists performing DURs must review past patterns of drug misuse, monitor current therapy, and offer patient counseling.
OBRA 90 Subtitle B: Medicaid - Part 1: Reductions in Spending - Amends the Medicaid program to deny federal matching funds for prescription drugs unless rebate agreements are in effect and states implement drug use review programs by January 1, 1993. Requires manufacturers to have entered into and have in effect a rebate agreement with the Secretary on behalf of the states in order to receive payment for covered outpatient drugs. Prohibits the application of State plan drug access limitations to drugs covered under a rebate agreement. Sets forth provisions with respect to the terms of the rebate agreements, rebate amounts, limitation on coverage of drugs, and pharmacy reimbursement. Outlines the requirements for state drug utilization review programs (DURs).
Below is a general summary of drug utilization review:
Prospective DUR: This process places responsibility on the health care practitioner to conduct a review of the drug order when it is presented for filling and proactively resolve potential drug-patient problems. It affords the pharmacist or other health care practitioner the opportunity to interact with patients and members of the health care team to work on a treatment plan for each patient. In the retail and institutional settings, a pharmacist can assess the prescription order at the time of dispensing and, using information from the patient's medical and/or pharmacy record, determine the appropriateness of the drug therapy prescribed. If the pharmacist identifies opportunities for improved patient care, he/she can contact the prescriber to discuss treatment alternatives.
Concurrent DUR: The pharmacist and other health care practitioners have the responsibility in the concurrent DUR process to assess the ongoing therapy of the patient and, when necessary, intervene to help modify the patient's treatment plan. When caring for those patients with multiple diseases, case managers may become actively involved in the management of the patient's condition. Through interaction with the prescriber, a health care practitioner within a managed care organization can better understand the care plan the prescriber would like to follow. Through patient counseling, health care practitioners can offer education on the proper use of medications and determine if there are specific patient needs.
Retrospective DUR: Due to their expertise in drug therapy management, health care practitioners play a leading role in describing the relationship between drug use and patient outcomes using retrospective DUR. When addressing population-based retrospective DUR issues rather than individual patient care, the managed care pharmacist has a primary role in planning, organizing, and implementing DUR activities. Pharmacists can educate health care professionals regarding drug use, participate in decision making within the context of the pharmacy and therapeutics (P&T) committee, and serve as members of DUR and other committees where input concerning drug use and drug policy development is required.
Person submitting Fiscal Note: Bill J. Crouch
Email Address: dhhrbudgetoffice@wv.gov