Senate Bill No. 374–Senator Schneider

 

March 17, 2003

____________

 

Referred to Committee on Human Resources and Facilities

 

SUMMARY—Makes various changes concerning coverage of prescription drugs by Medicaid fee-for-service program. (BDR 38‑764)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: Yes.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to public welfare; prohibiting a Medicaid fee-for-service program that provides coverage for prescription drugs from taking certain actions concerning the provision or coverage of prescription drugs; requiring the Department of Human Resources to submit a biennial report to the Legislature concerning the provision of coverage for prescription drugs by a Medicaid fee-for-service program; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. Chapter 422 of NRS is hereby amended by adding

1-2  thereto the provisions set forth as sections 2 to 9, inclusive, of this

1-3  act.

1-4  Sec. 2.  1.  To the extent permitted by federal law, a

1-5  Medicaid fee-for-service program established in the State of

1-6  Nevada that provides coverage for prescription drugs may not

1-7  request or require, directly or indirectly, a physician who treats

1-8  patients receiving benefits pursuant to Medicaid to change a

1-9  prescription for a drug that has previously been prescribed to and

1-10  used by a recipient of Medicaid for a specific condition to a

1-11  prescription for another drug based primarily on economic

2-1  considerations as a condition of the recipient of Medicaid

2-2  receiving:

2-3  (a) Coverage for the prescription drug;

2-4  (b) A favorable cost-sharing arrangement for the prescription

2-5  drug; or

2-6  (c) A prompt refill or renewal of a prescription for the

2-7  prescription drug.

2-8  2.  If a recipient of Medicaid files an action against the

2-9  Department for a violation of the provisions of this section and the

2-10  court finds that the Medicaid fee-for-service program acted with

2-11  disregard for the views of a physician treating the recipient in

2-12  violating the provisions of this section, the recipient may:

2-13      (a) Obtain compensation of up to $100,000 as liquidated

2-14  damages; and

2-15      (b) Recover all reasonable costs and expenses incurred in the

2-16  action, including the cost of expert witnesses, court fees and

2-17  attorney’s fees.

2-18      Sec. 3.  1.  A Medicaid fee-for-service program established

2-19  in the State of Nevada that provides coverage for prescription

2-20  drugs shall not use a management technique for the care of

2-21  patients receiving prescription drugs pursuant to the program

2-22  unless the program assures that the clinical foundation of the

2-23  management technique is consistent with the provisions of quality

2-24  patient care. For the purposes of this section, a “management

2-25  technique for the care of patients receiving prescription drugs”

2-26  includes, without limitation, the use of a formulary, a preferred

2-27  drug list, treatment protocols or guidelines, or step therapy, or the

2-28  requirement of prior authorization for prescription drugs.

2-29      2.  The assurance required pursuant to subsection 1 must

2-30  include, without limitation:

2-31      (a) Evidence of a clinically based definition for each

2-32  therapeutic class of prescription drugs covered by the program;

2-33      (b) Reliance on scientific and clinical data in updating

2-34  formularies, preferred drug lists, treatment protocols or

2-35  guidelines, and step therapy requirements; and

2-36      (c) For any prescription drug that is included within a

2-37  program that requires prior authorization, the use of a specific set

2-38  of clinical criteria that specifies when that drug is authorized for

2-39  coverage and that is made available to providers of health care

2-40  who provide services to patients receiving benefits pursuant to the

2-41  Medicaid fee-for-service program and to such patients.

2-42      3.  If a recipient of Medicaid files an action against the

2-43  Department for a denial of coverage for a prescription drug that is

2-44  based on the use of a management technique in violation of the

2-45  provisions of this section and the court finds that the Medicaid

3-1  fee-for-service program acted with disregard for the views of a

3-2  physician treating the recipient in using the management

3-3  technique the recipient may:

3-4  (a) Obtain compensation of up to $100,000 as liquidated

3-5  damages; and

3-6  (b) Recover all reasonable costs and expenses incurred in the

3-7  action, including the cost of expert witnesses, court fees and

3-8  attorney’s fees.

3-9  Sec. 4.  1.  Any program that requires prior authorization

3-10  for a prescription drug within a Medicaid fee-for-service program

3-11  established in the State of Nevada must:

3-12      (a) Provide for the receipt of requests for prior authorization

3-13  24 hours a day, 7 days a week, via telephone, facsimile or

3-14  electronic transmission;

3-15      (b) Provide a response to a request for prior authorization:

3-16          (1) Within 10 minutes after the submission of the request,

3-17  in a situation in which a physician treating the patient for whom

3-18  authorization for the prescription drug is being requested indicates

3-19  that a delay of care in the treatment of the patient exclusively to

3-20  fulfill administrative requirements would be medically

3-21  inappropriate;

3-22          (2) Within 4 hours after the submission of the request, in a

3-23  situation in which the physician who prescribed the prescription

3-24  drug for which authorization is being requested indicates that the

3-25  prescription drug is for an acute condition; or

3-26          (3) Within 24 hours after the submission of the request, in

3-27  a situation in which the physician who prescribed the prescription

3-28  drug for which authorization is being requested indicates that the

3-29  prescription drug is for a chronic or nonacute condition;

3-30      (c) Provide that in a situation described in subparagraph (1) or

3-31  (2) of paragraph (b), if the program of prior authorization denies a

3-32  request for prior authorization, the physician appeals that denial

3-33  in a timely manner and a response to the appeal is not received

3-34  within 24 hours after the initial request for prior authorization

3-35  was made, the program of prior authorization will provide for the

3-36  approval of:

3-37          (1) An initial course of therapy of the prescription drug for

3-38  an acute condition; or

3-39          (2) A 7-day supply of the prescription drug for a chronic

3-40  condition; and

3-41      (d) Not require prior authorization for the renewal or refill of

3-42  a prescription for a prescription drug that is authorized by the

3-43  same person who initially prescribed the prescription drug.

3-44      2.  As used in this section:

3-45      (a) “Acute condition” means:

4-1       (1) A symptom, condition or disease that is expected to last

4-2  two weeks or less; or

4-3       (2) A condition which requires prompt receipt of

4-4  medication for pain, for the treatment of an infection or an

4-5  exposure that requires antibiotics, or for symptoms which threaten

4-6  the life of a person.

4-7  (b) “Chronic condition” means a symptom, condition or

4-8  disease that is expected to last longer than two weeks.

4-9  Sec. 5.  1.  A Medicaid fee-for-service program established

4-10  in the State of Nevada that provides coverage for prescription

4-11  drugs shall not discriminate against recipients of Medicaid by

4-12  using either a cost-sharing requirement that is based on an

4-13  incentive to use a prescription drug or a tiered copayment for a

4-14  prescription drug that is based solely on:

4-15      (a) The relative cost of the prescription drug;

4-16      (b) The form of dosage of the prescription drug;

4-17      (c) Technology relating to the prescription drug;

4-18      (d) The regulatory status of the prescription drug; or

4-19      (e) The status of the patent for the prescription drug.

4-20      2.  Each cost-sharing requirement that is based on an

4-21  incentive to use a prescription drug and each tiered copayment for

4-22  a prescription drug used by a Medicaid fee-for-service program

4-23  established in the State of Nevada for the provision of prescription

4-24  drugs to recipients of Medicaid must be based on providing

4-25  choices to recipients of Medicaid so that in making decisions

4-26  concerning prescription drugs recipients can take cost into

4-27  account without sacrificing the quality of care they receive

4-28  pursuant to Medicaid, including, without limitation, cost-sharing

4-29  requirements and tiered copayments that are based on providing

4-30  choices in the form of a dosage and the substitution of a generic

4-31  pharmaceutical drug, and choices related to the convenience of a

4-32  product.

4-33      3.  If a recipient of Medicaid files an action against the

4-34  Department based on payments made over the previous 5 years by

4-35  the recipient that were required by the Medicaid fee-for-service

4-36  program in violation of the provisions of this section the recipient

4-37  may, if the court finds that the Medicaid fee-for-service program

4-38  required payments in violation of the provisions of this section:

4-39      (a) Obtain the difference between the payments actually made

4-40  by the recipient and the payments the recipient would have been

4-41  required to make if the Medicaid fee-for-service program did not

4-42  require payments in violation of the provisions of this section, and

4-43  interest on that difference;

4-44      (b) Obtain compensation for the discriminatory treatment in

4-45  an amount the court determines is appropriate to deter the

5-1  Medicaid fee-for-service program from violating the provisions of

5-2  this section in the future; and

5-3  (c) Recover all reasonable costs and expenses incurred in the

5-4  action, including the cost of expert witnesses, court fees and

5-5  attorney’s fees.

5-6  Sec. 6.  1.  If a Medicaid fee-for-service program established

5-7  in the State of Nevada that provides coverage for prescription

5-8  drugs denies coverage for a prescription drug which was

5-9  prescribed to a recipient of Medicaid for a medical condition

5-10  which is covered under the Medicaid fee-for-service program, the

5-11  recipient, or a provider of health care or other person acting on

5-12  behalf of the recipient, may request a review of the decision to

5-13  deny coverage before appealing to the Department in the manner

5-14  set forth in NRS 422.276 to 422.279, inclusive. The Medicaid fee-

5-15  for-service program must:

5-16      (a) Complete a review requested pursuant to this subsection

5-17  within 4 weeks after the date on which the review was requested;

5-18  and

5-19      (b) Notify the recipient or person acting on behalf of the

5-20  recipient in writing of the results of its review within 7 days after it

5-21  completes the review.

5-22      2.  A recipient of Medicaid, or a provider of health care or

5-23  other person acting on behalf of the recipient, may, pursuant to

5-24  NRS 422.276 to 422.279, inclusive, appeal the results of a review

5-25  conducted pursuant to subsection 1 to the Department if:

5-26      (a) The prescription drug is not excluded from the benefits

5-27  available to the recipient and the person who prescribed the

5-28  prescription drug to the recipient states that the denial of coverage

5-29  for the recipient is a denial of medically necessary care; or

5-30      (b) The Medicaid fee-for-service program fails to comply with

5-31  the requirements of paragraph (a) or (b) of subsection 1.

5-32      3.  Until the time that an appeal filed pursuant to subsection 2

5-33  is final, the Medicaid fee-for-service program shall pay for the

5-34  provision of the prescription drug for which coverage was denied

5-35  to the recipient of Medicaid.

5-36      4.  A recipient of Medicaid who succeeds in an appeal filed

5-37  pursuant to subsection 2 may:

5-38      (a) If the court finds that the Medicaid fee-for-service program

5-39  failed to pay for the provision of the prescription drug during the

5-40  appeal as required pursuant to subsection 3, obtain payment

5-41  retroactively for the provision of the prescription drug, and

5-42  interest on the amount paid by the recipient for the prescription

5-43  drug;

5-44      (b) If the court finds that the Medicaid fee-for-service program

5-45  acted with disregard for the views of a physician treating the

6-1  recipient in denying coverage of the prescription drug, obtain

6-2  compensation of up to $100,000 as liquidated damages; and

6-3  (c) Recover all reasonable costs and expenses incurred in the

6-4  appeal, including the cost of expert witnesses, court fees and

6-5  attorney’s fees.

6-6  Sec. 7.  1.  In addition to any other remedy provided by law,

6-7  a person aggrieved by a violation or threatened violation of the

6-8  provisions of sections 2 to 6, inclusive, of this act may seek

6-9  injunctive relief as provided by law.

6-10      2.  If a person prevails in any proceeding to seek injunctive

6-11  relief for a violation or threatened violation of the provisions of

6-12  sections 2 to 6, inclusive, of this act, he may recover all reasonable

6-13  costs and expenses incurred in the proceeding, including the cost

6-14  of expert witnesses, court fees and attorney’s fees.

6-15      3.  A contractor, administrator or fiscal agent of the Medicaid

6-16  fee-for-service program who is responsible for a violation which

6-17  results in a person obtaining injunctive relief pursuant to this

6-18  section is ineligible to provide services to recipients of the

6-19  Medicaid fee-for-service program until one year after the date on

6-20  which it establishes to the satisfaction of the court that the services

6-21  it intends to provide to recipients of the Medicaid fee-for-service

6-22  program will comply with sections 2 to 6, inclusive, of this act.

6-23      Sec. 8.  1.  If a Medicaid fee-for-service program violates the

6-24  provisions of section 2, 3 or 4 of this act, a physician who treats

6-25  patients receiving benefits pursuant to the program may bring an

6-26  action against the Department for impermissibly interfering with

6-27  the relationship between the physician and the patient.

6-28      2.  In an action brought pursuant to subsection 1, if the court

6-29  finds that the Medicaid fee-for-service program acted with

6-30  intentional disregard for the views of the physician in treating the

6-31  patient, the physician may:

6-32      (a) Obtain compensation in an amount the court determines is

6-33  appropriate to deter the Medicaid fee-for-service program from

6-34  violating the provisions of this section in the future; and

6-35      (b) Recover all reasonable costs and expenses incurred in the

6-36  action, including the cost of expert witnesses, court fees and

6-37  attorney’s fees.

6-38      Sec. 9.  1.  The Department shall, on or before January 15

6-39  of each odd-numbered year, submit to the Director of the

6-40  Legislative Counsel Bureau for transmittal to the Legislature a

6-41  report concerning the provision of coverage for prescription drugs

6-42  by any Medicaid fee-for-service program established in the State

6-43  of Nevada which, for a significant number of prescription drugs,

6-44  uses a formulary or preferred drug list, or requires prior

7-1  authorization for prescription drugs. The report must include,

7-2  without limitation, information regarding:

7-3  (a) The direct cost of using the formulary or preferred drug

7-4  list, or of requiring prior authorization, including, without

7-5  limitation, any costs, fees and incentives paid to contractors or

7-6  administrators;

7-7  (b) Any cost that is shifted to physicians who treat patients

7-8  receiving benefits pursuant to Medicaid for the time spent in

7-9  obtaining authorization for a prescription drug; and

7-10      (c) Any shifting of costs within the Department that are

7-11  associated with the use of any formulary or preferred drug list or

7-12  the requirement of obtaining prior authorization, including,

7-13  without limitation, costs related to additional prescriptions,

7-14  laboratory tests, visits to a physician, hospitalization and skilled

7-15  nursing care.

7-16      2.  The report required pursuant to this section must include a

7-17  list of all therapeutic classes of prescription drugs that are

7-18  included in a formulary or preferred drug list, or that require prior

7-19  authorization.

7-20      3.  The Department shall not contract with a person for the

7-21  preparation of the report required pursuant to this section related

7-22  to any person who develops or implements a formulary, a

7-23  preferred drug list, or a program for prior authorization for the

7-24  Medicaid fee-for-service program.

7-25      Sec. 10.  NRS 422.240 is hereby amended to read as follows:

7-26      422.240  1.  Money to carry out the provisions of NRS

7-27  422.001 to 422.410, inclusive, and sections 2 to 9, inclusive, of this

7-28  act and 422.580, including, without limitation, any federal money

7-29  allotted to the State of Nevada pursuant to the program to provide

7-30  Temporary Assistance for Needy Families and the Program for

7-31  Child Care and Development, must be provided by appropriation by

7-32  the Legislature from the State General Fund.

7-33      2.  Disbursements for the purposes of NRS 422.001 to 422.410,

7-34  inclusive, and sections 2 to 9, inclusive, of this act and 422.580

7-35  must be made upon claims duly filed, audited and allowed in the

7-36  same manner as other money in the State Treasury is disbursed.

7-37      Sec. 11.  This act becomes effective on July 1, 2003.

 

7-38  H