Bill Text: NJ S3538 | 2024-2025 | Regular Session | Introduced
Bill Title: Establishes "Equitable Drug Pricing and Patient Access Act."
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced) 2024-09-12 - Introduced in the Senate, Referred to Senate Health, Human Services and Senior Citizens Committee [S3538 Detail]
Download: New_Jersey-2024-S3538-Introduced.html
Sponsored by:
Senator VIN GOPAL
District 11 (Monmouth)
Senator LINDA R. GREENSTEIN
District 14 (Mercer and Middlesex)
SYNOPSIS
Establishes "Equitable Drug Pricing and Patient Access Act."
CURRENT VERSION OF TEXT
As introduced.
An Act concerning Medicaid reimbursement rates for prescription drug services and supplementing Title 30 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "Equitable Drug Pricing and Patient Access Act."
2. As used in this act:
"Division" means the Division of Medical Assistance and Health Services in the Department of Human Services.
"Medicaid" means the Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).
"Medicaid managed care contract" means a contract for the provision of health care services by a managed care organization to individuals eligible for the Medicaid program pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).
3. To the extent that the provisions of this section do not conflict with federal law and regulation, the reimbursement rate for prescription drug services paid to a pharmacy providing prescription drug services to a beneficiary of the Medicaid program, whether such services are provided in the Medicaid fee-for-service delivery system or through the Medicaid managed care delivery system, shall be no less than the national average drug acquisition cost of the drug plus a Medicaid fee-for-service professional dispensing fee of $10.92.
4. A Medicaid managed care contract shall include pharmacy choice as a required benefit for any enrollee, to be provided as follows:
a. any Medicaid managed care organization operating in this State shall permit all pharmacies in this State to dispense prescriptions for all covered medications regardless of the cost of medication or other criteria developed by the carrier;
b. a pharmacy in this State shall be required to accept the terms and conditions of the plan, but in no case shall the pharmacy be required to dispense medication at a rate below the pharmacy's cost of acquisition;
c. the terms and conditions of the plan shall be designed to allow fair participation by all pharmacies; and
d. any Medicaid managed care organization operating in this State shall reimburse an out-of-network pharmacy for prescription drug services provided to enrollee at a reimbursement rate that equals the reimbursement rate that is applicable, when those services are delivered through an in-network pharmacy.
5. To ensure that enrollees have access to a competitive selection of providers, a Medicaid managed care organization shall:
a. permit the enrollee to choose any qualified pharmacy provided that the qualified pharmacy is a contracting provider; and
b. provide that no pharmacy shall be denied the right to participate as a contracting provider, under the same terms and conditions currently applicable to all other contracting pharmacies, provided that the pharmacy accepts the terms and conditions of the Medicaid managed care contract.
6. The State Auditor shall perform an audit of pharmacy pricing practices within the Medicaid program to determine the amount of savings the State should accrue from all pharmacies as a result of the provisions of this act. In conducting this audit, the State Auditor shall audit the flow of funds in the State's Medicaid program from managed care organizations to pharmacy benefit managers to pharmacies.
7. The Commissioner of Human Services shall apply for such State plan amendments or waivers as may be necessary to implement the provisions of this act and to secure federal financial participation for State Medicaid expenditures under the federal Medicaid program.
8. The Commissioner of Human Services may adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as may be necessary to implement the provisions of this act.
9. This act shall take effect on the first day of the seventh month next following the date of enactment, and shall apply to any Medicaid managed care contract executed on or after the effective date of this act, except that the Commissioner of Human Services shall take such anticipatory administrative action in advance thereof as shall be necessary for the implementation of this act.
STATEMENT
This bill establishes the "Equitable Drug Pricing and Patient Accesses Act." The bill provides that the reimbursement rate for prescription drug services paid to a pharmacy providing prescription drug services to a beneficiary of the Medicaid program, whether such services are provided in the Medicaid fee-for-service delivery system or through the Medicaid managed care delivery system, will be no less than the national average drug acquisition cost of the drug plus a Medicaid fee-for-service professional dispensing fee of $10.92.
The bill provides that each Medicaid managed care contract executed in this State will include pharmacy choice as a required benefit for any enrollee as outlined under the bill. To ensure that enrollees have access to a competitive selection of providers, each Medicaid managed care organization will permit the enrollee to choose any qualified pharmacy provided that the qualified pharmacy is a contracting provider and provide that no pharmacy will be denied the right to participate as a contracting provider, under the same terms and conditions currently applicable to all other contracting pharmacies, provided that the pharmacy accepts the terms and conditions of the Medicaid managed care contract.
The bill requires the State Auditor to perform an audit of pharmacy pricing practices within the Medicaid program to determine the amount of savings the State should accrue from all pharmacies as a result of the provisions of the bill. In conducting this audit, the State Auditor will audit the flow of funds in the State's Medicaid program from managed care organizations to pharmacy benefit managers to pharmacies.
In recent years, drug pricing has escalated at unprecedented rates. Restrictive practices that segregate certain drug types and disadvantage patients' choice and access are contributing factors, particularly in Medicaid programs. According to evaluation data found in the Governor's Budget Recommendations, total Medicaid prescription drug spending increased by approximately $700 million, or 3.3 percent, from $2.1 billion in FY 2019 to $2.8 billion in FY 2024. It is the sponsor's belief that ensuring that Medicaid establishes the Equitable Drug Pricing and Patient Access Act will provide greater transparency and cost management within the program to reduce waste and cost increases.
