THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY MASSER, BENNINGHOFF, BRENNAN, CREIGHTON, CUTLER, EVERETT, FABRIZIO, FARRY, GABLER, GROVE, HARHAI, HENNESSEY, HESS, KAUFFMAN, KOTIK, KULA, LONGIETTI, METZGAR, MOUL, MUNDY, PASHINSKI, PICKETT, PYLE, REED, SABATINA, SANTARSIERO, STERN AND GIBBONS, MAY 21, 2012

REFERRED TO COMMITTEE ON HEALTH, MAY 21, 2012  

AN ACT

Providing for the Fair Pharmaceuticals Pricing and Payment Act;

imposing duties on the Department of Public Welfare; and

abrogating a regulation.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Fair

Pharmaceuticals Pricing and Payment Act.

Section 2.  Legislative findings.

The General Assembly finds and declares as follows:

(1)  The Department of Public Welfare has taken steps to

align its pharmaceutical payment structure with managed care

organizations in this Commonwealth absent consideration of

the outdated fee-for-service medical assistance pricing and

payment policies in this Commonwealth. 

(2)  Many Medicaid managed care organizations and other

third-party payors update their drug pricing databases on a

daily or weekly basis while the Medical Assistance Fee for

Service Program in this Commonwealth updates its pricing

sources only once a month.

(3)  This practice results in Pennsylvania pharmacies

getting paid significantly less than the cost to acquire and

dispense drugs to medical assistance beneficiaries and cost

Pennsylvania pharmacies nearly $5,500,000 in 2011. 

(4)  Most managed care organizations and private payors

pay pharmacy claims on a weekly basis, while the Medical

Assistance Fee for Service Program pays claim as late as 30

days after drugs are dispensed, which creates cash flow

problems for pharmacies in this Commonwealth that do not

occur under other health plans.  

(5)  Requiring the department to update its drug pricing

data and remit payment for claims to Pennsylvania pharmacies

on a weekly basis would bring medical assistance in line with

managed care organizations and other third-party private

payors and must remain a priority of the General Assembly.  

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Department."  The Department of Public Welfare of the

Commonwealth.

"EAC."  The estimated acquisition cost as defined in 42 CFR

447.502 (relating to definitions). 

"Pricing service."  A third-party source that compiles and

provides drug-specific information needed to maintain the drug

reference file under this act. 

Section 4.  Medical Assistance Fee for Service Program drug

pricing and payment of claims. 

In administering the Medical Assistance Fee for Service

Program in this Commonwealth, the department shall:

(1)  update the EAC for individual drugs on a weekly

basis as it appears in available nationally recognized

pricing services; and

(2)  remit payment for claims to pharmacies in this

Commonwealth within seven days of receiving the claim.

Section 19.  Repeal.

  The provisions of 55 Pa. Code § 1121.56(b) are abrogated

insofar as they are inconsistent with this act.

Section 20.  Effective date.

This act shall take effect in 60 days.