FOR CAUCUS & FLOOR ACTION
REVISED
As Amended
by Health Committee
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ARIZONA STATE SENATE
RESEARCH STAFF
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KATHY SEEGLITZ ASSISTANT
ANALYST JASON BEZOZO ASSISTANT
RESEARCH STAFF
DIRECTOR HEALTH COMMITTEE Telephone: (602) 542-3171 Facsimile: (602) 542-7833 |
DATE: March 12, 2001
SUBJECT: Health Committee Strike
Everything Amendment to S.B. 1110 (AHCCCS; prescription drugs)
Purpose
Allows, beginning October 1, 2001, eligible persons to receive financial subsidies for prescription drugs through the Arizona Health Care Cost Containment System (AHCCCS) and appropriates $4.5 million in FY 2001-2002 from the state general fund for the prescription drug financial subsidy program.
Background
According to 1999 Federal Health Care Financing Administration (HCFA) national health expenditure data, the costs of prescription medications grew 17 percent in 1999. Also, the average cost per senior was $1,196 per year. In response to the prescription medication needs of seniors and disabled individuals, particularly those with low income, 23 states have implemented some type of pharmaceutical assistance program. A recent state trend is to lower pharmaceutical prices for broader categories of consumers, such as Vermont and Maine have enacted.
Vermont’s plan uses their Medicaid program to extend discounts on prescription drugs to all seniors and other adults who are without prescription drug coverage and whose income is below 300 percent of the federal poverty level (FPL). Maine’s program includes state price controls for public consumer purchases and is scheduled to begin on April 1, 2001.
The strike everything amendment to S.B. 1110 allows, beginning October 1, 2001, an eligible person to receive a financial subsidy from AHCCCS for prescription drugs equal to the average rebate pharmaceutical manufacturers pay AHCCCS pursuant to federal law. Additionally, the amendment requires AHCCCS to apply to HCFA for a waiver for the expanded pharmaceutical drug coverage. The strike everything amendment to S.B. 1110 also appropriates $4.5 million in FY 2001-2002 from the state general fund to AHCCCS for start up costs for the prescription drug financial subsidy program and the state match for the initial reimbursement to participating pharmacies.
Provisions
1. Allows, beginning October 1, 2001, an eligible person to receive a financial subsidy from AHCCCS for prescription drugs that is equal to the average rebate pharmaceutical manufacturers pay AHCCCS pursuant to federal law.
2. Limits eligibility to persons who do not qualify for AHCCCS, have a household income of up to 300 percent FPL and do not have prescription drug coverage.
3. Requires AHCCCS to apply for a waiver from HCFA by August 1, 2001 and allows AHCCCS to negotiate for expanded coverage if the waiver request is denied.
4. Prescribes a formula for participating pharmacies to charge for prescription drugs to eligible persons.
5. Requires AHCCCS to reimburse participating pharmacies in the amount of the rebate paid by pharmaceutical manufacturers for each prescription drug.
6. Allows AHCCCS to charge a maximum annual fee of $25 to cover administrative costs and requires the fees to be deposited in the Arizona prescription discount fund (fund).
7. Establishes the fund consisting of annual fees, rebate payments from pharmaceutical manufacturers, legislative appropriations and any federal matching funds.
8. Specifies the fund monies are continuously appropriated and nonlapsing, unless HCFA denies the waiver by June 30, 2003.
9. Appropriates $4.5 million in FY 2001-2002 from the state general fund to the AHCCCS administration for the prescription drug financial subsidy program, including start up costs and initial reimbursement to participating pharmacies.
10. Defines “federal poverty guidelines”.
11. Contains conforming and technical changes.
12. Provides for a general effective date, except as noted.
Amendments Adopted by Health Committee
Adopted the strike everything amendment.
Amendments Adopted by Appropriations Committee
See “REVISED -- As Amended by Appropriations Committee” striker memo.
Senate Action
HEA 2/27/01 DPA/SE 5-2-1-0
APPROP 3/9/01 DPA/SE 7-3-2-0
KS/JB/ac