act-2006-0-111•Pennsylvania Act 2006-111 — STATE LOTTERY LAW - OMNIBUS AMENDMENTS
Pennsylvania Act 2006-111 — STATE LOTTERY LAW - OMNIBUS AMENDMENTS
act-2006-0-1112006 Pa. Act 111Law
Act text
STATE LOTTERY LAW - OMNIBUS AMENDMENTS
Act of Jul. 7, 2006, P.L. 1061, No. 111 Cl. 72
Session of 2006
No. 2006-111
SB 1188
AN ACT
Amending the act of August 26, 1971 (P.L.351, No.91), entitled
"An act providing for a State Lottery and administration
thereof; authorizing the creation of a State Lottery
Commission; prescribing its powers and duties; disposition of
funds; violations and penalties therefor; exemption of prizes
from State and local taxation and making an appropriation,"
further providing for definitions, for physician, certified
registered nurse practitioner and pharmacy participation, for
reduced assistance, for program generally, for restricted
formulary, for reimbursement, for income verification, for
contracts and for the pharmaceutical assistance contract for
the elderly needs enhancement tier, for pharmacy best
practices and cost controls review; further providing for
penalties; establishing the coordination of Federal and State
benefits; providing for continued eligibility under certain
circumstances; and making editorial changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Chapter 5 of the act of August 26, 1971 (P.L.351,
No.91), known as the State Lottery Law, is amended by adding a
subchapter heading to read:
SUBCHAPTER A
PRELIMINARY PROVISIONS
Section 1.1. The definitions of "eligible claimant,"
"maximum annual income" and "program" in section 502 of the act,
amended or added November 21, 1996 (P.L.741, No.134) and
November 26, 2003 (P.L.212, No.37), are amended and the section
is amended by adding definitions to read:
Section 502. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Claimant." An eligible person who is enrolled in the
program.
* * *
"Eligible [claimant] person." A resident of the Commonwealth
for no less than 90 days, who is 65 years of age [and over] or
older, whose annual income is less than the maximum annual
income and who is not otherwise qualified for public assistance
under the act of June 13, 1967 (P.L.31, No.21), known as the
Public Welfare Code.
* * *
"Maximum annual income." For PACE eligibility, the term
shall mean annual income which shall not exceed $14,500 in the
case of single persons nor $17,700 in the case of the combined
annual income of persons married to each other. For PACENET
eligibility, the term shall mean the annual income limits
established under section 519. Persons may, in reporting income
to the Department of Aging, round the amount of each source of
income and the income total to the nearest whole dollar, whereby
any amount which is less than 50¢ is eliminated.
"Medicare advantage." A plan of health benefits coverage
offered under a policy, contract or plan by an organization
certified under 42 U.S.C. § 1395w-26 (relating to establishment
of standards) and formerly referred to as Medicare+Choice.
"Medicare Advantage Prescription Drug Plan." A Medicare
advantage plan that provides qualified prescription drug
coverage as set forth in the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (Public Law 108-173,
117 Stat. 2066).
* * *
"Part D." A Federal program to offer voluntary prescription
drug benefits to Medicare enrollees, as set forth in the
Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Public Law 108-173, 117 Stat. 2066).
"Part D plan" or "PDP." A prescription drug plan approved
under the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173, 117 Stat. 2066)
in the PDP region that includes this Commonwealth and approved
by the Department of Aging of the Commonwealth and the Centers
for Medicare and Medicaid Services of the United States for
coordination of benefits with the programs established under
this chapter.
* * *
"Program." The Pharmaceutical Assistance Contract for the
Elderly (PACE) and the Pharmaceutical Assistance Contract for
the Elderly Needs Enhancement Tier (PACENET) as established by
this chapter[, unless otherwise specified].
* * *
"Regional benchmark premium." The average Part D premium
calculated annually by the Centers for Medicare and Medicaid
Services of the United States for PDPs in the PDP region that
includes this Commonwealth.
Section 1.2. Chapter 5 of the act is amended by adding a
subchapter heading to read:
SUBCHAPTER B
PROGRAMS
Section 2. Section 504 of the act, amended November 26, 2003
(P.L.212, No.37), is amended to read:
Section 504. Physician, certified registered nurse
practitioner and pharmacy participation.
Any physician, certified registered nurse practitioner,
pharmacist, pharmacy or corporation owned in whole or in part by
a physician, certified registered nurse practitioner or
pharmacist enrolled as a provider in the program or who has
prescribed medication for a claimant [in the program] who is
precluded or excluded for cause from the Department of Public
Welfare's Medical Assistance Program shall be precluded or
excluded from participation in the program. No physician or
certified registered nurse practitioner precluded or excluded
from the Department of Public Welfare's Medical Assistance
Program shall have claims resulting from prescriptions paid for
by the program.
Section 3. Sections 505 and 506 of the act, added November
21, 1996 (P.L.741, No.134), are amended to read:
Section 505. Drug utilization review system.
(a) Establishment.--The department shall ensure that a
state-of-the-art therapeutic drug utilization review system is
established to monitor and correct misutilization of drug
therapies.
(b) Review.--The department shall review utilization data
provided from a PDP to monitor increases in drug utilization
among claimants and determine if disease management intervention
is needed.
Section 506. Reduced assistance.
Any [eligible] claimant whose prescription drug costs are
covered in part by any other plan of assistance or insurance,
including Part D, may be required to receive reduced assistance
under the provisions of this [chapter] subchapter or be subject
to coordination of benefits under this chapter.
Section 4. Section 509 of the act, amended November 26, 2003
(P.L.212, No.37), is amended to read:
Section 509. Program generally.
The program shall include the following:
(1) Participating pharmacies shall be paid within 21
days of the contracting firm receiving the appropriate
substantiation of the transaction. Pharmacies shall be
entitled to interest for payment not made within the 21-day
period at a rate approved by the board.
(2) Collection of the copayment by pharmacies shall be
mandatory.
(3) [Senior citizens participating in the program]
Claimants are not required to maintain records of each
transaction.
(4) A system of rebates or reimbursements to [eligible]
claimants for pharmaceutical expenses shall be prohibited.
(5) PACE shall include participant copayment schedules
for each prescription, including a copayment for generic or
multiple-source drugs that is less than the copayment for
single-source drugs. The department shall annually calculate
the copayment schedules based on the Prescription Drugs and
Medical Supplies Consumer Price Index. When the aggregate
impact of the Prescription Drugs and Medical Supplies
Consumer Price Index equals or exceeds $1, the department
shall adjust the copayment schedules. Each copayment schedule
shall not be increased by more than $1 in a calendar year.
(6) The program payment shall be the lower of the
following amounts determined as follows:
(i) [90%] 88% of the average wholesale cost of the
prescription drug dispensed:
(A) with the addition of a dispensing fee of the
greater of:
(I) $4 per prescription; or
(II) the amount set by the department by
regulation;
(B) the subtraction of the copayment; and
(C) if required, the subtraction of the generic
differential; or
(ii) the pharmacy's usual charge for the drug
dispensed with the subtraction of the copayment and, if
required, the subtraction of the generic differential; or
(iii) if a generic drug, the most current Federal
upper payment limits established in the Medicaid Program
under 42 CFR § 447.332 (relating to upper limits for
multiple source drugs), plus a dispensing fee of $4 or
the amount set by the department by regulation, whichever
is greater minus the copayment. The department shall
update the average wholesale costs and the Federal upper
payment limits at least every 30 days.
(7) In no case shall the Commonwealth or any [person
enrolled in the program] claimant be charged more than the
price of the drug at the particular pharmacy on the date of
the sale.
(8) The Governor may, based upon certified State Lottery
Fund revenue that is provided to both the chairman and
minority chairman of the Appropriations Committee of the
Senate and the chairman and minority chairman of the
Appropriations Committee of the House of Representatives, and
after consultation with the board, decrease the eligibility
limits established in this [chapter] subchapter.
Section 5. Section 510 of the act, amended or added November
21, 1996 (P.L.741, No.134) and November 30, 2004 (P.L.1722,
No.219), is amended to read:
Section 510. Generic drugs.
(a) In general.--Notwithstanding any other statute or
regulation, a brand name product shall be dispensed and not
substituted with an A-rated generic therapeutically equivalent
drug if it is less expensive to the program. If a less expensive
A-rated generic therapeutically equivalent drug is available for
dispensing to a claimant, the provider shall dispense the A-
rated generic therapeutically equivalent drug to the claimant.
The department shall reimburse providers based upon the most
current listing of Federal upper payment limits established in
the Medicaid Program under 42 CFR § 447.332 (relating to upper
limits for multiple source drugs), plus a dispensing fee as set
forth in section 509(6). The department shall update the average
wholesale costs and the Federal upper payment limits on a
regular basis, at least every 30 days. The department shall not
reimburse providers for brand name products except in the
following circumstances:
(1) There is no A-rated generic therapeutically
equivalent drug available on the market. This paragraph does
not apply to the lack of availability of an A-rated generic
therapeutically equivalent drug in the providing pharmacy
unless it can be shown to the department that the provider
made reasonable attempts to obtain the A-rated generic
therapeutically equivalent drug or that there was an
unforeseeable demand and depletion of the supply of the A-
rated generic therapeutically equivalent drug. In either
case, the department shall reimburse the provider for [90%]
88% of the average wholesale cost plus a dispensing fee based
on the least expensive A-rated generic therapeutically
equivalent drug for the brand drug dispensed.
(2) An A-rated generic therapeutically equivalent drug
is deemed by the department, in consultation with a
utilization review committee, to have too narrow a
therapeutic index for safe and effective dispensing in the
community setting. The department shall notify providing
pharmacies of A-rated generic therapeutically equivalent
drugs that are identified pursuant to this paragraph on a
regular basis.
(3) The Department of Health has determined that a drug
shall not be recognized as an A-rated generic therapeutically
equivalent drug for purpose of substitution under section
5(b) of the act of November 24, 1976 (P.L.1163, No.259),
referred to as the Generic Equivalent Drug Law.
(4) At the time of dispensing, the provider has a
prescription on which the brand name drug dispensed is billed
to the program by the provider at a usual and customary
charge which is equal to or less than the least expensive
usual and customary charge of any A-rated generic
therapeutically equivalent drug reasonably available on the
market to the provider.
(5) The brand name drug is less expensive to the
program.
(b) Generic not accepted.--If a claimant chooses not to
accept the A-rated generic therapeutically equivalent drug
required by subsection (a), the claimant shall be liable for the
copayment and 70% of the average wholesale cost of the brand
name drug.
(c) Generic drugs not deemed incorrect substitution.--The
dispensing of an A-rated generic therapeutically equivalent drug
in accordance with this [chapter] subchapter shall not be deemed
incorrect substitution under section 6(a) of the Generic
Equivalent Drug Law.
(d) Medical exception.--A medical exception process shall be
established by the department, which shall be published as a
notice in the Pennsylvania Bulletin and distributed to providers
and recipients in the program.
Section 6. Section 512 of the act, amended November 26, 2003
(P.L.212, No.37), is amended to read:
Section 512. [Restricted formulary] Formulary.
The department may establish a [restricted] formulary of the
drugs which will not be reimbursed by the program. This
formulary shall include [only] experimental drugs and drugs on
the Drug Efficacy Study Implementation List prepared by CMS. A
medical exception may be permitted by the department for
reimbursement of a drug on the Drug Efficacy Study
Implementation List upon declaration of its necessity on the
prescription by the treating physician or certified registered
nurse practitioner, except that, for DESI drugs for which the
FDA has issued a Notice for Opportunity Hearing (NOOH) for the
purpose of withdrawing the New Drug Application approved for
that drug, reimbursement coverage shall be discontinued under
the provisions of this [chapter] subchapter.
Section 6.1. Section 513 of the act, added November 21, 1996
(P.L.741, No.134), is amended to read:
Section 513. Mail order system.
(a) The department may not enter into a contract with a
private contractor for an exclusive mail-order system for the
delivery of prescription drugs under this program. Only mail-
order pharmacy services provided by pharmacies which are
licensed by the Commonwealth and which have their principal
place of business within this Commonwealth may participate as
providers under the program. The department shall develop and
promulgate specific regulations governing the practice of mail-
order pharmacy and other enrolled providers to include the
following minimum standards of practice to ensure the health,
safety and welfare of program participants:
(1) The appropriate method or methods by which such
pharmacies shall verify the identity of the program recipient
and the authenticity of prescriptions received.
(2) The appropriate method or methods by which such
pharmacies shall mail or deliver prescription drugs to
program recipients ensuring, to the maximum extent possible,
that the intended program recipient is the actual ultimate
recipient of any prescription dispensed by such pharmacies.
(3) The appropriate method or methods by which such
pharmacies shall communicate with program participants in
emergency situations.
(b) Notwithstanding any provision of law to the contrary, a
claimant may use any and all pharmacy services offered by a PDP
or Medicare Advantage Prescription Drug Plan to receive drugs
and shall be permitted to continue to use those services
throughout the noncoverage phase.
(c) Nothing in this section shall require a claimant to use
mail-order services.
Section 6.2. Section 515 of the act, amended November 26,
2003 (P.L.212, No.37), is amended to read:
Section 515. Reimbursement.
For-profit third-party insurers, health maintenance
organizations, preferred provider organizations [and], not-for-
profit prescription plans, Medicare advantage plans and PDPs
shall be responsible for any payments made to a providing
pharmacy on behalf of a claimant covered by such a third party.
Final determination as to the existence of third-party coverage
shall be the responsibility of the department.
Section 7. Sections 517 and 518 of the act, added November
21, 1996 (P.L.741, No.134), are amended to read:
Section 517. Income verification.
(a) Procedure.--The department shall annually verify the
income of [eligible] claimants. The department shall verify the
income of [eligible] claimants by requiring income documentation
from the claimants. An application for benefits under this
[chapter] subchapter shall constitute a waiver to the department
of all relevant confidentiality requirements relating to the
claimant's Pennsylvania State income tax information in the
possession of the Department of Revenue. The Department of
Revenue shall provide the department with the necessary income
information shown on the claimant's Pennsylvania State income
tax return solely for income verification purposes.
(b) Information confidential.--It shall be unlawful for any
officer, agent or employee of the department to divulge or make
known in any manner whatsoever any information gained through
access to the Department of Revenue information except for
official income verification purposes under this [chapter]
subchapter or as authorized under section 535.
(c) Penalty.--A person who violates this [act] section
commits a misdemeanor and shall, upon conviction, be sentenced
to pay a fine of not more than $1,000 or to imprisonment for not
more than one year, or both, together with the cost of
prosecution, and, if the offender is an officer or employee of
the Commonwealth, he shall be dismissed from office or
discharged from employment.
(d) Coordination with Department of Public Welfare.--To the
extent possible, the department and the Department of Public
Welfare shall coordinate efforts to facilitate the application
and enrollment of eligible older people in the Medicaid Healthy
Horizons Program by processing these applications at senior
citizens centers and other appropriate facilities providing
services to the elderly.
Section 518. Contract.
The department is authorized to enter into a contract
providing for prescription drugs to [eligible persons] claimants
pursuant to this [chapter] subchapter. The department shall
select a proposal that includes, but is not limited to, the
criteria set forth in this [chapter] subchapter.
Section 8. Section 519 of the act, amended November 26, 2003
(P.L.212, No.37), is amended to read:
Section 519. The Pharmaceutical Assistance Contract for the
Elderly Needs Enhancement Tier.
(a) Establishment.--There is hereby established within the
department a program to be known as the Pharmaceutical
Assistance Contract for the Elderly Needs Enhancement Tier
(PACENET).
(b) PACENET eligibility.--A [claimant] person with an annual
income of not less than $14,500 and not more than $23,500 in the
case of a single person and of not less than $17,700 and not
more than $31,500 in the case of the combined income of persons
married to each other shall be eligible for enhanced
pharmaceutical assistance under this section. A person may, in
reporting income to the department, round the amount of each
source of income and the income total to the nearest whole
dollar, whereby any amount which is less than 50¢ is eliminated.
[(c) Deductible.--Upon enrollment in PACENET, eligible
claimants in the income ranges set forth in subsection (b) shall
be required to meet a deductible in unreimbursed prescription
drug expenses of $40 per person per month. The $40 monthly
deductible shall be cumulative and shall be applied to
subsequent months to determine eligibility. The cumulative
deductible shall be determined on an enrollment year basis for
an annual total deductible not to exceed $480 in a year. To
qualify for the deductible set forth in this subsection the
prescription drug must be purchased for the use of the eligible
claimant from a provider as defined in this chapter. The
department, after consultation with the board, may approve an
adjustment in the deductible on an annual basis.]
(c.1) Premium.--In those instances in which a PACENET
claimant is not enrolled in Part D pursuant to section 533, the
claimant shall be required to pay a monthly premium equivalent
to the regional benchmark premium.
(d) Copayment.--
(1) For [eligible] claimants under this section, the
copayment schedule shall be:
(i) eight dollars for noninnovator multiple source
drugs as defined in section 702; or
(ii) fifteen dollars for single-source drugs and
innovator multiple-source drugs as defined in section
702.
(2) The department shall annually calculate the
copayment schedules based on the Prescription Drugs and
Medical Supplies Consumer Price Index. When the aggregate
impact of the Prescription Drugs and Medical Supplies
Consumer Price Index equals or exceeds $1, the department
shall adjust the copayment schedules. Each copayment schedule
shall not be increased by more than $1 in a calendar year.
Section 9. Section 520.1 of the act, added November 26, 2003
(P.L.212, No.37), is amended to read:
[Section 520.1. Pharmacy best practices and cost controls
review.
(a) Review process.--The secretary shall review and
recommend pharmacy best practices and cost control mechanisms
that maintain high quality in prescription drug therapies but
are designed to reduce the cost of providing prescription drugs
for PACE and PACENET enrollees, including:
(1) A list of covered prescription drugs with
recommended copayment schedules. In developing the schedules,
the department shall take into account the standards
published in the United States Pharmacopeia Drug Information.
(2) A drug utilization review procedure, incorporating a
prescription review process for copayment schedules.
(3) A step therapy program that safely and effectively
utilizes in a sequential manner the least costly
pharmacological therapy to treat the symptoms of or effect a
cure for the medical condition or illness for which the
therapy is prescribed.
(4) Education programs designed to provide information
and education on the therapeutic and cost-effective
utilization of prescription drugs to physicians, pharmacists,
certified registered nurse practitioners and other health
care professionals authorized to prescribe and dispense
prescription drugs.
(b) Report and recommendations.--No later than two years
from the effective date of this section, the department shall
submit a report with recommendations to the Aging and Youth
Committee, the Appropriations Committee and the Public Health
and Welfare Committee of the Senate and the Aging and Older
Adult Services Committee, the Appropriations Committee and the
Health and Human Services Committee of the House of
Representatives. The report shall include information regarding
the efficacy of the pharmacy best practices and control
mechanisms set forth in subsection (a), including recommended
copayment schedules with impacted classes of drugs, exceptions,
cost effectiveness, improved drug utilization and therapies,
movement of market share and increased utilization of generic
drugs.]
Section 10. Section 521 of the act, amended or added
November 21, 1996 (P.L.741, No.134) and November 26, 2003
(P.L.212, No.37), is amended to read:
Section 521. Penalties.
(a) Prohibited acts.--It shall be unlawful for any person to
submit a false or fraudulent claim or application under this
[chapter] subchapter, including, but not limited to:
(1) aiding or abetting another in the submission of a
false or fraudulent claim or application;
(2) receiving benefits or reimbursement under a private,
Federal or State program for prescription assistance and
claiming or receiving duplicative benefits hereunder;
(3) soliciting, receiving, offering or paying any
kickback, bribe or rebate, in cash or in kind, from or to any
person in connection with the furnishing of services under
this [chapter] subchapter;
(4) engaging in a pattern of submitting claims that
repeatedly uses incorrect National Drug Code numbers [for the
purpose of obtaining wrongful enhanced reimbursement]; or
(5) otherwise violating any provision of this [chapter]
subchapter.
(b) Civil penalty.--In addition to any appropriate criminal
penalty for prohibited acts under this [chapter] subchapter
whether or not that act constitutes a crime under 18 Pa.C.S.
(relating to crimes and offenses), a provider who violates this
section may be liable for a civil penalty in an amount not less
than $500 and not more than $10,000 for each violation of this
act which shall be collected by the department. Each violation
constitutes a separate offense. If the department collects three
or more civil penalties against the same provider, the provider
shall be ineligible to participate in either PACE or PACENET for
a period of one year. If more than three civil penalties are
collected from any provider, the department may determine that
the provider is permanently ineligible to participate in PACE or
PACENET.
(c) Suspension of license.--The license of any provider who
has been found guilty under this [chapter] subchapter shall be
suspended for a period of one year. The license of any provider
who has committed three or more violations of this [chapter]
subchapter may be suspended for a period of one year.
(d) Reparation.--Any provider, [recipient] claimant or other
person who is found guilty of a crime for violating this
[chapter] subchapter shall repay three times the value of the
material gain received. In addition to the civil penalty
authorized pursuant to subsection (b), the department may
require the provider, [recipient] claimant or other person to
repay up to three times the value of any material gain to PACE
or PACENET.
Section 11. Chapter 5 of the act is amended by adding a
subchapter to read:
SUBCHAPTER C
COORDINATION OF FEDERAL AND STATE BENEFITS
Section 531. Definitions.
The following words and phrases when used in this subchapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"LIS." Low-income subsidy assistance from Part D provided by
the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (Public Law 108-173, 117 Stat. 2066) to help pay for
annual premiums, deductibles and copayments charged to
individuals enrolled in Part D by prescription plans approved
under that act.
"Noncoverage phase." The deductible phase or the difference
between Part D initial coverage and catastrophic coverage for
certain Part D enrollees, as set forth in section 1860D-2 of the
Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Public Law 108-173, 117 Stat. 2066).
"Part D eligible individual." An eligible person who is
entitled to benefits under Part A of Medicare or enrolled in
Part B of Medicare, as specified in section 1860D-1 of the
Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Public Law 108-173, 117 Stat. 2066).
"Part D enrollee." A claimant enrolled in a Part D plan.
"Part D provider." A pharmacy or other prescription drug
dispenser authorized by a Part D enrollee's Part D plan.
Section 532. Purpose.
The benefits available to a claimant enrolled in the program
under Subchapter B shall be a supplement to the benefits
available under Part D. The department may require claimants to
utilize Part D benefits prior to utilizing benefits provided
under either program and shall coordinate the benefits of the
programs with those provided under Part D.
Section 533. Powers of the department.
The department shall:
(1) Identify the Part D plan or plans with which the
department has entered into a contract under section 534 that
meet the prescription drug needs and pharmacy preferences of
a claimant.
(2) Recommend that the claimant enroll in the Part D
plan or program that meets the prescription drug needs and
pharmacy preferences of the claimant in the most cost-
effective manner for the Commonwealth.
(3) Initiate enrollment on behalf of the claimant in the
Part D plan recommended by the department unless the claimant
notifies the department that the claimant wishes to enroll in
another Part D plan.
(4) File and pursue appeals in accordance with CMS
regulations with a claimant's Part D plan on the claimant's
behalf to request exceptions to the plan's tiered cost-
sharing structure or to request a nonformulary Part D drug.
(5) Assist claimants the department believes to be
eligible for the LIS in making an application to the Social
Security Administration.
(6) Provide at least ten days for the claimant to
decline enrollment in the recommended plan.
(7) Develop and distribute language, when recommending
enrollment, notifying claimants of:
(i) The ability to decline enrollment in the
recommended Part D plan.
(ii) The ability to file and pursue appeals to the
recommended Part D plan on their own behalf.
(iii) The possibility that their choice of plan may
affect their medical coverage if they are enrolled in a
Medicare advantage plan, if applicable.
Section 534. Coordination of benefits.
(a) General coordination.--In addition to the specific
provisions of subsection (b), the department shall establish
standards and minimum requirements it deems necessary to allow
for the coordination of benefits between the program and Part D.
(b) Specific coordination provisions.--The following
provisions shall apply to claimants who are also Part D
enrollees:
(1) The primary payor shall be the PDP or the Medicare
Advantage Prescription Drug Plan, as appropriate.
(2) Part D enrollees shall be required to utilize
providers authorized by their PDPs or Medicare Advantage
Prescription Drug Plans.
(3) The program shall pay the premium assessed by a PACE
enrollee's PDP or, with respect to the prescription drug
plan, Medicare Advantage Prescription Drug Plan in an amount
not to exceed the regional benchmark premium and any
copayments in excess of those set forth in section 509.
(4) Part D enrollees enrolled in PACENET shall pay the
Part D premiums charged by their PDP or, with respect to the
prescription drug plan, Medicare Advantage Prescription Drug
Plan and the program shall pay any copayments in excess of
those set forth in section 519.
(5) For Part D enrollees enrolled in PACE who are not
eligible for LIS, PACE shall reimburse Part D providers for
prescription drugs in any noncoverage phase of Part D. For
Part D enrollees enrolled in PACENET, PACENET shall reimburse
Part D providers for prescription drugs in any noncoverage
phase of Part D.
(6) The provisions of Chapter 7 shall apply to all
payments made by the program in the noncoverage phase.
(7) The department shall advise a claimant on the
various benefits and drugs provided by each PDP approved by
the department as follows:
(i) Analyze the claimant's eligibility for and
assist the claimant in applying for LIS.
(ii) Identify the claimant's prescription drug needs
and preferred pharmacy.
(iii) Assist the claimant in enrolling in the PDP
that best fits the claimant's prescription drug needs.
(iv) File and pursue appeals in accordance with CMS
regulations with a claimant's Part D plan on the
claimant's behalf to request exceptions to the plan's
tiered cost-sharing structure or to request a
nonformulary Part D drug.
(8) Notwithstanding the provisions of sections 511 and
513(a), for purposes of coordination of benefits with
Medicare Part D plans and to minimize disruption to
enrollees, the program shall be authorized to reimburse Part
D providers, including mail-order pharmacies, for more than a
30-day supply of prescription drugs.
(c) Contracts.--The department is authorized to enter into
contracts with Part D plans to provide for prescription drugs to
Part D enrollees through Part D pursuant to this subchapter. A
Part D plan selected by the department shall meet all of the
following requirements:
(1) The Part D plan has a retail pharmacy network that
includes at least 90% of the pharmacies in the PACE network.
(2) The Part D plan has a premium at or below the
regional benchmark premium.
(d) Rebates.--The department may only receive rebates as
provided in Chapter 7 where the program is the only payor for a
Part D enrollee's covered prescription drugs.
Section 535. Financial resource information.
(a) Procedure.--The department may obtain information on the
financial resources of a Part D eligible individual for the
purpose of determining the individual's potential eligibility
for the LIS. The authority granted under this subsection shall
be exercised only with respect to a Part D eligible individual
who has income which is below the applicable threshold
established by the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173, 117 Stat. 2066)
for qualification under the LIS.
(b) Waiver.--An application by a Part D eligible individual
for enrollment in the program shall constitute a waiver to the
department of relevant confidentiality requirements relating to
the prospective claimant's financial resources in the possession
of any Commonwealth agency or third party when the information
is required for the purposes listed under subsection (a). This
waiver shall extend to the application phase and throughout the
entire time the claimant is in the program.
(c) Information confidential.--
(1) It shall be unlawful for an officer, agent or
employee of the department to divulge or make known
information obtained from a Commonwealth agency or third
party except for the purposes under subsection (a).
(2) A person that violates this subsection commits a
misdemeanor of the third degree and shall, upon conviction,
be sentenced to pay a fine of not more than $1,000 or to
imprisonment for not more than one year, or both, and to pay
the costs of prosecution. If the offender is an officer or
employee of the Commonwealth, the offender shall be dismissed
from office or discharged from employment.
(d) Upon request of the claimant, the department shall
provide a copy of any and all filings that are processed or
submitted under this subchapter.
Section 536. Reimbursement.
For-profit insurers, health maintenance organizations,
preferred provider organizations, not-for-profit prescription
plans, Medicare advantage plans and PDPs shall be responsible
for any payments made to a pharmacy on behalf of a Part D
enrollee covered by any such third party. Final determination as
to the existence of third-party coverage shall be the
responsibility of the department.
Section 537. Collection.
The department shall have the authority to collect any
amounts from the payment by the department of pharmacy claims
that are the responsibility of a PDP or Medicare Advantage
Prescription Drug Plan as a primary payor pursuant to section
534(b)(1).
Section 12. Section 706 of the act, added November 21, 1996
(P.L.741, No.134), is amended to read:
Section 706. Excessive pharmaceutical price inflation
discount.
(a) General rule.--A discount shall be provided to the
department for all covered prescription drugs except those
excluded under subsection (d). The discount shall be calculated
as follows:
(1) For each quarter for which a rebate under section
705(a) and (b) is to be paid after December 31, 1991, and
before January 1, 1997, the average manufacturer price for
each dosage form and strength of a covered prescription drug
shall be compared to the average manufacturer price for the
same form and strength in the previous calendar year, and a
percentage increase shall be calculated.
(2) For each quarter under paragraph (1), the average
percentage increase in the Producer Price Index for
Pharmaceuticals over the same quarter in the previous
calendar year shall be calculated.
(3) If the calculation under paragraph (1) is greater
than the calculation under paragraph (2), the discount amount
for each quarter shall be equal to the product of:
(i) the difference between the calculations under
paragraphs (1) and (2); and
(ii) the total number of units of each dosage form
and strength reimbursed by PACE and General Assistance
and the average manufacturer price reported by the
manufacturer under section 704(c)(1).
(b) Revised general rule.--A discount shall be provided to
the department for all covered prescription drugs except those
excluded under subsection (d). The discount shall be calculated
as follows:
(1) For each quarter for which a rebate under section
705(a) and (c) is to be paid after December 31, 1996, the
average manufacturer price for each dosage form and strength
of a covered prescription drug shall be compared to the
average manufacturer price for the same form and strength in
the previous calendar year and a percentage increase shall be
calculated.
(2) For each quarter under paragraph (1), the average
percentage increase in the Consumer Price Index-Urban over
the same quarter in the previous calendar year shall be
calculated.
(3) If the calculation under paragraph (1) is greater
than the calculation under paragraph (2), the discount amount
for each quarter shall be equal to the product of:
(i) the difference between the calculations under
paragraphs (1) and (2); and
(ii) the total number of units of each dosage form
and strength reimbursed by PACE, PACENET and designated
pharmaceutical programs and the average manufacturer
price reported by the manufacturer under section
704(c)(1).
(c) New bimarketed drugs.--For covered prescription drugs
that have not been marketed for a full calendar year, subsection
(a) shall apply after the covered prescription drug has been on
the market for four consecutive quarters. The drug's initial
average manufacturer price shall be based on the first day of
the first quarter that the drug was marketed.
(d) Applicability.--This section shall not apply to a
noninnovator multiple-source prescription drug or generic
prescription drug.
Section 13. Section 2103 of the act, added November 26, 2003
(P.L.212, No.37), is amended to read:
Section 2103. Federal programs.
If the Federal Government enacts pharmacy programs similar to
PACE or PACENET, the State programs shall be construed to only
supplement the Federal pharmacy programs.[, and all] All persons
qualified for coverage under [the] a Federal pharmacy program
[shall], including the prescription drug benefit program
provided by the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173, 117 Stat. 2066),
may be required by the department to utilize [that] the Federal
program before utilizing any State program.
Section 14. (a) Notwithstanding any other provision of law
to the contrary, persons who, as of December 31, 2005, are
enrolled in the PACE or PACENET program as defined in section
502 of the act shall remain eligible for the PACE or PACENET
program if the maximum income limit is exceeded due solely to a
Social Security cost-of-living adjustment.
(b) Funding, to the extent authorized by section
306(b)(1)(vii) of the act of June 26, 2001 (P.L.755, No.77),
known as the Tobacco Settlement Act, shall continue to be
appropriated to the Pharmaceutical Assistance Contract for the
Elderly Fund to support the program expansions contained in this
section. The Department of Aging shall also designate funds from
the fund to continue eligibility under this section; however,
these funds shall not exceed the funding designated under
section 306(b)(1)(vii) of the Tobacco Settlement Act. If
eligibility under this section requires that funds from the fund
exceed those from section 306(b)(1)(vii) of the Tobacco
Settlement Act, then the Department of Aging is authorized to
determine eligibility requirements.
(c) Eligibility in the PACE program pursuant to this section
shall expire December 31, 2006.
(d) Eligibility in the PACENET program pursuant to this
section shall expire December 31, 2007.
Section 15. This act shall take effect as follows:
(1) The amendment of section 512 of the act shall take
effect January 1, 2008.
(2) The amendment of section 706 of the act shall take
effect January 1, 2007.
(3) The remainder of this act shall take effect
immediately.
APPROVED--The 7th day of July, A. D. 2006.
EDWARD G. RENDELL
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