First Regular Session 114th General Assembly (2005)
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HOUSE ENROLLED ACT No. 1325
AN ACT to amend the Indiana Code concerning human services.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 12-15-5-5; (05)HE1325.1.1. -->
SECTION 1. IC 12-15-5-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 5. (a) The office may
provide a prescription drug benefit to a Medicaid recipient in the
Medicaid risk based managed care program.
(b) If the office provides a prescription drug benefit to a
Medicaid recipient in the Medicaid risk based managed care
program:
(1) the office shall develop a procedure and provide the
recipient's risk based managed care provider with
information concerning the recipient's prescription drug
utilization for the risk based managed care provider's case
management program; and
(2) the provisions of IC 12-15-35.5 apply.
(c) If the office does not provide a prescription drug benefit to
a Medicaid recipient in the Medicaid risk based managed care
program, a Medicaid managed care organization that provides shall
provide coverage and reimbursement for outpatient single source
legend drugs is subject to IC 12-15-35-46, and IC 12-15-35-47, and
IC 12-15-35.5.
SOURCE: IC 12-15-12-4.5; (05)HE1325.1.2. -->
SECTION 2. IC 12-15-12-4.5 IS ADDED TO THE INDIANA
CODE AS A
NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2005]:
Sec. 4.5. A managed care provider's
contract or provider agreement with the office may include a
prescription drug program, subject to IC 12-15-5-5, IC 12-15-35,
and IC 12-15-35.5.
SOURCE: IC 12-15-35-28; (05)HE1325.1.3. -->
SECTION 3. IC 12-15-35-28, AS AMENDED BY P.L.28-2004,
SECTION 104, AND AS AMENDED BY P.L.97-2004, SECTION 51,
IS CORRECTED AND AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2005]: Sec. 28. (a) The board has the following
duties:
(1) The adoption of rules to carry out this chapter, in accordance
with the provisions of IC 4-22-2 and subject to any office
approval that is required by the federal Omnibus Budget
Reconciliation Act of 1990 under Public Law 101-508 and its
implementing regulations.
(2) The implementation of a Medicaid retrospective and
prospective DUR program as outlined in this chapter, including
the approval of software programs to be used by the pharmacist
for prospective DUR and recommendations concerning the
provisions of the contractual agreement between the state and any
other entity that will be processing and reviewing Medicaid drug
claims and profiles for the DUR program under this chapter.
(3) The development and application of the predetermined criteria
and standards for appropriate prescribing to be used in
retrospective and prospective DUR to ensure that such criteria
and standards for appropriate prescribing are based on the
compendia and developed with professional input with provisions
for timely revisions and assessments as necessary.
(4) The development, selection, application, and assessment of
interventions for physicians, pharmacists, and patients that are
educational and not punitive in nature.
(5) The publication of an annual report that must be subject to
public comment before issuance to the federal Department of
Health and Human Services and to the Indiana legislative council
by December 1 of each year. The report
issued to the legislative
council must be in an electronic format under IC 5-14-6.
(6) The development of a working agreement for the board to
clarify the areas of responsibility with related boards or agencies,
including the following:
(A) The Indiana board of pharmacy.
(B) The medical licensing board of Indiana.
(C) The SURS staff.
(7) The establishment of a grievance and appeals process for
physicians or pharmacists under this chapter.
(8) The publication and dissemination of educational information
to physicians and pharmacists regarding the board and the DUR
program, including information on the following:
(A) Identifying and reducing the frequency of patterns of
fraud, abuse, gross overuse, or inappropriate or medically
unnecessary care among physicians, pharmacists, and
recipients.
(B) Potential or actual severe or adverse reactions to drugs.
(C) Therapeutic appropriateness.
(D) Overutilization or underutilization.
(E) Appropriate use of generic drugs.
(F) Therapeutic duplication.
(G) Drug-disease contraindications.
(H) Drug-drug interactions.
(I) Incorrect drug dosage and duration of drug treatment.
(J) Drug allergy interactions.
(K) Clinical abuse and misuse.
(9) The adoption and implementation of procedures designed to
ensure the confidentiality of any information collected, stored,
retrieved, assessed, or analyzed by the board, staff to the board, or
contractors to the DUR program that identifies individual
physicians, pharmacists, or recipients.
(10) The implementation of additional drug utilization review
with respect to drugs dispensed to residents of nursing facilities
shall not be required if the nursing facility is in compliance with
the drug regimen procedures under
410 IAC 16.2-3-8 410
IAC 16.2-3.1 and 42 CFR 483.60.
(11) The research, development, and approval of a preferred drug
list for:
(A) Medicaid's fee for service program;
(B) Medicaid's primary care case management program;
and
(C) Medicaid's risk based managed care program, if the
office provides a prescription drug benefit and subject to
IC 12-15-5; and
(C) (D) the primary care case management component of the
children's health insurance program under IC 12-17.6;
in consultation with the therapeutics committee.
(12) The approval of the review and maintenance of the preferred
drug list at least two (2) times per year.
(13) The preparation and submission of a report concerning the
preferred drug list at least two (2) times per year to the select joint
commission on Medicaid oversight established by IC 2-5-26-3.
(14) The collection of data reflecting prescribing patterns related
to treatment of children diagnosed with attention deficit disorder
or attention deficit hyperactivity disorder.
(15) Advising the Indiana comprehensive health insurance
association established by IC 27-8-10-2.1 concerning
implementation of chronic disease management and
pharmaceutical management programs under IC 27-8-10-3.5.
(b) The board shall use the clinical expertise of the therapeutics
committee in developing a preferred drug list. The board shall also
consider expert testimony in the development of a preferred drug list.
(c) In researching and developing a preferred drug list under
subsection (a)(11), the board shall do the following:
(1) Use literature abstracting technology.
(2) Use commonly accepted guidance principles of disease
management.
(3) Develop therapeutic classifications for the preferred drug list.
(4) Give primary consideration to the clinical efficacy or
appropriateness of a particular drug in treating a specific medical
condition.
(5) Include in any cost effectiveness considerations the cost
implications of other components of the state's Medicaid program
and other state funded programs.
(d) Prior authorization is required for coverage under a program
described in subsection (a)(11) of a drug that is not included on the
preferred drug list.
(e) The board shall determine whether to include a single source
covered outpatient drug that is newly approved by the federal Food and
Drug Administration on the preferred drug list not later than sixty (60)
days after the date on which the manufacturer notifies the board in
writing of the drug's approval. However, if the board determines that
there is inadequate information about the drug available to the board
to make a determination, the board may have an additional sixty (60)
days to make a determination from the date that the board receives
adequate information to perform the board's review. Prior authorization
may not be automatically required for a single source drug that is newly
approved by the federal Food and Drug Administration, and that is:
(1) in a therapeutic classification:
(A) that has not been reviewed by the board; and
(B) for which prior authorization is not required; or
(2) the sole drug in a new therapeutic classification that has not
been reviewed by the board.
(f) The board may not exclude a drug from the preferred drug list
based solely on price.
(g) The following requirements apply to a preferred drug list
developed under subsection (a)(11):
(1) Except as provided by IC 12-15-35.5-3(b) and
IC 12-15-35.5-3(c), the office or the board may require prior
authorization for a drug that is included on the preferred drug list
under the following circumstances:
(A) To override a prospective drug utilization review alert.
(B) To permit reimbursement for a medically necessary brand
name drug that is subject to generic substitution under
IC 16-42-22-10.
(C) To prevent fraud, abuse, waste, overutilization, or
inappropriate utilization.
(D) To permit implementation of a disease management
program.
(E) To implement other initiatives permitted by state or federal
law.
(2) All drugs described in IC 12-15-35.5-3(b) must be included on
the preferred drug list.
(3) The office may add a drug that has been approved by the
federal Food and Drug Administration to the preferred drug list
without prior approval from the board.
(4) The board may add a drug that has been approved by the
federal Food and Drug Administration to the preferred drug list.
(h) At least two (2) times each year, the board shall provide a report
to the select joint commission on Medicaid oversight established by
IC 2-5-26-3. The report must contain the following information:
(1) The cost of administering the preferred drug list.
(2) Any increase in Medicaid physician, laboratory, or hospital
costs or in other state funded programs as a result of the preferred
drug list.
(3) The impact of the preferred drug list on the ability of a
Medicaid recipient to obtain prescription drugs.
(4) The number of times prior authorization was requested, and
the number of times prior authorization was:
(A) approved; and
(B) disapproved.
(i) The board shall provide the first report required under subsection
(h) not later than six (6) months after the board submits an initial
preferred drug list to the office.
SOURCE: IC 12-15-35-45; (05)HE1325.1.4. -->
SECTION 4. IC 12-15-35-45 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 45. (a) The chairman
of the board, subject to the approval of the board members, may
appoint an advisory committee to make recommendations to the board
on the development of a Medicaid outpatient drug formulary.
(b) If the office decides to establish a Medicaid outpatient drug
formulary, the formulary shall be developed by the board.
(c) A formulary, preferred drug list, or prescription drug benefit
used by a Medicaid managed care organization is subject to
IC 12-15-5-5, IC 12-15-35.5, and sections 46 and 47 of this chapter.
SOURCE: IC 12-15-35.5-1; (05)HE1325.1.5. -->
SECTION 5. IC 12-15-35.5-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 1. (a) Except as
provided in subsection (b), This chapter applies to:
(1) the Medicaid program under this article; and
(2) the children's health insurance program under IC 12-17.6.
(b) This chapter does not apply to a formulary or prior authorization
program operated by a managed care organization under a program
described in subsection (a).
SOURCE: IC 12-15-35.5-3; (05)HE1325.1.6. -->
SECTION 6. IC 12-15-35.5-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 3. (a) Except as
provided in subsection (b), the office may establish prior authorization
requirements for drugs covered under a program described in
section
1(a) section 1 of this chapter.
(b) The office may not require prior authorization for the following
single source or brand name multisource drugs:
(1) A drug that is classified as an antianxiety, antidepressant, or
antipsychotic central nervous system drug in the most recent
publication of Drug Facts and Comparisons (published by the
Facts and Comparisons Division of J.B. Lippincott Company).
(2) A drug that, according to:
(A) the American Psychiatric Press Textbook of
Psychopharmacy;
(B) Current Clinical Strategies for Psychiatry;
(C) Drug Facts and Comparisons; or
(D) a publication with a focus and content similar to the
publications described in clauses (A) through (C);
is a cross-indicated drug for a central nervous system drug
classification described in subdivision (1).
(3) A drug that is:
(A) classified in a central nervous system drug category or
classification (according to Drug Facts and Comparisons) that
is created after the effective date of this chapter; and
(B) prescribed for the treatment of a mental illness (as defined
in the most recent publication of the American Psychiatric
Association's Diagnostic and Statistical Manual of Mental
Disorders).
(c) Except as provided under section 7 of this chapter, a recipient
enrolled in a program described in section 1(a) section 1 of this chapter
shall have unrestricted access to a drug described in subsection (b).
SOURCE: IC 12-15-35.5-7; (05)HE1325.1.7. -->
SECTION 7. IC 12-15-35.5-7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 7. (a) Subject to
subsection subsections (b)
and (c), the office may place limits on
quantities dispensed or the frequency of refills for any covered drug for
the purpose of:
(1) preventing fraud, abuse,
or waste;
(2) preventing overutilization,
or inappropriate utilization,
or
inappropriate prescription practices that are contrary to:
(A) clinical quality and patient safety; and
(B) accepted clinical practice for the diagnosis and
treatment of mental illness; or
(2) (3) implementing a disease management program.
(b) Before implementing a limit described in subsection (a), the
office shall:
(1) consider quality of care and the best interests of Medicaid
recipients;
(2) seek the advice of the drug utilization review board,
established by IC 12-15-35-19, at a public meeting of the board;
and
(3) publish a provider bulletin that complies with the
requirements of IC 12-15-13-6.
(c) Subject to subsection (d), the board may establish and the office
may implement a restriction on a drug described in section 3(b) of this
chapter if:
(1) the board determines that data provided by the office indicates
that a situation described in IC 12-15-35-28(a)(8)(A) through
IC 12-15-35-28(a)(8)(K) requires an intervention to:
(A) prevent fraud, abuse,
or waste;
(B) prevent overutilization,
or inappropriate utilization, or
inappropriate prescription practices that are contrary to:
(i) clinical quality and patient safety; and
(ii) accepted clinical practice for the diagnosis and
treatment of mental illness; or
(B) (C) implement a disease management program;
and
(2) the board approves and the office implements an educational
intervention program for providers to address the situation.
and
(3) at least six (6) months after the implementation of the
educational intervention program described in subdivision (2), the
board determines that the situation requires further action.
(d) A restriction established under subsection (c) for any drug
described in section 3(b) of this chapter:
(1) must comply with the procedures described in
IC 12-15-35-35;
(2) may include requiring a recipient to be assigned to one (1)
practitioner and one (1) pharmacy provider for purposes of
receiving mental health medications;
(3) may not lessen the quality of care; and
(4) must be in the best interest of Medicaid recipients.
(e) Implementation of a restriction established under subsection (c)
must provide that only the prescribing practitioner may authorize an
for the dispensing of a temporary supply of the drug for a
prescription not to exceed seven (7) business days, if additional
time is required to review the request for override of the restriction.
This subsection does not apply if the federal Food and Drug
Administration has issued a boxed warning under 21 CFR
201.57(e) that applies to the drug and is applicable to the patient.
(f) Before implementing a restriction established under subsection
(c), the office shall:
(1) seek the advice of the mental health quality advisory
committee until June 30, 2007; and
(2) publish a provider bulletin that complies with the
requirements of IC 12-15-13-6.
(g) Subsections (c) through (f):
(1) apply only to drugs described in section 3(b) of this chapter;
and
(2) do not apply to a restriction on a drug described in section
3(b) of this chapter that was approved by the board and
implemented by the office before April 1, 2003.
SOURCE: ; (05)HE1325.1.8. -->
SECTION 8. [EFFECTIVE JULY 1, 2005] (a) As used in this
SECTION, "committee" refers to the mental health quality
advisory committee established in subsection (c).
(b) As used in this SECTION, "office" refers to the office of
Medicaid policy and planning established by IC 12-8-6-1.
(c) The mental health quality advisory committee is established.
The committee consists of the following members:
(1) The director of the office or the director's designee, who
shall serve as chairperson of the committee.
(2) The director of the division of mental health and addiction
or the director's designee.
(3) A representative of a statewide mental health advocacy
organization.
(4) A representative of a statewide mental health provider
organization.
(5) A representative from a managed care organization that
participates in the state's Medicaid program.
(6) A member with expertise in psychiatric research
representing an academic institution.
(7) A pharmacist licensed under IC 25-26.
The governor shall make the appointments under subdivisions (3)
through (7) and fill any vacancy on the committee.
(d) The office shall staff the committee. The expenses of the
committee shall be paid by the office.
(e) Each member of the committee who is not a state employee
is entitled to the minimum salary per diem provided by
IC 4-10-11-2.1(b). The member is also entitled to reimbursement
for traveling expenses as provided under IC 4-13-1-4 and other
expenses actually incurred in connection with the member's duties
as provided in the state policies and procedures established by the
Indiana department of administration and approved by the budget
agency.
(f) Each member of the committee who is a state employee is
entitled to reimbursement for traveling expenses as provided under
IC 4-13-1-4 and other expenses actually incurred in connection
with the member's duties as provided in the state policies and
procedures established by the Indiana department of
administration and approved by the budget agency.
(g) The affirmative votes of a majority of the voting members
appointed to the committee are required by the committee to take
action on any measure, including a final report.
(h) The committee shall advise the office and make
recommendations concerning the implementation of
IC 12-15-35.5-7(c) and consider the following:
(1) Peer reviewed medical literature.
(2) Observational studies.
(3) Health economic studies.
(4) Input from physicians and patients.
(5) Any other information determined by the committee to be
appropriate.
(i) The office shall report recommendations made by the
committee to the drug utilization review board established by
IC 12-15-35-19.
(j) The office shall report the following information to the select
joint commission on Medicaid oversight established by IC 2-5-26-3:
(1) The committee's advice and recommendations made under
this SECTION.
(2) The number of instances that occur under the restriction
described in IC 12-15-35.5-7(c) and the outcome of each
occurrence.
(3) The transition of the aged, blind, and disabled population
to the risk based managed care program. This information
shall also be reported to the health finance commission
established by IC 2-5-23-3.
(4) Any decision by the office to change the health care
delivery system in which Medicaid is provided to recipients.
(k) This SECTION expires June 30, 2007.
SOURCE: ; (05)HE1325.1.9. -->
SECTION 9. [EFFECTIVE JULY 1, 2005] (a) The following are
void:
(1) 405 IAC 5-24-8.5.
(2) 405 IAC 5-24-8.6.
(3) 405 IAC 5-24-11.
(b) The publisher of the Indiana Administrative Code and the
Indiana Register shall remove these provisions from the Indiana
Administrative Code.
(c) This SECTION expires December 31, 2006.
SOURCE: ; (05)HE1325.1.10. -->
SECTION 10. [EFFECTIVE JULY 1, 2005] (a) As used in this
SECTION, "managed care provider" refers to a managed care
organization that has entered into a contract with the office to
provide services under Medicaid's risk based managed care
program.
(b) As used in this SECTION, "office" refers to the office of
Medicaid policy and planning established by IC 12-8-6-1.
(c) IC 12-15-12-4.5, as added by this act, applies to a provider
agreement or contract entered into, amended, or renewed after
June 30, 2005, between the office and a managed care provider.
(d) This SECTION expires December 31, 2010.
SOURCE: ; (05)HE1325.1.11. -->
SECTION 11. P.L.106-2002, SECTION 1 IS AMENDED TO
READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: SECTION
1. (a) The Indiana prescription drug advisory committee is established
to:
(1) study pharmacy benefit programs and proposals, including
programs and proposals in other states; and
(2) make initial and ongoing recommendations to the governor for
programs that address the pharmaceutical costs of low-income
senior citizens.
(b) The committee consists of eleven (11) members appointed by
the governor and four (4) legislative members. The term of each
member expires December 31, 2005. 2007. The members of the
committee appointed by the governor are as follows:
(1) A physician with a specialty in geriatrics.
(2) A pharmacist.
(3) A person with expertise in health plan administration.
(4) A representative of an area agency on aging.
(5) A consumer representative from a senior citizen advocacy
organization.
(6) A person with expertise in and knowledge of the federal
Medicare program.
(7) A health care economist.
(8) A person representing a pharmaceutical research and
manufacturing association.
(9) A township trustee.
(10) Two (2) other members as appointed by the governor.
The four (4) legislative members shall serve as nonvoting members.
The speaker of the house of representatives and the president pro
tempore of the senate shall each appoint two (2) legislative members,
who may not be from the same political party, to serve on the
committee.
(c) The governor shall designate a member to serve as chairperson.
A vacancy with respect to a member shall be filled in the same manner
as the original appointment. Each member is entitled to reimbursement
for traveling expenses and other expenses actually incurred in
connection with the member's duties. The expenses of the committee
shall be paid from the Indiana prescription drug account created by
IC 4-12-8. as added by this act. The office of the secretary of family
and social services shall provide staff for the committee. The
committee is a public agency for purposes of IC 5-14-1.5 and
IC 5-14-3. The committee is a governing body for purposes of
IC 5-14-1.5.
(d) Not later than September 1, 2004, the committee shall make
program design recommendations to the governor and the family and
social services administration concerning the following:
(1) Eligibility criteria, including the desirability of incorporating
an income factor based on the federal poverty level.
(2) Benefit structure.
(3) Cost-sharing requirements, including whether the program
should include a requirement for copayments or premium
payments.
(4) Marketing and outreach strategies.
(5) Administrative structure and delivery systems.
(6) Evaluation.
(e) The recommendations described in subsection (d) shall address
the following:
(1) Cost-effectiveness of program design.
(2) Coordination with existing pharmaceutical assistance
programs.
(3) Strategies to minimize crowd-out of private insurance.
(4) Reasonable balance between maximum eligibility levels and
maximum benefit levels.
(5) Feasibility of a health care subsidy program where the amount
of the subsidy is based on income.
(6) Advisability of entering into contracts with health insurance
companies to administer the program.
(f) Not later than September 1, 2005, the committee shall submit
recommendations to the secretary of the office of the secretary of
family and social services and the governor concerning the
redesign of the Indiana prescription drug program established by
IC 12-10-16-3 to coordinate the program with the federal Medicare
prescription drug benefit program. The recommendations must
include the following:
(1) Methods, including automatic enrollment, that the state
should use to ensure that current Indiana prescription drug
program enrollees are enrolled in the federal Medicare
prescription drug benefit program.
(2) Changes to the financial eligibility level requirements for
the Indiana prescription drug program, including eligibility
requirements that include individuals whose income does not
exceed two hundred percent (200%) of the federal poverty
level (as defined by IC 12-15-2-1).
(3) Methods to assist current enrollees in the Indiana
prescription drug program in completing applications and to
determine eligibility in the Medicare drug beneficiary subsidy
program.
(4) Changes to benefits offered under the Indiana prescription
drug program, including the following:
(A) Coverage for federal Medicare prescription drug
benefit:
(i) deductibles; or
(ii) premiums.
(B) Coverage for prescription drug costs that are not
covered by the federal Medicare prescription drug benefit
or the federal Medicare prescription drug plans.
(5) Methods to maximize use of federal funding available to
Indiana under the federal Medicare Modernization Act to
maximize enrollment in:
(A) the federal Medicare prescription drug benefit
program; and
(B) the Indiana prescription drug program.
The committee shall make recommendations in a manner that
would expend but not exceed the Indiana prescription drug
program's budget.
(g) The office of the secretary of family and social services may:
(1) implement the recommendations made by the committee
under subsection (f);
(2) act as the authorized representative and signatory to
complete:
(A) any federal low income Medicare drug beneficiary
subsidy application; and
(B) any federal Medicare prescription drug benefit
application; and
(3) enroll eligible individuals for the Indiana prescription
drug program and the federal Medicare prescription drug
benefit program.
(f) (h) The committee may not recommend the use of funds from the
Indiana prescription drug account for a state prescription drug benefit
for low-income senior citizens if there is a federal statute or program
providing a similar prescription drug benefit for the benefit of
low-income senior citizens.
(g) (i) This SECTION expires December 31, 2005. 2007.
SOURCE: ; (05)HE1325.1.12. -->
SECTION 12.
An emergency is declared for this act.
HEA 1325 _ Concur
Figure
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