Legislature(2017 - 2018)ADAMS ROOM 519

04/05/2018 01:30 PM House FINANCE

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Audio Topic
01:37:16 PM Start
01:38:32 PM Confirmation Hearings: Alaska Mental Health Trust Authority Board: Verne Boerner
01:48:13 PM HB240
01:56:45 PM HB219
02:26:05 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearings: Mental Health Trust TELECONFERENCED
Authority Board
-- Public Testimony --
<Bill Hearing Canceled>
Moved CSHB 219(JUD) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 240(FIN) Out of Committee
HOUSE BILL NO. 240                                                                                                            
     "An  Act relating  to the  registration  and duties  of                                                                    
     pharmacy  benefits  managers; relating  to  procedures,                                                                    
     guidelines,  and  enforcement mechanisms  for  pharmacy                                                                    
     audits; relating  to the  cost of  multi-source generic                                                                    
     drugs and insurance  reimbursement procedures; relating                                                                    
     to  the  duties of  the  director  of the  division  of                                                                    
     insurance; and providing for an effective date."                                                                           
1:48:13 PM                                                                                                                    
Co-Chair Foster indicated that the bill was last heard on                                                                       
the previous day. There was one amendment submitted.                                                                            
REPRESENTATIVE DAVID  GUTTENBERG, SPONSOR, relayed  that the                                                                    
fiscal note had changed from  the time the committee adopted                                                                    
the previous version.  The fiscal note by  the Department of                                                                    
Administration  (DOA)  was  zeroed  out  when  language  was                                                                    
changed from "shall" to "may."                                                                                                  
Co-Chair Seaton asked which version of the amendment would                                                                      
be under consideration.                                                                                                         
1:49:40 PM                                                                                                                    
AT EASE                                                                                                                         
1:50:11 PM                                                                                                                    
Vice-Chair Gara MOVED to ADOPT Amendment 1 (copy on file):                                                                      
     Page 1, line l, following "Act":                                                                                           
          Insert relating  to prescription  prices available                                                                    
          to  consumers; relating  to penalties  for certain                                                                    
          pharmacy or pharmacist violations;"                                                                                   
     Page 1, following line 6:                                                                                                  
          Insert new bill sections to read:                                                                                     
     "* Section 1.  AS 08.80.297 is amended by  adding a new                                                                    
     subsection to read:                                                                                                        
          (b)  No  contract  or  agreement  may  prohibit  a                                                                    
          pharmacy,   pharmacist,   or   pharmacy   benefits                                                                    
          manager from informing a patient  of a less costly                                                                    
          alternative for a   prescription  drug or  medical                                                                    
          device  or supply,  which may  include the  amount                                                                    
          the  patient  would  pay  without  the  use  of  a                                                                    
          health care plan.                                                                                                     
     *  Sec.  2.  AS  08.80.297 is  amended  by  adding  new                                                                    
     subsections to read:                                                                                                       
          (c)  A   pharmacist  or   person  acting   at  the                                                                    
          direction  of   a  pharmacist  shall   notify  the                                                                    
          patient if  a known less costly  alternative for a                                                                    
          prescription drug  or medical device or  supply is                                                                    
          available,  which  may   include  the  amount  the                                                                    
          patient  would pay  without the  use  of a  health                                                                    
          care plan.                                                                                                            
          (d) In this section,                                                                                                  
               (1)  "health  care   plan"  means  a  policy,                                                                    
               contract,   benefit,    or   agreement   that                                                                    
               provides, delivers,  arranges for,  pays for,                                                                    
               or  reimburses any  of  the  costs of  health                                                                    
               care services under                                                                                              
                 (A)     a    health    care insurance plan                                                                     
                  as     defined   under AS 21.54.500;                                                                          
                 (8)  a  governmental  or  employee  welfare                                                                    
                 benefit  plan under 29  U.S.C. 1001  - 1191                                                                    
                 (Employee  Retirement  Income Security  Act                                                                    
                 of 1974);                                                                                                      
                 (C) a plan offered under AS 39.30.090 or                                                                       
                 (D) a federal     governmental   plan    as                                                                    
                  defined under AS 21.54.500;                                                                                   
                 (E) the Medicaid or Medicare program; or                                                                       
                 (F) a self-insured employer benefit plan;                                                                      
               (2) "pharmacy benefits manager" has the                                                                          
              meaning given in AS 21.27.955.                                                                                    
     * Sec. 3. AS 08.80.460(a) is amended to read:                                                                              
     (a)  Except for  a  violation of  AS  08.80.297, a  [A]                                                                    
     person  who violates  a provision  of  this chapter  is                                                                    
     guilty of a class B misdemeanor.                                                                                           
     * Sec. 4. AS 08.80.460(b) is amended to read:                                                                              
     (b)  A  person  who   violates  the  provisions  of  AS                                                                    
     08.80.295 or 08.80.297 may  be punished [IS PUNISHABLE]                                                                    
     by a civil  fine in an amount established  by the board                                                                    
     in a  schedule or schedules establishing  the amount of                                                                    
     civil fine for a  particular violation. The schedule or                                                                    
     schedules shall be adopted by  the board by regulation.                                                                    
     Any  civil  fine  imposed under  this  section  may  be                                                                    
     appealed in the manner provided for appeals in AS                                                                          
     44.62 (Administrative Procedure Act)."                                                                                     
     Page 1, line 7:                                                                                                            
          Delete "Section l"                                                                                                    
          Insert "Sec. 5"                                                                                                       
     Renumber the following bill sections accordingly.                                                                          
     Page 8, lines 21 - 23:                                                                                                     
     Delete all material and insert:                                                                                            
          "APPLICABILITY.  (a)  AS  21.27.901  -  21.27.955,                                                                    
          enacted by sec. 5 of  this Act, apply to audits of                                                                    
          pharmacies   conducted    by   pharmacy   benefits                                                                    
          managers and contracts entered  into or renewed on                                                                    
          or  after the  effective date  of sec.  5 of  this                                                                    
     (b) AS 08.80.297(b), enacted by sec. 1 of this Act,                                                                        
     applies to contracts entered into or renewed on or                                                                         
     after the effective date of sec. 1 of this Act."                                                                           
     Reletter the following subsection accordingly.                                                                             
     Page 8, line 25:                                                                                                           
          Delete "added by sec. l                                                                                               
          Insert "enacted by sec. 5"                                                                                            
     Page 9, line 6:                                                                                                            
          Delete "Section 3 of this Act takes                                                                                   
          Insert "Sections 1, 3, and 6 of this Act take"                                                                        
     Page 9, line 7:                                                                                                            
          Delete "sec. 5"                                                                                                       
          Insert "sec. 9"                                                                                                       
There being NO OBJECTION, Amendment 1 was ADOPTED.                                                                              
Co-Chair Foster  asked Vice-Chair Gara to  review the fiscal                                                                    
notes. Vice-Chair  Gara indicated  there were 2  zero fiscal                                                                    
notes. The  first zero fiscal  note was from  the Department                                                                    
of  Commerce, Community  and  Economic Development  (DCCED).                                                                    
The   appropriation  was   insurance  operations,   and  the                                                                    
allocation   was  insurance   operations.   The  Office   of                                                                    
Management and  Budget (OMB) component  number was  354. The                                                                    
second  zero fiscal  note, OMB  component  number 2152,  was                                                                    
from DOA.  The appropriation was  centralized administrative                                                                    
services    and   the    allocation    was   health    plans                                                                    
Representative  Wilson  referred  to the  fiscal  note  with                                                                    
component number 2152. She referred  to page 2 in the second                                                                    
paragraph  where  it  stated  that  the  actuarial  analysis                                                                    
assumed that,  with the mandate,  planned costs  for generic                                                                    
drugs  filled  by  independent pharmacies  in  Alaska  would                                                                    
increase  by  20  percent.  The   assumed  impact  on  chain                                                                    
pharmacy pricing  would be  an increase  of 10  percent. She                                                                    
asked  where  the  percentage   numbers  were  derived.  She                                                                    
relayed  that  the  fiscal  note had  been  written  by  the                                                                    
Division of Retirement and Benefits.                                                                                            
Co-Chair Foster invited testifiers to come to the table.                                                                        
MICHELE  MICHAUD, DEPUTY  DIRECTOR,  DIVISION OF  RETIREMENT                                                                    
AND  BENEFITS,  DEPARTMENT   OF  ADMINISTRATION,  introduced                                                                    
EMILY RICCI,  HEALTH CARE POLICY ADMINISTRATOR,  DIVISION OF                                                                    
RETIREMENT  AND  BENEFITS,   DEPARTMENT  OF  ADMINISTRATION,                                                                    
introduced herself.                                                                                                             
Ms. Michaud  reported that the assumptions  that were listed                                                                    
were in relation  to the original fiscal note,  the one that                                                                    
had  been  resolved.  The numbers  were  provided  by  state                                                                    
actuaries. They  thought that the language  that required an                                                                    
appeal  "shall"  be  granted would  not  only  increase  the                                                                    
number  of appeals  but would  likely  increase the  Maximum                                                                    
Allowable Cost  (MAC) reimbursement rate for  certain drugs.                                                                    
As  a  result  of  that  and  based  on  their  analysis  of                                                                    
utilization trends,  it would  increase the  independents by                                                                    
20 percent and the chain pharmacies by 10 percent.                                                                              
Representative  Wilson  asked  why   the  language  was  not                                                                    
removed. Ms.  Ricci relayed  that it was  an attempt  in the                                                                    
fiscal note to explain why there  had been a change from the                                                                    
previous  fiscal  note  to  the  current  fiscal  note.  The                                                                    
language should be corrected to  reflect the prior actuarial                                                                    
analysis assumed. It was her  understanding that there was a                                                                    
letter   from   the   state's  actuaries   that   would   be                                                                    
accompanying the fiscal note.  The updated version explained                                                                    
the rational why  the change in language resulted  in a zero                                                                    
fiscal note or an indeterminate fiscal note.                                                                                    
Co-Chair  Seaton  MOVED to  report  CSHB  240 (FIN)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
There being NO OBJECTION, it was so ordered.                                                                                    
CSHB  240 (FIN)  was REPORTED  out of  committee with  a "do                                                                    
pass" recommendation  and with one  new zero fiscal  note by                                                                    
the  Department of  Administration and  with one  previously                                                                    
published zero fiscal note: FN1(CED).                                                                                           
1:55:52 PM                                                                                                                    
AT EASE                                                                                                                         
1:56:36 PM                                                                                                                    

Document Name Date/Time Subjects
HB 240 Amendment 1.pdf HFIN 4/5/2018 1:30:00 PM
HB 240
HB 240 Support email - petition.pdf HFIN 4/5/2018 1:30:00 PM
HB 240
HB 219 Amendment #1.pdf HFIN 4/5/2018 1:30:00 PM
HB 219