DEBATE CENTERS ON PHARMACY BENEFITS

Senate Bill 287 which appropriates funds and enacts changes to State Health Plan benefits was considered by two Senate Committees this week. The Select Committee on Employee Hospital and Medical Benefits gave the bill a favorable report on Tuesday. The bill cleared the Senate Appropriations Committee on Wednesday.

Senators on both committees raised a wide variety of questions about the impact of benefit changes on Plan members, the cost and content of various contracts between the State Health Plan and Blue Cross, and the proposal to establish the Maintenance Medication Retail Pharmacy Network.

The proposed Pharmacy Network became the focus of the debate as the bill moved through the committees. The Senate took the extraordinary step of meeting as a committee of the whole on Thursday morning to allow full discussion of all concerns.

The Network proposal is vehemently opposed by retail pharmacists. The pharmacists argue that the charges allowed under the proposed Network contract would hurt small independent pharmacists and would favor large pharmacy chains. The pharmacists also argued that Medco, the pharmacy provider for the State Health Plan, intends to move everyone to a mail order system for prescription drugs.

WHAT ARE THE FACTS?

We have received calls and e-mails from Association members expressing concerns about the Network and the supposed forced move to mail order pharmacy. Apparently, local pharmacists have contacted their clients to express their concerns.

So, what does Senate Bill 287 actually say about the Pharmacy Network and mail order drugs? Please allow us to set the record straight based on the explanation of these provisions by the State Health Plan and General Assembly staff.

Maintenance Medication Retail Pharmacy Network Initiative

The network will consist of all pharmacists who agree to the conditions of the Medco contract. Any pharmacy may join but they must accept the charges allowed to the State Health Plan for various maintenance drugs. This is projected to save the Plan approximately $35.3 million in 2009-10 and $41.2 million in 2010-11.

Plan members who take any maintenance prescription drugs for more than 2 months will be required to purchase these drugs through a local pharmacy in the Network or by mail order. If a member chooses to purchase maintenance drugs outside the Network, they will be responsible for 50% of the allowable pharmacy charge.

Plan members who purchase their maintenance drugs on a 90-day supply through a Network pharmacy will have a preferential co-pay of 2.5 times (rather than 3 times) the usual 30-day co-payment. This will save Plan members an estimated $19 million annually.

The preferential drug co-pay also will apply to purchases made through the Medco mail order system. However, no one will be required to use mail order for maintenance prescriptions.

The Network provisions do not apply to medications taken for acute conditions or to specialty medications.

Please contact our office by e-mail if you have any questions.

BILLS INTRODUCED THIS WEEK

House Bill 556: Treasurer’s Governance and Transparency Act
(Primary Sponsors – Reps. Folwell, McGee, Owens, Randleman)

This bill expands the Investment Advisory Committee from the current five to seven members. The committee is appointed by the State Treasurer who serves as chairman ex officio. Four of the members are selected from the general public and must have experience in areas relevant to the administration of a large diversified investment program, including but not limited to: investment management, securities law, real estate development, or absolute return strategies. The two remaining members are appointed from among the members of the Retirement Systems Board of Trustees.

The bill was referred to the House Committee on Pensions and Retirement

House Bill 438: State Health Plan/Calendar Year
(Primary Sponsors – Reps. Folwell, Holliman, Blackwell, Blue)

The bill authorizes the Executive Administrator and the Board of Trustees of the State Health Plan to change the plan year from the current July1-June 30 cycle to a calendar year after consultation with the Committee on Employee Hospital and Medical Benefits.

The bill was referred to the House Committee on Insurance

Senate Bill 558: Retirement System COLAs
(Primary sponsor- Sen. Foriest)

This bill would implement the recommendations of the Retirement Systems Board of Trustees regarding 2009 COLAs for members of the Teachers and State Employees’ Retirement System (TSERS) and the Consolidated Judicial Retirement System (CJRS). The bill authorizes a COLA equal to the raise granted active state employees but not to exceed 1%.

The bill was referred to the Senate Committee on Pensions, Retirement, and Aging