45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO PRESCRIPTION DRUGS; PROVIDING A PRESCRIPTION DRUG PROGRAM TO ASSIST PERSONS WITHOUT PRESCRIPTION DRUG COVERAGE; CREATING A FUND; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. SHORT TITLE.--This act may be cited as the "Prescription Program Act".

Section 2. DEFINITIONS.--As used in the Prescription Program Act:

A. "department" means the department of health;

B. "insurer" means a person, firm, association, corporation or risk-bearing entity duly authorized in the state pursuant to the New Mexico Insurance Code to transact the business of insurance;

C. "participant" means a person who is determined by the department to be eligible to participate in the program;

D. "prescription benefits manager" means a person, other than a pharmacy or pharmacist, who acts as an administrator in connection with pharmacy benefits; and

E. "program" means a plan that provides coverage and benefits to a variety of prescription medications for certain residents of the state pursuant to the Prescription Program Act.

Section 3. PRESCRIPTION DRUG PROGRAM--CONTRACTS--REQUEST FOR PROPOSAL.--

A. The department shall establish a voluntary, statewide program to provide access to a variety of prescription medications at the lowest possible rate for certain residents of the state.

B. The department shall contract with at least two insurers or prescription benefits managers for the program. The department may contract with only one insurer if only one insurer responds to the request for proposal.

C. The contracted insurer or prescription benefits manager may allow participants to purchase their prescription medication by mail or through a pharmacy network.

D. The department's request for proposal, negotiations and contracts with insurers or prescription benefits managers offering prescription drug coverage shall include safeguards to ensure that participants have appropriate access to medically necessary medications even if pharmaceutical management programs are implemented. Any contractors, subcontractors, administrators or affiliates used by the department or by the insurers or prescription benefits managers shall abide by and implement practices that comply with the safeguards to ensure participant access to medically necessary medications as outlined in this section. The insurers or prescription benefits managers shall provide in a timely manner the following information to health care providers authorized to issue prescriptions and to participants:

(1) the process and criteria used to establish medication access restrictions;

(2) the process and criteria for obtaining access to restricted medications;

(3) the internal and independent external appeals process; and

(4) the process and criteria by which certain medically necessary medications can be obtained without an additional charge incurred by the participant.

E. The department may adjust the requirements and terms of the program to ensure compliance with a new or existing federal prescription drug program. The department shall report to the legislative finance committee recommended adjustment, expansion or elimination of the program if a federal prescription drug plan is enacted.

F. In awarding a contract to an insurer or prescription benefits manager, the department shall determine whether the insurer or prescription benefits manager has any material organizational conflicts of interest. If a conflict exists, the department shall require the insurer or prescription benefits manager to:

(1) implement reasonable procedural safeguards to ensure that the insurer's or prescription benefits manager's contractual responsibilities are carried out in a manner that does not unfairly benefit the insurer or prescription benefits manager, the insurer's or prescription benefits manager's parent or affiliates; and

(2) fully disclose conflicts of interest to program participants, the state, risk-bearing entities or other interested persons.

Section 4. ELIGIBILITY.--

A. A resident is an eligible participant in the program if he is:

(1) at least sixty years of age at the time of application for the program;

(2) ineligible for medicaid or other prescription drug coverage;

(3) domiciled in the state on the date of the application or final determination of eligibility and has demonstrated an intent to remain in the state; and

(4) qualified for a subsidy grant.

B. The department shall undertake outreach efforts to build public awareness of the program and maximize enrollment for eligible residents.

Section 5. PROGRAM PREMIUMS--SUBSIDY.--

A. The department shall pay a subsidy out of the prescription program fund for certain participants to assist them with the cost of the program premium. The payment shall be made directly to the insurer with whom the department has entered into a contract.

B. The department shall set the annual premium subsidy amount based on a survey of the premiums for plans available in the state, the projected number of enrollees and the annual appropriation for the program.

C. The department may elect to use a sliding scale for establishing premium subsidies in order to use the available appropriation to meet the needs of low-income persons and those with catastrophic medical expenditures.

D. The department shall pay to an insurer or prescription benefits manager, the premium subsidy amount with respect to each participant enrolled in the program that meets criteria established by the department for the current year.

E. The department may implement a premium incentive or penalty to encourage enrollment of state subsidized and nonsubsidized eligible individuals.

Section 6. ADMINISTRATION.--

A. The department is responsible for the administration of the program.

B. A resident of the state who wishes to become a program participant shall submit an application to the department. The department shall examine the application and shall either grant or deny it within thirty days of receipt. If the application is granted, the department shall notify the participant, assess the program premium established by the department and advise the participant if he qualifies for a subsidy.

Section 7. DISCLOSURES TO PARTICIPANTS.--The insurer or prescription benefits manager shall comply with the New Mexico Insurance Code and the federal Health Insurance Portability and Accountability Act of 1996 with respect to disclosures to participants.

Section 8. RETROSPECTIVE DRUG UTILIZATION REVIEW--COMMITTEE.--The insurer or prescription benefits manager shall provide on an ongoing basis a retrospective drug utilization review program, which shall be applicable to covered prescribed drugs. The retrospective drug utilization review program shall be conducted by a committee, which shall include physicians, pharmacists and other appropriate health care providers who have recognized knowledge and expertise in appropriate clinical areas.

Section 9. PRESCRIPTION PROGRAM FUND.--

A. The "prescription program fund" is created.

B. The prescription program fund shall be credited with money received from private sources specifically designated for the fund and money received through federal grants or support. The fund is subject to appropriation by the legislature.

C. Money deposited in the prescription program fund and all interest earned on money in the fund shall remain in the fund to administer the program. No more than ninety-five percent of the money in the fund appropriated per fiscal year may be expended. No more than ten percent of the program expenditures shall be used for administrative expenses or other indirect costs. Any unexpended or unencumbered balance remaining in the fund at the end of a fiscal year shall not revert to the general fund.