LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION May 25, 2009 TO:Honorable David Dewhurst, Lieutenant Governor, Senate Honorable Joe Straus, Speaker of the House, House of Representatives FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB2030 by Zerwas (Relating to the Medicaid Drug Utilization Review Program and prescription drug use under the Medicaid program.), Conference Committee Report No significant fiscal implication to the State is anticipated. As recommended in the Legislative Budget Board's 2009 Government Effectiveness and Efficiency Report entitled "Strengthen the Texas Medicaid Drug Utilization Review Program to Promote Safety and Contain Spending," the bill would amend Chapter 531 of the Government Code to require the Health and Human Services Commission (HHSC) to increase the number and type of retrospective drug use reviews performed each year under the Medicaid Drug Utilization Review (DUR) program. HHSC would be required to include a detailed description of Medicaid DUR program activities and cost savings estimates for retrospective and prospective reviews in the program's federally required annual report and to post the annual report on its website. The bill would require HHSC to monitor and analyze Medicaid prescription drug use and expenditure patterns and post certain data on its website. The bill prohibits Medicaid DUR board members from having a contractual relationship, ownership interest, or other conflict of interest with a pharmaceutical manufacturer or labeler or with an entity engaged by HHSC to assist with administering the Medicaid DUR program. HHSC would be allowed to adopt rules that identify prohibited relationships or require the Medicaid DUR board to develop a conflict of interest policy. The bill would also require HHSC to ensure that prescriptions written under the Medicaid Program are valid for no more than one year. The bill would amend Chapter 531 of the Government Code regarding information that is confidentialwith respect to the Medicaid Vendor Drug program's preferred drug list (PDL). The bill would allowthe PDL to contain drugs for which no supplemental rebate agreement was reached if it would nothave a negative cost impact to the state. It would require HHSC to consider including all strengths and dosages of a drug on the PDL, and to consider including multiple methods of delivery within each drug class, including liquid, tablet, capsule, and orally disintegrating tablet. The bill would require the commission to ensure that prior authorization requests may be submitted by telephone, facsimile, or electronic communications via the Internet. HHSC would provide an automated process to determine whether a drug may be dispensed without an additional prior authorization request. The bill would require HHSC to publish on the Internet specific non-confidential information regarding HHSC decisions concerning preferred drug list placement of individual drug products. The bill would require HHSC to study the costs and benefits of the prior authorization process and methods to improve efficiency. It is assumed that these costs could be absorbed within current resources. Implementing strategies to strengthen the Medicaid DUR program has the potential to improve thequality of pharmaceutical care and contain Medicaid prescription drug spending. HHSC currentlycontracts with an entity to perform retrospective drug use reviews. Per HHSC's contract with thisentity, HHSC is guaranteed cost savings equal to twice the amount paid to the contracted entity foreach retrospective drug use review performed. As a result, the implementation of additionalretrospective drug use reviews would be cost neutral. It is assumed that any cost to implement theprovisions of the bill related to the annual report, analysis of prescription drug data, and the conflict ofinterest provision for the Medicaid DUR board would be minimal and can be absorbed withinavailable resources. Based on HHSC's analysis, any cost to implement provisions of the bill related to the period of validity for prescription drugs written under the Medicaid Program can be absorbed within available resources. The requirement for the agency to consider including multiple dosages and methods of delivery isassumed to have no fiscal impact; it is assumed that the agency would not implement unless there wasno signficant fiscal impact to do so. It is assumed that the automated process for certain drugdispensing without prior authorization would require system programming expenditures. Therequirement to publish HHSC PDL decisions on the Internet would result in an increased amount ofstaff time and resources needed to post the detailed information requested. It is assumed that thesecosts could be absorbed within current resources. The bill would take effect September 1, 2009. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies:529 Health and Human Services Commission LBB Staff: JOB, SD, CL, JI, DM
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
May 25, 2009
TO:Honorable David Dewhurst, Lieutenant Governor, Senate Honorable Joe Straus, Speaker of the House, House of Representatives FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB2030 by Zerwas (Relating to the Medicaid Drug Utilization Review Program and prescription drug use under the Medicaid program.), Conference Committee Report
TO: Honorable David Dewhurst, Lieutenant Governor, Senate Honorable Joe Straus, Speaker of the House, House of Representatives
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: HB2030 by Zerwas (Relating to the Medicaid Drug Utilization Review Program and prescription drug use under the Medicaid program.), Conference Committee Report
Honorable David Dewhurst, Lieutenant Governor, Senate Honorable Joe Straus, Speaker of the House, House of Representatives
Honorable David Dewhurst, Lieutenant Governor, Senate Honorable Joe Straus, Speaker of the House, House of Representatives
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
HB2030 by Zerwas (Relating to the Medicaid Drug Utilization Review Program and prescription drug use under the Medicaid program.), Conference Committee Report
HB2030 by Zerwas (Relating to the Medicaid Drug Utilization Review Program and prescription drug use under the Medicaid program.), Conference Committee Report
No significant fiscal implication to the State is anticipated.
No significant fiscal implication to the State is anticipated.
As recommended in the Legislative Budget Board's 2009 Government Effectiveness and Efficiency Report entitled "Strengthen the Texas Medicaid Drug Utilization Review Program to Promote Safety and Contain Spending," the bill would amend Chapter 531 of the Government Code to require the Health and Human Services Commission (HHSC) to increase the number and type of retrospective drug use reviews performed each year under the Medicaid Drug Utilization Review (DUR) program. HHSC would be required to include a detailed description of Medicaid DUR program activities and cost savings estimates for retrospective and prospective reviews in the program's federally required annual report and to post the annual report on its website. The bill would require HHSC to monitor and analyze Medicaid prescription drug use and expenditure patterns and post certain data on its website. The bill prohibits Medicaid DUR board members from having a contractual relationship, ownership interest, or other conflict of interest with a pharmaceutical manufacturer or labeler or with an entity engaged by HHSC to assist with administering the Medicaid DUR program. HHSC would be allowed to adopt rules that identify prohibited relationships or require the Medicaid DUR board to develop a conflict of interest policy. The bill would also require HHSC to ensure that prescriptions written under the Medicaid Program are valid for no more than one year. The bill would amend Chapter 531 of the Government Code regarding information that is confidentialwith respect to the Medicaid Vendor Drug program's preferred drug list (PDL). The bill would allowthe PDL to contain drugs for which no supplemental rebate agreement was reached if it would nothave a negative cost impact to the state. It would require HHSC to consider including all strengths and dosages of a drug on the PDL, and to consider including multiple methods of delivery within each drug class, including liquid, tablet, capsule, and orally disintegrating tablet. The bill would require the commission to ensure that prior authorization requests may be submitted by telephone, facsimile, or electronic communications via the Internet. HHSC would provide an automated process to determine whether a drug may be dispensed without an additional prior authorization request. The bill would require HHSC to publish on the Internet specific non-confidential information regarding HHSC decisions concerning preferred drug list placement of individual drug products. The bill would require HHSC to study the costs and benefits of the prior authorization process and methods to improve efficiency. It is assumed that these costs could be absorbed within current resources. Implementing strategies to strengthen the Medicaid DUR program has the potential to improve thequality of pharmaceutical care and contain Medicaid prescription drug spending. HHSC currentlycontracts with an entity to perform retrospective drug use reviews. Per HHSC's contract with thisentity, HHSC is guaranteed cost savings equal to twice the amount paid to the contracted entity foreach retrospective drug use review performed. As a result, the implementation of additionalretrospective drug use reviews would be cost neutral. It is assumed that any cost to implement theprovisions of the bill related to the annual report, analysis of prescription drug data, and the conflict ofinterest provision for the Medicaid DUR board would be minimal and can be absorbed withinavailable resources. Based on HHSC's analysis, any cost to implement provisions of the bill related to the period of validity for prescription drugs written under the Medicaid Program can be absorbed within available resources. The requirement for the agency to consider including multiple dosages and methods of delivery isassumed to have no fiscal impact; it is assumed that the agency would not implement unless there wasno signficant fiscal impact to do so. It is assumed that the automated process for certain drugdispensing without prior authorization would require system programming expenditures. Therequirement to publish HHSC PDL decisions on the Internet would result in an increased amount ofstaff time and resources needed to post the detailed information requested. It is assumed that thesecosts could be absorbed within current resources. The bill would take effect September 1, 2009.
As recommended in the Legislative Budget Board's 2009 Government Effectiveness and Efficiency Report entitled "Strengthen the Texas Medicaid Drug Utilization Review Program to Promote Safety and Contain Spending," the bill would amend Chapter 531 of the Government Code to require the Health and Human Services Commission (HHSC) to increase the number and type of retrospective drug use reviews performed each year under the Medicaid Drug Utilization Review (DUR) program. HHSC would be required to include a detailed description of Medicaid DUR program activities and cost savings estimates for retrospective and prospective reviews in the program's federally required annual report and to post the annual report on its website. The bill would require HHSC to monitor and analyze Medicaid prescription drug use and expenditure patterns and post certain data on its website. The bill prohibits Medicaid DUR board members from having a contractual relationship, ownership interest, or other conflict of interest with a pharmaceutical manufacturer or labeler or with an entity engaged by HHSC to assist with administering the Medicaid DUR program. HHSC would be allowed to adopt rules that identify prohibited relationships or require the Medicaid DUR board to develop a conflict of interest policy.
The bill would also require HHSC to ensure that prescriptions written under the Medicaid Program are valid for no more than one year.
The bill would amend Chapter 531 of the Government Code regarding information that is confidentialwith respect to the Medicaid Vendor Drug program's preferred drug list (PDL). The bill would allowthe PDL to contain drugs for which no supplemental rebate agreement was reached if it would nothave a negative cost impact to the state. It would require HHSC to consider including all strengths and dosages of a drug on the PDL, and to consider including multiple methods of delivery within each drug class, including liquid, tablet, capsule, and orally disintegrating tablet. The bill would require the commission to ensure that prior authorization requests may be submitted by telephone, facsimile, or electronic communications via the Internet. HHSC would provide an automated process to determine whether a drug may be dispensed without an additional prior authorization request. The bill would require HHSC to publish on the Internet specific non-confidential information regarding HHSC decisions concerning preferred drug list placement of individual drug products.
The bill would require HHSC to study the costs and benefits of the prior authorization process and methods to improve efficiency. It is assumed that these costs could be absorbed within current resources.
Implementing strategies to strengthen the Medicaid DUR program has the potential to improve thequality of pharmaceutical care and contain Medicaid prescription drug spending. HHSC currentlycontracts with an entity to perform retrospective drug use reviews. Per HHSC's contract with thisentity, HHSC is guaranteed cost savings equal to twice the amount paid to the contracted entity foreach retrospective drug use review performed. As a result, the implementation of additionalretrospective drug use reviews would be cost neutral. It is assumed that any cost to implement theprovisions of the bill related to the annual report, analysis of prescription drug data, and the conflict ofinterest provision for the Medicaid DUR board would be minimal and can be absorbed withinavailable resources.
Based on HHSC's analysis, any cost to implement provisions of the bill related to the period of validity for prescription drugs written under the Medicaid Program can be absorbed within available resources.
The requirement for the agency to consider including multiple dosages and methods of delivery isassumed to have no fiscal impact; it is assumed that the agency would not implement unless there wasno signficant fiscal impact to do so. It is assumed that the automated process for certain drugdispensing without prior authorization would require system programming expenditures. Therequirement to publish HHSC PDL decisions on the Internet would result in an increased amount ofstaff time and resources needed to post the detailed information requested. It is assumed that thesecosts could be absorbed within current resources.
The bill would take effect September 1, 2009.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 529 Health and Human Services Commission
529 Health and Human Services Commission
LBB Staff: JOB, SD, CL, JI, DM
JOB, SD, CL, JI, DM