SB-0831, As Passed Senate, June 30, 2004                                    

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 831

                                                                             A bill to amend 1978 PA 368, entitled                                             

"Public health code,"                                                       

(MCL 333.1101 to 333.25211) by adding part 97.                              

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1   PART 97.

2   MICHIGAN PHARMACEUTICAL BEST PRACTICES INITIATIVE

3   Sec. 9701.  As used in this part:                                           

4       (a) "Committee" means the Michigan pharmacy and therapeutics                

5   committee established by Executive Order No. 2001-8 and by                  

6   section 9705.                                                               

7       (b) "Controlled substance" means that term as defined in                    

8   section 7104.                                                               

9   (c) "Department" means the department of community health.                  

10      (d) "Drug" means that term as defined in section 17703.                     

11      (e) "Initiative" means the pharmaceutical best practices                    

1   initiative established by this part.                                        

2       (f) "Medicaid" means the program of medical assistance                      

3   established under title XIX of the social security act, 42 USC              

4   1396 to 1396v.                                                              

5       (g) "Pharmacist" means an individual licensed by this state                 

6   to engage in the practice of pharmacy under article 15.                     

7       (h) "Physician" means an individual licensed by this state to               

8   engage in the practice of medicine or osteopathic medicine and              

9   surgery under article 15.                                                   

10      (i) "Prescriber" means a licensed dentist, a licensed doctor                

11  of medicine, a licensed doctor of osteopathic medicine and                  

12  surgery, a licensed doctor of podiatric medicine and surgery, a             

13  licensed optometrist certified under part 174 to administer and             

14  prescribe therapeutic pharmaceutical agents, or another licensed            

15  health professional acting under the delegation and using,                  

16  recording, or otherwise indicating the name of the delegating               

17  licensed doctor of medicine or licensed doctor of osteopathic               

18  medicine and surgery.                                                       

19      (j) "Prescription" means that term as defined in section                    

20  17708.                                                                      

21      (k) "Prescription drug" means that term as defined in section               

22  17708.                                                                      

23                                                                               (l) "Type II transfer" means that term as defined in section                        

24  3 of the executive organization act of 1965, 1965 PA 380, MCL               

25  16.103.

26  Sec. 9703.  (1) The department may implement a                              

27  pharmaceutical best practices initiative for the department's               

Senate Bill No. 831 (H-1) as amended June 22, 2004

1   various health care programs to control the costs of health care,           

2   to reduce the costs of prescription drugs, and to assure                    

3   continued access to pharmaceutical services at fair and                     

4   reasonable prices.  If implemented, the initiative shall include,           

5   but is not limited to, the establishment and maintenance of each            

6   of the following:                                                           

7       (a) A preferred drug list.                                                  

8       (b) A prior authorization and appeal process.                               

9       (2) The prior authorization and appeal process established                  

10  under subsection (1) shall include the establishment of a                   

11  telephone hotline for prescribers that is accessible 24 hours per           

12  day and staffed to ensure that a response is initiated to each              

13  prior authorization request within 24 hours after its receipt and           

14  to each appeal of a prior authorization denial within 48 hours,             

15  excluding Saturday, Sunday, and legal holidays, after all                   

16  necessary documentation for reconsideration is received.  Each              

17  appeal for reconsideration of a previous denial for prior                   

18  authorization shall be reviewed and decided by a physician.                 

19      (3) The department, in cooperation with a pharmaceutical                    

20  manufacturer or its agent [or another qualified contractor], may establish disease management and                                                          

21  health management programs that may be provided, as negotiated,             

22  by the pharmaceutical manufacturer or its agent [or another qualified contractor] instead of a                                                        

23  supplemental rebate for the inclusion of certain products                   

24  manufactured by that pharmaceutical manufacturer on the                     

25  department's preferred drug list.  If the department negotiates a           

26  plan for the provision of services by the pharmaceutical                    

27  manufacturer instead of a supplemental rebate as provided under             

1   this subsection, the department shall provide a written report on           

2   the effectiveness of the programs being offered and the savings             

3   incurred as a result of those programs being provided instead of            

4   supplemental rebates to the members of the house and senate                 

5   appropriations subcommittees on community health.                           

6       (4) The department may hire or retain contractors,                          

7   subcontractors, advisors, consultants, and agents and may enter             

8   into contracts necessary or incidental to implement this part and           

9   carry out its responsibilities and duties.                                  

10      (5) The department may promulgate rules or medicaid policies                

11  to implement this part and to ensure compliance with the                    

12  published medicaid bulletin that initiated this initiative.

13  Sec. 9705.  (1) The Michigan pharmacy and therapeutics                      

14  committee, established by Executive Order No. 2001-8, is                    

15  transferred to the department as a type II transfer.  The                   

16  committee shall consist of 11 members appointed by the governor             

17  as follows:                                                                 

18      (a) Six physicians whose practice includes patients who are                 

19  eligible for medicaid.  A physician appointed under this                    

20  subdivision may include, but is not limited to, a physician with            

21  expertise in mental health, a physician who specializes in                  

22  pediatrics, and a physician with experience in long-term care.              

23      (b) Five pharmacists whose business includes prescriptions                  

24  from individuals who are eligible for medicaid.  A pharmacist               

25  appointed under this subdivision may include, but is not limited            

26  to, a pharmacist with expertise in mental health drugs, a                   

27  pharmacist who specializes in pediatrics, and a pharmacist with             

1   experience in long-term care.                                               

2       (2) No member of the committee shall be employed by a                       

3   pharmaceutical manufacturer or have any interest directly or                

4   indirectly in the business of a pharmaceutical manufacturer which           

5   shall cause a conflict of interest.  No more than 2 members                 

6   appointed to the committee shall be employed by the department.             

7       (3) Members of the committee shall serve a term of 2 years,                 

8   except as otherwise provided for members currently serving on the           

9   committee on the effective date of this section.  Members serving           

10  on the committee on the effective date of this section shall                

11  serve until the date on which their appointment would have                  

12  expired or until October 1, 2005, whichever occurs first.  A                

13  member serving on the committee on the effective date of this               

14  section whose term would have otherwise expired after October 1,            

15  2005 may serve the remainder of his or her term if he or she                

16  meets the qualifications established under this section.  The               

17  governor shall appoint an additional number of members to the               

18  committee necessary to reach 11 members as required under this              

19  section.  The governor shall designate 1 member of the committee            

20  to serve as the chairperson of the committee.  This member shall            

21  serve as chairperson at the pleasure of the governor.  An                   

22  individual appointed to serve as a physician or pharmacist member           

23  of the committee may serve only while maintaining his or her                

24  professional license in good standing.  An individual physician's           

25  or pharmacist's failure to maintain his or her professional                 

26  license in good standing immediately terminates that individual's           

27  membership on the committee.  One example of not maintaining a              

1   professional license in good standing is if the department                  

2   imposes a sanction under article 15 on a physician or pharmacist            

3   committee member.  A vacancy on the committee shall be filled in            

4   the same manner as the original appointment.  An individual                 

5   appointed to fill a vacancy created other than by expiration of a           

6   term shall be appointed for the unexpired term of the member whom           

7   he or she is to succeed in the same manner as the original                  

8   appointment.  A member may be reappointed for additional terms.             

9       (4) The committee has the powers, duties, and                               

10  responsibilities prescribed in Executive Order No. 2001-8 and               

11  shall operate pursuant to and in accordance with Executive Order            

12  No. 2001-8.                                                                 

13      (5) Members of the committee shall serve without                            

14  compensation, but shall be reimbursed for necessary travel and              

15  other expenses pursuant to the standard travel regulations of the           

16  department of management and budget.                                        

17      (6) The committee may promulgate rules governing the                        

18  organization, operation, and procedures of the committee.  The              

19  committee shall review its policies and procedures and consider             

20  means to increase and facilitate public comment.  A majority of             

21  the members serving constitute a quorum for the transaction of              

22  business.  The committee shall approve a final action of the                

23  committee by a majority vote of the members.  A member of the               

24  committee must be present at a meeting of the committee in order            

25  to vote.  A member shall not delegate his or her responsibilities           

26  to another individual.                                                      

27      (7) The committee shall meet at the call of the chairperson                 

1   and as otherwise provided in the rules promulgated by the                   

2   committee or the department.  The committee may meet at any                 

3   location within this state.  A meeting of the committee is                  

4   subject to the open meetings act, 1976 PA 267, MCL 15.261 to                

5   15.275.  The committee shall post a notice of the meeting on the            

6   department's website 14 days before each meeting date.  By                  

7   January 31 of each year, the committee shall make available the             

8   committee's regular meeting schedule and meeting locations for              

9   that year on the department's website.  The committee may make              

10  inquiries, conduct studies and investigations, hold hearings, and           

11  receive comments from the public.

12  Sec. 9707.  The committee shall be advisory in nature and                   

13  shall assist the department with the following functions pursuant           

14  to applicable state and federal law:                                        

15      (a) Advise and make recommendations to the department for the               

16  inclusion of prescription drugs on the preferred drug list based            

17  on available information regarding the known potential impact on            

18  patient care, the known potential fiscal impact on related                  

19  medicaid covered services, and sound clinical evidence found in             

20  labeling, drug compendia, and peer-reviewed literature pertaining           

21  to use of the drug in the relevant population.                              

22      (b) Advise the department on issues affecting prescription                  

23  drug coverage for the department's various health care programs.            

24      (c) Recommend to the department guidelines for prescription                 

25  drug coverage under the department's various health care                    

26  programs.                                                                   

27      (d) Develop a process to collect and review information about               

1   new prescription drugs.  The department shall post this process             

2   and the necessary forms on the department's website.                        

3       (e) Recommend to the department strategies to improve the                   

4   initiative.

5   Sec. 9709.  (1) Except as otherwise provided by law or in                   

6   this part, a prescriber shall obtain prior authorization for                

7   drugs that are being provided to medicaid beneficiaries directly            

8   through the department on a fee for service basis or pursuant to            

9   a contract for such pharmaceutical services and that are not                

10  included on the department's preferred drug list.  If the                   

11  prescriber's prior authorization request is denied, the                     

12  department or the department's agent shall inform the requesting            

13  prescriber of his or her option to speak to the agent's physician           

14  on duty regarding his or her request.  If immediate contact with            

15  the agent's physician on duty cannot be arranged, the department            

16  or the department's agent shall inform the requesting prescriber            

17  of his or her right to request a 72-hour supply of the                      

18  nonauthorized drug.  If contact with the agent's physician on               

19  duty cannot be arranged within 72 hours due to a legal holiday,             

20  the requesting prescriber may request a longer supply of the                

21  nonauthorized drug.                                                         

22      (2) The department or the department's agent shall provide                  

23  authorization for prescribed drugs that are not on its preferred            

24  drug list if any of the following are satisfied:                            

25      (a) The prescribing physician telephones the department's                   

26  agent or certifies in writing on a form as provided by the                  

27  department that the drugs are being prescribed consistent with              

Senate Bill No. 831 as amended June 30, 2004                                

1   its licensed indications, that no other drugs included on the               

2   preferred drug list, in the physician's professional opinion,               

3   would offer a comparable benefit to the patient, and that the               

4   drugs are necessary for the continued stabilization of the                  

5   patient's medical condition.                                                

6       (b) The prescribing physician telephones the department's                   

7   agent or certifies in writing on a form as provided by the                  

8   department that following documented failures on earlier                    

9   prescription regimens, in the physician's professional opinion,             

10  no other drug or drugs included on the preferred drug list can              

11  provide a comparable benefit.                                               

12      (c) The prescribing physician telephones the department's                   

13  agent or certifies in writing on a form as provided by the                  

14  department <<that no other drugs included on the preferred drug list, in the physician's professional opinion, would offer a comparable benefit to the patient and>> that the drugs are being prescribed to a patient for                      

15  the treatment of any symptoms or side effects that are a direct             

16  result of treatment received for any of the following:                      

17                                                                               (i) Human immunodeficiency virus infections or the                                  

18  complications of the human immunodeficiency virus or acquired               

19  immunodeficiency syndrome.                                                  

20      (ii) Cancer.                                                                 

21      (iii) Organ replacement therapy.                                             

22      (iv) Epilepsy or seizure disorder.                                           

23      (3) The department or the department's agent shall provide                  

24  authorization for a prescribed drug that is not on its preferred            

25  drug list if each of the following is met:                                  

26  (a) The prescribing physician has achieved advanced                         

27  specialization training and is certified as a specialist by a               

1   specialty board that is recognized by the American osteopathic              

2   association and the council on graduate medical education or                

3   their successor organizations and provides documentation of his             

4   or her certification.                                                       

5       (b) The prescribing physician described in subdivision (a)                  

6   telephones the department or certifies in writing each of the               

7   following:                                                                  

8                                                                                (i) The prescribed drug is being prescribed consistent with                         

9   its licensed indications or with generally accepted medical                 

10  practice as documented in a standard medical reference.                     

11      (ii) The prescribed drug is being used to treat a condition                  

12  that is normally treated within the prescribing physician's                 

13  specialty field.                                                            

14      (iii) In the physician's professional opinion, no other drug                 

15  or drugs included on the preferred drug list can provide a                  

16  comparable benefit.                                                         

17      (4) Documentation of necessity or failures under subsection                 

18  (2) or (3) may be provided by telephone, facsimile, or electronic           

19  transmission.                                                               

20      (5) A patient who is under a court order for a particular                   

21  prescription drug before becoming a recipient of medicaid is                

22  exempt from the prior authorization process and may continue on             

23  that medication for the duration of the order.                              

24      (6) Except as otherwise provided under this subsection, a                   

25  patient who is currently under medical treatment and whose                  

26  condition has been stabilized under a given prescription regimen            

27  before becoming a recipient of medicaid is exempt from the prior            

Senate Bill No. 831 (H-1) as amended June 22, 2004

1   authorization process and may continue on that medication for the           

2   current course of treatment if without that prescription regimen            

3   the patient would suffer serious health consequences.  Unless a             

4   controlled substance is currently being prescribed under a                  

5   patient's hospice plan of care, a continuing prescription for a             

6   controlled substance under this subsection requires prior                   

7   authorization.  The department or the department's agent shall              

8   not deny a request for prior authorization of a controlled                  

9   substance under this subsection unless the department or the                

10  department's agent determines that the controlled substance or              

11  the dosage of the controlled substance being prescribed is not              

12  consistent with its licensed indications or with generally                  

13  accepted medical practice as documented in a standard medical               

14   reference.

[(7) This section does not apply to drugs being provided under a contract between the department and a health maintenance organization.]