Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
Requires health insurance carriers and Medicaid managed care prescription drug plans to utilize consolidated procurement.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning health insurance carriers and Medicaid and supplementing P.L.1997, c.192 (C.26:2S-1 et seq.) and P.L.1968, c.413 (C.30:4D-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A carrier shall ensure that every contract to provide prescription drug benefits, or to authorize the purchase of a contract to provide prescription drug benefits, shall:
(1) provide for the utilization of consolidated procurement of pharmaceutical drugs to the extent appropriate and feasible; and
(2) require that failure to utilize consolidated procurement of pharmaceutical drugs shall be documented, justified, and reported to the Department of Banking and Insurance, the State Health Benefits Commission, or the School Employees Health Benefits Commission, as appropriate.
The Department of Banking and Insurance, State Health Benefits Commission, or School Employees Health Benefits Commission shall, within 30 days of receiving a report concerning the failure to utilize consolidated procurement pursuant to this section, conduct a review of any information provided and shall transmit findings to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1).
Any savings achieved through the consolidated procurement of pharmaceutical drugs pursuant to this section shall be used to reduce net prescription drug prices for covered persons at the point-of-sale.
b. As used in this section,
"Carrier" means an insurance company, health service corporation, hospital service corporation, medical service corporation, or health maintenance organization authorized to issue health benefits plans in this State or any entity contracted to administer health benefits in connection with the State Health Benefits Program or School Employees' Health Benefits Program.
"Covered person" means a person on whose behalf a carrier is obligated to pay health care expense benefits or provide health care services.
2. The State Medicaid Commission shall ensure that every Medicaid managed care contract to provide prescription drug benefits, or to authorize the purchase of a contract to provide prescription drug benefits, shall:
(1) provide for the utilization of consolidated procurement of pharmaceutical drugs to the extent appropriate and feasible; and
(2) require that failure to utilize consolidated procurement of pharmaceutical drugs shall be documented, justified, and reported to the Commissioner of Human Services.
The Commissioner of Human Services shall, within 30 days of receiving a report concerning the failure to utilize consolidated procurement pursuant to this section, conduct a review of any information provided and shall transmit findings to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1).
Any savings achieved through the consolidated procurement of pharmaceutical drugs pursuant to this section shall be used to reduce net prescription drug prices for qualified applicants at the point-of-sale.
The Commissioner of Human Services shall apply for such State plan amendments or waivers as may be necessary to implement the provisions of this section and to secure federal financial participation for State Medicaid expenditures under the federal Medicaid program.
3. This act shall take effect immediately and apply to every contract issued, renewed, or issued for renewal on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).
STATEMENT
This bill requires that health insurance carriers, including the State Health Benefits Program and the School Employees' Health Benefits Program, and Medicaid managed care prescription drug plans ensure that every contract to provide prescription drug benefits, or to authorize the purchase of a contract to provide prescription drug benefits, utilize consolidated procurement of pharmaceutical drugs in order to lower the cost to beneficiaries. The purpose of the bill is to regulate costs, increase transparency, and ensure cost-savings are passed on to consumers.
Under the bill, any failure to utilize consolidated procurement of pharmaceutical drugs is to be documented, justified, and reported to the Department of Banking and Insurance, the State Health Benefits Commission, the School Employees Health Benefits Commission, or the Department of Human Services, as appropriate. Such entity is to, within 30 days of receiving a report concerning the failure to utilize consolidated procurement pursuant to this section, conduct a review of any information provided and transmit findings to the Governor and to the Legislature.
Any savings achieved through the consolidated procurement of pharmaceutical drugs pursuant to the bill are to be used to reduce net prescription drug prices for covered persons or qualified applicants at the point-of-sale.