§ 2003. Pharmacy discount plans

(a) The Commissioner of Vermont Health Access shall implement pharmacy discount plans, to be known as the Healthy Vermonters Program, for Vermonters without adequate coverage for prescription drugs. The provisions of subchapter 8 of this chapter shall apply to the Commissioner's authority to administer the pharmacy discount plans established by this section.

(b) The Healthy Vermonters Program shall offer beneficiaries an initial discounted cost for covered drugs. Upon approval by the Centers for Medicare and Medicaid Services of a Section 1115 Medicaid Waiver Program, and upon subsequent legislative approval, the Healthy Vermonters Program shall offer beneficiaries a secondary discounted cost, which shall reflect a State payment toward the cost of each dispensed drug as well as any rebate amount negotiated by the Commissioner.

(c) As used in this section:

(1) "Beneficiary" means any individual enrolled in the Healthy Vermonters Program.

(2) "Healthy Vermonters beneficiary" means any individual Vermont resident without adequate coverage:

(A) who is at least 65 years of age, or is disabled and is eligible for Medicare or Social Security disability benefits, with household income equal to or less than 400 percent of the federal poverty level, as calculated using modified adjusted gross income as defined in 26 U.S.C. § 36B(d)(2)(B); or

(B) whose household income is equal to or less than 350 percent of the federal poverty level, as calculated using modified adjusted gross income as defined in 26 U.S.C. § 36B(d)(2)(B).

(3) [Repealed.]

(4) "Initial discounted cost" means the price of the drug based on the Medicaid fee schedule.

(5) "Labeler" means an entity or person that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and that has a labeler code from the federal Food and Drug Administration under 21 C.F.R. § 207.20.

(6) "Participating retail pharmacy" means a retail pharmacy located in this State or another business licensed to dispense prescription drugs in this State that participates in the Program according to rules established by the Department and provides discounted prices to eligible beneficiaries of the Program.

(7) "Rebate amount" means the rebate negotiated by the Director and required from a drug manufacturer or labeler under this section. In determining the appropriate rebate, the Director shall:

(A) take into consideration the rebate calculated under the Medicaid Rebate Program under 42 U.S.C. § 1396r-8, the average wholesale price of prescription drugs, and any other information on prescription drug prices and price discounts;

(B) use his or her best efforts to obtain an initial rebate amount equal to or greater than the rebate calculated under the Medicaid program under 42 U.S.C. § 1396r-8; and

(C) use his or her best efforts to obtain an amount equal to or greater than the amount of any discount, rebate, or price reduction for prescription drugs provided to the federal government.

(8) "Secondary discounted cost" means, under the Healthy Vermonters Program, the price of the drug based on the Medicaid fee schedule, less payment by the State of at least two percent of the Medicaid rate, less any rebate amount negotiated by the Director and paid for out of the Healthy Vermonters Dedicated Fund established under subsection (h) of this section and, under the Healthy Vermonters Plus Program, the average wholesale price of the drug, less payment by the State of at least two percent of the Medicaid rate, less any rebate amount negotiated by the Director and paid for out of the Healthy Vermonters Dedicated Fund established under subsection (h) of this section.

(9) "Without adequate coverage" includes beneficiaries with no coverage for prescription drugs or certain types of prescription drugs and beneficiaries whose annual maximum coverage limit under their health benefit plan has been reached.

(d) Drugs covered by the pharmacy discount plans shall include all drugs covered under the Medicaid program.

(e) The Vermont Board of Pharmacy shall adopt standards of practice requiring disclosure by participating retail pharmacies to beneficiaries of the amount of savings provided as a result of the pharmacy discount plans. The standards must consider and protect information that is proprietary in nature. The Department of Vermont Health Access may not impose transaction charges under this Program on pharmacies that submit claims or receive payments under the plans. Pharmacies shall submit claims to the Department to verify the amount charged to beneficiaries under the plans. On a weekly or biweekly basis, the Department must reimburse pharmacies for the difference between the initial discounted price or the average wholesale price and the secondary discounted price provided to beneficiaries.

(f) The names of drug manufacturers and labelers who do and do not enter into rebate agreements under pharmacy discount plans are public information. The Department of Vermont Health Access shall release this information to health care providers and the public on a regular basis and shall publicize participation by manufacturers and labelers. The Department shall impose prior authorization requirements in the Medicaid program, as permitted by law, to the extent the Department determines it is appropriate to do so in order to encourage manufacturer and labeler participation in the pharmacy discount plans and so long as the additional prior authorization requirements remain consistent with the goals of the Medicaid program and the requirements of Title XIX of the Social Security Act.

(g) The Commissioner of Vermont Health Access shall establish, by rule, a process to resolve discrepancies in rebate amounts claimed by manufacturers, labelers, pharmacies, and the Department.

(h) The Healthy Vermonters Dedicated Fund is established to receive revenue from manufacturers and labelers who pay rebates as provided in this section and any appropriations or allocations designated for the Fund. The purposes of the Fund are to reimburse retail pharmacies for discounted prices provided to individuals enrolled in the pharmacy discount plans; and to reimburse the Department of Vermont Health Access for contracted services, including pharmacy claims processing fees, administrative and associated computer costs, and other reasonable program costs. The Fund is a nonlapsing dedicated fund. Interest on Fund balances accrues to the fund. Surplus funds in the Fund must be used for the benefit of the Program.

(i) [Repealed.]

(j) The Department of Vermont Health Access shall undertake outreach efforts to build public awareness of the pharmacy discount plans and maximize enrollment. Outreach efforts shall include steps to educate retail pharmacists on the purposes of the Healthy Vermonters Dedicated Fund, in particular as it relates to pharmacy reimbursements for discounted prices provided to Program enrollees. The Department may adjust the requirements and terms of the pharmacy discount plans to accommodate any new federally funded prescription drug programs.

(k) The Department of Vermont Health Access may contract with a third party or third parties to administer any or all components of the pharmacy discount plans, including outreach, eligibility, claims, administration, and rebate recovery and redistribution.

(l) The Department of Vermont Health Access shall administer the pharmacy discount plans and other medical and pharmaceutical assistance programs under this title in a manner advantageous to the programs and enrollees. In implementing this section, the Department may coordinate the other programs and the pharmacy discount plans and may take actions to enhance efficiency, reduce the cost of prescription drugs, and maximize benefits to the programs and enrollees, including providing the benefits of pharmacy discount plans to enrollees in other programs.

(m) The Department of Vermont Health Access may adopt rules to implement the provisions of this section.

(n) The Department of Vermont Health Access shall seek a waiver from the Centers for Medicare and Medicaid Services (CMS) requesting authorization necessary to implement the provisions of this section, including application of manufacturer and labeler rebates to the pharmacy discount plans. The secondary discounted cost shall not be available to beneficiaries of the pharmacy discount plans until the Department receives written notification from CMS that the waiver requested under this section has been approved and until the General Assembly subsequently approves all aspects of the pharmacy discount plans, including funding for positions and related operating costs associated with eligibility determinations. (Added 2001, No. 127 (Adj. Sess.), § 1, eff. June 13, 2002; amended 2003, No. 122 (Adj. Sess.), § 128o; 2005, No. 174 (Adj. Sess.), § 105; 2007, No. 80, § 7; 2009, No. 156 (Adj. Sess.), § I.66; 2011, No. 171 (Adj. Sess.), § 41c; 2013, No. 79, § 31, eff. Jan. 1, 2014; 2013, No. 131 (Adj. Sess.), § 47, eff. May 20, 2014; 2013, No. 142 (Adj. Sess.), § 99.)