71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3276
A-Engrossed
Senate Bill 819
Ordered by the Senate May 10
Including Senate Amendments dated May 10
Sponsored by Senator CLARNO; Representative C WALKER
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
{ - Directs Health Resources Commission to develop limited
prescription drug formulary for medical assistance program. - }
Modifies requirements for prescription and payment of
prescription drugs for medical assistance program. Directs
{ - Department of Human Services to adopt - } { + Health
Services Commission to recommend + } copayments { + , not to
exceed $5, + }for prescription drugs. { + Requires Department
of Human Services to apply to federal government for waiver to
allow copayments. Directs department to adopt copayment schedule
by rule upon receipt of waiver. + } Modifies requirements for
fully capitated health plans. Modifies { - reimbursement rates
for Type A and Type B hospitals - } { + definition of rural
hospital + }.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to Oregon Health Plan; creating new provisions; amending
ORS 414.065, 414.325, 442.315 and 442.470; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 414.325 is amended to read:
414.325. (1) As used in this section { - , - } { + :
(a) + } 'Legend drug' means any drug requiring a prescription
by a practitioner, as defined in ORS 689.005.
{ + (b) 'Pharmacy network' means a group of pharmacies using
a shared database or employing other electronic means to access
prescription information of enrollees from multiple points of
service. + }
(2) A licensed practitioner may prescribe such drugs under this
chapter as the practitioner in the exercise of professional
judgment considers appropriate for the diagnosis or treatment of
the patient in the practitioner's care and within the scope of
practice. Prescriptions shall be dispensed in the generic form
pursuant to ORS 689.515, 689.854 and 689.857 and pursuant to
rules of the { - division - } { + Department of Human
Services + } unless the practitioner prescribes otherwise and an
exception is granted by the { - division - } { +
department + }.
(3) Except as provided in subsections (4) and (5) of this
section, the { - division - } { + department + } shall place
no limit on the type of legend drug that may be prescribed by a
practitioner, but shall pay only for drugs in the generic form
unless an exception has been granted by the { - division - }
{ + department + }.
(4) Notwithstanding subsection (3) of this section, an
exception must be applied for and granted before the
{ - division - } { + department + } is required to pay for
minor tranquilizers and amphetamines and amphetamine derivatives,
as defined by rule of the { - division - } { +
department + }.
(5)(a) Notwithstanding subsections (1) to (4) of this section
and except as provided in paragraph (b) of this subsection, the
{ - division - } { + department + } is authorized to:
(A) Withhold payment for a legend drug when federal financial
participation is not available; and
(B) Require prior authorization of payment for drugs which the
{ - division - } { + department + } has determined should be
limited to those conditions generally recognized as appropriate
by the medical profession.
(b) The { - division - } { + department + } may not require
prior authorization for therapeutic classes of nonsedating
antihistamines and nasal inhalers, as defined by rule by the
{ - division - } { + department + }, when prescribed by an
allergist for treatment of any of the following conditions, as
described by the Health Services Commission on the funded portion
of its prioritized list of services:
(A) Asthma;
(B) Sinusitis;
(C) Rhinitis; or
(D) Allergies.
{ + (6)(a) At the time of enrollment or reenrollment in a
fee-for-service payment system, an enrollee shall designate a
primary pharmacy or pharmacy network to dispense prescription
drugs prescribed by a practitioner and covered by the medical
assistance program.
(b) The department shall adopt rules establishing procedures
that allow an enrollee to:
(A) Obtain prescriptions at a pharmacy other than a designated
primary pharmacy or pharmacy network; and
(B) Change a designation of a primary pharmacy or pharmacy
network.
(7) The department may not establish or designate a pharmacy or
pharmacy network as exclusive providers of prescription or
pharmacy services for enrollees.
(8) The department shall adopt rules that:
(a) Establish procedures to ensure that a primary pharmacy or
pharmacy network will receive notice when an enrollee obtains a
prescription at another pharmacy; and
(b) Allow payment at the point of sale to a pharmacy other than
a primary pharmacy or pharmacy network for a prescription
obtained by an enrollee as described in subsection (6)(b)(A) of
this section. + }
SECTION 2. { + (1) By January 1, 2002, the Health Services
Commission shall recommend a schedule of copayments, not to
exceed $5, to be charged to enrollees of the Oregon Health Plan
for the purchase of prescription drugs provided under the Oregon
Health Plan.
(2) The Department of Human Services shall apply to the federal
Health Care Financing Administration to obtain the necessary
waiver from federal regulations to implement the schedule of
copayments recommended by the Health Services Commission.
(3) The department shall report to the Seventy-second
Legislative Assembly on whether the waiver required under
subsection (2) of this section was obtained.
(4) Section 3 of this 2001 Act becomes operative upon receipt
by the Department of Human Services of the necessary waiver from
the federal Health Care Financing Administration. + }
SECTION 3. { + (1) The department shall adopt by rule a
schedule of copayments recommended by the Health Services
Commission for the purchase of prescription drugs by enrollees
under the Oregon Health Plan.
(2) The department shall waive the requirement of subsection
(1) of this section upon request of a fully capitated health plan
or a treating practitioner. + }
SECTION 4. { + Section 5 of this 2001 Act is added to and made
a part of ORS chapter 414. + }
SECTION 5. { + (1) As used in this section and section 3 of
this 2001 Act, 'fully capitated health plan' means a prepaid
health plan that contracts with the Department of Human Services
to provide capitated services under the Oregon Health Plan and
that covers hospital inpatient services.
(2) The department may not require a fully capitated health
plan to comply with:
(a) Additional quality assurance requirements if the plan is
accredited by the National Committee for Quality Assurance; and
(b) Any administrative requirements that are not required by
the federal Health Care Financing Administration.
(3) The department shall accept from fully capitated health
plans that are certified by Medicare the Health Plan Employer
Data and Information Set required by the federal Health Care
Financing Administration and may not require additional audit
information.
(4) The department may not require fully capitated health plans
to provide information that is easily available to the department
from other state or federal sources.
(5) The Department of Human Services may not require fully
capitated health plans that are not licensed by the Department of
Consumer and Business Services or accredited by the National
Committee for Quality Assurance to provide information other than
that which is required by the federal Health Care Financing
Administration or is essential for the operation of the health
plan.
(6) The Secretary of State shall conduct an annual audit of the
encounter data used by the Department of Human Services to
determine the per capita costs and capitation rates for providers
or plans that have prepaid managed care health services
contracts.
(7) The Department of Human Services shall validate with fully
capitated health plans the actuarial assumptions used by the
department in the calculations of the per capita costs and
capitation rates for providers or plans that have prepaid managed
care health services contracts. + }
SECTION 6. ORS 414.065 is amended to read:
414.065. (1) With respect to medical and remedial care and
services to be provided in medical assistance during any period,
and within the limits of funds available therefor, the Department
of Human Services shall determine, subject to such revisions as
it may make from time to time and with respect to the 'health
services' defined in ORS 414.705, subject to legislative funding
in response to the report of the Health Services Commission:
(a) The types and extent of medical and remedial care and
services to be provided to each eligible group of recipients of
medical assistance.
(b) Standards to be observed in the provision of medical and
remedial care and services.
(c) The number of days of medical and remedial care and
services toward the cost of which public assistance funds will be
expended in the care of any person.
(d) Reasonable fees, charges and daily rates to which public
assistance funds will be applied toward meeting the costs of
providing medical and remedial care and services to an applicant
or recipient.
(e) Reasonable fees for professional medical and dental
services which may be based on usual and customary fees in the
locality for similar services.
(f) The amount and application of any copayment or other
similar cost-sharing payment that the department may require a
recipient to pay toward the cost of medical and remedial care or
services.
(2) The types and extent of medical and remedial care and
services and the amounts to be paid in meeting the costs thereof,
as determined and fixed by the department and within the limits
of funds available therefor, shall be the total available for
medical assistance and payments for such medical assistance shall
be the total amounts from public assistance funds available to
providers of medical and remedial care and services in meeting
the costs thereof.
(3) Except for payments under a cost-sharing plan, payments
made by the department for medical assistance shall constitute
payment in full for all medical and remedial care and services
for which such payments of medical assistance were made.
(4) Medical benefits, standards and limits established pursuant
to subsection (1)(a), (b) and (c) of this section for the
eligible medically needy, except for the aged served under ORS
chapter 413 and for the blind and disabled served under ORS
chapter 412, may be less but shall not exceed medical benefits,
standards and limits established for the eligible categorically
needy, except that, in the case of a research and demonstration
project entered into under ORS 411.135, medical benefits,
standards and limits for the eligible medically needy may exceed
those established for specific eligible groups of the
categorically needy.
(5) Notwithstanding the provisions of this section, the
department shall cause Type A hospitals { + , + } { - and - }
Type B hospitals { + and rural critical access hospitals + },
as { - defined - } { + described + } in ORS 442.470,
identified by the Office of Rural Health as rural hospitals to be
reimbursed for the cost of covered services as follows:
(a) For services provided to persons entitled to receive
medical assistance, based on the Medicare determination of
reasonable cost as derived from the Hospital and Hospital Health
Care Complex Cost Report, referred to as the Medicare Report.
(b) In accordance with the terms of the agreement for services
provided to persons whose medical assistance benefits are
administered by the contracting health care provider under an
agreement between the hospital and a health care provider
contracting with the Department of Human Services under ORS
414.725 (1) for reimbursement other than that specified by ORS
414.727 (1). Hospitals reimbursed under the terms of this
paragraph are entitled to no additional reimbursement for
services provided.
(c) Hospitals that have been reimbursed by health care
providers contracting with the Department of Human Services under
ORS 414.725 (1) in accordance with ORS 414.727 (1), are entitled
to full reimbursement from the department for the cost of covered
services provided to persons whose medical assistance benefits
are administered by the contracting health care provider
according to paragraph (a) of this subsection.
SECTION 7. ORS 442.470 is amended to read:
442.470. As used in ORS 442.470 to 442.507:
(1) 'Acute inpatient care facility' means a licensed hospital
with an organized medical staff, with permanent facilities that
include inpatient beds, and with comprehensive medical services,
including physician services and continuous nursing services
under the supervision of registered nurses, to provide diagnosis
and medical or surgical treatment primarily for but not limited
to acutely ill patients and accident victims.
(2) 'Council' means the Rural Health Coordinating Council.
(3) 'Office' means the Office of Rural Health.
(4) 'Primary care physician' means a doctor licensed under ORS
chapter 677 whose specialty is family practice, general practice,
internal medicine, pediatrics or obstetrics and gynecology.
(5) { + (a) + } 'Rural hospital' means a hospital characterized
{ - by - } { + as + } one of the following:
{ - (a) - } { + (A) A + } type A { - hospitals are - }
{ + hospital, which is a + } small and remote { - , have - }
{ + hospital that has + } 50 or fewer beds and { - are
greater - } { + is more + } than 30 miles from another acute
inpatient care facility;
{ - (b) - } { + (B) A + } type B { - hospitals are - }
{ + hospital, which is a + } small and rural { - and have - }
{ + hospital that has + } 50 or fewer beds { - , - } and
{ - are - } { + is + } 30 miles or less from another acute
inpatient care facility;
{ - (c) - } { + (C) A + } type C { - hospitals are - }
{ + hospital, which is + } considered { + to be a + } rural
{ + hospital + } and { - have - } { + has + } more than 50
beds, but { - are - } { + is + } not a referral center; or
{ + (D) A rural critical access hospital as defined in ORS
316.143. + }
{ - (d) - } { + (b) + } 'Rural hospital' { - of any
class - } does not include a hospital { + of any class that
was + } designated by the federal government as a rural referral
hospital before January 1, 1989.
SECTION 8. ORS 442.315 is amended to read:
442.315. (1) Any new hospital or new skilled nursing or
intermediate care service or facility not excluded pursuant to
ORS 441.065 shall obtain a certificate of need from the Health
Division prior to an offering or development.
(2) The division shall adopt rules specifying criteria and
procedures for making decisions as to the need for such new
services or facilities.
(3)(a) An applicant for a certificate of need shall apply to
the division on forms provided for this purpose which forms shall
be established by division rule.
(b) An applicant shall pay a fee prescribed as provided in this
section. Subject to the approval of the Oregon Department of
Administrative Services, the division shall prescribe application
fees, based on the complexity and scope of the proposed project.
(4) The division shall be the decision-making authority for the
purpose of certificates of need.
(5)(a) An applicant or any affected person who is dissatisfied
with the proposed decision of the division is entitled to an
informal hearing in the course of review and before a final
decision is rendered.
(b) Following a final decision being rendered by the division,
an applicant or any affected person may request a reconsideration
hearing pursuant to ORS 183.310 to 183.550.
(c) In any proceeding brought by an affected person or an
applicant challenging a division decision under this subsection,
the division shall follow procedures consistent with the
provisions of ORS 183.310 to 183.550 relating to a contested
case.
(6) Once a certificate of need has been issued, it may not be
revoked or rescinded unless it was acquired by fraud or deceit.
However, if the division finds that a person is offering or
developing a project that is not within the scope of the
certificate of need, the division may limit the project as
specified in the issued certificate of need or reconsider the
application. A certificate of need is not transferable.
(7) Nothing in this section applies to any hospital, skilled
nursing or intermediate care service or facility that seeks to
replace equipment with equipment of similar basic technological
function or an upgrade that improves the quality or
cost-effectiveness of the service provided. Any person acquiring
such replacement or upgrade shall file a letter of intent for the
project in accordance with the rules of the division if the price
of the replacement equipment or upgrade exceeds $1 million.
(8) Except as required in subsection (1) of this section for a
new hospital or new skilled nursing or intermediate care service
or facility not operating as a Medicare swing bed program,
nothing in this section requires a rural hospital as defined in
ORS 442.470 { - (5)(a) and (b) - } { + (5)(a)(A) and (B) + }
to obtain a certificate of need.
(9) Nothing in this section applies to basic health services,
but basic health services do not include:
(a) Magnetic resonance imaging scanners;
(b) Positron emission tomography scanners;
(c) Cardiac catheterization equipment;
(d) Megavoltage radiation therapy equipment;
(e) Extracorporeal shock wave lithotriptors;
(f) Neonatal intensive care;
(g) Burn care;
(h) Trauma care;
(i) Inpatient psychiatric services;
(j) Inpatient chemical dependency services;
(k) Inpatient rehabilitation services;
(L) Open heart surgery; or
(m) Organ transplant services.
(10) In addition to any other remedy provided by law, whenever
it appears that any person is engaged in, or is about to engage
in, any acts which constitute a violation of this section, or any
rule or order issued by the division under this section, the
division may institute proceedings in the circuit courts to
enforce obedience to such statute, rule or order by injunction or
by other processes, mandatory or otherwise.
(11) As used in this section, 'basic health services' means
health services offered in or through a hospital licensed under
ORS chapter 441, except skilled nursing or intermediate care
nursing facilities or services and those services specified in
subsection (9) of this section.
SECTION 9. { + This 2001 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2001 Act takes effect on its
passage. + }
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