72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
Enrolled
House Bill 3624
Sponsored by COMMITTEE ON AUDIT AND HUMAN SERVICES BUDGET REFORM
CHAPTER ................
AN ACT
Relating to medical assistance program of Department of Human
Services; creating new provisions; amending ORS 414.325,
414.705, 414.720 and 414.725; appropriating money; and
declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2, 3, 5, 5a, 6, 9, 10, 11, 12, 12a and
13 of this 2003 Act are added to and made a part of ORS 414.705
to 414.750. + }
SECTION 2. { + As used in this section and sections 3, 5, 5a,
6, 9, 10, 11, 12, 12a and 13 of this 2003 Act and ORS 414.725:
(1) 'Designated area' means a geographic area of the state
defined by the Department of Human Services by rule that is
served by a prepaid managed care health services organization.
(2) 'Fully capitated health plan' means an organization that
contracts with the Department of Human Services on a prepaid
capitated basis under ORS 414.725 to provide an adequate network
of providers to ensure that the health services provided under
the contract are reasonably accessible to enrollees.
(3) 'Physician care organization' means an organization that
contracts with the Department of Human Services on a prepaid
capitated basis under ORS 414.725 to provide an adequate network
of providers to ensure that the health services described in ORS
414.705 (1)(b), (c), (d), (e), (g) and (j) are reasonably
accessible to enrollees. A physician care organization may also
contract with the department on a prepaid capitated basis to
provide the health services described in ORS 414.705 (1)(k) and
(L).
(4) 'Prepaid managed care health services organization ' means
a managed physical health, dental, mental health or chemical
dependency organization that contracts with the Department of
Human Services on a prepaid capitated basis under ORS 414.725. A
prepaid managed care health services organization may be a dental
care organization, fully capitated health plan, physician care
organization, mental health organization or chemical dependency
organization. + }
SECTION 3. { + (1) Except as provided in subsections (2) and
(3) of this section, a person who is eligible for or receiving
physical health, dental, mental health or chemical dependency
services under ORS 414.705 to 414.750 must be enrolled in the
prepaid managed care health services organizations to receive the
health services for which the person is eligible.
(2) Subsection (1) of this section does not apply to:
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(a) A person who is a noncitizen and who is eligible only for
labor and delivery services and emergency treatment services;
(b) A person who is an American Indian and Alaskan Native
beneficiary; and
(c) A person whom the department may by rule exempt from the
mandatory enrollment requirement of subsection (1) of this
section, including but not limited to:
(A) A person who is also eligible for Medicare;
(B) A woman in her third trimester of pregnancy at the time of
enrollment;
(C) A person under 19 years of age who has been placed in
adoptive or foster care out of state;
(D) A person under 18 years of age who is medically fragile and
who has special health care needs; and
(E) A person with major medical coverage.
(3) Subsection (1) of this section does not apply to a person
who resides in a designated area in which a prepaid managed care
health services organization providing physical health, dental,
mental health or chemical dependency services is not able to
assign an enrollee to a person or entity that is primarily
responsible for coordinating the physical health, dental, mental
health or chemical dependency services provided to the enrollee.
(4) As used in this section, 'American Indian and Alaskan
Native beneficiary' means:
(a) A member of a federally recognized Indian tribe, band or
group;
(b) An Eskimo or Aleut or other Alaskan Native enrolled by the
United States Secretary of the Interior pursuant to the Alaska
Native Claims Settlement Act, 43 U.S.C. 1601; or
(c) A person who is considered by the United States Secretary
of the Interior to be an Indian for any purpose. + }
SECTION 4. ORS 414.725 is amended to read:
414.725. { - Upon meeting the requirements of section 9,
chapter 836, Oregon Laws 1989: - }
(1) { + (a) + } Pursuant to rules adopted by the Department of
Human Services, the department shall execute prepaid managed care
health services contracts for { - the - } health services
{ - funded pursuant to section 9, chapter 836, Oregon Laws
1989 - } { + funded by the Legislative Assembly + }. The
contract must require that all services are provided to the
extent and scope of the Health Services Commission's report for
each service provided under the contract. Such contracts are not
subject to ORS 279.011 to 279.063.
{ + (b) + } It is the intent of ORS 414.705 to 414.750 that
the state
{ - move toward utilizing full service managed care health
service providers for providing health - } { + use, to the
greatest extent possible, prepaid managed care health services
organizations to provide physical health, dental, mental health
and chemical dependency + } services under ORS 414.705 to
414.750.
{ + (c) + } The department shall solicit qualified providers
or plans to be reimbursed { - at rates which cover the costs of
providing - } { + for providing + } the covered services.
{ - Such - } { + The + } contracts may be with hospitals and
medical organizations, health maintenance organizations, managed
health care plans and any other qualified public or private
{ - entities - } { + prepaid managed care health services
organization + }. The department { - shall - } { + may + }
not discriminate against any contractors { - which - }
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{ + that + } offer services within their providers' lawful
scopes of practice.
(2) { - In the event that there is an insufficient number of
qualified entities to provide for prepaid managed health services
contracts in certain areas of the state, - } The department may
institute a fee-for-service case management system { - where
possible - } or { - may continue - } a fee-for-service
payment system { - for those areas that pay - } for the same
{ + physical health, dental, mental health or chemical
dependency + } services provided under the health services
contracts for persons eligible for health services under ORS
414.705 to 414.750 { + in designated areas of the state in which
a prepaid managed care health services organization is not able
to assign an enrollee to a person or entity that is primarily
responsible for coordinating the physical health, dental, mental
health or chemical dependency services provided to the
enrollee + }. In addition, the department may make other special
arrangements as necessary to increase the interest of providers
in participation in the state's managed care system, including
but not limited to the provision of stop-loss insurance for
providers wishing to limit the amount of risk they wish to
underwrite.
(3) As provided in subsections (1) and (2) of this section, the
aggregate expenditures by the department for health services
provided pursuant to ORS 414.705 to 414.750 { - shall - }
{ + may + } not exceed the total dollars appropriated for health
services under ORS 414.705 to 414.750.
(4) Actions taken by providers, potential providers,
contractors and bidders in specific accordance with ORS 414.705
to 414.750 in forming consortiums or in otherwise entering into
contracts to provide health care services shall be performed
pursuant to state supervision and shall be considered to be
conducted at the direction of this state, shall be considered to
be lawful trade practices and { - shall - } { + may + } not
be considered to be the transaction of insurance for purposes of
the Insurance Code.
(5) Health care providers contracting to provide services under
ORS 414.705 to 414.750 shall advise a patient of any service,
treatment or test that is medically necessary but not covered
under the contract if an ordinarily careful practitioner in the
same or similar community would do so under the same or similar
circumstances.
{ + (6) A prepaid managed care health services organization
shall provide information on contacting available providers to an
enrollee in writing within 30 days of assignment to the health
services organization.
(7) Each prepaid managed care health services organization
shall provide upon the request of an enrollee or prospective
enrollee annual summaries of the organization's aggregate data
regarding:
(a) Grievances and appeals; and
(b) Availability and accessibility of services provided to
enrollees.
(8) A prepaid managed care health services organization may not
limit enrollment in a designated area based on the zip code of an
enrollee or prospective enrollee. + }
SECTION 5. { + (1) If the Department of Human Services has not
been able to contract with the fully capitated health plan or
plans in a designated area, the department may contract with a
physician care organization in the designated area.
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(2) The Office for Oregon Health Policy and Research shall
develop criteria that the department shall consider when
determining the circumstances under which the department may
contract with a physician care organization. The criteria
developed by the office shall include but not be limited to the
following:
(a) The physician care organization must be able to assign an
enrollee to a person or entity that is primarily responsible for
coordinating the physical health services provided to the
enrollee;
(b) The contract with a physician care organization does not
threaten the financial viability of other fully capitated health
plans in the designated area; and
(c) The contract with a physician care organization must be
consistent with the legislative intent of using prepaid managed
care health services organizations to provide services under ORS
414.705 to 414.750. + }
SECTION 5a. { + (1) A fully capitated health plan may apply to
the Department of Human Services to contract with the department
as a physician care organization rather than as a fully capitated
health plan to provide services under ORS 414.705 to 414.750.
(2) The Office for Oregon Health Policy and Research shall
develop the criteria that the department must use to determine
the circumstances under which the department may accept an
application by a fully capitated health plan to contract as a
physician care organization. The criteria developed by the office
shall include but not be limited to the following:
(a) The fully capitated health plan must show documented losses
due to hospital risk and must show due diligence in managing
those risks; and
(b) Contracting as a physician care organization is financially
viable for the fully capitated health plan. + }
SECTION 6. { + (1) Notwithstanding section 5 (1) of this 2003
Act, the Department of Human Services shall contract under ORS
414.725 with a prepaid group practice health plan that serves at
least 200,000 members in this state and that has been issued a
certificate of authority by the Department of Consumer and
Business Services as a health care service contractor to provide
health services as described in ORS 414.705 (1)(b), (c), (d),
(e), (g) and (j). A health plan may also contract with the
Department of Human Services on a prepaid capitated basis to
provide the health services described in ORS 414.705 (1)(k) and
(L). The Department of Human Services may accept financial
contributions from any public or private entity to help implement
and administer the contract. The Department of Human Services
shall seek federal matching funds for any financial contributions
received under this section.
(2) In a designated area, in addition to the contract described
in subsection (1) of this section, the Department of Human
Services shall contract with prepaid managed care health services
organizations to provide health services under ORS 414.705 to
414.750. + }
SECTION 7. ORS 414.705 is amended to read:
414.705. { + (1) + } As used in ORS 414.705 to 414.750,
'health services' means at least so much of each of the following
as are approved and funded by the Legislative Assembly:
{ - (1) Provider services and supplies; - }
{ - (2) Outpatient services; - }
{ - (3) Inpatient hospital services; and - }
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{ - (4) Health promotion and disease prevention services. - }
{ + (a) Services required by federal law to be included in
the state's medical assistance program in order for the program
to qualify for federal funds;
(b) Services provided by a physician as defined in ORS 677.010,
a nurse practitioner certified under ORS 678.375 or other
licensed practitioner within the scope of the practitioner's
practice as defined by state law, and ambulance services;
(c) Prescription drugs;
(d) Laboratory and X-ray services;
(e) Medical supplies;
(f) Mental health services;
(g) Chemical dependency services;
(h) Emergency dental services;
(i) Nonemergency dental services;
(j) Provider services, other than services described in
paragraphs (a) to (i), (k), (L) and (m) of this subsection,
defined by federal law that may be included in the state's
medical assistance program;
(k) Emergency hospital services;
(L) Outpatient hospital services; and
(m) Inpatient hospital services.
(2) Health services approved and funded under subsection (1) of
this section are subject to the prioritized list of health
services required in ORS 414.720. + }
SECTION 8. ORS 414.720 is amended to read:
414.720. (1) The Health Services Commission shall conduct
public hearings prior to making the report described in
subsection (3) of this section. The commission shall solicit
testimony and information from advocates { - for - }
{ + representing + } seniors { - ; - } { + , + }
{ - handicapped - } persons { - ; - } { + with
disabilities + } { + , + } mental health services consumers
{ - ; - } { + and + } low-income Oregonians { - ; - } { + ,
representatives of commercial carriers, representatives of small
and large Oregon employers + } and providers of health care,
including but not limited to physicians licensed to practice
medicine, dentists, oral surgeons, chiropractors, naturopaths,
hospitals, clinics, pharmacists, nurses and allied health
professionals.
(2) The commission shall actively solicit public involvement in
a community meeting process to build a consensus on the values to
be used to guide health resource allocation decisions.
(3) The commission shall report to the Governor a list of
health services { - , including health care services of the
aged, blind and disabled pursuant to section 14, chapter 753,
Oregon Laws 1991, including one list into which those mental
health and chemical dependency services recommended pursuant to
ORS 414.730 are integrated, - } ranked by priority, from the
most important to the least important, representing the
comparative benefits of each service to the entire population to
be served. { - The report shall be accompanied by a report of
an independent actuary retained for the commission to determine
rates necessary to cover the costs of the services. Until federal
waiver approval is obtained and funding authorized for the
integrated list including mental health and chemical dependency
services, the coverage for mental health and chemical dependency
services shall not be considered to be mandated. - } The list
submitted by the commission pursuant to this subsection is not
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subject to alteration by any other state agency. The
recommendation may include practice guidelines reviewed and
adopted by the commission pursuant to subsection (4) of this
section.
(4) In order to encourage effective and efficient medical
evaluation and treatment, the commission { + :
(a) + } May include clinical practice guidelines in its
prioritized list of services. The commission shall actively
solicit testimony and information from the medical community and
the public to build a consensus on clinical practice guidelines
developed by the commission.
{ + (b) Shall consider both the clinical effectiveness and
cost-effectiveness of health services in determining their
relative importance using peer-reviewed medical literature as
defined in ORS 743.695. + }
(5) The commission shall make its report by July 1 of the year
preceding each regular session of the Legislative Assembly and
shall submit a copy of its report to the Governor, the Speaker of
the House of Representatives and the President of the Senate.
(6) The commission may alter the list during interim only under
the following conditions:
(a) Technical changes due to errors and omissions; and
(b) Changes due to advancements in medical technology or new
data regarding health outcomes.
(7) If a service is deleted or added and no new funding is
required, the commission shall report to the Speaker of the House
of Representatives and the President of the Senate. However, if a
service to be added requires increased funding to avoid
discontinuing another service, the commission must report to the
Emergency Board to request the funding.
(8) The report listing services to be provided pursuant to ORS
414.036, 414.042, 414.065, 414.107, 414.705 to 414.725 and
414.735 to 414.750 shall remain in effect from October 1 of the
odd-numbered year through September 30 of the next odd-numbered
year.
SECTION 9. { + (1) The Health Services Commission shall retain
an actuary to determine the benchmark for setting per capita
rates necessary to reimburse prepaid managed care health services
organizations and fee-for-service providers for the cost of
providing health services under ORS 414.705 to 414.750.
(2) The actuary retained by the commission shall use the
following information to determine the benchmark for setting per
capita rates:
(a) For hospital services, the most recently available Medicare
cost reports for Oregon hospitals;
(b) For services of physicians licensed under ORS chapter 677
and other health professionals using procedure codes, the
Medicare Resource Based Relative Value system conversion rates
for Oregon;
(c) For prescription drugs, the most recent payment
methodologies in the fee-for-service payment system for the
Oregon Health Plan;
(d) For durable medical equipment and supplies, 80 percent of
the Medicare allowable charge for purchases and rentals;
(e) For dental services, the most recent payment rates obtained
from dental care organization encounter data; and
(f) For all other services not listed in paragraphs (a) to (e)
of this subsection:
(A) The Medicare maximum allowable charge, if available; or
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(B) The most recent payment rates obtained from the data
available under subsection (3) of this section.
(3) The actuary shall use the most current encounter data and
the most current fee-for-service data that is available,
reasonable trends for utilization and cost changes to the
midpoint of the next biennium, appropriate differences in
utilization and cost based on geography, state and federal
mandates and other factors that, in the professional judgment of
the actuary, are relevant to the fair and reasonable estimation
of costs. The Department of Human Services shall provide the
actuary with the data and information in the possession of the
department or contractors of the department reasonably necessary
to develop a benchmark for setting per capita rates.
(4) The commission shall report the benchmark per capita rates
developed under this section to the Director of the Oregon
Department of Administrative Services, the Director of Human
Services and the Legislative Fiscal Officer no later than August
1 of every even-numbered year.
(5) The Department of Human Services shall retain an actuary to
determine:
(a) Per capita rates for health services that the department
shall use to develop the department's proposed biennial budget;
and
(b) Capitation rates to reimburse physician care organizations
for the cost of providing health services under ORS 414.705 to
414.750 using the same methodologies used to develop capitation
rates for fully capitated health plans. The rates may not
advantage or disadvantage fully capitated health plans for
similar services.
(6) The Department of Human Services shall submit to the
Legislative Assembly no later than February 1 of every
odd-numbered year a report comparing the per capita rates for
health services on which the proposed budget of the department is
based with the rates developed by the actuary retained by the
Health Services Commission. If the rates differ, the department
shall disclose, by provider categories described in subsection
(2) of this section, the amount of and reason for each
variance. + }
SECTION 10. { + (1) Subject to the provisions of subsections
(2) to (6) of this section, the Department of Human Services
shall contract with fully capitated health plans to provide
administrative services as follows for eligible persons who
receive one or more health services as defined in ORS 414.705 on
a fee-for-service payment basis:
(a) Prescription drug management services for all prescription
drugs except mental health drugs;
(b) Inpatient and outpatient hospital services;
(c) Utilization of nonemergency medical transportation in
designated areas where transportation brokerage services are not
available; and
(d) Durable medical equipment and supplies.
(2) The department shall contract with one or more fully
capitated health plans in a designated area to provide
administrative services to eligible persons who are receiving
health services on a fee-for-service payment basis. If the
department is not able to contract with a fully capitated health
plan in a designated area, the department may contract with a
plan that serves another designated area. If the department is
not able to contract with any plan, the department may contract
with a third party to provide administrative services.
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(3) In awarding a contract, the department must ensure that the
contract is cost-neutral to the department and that the
contractor has the capacity and competence to provide
administrative services for the additional persons.
(4) ORS 414.325 and 414.334 apply to prescription drug
management services provided under subsection (1)(a) of this
section.
(5) This section does not apply to institutional pharmacies
that dispense prescription drugs on a fee-for-service payment
basis to residents of nursing facilities and community-based
residential facilities.
(6) Notwithstanding subsection (1)(a) of this section, the
department may contract with a fully capitated health plan or a
mental health organization to provide administrative services
related to mental health drugs. A fully capitated health plan or
a mental health organization that contracts with the department
under this subsection shall develop and implement local or
regional drug management strategies that require the
collaboration of fully capitated health plans or mental health
organizations in the designated area that are not a party to the
contract.
(7) The department shall adopt rules to implement this section,
including but not limited to defining eligible persons who are
exempt from the provisions of this section. + }
SECTION 10a. { + Section 10 of this 2003 Act is repealed on
January 2, 2008. + }
SECTION 11. { + The Department of Human Services may not
establish capitation rates that include payment for mental health
drugs. The department shall reimburse pharmacy providers for
mental health drugs only on a fee-for-service payment basis. + }
SECTION 12. { + (1) A fully capitated health plan that does
not have a contract with a hospital to provide inpatient or
outpatient hospital services under ORS 414.705 to 414.750 must
pay for hospital services as follows:
(a) For inpatient hospital services, based on the capitation
rates developed for the budget period, at the level of the
statewide average unit cost, multiplied by the geographic factor,
the payment discount factor and an adjustment factor of 0.925.
(b) For outpatient hospital services, based on the capitation
rates developed for the budget period, at the level of charges
multiplied by the statewide average cost-to-charge ratio, the
geographic factor, the payment discount factor and an adjustment
factor of 0.925.
(2) A hospital that does not have a contract with a fully
capitated health plan to provide inpatient or outpatient hospital
services under ORS 414.705 to 414.750 must accept payment for
hospital services as follows:
(a) For inpatient hospital services, based on the capitation
rates developed for the budget period, at the level of the
statewide average unit cost, multiplied by the geographic factor,
the payment discount factor and an adjustment factor of 0.925.
(b) For outpatient hospital services, based on the capitation
rates developed for the budget period, at the level of charges
multiplied by the statewide average cost-to-charge ratio, the
geographic factor, the payment discount factor and an adjustment
factor of 0.925.
(3) This section does not apply to type A and type B hospitals,
as described in ORS 442.470, and rural critical access hospitals,
as defined in ORS 316.143.
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(4) The Department of Human Services shall adopt rules to
implement and administer this section. + }
SECTION 12a. { + A fully capitated health plan or a physician
care organization that offers enrollees the option of obtaining
prescription drugs through a mail order pharmacy may use the same
mail order pharmacy used by the Department of Human Services for
the department's mail order pharmacy program. + }
SECTION 12b. { + Section 12a of this 2003 Act is repealed on
January 2, 2008. + }
SECTION 13. { + (1) Subject to the provisions of subsection
(4) of this section, the Department of Human Services shall
contract with a pharmacy benefit manager to manage prescription
drug benefits for the medical assistance program. The pharmacy
benefit manager shall purchase prescription drugs in bulk or
reimburse pharmacies for prescription drugs prescribed for
eligible persons in the medical assistance program.
(2) The pharmacy benefit manager shall establish two programs
for the medical assistance program. One program shall purchase
prescription drugs for or reimburse fully capitated health plans
that use the pharmacy benefit manager under contract with the
department. The second program shall reimburse fee-for-service
pharmacy providers directly or provide for payment by the
Department of Human Services.
(3) Fully capitated health plans may use the pharmacy benefit
manager under contract with the department under subsection (1)
of this section.
(4) In awarding a contract under this section, the department
must ensure that the contractor has the capacity and competence
to administer the services and that the contract is cost-neutral
to the department.
(5) ORS 414.325 and 414.334 apply to the management of
prescription drug benefits under this section. + }
SECTION 14. { + (1) The Department of Human Services, in
consultation with representatives of fully capitated health
plans, shall:
(a) Develop a request for proposal for the pharmacy benefit
manager contract described in section 13 of this 2003 Act; and
(b) Review administrative requirements for fully capitated
health plan contracts and implement changes that would decrease
the costs of administering the contracts. The department shall
report to the Emergency Board and the Joint Legislative Audit
Committee by November 30, 2003, on the department's findings.
(2) As used in this section, 'fully capitated health plan ' has
the meaning given that term in section 2 of this 2003 Act. + }
SECTION 15. { + (1) The Department of Human Services shall
negotiate and enter into agreements with pharmaceutical
manufacturers for supplemental rebates that are in addition to
the discount required under federal law to participate in the
medical assistance program.
(2) The department may participate in a multistate prescription
drug purchasing pool for the purpose of negotiating supplemental
rebates.
(3) ORS 414.325 and 414.334 apply to prescription drugs
purchased for the medical assistance program under this
section. + }
{ + NOTE: + } Section 16 was deleted by amendment. Subsequent
sections were not renumbered.
SECTION 17. { + For each person applying for health services
under ORS 414.705 to 414.750, the Department of Human Services
shall fully document:
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(1) The category of aid as defined in ORS 414.025 that makes
the person eligible for medical assistance or the way in which
the person qualifies as categorically needy as defined in ORS
414.025;
(2) The status of the person as a resident of this state; and
(3) The financial income and resources of the person. + }
SECTION 18. { + (1) Except as provided in section 19 of this
2003 Act, sections 2, 3, 5, 5a, 11, 12, 12a, 14 and 15 of this
2003 Act and the amendments to ORS 414.705 and 414.725 by
sections 4 and 7 of this 2003 Act become operative on October 1,
2003.
(2) Sections 10 and 13 of this 2003 Act become operative on the
day after the date the Department of Human Services receives the
necessary waivers from the Centers for Medicare and Medicaid
Services.
(3) The Director of Human Services shall notify the Legislative
Counsel upon receipt of the waivers or denial of the waiver
request. + }
SECTION 19. { + The Director of Human Services may take any
action before the operative dates of sections 2, 3, 5, 5a, 10,
11, 12, 12a, 13, 14 and 15 of this 2003 Act and the amendments to
ORS 414.705 and 414.725 by sections 4 and 7 of this 2003 Act that
is necessary to enable the director to exercise, on and after the
operative dates of sections 2, 3, 5, 5a, 10, 11, 12, 12a, 13, 14
and 15 of this 2003 Act and the amendments to ORS 414.705 and
414.725 by sections 4 and 7 of this 2003 Act, all the duties,
functions and powers conferred on the director by this 2003
Act. + }
SECTION 20. ORS 414.325 is amended to read:
414.325. (1) As used in this section, 'legend drug' means any
drug requiring a prescription by a practitioner, as defined in
ORS 689.005.
(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 Department of Human Services unless the practitioner
prescribes otherwise and an exception is granted by the
department.
(3) The department shall pay only for drugs in the generic form
if the federal Food and Drug Administration has approved a
generic version of a particular brand name drug that is
chemically identical to the brand name drug according to federal
Food and Drug Administration rating standards, unless an
exception has been granted by the department.
(4) An exception must be applied for and granted before the
department is required to pay for minor tranquilizers and
amphetamines and amphetamine derivatives, as defined by rule of
the department.
(5) Notwithstanding subsections (1) to (4) of this section, the
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 that the
department has determined should be limited to those conditions
generally recognized as appropriate by the medical profession.
(6) Notwithstanding subsection (3) of this section, the
department may not limit legend drugs when used as approved by
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the federal Food and Drug Administration to treat mental illness,
HIV and AIDS, and cancer.
{ + (7) Notwithstanding ORS 414.334, the department may
conduct prospective drug utilization review prior to payment for
drugs for a patient whose prescription drug use exceeded 15 drugs
in the preceding six-month period. + }
SECTION 21. ORS 414.325, as amended by section 6, chapter 897,
Oregon Laws 2001, is amended to read:
414.325. (1) As used in this section, 'legend drug' means any
drug requiring a prescription by a practitioner, as defined in
ORS 689.005.
(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 Department of Human Services unless the practitioner
prescribes otherwise and an exception is granted by the
department.
(3) Except as provided in subsections (4) and (5) of this
section, the department shall place no limit on the type of
legend drug that may be prescribed by a practitioner, but the
department shall pay only for drugs in the generic form unless an
exception has been granted by the department.
(4) Notwithstanding subsection (3) of this section, an
exception must be applied for and granted before the department
is required to pay for minor tranquilizers and amphetamines and
amphetamine derivatives, as defined by rule of the department.
(5)(a) Notwithstanding subsections (1) to (4) of this section
and except as provided in paragraph (b) of this subsection, the
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 that the
department has determined should be limited to those conditions
generally recognized as appropriate by the medical profession.
(b) The department may not require prior authorization for
therapeutic classes of nonsedating antihistamines and nasal
inhalers, as defined by rule by the 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) Notwithstanding ORS 414.334, the department may
conduct prospective drug utilization review prior to payment for
drugs for a patient whose prescription drug use exceeded 15 drugs
in the preceding six-month period. + }
SECTION 22. { + The Department of Human Services may not adopt
or amend any rule that requires a prescribing practitioner to
contact the department to request an exception for a medically
appropriate or medically necessary drug that is not listed on the
Practitioner-Managed Prescription Drug Plan drug list for that
class of drugs adopted under ORS 414.334, unless otherwise
authorized by enabling legislation setting forth the requirement
for prior authorization. + }
Enrolled House Bill 3624 (HB 3624-C) Page 11
SECTION 23. { + Section 22 of this 2003 Act applies to rules
adopted or amended by the Department of Human Services before, on
or after the effective date of this 2003 Act. + }
SECTION 24. { + In addition to and not in lieu of any other
appropriation, there is appropriated to the Oregon Department of
Administrative Services for the biennium ending June 30, 2005,
out of the General Fund, the amount of $275,000, for the Office
for Oregon Health Policy and Research for the purpose of the
Health Services Commission carrying out the provisions of section
9 (1) of this 2003 Act. + }
SECTION 25. { + This 2003 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2003 Act takes effect on
its passage. + }
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Passed by House May 16, 2003
Repassed by House August 23, 2003
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate August 22, 2003
...........................................................
President of Senate
Enrolled House Bill 3624 (HB 3624-C) Page 12
Received by Governor:
......M.,............., 2003
Approved:
......M.,............., 2003
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2003
...........................................................
Secretary of State
Enrolled House Bill 3624 (HB 3624-C) Page 13