Chapter 697
AN ACT
SB 329
Relating to the Oregon Health Fund program; creating new provisions;
amending ORS 414.221, 414.312, 414.314, 414.316, 414.318, 414.320 and 442.011
and sections 2 and 3, chapter 314, Oregon Laws 2005; appropriating money;
limiting expenditures; and declaring an emergency.
Whereas improving and
protecting the health of Oregonians must be a primary issue and an important
goal of the state; and
Whereas the objective of
Whereas health is more
than just the absence of physical and mental disease, it is the product of a
number of factors, only one of which is access to the medical system; and
Whereas persons with disabilities
and other ongoing conditions can live long and healthy lives; and
Whereas Oregonians
cannot achieve the objective of health unless all individuals have timely
access to a defined set of essential health services; and
Whereas Oregonians cannot
achieve the objective of health unless the state invests not only in health
care, but also in education, economic opportunity, housing, sustainable
environmental stewardship, full participation and other areas that are
important contributing factors to health; and
Whereas the escalating
cost of health care is compromising the ability to invest in those other areas
that contribute to the health of the population; and
Whereas
Whereas
(1) Develop effective
strategies through education of individuals and health care providers,
development of policies and practices as well as financial incentives and disincentives
to empower individuals to assume more personal responsibility for their own
health status through the choices they make;
(2) Reevaluate the
structure of Oregon’s financing and eligibility system in light of the
realities and circumstances of the 21st century and of what Oregonians want the
system to achieve from the standpoint of a healthy population; and
(3) Rethink how
Oregonians define a “benefit” and restructure the misaligned financial
incentives and inefficient system through which health care is currently
delivered; and
Whereas public resources
are finite, and therefore the public resources available for health care are
also finite; and
Whereas finite resources
require that explicit priorities be set through an open process with public input
on what should and should not be financed with public resources; and
Whereas those priorities
must be based on publicly debated criteria that reflect a consensus of social
values and that consider the good of individuals across their lifespans; and
Whereas those with more
disposable private income will always be able to purchase more health care than
those who depend solely on public resources; and
Whereas society is
responsible for ensuring equitable financing for the defined set of essential
health services for those Oregonians who cannot afford that care; and
Whereas health care
policies should emphasize public health and encourage the use of quality
services and evidence-based treatment that is appropriate and safe and that
discourages unnecessary treatment; and
Whereas health care
providers and informed patients must be the primary decision makers in the
health care system; and
Whereas access, cost,
transparency and quality are intertwined and must be simultaneously addressed
for health care reform to be sustainable; and
Whereas health is the
shared responsibility of individual consumers, government, employers, providers
and health plans; and
Whereas individual
consumers, government, employers, providers and health plans must be part of
the solution and share in the responsibility for both the financing and
delivery of health care; and
Whereas the current
health care system is unsustainable in large part because of outdated federal
policies that reflect the realities of the last century instead of the
realities of today and that are based on assumptions that are no longer valid;
and
Whereas the ability of
states to maintain the public’s health is increasingly constrained by those
federal policies, which were built around “categories” rather than a commitment
to ensure all citizens have timely access to essential health services; and
Whereas the economic and
demographic environment in which state and federal policies were created has
changed dramatically over the past 50 years, while the programs continue to
reflect a set of circumstances that existed in the mid-20th century; and
Whereas any strategies
for financing, mandating or developing new programs to expand access must
address what will be covered with public resources and how those services will
be delivered; otherwise, those strategies will do little to stem escalating
medical costs, make health care more affordable or create a sustainable system;
and
Whereas incremental
changes will not solve
Be It Enacted by the People of
the State of
SECTION 1. Sections 2 to 13 of this 2007 Act shall be
known and may be cited as the Healthy
SECTION 2. As used in sections 2 to 13 of this 2007 Act,
except as otherwise specifically provided or unless the context requires
otherwise:
(1) “Accountable health
plan” means a prepaid managed care health services organization described in
ORS 414.725 or an entity that contracts with the Oregon Health Fund Board to
provide a health benefit plan, as defined in ORS 743.730, through the Oregon
Health Fund program.
(2) “Core health care
safety net provider” means a safety net provider that is especially adept at
serving persons who experience significant barriers to accessing health care,
including homelessness, language and cultural barriers, geographic isolation,
mental illness, lack of health insurance and financial barriers, and that has a
mission or mandate to deliver services to persons who experience barriers to
accessing care and serves a substantial share of persons without health
insurance and persons who are enrolled in Medicaid or Medicare, as well as
other vulnerable or special populations.
(3) “Defined set of
essential health services” means the services:
(a) Identified by the
Health Services Commission using the methodology in ORS 414.720 or an
alternative methodology developed pursuant to section 9 (3)(c) of this 2007
Act; and
(b) Approved by the
(4) “Employer” has the
meaning given that term in ORS 657.025.
(5) “
(6) “
(7) “
(8) “Safety net provider”
means providers that deliver health services to persons experiencing cultural,
linguistic, geographic, financial or other barriers to accessing appropriate,
timely, affordable and continuous health care services. “Safety net providers”
includes health care safety net providers, core health care safety net
providers, tribal and federal health care organizations and local nonprofit
organizations, government agencies, hospitals and individual providers.
SECTION 3. The
(1) Expanding access.
The state Medicaid program, the
(2) Equity. All
individuals must be eligible for and have timely access to at least the same
set of essential and effective health services.
(3) Financing of the
health care system must be equitable, broadly based and affordable.
(4) Population benefit.
The public must set priorities to optimize the health of Oregonians.
(5) Responsibility for
optimizing health must be shared by individuals, employers, health care systems
and communities.
(6) Education is a
powerful tool for health promotion. The health care system, health plans,
providers and government must promote and engage in education activities for
individuals, communities and providers.
(7) Effectiveness. The
relationship between specific health interventions and their desired health
outcomes must be backed by unbiased, objective medical evidence.
(8) Efficiency. The
administration and delivery of health services must use the fewest resources
necessary to produce the most effective health outcome.
(9) Explicit
decision-making. Decision-making will be clearly defined and accessible to the
public, including lines of accountability, opportunities for public engagement
and how public input will be used in decision-making.
(10) Transparency. The
evidence used to support decisions must be clear, understandable and observable
to the public.
(11) Economic sustainability.
Health service expenditures must be managed to ensure long-term sustainability,
using efficient planning, budgeting and coordination of resources and reserves,
based on public values and recognizing the impact that public and private
health expenditures have on each other.
(12) Aligned financial
incentives. Financial incentives must be aligned to support and invest in
activities that will achieve the goals of the
(13) Wellness. Health
and wellness promotion efforts must be emphasized and strengthened.
(14) Community-based.
The delivery of care and distribution of resources must be organized to take
place at the community level to meet the needs of the local population, unless
outcomes or cost can be improved at regional or statewide levels.
(15) Coordination.
Collaboration, coordination and integration of care and resources must be
emphasized throughout the health care system.
(16) The health care
safety net is a key delivery system element for the protection of the health of
Oregonians and the delivery of community-based care.
SECTION 4. The intent of the Healthy
(1) As a primary goal,
cover the current uninsured population in Oregon through the expansion of the
state Medicaid program, the Oregon State Children’s Health Insurance Program
and the Family Health Insurance Assistance Program;
(2) Reform the health
care delivery system to maximize federal and other public resources without
compromising proven programs supported by federal law that ensure to vulnerable
populations access to efficient and high quality care;
(3) Ensure that all
Oregonians have timely access to and participate in a health benefit plan that
provides high quality, effective, safe, patient-centered, evidence-based and
affordable health care delivered at the lowest cost;
(4) Develop a method to
finance the coverage of a defined set of essential health services for
Oregonians that is not necessarily tied directly to employment;
(5) Allow the potential
for employees, employers, individuals and unions to participate in the program,
or to purchase primary coverage or offer, purchase or bargain for coverage of
benefits beyond the defined set of essential health services;
(6) Allow for a system
of public and private health care partnerships that integrate public
involvement and oversight, consumer choice and competition within the health
care market;
(7) Use proven models of
health care benefits, service delivery and payments that control costs and
overutilization, with emphasis on preventive care and chronic disease
management using evidence-based outcomes and a health benefit model that
promotes a primary care medical home;
(8) Provide services for
dignified end-of-life care;
(9) Restructure the
health care system so that payments for services are fair and proportionate
among various populations, health care programs and providers;
(10) Fund a high quality
and transparent health care delivery system that will be held to high standards
of transparency and accountability and allows users and purchasers to know what
they are receiving for their money;
(11) Ensure that funding
for health care is equitable and affordable for all
(12) Ensure, to the
greatest extent possible, that annual inflation in the cost of providing access
to essential health care services does not exceed the increase in the cost of
living for the previous calendar year, based on the Portland-Salem, OR-WA,
Consumer Price Index for All Urban Consumers for All Items, as published by the
Bureau of Labor Statistics of the United States Department of Labor.
SECTION 5. (1) There is established within the
Department of Human Services the
(2) Each board member
shall serve for a term of four years. However, a board member shall serve until
a successor has been appointed and qualified. A member is eligible for
reappointment.
(3) If there is a
vacancy for any cause, the Governor shall make an appointment to become
effective immediately for the balance of the unexpired term.
(4) The board shall
select one of its members as chairperson and another as vice chairperson, for
such terms and with duties and powers necessary for the performance of the functions
of such offices as the board determines.
(5) A majority of the
members of the board constitutes a quorum for the transaction of business.
(6) Official action by
the board requires the approval of a majority of the members of the board.
(7) A member of the
board is not entitled to compensation for services as a member, but is entitled
to expenses as provided in ORS 292.495 (2).
SECTION 6. (1) Within 30 days after the effective date
of this 2007 Act, the Governor shall appoint an executive director of the
(2) The executive
director appointed under this section may employ and shall fix the duties and
amounts of compensation of persons necessary to carry out the provisions of
sections 2 to 13 of this 2007 Act. Those persons shall serve at the pleasure of
the executive director.
(3) The executive
director shall serve at the pleasure of the Governor.
SECTION 7. Except as otherwise provided by law, and
except for ORS 279A.250 to 279A.290, the provisions of ORS chapters 279A, 279B
and 279C do not apply to the Oregon Health Fund Board.
SECTION 8. (1) The
(a) Employer and
employee health care contributions.
(b) Individual health
care premium contributions.
(c) Federal funds from
Title XIX or XXI of the Social Security Act, and state matching funds, that are
made available to the fund, excluding Title XIX funds for long term care
supports, services and administration, and reimbursements for graduate medical
education costs pursuant to 42 U.S.C. 1395ww(h) and
disproportionate share adjustments made pursuant to 42 U.S.C.
1396a(a)(13)(A)(iv).
(d) Contributions from
the
(e) Moneys appropriated
to the
(f) Interest earnings
from the investment of moneys in the fund.
(g) Gifts, grants or
contributions from any source, whether public or private, for the purpose of
carrying out the provisions of the Healthy
(2)(a) All moneys in the
(b) The
SECTION 9. (1)(a) The Oregon Health Fund Board shall
establish a committee to examine the impact of federal law requirements on
reducing the number of Oregonians without health insurance, improving
Oregonians’ access to health care and achieving the goals of the Healthy Oregon
Act, focusing particularly on barriers to reducing the number of uninsured
Oregonians, including but not limited to:
(A) Medicaid
requirements such as eligibility categories and household income limits;
(B) Federal tax code
policies regarding the impact on accessing health insurance or self-insurance
and the affect on the portability of health insurance;
(C) Emergency Medical
Treatment and Active Labor Act regulations that make the delivery of health
care more costly and less efficient; and
(D) Medicare policies
that result in
(b) With the approval of
the
(c) The committee shall
request that the
(A) Participate in at
least one hearing in each congressional district in this state on the impacts
of federal policies on health care services; and
(B) Request
congressional hearings in
(2) The
(a) Financing the
(A) A model for rate
setting that ensures providers will receive fair and adequate compensation for
health care services.
(B) Collecting employer
and employee contributions and individual health care premium contributions,
and redirecting them to the
(C) Implementing a
health insurance exchange to serve as a central forum for uninsured individuals
and businesses to purchase affordable health insurance.
(D) Taking best
advantage of health savings accounts and similar vehicles for making health
insurance more accessible to uninsured individuals.
(E) Addressing the issue
of medical liability and medical errors including, but not limited to,
consideration of a patients’ compensation fund.
(F) Requesting federal
waivers under Titles XIX and XXI of the Social Security Act, or other federal
matching funds that may be made available to implement the comprehensive plan
and increase access to health care.
(G) Evaluating statutory
and regulatory barriers to the provision of cost-effective services, including
limitations on access to information that would enable providers to fairly
evaluate contract reimbursement, the regulatory effectiveness of the
certificate of need process, consideration of a statewide uniform credentialing
process and the costs and benefits of improving the transparency of costs of
hospital services and health benefit plans.
(b) Delivering health
services in the
(A) An efficient and
effective delivery system model that ensures the continued viability of
existing prepaid managed care health services organizations, as described in
ORS 414.725, to serve Medicaid populations.
(B) The design and
implementation of a program to create a public partnership with accountable
health plans to provide, through the use of an Oregon Health Card, health
insurance coverage of the defined set of essential health services that meets
standards of affordability based upon a calculation of how much individuals and
families, particularly the uninsured, can be expected to spend for health
insurance and still afford to pay for housing, food and other necessities. The
proposal must ensure that each accountable health
plan:
(i) Does not deny
enrollment to qualified Oregonians eligible for Medicaid;
(ii) Provides coverage
of the entire defined set of essential health services;
(iii) Will develop an
information system to provide written information, and telephone and Internet
access to information, necessary to connect enrollees with appropriate medical
and dental services and health care advice;
(iv)
Offers a simple and timely complaint process;
(v) Provides enrollees
with information about the cost and quality of services offered by health plans
and procedures offered by medical and dental providers;
(vi)
Provides advance disclosure of the estimated out-of-pocket costs of a
service or procedure;
(vii) Has contracts with
a sufficient network of providers, including but not limited to hospitals and
physicians, with the capacity to provide culturally appropriate, timely health
services and that operate during hours that allow optimal access to health
services;
(viii) Ensures that all
enrollees have a primary care medical home;
(ix)
Includes in its network safety net providers and local community
collaboratives;
(x) Regularly evaluates
its services, surveys patients and conducts other assessments to ensure patient
satisfaction;
(xi) Has strategies to
encourage enrollees to utilize preventive services and engage in healthy
behaviors;
(xii) Has simple and
uniform procedures for enrollees to report claims and for accountable health
plans to make payments to enrollees and providers;
(xiii) Provides
enrollment, encounter and outcome data for evaluation and monitoring purposes;
and
(xiv) Meets established
standards for loss ratios, rating structures and profit or nonprofit status.
(C) Using information
technology that is cost-neutral or has a positive return on investment to
deliver efficient, safe and quality health care and a voluntary program to
provide every Oregonian with a personal electronic health record that is within
the individual’s control, use and access and that is portable.
(D) Empowering individuals
through education as well as financial incentives to assume more personal
responsibility for their own health status through the choices they make.
(E) Establishing and
maintaining a registry of advance directives and Physician Orders for
Life-Sustaining Treatment (POLST) forms and a process for assisting a person
who chooses to execute an advance directive in accordance with ORS 127.531 or a
POLST form.
(F) Designing a system
for regional health delivery.
(G) Combining,
reorganizing or eliminating state agencies involved in health planning and
policy, health insurance and the delivery of health care services and
integrating and streamlining their functions and programs to maximize their
effectiveness and efficiency. The subcommittee may consider, but is not limited
to considering, the following state agencies, functions or programs:
(i) The Health Services
Commission;
(ii) The
(iii) The Health
Resources Commission;
(iv)
The Medicaid Advisory Committee;
(v) The Department of
Human Services, including but not limited to the state Medicaid agency, the
Office for Oregon Health Policy and Research, offices involved in health
systems planning, offices involved in carrying out the duties of the department
with respect to certificates of need under ORS 443.305 to 443.350 and the
functions of the department under ORS chapter 430;
(vi)
The Department of Consumer and Business Services;
(vii) The
(viii) The Office of
Private Health Partnerships;
(ix) The Public
Employees’ Benefit Board;
(x) The State Accident
Insurance Fund Corporation; and
(xi) The Office of Rural
Health.
(c) Establishing the
defined set of essential health services, including but not limited to
proposals for a methodology, consistent with the principles in section 3 of
this 2007 Act, for determining and continually updating the defined set of
essential health services. The
(d) The eligibility
requirements and enrollment procedures for the
(A) Public subsidies of
premiums or other costs under the program.
(B) Streamlined
enrollment procedures, including:
(i) A standardized
application process;
(ii) Requirements to
ensure that enrollees demonstrate
(iii) A process to
enable a provider to enroll an individual in the Oregon Health Fund program at
the time the individual presents for treatment to ensure coverage as of the
date of the treatment; and
(iv)
Permissible waiting periods, preexisting condition limitations or other
administrative requirements for enrollment.
(C) A grievance and
appeal process for enrollees.
(D) Standards for
disenrollment and changing enrollment in accountable
health plans.
(E) An outreach plan to
educate the general public, particularly uninsured and underinsured persons,
about the program and the program’s eligibility requirements and enrollment
procedures.
(F) Allowing employers
to offer health insurance coverage by insurers of the employer’s choice or to
contract for coverage of benefits beyond the defined set of essential health
services.
(3) On the effective
date of this 2007 Act, the Oregon Health Policy Commission, the Office for
Oregon Health Policy and Research, the Health Services Commission and the
Medicaid Advisory Committee are directed to begin compiling data and conducting
research to inform the decision-making of the subcommittees when they are
convened. No later than February 1, 2008, the Oregon Health Policy Commission,
the Office for Oregon Health Policy and Research, the Health Services
Commission and the Medicaid Advisory Committee shall present reports containing
data and recommendations to the subcommittees as follows:
(a) The
(b) The Administrator of
the Office for
(c) The Health Services
Commission shall report on the methodology for establishing the defined set of
essential health services under the comprehensive plan; and
(d) The Medicaid
Advisory Committee shall report on eligibility and enrollment requirements
under the comprehensive plan.
(4) The membership of
the subcommittees shall, to the extent possible, represent the geographic and
ethnic diversity of the state and include individuals with actuarial and
financial management experience, individuals who are providers of health care,
including safety net providers, and individuals who are consumers of health
care, including seniors, persons with disabilities and individuals with complex
medical needs.
(5) Each subcommittee
shall select one of its members as chairperson for such terms and with such
duties and powers necessary for performance of the functions of those offices.
Each chairperson shall serve as an ex officio member of the
(6) The committee and
the subcommittees are public bodies for purposes of ORS chapter 192 and must
provide reasonable opportunity for public testimony at each meeting.
(7) All agencies of
state government, as defined in ORS 174.111, are directed to assist the
committee, the subcommittees and the Oregon Health Fund Board in the
performance of their duties and, to the extent permitted by laws relating to
confidentiality, to furnish such information and advice as the members of the
committees, the subcommittees and the Oregon Health Fund Board consider
necessary to perform their duties.
(8) The
(a) Decrease the number
of children and adults without health insurance;
(b) Ensure universal
access to health care;
(c) Contain health care
costs; and
(d) Address issues
regarding the quality of health care services.
(9) The Oregon Health
Fund Board shall present a plan to the Legislative Assembly not later than
February 1, 2008, for the design and implementation of the health insurance
exchange described in subsection (2)(a)(C) of this section.
SECTION 10. The Oregon Health Fund Board shall conduct
public hearings on the draft Oregon Health Fund program comprehensive plan
developed under section 9 of this 2007 Act and solicit testimony and input from
advocates representing seniors, persons with disabilities, tribes, consumers of
mental health services, low-income Oregonians, employers, employees, insurers,
health plans and providers of health care including, but not limited to,
physicians, dentists, oral surgeons, chiropractors, naturopaths, hospitals,
clinics, pharmacists, nurses and allied health professionals.
SECTION 11. (1) The Oregon Health Fund Board shall
finalize the Oregon Health Fund program comprehensive plan developed under
section 9 of this 2007 Act with due consideration to the information provided
in the public hearings under section 10 of this 2007 Act and shall present the
finalized comprehensive plan to the Governor, the Speaker of the House of
Representatives and the President of the Senate no later than October 1, 2008.
The board is authorized to submit the finalized comprehensive plan as a measure
request directly to the Legislative Counsel upon the convening of the Seventy-fifth
Legislative Assembly.
(2) Upon legislative
approval of the comprehensive plan, the board is authorized to request federal
waivers deemed necessary and appropriate to implement the comprehensive plan.
(3) Upon legislative
approval of the comprehensive plan, the board is authorized immediately to
implement any elements necessary to implement the plan that do not require
legislative changes or federal approval.
SECTION 12. (1) The Oregon Health Fund program
comprehensive plan described in section 11 of this 2007 Act must ensure, except
as provided in subsection (2) of this section, that a resident of Oregon who is
not a beneficiary of a health benefit plan providing coverage of the defined
set of essential health services and who is not eligible to be enrolled in a
publicly funded medical assistance program providing primary care and hospital
services participates in the Oregon Health Fund program. A resident of
(2) Oregon residents who
are enrolled in commercial health insurance plans, self-insured programs,
health plans funded by a Taft-Hartley trust, or state or local government
health insurance pools may not be required to participate in the Oregon Health
Fund Program.
SECTION 13. (1) The Administrator of the Office for
Oregon Health Policy and Research, in collaboration with the Oregon Health
Research and Evaluation Collaborative and other persons with relevant
expertise, shall be responsible for developing a plan for evaluating the
implementation and outcomes of the legislation described in section 11 of this
2007 Act. The evaluation plan shall focus particularly on the individuals
receiving health care covered through the state Medicaid program, the Oregon
State Children’s Health Insurance Program and the Family Health Insurance
Assistance Program and shall include measures of:
(a) Access to care;
(b) Access to health
insurance coverage;
(c) Quality of care;
(d) Consumer
satisfaction;
(e) Health status;
(f) Provider capacity;
(g) Population demand;
(h) Provider and
consumer participation;
(i) Utilization
patterns;
(j) Health outcomes;
(k) Health disparities;
(L) Financial impacts,
including impacts on medical debt;
(m) The extent to which
employers discontinue coverage due to the availability of publicly financed
coverage or other employer responses;
(n) Impacts on the
financing of health care and uncompensated care;
(o) Adverse selection,
including migration to
(p) Use of technology;
(q) Transparency of
costs; and
(r) Impact on health
care costs.
(2) The administrator
shall develop recommendations for a model quality institute that shall:
(a) Develop and promote
methods for improving collection, measurement and reporting of information on
quality in health care;
(b) Provide leadership
and support to further the development of widespread and shared electronic
health records;
(c) Develop the capacity
of the workforce to capitalize on health information technology;
(d) Encourage
purchasers, providers and state agencies to improve system transparency and
public understanding of quality in health care;
(e) Support the
(f) Coordinate an effort
among all state purchasers of health care and insurers to support delivery
models and reimbursement strategies that will more effectively support
infrastructure investments, integrated care and improved health outcomes.
SECTION 14. ORS 442.011 is amended to read:
442.011. (1) There is created in the [Oregon
Department of Administrative Services] Department of Human Services
the Office for Oregon Health Policy and Research. The Administrator of the
Office for Oregon Health Policy and Research shall be appointed by the Governor
and the appointment shall be subject to Senate confirmation in the manner
prescribed in ORS 171.562 and 171.565. The administrator shall be an individual
with demonstrated proficiency in planning and managing programs with complex
public policy and fiscal aspects such as those involved in the Oregon Health
Plan. Before making the appointment, the Governor must advise the President of
the Senate and the Speaker of the House of Representatives of the names of at
least three finalists and shall consider their recommendation in appointing the
administrator.
(2) In carrying out the
responsibilities and duties of the administrator, the administrator shall
consult with and be advised by the Oregon Health Policy Commission and the
SECTION 15. ORS 442.011, as amended by section 14 of this
2007 Act, is amended to read:
442.011. (1) There is created in the Department of Human Services the Office
for Oregon Health Policy and Research. The Administrator of the Office for
Oregon Health Policy and Research shall be appointed by the Governor and the
appointment shall be subject to Senate confirmation in the manner prescribed in
ORS 171.562 and 171.565. The administrator shall be an individual with
demonstrated proficiency in planning and managing programs with complex public
policy and fiscal aspects such as those involved in the Oregon Health Plan.
Before making the appointment, the Governor must advise the President of the
Senate and the Speaker of the House of Representatives of the names of at least
three finalists and shall consider their recommendation in appointing the
administrator.
(2) In carrying out the
responsibilities and duties of the administrator, the administrator shall
consult with and be advised by the Oregon Health Policy Commission [and the
SECTION 16. ORS 414.221 is amended to read:
414.221. The Medicaid
Advisory Committee shall advise the Administrator of the Office for Oregon
Health Policy and Research and the [Department]
Director of Human Services on:
(1) Medical care,
including mental health and alcohol and drug treatment and remedial care to be
provided under ORS chapter 414; and
(2) The operation and
administration of programs provided under ORS chapter 414.
SECTION 17. ORS 414.312, as amended by section 1, chapter
2, Oregon Laws 2007 (Ballot Measure 44 (2006)), is amended to read:
414.312. (1) As used in ORS 414.312 to 414.318:
(a) “Pharmacy benefit
manager” means an entity that, in addition to being a prescription drug claims
processor, negotiates and executes contracts with pharmacies, manages preferred
drug lists, negotiates rebates with prescription drug manufacturers and serves
as an intermediary between the Oregon Prescription Drug Program, prescription
drug manufacturers and pharmacies.
(b) “Prescription drug
claims processor” means an entity that processes and pays prescription drug
claims, adjudicates pharmacy claims, transmits prescription drug prices and
claims data between pharmacies and the Oregon Prescription Drug Program and
processes related payments to pharmacies.
(c) “Program price”
means the reimbursement rates and prescription drug prices established by the
administrator of the Oregon Prescription Drug Program.
(2) The Oregon
Prescription Drug Program is established in the [Oregon Department of Administrative Services] Department of
Human Services. The purpose of the program is to:
(a) Purchase
prescription drugs or reimburse pharmacies for prescription drugs in order to
receive discounted prices and rebates;
(b) Make prescription
drugs available at the lowest possible cost to participants in the program; and
(c) Maintain a list of
prescription drugs recommended as the most effective prescription drugs
available at the best possible prices.
(3) The Director of [the
(a) Negotiate price
discounts and rebates on prescription drugs with prescription drug
manufacturers;
(b) Purchase
prescription drugs on behalf of individuals and entities that participate in
the program;
(c) Contract with a
prescription drug claims processor to adjudicate pharmacy claims and transmit
program prices to pharmacies;
(d) Determine program
prices and reimburse pharmacies for prescription drugs;
(e) Adopt and implement
a preferred drug list for the program;
(f) Develop a system for
allocating and distributing the operational costs of the program and any
rebates obtained to participants of the program; and
(g) Cooperate with other
states or regional consortia in the bulk purchase of prescription drugs.
(4) The following
individuals or entities may participate in the program:
(a) Public Employees’
Benefit Board;
(b) Local governments as
defined in ORS 174.116 and special government bodies as defined in ORS 174.117
that directly or indirectly purchase prescription drugs;
(c) Enrollees in the
Senior Prescription Drug Assistance Program created under ORS 414.342;
(d) Oregon Health and
(e) State agencies that
directly or indirectly purchase prescription drugs, including agencies that dispense
prescription drugs directly to persons in state-operated facilities; and
(f) Residents of this
state who do not have prescription drug coverage.
(5) The state agency
that receives federal Medicaid funds and is responsible for implementing the
state’s medical assistance program may not participate in the program.
(6) The administrator
may establish different reimbursement rates or prescription drug prices for
pharmacies in rural areas to maintain statewide access to the program.
(7) The administrator
shall establish the terms and conditions for a pharmacy to enroll in the
program. A licensed pharmacy that is willing to accept the terms and conditions
established by the administrator may apply to enroll in the program.
(8) Except as provided
in subsection (9) of this section, the administrator may not:
(a) Contract with a
pharmacy benefit manager;
(b) Establish a
state-managed wholesale or retail drug distribution or dispensing system; or
(c) Require pharmacies
to maintain or allocate separate inventories for prescription drugs dispensed
through the program.
(9) The administrator
shall contract with one or more entities to provide the functions of a
prescription drug claims processor. The administrator may also contract with a
pharmacy benefit manager to negotiate with prescription drug manufacturers on
behalf of the administrator.
(10) Notwithstanding
subsection (4)(f) of this section, individuals who are
eligible for Medicare Part D prescription drug coverage may participate in the
program.
SECTION 18. ORS 414.314 is amended to read:
414.314. (1) An individual or entity described in ORS 414.312 (4) may
apply to participate in the Oregon Prescription Drug Program. Participants
shall apply annually on an application provided by the [Oregon Department of Administrative Services] Department of
Human Services. The department may charge participants a nominal fee to
participate in the program. The department shall issue a prescription drug
identification card annually to participants of the program.
(2) The department shall
provide a mechanism to calculate and transmit the program prices for
prescription drugs to a pharmacy. The pharmacy shall charge the participant the
program price for a prescription drug.
(3) A pharmacy may
charge the participant the professional dispensing fee set by the department.
(4) Prescription drug
identification cards issued under this section must contain the information
necessary for proper claims adjudication or transmission of price data.
SECTION 19. ORS 414.316 is amended to read:
414.316. The Office for
Oregon Health Policy and Research shall develop and recommend to the [Oregon Department of Administrative Services]
Department of Human Services a preferred drug list that identifies
preferred choices of prescription drugs within therapeutic classes for
particular diseases and conditions, including generic alternatives, for use in
the Oregon Prescription Drug Program. The office shall conduct public hearings
and use evidence-based evaluations on the effectiveness of similar prescription
drugs to develop the preferred drug list.
SECTION 20. ORS 414.318 is amended to read:
414.318. The
Prescription Drug Purchasing Fund is established separate and distinct from the
General Fund. The Prescription Drug Purchasing Fund shall consist of moneys
appropriated to the fund by the Legislative Assembly and moneys received by the
[Oregon Department of Administrative
Services] Department of Human Services for the purposes established
in this section in the form of gifts, grants, bequests, endowments or
donations. The moneys in the Prescription Drug Purchasing Fund are continuously
appropriated to the [Oregon Department of
Administrative Services] department and shall be used to purchase
prescription drugs, reimburse pharmacies for prescription drugs and reimburse
the department for the costs of administering the Oregon Prescription Drug
Program, including contracted services costs, computer costs, professional
dispensing fees paid to retail pharmacies and other reasonable program costs.
Interest earned on the fund shall be credited to the fund.
SECTION 21. ORS 414.320 is amended to read:
414.320. The [Oregon Department of Administrative Services]
Department of Human Services shall adopt rules to implement and
administer ORS 414.312 to 414.318. The rules shall include but are not limited
to establishing procedures for:
(1) Issuing prescription
drug identification cards to individuals and entities that participate in the
Oregon Prescription Drug Program; and
(2) Enrolling pharmacies
in the program.
SECTION 22. Section 2, chapter 314, Oregon Laws 2005, is
amended to read:
Sec.
2. In addition to the notices required under ORS 183.335 (15), the [Oregon Department of Administrative Services]
Department of Human Services shall give notice to the individual members
of any interim or session committee with authority over the subject matter of
the rule if the department proposes to adopt a rule under ORS 414.320.
SECTION 23. Section 3, chapter 314, Oregon Laws 2005, is
amended to read:
Sec.
3. Section 2, chapter 314,
SECTION 24. (1) There is appropriated to the
(2) Notwithstanding any
other law limiting expenditures, the amount of $1 is established for the
biennium beginning July 1, 2007, as the maximum limit for payment of expenses
from fees, moneys or other revenues, including Miscellaneous Receipts, but
excluding lottery funds and federal funds, collected or received by the Oregon
Health Fund Board.
SECTION 25. (1) There is appropriated to the Department
of Human Services, for the biennium beginning July 1, 2007, out of the General
Fund, the amount of $1,215,350 for the purpose of carrying out the provisions
of sections 2 to 13 of this 2007 Act.
(2) Notwithstanding any
other law limiting expenditures, the amount of $671,971 is established for the
biennium beginning July 1, 2007, as the maximum limit for payment of expenses
from federal funds collected or received by the Department of Human Services,
for the purpose of carrying out sections 2 to 13 of this 2007 Act.
SECTION 26. (1) The unexpended balances of amounts
authorized to be expended by the Oregon Department of Administrative Services
for the biennium beginning July 1, 2007, from revenues dedicated, continuously
appropriated, appropriated or otherwise made available for the purpose of
administering and enforcing the duties, functions and powers transferred by the
amendments to statutes and session laws by sections 14 and 16 to 23 of this
2007 Act are transferred to and are available for expenditure by the Department
of Human Services, for the purposes of administering and enforcing the duties,
functions and powers transferred by the amendments to statutes and session laws
by sections 14 and 16 to 23 of this 2007 Act.
(2) The expenditure
classifications, if any, established by Acts authorizing or limiting
expenditures by the Oregon Department of Administrative Services remain
applicable to expenditures by the Department of Human Services under this
section.
SECTION 27. Sections 1 to 13 of this 2007 Act are
repealed on January 2, 2010.
SECTION 28. The amendments to ORS 442.011 by section 15
of this 2007 Act become operative on January 2, 2010.
SECTION 29. This 2007 Act being necessary for the
immediate preservation of the public peace, health and safety, an emergency is
declared to exist, and this 2007 Act takes effect on its passage.
Approved by the Governor June 28, 2007
Filed in the office of Secretary of State July 2, 2007
Effective date June 28, 2007
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