SB-0831, As Passed Senate, June 9, 2004                                     

SUBSTITUTE FOR

SENATE BILL NO. 831

                                                                             A bill to amend 1978 PA 368, entitled                                             

"Public health code,"                                                       

(MCL 333.1101 to 333.25211) by adding part 97.                              

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1   PART 97.

2   MICHIGAN PHARMACEUTICAL BEST PRACTICES INITIATIVE

3   Sec. 9701.  As used in this part:                                           

4       (a) "Committee" means the Michigan pharmacy and therapeutics                

5   committee established by Executive Order No. 2001-8 and by                  

6   section 9705.                                                               

7       (b) "Controlled substance" means that term as defined in                    

8   section 7104.                                                               

9   (c) "Department" means the department of community health.                  

10      (d) "Drug" means that term as defined in section 17703.                     

11      (e) "Initiative" means the pharmaceutical best practices                    

1   initiative established by this part.                                        

2       (f) "Medicaid" means the program of medical assistance                      

3   established under title XIX of the social security act, 42 USC              

4   1396 to 1396v.                                                              

5       (g) "Pharmacist" means an individual licensed by this state                 

6   to engage in the practice of pharmacy under article 15.                     

7       (h) "Physician" means an individual licensed by this state to               

8   engage in the practice of medicine or osteopathic medicine and              

9   surgery under article 15.                                                   

10      (i) "Prescriber" means a licensed dentist, a licensed doctor                

11  of medicine, a licensed doctor of osteopathic medicine and                  

12  surgery, a licensed doctor of podiatric medicine and surgery, a             

13  licensed optometrist certified under part 174 to administer and             

14  prescribe therapeutic pharmaceutical agents, or another licensed            

15  health professional acting under the delegation and using,                  

16  recording, or otherwise indicating the name of the delegating               

17  licensed doctor of medicine or licensed doctor of osteopathic               

18  medicine and surgery.                                                       

19      (j) "Prescription" means that term as defined in section                    

20  17708.                                                                      

21      (k) "Prescription drug" means that term as defined in section               

22  17708.                                                                      

23                                                                               (l) "Type II transfer" means that term as defined in section                        

24  3 of the executive organization act of 1965, 1965 PA 380, MCL               

25  16.103.

26  Sec. 9703.  (1) The department may implement a                              

27  pharmaceutical best practices initiative for the department's               

1   various health care programs to control the costs of health care,           

2   to reduce the costs of prescription drugs, and to assure                    

3   continued access to pharmaceutical services at fair and                     

4   reasonable prices.  If implemented, the initiative shall include,           

5   but is not limited to, the establishment and maintenance of each            

6   of the following:                                                           

7       (a) A preferred drug list.                                                  

8       (b) A prior authorization and appeal process.                               

9       (2) The prior authorization and appeal process established                  

10  under subsection (1) shall include the establishment of a                   

11  telephone hotline for prescribers that is accessible 24 hours per           

12  day and staffed to ensure that a response is initiated to each              

13  prior authorization request within 24 hours after its receipt and           

14  to each appeal of a prior authorization denial within 48 hours,             

15  excluding Saturday, Sunday, and legal holidays, after all                   

16  necessary documentation for reconsideration is received.  Each              

17  appeal for reconsideration of a previous denial for prior                   

18  authorization shall be reviewed and decided by a physician.                 

19      (3) The department, in cooperation with a pharmaceutical                    

20  manufacturer or its agent, may establish disease management and             

21  health management programs that shall be provided, as negotiated,           

22  by the pharmaceutical manufacturer or its agent instead of a                

23  supplemental rebate for the inclusion of certain products                   

24  manufactured by that pharmaceutical manufacturer on the                     

25  department's preferred drug list.  If the department negotiates a           

26  plan for the provision of services by the pharmaceutical                    

27  manufacturer instead of a supplemental rebate as provided under             

1   this subsection, the department shall provide a written report on           

2   the effectiveness of the programs being offered and the savings             

3   incurred as a result of those programs being provided instead of            

4   supplemental rebates to the members of the house and senate                 

5   appropriations subcommittees on community health.                           

6       (4) The department may hire or retain contractors,                          

7   subcontractors, advisors, consultants, and agents and may enter             

8   into contracts necessary or incidental to implement this part and           

9   carry out its responsibilities and duties.                                  

10      (5) The department may promulgate rules or medicaid policies                

11  to implement this part and to ensure compliance with the                    

12  published medicaid bulletin that initiated this initiative.

13  Sec. 9705.  (1) The Michigan pharmacy and therapeutics                      

14  committee, established by Executive Order No. 2001-8, is                    

15  transferred to the department as a type II transfer.  The                   

16  committee shall consist of 11 members appointed by the governor             

17  as follows:                                                                 

18      (a) Six physicians whose practice includes patients who are                 

19  eligible for medicaid.  The governor shall make this appointment            

20  from a list of physicians recommended by the Michigan state                 

21  medical society and the Michigan osteopathic association or their           

22  successor organizations.  The list of recommended physicians may            

23  include, but is not limited to, a physician with expertise in               

24  mental health, a physician who specializes in pediatrics, and a             

25  physician with experience in long-term care.                                

26      (b) Five pharmacists whose business includes prescriptions                  

27  from individuals who are eligible for medicaid.  The governor               

1   shall make this appointment from a list of pharmacists                      

2   recommended by the Michigan pharmacists association and the                 

3   Michigan retailers association or their successor organizations.            

4   The list of recommended pharmacists may include, but is not                 

5   limited to, a pharmacist with expertise in mental health drugs, a           

6   pharmacist who specializes in pediatrics, and a pharmacist with             

7   experience in long-term care.                                               

8       (2) If the governor declines to appoint, with or without                    

9   cause, any of the individuals recommended under subsection (1)(a)           

10  or (b), the respective organizations shall, as soon as possible,            

11  provide the governor with a new list of recommendations for his             

12  or her consideration.                                                       

13      (3) No member of the committee shall be employed by a                       

14  pharmaceutical manufacturer or have any interest directly or                

15  indirectly in the business of a pharmaceutical manufacturer which           

16  shall cause a conflict of interest.                                         

17      (4) Members of the committee shall serve a term of 2 years,                 

18  except as otherwise provided for members currently serving on the           

19  committee on the effective date of this section.  Members serving           

20  on the committee on the effective date of this section shall                

21  serve until the date on which their appointment would have                  

22  expired or until October 1, 2005, whichever occurs first.  A                

23  member serving on the committee on the effective date of this               

24  section whose term would have otherwise expired after October 1,            

25  2005 may serve the remainder of his or her term if he or she                

26  meets the qualifications established under this section.  The               

27  governor shall appoint an additional number of members to the               

1   committee necessary to reach 11 members as required under this              

2   section.  The governor shall designate 1 member of the committee            

3   to serve as the chairperson of the committee.  This member shall            

4   serve as chairperson at the pleasure of the governor.  An                   

5   individual appointed to serve as a physician or pharmacist member           

6   of the committee may serve only while maintaining his or her                

7   professional license in good standing.  An individual physician's           

8   or pharmacist's failure to maintain his or her professional                 

9   license in good standing immediately terminates that individual's           

10  membership on the committee.  One example of not maintaining a              

11  professional license in good standing is if the department                  

12  imposes a sanction under article 15 on a physician or pharmacist            

13  committee member.  A vacancy on the committee shall be filled in            

14  the same manner as the original appointment.  An individual                 

15  appointed to fill a vacancy created other than by expiration of a           

16  term shall be appointed for the unexpired term of the member whom           

17  he or she is to succeed in the same manner as the original                  

18  appointment.  A member may be reappointed for additional terms.             

19      (5) The committee has the powers, duties, and                               

20  responsibilities prescribed in Executive Order No. 2001-8 and               

21  shall operate pursuant to and in accordance with Executive Order            

22  No. 2001-8.                                                                 

23      (6) Members of the committee shall serve without                            

24  compensation, but shall be reimbursed for necessary travel and              

25  other expenses pursuant to the standard travel regulations of the           

26  department of management and budget.                                        

27      (7) The committee may promulgate rules governing the                        

1   organization, operation, and procedures of the committee.  A                

2   majority of the members serving constitute a quorum for the                 

3   transaction of business.  The committee shall approve a final               

4   action of the committee by a majority vote of the members.  A               

5   member of the committee must be present at a meeting of the                 

6   committee in order to vote.  A member shall not delegate his or             

7   her responsibilities to another individual.                                 

8       (8) The committee shall meet at the call of the chairperson                 

9   and as otherwise provided in the rules promulgated by the                   

10  committee or the department.  The committee may meet at any                 

11  location within this state.  A meeting of the committee is                  

12  subject to the open meetings act, 1976 PA 267, MCL 15.261 to                

13  15.275.  The committee shall post a notice of the meeting on the            

14  department's website 14 days before each meeting date.  By                  

15  January 31 of each year, the committee shall make available the             

16  committee's regular meeting schedule and meeting locations for              

17  that year on the department's website.  The committee may make              

18  inquiries, conduct studies and investigations, hold hearings, and           

19  receive comments from the public.

20  Sec. 9707.  The committee shall be advisory in nature and                   

21  shall assist the department with the following functions pursuant           

22  to applicable state and federal law:                                        

23      (a) Advise and make recommendations to the department for the               

24  inclusion of prescription drugs on the preferred drug list based            

25  on available information regarding the known potential impact on            

26  patient care, the known potential fiscal impact on related                  

27  medicaid covered services, and sound clinical evidence found in             

1   labeling, drug compendia, and peer-reviewed literature pertaining           

2   to use of the drug in the relevant population.                              

3       (b) Advise the department on issues affecting prescription                  

4   drug coverage for the department's various health care programs.            

5   (c) Recommend to the department guidelines for prescription                 

6   drug coverage under the department's various health care                    

7   programs.                                                                   

8       (d) Develop a process to collect and review information about               

9   new prescription drugs.  The department shall post this process             

10  and the necessary forms on the department's website.                        

11      (e) Recommend to the department strategies to improve the                   

12  initiative.

13  Sec. 9709.  (1) Except as otherwise provided by law or in                   

14  this part, a prescriber shall obtain prior authorization for                

15  drugs that are not included on the department's preferred drug              

16  list.  If the prescriber's prior authorization request is denied,           

17  the department or the department's agent shall inform the                   

18  requesting prescriber of his or her option to speak to the                  

19  agent's physician on duty regarding his or her request.  If                 

20  immediate contact with the agent's physician on duty cannot be              

21  arranged, the department or the department's agent shall inform             

22  the requesting prescriber of his or her right to request a                  

23  72-hour supply of the nonauthorized drug.  If contact with the              

24  agent's physician on duty cannot be arranged within 72 hours due            

25  to a legal holiday, the requesting prescriber may request a                 

26  longer supply of the nonauthorized drug.                                    

27      (2) The department or the department's agent shall provide                  

1   authorization for prescribed drugs that are not on its preferred            

2   drug list if the prescribing physician telephones the                       

3   department's agent or certifies in writing on a form as provided            

4   by the department that the drugs are being prescribed consistent            

5   with its licensed indications, that no other drugs included on              

6   the preferred drug list would offer a comparable benefit to the             

7   patient, and that the drugs are necessary for the continued                 

8   stabilization of the patient's medical condition as initial                 

9   therapy or if the prescribing physician telephones the                      

10  department's agent or certifies in writing on a form as provided            

11  by the department that following documented failures on earlier             

12  prescription regimens, in the physician's professional opinion,             

13  no other drug or drugs included on the preferred drug list can              

14  provide a comparable benefit.  Documentation of necessity or                

15  failures under this subsection or subsection (3) may be provided            

16  by telephone, facsimile, or electronic transmission.                        

17      (3) The department or the department's agent shall provide                  

18  authorization for a prescribed drug that is not on its preferred            

19  drug list if each of the following is met:                                  

20      (a) The prescribing physician has achieved advanced                         

21  specialization training and is certified as a specialist by a               

22  specialty board that is recognized by the American osteopathic              

23  association and the council on graduate medical education or                

24  their successor organizations and provides documentation of his             

25  or her certification.                                                       

26      (b) The prescribing physician described in subdivision (a)                  

27  telephones the department or certifies in writing each of the               

1   following:                                                                  

2                                                                                (i) The prescribed drug is being prescribed consistent with                         

3   its licensed indications or with generally accepted medical                 

4   practice as documented in a standard medical reference.                     

5       (ii) The prescribed drug is being used to treat a condition                  

6   that is normally treated within the prescribing physician's                 

7   specialty field.                                                            

8       (iii) No other drug or drugs included on the preferred drug                  

9   list can provide a comparable benefit.                                      

10      (4) A patient who is under a court order for a particular                   

11  prescription drug before becoming a recipient of medicaid is                

12  exempt from the prior authorization process and may continue on             

13  that medication for the duration of the order.                              

14      (5) Except as otherwise provided under this subsection, a                   

15  patient who is currently under medical treatment and whose                  

16  condition has been stabilized under a given prescription regimen            

17  before becoming a recipient of medicaid is exempt from the prior            

18  authorization process and may continue on that medication for the           

19  current course of treatment if without that prescription regimen            

20  the patient would suffer serious health consequences.  Unless a             

21  controlled substance is currently being prescribed under a                  

22  patient's hospice plan of care, a continuing prescription for a             

23  controlled substance under this subsection requires prior                   

24  authorization.  The department or the department's agent shall              

25  not deny a request for prior authorization of a controlled                  

26  substance under this subsection unless the department or the                

27  department's agent determines that the controlled substance or              

1   the dosage of the controlled substance being prescribed is not              

2   consistent with its licensed indications or with generally                  

3   accepted medical practice as documented in a standard medical               

4   reference.