"Eligible person", a resident of the commonwealth for not less than six months prior to application for enrollment in said program, who is 65 years of age or older, not eligible for pharmacy benefits or coverage under this chapter, who has exhausted, either on a quarterly or annual basis, pharmacy benefits or coverage available to such a resident from a Medicare supplemental insurance policy regulated by chapter 176K or any other third party payor and whose annual income does not exceed 200 per cent of the federal poverty level or the applicable income eligibility limits as provided herein; provided, however, that for the purposes of determining eligibility under this section, countable annual income shall not include the cost of Medicare Part B premiums unless the cost of said premiums is paid by the division.

4000-0450

4000-1450

Tobacco Settlement Fund 50.0%
Children's and Seniors' Health Care Assistance Fund 50.0%

SECTION 122. Section 16B of said chapter 118E, as so appearing, is hereby amended by striking out, in line 3, the words "thirty million dollars" and inserting in place thereof the following words:- $51,700,000, of which $30,000,000 shall be.

SECTION 123. The second paragraph of said section 16B of said chapter 118E is hereby amended by striking out the definition of "Eligible person", as amended by section 14 of chapter 68 of the acts of 1999, and inserting in place thereof the following definition:-

"Eligible person", a resident of the commonwealth

(a) who:

is 65 years of age or older; or

(I) does not work more than 40 hours per month, and (ii) meets (A) the disability requirements of the CommonHealth program, so called, under clause (h) of subsection (2) of section 9A, notwithstanding the income eligibility requirements under said clause (h), or (B) the disability requirements of the CommonHealth program, so called, under section 16, notwithstanding the income eligibility requirements under said clause, or (C) the disability requirements of the CommonHealth program, so called, under section 16A, and

(b) is not eligible for pharmacy benefits or coverage under this chapter other than under said clause (h), said section 16 or said section16A; and

(c) who has exhausted, either on a quarterly or annual basis, pharmacy benefits or coverage available to such a resident from a Medicare supplemental insurance policy regulated by chapter 176K or any other third party payor; and

(d) whose annual income does not exceed 200 per cent of the federal poverty level or the applicable income eligibility limits as provided in this section. For the purposes of determining eligibility under this section, countable annual income shall not include the cost of Medicare Part B premiums unless the cost of the premiums is paid by the division.

SECTION 124. Said second paragraph of said section 16B of said chapter 118E, as so appearing, is hereby further amended by striking out the definition of "Pharmacy assistance" and inserting in place thereof the following definition:- "Pharmacy assistance", the amount of $1,250 per fiscal year, or the actual amount of covered benefits per fiscal year, whichever is less, for each eligible person for the purchase of covered benefits.

SECTION 125. The tenth paragraph of said section 16B of said chapter 118E, as so appearing, is hereby amended by striking out the second sentence and inserting in place thereof the following sentence:- The income eligibility limit shall be not less than 188 per cent of the federal poverty level.

SECTION 126. Said tenth paragraph of said section 16B of said chapter 118E, as so appearing, is hereby further amended by striking out the fifth and sixth sentences.

SECTION 127. Said section 16B of said chapter 118E, as so appearing, is hereby amended by striking out the twelfth paragraph and inserting in place thereof the following paragraph:-

Unexpended amounts at the close of the accounts payable period established by section 13 of chapter 29 shall revert as unrestricted funds to the Children's and Seniors' Health Care Assistance Fund; provided, however, that the unexpended amounts shall be available for appropriation for pharmacy assistance benefits in the following fiscal years, subject to the provisions of section two FF of chapter 29. If pharmacy assistance payments in any fiscal year are projected to exceed the amounts appropriated for said program or, based on not less than nine months of claims and enrollment data for the current fiscal year, expenditures in the subsequent fiscal year are clearly projected to annualize beyond the expenditure cap imposed by this section, the division shall close open enrollment, institute waiting lists, or modify income eligibility levels and covered benefits to the amount appropriated therefor but, if such projection is based on expenditures in the subsequent fiscal year, the division shall not modify income eligibility levels or covered benefits until not earlier than the beginning of the subsequent fiscal year.

SECTION 128. Subsection (2) of section 16C of said chapter 118E, as so appearing, is hereby amended by adding the following sentence:- All children in the child health insurance program shall receive pharmacy benefits from the division of medical assistance.

- - - -

SECTION 271. Notwithstanding any other general or special law to the contrary, the secretary of administration and finance, in consultation with the secretary of the executive office of elder affairs, the commissioner of the divisional of medical assistance, the commissioner of the department of public health and the executive director of the group insurance commission, shall, within 60 days of the passage of this act, develop a program to aggregate the purchase of prescription drugs for the following individuals who are residents of the commonwealth: (i) participants in the Senior Pharmacy program, so-called, pursuant to section 16B of chapter 118E of the General Laws, (ii) enrollees in the Group Insurance program pursuant to chapter 32A of the General Laws, (iii) enrollees in the Medicaid program, pursuant to chapter 118E of the General Laws, (iv) any other individuals on whose behalf the state subsidizes, in whole or in part, the purchase of prescription drug benefits, and (v) uninsured or underinsured individuals, hereinafter, the "Coverage Group". In order to ensure the timely performance of his obligations under this act, the secretary of administration and finance may enter into an agreement with a not-for-profit entity for the purpose of developing and managing said program.

As part of said program, the secretary of administration and finance or his designee, shall prepare a request for proposals for the purpose of selecting one or more entities to provide prescription drug benefit management services to members of the Coverage Group. The selection process shall include criteria designed to select that entity best able to provide a prescription drug benefit program for the Coverage Group in a way that maximizes savings for the commonwealth and participants without reducing the quality of prescription drug benefits, if any, now being provided to the Coverage Group.

Prior to finally accepting a proposal to provide said prescription drug benefit management services, the secretary, in conjunction with the house and senate chairs of the joint committee on health care, the chair of the senate committee on ways and means and the chair of the house committee on ways and means, shall conduct a public hearing to consider testimony on the public benefits of all proposals submitted. The secretary and said chairs shall take oral and written testimony at the hearing. After the hearing, the secretary shall solicit from said chairs their input regarding the selection of one of the proposals. The secretary shall select a proposal, if any, only after making a determination in writing that it maximizes savings to the commonwealth, or provides other substantial public benefits, in a way that does not reduce the quality of existing prescription drug services for the Coverage Group. At least 30 days before the secretary's selection becomes final, he shall submit a report containing his selection, along with the basis therefor, to the house and senate chairs of the joint committee on health care, the chair of the senate committee on ways and means and the chair of the house committee on ways and means.

The accepted proposal shall not terminate any contract currently in existence with any agency or program affected hereunder which cannot be favorably renegotiated.

SECTION 313. Notwithstanding the provisions of any general or special law to the contrary, the division of medical assistance, in consultation with the department of public health, the executive office of elder affairs and the division of health care finance and policy, shall develop and implement a temporary program to provide catastrophic pharmacy assistance to seniors in the commonwealth to assist in the purchase of covered benefits. For the purpose of this section, "covered benefits" shall have the same meaning as that term is defined in paragraph 2 of section 16B of chapter 118E of the General Laws. The program shall be available to those residents of the commonwealth (a) who (i) are 65 years or older, or (ii) are disabled, pursuant to section 16B of chapter 118E of the General Laws, (b) whose income is no more than 500 per cent of the federal poverty level, and (c) who, in at least 3 of the 6 months prior to application, have spent at least 10 per cent of gross monthly income on prescription drugs, including any amounts subsidized pursuant to said section 16B of chapter 118E of the General Laws or any amounts expended on the applicant's behalf for prescription drugs under a Medicare health maintenance organization plan and (d) whose continuing prescription drug costs exceed 5 per cent of gross quarterly income for the duration of eligibility under this program. Priority shall be given, first, to those applicants with the greatest financial need, as determined by a review of the applicant's household assets, disposable household income and financial liabilities; and second to those applicants who received unlimited drug coverage on December 31, 1998 through a medicare health maintenance organization agreement which has been discontinued. Applicants shall be required to exhaust any other pharmacy benefits or coverage, including benefits under said section 16B of chapter 118E. There shall be no monetary limit on benefits. The division of medical assistance shall immediately enter into a contract with a public or private organization with expertise in marketing and outreach for the purpose of conducting outreach and publicity efforts to promote the program. Said contracting party shall work in conjunction with advocacy organizations for the elderly and the disabled, including but not limited to Health Care for All, the Massachusetts Senior Action Council, the American Association of Retired Persons and the Disability Law Center for the purpose of exploring creative and innovative ways to perform immediate outreach and marketing of this program. The division may expend not more than $200,000 for such contract from item 4000-1450 in section 2 of this act. The division shall file a report detailing such outreach and publicity efforts and the results of such efforts upon enrollment in the program with the house and senate committees on ways and means on or before 60 days after the passage of this act, and thereafter file quarterly reports until the program is no longer in effect. The division of medical assistance shall close enrollment in said program or take other necessary steps if the commissioner of said division determines that benefits are projected to exceed the amounts appropriated for the program. The program shall be in effect from January 1, 2000 until December 31, 2000.

Said commission shall examine the following eligibility requirements and program features of said subsidized prescription drug insurance program: (1) eligible persons may include individuals who are 65 years of age and older; and persons with disabilities who meet the definition of an eligible person pursuant to section 16B of chapter 118E; (2) required exhaustion of any other pharmacy benefits or coverage, including benefits under section 16B of chapter 118E; (3) deductibles, which may be on a sliding scale; (4) premiums on a sliding scale based on a recipient's income; (5) incentives for each eligible person to apply for benefits at the age of 65 and a penalty for later enrollment; and (6) copayment requirements.

In developing said program, the special commission shall also study relevant issues, including, but not limited to, the following: (1) the types and costs of all out-patient prescription drug coverage, including medigap supplemental plans, currently operating and available to the elderly and disabled in the commonwealth and the extent of coverage or benefits that each plan provides to the policyholder, including but not limited to, Medicare deductibles, coinsurance amounts, co-payments, or premiums required per plan, benefit limits per plan, legend and non-legend drugs covered per plan, and all other aspects of member benefits and regulations that the commission deems relevant to said study; (2) the implications of public financing of prescription drug benefits on the continued availability of private insurance prescription drug coverage in the commonwealth; (3) possible funding sources for said subsidized insurance program through publicly financed or subsidized sources, including, but not limited to, savings from the general fund, contributions by the federal government, or tobacco settlement payments, so-called; and (4) the potential fiscal impact of said special commission's recommendations on the MassHealth demonstration project and budget neutrality, established pursuant to sections 9A and 9B of chapter 118E of the General Laws.

Said commission shall consist of 21 members as follows: the senate and house chairs of the joint committee on health care, the chairs of the house and senate committees on ways and means or their designees; the secretary of health and human services; the secretary of elder affairs; the commissioner of medical assistance; the commissioner of health care finance and policy; the commissioner of public health; the commissioner of the division of insurance; the executive director of the board of pharmacy; a representative of the biotech council; a representative of Health Care for All; a representative of the Massachusetts Senior Action Council; a representative of the American Association of Retired Persons; a representative of the Alzheimer's Association; a representative of the Massachusetts Association of Health Maintenance Organizations; a representative of the Disability Law Center; and three persons appointed by the governor, one of whom shall be from higher education institutions and shall have expertise in public health or health care economics, one of whom shall represent the pharmaceutical industry, and one of whom shall be an actuary. Said commission shall be chaired jointly by the chairpersons of the house and senate committees on ways and means, or their designees.

Said commission may expend up to $200,000 for the services of an actuary to provide financial and technical assistance. Said expenses shall be allocated from item 4000-1450 of section 2 in this act. Said actuary shall provide the commission with detailed information including but not limited to the following: (1) an estimate of the total population of seniors and persons with disabilities eligible to participate in said program, delineated by income levels, as individuals and households; (2) an analysis of utilization and cost-per-recipient patterns projected for seniors and persons with disabilities; and (3) the projected cost of providing full or partial subsidies on a sliding scale to certain low income participants.

Said commission shall file a report with recommendations for a proposed program not later than April 30, 2000 with the house and senate committees on ways and means and the joint committee on health care