2001 - 2002 LEGISLATURE
February 19, 2001 - Introduced by Representatives Krusick, Balow, Berceau,
Black, Bock, Boyle, Carpenter, Coggs, Colon, Gronemus, Hebl, Huber,
Hubler, Kreuser, Krug, La Fave, Lassa, J. Lehman, Meyerhofer, Miller,
Morris-Tatum, Plale, Plouff, Pocan, Reynolds, Richards, Riley, Ryba,
Schneider, Schooff, Seratti, Sherman, Shilling, Sinicki, Staskunas,
Steinbrink, Travis, Turner, Wasserman, Williams, Wood and Young,
cosponsored by Senators Robson, Breske, Burke, Decker, Erpenbach,
George, Grobschmidt, A. Lasee, Plache and Risser, by request of Coalition of
Wisconsin Aging Groups, American Association of Retired Persons, Wisconsin
Citizen Action, Franklin Senior Citizens, Medical College of Wisconsin,
Milwaukee Police Association, Oilgear Retirees, Wisconsin Alzheimers
Association Chapter Network, Wisconsin Council of Senior Citizens,
Wisconsin Federation of Nurses and Health Professionals, Wisconsin
Homecare Organization, Wisconsin Retired Educators Association,. Referred
to Committee on Health.
1An Act to amend
49.47 (4) (b) 2m. b., 49.47 (4) (b) 2r., 49.47 (4) (b) 2w., 49.47 (4) 2
(b) 3., 49.47 (4) (c) 1., 49.47 (4) (c) 3. and 49.47 (4) (i) 2. (intro.); and to create
20.435 (4) (bv), 20.435 (4) (j), 20.435 (4) (jb), 49.47 (4) (aq), 49.688 and 100.31 4
(2m) of the statutes; relating to: expanding medical assistance income
5eligibility requirements for individuals who are elderly, blind, or disabled;
6requiring pharmacies and pharmacists, as a condition of medical assistance
7participation, to charge elderly persons for prescription drugs no more than
8specific amounts; specifying requirements for rebate agreements between the
9department of health and family services and drug manufacturers; requiring
10an annual report on the sale and pricing of certain drugs and programs that
1offer discounts on drugs to consumers; requiring the exercise of rule-making
2authority; making appropriations; and providing penalties.
Analysis by the Legislative Reference Bureau
Under current state law, pharmacies and pharmacists that are certified
providers of medical assistance (MA) services are reimbursed, at a rate established
by the department of health and family services (DHFS), for providing certain
prescription drugs to MA recipients. Under current federal law, persons entitled to
coverage under part B of medicare do not receive coverage for prescription drugs for
outpatient care as a benefit.
Under current law, an individual who is 65 years of age or older, blind, or
permanently disabled, is eligible to receive MA if he or she meets certain income and
asset requirements. Currently, to satisfy the income requirements for MA eligibility,
an individual who is 65 years of age or older, blind, or permanently disabled must
have an income that does not exceed 133.33% of the maximum payment amount
under the former aid to families with dependent children (AFDC) program or the
combined benefit amount available under the federal supplemental security income
Currently, a seller who sells drugs that are on the list of therapeutically
equivalent drugs published by the federal food and drug administration to any
purchaser in this state, who in turn sells the drugs to consumers, must offer the drugs
to all such purchasers. These sellers must also offer the same prices, rebates, or
similar incentives for purchasing these drugs to all of these purchasers.
Beginning January 1, 2002, this bill increases to 100% of the federal poverty
level the maximum income level for eligibility for MA for individuals 65 years of age
or older, blind, or permanently disabled.
The bill provides that, beginning January 1, 2002, persons who have applied
for and have been found by DHFS to be eligible for prescription drug assistance and
who have paid an annual enrollment fee of $25 may use a card, issued by DHFS, to
obtain certain prescription drugs for outpatient care at a rate that is not more than
the medical assistance rate plus 5%, plus a pharmacy dispensing fee. After an
eligible person has paid a deductible by expending $500 in a 12-month period for
prescription drugs at this reduced rate, the person may obtain additional
prescription drugs in that period by paying a copayment of $5 for each generic drug
and a copayment of $10 for each drug that is not a generic drug. Persons who are
eligible to obtain prescription drugs for these reduced charges are state residents
who are at least 65 years of age, are not MA recipients, and have household incomes,
as determined by DHFS, that do not exceed 300% of the federal poverty line for a
family the size of the persons' eligible families. Persons who are otherwise eligible
but who have household incomes that do not exceed 175% of the federal poverty line
for a family the size of the persons' eligible families may obtain prescription drugs
by paying the $5 and $10 copayments without first paying the $500 deductible.
Persons who are otherwise eligible but who have household incomes that exceed
300% of the federal poverty line for a family the size of the persons' eligible families
must first, in a 12-month period, pay for prescription drugs, at market rate, a
deductible that equals the difference between the person's annual household income
and 300% of the federal poverty line; after this is paid, the persons must pay an
additional $500 deductible for prescription drugs at the reduced rate; and the
persons may then obtain additional prescription drugs in the remaining amount of
the 12-month period by paying the generic and nongeneric copayments. As a
condition of participation by a pharmacy or pharmacist in the MA program, the
pharmacy or pharmacist may not charge persons who are eligible for prescription
drug assistance more than these amounts; as a part of the costs chargeable for the
deductible, the pharmacy or pharmacist may include a dispensing fee but may not
charge a dispensing fee after the deductible is met. If a person who is eligible has
available coverage for prescription drugs, the program does not apply to the costs for
prescription drugs available under that coverage.
Under the bill, DHFS or an entity with which DHFS contracts must provide to
drug manufacturers material designed for use in entering into rebate agreements
that are modeled on federal medicaid rebate agreements, under which the
manufacturer must make payments to the state treasurer for deposit in the general
fund for the manufacturer's drugs that are prescribed and purchased under the
program. The amount of the rebate payment under the agreement is required to be
determined by the method that is specified under the federal medicaid rebate
agreements. The amounts of the rebate payments must, in turn, together with
general purpose revenues under a sum sufficient appropriation created under the
bill, be paid by DHFS to pharmacies or pharmacists that have reduced charges for
prescription drugs for the eligible persons. Payment is at the MA rate plus 5%, minus
any copayment made, plus a dispensing fee.
Under the bill, DHFS is authorized to enter into a contract with an entity to
perform DHFS' duties and exercise its powers, other than rule making, under the
prescription drug assistance program. DHFS must, under the bill, promulgate rules
that specify the criteria to be used to determine household income for persons eligible
for prescription drug assistance. Prescription drugs for which the reduced charges
must be made are those that are available as an MA benefit and that are
manufactured by a manufacturer that enters into a rebate agreement with DHFS.
DHFS must calculate and transmit to pharmacies and pharmacists that participate
in the MA program the prices at the MA rate plus 5% that must be charged to certain
eligible persons in meeting the deductible for prescription drugs and must
periodically update this information and transmit the updated information to
pharmacies and pharmacists. DHFS must monitor compliance by pharmacies and
pharmacists with the requirement to charge eligible persons for the specified
prescription drugs at the reduced amounts and annually report to the legislature
concerning the compliance. DHFS also must promulgate rules that establish
prohibitions against fraud that are substantially similar to MA fraud provisions; the
bill specifies penalties applicable to violations of these prohibitions.
If federal law is changed to provide coverage for outpatient prescription drugs
as a benefit under medicare or another program, DHFS must provide a report to the
legislature that analyzes the differences between the federal program and the
program under the bill and that provides recommendations concerning alignment,
if any, of the differences. The bill appropriates $1,000,000 in general purpose
revenues in fiscal year 2001-02 to DHFS for administration of the program. Further,
the bill appropriates $1,000,000 in general purpose revenues to the joint committee
on finance and authorizes DHFS to submit a proposal for review and approval by the
department of administration and by the joint committee on finance for expenditure
of these moneys.
Lastly, the bill requires that the department of agriculture, trade and consumer
protection (DATCP) prepare an annual report to be submitted to the governor and
the legislature on how sellers have complied with requirements and on whether state
retailers have passed on to consumers any savings resulting from these pricing
requirements. The report must also describe programs that offer discounts on drugs
to consumers and DATCP must publicize these programs to consumers.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB132, s. 1
20.435 (4) (bv) of the statutes is created to read:
(bv) Prescription drug assistance for elderly; aids.
A sum sufficient 3
for payment to pharmacies and pharmacists under s. 49.688 (7) for prescription drug 4
assistance for elderly persons.
AB132, s. 2
20.435 (4) (j) of the statutes is created to read:
(j) Prescription drug assistance for elderly; manufacturer rebates. 7
All moneys received from rebate payments by manufacturers under s. 49.688 (6), to 8
be used for payment to pharmacies and pharmacists under s. 49.688 (7) for 9
prescription drug assistance for elderly persons.
AB132, s. 3
20.435 (4) (jb) of the statutes is created to read:
(jb) Prescription drug assistance for elderly; enrollment fees.
moneys received from payment of enrollment fees under s. 49.688 (3), to be used for 13
administration of the program under s. 49.688.
AB132, s. 4
49.47 (4) (aq) of the statutes is created to read:
(aq) 1. Subject to subd. 2., an individual who does not meet the 3
limitation on income under par. (c) is eligible for medical assistance if the individual's 4
income does not exceed 100% of the federal poverty level, and the individual is 65 5
years of age or older or is blind or totally and permanently disabled, as defined under 6
federal Title XVI.
2. If a federal waiver is necessary to provide medical assistance to individuals 8
specified in subd. 1., the department shall request a waiver from the secretary of the 9
federal department of health and human services before providing medical 10
assistance under this paragraph.
AB132, s. 5
49.47 (4) (b) 2m. b. of the statutes is amended to read:
(b) 2m. b. For persons who are eligible under par. (a) 3. or 4. or (aq)
motor vehicles are exempt from consideration as an asset to the same extent as 14
provided under 42 USC 1381
AB132, s. 6
49.47 (4) (b) 2r. of the statutes is amended to read:
(b) 2r. For a person who is eligible under par. (a) 3. or 4. or (aq)
, the 17
value of any burial space or agreement representing the purchase of a burial space 18
held for the purpose of providing a place for the burial of the person or any member 19
of his or her immediate family.
AB132, s. 7
49.47 (4) (b) 2w. of the statutes is amended to read:
(b) 2w. For a person who is eligible under par. (a) 3. or 4. or (aq)
, life 22
insurance with cash surrender values if the total face value of all life insurance 23
policies is not more than $1,500.
AB132, s. 8
49.47 (4) (b) 3. of the statutes is amended to read:
(b) 3. For a person who is eligible under par. (a) 3. or 4. or (aq)
, funds 2
set aside to meet the burial and related expenses of the person and his or her spouse 3
in an amount not to exceed $1,500 each, minus the sum of the cash value of any life 4
insurance excluded under subd. 2w. and the amount in any irrevocable burial trust 5
under s. 445.125 (1) (a).
AB132, s. 9
49.47 (4) (c) 1. of the statutes is amended to read:
(c) 1. Except as provided in par. pars.
(am) and (aq)
and as limited by 8
subd. 3., eligibility exists if income does not exceed 133 1/3% 133.33%
of the 9
maximum aid to families with dependent children payment under s. 49.19 (11) for 10
the applicant's family size or the combined benefit amount available under 11
supplemental security income under 42 USC 1381
and state supplemental 12
aid under s. 49.77 whichever is higher. In this subdivision "income" includes earned 13
or unearned income that would be included in determining eligibility for the 14
individual or family under s. 49.19 or 49.77, or for the aged, blind
or disabled under 1542 USC 1381
. "Income" does not include earned or unearned income which 16
would be excluded in determining eligibility for the individual or family under s. 17
49.19 or 49.77, or for the aged, blind,
or disabled individual under 42 USC 1381
AB132, s. 10
49.47 (4) (c) 3. of the statutes is amended to read:
(c) 3. Except as provided in par. pars.
(am) and (aq)
, no person is 21
eligible for medical assistance under this section if the person's income exceeds the 22
maximum income levels that the U.S. department of health and human services sets 23
for federal financial participation under 42 USC 1396b
AB132, s. 11
49.47 (4) (i) 2. (intro.) of the statutes is amended to read:
(i) 2. (intro.) Notwithstanding par. (b) 2r. and 3., a person who is 2
described in par. (a) 3. or 4. or (aq)
is not eligible for benefits under this section if any 3
of the following criteria is met:
AB132, s. 12
49.688 of the statutes is created to read:
549.688 Prescription drug assistance for low-income elderly persons.
In this section:
(a) "Generic name" has the meaning given in s. 450.12 (1) (b).
(b) "Poverty line" means the nonfarm federal poverty line for the continental 9
United States, as defined by the federal department of labor under 42 USC 9902
(c) "Prescription drug" means a prescription drug, as defined in s. 450.01 (20), 11
that is included in the drugs specified under s. 49.46 (2) (b) 6. h. and that is 12
manufactured by a manufacturer that enters into a rebate agreement in force under 13
(d) "Prescription order" has the meaning given in s. 450.01 (21).
(e) "Program payment rate" means the rate of payment made for the identical 16
drug specified under s. 49.46 (2) (b) 6. h., plus 5%.
(a) A person to whom all of the following applies is eligible to purchase a 18
prescription drug for the amounts specified in sub. (5) (a) 1. and 2.: