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2001 - 2002 LEGISLATURE
January 12, 2001 - Introduced by Senators Robson, Plache, Roessler, Shibilski,
Erpenbach, Chvala, Baumgart, George, Grobschmidt, Hansen, Jauch, Risser,
Wirch, Moen
and M. Meyer, cosponsored by Representatives Plouff,
Krusick, Schooff, Krug, Berceau, Black, Bock, Boyle, Carpenter, Coggs,
Colon, Cullen, Gronemus, Hebl, La Fave, Lassa, J. Lehman, Meyerhofer,
Miller, Plale, Pocan, Reynolds, Richards, Riley, Ryba, Sherman, Shilling,
Sinicki, Turner, Young, Wood, Schneider, Wasserman, Balow,
Morris-Tatum, Huber
and Staskunas. Referred to Committee on Health,
Utilities, Veterans and Military Affairs.
SB1,1,10 1An Act to create 20.435 (4) (bv), 20.435 (4) (j), 20.435 (4) (jb), 20.435 (4) (jd),
249.477 and 49.688 of the statutes; relating to: requiring pharmacies and
3pharmacists, as a condition of medical assistance participation, to charge
4elderly persons for prescription drugs no more than specific amounts;
5specifying requirements for rebate agreements between the department of
6health and family services and drug manufacturers; requiring the department
7of health and family services to seek a waiver to provide medical assistance
8eligibility to certain persons for purposes of a prescription drug benefit;
9requiring the exercise of rule-making authority; making appropriations; and
10providing 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.

This bill provides that, beginning March 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 $20 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 person's eligible family
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 drug 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
other available coverage for prescription drugs, the program does not apply to the
costs for prescription drugs available under that other 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 medical assistance 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 medical assistance 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 2001-01 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, under the bill, DHFS must request from the secretary of the federal
department of health and human services a waiver of federal medicaid laws to permit
DHFS to conduct a project to expand MA eligibility for persons who are eligible for
and enrolled in Medicare and persons whose annual household incomes do not
exceed 300% of the federal poverty line for a family the size of the persons' eligible
families. Under the waiver, the expanded MA eligibility entitles an eligible person,
after paying a $20 annual enrollment fee, to purchase a prescription drug for a
copayment, as specified in the bill, for that prescription drug. The pharmacy or
pharmacist who sells the drug at this reduced price receives reimbursement for the
difference between the copayment and the medical assistance reimbursement
amount from DHFS, from moneys received by DHFS under rebate agreements with
drug manufacturers.
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:
SB1, s. 1 1Section 1. 20.435 (4) (bv) of the statutes is created to read:
SB1,4,3
120.435 (4) (bv) Prescription drug assistance for elderly; aids. A sum sufficient
2for payment to pharmacies and pharmacists under s. 49.688 (7) for prescription drug
3assistance for elderly persons.
SB1, s. 2 4Section 2. 20.435 (4) (j) of the statutes is created to read:
SB1,4,85 20.435 (4) (j) Prescription drug assistance for elderly; manufacturer rebates.
6All moneys received from rebate payments by manufacturers under s. 49.688 (6), to
7be used for payment to pharmacies and pharmacists under s. 49.688 (7) for
8prescription drug assistance for elderly persons.
SB1, s. 3 9Section 3. 20.435 (4) (jb) of the statutes is created to read:
SB1,4,1210 20.435 (4) (jb) Prescription drug assistance for elderly; enrollment fees. All
11moneys received from payment of enrollment fees under s. 49.688 (3), to be used for
12administration of the program under s. 49.688.
SB1, s. 4 13Section 4. 20.435 (4) (jd) of the statutes is created to read:
SB1,4,1714 20.435 (4) (jd) Prescription drug assistance project; enrollment fees. All moneys
15received from payment of enrollment fees under s. 49.477 (2), to be used for
16administration of the program under s. 49.477. This paragraph applies only if a
17waiver, under 42 USC 1315 (a), is granted as requested under s. 49.477 (2).
SB1, s. 5 18Section 5. 49.477 of the statutes is created to read:
SB1,4,19 1949.477 Prescription drug assistance project. (1) In this section:
SB1,4,2120 (a) "Medicare" means coverage under part A or part B of Title XVIII of the
21federal Social Security Act, 42 USC 1395 to 1395y.
SB1,4,2322 (b) "Poverty line" means the nonfarm federal poverty line for the continental
23United States, as defined by the federal department of labor under 42 USC 9902 (2).
SB1,5,224 (c) "Prescription drug" means a prescription drug, as defined in s. 450.01 (20),
25that is included in the drugs specified under s. 49.46 (2) (b) 6. h. and that is

1manufactured by a manufacturer that enters into a rebate agreement in force under
2sub. (4).
SB1,5,33 (d) "Prescription order" has the meaning given in s. 450.01 (21).
SB1,5,12 4(2) The department shall request from the secretary of the federal department
5of health and human services a waiver, under 42 USC 1315 (a), of federal medicaid
6laws necessary to permit the department to conduct a project to expand eligibility for
7medical assistance to include individuals who are eligible for and enrolled in
8medicare and individuals whose annual household incomes, as determined by the
9department, do not exceed 300% of the federal poverty line for a family the size of the
10individual's eligible family. Eligibility for medical assistance under this subsection
11entitles an individual, after payment of a $20 annual enrollment fee, only to the
12discounted purchase of prescription drugs as specified under sub. (3).
SB1,5,20 13(3) Under the project under sub. (2), as a condition of participation by a
14pharmacy or pharmacist in the program under s. 49.45, 49.46, or 49.47, the
15pharmacy or pharmacist may not charge an individual who is eligible for medical
16assistance under sub. (2), who is not enrolled in the program under s. 49.688, and who
17presents a valid prescription order an amount for a prescription drug under the order
18that exceeds the amount obtained by subtracting the amount under sub. (4) from the
19medical assistance reimbursement amount for the drug, as determined by the
20department.
SB1,6,4 21(4) From the appropriations under s. 20.435 (4) (b) and (o), the department
22shall pay the pharmacy or pharmacist for a prescription drug purchased as specified
23under sub. (3) an amount that results from applying to the medical assistance
24reimbursement rate amount for the drug the percentage that results from dividing
25the revenue for the prescription drug that the department received the previous year

1under the rebate agreement under 42 USC 1396r-8 with a prescription drug
2manufacturer that sells the prescription drug for prescribed use in this state by the
3total amount of medical assistance expenditures for prescription drugs for the
4previous year, as determined by the department.
SB1,6,9 5(5) The department may not implement the program under this section unless
6a waiver that is consistent with all of the provisions of this section is granted and in
7effect. If the department receives the waiver, at the end of the period during which
8the waiver remains in effect the department shall request any available extension
9of the waiver.
SB1, s. 6 10Section 6. 49.688 of the statutes is created to read:
SB1,6,12 1149.688 Prescription drug assistance for elderly persons. (1) In this
12section:
SB1,6,1313 (a) "Generic name" has the meaning given in s. 450.12 (1) (b).
SB1,6,1514 (b) "Poverty line" means the nonfarm federal poverty line for the continental
15United States, as defined by the federal department of labor under 42 USC 9902 (2).
SB1,6,1916 (c) "Prescription drug" means a prescription drug, as defined in s. 450.01 (20),
17that is included in the drugs specified under s. 49.46 (2) (b) 6. h. and that is
18manufactured by a drug manufacturer that enters into a rebate agreement in force
19under sub. (6).
SB1,6,2020 (d) "Prescription order" has the meaning given in s. 450.01 (21).
SB1,6,2221 (e) "Program payment rate" means the rate of payment made for the identical
22drug specified under s. 49.46 (2) (b) 6. h., plus 5%.
SB1,6,24 23(2) (a) A person to whom all of the following applies is eligible to purchase a
24prescription drug for the amounts specified in sub. (5) (a) 1. and 2.:
SB1,6,2525 1. The person is a resident, as defined in s. 27.01 (10) (a), of this state.
SB1,7,1
12. The person is at least 65 years of age.
SB1,7,22 3. The person is not a recipient of medical assistance.
SB1,7,53 4. The person's annual household income, as determined by the department,
4does not exceed 300% of the federal poverty line for a family the size of the person's
5eligible family.
SB1,7,66 5. The person pays the program enrollment fee specified in sub. (3) (a).
SB1,7,137 (b) A person to whom par. (a) 1. to 3. and 5. applies, but whose annual household
8income, as determined by the department, exceeds 300% of the federal poverty line
9for a family the size of the persons' eligible family, is eligible to purchase a
10prescription drug at the amounts specified in sub. (5) (a) 4. only during the remaining
11amount of any 12-month period in which the person has first paid the annual
12deductible specified in sub. (3) (b) 2. a. in purchasing prescription drugs at the retail
13price and has then paid the annual deductible specified in sub. (3) (b) 2. b.
SB1,7,14 14(3) Program participants shall pay all of the following:
SB1,7,1515 (a) For each 12-month benefit period, a program enrollment fee of $20.
SB1,7,1916 (b) 1. For each 12-month benefit period, for a person specified in sub. (2) (a),
17a deductible for prescription drugs of $500, except that a person whose annual
18household income, as determined by the department, is 175% or less of the federal
19poverty line for a family the size of the person's eligible family pays no deductible.
SB1,7,2120 2. For each 12-month benefit period, for a person specified in sub. (2) (b), a
21deductible for prescription drugs that equals all of the following:
SB1,7,2322 a. The difference between the person's annual household income and 300% of
23the federal poverty line for a family the size of the person's eligible family.
SB1,7,2424 b. Five hundred dollars.
SB1,8,2
1(c) After payment of any applicable deductible under par. (b), all of the
2following:
SB1,8,33 1. A copayment of $5 for each prescription drug that bears only a generic name.
SB1,8,54 2. A copayment of $10 for each prescription drug that does not bear only a
5generic name.
SB1,8,96 (d) Notwithstanding s. 49.002, if a person who is eligible under this section has
7other available coverage for payment of a prescription drug, this section applies only
8to costs for prescription drugs for the person that are not covered under the person's
9other available coverage.
SB1,8,15 10(4) The department shall devise and distribute a form for application for the
11program under sub. (2), shall determine eligibility for each 12-month benefit period
12of applicants and shall issue to eligible persons a prescription drug card for use in
13purchasing prescription drugs, as specified in sub. (5). The department shall
14promulgate rules that specify the criteria to be used to determine household income
15under sub. (2) (a) 4. and (b) and (3) (b) 1.
SB1,8,20 16(5) (a) Beginning March 1, 2002, as a condition of participation by a pharmacy
17or pharmacist in the program under s. 49.45, 49.46, or 49.47, the pharmacy or
18pharmacist may not charge a person who presents a valid prescription order and a
19card indicating that he or she meets eligibility requirements under sub. (2) (a) an
20amount for a prescription drug under the order that exceeds the following:
SB1,8,2321 1. For a deductible, as specified in sub. (3) (b) 1. and 2. b., the program payment
22rate, plus a dispensing fee that is equal to the dispensing fee permitted to be charged
23for prescription drugs for which coverage is provided under s. 49.46 (2) (b) 6. h.
SB1,9,3
12. After any applicable deductible under subd. 1. is charged, the copayment, as
2applicable, that is specified in sub. (3) (c) 1. or 2. No dispensing fee, as specified under
3subd. 1., may be charged to a person under this subdivision.
SB1,9,44 3. For a deductible, as specified in sub. (3) (b) 2. a., the retail price.
SB1,9,75 4. After the deductible under subd. 3. is charged, the copayment, as applicable,
6that is specified in sub. (3) (c) 1. or 2. No dispensing fee, as specified under subd. 1.,
7may be charged to a person under this subdivision.
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