LRB-4083/3
DAK:wlj:km
1999 - 2000 LEGISLATURE
February 10, 2000 - Introduced by Representatives Huber, Krusick, Underheim,
Meyer, Musser, Black, Bock, Boyle, Carpenter, Colon, Cullen, Hasenohrl,
Kreuser, Lassa, La Fave, J. Lehman, Meyerhofer, Miller, Plale, Plouff,
Reynolds, Ryba, Sherman, Staskunas, Waukau
and Young, cosponsored by
Senators Decker, Breske, Moen, Roessler, Plache, Erpenbach, Rosenzweig,
Shibilski, Grobschmidt, Baumgart, Risser
and Darling. Referred to
Committee on Health.
AB745,1,4 1An Act to create 20.435 (4) (bv), 20.435 (4) (j), 49.688 and 227.01 (13) (zL) of the
2statutes; relating to: prescription drug assistance for elderly persons,
3requiring the exercise of rule-making authority, providing an exemption from
4rule-making procedures, 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 services are reimbursed for the provision of certain
prescription drugs to medical assistance recipients at a rate established by the
department of health and family services (DHFS). 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 creates a program for prescription drug assistance for elderly persons
in DHFS and appropriates $6,600,000 in general purpose revenues in fiscal year
2000-01 for the program. Under the program, beginning January 1, 2001, state
residents who are aged at least 65 years, who are ineligible for medical assistance
and whose gross incomes are not more than $15,244 or, if married, are not more than
$20,461 per couple, as annually indexed for inflation, may apply for assistance in
paying for prescription drugs. Prescription drugs for which a program participant
may receive coverage are those prescription drugs that are designated by DHFS to
be for a chronic condition, as defined in the bill. Participants in the prescription drug
assistance program must pay a 12-month enrollment fee of between $25 and $200,
based on the participant's gross income, as specified by DHFS by rule, and 50% of the

cost of each prescription drug, at the rate under which pharmacists are reimbursed
under the medical assistance program. Under the program, DHFS is the payer of
last resort for coverage for prescription drugs and must reimburse pharmacist
providers at the rate under which pharmacists are reimbursed under the medical
assistance program. In order for drugs manufactured by a manufacturer doing
business in this state to be included in the program, the manufacturer must enter
with DHFS into a rebate agreement that is modeled on rebate agreements under
federal medicaid law. The rebate agreement must provide that the manufacturer
make payments to DHFS each calendar quarter or as scheduled by DHFS and that
the rebate payment amounts be determined by the method specified in federal
medicaid law. The bill creates penalties for fraud that are identical to those under
the medical assistance program with respect to receipt of payment or receipt of the
benefit under the program. The bill appropriates $1,000,000 in general purpose
revenues in fiscal year 1999-2000 to the general program supplementation
appropriation account of the joint committee on finance (JCF) and requires DHFS
to submit to JCF a plan for expenditure of these funds for administration of the
prescription drug assistance program.
In addition, if the amount of funds in the general purpose revenues
appropriation account created for the program is insufficient to meet program
demand, the bill requires DHFS to request a supplement from the general program
supplementation appropriation account of JCF and to submit to JCF a plan for the
expenditure. If the cochairpersons of JCF do not notify the secretary of health and
family services of the committee's intent to schedule a meeting to review either plan,
JCF must supplement the DHFS general program operations appropriation account
as provided in the DHFS plan. If the cochairpersons of JCF notify the secretary of
health and family services that JCF intends to schedule a meeting to review either
plan, the DHFS appropriation account may be supplemented only as approved by
JCF.
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:
AB745, s. 1 1Section 1. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
2the following amounts for the purposes indicated: - See PDF for table PDF
AB745, s. 2 1Section 2. 20.435 (4) (bv) of the statutes is created to read:
AB745,3,42 20.435 (4) (bv) Prescription drug assistance for elderly; aids. As a continuing
3appropriation, the amounts in the schedule for the program for prescription drug
4assistance for elderly persons under s. 49.688.
AB745, s. 3 5Section 3. 20.435 (4) (j) of the statutes is created to read:
AB745,3,96 20.435 (4) (j) Prescription drug assistance for elderly; enrollment fees;
7manufacturer rebates.
All moneys received from payments of program enrollment
8fees under s. 49.688 (3) (b) 1. and rebate payments by manufacturers under s. 49.688
9(5), to be used for prescription drug assistance for elderly persons under s. 49.688.
AB745, s. 4 10Section 4. 49.688 of the statutes is created to read:
AB745,3,12 1149.688 Prescription drug assistance for elderly persons. (1) In this
12section:
AB745,3,1713 (a) "Chronic condition" means a cardiac condition, high blood pressure,
14diabetes, arthritis, blood coagulation or hematologic disease, hyperlipidemia,
15osteoporosis, chronic obstructive pulmonary disease, asthma, incontinence, thyroid
16disease, glaucoma, Alzheimer's disease, Parkinson's disease, multiple sclerosis,
17amyotrophic lateral sclerosis (Lou Gehrig's disease), ulcers, seizures and depression.
AB745,4,2
1(b) "Gross income" means all income, from whatever source derived and in
2whatever form realized, whether in money, property or services.
AB745,4,33 (c) "Prescription drug" has the meaning given in s. 450.01 (20).
AB745,4,14 4(2) From the appropriations under s. 20.435 (4) (bv) and (j), beginning January
51, 2001, the department shall reimburse pharmacists for the provision of
6prescription drugs designated by the department for a chronic condition and for
7which the manufacturer has entered into a rebate agreement with the department
8under sub. (5), to persons who meet criteria for eligibility under sub. (3). The
9department is the payer of last resort for coverage for prescription drugs under this
10subsection. The payment rate for provider reimbursement shall be the allowable
11charges paid under s. 49.46 (2) (b) 6. h. for prescription drugs. The department shall
12maintain, or contract for the maintenance of, a toll-free telephone number at
13department headquarters to provide information about the program under this
14subsection, including information about application procedures.
AB745,4,16 15(3) (a) An individual is eligible for participation in the program under sub. (2)
16if the individual meets all of the following requirements:
AB745,4,1917 1. The individual is at least 65 years of age, is a resident, as defined in s. 27.01
18(10) (a), of this state and is ineligible for medical assistance under s. 49.46, 49.465,
1949.468 or 49.47.
AB745,4,2220 2. If single, the individual's gross income does not exceed $15,244 or, if married,
21the couple's gross income does not exceed $20,461. These limitations shall be
22annually adjusted as specified in sub. (4).
AB745,4,2323 (b) Program participants shall pay all of the following:
AB745,5,3
11. Upon enrolling and every 12 months thereafter, to the department, a
2program enrollment fee of between $25 and $200, based on the participant's gross
3income, as specified by the department by rule.
AB745,5,54 2. To the selling pharmacy or pharmacist, a copayment of 50% for each
5prescription drug provided under the program.
AB745,5,76 (c) No program participant may be required to demonstrate that he or she has
7no disability insurance policy, as defined in s. 632.895 (1) (a).
AB745,5,13 8(4) Beginning by January 1, 2001, the department shall annually by January
91 increase the dollar amounts specified under sub. (3) (a) 2. by a percentage equal to
10the percentage change between the U.S. consumer price index for all consumers, U.S.
11city average, for the month of December of the previous year and the U.S. consumer
12price index for all urban consumers, U.S. city average, for the month of December of
13the year before the previous year, as determined by the federal department of labor.
AB745,5,18 14(5) A drug manufacturer that sells drugs for prescribed use in this state shall,
15as a condition of inclusion of those drugs in the program under this section, enter
16with the department into a rebate agreement that is modeled on the rebate
17agreement specified under 42 USC 1396r-8. The rebate agreement shall include all
18of the following as requirements:
AB745,5,2019 (a) That the manufacturer shall make rebate payments to the department each
20calendar quarter or according to a schedule established by the department.
AB745,5,2221 (b) That the amount of the rebate payment shall be determined by the method
22specified in 42 USC 1396r-8 (c).
AB745,5,25 23(6) The department shall promulgate rules specifying the amount, between
24$25 and $200, of program enrollment fee required of a program participant, based
25on the participant's gross income.
AB745,6,1
1(7) (a) No person, in connection with the program under this section, may:
AB745,6,32 1. Knowingly and wilfully make or cause to be made a false statement or
3representation of a material fact in an application for a benefit or payment.
AB745,6,64 2. Knowingly and wilfully make or cause to be made a false statement or
5representation of a material fact for use in determining rights to a benefit or
6payment.
AB745,6,127 3. Having knowledge of the occurrence of an event that affects the initial or
8continued right to a benefit or payment or the initial or continued right to the benefit
9or payment of any other individual on whose behalf the person has applied for or is
10receiving the benefit or payment, conceal or fail to disclose the event with an intent
11to secure fraudulently the benefit or payment either in a greater amount or quantity
12than is due or when no such benefit or payment is authorized.
AB745,6,1613 4. Having made application to receive a benefit or payment for the use and
14benefit of another and having received it, knowingly and wilfully convert the benefit
15or payment or any part of it to a use other than for the use and benefit of the other
16individual.
AB745,6,1717 (b) Violators of this subsection are subject to the following:
AB745,6,2218 1. In the case of a false statement or representation, concealment of or failure
19to disclose an event or conversion by any person in connection with the furnishing
20by that person of a prescription drug for which payment is or may be made, a person
21convicted of violating this subsection may be fined not more than $25,000 or
22imprisoned for not more than 7 years and 6 months or both.
AB745,7,223 2. In the case of a false statement or representation, concealment of or failure
24to disclose an event or conversion by any person other than as specified in subd. 1.,

1a person convicted of violating this subsection may be fined not more than $10,000
2or imprisoned for not more than one year in the county jail or both.
AB745,7,113 (c) The state has a cause of action for relief against a person who is convicted
4under this subsection, in an amount 3 times the amount of actual damages sustained
5as a result of any excess payments made in connection with the offense for which the
6conviction was obtained. Proof by the state of a conviction under this section in a civil
7action is conclusive regarding the state's right to damages and the only issue in
8controversy is the amount, if any, of the actual damages sustained. Actual damages
9consist of the total amount of excess payments, any part of which is paid by state
10funds. Upon receipt of a motion filed by the state in expedition of the action, the
11presiding judge shall expedite the action.
AB745, s. 5 12Section 5. 227.01 (13) (zL) of the statutes is created to read:
AB745,7,1413 227.01 (13) (zL) Designates prescription drugs for a chronic condition, under
14s. 49.688 (2).
AB745, s. 6 15Section 6. Nonstatutory provisions.
AB745,8,1316 (1) Prescription drug assistance for elderly persons; administration. The
17department of health and family services may request the joint committee on finance
18to supplement, from the appropriation account under section 20.865 (4) (a) of the
19statutes, the appropriation account under section 20.435 (4) (a) of the statutes, to pay
20the costs of staffing and administration of the program of prescription drug
21assistance for elderly persons under section 49.688 of the statutes, as created by this
22act. If the department of health and family services requests supplementation of the
23appropriation account under section 20.435 (4) (a) of the statutes, the department
24shall submit a plan to the joint committee on finance to expend not more than
25$1,000,000 for fiscal year 1999-2000. The plan shall be based on a review by the

1department of health and family services of the pharmacy assistance programs of
2other states and the feasibility of contracting with the medical assistance fiscal agent
3for this state to administer the program under section 49.688 of the statutes, as
4created by this act. If the cochairpersons of the committee do not notify the secretary
5of the department within 14 working days after the date of the department's
6submittal that the committee intends to schedule a meeting to review the request,
7the appropriation account shall be supplemented as provided in the request. If,
8within 14 working days after the date of the department's submittal, the
9cochairpersons of the committee notify the secretary of the department that the
10committee intends to schedule a meeting to review the request, the appropriation
11account shall be supplemented only as approved by the committee. Notwithstanding
12section 13.101 (3) (a) 1. of the statutes, the committee is not required to find that an
13emergency exists.
AB745,9,514 (2) Prescription drug assistance for elderly persons; program supplement.
15If the amount of funds in the appropriation account under section 20.435 (4) (bv) of
16the statutes, as created by this act, is insufficient to meet program demand under
17section 49.688 of the statutes, as created by this act, the department of health and
18family services shall request the joint committee on finance to supplement, from the
19appropriation under section 20.865 (4) (a) of the statutes, the appropriation account
20under section 20.435 (4) (bv) of the statutes and shall submit a plan to the joint
21committee on finance for the expenditure. If the cochairpersons of the committee do
22not notify the secretary of the department within 14 working days after the date of
23the department's submittal that the committee intends to schedule a meeting to
24review the request, the appropriation account shall be supplemented as provided in
25the request. If, within 14 working days after the date of the department's submittal,

1the cochairpersons of the committee notify the secretary of the department that the
2committee intends to schedule a meeting to review the request, the appropriation
3account shall be supplemented only as approved by the committee. Notwithstanding
4section 13.101 (3) (a) 1. of the statutes, the committee is not required to find that an
5emergency exists.
AB745, s. 7 6Section 7. Appropriation changes; joint committee on finance.
AB745,9,127 (1) Prescription drug assistance for elderly; administration. In the schedule
8under section 20.005 (3) of the statutes for the appropriation to the joint committee
9on finance under section 20.865 (4) (a) of the statutes, as affected by the acts of 1999,
10the dollar amount is increased by $1,000,000 for fiscal year 1999-00 to increase
11funding for administration of the prescription drug assistance for elderly program
12under section 49.688 of the statutes, as created by this act.
AB745,9,1313 (End)
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