SENATE, No. 6

STATE OF NEW JERSEY

209th LEGISLATURE

INTRODUCED SEPTEMBER 14, 2000

Sponsored by:

Senator DONALD T. DIFRANCESCO

District 22 (Middlesex, Morris, Somerset and Union)

Senator JAMES S. CAFIERO

District 1 (Cape May, Atlantic and Cumberland)

Co-Sponsored by:

Senators Bennett, Allen, Matheussen, Bucco, Singer, Bassano, Robertson, Inverso, Connors, Ciesla, Kosco, Sinagra, McNamara, Gormley, Bark, Palaia, Kavanaugh and Vitale

SYNOPSIS

    "Senior Gold Prescription Discount Act."

CURRENT VERSION OF TEXT

    As introduced.

(Sponsorship Updated As Of: 11/13/2000)

An Act establishing the Senior Gold Prescription Discount Program and supplementing Title 30 of the Revised Statutes.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. This act shall be known and may be cited as the "Senior Gold Prescription Discount Act."

    2. As used in this act:

    "Commissioner" means the Commissioner of Health and Senior Services.

    "Department" means the Department of Health and Senior Services.

    "PAAD" means the program of pharmaceutical assistance to the aged and disabled established pursuant to P.L.1975, c.194 (C.30:4D-20 et seq.).

    "Prescription drug" means any legend drug which is covered by PAAD.

    "Program" means the "Senior Gold Prescription Discount Program" established pursuant to this act.

    "Reasonable cost" means the maximum allowable cost of the prescription drug and shall include the conditions set forth on page 104 of P.L.2000, c.53.

    "Resident" means a resident as defined in section 3 of P.L.1975, c.194 (C.30:4D-22) for purposes of eligibility for PAAD.

    3. a. There is established the "Senior Gold Prescription Discount Program" in the Department of Health and Senior Services.

    b. A resident of this State shall be eligible for the program if the person is:

    (1) either 65 years of age or older or a recipient of disability insurance benefits under Title II of the federal Social Security Act (42 U.S.C. s.401 et seq.);

    (2) receiving an annual income that does not exceed $28,587 if single or, if married, whose annual income combined with that of his spouse is less than $32,791, which is to be determined on the same basis as income is determined for the purpose of eligibility for PAAD; and

    (3) not eligible for any other program of State-funded prescription drug benefits.

    c. Beginning January 1, 2002 and annually thereafter, the income eligibility limits provided for the program shall increase by the amount of the maximum Social Security benefit cost-of-living increase for that year for single and married persons, respectively. The commissioner shall adopt the new income limits annually by regulation pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

    d. Commencing no later than the 120th day after the effective date of this act, the program shall provide a payment to a pharmacy that is participating in the program for the reasonable cost of one or more prescription drugs purchased by an eligible person who presents an identification card issued by the program in an amount that exceeds the copayment paid by the eligible person.

    At the time of each purchase of a prescription drug, the eligible person shall pay a copayment that shall not be waived, discounted or rebated in whole or in part, and shall be equal to:

    (1) $15 plus 50% of the remaining amount of the reasonable cost for the prescription drug, or the reasonable cost for the drug, whichever is less; or

    (2) $15, or the reasonable cost for the drug, whichever is less, in the case of an eligible person who has incurred out-of-pocket expenditures, including copayments and deductibles, for the purchase of prescription drugs, which are not reimbursable by any other plan of assistance or insurance and are credited to that person's account in accordance with procedures established by the commissioner, in the following amounts: $2,000 for a single person and $3,000 for a married couple. These amounts shall be incurred on or after the date that the person received proof of eligibility for the program from the department.

    e. Whenever an interchangeable drug product that is covered by the program is available for the prescription written, an eligible person shall either:

    (1) purchase an interchangeable drug product which is equal to or less than the maximum allowable cost as determined by the commissioner, in accordance with the provisions of subsection d. of this section; or

    (2) purchase the prescribed drug product which is higher in cost than the maximum allowable cost as determined by the commissioner and pay the difference between the two, in addition to the amount paid by the eligible person pursuant to subsection d. of this section, unless the prescriber specifically indicates that substitution is not permissible, in which case an eligible person may purchase the prescribed drug product in accordance with the provisions of subsection d. of this section.

    f. An eligible person whose prescription drug costs are covered in part by any other program or plan of assistance or insurance may be required to receive reduced assistance under the Senior Gold Prescription Discount Program. If an eligible person's prescription drug costs are covered in whole or in part by any other program or plan of assistance or insurance, the other program or plan shall be the primary payer and the Senior Gold Prescription Discount Program shall be the payer of last resort.

    g. The commissioner may establish limits on the day supply or maximum quantity of prescription drugs which may be purchased by an eligible person under the program in a manner equivalent to those established by the commissioner for prescription drug purchases under PAAD.

    h. An eligible person under the program shall, upon the submission of such application and proof of expenditure as the department may prescribe, be reimbursed for 50% of the cost of each prescription drug purchased by that person in an amount that exceeds the required copayment, during the period commencing 30 days after the person's properly completed application was received by the department and ending on the date on which the person received proof of eligibility from the department; except that no reimbursement under this act shall be made for a prescription drug purchased prior to the effective date of this act.

    i. The commissioner shall by regulation provide for:

    (1) arrangements for providing notice of the availability of the program and the distribution of application forms therefor;

    (2) a system of payments to pharmacies and a system for determining eligibility for the program, including evidence of complete or partial coverage of prescription drug costs by any other program or plan of assistance or insurance; and

    (3) the issuance of program identification cards to persons who are determined eligible for the program.

    4. The commissioner shall annually report to the Governor and the Legislature on the operations of the program and shall include with that report any recommendations for legislative action which the commissioner deems appropriate.

    5. a. A person violating any provision of this act shall be subject to the applicable civil and criminal penalties provided in P.L.1968, c.413 (C.30:4D-1 et seq.). An eligible person who violates any provision of this act shall be subject to a suspension of the person's eligibility for the program for one year for a first offense and a permanent revocation of the person's eligibility for a second offense.

    b. The commissioner shall include on the program identification cards issued pursuant to subsection i. of section 3 of this act a conspicuous notice of the penalties for violating the provisions of this act.

    6. The New Jersey EASE program established by the department shall provide information and assistance to members of the public and potential or actual applicants to the program, including, but not limited to, making general information about the program available to the public Statewide, answering specific inquiries about the program, assisting interested persons to ascertain their eligibility for the program or other State-funded prescription drug benefits, and further assisting program applicants to complete their application as necessary.

    7. The program shall be funded from the monies made available to the State from tobacco companies under the nationwide settlement of the respective actions by state governments against those companies, entered into by the State in the Master Settlement Agreement in State of New Jersey v. R.J. Reynolds Tobacco Company, et al., Superior Court, Chancery Division, Middlesex County, No. C-254-96.

    8. The Commissioner of Health and Senior Services, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations to effectuate the purposes of this act.

    9. This act shall take effect on January 1, 2001.

STATEMENT

    This bill, which is designated the "Senior Gold Prescription Discount Act," establishes the "Senior Gold Prescription Discount Program" in the Department of Health and Senior Services (DHSS).

    A resident of this State shall be eligible for the program if the person is:

∙   either 65 years of age or older or a recipient of disability insurance benefits under Title II of the federal Social Security Act (42 U.S.C. s.401 et seq.);

∙   receiving an annual income that does not exceed $28,587 if single or, if married, whose annual income combined with that of his spouse is less than $32,791, which is to be determined on the same basis as income is determined for the purpose of eligibility for the program of pharmaceutical assistance to the aged and disabled (PAAD); and

∙   not eligible for any other program of State-funded prescription drug benefits.

    Beginning January 1, 2002 and annually thereafter, the income eligibility limits provided for the program would increase by the amount of the maximum Social Security benefit cost-of-living increase for that year for single and married persons, respectively, by regulation of the Commissioner of Health and Senior Services.

    Commencing no later than the 120th day after the effective date of the bill, the program would provide a payment to a pharmacy which is participating in the program for the cost of one or more prescription drugs purchased by an eligible person who presents an identification card issued by the program in an amount which exceeds the copayment paid by the eligible person.

    The bill requires that, at the time of each purchase of a prescription drug, the eligible person pay a copayment that shall not be waived, discounted or rebated in whole or in part, and is equal to:

    (1) $15 plus 50% of the remaining amount of the reasonable cost for the prescription drug, or the reasonable cost for the drug, whichever is less; or

    (2) $15, or the reasonable cost for the drug, whichever is less, in the case of an eligible person who has incurred out-of-pocket prescription drugs expenditures, including copayments and deductibles, which are not reimbursable by any other plan of assistance or insurance and are credited to that person's account in accordance with procedures established by the commissioner, in the following amounts: $2,000 for a single person and $3,000 for a married couple. These amounts shall be incurred on or after the date that the person received proof of eligibility for the program from DHSS.

    The bill provides that whenever a generic drug product which is covered by the program is available for the prescription written, an eligible person shall either:

    -- purchase a generic drug product which is equal to or less than the maximum allowable cost as determined by the commissioner, in accordance with the provisions of the bill; or

    -- purchase the prescribed drug product which is higher in cost than the maximum allowable cost as determined by the commissioner and pay the difference between the two, in addition to the amount paid by the eligible person pursuant to the bill, unless the prescriber specifically indicates that substitution is not permissible, in which case an eligible person may purchase the prescribed drug product in accordance with the provisions of the bill.

    An eligible person whose prescription drug costs are covered in part by any other program or plan of assistance or insurance may be required to receive reduced assistance under the Senior Gold Prescription Discount Program. If an eligible person's prescription drug costs are covered in whole or in part by any other program or plan of assistance or insurance, the other program or plan shall be the primary payer and the Senior Gold Prescription Discount Program shall be the payer of last resort.

    The bill permits the commissioner to establish limits on the day supply or maximum quantity of prescription drugs which may be purchased by an eligible person under the program in a manner equivalent to those established by the commissioner for prescription drug purchases under PAAD.

    An eligible person under the program would, upon the submission of such application and proof of expenditure as DHSS may prescribe, be reimbursed for 50% of the cost of each prescription drug purchased by that person, during the period commencing 30 days after the person's properly completed application was received by DHSS and ending on the date on which the person received his proof of eligibility from DHSS; except that no reimbursement under the bill would be made for a prescription drug purchased prior to the effective date of the bill.

    The commissioner would by regulation provide for:

    - arrangements for providing notice of the availability of the program and the distribution of application forms therefor;

    - a system of payments to pharmacies and a system for determining eligibility for the program, including evidence of complete or partial coverage of prescription drug costs by any other program or plan of assistance or insurance; and

    - the issuance of program identification cards to persons who are determined eligible for the program.

     A person violating any provision of this bill would be subject to the applicable civil and criminal penalties provided with respect to the Medicaid program in P.L.1968, c. 413 (N.J.S.A.30:4D-1 et seq.). An eligible person who violates any provision of the bill would be subject to a suspension of the person's eligibility for the program for one year for a first offense and a permanent revocation of the person's eligibility for a second offense.

    The commissioner would include on the program identification cards issued to eligible persons a conspicuous notice of the penalties for violating the provisions of this bill.

    The bill also requires that the commissioner annually report to the Governor and the Legislature on the operations of the program and include with that report any recommendations for legislative action which the commissioner deems appropriate.

    In addition, the bill requires that the New Jersey EASE program established by DHSS provide information and assistance to members of the public and potential or actual applicants to the program, including, but not limited to, making general information about the program available to the public Statewide, answering specific inquiries about the program, assisting interested persons to ascertain their eligibility for the program or other State-funded prescription drug benefits, and further assisting program applicants to complete their application as necessary.

    The bill provides that the program shall be funded from the monies received by New Jersey under the nationwide settlement of the respective state actions against the major tobacco companies under the formal agreement reached on November 23, 1998.

    Finally, the bill takes effect on January 1, 2001.