12/2002 State Legislative Update

Published December 1, 2002


Arkansas Governor Mike Huckabee (R) says state officials will begin promoting Eli Lilly’s and Pfizer’s prescription drug discount cards to low-income residents who are eligible for Medicare and lack prescription drug coverage.

According to Huckabee, as many as 100,000 Arkansans could be eligible for the drug cards. Fewer than 7,000 state residents currently have Pfizer’s card, and about 2,000 have Lilly’s card, officials from each company said. Huckabee said an $80 prescription drug would cost $12 with Lilly’s card and $15 with Pfizer’s.

To qualify for the cards, state residents must be eligible for Medicare, have no prescription drug coverage, and earn less than $18,000 annually for an individual and $24,000 for a couple.


Massachusetts officials scaled back a plan to cut Medicaid payment rates to pharmacies, ensuring that at least two of the state’s largest pharmacy chains–Wal-Mart and Osco–would continue to serve the state’s 900,000 Medicaid beneficiaries.

But the state’s three largest pharmacy chains–CVS, Brooks Pharmacy, and Walgreens–announced they would discontinue their participation in Medicaid unless the state increases the reimbursement rate.


The Mississippi legislature approved a measure that would cap awards in malpractice lawsuits against physicians, hospitals, and nursing homes, ending a long standoff between House and Senate negotiators. The House voted 88-31 and the Senate 41-6 to limit jury awards for non-economic damages to $500,000. That figure would be raised to $750,000 in 2011 and $1 million in 2017.

The legislation also requires that malpractice suits be filed in the county in which the alleged malpractice occurred; doctors or nurses who volunteer their services would be immune from malpractice lawsuits; the statute of limitations in cases against nursing homes would be reduced from three to two years; and a doctor who is listed among multiple defendants must be found to be more than 30 percent at fault to be held responsible for up to 50 percent of the final jury award.

Although the legislation does not include a proposal requested by Governor Ronnie Musgrove (D) that would have created a state-administered malpractice insurance pool, the governor is expected to sign the bill.


The state supreme court refused to hear an appeal from North Carolina officials to block a lawsuit alleging the state’s Medicaid program does not provide adequate dental care to low-income children.

In the lawsuit, filed in November 2000, representatives for six children said they and other Medicaid beneficiaries in the state must conduct extensive searches and travel long distances to find dentists who will treat them. About 16 percent of North Carolina dentists participate in the state’s Medicaid program, one of the lowest participation rates nationwide.

All but one of the original six children who filed suit has dropped out of the lawsuit. Eight new plaintiffs promptly replaced them.

Lawyers for the state argue Medicaid recipients unhappy with government benefits cannot file suit against the program. The court decided without comment not to hear the state’s appeal.


Measure 23, sponsored by Health Care For All–Oregon, failed in the state’s November ballot by a 79 percent to 21 percent margin. (See story on page 1.) The measure would have required the state to implement a single-payer health care system covering all medically necessary health services, including preventive care, prescription drugs, long-term care, and alternative care, by 2005.

Businesses would have paid a new payroll tax of as much as 11.5 percent and personal income tax rates would have increased by as much as 8 percent. State officials estimated the measure would have cost about $19 billion per year.

The New York Times reported voters appeared receptive to opponents’ arguments that the proposal was too costly, was likely to harm employers, and might drive doctors from the state.


State officials have moved to block reimportation of less-expensive prescription drugs from Canada in response to the increased number of state residents who illegally order treatments from Canadian pharmacies. State law requires out-of-state pharmacies to register for a license with the state Board of Pharmacy before they can market treatments to state residents, and federal law prohibits the importation of prescription drugs across the U.S. border. (For more information on drug reimportation, see “Rx Reimportation: A Legislative History,” Health Care News, November 2002.)

But the state pharmacy board has no authority over Canadian pharmacies, and the federal government cannot monitor the estimated two million packages of medications sent across the border each year.

After a Rhode Island physician informed the state pharmacy board some of his patients had ordered treatments from two Canadian pharmacies, the board sent the pharmacies cease-and-desist orders and informed Canadian regulatory authorities of the state licensure requirement.

In response, Ronald Guse, registrar of the Manitoba Pharmaceutical Association (MPA), informed pharmacies in the province they must have a license from Rhode Island to market prescription drugs in the state.

According to Guse, MPA rules mandate pharmacies in the province cannot violate laws in the jurisdictions where patients reside. Catherine Cordy, head of the Rhode Island pharmacy board, said Canadian pharmacies do not qualify for a license to market prescription drugs to state residents because exportation of the treatments to the United States violates federal law.


State Representative Kathryn Bowers (D) wrote a letter to Governor Don Sundquist (R) requesting the state delay the planned termination of benefits for about 95,000 people enrolled in TennCare, the state’s troubled Medicaid managed care program.

The reduction in services results from a waiver, approved earlier this year by the federal government, that allows the state to restructure eligibility and benefits offered under TennCare.

The waiver requires TennCare to reverify all non-Medicaid-eligible beneficiaries’ eligibility. Some 159,000 current beneficiaries are expected to be found ineligible under the new guidelines, according to state officials.

TennCare spokesperson Lola Potter said she did not know if the state would extend the reverification process and would have to look to the governor for leadership.


State health advocates protested potential funding cuts of 5 to 15 percent to the state’s mental health system this fiscal year and next to counter a projected $2 billion state budget deficit.

Governor Mark Warner (D) has said every state agency “should expect cuts of 5 percent at least” during the first round of state spending reductions.

But mental health advocates said the cuts could have “frightening consequences for a mental health system that is already stretched.”

Delegate Phillip Hamilton (R), chair of the House Health, Welfare and Institutions Committee, said, “We can’t afford to take mental health off our priority list. It can’t afford any more budget reductions.”


Governor Bob Wise (D) mailed letters to drug makers Merck, GlaxoSmithKline, and other companies requesting they offer West Virginians the same medication prices charged in Canada. Wise said residents of other countries pay much lower prices. “We want West Virginians to pay the same price as the people in Canada.”

According to Wise, the arthritis treatment Celebrex costs between $78.00 and $93.09 a month at local pharmacies, while the drug costs $46 per month in Canada. Wise called on pharmaceutical companies to make a “good faith effort” in negotiating drug discounts associated with the Golden Mountaineer Card, the state’s drug discount card for seniors.

The State Legislative Update is compiled from a wide range of news sources, including the Council for Affordable Health Insurance (CAHI) http://www.cahi.org; the National Association of Health Underwriters (NAHU) http://nahu.org; Bizjournals at http://bizjournals.com; Stateline at http://stateline.org; and Lexis/Nexis research.