Second Regular Session 112th General Assembly (2002)
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HOUSE ENROLLED ACT No. 1233
AN ACT to amend the Indiana Code concerning human services.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 12-7-2-51.8; (02)HE1233.1.1. -->
SECTION 1. IC 12-7-2-51.8 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 51.8. "Cross-indicated drug", for purposes
of IC 12-15-35.5, has the meaning set forth in IC 12-15-35.5-2.
SOURCE: IC 12-7-2-178.5; (02)HE1233.1.2. -->
SECTION 2. IC 12-7-2-178.5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 178.5. "Single
for purposes of IC 12-15-35-35, has the meaning set forth
in IC 12-15-35-35(a). means an outpatient drug that is produced or
distributed under an original new drug application approved by
the federal Food and Drug Administration, including a drug
product marketed by any cross-licensed producers or distributors
operating under the new drug application.
SOURCE: IC 12-15-35-35; (02)HE1233.1.3. -->
SECTION 3. IC 12-15-35-35, AS AMENDED BY P.L.231-1999,
SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 35.
(a) As used in this section, "single source
drug" means a covered outpatient drug that is produced or distributed
under an original new drug application approved by the federal Food
and Drug Administration, including a drug product marketed by any
cross-licensed producers or distributors operating under the new drug
Before the board develops a program to place a single source
drug on prior approval, restrict the drug in its use, or establish a drug
monitoring process or program to measure or restrict utilization of
single source drugs other than in the SURS program, the board must
meet the following conditions:
(1) Make a determination, after considering evidence and credible
information provided to the board by the office and the public,
that placing a single source drug on prior approval or restricting
the drug's use will not:
(A) impede the quality of patient care in the Medicaid
(B) increase costs in other parts of the Medicaid program,
including hospital costs and physician costs.
(2) Meet to review a formulary or a restriction on a single source
drug after the office provides at least thirty (30) days notification
to the public that the board will review the formulary or
restriction on a single source drug at a particular board meeting.
The notification shall contain the following information:
(A) A statement of the date, time, and place at which the board
meeting will be convened.
(B) A general description of the subject matter of the board
(C) An explanation of how a copy of the formulary to be
discussed at the meeting may be obtained.
The board shall meet to review the formulary or the restriction on
a single source drug at least thirty (30) days but not more than
sixty (60) days after the notification.
(3) Ensure that:
(A) there is access to at least two (2) alternative drugs within
each therapeutic classification, if available, on the formulary;
(B) a process is in place through which a Medicaid recipient
has access to medically necessary drugs.
(4) Reconsider the drug's removal from its restricted status or
from prior approval not later than six (6) months after the single
source drug is placed on prior approval or restricted in its use.
(5) Ensure that the program provides either telephone or FAX
approval or denial Monday through Friday, twenty-four (24) hours
a day. The office must provide the approval or denial within
twenty-four (24) hours after receipt of a prior approval request.
The program must provide for the dispensing of at least a
seventy-two (72) hour supply of the drug in an emergency
situation or on weekends.
(6) Ensure that any prior approval program or restriction on the
use of a single source drug is not applied to prevent acceptable
medical use for appropriate off-label indications.
(c) (b) The board shall advise the office on the implementation of
any program to restrict the use of brand name multisource drugs.
(d) (c) The board shall consider:
(1) health economic data;
(2) cost data; and
(3) the use of formularies in the non-Medicaid markets;
in developing its recommendations to the office.
SOURCE: IC 12-15-35.5; (02)HE1233.1.4. -->
SECTION 4. IC 12-15-35.5 IS ADDED TO THE INDIANA CODE
AS A NEW
CHAPTER TO READ AS FOLLOWS [EFFECTIVE
Chapter 35.5. Prescription Drugs
Sec. 1. (a) Except as provided in subsection (b), this chapter
(1) the Medicaid program under this article; and
(2) the children's health insurance program under IC 12-17.6.
(b) This chapter does not apply to a formulary or prior
authorization program operated by a managed care organization
under a program described in subsection (a).
Sec. 2. As used in this chapter, "cross-indicated drug" means a
drug that is used for a purpose generally held to be reasonable,
appropriate, and within the community standards of practice even
though the use is not included in the federal Food and Drug
Administration's approved labeled indications for the drug.
Sec. 3. (a) Except as provided in subsection (b), the office may
establish prior authorization requirements for drugs covered
under a program described in section 1(a) of this chapter.
(b) The office may not require prior authorization for the
following single source or brand name multisource drugs:
(1) A drug that is classified as an antianxiety, antidepressant,
or antipsychotic central nervous system drug in the most
recent publication of Drug Facts and Comparisons (published
by the Facts and Comparisons Division of J.B. Lippincott
(2) A drug that, according to:
(A) the American Psychiatric Press Textbook of
(B) Current Clinical Strategies for Psychiatry;
(C) Drug Facts and Comparisons; or
(D) a publication with a focus and content similar to the
publications described in clauses (A) through (C);
is a cross-indicated drug for a central nervous system drug
classification described in subdivision (1).
(3) A drug that is:
(A) classified in a central nervous system drug category or
classification (according to Drug Facts and Comparisons)
that is created after the effective date of this chapter; and
(B) prescribed for the treatment of a mental illness (as
defined in the most recent publication of the American
Psychiatric Association's Diagnostic and Statistical Manual
of Mental Disorders).
(c) Except as provided under section 7 of this chapter, a
recipient enrolled in a program described in section 1(a) of this
chapter shall have unrestricted access to a drug described in
Sec. 4. Prior authorization requirements developed under this
(1) comply with all applicable state and federal laws,
including the provisions of 405 IAC 5-3 and 42 U.S.C.
(2) provide that the prior authorization number assigned to
an approved request be included on the prescription or drug
(A) issued by the prescribing physician; or
(B) if the prescription is transmitted orally, relayed to the
dispensing pharmacist by the prescribing physician.
Sec. 5. Before requiring prior authorization for a single source
drug, the office shall seek the advice of the drug utilization review
board, established by IC 12-15-35-19, at a public meeting of the
Sec. 6. (a) The office shall publish the decision to require prior
authorization for a single source drug in a provider bulletin.
(b) IC 12-15-13-6 applies to a provider bulletin described in
Sec. 7. (a) Subject to subsection (b), the office may place limits
on quantities dispensed or the frequency of refills for any covered
drug for the purpose of:
(1) preventing fraud, abuse, waste, overutilization, or
inappropriate utilization; or
(2) implementing a disease management program.
(b) Before implementing a limit described in subsection (a), the
(1) consider quality of care and the best interests of Medicaid
(2) seek the advice of the drug utilization review board,
established by IC 12-15-35-19, at a public meeting of the
(3) publish a provider bulletin that complies with the
requirements of IC 12-15-13-6.
SOURCE: IC 12-17.6-4-2.5; (02)HE1233.1.5. -->
SECTION 5. IC 12-17.6-4-2.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 2.5. Prescription drugs
provided under the program are subject to the requirements of
SOURCE: IC 12-15-32-11; (02)HE1233.1.6. -->
SECTION 6. IC 12-15-32-11, AS AMENDED BY P.L.291-2001,
SECTION 216, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 11. (a) The office may assess
community residential facilities for the developmentally disabled (as
defined in IC 12-7-2-61) and intermediate care facilities for the
mentally retarded (ICF/MR) (as defined in IC 16-29-4-2) that are not
operated by the state in an amount not to exceed ten percent (10%) of
the total annual
gross residential services revenue of the facility for the
facility's preceding fiscal year.
(b) The assessments shall be paid to the office of Medicaid policy
and planning in equal monthly amounts on or before the tenth day of
each calendar month. The office may withhold Medicaid payments to
a provider described in subsection (a) that fails to pay an assessment
within thirty (30) days after the due date. The amount withheld may not
exceed the amount of the assessments due.
(c) Revenue from the assessments shall be credited to a special
account within the state general fund to be called the Medicaid
assessment account. Money in the account may be used only for
services for which federal financial participation under Medicaid is
available to match state funds. An amount equivalent to the federal
financial participation estimated to be received for services financed
from assessments under subsection (a) shall be used to finance
Medicaid services provided by facilities described in subsection (a).
(d) If federal financial participation to match the assessments in
subsection (a) becomes unavailable under federal law, the authority to
impose the assessments terminates on the date that the federal
statutory, regulatory, or interpretive change takes effect.
SOURCE: ; (02)HE1233.1.7. -->
SECTION 7. An emergency is declared for this act.
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