SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

SENATE, No. 234

with Senate committee amendments

STATE OF NEW JERSEY

DATED: OCTOBER 28, 1996

      The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 234 of 1996 with amendments.

      Senate Bill No. 234, as amended, requires that Medicaid prescription drug benefits be provided on a fee-for-service basis based upon reimbursement formulas established by the Commissioner of Human Services and prohibits the department from requiring any Medicaid recipient to accept the pharmaceutical benefits of a managed care plan unless the recipient has specifically notified the department in writing that he or she elects pharmaceutical benefits through a managed care plan.

      The bill requires the department to notify all Medicaid recipients that they may elect to receive prescription drug benefits through a managed care plan. A Medicaid recipient who wants to receive prescription drug benefits through a managed care plan would have to notify the department within 30 days after receiving the notice

      The Department of Human Services is currently shifting AFDC-eligible Medicaid recipients into managed care plans that include pharmaceutical benefits; the department anticipates completion of this process by the end of 1996. These Medicaid recipients are being removed from the current fee-for-service reimbursement system for prescription benefits run by the Medicaid program. The bill provides Medicaid recipients with a choice between fee-for-service or managed care prescription drug benefit plans.

COMMITTEE AMENDMENTS

      The committee amended the bill to require the Department of Human Services to notify Medicaid recipients that they may receive prescription drug benefits through a managed care plan and if they wish to do so, they must notify the department. The amendments prohibit the department from removing any Medicaid recipient from the current prescription drug fee-for-service reimbursement system unless the recipient notifies the department that the managed care plan is the recipient’s preference.

FISCAL IMPACT

      In a fiscal estimate prepared on the original version of this bill by the Office of Legislative Services (OLS), the OLS states that there is insufficientt information available to estimate the cost associated with this bill.