Subd. 1. Establishment and administration.

1. (a) The commissioner of administration shall award a contract or contracts to claims processing companies to process payments to participating pharmacies. The contract must include:

   1. (1) provisions for participating manufacturers to provide discount payments, through participating claims processing companies, equal to four percent of the average manufacturer price; and
   2. (2) quality assurance and verification procedures and authority to conduct audits of pharmacy claims as necessary to ensure that pharmacy reimbursement payments are appropriate and justified.
2. (b) The commissioner of administration may establish an expert panel to assist in the development of the request for proposal for awarding the contract or contracts to process payments for the senior drug discount program.

Subd. 2. Participating manufacturers.

Participating manufacturers agree to:

1. (1) pay participating pharmacies through the claims processor an amount equal to four percent of the average manufacturer price;
2. (2) process discount payments through participating claims processing companies according to the timelines used under the medical assistance program;
3. (3) pay administrative fees established under subdivision 7.

Subd. 3. Participating pharmacies.

Participating pharmacies agree to:

1. (1) provide eligible seniors the discounted price established by the senior drug discount program;
2. (2) accept payments from participating claims processing companies equal to four percent of the average manufacturer price; and
3. (3) not charge eligible seniors a dispensing fee greater than $3.

Subd. 4. Enrollment.

The commissioner of human services shall determine eligibility as specified in subdivision 5 and enroll senior citizens in the senior drug discount program. The commissioner may use volunteers to assist in eligibility and enrollment duties. The commissioner of human services shall post the eligibility of the enrollees to the Medicaid Management Information System (MMIS) where it can be assessed by participating pharmacies through the department's eligibility verification system and point-of-sale system upon presentation of the enrollee's Minnesota health care programs card.

Subd. 5. Eligibility.

1. (a) Senior citizens are eligible for the program if:

   1. (1) their household income does not exceed 200 percent of the federal poverty guidelines;
   2. (2) they are enrolled in Medicare Part A and Part B;
   3. (3) they do not have coverage for prescription drugs under a health plan, as defined in section 62Q.01, subdivision 3;
   4. (4) they do not have coverage for prescription drugs under a Medicare supplement plan, as defined in sections 62A.31 to 62A.44, or policies, contracts, or certificates that supplement Medicare issued by health maintenance organizations or those policies, contracts, or certificates governed by section 1833 or 1976 of the federal Social Security Act, United States Code, title 42, section 1395, et seq., as amended, or coverage for prescription drugs under medical assistance under chapter 256B, general assistance medical care under chapter 256D, MinnesotaCare, or the qualified medical beneficiaries program;
   5. (5) they meet the residency requirements established under section 256L.09; and
   6. (6) they do not have coverage for prescription drugs under medical assistance, general assistance medical care, MinnesotaCare, or the qualified Medicare beneficiary program.
2. (b) The commissioner of human services shall provide each eligible senior with a Minnesota health care programs card indicating enrollment in the senior drug discount program. Eligible seniors must present this card to the participating pharmacy in order to receive the discounted price.

Subd. 6. Enrollment fee.

The commissioner of human services may establish an annual enrollment fee of $5 for purposes of administering the senior drug discount program. The fees shall be deposited in a special revenue account for the purpose of administration of enrollment to the senior drug discount program. This account shall be exempt from paying statewide and agency indirect costs as required under section 16A.127.

Subd. 7. Administrative fee.

The commissioner of administration may authorize a claims processing contractor to charge a fixed claims processing fee not to exceed ten cents for each prescription drug provided to participating seniors under this section. In the event the commissioner authorizes a claims processing fee, one-half of the fee must be paid by the participating manufacturer and one-half by the participating pharmacy.

Subd. 8. Disease management for drug therapy.

The commissioner of human services may establish a disease management program for drug therapy for eligible senior citizens. The commissioner may seek grants and donations from drug manufacturers, drug wholesalers, and other nonstate entities to establish and administer this disease management program.

Subd. 9. Senior drug discount program evaluation.

The commissioners of human services and health, in consultation with the commissioner of administration, shall study the efficiency and effectiveness of the senior drug discount program. The commissioners shall examine methods of encouraging participation by drug manufacturers and pharmacies in the program and any program modifications necessary to effectively serve eligible senior citizens. The commissioners shall present a progress report on the program to the legislature by January 15, 1996, and recommendations for program changes to the legislature by January 15, 1997.