The issues surrounding pharmacy reimbursement and service delivery resulted in the introduction during the 1992 Session of HJR 240, requesting a legislative study to evaluate the use of mail-order pharmacies by third party payors. Although HJR 240 was not approved, a special subcommittee of the House Committee on Health, Welfare, and Institutions (HWI) was authorized to examine the HJR 240 concerns. The HWI special subcommittee recommended that a joint subcommittee be established to address the complex issues identified in its study (see HJR 528 attached).

During the 1993 Session, four resolutions calling for pharmacy-related reimbursement studies were approved -- HJR 528 (joint subcommittee to study mail-order pharmacies; chief patron -- Delegate Kenneth R. Melvin); HJR 556 (joint subcommittee to study .impact of third party reimbursements on pharmacies; chief patron -- Delegate Jerry M. Wood); HJR 658 (Secretary of Administration to study KeyAdvantage's mail-order pharmacy program; chief patron -- Delegate Alson H. Smith, Jr.); and HJR 714 (Joint Commission on Health Care to study third party reimbursement programs; chief patron -- Delegate Harvey B. Morgan).

House Joint Resolutions 528 and 556 were the original enabling resolutions for this study. House Joint Resolution 556 was designated as the joint subcommittee's "vehicle;" however, the current study represents a collaborative approach, encompassing the issues included in HJR 528 and HJR 556 as well as any issues covered in HJR 714 which were not noted in either of the enabling resolutions.

Establishing a nine-member joint subcommittee of six House and three Senate members, HJR 556 called for an examination of the following issues in relation to impact on pharmacies, the quality of pharmacy services, and the best interests of the consumer:

• Insurance law and regulations

• Agreements between self-funded employers and insurance companies serving as third party administrators

• Insurers' policies and reimbursement levels vis-à-vis the use of networks and mail-order pharmacies

• Competitive fairness, including drug-pricing differentials

• Quality-of-care issues related to the use of mail-order pharmacies, such as the loss of the physician-patient-pharmacist relationship and loss of personal counseling concerning drug effects and interactions

• The potential for abuse or improper use of controlled substances as a result of mail-order receipt of drugs and obtaining excess supplies of drugs

• The error rates, insofar as data is available, of mail-order versus store pharmacies

• Insofar as data can be obtained, the rates of hospitalization among patients with similar diagnoses who use mail-order and store pharmacies

• The feasibility of using possible administrative efficiencies to cut costs rather than limiting services, such as streamlining claims processing, simplifying claims forms, automating some claims reviews, and developing a single claims form for all payors in the Commonwealth

• Medicaid pharmacy policies to ascertain whether Medicaid reimbursement policies discriminate against certain pharmacies and whether Medicaid pharmacy reimbursement policies and restrictions on certain drugs are appropriate, promote quality health care, and effectively contain costs for the Commonwealth

The study plan was also structured to subsume the following issues described in HJR 528 and HJR 714:

• The effects of the increase in the required use of mail-order pharmacies by third party payors (HJR 528)

• The effects of third party reimbursement programs on the quality of health care services (HJR 714)

• Whether third party reimbursement programs jeopardize or unfairly take advantage of health care providers (HJR 714)

• The value of special pharmacy services, including, but not limited to, compounding drugs and medicines, furnishing special containers or applicators, or utilizing special equipment in preparing or dispensing drugs, applicators, or medicines (HJR 714)