Legislative Update from State Senator Joey Hensley June 2, 2021

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   Legislation improving access to quality health care in Tennessee

   Legislation gives patients more control over prescription drugs — The Patient Access Choice and Transparency Act, legislation prioritizing patient-centered care by making certain reforms to how Pharmacy Benefit Managers (PBMs) operate in Tennessee, was approved by the House and Senate this year. Senate Bill 1617 would help ensure patients can use the pharmacies they choose and trust rather than being forced by their insurance companies to use specialty pharmacies that often don’t meet patients’ needs. This is particularly important for patients with chronic, complex or rare diseases. PBMs are companies that manage prescription drug benefits on behalf of health insurers, Medicare Part D drug plans, large employers and others. They are owned by insurance companies and often own pharmacies as well. As a big industry in the U.S., the top three PBMs in America service 230 million patients. Senate Bill 1617:

•Protects rural hospitals that utilize 340B programs across the state to provide lifesaving medication to some of our state’s most marginalized citizens;

•Prohibits PBMs from steering patients away from their community pharmacies to PBM-owned pharmacies which is particularly important to patients with chronic, complex and rare diseases like Multiple Sclerosis, cystic fibrosis, cancer, and ALS. 

•Ensures that pharmacies are at least paid their acquisition cost for medications and instructs PBMs to establish a process for pharmacies to appeal their reimbursements from PBMs if it is below the cost.

•Provides greater transparency to employers who want to gain a better understanding of how their pharmacy benefit expenses are being impacted by spread pricing and rebate retention which ultimately impacts their premiums; and 

•Provides more transparency for patients in real time when they are in a physician’s office as to what medications cost and their formulary.

    Reform of state’s CON process aims to improve health care access and cost –Senate Bill 1281 seeks to eliminate bureaucratic red tape by making the CON process quicker, easier and less expensive to improve access and cost of health care services in Tennessee. It also reduces CON regulation of certain facilities and services, eliminates protectionist aspects of the CON process and creates greater regulatory flexibility. The reform legislation comes as a result of an impressive two-year collaboration from various stakeholders and legislators in a joint House and Senate working group who focused on how improvements could be made to benefit patients.  CON is a legal document required for a hospital or health care facility that wants to locate or expand its capacity. Whether it is the number of hospital beds it makes available or the types of imaging it can conduct, the facility must apply to the state’s Health Services and Development Agency (HSDA) for permission through the CON process. 

   Under Senate Bill 1281, some CON regulations would be reduced or eliminated for certain facilities and services. For example, economically distressed counties which do not currently have a hospital would be completely exempt from CON regulations, making it easier for health care companies to offer new health services to patients in those counties. Non-pediatric MRI services and PET Scan services would also no longer be regulated by CON in counties with a population above 175,000. Because of an increasing focus and need for mental health services in Tennessee, mental health hospitals would no longer be subject to CON regulations as well. The legislation further eliminates protectionist aspects of CON by reducing the power competitors have over new applicants and holding CON-holders more accountable to ensure they are providing authorized services. The current system is antiquated and adds costs to health care delivery.  This legislation provides meaningful reforms without totally disrupting the system or sending unnecessary shock waves through it.

   Bill to increase primary care physicians in state’s rural communities is approved — A bill designed to increase the number of primary care physicians in Tennessee’s rural communities was approved by the General Assembly before adjourning the 2021 legislative session. Senate Bill 298 establishes residency opportunities focusing on family practice, general pediatrics, internal medicine and psychiatry to provide medical and behavioral health services in Tennessee’s underserved and distressed rural counties. Over the past 25 years, the population of Tennessee has doubled, but the number of primary care physician residencies remains frozen at the same amount because of the lack of federal funding since 1996. Under this legislation, rural hospitals and community health centers will have access to these residents. When these physicians settle in rural communities, they bring not only improved health care to area citizens, but they also bring great economic benefit. Approximately 60% to 70% of doctors stay in the communities where they train. Current workforce projections show Tennessee with a doctor shortage of 1,050 by 2025.    

   The residencies will be open to all graduates of University of Tennessee schools, Meharry Medical College and Vanderbilt University. Residents will be approved by the National Accreditation Agency for Graduate Medical Education (GME). The program requires the residencies be open to all qualified candidates and filled through the existing matching process employed by the GME. In addition, the bill establishes residencies through Lincoln Memorial University which offers osteopathic medicine instruction. The new residencies will be distributed across all grand divisions of the state. Both programs will be conducted in cooperation with the Tennessee Department of Health and the Tennessee Higher Education Commission (THEC). The 2021-2022 state budget passed last week by the legislature provided an increase of $5.5 million to fund the residencies. The legislation now goes to Governor Bill Lee’s desk for his signature.