SecureGuard tamper-resistant prescription papers meet all 2008 Medicaid requirements.

Effective October 1, 2008 all Medicaid scripts MUST be written on tamper-resistant paper.

Section 1903b(I) of the Social Security Act (42 USC193b(I), paragraph (23) (1) Payment shall not be made for amounts expended for medical assistance for covered outpatient drugs (as defined in section 1927(k) (2)) for which the prescription was executed in written (and non-electronic) form unless the prescription was executed on tamper-resistant pad (paper).

EFFECTIVE DATE – The amendments made by paragraph (1) shall apply to prescriptions executed after September 30, 2007.

To be considered tamper resistant on October 1, 2007, a prescription must contain at least one of the following three characteristics:

1. One or more industry-recognized features designed to prevent unauthorized copying of a completed or blank prescription form.

2. One or more industry-recognized features designed to prevent the erasure or modification of information written on the prescription by the prescriber.

3. One or more industry-recognized features designed to prevent the use of counterfeit prescription forms.

No later than October 1, 2008, to be considered tamper resistant, a prescription pad must contain all of the foregoing three characteristics. Failure of a state to enforce the tamper-resistant pad requirements of section 7002(b) may result in the loss of Federal financial participation.

Micro Format, Inc., the manufacturer of SecureGuard papers, is an approved manufacturer of prescription paper products in all states in which approval is required and meets all state Medicaid tamper-resistant paper requirements.

Requirements for the Use of Tamper-Resistant Prescription Papers Under the Medicaid Program

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ADDITIONAL CLARIFICATIONS

Excerpt from letter sent to State Medicaid Directors on August 17, 2007 from the Department of Health & Human Resources Centers for Medicaid & Medicaid Services:“The purpose of this letter is to offer guidance to State Medicaid agencies on section 7002(b) of the U.S. Troop Readiness, Veteran’s Care, Katrina Recovery, and Iraq Accountability appropriations Act of 2007 … To the extent permissible under State and Federal law and regulation, our guidance does not restrict emergency fills of non-controlled or controlled dangerous substances for which a prescriber provides the pharmacy with a verbal, faxed, electronic, or compliant written prescription within 72 hours after the date on which the prescription was filled.”

Information provided by the Centers for Medicare and Medicaid Services (CMS):“Several states had questions about whether a provider can add a feature to a prescription to make it compliant with requirements. States have proposed various features including using specific inks to write the prescription (gel or indelible), writing out the drug quantities rather than just the number (i.e. “thirty” vs “30”), and embossed logos. The statute states that all written prescriptions must be “executed on a tamper-resistant pad” (paper). As a result, features added to the prescription after they are printed (written) do not meet the requirement of the statute.”

* The full law requiring Medicaid prescriptions to be written or printed on tamper resistant is attached as Appendix A at the end of this document.

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WHAT QUALIFIES PAPER AS TAMPER RESISTANT?

Tamper-resistant papers are manufactured to include a number of covert and overt security features. Overt features are used to identify an original document by sight and/or touch. Covert features become apparent when a document is photocopied or scanned. Micro Format refers to using multiple features on all its SecureGuard papers as “layer-upon-layer security” which serves to hinder prescriptions from being accurately duplicated or altered.

Why is layer-upon-layer security so important? A document that contains only one security feature, a hidden VOID background for example, may be successfully duplicated on a photo copier without the word VOID appearing if that copier lacks the needed technology. By adding additional features, such as a watermark, coin activated ink and security border, the document is virtually impossible to accurately duplicate using a photo copier or scanner. The document can still be copied or scanned and the text and/or graphics will be visible, yet it will always be possible to determine which document is the original and which is the duplicate.

Tamper-Resistant Papers CAN:• Prevent unauthorized copying of a completed or blank prescription form.

• Help the viewer or recipient identify an original document.

• Act as a deterrent against unauthorized duplication.

• Prevent the erasure or modification of information written on the prescription by the prescriber.

• Cause information modification to be visible to the recipient.

• Prevent accurate duplication and prevent the use of counterfeit prescription forms.

Tamper-Resistant Papers CANNOT:• Distort the image, rendering the copy useless.

• Cause damage to or in any way change the original document when copied or scanned.

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A tamper-resistant prescription contains both overt and covert security features. These features will prevent accurate duplication as well as prescription alteration. Below are the vast array of security features of SecureGuard prescription papers and pads. Please note: Each state may require a unique configuration of these features. Depending on your state requirements, prescriptions may be printed on secure pads, laser papers or thermal papers. SecureGuard security features are available on all formats.

Toner Bond™ Security (covert): Bonds laser toner permanently with the paper surface, destroying the document when attempting to “lift” words and numbers with adhesive tape.

Batch Number Protection™ (overt): Utilize unique product identification numbers to identify document information.

Anti-Copy Watermark (overt): View watermark and verify an original document by tipping towards a light source.

Hidden Message Technology™ (covert): Photocopy or scan to uncover hidden words such as “unauthorized”, “void” or “copy”.

2

1

Distinctive Blue Security Background: Distinctive blue background provides erasure protection.

21

Secure Rub™ Color Change Technology (overt): Briskly rub the ink and the background color will temporarily change color.

21

1

3 33

1 3

Security Warning Band (overt): Deters unauthorized copies by describing the security features of the document.

UV Invisible Fiber Security (covert) – Shine a black light on the document to activate fluorescent fibers and threads.

24# Bond (60# O�set) Security Paper

DEFINING TAMPER-RESISTANT PRESCRIPTIONS

Security Features Meet or Exceed Medicaid “Tamper Resistant” RequirementsOne or more industry-recognized features designed to prevent unauthorized copying of a completed or blank prescription form.

One or more industry-recognized features designed to prevent the erasure or modification of information written on the prescription by the prescriber.

One or more industry-recognized features designed to prevent the use of counterfeit prescription forms.

SECUREGUARD PRESCRIPTIONS (FRONT)

Available for both single and multi-part prescriptions

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A tamper-resistant prescription contains both overt and covert security features. These features will prevent accurate duplication as well as prescription alteration. Below are the vast array of security features of SecureGuard prescription papers and pads. Please note: Each state may require a unique configuration of these features. Depending on your state requirements, prescriptions may be printed on secure pads, laser papers or thermal papers. SecureGuard security features are available on all formats.

Security Warning Box (overt): Deters unauthorized copies by describing the security features of the document. Visible warning box in four positions.

1 3Anti-Copy Coin Rub™ (overt): Rub a coin or metal paper clip on the back of the sheet to activate invisible, anti-copy symbols and words.

Hidden Message Technology™ (covert): Photocopy or scan to uncover hidden words such as “unauthorized”, “void” or “copy”.

1Batch Number Protection™ (overt): Utilize unique product identification numbers to identify document information.

3

DEFINING TAMPER-RESISTANT PRESCRIPTIONS

Security Features Meet or Exceed Medicaid “Tamper Resistant” RequirementsOne or more industry-recognized features designed to prevent unauthorized copying of a completed or blank prescription form.

One or more industry-recognized features designed to prevent the erasure or modification of information written on the prescription by the prescriber.

One or more industry-recognized features designed to prevent the use of counterfeit prescription forms.

SECUREGUARD PRESCRIPTIONS (BACK)

Available for both single and multi-part prescriptions

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1023 IS 110th CONGRESS 1st Session S. 1023 To amend title XXI of the Social Security Act to eliminate the remainder of funding shortfalls for the State Children’s Health Insurance Program (SCHIP) for fiscal year 2007, and for other purposes.

IN THE SENATE OF THE UNITED STATES March 29, 2007 Mr. MENENDEZ introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL To amend title XXI of the Social Security Act to eliminate the remainder of funding shortfalls for the State Children’s Health Insurance Program (SCHIP) for fiscal year 2007, and for other purposes.

SECTION 1. ELIMINATION OF REMAINDER OF SCHIP FUNDING SHORTFALLS FOR FISCAL YEAR 2007. (a) In General- Section 2104(h) of the Social Security Act ( 42 U.S.C. 1397dd(h)), as added by section 201(a) of the National Institutes of Health Reform Act of 2006 (Public Law 109-482), is amended-- (1) in the heading for paragraph (2), by striking ‘REMAINDER OF REDUCTION’ and inserting ‘ PART’; and(2) by striking paragraph (4) and inserting the following:

‘(4) ADDITIONAL AMOUNTS TO ELIMINATE REMAINDER OF FISCAL YEAR 2007FUNDING SHORTFALLS-, ‘(A) IN GENERAL- The Secretary shall allot to each remaining shortfall State described in subparagraph (B) such amount as the Secretary determines will eliminate the estimated shortfall described in such subparagraph for the State for fiscal year 2007.‘(B) REMAINING SHORTFALL STATE DESCRIBED- For purposes of subparagraph

(A), a remaining shortfall State is a State with a State child health plan approved under this title for which the Secretary estimates, on the basis of the most recent data available to the Secretary as of the date of the enactment of this paragraph, that the projected federal expenditures under such plan for the State for fiscal year 2007 will exceed the sum of-

(i) the amount of the State’s allotments for each of fiscal years 2005 and 2006 that will not be expended by the end of fiscal year 2006;(ii) the amount of the State’s allotment for fiscal year 2007; and(iii) the amounts, if any, that are to be redistributed to the State during fiscal year 2007 in accordance with paragraphs (1) and (2).

‘(C) APPROPRIATION; ALLOTMENT AUTHORITY- For the purpose of providing additional allotments to remaining shortfall States under this paragraph there is appropriated, out of any funds in the Treasury not otherwise appropriated, such sums as are necessary for fiscal year 2007. Amounts appropriated pursuant to the preceding sentence are designated as an emergency requirement pursuant to section 402 of H. Con. Res. 95 (109th Congress).’.

(b) Conforming Amendments- Section 2104(h) of such Act (42 U.S.C. 1397dd(h)) (as so added), is amended--(1) in paragraph (l)(B), by striking ‘subject to paragraph (4)(B) and’;(2) in paragraph (2)(8), by striking ‘subject to paragraph (4)(8) and’;(3) in paragraph (S)(A), by striking ‘and (3)’ and inserting ‘(3), and (4)’; and(4) in paragraph (6)--

(A) in the first sentence--

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(i) by inserting ‘or allotted’ after ‘redistributed’; and(ii) by inserting ‘or allotments’ after ‘ redistributions’; and

(B) by striking ‘and (3)’ and inserting ‘(3), and (4)’.

SEC. 2. FUNDING PROVISIONS. (a) Requirement for Use of Tamper-Resistant Prescription Pads Under the Medicaid Program (1) IN GENERAL- Section 1903(i) of the Social Security Act (42 U.S.C. 1396b(i)) is amended--

(A) by striking ‘or’ at the end of paragraph (21);(B) by striking the period at the end of paragraph (22) and inserting ‘; or’; and(C) by inserting after paragraph (22) the following new paragraph:

(23) with respect to amounts expended for medical assistance for covered outpatient drugs (as defined in section 1927(k)(2)) for which the prescription was executed in written (and non-electronic) form unless the prescription was executed on a tamper-resistant pad.’.

(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply to prescriptions executed after September 30, 2007.(b) Repeal of the Limited Continuous Enrollment Provision for Certain Beneficiaries Under the Medicare Advantage Program-(1) IN GENERAL- Subparagraph (E) of section 1851(e)(2) of the Social Security Act (42 U.S.C. 1395w-21 (e)(2), as added by section 206(a) of division B of the Tax Relief and Health Care Act of 2006 (Public Law 109-432), is repealed.(2) CONFORMING AMENDMENT- Section 1860D-1(b)(1)(B)(iii) of the Social Security Act (42 U.S.C. 1395w-101(b)(1)(B)(iii)), as amended by 206(b) of division B of the Tax Relief and Health Care Act of 2006 (Public Law 109-432), is amended by striking ‘subparagraphs (B), (C), and (E)’ and inserting ‘subparagraphs (B) and (C)’.(3) EFFECTIVE DATE- The amendments made by this subsection shall take effect on the day after the date of enactment of this Act.(c) Denial of Payments for Hospital Services or Ambulatory Surgical Center Services That Directly Harm Patients-(1) IN GENERAL- Section 1862(a) of the Social Security Act ( 42 U.S.C. 1395y(a)) is amended--(A) by striking ‘or’ at the end of paragraph (21);(B) by striking the period at the end of paragraph (22) and inserting ‘; or’; and(C) by inserting after paragraph (22) the following new paragraph:

‘(23) which are inpatient or outpatient hospital services or facility services furnished in an ambulatory surgical facility if in the provision of such services there occurred a type of event (such as a surgical event, product or device event, patient protection event, care management event, environmental event, or criminal event) which the Secretary has determined, based on a consensus process involving clinicians, quality experts, health care providers, and patients, which should never occur.’.

(2) POTENTIAL APPLICATION OF NQF ‘ NEVER EVENTS’ LISTS- Nothing in section 1862(a)(23) of the Social Security Act, as inserted by paragraph (1), shall be construed as preventing the Secretary of Health and Human Services from applying all (or a subset of) the events that are listed and endorsed as ‘serious reportable events’ (also known as ‘never events)’ by the National Quality Forum as of November 16, 2006, (or such subsequent, revised list of such events issued by such Forum as the Secretary may specify) as events described in such section.(3) CONFORMING AMENDMENTS-(A) Section 1834(j)(4)(C) of the Social Security Act (42 U.S.C. 1395m(j)(4)©) is amended by striking ‘or 1862(a)(23)’ after ‘1862(a)(1)’.(B) Section 1842(1) of such Act ( 42 U.S.C. 1395u(I)) is amended-- (i) in paragraph (l)(A)(iii)--(I) by striking ‘or (II)’ and inserting ‘, (II)’; and

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(II) by inserting ‘, or (III) payment under this title is denied under section 1862(a)(23)’ after ‘section 1154(a)(1)(B)’; and(ii) in paragraph (2), by inserting ‘or 1862(a)(23)’ after ‘1862(a)(1)’.(C) Section 1866(a)(1)(K) of such Act ( 42 U.S.C. 1395cc(a)(1)(K)) is amended by inserting ‘or is denied under section 1862(a)(23)’ after’ 1154(a)(1)(B)’.(4) REPORT ON DISCLOSURE- Not later than January 1, 2009, the Secretary of Health and Human Services shall submit to Congress a report on a process for public disclosure on never events described in section 1862(a)(24) of the Social Security Act, as inserted by paragraph (l)(C), which will ensure protection of patient privacy and will permit the use of the disclosed information for a root cause analysis to inform the public and the medical community about safety issues involved.

(5) EFFECTIVE DATE- The amendments made by this subsection shall take effect on the date of the enactment of this Act and shall apply to payments for--(A) inpatient hospital services for discharges occurring on or after October 1, 2007; and(B) outpatient hospital services and facility services in an ambulatory surgical center furnished on or after January 1, 2008.