Bill Text: HI SB507 | 2019 | Regular Session | Introduced

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Bill Title: Relating To Pharmacy Benefit Managers.

Spectrum: Strong Partisan Bill (Democrat 12-1)

Status: (Introduced - Dead) 2019-01-24 - Referred to CPH, WAM. [SB507 Detail]

Download: Hawaii-2019-SB507-Introduced.html

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THE SENATE	S.B. NO.	507
THIRTIETH LEGISLATURE, 2019
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to pharmacy benefit managers.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that there needs to be more transparency and regulation for the cost of prescription drugs.  Prices for prescription drugs have continued to increase, making it difficult for individuals to purchase medicine.  The legislature further finds that the State needs to strengthen its laws to promote better transparency of prescription drug prices.

     The purpose of this Act is to:

     (1)  Require pharmacy benefit managers to notify contracting pharmacies of changes to maximum allowable costs for any drug, identified by its national drug code, fifteen days prior to the change;

     (2)  Require pharmacy benefit managers to disclose where an equivalent drug can be obtained at or below the maximum allowable cost, when a maximum allowable cost is upheld on appeal;

     (3)  Require pharmacy benefit managers to allow contracting pharmacies to reverse and rebill claims if the pharmacy benefit manager establishes a maximum allowable cost that is denied on appeal and pay the difference to the contracting pharmacies;

     (4)  Permit contracting pharmacies to decline to dispense a drug if the reimbursement is less than the acquisition cost;

     (5)  Permit the insurance commissioner to revoke a pharmacy benefit manager's registration if the manager does not comply with state law; and

     (6)  Require the department of health to annually report to the legislature and any other state agency on appeals and dispositions.

     SECTION 2.  Section 328-106, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§328-106[]]  Pharmacy benefit manager; maximum allowable cost.  (a)  A pharmacy benefit manager that reimburses a contracting pharmacy for a drug on a maximum allowable cost basis shall comply with the requirements of this section.

     (b)  The pharmacy benefit manager shall include the following in the contract information with a contracting pharmacy:

     (1)  Information identifying any national drug pricing compendia; or

     (2)  Other data sources for the maximum allowable cost list.

     (c)  The pharmacy benefit manager shall make available to a contracting pharmacy, upon request, the most up-to-date maximum allowable cost price or prices used by the pharmacy benefit manager for patients served by the pharmacy in a readily accessible, secure, and usable web-based or other comparable format.

     (d)  A drug shall not be included on a maximum allowable cost list or reimbursed on a maximum allowable cost basis unless all of the following apply:

     (1)  The drug is listed as "A" or "B" rated in the most recent version of the Orange Book or has a rating of "NR", "NA", or similar rating by a nationally recognized reference;

     (2)  The drug is generally available for purchase in this State from a national or regional wholesaler; and

     (3)  The drug is not obsolete.

     (e)  The pharmacy benefit manager shall review and make necessary adjustments to the maximum allowable cost of each drug on a maximum allowable cost list at least once every seven days using the most recent data sources available, and shall apply the updated maximum allowable cost list beginning that same day to reimburse the contracted pharmacy until the pharmacy benefit manager next updates the maximum allowable cost list in accordance with this section.

     (f)  The pharmacy benefit manager shall notify all contracting pharmacies of changes to maximum allowable costs for any drug, identified by its national drug code, fifteen days prior to initiating the change.

     [(f)] (g)  The pharmacy benefit manager shall have a clearly defined process for a contracting pharmacy to appeal the maximum allowable cost for a drug on a maximum allowable cost list that complies with all of the following:

     (1)  A contracting pharmacy may base its appeal on one or more of the following:

          (A)  The maximum allowable cost for a drug is below the cost at which the drug is available for purchase by similarly situated pharmacies in this State from a national or regional wholesaler; or

          (B)  The drug does not meet the requirements of subsection (d);

     (2)  A contracting pharmacy shall be provided no less than fourteen business days following receipt of payment for a claim to file the appeal with the pharmacy benefit manager;

     (3)  The pharmacy benefit manager shall make a final determination on the contracting pharmacy's appeal no later than fourteen business days after the pharmacy benefit manager's receipt of the appeal;

     (4)  If the maximum allowable cost is upheld on appeal, the pharmacy benefit manager shall provide to the contracting pharmacy the reason therefor and the national drug code of an equivalent drug that may be purchased by a similarly situated pharmacy at a price that is equal to or less than the maximum allowable cost of the drug that is the subject of the appeal[;] with the name of the source, including but not limited to the wholesaler or distributor, where the drug may be purchased; and

     (5)  If the maximum allowable cost is not upheld on appeal, the pharmacy benefit manager shall adjust, for the appealing contracting pharmacy, the maximum allowable cost of the drug that is the subject of the appeal, within one calendar day of the date of the decision on the appeal and allow the contracting pharmacy to reverse and rebill [the appealed claim.] claims submitted from the date of the original submission; provided that the pharmacy benefit manager shall pay the appealing contracting pharmacy the difference between the maximum allowable cost on the day of the claim and the maximum allowable cost being appealed.

     [(g)] (h)  A contracting pharmacy shall not disclose to any third party the maximum allowable cost list and any related information it receives, either directly from a pharmacy benefit manager or through a pharmacy services administrative organization or similar entity with which the pharmacy has a contract to provide administrative services for that pharmacy.

     (i)  A contracting pharmacy or pharmacist may decline to provide a brand name drug, equivalent generic drug product, or service, if the contracting pharmacy or pharmacist is paid less than the acquisition cost for the drug or service.  If the contracting pharmacy or pharmacist declines to provide such drug or service, the pharmacy or pharmacist shall inform the individual requesting the drug or service to contact the individual's prescription drug benefit plan provider, as defined in section 431R-1, for adequate information as to where the prescription for the drug or service may be filled, and the prescription drug benefit plan provider, upon request, shall provide that adequate information to the individual.

     (j)  The insurance commissioner may immediately revoke a pharmacy benefit manager's registration if the pharmacy benefit manager violates this section.

     The department shall adopt rules, pursuant to chapter 91, necessary to enforce this subsection.

     (k)  The department of health shall submit an annual report to the legislature and to any other state agency, as deemed necessary by the department, no later than twenty days prior to the convening of each regular session providing a list of appeals made and whether the appeals were upheld or not."

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2019.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Prescription Drugs; Pharmacy Benefit Managers; Maximum Allowable Costs; Department of Health; Insurance Commissioner

 

Description:

Requires pharmacy benefit managers to notify contracting pharmacies of changes to maximum allowable costs for any drug, identified by its National Drug Code, fifteen days prior to the change.  Requires pharmacy benefit managers to disclose where an equivalent drug can be obtained at or below the maximum allowable cost, when a maximum allowable cost appeal is upheld on appeal.  Requires pharmacy benefit managers to:  allow contracting pharmacies to reverse and rebill claims if the pharmacy benefit manager establishes a maximum allowable cost that is denied on appeal; and pay the difference to the contracting pharmacies.  Permits contracting pharmacies to decline to dispense a drug if the reimbursement is less than the acquisition cost.  Permits the insurance commissioner to revoke a pharmacy benefit manager's registration if the manager does not comply with state law.  Requires the Department of Health to annually report to the legislature and any other state agency on appeals and disposition.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.