Bill Text: IA HSB685 | 2019-2020 | 88th General Assembly | Introduced

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Bill Title: A bill for an act related to pharmacy benefits managers and prescription drug prices, and including applicability provisions.

Spectrum: Committee Bill

Status: (N/A - Dead) 2020-02-20 - Committee report, recommending passage. H.J. 320. [HSB685 Detail]

Download: Iowa-2019-HSB685-Introduced.html

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House Study Bill 685 - Introduced
HOUSE FILE _____
BY (PROPOSED COMMITTEE ON
HUMAN RESOURCES BILL BY
CHAIRPERSON LUNDGREN)
A BILL FOR
An Act related to pharmacy benefits managers and prescription
drug prices, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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Section 1. Section 510B.1, Code 2020, is amended to read as
follows:
510B.1 Definitions.
As used in this chapter , unless the context otherwise
requires:
1. “Biological product” means the same as defined in section
155A.3.
2. “Clean claim” means a claim that has no defect or
impropriety, including a lack of any required substantiating
documentation, or other circumstances requiring special
treatment, that prevents timely payment from being made on the
claim.
1. 3. “Commissioner” means the commissioner of insurance.
2. “Covered entity” means a nonprofit hospital or medical
services corporation, health insurer, health benefit plan, or
health maintenance organization; a health program administered
by a department or the state in the capacity of provider of
health coverage; or an employer, labor union, or other group of
persons organized in the state that provides health coverage.
“Covered entity” does not include a self-funded health coverage
plan that is exempt from state regulation pursuant to the
federal Employee Retirement Income Security Act of 1974
(ERISA) , as codified at 29 U.S.C. §1001 et seq. ; a plan issued
for health coverage for federal employees; or a health plan
that provides coverage only for accidental injury, specified
disease, hospital indemnity, Medicare supplemental, disability
income, or long-term care, or other limited benefit health
insurance policy or contract.
3. “Covered individual” means a member, participant,
enrollee, contract holder, policyholder, or beneficiary of a
covered entity who is provided health coverage by the covered
entity, and includes a dependent or other person provided
health coverage through a policy, contract, or plan for a
covered individual.
4. “Generic drug” means a chemically equivalent copy of a
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brand-name drug with an expired patent.
5. “Labeler” means a person that receives prescription
drugs from a manufacturer or wholesaler and repackages those
drugs for later retail sale and that has a labeler code from
the federal food and drug administration pursuant to 21 C.F.R.
§207.20 .
6. “Maximum reimbursement amount” means the maximum
reimbursement amount for a therapeutically and pharmaceutically
equivalent multiple-source prescription drug that is listed in
the most recent edition of the publication entitled “Approved
Drug Products with Therapeutic Equivalence Evaluations”,
published by the United States food and drug administration,
otherwise known as the orange book.
4. “Contracted pharmacy” means a pharmacy that participates
in a pharmacy benefits manager’s network through a contract
with any of the following:
a. A pharmacy benefits manager.
b. A pharmacy services administration organization.
c. A pharmacy group purchasing organization.
5. “Cost-sharing” means any coverage limit, copayment,
coinsurance, deductible, or other out-of-pocket expense
obligation imposed on a covered person by a health benefit plan
providing for third-party payment or prepayment of health or
medical expenses.
6. “Covered person” means a policyholder, subscriber, or
other person participating in a health benefit plan that covers
prescription drugs.
7. “Drug” means all medicines and preparations recognized
in the official United States Pharmacopeia or the official
National Formulary as substances intended to be used for the
care, mitigation, or prevention of disease.
8. “Generically equivalent drug” means a drug that is
pharmaceutically and therapeutically equivalent to a drug that
is prescribed.
9. “Health benefit plan” means the same as defined in
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section 514J.102.
10. “Health care professional” means the same as defined in
section 514J.102.
11. “Health carrier” means the same as defined in section
514J.102.
12. “Maximum allowable cost list” means a list of drugs
or other methodology used by a pharmacy benefits manager,
directly or indirectly, setting the maximum allowable payment
to a pharmacy for a generic drug, brand-name drug, biological
product, or other prescription drug. “Maximum allowable cost
list” includes without limitation all of the following:
a. Average acquisition cost, including the national average
drug acquisition cost.
b. Average manufacturer price.
c. Average wholesale price.
d. Brand effective rate.
e. Generic effective rate.
f. Discount indexing.
g. Federal upper limits.
h. Wholesale acquisition cost.
i. Any other term that a pharmacy benefits manager or a
health carrier may use to establish reimbursement rates to a
pharmacy for pharmacist services.
13. “Pharmaceutically equivalent” means drugs that have
identical amounts of the same active chemical ingredients in
the same dosage form and that meet the identical, compendious,
or other applicable standards of strength, quality, and purity
according to the official United States Pharmacopeia or other
nationally recognized compendium.
14. “Pharmacist services” means products, goods, and
services, or any combination of products, goods, and services,
provided as part of the practice of pharmacy.
7. 15. “Pharmacy” means pharmacy the same as defined in
section 155A.3 .
16. “Pharmacy acquisition cost” means the amount that a
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pharmaceutical wholesaler charges for a drug as listed on the
pharmacy’s billing invoice.
17. “Pharmacy benefits manager affiliate” means a pharmacy
or pharmacist that directly or indirectly, through one or more
intermediaries, owns or controls, is owned or controlled by, or
is under common ownership or control with a pharmacy benefits
manager.
8. 18. “Pharmacy benefits management services ” means the
administration or management of prescription drug benefits
provided by a covered entity under the terms and conditions
of the contract between the pharmacy benefits manager and the
covered entity. provision of any of the following services on
behalf of a health carrier:
a. The procurement of prescription drugs at a negotiated
rate for dispensing within this state.
b. The processing of prescription drug claims.
c. The administration of payments related to prescription
drug claims.
9. 19. “Pharmacy benefits manager” means a person who
performs pharmacy benefits management services , pursuant to a
contract or other relationship with a health carrier, either
directly or through an intermediary, provides pharmacy benefits
management services for a health carrier . “Pharmacy benefits
manager” includes a person acting on behalf of a pharmacy
benefits manager in a contractual or employment relationship in
the performance of pharmacy benefits management services for a
covered entity. “Pharmacy benefits manager” does not include
a health insurer licensed in the state if the health insurer
or its subsidiary is providing pharmacy benefits management
services exclusively to its own insureds, or a public
self-funded pool or a private single employer self-funded
plan that provides such benefits or services directly to its
beneficiaries.
20. “Pharmacy services administrative organization” means
an organization that assists pharmacies, pharmacy benefits
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managers, or third-party payers in achieving administrative
efficiencies, including contracting and payment efficiencies.
10. 21. “Prescription drug” means prescription drug the
same as defined in section 155A.3 .
11. 22. “Prescription drug order” means prescription drug
order the same as defined in section 155A.3 .
23. “Spread pricing” means a model of prescription drug
pricing in which a pharmacy benefits manager charges a health
benefit plan a contracted price for a prescription drug, and
the contracted price for the prescription drug differs from the
amount the pharmacy benefits manager directly or indirectly
pays a pharmacy for the same prescription drug.
24. “Therapeutically equivalent” means drugs from the same
therapeutic class that if administered in appropriate amounts
will provide the same therapeutic effect, identical in duration
and intensity.
Sec. 2. Section 510B.2, Code 2020, is amended to read as
follows:
510B.2 Certification as a third-party administrator required .
A pharmacy benefits manager doing business in this state
shall obtain a certificate of registration as a third-party
administrator under chapter 510 pursuant to section 510.21 , and
the provisions relating to a third-party administrator pursuant
to chapter 510 shall apply to a pharmacy benefits manager.
Sec. 3. Section 510B.4, Code 2020, is amended to read as
follows:
510B.4 Performance of duties —— good faith —— conflict of
interest.
1. A pharmacy benefits manager shall perform the pharmacy
benefits manager’s duties exercising exercise good faith and
fair dealing in the performance of its the pharmacy benefits
manager’s contractual obligations toward the covered entity a
health carrier or a pharmacy .
2. A pharmacy benefits manager shall notify the covered
entity a health carrier or a pharmacy in writing of any
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activity, policy, practice ownership interest, or affiliation
of the pharmacy benefits manager that presents any conflict of
interest.
Sec. 4. Section 510B.5, Code 2020, is amended to read as
follows:
510B.5 Contacting covered individual —— requirements.
A pharmacy benefits manager, unless authorized pursuant to
the terms of its contract with a covered entity health carrier ,
shall not contact any covered individual person without
the express written permission of the covered entity health
carrier .
Sec. 5. Section 510B.6, Code 2020, is amended to read as
follows:
510B.6 Dispensing of substitute prescription drug for
prescribed drug drugs .
1. The following provisions shall apply when if a pharmacy
benefits manager requests the dispensing of a substitute
prescription drug for a prescribed prescription drug prescribed
to a covered individual person :
a. The pharmacy benefits manager may request the
substitution of a lower priced generic and therapeutically
equivalent prescription drug for a higher priced prescribed
prescription drug.
b. If the substitute prescription drug’s net cost to
the covered individual person or covered entity the health
carrier exceeds the cost of the prescribed prescription drug,
the substitution shall be made only for medical reasons that
benefit the covered individual person as determined by the
covered person’s prescribing health care professional .
2. A pharmacy benefits manager shall obtain the approval of
the prescribing practitioner health care professional prior to
requesting any substitution under this section .
3. A pharmacy benefits manager shall not substitute an
equivalent prescription drug contrary to a prescription drug
order that prohibits a substitution.
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Sec. 6. Section 510B.7, Code 2020, is amended by striking
the section and inserting in lieu thereof the following:
510B.7 Health carrier termination of contract —— notice.
If a pharmacy benefits manager receives notice from a health
carrier of termination of the health carrier’s contract with
the pharmacy benefits manager, the pharmacy benefits manager
shall notify all contracted pharmacies of the effective date
of the termination within ten working days of receipt of the
notice.
Sec. 7. Section 510B.8, Code 2020, is amended by striking
the section and inserting in lieu thereof the following:
510B.8 Maximum allowable cost lists —— requirements.
1. Before a pharmacy benefits manager places or continues a
particular drug on a maximum allowable cost list, all of the
following requirements must be satisfied:
a. If the drug is a generically equivalent drug, the
drug shall be listed as therapeutically equivalent and
pharmaceutically equivalent “A” or “B” rated in the most recent
edition of the publication entitled “Approved Drug Products
with Therapeutic Equivalence Evaluations”, published by the
United States food and drug administration, otherwise known as
the orange book, or have an NR or NA rating by a nationally
recognized reference.
b. The drug shall be available for purchase by each pharmacy
in this state from a national or regional wholesaler licensed
pursuant to section 155A.17.
c. The drug shall not be obsolete.
2. A pharmacy benefits manager shall comply with all of the
following requirements:
a. The pharmacy benefits manager must provide each pharmacy
subject to a maximum allowable cost list access to the maximum
allowable cost list.
b. The pharmacy benefits manager must update the maximum
allowable cost list within seven calendar days of any of the
following dates:
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(1) The date of an increase in the pharmacy acquisition
cost.
(2) The date of a change in the methodology on which the
maximum allowable cost list is based.
(3) The date of a change in any value of any variable
involved in the methodology on which the maximum allowable cost
list is based.
c. The pharmacy benefits manager must provide a process
for each pharmacy subject to the maximum allowable cost list
to receive prompt notification of any update to the maximum
allowable cost list.
d. The pharmacy benefits manager shall not reimburse any
pharmacy in this state for a prescription drug in an amount
less than the amount that the pharmacy benefits manager
reimburses a pharmacy benefits manager affiliate for providing
the same prescription drug. The amount shall be calculated on
a per unit basis based on the same generic product identifier
or generic code number.
3. A pharmacy may decline to provide pharmacist services
to a pharmacy benefits manager or to a covered person if, as a
result of a maximum allowable cost list, a pharmacy is to be
paid less than that pharmacy’s pharmacy acquisition cost for
the pharmacist services.
Sec. 8. NEW SECTION . 510B.8A Maximum allowable cost lists
—— appeal procedure.
1. A pharmacy benefits manager shall provide an appeal
procedure to allow a pharmacy to challenge a maximum allowable
cost list, and any reimbursement made under a maximum allowable
cost list, for a specific drug for any of the following
reasons:
a. Failure to meet the requirements of section 510B.8.
b. The maximum allowable cost falls below the pharmacy
acquisition cost.
2. The appeal procedure shall include all of the following:
a. A dedicated telephone number, email address, and internet
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site for the pharmacy to submit appeals.
b. The ability to submit an appeal directly to the
pharmacy benefits manager or directly to the pharmacy service
administration organization.
c. A time limit of no less than thirty business days to
submit an appeal from the date of any of the following:
(1) Access to a maximum allowable cost list pursuant to
section 510B.8, subsection 2, paragraph “a” .
(2) A reimbursement that falls below the pharmacy
acquisition cost for a drug.
3. A pharmacy benefits manager shall respond in writing to
a pharmacy’s appeal within ten business days of the date of
receipt of the appeal.
4. If a pharmacy benefits manager upholds a pharmacy’s
appeal, the pharmacy benefits manager shall comply with all of
the following:
a. The pharmacy benefits manager shall permit the
challenging pharmacy to reverse and rebill the claim in
question.
b. The pharmacy benefits manager shall make a change in the
maximum allowable cost list for the drug that is the subject of
the appeal so that the reimbursement for such drug is at least
equal to the pharmacy acquisition cost.
c. The pharmacy benefits manager shall provide the pharmacy
with the national drug code that is the basis for the increase
or change in the price of the drug.
d. The pharmacy benefits manager shall make the changes
pursuant to paragraphs “a” and “b” immediately effective for all
similarly situated pharmacies in this state.
5. If a pharmacy benefits manager denies a pharmacy’s
appeal, the pharmacy benefits manager shall comply with all of
the following:
a. The pharmacy benefits manager shall provide the appealing
pharmacy the national drug code and the name of a national or
regional wholesaler licensed pursuant to section 155A.17 that
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has the drug currently in stock at a price below the maximum
allowable cost list.
b. If the national drug code provided by the pharmacy
benefits manager is not available pursuant to paragraph
“a” , the pharmacy benefits manager shall adjust the maximum
allowable cost list for the drug that is the basis of the
appeal to a price greater than the appealing pharmacy’s
pharmacy acquisition cost for that drug, and permit the
appealing pharmacy to reverse and rebill each claim affected
by the pharmacy’s inability to procure the drug at a cost that
is equal to or less than the previously challenged maximum
allowable cost.
Sec. 9. NEW SECTION . 510B.8B Prohibited actions and
activities.
1. A pharmacy benefits manager or a health carrier shall
not, as a condition of payment, reimbursement, or network
participation, require any of the following of a pharmacy:
a. To meet accreditation, certification, or credentialing
standards that are inconsistent with, more stringent than, or
in addition to the federal and state requirements applicable to
a pharmacy in this state.
b. To satisfy any insurance, surety bond, or other
financial guarantee requirements that are inconsistent with,
more stringent than, or in addition to the federal and state
requirements applicable to a pharmacy in this state.
2. A pharmacy benefits manager or a health carrier shall not
directly or indirectly charge or hold a pharmacy responsible
for a fee related to a claim in any of the following
circumstances:
a. The fee is not readily apparent to the pharmacy at the
time the pharmacy submits the claim.
b. The fee is not reported on the remittance advice of an
adjudicated claim.
c. The fee is not processed at the time a claim is
adjudicated at the point of sale.
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3. A pharmacy benefits manager is prohibited from
conducting spread pricing in this state.
4. A pharmacy benefits manager shall not terminate a
contracted pharmacy solely on the basis that the contracted
pharmacy offers or provides store-direct delivery or mail
prescriptions as an ancillary service to a covered person.
Sec. 10. Section 510B.9, Code 2020, is amended to read as
follows:
510B.9 Submission, approval, and use of prior Prior
authorization form .
A pharmacy benefits manager shall file with and have
approved by the commissioner a single prior authorization
form as provided in section 505.26 comply with all applicable
prior authorization requirements pursuant to section 505.26 .
A pharmacy benefits manager shall use the single prior
authorization form as provided in section 505.26 .
Sec. 11. Section 510B.10, Code 2020, is amended by striking
the section and inserting in lieu thereof the following:
510B.10 Disclosure of lower-cost options —— pharmacists.
1. A pharmacy benefits manager shall not require a covered
person to make a cost-sharing payment at the point of sale
for a prescription drug in an amount that exceeds the amount
the covered person would pay for the prescription drug if the
covered person purchased the prescription drug without using
the covered person’s health benefit plan.
2. A pharmacy benefits manager shall not prohibit a
contracted pharmacy from disclosing, and shall not apply a
penalty or any other type of disincentive to a contracted
pharmacy that discloses, lower-cost prescription drug options
to a covered person including those options that are available
to the covered person if the covered person purchases the
prescription drug without using the covered person’s health
benefit plan.
3. Any amount paid by a covered person for a prescription
drug purchased without using the covered person’s health
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benefit plan pursuant to subsection 2 shall be applied to any
deductible imposed by the covered person’s health benefit plan
in accordance with the covered person’s health benefit plan
coverage documents.
4. Any provision of a contract that conflicts with
subsection 1 or 2 shall be void and unenforceable.
5. A violation of this section shall be an unlawful practice
and shall be a violation of section 507B.4.
Sec. 12. NEW SECTION . 510B.11 Clean claims —— retroactive
reductions.
1. After the date of receipt of a clean claim for payment
made by a contracted pharmacy, a pharmacy benefits manager
shall not retroactively reduce payment on the claim, either
directly or indirectly, through an aggregated effective rate,
direct or indirect remuneration, a quality assurance program,
or any other means, except if the claim is found not to be
a clean claim during the course of a routine audit performed
pursuant to an agreement between the pharmacy benefits manager
and the contracted pharmacy.
2. If a contracted pharmacy adjudicates a claim at the point
of sale, the reimbursement amount provided to the contracted
pharmacy by the pharmacy benefits manager shall constitute a
final reimbursement amount.
3. Nothing in this section shall be construed to prohibit
any retroactive increase in payment to a contracted pharmacy
pursuant to a contract between a pharmacy benefits manager and
a pharmacy services administration organization, or between a
pharmacy benefits manager and a pharmacy.
4. A pharmacy benefits manager shall not recoup funds from a
contracted pharmacy in connection with any claims for which the
contracted pharmacy has already been paid unless the recoupment
is a result of any of the following:
a. The recoupment is otherwise permitted or required by law.
b. The recoupment is based on an audit performed pursuant
to a contract between the pharmacy benefits manager and the
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contracted pharmacy.
c. The recoupment is a result of an audit performed pursuant
to a contract between the pharmacy benefits manager and a
designated pharmacy services administrative organization.
5. The provisions of this section shall not apply to
an investigative audit of a contracted pharmacy’s records
conducted by a pharmacy benefits manager in any of the
following circumstances:
a. Fraud, waste, abuse, or other intentional misconduct is
indicated by a review of the contracted pharmacy’s claims data
or statements.
b. Other investigative methods utilized by the pharmacy
benefits manager indicate that the contracted pharmacy is
or has been engaged in criminal wrongdoing, fraud, or other
intentional or willful misrepresentation.
Sec. 13. NEW SECTION . 510B.12 Compensation program ——
commissioner approval.
The commissioner may review and approve the compensation
program of a pharmacy benefits manager for a health carrier to
ensure that the reimbursement for pharmacist services provided
by a contracted pharmacy is fair, reasonable, and appropriate
to provide an adequate pharmacy benefits manager’s network for
the health carrier.
Sec. 14. NEW SECTION . 510B.13 Rules.
The commissioner shall adopt rules pursuant to chapter 17A
to administer this chapter.
Sec. 15. NEW SECTION . 510B.14 Enforcement.
1. The commissioner shall take any enforcement action under
the commissioner’s authority to enforce compliance with this
chapter.
2. After notice and hearing, the commissioner may impose
any or all of the sanctions pursuant to section 507B.7 and may
suspend or revoke a pharmacy benefits manager’s certificate of
registration as a third-party administrator upon a finding that
the pharmacy benefits manager violated any of the requirements
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of this chapter, or of chapter 510 pertaining to third-party
administrators.
3. A pharmacy benefits manager, as an agent or vendor of a
health carrier, is subject to the commissioner’s authority to
conduct an examination pursuant to chapter 507. The procedures
set forth in chapter 507 regarding examination reports shall
apply to an examination of a pharmacy benefits manager under
this chapter.
4. A pharmacy benefits manager is subject to the
commissioner’s authority to conduct an investigation pursuant
to chapter 507B. The procedures set forth in chapter 507B
regarding investigations shall apply to an investigation of a
pharmacy benefits manager under this chapter.
5. A pharmacy benefits manager is subject to the
commissioner’s authority to conduct an examination, audit,
or inspection pursuant to chapter 510 for third-party
administrators. The procedures set forth in chapter 510 for
third-party administrators shall apply to an examination,
audit, or inspection of a pharmacy benefits manager under this
chapter.
6. If the commissioner conducts an examination of a pharmacy
benefits manager under chapter 507; a proceeding under chapter
507B; or an examination, audit, or inspection under chapter
510, all information received from the pharmacy benefits
manager, and all notes, work papers, or other documents
related to the examination, investigation, audit, or inspection
of the pharmacy benefits manager, shall be confidential
records pursuant to chapter 22 and shall be accorded the same
confidentiality as notes, work papers, investigatory materials,
or other documents related to the examination of an insurer as
provided in section 507.14.
Sec. 16. NEW SECTION . 510B.15 Severability.
If any provision of this chapter or the application
thereof to any person or circumstances is held invalid, the
invalidity shall not affect other provisions or applications
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of the chapter which can be given effect without the invalid
provisions or application and, to this end, the provisions of
this chapter are severable.
Sec. 17. REPEAL. Section 510B.3, Code 2020, is repealed.
Sec. 18. APPLICABILITY. This Act applies to a pharmacy
benefits manager providing pharmacy benefits management
services in this state on or after the effective date of this
Act.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill relates to pharmacy benefits managers and
prescription drug prices.
“Pharmacy benefits manager” (PBM) is defined in the bill as
a person who, pursuant to a contract or other relationship with
a health carrier, either directly or through an intermediary,
provides pharmacy benefits management services for the
health carrier. “Pharmacy benefits management services” is
defined as, on behalf of a health carrier, the procurement of
prescription drugs at a negotiated rate for dispensing within
this state, the processing of prescription drug claims, or the
administration of payments related to prescription drug claims.
The bill details the requirements that must be satisfied
before a PBM places a particular drug on a maximum allowable
cost list, or continues a particular drug on a maximum
allowable cost list. “Maximum allowable cost list” (MAC list)
is defined in the bill as a list of drugs or other methodology
used by a PBM, directly or indirectly, setting the maximum
allowable payment to a pharmacy for a generic drug, brand-name
drug, biological product, or other prescription drug. A PBM
cannot place a drug on the MAC list unless the PBM first
complies with the requirements in the bill, including ensuring
that the drug is available for purchase by each pharmacy in
this state for a national or regional wholesaler licensed in
this state.
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A PBM must allow a pharmacy that is subject to a MAC list
to have access to the list. The PBM is required to update a
MAC list within seven calendar days of the date of an increase
in the pharmacy acquisition cost, a change in methodology on
which the MAC is based, or a change in any value of any variable
involved in the methodology on which the MAC list is based.
The PBM must provide a pharmacy subject to a MAC list with
prompt notification of any updates to the MAC list.
The bill provides that a PBM cannot reimburse a pharmacy in
this state for a prescription drug in an amount less than the
amount that the PBM reimburses a PBM affiliate for providing
the same prescription drug. A pharmacy may decline to provide
pharmacist services to a PBM or to a covered person if, as a
result of a maximum allowable cost list, a pharmacy is to be
paid less than that pharmacy’s pharmacy acquisition cost for
the prescription drug.
The bill requires a PBM to provide an appeal procedure to
allow a pharmacy to challenge a maximum allowable cost list,
and any reimbursement made under a maximum allowable cost
list. The appeal procedure must include a dedicated telephone
number, email address, and internet site for a pharmacy to
submit appeals, and must include the ability to submit an
appeal directly to the PBM or directly to the pharmacy service
administration organization. Additional requirements for the
appeals process, including the PBM’s obligations if an appeal
is upheld or denied, are detailed in the bill.
The bill prohibits a PBM or a health carrier from, as a
condition of payment, reimbursement, or network participation,
requiring a pharmacy to meet accreditation, certification,
or credentialing standards that are inconsistent with, more
stringent than, or in addition to the federal and state
requirements applicable to a pharmacy in this state; or
to satisfy any insurance, surety bond, or other financial
guarantee requirements that are inconsistent with, more
stringent than, or in addition to the federal and state
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requirements applicable to a pharmacy in this state. The bill
also prohibits the PBM from charging or holding a pharmacy
responsible for certain fees as detailed in the bill.
A PBM or a health carrier also cannot directly or indirectly
charge or hold a pharmacy responsible for a fee related to a
claim in any of the circumstances detailed in the bill. A
PBM is additionally prohibited from conducting spread pricing
in this state. “Spread pricing” is defined as a model of
prescription drug pricing in which a PBM charges a health
benefit plan a contracted price for a prescription drug, and
the contracted price for the prescription drug differs from the
amount the PBM directly or indirectly pays a pharmacy for the
prescription drug.
The bill prohibits a PBM from terminating a contracted
pharmacy for providing direct delivery or delivery by mail for
prescriptions to covered persons.
After the date of receipt of a clean claim for payment
from a contracted pharmacy, the bill prohibits a PBM from
retroactively reducing payment on the claim, either directly
or indirectly, through an aggregated effective rate, direct
or indirect remuneration, a quality assurance program, or any
other means unless the claim is found not to be a clean claim
during the course of a routine audit performed by the PBM. The
bill provides that if a contracted pharmacy adjudicates a claim
at the point of sale, the reimbursement amount provided to the
pharmacy by the PBM is the final reimbursement amount. A PBM
cannot recoup funds from a contracted pharmacy in connection
with claims for which the pharmacy has already been paid except
in circumstances outlined in the bill.
The bill authorizes the commissioner of insurance to review
and approve the compensation program of a PBM for a health
carrier to ensure that the reimbursement for services provided
by a contracted pharmacy is fair, reasonable, and appropriate
to provide an adequate PBM network for the health carrier.
The bill requires the commissioner to adopt rules to
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administer the provisions of the bill and to take any
enforcement action under the commissioner’s authority to
enforce compliance with the provisions of the bill.
The bill provides that if any provision of the bill is held
invalid, the invalidity shall not affect other provisions or
applications of the bill which can be given effect without the
invalid provisions.
The bill repeals Code section 510B.3, relating to current
enforcement and rulemaking authority, and makes conforming
changes throughout Code chapter 510B.
The bill applies to a PBM providing pharmacy benefits
management services in this state on or after the effective
date of the bill.
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