Bill Text: IA SSB3128 | 2021-2022 | 89th General Assembly | Introduced

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Bill Title: A bill for an act relating to contract pharmacies and covered entities that participate in the 340B drug program.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2022-02-09 - Subcommittee Meeting: 02/10/2022 10:30AM Room G15. [SSB3128 Detail]

Download: Iowa-2021-SSB3128-Introduced.html

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Senate Study Bill 3128 - Introduced
SENATE FILE _____
BY (PROPOSED COMMITTEE
ON COMMERCE BILL BY
CHAIRPERSON SCHULTZ)
A BILL FOR
An Act relating to contract pharmacies and covered entities
that participate in the 340B drug program.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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Section 1. NEW SECTION . 510D.1 Definitions.
As used in this chapter, unless the context otherwise
requires:
1. “340B program” means the program created pursuant to the
Veterans Health Care Act of 1992, Pub. L. No. 102-585, section
602, and codified as section 340B of the federal Public Health
Services Act.
2. “Contract pharmacy” means a pharmacy that has executed a
contract with a covered entity to dispense covered outpatient
drugs, purchased by the covered entity through the 340B
program, to eligible patients of the covered entity.
3. “Covered entity” means the same as defined in 42 U.S.C.
§256b(a)(4).
4. “Group health plan” means the same as defined in section
513B.2.
5. “Medicaid managed care organization” means an entity that
is under contract with the Iowa department of human services
to provide services to Medicaid recipients and that also meets
the definition of “health maintenance organization” in section
514B.1.
6. “Pharmacy benefits manager” means the same as defined in
section 510B.1.
7. “Similarly situated entity or pharmacy” means an entity
or pharmacy that is of a generally comparable size, and that
operates in a market with similar demographic characteristics,
including population size, density, distribution, and vital
statistics, and reasonably similar economic and geographic
conditions.
8. “Third-party administrator” means the same as defined in
section 510.11.
Sec. 2. NEW SECTION . 510D.2 340B drug program —— contract
pharmacies and covered entities.
1. Group health plans, health insurance issuers that offer
group or individual health insurance coverage, third-party
administrators, and pharmacy benefits managers shall not
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discriminate against a covered entity or a contract pharmacy
by reimbursing the covered entity or the contract pharmacy for
a dispensing fee in an amount less than the group health plan,
health insurance issuer, third-party administrator, or pharmacy
benefits manager reimburses a similarly situated entity or
pharmacy that is not a covered entity or a contract pharmacy.
2. a. Group health plans, health insurance issuers that
offer group or individual health insurance coverage, third-
party administrators, Medicaid managed care organizations, and
pharmacy benefits managers shall not, solely on the basis that
an entity is a covered entity or that a pharmacy is a contract
pharmacy, or that a covered entity or contract pharmacy
participate in the 340B program, impose any of the following
contractual terms and conditions on the covered entity or the
contract pharmacy that differ from those imposed on a similarly
situated entity or pharmacy that is not a covered entity or a
contract pharmacy:
(1) Fees or other assessments that are not required by state
law or the Iowa administrative code.
(2) Professional dispensing fees that are not required by
state law or the Iowa administrative code.
(3) Restrictions or requirements related to participation
in standard or preferred pharmacy networks.
(4) Requirements related to the frequency or scope of
audits.
(5) Requirements related to inventory management systems
that utilize generally accepted accounting principles.
(6) Requirements related to mandatory disclosure either
directly or through a third party, except disclosures required
by federal law, of prescription orders that are filled with
covered outpatient drugs obtained through the 340B program.
b. Paragraph “a” , subparagraph (1), shall not be construed
to prohibit adjustments for overpayments or other errors
associated with an adjudicated claim.
3. Group health plans, health insurance issuers that offer
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group or individual health insurance coverage, third-party
administrators, Medicaid managed care organizations, and
pharmacy benefits managers shall not do any of the following:
a. Place any restrictions or impose any requirements on
an individual that chooses to obtain a covered outpatient
drug from a covered entity or a contract pharmacy, whether in
person, via courier or the United States post office, or any
other form of delivery.
b. Refuse to contract with a covered entity or a contract
pharmacy based on any criteria that is not applied equally to
contract with a similarly situated entity or pharmacy that does
not participate in the 340B drug program.
c. Impose any restriction or condition, as identified by
the commissioner by rule, on a covered entity that interferes
with the covered entity’s ability to maximize the value of the
discounts obtained by the covered entity through the covered
entity’s participation in the 340B drug program.
Sec. 3. NEW SECTION . 510D.3 Penalties.
The commissioner of insurance shall impose a civil penalty,
not to exceed five thousand dollars per violation per day, on
any entity that violates this chapter.
Sec. 4. NEW SECTION . 510D.4 Rules.
No later than one hundred eighty days after the date of
enactment of this chapter, the commissioner of insurance shall
adopt rules as necessary to implement the chapter.
Sec. 5. NEW SECTION . 510D.5 Applicability.
This chapter shall apply to covered entities, contract
pharmacies, and Medicaid managed care organizations regardless
of whether the covered entity, contract pharmacy, or Medicaid
managed care organization is eligible to retain the discounts
generated by the covered entity’s, contract pharmacy’s, or
Medicaid managed care organization’s participation in the 340B
program.
Sec. 6. PREVENTION OF DUPLICATE DISCOUNTS —— DEPARTMENT
OF HUMAN SERVICES. Within one calendar year of the date of
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enactment of this chapter, the director of the department
of human services shall contract with a third-party
vendor or create a role within the department for the
purpose of establishing a process, pursuant to 42 U.S.C.
§1396r-8(a)(5)(C), to prevent the state from submitting claims
for Medicaid rebates for covered outpatient drugs purchased by
covered entities through the 340B drug program.
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 contract pharmacies and covered
entities that participate in the 340B drug program (340B
program). “340B drug program”, “contract pharmacy”, and
“covered entity” are defined in the bill.
Group health plans (plans), health insurance issuers that
offer group or individual health insurance coverage (issuers),
third-party administrators (administrators), and pharmacy
benefits managers (PBM) are prohibited from discriminating
against a covered entity or a contract pharmacy by reimbursing
the covered entity or the contract pharmacy a dispensing fee
in an amount less than the plan, issuer, administrator, or PBM
reimburses a similarly situated entity or pharmacy that is not
a covered entity or a contract pharmacy. “Similarly situated
entity or pharmacy” is defined in the bill.
Plans, issuers, administrators, Medicaid managed care
organizations (MCOs), and PBMs shall not, solely on the basis
that an entity is a covered entity or that a pharmacy is
a contract pharmacy, or that a covered entity or contract
pharmacy participates in the 340B program, impose certain
contractual terms and conditions, as described in the bill, on
the covered entity or contract pharmacy that differ from those
imposed on a similarly situated entity or pharmacy that is
not a covered entity or a contract pharmacy. Plans, issuers,
administrators, MCOs, and PBMs are also prohibited from
placing restrictions or imposing requirements on individuals
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that choose to obtain a covered outpatient drug from a
covered entity or a contract pharmacy, whether in person, via
courier or the United States post office, or any other form
of delivery; refusing to contract with a covered entity or a
contract pharmacy based on any criteria that is not applied
equally to a contract with a similarly situated entity or
pharmacy that does not participate in the 340B program; or
imposing any restriction or condition as identified by the
commissioner of insurance (commissioner) by rule, on a covered
entity that interferes with the covered entity’s ability to
maximize the value of the discounts obtained by the covered
entity through the covered entity’s participation in the 340B
program.
“Group health plan” and “third-party administrator” are
defined in the bill.
The commissioner shall impose a civil penalty, not to exceed
$5,000 per violation per day, on any entity that violates a
provision of the bill.
No later than 180 days after the date of enactment of the
bill, the commissioner shall adopt rules as necessary to
implement the bill.
The bill applies to covered entities, contract pharmacies,
and MCOs regardless of whether the covered entity, contract
pharmacy, or MCO is eligible to retain the discounts generated
by the covered entity’s, contract pharmacy’s, or MCO’s
participation in the 340B program.
Within one calendar year of the date of enactment of the
bill, the director of the department of human services shall
contract with a third-party vendor or create a role within the
department for the purpose of establishing a process, pursuant
to 42 U.S.C. §1396r-8(a)(5)(C), to prevent the state from
submitting claims for Medicaid rebates for covered outpatient
drugs purchased by covered entities through the 340B drug
program.
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