Bill Text: IA SSB3128 | 2021-2022 | 89th General Assembly | Introduced
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
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
1
that
participate
in
the
340B
drug
program.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
NEW
SECTION
.
510D.1
Definitions.
1
As
used
in
this
chapter,
unless
the
context
otherwise
2
requires:
3
1.
“340B
program”
means
the
program
created
pursuant
to
the
4
Veterans
Health
Care
Act
of
1992,
Pub.
L.
No.
102-585,
section
5
602,
and
codified
as
section
340B
of
the
federal
Public
Health
6
Services
Act.
7
2.
“Contract
pharmacy”
means
a
pharmacy
that
has
executed
a
8
contract
with
a
covered
entity
to
dispense
covered
outpatient
9
drugs,
purchased
by
the
covered
entity
through
the
340B
10
program,
to
eligible
patients
of
the
covered
entity.
11
3.
“Covered
entity”
means
the
same
as
defined
in
42
U.S.C.
12
§256b(a)(4).
13
4.
“Group
health
plan”
means
the
same
as
defined
in
section
14
513B.2.
15
5.
“Medicaid
managed
care
organization”
means
an
entity
that
16
is
under
contract
with
the
Iowa
department
of
human
services
17
to
provide
services
to
Medicaid
recipients
and
that
also
meets
18
the
definition
of
“health
maintenance
organization”
in
section
19
514B.1.
20
6.
“Pharmacy
benefits
manager”
means
the
same
as
defined
in
21
section
510B.1.
22
7.
“Similarly
situated
entity
or
pharmacy”
means
an
entity
23
or
pharmacy
that
is
of
a
generally
comparable
size,
and
that
24
operates
in
a
market
with
similar
demographic
characteristics,
25
including
population
size,
density,
distribution,
and
vital
26
statistics,
and
reasonably
similar
economic
and
geographic
27
conditions.
28
8.
“Third-party
administrator”
means
the
same
as
defined
in
29
section
510.11.
30
Sec.
2.
NEW
SECTION
.
510D.2
340B
drug
program
——
contract
31
pharmacies
and
covered
entities.
32
1.
Group
health
plans,
health
insurance
issuers
that
offer
33
group
or
individual
health
insurance
coverage,
third-party
34
administrators,
and
pharmacy
benefits
managers
shall
not
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discriminate
against
a
covered
entity
or
a
contract
pharmacy
1
by
reimbursing
the
covered
entity
or
the
contract
pharmacy
for
2
a
dispensing
fee
in
an
amount
less
than
the
group
health
plan,
3
health
insurance
issuer,
third-party
administrator,
or
pharmacy
4
benefits
manager
reimburses
a
similarly
situated
entity
or
5
pharmacy
that
is
not
a
covered
entity
or
a
contract
pharmacy.
6
2.
a.
Group
health
plans,
health
insurance
issuers
that
7
offer
group
or
individual
health
insurance
coverage,
third-
8
party
administrators,
Medicaid
managed
care
organizations,
and
9
pharmacy
benefits
managers
shall
not,
solely
on
the
basis
that
10
an
entity
is
a
covered
entity
or
that
a
pharmacy
is
a
contract
11
pharmacy,
or
that
a
covered
entity
or
contract
pharmacy
12
participate
in
the
340B
program,
impose
any
of
the
following
13
contractual
terms
and
conditions
on
the
covered
entity
or
the
14
contract
pharmacy
that
differ
from
those
imposed
on
a
similarly
15
situated
entity
or
pharmacy
that
is
not
a
covered
entity
or
a
16
contract
pharmacy:
17
(1)
Fees
or
other
assessments
that
are
not
required
by
state
18
law
or
the
Iowa
administrative
code.
19
(2)
Professional
dispensing
fees
that
are
not
required
by
20
state
law
or
the
Iowa
administrative
code.
21
(3)
Restrictions
or
requirements
related
to
participation
22
in
standard
or
preferred
pharmacy
networks.
23
(4)
Requirements
related
to
the
frequency
or
scope
of
24
audits.
25
(5)
Requirements
related
to
inventory
management
systems
26
that
utilize
generally
accepted
accounting
principles.
27
(6)
Requirements
related
to
mandatory
disclosure
either
28
directly
or
through
a
third
party,
except
disclosures
required
29
by
federal
law,
of
prescription
orders
that
are
filled
with
30
covered
outpatient
drugs
obtained
through
the
340B
program.
31
b.
Paragraph
“a”
,
subparagraph
(1),
shall
not
be
construed
32
to
prohibit
adjustments
for
overpayments
or
other
errors
33
associated
with
an
adjudicated
claim.
34
3.
Group
health
plans,
health
insurance
issuers
that
offer
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group
or
individual
health
insurance
coverage,
third-party
1
administrators,
Medicaid
managed
care
organizations,
and
2
pharmacy
benefits
managers
shall
not
do
any
of
the
following:
3
a.
Place
any
restrictions
or
impose
any
requirements
on
4
an
individual
that
chooses
to
obtain
a
covered
outpatient
5
drug
from
a
covered
entity
or
a
contract
pharmacy,
whether
in
6
person,
via
courier
or
the
United
States
post
office,
or
any
7
other
form
of
delivery.
8
b.
Refuse
to
contract
with
a
covered
entity
or
a
contract
9
pharmacy
based
on
any
criteria
that
is
not
applied
equally
to
10
contract
with
a
similarly
situated
entity
or
pharmacy
that
does
11
not
participate
in
the
340B
drug
program.
12
c.
Impose
any
restriction
or
condition,
as
identified
by
13
the
commissioner
by
rule,
on
a
covered
entity
that
interferes
14
with
the
covered
entity’s
ability
to
maximize
the
value
of
the
15
discounts
obtained
by
the
covered
entity
through
the
covered
16
entity’s
participation
in
the
340B
drug
program.
17
Sec.
3.
NEW
SECTION
.
510D.3
Penalties.
18
The
commissioner
of
insurance
shall
impose
a
civil
penalty,
19
not
to
exceed
five
thousand
dollars
per
violation
per
day,
on
20
any
entity
that
violates
this
chapter.
21
Sec.
4.
NEW
SECTION
.
510D.4
Rules.
22
No
later
than
one
hundred
eighty
days
after
the
date
of
23
enactment
of
this
chapter,
the
commissioner
of
insurance
shall
24
adopt
rules
as
necessary
to
implement
the
chapter.
25
Sec.
5.
NEW
SECTION
.
510D.5
Applicability.
26
This
chapter
shall
apply
to
covered
entities,
contract
27
pharmacies,
and
Medicaid
managed
care
organizations
regardless
28
of
whether
the
covered
entity,
contract
pharmacy,
or
Medicaid
29
managed
care
organization
is
eligible
to
retain
the
discounts
30
generated
by
the
covered
entity’s,
contract
pharmacy’s,
or
31
Medicaid
managed
care
organization’s
participation
in
the
340B
32
program.
33
Sec.
6.
PREVENTION
OF
DUPLICATE
DISCOUNTS
——
DEPARTMENT
34
OF
HUMAN
SERVICES.
Within
one
calendar
year
of
the
date
of
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enactment
of
this
chapter,
the
director
of
the
department
1
of
human
services
shall
contract
with
a
third-party
2
vendor
or
create
a
role
within
the
department
for
the
3
purpose
of
establishing
a
process,
pursuant
to
42
U.S.C.
4
§1396r-8(a)(5)(C),
to
prevent
the
state
from
submitting
claims
5
for
Medicaid
rebates
for
covered
outpatient
drugs
purchased
by
6
covered
entities
through
the
340B
drug
program.
7
EXPLANATION
8
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
9
the
explanation’s
substance
by
the
members
of
the
general
assembly.
10
This
bill
relates
to
contract
pharmacies
and
covered
11
entities
that
participate
in
the
340B
drug
program
(340B
12
program).
“340B
drug
program”,
“contract
pharmacy”,
and
13
“covered
entity”
are
defined
in
the
bill.
14
Group
health
plans
(plans),
health
insurance
issuers
that
15
offer
group
or
individual
health
insurance
coverage
(issuers),
16
third-party
administrators
(administrators),
and
pharmacy
17
benefits
managers
(PBM)
are
prohibited
from
discriminating
18
against
a
covered
entity
or
a
contract
pharmacy
by
reimbursing
19
the
covered
entity
or
the
contract
pharmacy
a
dispensing
fee
20
in
an
amount
less
than
the
plan,
issuer,
administrator,
or
PBM
21
reimburses
a
similarly
situated
entity
or
pharmacy
that
is
not
22
a
covered
entity
or
a
contract
pharmacy.
“Similarly
situated
23
entity
or
pharmacy”
is
defined
in
the
bill.
24
Plans,
issuers,
administrators,
Medicaid
managed
care
25
organizations
(MCOs),
and
PBMs
shall
not,
solely
on
the
basis
26
that
an
entity
is
a
covered
entity
or
that
a
pharmacy
is
27
a
contract
pharmacy,
or
that
a
covered
entity
or
contract
28
pharmacy
participates
in
the
340B
program,
impose
certain
29
contractual
terms
and
conditions,
as
described
in
the
bill,
on
30
the
covered
entity
or
contract
pharmacy
that
differ
from
those
31
imposed
on
a
similarly
situated
entity
or
pharmacy
that
is
32
not
a
covered
entity
or
a
contract
pharmacy.
Plans,
issuers,
33
administrators,
MCOs,
and
PBMs
are
also
prohibited
from
34
placing
restrictions
or
imposing
requirements
on
individuals
35
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that
choose
to
obtain
a
covered
outpatient
drug
from
a
1
covered
entity
or
a
contract
pharmacy,
whether
in
person,
via
2
courier
or
the
United
States
post
office,
or
any
other
form
3
of
delivery;
refusing
to
contract
with
a
covered
entity
or
a
4
contract
pharmacy
based
on
any
criteria
that
is
not
applied
5
equally
to
a
contract
with
a
similarly
situated
entity
or
6
pharmacy
that
does
not
participate
in
the
340B
program;
or
7
imposing
any
restriction
or
condition
as
identified
by
the
8
commissioner
of
insurance
(commissioner)
by
rule,
on
a
covered
9
entity
that
interferes
with
the
covered
entity’s
ability
to
10
maximize
the
value
of
the
discounts
obtained
by
the
covered
11
entity
through
the
covered
entity’s
participation
in
the
340B
12
program.
13
“Group
health
plan”
and
“third-party
administrator”
are
14
defined
in
the
bill.
15
The
commissioner
shall
impose
a
civil
penalty,
not
to
exceed
16
$5,000
per
violation
per
day,
on
any
entity
that
violates
a
17
provision
of
the
bill.
18
No
later
than
180
days
after
the
date
of
enactment
of
the
19
bill,
the
commissioner
shall
adopt
rules
as
necessary
to
20
implement
the
bill.
21
The
bill
applies
to
covered
entities,
contract
pharmacies,
22
and
MCOs
regardless
of
whether
the
covered
entity,
contract
23
pharmacy,
or
MCO
is
eligible
to
retain
the
discounts
generated
24
by
the
covered
entity’s,
contract
pharmacy’s,
or
MCO’s
25
participation
in
the
340B
program.
26
Within
one
calendar
year
of
the
date
of
enactment
of
the
27
bill,
the
director
of
the
department
of
human
services
shall
28
contract
with
a
third-party
vendor
or
create
a
role
within
the
29
department
for
the
purpose
of
establishing
a
process,
pursuant
30
to
42
U.S.C.
§1396r-8(a)(5)(C),
to
prevent
the
state
from
31
submitting
claims
for
Medicaid
rebates
for
covered
outpatient
32
drugs
purchased
by
covered
entities
through
the
340B
drug
33
program.
34
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