Bill Text: MI HB4155 | 2019-2020 | 100th Legislature | Introduced
Bill Title: Insurance; third party administrators; pharmacy benefit managers; regulate. Amends sec. 2 of 1984 PA 218 (MCL 550.902) by adding secs. 25, 26 & 27.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-02-07 - Bill Electronically Reproduced 02/06/2019 [HB4155 Detail]
Download: Michigan-2019-HB4155-Introduced.html
HOUSE BILL No. 4155
February 6, 2019, Introduced by Rep. Vaupel and referred to the Committee on Government Operations.
A bill to amend 1984 PA 218, entitled
"Third party administrator act,"
by amending section 2 (MCL 550.902) and by adding sections 25, 26,
and 27.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. As used in this act:
(a) "Administrative services manager" or "manager" means an
individual responsible for conducting the daily operations of a
third party administrator.
(b) "Benefit plan" or "plan" means a medical, surgical,
dental, vision, or health care benefit plan and may include
coverage under a policy or certificate issued by a carrier.
(c) "Board" means the TPA advisory board created under section
19.
(d)
"Carrier" means any of the following:
(i) An an
insurer, which is including a health maintenance
organization,
regulated pursuant to under the
insurance code of
1956,
Act No. 218 of the Public Acts of 1956, being sections 1956
PA
218, MCL 500.100 to 500.8302, of
the Michigan Compiled Laws.
(ii) A medical care corporation regulated pursuant to
Act No.
108
of the Public Acts of 1939, being sections 550.301 to 550.316
of
the Michigan Compiled Laws.
(iii) A hospital service corporation regulated pursuant
to Act
No.
109 of the Public Acts of 1939, being sections 550.501 to
550.517
of the Michigan Compiled Laws.
(iv) A health care corporation regulated pursuant to
the
nonprofit
health care corporation reform act, Act No. 350 of the
Public
Acts of 1980, being sections 550.1101 to 550.1704 of the
Michigan
Compiled Laws.
(v) A health maintenance organization regulated under
part 210
of
the public health code, Act No. 368 of the Public Acts of 1978,
being
sections 333.21001 to 333.21099 of the Michigan Compiled
Laws.
(vi) A or
a dental care corporation regulated pursuant
to Act
No.
125 of the Public Acts of 1963, being sections under 1963 PA
125,
MCL 550.351 to 550.373. of
the Michigan Compiled Laws.
(e)
"Commissioner" means the commissioner of insurance of this
state.director.
(f) "Department" means the department of insurance and
financial services.
(g) "Director" means the director of the department.
(h) (f)
"ERISA" means the
employee retirement income security
act
of 1974, as amended, Public Law 93-406. , 88 Stat. 829.
(i) "Manufacturer" means that term as defined in section 17706
of the public health code, 1978 PA 368, MCL 333.17706.
(j) (g)
"Person" means an
individual, sole proprietorship,
partnership, corporation, association, or any other legal entity.
(k) (h)
"Personal data" means any
record or information
pertaining to the diagnosis, treatment, or health of an individual
covered by a plan.
(l) "Pharmacy" means that term as defined in section 17707 of
the public health code, 1978 PA 368, MCL 333.17707.
(m) "Pharmacy benefit manager" means a person that contracts
with a pharmacy on behalf of an employer, multiple employer welfare
arrangement, public employee benefit plan, state agency, insurer,
managed care organization, or other third-party payer to provide
pharmacy health benefit services or administration.
(n) (i)
"Processes claims" means
the administrative services
performed in connection with a claim for benefits under a plan.
(o) (j)
"Service contract" means
the written agreement for the
provision of administrative services between the TPA and a plan, a
sponsor of a plan, or a carrier.
(p) (k)
"Third party
administrator" or "TPA" means a person
who
that processes claims pursuant to a service contract and who
that may also provide 1 or more other administrative services
pursuant to a service contract, other than under a worker's
compensation self-insurance program pursuant to section 611 of the
worker's
disability compensation act of 1969, Act No. 317 of the
Public
Acts of 1969, being section 1969
PA 317, MCL 418.611. of
the
Michigan
Compiled Laws. Third party
administrator includes a
pharmacy benefit manager. Third party administrator does not
include a carrier or employer sponsoring a plan.
Sec. 25. A person shall not establish or operate as a pharmacy
benefit manager unless the person registers with the director. A
person that violates this section is subject to a civil fine of not
more than $7,500.00.
Sec. 26. (1) By May 1 of each year, a pharmacy benefit manager
shall provide the department with a report containing the following
information from the prior calendar year:
(a) For each of the pharmacy benefit manager's contractual or
other relationships with an insurer, the aggregate amount of all
rebates that the pharmacy benefit manager received from
pharmaceutical manufacturers other than any of the following
rebates:
(i) A pharmaceutical rebate provided under the Medicaid rebate
program under 42 USC 1396r-8.
(ii) A pharmaceutical rebate provided under the Medicare drug
discount program under the social security act under title XVIII of
the social security act, 42 USC 1395 to 1395jjj, and the patient
protection and affordable care act, Public Law 111-148, as amended
by the health care and education reconciliation act of 2010, Public
Law 111-152.
(iii) A pharmaceutical rebate provided under the 340b drug
pricing program under 42 USC 256b.
(iv) A pharmaceutical rebate provided under the federal
prescription drug program as paid by the Department of Defense and
the Department of Veterans Affairs.
(b) For each of the pharmacy benefit manager's contractual or
other relationships with an insurer, the aggregate rebates that the
pharmacy benefit manager received from pharmaceutical manufacturers
and did not pass through to the insurer.
(c) For each of the pharmacy benefit manager's contractual or
other relationships with an insurer, the highest aggregate retained
rebate percentage, lowest aggregate retained rebate percentage, and
the mean aggregate retained rebate percentage.
(2) The department shall publish in a timely manner the
information that it receives under subsection (1) on a publicly
available website. However, the information must be made available
in a form that does not disclose the identity of a specific insurer
or health plan, the prices charged for specific drugs or classes of
drugs, or the amount of any rebates provided for specific drugs or
classes of drugs. In developing the information to be published in
this section, the department shall consult with the 5 largest
carriers in this state, to be determined by the number of
enrollees, to ensure their identity is not able to be inferred
unknowingly on public disclosure.
(3) The pharmacy benefit manager and the department shall not
publish or disclose any information that would reveal the identity
of a specific insurer or health plan, a price charged for a
specific drug or class of drugs, or the amount of any rebates
provided for a specific drug or class of drugs. The information
described in this subsection must be protected from disclosure as
confidential and proprietary information, and is exempt from
disclosure as a public record under section 13 of the freedom of
information act, 1976 PA 442, MCL 15.243.
(4) As used in this section:
(a) "Aggregated retained rebate percentage" means the
following percentage, calculated for each prescription drug for
which a pharmacy benefit manager receives rebates under a health
plan, and expressed without disclosing any identifying information
regarding the health plan, prescription drug, or therapeutic class:
(i) Calculate the aggregate rebates that the pharmacy benefit
manager received during the prior calendar year from a
pharmaceutical manufacturer related to utilization of the
manufacturer's prescription drug by health plan insureds and did
not pass through to the health plan or insurer.
(ii) Divide the result of the calculation under subparagraph
(i) by the aggregate rebates that the pharmacy benefit manager
received during the prior calendar year from a pharmaceutical
manufacturer related to utilization of the manufacturer's
prescription drug by health plan insureds.
(b) "Rebates" means all rebates, discounts, education or
promotional funds, and other price concessions, based on
utilization of a prescription drug and paid by the manufacturer or
other party, other than an insured, directly or indirectly, to the
pharmacy benefit manager after the claim has been adjudicated at
the pharmacy. Rebates include a reasonable estimate of any volume-
based or other discounts.
Sec. 27. A contract between a pharmacy benefit manager and a
pharmacy or between a pharmacy benefit manager and any other
entity, including, but not limited to, a manufacturer, must not
prohibit or penalize a pharmacy or any other entity for doing any
of the following:
(a) Disclosing to a customer information regarding either of
the following:
(i) The cost sharing amounts that the customer must pay for a
particular prescription drug under his or her health plan's
prescription drug benefit or, without requesting any health plan
reimbursement, outside his or her health plan's prescription drug
benefit, or both.
(ii) The existence and clinical efficacy of a therapeutically
equivalent drug that would be less expensive to the customer under
his or her health plan's prescription drug benefit or outside his
or her health plan's prescription drug benefit, or both, without
requesting any health plan reimbursement, than the drug that was
originally prescribed.
(b) Selling to a customer, instead of a particular prescribed
drug, a therapeutically equivalent drug that would be less
expensive to the customer under his or her health plan's
prescription drug benefit or outside his or her health plan's
prescription drug benefit, without requesting any health plan
reimbursement, than the drug that was originally prescribed.
