June 12, 2014, Introduced by Senators CASPERSON, SCHUITMAKER and CASWELL and referred to the Committee on Insurance.
A bill to amend 1984 PA 218, entitled
"Third party administrator act,"
by amending section 2 (MCL 550.902).
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 or 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. 829.29 USC
1001 to 1461.
(i) "Maximum allowable cost price" or "MAC price" means a
maximum reimbursement amount for a multiple source drug that is
listed in the orange book and is nationally available.
(j) "Multiple source drug" means a drug for which there are 3
or more drug products, each of which meets all of the following
requirements, as determined by the director:
(i) Is listed as A- or B-rated in the orange book, has an "NR"
or "NA" rating by medi-span, or has a similar rating by a
nationally recognized reference.
(ii) Is generally and readily available for purchase by
pharmacies in this state from national or regional wholesalers and
is not obsolete.
(k) "Nationally available" means that the drug product is
available for purchase by pharmacies or chain-operated warehouses
in sufficient supply from national pharmaceutical wholesalers and
is not obsolete or temporarily unavailable.
(l) "Obsolete" means that the drug product may be listed in the
national pricing compendia but is no longer actively marketed by
the manufacturer or labeler.
(m) "Orange book" means the publication entitled "Approved
Drug Products with Therapeutic Equivalence Evaluations" that
identifies drug products approved on the basis of safety and
effectiveness by the United States food and drug administration
under the authority of the federal food, drug, and cosmetic act, 21
USC 301 to 399f.
(n) (g)
"Person" means an
individual, sole proprietorship,
partnership, corporation, association, or any other legal entity.
(o) (h)
"Personal data" means any
record or information
pertaining to the diagnosis, treatment, or health of an individual
covered by a plan.
(p) "Pharmacy" means that term as defined in section 17707 of
the public health code, 1978 PA 368, MCL 333.17707.
(q) "Pharmacy benefit manager" or "PBM" means a person that
contracts with a pharmacy on behalf of a benefit plan for the
pharmacy to provide pharmacy services to individuals covered by the
plan and that determines reimbursement to the pharmacy for the
pharmacy services provided to individuals covered by the plan. A
person that engages in, or subcontracts for, 3 or more of the
following activities is considered a PBM subject to this act:
(i) Claims processing.
(ii) Pharmacy network management.
(iii) Pharmacy discount card management.
(iv) Payment of claims to pharmacies for prescription drugs
dispensed to individuals covered by the plan.
(v) Clinical formulary development and management services
including, but not limited to, utilization management and quality
assurance programs.
(vi) Rebate contracting and administration.
(vii) Conducting of audits of network pharmacies.
(viii) Setting of pharmacy reimbursement pricing and
methodologies, including MAC price, and determining single source
drugs or multiple source drugs.
(ix) Retention of any spread or differential between what is
received from plans as reimbursement for prescription drugs and
what is paid to pharmacies by the PBM for the drugs.
(r) (i)
"Processes claims" means
the administrative services
performed in connection with a claim for benefits under a plan.
(s) (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.
(t) "Temporarily unavailable" means that the drug product is
experiencing short-term supply interruptions for which only
inconsistent or intermittent supply is available in the current
marketplace.
(u) (k)
"Third party
administrator" or "TPA" means a person
who processes claims pursuant to a service contract and who 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.