Bill Text: NJ A3717 | 2018-2019 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Prohibits pharmacy benefits managers from making certain retroactive reductions in claims payments to pharmacies; requires pharmacy benefits managers to disclose certain product information to pharmacies.*

Spectrum: Partisan Bill (Democrat 17-0)

Status: (Passed) 2019-12-19 - Approved P.L.2019, c.274. [A3717 Detail]

Download: New_Jersey-2018-A3717-Amended.html

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[First Reprint]

ASSEMBLY, No. 3717

STATE OF NEW JERSEY

218th LEGISLATURE

 

INTRODUCED MARCH 22, 2018

 

 

Sponsored by:

Assemblyman  RAJ MUKHERJI

District 33 (Hudson)

Assemblywoman  JOANN DOWNEY

District 11 (Monmouth)

Assemblyman  ERIC HOUGHTALING

District 11 (Monmouth)

 

 

 

 

SYNOPSIS

     Prohibits pharmacy benefits managers from making certain retroactive reductions in claims payments to pharmacies; requires pharmacy benefits managers to disclose certain product information to pharmacies.

 

CURRENT VERSION OF TEXT

     As reported by the Assembly Financial Institutions and Insurance Committee on September 13, 2018, with amendments.

  

An Act concerning pharmacy benefits managers ¹and amending¹ and supplementing P.L.2015, c.179 ¹[(C.17B:27F-1 et seq.)].¹

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    (New section) a. After the date of receipt of a clean claim for payment made by a pharmacy, a pharmacy benefits manager shall not retroactively reduce payment on the claim, either directly or indirectly, through aggregated effective rate ¹, direct or indirect remuneration, quality assurance program,¹ or otherwise, 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 pharmacy. ¹[Nothing in this section shall be construed to prohibit any retroactive increase in payment to a pharmacy pursuant to a written agreement between the pharmacy benefits manager and the pharmacy.]  When a pharmacy adjudicates a claim at the point of sale, the reimbursement amount provided to the pharmacy by the pharmacy benefits manager shall constitute a final reimbursement amount.¹

     b.    For the purpose of this section, "clean claim" means a claim that has no defect or impropriety, including a lack of any required substantiating documentation, or particular circumstance requiring special treatment that prevents timely payment from being made on the claim.

 

     ¹2.   Section 2 of P.L.2015, c.179 (C.17B:27F-2) is amended to read as follows:

     2.    Upon execution or renewal of each contract, or at such a time when there is any change in the term of the contract, a pharmacy benefits manager shall, with respect to contracts between a pharmacy benefits manager and a contracted pharmacy:

     a.     (1)  include in the contract the sources utilized to determine multiple source generic drug pricing, the outlet in the State of New Jersey where pharmacies may acquire the product and brand effective rate, generic effective rate, and professional fee, including, if applicable, the maximum allowable cost or any successive pricing formula, or other pricing methodology utilized by the pharmacy benefits manager as a benchmark for pharmacy reimbursement of the pharmacy benefits manager;

     (2)   update that pricing information every seven calendar days; and

     (3)   establish a reasonable process by which contracted
pharmacies have a method to access relevant maximum allowable cost pricing lists, brand effective rate, generic effective rate, professional fee, any successive pricing formulas and any other pricing methodology utilized by the pharmacy benefits manager as a benchmark for pharmacy reimbursement and any successive pricing formulas in a timely manner; and

     b.    Maintain a procedure to eliminate drugs from the list of drugs subject to multiple source generic drug pricing or modify maximum allowable cost rates in a timely fashion and make that procedure easily accessible to pharmacies¹.

(cf: P.L.2015, c.179, s.2)

 

     ¹3.   Section 4 of P.L.2015, c.179 (C.17B:27F-4) is amended to read as follows:     

     4.    All contracts between a pharmacy benefits manager and a contracted pharmacy shall include a process to appeal, investigate, and resolve disputes regarding multiple source generic drug pricing, brand effective rate, generic effective rate, professional fees, State Health Benefits Program plans and any other pricing methodology utilized by the pharmacy benefits manager as a benchmark for pharmacy reimbursement.  The contract provision establishing the process shall include the following:

     a.     The right to appeal shall be limited to 14 calendar days following the initial claim;

     b.    The appeal shall be investigated and resolved by the pharmacy benefits manager through an internal process within 14 calendar days of receipt of the appeal by the pharmacy benefits manager;

     c.     A telephone number at which a pharmacy may contact the pharmacy benefits manager and speak with an individual who is involved in the appeals process; and

     d.    (1)  If the appeal is denied, the pharmacy benefits manager shall provide the reason for the denial [and], identify the national drug code of a drug product that is available for purchase by [contracted pharmacies] the specific contracted pharmacy appealing the claim in this State from wholesalers registered pursuant to P.L.1961, c.52 (C.24:6B-1 et seq.) and the outlet in the State of New Jersey where pharmacies may acquire the product at a price which is available to the specific contracted pharmacy appealing the claim and which is equal to or less than the maximum allowable cost or the brand effective rate, generic effective rate and professional fee for the appealed drug as determined by the pharmacy benefits manager;

     (2)   If the appeal is approved, the pharmacy benefits manager shall make the price correction, permit the reporting pharmacy to reverse and rebill the appealed claim, and make the price correction effective for all similarly situated pharmacies from the date of the approved appeal.

     e.     A pharmacy licensed in the State of New Jersey shall be permitted to make product deliveries and mail prescriptions to patients without contractual restrictions by a pharmacy benefits manager.¹

(cf: P.L.2015, c.179, s.4)

 

     ¹4.   (New section) A pharmacy benefits manager or third-party payer shall not require pharmacy accreditation standards or recertification requirements to participate in a network which are inconsistent with, more stringent than, or in addition to, the federal and State requirements for licensure as a pharmacy in this State.¹

 

     ¹5.  (New section) The Commissioner of Banking and Insurance may review and approve the compensation program of a pharmacy benefits manager with a health benefits plan to ensure that the reimbursement for pharmacist services paid to a pharmacist or pharmacy is fair and reasonable to provide an adequate pharmacy benefits manager network for a health benefits plan.¹

 

     ¹6.   (New section) P.L.2015, c.179 (C.17B:27F-1 et seq.) shall apply to all pharmacy benefits managers operating in the State of New Jersey and shall apply to plans offered through the State Health Benefits Program.¹

 

     ¹7.   (New section) A pharmacy benefits manager that violates any provision of P.L.2015, c.179 (C.17B:27F-1 et seq.) shall be subject to a penalty, after notice and opportunity for a hearing, for each day during which the violation continues, of not less than $5,000 or more than $10,000 for each violation.¹

 

     ¹[2.] 8.¹     This act shall take effect immediately.