11101824D
SENATE BILL NO. 879
Offered January 12, 2011
Prefiled January 10, 2011
A BILL to amend and reenact § 38.2-3407.7 of the Code of
Virginia, relating to health insurance; choice of pharmacy.
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Patron-- Reynolds
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Referred to Committee on Commerce and Labor
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Be it enacted by the General Assembly of Virginia:
1. That § 38.2-3407.7 of the Code of Virginia is
amended and reenacted as follows:
§ 38.2-3407.7. Pharmacies; freedom of choice.
A. As used in this
section, unless the context requires a different meaning:
"Contract
provider" means a pharmacy granted the right to provide prescription drugs
and pharmacy services according to the terms of the insurer.
"Copayment"
means a type of cost sharing whereby insured or covered persons pay a specified
predetermined amount per unit of service with their insurer paying the
remainder of the charge. The copayment is incurred at the time the service is
used. The copayment may be a fixed or variable amount.
"Health benefit
plan" means any accident and health insurance policy or certificate,
health services plan contract, health maintenance organization subscriber
contract, plan provided by a multiple employer welfare
association or plan provided by another benefit arrangement.
"Health benefit plan" does not mean accident only, credit, or
disability insurance; coverage of Medicare services or federal employee health
plans, pursuant to contracts with the United States government; Medicare
supplement or long-term care insurance; Medicaid coverage; dental only or
vision only insurance; specified disease insurance; hospital confinement
indemnity coverage; limited benefit health coverage; coverage issued as a supplement
to liability insurance; insurance arising out of a workers' compensation or
similar law; automobile medical payment insurance; medical expense and loss of
income benefits; or insurance under which benefits are payable with or without
regard to fault and that is statutorily required to be contained in any
liability insurance policy or equivalent self-insurance.
"Insurer"
means any entity that provides or offers a health benefit plan.
B. This
section shall:
1. Apply to all:
a. Health
benefit plans providing pharmaceutical services benefits, including
prescription drugs, to any resident of the Commonwealth;
and
b. Insurance
companies and health maintenance organizations that provide or administer
coverages and benefits for prescription drugs; and
2. Not apply to any:
a. Entity
that (i) has its own facility; (ii)
employs or contracts with physicians, pharmacists,
nurses, and other health care personnel; and
(iii) dispenses
prescription drugs from its own pharmacy to its employees and to enrollees of
its health benefit plan; however, this section shall apply to an entity
otherwise excluded by this subdivision that
contracts with an outside pharmacy or group of pharmacies to provide
prescription drugs and services; or
b. Federal
program, clinical trial program, or hospital
or other licensed health care facility
when dispensing prescription drugs to its patients.
C. Notwithstanding
any provision of § 38.2-3407 to the contrary, no
insurer proposing to issue preferred provider policies or
contracts the terms of a health
benefit plan shall prohibit not:
1. Prohibit
or limit any person receiving
pharmacy benefits furnished thereunder resident of the Commonwealth who is eligible for reimbursement for pharmacy
services as a participant or beneficiary of a health benefit plan
from selecting, without limitation, the pharmacy of his choice to furnish such
benefits. This right of selection extends to and includes
pharmacies that are nonpreferred providers and that have previously notified
the insurer, by facsimile or otherwise, of their agreement to accept
reimbursement for their services at rates applicable to pharmacies that are
preferred providers, including any copayment consistently imposed by the
insurer, as payment in full. Each insurer shall permit prompt electronic or
telephonic transmittal of the reimbursement agreement by the pharmacy and
ensure prompt verification to the pharmacy of the terms of reimbursement. In no
event shall any person receiving a covered pharmacy benefit from a nonpreferred
provider which has submitted a reimbursement agreement be responsible for
amounts that may be charged by the nonpreferred provider in excess of the
copayment and the insurer's reimbursement applicable to all of its preferred
pharmacy providers. when the pharmacy has agreed to participate in the
health benefit plan according to the terms offered by the insurer;
2. Deny a pharmacy the
opportunity to participate as a contract provider under a health benefit plan
if the pharmacy agrees to provide pharmacy services that meet the terms and
requirements, including terms of reimbursement, of the insurer under a health
benefit plan; however, if the pharmacy is
offered the opportunity to participate as a contract
provider, no provisions of this section shall
apply if the pharmacy elects not to participate;
B. No such insurer
shall impose upon any person receiving pharmaceutical benefits furnished under
any such policy or contract:
13. Any Impose upon a beneficiary of pharmacy services
under a health benefit plan any copayment, fee, or condition that is not
equally imposed upon all individuals in the same benefit category, class, or copayment level, whether or not such benefits are furnished by
pharmacists who are nonpreferred providers under the health benefit plan when receiving
services from a contract provider;
24. Any Impose a monetary advantage or penalty under a health benefit plan
that would affect or influence any such person's a beneficiary's choice of
pharmacy. Monetary advantage or penalty includes higher
copayment, a reduction in reimbursement for services, or promotion of one
participating pharmacy over another by these methods; or
35. Any
reduction in Reduce allowable reimbursement for pharmacy services related to utilization of pharmacists who are
nonpreferred providers to
a beneficiary under a health benefit plan because the beneficiary selects a
pharmacy of his choice, so long as that pharmacy has enrolled with the health
benefit plan under the terms offered to all pharmacies in the plan coverage
area; or
6. Require a
beneficiary, as a condition of payment or reimbursement, to purchase pharmacy
services, including prescription drugs, exclusively through a mail-order
pharmacy.
C. For purposes of
this section, a prohibited condition or penalty shall include, without
limitation: (i) denying immediate access to electronic claims filing to a
pharmacy that is a nonpreferred provider and that has complied with subsection
D or (ii) requiring a person receiving pharmacy benefits to make payment at
point of service, except to the extent such conditions and penalties are
similarly imposed on preferred providers.
D. Any A pharmacy that wishes to be covered by this section shall, if requested to do so in
writing by an insurer, within 30 days of the pharmacy's receipt of the request,
execute and deliver to the insurer the direct service agreement or preferred
provider agreement that the insurer requires all of its preferred providers of
pharmacy benefits to execute. Any pharmacy that fails to timely execute and
deliver such agreement shall not be covered by this section with respect to
that insurer unless and until the pharmacy executes and delivers the agreement , by or through a pharmacist acting on its behalf
as its employee, agent, or owner, may not waive, discount, rebate, or distort a
copayment of any insurer, policy, or plan or a beneficiary's coinsurance
portion of a prescription drug coverage or reimbursement. If a
pharmacy, by or through a pharmacist's acting on its behalf as its employee,
agent, or owner, provides a
pharmacy service to an enrollee of a health benefit plan that meets the terms
and requirements of the insurer under a health benefit plan, the pharmacy shall
provide its pharmacy services to all enrollees of that health benefit plan on
the same terms and requirements of the insurer. A violation of this subsection
shall subject the pharmacist to license revocation or suspension by the
Board of Pharmacy pursuant to § 54.1-3316.
E. The
Commission shall have no jurisdiction to adjudicate controversies arising out
of this section At least 60 days
before the effective date of any health benefit plan providing reimbursement to
residents of the Commonwealth for prescription drugs, which plan
restricts pharmacy participation, the entity
providing the health benefit plan shall notify, in writing, all pharmacies
within the geographical coverage area of the health benefit plan and offer the
pharmacies the opportunity to participate in the health benefit plan. All
pharmacies in the geographical coverage area of the plan shall be eligible to
participate under identical reimbursement terms for providing pharmacy
services, including prescription drugs. The entity providing the health benefit
plan shall, through reasonable means, on a timely basis, and on regular
intervals in order to effectuate the purposes of this section, inform the
beneficiaries of the plan of the names and locations of pharmacies that are
participating in the plan as providers of pharmacy services and prescription
drugs. Additionally, participating pharmacies shall be entitled to announce
their participation to their customers through a means acceptable to the
pharmacy and the entity providing the health benefit plans. The pharmacy
notification provisions of this section shall not apply when an individual or
group is enrolled, but when the plan enters a particular county of the Commonwealth.
F. If rebates or marketing
incentives are allowed to pharmacies or other dispensing entities providing
services or benefits under a health benefit plan, these rebates or marketing
incentives shall be offered on an equal basis to all pharmacies and other
dispensing entities providing services or benefits under a health benefit plan
when pharmacy services, including prescription drugs, are purchased in the same
volume and under the same terms of payment. Nothing in this
section shall limit
the authority of an insurer proposing to issue preferred provider policies or
contracts to select a single mail order pharmacy provider as the exclusive
provider of pharmacy services that are delivered to the covered person's
address by mail, common carrier, or delivery service. The provisions of this
section shall not apply to such contracts. As used in this subsection,
"mail order pharmacy provider" means a pharmacy permitted to conduct
business in the Commonwealth whose primary business is to dispense a
prescription drug or device under a prescriptive drug order and to deliver the
drug or device to a patient primarily by mail, common carrier, or delivery
service prevent a
pharmaceutical manufacturer or wholesale distributor of pharmaceutical products
from providing special prices, marketing incentives, rebates, or discounts to
different purchasers not prohibited by federal and state
antitrust laws.
G. Any entity or
insurer providing a health benefit plan that fails to comply
with the requirements of this section shall be subject to one or more of the
following: (i) punishment as provided in § 38.2-218; (ii) suspension or
revocation of any license issued by the Commonwealth;
or (iii) any order that may be issued by the Commission pursuant to § 38.2-219.
H. A
violation of this section creates a civil cause of action for damages or
injunctive relief in favor of any person or pharmacy aggrieved by the
violation.
I. The Commissioner
shall not approve any health benefit plan providing pharmaceutical services that does not conform to this section.
J. Any provision in a
health benefit plan that is executed, delivered, renewed, or otherwise
contracted for in the Commonwealth that is contrary to any provision of this
section shall, to the extent of the conflict, be void.
K. It shall be a
violation of this section for any insurer or any person to provide any health
benefit plan providing for pharmaceutical services to residents of the Commonwealth that does not conform to the provisions of this section.
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