House
Study
Bill
228
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
LUNDGREN)
A
BILL
FOR
An
Act
relating
to
pharmacy
benefits
managers,
pharmacies,
and
1
prescription
drug
benefits,
and
including
applicability
2
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
TLSB
2245YC
(6)
89
ko/rn
H.F.
_____
Section
1.
Section
505.26,
subsection
1,
paragraph
b,
Code
1
2021,
is
amended
to
read
as
follows:
2
b.
“Pharmacy
benefits
manager”
means
the
same
as
defined
in
3
section
510B.1
510C.1
.
4
Sec.
2.
Section
507B.4,
subsection
2,
Code
2021,
is
amended
5
by
adding
the
following
new
paragraph:
6
NEW
PARAGRAPH
.
t.
Pharmacy
benefits
managers.
Any
7
violation
of
chapter
510B
by
a
pharmacy
benefits
manager.
8
Sec.
3.
Section
510B.1,
Code
2021,
is
amended
by
striking
9
the
section
and
inserting
in
lieu
thereof
the
following:
10
510B.1
Definitions.
11
As
used
in
this
chapter,
unless
the
context
otherwise
12
requires:
13
1.
“Clean
claim”
means
a
claim
that
has
no
defect
or
14
impropriety,
including
a
lack
of
any
required
substantiating
15
documentation,
or
other
circumstances
requiring
special
16
treatment,
that
prevents
timely
payment
from
being
made
on
the
17
claim.
18
2.
“Commissioner
”
means
the
commissioner
of
insurance.
19
3.
“Cost-sharing”
means
any
coverage
limit,
copayment,
20
coinsurance,
deductible,
or
other
out-of-pocket
expense
21
obligation
imposed
by
a
health
benefit
plan
on
a
covered
22
person.
23
4.
“Covered
person”
means
a
policyholder,
subscriber,
or
24
other
person
participating
in
a
health
benefit
plan
that
has
25
a
prescription
drug
benefit
managed
by
a
pharmacy
benefits
26
manager.
27
5.
“Health
benefit
plan”
means
the
same
as
defined
in
28
section
514J.102.
29
6.
“Health
care
professional”
means
the
same
as
defined
in
30
section
514J.102.
31
7.
“Health
carrier”
means
the
same
as
defined
in
section
32
514J.102.
33
8.
“Maximum
allowable
cost”
means
the
maximum
amount
that
a
34
pharmacy
will
be
reimbursed
by
a
pharmacy
benefits
manager
or
a
35
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_____
health
carrier
for
a
generic
drug,
brand-name
drug,
biologic
1
product,
or
other
prescription
drug,
and
that
may
include
any
2
of
the
following:
3
a.
Average
acquisition
cost.
4
b.
National
average
acquisition
cost.
5
c.
Average
manufacturer
price.
6
d.
Average
wholesale
price.
7
e.
Brand
effective
rate.
8
f.
Generic
effective
rate.
9
g.
Discount
indexing.
10
h.
Federal
upper
limits.
11
i.
Wholesale
acquisition
cost.
12
j.
Any
other
term
used
by
a
pharmacy
benefits
manager
or
a
13
health
carrier
to
establish
reimbursement
rates
for
a
pharmacy.
14
9.
“Maximum
allowable
cost
list”
means
a
list
of
15
prescription
drugs
that
includes
the
maximum
allowable
cost
16
for
each
prescription
drug
and
that
is
used,
directly
or
17
indirectly,
by
a
pharmacy
benefits
manager.
18
10.
“Pharmacy”
means
the
same
as
defined
in
section
155A.3.
19
11.
“Pharmacy
acquisition
cost”
means
the
cost
to
a
pharmacy
20
for
a
prescription
drug
as
invoiced
by
a
wholesale
distributor.
21
12.
“Pharmacy
benefits
manager”
means
the
same
as
defined
22
in
section
510C.1.
23
13.
“Pharmacy
benefits
manager
affiliate”
means
a
pharmacy
or
24
a
pharmacist
that
directly
or
indirectly
through
one
or
more
25
intermediaries,
owns
or
controls,
is
owned
and
controlled
by,
26
or
is
under
common
ownership
or
control
of,
a
pharmacy
benefits
27
manager.
28
14.
“Pharmacy
network”
or
“network”
means
pharmacies
that
29
have
contracted
with
a
pharmacy
benefits
manager
to
dispense
30
or
sell
prescription
drugs
to
covered
persons
of
a
health
31
benefit
plan
for
which
the
pharmacy
benefits
manager
manages
32
the
prescription
drug
benefit.
33
15.
“Prescription
drug”
means
the
same
as
defined
in
section
34
155A.3.
35
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_____
16.
“Prescription
drug
benefit”
means
the
same
as
defined
1
in
section
510C.1.
2
17.
“Prescription
drug
order”
means
the
same
as
defined
in
3
section
155A.3.
4
18.
“Wholesale
distributor”
means
the
same
as
defined
in
5
section
155A.3.
6
Sec.
4.
Section
510B.2,
Code
2021,
is
amended
to
read
as
7
follows:
8
510B.2
Certification
as
a
third-party
administrator
required.
9
A
pharmacy
benefits
manager
doing
business
in
this
state
10
shall
obtain
a
certificate
of
registration
as
a
third-party
11
administrator
under
chapter
510
pursuant
to
section
510.21
,
and
12
the
provisions
relating
to
a
third-party
administrator
pursuant
13
to
chapter
510
shall
apply
to
a
pharmacy
benefits
manager.
14
Sec.
5.
Section
510B.4,
Code
2021,
is
amended
to
read
as
15
follows:
16
510B.4
Performance
of
duties
——
good
faith
——
conflict
of
17
interest.
18
1.
A
pharmacy
benefits
manager
shall
perform
the
pharmacy
19
benefits
manager’s
duties
exercising
exercise
good
faith
and
20
fair
dealing
in
the
performance
of
its
the
pharmacy
benefits
21
manager’s
contractual
obligations
toward
the
covered
entity
a
22
health
carrier
.
23
2.
A
pharmacy
benefits
manager
shall
notify
the
covered
24
entity
a
health
carrier
in
writing
of
any
activity,
policy,
25
practice
ownership
interest,
or
affiliation
of
the
pharmacy
26
benefits
manager
that
presents
any
conflict
of
interest.
27
Sec.
6.
Section
510B.5,
Code
2021,
is
amended
to
read
as
28
follows:
29
510B.5
Contacting
covered
individual
persons
——
requirements.
30
A
pharmacy
benefits
manager,
unless
authorized
pursuant
to
31
the
terms
of
its
contract
with
a
covered
entity
health
carrier
,
32
shall
not
contact
any
covered
individual
person
without
33
the
express
written
permission
of
the
covered
entity
health
34
carrier
.
35
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H.F.
_____
Sec.
7.
Section
510B.6,
Code
2021,
is
amended
to
read
as
1
follows:
2
510B.6
Dispensing
of
substitute
Substitute
prescription
drug
3
for
prescribed
drug
drugs
.
4
1.
The
following
provisions
shall
apply
when
if
a
pharmacy
5
benefits
manager
requests
the
dispensing
of
a
substitute
6
prescription
drug
for
a
prescribed
drug
to
prescribed
for
a
7
covered
individual
person
by
the
covered
person’s
health
care
8
professional
:
9
a.
The
pharmacy
benefits
manager
may
request
the
10
substitution
of
a
lower
priced
generic
and
therapeutically
11
equivalent
prescription
drug
for
a
higher
priced
prescribed
12
prescription
drug.
13
b.
If
the
substitute
prescription
drug’s
net
cost
to
the
14
covered
individual
person
or
covered
entity
to
the
health
15
carrier
exceeds
the
cost
of
the
prescribed
prescription
drug
16
originally
prescribed
for
the
covered
person
,
the
substitution
17
shall
be
made
only
for
medical
reasons
that
benefit
the
18
covered
individual
person
as
determined
by
the
covered
person’s
19
prescribing
health
care
professional
.
20
2.
A
pharmacy
benefits
manager
shall
obtain
the
approval
of
21
the
prescribing
practitioner
health
care
professional
prior
to
22
requesting
any
substitution
under
this
section
.
23
3.
A
pharmacy
benefits
manager
shall
not
substitute
an
24
equivalent
prescription
drug
contrary
to
a
prescription
drug
25
order
that
prohibits
a
substitution.
26
Sec.
8.
Section
510B.7,
Code
2021,
is
amended
by
striking
27
the
section
and
inserting
in
lieu
thereof
the
following:
28
510B.7
Pharmacy
networks.
29
1.
A
pharmacy
located
in
the
state
shall
not
be
prohibited
30
from
participating
in
a
pharmacy
network
provided
that
the
31
pharmacy
accepts
the
same
terms
and
conditions
as
the
pharmacy
32
benefits
manager
imposes
on
the
pharmacies
in
the
network.
33
2.
A
pharmacy
benefits
manager
shall
not
assess,
charge,
or
34
collect
any
form
of
remuneration
that
passes
from
a
pharmacy
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or
a
pharmacist
in
a
pharmacy
network
to
the
pharmacy
benefits
1
manager
including
but
not
limited
to
claim
processing
fees,
2
performance-based
fees,
network
participation
fees,
or
3
accreditation
fees.
4
Sec.
9.
Section
510B.8,
Code
2021,
is
amended
by
striking
5
the
section
and
inserting
in
lieu
thereof
the
following:
6
510B.8
Prescription
drugs
——
point
of
sale.
7
1.
A
covered
person
shall
not
be
required
to
make
a
8
cost-sharing
payment
at
the
point
of
sale
for
a
prescription
9
drug
in
an
amount
that
exceeds
the
maximum
allowable
cost
for
10
that
drug
at
the
pharmacy
at
which
the
covered
person
fills
the
11
covered
person’s
prescription
drug
order.
12
2.
A
pharmacy
benefits
manager
shall
not
prohibit
a
pharmacy
13
from
disclosing
the
availability
of
a
lower-cost
prescription
14
drug
option
to
a
covered
person,
or
from
selling
a
lower-cost
15
prescription
drug
option
to
a
covered
person.
16
3.
Any
amount
paid
by
a
covered
person
for
a
prescription
17
drug
purchased
pursuant
to
this
section
shall
be
applied
to
any
18
deductible
imposed
by
the
covered
person’s
health
benefit
plan
19
in
accordance
with
the
health
benefit
plan
coverage
documents.
20
4.
A
covered
person
shall
not
be
prohibited
from
filling
21
a
prescription
drug
order
at
any
pharmacy
located
in
the
22
state
provided
that
the
pharmacy
accepts
the
same
terms
and
23
conditions
as
the
pharmacy
benefits
manager
imposes
on
at
least
24
one
of
the
pharmacy
networks
that
the
pharmacy
benefits
manager
25
has
established
in
the
state.
26
5.
A
pharmacy
benefits
manager
shall
not
impose
different
27
cost-sharing
or
additional
fees
on
a
covered
person
based
on
28
the
pharmacy
at
which
the
covered
person
fills
the
covered
29
person’s
prescription
drug
order.
30
6.
A
pharmacy
may
decline
to
dispense
a
prescription
drug
to
31
a
covered
person
if,
as
a
result
of
the
maximum
allowable
cost
32
list
to
which
the
pharmacy
is
subject,
the
pharmacy
will
be
33
reimbursed
less
for
the
prescription
drug
than
the
pharmacy’s
34
acquisition
cost.
35
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_____
Sec.
10.
NEW
SECTION
.
510B.8A
Maximum
allowable
cost
lists.
1
1.
Prior
to
placement
of
a
particular
prescription
drug
on
a
2
maximum
allowable
cost
list,
a
pharmacy
benefits
manager
shall
3
ensure
that
all
of
the
following
requirements
are
met:
4
a.
The
particular
prescription
drug
must
be
listed
as
5
therapeutically
and
pharmaceutically
equivalent
in
the
most
6
recent
edition
of
the
publication
entitled
“Approved
Drug
7
Products
with
Therapeutic
Equivalence
Evaluations”,
published
8
by
the
United
States
food
and
drug
administration,
otherwise
9
known
as
the
orange
book.
10
b.
The
particular
prescription
drug
must
not
be
obsolete
or
11
temporarily
unavailable.
12
c.
The
particular
prescription
drug
must
be
available
for
13
purchase,
without
limitations,
by
all
pharmacies
in
the
state
14
from
a
national
or
regional
wholesale
distributor
that
is
15
licensed
in
the
state.
16
2.
For
each
maximum
allowable
cost
list
that
a
pharmacy
17
benefits
manager
uses
in
the
state,
the
pharmacy
benefits
18
manager
shall
do
all
of
the
following:
19
a.
Provide
each
pharmacy
in
a
pharmacy
network
reasonable
20
access
to
the
maximum
allowable
cost
list
to
which
the
pharmacy
21
is
subject.
22
b.
Update
the
maximum
allowable
cost
list
within
seven
23
calendar
days
from
the
date
of
an
increase
of
ten
percent
or
24
more
in
the
pharmacy
acquisition
cost
of
a
prescription
drug
on
25
the
list
by
one
or
more
wholesale
distributors
doing
business
26
in
the
state.
27
c.
Update
the
maximum
allowable
cost
list
within
seven
28
calendar
days
from
the
date
of
a
change
in
the
methodology,
or
29
a
change
in
the
value
of
a
variable
applied
in
the
methodology,
30
on
which
the
maximum
allowable
cost
list
is
based.
31
d.
Provide
a
reasonable
process
for
each
pharmacy
in
a
32
pharmacy
network
to
receive
prompt
notice
of
all
changes
to
the
33
maximum
allowable
cost
list
to
which
the
pharmacy
is
subject.
34
Sec.
11.
NEW
SECTION
.
510B.8B
Pharmacy
benefits
manager
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affiliates
——
reimbursement.
1
A
pharmacy
benefits
manager
shall
not
reimburse
any
pharmacy
2
located
in
the
state
in
an
amount
less
than
the
amount
that
3
the
pharmacy
benefits
manager
reimburses
a
pharmacy
benefits
4
manager
affiliate
for
dispensing
the
same
prescription
drug
5
as
dispensed
by
the
pharmacy.
The
reimbursement
amount
shall
6
be
calculated
on
a
per
unit
basis
based
on
the
same
generic
7
product
identifier
or
generic
code
number.
8
Sec.
12.
NEW
SECTION
.
510B.8C
Clean
claims.
9
After
the
date
of
receipt
of
a
clean
claim
submitted
by
a
10
pharmacy
in
a
pharmacy
network,
a
pharmacy
benefits
manager
11
shall
not
retroactively
reduce
payment
on
the
claim,
either
12
directly
or
indirectly,
except
if
the
claim
is
found
not
to
be
13
a
clean
claim
during
the
course
of
a
routine
audit.
14
Sec.
13.
NEW
SECTION
.
510B.8D
Appeals
and
disputes.
15
1.
A
pharmacy
benefits
manager
shall
provide
a
reasonable
16
process
to
allow
a
pharmacy
to
appeal
a
maximum
allowable
cost,
17
or
a
reimbursement
made
under
a
maximum
allowable
cost
list,
18
for
a
specific
prescription
drug
for
any
of
the
following
19
reasons:
20
a.
The
pharmacy
benefits
manager
violated
section
510B.8A.
21
b.
The
maximum
allowable
cost
is
below
the
pharmacy
22
acquisition
cost.
23
2.
The
appeal
process
must
include
all
of
the
following:
24
a.
A
dedicated
telephone
number
at
which
a
pharmacy
may
25
contact
the
pharmacy
benefits
manager
and
speak
directly
with
26
an
individual
involved
in
the
appeal
process.
27
b.
A
dedicated
electronic
mail
address
or
internet
site
for
28
the
purpose
of
submitting
an
appeal
directly
to
the
pharmacy
29
benefits
manager.
30
c.
A
period
of
at
least
seven
business
days
after
the
date
31
of
a
pharmacy’s
initial
submission
of
a
clean
claim
during
32
which
the
pharmacy
may
initiate
an
appeal.
33
3.
A
pharmacy
benefits
manager
shall
respond
to
an
appeal
34
within
seven
business
days
after
the
date
on
which
the
pharmacy
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benefits
manager
receives
the
appeal.
1
a.
If
the
pharmacy
benefits
manager
grants
a
pharmacy’s
2
appeal,
the
pharmacy
benefits
manager
shall
do
all
of
the
3
following:
4
(1)
Adjust
the
maximum
allowable
cost
of
the
prescription
5
drug
that
is
the
subject
of
the
appeal
and
provide
the
national
6
drug
code
number
that
the
adjustment
is
based
on
to
the
7
appealing
pharmacy.
8
(2)
Permit
the
appealing
pharmacy
to
reverse
and
rebill
the
9
claim
that
is
the
subject
of
the
appeal.
10
(3)
Make
the
adjustment
pursuant
to
subparagraph
(1)
11
applicable
to
each
pharmacy
in
the
state
subject
to
the
same
12
maximum
allowable
cost
list
as
the
appealing
pharmacy.
13
b.
If
the
pharmacy
benefits
manager
denies
a
pharmacy’s
14
appeal,
the
pharmacy
benefits
manager
shall
do
all
of
the
15
following:
16
(1)
Provide
the
appealing
pharmacy
the
national
drug
17
code
number
and
the
name
of
a
wholesale
distributor
licensed
18
pursuant
to
section
155A.17
from
which
the
pharmacy
can
obtain
19
the
prescription
drug
at
or
below
the
maximum
allowable
cost.
20
(2)
If
the
national
drug
code
number
provided
by
the
21
pharmacy
benefits
manager
pursuant
to
subparagraph
(1)
is
22
not
available
below
the
pharmacy
acquisition
cost
from
the
23
wholesale
distributor
from
whom
the
pharmacy
purchases
the
24
majority
of
its
prescription
drugs
for
resale,
the
pharmacy
25
benefits
manager
shall
adjust
the
maximum
allowable
cost
list
26
above
the
appealing
pharmacy’s
pharmacy
acquisition
cost,
and
27
permit
the
pharmacy
to
reverse
and
rebill
each
claim
affected
28
by
the
pharmacy’s
inability
to
procure
the
prescription
drug
29
at
a
cost
that
is
equal
to
or
less
than
the
previously
appealed
30
maximum
allowable
cost.
31
Sec.
14.
Section
510B.9,
Code
2021,
is
amended
to
read
as
32
follows:
33
510B.9
Submission,
approval,
and
use
of
prior
Prior
34
authorization
form
.
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A
pharmacy
benefits
manager
shall
file
with
and
have
1
approved
by
the
commissioner
a
single
prior
authorization
2
form
as
provided
in
section
505.26
comply
with
all
applicable
3
prior
authorization
requirements
pursuant
to
section
505.26
.
4
A
pharmacy
benefits
manager
shall
use
the
single
prior
5
authorization
form
as
provided
in
section
505.26
.
6
Sec.
15.
Section
510B.10,
Code
2021,
is
amended
by
striking
7
the
section
and
inserting
in
lieu
thereof
the
following:
8
510B.10
Enforcement.
9
1.
The
commissioner
shall
take
any
enforcement
action
under
10
the
commissioner’s
authority
to
enforce
compliance
with
this
11
chapter.
12
2.
After
notice
and
hearing,
the
commissioner
may
impose
any
13
sanctions
pursuant
to
section
507B.7,
and
may
suspend
or
revoke
14
a
pharmacy
benefits
manager’s
certificate
of
registration
as
15
a
third-party
administrator
upon
a
finding
that
the
pharmacy
16
benefits
manager
violated
this
chapter,
or
any
applicable
17
requirements
pertaining
to
third-party
administrators
under
18
chapter
510.
19
3.
A
pharmacy
benefits
manager,
as
an
agent
or
vendor
of
a
20
health
carrier,
is
subject
to
the
commissioner’s
authority
to
21
conduct
an
examination
pursuant
to
chapter
507.
The
procedures
22
set
forth
in
chapter
507
regarding
examination
reports
shall
23
apply
to
an
examination
of
a
pharmacy
benefits
manager
under
24
this
chapter.
25
4.
A
pharmacy
benefits
manager
is
subject
to
the
26
commissioner’s
authority
to
conduct
a
proceeding
pursuant
27
to
chapter
507B.
The
procedures
set
forth
in
chapter
507B
28
regarding
proceedings
shall
apply
to
a
proceeding
related
to
a
29
pharmacy
benefits
manager
under
this
chapter.
30
5.
A
pharmacy
benefits
manager
is
subject
to
the
31
commissioner’s
authority
to
conduct
an
examination,
audit,
32
or
inspection
pursuant
to
chapter
510
for
third-party
33
administrators.
The
procedures
set
forth
in
chapter
510
for
34
third-party
administrators
shall
apply
to
an
examination,
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audit,
or
inspection
of
a
pharmacy
benefits
manager
under
this
1
chapter.
2
6.
If
the
commissioner
conducts
an
examination
of
a
pharmacy
3
benefits
manager
under
chapter
507;
a
proceeding
under
chapter
4
507B;
or
an
examination,
audit,
or
inspection
under
chapter
5
510,
all
information
received
from
the
pharmacy
benefits
6
manager,
and
all
notes,
work
papers,
or
other
documents
related
7
to
the
examination,
proceeding,
audit,
or
inspection
shall
8
be
confidential
records
pursuant
to
chapter
22
and
shall
be
9
accorded
the
same
confidentiality
as
notes,
work
papers,
10
investigatory
materials,
or
other
documents
related
to
the
11
examination
of
an
insurer
as
provided
in
section
507.14.
12
7.
A
violation
of
this
chapter
shall
be
an
unfair
or
13
deceptive
act
or
practice
in
the
business
of
insurance
pursuant
14
to
section
507B.4,
subsection
3.
15
Sec.
16.
NEW
SECTION
.
510B.11
Rules.
16
The
commissioner
shall
adopt
rules
pursuant
to
chapter
17A
17
to
administer
this
chapter.
18
Sec.
17.
NEW
SECTION
.
510B.12
Severability.
19
If
a
provision
of
this
chapter
or
its
application
to
any
20
person
or
circumstance
is
held
invalid,
the
invalidity
does
21
not
affect
other
provisions
or
applications
of
this
chapter
22
which
can
be
given
effect
without
the
invalid
provision
or
23
application,
and
to
this
end
the
provisions
of
this
chapter
are
24
severable.
25
Sec.
18.
REPEAL.
Section
510B.3,
Code
2021,
is
repealed.
26
Sec.
19.
APPLICABILITY.
This
Act
applies
to
pharmacy
27
benefits
managers
that
manage
a
health
carrier’s
prescription
28
drug
benefit
in
the
state
on
or
after
the
effective
date
of
29
this
Act.
30
EXPLANATION
31
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
32
the
explanation’s
substance
by
the
members
of
the
general
assembly.
33
This
bill
relates
to
pharmacy
benefits
managers,
pharmacies,
34
and
prescription
drug
benefits.
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The
bill
requires
a
pharmacy
benefits
manager
(PBM)
to
allow
1
a
pharmacy
located
in
the
state
to
participate
in
a
pharmacy
2
network
(network)
provided
that
the
pharmacy
accepts
the
same
3
terms
and
conditions
as
the
PBM
imposes
on
the
pharmacies
4
in
the
network.
“Pharmacy
benefits
manager”
is
defined
in
5
the
bill
as
a
person
who,
pursuant
to
a
contract
or
other
6
relationship
with
a
health
carrier,
either
directly
or
through
7
an
intermediary,
manages
a
prescription
drug
benefit
provided
8
by
the
health
carrier.
“Pharmacy
network”,
“pharmacy”,
9
“prescription
drug
benefit”,
and
“health
carrier”
are
also
10
defined
in
the
bill.
11
The
bill
prohibits
a
PBM
from
assessing,
charging,
or
12
collecting
any
form
of
remuneration
that
passes
from
a
pharmacy
13
in
the
network
to
the
PBM
including
but
not
limited
to
claim
14
processing
fees,
performance-based
fees,
network
participation
15
fees,
or
accreditation
fees.
16
The
bill
prohibits
a
covered
person
from
being
required
17
to
make
a
cost-sharing
payment
at
the
point-of-sale
for
a
18
prescription
drug
(drug)
in
an
amount
that
exceeds
the
maximum
19
allowable
cost
(MAC)
for
that
drug.
The
bill
defines
the
20
“maximum
allowable
cost”
as
the
maximum
amount
that
a
pharmacy
21
will
be
reimbursed
by
a
PBM
or
a
health
carrier
for
a
generic
22
drug,
brand-name
drug,
biologic
product,
or
other
drug
and
23
that
may
include
the
average
or
national
average
acquisition
24
cost;
the
average
manufacturer
price;
the
average
wholesale
25
price;
the
brand
or
generic
effective
rate;
discount
indexing;
26
federal
upper
limits;
wholesale
acquisition
cost;
or
any
other
27
term
used
by
a
PBM
or
health
carrier
to
establish
reimbursement
28
rates
for
a
pharmacy.
“Covered
person”
is
defined
in
the
bill.
29
A
PBM
cannot
prohibit
a
pharmacy
from
disclosing
the
30
availability
of
a
lower-cost
drug
option
to
a
covered
person,
31
or
from
selling
a
lower-cost
drug
option
to
a
covered
person.
32
The
bill
requires
that
any
amount
paid
by
a
covered
person
33
for
a
drug
in
the
circumstances
detailed
in
the
bill
must
34
be
applied
to
any
deductible
imposed
by
the
covered
person’s
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health
benefit
plan
in
accordance
with
the
plan’s
coverage
1
documents.
Under
the
bill,
a
covered
person
cannot
be
2
prohibited
from
filling
a
drug
order
at
any
pharmacy
located
in
3
the
state
if
the
pharmacy
accepts
the
same
terms
and
conditions
4
as
the
PBM
imposes
on
at
least
one
of
the
pharmacy
networks
5
that
the
PBM
has
established
in
the
state.
A
PBM
cannot
6
impose
different
cost-sharing
or
additional
fees
on
a
covered
7
person
based
on
the
pharmacy
at
which
a
covered
person
fills
8
their
prescription.
The
bill
allows
a
pharmacy
to
decline
9
to
dispense
a
drug
to
a
covered
person
if,
as
a
result
of
10
the
maximum
allowable
cost
list
(MACL)
to
which
the
pharmacy
11
is
subject,
the
pharmacy
will
be
reimbursed
less
than
the
12
pharmacy’s
acquisition
cost.
“Pharmacy
acquisition
cost”
is
13
defined
in
the
bill.
“Maximum
allowable
cost
list”
is
defined
14
in
the
bill
as
a
list
of
prescription
drugs
that
includes
the
15
MAC
for
each
drug
and
that
is
used,
directly
or
indirectly,
16
by
a
PBM.
“Pharmacy
acquisition
cost”
is
also
defined
in
the
17
bill.
18
The
bill
requires
that
prior
to
placement
of
a
particular
19
drug
on
a
MACL,
a
PBM
must
ensure
that
the
drug
is
listed
as
20
therapeutically
and
pharmaceutically
equivalent
in
the
most
21
recent
edition
of
the
“Approved
Drug
Products
with
Therapeutic
22
Equivalence
Evaluations”,
published
by
the
United
States
23
food
and
drug
administration;
the
drug
cannot
be
obsolete
or
24
temporarily
unavailable;
and
the
drug
must
be
available
for
25
purchase
by
all
pharmacies
in
the
state
from
a
national
or
26
regional
wholesale
distributor
(distributor)
that
is
licensed
27
in
the
state.
“Wholesale
distributor”
is
defined
in
the
bill.
28
The
bill
requires
a
PBM
to
provide
each
pharmacy
in
a
29
network
reasonable
access
to
the
MACL
to
which
the
pharmacy
is
30
subject,
and
to
update
each
MACL
within
seven
calendar
days
31
from
the
date
of
an
increase
of
10
percent
or
more
in
the
32
pharmacy
acquisition
cost
of
a
drug
by
one
or
more
distributors
33
doing
business
in
the
state.
The
PBM
must
also
update
a
MACL
34
within
seven
calendar
days
from
the
date
of
a
change
in
the
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methodology,
or
a
change
in
a
value
of
a
variable
applied
in
1
the
methodology,
on
which
the
MACL
is
based.
The
PBM
is
also
2
required
to
provide
a
process
for
each
pharmacy
in
a
network
to
3
receive
prompt
notice
of
all
changes
to
a
MACL.
4
The
bill
prohibits
a
PBM
from
reimbursing
a
pharmacy
located
5
in
the
state
in
an
amount
less
than
the
amount
that
the
PBM
6
reimburses
a
PBM
affiliate
for
dispensing
the
same
drug
as
the
7
pharmacy.
“Pharmacy
benefits
manager
affiliate”
is
defined
in
8
the
bill.
9
The
bill
provides
that
after
the
date
of
receipt
of
a
clean
10
claim
submitted
by
a
pharmacy,
a
PBM
cannot
retroactively
11
reduce
payment
on
the
claim,
either
directly
or
indirectly,
12
except
if
the
claim
is
found
not
to
be
a
clean
claim
during
the
13
course
of
a
routine
audit.
“Clean
claim”
is
defined
in
the
14
bill.
15
The
bill
requires
a
PBM
to
provide
a
process
for
pharmacies
16
to
appeal
a
MAC,
or
a
reimbursement
made
under
a
MACL.
The
17
requirements
for
the
appeal
process
are
detailed
in
the
bill.
18
The
commissioner
of
insurance
(commissioner)
is
required
to
19
take
any
enforcement
action
under
the
commissioner’s
authority
20
to
enforce
compliance
with
the
bill.
After
notice
and
hearing,
21
the
commissioner
may
impose
any
sanctions
pursuant
to
Code
22
section
507B.7,
and
may
suspend
or
revoke
a
PBM’s
certificate
23
of
registration
as
a
third-party
administrator
(administrator)
24
upon
a
finding
that
the
PBM
violated
any
requirements
of
25
the
bill,
or
any
applicable
requirements
pertaining
to
26
administrators
under
Code
chapter
510.
27
A
PBM
is
subject
to
the
commissioner’s
authority
to
conduct
28
an
examination
pursuant
to
Code
chapter
507
and
a
proceeding
29
pursuant
to
Code
chapter
507B.
A
PBM
is
also
subject
to
30
the
commissioner’s
authority
to
conduct
an
examination,
31
audit,
or
inspection
pursuant
to
Code
chapter
510.
If
the
32
commissioner
conducts
an
examination,
a
proceeding,
an
audit,
33
or
an
inspection,
all
information
received
from
the
PBM,
and
34
all
documents
related
to
the
examination,
proceeding,
audit,
or
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inspection
are
confidential
records
pursuant
to
Code
chapter
1
22.
2
A
violation
of
the
bill
is
an
unfair
or
deceptive
act
or
3
practice
in
the
business
of
insurance
pursuant
to
Code
section
4
507B.4.
5
The
bill
requires
the
commissioner
to
adopt
rules
to
6
administer
the
bill.
7
If
a
provision
of
the
bill
or
its
application
to
any
person
8
or
circumstance
is
held
invalid,
the
invalidity
does
not
affect
9
other
provisions
or
applications
of
the
bill
that
can
be
given
10
effect
without
the
invalid
provision
or
application.
11
The
bill
make
conforming
changes
to
Code
sections
510B.2,
12
510B.4,
510B.5,
510B.6,
and
510B.9.
13
The
bill
repeals
Code
section
510B.3
which
is
replaced
in
14
large
part
by
new
Code
section
510B.10
(enforcement).
15
The
bill
applies
to
PBMs
that
manage
a
health
carrier’s
16
prescription
drug
benefit
in
the
state
on
or
after
the
17
effective
date
of
the
bill.
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