Senate amendment amends the second edition of the bill by expanding the definition of “covered entity” to include entities defined under 42 U.S.C. §256b(a)(4)(C), 42 U.S.C. §256b(a)(4)(I), 42 U.S.C. §256b(a)(4)(J), and 42 U.S.C. §256b(a)(4)(K).
Bill S 257 (2021)Summary date: Jun 1 2021 - View summary
Bill S 257 (2021)Summary date: May 20 2021 - View summary
Senate committee substitute makes the following changes to the 1st edition.
Amends and adds to the proposed changes to Article 56A, Pharmacy Benefits Management, of GS Chapter 58 as follows.
Adds to the defined terms: 340B pharmacy and 340B covered entity. Changes the definition of the terms insurer and pharmacy to now define the terms by statutory cross-reference. Revises the definition of the newly defined term pharmacy benefits manager affiliate to no longer include a pharmacy or pharmacist that directly or indirectly is under the common ownership or control with a pharmacy benefits manager.
Revises the proposed new language in GS 58-56A-4 to bar a pharmacy benefits manager from prohibiting a licensed pharmacy or pharmacist from dispensing any prescription drug (was, prohibit or restrict in any way).
Modifies new GS 58-56A-15 to more specifically prohibit pharmacy benefits managers from denying licensed pharmacists or pharmacies from participating in a retail pharmacy network (was, a network) on the same terms and conditions of other similarly situated network participants (was, other network participants).
Enacts new GS 58-56A-50, establishing two limitations of contracts between a pharmacy benefits manager and a 340B covered entity's pharmacy or between a pharmacy benefits manager and a 340B contract pharmacy, including: (1) prohibiting restricting access to a pharmacy network or adjusting 340B drug reimbursement rates based on whether a pharmacy dispenses drugs under the 340B drug discount program; or (2) prohibiting assessing any additional, or varying the amount of any, fees, chargebacks, or other adjustments on the basis of a drug being dispensed under the 340B drug discount program or a pharmacy's status as a 340B covered entity or a 340B contract pharmacy (not including adjustments to correct errors or overpayments resulting from an adjudicated claim). Defines 340B covered entity as any entity defined in one of five specified federal law provisions, including a federally-qualified health center; a critical access hospital; or a rural referral center. Defines 340B contract pharmacy as any pharmacy under contract with a 340B covered entity to dispense drugs on behalf of the 340B covered entity. Prohibits pharmacy benefits managers making payments pursuant to a health benefit plan from discriminating against a 340B entity or a 340B contract pharmacy in a manner that prevents or interferes with an enrollee's choice to receive a prescription drug from an in-network 340B covered entity or an in-network 340B contract pharmacy. Deems the provisions regarding choice of pharmacy under GS 58-51-37 applicable to pharmacy benefits managers with respect to 340B covered entities and 340B contract pharmacies. Deems any contractual provisions contrary to the statute as unenforceable. Makes conforming changes to GS 58-51-37, adding a provision to explicitly include pharmacy benefits managers in the scope of the statute with respect to 340B covered entities and 340B contract pharmacies.
Bill S 257 (2021-2022)Summary date: Mar 15 2021 - View summary
Recodifies GS 58-56A-10 as GS 58-56A-30, which provides for civil penalties and procedure for violations of Article 56A, Pharmacy Benefits Management, of GS Chapter 58. Amends and adds to the Article as follows.
Adds the following defined terms: claim, claims processing service, maximum allowable cost list, out-of-pocket costs, pharmacy services administration organization (PSAO) pharmacist services, and pharmacy benefits manager affiliate. Amends existing defined terms as follows. More specifically defines pharmacy benefits manager, which is currently defined to mean an entity who contracts with a pharmacy on behalf of an insurer or third-party administrator to administer or manage prescription drug benefits, to specify three functions the entity can perform under the definition: (1) negotiating rebates with manufacturers for drugs paid for or procured as described in the Article; (2) processing claims for prescription drugs or medical supplies or providing retail network management for pharmacies or pharmacists; or (3) paying pharmacies or pharmacists for prescription drugs or medical supplies. Changes the statutory cross-reference used to define health benefit plan, and no longer explicitly excludes the State Health Plan for Teachers and State Employees from the term. Amends the term maximum allowable cost price to define the term to mean the maximum amount that a pharmacy benefits manager will reimburse a pharmacy for the cost of generic or multiple source prescription drugs, medical products, or devices (previously the max per unit reimbursement for multiple source prescription drugs, medical products, or devices).
Prohibits persons or organizations from establishing or operating as a pharmacy benefits manager for health benefit plans in the State without being licensed. Charges the Commissioner of Insurance (Commissioner) with licensing responsibilities. Authorizes the Commissioner to set the initial application fee at $2,000 and the annual renewal fee at $1,500. Delineates required application content. Requires applicants or licensees to file notice of material changes to required information.
Bars pharmacy benefit managers from prohibiting a pharmacist or pharmacy from charging a minimal shipping and handling fee for a mailed or delivered prescription if three disclosures are made to the insured by the pharmacist or pharmacy before delivery, including that the fee cannot be reimbursed by the health benefit plan, insurer, or pharmacy benefits manager.
Requires any fee or adjustment charged for the receipt and processing of a claim or the adjudication of a claim be justified on the remittance advice or be set out in contract and agreed upon by the pharmacy or pharmacist for each adjustment or fee. Specifies that the Article does not abridge the right of a pharmacist to refuse to fill or refill a prescription if the pharmacist believes it would be harmful to the patient or is not in the patient's best interest, or if there is no question to the validity of the prescription. Prohibits a pharmacy benefits manager from restricting a licensed pharmacy or pharmacist from dispensing any prescription drug. Bars retaliation against pharmacists or pharmacies exercising rights granted by the Article. Establishes five grounds for retroactive denial or reduction of a claim for pharmacist services after adjudication of the claim, including that the original claim was submitted fraudulently or the adjustments were part of an attempt to limit overpayment recovery efforts by a pharmacy benefits manager. Provides that the statute does not limit overpayment recovery efforts.
Adds a new provision to require pharmacy benefits managers to ensure that dispensing fees are not included in the calculation of a prescription drug's maximum allowable cost price. Additionally requires pharmacy benefits managers to create an administrative appeals procedure for contracted pharmacies or pharmacists, or their designee, to appeal the provider's reimbursement for a prescription drug subject to maximum allowable cost pricing. Restricts appeals to when the reimbursement amount for the drug is less than the net amount that the network provider paid to the drug supplier. Sets forth six requirements of the appeals procedure, including setting up a dedicated number and email address or website to submit appeals, allowing for at least 10 calendar days after the fill date to file an appeal and requiring a decision to be made within 10 days after receipt, and, for denied appeals, to require notification to include the names of the national or regional pharmaceutical wholesalers operating in the State.
Enacts new provisions as follows. Prohibits pharmacy benefits managers from denying licensed pharmacists or pharmacies from participating in a network on the same terms and conditions of other network participants. Entitles pharmacists or pharmacies that are members of a pharmacy service administration organization, as defined, to receive a copy of the contract provisions application to the pharmacy. Provides for continued liability for payment due for services rendered following termination of a pharmacist or pharmacy from a pharmacy benefits manager network, excluding cases of fraud, waste and abuse. Clarifies that pharmacy benefits managers are subject to HIPPA.
Establishes the following enforcement provisions. Authorizes the Commissioner to examine any pharmacy benefits manager's affairs to determine compliance with the Article. Authorizes the Commissioner to retain attorneys, independent actuaries, independent CPAs, or other professional and specialists as examiners, at cost to the pharmacy benefits manager. Provides for confidentiality of examinations. Deems violations of the Article subject to the existing civil penalties under GS 58-56A-30, as recodified, as well as license denial or revocation after notice and hearing. Makes conforming changes to repeal the existing procedure for the Department of Insurance to report any Article violations to the Attorney General.
Directs the Commissioner to adopt implementing rules.
Makes clarifying changes.
Amends GS 58-2-40 to require the Commissioner to report to the Attorney General any violations of pharmacy benefits managers.
Amends GS 58-56-2 to exclude a licensed pharmacy benefits manager from the definition of a third party administrator as the term applies to Article 56.
Effective October 1, 2021, and applies to any contracts entered into, renewed, or amended on or after that date.
Bill S 257 (2021-2022)Summary date: Mar 11 2021 - View summary
To be summarized.