FISCAL NOTE

Date Requested: March 08, 2017
Time Requested: 02:46 PM
Agency: Insurance Commission
CBD Number: Version: Bill Number: Resolution Number:
2863 Introduced SB522
CBD Subject: Insurance


FUND(S):

7152,7162,7163,7164,7165,7170,7173

Sources of Revenue:

Special Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    SB 522, if enacted, will set forth procedures and requirements for pharmacy audits and require the Insurance Commissioner to register pharmacy benefit managers and auditing entities.
    
    It is unknown at this time what the full fiscal impact to the Offices of the Insurance Commissioner would be if SB 522 is enacted.
    
    Potential Impact to Fund 7152 (OIC Operating Fund): The OIC estimates that the enactment of SB 522 could require the addition of one full time employee (FTE), depending on the volume of pharmacy benefit managers (PBMs) and auditing entities are required to register. The OIC is permitted to assess fees for registration, but it is unknown at this time how many PBMs would be registering. The OIC would endeavor to keep the impact revenue neutral with regard to the OIC's Operating Fund 7152.
    
    The Procedures for conducting pharmacy audits set forth in §33-51-4 (9)(A) and (B) may impact the workers' compensation related funds administered by the OIC. See memorandum section of this fiscal note.
    
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    



Memorandum


    Senate Bill 522:
    Potential Impact to Fund 7152 (OIC Operating Fund): The OIC estimates that the enactment of SB 522 could require the addition of one full time employee (FTE), depending on the volume of pharmacy benefit managers (PBMs) and auditing entities are required to register. The OIC is permitted to assess fees for registration, but it is unknown at this time how many PBMs would be registering. The OIC would endeavor to keep the impact of SB 522 revenue neutral with regard to the OIC's Operating Fund.
    
    Impact to worker's compensation related funds administered by the OIC:
    Worker's Compensation Old Fund, Uninsured Employer's Fund, Self-insured Guaranty Risk Pool, Self-insured Security Risk Pool, Coal Worker's Pneumoconiosis Fund and the State Entities Work Comp program.
    
    The Procedures for conducting pharmacy audits set forth in §33-51-4 (9)(A) and (B) may impact the workers' compensation related funds administered by the OIC. §33-51-4(9)(A)would limit the period for claims subject to audit to a period of not more than twenty-four months. If this provision is effective from passage, it could preclude from audit any pharmacy bills with dates of service greater than 24 months, without providing a phase in or future effective date that would provide an opportunity for entities covering pharmacy benefits or their third party administrators to complete any audits for service dates prior to the 24 month period.
    §33-51-4(9)(B)limits an auditing entity to only auditing two hundred fifty prescriptions. This limitation could significantly impact covering entities with large volumes of pharmacy bills, which would include all OIC Worker's Compensation related Funds. This limitation could negatively impact the ability for those Funds to recover pharmacy overpayments. §33-51-4 (10) forbids the use of extrapolation to calculate amounts to be recovered, which can increase the negative fiscal impact due to the audit quantity limitation of two hundred fifty prescriptions.
    



    Person submitting Fiscal Note: Melinda Ashworth Kiss
    Email Address: Melinda.A.Kiss@wv.gov