HB4112 S H&HR AM #1 3-6
The Committee on House and Human Resources moved to amend the bill by striking out everything after the enacting clause and inserting in lieu thereof the following:
For purposes of this article:
“340B entity” means an entity participating in the federal 340B drug discount program, as described in 42 U.S.C. § 256b, including its pharmacy or pharmacies, or any pharmacy or pharmacies, contracted with the participating entity to dispense drugs purchased through such program.
“Affiliate” means a pharmacy, pharmacist, or pharmacy technician which, either directly or indirectly through one or more intermediaries: (A) Has an investment or ownership interest in a pharmacy benefits manager licensed under this chapter; (B) shares common ownership with a pharmacy benefits manager licensed under this chapter; or (C) has an investor or ownership interest holder which is a pharmacy benefits manager licensed under this article.
“Auditing entity” means a
person or company that performs a pharmacy audit, including a
entity, pharmacy benefits manager, managed care organization, or
“Business day” means any day of the week excluding Saturday, Sunday, and any legal holiday as set forth in §2-2-1 of this code.
“Claim level information”
means data submitted by a pharmacy,
or required by a payer payor,
or claims processor to adjudicate a claim. “Covered entity” means a
contract holder or policy holder providing pharmacy benefits to a covered
individual under a health insurance policy pursuant to a contract administered
by a pharmacy benefits manager and may include a health benefit plan.
“Covered individual” means
a member, participant, enrollee, or beneficiary of a
covered entity health
benefit plan who is provided health coverage health care
service coverage by a covered entity health benefit plan,
including a dependent or other person provided health coverage through the
policy or contract of a covered individual.
“Extrapolation” means the practice of inferring a frequency of dollar amount of overpayments, underpayments, nonvalid claims, or other errors on any portion of claims submitted, based on the frequency of dollar amount of overpayments, underpayments, nonvalid claims, or other errors actually measured in a sample of claims.
“Defined cost sharing” means a deductible payment or coinsurance amount imposed on an enrollee for a covered prescription drug under the enrollee’s health plan.
“Health benefit plan” or “health
plan” means a policy, contract, certificate, or agreement entered into,
offered, or issued by a
health carrier health care payor to
provide, deliver, arrange for, pay for, or reimburse any of the costs of health
“Health care payor” or “payor” means a health insurance company, a health maintenance organization, a hospital, medical, or dental corporation, a health care corporation, an entity that provides, administers, or manages a self-funded health benefit plan, including a governmental plan, or any other payor that provides prescription drug coverages, including a workers’ compensation insurer. Health care payor does not include an insurer that provides coverage under a policy of casualty or property insurance.
“Health care provider” has the same meaning as defined in §33-41-2 of this code.
“Health insurance policy” means a policy, subscriber contract, certificate, or plan that provides prescription drug coverage. The term includes both comprehensive and limited benefit health insurance policies.
“Insurance commissioner” or “commissioner” has the same meaning as defined in §33-1-5 of this code.
“Network” means a pharmacy
or group of pharmacies that agree to provide prescription services to covered
individuals on behalf of a
covered entity or group of covered entities health
benefit plan in exchange for payment for its services by a pharmacy
benefits manager or pharmacy services administration organization. The term
includes a pharmacy that generally dispenses outpatient prescriptions to
covered individuals or dispenses particular types of prescriptions, provides
pharmacy services to particular types of covered individuals or dispenses
prescriptions in particular health care settings, including networks of
specialty, institutional or long-term care facilities.
“Maximum allowable cost” means the per unit amount that a pharmacy benefits manager reimburses a pharmacist for a prescription drug, excluding dispensing fees and copayments, coinsurance, or other cost-sharing charges, if any.
“National average drug acquisition cost” means the monthly survey of retail pharmacies conducted by the federal Centers for Medicare and Medicaid Services to determine average acquisition cost for Medicaid covered outpatient drugs.
“Nonproprietary drug” means a drug containing any quantity of any controlled substance or any drug which is required by any applicable federal or state law to be dispensed only by prescription.
“Pharmacist” means an individual licensed by the West Virginia Board of Pharmacy to engage in the practice of pharmacy.
“Pharmacy” means any place within this state where drugs are dispensed and pharmacist care is provided.
“Pharmacy audit” means an
on-site by or on behalf of an auditing entity of any
records of a pharmacy for prescription or nonproprietary drugs dispensed by a
pharmacy to a covered individual.
“Pharmacy benefits management” means the performance of any of the following:
(1) The procurement of prescription drugs at a negotiated contracted rate for dispensation within the state of West Virginia to covered individuals;
(2) The administration or
management of prescription drug benefits provided by a
covered entity health
benefit plan for the benefit of covered individuals;
(3) The administration of pharmacy benefits, including:
(A) Operating a mail-service pharmacy;
(B) Claims processing;
(C) Managing a retail pharmacy network;
(D) Paying claims to a pharmacy for prescription drugs dispensed to covered individuals via retail or mail-order pharmacy;
(E) Developing and managing a clinical formulary including utilization management and quality assurance programs;
(F) Rebate contracting administration; and
(G) Managing a patient compliance, therapeutic intervention, and generic substitution program.
“Pharmacy benefits manager”
means a person, business, or other entity that performs pharmacy benefits
covered entities health benefit plans;
“Pharmacy record” means any record stored electronically or as a hard copy by a pharmacy that relates to the provision of prescription or nonproprietary drugs or pharmacy services or other component of pharmacist care that is included in the practice of pharmacy.
administration organization” means any entity that contracts with a pharmacy to
third-party payer payor interactions and that
may provide a variety of other administrative services, including contracting
with pharmacy benefits managers on behalf of pharmacies and managing pharmacies’
claims payments from third-party payers payors.
“Point-of-sale fee” means all or a portion of a drug reimbursement to a pharmacy or other dispenser withheld at the time of adjudication of a claim for any reason.
“Rebate” means any and all payments that accrue to a pharmacy benefits manager or its health plan client, directly or indirectly, from a pharmaceutical manufacturer, including, but not limited to, discounts, administration fees, credits, incentives, or penalties associated directly or indirectly in any way with claims administered on behalf of a health plan client. The term “rebate” does not include any discount or payment that may be provided to or made to any 340B entity through such program.
“Retroactive fee” means all or a portion of a drug reimbursement to a pharmacy or other dispenser recouped or reduced following adjudication of a claim for any reason, except as otherwise permissible as described in this article.
“Specialty drug” means a drug used to treat chronic and complex, or rare medical conditions and requiring special handling or administration, provider care coordination, or patient education that cannot be provided by a non-specialty pharmacy or pharmacist.
“Third party” means any
insurer, health benefit plan for employees which provides a pharmacy benefits
plan, a participating public agency which provides a system of health insurance
for public employees, their dependents and retirees, or any other insurer or
organization that provides health coverage, benefits, or coverage of
prescription drugs as part of workers’ compensation insurance in accordance
with state or federal law. The term does not include an insurer that provides
coverage under a policy of casualty or property insurance.
§33-51-8. Licensure of pharmacy benefit managers.
(a) A person or
organization may not establish or operate as a pharmacy benefits manager in the
state of West Virginia without first obtaining a license from the Insurance Commissioner
pursuant to this section: Provided, That a pharmacy benefit manager
registered pursuant to §33-51-7 of this code may continue to do business
in the state until the Insurance Commissioner has completed the legislative
rule as set forth in §
33-55-10 §33-51-10 of this code: Provided,
however, That additionally the pharmacy benefit manager shall submit an
application within six months of completion of the final rule. The Insurance
Commissioner shall make an application form available on its publicly
accessible internet website that includes a request for the following
(1) The identity, address, and telephone number of the applicant;
(2) The name, business address, and telephone number of the contact person for the applicant;
(3) When applicable, the federal employer identification number for the applicant; and
(4) Any other information the Insurance Commissioner considers necessary and appropriate to establish the qualifications to receive a license as a pharmacy benefit manager to complete the licensure process, as set forth by legislative rule promulgated by the Insurance Commissioner pursuant to §33-51-10 of this code.
(b) Term and fee. —
(1) The term of licensure shall be two years from the date of issuance.
(2) The Insurance Commissioner shall determine the amount of the initial application fee and the renewal application fee for the registration. The fee shall be submitted by the applicant with an application for registration. An initial application fee is nonrefundable. A renewal application fee shall be returned if the renewal of the registration is not granted.
(3) The amount of the initial application fees and renewal application fees must be sufficient to fund the Insurance Commissioner’s duties in relation to his/her responsibilities under this section, but a single fee may not exceed $10,000.
(4) Each application for a license, and subsequent renewal for a license, shall be accompanied by evidence of financial responsibility in an amount of $1 million.
(c) Licensure. —
(1) The Insurance Commissioner shall propose legislative rules, in accordance with §33-51-10 of this code, establishing the licensing, fees, application, financial standards, and reporting requirements of pharmacy benefit managers.
(2) Upon receipt of a completed application, evidence of financial responsibility, and fee, the Insurance Commissioner shall make a review of each applicant and shall issue a license if the applicant is qualified in accordance with the provisions of this section and the rules promulgated by the Insurance Commissioner pursuant to this section. The commissioner may require additional information or submissions from an applicant and may obtain any documents or information reasonably necessary to verify the information contained in the application.
(3) The license may be in paper or electronic form, is nontransferable, and shall prominently list the expiration date of the license.
(d) Network adequacy. —
(1) A pharmacy benefit manager’s network shall be reasonably adequate, shall provide for convenient patient access to pharmacies within a reasonable distance from a patient’s residence and shall not be comprised only of mail-order benefits but must have a mix of mail-order benefits and physical stores in this state.
(2) A pharmacy benefit manager shall provide a pharmacy benefit manager’s network report describing the pharmacy benefit manager’s network and the mix of mail-order to physical stores in this state in a time and manner required by rule issued by the Insurance Commissioner pursuant to this section. A pharmacy benefit manager’s network report shall include a detailed description of any separate, sub-networks for specialty drugs.
(3) Failure to provide a timely report may result in the suspension or revocation of a pharmacy benefit manager’s license by the Insurance Commissioner.
(4) A pharmacy benefit manager may not require a pharmacy or pharmacist, as a condition for participating in the pharmacy benefit manager’s network, to obtain or maintain accreditation, certification, or credentialing that is inconsistent with, more stringent than, or in addition to state requirements for licensure or other relevant federal or state standards.
(e) Enforcement. —
(1) The Insurance Commissioner shall enforce this section and may examine or audit the books and records of a pharmacy benefit manager providing pharmacy benefits management to determine if the pharmacy benefit manager is in compliance with this section: Provided, That any information or data acquired during the examination or audit is considered proprietary and confidential and exempt from disclosure under the West Virginia Freedom of Information Act pursuant to §29B-1-4(a)(1) of this code.
(2) The Insurance Commissioner may propose rules for legislative approval in accordance with §29A-3-1 et seq. of this code regulating pharmacy benefit managers in a manner consistent with this chapter. Rules adopted pursuant to this section shall set forth penalties or fines, including, without limitation, monetary fines, suspension of licensure, and revocation of licensure for violations of this chapter and the rules adopted pursuant to this section.
— This section is
applicable to any contract or health benefit plan issued, renewed,
recredentialed, amended, or extended on or after July 1, 2019.
§33-51-9. Regulation of pharmacy benefit managers.
(a) A pharmacy, a pharmacist, and a pharmacy technician shall have the right to provide a covered individual with information related to lower cost alternatives and cost share for the covered individual to assist health care consumers in making informed decisions. Neither a pharmacy, a pharmacist, nor a pharmacy technician may be penalized by a pharmacy benefit manager for discussing information in this section or for selling a lower cost alternative to a covered individual, if one is available, without using a health insurance policy.
(b) A pharmacy benefit manager may not collect from a pharmacy, a pharmacist, or a pharmacy technician a cost share charged to a covered individual that exceeds the total submitted charges by the pharmacy or pharmacist to the pharmacy benefit manager.
(c) A pharmacy benefit
manager may only directly or indirectly charge or hold a pharmacy, a
pharmacist, or a pharmacy technician responsible for a fee related to the
adjudication of a claim if: (1) The total amount of
the fee is identified, reported, and specifically explained for each line item
on the remittance advice of the adjudicated claim; or (2) The total amount of
the fee is apparent at the point of sale and not adjusted between the point of
sale and the issuance of the remittance advice. (d) (c) A pharmacy benefit manager , or any
other third party, that reimburses a 340B entity for drugs that are subject
to an agreement under 42 U.S.C. § 256b shall not reimburse the 340B entity for
pharmacy-dispensed drugs at a rate lower than that paid for the same drug to
pharmacies similar in prescription volume that are not 340B entities, and shall
not assess any fee, charge-back, or other adjustment upon the 340B entity on
the basis that the 340B entity participates in the program set forth in 42
U.S.C. §256b. For purposes of this subsection, the term “other adjustment”
includes placing any additional requirements, restrictions, or unnecessary
burdens upon the 340B entity that results in administrative costs or fees to
the 340B entity that are not placed upon other pharmacies that do not
participate in the 340B program, including affiliate pharmacies of the pharmacy
benefit manager, and further includes but is not limited to requiring a claim
for a drug to include a modifier or be processed or resubmitted to indicate
that the drug is a 340B drug. Provided, That nothing in this subsection shall be construed to
prohibit the Medicaid program or a Medicaid managed care organization as
described in 42 U.S.C. § 1396b(m) from preventing duplicate discounts as
described in 42 U.S.C. 256b(a)(5)(A)(i). The
provisions of this subsection are applicable to the West Virginia Public
Employees Insurance Agency. (e) (d) With respect to a patient eligible to
receive drugs subject to an agreement under 42 U.S.C. § 256b, a pharmacy
benefit manager , or any other third party that makes payment for such drugs,
shall not discriminate against a 340B entity in a manner that prevents or
interferes with the patient’s choice to receive such drugs from the 340B
entity: Provided, That for purposes of this section, “third
party” does not include apply to the state Medicaid program
when Medicaid is providing reimbursement for covered outpatient drugs, as that
term is defined in 42 U.S.C. §1396r-8(k), on a fee-for-service basis: Provided,
however, That “third party” does include this subsection does
apply to a Medicaid-managed care organization as described in 42 U.S.C. §
1396b(m). For purposes of this subsection, it shall be considered a
discriminatory practice that prevents or interferes with a patient’s choice to
receive drugs at a 340B entity if a pharmacy benefit manager places additional
requirements, restrictions or unnecessary burdens upon a 340B entity that
results in administrative costs or fees to the 340B entity that are not placed
upon other pharmacies that do not participate in the 340B program, including
affiliate pharmacies of the pharmacy benefit manager or any other third-party,
and further includes but is not limited to requiring a claim for a drug to
include a modifier or be processed or resubmitted to indicate that the drug is
a 340B drug. Provided further, That nothing in this subsection shall be
construed to prohibit the Medicaid program or a Medicaid managed care
organization as described in 42 U.S.C. § 1396b(m) from preventing duplicate
discounts as described in 42 U.S.C. 256b(a)(5)(A)(i). The provisions of this subsection are applicable to
the West Virginia Public Employees Insurance Agency. (f) (e) A pharmacy benefit manager may not
reimburse a pharmacy or pharmacist for a prescription drug or pharmacy service
in an amount less than the national average drug acquisition cost for the
prescription drug or pharmacy service at the time the drug is administered or
dispensed, plus a professional dispensing fee of $10.49: Provided, That
if the national average drug acquisition cost is not available at the time a
drug is administered or dispensed, a pharmacy benefit manager may not reimburse
in an amount that is less than the wholesale acquisition cost of the drug, as
defined in 42 U.S.C. § 1395w-3a(c)(6)(B), plus a professional dispensing fee of
$10.49. (g) (f) A pharmacy benefit manager may not
reimburse a pharmacy or pharmacist for a prescription drug or pharmacy service
in an amount less than the amount the pharmacy benefit manager reimburses
itself or an affiliate for the same prescription drug or pharmacy service. (h) (g)The commissioner may order reimbursement to
an insured, pharmacy, or dispenser who has incurred a monetary loss as a result
of a violation of this article or legislative rules implemented pursuant to
this article. (i)(h) (1) Any
methodologies utilized by a pharmacy benefits manager in connection with
reimbursement shall be filed with the commissioner at the time of initial
licensure and at any time thereafter that the methodology is changed by the
pharmacy benefit manager for use in determining maximum allowable cost appeals.
The methodologies are not subject to disclosure and shall be treated as
confidential and exempt from disclosure under the West Virginia Freedom of
Information Act §29B-1-4(a)(1) of this code. The filed methodologies shall
comply with the provisions of §33-51-9(e) of this code, and a pharmacy benefits
manager shall not enter into a contract with a pharmacy that provides for
reimbursement methodology not permissible under the provisions of §33-51-9(e)
of this code.
(2) For purposes of
complying with the provisions of §33-51-9(e) of this code,
pharmacy benefits manager shall utilize the most recently published monthly
national average drug acquisition cost as a point of reference for the
ingredient drug product component of a pharmacy’s reimbursement for drugs
appearing on the national average drug acquisition cost list; and, (j)(i) A
pharmacy benefits manager may not:
(1) Discriminate in reimbursement, assess any fees or adjustments, or exclude a pharmacy from the pharmacy benefit manager’s network on the basis that the pharmacy dispenses drugs subject to an agreement under 42 U.S.C. § 256b; or
(2) Engage in any practice that:
(A) In any way bases pharmacy reimbursement for a drug on patient outcomes, scores, or metrics. This does not prohibit pharmacy reimbursement for pharmacy care, including dispensing fees from being based on patient outcomes, scores, or metrics so long as the patient outcomes, scores, or metrics are disclosed to and agreed to by the pharmacy in advance;
(B) Includes imposing a point-of-sale fee or retroactive fee; or
(C) Derives any revenue
from a pharmacy or insured in connection with performing pharmacy benefits
management services: Provided, That this may not be construed to
prohibit pharmacy benefits managers from
receiving processing deductibles
or copayments as have been approved by a covered individual’s health benefit
plan. (k)(j) A
pharmacy benefits manager shall offer a health plan the option of charging such
health plan the same price for a prescription drug as it pays a pharmacy for
the prescription drug: Provided, That a pharmacy benefits manager shall
charge a health benefit plan administered by or on behalf of the state or a
political subdivision of the state, the same price for a prescription drug as
it pays a pharmacy for the prescription drug. (l)(k) A
covered individual’s defined cost sharing for each prescription drug shall be
calculated at the point of sale based on a price that is reduced by an amount
equal to at least 100 % percent of all rebates received, or to be
received, in connection with the dispensing or administration of the
prescription drug. Any rebate over and above the defined cost sharing would
then be passed on to the health plan to reduce premiums. Nothing precludes an
insurer from decreasing a covered individual’s defined cost sharing by an
amount greater than what is previously stated. The commissioner may propose a
legislative rule or by policy effectuate the provisions of this subsection. Notwithstanding
any other effective date to the contrary, the amendments to this article
enacted during the 2021 regular legislative session shall apply to all
policies, contracts, plans, or agreements subject to this section that are
delivered, executed, amended, adjusted, or renewed on or after January 1, 2022. (m) This section is
effective for policy, contract, plans, or agreements beginning on or after
January 1, 2022. This section applies to all policies, contracts, plans, or
agreements subject to this section that are delivered, executed, amended,
adjusted, or renewed on or after the effective date of this section.
§33-51-11. Freedom of consumer choice for pharmacy.
(a) A pharmacy benefits
or health benefit plan, may not:
(1) Prohibit or limit any
covered individual from selecting a pharmacy or pharmacist of his or her choice
who has agreed to participate in the health benefit plan according to
the terms offered by the
insurer health benefit plan;
(2) Deny a pharmacy or
pharmacist the right to participate as a contract provider under the policy or
plan if the pharmacy or pharmacist agrees to provide pharmacy services,
including, but not limited to, prescription drugs, that meet the terms and
requirements set forth by the
insurer under the policy or health
benefit plan and agrees to the terms of reimbursement set forth by the
(3) Impose upon a pharmacy or pharmacist, as a condition of participation in a health benefit plan network, any course of study, accreditation, certification, or credentialing that is inconsistent with, more stringent than, or in addition to state requirements for licensure or certification as provided for in the §30-5-1 et seq. and legislative rules of the Board of Pharmacy.
upon a beneficiary of pharmacy services under a health benefit plan any
copayment, fee, or condition that is not equally imposed upon all beneficiaries
in the same benefit category, class, or copayment level under the health
benefit plan when receiving services from a contract provider; (4) (5) Impose a monetary advantage or penalty
under a health benefit plan that would affect a beneficiary’s choice among
those pharmacies or pharmacists who have agreed to participate in the plan
according to the terms offered by the insurer. Monetary advantage or penalty
includes higher copayment, a reduction in reimbursement for services, or
promotion of one participating pharmacy over another by these methods; (5) (6) Reduce allowable reimbursement for pharmacy
services to a beneficiary under a health benefit plan because the beneficiary
selects a pharmacy of his or her 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;
(7) Prohibit or otherwise limit a beneficiary’s access to prescription drugs from a pharmacy or pharmacist enrolled with the health benefit plan under the terms offered to all pharmacies in the plan coverage area by unreasonably designating the covered prescription drug as a specialty drug. Any beneficiary or pharmacy impacted by an alleged violation of this subsection may file a complaint with the Insurance Commissioner, who shall, in consultation with the West Virginia Board of Pharmacy, make a determination as to whether the covered prescription drug meets the definition of a specialty drug;
(8) Limit a beneficiary’s access to specialty drugs;
(6) (9) Require a beneficiary, as a condition of
payment or reimbursement, to purchase pharmacy services, including prescription
drugs, exclusively through a mail-order pharmacy; or (7) (10) Impose upon a beneficiary any copayment,
amount of reimbursement, number of days of a drug supply for which
reimbursement will be allowed, or any other payment or condition relating to
purchasing pharmacy services from any pharmacy, including prescription drugs,
that is are more costly or more restrictive than that which would
be imposed upon the beneficiary if such services were purchased from a
mail-order pharmacy or any other pharmacy that is willing to provide the same
services or products for the same cost and copayment as any mail order service.
(b) If a health benefit
plan providing reimbursement to West Virginia residents for prescription drugs
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 to the pharmacies the
opportunity to participate in the health benefit plan at least 60 days prior to
the effective date of the 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. Participating
pharmacies shall be entitled to 30 business days effective date notice for any
subsequent contract amendment or provider manual change by a health benefit
plan or a pharmacy benefit manager. The entity providing the health
benefit plan shall, through reasonable means, on a timely basis and on regular
intervals, 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
plan s. 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 state.
(c) The Insurance Commissioner shall not approve any pharmacy benefits manager or health benefit plan providing pharmaceutical services which do not conform to this section.
(d) Any covered individual or pharmacy injured by a violation of this section may maintain a cause of action to enjoin the continuance of any such violation.
(e) This section shall
apply to all pharmacy benefits managers and health benefit plans providing
pharmaceutical services benefits, including prescription drugs, to any resident
of West Virginia.
For purposes of this section, “health benefit plan” means
any entity or program that provides reimbursement for pharmaceutical services.
This section shall also apply to insurance companies and health maintenance
organizations that provide or administer coverages and benefits for
prescription drugs. This section shall not apply to any entity that has its
own facility, employs or contracts with physicians, pharmacists, nurses, and
other health care personnel, and that dispenses prescription drugs from its own
pharmacy to its employees and dependents enrolled in its health benefit plan;
but this section shall apply to an entity otherwise excluded that contracts
with an outside pharmacy or group of pharmacies to provide prescription drugs
Notwithstanding any other effective date to the contrary, the amendments to this article enacted during the 2022 regular legislative session shall apply to all policies, contracts, plans, or agreements subject to this section that are delivered, executed, amended, adjusted, or renewed on or after January 1, 2023.