WEST virginia Legislature

2016 regular session

Introduced

House Bill 4545

By Delegate Howell

[Introduced February 16, 2016; Referred
to the Committee on Health and Human Resources then Finance.]

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §33-46-21, relating to regulation of pharmacy benefits managers; defining terms; requiring pharmacy benefits managers to register with the commissioner; authorizing the commissioner to charge registration fees; authorizing the commissioner to take action against a pharmacy benefits manager’s license or fine a pharmacy benefits manager upon violation of certain requirements; requiring pharmacy benefits managers to maintain a “Maximum Cost List,” which is a list of sources used to determine maximum allowable cost pricing for products; requiring pharmacy benefits managers to update Maximum Allowable Cost Lists and to make the updates available in a reviewable format for pharmacies; establishing requirements for drugs to be placed on Maximum Allowable Cost Lists; requiring contracts between pharmacy benefits managers and pharmacies to include a process to appeal, investigate and resolve disputes regarding maximum allowable cost pricing; establishing requirements for the appeals and dispute resolution process; requiring pharmacy benefits managers to make certain disclosures to pharmacies regarding maximum cost lists; allowing a pharmacy to decline to provide a service or product to a patient if the Maximum Cost List will prevent the pharmacy from being paid the cost of providing the service; and prohibiting a patient from being required to pay an amount for pharmacist services that is greater than the amount the pharmacy may retain.

Be it enacted by the Legislature of West Virginia:

That the Code of West Virginia, 1931, as amended, be amended and reenacted, by adding thereto a new section, designated §33-46-21, to read as follows:

ARTICLE 46. THIRD-PARTY ADMINISTRATOR ACT.

§33-46-21. Requirements for pharmacy benefits managers.

(a) Definitions.--

(1) “Commissioner” means the Insurance Commissioner of this state.

(2) “Maximum Allowable Cost List” means a listing of drugs used by a pharmacy benefits manager setting the maximum allowable cost on which reimbursement to a pharmacy or pharmacist may be based.

(3) “Pharmacy benefits manager” means an entity that contracts with pharmacies on behalf of an employer, a multiple employer welfare arrangement, public employee benefit plan, state agency, insurer, managed care organization, or other third-party payer to provide pharmacy health benefit services or administration.

(4) “Pharmacist service” means products, goods, or services provided as part of the practice of pharmacy in West Virginia.

(5) “Plan sponsor” means an employer, a multiple employer welfare arrangement, public employee benefit plan, state agency, insurer, managed care organization, or other third-party payer that facilitates a health benefit plan that provides a drug.

(b) Registration and general requirements for pharmacy benefits managers.--

(1) A pharmacy benefits manager may not operate in this state without first registering with the Commissioner of Insurance and paying registration fees, in accordance with all registration requirements of this article applying to third-party administrators.

(2) A pharmacy benefits manager must renew its registration annually to lawfully operate in this state, in accordance with all registration renewal requirements of this article applying to third-party administrators.

(3) Neither a plan sponsor nor a pharmacy shall enter into a contract with an unregistered pharmacy benefits manager.

(4)(A) The commissioner may take any of the following actions against a pharmacy benefits manager or a pharmacy benefits manager registration applicant that violates any provision of this section:

(i) Deny registration to a pharmacy benefits manager registration applicant;

(ii) Revoke, suspend, or refuse to renew the registration of a pharmacy benefits manager; or

(iii) Fine the pharmacy benefits manager.

(B) The commissioner shall adopt rules prescribing when fines are to be levied and in what amounts.

(5) A pharmacy benefits manager or pharmacy benefits manager applicant may not do any of the following:

(A) Make a material misstatement or misrepresentation in an application for registration or renewal;

(B) Fraudulently or deceptively obtain or attempt to obtain a registration or renewal;

(C) Commit fraud or engage in any illegal or dishonest activity in connection with the administration of pharmacy benefit management services; or

(D) Violate any provision of this section or any rule adopted by the commissioner to carry out this section.

(c) Maximum Allowable Cost Lists.--

(1) In each contract between a pharmacy benefits manager and a pharmacy, the pharmacy shall have the right to obtain from the pharmacy benefits manager, within ten days after any request, a current list of the sources used to determine maximum allowable cost pricing. The list required by this subdivision shall be referred to as the “Maximum Allowable Cost List.”

(2) The pharmacy benefits manager shall update and implement the pricing information on the list at least every seven days and provide a means by which contracted pharmacies may promptly review pricing updates in a format that is readily available and accessible.

(3) A pharmacy benefits manager shall maintain a procedure to eliminate products from the Maximum Allowable Cost List in a timely manner in order to remain consistent with pricing changes in the marketplace.

(4) In order to place a prescription drug on the Maximum Allowable Cost List, a pharmacy benefits manager shall ensure that all of the following conditions are met:

(A) The drug is listed as “A” or “AB” rated in the most recent version of the United States food and drug administration's approved drug products with therapeutic equivalence evaluations, or has an “NR” or “NA” rating or similar rating by a nationally recognized reference;

(B) The drug is generally available for purchase by pharmacies in this state from a national or regional wholesaler and is not obsolete; and

(C) The drug has at least two therapeutically equivalent multiple source drugs available or at least one generic drug available in this state from a national or regional wholesaler and is not obsolete.

(5) Each contract between a pharmacy benefits manager and a pharmacy shall include a process to appeal, investigate, and resolve disputes regarding maximum allowable cost pricing that includes all of the following:

(A) A twenty-one-day limit on the right to appeal following the initial claim;

(B) A requirement that the appeal be investigated and resolved within twenty-one days after the appeal;

(C) A telephone number at which the pharmacy may contact the pharmacy benefits manager to speak to a person responsible for processing appeals;

(D) A requirement that a pharmacy benefits manager provide a reason for any appeal denial and the identification of the national drug code of a drug that may be purchased in this state by the pharmacy at a price at or below the benchmark price determined by the pharmacy benefits manager; and

(E) A requirement that a pharmacy benefits manager make an adjustment to a date related to a claim not later than one day after the date of determination of the appeal. The adjustment shall be retroactive to the date the appeal was made and shall apply to all similarly situated pharmacies; Provided, That this requirement does not prohibit a pharmacy benefits manager from retroactively adjusting a claim for the appealing pharmacy or for another similarly situated pharmacy.

(6)(A) A pharmacy benefits manager shall disclose to a plan sponsor whether or not the pharmacy benefits manager uses the same maximum allowable cost list when billing a plan sponsor as it does when reimbursing a pharmacy.

(B) If a pharmacy benefits manager uses multiple Maximum Allowable Cost Lists, the pharmacy benefits manager shall disclose to a plan sponsor any difference between the amount paid to a pharmacy and the amount charged to the plan sponsor.

(d) Protections for patients and pharmacies.--

(1) An individual may not be required to make a payment for pharmacist services in an amount greater than the pharmacist or pharmacy providing the pharmacists services may retain from all payment sources.

(2) A pharmacy or pharmacist may decline to provide pharmacist services to a patient or pharmacy benefits manager if, as a result of a Maximum Allowable Cost List, a pharmacy or pharmacist is to be paid less than the than the cost to the pharmacy of providing the pharmacist service.

NOTE: The purpose of this bill is to regulate pharmacy benefits managers; to define terms; to require pharmacy benefits managers to register with the commissioner; to authorize the commissioner to charge registration fees; to authorize the commissioner to take action against a pharmacy benefits manager’s license or fine a pharmacy benefits manager upon violation of certain requirements; to require pharmacy benefits managers to maintain a “Maximum Cost List,” to require pharmacy benefits managers to update Maximum Allowable Cost Lists and to make the updates available in a reviewable format for pharmacies; to establish requirements for drugs to be placed on Maximum Allowable Cost Lists; to require contracts between pharmacy benefits managers and pharmacies to include a process to appeal, investigate and resolve disputes regarding maximum allowable cost pricing; to establish requirements for the appeals and dispute resolution process; to require pharmacy benefits managers to make certain disclosures to pharmacies regarding maximum cost lists; to allow a pharmacy to decline to provide a service or product to a patient if the Maximum Cost List will prevent the pharmacy from being paid the cost of providing the service; and to prohibit a patient from being required to pay an amount for pharmacist services that is greater than amount the pharmacy may retain.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.