Illinois General Assembly - Full Text of HB3630
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Full Text of HB3630  102nd General Assembly




State of Illinois
2021 and 2022


Introduced 2/22/2021, by Rep. Greg Harris


See Index

    Amends the Illinois Insurance Code. Provides that if a generic equivalent for a brand name drug is approved by the federal Food and Drug Administration, plans that provide coverage for prescription drugs through the use of a drug formulary that are amended, delivered, issued, or renewed in the State on or after January 1, 2022 shall comply with specified requirements. Provides that the Department of Insurance may adopt rules to implement provisions concerning notice of change of drug formulary. In provisions concerning a contract between a health insurer and a pharmacy benefit manager, provides that a pharmacy benefit manager must update and publish maximum allowable cost pricing information according to specified requirements, must provide a reasonable administrative appeal procedure to allow pharmacies to challenge maximum allowable costs, and must comply with specified requirements if an appeal is denied. Sets forth provisions concerning pharmacy benefit manager contracts; specified requirements that a pharmacy benefit manager shall comply with; and specified requirements that an auditing entity shall comply with when conducting a pharmacy audit. Provides that a violation of specified provisions is an unfair method of competition and unfair and deceptive act or practice in the business of insurance. Sets forth provisions concerning applicability of the Pharmacy Benefit Managers Article of the Illinois Insurance Code, and provisions concerning fiduciary responsibility of a pharmacy benefit manager. Defines terms. Makes other changes. Amends the Illinois Public Aid Code. Sets forth provisions concerning reimbursement of professional dispensing fees and acquisition costs for pharmacy providers.

LRB102 14893 BMS 22454 b






HB3630LRB102 14893 BMS 22454 b

1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 155.37, 424, and 513b1 and by adding
6Sections 513b1.1 and 513b1.3 as follows:
7    (215 ILCS 5/155.37)
8    Sec. 155.37. Drug formulary; notice.
9    (a) As used in this Section:
10    "Brand name drug" means a prescription drug marketed under
11a proprietary name or registered trademark name, including a
12biological product.
13    "Formulary" means a list of prescription drugs that is
14developed by clinical and pharmacy experts and represents the
15carrier's medically appropriate and cost-effective
16prescription drugs approved for use.
17    "Generic drug" means a prescription drug, whether
18identified by its chemical, proprietary, or nonproprietary
19name, that is not a brand name drug and is therapeutically
20equivalent to a brand name drug in dosage, safety, strength,
21method of consumption, quality, performance, and intended use.
22"Generic drug" includes a biosimilar product.
23    (b) Insurance companies that transact the kinds of



HB3630- 2 -LRB102 14893 BMS 22454 b

1insurance authorized under Class 1(b) or Class 2(a) of Section
24 of this Code and provide coverage for prescription drugs
3through the use of a drug formulary must notify insureds of any
4change in the formulary. A company may comply with this
5Section by posting changes in the formulary on its website.
6    (c) If a generic equivalent for a brand name drug is
7approved by the federal Food and Drug Administration,
8insurance companies with plans that provide coverage for
9prescription drugs through the use of a drug formulary that
10are amended, delivered, issued, or renewed in this State on or
11after January 1, 2022 shall:
12        (1) immediately substitute the brand name drug with
13    the generic equivalent; or
14        (2) move the brand name drug to a formulary tier that
15    reduces an enrollee's cost.
16    (d) The Department may adopt rules to implement this
18(Source: P.A. 92-440, eff. 8-17-01; 92-651, eff. 7-11-02.)
19    (215 ILCS 5/424)  (from Ch. 73, par. 1031)
20    Sec. 424. Unfair methods of competition and unfair or
21deceptive acts or practices defined. The following are hereby
22defined as unfair methods of competition and unfair and
23deceptive acts or practices in the business of insurance:
24        (1) The commission by any person of any one or more of
25    the acts defined or prohibited by Sections 134, 143.24c,



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1    147, 148, 149, 151, 155.22, 155.22a, 155.42, 236, 237,
2    364, and 469, and 513b1 of this Code.
3        (2) Entering into any agreement to commit, or by any
4    concerted action committing, any act of boycott, coercion
5    or intimidation resulting in or tending to result in
6    unreasonable restraint of, or monopoly in, the business of
7    insurance.
8        (3) Making or permitting, in the case of insurance of
9    the types enumerated in Classes 1, 2, and 3 of Section 4,
10    any unfair discrimination between individuals or risks of
11    the same class or of essentially the same hazard and
12    expense element because of the race, color, religion, or
13    national origin of such insurance risks or applicants. The
14    application of this Article to the types of insurance
15    enumerated in Class 1 of Section 4 shall in no way limit,
16    reduce, or impair the protections and remedies already
17    provided for by Sections 236 and 364 of this Code or any
18    other provision of this Code.
19        (4) Engaging in any of the acts or practices defined
20    in or prohibited by Sections 154.5 through 154.8 of this
21    Code.
22        (5) Making or charging any rate for insurance against
23    losses arising from the use or ownership of a motor
24    vehicle which requires a higher premium of any person by
25    reason of his physical disability, race, color, religion,
26    or national origin.



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1        (6) Failing to meet any requirement of the Unclaimed
2    Life Insurance Benefits Act with such frequency as to
3    constitute a general business practice.
4(Source: P.A. 99-143, eff. 7-27-15; 99-893, eff. 1-1-17.)
5    (215 ILCS 5/513b1)
6    Sec. 513b1. Pharmacy benefit manager contracts.
7    (a) As used in this Section:
8    "Audit" means any physical on-site, remote electronic, or
9concurrent review of a pharmacist service submitted to the
10pharmacy benefit manager or pharmacy benefit manager affiliate
11by a pharmacist or pharmacy for payment.
12    "Auditing entity" means a person or company that performs
13a pharmacy audit.
14    "Biological product" has the meaning ascribed to that term
15in Section 19.5 of the Pharmacy Practice Act.
16    "Business day" means any day of the week excluding
17Saturday, Sunday, and any legal holiday, as specified in
18Section 17 of the Promissory Note and Bank Holiday Act.
19    "Claims processing services" means the administrative
20services performed in connection with the processing and
21adjudicating of claims relating to pharmacist services that
23        (1) receiving payments for pharmacist services; or
24        (2) making payments to a pharmacist or pharmacy for
25    pharmacist services.



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1    "Covered entity" has the meaning given to that term under
2the federal Health Insurance Portability and Accountability
3Act of 1996, as specified in 45 CFR 160.103.
4    "Covered person" means a member, policyholder, subscriber,
5enrollee, beneficiary, dependent, or other individual
6participating in a health benefit plan.
7    "Extrapolation" means the practice of inferring a
8frequency of dollar amount of overpayments, underpayments,
9nonvalid claims, or other errors on any portion of claims
10submitted, based on the frequency of dollar amount of
11overpayments, underpayments, nonvalid claims, or other errors
12actually measured in a sample of claims.
13    "Health benefit plan" means a policy, contract,
14certificate, or agreement entered into, offered, or issued by
15a health carrier to provide, deliver, arrange for, pay for, or
16reimburse any of the costs of physical, mental, or behavioral
17health care services.
18    "Health carrier" means an entity subject to the insurance
19laws and rules of this State or subject to the jurisdiction of
20the Director that contracts or offers to contract or enters
21into an agreement to provide, deliver, arrange for, pay for,
22or reimburse any of the costs of health care services,
23including a sickness and accident insurance company, a health
24insurance company, a health maintenance organization, a
25hospital and health service corporation, or any other entity
26providing a plan of health insurance, health benefits, or



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1health care services.
2    "Maximum allowable cost" means any listing of
3pharmaceutical products or method for calculating
4reimbursement amounts used by a pharmacy benefit manager,
5directly or indirectly, setting the maximum allowable cost on
6which reimbursement payment to a pharmacy or pharmacist may be
7based for dispensing a prescription pharmaceutical product and
8includes, without limitation: the maximum amount that a
9pharmacy benefit manager will reimburse a pharmacy for the
10cost of a drug.
11        (1) average acquisition cost, including national
12    average drug acquisition cost;
13        (2) average manufacturer price;
14        (3) average wholesale price;
15        (4) brand effective rate or generic effective rate;
16        (5) discount indexing;
17        (6) federal upper limits;
18        (7) wholesale acquisition cost; or
19        (8) any other term that a pharmacy benefit manager or
20    a third-party payer may use to establish reimbursement
21    rates to a pharmacist or pharmacy for pharmaceutical
22    products.
23    "Maximum allowable cost list" means a list of drugs for
24which a maximum allowable cost has been established by a
25pharmacy benefit manager.
26    "Other prescription drug or device services" means



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1services other than claims processing services, provided
2directly or indirectly, whether in connection with or separate
3from claims processing services, including, but not limited
5        (1) negotiating rebates, discounts, or other financial
6    incentives and arrangements with drug companies;
7        (2) disbursing or distributing rebates;
8        (3) managing or participating in incentive programs or
9    arrangements for pharmacist services;
10        (4) negotiating or entering into contractual
11    arrangements with pharmacists or pharmacies;
12        (5) developing and maintaining formularies;
13        (6) designing prescription benefit programs; or
14        (7) advertising or promoting services.
15    "Pharmacy benefit manager" means a person, business, or
16entity, including a wholly or partially owned or controlled
17subsidiary of a pharmacy benefit manager, that provides claims
18processing services or other prescription drug or device
19services, or both, for health benefit plans. "Pharmacy benefit
20manager" does not include:
21        (1) a health care facility licensed in this State;
22        (2) a health care professional licensed in this State;
23        (3) a consultant who only provides advice as to the
24    selection or performance of a pharmacy benefit manager; or
25        (4) a health carrier to the extent that it performs
26    any claims processing and other prescription drug or



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1    device services exclusively for its enrollees.
2    "Pharmacy benefit manager affiliate" means a pharmacy or
3pharmacist that directly or indirectly, through one or more
4intermediaries, owns or controls, is owned or controlled by,
5or is under common ownership or control with a pharmacy
6benefit manager.
7    "Pharmaceutical wholesaler" means a person or entity that
8sells and distributes, directly or indirectly, prescription
9pharmaceutical products, including, without limitation, brand
10name, generic, and over-the-counter pharmaceuticals, and that
11offers regular or private delivery to a pharmacy.
12    "Pharmaceutical product" means a generic drug, brand name
13drug, biologic, or other prescription drug, vaccine, or
15    "Pharmacist" has the meaning given to that term in the
16Pharmacy Practice Act.
17    "Pharmacist services" means products, goods, and services
18or any combination of products, goods, and services, provided
19as a part of the practice of pharmacy. "Pharmacist services"
20includes "pharmacist care" as defined in the Pharmacy Practice
22    "Pharmacy" has the meaning given to that term in the
23Pharmacy Practice Act.
24    "Pharmacy acquisition cost" means the amount that a
25pharmaceutical wholesaler charges for a pharmaceutical product
26as listed on the pharmacy's billing invoice.



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1    "Pharmacy audit" means an audit conducted of any records
2of a pharmacy for prescriptions dispensed or non-proprietary
3drugs or pharmacist services provided by a pharmacy or
4pharmacist to a covered person.
5    "Pharmacy record" means any record stored electronically
6or as a hard copy by a pharmacy that relates to the provision
7of a prescription or pharmacy services or other component of
8pharmacist care that is included in the practice of pharmacy.
9    "Prescription" has the meaning given to the term in the
10Pharmacy Practice Act.
11    "Retail price" means the price an individual without
12prescription drug coverage would pay at a retail pharmacy, not
13including a pharmacist dispensing fee.
14    "Third-party payer" means any entity involved in the
15financing of a pharmacy benefit plan or program other than the
16patient, health care provider, or sponsor of a plan subject to
17regulation under Medicare Part D, 42 U.S.C. 1395w–101, et al.
18    (b) A contract between a health insurer and a pharmacy
19benefit manager must require that the pharmacy benefit
21        (1) Update and publish maximum allowable cost pricing
22    information at least every 7 calendar days and at least 7
23    calendar days from an increase of 10% or more in the
24    pharmacy acquisition cost from 60% or more of the
25    pharmaceutical wholesalers doing business in the State or
26    a change in the methodology on which the maximum allowable



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1    cost list is based or in the value of a variable involved
2    in the methodology.
3        (2) Maintain a process that will, in a timely manner,
4    eliminate drugs from maximum allowable cost lists or
5    modify drug prices to remain consistent with changes in
6    pricing data used in formulating maximum allowable cost
7    prices and product availability.
8        (3) Provide access to its maximum allowable cost list
9    to each pharmacy or pharmacy services administrative
10    organization subject to the maximum allowable cost list.
11    Access may include a real-time pharmacy website portal to
12    be able to view the maximum allowable cost list. As used in
13    this Section, "pharmacy services administrative
14    organization" means an entity operating within the State
15    that contracts with independent pharmacies to conduct
16    business on their behalf with third-party payers. A
17    pharmacy services administrative organization may provide
18    administrative services to pharmacies and negotiate and
19    enter into contracts with third-party payers or pharmacy
20    benefit managers on behalf of pharmacies.
21        (4) Provide a reasonable administrative appeal
22    procedure to allow pharmacies to challenge maximum
23    allowable costs and reimbursements made under a maximum
24    allowable cost for a specific pharmaceutical product or
25    pharmaceutical products as: Provide a process by which a
26    contracted pharmacy can appeal the provider's



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1    reimbursement for a drug subject to maximum allowable cost
2    pricing.
3            (i) not meeting the requirements of this Section;
4        or
5            (ii) being below the pharmacy acquisition cost.
6        The appeals process must, at a minimum, include the
7    following:
8            (A) A requirement that a contracted pharmacy has
9        14 calendar days after the applicable fill date to
10        appeal a maximum allowable cost if the reimbursement
11        for the drug is less than the net amount that the
12        network provider paid to the supplier of the drug.
13            (B) A requirement that a pharmacy benefit manager
14        must respond to a challenge within 14 calendar days of
15        the contracted pharmacy making the claim for which the
16        appeal has been submitted.
17            (C) A telephone number and e-mail address or
18        website to network providers, at which the provider
19        can contact the pharmacy benefit manager to process
20        and submit an appeal.
21            (D) A requirement that, if an appeal is denied,
22        the pharmacy benefit manager must provide the reason
23        for the denial and the name and the national drug code
24        number from national or regional wholesalers operating
25        in Illinois that have the pharmaceutical product
26        currently in stock at a price below the maximum



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1        allowable cost list. If the national drug code number
2        provided by the pharmacy benefit manager is not
3        available below the pharmacy acquisition cost from the
4        pharmaceutical wholesaler from whom the pharmacy or
5        pharmacist purchases the majority of prescription
6        pharmaceutical products for resale, then the pharmacy
7        benefit manager shall adjust the maximum allowable
8        cost list above the challenging pharmacy's pharmacy
9        acquisition cost and permit the pharmacy to reverse
10        and rebill each claim affected by the inability to
11        procure the pharmaceutical product at a cost that is
12        equal to or less than the previously challenged
13        maximum allowable cost.
14            (E) A requirement that, if an appeal is sustained,
15        the pharmacy benefit manager must make an adjustment
16        in the drug price effective the date the challenge is
17        resolved and make the adjustment applicable to all
18        similarly situated network pharmacy providers, as
19        determined by the managed care organization or
20        pharmacy benefit manager.
21        (5) Allow a plan sponsor contracting with a pharmacy
22    benefit manager an annual right to audit compliance with
23    the terms of the contract by the pharmacy benefit manager,
24    including, but not limited to, full disclosure of any and
25    all rebate amounts secured, whether product specific or
26    generalized rebates, that were provided to the pharmacy



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1    benefit manager by a pharmaceutical manufacturer.
2        (6) Allow a plan sponsor contracting with a pharmacy
3    benefit manager to request that the pharmacy benefit
4    manager disclose the actual amounts paid by the pharmacy
5    benefit manager to the pharmacy.
6        (7) Provide notice to the party contracting with the
7    pharmacy benefit manager of any consideration that the
8    pharmacy benefit manager receives from the manufacturer
9    for dispense as written prescriptions once a generic or
10    biologically similar product becomes available.
11    (c) In order to place a particular prescription drug on a
12maximum allowable cost list, the pharmacy benefit manager
13must, at a minimum, ensure that:
14        (1) if the drug is a generically equivalent drug, it
15    is listed as therapeutically equivalent and
16    pharmaceutically equivalent "A" or "B" rated in the United
17    States Food and Drug Administration's most recent version
18    of the "Orange Book" or have an NR or NA rating by
19    Medi-Span, Gold Standard, or a similar rating by a
20    nationally recognized reference;
21        (2) the drug is available for purchase by each
22    pharmacy in the State from national or regional
23    wholesalers operating in Illinois; and
24        (3) the drug is not obsolete.
25    (d) A pharmacy benefit manager is prohibited from limiting
26a pharmacist's ability to disclose whether the cost-sharing



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1obligation exceeds the retail price for a covered prescription
2drug, and the availability of a more affordable alternative
3drug, if one is available in accordance with Section 42 of the
4Pharmacy Practice Act.
5    (e) A health insurer or pharmacy benefit manager shall not
6require an insured to make a payment for a prescription drug at
7the point of sale in an amount that exceeds the lesser of:
8        (1) the applicable cost-sharing amount; or
9        (2) the retail price of the drug in the absence of
10    prescription drug coverage.
11    (f) In any participation contracts between a pharmacy
12benefit manager and pharmacists or pharmacies providing
13prescription drug coverage for health benefit plans, no
14pharmacy or pharmacist may be prohibited, restricted, or
15penalized in any way from disclosing to any covered person any
16health care information that the pharmacy or pharmacist deems
17appropriate regarding:
18        (1) the nature of treatment, risks, or alternatives
19    thereto;
20        (2) the availability of alternative therapies,
21    consultations, or tests;
22        (3) the decision of utilization reviewers or similar
23    persons to authorize or deny services;
24        (4) the process that is used to authorize or deny
25    health care services or benefits; or
26        (5) information on financial incentives and structures



HB3630- 15 -LRB102 14893 BMS 22454 b

1    used by the insurer.
2    (g) A pharmacy benefit manager may not prohibit a pharmacy
3or pharmacist from discussing information regarding the total
4cost for pharmacist services for a prescription drug or from
5selling a more affordable alternative to the covered person if
6a more affordable alternative is available.
7    (h) A pharmacy benefit manager contract with a
8participating pharmacist or pharmacy may not prohibit,
9restrict, or limit disclosure of information to the Director,
10law enforcement, or State or federal governmental officials
12        (1) the recipient of the information represents that
13    it has the authority, to the extent provided by State or
14    federal law, to maintain proprietary information as
15    confidential; and
16        (2) before disclosure of information designated as
17    confidential the pharmacist or pharmacy:
18            (A) marks as confidential any document in which
19        the information appears; or
20            (B) requests confidential treatment for any oral
21        communication of the information.
22    (i) A pharmacy benefit manager may not terminate the
23contract of or penalize a pharmacist or pharmacy due to a
24pharmacist or pharmacy:
25        (1) disclosing information about pharmacy benefit
26    manager practices, except for information determined to be



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1    a trade secret as determined by State law or the Director;
2    or
3        (2) sharing any portion of the pharmacy benefit
4    manager contract with the Director pursuant to a complaint
5    or a query regarding whether the contract is in compliance
6    with this Article.
7    (j) A pharmacy benefit manager shall not prohibit a
8pharmacist or pharmacy from or indirectly punish a pharmacist
9or pharmacy for making any written or oral statement to any
10State, county, or municipal official or before any State,
11county, or municipal committee, body, or proceeding.
12    (k) A pharmacy benefit manager may not require a covered
13person purchasing a covered prescription drug to pay an amount
14greater than the lesser of the covered person's cost-sharing
15amount under the terms of the health benefit plan or the amount
16the covered person would pay for the drug if the covered person
17were paying the cash price. Any amount paid by a covered person
18under this subsection shall be attributable toward any
19deductible or, to the extent consistent with Section 2707 of
20the Public Health Service Act, the annual out-of-pocket
21maximums under the covered person's health benefit plan.
22    (l) A pharmacy benefit manager shall not reimburse a
23pharmacy or pharmacist in this State an amount less than the
24amount that the pharmacy benefit manager reimburses a pharmacy
25benefit manager affiliate for providing the same
26pharmaceutical product. The amount shall be calculated on a



HB3630- 17 -LRB102 14893 BMS 22454 b

1per unit basis based on the same generic product identifier or
2generic code number. The amount shall not be less than the
3current national average drug acquisition cost listing for the
4same pharmaceutical product.
5    (m) A pharmacy or pharmacist may decline to provide a
6pharmaceutical product to a patient or pharmacy benefit
7manager if, as a result of a maximum allowable cost list, a
8pharmacy or pharmacist is to be paid less than the pharmacy
9acquisition cost of the pharmacy providing the pharmaceutical
11    (n) A pharmacy benefit manager shall pay a pharmacy a
12professional dispensing fee at a rate not less than the
13fee-for-service rate paid under the State's Medical Assistance
14Program established under Article V of the Illinois Public Aid
15Code for each prescription pharmaceutical product that is
16dispensed (on a per unit basis based on the same generic
17product identifier or generic code number) to the patient by
18the pharmacy. This dispensing fee shall be in addition to the
19amount that the pharmacy benefit manager reimburses a
20pharmacy, consistent with the provisions of this Article, for
21the cost of the pharmaceutical product that the pharmacy
22dispenses to the patient.
23    (o) A pharmacy benefit manager shall not assess, charge,
24or collect any form of remuneration that passes from a
25pharmacy or pharmacist to the pharmacy benefit manager,
26including, but not limited to, claim-processing fees,



HB3630- 18 -LRB102 14893 BMS 22454 b

1performance-based fees, network-participation fees, or
2accreditation fees.
3    (p) A pharmacy benefit manager shall not directly or
4indirectly deny or reduce a claim after the claim has been
5adjudicated, unless one of the following applies:
6        (1) the original claim was submitted fraudulently; or
7        (2) the original claim payment was incorrect because
8    the pharmacy or pharmacist had already been paid for the
9    pharmaceutical product.
10    (q) A pharmacy benefit manager shall not condition
11payment, reimbursement, or network participation on any type
12of accreditation, certification, or credentialing standard
13beyond those required by the State Board of Pharmacy or
14applicable State or federal law.
15    (r) A pharmacy benefit manager shall not prohibit or
16otherwise restrict a pharmacist or pharmacy from offering
17prescription delivery services to any covered person.
18    (s) A pharmacy benefit manager shall not require any
19additional requirement for a prescription claim that is more
20restrictive than the standards established under the Illinois
21Food, Drug and Cosmetic Act; the Pharmacy Practice Act; or the
22Illinois Controlled Substances Act.
23    (t) A pharmacy benefit manager shall allow participants
24and beneficiaries of the pharmacy benefit plans and programs
25that the pharmacy benefit manager serves to utilize any
26pharmacy within the State that is licensed to dispense the



HB3630- 19 -LRB102 14893 BMS 22454 b

1prescription pharmaceutical product that the participant or
2beneficiary seeks to fill, if the pharmacy is willing to
3accept the same terms and conditions that the pharmacy benefit
4manager has established for at least one of the networks of
5pharmacies that the pharmacy benefit manager has established
6to serve patients within the State.
7    (u) A pharmacy benefit manager shall not:
8        (1) prohibit or limit any person who is a participant
9    or beneficiary of the policy or plan from selecting a
10    pharmacy or pharmacist of his or her choice who has agreed
11    to participate in the plan according to the terms offered
12    by the insurer;
13        (2) deny a pharmacy or pharmacist the right to
14    participate as a contract provider under the policy or
15    plan if the pharmacy or pharmacist agrees to provide
16    pharmacy services, including, but not limited to,
17    prescription drugs, that meet the terms and requirements
18    set forth by the insurer under the policy or plan and
19    agrees to the terms of reimbursement set forth by the
20    insurer;
21        (3) impose upon a beneficiary of pharmacy services
22    under a health benefit plan any copayment, fee, or any
23    other condition that is not equally imposed upon all
24    beneficiaries in the same benefit category, class, or
25    copayment level under the health benefit plan when
26    receiving services from a contract provider;



HB3630- 20 -LRB102 14893 BMS 22454 b

1        (4) impose a monetary advantage, incentive, or penalty
2    under a health benefit plan that would affect or influence
3    a beneficiary's choice among those pharmacies or
4    pharmacists who have agreed to participate in the plan
5    according to the terms offered by the insurer;
6        (5) require a beneficiary, as a condition of payment
7    or reimbursement, to purchase pharmacy services, including
8    prescription drugs, exclusively through a mail-order
9    pharmacy or pharmacy benefit manager affiliate; or
10        (6) impose upon a beneficiary any copayment, amount of
11    reimbursement, number of days of a drug supply for which
12    reimbursement will be allowed, or any other payment,
13    restriction, limitation, or condition relating to
14    purchasing pharmacy services from any pharmacy, including
15    prescription drugs, that is more costly or more
16    restrictive than that which would be imposed upon the
17    beneficiary if such services were purchased from a
18    mail-order pharmacy, a pharmacy benefit manager affiliate,
19    or any other pharmacy that is willing to provide the same
20    services or products for the same cost and copayment as
21    any mail-order service.
22    (v) A pharmacy benefit manager or a pharmacy benefit
23manager affiliate shall not:
24        (1) refer a covered person to a mail-order pharmacy or
25    any other pharmacy benefit manager affiliate; or
26        (2) utilize a covered person's pharmacy service data



HB3630- 21 -LRB102 14893 BMS 22454 b

1    collected pursuant to the provision of claims processing
2    services for the purpose referring the covered person to a
3    mail-order pharmacy or any other pharmacy benefit manager
4    affiliate.
5    As used this subsection, "refer" means:
6        (A) ordering a covered person to a pharmacy either
7    orally or in writing, including online messaging;
8        (B) offering or implementing plan designs that require
9    covered persons to utilize a pharmacy benefit manager
10    affiliate or that increase plan or patient costs,
11    including requiring covered persons to pay the full cost
12    for a prescription when covered persons choose not to use
13    a pharmacy benefit manager affiliate; or
14        (C) using person-specific advertising, marketing,
15    direct written, electronic, or verbal communication,
16    promotion, or other solicitation of a pharmacy by an
17    affiliate or pharmacy benefit manager as a result of an
18    arrangement or agreement with the pharmacy's affiliate.
19    (w) A pharmacy benefit manager shall not prohibit a
20pharmacy from participating in any given network of pharmacies
21within the State if the pharmacy is licensed by the Department
22of Financial and Professional Regulation and willing to accept
23the same terms and conditions that the pharmacy benefit
24manager has established for other pharmacies participating
25within the network that the pharmacy wishes to join.
26    (x) A pharmacy benefit manager shall not require



HB3630- 22 -LRB102 14893 BMS 22454 b

1participation in additional networks for a pharmacy to enroll
2in an individual network.
3    (y) A pharmacy benefit manager shall not charge a
4participant or beneficiary of a pharmacy benefits plan or
5program that the pharmacy benefit manager serves a different
6copayment obligation or additional fee for using any pharmacy
7within a given network of pharmacies established by the
8pharmacy benefit manager to serve patients within the State.
9    (z) Notwithstanding any other law, when conducting a
10pharmacy audit, an auditing entity shall:
11        (1) not conduct an on-site audit of a pharmacy at any
12    time during the first 3 business days of a month or the
13    first 2 weeks and final 2 weeks of the calendar year or
14    during a declared State or federal public health
15    emergency;
16        (2) notify the pharmacy or its contracting agent no
17    later than 30 days before the date of initial on-site
18    audit; the notification to the pharmacy or its contracting
19    agent shall be in writing and delivered either:
20            (A) by mail or common carrier, return receipt
21        requested; or
22            (B) electronically with electronic receipt
23        confirmation, addressed to the supervising pharmacist
24        of record and pharmacy corporate office, if
25        applicable, at least 30 days before the date of an
26        initial on-site audit;



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1        (3) limit the audit period to 24 months after the date
2    a claim is submitted to or adjudicated by the pharmacy
3    benefit manager;
4        (4) include in the written advance notice of an
5    on-site audit the list of specific prescription numbers to
6    be included in the audit that may or may not include the
7    final 2 digits of the prescription numbers;
8        (5) use the written and verifiable records of a
9    hospital, physician, or other authorized practitioner that
10    are transmitted by any means of communication to validate
11    the pharmacy records in accordance with State and federal
12    law;
13        (6) limit the number of prescriptions audited to no
14    more than 100 randomly selected in a 12-month period and
15    no more than one on-site audit per quarter of the calendar
16    year, except in cases of fraud;
17        (7) provide the pharmacy or its contracting agent with
18    a copy of the preliminary audit report within 45 days
19    after the conclusion of the audit;
20        (8) be allowed to conduct a follow-up audit on site if
21    a remote or desk audit reveals the necessity for a review
22    of additional claims;
23        (9) accept invoice audits as validation invoices from
24    any wholesaler registered with the Department of Financial
25    and Professional Regulation from which the pharmacy has
26    purchased prescription drugs or, in the case of durable



HB3630- 24 -LRB102 14893 BMS 22454 b

1    medical equipment or sickroom supplies, invoices from an
2    authorized distributor other than a wholesaler;
3        (10) provide the pharmacy or its contracting agent
4    with the ability to provide documentation to address a
5    discrepancy or audit finding if the documentation is
6    received by the pharmacy benefit manager no later than the
7    45th day after the preliminary audit report was provided
8    to the pharmacy or its contracting agent; the pharmacy
9    benefit manager shall consider a reasonable request from
10    the pharmacy for an extension of time to submit
11    documentation to address or correct any findings in the
12    report;
13        (11) be required to provide the pharmacy or its
14    contracting agent with the final audit report no later
15    than 60 days after the initial audit report was provided
16    to the pharmacy or its contracting agent;
17        (12) conduct the audit in consultation with a
18    pharmacist if the audit involves clinical or professional
19    judgment;
20        (13) not chargeback, recoup, or collect penalties from
21    a pharmacy until the time period to file an appeal of the
22    final pharmacy audit report has passed or the appeals
23    process has been exhausted, whichever is later, unless the
24    identified discrepancy is expected to exceed $25,000, in
25    which case the auditing entity may withhold future
26    payments in excess of that amount until the final



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1    resolution of the audit;
2        (14) not compensate the employee or contractor
3    conducting the audit based on a percentage of the amount
4    claimed or recouped pursuant to the audit;
5        (15) not use extrapolation to calculate penalties or
6    amounts to be charged back or recouped unless otherwise
7    required by federal law or regulation; any amount to be
8    charged back or recouped due to overpayment may not exceed
9    the amount the pharmacy was overpaid;
10        (16) not include dispensing fees in the calculation of
11    overpayments unless a prescription is considered a
12    misfill; as used in this paragraph, "misfill" means a
13    prescription that was not dispensed; a prescription that
14    was dispensed but was an incorrect dose, amount, or type
15    of medication; a prescription that was dispensed to the
16    wrong person; a prescription in which the prescriber
17    denied the authorization request; or a prescription in
18    which an additional dispensing fee was charged; or
19        (17) conduct a pharmacy audit under the same standards
20    and parameters as conducted for other similarly situated
21    pharmacies audited by the auditing entity.
22    (aa) Except as otherwise provided by State or federal law,
23an auditing entity conducting a pharmacy audit may have access
24to a pharmacy's previous audit report only if the report was
25prepared by that auditing entity.
26    (bb) Information collected during a pharmacy audit shall



HB3630- 26 -LRB102 14893 BMS 22454 b

1be confidential by law, except that the auditing entity
2conducting the pharmacy audit may share the information with
3the covered entity for which a pharmacy audit is being
4conducted and with any regulatory agencies and law enforcement
5agencies as required by law.
6    (cc) A pharmacy may not be subject to a chargeback or
7recoupment for a clerical or recordkeeping error in a required
8document or record, including a typographical error or
9computer error, unless the error resulted in overpayment to
10the pharmacy.
11    (dd) A pharmacy shall have the right to file a written
12appeal of a preliminary and final pharmacy audit report in
13accordance with the procedures established by the entity
14conducting the pharmacy audit.
15    (ee) No interest shall accrue for any party during the
16audit period, beginning with the notice of the pharmacy audit
17and ending with the conclusion of the appeals process.
18    (ff) A contract between a pharmacy or pharmacist and a
19pharmacy benefit manager must contain a provision allowing,
20during the course of a pharmacy audit conducted by or on behalf
21of a pharmacy benefit manager, a pharmacy or pharmacist to
22withdraw and resubmit a claim within 30 days after:
23        (1) the preliminary written audit report is delivered
24    if the pharmacy or pharmacist does not request an internal
25    appeal; or
26        (2) the conclusion of the internal audit appeals



HB3630- 27 -LRB102 14893 BMS 22454 b

1    process if the pharmacy or pharmacist requests an internal
2    audit appeal.
3    (gg) To the extent that an audit results in the
4identification of any clerical or recordkeeping errors, such
5as typographical errors, scrivener's errors, or computer
6errors, in a required document or record, the pharmacy shall
7not be subject to recoupment of funds by the pharmacy benefit
8manager unless the pharmacy benefit manager can provide proof
9of intent to commit fraud or such error results in actual
10financial harm to the pharmacy benefit manager, a health plan
11managed by the pharmacy benefit manager, or a consumer.
12    (hh) Any claim that was retroactively denied for a
13clerical error, typographical error, scrivener's error, or
14computer error shall be paid if the prescription was properly
15and correctly dispensed, unless a pattern of such errors
16exists, fraudulent billing is alleged, or the error results in
17actual financial loss to the entity. As used in this
18subsection, "clerical error" means an error that does not
19result in actual financial harm to the covered entity or
20consumer and does not include the dispensing of an incorrect
21dose, amount, or type of medication or dispensing a
22prescription drug to the wrong person.
23    (ii) For any claim that meets the definition of a clean
24claim or is deemed to not have violated the terms of the
25contract or the practice of pharmacy as described under the
26Pharmacy Practice Act, the pharmacy benefit manager shall pay



HB3630- 28 -LRB102 14893 BMS 22454 b

1the pharmacy 5% of the total claim amount to cover audit
2preparation costs and time taken away from pharmacy staff in
3providing patient care.
4    (jj) This Section shall not apply to:
5        (1) audits in which suspected fraudulent activity or
6    other intentional or willful misrepresentation is
7    evidenced by a physical review, review of claims data or
8    statements, or other investigative methods;
9        (2) audits of claims paid for by federally funded
10    programs; or
11        (3) concurrent reviews or desk audits that occur
12    within 3 business days after transmission of a claim and
13    where no chargeback or recoupment is demanded.
14    (kk) A violation of this Section shall be an unfair and
15deceptive act or practice.
16    (ll) (f) This Section applies to contracts entered into or
17renewed on or after July 1, 2020.
18    (mm) (g) This Section applies to any group or individual
19policy of accident and health insurance or managed care plan
20that provides coverage for prescription drugs and that is
21amended, delivered, issued, or renewed on or after July 1,
23(Source: P.A. 101-452, eff. 1-1-20.)
24    (215 ILCS 5/513b1.1 new)
25    Sec. 513b1.1. Applicability.



HB3630- 29 -LRB102 14893 BMS 22454 b

1    (a) This Article applies to a contract or health benefit
2plan issued, renewed, recredentialed, amended, or extended on
3or after the effective date of this amendatory Act of the 102nd
4General Assembly, including any health carrier that performs
5claims processing or other prescription drug or device
6services through a third party.
7    (b) As a condition of licensure, any contract in existence
8on the date the pharmacy benefit manager receives its license
9to do business in this State shall comply with the
10requirements of this Article.
11    (c) Nothing in this Article is intended or shall be
12construed to conflict with existing federal law.
13    (215 ILCS 5/513b1.3 new)
14    Sec. 513b1.3. Fiduciary responsibility. A pharmacy benefit
15manager is a fiduciary to a health carrier and shall:
16        (1) discharge that duty in accordance with federal and
17    State law;
18        (2) notify the covered entity in writing of any
19    activity, policy, or practice of the pharmacy benefit
20    manager that directly or indirectly presents any conflict
21    of interest and inability to comply with the duties
22    imposed by this Section, but in no event does this
23    notification exempt the pharmacy benefit manager from
24    compliance with all other Sections of this Code; and
25        (3) disclose all direct or indirect payments related



HB3630- 30 -LRB102 14893 BMS 22454 b

1    to the dispensation of prescription drugs or classes or
2    brands of drugs to the covered entity.
3    Section 10. The Illinois Public Aid Code is amended by
4changing Sections 5-5.12 and 5-36 as follows:
5    (305 ILCS 5/5-5.12)  (from Ch. 23, par. 5-5.12)
6    Sec. 5-5.12. Pharmacy payments.
7    (a) Every request submitted by a pharmacy for
8reimbursement under this Article for prescription drugs
9provided to a recipient of aid under this Article shall
10include the name of the prescriber or an acceptable
11identification number as established by the Department.
12    (b) Pharmacies providing prescription drugs under this
13Article shall be reimbursed at a rate which shall include a
14professional dispensing fee as determined by the Illinois
15Department, plus the current acquisition cost of the
16prescription drug dispensed. The Illinois Department shall
17update its information on the acquisition costs of all
18prescription drugs no less frequently than every 30 days. The
19Department shall not reimburse a pharmacy or pharmacist in
20this State an amount less than the current national average
21drug acquisition cost listing for the pharmaceutical product.
22However, the Illinois Department may set the rate of
23reimbursement for the acquisition cost, by rule, at a
24percentage of the current average wholesale acquisition cost.



HB3630- 31 -LRB102 14893 BMS 22454 b

1    (b-5) The Department shall pay a pharmacy or pharmacist a
2professional dispensing fee at a rate not less than the amount
3determined by a pharmacy profession-recognized national or
4state survey of pharmacies for each prescription
5pharmaceutical product that is dispensed (on a per unit basis
6based on the same generic product identifier or generic code
7number) to the patient by the pharmacy. This dispensing fee
8shall be in addition to the amount that the Department
9reimburses a pharmacy for the cost of the pharmaceutical
10product that the pharmacy dispenses to the patient. If a
11vendor is utilized for conducting the survey or data analysis,
12the vendor may not be a wholly or partially owned or controlled
13subsidiary of a pharmacy benefit manager or managed care
15    (b-10) All Medicaid managed care organizations must
16reimburse pharmacy provider professional dispensing fees and
17acquisition costs at no less than the amounts established
18under the fee-for-service program whether the Medicaid managed
19care organization directly reimburses pharmacy providers or
20contracts with a pharmacy benefit manager to reimburse
21pharmacy providers. The reimbursement requirement specified in
22this subsection applies to all pharmacy services for persons
23receiving benefits under this Code, including services
24reimbursed under Section 5-36.
25    (c) (Blank).
26    (d) The Department shall review utilization of narcotic



HB3630- 32 -LRB102 14893 BMS 22454 b

1medications in the medical assistance program and impose
2utilization controls that protect against abuse.
3    (e) When making determinations as to which drugs shall be
4on a prior approval list, the Department shall include as part
5of the analysis for this determination, the degree to which a
6drug may affect individuals in different ways based on factors
7including the gender of the person taking the medication.
8    (f) The Department shall cooperate with the Department of
9Public Health and the Department of Human Services Division of
10Mental Health in identifying psychotropic medications that,
11when given in a particular form, manner, duration, or
12frequency (including "as needed") in a dosage, or in
13conjunction with other psychotropic medications to a nursing
14home resident or to a resident of a facility licensed under the
15ID/DD Community Care Act or the MC/DD Act, may constitute a
16chemical restraint or an "unnecessary drug" as defined by the
17Nursing Home Care Act or Titles XVIII and XIX of the Social
18Security Act and the implementing rules and regulations. The
19Department shall require prior approval for any such
20medication prescribed for a nursing home resident or to a
21resident of a facility licensed under the ID/DD Community Care
22Act or the MC/DD Act, that appears to be a chemical restraint
23or an unnecessary drug. The Department shall consult with the
24Department of Human Services Division of Mental Health in
25developing a protocol and criteria for deciding whether to
26grant such prior approval.



HB3630- 33 -LRB102 14893 BMS 22454 b

1    (g) The Department may by rule provide for reimbursement
2of the dispensing of a 90-day supply of a generic or brand
3name, non-narcotic maintenance medication in circumstances
4where it is cost effective.
5    (g-5) On and after July 1, 2012, the Department may
6require the dispensing of drugs to nursing home residents be
7in a 7-day supply or other amount less than a 31-day supply.
8The Department shall pay only one dispensing fee per 31-day
10    (h) Effective July 1, 2011, the Department shall
11discontinue coverage of select over-the-counter drugs,
12including analgesics and cough and cold and allergy
14    (h-5) On and after July 1, 2012, the Department shall
15impose utilization controls, including, but not limited to,
16prior approval on specialty drugs, oncolytic drugs, drugs for
17the treatment of HIV or AIDS, immunosuppressant drugs, and
18biological products in order to maximize savings on these
19drugs. The Department may adjust payment methodologies for
20non-pharmacy billed drugs in order to incentivize the
21selection of lower-cost drugs. For drugs for the treatment of
22AIDS, the Department shall take into consideration the
23potential for non-adherence by certain populations, and shall
24develop protocols with organizations or providers primarily
25serving those with HIV/AIDS, as long as such measures intend
26to maintain cost neutrality with other utilization management



HB3630- 34 -LRB102 14893 BMS 22454 b

1controls such as prior approval. For hemophilia, the
2Department shall develop a program of utilization review and
3control which may include, in the discretion of the
4Department, prior approvals. The Department may impose special
5standards on providers that dispense blood factors which shall
6include, in the discretion of the Department, staff training
7and education; patient outreach and education; case
8management; in-home patient assessments; assay management;
9maintenance of stock; emergency dispensing timeframes; data
10collection and reporting; dispensing of supplies related to
11blood factor infusions; cold chain management and packaging
12practices; care coordination; product recalls; and emergency
13clinical consultation. The Department may require patients to
14receive a comprehensive examination annually at an appropriate
15provider in order to be eligible to continue to receive blood
17    (i) On and after July 1, 2012, the Department shall reduce
18any rate of reimbursement for services or other payments or
19alter any methodologies authorized by this Code to reduce any
20rate of reimbursement for services or other payments in
21accordance with Section 5-5e.
22    (j) On and after July 1, 2012, the Department shall impose
23limitations on prescription drugs such that the Department
24shall not provide reimbursement for more than 4 prescriptions,
25including 3 brand name prescriptions, for distinct drugs in a
2630-day period, unless prior approval is received for all



HB3630- 35 -LRB102 14893 BMS 22454 b

1prescriptions in excess of the 4-prescription limit. Drugs in
2the following therapeutic classes shall not be subject to
3prior approval as a result of the 4-prescription limit:
4immunosuppressant drugs, oncolytic drugs, anti-retroviral
5drugs, and, on or after July 1, 2014, antipsychotic drugs. On
6or after July 1, 2014, the Department may exempt children with
7complex medical needs enrolled in a care coordination entity
8contracted with the Department to solely coordinate care for
9such children, if the Department determines that the entity
10has a comprehensive drug reconciliation program.
11    (k) No medication therapy management program implemented
12by the Department shall be contrary to the provisions of the
13Pharmacy Practice Act.
14    (l) Any provider enrolled with the Department that bills
15the Department for outpatient drugs and is eligible to enroll
16in the federal Drug Pricing Program under Section 340B of the
17federal Public Health Service Services Act shall enroll in
18that program. No entity participating in the federal Drug
19Pricing Program under Section 340B of the federal Public
20Health Service Services Act may exclude Medicaid from their
21participation in that program, although the Department may
22exclude entities defined in Section 1905(l)(2)(B) of the
23Social Security Act from this requirement.
24(Source: P.A. 98-463, eff. 8-16-13; 98-651, eff. 6-16-14;
2599-180, eff. 7-29-15; revised 9-2-20.)



HB3630- 36 -LRB102 14893 BMS 22454 b

1    (305 ILCS 5/5-36)
2    Sec. 5-36. Pharmacy benefits.
3    (a)(1) The Department may enter into a contract with a
4third party on a fee-for-service reimbursement model for the
5purpose of administering pharmacy benefits as provided in this
6Section for members not enrolled in a Medicaid managed care
7organization; however, these services shall be approved by the
8Department. The Department shall ensure coordination of care
9between the third-party administrator and managed care
10organizations as a consideration in any contracts established
11in accordance with this Section. Any managed care techniques,
12principles, or administration of benefits utilized in
13accordance with this subsection shall comply with State law.
14    (2) The following shall apply to contracts between
15entities contracting relating to the Department's third-party
16administrators and pharmacies:
17        (A) the Department shall approve any contract between
18    a third-party administrator and a pharmacy;
19        (B) the Department's third-party administrator shall
20    not change the terms of a contract between a third-party
21    administrator and a pharmacy without written approval by
22    the Department; and
23        (C) the Department's third-party administrator shall
24    not create, modify, implement, or indirectly establish any
25    fee on a pharmacy, pharmacist, or a recipient of medical
26    assistance without written approval by the Department.



HB3630- 37 -LRB102 14893 BMS 22454 b

1    (b) The provisions of this Section shall not apply to
2outpatient pharmacy services provided by a health care
3facility registered as a covered entity pursuant to 42 U.S.C.
4256b or any pharmacy owned by or contracted with the covered
5entity. A Medicaid managed care organization shall, either
6directly or through a pharmacy benefit manager, administer and
7reimburse outpatient pharmacy claims submitted by a health
8care facility registered as a covered entity pursuant to 42
9U.S.C. 256b, its owned pharmacies, and contracted pharmacies
10in accordance with the contractual agreements the Medicaid
11managed care organization or its pharmacy benefit manager has
12with such facilities and pharmacies. Any pharmacy benefit
13manager that contracts with a Medicaid managed care
14organization to administer and reimburse pharmacy claims as
15provided in this Section must be registered with the Director
16of Insurance in accordance with Section 513b2 of the Illinois
17Insurance Code.
18    (c) On at least an annual basis, the Director of the
19Department of Healthcare and Family Services shall submit a
20report beginning no later than one year after January 1, 2020
21(the effective date of Public Act 101-452) this amendatory Act
22of the 101st General Assembly that provides an update on any
23contract, contract issues, formulary, dispensing fees, and
24maximum allowable cost concerns regarding a third-party
25administrator and managed care. The requirement for reporting
26to the General Assembly shall be satisfied by filing copies of



HB3630- 38 -LRB102 14893 BMS 22454 b

1the report with the Speaker, the Minority Leader, and the
2Clerk of the House of Representatives and with the President,
3the Minority Leader, and the Secretary of the Senate. The
4Department shall take care that no proprietary information is
5included in the report required under this Section.
6    (d) A pharmacy benefit manager shall notify the Department
7in writing of any activity, policy, or practice of the
8pharmacy benefit manager that directly or indirectly presents
9a conflict of interest that interferes with the discharge of
10the pharmacy benefit manager's duty to a managed care
11organization to exercise its contractual duties. "Conflict of
12interest" shall be defined by rule by the Department.
13    (e) A pharmacy benefit manager shall, upon request,
14disclose to the Department the following information:
15        (1) whether the pharmacy benefit manager has a
16    contract, agreement, or other arrangement with a
17    pharmaceutical manufacturer to exclusively dispense or
18    provide a drug to a managed care organization's enrollees,
19    and the aggregate amounts of consideration of economic
20    benefits collected or received pursuant to that
21    arrangement;
22        (2) the percentage of claims payments made by the
23    pharmacy benefit manager to pharmacies owned, managed, or
24    controlled by the pharmacy benefit manager or any of the
25    pharmacy benefit manager's management companies, parent
26    companies, subsidiary companies, or jointly held



HB3630- 39 -LRB102 14893 BMS 22454 b

1    companies;
2        (3) the aggregate amount of the fees or assessments
3    imposed on, or collected from, pharmacy providers; and
4        (4) the average annualized percentage of revenue
5    collected by the pharmacy benefit manager as a result of
6    each contract it has executed with a managed care
7    organization contracted by the Department to provide
8    medical assistance benefits which is not paid by the
9    pharmacy benefit manager to pharmacy providers and
10    pharmaceutical manufacturers or labelers or in order to
11    perform administrative functions pursuant to its contracts
12    with managed care organizations.
13    (f) The information disclosed under subsection (e) shall
14include all retail, mail order, specialty, and compounded
15prescription products. All information made available to the
16Department under subsection (e) is confidential and not
17subject to disclosure under the Freedom of Information Act.
18All information made available to the Department under
19subsection (e) shall not be reported or distributed in any way
20that compromises its competitive, proprietary, or financial
21value. The information shall only be used by the Department to
22assess the contract, agreement, or other arrangements made
23between a pharmacy benefit manager and a pharmacy provider,
24pharmaceutical manufacturer or labeler, managed care
25organization, or other entity, as applicable.
26    (g) A pharmacy benefit manager shall disclose directly in



HB3630- 40 -LRB102 14893 BMS 22454 b

1writing to a pharmacy provider or pharmacy services
2administrative organization contracting with the pharmacy
3benefit manager of any material change to a contract provision
4that affects the terms of the reimbursement, the process for
5verifying benefits and eligibility, dispute resolution,
6procedures for verifying drugs included on the formulary, and
7contract termination at least 30 days prior to the date of the
8change to the provision. The terms of this subsection shall be
9deemed met if the pharmacy benefit manager posts the
10information on a website, viewable by the public. A pharmacy
11service administration organization shall notify all contract
12pharmacies of any material change, as described in this
13subsection, within 2 days of notification. As used in this
14Section, "pharmacy services administrative organization" means
15an entity operating within the State that contracts with
16independent pharmacies to conduct business on their behalf
17with third-party payers. A pharmacy services administrative
18organization may provide administrative services to pharmacies
19and negotiate and enter into contracts with third-party payers
20or pharmacy benefit managers on behalf of pharmacies.
21    (h) A pharmacy benefit manager shall not include the
22following in a contract with a pharmacy provider:
23        (1) a provision prohibiting the provider from
24    informing a patient of a less costly alternative to a
25    prescribed medication; or
26        (2) a provision that prohibits the provider from



HB3630- 41 -LRB102 14893 BMS 22454 b

1    dispensing a particular amount of a prescribed medication,
2    if the pharmacy benefit manager allows that amount to be
3    dispensed through a pharmacy owned or controlled by the
4    pharmacy benefit manager, unless the prescription drug is
5    subject to restricted distribution by the United States
6    Food and Drug Administration or requires special handling,
7    provider coordination, or patient education that cannot be
8    provided by a retail pharmacy.
9    (i) Nothing in this Section shall be construed to prohibit
10a pharmacy benefit manager from requiring the same
11reimbursement and terms and conditions for a pharmacy provider
12as for a pharmacy owned, controlled, or otherwise associated
13with the pharmacy benefit manager. Reimbursement must not be
14less than the dispensing fees and acquisition costs under the
15fee-for-service program as required under subsection (b-10) of
16Section 5-5.12.
17    (j) A pharmacy benefit manager shall establish and
18implement a process for the resolution of disputes arising out
19of this Section, which shall be approved by the Department.
20    (k) The Department shall adopt rules establishing
21reasonable dispensing fees for fee-for-service payments in
22accordance with guidance or guidelines from the federal
23Centers for Medicare and Medicaid Services.
24(Source: P.A. 101-452, eff. 1-1-20; revised 10-22-19.)



HB3630- 42 -LRB102 14893 BMS 22454 b

2 Statutes amended in order of appearance
3    215 ILCS 5/155.37
4    215 ILCS 5/424from Ch. 73, par. 1031
5    215 ILCS 5/513b1
6    215 ILCS 5/513b1.1 new
7    215 ILCS 5/513b1.3 new
8    305 ILCS 5/5-5.12from Ch. 23, par. 5-5.12
9    305 ILCS 5/5-36