Full Text of HB5833 103rd General Assembly
HB5833 103RD GENERAL ASSEMBLY | | | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 HB5833 Introduced 5/3/2024, by Rep. John M. Cabello SYNOPSIS AS INTRODUCED: | | | Amends the Illinois Insurance Code. Provides that a pharmacy benefit manager or an affiliate acting on the pharmacy benefit manager's behalf is prohibited from steering a covered individual. Defines "steer". Effective July 1, 2024. |
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| | A BILL FOR |
| | | | HB5833 | | LRB103 40511 RPS 72993 b |
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| 1 | | AN ACT concerning regulation. | 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly: | 4 | | Section 5. The Illinois Insurance Code is amended by | 5 | | changing Section 513b1 and by adding Section 513b1.5 as | 6 | | follows: | 7 | | (215 ILCS 5/513b1) | 8 | | Sec. 513b1. Pharmacy benefit manager contracts. | 9 | | (a) As used in this Section: | 10 | | "340B drug discount program" means the program established | 11 | | under Section 340B of the federal Public Health Service Act, | 12 | | 42 U.S.C. 256b. | 13 | | "340B entity" means a covered entity as defined in 42 | 14 | | U.S.C. 256b(a)(4) authorized to participate in the 340B drug | 15 | | discount program. | 16 | | "340B pharmacy" means any pharmacy used to dispense 340B | 17 | | drugs for a covered entity, whether entity-owned or external. | 18 | | "Biological product" has the meaning ascribed to that term | 19 | | in Section 19.5 of the Pharmacy Practice Act. | 20 | | "Maximum allowable cost" means the maximum amount that a | 21 | | pharmacy benefit manager will reimburse a pharmacy for the | 22 | | cost of a drug. | 23 | | "Maximum allowable cost list" means a list of drugs for |
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| 1 | | which a maximum allowable cost has been established by a | 2 | | pharmacy benefit manager. | 3 | | "Pharmacy benefit manager" means a person, business, or | 4 | | entity, including a wholly or partially owned or controlled | 5 | | subsidiary of a pharmacy benefit manager, that provides claims | 6 | | processing services or other prescription drug or device | 7 | | services, or both, for health benefit plans. | 8 | | "Retail price" means the price an individual without | 9 | | prescription drug coverage would pay at a retail pharmacy, not | 10 | | including a pharmacist dispensing fee. | 11 | | "Steer" includes, but is not limited to: | 12 | | (1) requiring a covered individual to use only a | 13 | | pharmacy, including a mail-order pharmacy, in which the | 14 | | pharmacy benefit manager maintains an ownership interest | 15 | | or control; | 16 | | (2) offering or implementing a plan design that | 17 | | encourages a covered individual to use a pharmacy in which | 18 | | the pharmacy benefit manager maintains an ownership | 19 | | interest or control, if such plan design increases costs | 20 | | for the covered individual, including requiring a covered | 21 | | individual to pay full costs for a prescription if the | 22 | | covered individual chooses not to use a pharmacy owned or | 23 | | controlled by the pharmacy benefit manager; | 24 | | (3) reimbursing a pharmacy or pharmacist for a | 25 | | pharmaceutical product or pharmacist service in an amount | 26 | | less than the amount that the pharmacy benefit manager |
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| 1 | | reimburses itself or an affiliate for providing the same | 2 | | product or services, unless the pharmacy or pharmacist | 3 | | contractually agrees to a lower reimbursement amount; or | 4 | | (4) any other actions determined by the Department by | 5 | | rule. | 6 | | "Third-party payer" means any entity that pays for | 7 | | prescription drugs on behalf of a patient other than a health | 8 | | care provider or sponsor of a plan subject to regulation under | 9 | | Medicare Part D, 42 U.S.C. 1395w-101 et seq. | 10 | | (b) A contract between a health insurer and a pharmacy | 11 | | benefit manager must require that the pharmacy benefit | 12 | | manager: | 13 | | (1) Update maximum allowable cost pricing information | 14 | | at least every 7 calendar days. | 15 | | (2) Maintain a process that will, in a timely manner, | 16 | | eliminate drugs from maximum allowable cost lists or | 17 | | modify drug prices to remain consistent with changes in | 18 | | pricing data used in formulating maximum allowable cost | 19 | | prices and product availability. | 20 | | (3) Provide access to its maximum allowable cost list | 21 | | to each pharmacy or pharmacy services administrative | 22 | | organization subject to the maximum allowable cost list. | 23 | | Access may include a real-time pharmacy website portal to | 24 | | be able to view the maximum allowable cost list. As used in | 25 | | this Section, "pharmacy services administrative | 26 | | organization" means an entity operating within the State |
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| 1 | | that contracts with independent pharmacies to conduct | 2 | | business on their behalf with third-party payers. A | 3 | | pharmacy services administrative organization may provide | 4 | | administrative services to pharmacies and negotiate and | 5 | | enter into contracts with third-party payers or pharmacy | 6 | | benefit managers on behalf of pharmacies. | 7 | | (4) Provide a process by which a contracted pharmacy | 8 | | can appeal the provider's reimbursement for a drug subject | 9 | | to maximum allowable cost pricing. The appeals process | 10 | | must, at a minimum, include the following: | 11 | | (A) A requirement that a contracted pharmacy has | 12 | | 14 calendar days after the applicable fill date to | 13 | | appeal a maximum allowable cost if the reimbursement | 14 | | for the drug is less than the net amount that the | 15 | | network provider paid to the supplier of the drug. | 16 | | (B) A requirement that a pharmacy benefit manager | 17 | | must respond to a challenge within 14 calendar days of | 18 | | the contracted pharmacy making the claim for which the | 19 | | appeal has been submitted. | 20 | | (C) A telephone number and e-mail address or | 21 | | website to network providers, at which the provider | 22 | | can contact the pharmacy benefit manager to process | 23 | | and submit an appeal. | 24 | | (D) A requirement that, if an appeal is denied, | 25 | | the pharmacy benefit manager must provide the reason | 26 | | for the denial and the name and the national drug code |
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| 1 | | number from national or regional wholesalers. | 2 | | (E) A requirement that, if an appeal is sustained, | 3 | | the pharmacy benefit manager must make an adjustment | 4 | | in the drug price effective the date the challenge is | 5 | | resolved and make the adjustment applicable to all | 6 | | similarly situated network pharmacy providers, as | 7 | | determined by the managed care organization or | 8 | | pharmacy benefit manager. | 9 | | (5) Allow a plan sponsor contracting with a pharmacy | 10 | | benefit manager an annual right to audit compliance with | 11 | | the terms of the contract by the pharmacy benefit manager, | 12 | | including, but not limited to, full disclosure of any and | 13 | | all rebate amounts secured, whether product specific or | 14 | | generalized rebates, that were provided to the pharmacy | 15 | | benefit manager by a pharmaceutical manufacturer. | 16 | | (6) Allow a plan sponsor contracting with a pharmacy | 17 | | benefit manager to request that the pharmacy benefit | 18 | | manager disclose the actual amounts paid by the pharmacy | 19 | | benefit manager to the pharmacy. | 20 | | (7) Provide notice to the party contracting with the | 21 | | pharmacy benefit manager of any consideration that the | 22 | | pharmacy benefit manager receives from the manufacturer | 23 | | for dispense as written prescriptions once a generic or | 24 | | biologically similar product becomes available. | 25 | | (c) In order to place a particular prescription drug on a | 26 | | maximum allowable cost list, the pharmacy benefit manager |
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| 1 | | must, at a minimum, ensure that: | 2 | | (1) if the drug is a generically equivalent drug, it | 3 | | is listed as therapeutically equivalent and | 4 | | pharmaceutically equivalent "A" or "B" rated in the United | 5 | | States Food and Drug Administration's most recent version | 6 | | of the "Orange Book" or have an NR or NA rating by | 7 | | Medi-Span, Gold Standard, or a similar rating by a | 8 | | nationally recognized reference; | 9 | | (2) the drug is available for purchase by each | 10 | | pharmacy in the State from national or regional | 11 | | wholesalers operating in Illinois; and | 12 | | (3) the drug is not obsolete. | 13 | | (d) A pharmacy benefit manager is prohibited from limiting | 14 | | a pharmacist's ability to disclose whether the cost-sharing | 15 | | obligation exceeds the retail price for a covered prescription | 16 | | drug, and the availability of a more affordable alternative | 17 | | drug, if one is available in accordance with Section 42 of the | 18 | | Pharmacy Practice Act. | 19 | | (e) A health insurer or pharmacy benefit manager shall not | 20 | | require an insured to make a payment for a prescription drug at | 21 | | the point of sale in an amount that exceeds the lesser of: | 22 | | (1) the applicable cost-sharing amount; or | 23 | | (2) the retail price of the drug in the absence of | 24 | | prescription drug coverage. | 25 | | (f) Unless required by law, a contract between a pharmacy | 26 | | benefit manager or third-party payer and a 340B entity or 340B |
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| 1 | | pharmacy shall not contain any provision that: | 2 | | (1) distinguishes between drugs purchased through the | 3 | | 340B drug discount program and other drugs when | 4 | | determining reimbursement or reimbursement methodologies, | 5 | | or contains otherwise less favorable payment terms or | 6 | | reimbursement methodologies for 340B entities or 340B | 7 | | pharmacies when compared to similarly situated non-340B | 8 | | entities; | 9 | | (2) imposes any fee, chargeback, or rate adjustment | 10 | | that is not similarly imposed on similarly situated | 11 | | pharmacies that are not 340B entities or 340B pharmacies; | 12 | | (3) imposes any fee, chargeback, or rate adjustment | 13 | | that exceeds the fee, chargeback, or rate adjustment that | 14 | | is not similarly imposed on similarly situated pharmacies | 15 | | that are not 340B entities or 340B pharmacies; | 16 | | (4) prevents or interferes with an individual's choice | 17 | | to receive a covered prescription drug from a 340B entity | 18 | | or 340B pharmacy through any legally permissible means, | 19 | | except that nothing in this paragraph shall prohibit the | 20 | | establishment of differing copayments or other | 21 | | cost-sharing amounts within the benefit plan for covered | 22 | | persons who acquire covered prescription drugs from a | 23 | | nonpreferred or nonparticipating provider; | 24 | | (5) excludes a 340B entity or 340B pharmacy from a | 25 | | pharmacy network on any basis that includes consideration | 26 | | of whether the 340B entity or 340B pharmacy participates |
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| 1 | | in the 340B drug discount program; | 2 | | (6) prevents a 340B entity or 340B pharmacy from using | 3 | | a drug purchased under the 340B drug discount program; or | 4 | | (7) any other provision that discriminates against a | 5 | | 340B entity or 340B pharmacy by treating the 340B entity | 6 | | or 340B pharmacy differently than non-340B entities or | 7 | | non-340B pharmacies for any reason relating to the | 8 | | entity's participation in the 340B drug discount program. | 9 | | As used in this subsection, "pharmacy benefit manager" and | 10 | | "third-party payer" do not include pharmacy benefit managers | 11 | | and third-party payers acting on behalf of a Medicaid program. | 12 | | (f-5) A pharmacy benefit manager or an affiliate acting on | 13 | | the pharmacy benefit manager's behalf shall not steer a | 14 | | covered individual. | 15 | | (g) A violation of this Section by a pharmacy benefit | 16 | | manager constitutes an unfair or deceptive act or practice in | 17 | | the business of insurance under Section 424. | 18 | | (h) A provision that violates subsection (f) in a contract | 19 | | between a pharmacy benefit manager or a third-party payer and | 20 | | a 340B entity that is entered into, amended, or renewed after | 21 | | July 1, 2022 shall be void and unenforceable. | 22 | | (i)(1) A pharmacy benefit manager may not retaliate | 23 | | against a pharmacist or pharmacy for disclosing information in | 24 | | a court, in an administrative hearing, before a legislative | 25 | | commission or committee, or in any other proceeding, if the | 26 | | pharmacist or pharmacy has reasonable cause to believe that |
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| 1 | | the disclosed information is evidence of a violation of a | 2 | | State or federal law, rule, or regulation. | 3 | | (2) A pharmacy benefit manager may not retaliate against a | 4 | | pharmacist or pharmacy for disclosing information to a | 5 | | government or law enforcement agency, if the pharmacist or | 6 | | pharmacy has reasonable cause to believe that the disclosed | 7 | | information is evidence of a violation of a State or federal | 8 | | law, rule, or regulation. | 9 | | (3) A pharmacist or pharmacy shall make commercially | 10 | | reasonable efforts to limit the disclosure of confidential and | 11 | | proprietary information. | 12 | | (4) Retaliatory actions against a pharmacy or pharmacist | 13 | | include cancellation of, restriction of, or refusal to renew | 14 | | or offer a contract to a pharmacy solely because the pharmacy | 15 | | or pharmacist has: | 16 | | (A) made disclosures of information that the | 17 | | pharmacist or pharmacy has reasonable cause to believe is | 18 | | evidence of a violation of a State or federal law, rule, or | 19 | | regulation; | 20 | | (B) filed complaints with the plan or pharmacy benefit | 21 | | manager; or | 22 | | (C) filed complaints against the plan or pharmacy | 23 | | benefit manager with the Department. | 24 | | (j) This Section applies to contracts entered into or | 25 | | renewed on or after July 1, 2022. | 26 | | (k) This Section applies to any group or individual policy |
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| 1 | | of accident and health insurance or managed care plan that | 2 | | provides coverage for prescription drugs and that is amended, | 3 | | delivered, issued, or renewed on or after July 1, 2020. | 4 | | (Source: P.A. 102-778, eff. 7-1-22; 103-154, eff. 6-30-23; | 5 | | 103-453, eff. 8-4-23.) | 6 | | Section 99. Effective date. This Act takes effect July 1, | 7 | | 2024. |
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