Full Text of SB1828 94th General Assembly
SB1828eng 94TH GENERAL ASSEMBLY
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SB1828 Engrossed |
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LRB094 11306 RAS 42120 b |
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| AN ACT concerning regulation.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing the heading of Article XXXI 1/2 and Sections 512-1, | 6 |
| 512-2, 512-3, 512-4, 512-5, 512-6, 512-7, 512-8, 512-9, and | 7 |
| 512-10 and by adding Sections 512-11 and 512-12 as follows: | 8 |
| (215 ILCS 5/Art. XXXI.5 heading) | 9 |
| ARTICLE XXXI 1/2.
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| PHARMACEUTICAL BENEFITS MANAGEMENT
THIRD PARTY PRESCRIPTION
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| PROGRAMS
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| (215 ILCS 5/512-1) (from Ch. 73, par. 1065.59-1)
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| Sec. 512-1. Short Title. This Article shall be known and | 14 |
| may be cited
as the " Pharmaceutical Benefits Management | 15 |
| Programs Law
Third Party Prescription Program Act ".
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-2) (from Ch. 73, par. 1065.59-2)
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| Sec. 512-2. Purpose. It is hereby determined and declared | 19 |
| that the
purpose of this Article is to regulate pharmaceutical | 20 |
| benefits management programs
certain practices engaged in by | 21 |
| third-party
prescription
program administrators .
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-3) (from Ch. 73, par. 1065.59-3)
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| Sec. 512-3. Definitions. For the purposes of this Article, | 25 |
| unless the
context otherwise requires, the terms defined in | 26 |
| this Article have the meanings
ascribed
to them herein:
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| "Director" means the Director of the Division of Insurance | 28 |
| of the Department of Financial and Professional Regulation. | 29 |
| "Division" means the Division of Insurance of the |
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| Department of Financial and Professional Regulation.
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| (a) " Pharmaceutical benefits management
Third party | 3 |
| prescription program" or "program" means any system of
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| providing for the administration of or reimbursement for
of
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| pharmaceutical services and prescription
drug products offered | 6 |
| or operated in this State by a pharmaceutical benefits manager
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| under a contractual arrangement
or agreement between a provider | 8 |
| of such services and another party who is
not the consumer of | 9 |
| those services and products. Such programs may include, but | 10 |
| need not be limited to, employee benefit
plans whereby a | 11 |
| consumer receives prescription drugs or other pharmaceutical
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| services and those services are paid for by
an agent of the | 13 |
| employer or others .
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| (b) " Pharmaceutical benefits manager
Third party program | 15 |
| administrator " or " PBM
administrator " means any person,
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| partnership or corporation who issues or causes to be issued | 17 |
| any payment
or reimbursement to a provider for services | 18 |
| rendered pursuant to a pharmaceutical benefits management
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| third
party prescription program . "Pharmaceutical benefits | 20 |
| manager" or "PBM" , but does not include the Director of Public
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| Aid or any agent authorized by
the Director to reimburse a | 22 |
| provider of services rendered pursuant to a
program of which | 23 |
| the Department of Public Aid is the third party.
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| (Source: P.A. 90-372, eff. 7-1-98.)
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| (215 ILCS 5/512-4) (from Ch. 73, par. 1065.59-4)
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| Sec. 512-4. Registration. All pharmaceutical benefits | 27 |
| management
third party prescription programs and
PBMs
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| administrators doing business in the State shall register with | 29 |
| the Director
of Insurance . The Director may
shall promulgate | 30 |
| regulations establishing criteria
for registration in | 31 |
| accordance with the terms of this Article. The Director
may by | 32 |
| rule establish an annual registration fee for each | 33 |
| pharmaceutical benefits management program
third party | 34 |
| administrator .
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-5) (from Ch. 73, par. 1065.59-5)
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| Sec. 512-5. Fiduciary and Bonding Requirements.
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| (a) A PBM
third party prescription program administrator
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| shall (1) establish and
maintain a fiduciary account, separate | 5 |
| and apart from any and all other
accounts, for the receipt and | 6 |
| disbursement of funds for reimbursement of
providers of | 7 |
| services under the program, or (2) post,
or cause to be posted, | 8 |
| a bond of indemnity in an amount equal to not less
than 10% of | 9 |
| the total estimated annual reimbursements under the program.
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| (b) The establishment of such fiduciary accounts and bonds | 11 |
| shall be consistent
with applicable State law.
If a bond of | 12 |
| indemnity is posted, it shall be held by the Director of | 13 |
| Insurance
for the benefit and indemnification of the providers | 14 |
| of services under the
pharmaceutical benefits management
third | 15 |
| party prescription program.
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| (c) Any PBM
An administrator who operates more than one | 17 |
| pharmaceutical benefits management
third party prescription
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| program
may establish and maintain a separate fiduciary account | 19 |
| or bond of indemnity
for each such program, or may operate and | 20 |
| maintain a consolidated fiduciary
account or bond of indemnity | 21 |
| for all such programs.
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| (d) The requirements of this Section do not apply to any | 23 |
| pharmaceutical benefits management
third party prescription
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| program administered by or on behalf of any insurance company, | 25 |
| Health Maintenance Organization, Limited Health Service | 26 |
| Organization, or Voluntary Health Services Plan
Care
Service | 27 |
| Plan Corporation or Pharmaceutical Service Plan Corporation
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| authorized
to do business in the State of Illinois.
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-6) (from Ch. 73, par. 1065.59-6)
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| Sec. 512-6. Notice. Notice of any change in the terms of a | 32 |
| pharmaceutical benefits management
third party prescription
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| program,
including but not limited to drugs covered, | 34 |
| reimbursement rates, co-payments,
and dosage quantity, shall |
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| be given to each enrolled pharmacy at least 30
days prior to | 2 |
| the time it becomes effective.
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-7) (from Ch. 73, par. 1065.59-7)
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| Sec. 512-7. Contractual provisions.
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| (a) Any agreement or contract entered into in this State
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| between a PBM
the
administrator of a program and a pharmacy | 8 |
| under a pharmaceutical benefits management program shall | 9 |
| include a statement of the
method and amount of reimbursement | 10 |
| to the pharmacy for services rendered to
persons enrolled in | 11 |
| the program, the frequency of payment by the PBM
program
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| administrator to the pharmacy for those services, and a method | 13 |
| for the
adjudication of complaints and the settlement of | 14 |
| disputes between the
contracting parties.
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| (b)(1) A program shall provide an annual period of at least | 16 |
| 30 days
during which any pharmacy licensed under the | 17 |
| Pharmacy Practice Act of 1987
may elect to participate in | 18 |
| the program under the program terms for at
least one year.
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| (2) If compliance with the requirements of this | 20 |
| subsection (b) would
impair any provision of a contract | 21 |
| between a program and any other person,
and if the contract | 22 |
| provision was in existence before January 1, 2006
1990 ,
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| then immediately after the expiration of those contract | 24 |
| provisions the
program shall comply with the requirements | 25 |
| of this subsection (b).
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| (3) This subsection (b) does not apply if:
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| (A) the PBM
program administrator is a licensed | 28 |
| health maintenance
organization , limited health | 29 |
| service organization, or voluntary health services | 30 |
| plan that owns or controls a pharmacy and that enters | 31 |
| into an
agreement or contract with that pharmacy in | 32 |
| accordance with subsection (a); or
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| (B) (blank).
the program administrator is a | 34 |
| licensed health maintenance
organization that is owned | 35 |
| or controlled by another entity that also owns
or |
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| controls a pharmacy, and the administrator enters into | 2 |
| an agreement or
contract with that pharmacy in | 3 |
| accordance with subsection (a).
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| (4) (Blank).
This subsection (b) shall be inoperative | 5 |
| after October 31,
1992.
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| (c) The PBM
program administrator shall cause to be issued | 7 |
| an identification
card to each person enrolled in the program. | 8 |
| The identification card
shall comply with the Uniform | 9 |
| Prescription Drug Information Card Act.
include:
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| (1) the name of the individual enrolled in the program; | 11 |
| and
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| (2) an expiration date if required under the | 13 |
| contractual arrangement or
agreement between a provider of | 14 |
| pharmaceutical services and prescription
drug products and | 15 |
| the third party prescription program administrator.
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| (Source: P.A. 86-473; 87-254.)
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| (215 ILCS 5/512-8) (from Ch. 73, par. 1065.59-8)
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| Sec. 512-8. Cancellation procedures. | 19 |
| (a) The pharmaceutical benefits manager
administrator of a | 20 |
| program
shall notify all pharmacies enrolled in the program of | 21 |
| any cancellation
of the coverage of benefits of any group | 22 |
| enrolled in the program at least
30 days prior to the effective | 23 |
| date of such cancellation.
However, if the PBM
administrator of | 24 |
| a program is not notified at least 45
days prior to the | 25 |
| effective date of such cancellation, the PBM
administrator
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| shall notify all pharmacies enrolled in the program of the | 27 |
| cancellation
as soon as practicable after having received | 28 |
| notice.
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| (b) When a program is terminated, all persons enrolled | 30 |
| therein shall be
so notified, and the employer shall make every | 31 |
| reasonable effort to gain
possession of any plan identification | 32 |
| cards in such persons' possession.
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| (c) Any person who intentionally uses a program | 34 |
| identification card to
obtain services from a pharmacy after | 35 |
| having received notice of the cancellation
of his benefits |
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| shall be guilty of a Class C misdemeanor. Persons shall
be | 2 |
| liable to the PBM
program administrator for all monies paid by | 3 |
| the PBM
program
administrator for any services received | 4 |
| pursuant to such misuse
any improper use of
the identification | 5 |
| card.
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-9) (from Ch. 73, par. 1065.59-9)
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| Sec. 512-9. Denial of Payment. | 9 |
| (a) No PBM
administrator shall deny payment
to any pharmacy | 10 |
| for covered pharmaceutical services or prescription drug
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| products rendered as a result of the misuse, fraudulent or | 12 |
| illegal use of
an identification card unless such | 13 |
| identification card had expired, been
noticeably altered, or | 14 |
| the pharmacy was notified of the cancellation of
such card. In | 15 |
| lieu of notifying pharmacies which have a common ownership,
the | 16 |
| PBM
administrator may notify a party designated by the pharmacy | 17 |
| to receive
such notice, in which case, notification shall not | 18 |
| become effective until
5 calendar days after the designee | 19 |
| receives notification.
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| (b) No PBM
program administrator may withhold any payment | 21 |
| to any pharmacy
for covered pharmaceutical services or | 22 |
| prescription drug products beyond
the time period specified in | 23 |
| the payment schedule provisions of the agreement,
except for | 24 |
| individual claims for payment which have been returned to the | 25 |
| pharmacy
as incomplete or illegible. Such returned claims shall | 26 |
| be paid if resubmitted
by the pharmacy to the PBM
program | 27 |
| administrator with the appropriate corrections made.
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-10) (from Ch. 73, par. 1065.59-10)
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| Sec. 512-10. Failure to Register. Any pharmaceutical | 31 |
| benefits management
third party prescription program
or PBM | 32 |
| that
administrator which operates without a certificate of | 33 |
| registration or
fails to register with the Director and pay the | 34 |
| fee prescribed by this Article
shall be construed to be an |
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| unauthorized insurer as defined in Article VII
of this Code and | 2 |
| shall be subject to all penalties contained therein.
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| The provisions of this
the Article shall apply to all new | 4 |
| programs established
on or after January 1, 2006
1983 . Programs | 5 |
| existing on the effective date of this amendatory Act of the | 6 |
| 94th General Assembly
Existing programs shall comply with the | 7 |
| provisions
of this Article as they existed before the effective | 8 |
| date of this amendatory Act of the 94th General Assembly until
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| on the anniversary date of the programs that occurs on or
after | 10 |
| January 1, 2006, at which time the programs shall comply with | 11 |
| the provisions of this Article as they exist beginning on the | 12 |
| effective date of this amendatory Act of the 94th General | 13 |
| Assembly
1983 .
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-11 new) | 16 |
| Sec. 512-11. Failure to Comply. In order to enforce the | 17 |
| provisions of this Article, the Director may issue a cease and | 18 |
| desist order or require a PBM to pay a civil penalty or both. | 19 |
| Subject to the provisions of the Illinois Administrative | 20 |
| Procedure Act, the Director may, pursuant to Section 403A of | 21 |
| the Illinois Insurance Code, impose upon a pharmaceutical | 22 |
| benefits management program an administrative fine of $5,000 | 23 |
| for violations of this Article. | 24 |
| (215 ILCS 5/512-12 new) | 25 |
| Sec. 512-12. Rulemaking. The Director shall have the | 26 |
| authority to adopt any rules necessary for the implementation | 27 |
| and administration of this Article. | 28 |
| Section 99. Effective date. This Act takes effect upon | 29 |
| becoming law. |
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