Full Text of SB2222 95th General Assembly
SB2222sam005 95TH GENERAL ASSEMBLY
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Sen. John J. Cullerton
Filed: 4/4/2008
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LRB095 18675 RAS 48968 a |
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| AMENDMENT TO SENATE BILL 2222
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| AMENDMENT NO. ______. Amend Senate Bill 2222, AS AMENDED, | 3 |
| by replacing everything after the enacting clause with the | 4 |
| following:
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| "Section 5. The Illinois Insurance Code is amended by | 6 |
| changing the heading of Article XXXI 1/2 and Sections 512-1, | 7 |
| 512-2, 512-3, 512-4, 512-5, 512-6, 512-7, 512-8, 512-9, and | 8 |
| 512-10 and by adding Sections 512-11 and 512-12 as follows: | 9 |
| (215 ILCS 5/Art. XXXI.5 heading) | 10 |
| ARTICLE XXXI 1/2.
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| PHARMACY BENEFITS MANAGEMENT PLAN THIRD PARTY PRESCRIPTION | 12 |
| 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 | 15 |
| may be cited
as the " Pharmacy Benefits Management Plan Law |
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| 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 | 5 |
| that the
purpose of this Article is to regulate pharmacy | 6 |
| benefits management plans certain practices engaged in by | 7 |
| 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, | 11 |
| unless the
context otherwise requires, the terms defined in | 12 |
| this Article have the meanings
ascribed
to them herein:
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| "Director" means the Director of the Division of Insurance | 14 |
| of the Department of Financial and Professional Regulation. | 15 |
| "Division" means the Division of Insurance of the | 16 |
| Department of Financial and Professional Regulation. | 17 |
| "Pharmacy benefits management plan" or "plan" (a) "Third | 18 |
| party prescription program" or "program" means any system of
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| providing for the administration of or reimbursement for of | 20 |
| pharmaceutical services and prescription
drug products offered | 21 |
| or operated in this State by a pharmacy benefits manager under | 22 |
| a contractual arrangement
or agreement between a provider of | 23 |
| such services and another party who is
not the consumer of | 24 |
| those services and products. Such programs may include, but |
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| need not be limited to, employee benefit
plans whereby a | 2 |
| consumer receives prescription drugs or other pharmaceutical
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| services and those services are paid for by
an agent of the | 4 |
| employer or others .
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| "Pharmacy benefits manager" or "PBM" (b) "Third party | 6 |
| program administrator" or "administrator" means any person,
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| partnership or corporation who issues or causes to be issued | 8 |
| any payment
or reimbursement to a provider for services | 9 |
| rendered pursuant to a pharmacy benefits management plan. | 10 |
| "Pharmacy benefits manager" or "PBM" third
party prescription | 11 |
| program, but does not include the Director of Healthcare and | 12 |
| Family Services or any agent authorized by
the Director to | 13 |
| reimburse a provider of services rendered pursuant to a plan
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| program of which the Department of Healthcare and Family | 15 |
| Services is the third party.
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| (Source: P.A. 95-331, eff. 8-21-07.)
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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 PBMs third party | 19 |
| prescription programs and
administrators doing business in the | 20 |
| State shall register with the Director
of Insurance . The | 21 |
| Director may shall promulgate regulations establishing | 22 |
| criteria
for registration in accordance with the terms of this | 23 |
| Article. The Director
may by rule establish an annual | 24 |
| registration fee for each PBM third party administrator . | 25 |
| Persons and entities registered under this Article as |
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| administrators prior to the effective date of this amendatory | 2 |
| Act of the 95th General Assembly shall be deemed registered | 3 |
| PBMs under this Article until such time as that registration | 4 |
| expires or is suspended or revoked, at which time the | 5 |
| provisions of this Article and all rules adopted under this | 6 |
| Article concerning renewal or restoration of PBM registration | 7 |
| shall apply.
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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. | 11 |
| (a) A PBM third party prescription program administrator | 12 |
| shall (1) establish and
maintain a fiduciary account, separate | 13 |
| and apart from any and all other
accounts, for the receipt and | 14 |
| disbursement of funds for reimbursement of
providers of | 15 |
| services under the plans that it administers program , or (2) | 16 |
| post,
or cause to be posted, a bond of indemnity in an amount | 17 |
| equal to not less
than 10% of the total estimated annual | 18 |
| reimbursements under the plans that it administers program .
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| (b) The establishment of such fiduciary accounts and bonds | 20 |
| shall be consistent
with applicable State law.
If a bond of | 21 |
| indemnity is posted, it shall be held by the Director of | 22 |
| Insurance
for the benefit and indemnification of the providers | 23 |
| of services under the
plan third party prescription program .
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| (c) Any PBM An administrator who operates more than one | 25 |
| pharmacy benefits management plan third party prescription |
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| program
may establish and maintain a separate fiduciary account | 2 |
| or bond of indemnity
for each such plan program , or may operate | 3 |
| and maintain a consolidated fiduciary
account or bond of | 4 |
| indemnity for all such plans programs .
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| (d) The requirements of this Section do not apply to any | 6 |
| pharmacy benefits management plan third party prescription
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| program administered by or on behalf of any insurance company, | 8 |
| Health Maintenance Organization, Limited Health Service | 9 |
| Organization, or Voluntary Health Services Plan Care
Service | 10 |
| Plan Corporation or Pharmaceutical Service Plan Corporation | 11 |
| 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 | 15 |
| pharmacy benefits management plan third party prescription | 16 |
| program ,
including but not limited to drugs covered, | 17 |
| reimbursement rates, co-payments,
and dosage quantity, shall | 18 |
| be given to each enrolled pharmacy at least 30
days prior to | 19 |
| 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. (a) Any agreement or | 23 |
| contract entered into in this State between a PBM the
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| administrator of a program and a pharmacy shall include a |
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| statement of the
method and amount of reimbursement to the | 2 |
| pharmacy for services rendered to
persons enrolled in the plan | 3 |
| program , the frequency of payment by the PBM program
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| administrator to the pharmacy for those services, and a method | 5 |
| for the
adjudication of complaints and the settlement of | 6 |
| disputes between the
contracting parties.
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| (b)(1) A program shall provide an annual period of at least | 8 |
| 30 days
during which any pharmacy licensed under the | 9 |
| Pharmacy Practice Act
may elect to participate in the | 10 |
| program under the program terms for at
least one year.
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| (2) If compliance with the requirements of this | 12 |
| subsection (b) would
impair any provision of a contract | 13 |
| between a program and any other person,
and if the contract | 14 |
| provision was in existence before January 1, 1990,
then | 15 |
| immediately after the expiration of those contract | 16 |
| provisions the
program shall comply with the requirements | 17 |
| of this subsection (b).
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| (3) This subsection (b) does not apply if:
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| (A) the program administrator is a licensed health | 20 |
| maintenance
organization that owns or controls a | 21 |
| pharmacy and that enters into an
agreement or contract | 22 |
| with that pharmacy in accordance with subsection (a); | 23 |
| or
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| (B) the program administrator is a licensed health | 25 |
| maintenance
organization that is owned or controlled | 26 |
| by another entity that also owns
or controls a |
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| pharmacy, and the administrator enters into an | 2 |
| agreement or
contract with that pharmacy in accordance | 3 |
| with subsection (a).
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| (4) This subsection (b) shall be inoperative after | 5 |
| October 31,
1992.
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| (c) The program administrator shall cause to be issued an | 7 |
| identification
card to each person enrolled in the program. The | 8 |
| identification card
shall include:
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| (1) the name of the individual enrolled in the program; | 10 |
| and
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| (2) an expiration date if required under the | 12 |
| contractual arrangement or
agreement between a provider of | 13 |
| pharmaceutical services and prescription
drug products and | 14 |
| the third party prescription program administrator.
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| (Source: P.A. 95-689, eff. 10-29-07.)
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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. | 18 |
| (a) The PBM administrator of a program
shall notify or | 19 |
| cause to be notified all pharmacies enrolled in the plan | 20 |
| program of any cancellation
of the coverage of benefits of any | 21 |
| group enrolled in the plan program at least
30 days prior to | 22 |
| the effective date of such cancellation.
However, if the PBM | 23 |
| administrator of a program is not notified at least 45
days | 24 |
| prior to the effective date of such cancellation, the PBM | 25 |
| administrator
shall notify all pharmacies enrolled in the plan |
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| program of the cancellation
as soon as practicable after having | 2 |
| received notice.
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| (b) When a plan program is terminated, all persons enrolled | 4 |
| therein shall be
so notified, and the employer shall make every | 5 |
| reasonable effort to gain
possession of any plan identification | 6 |
| cards in such persons' possession.
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| (c) Any person who intentionally uses a plan program | 8 |
| identification card to
obtain services from a pharmacy after | 9 |
| having received notice of the cancellation
of his benefits | 10 |
| shall be guilty of a Class C misdemeanor. Persons shall
be | 11 |
| liable to the PBM program administrator for all monies paid by | 12 |
| the PBM program
administrator for any services received | 13 |
| pursuant to such misuse any improper use of
the identification | 14 |
| 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. | 18 |
| (a) No PBM administrator shall deny payment
to any pharmacy | 19 |
| for covered pharmaceutical services or prescription drug
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| products rendered as a result of the misuse, fraudulent or | 21 |
| illegal use of
an identification card unless such | 22 |
| identification card had expired, been
noticeably altered, or | 23 |
| the pharmacy was notified of the cancellation of
such card. In | 24 |
| lieu of notifying pharmacies which have a common ownership,
the | 25 |
| PBM administrator may notify a party designated by the pharmacy |
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| to receive
such notice, in which case, notification shall not | 2 |
| become effective until
5 calendar days after the designee | 3 |
| receives notification.
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| (b) No PBM program administrator may withhold any payment | 5 |
| to any pharmacy
for covered pharmaceutical services or | 6 |
| prescription drug products beyond
the time period specified in | 7 |
| the payment schedule provisions of the agreement,
except for | 8 |
| individual claims for payment which have been returned to the | 9 |
| pharmacy
as incomplete or illegible. Such returned claims shall | 10 |
| be paid if resubmitted
by the pharmacy to the PBM program | 11 |
| 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 PBM or plan that | 15 |
| third party prescription program
or administrator which | 16 |
| operates without a certificate of registration or
fails to | 17 |
| register with the Director and pay the fee prescribed by this | 18 |
| Article
shall be construed to be an unauthorized insurer as | 19 |
| defined in Article VII
of this Code and shall be subject to all | 20 |
| penalties contained therein.
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| The provisions of this the Article shall apply to all plans | 22 |
| new programs established
on or after December 31, 2008 January | 23 |
| 1, 1983 . Plans existing on or established prior to the | 24 |
| effective date of this amendatory Act of the 95th General | 25 |
| Assembly Existing programs shall comply with the provisions
of |
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| this Article as they existed before the effective date of this | 2 |
| amendatory Act of the 95th General Assembly until on the | 3 |
| anniversary date of the plans programs that occurs on or
after | 4 |
| January 1, 2009, at which time the plans shall comply with the | 5 |
| provisions of this Article as they exist beginning on the | 6 |
| effective date of this amendatory Act of the 95th General | 7 |
| Assembly 1983 .
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-11 new) | 10 |
| Sec. 512-11. Failure to comply. In order to enforce the | 11 |
| provisions of this Article, the Director may issue a cease and | 12 |
| desist order or require a PBM to pay a civil penalty or both. | 13 |
| Subject to the provisions of the Illinois Administrative | 14 |
| Procedure Act, the Director may, pursuant to Section 403A of | 15 |
| the Illinois Insurance Code, impose upon a PBM an | 16 |
| administrative fine of $5,000 for violations of this Article. | 17 |
| (215 ILCS 5/512-12 new)
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| Sec. 512-12. Request for proposals for pharmacy benefits | 19 |
| manager; confidential information. | 20 |
| (a) In order for a vendor to qualify to submit a pharmacy | 21 |
| benefits manager proposal in response to a request for | 22 |
| proposals for pharmacy benefits manager services issued by the | 23 |
| Department of Central Management Services, the vendor must | 24 |
| provide full disclosure of all revenue sources or the |
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| equivalent thereof, including the aggregate amount of all | 2 |
| rebates and other retrospective utilization discounts that the | 3 |
| vendor receives, directly or indirectly, from pharmaceutical | 4 |
| manufacturers or labelers in connection with the purchasing or | 5 |
| dispensing of pharmaceuticals for individuals covered under | 6 |
| the State health plan covered by the request for proposals. It | 7 |
| is at the discretion of the Director of the Department of | 8 |
| Central Management Services issuing the request for proposals | 9 |
| to determine the extent to which information provided pursuant | 10 |
| to this Section is required for award of a contract. | 11 |
| (b) A vendor providing information pursuant to this Section | 12 |
| may designate that information as confidential. Information | 13 |
| designated as confidential may not be disclosed to any person | 14 |
| without the consent of the vendor, except that disclosure may | 15 |
| be made when ordered by a court of this State or as required | 16 |
| under the Illinois Freedom of Information Act. In the event the | 17 |
| Department of Central Management Services receives a request | 18 |
| under the Illinois Freedom of Information Act for information | 19 |
| designated as confidential, it will provide written notice to | 20 |
| the vendor 10 calendar days prior to the release of the | 21 |
| information to allow the vendor to seek injunctive relief. A | 22 |
| vendor's failure to designate information as confidential may | 23 |
| be deemed by the Department of Central Management Services as a | 24 |
| waiver of any right of confidentiality under this Section.
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| Section 99. Effective date. This Act takes effect upon |
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| becoming law.".
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