Full Text of HB4595 102nd General Assembly
HB4595ham001 102ND GENERAL ASSEMBLY | Rep. Greg Harris Filed: 2/28/2022
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| 1 | | AMENDMENT TO HOUSE BILL 4595
| 2 | | AMENDMENT NO. ______. Amend House Bill 4595 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Insurance Code is amended by | 5 | | changing Sections 424 and 513b1 as follows:
| 6 | | (215 ILCS 5/424) (from Ch. 73, par. 1031)
| 7 | | Sec. 424. Unfair methods of competition and unfair or | 8 | | deceptive acts or
practices defined. The following are hereby | 9 | | defined as unfair methods of
competition and unfair and | 10 | | deceptive acts or practices in the business of
insurance:
| 11 | | (1) The commission by any person of any one or more of | 12 | | the acts
defined or prohibited by Sections 134, 143.24c, | 13 | | 147, 148, 149, 151, 155.22,
155.22a, 155.42,
236, 237, | 14 | | 364, and 469 , and 513b1 of this Code.
| 15 | | (2) Entering into any agreement to commit, or by any | 16 | | concerted
action committing, any act of boycott, coercion |
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| 1 | | or intimidation
resulting in or tending to result in | 2 | | unreasonable restraint of, or
monopoly in, the business of | 3 | | insurance.
| 4 | | (3) Making or permitting, in the case of insurance of | 5 | | the types
enumerated in Classes 1, 2, and 3 of Section 4, | 6 | | any unfair discrimination
between individuals or risks of | 7 | | the same class or of essentially the same
hazard and | 8 | | expense element because of the race, color, religion, or | 9 | | national
origin of such insurance risks or applicants. The | 10 | | application of this Article
to the types of insurance | 11 | | enumerated in Class 1 of Section 4 shall in no way
limit, | 12 | | reduce, or impair the protections and remedies already | 13 | | provided for by
Sections 236 and 364 of this Code or any | 14 | | other provision of this Code.
| 15 | | (4) Engaging in any of the acts or practices defined | 16 | | in or prohibited by
Sections 154.5 through 154.8 of this | 17 | | Code.
| 18 | | (5) Making or charging any rate for insurance against | 19 | | losses arising
from the use or ownership of a motor | 20 | | vehicle which requires a higher
premium of any person by | 21 | | reason of his physical disability, race, color,
religion, | 22 | | or national origin.
| 23 | | (6) Failing to meet any requirement of the Unclaimed | 24 | | Life Insurance Benefits Act with such frequency as to | 25 | | constitute a general business practice. | 26 | | (Source: P.A. 99-143, eff. 7-27-15; 99-893, eff. 1-1-17 .)
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| 1 | | (215 ILCS 5/513b1) | 2 | | Sec. 513b1. Pharmacy benefit manager contracts. | 3 | | (a) As used in this Section: | 4 | | "340B drug discount program" means the program established
| 5 | | under Section 340B of the federal Public Health Service Act, | 6 | | 42 U.S.C. 256b. | 7 | | "340B entity" means a covered entity as defined in 42 | 8 | | U.S.C. 256b(a)(4) authorized to participate in the 340B drug | 9 | | discount program. | 10 | | "340B pharmacy" means any pharmacy used to dispense 340B | 11 | | drugs for a covered entity, whether entity-owned or external. | 12 | | "Biological product" has the meaning ascribed to that term | 13 | | in Section 19.5 of the Pharmacy Practice Act. | 14 | | "Maximum allowable cost" means the maximum amount that a | 15 | | pharmacy benefit manager will reimburse a pharmacy for the | 16 | | cost of a drug. | 17 | | "Maximum allowable cost list" means a list of drugs for | 18 | | which a maximum allowable cost has been established by a | 19 | | pharmacy benefit manager. | 20 | | "Pharmacy benefit manager" means a person, business, or | 21 | | entity, including a wholly or partially owned or controlled | 22 | | subsidiary of a pharmacy benefit manager, that provides claims | 23 | | processing services or other prescription drug or device | 24 | | services, or both, for health benefit plans. | 25 | | "Retail price" means the price an individual without |
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| 1 | | prescription drug coverage would pay at a retail pharmacy, not | 2 | | including a pharmacist dispensing fee. | 3 | | "Third-party payer" means any entity that pays for | 4 | | prescription drugs on behalf of a patient other than a health | 5 | | care provider or sponsor of a plan subject to regulation under | 6 | | Medicare Part D, 42 U.S.C. 1395w–101, et seq. | 7 | | (b) A contract between a health insurer and a pharmacy | 8 | | benefit manager must require that the pharmacy benefit | 9 | | manager: | 10 | | (1) Update maximum allowable cost pricing information | 11 | | at least every 7 calendar days. | 12 | | (2) Maintain a process that will, in a timely manner, | 13 | | eliminate drugs from maximum allowable cost lists or | 14 | | modify drug prices to remain consistent with changes in | 15 | | pricing data used in formulating maximum allowable cost | 16 | | prices and product availability. | 17 | | (3) Provide access to its maximum allowable cost list | 18 | | to each pharmacy or pharmacy services administrative | 19 | | organization subject to the maximum allowable cost list. | 20 | | Access may include a real-time pharmacy website portal to | 21 | | be able to view the maximum allowable cost list. As used in | 22 | | this Section, "pharmacy services administrative | 23 | | organization" means an entity operating within the State | 24 | | that contracts with independent pharmacies to conduct | 25 | | business on their behalf with third-party payers. A | 26 | | pharmacy services administrative organization may provide |
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| 1 | | administrative services to pharmacies and negotiate and | 2 | | enter into contracts with third-party payers or pharmacy | 3 | | benefit managers on behalf of pharmacies. | 4 | | (4) Provide a process by which a contracted pharmacy | 5 | | can appeal the provider's reimbursement for a drug subject | 6 | | to maximum allowable cost pricing. The appeals process | 7 | | must, at a minimum, include the 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. | 25 | | (E) A requirement that, if an appeal is sustained, | 26 | | the pharmacy benefit manager must make an adjustment |
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| 1 | | in the drug price effective the date the challenge is | 2 | | resolved and make the adjustment applicable to all | 3 | | similarly situated network pharmacy providers, as | 4 | | determined by the managed care organization or | 5 | | pharmacy benefit manager. | 6 | | (5) Allow a plan sponsor contracting with a pharmacy | 7 | | benefit manager an annual right to audit compliance with | 8 | | the terms of the contract by the pharmacy benefit manager, | 9 | | including, but not limited to, full disclosure of any and | 10 | | all rebate amounts secured, whether product specific or | 11 | | generalized rebates, that were provided to the pharmacy | 12 | | benefit manager by a pharmaceutical manufacturer. | 13 | | (6) Allow a plan sponsor contracting with a pharmacy | 14 | | benefit manager to request that the pharmacy benefit | 15 | | manager disclose the actual amounts paid by the pharmacy | 16 | | benefit manager to the pharmacy. | 17 | | (7) Provide notice to the party contracting with the | 18 | | pharmacy benefit manager of any consideration that the | 19 | | pharmacy benefit manager receives from the manufacturer | 20 | | for dispense as written prescriptions once a generic or | 21 | | biologically similar product becomes available. | 22 | | (c) In order to place a particular prescription drug on a | 23 | | maximum allowable cost list, the pharmacy benefit manager | 24 | | must, at a minimum, ensure that: | 25 | | (1) if the drug is a generically equivalent drug, it | 26 | | is listed as therapeutically equivalent and |
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| 1 | | pharmaceutically equivalent "A" or "B" rated in the United | 2 | | States Food and Drug Administration's most recent version | 3 | | of the "Orange Book" or have an NR or NA rating by | 4 | | Medi-Span, Gold Standard, or a similar rating by a | 5 | | nationally recognized reference; | 6 | | (2) the drug is available for purchase by each | 7 | | pharmacy in the State from national or regional | 8 | | wholesalers operating in Illinois; and | 9 | | (3) the drug is not obsolete. | 10 | | (d) A pharmacy benefit manager is prohibited from limiting | 11 | | a pharmacist's ability to disclose whether the cost-sharing | 12 | | obligation exceeds the retail price for a covered prescription | 13 | | drug, and the availability of a more affordable alternative | 14 | | drug, if one is available in accordance with Section 42 of the | 15 | | Pharmacy Practice Act. | 16 | | (e) A health insurer or pharmacy benefit manager shall not | 17 | | require an insured to make a payment for a prescription drug at | 18 | | the point of sale in an amount that exceeds the lesser of: | 19 | | (1) the applicable cost-sharing amount; or | 20 | | (2) the retail price of the drug in the absence of | 21 | | prescription drug coverage. | 22 | | (f) Unless required by law, a contract between a pharmacy | 23 | | benefit manager or third-party payer and a 340B entity or 340B | 24 | | pharmacy shall not contain any provision that: | 25 | | (1) distinguishes between drugs purchased through the | 26 | | 340B drug discount program and other drugs when |
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| 1 | | determining reimbursement or reimbursement methodologies, | 2 | | or contains otherwise less favorable payment terms or | 3 | | reimbursement methodologies for 340B entities or 340B | 4 | | pharmacies when compared to similarly situated non-340B | 5 | | entities; | 6 | | (2) imposes any fee, chargeback, or rate adjustment | 7 | | that is not similarly imposed on similarly situated | 8 | | pharmacies that are not 340B entities or 340B pharmacies; | 9 | | (3) imposes any fee, chargeback, or rate adjustment | 10 | | that exceeds the fee, chargeback, or rate adjustment that | 11 | | is not similarly imposed on similarly situated pharmacies | 12 | | that are not 340B entities or 340B pharmacies; | 13 | | (4) prevents or interferes with an individual's choice | 14 | | to receive a covered prescription drug from a 340B entity | 15 | | or 340B pharmacy through any legally permissible means, | 16 | | except that nothing in this paragraph shall prohibit the | 17 | | establishment of differing copayments or other | 18 | | cost-sharing amounts within the benefit plan for covered | 19 | | persons who acquire covered prescription drugs from a | 20 | | nonpreferred or nonparticipating provider; | 21 | | (5) excludes a 340B entity or 340B pharmacy from a | 22 | | pharmacy network on any basis that includes consideration | 23 | | of whether the 340B entity or 340B pharmacy participates | 24 | | in the 340B drug discount program; | 25 | | (6) prevents a 340B entity or 340B pharmacy from using | 26 | | a drug purchased under the 340B drug discount program; or |
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| 1 | | (7) any other provision that discriminates against a | 2 | | 340B entity or 340B pharmacy by treating the 340B entity | 3 | | or 340B pharmacy differently than non-340B entities or | 4 | | non-340B pharmacies for any reason relating to the | 5 | | entity's participation in the 340B drug discount program. | 6 | | As used in this subsection, "pharmacy benefit manager" and | 7 | | "third-party payer" do not include pharmacy benefit managers | 8 | | and third-party payers acting on behalf of a Medicaid program. | 9 | | (g) A violation of this Section by a pharmacy benefit | 10 | | manager constitutes an unfair or deceptive act or practice in | 11 | | the business of insurance under Section 424. | 12 | | (h) A provision that violates subsection (f) in a contract | 13 | | between a pharmacy benefit manager or a third-party payer and | 14 | | a 340B entity that is entered into, amended, or renewed after | 15 | | July 1, 2022 shall be void and unenforceable. | 16 | | (i) (f) This Section applies to contracts entered into or | 17 | | renewed on or after July 1, 2022 2020 . | 18 | | (j) (g) This Section applies to any group or individual | 19 | | policy of accident and health insurance or managed care plan | 20 | | that provides coverage for prescription drugs and that is | 21 | | amended, delivered, issued, or renewed on or after July 1, | 22 | | 2020.
| 23 | | (Source: P.A. 101-452, eff. 1-1-20 .) | 24 | | Section 10. The Illinois Public Aid Code is amended by | 25 | | changing Sections 5-5.12 and 5-36 as follows:
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| 1 | | (305 ILCS 5/5-5.12) (from Ch. 23, par. 5-5.12)
| 2 | | Sec. 5-5.12. Pharmacy payments.
| 3 | | (a) Every request submitted by a pharmacy for | 4 | | reimbursement under this
Article for prescription drugs | 5 | | provided to a recipient of aid under this
Article shall | 6 | | include the name of the prescriber or an acceptable
| 7 | | identification number as established by the Department.
| 8 | | (b) Pharmacies providing prescription drugs under
this | 9 | | Article shall be reimbursed at a rate which shall include
a | 10 | | professional dispensing fee as determined by the Illinois
| 11 | | Department, plus the current acquisition cost of the | 12 | | prescription
drug dispensed. The Illinois Department shall | 13 | | update its
information on the acquisition costs of all | 14 | | prescription drugs
no less frequently than every 30 days. | 15 | | However, the Illinois
Department may set the rate of | 16 | | reimbursement for the acquisition
cost, by rule, at a | 17 | | percentage of the current average wholesale
acquisition cost.
| 18 | | (c) (Blank).
| 19 | | (d) The Department shall review utilization of narcotic | 20 | | medications in the medical assistance program and impose | 21 | | utilization controls that protect against abuse.
| 22 | | (e) When making determinations as to which drugs shall be | 23 | | on a prior approval list, the Department shall include as part | 24 | | of the analysis for this determination, the degree to which a | 25 | | drug may affect individuals in different ways based on factors |
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| 1 | | including the gender of the person taking the medication. | 2 | | (f) The Department shall cooperate with the Department of | 3 | | Public Health and the Department of Human Services Division of | 4 | | Mental Health in identifying psychotropic medications that, | 5 | | when given in a particular form, manner, duration, or | 6 | | frequency (including "as needed") in a dosage, or in | 7 | | conjunction with other psychotropic medications to a nursing | 8 | | home resident or to a resident of a facility licensed under the | 9 | | ID/DD Community Care Act or the MC/DD Act, may constitute a | 10 | | chemical restraint or an "unnecessary drug" as defined by the | 11 | | Nursing Home Care Act or Titles XVIII and XIX of the Social | 12 | | Security Act and the implementing rules and regulations. The | 13 | | Department shall require prior approval for any such | 14 | | medication prescribed for a nursing home resident or to a | 15 | | resident of a facility licensed under the ID/DD Community Care | 16 | | Act or the MC/DD Act, that appears to be a chemical restraint | 17 | | or an unnecessary drug. The Department shall consult with the | 18 | | Department of Human Services Division of Mental Health in | 19 | | developing a protocol and criteria for deciding whether to | 20 | | grant such prior approval. | 21 | | (g) The Department may by rule provide for reimbursement | 22 | | of the dispensing of a 90-day supply of a generic or brand | 23 | | name, non-narcotic maintenance medication in circumstances | 24 | | where it is cost effective. | 25 | | (g-5) On and after July 1, 2012, the Department may | 26 | | require the dispensing of drugs to nursing home residents be |
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| 1 | | in a 7-day supply or other amount less than a 31-day supply. | 2 | | The Department shall pay only one dispensing fee per 31-day | 3 | | supply. | 4 | | (h) Effective July 1, 2011, the Department shall | 5 | | discontinue coverage of select over-the-counter drugs, | 6 | | including analgesics and cough and cold and allergy | 7 | | medications. | 8 | | (h-5) On and after July 1, 2012, the Department shall | 9 | | impose utilization controls, including, but not limited to, | 10 | | prior approval on specialty drugs, oncolytic drugs, drugs for | 11 | | the treatment of HIV or AIDS, immunosuppressant drugs, and | 12 | | biological products in order to maximize savings on these | 13 | | drugs. The Department may adjust payment methodologies for | 14 | | non-pharmacy billed drugs in order to incentivize the | 15 | | selection of lower-cost drugs. For drugs for the treatment of | 16 | | AIDS, the Department shall take into consideration the | 17 | | potential for non-adherence by certain populations, and shall | 18 | | develop protocols with organizations or providers primarily | 19 | | serving those with HIV/AIDS, as long as such measures intend | 20 | | to maintain cost neutrality with other utilization management | 21 | | controls such as prior approval.
For hemophilia, the | 22 | | Department shall develop a program of utilization review and | 23 | | control which may include, in the discretion of the | 24 | | Department, prior approvals. The Department may impose special | 25 | | standards on providers that dispense blood factors which shall | 26 | | include, in the discretion of the Department, staff training |
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| 1 | | and education; patient outreach and education; case | 2 | | management; in-home patient assessments; assay management; | 3 | | maintenance of stock; emergency dispensing timeframes; data | 4 | | collection and reporting; dispensing of supplies related to | 5 | | blood factor infusions; cold chain management and packaging | 6 | | practices; care coordination; product recalls; and emergency | 7 | | clinical consultation. The Department may require patients to | 8 | | receive a comprehensive examination annually at an appropriate | 9 | | provider in order to be eligible to continue to receive blood | 10 | | factor. | 11 | | (i) On and after July 1, 2012, the Department shall reduce | 12 | | any rate of reimbursement for services or other payments or | 13 | | alter any methodologies authorized by this Code to reduce any | 14 | | rate of reimbursement for services or other payments in | 15 | | accordance with Section 5-5e. | 16 | | (j) On and after July 1, 2012, the Department shall impose | 17 | | limitations on prescription drugs such that the Department | 18 | | shall not provide reimbursement for more than 4 prescriptions, | 19 | | including 3 brand name prescriptions, for distinct drugs in a | 20 | | 30-day period, unless prior approval is received for all | 21 | | prescriptions in excess of the 4-prescription limit. Drugs in | 22 | | the following therapeutic classes shall not be subject to | 23 | | prior approval as a result of the 4-prescription limit: | 24 | | immunosuppressant drugs, oncolytic drugs, anti-retroviral | 25 | | drugs, and, on or after July 1, 2014, antipsychotic drugs. On | 26 | | or after July 1, 2014, the Department may exempt children with |
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| 1 | | complex medical needs enrolled in a care coordination entity | 2 | | contracted with the Department to solely coordinate care for | 3 | | such children, if the Department determines that the entity | 4 | | has a comprehensive drug reconciliation program. | 5 | | (k) No medication therapy management program implemented | 6 | | by the Department shall be contrary to the provisions of the | 7 | | Pharmacy Practice Act. | 8 | | (l) Any provider enrolled with the Department that bills | 9 | | the Department for outpatient drugs and is eligible to enroll | 10 | | in the federal Drug Pricing Program under Section 340B of the | 11 | | federal Public Health Service Act shall enroll in that | 12 | | program. No entity participating in the federal Drug Pricing | 13 | | Program under Section 340B of the federal Public Health | 14 | | Service Act may exclude fee-for-service Medicaid from their | 15 | | participation in that program, however, although the | 16 | | Department may exclude entities defined in Section | 17 | | 1905(l)(2)(B) of the Social Security Act are excluded from | 18 | | this requirement. This subsection does not apply to outpatient | 19 | | drugs billed to Medicaid managed care organizations. | 20 | | (Source: P.A. 102-558, eff. 8-20-21.)
| 21 | | (305 ILCS 5/5-36) | 22 | | Sec. 5-36. Pharmacy benefits. | 23 | | (a)(1) The Department may enter into a contract with a | 24 | | third party on a fee-for-service reimbursement model for the | 25 | | purpose of administering pharmacy benefits as provided in this |
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| 1 | | Section for members not enrolled in a Medicaid managed care | 2 | | organization; however, these services shall be approved by the | 3 | | Department. The Department shall ensure coordination of care | 4 | | between the third-party administrator and managed care | 5 | | organizations as a consideration in any contracts established | 6 | | in accordance with this Section. Any managed care techniques, | 7 | | principles, or administration of benefits utilized in | 8 | | accordance with this subsection shall comply with State law. | 9 | | (2) The following shall apply to contracts between | 10 | | entities contracting relating to the Department's third-party | 11 | | administrators and pharmacies: | 12 | | (A) the Department shall approve any contract between | 13 | | a third-party administrator and a pharmacy; | 14 | | (B) the Department's third-party administrator shall | 15 | | not change the terms of a contract between a third-party | 16 | | administrator and a pharmacy without written approval by | 17 | | the Department; and | 18 | | (C) the Department's third-party administrator shall | 19 | | not create, modify, implement, or indirectly establish any | 20 | | fee on a pharmacy, pharmacist, or a recipient of medical | 21 | | assistance without written approval by the Department. | 22 | | (b) The provisions of this Section shall not apply to | 23 | | outpatient pharmacy services provided by a health care | 24 | | facility registered as a covered entity pursuant to 42 U.S.C. | 25 | | 256b or any pharmacy owned by or contracted with the covered | 26 | | entity. A Medicaid managed care organization shall, either |
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| 1 | | directly or through a pharmacy benefit manager, administer and | 2 | | reimburse outpatient pharmacy claims submitted by a health | 3 | | care facility registered as a covered entity pursuant to 42 | 4 | | U.S.C. 256b, its owned pharmacies, and contracted pharmacies | 5 | | in accordance with the contractual agreements the Medicaid | 6 | | managed care organization or its pharmacy benefit manager has | 7 | | with such facilities and pharmacies and in accordance with | 8 | | subsection (h-5) . | 9 | | (b-5) Any pharmacy benefit manager that contracts with a | 10 | | Medicaid managed care organization to administer and reimburse | 11 | | pharmacy claims as provided in this Section must be registered | 12 | | with the Director of Insurance in accordance with Section | 13 | | 513b2 of the Illinois Insurance Code. | 14 | | (c) On at least an annual basis, the Director of the | 15 | | Department of Healthcare and Family Services shall submit a | 16 | | report beginning no later than one year after January 1, 2020 | 17 | | (the effective date of Public Act 101-452) that provides an | 18 | | update on any contract, contract issues, formulary, dispensing | 19 | | fees, and maximum allowable cost concerns regarding a | 20 | | third-party administrator and managed care. The requirement | 21 | | for reporting to the General Assembly shall be satisfied by | 22 | | filing copies of the report with the Speaker, the Minority | 23 | | Leader, and the Clerk of the House of Representatives and with | 24 | | the President, the Minority Leader, and the Secretary of the | 25 | | Senate. The Department shall take care that no proprietary | 26 | | information is included in the report required under this |
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| 1 | | Section. | 2 | | (d) A pharmacy benefit manager shall notify the Department | 3 | | in writing of any activity, policy, or practice of the | 4 | | pharmacy benefit manager that directly or indirectly presents | 5 | | a conflict of interest that interferes with the discharge of | 6 | | the pharmacy benefit manager's duty to a managed care | 7 | | organization to exercise its contractual duties. "Conflict of | 8 | | interest" shall be defined by rule by the Department. | 9 | | (e) A pharmacy benefit manager shall, upon request, | 10 | | disclose to the Department the following information: | 11 | | (1) whether the pharmacy benefit manager has a | 12 | | contract, agreement, or other arrangement with a | 13 | | pharmaceutical manufacturer to exclusively dispense or | 14 | | provide a drug to a managed care organization's enrollees, | 15 | | and the aggregate amounts of consideration of economic | 16 | | benefits collected or received pursuant to that | 17 | | arrangement; | 18 | | (2) the percentage of claims payments made by the | 19 | | pharmacy benefit manager to pharmacies owned, managed, or | 20 | | controlled by the pharmacy benefit manager or any of the | 21 | | pharmacy benefit manager's management companies, parent | 22 | | companies, subsidiary companies, or jointly held | 23 | | companies; | 24 | | (3) the aggregate amount of the fees or assessments | 25 | | imposed on, or collected from, pharmacy providers; and | 26 | | (4) the average annualized percentage of revenue |
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| 1 | | collected by the pharmacy benefit manager as a result of | 2 | | each contract it has executed with a managed care | 3 | | organization contracted by the Department to provide | 4 | | medical assistance benefits which is not paid by the | 5 | | pharmacy benefit manager to pharmacy providers and | 6 | | pharmaceutical manufacturers or labelers or in order to | 7 | | perform administrative functions pursuant to its contracts | 8 | | with managed care organizations. | 9 | | (f) The information disclosed under subsection (e) shall | 10 | | include all retail, mail order, specialty, and compounded | 11 | | prescription products. All information made
available to the | 12 | | Department under subsection (e) is confidential and not | 13 | | subject to disclosure under the Freedom of Information Act. | 14 | | All information made available to the Department under | 15 | | subsection (e) shall not be reported or distributed in any way | 16 | | that compromises its competitive, proprietary, or financial | 17 | | value. The information shall only be used by the Department to | 18 | | assess the contract, agreement, or other arrangements made | 19 | | between a pharmacy benefit manager and a pharmacy provider, | 20 | | pharmaceutical manufacturer or labeler, managed care | 21 | | organization, or other entity, as applicable. | 22 | | (g) A pharmacy benefit manager shall disclose directly in | 23 | | writing to a pharmacy provider or pharmacy services | 24 | | administrative organization contracting with the pharmacy | 25 | | benefit manager of any material change to a contract provision | 26 | | that affects the terms of the reimbursement, the process for |
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| 1 | | verifying benefits and eligibility, dispute resolution, | 2 | | procedures for verifying drugs included on the formulary, and | 3 | | contract termination at least 30 days prior to the date of the | 4 | | change to the provision. The terms of this subsection shall be | 5 | | deemed met if the pharmacy benefit manager posts the | 6 | | information on a website, viewable by the public. A pharmacy | 7 | | service administration organization shall notify all contract | 8 | | pharmacies of any material change, as described in this | 9 | | subsection, within 2 days of notification. As used in this | 10 | | Section, "pharmacy services administrative organization" means | 11 | | an entity operating within the State that contracts with | 12 | | independent pharmacies to conduct business on their behalf | 13 | | with third-party payers. A pharmacy services administrative | 14 | | organization may provide administrative services to pharmacies | 15 | | and negotiate and enter into contracts with third-party payers | 16 | | or pharmacy benefit managers on behalf of pharmacies. | 17 | | (h) A pharmacy benefit manager shall not include the | 18 | | following in a contract with a pharmacy provider: | 19 | | (1) a provision prohibiting the provider from | 20 | | informing a patient of a less costly alternative to a | 21 | | prescribed medication; or | 22 | | (2) a provision that prohibits the provider from | 23 | | dispensing a particular amount of a prescribed medication, | 24 | | if the pharmacy benefit manager allows that amount to be | 25 | | dispensed through a pharmacy owned or controlled by the | 26 | | pharmacy benefit manager, unless the prescription drug is |
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| 1 | | subject to restricted distribution by the United States | 2 | | Food and Drug Administration or requires special handling, | 3 | | provider coordination, or patient education that cannot be | 4 | | provided by a retail pharmacy. | 5 | | (h-5) Unless required by law, a Medicaid managed care | 6 | | organization or pharmacy benefit manager administering or | 7 | | managing benefits on behalf of a Medicaid managed care | 8 | | organization shall not refuse to contract with a 340B entity | 9 | | or 340B pharmacy for refusing to accept less favorable payment | 10 | | terms or reimbursement methodologies when compared to | 11 | | similarly situated non-340B entities and shall not include in | 12 | | a contract with a 340B entity or 340B pharmacy a provision | 13 | | that: | 14 | | (1) imposes any fee, chargeback, or rate adjustment | 15 | | that is not similarly imposed on similarly situated | 16 | | pharmacies that are not 340B entities or 340B pharmacies; | 17 | | (2) imposes any fee, chargeback, or rate adjustment | 18 | | that exceeds the fee, chargeback, or rate adjustment that | 19 | | is not similarly imposed on similarly situated pharmacies | 20 | | that are not 340B entities or 340B pharmacies; | 21 | | (3) prevents or interferes with an individual's choice | 22 | | to receive a prescription drug from a 340B entity or 340B | 23 | | pharmacy through any legally permissible means; | 24 | | (4) excludes a 340B entity or 340B pharmacy from a | 25 | | pharmacy network on the basis of whether the 340B entity | 26 | | or 340B pharmacy participates in the 340B drug discount |
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| 1 | | program; | 2 | | (5) prevents a 340B entity or 340B pharmacy from using | 3 | | a drug purchased under the 340B drug discount program so | 4 | | long as the drug recipient is a patient of the 340B entity; | 5 | | nothing in this Section exempts a 340B pharmacy from | 6 | | following the Department's preferred drug list or from any | 7 | | prior approval requirements of the Department or the | 8 | | Medicaid managed care organization that are imposed on the | 9 | | drug for all pharmacies; or | 10 | | (6) any other provision that discriminates against a | 11 | | 340B entity or 340B pharmacy by treating a 340B entity or | 12 | | 340B pharmacy differently than non-340B entities or | 13 | | non-340B pharmacies for any reason relating to the | 14 | | entity's participation in the 340B drug discount program. | 15 | | A provision that violates this subsection in any contract | 16 | | between a Medicaid managed care organization or its pharmacy | 17 | | benefit manager and a 340B entity entered into, amended, or | 18 | | renewed after July 1, 2022 shall be void and unenforceable. | 19 | | In this subsection (h-5): | 20 | | "340B entity" means a covered entity as defined in 42 | 21 | | U.S.C. 256b(a)(4) authorized to participate in the 340B drug | 22 | | discount program. | 23 | | "340B pharmacy" means any pharmacy used to dispense 340B | 24 | | drugs for a covered entity, whether entity-owned or external. | 25 | | (i) Nothing in this Section shall be construed to prohibit | 26 | | a pharmacy benefit manager from requiring the same |
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| 1 | | reimbursement and terms and conditions for a pharmacy provider | 2 | | as for a pharmacy owned, controlled, or otherwise associated | 3 | | with the pharmacy benefit manager. | 4 | | (j) A pharmacy benefit manager shall establish and | 5 | | implement a process for the resolution of disputes arising out | 6 | | of this Section, which shall be approved by the Department. | 7 | | (k) The Department shall adopt rules establishing | 8 | | reasonable dispensing fees for fee-for-service payments in | 9 | | accordance with guidance or guidelines from the federal | 10 | | Centers for Medicare and Medicaid Services.
| 11 | | (Source: P.A. 101-452, eff. 1-1-20; 102-558, eff. 8-20-21.)
| 12 | | Section 99. Effective date. This Act takes effect July 1, | 13 | | 2022.".
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