State pharmacy benefits manager; contractual provisions, report.

Plain English Breakdown

The bill's official text does not provide specific details about how much dispensing fees will be increased or penalties for noncompliance.

State Pharmacy Benefits Manager Rules

This bill sets rules for how the Department of Medical Assistance Services works with a state pharmacy benefits manager to ensure fair drug pricing and services for Medicaid recipients.

What This Bill Does

• Requires the department's contract with the state pharmacy benefits manager to set ingredient-cost reimbursement rates based on national or wholesale costs, plus a dispensing fee determined by the department.
• Needs real-time cost transparency from the pharmacy benefits manager about drug costs, rebates, fees, and other charges.
• Forbids the pharmacy benefits manager from directing Medicaid recipients to certain pharmacies through higher costs or network restrictions.
• Requires the pharmacy benefits manager to meet network adequacy standards, allow any willing pharmacy to join, verify that all contracted pharmacies accept Medicaid, submit annual reports, disclose pricing methods, and adjust rates if an appeal is upheld.
• Allows the department to increase dispensing fees based on savings generated by using the state pharmacy benefits manager.

Who It Names or Affects

• The Department of Medical Assistance Services
• State pharmacy benefits managers
• Medicaid recipients

Terms To Know

ingredient-cost reimbursement

Payment for the cost of a drug's ingredients.

dispensing fee

A charge paid to pharmacies for handling and delivering medications.

Limits and Unknowns

• The bill does not specify how much the dispensing fees will increase.
• It is unclear if all pharmacies will comply with network adequacy standards.
• The exact penalties for noncompliance are not detailed in the summary.

Official Summary Text

State pharmacy benefits manager; contractual provisions; report.
Requires the Department of Medical Assistance Services' contract with the state pharmacy benefits manager to (i) require that that ingredient-cost reimbursement is based on the national average drug acquisition cost, or if unavailable, the wholesale acquisition cost minus a discount set by the Department, plus a professional dispensing fee, determined by the Department; (ii) require real-time or near real-time transparency in drug costs, rebates collected and paid, dispensing fees paid, administrative fees, and all other charges, fees, costs, and holdbacks, claim denials appeals, and network participation; (iii) prohibit the state pharmacy benefits manager from steering Medicaid recipients to affiliated pharmacies through differential cost-sharing, restrictive network design, or the mandatory use of a mail order pharmacy provider; (iv) require the state pharmacy benefits manager to (a) meet network adequacy standards established by the Department; (b) allow any willing pharmacy to participate in the pharmacy network; (c) verify that all contracted pharmacies are actively accepting Medicaid recipients; (d) submit annual reports containing certain information; (e) disclose to the Department pricing and maximum acquisition cost methodologies; and (f) allow invoice-based or national average drug acquisition cost-based appeals and require an adjustment of rates network-wide when an appeal is upheld; and (v) include enforcement mechanisms and monetary penalties for noncompliance.

Additionally, the bill requires Department to annually calculate the savings generated by the use of the state pharmacy benefits manager and to annually increase its dispensing fee by the amount of such savings. The bill requires the Department to annually (1) publish and make available on its website its annual and total savings achieved, the annual and total amount applied to dispensing fees increases, and the updated dispensing fees and (2) report to the General Assembly on the state pharmacy benefits manager's compliance, national average drug acquisition cost compliance, pharmacy reimbursement trends, network adequacy compliance, and dispensing fee sufficiency.

Current Bill Text

HB 631

LABOR AND COMMERCE

1. Line 21, introduced, after shall

strike

select and contract with

insert

issue a request for proposals for

LABOR AND COMMERCE

2. Line 60, introduced, after
D.

strike

the remainder of line 60, all of lines 61 through 69, and through
F.
on line 70

LABOR AND COMMERCE

3. After line 73, introduced

insert

2. That, no later than January 1, 2027, the Department of Medical Assistance Services (the Department) shall award the third-party administrator that the Department has issued a request for proposals for to serve as the state pharmacy benefits manager pursuant to §
32.1-325.5
of the Code of Virginia, as amended by this act.