Pharmacy benefit manager regulation.

ORIGINAL
House
Bill No
.
HB0035

ENROLLED ACT NO. 18,

HOUSE OF REPRESENTATIVES

SIXTY-THIRD LEGISLATURE OF THE STATE OF WYOMING
2016 Budget Session

AN ACT relating to insurance; regulating the provision of pharmacy benefits; requiring licensure of pharmacy benefit managers; establishing a licensing fee; providing definitions; requiring the promulgation of rules; providing requirements for audits conducted by pharmacy benefit managers; providing requirements for drug maximum allowable cost lists; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1
.

W.S. 26
‑
52
‑
101 through 26
‑
52
‑
104

are
created to read:

CHAPTER 52
PHARMACY BENEFIT MANAGERS

26
‑
5
2
‑
101
.

Licensure of
p
harmacy
b
enefit

m
anagers.

No person shall act
or hold himself out
as a pharmacy benefit manager
in this state unless he obtains a license
from the department
.

The department
shall
through rules
establish license requirements
and procedures for the licensing of pharmacy benefit managers
consistent with this article
.
The requirements shall only provide for the adequate identification of licensees and the payment of the required licensing fee.

26
‑
5
2
‑
102
.

Definitions.

(a)

As used in this article:

(
i
)

"
Claim
"
means a request from a pharmacy or pharmacist to be reimbursed for the cost of filling or
refilling a prescription for a drug or for provid
ing a medical supply or device;

(
ii
)

"
I
nsurer
"
means
the entity defined in W.S. 26
‑
1
‑
102(
a)(xvi)

and who
provides health insurance coverage in this
s
tate
;

(iii)

"
List
"
means the list of drugs for which a pharmacy benefit manager has established a maximum allowable cost;

(iv)

"
Maximum allowable cost
"
means the maximum amount that
a pharmacy benefit
manager will reimburse a pharmacist or pharmacy for the cost of a generic drug;

(v)

"
Network providers
"
means those pharmacies that provide covered health care services or supplies to an insured or a member pursuant to a contract with a network plan to act as a participating provider;

(
vi
)

"
Pharmacy
"
means an entity through which pharmacists or other persons practice pharmacy as specified in W.S. 33
‑
24
‑
124;

(
v
ii
)

"
Pharmacy benefit manager
"
means an entity
that contracts
with a pharmacy on behalf of an insurer or third party administrator to administer or manage prescription drug benefits
.

26
‑
5
2
‑
103
.

Pharmacy
b
enefit

m
anager
a
udits
.

(a)

Any pharmacy benefit manager or person acting on behalf of a pharmacy benefit manager who conducts
an audit

of
a pharmacy
shall follow the following procedures:

(
i
)

Provide written notice to the pharmacy not less than
ten
(10)
business days
before conducting any on
‑
site,
initial audit;

(
ii
)

Conduct any
audit
requiring
clinical or professional judgment
through
or in consultation with a licensed pharmacist;

(
iii
)

Limit t
he period covered by the audit
to not more than
two
(2)
years from the date that
an audited
claim was adjudicated;

(
iv
)

Allow
verifiable statements or records, including medication administration records of a nursing home, assisted livin
g facility, hospital, physician
or other authorized practitioner, to validate the pharmacy record;

(
v
)

Allow
legal prescription
s,

including medication administration records, faxes, electronic prescriptions or documented telephone calls from the prescriber or the prescriber
'
s agent,
to validate claims in connection with prescriptions, refi
lls or changes in prescriptions
;

(
vi
)

Apply
the same standards and parameters to each audited pharmacy as are applied to
other similarly situated pharmacies in a

pharmacy network contract in this state;

(
vii
)

Not conduct any audit
provided for in this section

during the first
seven (
7
)
calendar days of any month
without the consent of the audited pharmacy;
and

(
viii
)

Establish a written appeals process and provide a copy to every audited pharmacy.

(b)

A pharmacy benefit manager or
person
acting on behalf of a pharmacy benefit manager who conducts an audit
of
a pharmacy also shall
comply with the following requirements:

(
i
)

A
ny
finding of overpayment or underpayment
shall
be based on the actual overpayment or underpayment and not
on
a projection based on the number of patients served having a similar diagnosis or on the number of similar orders or refills for similar drugs;

(
ii
)

A
ny
finding of an overpayment
shall
not include the dispensing fee amount unless:

(
A
)

A prescrip
tion was not
received by the patient or the patient's designee
;

(
B
)

The
prescriber denied authorization;

(
C
)

The prescription dispensed was a medication error by th
e pharmacy;
or

(
D
)

The identified overpayment is
based
solely on an extra dispensing fee.

(
iii
)

No
audit shall use extrapolation in calculating the recoupments or penalties for audits, unless required by state or federal contracts;

(
iv
)

No
payment for the performance of an audit shall be
based on a percentage of the amount recovered;

(
v
)

I
nterest shall
not accrue during the audit period
;

(
vi
)

No
audit shall
consider any clerical or recordkeeping error, such as a typographical err
or, scrivener
'
s error
or computer error regarding a required document or record
, as fraud. These
errors may be subject to recoupment.
No recovery shall be assessed for e
rrors
causing no financial harm to the patient or plan.

Errors that are
the result of a
pharmacy failing to comply with a formal corrective action plan may be subject to recovery. Any recoupment shall be based on the ac
tual overpayment of a
claim;

(
vii
)

A preliminary audit report
shall
be delivered to the
audited
pharmacy within
one hundred twenty (
120
)
days af
ter the conclusion of the audit;

(
viii
)

A pharmacy shall be allowed at least
thirty (
30
)
days following receipt of the preliminary audit
report
to provide documentation
addressing any audit finding, and
a reasonable extension
of time shall be
granted upon request;

(
ix
)

A final audit report shall be delivered to the pharmacy
not more than
one hundred twenty (
120
)
days after the preliminary audit report
is received by the pharmacy
or

submission of final internal
appeal, whichever is later
;

(x)

Recoupment of any disputed funds or repayment of funds to the pharmacy benefit manager or insurer by the pharmacy, if permitted pursuant to contracts, shall occur, to the extent demonstrated or documented in the pharmacy audit findings, after final
internal disposition of the audit including the appeals process. If the identified discrepancy for an individual audit exceeds fifteen thousand dollars ($15,000.00), any future payments to the pharmacy may be withheld pending finalization of the audit;

(
xi
)

No chargebacks, recoupment or other penalties may be assessed until the appeal process has been exhausted and the final report issued.

(c)

Subsections (a) and (b) of this section shall not apply to
:

(
i
)

Audits in which suspected fraudulent activity or other intentional or willful misrepresentation is evidenced by a physical review, review of claims data, statements or other investigative methods; or

(ii
)

Audits of claims paid for by federally funded programs.

(d)

This section shall apply to a contracted phar
macy, or the pharmacy's designee
who holds a contract with a pharmacy benefit manager
,
entered into, renewed or extended on or
after July 1, 2016, and
to
all
audits
of pharmacies
on
and after

July
1, 2017.

26
‑
5
2
‑
104
.

Maximum
a
llowable
c
ost
.

(a)

To place a drug on a maximum allowable cost list, a pharmacy benefit manager
shall
ensure that the drug is:

(
i
)

R
ated
"
A
"
or
"
B
"
in the most recent version of the United States Food and Drug Administration
'
s Approved Drug Products with Therapeutic Equivalence
Evaluations
(
Orange Book
)
, or rated "NR" or "NA," or has a similar rating, by a nationally recognized reference;

(
ii
)

G
enerally available for purchase by retail pharmacies in the state from nation
al or regional wholesalers;

(iii
)

N
ot obsolete or temporarily unavailable.

(
b
)

In formulating the maximum allowable cost price for a drug,
an insurer
or pharmacy benefit manager shall consider only
the price of that drug and any drug listed as therapeutically equivalent to that drug in the most recent version of the
United States Food and Drug Administration
'
s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book)
.

(
c
)

Notwithstanding
s
ubsection (
b
)
of this section
, if a therapeutically equivalent generic drug is unavailable or has limited market presence,
an insurer
or pharmacy benefit manager may place on a maximum allowable cost list a drug that has:

(
i
)

A

"
B
"
rating in the most recent version of the
United States Food and Drug Administration
'
s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book)
; or

(
ii
)

A
n
"
NR
"
or
"
NA
"
rating
,
or a similar rating
,
by a nationally recognized reference.

(
d
)

A
pharmacy benefit manager
shall
:

(
i
)

M
ake available to each network provider at the beginning of the term of the network provider
'
s
contract, and upon renewal of the contract, the sources utilized to determine the maximum allowable cost pricing;

(
ii
)

P
rovide a telephone number at which a network pharm
acy may contact an employee of
a
pharmac
y
benefit manager to discuss the
pharmacy
's
appeal
;

(
iii
)

P
rovide a process for network providers to readily access the maximum allowable cos
t
applicable
to that provider;

(
iv
)

R
eview and update applicable maximum allowable cost price information at least once every seven
(7)
business days to reflect any modification of maximum allowable cost pricing; and

(
v
)

E
nsure that dispensing fees are not included in the calculation of maximum allowable cost.

(
e
)

A pharmacy benefit manager
shall
establish a process by which a contracted pharmacy, or the pharmacy
'
s designee who holds a contract with the
pharmacy benefit manager
, can appeal the provider
'
s reimbursement for a drug subject to maximum allowable cost pricing. A contracted pharmacy, or the pharmacy
'
s designee who holds a contract with the
pharmacy benefit manager
,
shall have
up to
ten
(10)
business days after
dispensing a drug subject to a maximum allowable cost in which
to appeal
the amount of the maximum allowable cost
.
A pharmacy benefit manager shall
respond to
the appeal
within ten
(10)
business days
after
the contracted pharmacy
makes the appeal
.

(
f
)

If
a maximum allowable cost
appeal
is denied, the pharmacy benefit manager
shall
provide
to the appealing pharmacy
, or the pharmacy's designee who holds a contract
with the pharmacy benefit manager,
the reason for the denial and the national drug code number for the drug that is available for purchase by pharmacies in the state
from national or regional wholesalers
at a price at or below the maximum allowable cost.

(
g
)

If an appeal is upheld, the pharmacy benefit manager
shall
make an adjustment
to the applicable maximum allowable cost
no later than one
(1)
day after the date of the determination and make the adjustment applicable to all similarly situated network pharmacy providers, as determined by the insur
er or pharmacy benefit manager. The pharmacy benefit manager shall allow
the appealing pharmacy to reverse and rebill the claim
which was the subject of the appeal
.

(h)

This section shall apply to a contracted pharmacy, or the pharmacy's designee who holds a contract with a pharmacy benefit manager, entered into, renewed or extended on or after July 1, 2016, and to contracts on and after July 1, 2017.

Section 2
.

W.S. 26
‑
4
‑
101
(
a)
by creating a new paragraph (xviii) is amended to read:

26
‑
4
‑
101
.

Fee schedule
.

(a)

The commissioner shall collect in advance or contemporaneously fees, licenses and miscellaneous charges as specified in this subsection. Collection may include the acceptance of electronic funds transfer. All fees and other charges collected by the commissioner as specified in this subsection shall be nonrefundable:

(xviii)

Pharmacy
b
enefit
m
anager (annually)
.......................................
.............$500.
00

Section
3
.

This act is effective July 1, 2016.

(END)

Speaker of the House

President of the Senate

Governor

TIME APPROVED: _________

DATE APPROVED: _________

I hereby certify that this act originated in the House.

Chief Clerk

1