2019 - 2020 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 1,
TO ASSEMBLY BILL 114
February 5, 2020 - Offered by Representative Schraa.
1An Act to repeal
40.51 (15m) and 632.86; to renumber
632.865 (1) (a); to
2renumber and amend
632.865 (1) (c) and 633.01 (4); to amend
40.51 (8), 3
40.51 (8m), 66.0137 (4), 120.13 (2) (g), 185.983 (1) (intro.), 450.135 (9), 601.31 4
(1) (w), 601.46 (3) (b), 609.83, 616.09 (1) (a) 2., chapter 633 (title), 633.01 (1) 5
(intro.) and (c), 633.01 (3), 633.01 (5), 633.04 (intro.), 633.05, 633.06, 633.07, 6
633.09 (4) (b) 2. and 3., 633.11, 633.12 (1) (intro.), (b) and (c), 633.13 (1) and (3), 7
633.14 (2) (intro.) and (c) 1. and 3. and (3), 633.15 (1) (a), (1m), and (2) (a) 1., 2. 8
and 3. and (b) 1., 633.15 (2) (b) 2. and 633.16; and to create
450.13 (5m), 450.135 9
(8m), 632.861, 632.865 (1) (ae) and (ak), 632.865 (1) (c) 2., 632.865 (1) (dm), 10
632.865 (3) to (7), 633.01 (2r), 633.01 (4g), 633.01 (4r), 633.01 (6), 633.15 (2) (b)
1. d. and 633.15 (2) (f) of the statutes; relating to: licensure and regulation of
2pharmacy benefit managers and granting rule-making authority.
Analysis by the Legislative Reference Bureau
This bill generally requires pharmacy benefit managers to be licensed with the
commissioner of insurance or to have an employee benefit plan administrator license
under current law. The bill also establishes certain requirements on pharmacy
benefit managers and certain health plans regarding their interactions with
pharmacies and pharmacists.
Licensure of pharmacy benefit managers
The bill requires a pharmacy benefit manager to be licensed either as a
pharmacy benefit manager or as an employee benefit plan administrator, which is
an existing license, in order to perform the activities of a pharmacy benefit manager.
The bill specifies that an entity that is both an employee benefit plan administrator
and a pharmacy benefit manager need only have a single license as an administrator.
To obtain a license the pharmacy benefit manager must pay the applicable fee;
supply a bond; provide its federal employer identification number; and show to the
commissioner that the pharmacy benefit manager intends to act in good faith in
compliance with applicable laws, rules, and commissioner's orders through certain
competent and trustworthy individuals, to designate an individual to directly
administer the prescription drug benefits, and, if not organized in Wisconsin, to
agree to be subject to the jurisdiction of the commissioner and Wisconsin courts.
Under the bill, pharmacy benefit manager licenses may be limited, suspended, or
revoked for the same reasons as for employee benefit plan administrators licenses,
which include that the pharmacy benefit manager is unqualified, repeatedly or
knowingly violates laws, rules, or commissioner's orders, endangers enrollees or the
public, or has inadequate financial resources. After a pharmacy benefit manager's
license is ordered suspended or revoked, the commissioner may allow the pharmacy
benefit manager to continue to provide services for the purpose of providing
continuity of care to existing enrollees. In addition to powers the commissioner has
generally to implement and enforce insurance-related laws, the bill allows the
commissioner to examine, audit, or accept an audit of a pharmacy benefit manager
in the same manner as employee benefit plan administrators and insurers and to
promulgate any rules to implement licensure of pharmacy benefit managers.
Pharmacy benefit manager regulation
Unless federal law requires otherwise, a pharmacy benefit manager is
prohibited in the bill from retroactively denying a pharmacist's or pharmacy's claim
unless the original claim was fraudulent, the payment of the original claim was
incorrect, the pharmacy services were not rendered by the pharmacist or pharmacy,
the pharmacist or pharmacy violated state or federal law, or the reduction is
permitted by contract and is related to a quality program. The bill limits recovery
for an incorrect payment to the amount that exceeds the allowable claim. The bill
requires every pharmacy benefit manager to submit annual transparency reports
containing information specified in the bill to the commissioner. The bill sets
requirements on a pharmacy benefit manager, insurer, defined network plan, such
as a health maintenance organization, or a self-insured governmental health plan
that is conducting an audit of a pharmacist or pharmacy. The bill requires a
pharmacy benefit manager or a representative of a pharmacy benefit manager to
provide to a pharmacy, within 30 days of receipt of a written request from the
pharmacy, written notice of the certification or accreditation requirements as a
determinant of network participation. The bill prohibits a pharmacy benefit
manager or representative from changing its accreditation requirements more
frequently than once every 24 months.
Current law requires pharmacy benefit managers to agree in their contracts to
make certain disclosures regarding prescription drug reimbursement, including
updating maximum allowable cost pricing information for prescribed drugs or
devices at least every seven business days, reimbursing pharmacies or pharmacists
subject to the updated maximum allowable cost pricing, and modifying information
in the maximum allowable cost information in a timely fashion. Pharmacy benefit
managers currently must also include in each contract with a pharmacy a process
to appeal, investigate, and resolve pricing disputes in accordance with the specifics
in current law. These current law requirements are unchanged by the bill.
Disclosures to consumers; cost-sharing limitation
Under the bill, a health insurance policy, referred to in the statutes as a
disability insurance policy, or a governmental self-insured health plan may not, and
a policy or plan must ensure that a pharmacy benefit manager does not, restrict a
pharmacy from or penalize a pharmacy for informing an enrollee under the policy or
plan of any differential between the out-of-pocket cost of a drug to the enrollee under
the policy or plan and the cost an individual would pay for the drug without using
insurance. The bill prohibits a policy, plan, or pharmacy benefit manager from
requiring an enrollee under the policy or plan to pay more for a covered drug than
either the cost-sharing amount for the prescription drug under the policy or plan or
the amount the enrollee would pay for the drug without using insurance.
The bill requires pharmacies to post a sign describing the pharmacist's ability
to substitute a less expensive drug product equivalent or interchangeable biological
product for the prescribed drug or biological product unless the consumer or the
prescribing practitioner indicates otherwise. Under current law, a pharmacist is
required to dispense either the prescribed drug or biological product or, if lower in
price, a drug product equivalent or interchangeable biological product and is
required to inform the consumer of the options available in dispensing the
prescription. The bill requires each pharmacy to have available for the public a
listing of the retail price, updated monthly or more often, of the 100 most commonly
prescribed prescription drugs available for purchase at the pharmacy. The bill also
requires pharmacies to make available for the public information on how to access
a list, created by the Pharmacy Examining Board, of the 100 most commonly
prescribed generic drugs with the corresponding brand name, and the federal Food
and Drug Administration's list of currently approved interchangeable biological
products, which the Pharmacy Examining Board currently has to provide a link to
on its Internet site.
The bill requires a health insurance policy, self-insured governmental plan, or
pharmacy benefit manager to provide advanced written notice to an enrollee of a
formulary change that either removes a prescription drug from the formulary or
reassigns a prescription drug to a benefit tier with a higher deductible, copayment,
or coinsurance. The advanced notice required by the bill must be provided no fewer
than 30 days of the expected formulary change, must include information on the
procedure for the enrollee to request an exception to the formulary change, and need
only be provided to those enrollees who are using the drug at the time the notification
must be sent. A policy, plan, or pharmacy benefit manager is not required to provide
advanced written notice if the prescription drug is no longer approved by the federal
Food and Drug Administration, is the subject of a notice, guidance, warning,
announcement, or other statement from the FDA relating to concerns about the
safety of the drug, or is approved by the FDA for use without a prescription. A policy,
plan, or pharmacy benefit manager is also not required to provide advanced written
notice for the removal or reassignment of a prescription drug if the policy, plan, or
pharmacy benefit manager adds to the formulary at the same or a lower cost-sharing
tier a generic prescription drug that is approved by the FDA for use as an alternative
to the prescription drug or a prescription drug in the same pharmacologic class or
with the same mechanism of action.
The bill requires a pharmacist or pharmacy to notify an enrollee in a policy or
plan if a prescription drug for which an enrollee is filling or refilling a prescription
is removed from the formulary and the policy or plan or a pharmacy benefit manager
acting on behalf of a policy or plan adds to the formulary at the same or a lower cost
sharing tier a generic prescription drug or a prescription drug in the same
pharmacologic class or with the same mechanism of action. If an enrollee has had
an adverse reaction to the generic prescription drug or the prescription drug in the
same pharmacologic class or with the same mechanism of action that is being
substituted for an originally prescribed drug, the bill allows the pharmacist or
pharmacy to extend the prescription order for the originally prescribed drug to fill
one 30-day supply of the originally prescribed drug for the cost-sharing amount that
applies to the prescription drug at the time of the substitution.
This proposal may contain a health insurance mandate requiring a social and
financial impact report under s. 601.423, stats.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
40.51 (8) of the statutes is amended to read:
Every health care coverage plan offered by the state under sub. (6) 2
shall comply with ss. 631.89, 631.90, 631.93 (2), 631.95, 632.72 (2), 632.746 (1) to (8) 3
and (10), 632.747, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 4632.861,
632.867, 632.87 (3) to (6), 632.885, 632.89, 632.895 (5m) and (8) to (17), and 5
40.51 (8m) of the statutes is amended to read:
Every health care coverage plan offered by the group insurance 8
board under sub. (7) shall comply with ss. 631.95, 632.746 (1) to (8) and (10), 632.747, 9
632.748, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.861,
632.885, 632.89, and 632.895 (11) to (17).
40.51 (15m) of the statutes is repealed.
66.0137 (4) of the statutes is amended to read:
66.0137 (4) Self-insured health plans.
If a city, including a 1st class city, or 14
a village provides health care benefits under its home rule power, or if a town 15
provides health care benefits, to its officers and employees on a self-insured basis, 16
the self-insured plan shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 17
632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.798, 632.85, 632.853, 632.855, 632.861, 18
632.867, 632.87 (4) to (6), 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 19
120.13 (2) (g) of the statutes is amended to read:
(g) Every self-insured plan under par. (b) shall comply with ss. 22
49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 23
632.798, 632.85, 632.853, 632.855, 632.861,
632.867, 632.87 (4) to (6), 632.885, 24
632.89, 632.895 (9) to (17), 632.896, and 767.513 (4).
185.983 (1) (intro.) of the statutes is amended to read:
(intro.) Every voluntary nonprofit health care plan operated by a 2
cooperative association organized under s. 185.981 shall be exempt from chs. 600 to 3
646, with the exception of ss. 601.04, 601.13, 601.31, 601.41, 601.42, 601.43, 601.44, 4
601.45, 611.26, 611.67, 619.04, 623.11, 623.12, 628.34 (10), 631.17, 631.89, 631.93, 5
631.95, 632.72 (2), 632.745 to 632.749, 632.775, 632.79, 632.795, 632.798, 632.85, 6
632.853, 632.855, 632.861,
632.867, 632.87 (2) to (6), 632.885, 632.89, 632.895 (5) and 7
(8) to (17), 632.896, and 632.897 (10) and chs. 609, 620, 630, 635, 645, and 646, but 8
the sponsoring association shall:
450.13 (5m) of the statutes is created to read:
450.13 (5m) Disclosures to consumers.
(a) Each pharmacy shall post in a 11
prominent place at or near the place where prescriptions are dispensed a sign that 12
clearly describes a pharmacist's ability under this state's law to substitute a less 13
expensive drug product equivalent under sub. (1s) unless the consumer or the 14
prescribing practitioner has indicated otherwise under sub. (2).
(b) The pharmacy examining board shall create a list of the 100 most commonly 16
prescribed generic drug product equivalents, including the generic and brand names 17
of the drugs, and provide, either directly or on the department's Internet site, the list 18
to each pharmacy on an annual basis. Each pharmacy shall make available to the 19
public information on how to access the list under this paragraph.
(c) Each pharmacy shall have available for the public a listing of the retail price, 21
updated no less frequently than monthly, of the 100 most commonly prescribed 22
prescription drugs, which includes brand name and generic equivalent drugs and 23
biological products and interchangeable biological products, that are available for 24
purchase at the pharmacy.
450.135 (8m) of the statutes is created to read:
450.135 (8m) Disclosure to consumers.
(a) Each pharmacy shall post in a 2
prominent place at or near the place where prescriptions are dispensed a sign that 3
clearly describes a pharmacist's ability under this state's law to substitute a less 4
expensive interchangeable biological product under sub. (2) unless the consumer or 5
the prescribing practitioner has indicated otherwise under sub. (3).
450.135 (9) of the statutes is amended to read:
450.135 (9) Links to be maintained by board.
The board shall maintain links 8
on the department's Internet site to the federal food and drug administration's lists 9
of all currently approved interchangeable biological products.
Each pharmacy shall
10make available for the public information on how to access the federal food and drug
11administration's lists of all currently approved interchangeable biological products
12through the department's Internet site.
601.31 (1) (w) of the statutes is amended to read:
(w) For initial issuance and for each annual renewal of a license as 15
an administrator or pharmacy benefit manager
under ch. 633, $100.
601.46 (3) (b) of the statutes is amended to read:
(b) A general review of the insurance business in this state, including 18
a report on emerging regulatory problems, developments and trends
19trends related to prescription drugs
609.83 of the statutes is amended to read:
21609.83 Coverage of drugs and devices.
Limited service health 22
organizations, preferred provider plans, and defined network plans are subject to ss. 23
and 632.895 (16t).
616.09 (1) (a) 2. of the statutes is amended to read:
(a) 2. Plans authorized under s. 616.06 are subject to s. 610.21, 1977 2
stats., s. 610.55, 1977 stats., s. 610.57, 1977 stats., and ss. 628.34 to 628.39, 1977 3
stats., to chs. 600, 601, 620, 625, 627 and 645, to ss. 632.72, 632.755, 632.86 632.861 4
and 632.87 and to this subchapter except s. 616.08.