AB114: Bill Text

This proposal may contain a health insurance mandate requiring a social and financial impact report under s. 601.423, stats.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB114,1 Section 1 . 40.51 (8) of the statutes is amended to read:

AB114,4,6 40.51 (8) Every health care coverage plan offered by the state under sub. (6) shall comply with ss. 631.89, 631.90, 631.93 (2), 631.95, 632.72 (2), 632.746 (1) to (8) and (10), 632.747, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.861, 632.867, 632.87 (3) to (6), 632.885, 632.89, 632.895 (5m) and (8) to (17), and 632.896.

AB114,2 Section 2 . 40.51 (8m) of the statutes is amended to read:

AB114,5,4 40.51 (8m) Every health care coverage plan offered by the group insurance board under sub. (7) shall comply with ss. 631.95, 632.746 (1) to (8) and (10), 632.747, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.861, 632.867, 632.885, 632.89, and 632.895 (11) to (17).

AB114,3 Section 3 . 40.51 (15m) of the statutes is repealed.

AB114,4 Section 4 . 66.0137 (4) of the statutes is amended to read:

AB114,5,13 66.0137 (4) Self-insured health plans. If a city, including a 1st class city, or a village provides health care benefits under its home rule power, or if a town provides health care benefits, to its officers and employees on a self-insured basis, the self-insured plan shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.798, 632.85, 632.853, 632.855, 632.861, 632.867, 632.87 (4) to (6), 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4).

AB114,5 Section 5 . 120.13 (2) (g) of the statutes is amended to read:

AB114,5,18 120.13 (2) (g) Every self-insured plan under par. (b) shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.798, 632.85, 632.853, 632.855, 632.861, 632.867, 632.87 (4) to (6), 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4).

AB114,6 Section 6 . 185.983 (1) (intro.) of the statutes is amended to read:

AB114,6,2 185.983 (1) (intro.) Every voluntary nonprofit health care plan operated by a cooperative association organized under s. 185.981 shall be exempt from chs. 600 to 646, with the exception of ss. 601.04, 601.13, 601.31, 601.41, 601.42, 601.43, 601.44, 601.45, 611.26, 611.67, 619.04, 623.11, 623.12, 628.34 (10), 631.17, 631.89, 631.93, 631.95, 632.72 (2), 632.745 to 632.749, 632.775, 632.79, 632.795, 632.798, 632.85, 632.853, 632.855, 632.861, 632.867, 632.87 (2) to (6), 632.885, 632.89, 632.895 (5) and (8) to (17), 632.896, and 632.897 (10) and chs. 609, 620, 630, 635, 645, and 646, but the sponsoring association shall:

AB114,7 Section 7. 601.43 (1) (a) of the statutes is amended to read:

AB114,6,11 601.43 (1) (a) Insurers, other licensees and other persons subject to regulation. Whenever the commissioner deems it necessary in order to inform himself or herself about any matter related to the enforcement of chs. 600 to 647 and 649, the commissioner may examine the affairs and condition of any licensee or, permittee, or registrant under chs. 600 to 647 and 649 or applicant for a license or, permit, or registration of any person or organization of persons doing or in process of organizing to do an insurance business in this state, and of any advisory organization serving any of the foregoing in this state.

AB114,8 Section 8. 609.83 of the statutes is amended to read:

AB114,6,15 609.83 Coverage of drugs and devices. Limited service health organizations, preferred provider plans, and defined network plans are subject to ss. 632.853, 632.861, and 632.895 (16t).

AB114,9 Section 9 . 616.09 (1) (a) 2. of the statutes is amended to read:

AB114,6,20 616.09 (1) (a) 2. Plans authorized under s. 616.06 are subject to s. 610.21, 1977 stats., s. 610.55, 1977 stats., s. 610.57, 1977 stats., and ss. 628.34 to 628.39, 1977 stats., to chs. 600, 601, 620, 625, 627 and 645, to ss. 632.72, 632.755, 632.86 632.861 and 632.87 and to this subchapter except s. 616.08.

AB114,10 Section 10 . 628.36 (2m) (a) 2s. of the statutes is created to read:

AB114,6,23 628.36 (2m) (a) 2s. “Pharmacy benefit manager” has the meaning given in s. 649.01 (6).

AB114,11 Section 11 . 628.36 (2m) (e) 1. of the statutes is amended to read:

AB114,7,10 628.36 (2m) (e) 1. A health maintenance organization, limited service health organization or, preferred provider plan, or pharmacy benefit manager that provides or administers coverage of pharmaceutical services when performed by one or more pharmacists who are selected by the organization or , plan, or pharmacy benefit manager but who are not full-time salaried employees or partners of the organization or, plan, or pharmacy benefit manager shall provide an annual period of at least 30 days during which any pharmacist registered under ch. 450 may elect to participate in the health maintenance organization, limited service health organization or, preferred provider plan, or coverage administered by a pharmacy benefit manager under its terms as a selected provider for at least one year.

AB114,12 Section 12 . 632.86 of the statutes is repealed.

AB114,13 Section 13 . 632.861 of the statutes is created to read:

AB114,7,14 632.861 Prescription drug charges; choice of provider. (1) Definitions. In this section:

AB114,7,15 (a) “Disability insurance policy” has the meaning given in s. 632.895 (1) (a).

AB114,7,16 (b) “Pharmacist” has the meaning given in s. 450.01 (15).

AB114,7,17 (c) “Pharmacy benefit manager” has the meaning given in s. 649.01 (6).

AB114,7,18 (d) “Prescribed drug or device” has the meaning given in s. 450.01 (18).

AB114,7,19 (e) “Prescription drug benefit” has the meaning given in s. 649.01 (8).

AB114,7,20 (f) “Self-insured health plan” has the meaning given in s. 632.85 (1) (c).

AB114,8,2 (2) Allowing disclosures. No disability insurance policy or self-insured health plan that provides a prescription drug benefit may include in a contract for pharmacy services, or allow a pharmacy benefit manager or another entity to include in a contract for pharmacy services, a provision that prohibits or penalizes, including by increased utilization review, reduced reimbursement, or other financial disincentives, a disclosure of any of the following by a pharmacist to an individual purchasing a prescribed drug or device:

AB114,8,3 (a) The cost of the prescribed drug or device to the individual.

AB114,8,6 (b) The availability of any therapeutically equivalent alternative prescribed drugs or devices or alternative methods of purchasing the prescribed drug or device, including paying cash, that are less expensive to the individual.

AB114,8,11 (3) Cost sharing limitation. An insurer, self-insured health plan, or a pharmacy benefit manager may not require a person who is covered under a disability insurance policy or self-insured health plan to pay at the point of sale for a covered prescription drug an amount greater than the lowest of all of the following amounts:

AB114,8,12 (a) The applicable copayment for the prescription drug.

AB114,8,13 (b) The allowable claim amount for the prescription drug.

AB114,8,17 (c) The amount a person who is covered under the disability insurance policy or plan would pay for the prescription drug if the person purchased the prescription drug without using a disability insurance policy or any other source of prescription drug benefits or discounts.

AB114,8,19 (d) The amount the pharmacist or pharmacy is reimbursed for the prescription drug from the pharmacy benefit manager or insurer.

AB114,9,2 (4) Choice of provider; penalty prohibited. An insurer, self-insured health plan, or pharmacy benefit manager is prohibited from requiring or penalizing a person who is covered under a disability insurance policy or self-insured health plan to use or for not using a specific retail, specific mail order, or other specific pharmacy provider within the network of pharmacy providers under the policy or plan. A prohibited penalty under this subsection includes an increase in premium, deductible, copayment, or coinsurance.

AB114,9,10 (5) Drug substitution. (a) A disability insurance policy that offers a prescription drug benefit or self-insured health plan or a pharmacy benefit manager acting on behalf of a disability insurance policy or self-insured health plan may not require a person covered under the policy or plan to pay an increased cost-sharing amount for a newly prescribed drug or device if the substitution for the originally prescribed drug or device is suggested by the policy, plan, or pharmacy benefit manager and if the newly prescribed drug or device is therapeutically equivalent to the originally prescribed drug or device being substituted.

AB114,9,16 (b) Every disability insurance policy that offers a prescription drug benefit, self-insured health plan, and pharmacy benefit manager shall develop a procedure to ensure that a policy or plan does not deny coverage to an insured or plan participant during a plan year or subject the insured or plan participant to new exclusions, limitations, deductibles, copayments, or coinsurance under a circumstance that satisfies all of the following:

AB114,9,19 1. The prescribed drug or device was covered under the policy or plan for the insured or plan participant when the insured or plan participant either enrolled in coverage or renewed coverage, whichever is later.

AB114,9,23 2. A health care provider who prescribed the prescribed drug or device states, in writing, that the prescribed drug or device is more suitable for the insured's or plan participant's condition than alternative drugs or devices that are covered under the policy or plan.

AB114,14 Section 14. 632.865 (title) and (1) of the statutes are repealed.

AB114,15 Section 15. 632.865 (2) of the statutes is renumbered 649.30 (1).

AB114,16 Section 16. Chapter 649 of the statutes is created to read:

AB114,10,3 Chapter 649 pharmacy benefit managers

AB114,10,4 649.01 Definitions. In this chapter:

AB114,10,5 (1) “Health benefit plan” has the meaning given in s. 632.745 (11).

AB114,10,6 (2) “Health care provider” has the meaning given in s. 146.81 (1).

AB114,10,9 (3) “Maximum allowable cost” means the maximum amount that a pharmacy benefit manager will pay a pharmacist or pharmacy toward the cost of a prescribed drug or device.

AB114,10,10 (4) “Pharmacist" has the meaning given in s. 450.01 (15).

AB114,10,11 (5) “Pharmacy" means an entity licensed under s. 450.06 or 450.065.

AB114,10,19 (6) “Pharmacy benefit manager" means an entity doing business in this state that contracts to provide claims processing services, to otherwise administer or manage prescription drug benefits, or both on behalf of any insurer or other entity that provides prescription drug benefits to residents of this state. “Pharmacy benefit manager” does not include a health care provider except for a health care provider that is required to obtain a license under s. 450.06, 450.065, or 450.071 and does not include an entity that provides claims processing services or other administration of prescription drug only for the Medical Assistance program under subch. IV of ch. 49.

AB114,10,20 (7) “Prescribed drug or device" has the meaning given in s. 450.01 (18).

AB114,10,22 (8) “Prescription drug benefit" means coverage of or payment or assistance for prescribed drugs or devices.

AB114,10,24 (9) “Registrant" means a pharmacy benefit manager that is registered under this chapter.

AB114,11,4 649.05 Registration of pharmacy benefit managers. (1) (a) Except as provided in par. (b), no person may perform any activities of a pharmacy benefit manager in this state without first registering with the commissioner under this chapter.

AB114,11,6 (b) A pharmacy benefit manager that is an insurer with a current certificate of authority issued under s. 601.04 is not required to register under this section.

AB114,11,8 (c) 1. Any pharmacy benefit manager that is required to obtain a license under s. 450.06, 450.065, or 450.071 shall also register under this chapter.

AB114,11,12 2. If the pharmacy examining board revokes a license that had been granted under s. 450.06, 450.065, or 450.071 to a registrant, the registrant shall notify the commissioner of the revocation. The commissioner shall revoke the registration under this chapter.

AB114,11,14 (2) An applicant for registration as a pharmacy benefit manager shall do all of the following:

AB114,11,16 (a) File with the commissioner an application on a form that the commissioner provides.

AB114,11,17 (b) Pay any registration fee set by the commissioner.

AB114,11,22 (3) The commissioner shall register any pharmacy benefit manager that meets the requirements of this chapter and any requirements the commissioner requires of applicants. Registration under this section is valid for one year unless registration is suspended or revoked. The commissioner may refuse to register any pharmacy benefit manager for which a previous registration was suspended or revoked.

AB114,11,24 649.10 Powers and duties of the commissioner. (1) The commissioner may do any of the following:

AB114,11,25 (a) Promulgate rules necessary to carry out the intent of this chapter.

AB114,12,3 (b) Use authority granted under ss. 601.41, 601.42, 601.43, 601.44, 601.61, 601.62, 601.63, and 601.64 to enforce this chapter, s. 628.36, and ch. 632 as it relates to pharmacy benefit managers.

AB114,12,7 (2) The commissioner shall promulgate rules regarding all of the following using as a model the prescription drug benefit management model act of the National Association of Insurance Commissioners for the 2nd quarter of 2018 to the extent the model act does not conflict with this chapter or ch. 632:

AB114,12,13 (a) Requirements for the development and maintenance of prescription drug formularies and other pharmacy benefit manager procedures, except that the commissioner may not allow a health benefit plan, self-insured health plan, or pharmacy benefit manager to require a consumer to obtain a prescription drug at a mail order pharmacy because the prescription drug requires special handling, provider coordination, or patient education.

AB114,12,17 (b) Information that the pharmacy benefit manager is required to provide to a person who is covered or who seeks to be covered under a health benefit plan or self-insured health plan, a prescriber of prescription drugs, or a pharmacist or pharmacy.

AB114,12,19 (c) Requirements and procedures for a medical exceptions approval process that is standardized among pharmacy benefit managers.

AB114,12,20 (d) Requirements for nondiscrimination in prescription drug benefit design.

AB114,12,22 (e) Requirements for record keeping and reporting by a pharmacy benefit manager.

AB114,12,24 (f) Responsibilities for the pharmacy benefit manager in oversight and contracting.

AB114,13,2 (g) Required disclosures by a health benefit plan or self-insured health plan or a pharmacy benefit manager.

AB114,13,6 649.20 Suspension or revocation of registration; penalty. (1) The commissioner, after a hearing, may suspend or revoke the registration of a registrant, if the registrant or an officer, director, or employee of the registrant does any of the following:

AB114,13,9 (a) Knowingly makes or causes to be made a false statement or misrepresentation of a material fact in an application for registration under s. 649.05.

AB114,13,11 (b) Obtains or attempts to obtain a registration under s. 649.05 through misrepresentation or fraud.

AB114,13,16 (c) Misappropriates or converts for the registrant's own use or improperly withholds insurance premiums or contributions held in a fiduciary capacity, except for any interest earnings received by the pharmacy benefit manager and disclosed to the pharmacist, pharmacy, or health benefit plan sponsor with which the pharmacy benefit manager has a contract to provide services.

AB114,13,18 (d) Commits fraudulent, coercive, or dishonest practices in the transaction of business as a pharmacy benefit manager.

AB114,13,21 (e) Uses, or knowingly permits the use of, any advertisement, promotion, solicitation, representation, proposal, or offer that is untrue, deceptive, or misleading.

AB114,13,24 (f) Has a license or registration suspended, revoked, or not renewed in any other state, district, territory, or province that impacts business conducted in this state.

AB114,14,2 (g) Knowingly violates a requirement of this chapter or ch. 632 or a rule promulgated under this chapter or ch. 632.