AB114: Bill Text

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.

AB114,14,5 (2) Any person who performs the activities of a pharmacy benefit manager in this state without a valid registration under s. 649.05 is subject to a forfeiture of $500 for each day of violation.

AB114,14,6 649.30 Pricing transparency; prohibitions; contracts.

AB114,14,8 (2) Prohibitions. A pharmacy benefit manager or a representative of a pharmacy benefit manager may not do any of the following:

AB114,14,12 (a) Unless approved by the commissioner, charge a pharmacist or pharmacy a fee related to the adjudication of a claim, including a fee for receiving and processing a pharmacy claim, developing or managing claims processing services in a pharmacy benefit manager network, or participating in a pharmacy benefit manager network.

AB114,14,16 (b) Unless approved by the commissioner after consulting with the pharmacy examining board, require pharmacist or pharmacy accreditation standards or certification requirements in addition to, more stringent than, or inconsistent with any requirements of the pharmacy examining board.

AB114,14,21 (c) Reimburse a pharmacy or pharmacist in this state an amount less than the amount that the pharmacy benefit manager reimburses an affiliate of the pharmacy benefit manager for providing the same services. To comply with this paragraph, the pharmacy benefit manager shall compare the amounts calculated on a per-unit basis using the same generic product identifier or generic code number.

AB114,14,24 (d) After termination of a pharmacy or pharmacist from a pharmacy benefit network, fail to make payments to a pharmacist or pharmacy for services that were properly rendered and provided before termination.

AB114,15,5 (e) Prohibit, restrict, or limit a pharmacy or pharmacist from disclosing information to the commissioner, law enforcement, or a state or federal governmental official that is investigating or examining a complaint or conducting a review of a pharmacy benefit manager's compliance with the requirements under this section.

AB114,15,10 (3) Conflict of interest; business practices. (a) If a pharmacy benefit manager makes a formulary substitution in which the substitute drug costs more than the originally prescribed drug, the pharmacy benefit manager shall disclose to the health benefit plan sponsor the cost of the drugs and any benefit that accrues, directly or indirectly, to the pharmacy benefit manager related to the substitution.

AB114,15,12 (b) A pharmacy benefit manager may not require that a pharmacy or pharmacist enter into one contract in order to enter into another contract.

AB114,15,16 (c) A pharmacy benefit manager shall notify a health benefit plan sponsor in writing of any activity, policy, or practice of the pharmacy benefit manager that presents a conflict of interest, directly or indirectly, with any requirement of this section.

AB114,15,19 (4) Retroactive claim reduction. A pharmacy benefit manager may not retroactively deny or reduce a pharmacist's or pharmacy's claim after adjudication of the claim unless any of the following is true:

AB114,15,20 (a) The original claim was submitted fraudulently.

AB114,15,22 (b) The payment for the original claim was incorrect because the pharmacy or pharmacist had already been paid for the pharmacy services.

AB114,15,23 (c) The pharmacy services were not rendered by the pharmacist or pharmacy.

AB114,16,2 649.35 Audits of pharmacies or pharmacists. (1) Definition. In this section, “entity” means a defined network plan, as defined in s. 609.01 (1b), insurer, 3rd-party payer, or pharmacy benefit manager or a person acting on behalf of a defined network plan, insurer, 3rd-party payer, or pharmacy benefit manager.

AB114,16,4 (2) Audit procedure requirements. An entity conducting an audit of pharmacist or pharmacy records shall do all of the following:

AB114,16,7 (a) If the audit is an audit on the premises of the pharmacist or pharmacy, notify the pharmacist or pharmacy in writing of the audit at least 2 weeks before conducting the audit.

AB114,16,9 (b) Refrain from auditing a pharmacist or pharmacy within the first 7 days of a month unless the pharmacist or pharmacy consents to an audit during that time.

AB114,16,12 (c) If the audit involves clinical or professional judgement, conduct the audit by or in consultation with a pharmacist licensed in this state or the pharmacy examining board.

AB114,16,14 (d) Limit the audit review to claims submitted no more than 2 years before the date of the audit.

AB114,16,16 (e) Audit each pharmacist or pharmacy under the same standards and parameters as other similarly situated pharmacists or pharmacies.

AB114,16,18 (f) Establish a written appeals process that allows appeals of preliminary and final reports and allows for mediation if either party is dissatisfied with the appeal.

AB114,16,23 (g) Allow the pharmacist or pharmacy to use records of a hospital, physician, or other health care provider to validate the pharmacist's or pharmacy's records and use any prescription that complies with requirements of the pharmacy examining board to validate claims in connection with a prescription, refill of a prescription, or change in prescription.

AB114,16,25 (3) Results of audit. (a) An entity that has conducted an audit of a pharmacist or pharmacy shall do all of the following:

AB114,17,2 1. Deliver to the pharmacist or pharmacy a preliminary report of the audit within 60 days after date of the conclusion of the audit.

AB114,17,5 2. Allow a pharmacist or pharmacy that is the subject of an audit at least 30 days after the date the pharmacist or pharmacy receives the preliminary report to provide documentation to address any discrepancy found in the audit.

AB114,17,8 3. Deliver to the pharmacist or pharmacy a final audit report within 90 days of the date the pharmacist or pharmacy receives the preliminary report or the date of the final appeal of the audit, whichever is later.

AB114,17,11 4. Refrain from assessing a recoupment or other penalty on a pharmacist or pharmacy until the appeal process is exhausted and the final report under subd. 3. is delivered to the pharmacist or pharmacy.

AB114,17,15 5. Base a finding of overpayment or underpayment of a claim 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.

AB114,17,16 6. Exclude dispensing fees from calculations of overpayments.

AB114,17,18 7. Refrain from using extrapolation in calculating the recoupments or penalties for an audit.

AB114,17,20 8. Refrain from charging interest until the final report under subd. 3. has been delivered.

AB114,18,2 (b) If an audit of a pharmacist or pharmacy identifies a clerical or record-keeping error in a required document or record, the pharmacy benefit manager or entity conducting the audit may not request recoupment of funds from the pharmacist or pharmacy based on such an error unless the pharmacy benefit manager or entity proves the pharmacist or pharmacy intended to commit fraud or unless the error by the pharmacist or pharmacy results in actual financial harm to the pharmacy benefit manager, a health benefit plan, or a consumer.

AB114,18,6 (c) Information obtained in an audit under this section is confidential and may not be shared unless the information is required to be shared under state or federal law. An entity conducting an audit may have access to the previous audit reports on a particular pharmacy conducted by the same entity.

AB114,18,9 (d) Any entity that conducts an audit shall provide to the health benefit plan a copy of the final report of the audit and a disclosure of any recoupment amount assessed as a result of the audit.

AB114,18,12 (5) Payment of auditors. A pharmacy benefit manager or entity conducting an audit may not pay an auditor employed by or contracted with the pharmacy benefit manager or entity based on a percentage of the amount recovered in an audit.

AB114,18,14 (6) Applicability. This section does not apply to an investigative audit that is initiated as a result of a credible allegation of fraud or willful misrepresentation.

AB114,18,19 649.40 Transparency reports. (1) Beginning on June 1, 2020, and annually thereafter, every pharmacy benefit manager shall submit to the commissioner, the joint committee on finance, and, under s. 13.172 (3), each standing committee of the legislature with jurisdiction over insurance a report that contains all of the following information from the previous calendar year:

AB114,18,22 (a) The aggregate amount of all rebates that the pharmacy benefit manager received from all pharmaceutical manufacturers by each health benefit plan sponsor and for all health benefit plan sponsors combined.

AB114,18,25 (b) The aggregate administrative fee amount that the pharmacy benefit manager received from all pharmaceutical manufacturers by each health benefit plan sponsor and for all health benefit plan sponsors combined.

AB114,19,4 (c) The aggregate rebate amount that the pharmacy benefit manager received from all pharmaceutical manufacturers but retained and did not pass through to health benefit plan sponsors and the percentage of the aggregate rebate amount that is retained rebates.

AB114,19,8 (2) The commissioner shall publish, within 60 days of receiving the report under sub. (1), on the office's Internet site information from the transparency report submitted under sub. (1). The commissioner shall publish the report information in a manner that does not disclose any trade secrets.

AB114,19,10 649.45 Network adequacy. A pharmacy benefit manager shall do all of the following:

AB114,19,15 (1) Provide a reasonably adequate and accessible pharmacy network for providing prescribed drugs or devices for a health benefit plan that allows convenient patient access to pharmacies within a reasonable distance from a plan participant's residence. A pharmacy benefit manager may not include any mail-order pharmacy in its calculations of network adequacy under this subsection.

AB114,19,19 (2) Submit to the commissioner, at the time and in the manner required by the commissioner, a pharmacy benefit manager network adequacy report describing the pharmacy benefit manager network and accessibility to the network for health benefit plan participants.

AB114,17 Section 17 . Nonstatutory provisions.

AB114,19,25 (1) Pharmacy benefit manager; compliance date. Notwithstanding s. 649.05, a pharmacy benefit manager is not required to register under s. 649.05 or to comply with ch. 649 until the date that is 180 days after the date of the promulgation of rules by the commissioner of insurance under s. 649.10, unless the commissioner specifies a different date on which registration or compliance is required.

AB114,20,13 (2) Rulemaking; reconciliation with step therapy bill. If 2019 Assembly Bill 24 or 2019 Senate Bill 26 is enacted and contains criteria for when a medical exception to a step therapy protocol must be granted, notwithstanding the requirement in s. 649.10 (2) to base rules on the prescription drug benefit management model act of the National Association of Insurance Commissioners for the 2nd quarter of 2018, the commissioner of insurance shall incorporate in rules promulgated under s. 649.10 (2) (c) criteria for granting a medical exception that are identical to the criteria for granting a medical exception in 2019 Assembly Bill 24 or 2019 Senate Bill 26. The commissioner of insurance may incorporate in rules promulgated under s. 649.10 (2) (c) requirements and procedures for a medical exceptions process that do not conflict with 2019 Assembly Bill 24 or 2019 Senate Bill 26. If 2019 Assembly Bill 24 or 2019 Senate Bill 26 is not enacted in the 2019 legislative session, this subsection is void.

AB114,18 Section 18 . Initial applicability.

AB114,20,17 (1) For policies and plans containing provisions inconsistent with this act, this act first applies to policy or plan years beginning on January 1 of the year following the year in which this subsection takes effect.

AB114,20,19 (2) This act first applies to contracts with a pharmacy or pharmacist that are entered into, modified, or renewed on the effective date of this subsection.

AB114,19 Section 19. Effective date.

AB114,20,22 (1) This act takes effect on the first day of the 4th month beginning after publication.

AB114,20,23 (End)