AB773: Bill Text

AB773,,58 (cr) “Pharmacy services administrative organization” means an entity that provides contracting and other administrative services to pharmacies or pharmacists to assist them in their interactions with 3rd-party payers, pharmacy benefit managers, pharmaceutical wholesalers, and other entities.

AB773,18 Section 18. 632.865 (2) of the statutes is repealed.

AB773,19 Section 19. 632.865 (2d) of the statutes is created to read:

AB773,,61 632.865 (2d) Pharmaceutical product reimbursements. (ag) Contents of maximum allowable cost lists. A pharmacy benefit manager that uses a maximum allowable cost list shall include all of the following information on the maximum allowable cost list:

AB773,,62 1. The average acquisition cost of each pharmaceutical product and the cost of the pharmaceutical product set forth in the national average drug acquisition cost data published by the federal centers for medicare and medicaid services.

AB773,,63 2. The average manufacturer price of each pharmaceutical product.

AB773,,64 3. The average wholesale price of each pharmaceutical product.

AB773,,65 4. The brand effective rate or generic effective rate for each pharmaceutical product.

AB773,,66 5. Any applicable discount indexing.

AB773,,67 6. The federal upper limit for each pharmaceutical product published by the federal centers for medicare and medicaid services.

AB773,,68 7. The wholesale acquisition cost of each pharmaceutical product.

AB773,,69 8. Any other terms that are used to establish the maximum allowable costs.

AB773,,70 (ar) Regulation of maximum allowable cost lists. A pharmacy benefit manager may place or continue a particular pharmaceutical product on a maximum allowable cost list only if all of the following apply to the pharmaceutical product:

AB773,,71 1. The pharmaceutical product is listed as a drug product equivalent, as defined in s. 450.13 (1e), or is rated by a nationally recognized reference, such as Medi-Span or Gold Standard Drug Database, as “not rated” or “not available.”

AB773,,72 2. The pharmaceutical product is available for purchase by all pharmacies and pharmacists in this state from national or regional pharmaceutical wholesalers operating in this state.

AB773,,73 3. The pharmaceutical product has not been determined by the drug manufacturer to be obsolete.

AB773,,74 (b) Access and update obligations. A pharmacy benefit manager that uses a maximum allowable cost list shall do all of the following:

AB773,,75 1. Provide access to the maximum allowable cost list to each pharmacy or pharmacist subject to the maximum allowable cost list.

AB773,,76 2. Update the maximum allowable cost list on a timely basis.

AB773,,77 3. Update the maximum allowable cost list no later than 7 days after any of the following occurs:

AB773,,78 a. The pharmacy acquisition cost of a pharmaceutical product increases by 10 percent or more from at least 60 percent of the pharmaceutical wholesalers doing business in this state.

AB773,,79 b. There is a change in the methodology on which the maximum allowable cost list is based or in the value of a variable involved in the methodology.

AB773,,80 4. Provide a process for a pharmacy or pharmacist subject to the maximum allowable cost list to receive prompt notification of an update to the maximum allowable cost list.

AB773,,81 (c) Appeal process. 1. A pharmacy benefit manager that uses a maximum allowable cost list shall provide a process for a pharmacy or pharmacist to appeal and resolve disputes regarding claims that the maximum payment amount for a pharmaceutical product is below the pharmacy acquisition cost.

AB773,,82 2. A pharmacy benefit manager required to provide an appeal process under subd. 1. shall do all of the following:

AB773,,83 a. Provide a dedicated telephone number and email address or website that a pharmacy or pharmacist may use to submit an appeal.

AB773,,84 b. Allow a pharmacy or pharmacist to submit an appeal directly on the pharmacy’s or pharmacist’s own behalf.

AB773,,85 c. Allow a pharmacy services administrative organization to submit an appeal on behalf of a pharmacy or pharmacist.

AB773,,86 d. Provide at least 7 business days after a customer transaction for a pharmacy or pharmacist to submit an appeal under this paragraph concerning a pharmaceutical product involved in the transaction.

AB773,,87 3. A pharmacy benefit manager that receives an appeal from or on behalf of a pharmacy or pharmacist under this paragraph shall resolve the appeal and notify the pharmacy or pharmacist of the pharmacy benefit manager’s determination no later than 7 business days after the appeal is received by doing any of the following:

AB773,,88 a. If the pharmacy benefit manager grants the relief requested in the appeal, the pharmacy benefit manager shall make the requested change in the maximum allowable cost; allow the pharmacy or pharmacist to reverse and rebill the relevant claim; provide to the pharmacy or pharmacist the national drug code number published in a directory by the federal food and drug administration on which the increase or change is based; and make the change effective for each similarly situated pharmacy or pharmacist subject to the maximum allowable cost list.

AB773,,89 b. If the pharmacy benefit manager denies the relief requested in the appeal, the pharmacy benefit manager shall provide to the pharmacy or pharmacist a reason for the denial, the national drug code number published in a directory by the federal food and drug administration for the pharmaceutical product to which the claim relates, and the name of a national or regional pharmaceutical wholesaler operating in this state that has the pharmaceutical product currently in stock at a price below the amount specified in the pharmacy benefit manager’s maximum allowable cost list.

AB773,,90 4. Notwithstanding subd. 3. b., a pharmacy benefit manager may not deny a pharmacy’s or pharmacist’s appeal under this paragraph if the relief requested in the appeal relates to the maximum allowable cost for a pharmaceutical product that is not available for the pharmacy or pharmacist to purchase at a cost that is below the pharmacy acquisition cost from the pharmaceutical wholesaler from which the pharmacy or pharmacist purchases the majority of pharmaceutical products for resale. If this subdivision applies, the pharmacy benefit manager shall revise the maximum allowable cost list to increase the maximum allowable cost for the pharmaceutical product to an amount equal to or greater than the pharmacy’s or pharmacist’s pharmacy acquisition cost and allow the pharmacy or pharmacist to reverse and rebill each claim affected by the pharmacy’s or pharmacist’s inability to procure the pharmaceutical product at a cost that is equal to or less than the maximum allowable cost that was the subject of the pharmacy’s or pharmacist’s appeal.

AB773,,91 (d) Affiliated reimbursements. A pharmacy benefit manager may not reimburse a pharmacy or pharmacist in this state an amount less than the amount that the pharmacy benefit manager reimburses a pharmacy benefit manager affiliate for providing the same pharmaceutical product. The reimbursement amount shall be calculated on a per unit basis based on the same generic product identifier or generic code number, if applicable.

AB773,,92 (e) Declining to dispense. A pharmacy or pharmacist may decline to provide a pharmaceutical product to an individual or pharmacy benefit manager if, as a result of the applicable maximum allowable cost list, the pharmacy or pharmacist would be paid less than the pharmacy acquisition cost of the pharmacy or pharmacist providing the pharmaceutical product.

AB773,20 Section 20. 632.865 (2h) of the statutes is created to read:

AB773,,94 632.865 (2h) Professional dispensing fees. A pharmacy benefit manager shall pay a pharmacy or pharmacist a professional dispensing fee at a rate not less than is paid by this state under the medical assistance program under subch. IV of ch. 49 for each pharmaceutical product that the pharmacy or pharmacist dispenses to an individual. The fee shall be calculated on a per unit basis based on the same generic product identifier or generic code number, if applicable. The pharmacy benefit manager shall pay the professional dispensing fee in addition to the amount the pharmacy benefit manager reimburses the pharmacy or pharmacist for the cost of the pharmaceutical product that the pharmacy or pharmacist dispenses to the individual.

AB773,21 Section 21. 632.865 (2p) of the statutes is created to read:

AB773,,96 632.865 (2p) Pharmacy benefit manager-imposed fees prohibited. A pharmacy benefit manager may not assess, charge, or collect any form of remuneration that passes from a pharmacy or pharmacist to the pharmacy benefit manager, including claim-processing fees, performance-based fees, network-participation fees, or accreditation fees.

AB773,22 Section 22. 632.865 (2t) of the statutes is created to read:

AB773,,98 632.865 (2t) Fiduciary duty and disclosures to health benefit plan sponsors. (a) A pharmacy benefit manager owes a fiduciary duty to the health benefit plan sponsor to act according to the health benefit plan sponsor’s instructions and in the best interests of the health benefit plan sponsor.

AB773,,99 (b) A pharmacy benefit manager shall annually provide, no later than the date and using the method prescribed by the commissioner by rule, the health benefit plan sponsor with all of the following information from the previous calendar year:

AB773,,100 1. The indirect profit received by the pharmacy benefit manager from owning any interest in a pharmacy or service provider.

AB773,,101 2. Any payment made by the pharmacy benefit manager to a consultant or broker who works on behalf of the health benefit plan sponsor.

AB773,,102 3. From the amounts received from all drug manufacturers, the amounts retained by the pharmacy benefit manager, and not passed through to the health benefit plan sponsor, that are related to the health benefit plan sponsor’s claims or bona fide service fees.

AB773,,103 4. The amounts, including pharmacy access and audit recovery fees, received from all pharmacies and pharmacists that are in the pharmacy benefit manager’s network or have a contract to be in the network and, from these amounts, the amount retained by the pharmacy benefit manager and not passed through to the health benefit plan sponsor.

AB773,23 Section 23. 632.865 (4) of the statutes is renumbered 632.865 (4) (a).

AB773,24 Section 24. 632.865 (4) (b) of the statutes is created to read:

AB773,,106 632.865 (4) (b) A pharmacy benefit manager may not use any certification or accreditation requirement as a determinant of pharmacy network participation that is inconsistent with, more stringent than, or in addition to the federal requirements for licensure as a pharmacy and the requirements for licensure as a pharmacy under s. 450.06 or 450.065.

AB773,25 Section 25. 632.865 (5) (e) of the statutes is repealed.

AB773,26 Section 26. 632.865 (5d), (5h), (5p) and (5t) of the statutes are created to read:

AB773,,109 632.865 (5d) Discriminatory reimbursement prohibited. (a) In this subsection, “3rd-party payer” means an entity, other than a patient or health care provider, that reimburses for and manages health care expenses.

AB773,,110 (b) A pharmacy benefit manager may not do any of the following:

AB773,,111 1. Refuse to reimburse a 340B covered entity or a pharmacy or pharmacist contracted with a 340B covered entity for dispensing 340B drugs.

AB773,,112 2. Impose requirements or restrictions on 340B covered entities or pharmacies or pharmacists contracted with 340B covered entities that are not imposed on other entities, pharmacies, or pharmacists.

AB773,,113 3. Reimburse a 340B covered entity or a pharmacy or pharmacist contracted with a 340B covered entity for a 340B drug at a rate lower than the amount paid for the same drug to pharmacies or pharmacists that are not 340B covered entities or pharmacies or pharmacists contracted with a 340B covered entity.

AB773,,114 4. Assess a fee, charge back, or other adjustment against a 340B covered entity or a pharmacy or pharmacist contracted with a 340B covered entity after a claim has been paid or adjudicated.

AB773,,115 5. Restrict the access of a 340B covered entity or a pharmacy or pharmacist contracted with a 340B covered entity to a 3rd-party payer’s pharmacy network solely because the 340B covered entity or the pharmacy or pharmacist contracted with a 340B covered entity participates in the 340B drug pricing program under 42 USC 256b.

AB773,,116 6. Require a 340B covered entity or a pharmacy or pharmacist contracted with a 340B covered entity to contract with a specific pharmacy or pharmacist or health benefit plan in order to access a 3rd-party payer’s pharmacy network.

AB773,,117 7. Impose a restriction or an additional charge on a patient who obtains a 340B drug from a 340B covered entity or a pharmacy or pharmacist contracted with a 340B covered entity.

AB773,,118 8. Restrict the methods by which a 340B covered entity or a pharmacy or pharmacist contracted with a 340B covered entity may dispense or deliver 340B drugs.

AB773,,119 9. Require a 340B covered entity or a pharmacy or pharmacist contracted with a 340B covered entity to share pharmacy bills or invoices with a pharmacy benefit manager, a 3rd-party payer, or a health benefit plan.

AB773,,120 (5h) Regulation of pharmacy networks and individual choice. All of the following apply to a pharmacy benefit manager that sells access to networks of pharmacies or pharmacists that operate in this state:

AB773,,121 (a) The pharmacy benefit manager shall allow a participant or beneficiary of a pharmacy benefits plan or program that the pharmacy benefit manager serves to use any pharmacy or pharmacist in this state that is licensed to dispense the pharmaceutical product that the participant or beneficiary seeks to obtain, provided that the pharmacy or pharmacist accepts the same terms and conditions that the pharmacy benefit manager has established for at least one of the networks of pharmacies or pharmacists the pharmacy benefit manager has established to serve individuals in this state.

AB773,,122 (b) The pharmacy benefit manager may establish a preferred network of pharmacies or pharmacists and a nonpreferred network of pharmacies or pharmacists, but the pharmacy benefit manager may not prohibit a pharmacy or pharmacist from participating in either type of network in this state, provided that the pharmacy or pharmacist is licensed by this state and the federal government and accepts the same terms and conditions that the pharmacy benefit manager has established for other pharmacies or pharmacists participating in the network that the pharmacy or pharmacist wants to join.

AB773,,123 (c) The pharmacy benefit manager may not charge a participant or beneficiary of a pharmacy benefits plan or program that the pharmacy benefit manager serves a different copayment obligation or additional fee, or provide any inducement or financial incentive, for the participant or beneficiary to use a pharmacy or pharmacist in a particular network of pharmacies or pharmacists the pharmacy benefit manager has established to serve individuals in this state.

AB773,,124 (5p) Gag clauses prohibited. A pharmacy benefit manager may not prohibit a pharmacy or pharmacist that dispenses a pharmaceutical product from, nor may a pharmacy benefit manager penalize the pharmacy or pharmacist for, informing an individual about the cost of the pharmaceutical product, the amount in reimbursement that the pharmacy or pharmacist receives for dispensing the pharmaceutical product, the cost and clinical efficacy of a less expensive alternative to the pharmaceutical product, or any difference between the cost to the individual under the individual’s pharmacy benefits plan or program and the cost to the individual if the individual purchases the pharmaceutical product without making a claim for benefits under the individual’s pharmacy benefits plan or program.

AB773,,125 (5t) Exclusion of pharmacies prohibited. No pharmacy benefit manager, 3rd-party payer, or health benefit plan may exclude a pharmacy or pharmacist from its network because the pharmacy or pharmacist serves less than a certain portion of the population of the state or serves a population living with certain health conditions.

AB773,27 Section 27. 632.865 (6) (bm) of the statutes is created to read:

AB773,,127 632.865 (6) (bm) Requirements of audits. An entity that conducts audits of pharmacists of pharmacies shall ensure all of the following:

AB773,,128 1. Each pharmacist or pharmacy audited by the entity is audited under the same standards and parameters as other similarly situated pharmacists or pharmacies audited by the entity.

AB773,,129 2. The entity randomizes the prescriptions that the entity audits and the entity audits the same number of prescriptions in each prescription benefit tier.

AB773,,130 3. Each audit of a prescription reimbursed under Part D of Medicare under 42 USC 1395w-101 et seq. is conducted separately from audits of prescriptions reimbursed under other policies or plans.

AB773,28 Section 28. 632.865 (6) (c) 3. of the statutes is amended to read:

AB773,,132 632.865 (6) (c) 3. Deliver to the pharmacist or pharmacy a final audit report, which may be delivered electronically, 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. The final audit report under this subdivision shall include specific documentation of any alleged errors and shall include any response provided to the auditor by the pharmacy or pharmacist and consider and address the pharmacy’s or pharmacist’s response.

AB773,29 Section 29. 632.865 (6) (c) 3m. of the statutes is created to read:

AB773,,134 632.865 (6) (c) 3m. If an entity delivers to the pharmacist or pharmacy a preliminary report of the audit or final audit report that references a billing code, drug code, or other code associated with audits, the entity shall provide an electronic link to a plain language explanation of the code.

AB773,30 Section 30. 632.865 (6g) of the statutes is created to read:

AB773,,136 632.865 (6g) Recoupment. (a) No pharmacy benefit manager may recoup reimbursement made to a pharmacist or pharmacy for errors that have no actual financial harm to an enrollee, policy, or plan unless the error is the result of the pharmacist or pharmacy failing to comply with a formal corrective action plan.

AB773,,137 (b) No pharmacy benefit manager may use extrapolation in calculating reimbursements that it may recoup. The finding of errors for which reimbursement will be recouped shall be based on an actual error in reimbursement and not on a projection of the number of patients served having a similar diagnosis or on a projection of the number of similar orders or refills for similar prescription drugs.

AB773,,138 (c) A pharmacy benefit manager that recoups any reimbursement made to a pharmacist or pharmacy for an error that was the cause of financial harm shall return the recouped reimbursement to the individual or the policy or plan sponsor who was harmed by the error.

AB773,31 Section 31. 632.865 (6r) of the statutes is created to read:

AB773,,140 632.865 (6r) Quality programs. No pharmacy benefit manager may base any criteria of a quality program in a contract between a pharmacy and a pharmacy benefit manager on a factor for which the pharmacy does not have complete and exclusive control.

AB773,32 Section 32. 632.865 (8) of the statutes is created to read:

AB773,,142 632.865 (8) Retaliation prohibited. (a) In this subsection, “retaliate” includes any of the following actions taken by a pharmacy benefit manager:

AB773,,143 1. Terminating or refusing to renew a contract with a pharmacy or pharmacist.

AB773,,144 2. Subjecting a pharmacy or pharmacist to increased audits.

AB773,,145 3. Failing to promptly pay a pharmacy or pharmacist any money the pharmacy benefit manager owes to the pharmacy or pharmacist.

AB773,,146 (b) A pharmacy benefit manager may not retaliate against a pharmacy or pharmacist for reporting an alleged violation of this section or for exercising a right or remedy under this section.