1. The indirect profit received by the pharmacy benefit manager from owning a pharmacy or service provider.
2. Any payments made to a consultant or broker who works on behalf of the plan sponsor.
3. From the amounts received from drug manufacturers, the amounts retained by the pharmacy benefit manager that are related to the plan sponsor’s claims or bona fide service fees.
4. The amounts received from network pharmacies and the amount retained by the pharmacy benefit manager.
Licensure of pharmacy benefit management brokers and consultants
The bill requires an individual who is acting as a pharmacy benefit management broker or consultant or any other individual who procures the services of a pharmacy benefit manager on behalf of a client to be licensed by OCI. The bill allows OCI to promulgate administrative rules to establish criteria, procedures, and fees for licensure. A pharmacy benefit manager, as defined under current law, is an entity that contracts to administer or manage prescription drug benefits on behalf of an insurer or other entity that provides prescription drug benefits.
Prescription drug affordability review board
The bill creates a prescription drug affordability review board, whose purpose is to protect Wisconsin residents and other stakeholders from the high costs of prescription drugs. The board consists of the commissioner of insurance and the following members, all of whom are appointed by the governor for four-year terms:
1. Two members who represent the pharmaceutical drug industry, at least one of whom is a licensed pharmacist.
2. Two members who represent the health insurance industry.
3. Two members who represent the health care industry, at least one of whom is a licensed practitioner.
4. Two members who represent the interests of the public.
The bill requires the board to meet in open session at least four times per year to review prescription drug pricing information. The board must provide at least two weeks’ public notice of its meetings, make the meeting’s materials publicly available at least one week prior to meeting, and provide the opportunity for public comment. The bill imposes conflict of interest requirements for the board relating to recusal and public disclosure of certain conflicts. The bill directs the board to access and assess drug pricing information, to the extent practicable, by accessing and assessing information from other states, by assessing spending for the drug in Wisconsin, and by accessing other available pricing information.
Under the bill, the board must conduct drug cost affordability reviews. The first step in the reviews is for the board to identify prescription drugs whose launch wholesale acquisition cost exceeds specified thresholds, prescription drugs whose increase in wholesale acquisition cost exceeds specified thresholds, and other prescription drugs that may create affordability challenges for the health care system in Wisconsin. For each identified prescription drug, the board must determine whether to conduct an affordability review by seeking stakeholder input and by considering the average patient cost share for the drug. During an affordability review, the board must determine whether use of the prescription drug that is fully consistent with the labeling approved by the federal Food and Drug Administration or standard medical practice has led or will lead to an affordability challenge for the health care system in Wisconsin. In making this determination, the bill requires the board to consider a variety of factors, which include the following:
1. The drug’s wholesale acquisition cost.
2. The average monetary price concession, discount, or rebate the manufacturer provides, or is expected to provide, for the drug to health plans.
3. The total amount of price concessions, discounts, and rebates the manufacturer provides to each pharmacy benefit manager for the drug.
4. The price at which therapeutic alternatives have been sold and the average monetary concession, discount, or rebate the manufacturer provides, or is expected to provide, to health plan payors and pharmacy benefit managers for therapeutic alternatives.
5. The costs to health plans based on patient access consistent with federal labeled indications and recognized standard medical practice.
6. The impact on patient access resulting from the drug’s cost relative to insurance benefit design.
7. The current or expected dollar value of drug-specific patient access programs that are supported by the manufacturer.
8. The relative financial impacts to health, medical, or social services costs that can be quantified and compared to baseline effects of existing therapeutic alternatives.
9. The average patient copay or other cost sharing for the drug.
If the board determines that a prescription drug will lead to an affordability challenge, the bill directs the board to establish an upper payment limit for that drug that applies to all purchases and payor reimbursements of the drug dispensed or administered to individuals in this state. In establishing the upper payment limit, the board must consider the cost of administering the drug, the cost of delivering it to consumers, and other relevant administrative costs. For certain drugs, the board must solicit information from the manufacturer regarding the price increase and, if the board determines that the price increase is not a result of the need for increased manufacturing capacity or other effort to improve patient access during a public health emergency, the board must establish an upper payment limit equal to the drug’s cost prior to the price increase.
Cost-sharing cap on insulin
The bill prohibits each health insurance policy and governmental self-insured health plan that covers insulin and imposes cost sharing on prescription drugs from imposing cost sharing on insulin in an amount that exceeds $35 for a one-month supply. Current law requires each health insurance policy that provides coverage of expenses incurred for treatment of diabetes to provide coverage for specified expenses and items, including insulin. The required coverage under current law for certain diabetes treatments other than insulin infusion pumps is subject to the same exclusions, limitations, deductibles, and coinsurance provisions of the policy as other covered expenses. The bill’s cost-sharing limitation on insulin supersedes the specification that the exclusions, limitations, deductibles, and coinsurance are the same as for other coverage.
Insulin safety net programs
The bill requires insulin manufacturers to establish a program under which qualifying residents of this state who are in urgent need of insulin and are uninsured or have limited insurance coverage can be dispensed insulin at a pharmacy. Under the program, if a qualifying individual in urgent need of insulin provides a pharmacy with a form attesting that the individual meets the program’s eligibility requirements, specified proof of residency, and a valid insulin prescription, the pharmacy must dispense a 30-day supply of insulin to the individual and may charge the individual a copayment of no more than $35. The pharmacy may submit an electronic payment claim for the insulin’s acquisition cost to the manufacturer or agree to receive a replacement of the same insulin in the amount dispensed.
The bill also requires that each insulin manufacturer establish a patient assistance program to make insulin available to any qualifying resident of this state who, among other requirements, is uninsured or has limited insurance coverage and whose family income does not exceed 400 percent of the federal poverty line. Under the bill, an individual must apply to participate in a manufacturer’s program. If the manufacturer determines that the individual meets the program’s eligibility requirements, the manufacturer must issue the individual a statement of eligibility, which is valid for 12 months and may be renewed. Under the bill, if an individual with a statement of eligibility and valid insulin prescription requests insulin from a pharmacy, the pharmacy must submit an order to the manufacturer, who must then provide a 90-day supply of insulin at no charge to the individual or pharmacy. The pharmacy may charge the individual a copayment of no more than $50. Under the bill, a manufacturer is not required to issue a statement of eligibility if the individual has prescription drug coverage through an individual or group health plan and the manufacturer determines that the individual’s insulin needs are better addressed through the manufacturer’s copayment assistance program. In such case, the manufacturer must provide the individual with the necessary drug coupons, and the individual may not be required to pay more than a $50 copayment for a 90-day supply of insulin.
Under the bill, if the manufacturer determines that an individual is not eligible for the patient assistance program, the individual may file an appeal with OCI. The bill directs OCI to establish procedures for deciding appeals. Under the bill, OCI must issue a decision within 10 days, and that decision is final.
The bill requires that insulin manufacturers annually report to OCI certain information, including the number of individuals served and the cost of insulin dispensed under the programs, and that OCI annually report to the governor and the legislature on the programs. The bill also directs OCI to conduct public outreach and develop an information sheet about the programs, conduct satisfaction surveys of individuals and pharmacies that participate in the programs, and report to the governor and the legislature on the surveys by July 1, 2026. Additionally, the bill requires that OCI develop a training program for health care navigators to assist individuals in accessing appropriate long-term insulin options and maintain a list of trained navigators.
The bill provides that a manufacturer that violates the bill’s provisions may be required to forfeit not more than $200,000 per month of violation, which increases to $400,000 per month if the manufacturer continues to be in violation after six months and to $600,000 per month if the manufacturer continues to be in violation after one year. The bill’s requirements do not apply to manufacturers with annual insulin sales revenue in this state of no more than $2,000,000 or to insulin that costs less than a specified dollar amount.
Application of manufacturer discounts
Health insurance policies and plans often apply deductibles and out-of-pocket maximum amounts to the benefits covered by the policy or plan. A deductible is an amount that an enrollee in a policy or plan must pay out of pocket before attaining the full benefits of the policy or plan. An out-of-pocket maximum amount is a limit specified by a policy or plan on the amount that an enrollee pays, and once that limit is reached, the policy or plan covers the benefit entirely. The bill requires health insurance policies that offer prescription drug benefits and self-insured health plans to apply the amount of any discounts that a manufacturer of a brand name drug provides to reduce the amount of cost sharing that is charged to an enrollee for those brand name drugs to the enrollee’s deductible and out-of-pocket maximum amount. That requirement applies for brand name drugs that have no generic equivalent and for brand name drugs that have a generic equivalent but that the enrollee has prior authorization or physician approval to obtain.
Reimbursement to federal drug pricing program participants
The bill prohibits any person from reimbursing certain entities that participate in the federal drug pricing program, known as the 340B program, for a drug subject to an agreement under the program at a rate lower than that paid for the same drug to pharmacies that have a similar prescription volume. The bill also prohibits a person from imposing any fee, charge back, or other adjustment on the basis of the entity’s participation in the 340B program. The entities covered by the prohibitions under the bill are federally qualified health centers, critical access hospitals, and grantees under the federal Ryan White HIV/AIDS program, as well as these entities’ pharmacies and any pharmacy with which any of the entities have contracted to dispense drugs through the 340B program. The bill allows the commissioner to promulgate administrative rules to establish a minimum reimbursement rate for entities that participate in the 340B program.
Value-based diabetes medication pilot project
The bill directs OCI to develop a pilot project under which a pharmacy benefit manager and a pharmaceutical manufacturer are directed to create a value-based, sole-source arrangement to reduce the costs of prescription diabetes medication. The bill allows OCI to promulgate administrative rules to implement the pilot project.
Pharmacy services administrative organizations
The bill requires that a pharmacy services administrative organization (PSAO) be licensed by OCI. Under the bill, a PSAO is an entity operating in Wisconsin that does all of the following:
1. Contracts with an independent pharmacy to conduct business on the pharmacy’s behalf with a third-party payer.
2. Provides at least one administrative service to an independent pharmacy and negotiates and enters into a contract with a third-party payer or pharmacy benefit manager on the pharmacy’s behalf.
The bill defines “independent pharmacy” to mean a licensed pharmacy operating in this state that is under common ownership with no more than two other pharmacies. “Administrative service” is defined to mean assisting with claims or audits, providing centralized payment, performing certification in a specialized care program, providing compliance support, setting flat fees for generic drugs, assisting with store layout, managing inventory, providing marketing support, providing management and analysis of payment and drug dispensing data, or providing resources for retail cash cards. The bill defines “third-party payer” to mean an entity operating in this state that pays or insures health, medical, or prescription drug expenses on behalf of beneficiaries. The bill uses the current law definition of “pharmacy benefit manager,” which is an entity doing business in this state that contracts to administer or manage prescription drug benefits on behalf of an insurer or other entity that provides prescription drug benefits to Wisconsin residents.
To obtain the license required by the bill, a person must apply to OCI and provide the contact information for the applicant and a contact person, evidence of financial responsibility of at least $1,000,000, and any other information required by the commissioner. Under the bill, the license fee is set by the commissioner, and the term of a license is two years.
The bill also requires that a PSAO disclose to OCI the extent of any ownership or control by an entity that provides pharmacy services; provides prescription drug or device services; or manufactures, sells, or distributes prescription drugs, biologicals, or medical devices. The PSAO must notify OCI within five days of any material change in its ownership or control related to such an entity.
Licensure of pharmaceutical representatives
The bill requires a pharmaceutical representative to be licensed by OCI and to display the pharmaceutical representative’s license during each visit with a health care professional. The bill defines “pharmaceutical representative” to mean an individual who markets or promotes pharmaceuticals to health care professionals on behalf of a pharmaceutical manufacturer for compensation. The term of a license issued under the bill is one year, and the license is renewable. Under the bill, the license fee is set by the commissioner of insurance. The bill directs the commissioner to promulgate administrative rules to implement the bill’s requirements, including rules that require pharmaceutical representatives to complete continuing educational coursework as a condition of licensure. An individual who violates any of the requirements under the bill is subject to a fine, and the individual’s license may be suspended or revoked.
Moneys from professional regulation used for general program operations
The bill credits to the appropriation account for OCI’s general program operations all moneys received from the regulation of pharmacy benefit managers, pharmacy benefit management brokers, pharmacy benefit management consultants, PSAOs, and pharmaceutical representatives.
Coverage of infertility services
The bill requires health insurance policies and self-insured governmental health plans that cover medical or hospital expenses to cover diagnosis of and treatment for infertility and standard fertility preservation services. Coverage required under the bill must include at least four completed egg retrievals with unlimited embryo transfers, in accordance with certain guidelines, and single embryo transfer is allowed when recommended and medically appropriate. Policies and plans are prohibited from imposing an exclusion, limitation, or other restriction on coverage of medications of which the bill requires coverage that is not imposed on any other prescription medications covered under the policy or plan. Similarly, policies and plans may not impose any exclusion, limitation, cost-sharing requirement, benefit maximum, waiting period, or other restriction on diagnosis, treatment, or services for which coverage is required under the bill that is different from any exclusion, limitation, cost-sharing requirement, benefit maximum, waiting period, or other restriction imposed on benefits for other services. Also, policies and plans may not impose an exclusion, limitation, or other restriction on diagnosis, treatment, or services for which coverage is required under the bill on the basis that an insured person participates in fertility services provided by or to a third party.
Coverage of treatment or services provided by qualified treatment trainees
The bill prohibits any health insurance plan from excluding coverage for mental health or behavioral health treatment or services provided by a qualified treatment trainee within the scope of the qualified treatment trainee’s education and training if the health insurance plan covers the mental health or behavioral health treatment or services when provided by another health care provider. “Qualified treatment trainee” is defined under current law to mean either a graduate student who is enrolled in an accredited institution in psychology, counseling, marriage and family therapy, social work, nursing, or a closely related field, or a person with a graduate degree from an accredited institution and course work in psychology, counseling, marriage and family therapy, social work, nursing, or a closely related field who has not yet completed the applicable supervised practice requirements described under the administrative code.
Coverage of treatment or services provided by substance abuse counselors
The bill prohibits any health insurance plan from excluding coverage for alcoholism or other drug abuse treatment or services provided by a certified substance abuse counselor within the scope of the substance abuse counselor’s education and training if the health insurance plan covers the alcoholism or other drug abuse treatment or services when provided by another health care provider. “Substance abuse counselor” is defined under current law to mean a substance abuse counselor-in-training, a substance abuse counselor, or a clinical substance abuse counselor.
Telehealth parity
The bill requires health insurance policies and self-insured governmental health plans to cover a treatment or service that is provided through telehealth if the treatment or service is covered by the policy or plan when provided in person. A policy or plan may limit its coverage to those treatments or services that are medically necessary. “Telehealth” is defined in the bill as a practice of health care delivery, diagnosis, consultation, treatment, or transfer of medically relevant data by means of audio, video, or data communications that are used either during a patient visit or consultation or are used to transfer medically relevant data about a patient. A self-insured governmental health plan is a self-funded health plan of the state or a county, city, village, town, or school district.
The bill also sets parameters on the coverage of telehealth treatments and services that is required in the bill. A policy or plan may not subject a telehealth treatment or service to a greater deductible, copayment, or coinsurance than if provided in person. Similarly, a policy or plan may not impose a policy or calendar year or lifetime benefit limit or other maximum limitation or a prior authorization requirement on a telehealth treatment or service that is not imposed on treatments or services provided through manners other than telehealth. A policy or plan also may not place unique location requirements on a telehealth treatment or service. If a policy or plan covers a telehealth treatment or service that has no in-person equivalent, the policy or plan must disclose this in the policy or plan materials.
State-based exchange
The bill directs OCI to establish and operate a state-based health insurance exchange. Under current law, the federal Patient Protection and Affordable Care Act (ACA) requires that an exchange be established in each state to facilitate the purchase of qualified health insurance coverage by individuals and small employers. Under the ACA, a state must operate its own state-based exchange, use the federally facilitated exchange operated by the federal Department of Health and Human Services, or adopt a hybrid approach under which the state operates a state-based exchange but uses the federal platform, known as HealthCare.gov, to handle eligibility and enrollment functions. Wisconsin currently uses the federally facilitated exchange. The bill directs OCI to establish and operate a state-based exchange, first by using the federal platform and then transitioning to a fully state-run exchange. The bill authorizes OCI to enter into any agreement with the federal government necessary to implement those provisions. The bill also requires that OCI impose a user fee on insurers offering plans through the state-based exchange. Under current law, the ACA imposes user fees on insurers offering plans through federally facilitated exchanges and state-based exchanges using the federal platform, which are currently 2.75 percent and 2.25 percent of total monthly premiums, respectively. The bill authorizes OCI to impose a user fee at the following rates:
1. For any plan year that OCI operates the state-based exchange using the federal platform, the rate is 0.5 percent.
2. For the first two plan years that OCI operates the fully state-run exchange, the rate is equal to the user fee for the federally facilitated exchanges. For later plan years, the rate is set by OCI by rule.
The bill also creates an annual GPR appropriation for OCI’s general program operations and allows OCI to spend up to $1,000,000 from that appropriation in fiscal year 2023-24 for the development of a public option health insurance plan.
Insurer network adequacy standards
The bill allows OCI to promulgate administrative rules to establish minimum network time and distance standards and minimum network wait-time standards for defined network plans and preferred provider plans. The bill specifies that OCI, in promulgating rules under the bill, must consider standards adopted by the federal Centers for Medicare and Medicaid Services for qualified health plans offered on the federally-facilitated health insurance marketplace established pursuant to the ACA.
Wisconsin Healthcare Stability Plan spending limit
The bill directs the commissioner of insurance to index for inflation the annual maximum expenditure amount under the Wisconsin Healthcare Stability Plan (WIHSP). Under current law, WIHSP makes a reinsurance payment to a health insurance carrier if the claims for an individual who is enrolled in a health benefit plan with that carrier exceed a threshold amount, known as the attachment point, in a benefit year. WIHSP is administered by OCI and operates under specific terms and conditions of a waiver agreement between OCI and the federal Department of Health and Human Services, which was dated July 29, 2018. Currently, the commissioner is limited to spending $230,000,000 for WIHSP from all revenue sources in a year, unless JCF increases the amount.
Beginning in 2025, the bill directs the commissioner to annually adjust the annual expenditure limit based on the increase, if any, in the medical care index of the consumer price index. The bill also specifies that OCI’s authority includes the authority to operate WIHSP under any waiver extension approvals.
Prescription drug importation program
The bill requires the commissioner of insurance, in consultation with persons interested in the sale and pricing of prescription drugs and federal officials and agencies, to design and implement a prescription drug importation program for the benefit of and that generates savings for residents of this state. The bill establishes requirements for the program, including all of the following: 1) the commissioner must designate a state agency to become a licensed wholesale distributor or contract with a licensed wholesale distributor and to seek federal certification and approval to import prescription drugs; 2) the program must comply with certain federal regulations and import from Canadian suppliers only prescription drugs that are not brand-name drugs, have fewer than four competitor drugs in this country, and for which importation creates substantial savings; 3) the commissioner must ensure that prescription drugs imported under the program are not distributed, dispensed, or sold outside of Wisconsin; and 4) the program must have an audit procedure to ensure the program complies with certain requirements specified in the bill. Before submitting the proposed program to the federal government for certification, the commissioner must submit the proposed program to JCF for its approval.
State prescription drug purchasing entity
The bill requires OCI to conduct a study on the viability of creating or implementing a state prescription drug purchasing entity.
Short-term, limited duration plan coverage requirements
The bill sets certain coverage requirements on individual health plans that are short-term, limited duration plans. Under current law, a short-term, limited duration plan is individual health benefit plan coverage that is marketed and designed to provide short-term coverage as a bridge between other coverages and that has a term of not more than 12 months and an aggregate term of all consecutive periods of coverage that does not exceed 18 months. Under current law, an insurer generally must renew individual health coverage at the option of the insured, but an insurer is not required to renew a short-term, limited duration plan.
The bill requires an insurer that offers a short-term, limited duration plan to accept each individual who applies for coverage, regardless of whether the individual has a preexisting condition. The bill also prohibits a short-term, limited duration plan from imposing a preexisting condition exclusion. Under current law, a short-term, limited duration plan may impose a preexisting condition exclusion, but the plan must reduce the length of time of the exclusion by the aggregate duration of the insured’s consecutive periods of coverage. Under current law, a preexisting condition exclusion is a period of time during which a plan will not cover a medical condition for which the insured received some medical attention before the effective date of coverage.
Under the bill, an insurer that offers a short-term, limited duration plan may not vary premium rates for a specific plan except on the basis of 1) whether the plan covers an individual or a family; 2) area in this state; 3) age; and 4) tobacco use, as specified in the bill. An insurer that offers a short-term, limited duration plan is prohibited under the bill from establishing rules for the eligibility of any individual to enroll based on certain health status-related factors, which are specified in the bill, and from requiring an enrollee to pay a greater premium, contribution, deductible, copayment, or coinsurance amount than is required of a similarly situated enrollee based on a health status-related factor. Under the bill, a short-term, limited duration plan may not establish lifetime limits or limits for the duration of the coverage on the dollar value of benefits for an enrollee or a dependent of an enrollee under the plan.
Finally, the bill reduces the maximum allowable term of a short-term, limited duration plan from 12 months to three months and reduces the maximum aggregate duration from 18 months to six months.
Eliminate obsolete OCI appropriation
The bill eliminates an obsolete appropriation. The 2021-23 biennial budget act required the transfer of $1,520,300 in each fiscal year of that biennium from the unencumbered balance of the program-revenue-funded general program operations appropriation of OCI to an interagency and intraagency operations appropriation created in the act for the purpose of general program operations. The bill eliminates that appropriation.
JUSTICE
Grant programs
Treatment alternatives and diversion grants
Under current law, DOJ, in collaboration with DOC and DHS, awards grants to counties and tribes that have established qualifying treatment alternatives and diversion (TAD) programs that offer substance abuse or mental health treatment services as alternatives to prosecution or incarceration in order to reduce recidivism, promote public safety, and reduce prison and jail populations.
Under current law, in order to qualify for a TAD grant, a county’s or tribe’s program is required to match 25 percent of the grant and to charge participants a fee to participate. A county or tribe that receives a TAD grant must create an oversight committee to administer and evaluate its program. DOJ is required to make grants available to any county or tribe on a competitive basis every five years. At the end of the five-year grant cycle, DOJ is required to prepare a comprehensive report on the grant program based on annual reports and other data it collects from the counties and tribes.
Under current law, one of the appropriations used to fund the TAD grant program provides that DOJ may use that appropriation to provide a TAD grant to counties that were not a recipient of a TAD grant as of September 23, 2017.
The bill makes several changes to the TAD grant program. Under the bill, a program funded by a TAD grant need not focus solely on alcohol and other drug treatment, but must employ evidence-based practices targeted to the population served by the program. The bill changes the match requirement from 25 percent to 10 percent and changes the competitive grant process to a four-year cycle. The bill allows, but does not require, an eligible program to charge participants a fee for their treatment. The bill also eliminates certain requirements pertaining to exposure of genitals during drug testing. The bill also provides that the appropriation that was formerly limited to providing a TAD grant to a county that had not received one as of September 23, 2017, may be used to provide a TAD grant to a county that is not a recipient of a TAD grant on the effective date of the bill.
Under current law, when a person pleads or is found guilty of certain drug offenses, the court is required to order a substance use assessment. Under current law, the court does not have to order an assessment if the person is already covered by such an order, has recently completed an assessment under such an order, or is participating in a TAD program. The bill specifies that if a person is participating in any evidence-based substance use disorder treatment program as determined by DOJ, regardless of its status relating to the TAD program, the court does not need to order an assessment.
