AB7: Bill Text

AB7,10,8 (b) 1. A disability insurance policy, self-insured health plan, or pharmacy benefit manager is not required to provide advanced written notice under par. (a) if the prescription drug that is to be removed or reassigned is any of the following:

AB7,10,9 a. No longer approved by the federal food and drug administration.

AB7,10,12 b. The subject of a notice, guidance, warning, announcement, or other statement from the federal food and drug administration relating to concerns about the safety of the prescription drug.

AB7,10,14 c. Approved by the federal food and drug administration for use without a prescription.

AB7,10,22 2. A disability insurance policy, self-insured health plan, or pharmacy benefit manager is not required to provide advanced written notice under par. (a) if, for the prescription drug that is being removed from the formulary or reassigned to a benefit tier that has a higher deductible, copayment, or coinsurance, the policy, plan, or pharmacy benefit manager adds to the formulary a generic prescription drug that is approved by the federal food and drug administration 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 at any of the following benefit tiers:

AB7,10,24 a. The same benefit tier from which the prescription drug is being removed or reassigned.

AB7,11,2 b. A benefit tier that has a lower deductible, copayment, or coinsurance than the benefit tier from which the prescription drug is being removed or reassigned.

AB7,11,10 (c) A pharmacist or pharmacy shall notify an enrollee in a disability insurance policy or self-insured health 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 a generic prescription drug that is approved by the federal food and drug administration 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 at any of the following benefit tiers:

AB7,11,12 1. The same benefit tier from which the prescription drug is being removed or reassigned.

AB7,11,14 2. A benefit tier that has a lower deductible, copayment, or coinsurance than the benefit tier from which the prescription drug is being removed or reassigned.

AB7,11,21 (d) 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 pharmacist or pharmacy may 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.

AB7,16 Section 16 . 632.865 (1) (a) of the statutes is renumbered 632.865 (1) (aw).

AB7,17 Section 17 . 632.865 (1) (ae) and (ak) of the statutes are created to read:

AB7,11,24 632.865 (1) (ae) “Health benefit plan” has the meaning given in s. 632.745 (11).

AB7,11,25 (ak) “Health care provider” has the meaning given in s. 146.81 (1).

AB7,18 Section 18. 632.865 (1) (c) of the statutes is renumbered 632.865 (1) (c) (intro.) and amended to read:

AB7,12,5 632.865 (1) (c) (intro.) “Pharmacy benefit manager" means an entity doing business in this state that contracts to administer or manage prescription drug benefits on behalf of any of the following:

AB7,12,6 1. An insurer or other.

AB7,12,8 3. Another entity that provides prescription drug benefits to residents of this state.

AB7,19 Section 19 . 632.865 (1) (c) 2. of the statutes is created to read:

AB7,12,10 632.865 (1) (c) 2. A cooperative, as defined in s. 185.01 (2).

AB7,20 Section 20 . 632.865 (1) (dm) of the statutes is created to read:

AB7,12,12 632.865 (1) (dm) “Prescription drug" has the meaning given in s. 450.01 (20).

AB7,21 Section 21 . 632.865 (3) to (7) of the statutes are created to read:

AB7,12,16 632.865 (3) License required. No person may perform any activities of a pharmacy benefit manager without being licensed by the commissioner as an administrator or pharmacy benefit manager under s. 633.14.

AB7,12,23 (4) Accreditation for network participation. A pharmacy benefit manager or a representative of a pharmacy benefit manager shall provide to a pharmacy, within 30 days of receipt of a written request from the pharmacy, a written notice of any certification or accreditation requirements used by the pharmacy benefit manager or its representative as a determinant of network participation. A pharmacy benefit manager or a representative of a pharmacy benefit manager may change its accreditation requirements no more frequently than once every 12 months.

AB7,13,3 (5) Retroactive claim reduction. Unless required otherwise by federal law, 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:

AB7,13,4 (a) The original claim was submitted fraudulently.

AB7,13,7 (b) The payment for the original claim was incorrect. Recovery for an incorrect payment under this paragraph is limited to the amount that exceeds the allowable claim.

AB7,13,8 (c) The pharmacy services were not rendered by the pharmacist or pharmacy.

AB7,13,10 (d) In making the claim or performing the service that is the basis for the claim, the pharmacist or pharmacy violated state or federal law.

AB7,13,12 (e) The reduction is permitted in a contract between a pharmacy and a pharmacy benefit manager and is related to a quality program.

AB7,13,13 (6) Audits of pharmacies or pharmacists. (a) Definitions. In this subsection:

AB7,13,16 1. “Audit” means a review of the accounts and records of a pharmacy or pharmacist by or on behalf of an entity that finances or reimburses the cost of health care services or prescription drugs.

AB7,13,20 2. “Entity” means a defined network plan, as defined in s. 609.01 (1b), insurer, self-insured health plan, or pharmacy benefit manager or a person acting on behalf of a defined network plan, insurer, self-insured health plan, or pharmacy benefit manager.

AB7,13,21 3. “Self-insured health plan” has the meaning given in s. 632.85 (1) (c).

AB7,13,23 (b) Procedures. An entity conducting an on-site or desk audit of pharmacist or pharmacy records shall do all of the following:

AB7,14,3 1. 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.

AB7,14,6 2. Refrain from auditing a pharmacist or pharmacy within the first 5 business days of a month unless the pharmacist or pharmacy consents to an audit during that time.

AB7,14,8 3. If the audit involves clinical or professional judgment, conduct the audit by or in consultation with a pharmacist licensed in any state.

AB7,14,10 4. Limit the audit review to no more than 250 separate prescriptions. For purposes of this subdivision, a refill of a prescription is not a separate prescription.

AB7,14,12 5. Limit the audit review to claims submitted no more than 2 years before the date of the audit, unless required otherwise by state or federal law.

AB7,14,18 6. Allow the pharmacist or pharmacy to use authentic and verifiable records of a hospital, physician, or other health care provider to validate the pharmacist's or pharmacy's records relating to delivery of a prescription drug and use any valid 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.

AB7,14,21 7. Allow the pharmacy or pharmacist to document the delivery of a prescription drug or pharmacist services to an enrollee under a health benefit plan using either paper or electronic signature logs.

AB7,14,24 8. Before leaving the pharmacy after concluding the on-site portion of an audit, provide to the representative of the pharmacy or the pharmacist a complete list of the pharmacy records reviewed.

AB7,15,2 (c) Results of audit. An entity that has conducted an audit of a pharmacist or pharmacy shall do all of the following:

AB7,15,10 1. Deliver to the pharmacist or pharmacy a preliminary report of the audit within 60 days after the date the auditor departs from an on-site audit or the pharmacy or pharmacist submits paperwork for a desk audit. A preliminary report under this subdivision shall include claim-level information for any discrepancy reported, the estimated total amount of claims subject to recovery, and contact information for the entity or person that completed the audit so the pharmacist or pharmacy subject to the audit may review audit results, procedures, and discrepancies.

AB7,15,13 2. Allow a pharmacist or pharmacy that is the subject of an audit to provide documentation to address any discrepancy found in the audit within 30 days after the date the pharmacist or pharmacy receives the preliminary report.

AB7,15,19 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 any response provided to the auditor by the pharmacy or pharmacist and consider and address the pharmacy's or pharmacist's response.

AB7,15,22 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.

AB7,15,24 5. Refrain from accruing or charging interest between the time the notice of the audit is given under par. (b) 1. and the final report under subd. 3. has been delivered.

AB7,15,25 6. Exclude dispensing fees from calculations of overpayments.

AB7,16,4 7. Establish and follow a written appeals process that allows a pharmacy or pharmacist to appeal the final report of an audit and allow the pharmacy or pharmacist as part of the appeal process to arrange for, at the cost of the pharmacy or pharmacist, an independent audit.

AB7,16,8 8. Refrain from subjecting the pharmacy or pharmacist to a recoupment or recovery for a clerical or record-keeping error in a required document or record, including a typographical or computer error, unless the error resulted in an overpayment to the pharmacy or pharmacist.

AB7,16,14 (d) Confidentiality of audit. Information obtained in an audit under this subsection is confidential and may not be shared unless the information is required to be shared under state or federal law and except that the audit may be shared with the entity on whose behalf the audit is performed. An entity conducting an audit may have access to the previous audit reports on a particular pharmacy only if the audit is conducted by the same entity.

AB7,16,18 (e) Cooperation with audit. If an entity is conducting an audit that is complying with this subsection in auditing a pharmacy or pharmacist, the pharmacy or pharmacist that is the subject of the audit may not interfere with or refuse to participate in the audit.

AB7,16,21 (f) 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.

AB7,16,24 (g) Applicability. 1. This subsection does not apply to an investigative audit that is initiated as a result of a credible allegation of fraud or willful misrepresentation or criminal wrongdoing.

AB7,17,3 2. If an entity conducts an audit to which a federal law applies that is in conflict with all or part of this subsection, the entity shall comply with this subsection only to the extent that it does not conflict with federal law.

AB7,17,11 (7) Transparency reports. (a) Beginning on June 1, 2021, and annually thereafter, every pharmacy benefit manager shall submit to the commissioner a report that contains, from the previous calendar year, 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. Information required under this paragraph is limited to contracts held with pharmacies located in this state.

AB7,17,13 (b) Reports under this subsection shall be considered a trade secret under the uniform trade secret act under s. 134.90.

AB7,17,15 (c) The commissioner may not expand upon the reporting requirement under this subsection, except that the commissioner may effectuate this subsection.

AB7,22 Section 22 . Chapter 633 (title) of the statutes is amended to read:

AB7,17,20 CHAPTER 633 EMPLOYEE BENEFIT PLAN ADMINISTRATORS AND, PRINCIPALS , and Pharmacy benefit managers

AB7,23 Section 23 . 633.01 (1) (intro.) and (c) of the statutes are amended to read:

AB7,17,25 633.01 (1) (intro.) “Administrator" means a person who directly or indirectly solicits or collects premiums or charges or otherwise effects coverage or adjusts or settles claims for a an employee benefit plan, but does not include the following persons if they perform these acts under the circumstances specified for each:

AB7,18,3 (c) A creditor on behalf of its debtor, if to obtain payment, reimbursement or other method of satisfaction from a an employee benefit plan for any part of a debt owed to the creditor by the debtor.

AB7,24 Section 24 . 633.01 (2r) of the statutes is created to read:

AB7,18,5 633.01 (2r) “Enrollee” has the meaning given in s. 632.861 (1) (b).

AB7,25 Section 25 . 633.01 (3) of the statutes is amended to read:

AB7,18,8 633.01 (3) “Insured employee" means an employee who is a resident of this state and who is covered under a an employee benefit plan.

AB7,26 Section 26 . 633.01 (4) of the statutes is renumbered 633.01 (2g) and amended to read:

AB7,18,16 633.01 (2g) “Plan Employee benefit plan" means an insured or wholly or partially self-insured employee benefit plan which by means of direct payment, reimbursement or other arrangement provides to one or more employees who are residents of this state benefits or services that include, but are not limited to, benefits for medical, surgical or hospital care, benefits in the event of sickness, accident, disability or death, or benefits in the event of unemployment or retirement.

AB7,27 Section 27 . 633.01 (4g) of the statutes is created to read:

AB7,18,19 633.01 (4g) “Pharmacy benefit manager” has the meaning given in s. 632.865 (1) (c).

AB7,28 Section 28 . 633.01 (4r) of the statutes is created to read:

AB7,18,22 633.01 (4r) “Prescription drug benefit” has the meaning given in s. 632.865 (1) (e).

AB7,29 Section 29 . 633.01 (5) of the statutes is amended to read:

AB7,18,25 633.01 (5) “Principal" means a person, including an insurer, that uses the services of an administrator to provide a an employee benefit plan.

AB7,30 Section 30. 633.01 (6) of the statutes is created to read:

AB7,19,2 633.01 (6) “Self-insured health plan" has the meaning given in s. 632.85 (1) (c).

AB7,31 Section 31 . 633.04 (intro.) of the statutes is amended to read:

AB7,19,8 633.04 Written agreement required. (intro.) An administrator may not administer a an employee benefit plan in the absence of a written agreement between the administrator and a principal. The administrator and principal shall each retain a copy of the written agreement for the duration of the agreement and for 5 years thereafter. The written agreement shall contain the following terms:

AB7,32 Section 32 . 633.05 of the statutes is amended to read:

AB7,19,16 633.05 Payment to administrator. If a principal is an insurer, payment to the administrator of a premium or charge by or on behalf of an insured employee is payment to the insurer, but payment of a return premium or claim by the insurer to the administrator is not payment to an insured employee until the payment is received by the insured employee. This section does not limit any right of the insurer against the administrator for failure to make payments to the insurer or an insured employee.

AB7,33 Section 33 . 633.06 of the statutes is amended to read:

AB7,19,22 633.06 Examination and inspection of books and records. (1) The commissioner may examine, audit or accept an audit of the books and records of an administrator or pharmacy benefit manager as provided for examination of licensees under s. 601.43 (1), (3), (4) and (5), to be conducted as provided in s. 601.44, and with costs to be paid as provided in s. 601.45.

AB7,20,2 (2) A principal that uses an administrator may inspect the books and records of the administrator, subject to any restrictions set forth in ss. 146.81 to 146.835 and in the written agreement required under s. 633.04, for the purpose of enabling the principal to fulfill its contractual obligations to insureds insured employees.

AB7,34 Section 34 . 633.07 of the statutes is amended to read: