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SB3,13,2322 (b) Procedures. An entity conducting an on-site or desk audit of pharmacist
23or pharmacy records shall do all of the following:
SB3,14,3
11. If the audit is an audit on the premises of the pharmacist or pharmacy, notify
2the pharmacist or pharmacy in writing of the audit at least 2 weeks before conducting
3the audit.
SB3,14,64 2. Refrain from auditing a pharmacist or pharmacy within the first 5 business
5days of a month unless the pharmacist or pharmacy consents to an audit during that
6time.
SB3,14,87 3. If the audit involves clinical or professional judgment, conduct the audit by
8or in consultation with a pharmacist licensed in any state.
SB3,14,109 4. Limit the audit review to no more than 250 separate prescriptions. For
10purposes of this subdivision, a refill of a prescription is not a separate prescription.
SB3,14,1211 5. Limit the audit review to claims submitted no more than 2 years before the
12date of the audit, unless required otherwise by state or federal law.
SB3,14,1813 6. Allow the pharmacist or pharmacy to use authentic and verifiable records
14of a hospital, physician, or other health care provider to validate the pharmacist's or
15pharmacy's records relating to delivery of a prescription drug and use any valid
16prescription that complies with requirements of the pharmacy examining board to
17validate claims in connection with a prescription, refill of a prescription, or change
18in prescription.
SB3,14,2119 7. Allow the pharmacy or pharmacist to document the delivery of a prescription
20drug or pharmacist services to an enrollee under a health benefit plan using either
21paper or electronic signature logs.
SB3,14,2422 8. Before leaving the pharmacy after concluding the on-site portion of an audit,
23provide to the representative of the pharmacy or the pharmacist a complete list of
24the pharmacy records reviewed.
SB3,15,2
1(c) Results of audit. An entity that has conducted an audit of a pharmacist or
2pharmacy shall do all of the following:
SB3,15,103 1. Deliver to the pharmacist or pharmacy a preliminary report of the audit
4within 60 days after the date the auditor departs from an on-site audit or the
5pharmacy or pharmacist submits paperwork for a desk audit. A preliminary report
6under this subdivision shall include claim-level information for any discrepancy
7reported, the estimated total amount of claims subject to recovery, and contact
8information for the entity or person that completed the audit so the pharmacist or
9pharmacy subject to the audit may review audit results, procedures, and
10discrepancies.
SB3,15,1311 2. Allow a pharmacist or pharmacy that is the subject of an audit to provide
12documentation to address any discrepancy found in the audit within 30 days after
13the date the pharmacist or pharmacy receives the preliminary report.
SB3,15,1914 3. Deliver to the pharmacist or pharmacy a final audit report, which may be
15delivered electronically, within 90 days of the date the pharmacist or pharmacy
16receives the preliminary report or the date of the final appeal of the audit, whichever
17is later. The final audit report under this subdivision shall include any response
18provided to the auditor by the pharmacy or pharmacist and consider and address the
19pharmacy's or pharmacist's response.
SB3,15,2220 4. Refrain from assessing a recoupment or other penalty on a pharmacist or
21pharmacy until the appeal process is exhausted and the final report under subd. 3.
22is delivered to the pharmacist or pharmacy.
SB3,15,2423 5. Refrain from accruing or charging interest between the time the notice of the
24audit is given under par. (b) 1. and the final report under subd. 3. has been delivered.
SB3,15,2525 6. Exclude dispensing fees from calculations of overpayments.
SB3,16,4
17. Establish and follow a written appeals process that allows a pharmacy or
2pharmacist to appeal the final report of an audit and allow the pharmacy or
3pharmacist as part of the appeal process to arrange for, at the cost of the pharmacy
4or pharmacist, an independent audit.
SB3,16,85 8. Refrain from subjecting the pharmacy or pharmacist to a recoupment or
6recovery for a clerical or record-keeping error in a required document or record,
7including a typographical or computer error, unless the error resulted in an
8overpayment to the pharmacy or pharmacist.
SB3,16,149 (d) Confidentiality of audit. Information obtained in an audit under this
10subsection is confidential and may not be shared unless the information is required
11to be shared under state or federal law and except that the audit may be shared with
12the entity on whose behalf the audit is performed. An entity conducting an audit may
13have access to the previous audit reports on a particular pharmacy only if the audit
14is conducted by the same entity.
SB3,16,1815 (e) Cooperation with audit. If an entity is conducting an audit that is complying
16with this subsection in auditing a pharmacy or pharmacist, the pharmacy or
17pharmacist that is the subject of the audit may not interfere with or refuse to
18participate in the audit.
SB3,16,2119 (f) Payment of auditors. A pharmacy benefit manager or entity conducting an
20audit may not pay an auditor employed by or contracted with the pharmacy benefit
21manager or entity based on a percentage of the amount recovered in an audit.
SB3,16,2422 (g) Applicability. 1. This subsection does not apply to an investigative audit
23that is initiated as a result of a credible allegation of fraud or willful
24misrepresentation or criminal wrongdoing.
SB3,17,3
12. If an entity conducts an audit to which a federal law applies that is in conflict
2with all or part of this subsection, the entity shall comply with this subsection only
3to the extent that it does not conflict with federal law.
SB3,17,11 4(7) Transparency reports. (a) Beginning on June 1, 2021, and annually
5thereafter, every pharmacy benefit manager shall submit to the commissioner a
6report that contains, from the previous calendar year, the aggregate rebate amount
7that the pharmacy benefit manager received from all pharmaceutical manufacturers
8but retained and did not pass through to health benefit plan sponsors and the
9percentage of the aggregate rebate amount that is retained rebates. Information
10required under this paragraph is limited to contracts held with pharmacies located
11in this state.
SB3,17,1312 (b) Reports under this subsection shall be considered a trade secret under the
13uniform trade secret act under s. 134.90.
SB3,17,1514 (c) The commissioner may not expand upon the reporting requirement under
15this subsection, except that the commissioner may effectuate this subsection.
SB3,22 16Section 22 . Chapter 633 (title) of the statutes is amended to read:
SB3,17,2017 CHAPTER 633
18 EMPLOYEE BENEFIT PLAN
19 ADMINISTRATORS AND, PRINCIPALS ,
20 and Pharmacy benefit managers
SB3,23 21Section 23 . 633.01 (1) (intro.) and (c) of the statutes are amended to read:
SB3,17,2522 633.01 (1) (intro.) “Administrator" means a person who directly or indirectly
23solicits or collects premiums or charges or otherwise effects coverage or adjusts or
24settles claims for a an employee benefit plan, but does not include the following
25persons if they perform these acts under the circumstances specified for each:
SB3,18,3
1(c) A creditor on behalf of its debtor, if to obtain payment, reimbursement or
2other method of satisfaction from a an employee benefit plan for any part of a debt
3owed to the creditor by the debtor.
SB3,24 4Section 24 . 633.01 (2r) of the statutes is created to read:
SB3,18,55 633.01 (2r) “Enrollee” has the meaning given in s. 632.861 (1) (b).
SB3,25 6Section 25 . 633.01 (3) of the statutes is amended to read:
SB3,18,87 633.01 (3) “Insured employee" means an employee who is a resident of this
8state and who is covered under a an employee benefit plan.
SB3,26 9Section 26 . 633.01 (4) of the statutes is renumbered 633.01 (2g) and amended
10to read:
SB3,18,1611 633.01 (2g)Plan Employee benefit plan" means an insured or wholly or
12partially self-insured employee benefit plan which by means of direct payment,
13reimbursement or other arrangement provides to one or more employees who are
14residents of this state benefits or services that include, but are not limited to, benefits
15for medical, surgical or hospital care, benefits in the event of sickness, accident,
16disability or death, or benefits in the event of unemployment or retirement.
SB3,27 17Section 27 . 633.01 (4g) of the statutes is created to read:
SB3,18,1918 633.01 (4g) “Pharmacy benefit manager” has the meaning given in s. 632.865
19(1) (c).
SB3,28 20Section 28 . 633.01 (4r) of the statutes is created to read:
SB3,18,2221 633.01 (4r) “Prescription drug benefit” has the meaning given in s. 632.865 (1)
22(e).
SB3,29 23Section 29 . 633.01 (5) of the statutes is amended to read:
SB3,18,2524 633.01 (5) “Principal" means a person, including an insurer, that uses the
25services of an administrator to provide a an employee benefit plan.
SB3,30
1Section 30. 633.01 (6) of the statutes is created to read:
SB3,19,22 633.01 (6) “Self-insured health plan" has the meaning given in s. 632.85 (1) (c).
SB3,31 3Section 31 . 633.04 (intro.) of the statutes is amended to read:
SB3,19,8 4633.04 Written agreement required. (intro.) An administrator may not
5administer a an employee benefit plan in the absence of a written agreement
6between the administrator and a principal. The administrator and principal shall
7each retain a copy of the written agreement for the duration of the agreement and
8for 5 years thereafter. The written agreement shall contain the following terms:
SB3,32 9Section 32 . 633.05 of the statutes is amended to read:
SB3,19,16 10633.05 Payment to administrator. If a principal is an insurer, payment to
11the administrator of a premium or charge by or on behalf of an insured employee is
12payment to the insurer, but payment of a return premium or claim by the insurer to
13the administrator is not payment to an insured employee until the payment is
14received by the insured employee. This section does not limit any right of the insurer
15against the administrator for failure to make payments to the insurer or an insured
16employee.
SB3,33 17Section 33 . 633.06 of the statutes is amended to read:
SB3,19,22 18633.06 Examination and inspection of books and records. (1) The
19commissioner may examine, audit or accept an audit of the books and records of an
20administrator or pharmacy benefit manager as provided for examination of licensees
21under s. 601.43 (1), (3), (4) and (5), to be conducted as provided in s. 601.44, and with
22costs to be paid as provided in s. 601.45.
SB3,20,2 23(2) A principal that uses an administrator may inspect the books and records
24of the administrator, subject to any restrictions set forth in ss. 146.81 to 146.835 and

1in the written agreement required under s. 633.04, for the purpose of enabling the
2principal to fulfill its contractual obligations to insureds insured employees.
SB3,34 3Section 34 . 633.07 of the statutes is amended to read:
SB3,20,6 4633.07 Approval of advertising. An administrator may not use any
5advertising for a an employee benefit plan underwritten by an insurer unless the
6insurer approves the advertising in advance.
SB3,35 7Section 35 . 633.09 (4) (b) 2. and 3. of the statutes are amended to read:
SB3,20,98 633.09 (4) (b) 2. To a an employee benefit plan policyholder for payment to a
9principal, the funds belonging to the principal.
SB3,20,1010 3. To an insured employee, the funds belonging to the insured employee.
SB3,36 11Section 36 . 633.11 of the statutes is amended to read:
SB3,20,17 12633.11 Claim adjustment compensation. If an administrator adjusts or
13settles claims under a an employee benefit plan, the commission, fees or charges
14that the principal pays the administrator may not be based on the employee benefit
15plan's loss experience. This section does not prohibit compensation based on the
16number or amount of premiums or charges collected, or the number or amount of
17claims paid or processed by the administrator.
SB3,37 18Section 37 . 633.12 (1) (intro.), (b) and (c) of the statutes are amended to read:
SB3,20,2319 633.12 (1) (intro.) An administrator shall prepare sufficient copies of a written
20notice approved in advance by the principal for distribution to all insureds insured
21employees
of the principal and either shall distribute the copies to the insureds
22insured employees or shall provide the copies to the principal for distribution to the
23insureds
insured employees. The written notice shall contain all of the following:
SB3,20,2524 (b) An explanation of the respective rights and responsibilities of the
25administrator, the principal and the insureds insured employees.
SB3,21,2
1(c) A statement of the extent to which the employee benefit plan is insured or
2self-insured, and an explanation of the terms “insured" and “self-insured".
SB3,38 3Section 38 . 633.13 (1) and (3) of the statutes are amended to read:
SB3,21,84 633.13 (1) General. Except as provided in sub. (2), a person may not perform,
5offer to perform or advertise any service as an administrator or a pharmacy benefit
6manager
unless the person has obtained a license under s. 633.14. A pharmacy
7benefit manager that also performs services as an administrator need only obtain an
8administrator license under s. 633.14.
SB3,21,13 9(3) Responsibilities of principal. A principal may not use the services of an
10administrator unless the administrator furnishes proof of licensure under s. 633.14
11or exemption under sub. (2). An insurer or a self-insured health plan may not use
12the services of a pharmacy benefit manager unless the pharmacy benefit manager
13furnishes proof of licensure under s. 633.14.
SB3,39 14Section 39 . 633.14 (2) (intro.) and (c) 1. and 3. and (3) of the statutes are
15amended to read:
SB3,21,1816 633.14 (2) (intro.) The commissioner shall issue a license to act as an
17administrator or pharmacy benefit manager to a corporation, limited liability
18company or partnership that does all of the following:
SB3,21,2219 (c) 1. That the corporation, limited liability company or partnership intends in
20good faith to act as an administrator or pharmacy benefit manager through
21individuals designated under subd. 3. in compliance with applicable laws of this
22state and rules and orders of the commissioner.
SB3,22,223 3. That for each employee benefit plan or prescription drug benefit to be
24administered, the corporation, limited liability company or partnership has
25designated or will designate an individual in the corporation, limited liability

1company or partnership to directly administer the employee benefit plan or
2prescription drug benefit
.
SB3,22,6 3(3) The commissioner shall promulgate rules establishing the specifications
4that a bond supplied by an administrator or pharmacy benefit manager under sub.
5(1) (b) or (2) (b) must satisfy to guarantee faithful performance of the administrator
6or pharmacy benefit manager.
SB3,40 7Section 40 . 633.15 (1) (a), (1m), and (2) (a) 1., 2. and 3. and (b) 1. of the statutes
8are amended to read:
SB3,22,119 633.15 (1) (a) Payment. An administrator or pharmacy benefit manager shall
10pay the annual renewal fee under s. 601.31 (1) (w) for each annual renewal of a
11license by the date specified by a schedule established under par. (b).
SB3,22,23 12(1m) Social security number, federal employer identification number or
13statement.
At an annual renewal, an administrator or pharmacy benefit manager
14shall provide his or her social security number, if the administrator is an individual
15unless he or she does not have a social security number, or its federal employer
16identification number, if the administrator or pharmacy benefit manager is a
17corporation, limited liability company or partnership, if the social security number
18or federal employer identification number was not previously provided on the
19application for the license or at a previous renewal of the license. If an administrator
20who is an individual does not have a social security number, the individual shall
21provide to the commissioner, at each annual renewal and on a form prescribed by the
22department of children and families, a statement made or subscribed under oath or
23affirmation that the administrator does not have a social security number.
SB3,23,6 24(2) (a) 1. If an administrator or pharmacy benefit manager fails to pay the
25annual renewal fee as provided under sub. (1) or fails to provide a social security

1number, federal employer identification number or statement made or subscribed
2under oath or affirmation as required under sub. (1m), the commissioner shall
3suspend the administrator's or pharmacy benefit manager's license effective the day
4following the last day when the annual renewal fee may be paid, if the commissioner
5has given the administrator or pharmacy benefit manager reasonable notice of when
6the fee must be paid to avoid suspension.
SB3,23,127 2. If, within 60 days from the effective date of suspension under subd. 1., an
8administrator or pharmacy benefit manager pays the annual renewal fee or provides
9the social security number, federal employer identification number or statement
10made or subscribed under oath or affirmation, or both if the suspension was based
11upon a failure to do both, the commissioner shall reinstate the administrator's or
12pharmacy benefit manager's
license effective as of the date of suspension.
SB3,23,1713 3. If payment is not made or the social security number, federal employer
14identification number or statement made or subscribed under oath or affirmation is
15not provided within 60 days from the effective date of suspension under subd. 1., the
16commissioner shall revoke the administrator's or pharmacy benefit manager's
17license.
SB3,23,2018 (b) 1. Except as provided in pars. (c) to (e), the commissioner may revoke,
19suspend or limit the license of an administrator or pharmacy benefit manager after
20a hearing if the commissioner makes any of the following findings:
SB3,23,2221 a. That the administrator or pharmacy benefit manager is unqualified to
22perform the responsibilities of an administrator or pharmacy benefit manager.
SB3,23,2423 b. That the administrator or pharmacy benefit manager has repeatedly or
24knowingly violated an applicable law, rule or order of the commissioner.
SB3,24,5
1c. That If the licensee is an administrator, that the administrator's methods or
2practices in administering a an employee benefit plan endanger the interests of
3insureds insured employees or the public, or that the financial resources of the
4administrator are inadequate to safeguard the interests of insureds insured
5employees
or the public.
SB3,41 6Section 41 . 633.15 (2) (b) 1. d. of the statutes is created to read:
SB3,24,117 633.15 (2) (b) 1. d. If the licensee is a pharmacy benefit manager, that the
8pharmacy benefit manager's methods or practices in administering a prescription
9drug benefit endanger the interests of enrollees or the public, or that the financial
10resources of the pharmacy benefit manager are inadequate to safeguard the
11interests of enrollees or the public.
SB3,42 12Section 42 . 633.15 (2) (b) 2. of the statutes is amended to read:
SB3,24,1613 633.15 (2) (b) 2. A person whose license has been revoked under subd. 1. may
14apply for a new license under s. 633.14 only after the expiration of 5 years from the
15date of the order revoking the administrator's or pharmacy benefit manager's
16license, unless the order specifies a lesser period.
SB3,43 17Section 43 . 633.15 (2) (f) of the statutes is created to read:
SB3,24,2118 633.15 (2) (f) The commissioner, after ordering a suspension or revocation
19under this subsection, may allow a pharmacy benefit manager to continue to provide
20services for the purpose of providing continuity of care in prescription drug benefits
21to existing enrollees.
SB3,44 22Section 44 . 633.16 of the statutes is amended to read:
SB3,24,25 23633.16 Regulation. Nothing in this chapter gives the commissioner the
24authority to impose requirements on a an employee benefit plan that is exempt from
25state law under 29 USC 1144 (b).
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