This bill makes several changes to audits of pharmacists and pharmacies. The bill requires an entity that conducts audits of pharmacists and pharmacies to ensure that 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, that the entity randomizes the prescriptions that the entity audits and the entity audits the same number of prescriptions in each prescription benefit tier, and that each audit of a prescription reimbursed under Part D of the federal Medicare program is conducted separately from audits of prescriptions reimbursed under other policies or plans. The bill prohibits any pharmacy benefit manager from recouping reimbursements made to a pharmacist or pharmacy for errors that involve 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. The bill further prohibits any pharmacy benefit manager from using extrapolation in calculating reimbursements that it may recoup, and instead requires a pharmacy benefit manager to base the finding of errors for which reimbursements will be recouped on an actual error in reimbursement and not 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. The bill requires that a pharmacy benefit manager that recoups any reimbursements made to a pharmacist or pharmacy for an error that was the cause of financial harm must return the recouped reimbursement to the individual or the policy or plan sponsor who was harmed by the error.

The bill provides that a pharmacy benefit manager owes a fiduciary duty to a health benefit plan sponsor. The bill also requires that a pharmacy benefit manager annually disclose all of the following information to the health benefit plan sponsor:

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 pharmacists and the amount retained by the pharmacy benefit manager.

The bill prohibits a pharmacy benefit manager from taking certain actions with respect to 340B covered entities, pharmacies and pharmacists contracted with 340B covered entities, and patients who obtain prescription drugs from 340B covered entities. The 340B drug pricing program is a federal program that requires pharmaceutical manufacturers that participate in the federal Medicaid program to sell outpatient drugs at discounted prices to certain health care organizations that provide health care for uninsured and low-income patients. Entities that are eligible for discounted prices under the 340B drug pricing program include federally-qualified health centers, critical access hospitals, and certain public and nonprofit disproportionate share hospitals. The bill prohibits pharmacy benefit managers from doing any of the following:

1. Refusing to reimburse a 340B covered entity or a pharmacy or pharmacist contracted with a 340B covered entity for dispensing 340B drugs.

2. Imposing 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.

3. Reimbursing 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.

4. Restricting 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.

5. Requiring 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.

6. Restricting 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.

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 generally requires health insurance policies that offer prescription drug benefits, self-insured health plans, and pharmacy benefit managers acting on behalf of policies or plans to apply amounts paid by or on behalf of an individual covered under the policy or plan for brand name prescription drugs to any cost-sharing requirement or to any calculation of an out-of-pocket maximum amount of the policy or plan. Health insurance policies are referred to in the bill as disability insurance policies.

The bill prohibits a pharmacy benefit manager from retaliating against a pharmacy or pharmacist for reporting an alleged violation of certain laws applicable to pharmacy benefit managers or for exercising certain rights or remedies. Retaliation includes terminating or refusing to renew a contract with a pharmacy or pharmacist, subjecting a pharmacy or pharmacist to increased audits, or failing to promptly pay a pharmacy or pharmacist any money that the pharmacy benefit manager owes to the pharmacy or pharmacist. The bill provides that a pharmacy or pharmacist may bring an action in court for injunctive relief if a pharmacy benefit manager is retaliating against the pharmacy or pharmacist as provided in the bill. In addition to equitable relief, the court may award a pharmacy or pharmacist that prevails in such an action reasonable attorney fees and costs.

AB773,,6640.51 (8) Every health care coverage plan offered by the state under sub. (6) shall comply with ss. 631.89, 631.90, 631.93 (2), 631.95, 632.72 (2), 632.729, 632.746 (1) to (8) and (10), 632.747, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.861, 632.862, 632.867, 632.87 (3) to (6), 632.885, 632.89, 632.895 (5m) and (8) to (17), and 632.896.

AB773,,101066.0137 (4) Self-insured health plans. If a city, including a 1st class city, or a village provides health care benefits under its home rule power, or if a town provides health care benefits, to its officers and employees on a self-insured basis, the self-insured plan shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.729, 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.798, 632.85, 632.853, 632.855, 632.861, 632.862, 632.867, 632.87 (4) to (6), 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4).