PHARMACY BENEFITS MANAGEMENT
2022 Okla. Sess. Law Serv. Ch. 38 (S.B. 737) (WEST)
2022 Okla. Sess. Law Serv. Ch. 38 (S.B. 737) (WEST)
OKLAHOMA 2022 SESSION LAW SERVICE
Fifty-Eighth Legislature, 2022 Second Regular Session
CHAPTER 38
S.B. No. 737
PHARMACY BENEFITS MANAGEMENT
An Act relating to pharmacy benefits management; amending 36 O.S. 2021, Section 6960, which relates to definitions; adding definition of provider and spread pricing; deleting definition; amending 36 O.S. 2021, Section 6962, which relates to compliance review; updating reference; adding prohibited activities; adding duties of pharmacy benefits managers; authorizing Commissioner to take certain actions on PBM licenses for certain violations; authorizing fine for violation of certain acts; authorizing Insurance Commissioner to enforce Patient's Right to Pharmacy Choice Act and investigate violations of certain acts; specifying that operating without a PBM license is a violation of Patient's Right to Pharmacy Choice Act; specifying certain hearings be conducted pursuant to Administrative Procedures Act; establishing procedures for certain hearings; authorizing full stenographic record of hearing proceedings in certain circumstances; providing for payment of certain costs and fees; authorizing appeal from certain final order of Commissioner; authorizing Commissioner to require certain reporting from PBMs in certain circumstances; providing for codification; and declaring an emergency.
SUBJECT: Pharmacy benefits management
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
<< OK ST T. 36 § 6960 >>
SECTION 1. AMENDATORY 36 O.S. 2021, Section 6960, is amended to read as follows:
Section 6960. For purposes of the Patient's Right to Pharmacy Choice Act:
1. “Health insurer” means any corporation, association, benefit society, exchange, partnership or individual licensed by the Oklahoma Insurance Code;
2. “Health insurer payor” means a health insurance company, health maintenance organization, union, hospital and medical services organization or any entity providing or administering a self-funded health benefit plan;
3. “Mail-order pharmacy” means a pharmacy licensed by this state that primarily dispenses and delivers covered drugs via common carrier;
5. “Provider” means a pharmacy, as defined in Section 353.1 of Title 59 of the Oklahoma Statutes or an agent or representative of a pharmacy;
<< OK ST T. 36 § 6962 >>
SECTION 2. AMENDATORY 36 O.S. 2021, Section 6962, is amended to read as follows:
Section 6962. A. The Oklahoma Insurance Department shall review and approve retail pharmacy network access for all pharmacy benefits managers (PBMs) to ensure compliance with Section 4 of this act 6961 of this title.
B. A PBM, or an agent of a PBM, shall not:
1. Cause or knowingly permit the use of advertisement, promotion, solicitation, representation, proposal or offer that is untrue, deceptive or misleading;
2. Charge a pharmacist or pharmacy a fee related to the adjudication of a claim, including without limitation a fee for:
a. the submission of a claim,
b. enrollment or participation in a retail pharmacy network, or
c. the development or management of claims processing services or claims payment services related to participation in a retail pharmacy network;
3. Reimburse a pharmacy or pharmacist in the state an amount less than the amount that the PBM reimburses a pharmacy owned by or under common ownership with a PBM for providing the same covered services. The reimbursement amount paid to the pharmacy shall be equal to the reimbursement amount calculated on a per-unit basis using the same generic product identifier or generic code number paid to the PBM-owned or PBM-affiliated pharmacy;
4. Deny a pharmacy provider the opportunity to participate in any pharmacy network at preferred participation status if the pharmacy provider is willing to accept the terms and conditions that the PBM has established for other pharmacies providers as a condition of preferred network participation status;
5. Deny, limit or terminate a pharmacy's provider's contract based on employment status of any employee who has an active license to dispense, despite probation status, with the State Board of Pharmacy;
6. Retroactively deny or reduce reimbursement for a covered service claim after returning a paid claim response as part of the adjudication of the claim, unless:
a. the original claim was submitted fraudulently, or
b. to correct errors identified in an audit, so long as the audit was conducted in compliance with Sections 356.2 and 356.3 of Title 59 of the Oklahoma Statutes; or
7. Fail to make any payment due to a pharmacy or pharmacist for covered services properly rendered in the event a PBM terminates a pharmacy or pharmacist provider from a pharmacy benefits manager network;
8. Conduct or practice spread pricing, as defined in Section 1 of this act, in this state; or
9. Charge a pharmacist or pharmacy a fee related to participation in a retail pharmacy network including but not limited to the following:
a. an application fee,
b. an enrollment or participation fee,
c. a credentialing or re-credentialing fee,
d. a change of ownership fee, or
e. a fee for the development or management of claims processing services or claims payment services.
C. The prohibitions under this section shall apply to contracts between pharmacy benefits managers and pharmacists or pharmacies providers for participation in retail pharmacy networks.
1. A PBM contract shall:
a. not restrict, directly or indirectly, any pharmacy that dispenses a prescription drug from informing, or penalize such pharmacy for informing, an individual of any differential between the individual's out-of-pocket cost or coverage with respect to acquisition of the drug and the amount an individual would pay to purchase the drug directly, and
b. ensure that any entity that provides pharmacy benefits management services under a contract with any such health plan or health insurance coverage does not, with respect to such plan or coverage, restrict, directly or indirectly, a pharmacy that dispenses a prescription drug from informing, or penalize such pharmacy for informing, a covered individual of any differential between the individual's out-of-pocket cost under the plan or coverage with respect to acquisition of the drug and the amount an individual would pay for acquisition of the drug without using any health plan or health insurance coverage.
2. A pharmacy benefits manager's contract with a participating pharmacist or pharmacy provider shall not prohibit, restrict or limit disclosure of information to the Insurance Commissioner, law enforcement or state and federal governmental officials investigating or examining a complaint or conducting a review of a pharmacy benefits manager's compliance with the requirements under the Patient's Right to Pharmacy Choice Act.
1. Establish and maintain an electronic claim inquiry processing system using the National Council for Prescription Drug Programs' current standards to communicate information to pharmacies submitting claim inquiries;
2. Fully disclose to insurers, self-funded employers, unions or other PBM clients the existence of the respective aggregate prescription drug discounts, rebates received from drug manufacturers and pharmacy audit recoupments;
3. Provide the Insurance Commissioner, insurers, self-funded employer plans and unions unrestricted audit rights of and access to the respective PBM pharmaceutical manufacturer and provider contracts, plan utilization data, plan pricing data, pharmacy utilization data and pharmacy pricing data;
4. Maintain, for no less than three (3) years, documentation of all network development activities including but not limited to contract negotiations and any denials to providers to join networks. This documentation shall be made available to the Commissioner upon request;
5. Report to the Commissioner, on a quarterly basis for each health insurer payor, on the following information:
a. the aggregate amount of rebates received by the PBM,
b. the aggregate amount of rebates distributed to the appropriate health insurer payor,
c. the aggregate amount of rebates passed on to the enrollees of each health insurer payor at the point of sale that reduced the applicable deductible, copayment, coinsure or other cost sharing amount of the enrollee,
d. the individual and aggregate amount paid by the health insurer payor to the PBM for pharmacy services itemized by pharmacy, drug product and service provided, and
e. the individual and aggregate amount a PBM paid a provider for pharmacy services itemized by pharmacy, drug product and service provided.
SECTION 3. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 6966.1 of Title 36, unless there is created a duplication in numbering, reads as follows:
<< OK ST T. 36 § 6966.1 >>
A. The Insurance Commissioner may censure, suspend, revoke or refuse to issue or renew a license of or levy a civil penalty against any person licensed under the insurance laws of this state for any violation of the Patient's Right to Pharmacy Choice Act, Section 6958 et seq. of Title 6 of the Oklahoma Statutes.
B. 1. If the Commissioner finds, after notice and opportunity for hearing, that a pharmacy benefits manager (PBM) violated one or more provisions of the Patient's Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act or the provisions of Sections 357 through 360 of Title 59 of the Oklahoma Statues, the PBM may be censured, his or her license may be suspended or revoked and a penalty or remedy authorized by this act may be imposed.
2. In addition to or in lieu of any censure, suspension or revocation of a license, a PBM may be subject to a civil fine of not less than One Hundred Dollars ($100.00) and not greater than Ten Thousand Dollars ($10,000.00) for each violation of the provisions of the Patient's Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act or the provisions of Sections 357 through 360 of Title 59 of the Oklahoma Statues, following notice and an opportunity for a hearing.
C. Notwithstanding whether the license of a PBM has been issued, suspended, revoked, surrendered or lapsed by operation of law, the Commissioner is hereby authorized to enforce the provisions of the Patient's Right to Pharmacy Choice Act and impose any penalty or remedy authorized under the Act against a PBM under investigation for or charged with a violation of the Patient's Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, the provisions of Sections 357 through 360 of Title 59 of the Oklahoma Statues or any provision of the insurance laws of this state.
D. Each day that a PBM conducts business in this state without a license from the Insurance Department shall be deemed a violation of the Patient's Right to Pharmacy Choice Act.
E. 1. All hearings conducted by the Insurance Department pursuant to this section shall be public and held in accordance with the Administrative Procedures Act.
2. Hearings shall be held at the office of the Insurance Commissioner or any other place the Commissioner may deem convenient.
3. The Commissioner, upon written request from a PBM affected by the hearing, shall cause a full stenographic record of the proceedings to be made by a competent court reporter. This record shall be at the expense of the PBM.
4. The ordinary fees and costs of the hearing examiner appointed pursuant to Section 319 of Title 36 of the Oklahoma Statutes may be assessed by the hearing examiner against the respondent unless the respondent is the prevailing party.
F. Any PBM whose license has been censured, suspended, revoked or denied renewal or who has had a fine levied against him or her shall have the right of appeal from the final order of the Insurance Commissioner, pursuant to Section 318 et seq. of Title 75 of the Oklahoma Statutes.
G. If the Insurance Commissioner determines, based upon an investigation of complaints, that a PBM has engaged in violations of the provisions of the Patient's Right to Pharmacy Choice Act with such frequency as to indicate a general business practice, and that the PBM should be subjected to closer supervision with respect to those practices, the Commissioner may require the PBM to file a report at any periodic interval the Commissioner deems necessary.
SECTION 4. It being immediately necessary for the preservation of the public peace, health or safety, an emergency is hereby declared to exist, by reason whereof this act shall take effect and be in full force from and after its passage and approval.
Approved April 21, 2022.
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