PRINTER'S NO. 2989
No. 2303 Session of 1982
INTRODUCED BY NAHILL, BOWSER, PRATT, BELFANTI, KOWALYSHYN,
DAIKELER, FRAZIER, HALUSKA, COLAFELLA, MACKOWSKI, SNYDER,
MORRIS, STEWART, WARGO, COLE, A. C. FOSTER, JR., JOHNSON,
TRELLO, DOMBROWSKI, CESSAR, SAURMAN, FARGO, DIETZ, SALVATORE,
RYBAK, RITTER, McVERRY, MADIGAN, ZWIKL, PUNT, STEIGHNER,
PETRONE, CORNELL, BITTLE, W. W. FOSTER, GRIECO, ARTY, BELOFF,
BOYES, CALTAGIRONE, COWELL, GALLAGHER, ITKIN, LASHINGER,
LETTERMAN, MAIALE, MARMION, NOYE, PERZEL, SERAFINI,
SIEMINSKI, SPENCER, E. Z. TAYLOR, WACHOB, J. L. WRIGHT,
GALLEN, GAMBLE AND MANMILLER, MARCH 1, 1982
REFERRED TO COMMITTEE ON INSURANCE, MARCH 1, 1982
AN ACT
1 Establishing the rights and responsibilities of parties engaged
2 in third-party type prescription programs.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Short title.
6 This act shall be known and may be cited as the "Third-party
7 Prescription Program Act."
8 Section 2. Definitions.
9 The following words and phrases when used in this act shall
10 have, unless the context clearly indicates otherwise, the
11 meanings given to them in this section:
12 "Pharmacy." Every place properly licensed by the State Board
13 of Pharmacy where the practice of pharmacy is conducted.
14 "Practice of pharmacy." The practice of that profession
1 concerned with the art and science of preparing, compounding and
2 dispensing of drugs and devices, whether dispensed on the
3 prescription of a medical practitioner or legally dispensed or
4 sold directly to the ultimate consumer, and shall include the
5 proper and safe storage and distribution of drugs, the
6 maintenance of proper records therefor, and the responsibility
7 of relating information as required concerning such drugs and
8 medicines and their therapeutic values and uses in the treatment
9 and prevention of disease. "Practice of pharmacy" does not
10 include the operations of a manufacturer or wholesaler as
11 defined in the act of April 14, 1972 (P.L.233, No.64), known as
12 "The Controlled Substance, Drug, Device and Cosmetic Act."
13 "Third-party prescription program." Any system of providing
14 for the reimbursement of pharmaceutical services under a
15 contractual arrangement or agreement between a provider of such
16 services and another party who is not the consumer of those
17 services. Such programs may include but not be limited to,
18 employee benefit plans whereby a consumer receives prescription
19 drugs or other pharmaceutical services and those services are
20 paid for by an agent of the employer or others.
21 Section 3. Application.
22 This act shall not apply to any services rendered pursuant to
23 the provisions of the act of June 13, 1967 (P.L.31, No.21),
24 known as the "Public Welfare Code."
25 Section 4. Notice.
26 No third-party prescription programs shall be instituted in
27 this Commonwealth unless the program administrator of a third-
28 party program has given written notice of the provisions of the
29 particular program to the Insurance Commissioners office and
30 every pharmacy in the county or counties in which the program
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1 will be conducted within 30 days from the date of the written
2 notice to enroll in the particular program. Each administrator
3 shall mail to any pharmacist, upon written request, a copy of
4 each contract or agreement form in use in the Commonwealth
5 between such administrator and a pharmacy.
6 Section 5. Required contractual provisions.
7 Any agreement or contract entered into in this Commonwealth
8 between the program administrator of a third-party program and a
9 pharmacy shall include a statement of the method and amount of
10 reimbursement to the pharmacy for services rendered to persons
11 enrolled in the program, the frequency of payment by the program
12 administrator to the pharmacy for such services rendered, and a
13 method for the adjudication of complaints or the settlement of
14 disputes between the parties.
15 Section 6. Cancellation.
16 (a) The administrator of a program shall notify each
17 pharmacy enrolled in the program of any cancellation of coverage
18 of benefits of any group enrolled in the program at least 30
19 days prior to the effective date of the cancellation. The
20 pharmacy shall be reimbursed for the product and services
21 rendered until the effective date of cancellation or 30 days
22 after the receipt of the cancellation notice, whichever is
23 later.
24 (b) All persons enrolled in the program shall be notified of
25 its cancellation and the administrator of the program shall make
26 every reasonable effort to gain possession of their plan
27 identification cards.
28 Section 7. Denial of payment.
29 (a) No program administrator shall deny payment for services
30 to any pharmacy which may have resulted from the fraudulent or
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1 illegal use of an identification card by any person unless the
2 pharmacy has been notified that the card has been cancelled or
3 discontinued and that the program administrator has been
4 unsuccessful in attempting to regain possession of the card.
5 (b) No program administrator shall withhold any payments to
6 any pharmacy beyond the time period specified in the payment
7 schedule provisions of the agreement, except that individual
8 claims for payment may be returned to the pharmacy for causes
9 such as incomplete or illegible information and may then be
10 resubmitted by the pharmacy to the program administrator after
11 the appropriate corrections have been made.
12 Section 8. Reimbursement rates.
13 (a) No agreement between a program administrator and a
14 pharmacy shall establish reimbursement rates or procedures that
15 result in reimbursement for services rendered to persons covered
16 by the plan which are less than the prevailing rates paid by
17 ordinary consumers for the same or similar services.
18 (b) Any agreement between the third-party insurance carrier
19 and a pharmacy provider shall recognize the additional and
20 extraordinary costs involved in filling a third-party
21 prescription by providing for the payment to the pharmacy
22 provider of an administrative reimbursement for each
23 prescription. This reimbursement shall be recalculated on a
24 periodic basis, not to exceed one year and shall reflect the
25 specific costs to the pharmacy incurred as a result of
26 participation in the program. The administrative reimbursement
27 shall be recognized in the contract as a separate and distinct
28 reimbursable entity and shall not be incorporated into a single
29 dispensing fee.
30 Section 9. Enforcement.
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1 The Insurance Department shall enforce this act and shall
2 make such rules and regulations as may be necessary to carry out
3 the provisions of this act.
4 Section 10. Effective date.
5 This act shall take effect in 60 days.
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