A03878
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
941
Session of
2019
INTRODUCED BY HEFFLEY, MATZIE, NEILSON, WARNER, BURGOS, SAINATO,
FRANKEL, READSHAW, BARRAR, LONGIETTI, MILLARD, KEEFER, SIMS,
DeLUCA, BERNSTINE, MULLINS, CRUZ, WHEELAND, MARSHALL,
SCHWEYER, MOUL, BROWN, STRUZZI, KENYATTA, PYLE, McCLINTON,
DEASY, EVERETT, KNOWLES AND SCHMITT, MAY 7, 2019
REFERRED TO COMMITTEE ON HEALTH, MAY 7, 2019
AN ACT
Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An
act to consolidate, editorially revise, and codify the public
welfare laws of the Commonwealth," in public assistance,
providing for financial disclosures for pharmacy services.
Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An
act to consolidate, editorially revise, and codify the public
welfare laws of the Commonwealth," in public assistance,
further providing for medical assistance pharmacy services.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of June 13, 1967 (P.L.31, No.21), known
as the Human Services Code, is amended by adding a section to
read:
Section 449.1. Financial Disclosures for Pharmacy
Services.--(a) A pharmacy benefits manager that contracts with
a medical assistance managed care organization under contract
with the department shall be prohibited from utilizing a
confidentiality provision which would in effect prohibit
disclosure of information to the medical assistance managed care
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organization and the department upon request of the medical
assistance managed care organization or the department.
(b) Requests by the department may include the payment
methodology for the pharmacy benefits manager which must include
the actual amount paid by the pharmacy benefits manager to a
pharmacy for dispensing an outpatient covered drug or medical
supply item, including, at a minimum, the ingredient cost and
dispensing fee and any other administrative fees.
(c) A medical assistance managed care organization that
assigns financial responsibility for determining the dispensing
pharmacy payment methodology, including the ingredient cost and
dispensing fee, shall upon request disclose to the department
all financial terms and payment arrangements that apply between
the medical assistance managed care organization and the
pharmacy benefits manager annually and within ten days of any
changes to the financial terms and payment arrangements. For the
purposes of this section, a pharmacy benefits manager which
contracts with a medical assistance managed care organization
shall maintain records sufficient to ensure compliance with this
section and to provide information for pharmaceuticals dispensed
and paid for by medical assistance to the department, including
the information required under Chapter 7 of the act of November
21, 2016 (P.L.1318, No.169), known as the "Pharmacy Audit
Integrity and Transparency Act."
(d) A medical assistance managed care organization may use a
pharmacy benefits manager to process prescription claims only if
the medical assistance managed care organization has received
advanced written approval by the department.
(e) A medical assistance managed care organization shall:
(1) Indicate to the department its intent to use a pharmacy
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benefits manager.
(2) Identify:
(i) the proposed pharmacy benefits manager;
(ii) the medical assistance managed care organization's
payment methodology for payment to the pharmacy benefits
manager;
(iii) the pharmacy benefits manager's payment methodology
for actual payment to the providers of covered outpatient drugs;
and
(iv) the ownership of the proposed pharmacy benefits
manager.
(3) Provide for each outpatient drug encounter the amount
paid to the pharmacy benefits manager by the medical assistance
managed care organization and the actual amount paid by the
pharmacy benefits manager to the dispensing pharmacy or
prescribing provider.
(4) Report differences between the amount paid by the
medical assistance managed care organization to the pharmacy
benefits manager and the amount paid by the pharmacy benefits
manager to the providers of covered outpatient drugs as
administrative fees.
(5) Report all pharmacy benefits manager administrative
fees, including the difference in amounts paid as described in
clause (4), in a format designated by the department.
(6) Submit a written description of the procedures that the
medical assistance managed care organization will use to monitor
the pharmacy benefits manager for compliance with this section.
(7) Upon request by the department, conduct an independent
audit of the pharmacy benefits manager's transparent pricing
arrangement.
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(8) Develop, implement and maintain a second level pricing
dispute resolution process that provides for settlement of a
pharmacy benefits manager network provider's pricing dispute
with the pharmacy benefits manager.
(9) Submit to the department, prior to implementation, the
medical assistance managed care organization's policies and
procedures relating to the resolution of pharmacy benefits
manager provider pricing disputes.
(f) The department shall reimburse pharmacies in the fee-
for-service delivery system and pharmacies within a managed care
organization's network as follows:
(1) If the NADAC per unit is available, the payment to the
pharmacy shall be the lower of the following amounts:
(i) The NADAC per unit with the addition of a professional
dispensing fee. The professional dispensing fee shall be no less
than the fee-for-service dispensing fee approved by the Centers
for Medicare and Medicaid Services.
(ii) The pharmacy's usual and customary charge for the drug
dispensed.
(2) If the NADAC per unit is unavailable, the payment to the
pharmacy shall be the lower of the following amounts:
(i) The wholesale acquisition cost with the addition of a
professional dispensing fee. The professional dispensing fee
shall be no less than the fee-for-service dispensing fee
approved by the Centers for Medicare and Medicaid Services.
(ii) The pharmacy's usual and customary charge for the drug
dispensed.
(g) Pharmacies in this Commonwealth shall be reimbursed by
the department through the medical assistance program for
specialty medications dispensed to medical assistance eligible
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patients that require special handling and ongoing patient
support and interventions to ensure the desired patient
outcomes. The medications that are to be reimbursed as specialty
medications shall be selected and published by the department.
Reimbursement shall consist of the following:
(1) Reimbursement of an estimate of the dispensing
pharmacy's cost of goods, based upon a national survey-based
reference price that is available throughout the pharmacy
community, such as wholesale acquisition cost, average wholesale
price or NADAC. Selection of the appropriate and most equitable
reference pricing for the specialty medication list shall be
made by the department.
(2) A variable care management fee, based upon each
patient's primary disease state that is being treated with a
medication on the specialty medication list. The care management
fees shall be determined. Each care management fee shall be
based upon the disease state being treated with a specialty
medication and shall describe the activities, interventions,
data gathering and reporting that must be completed by each
pharmacy before it can invoice a care management fee related to
the dispensing of a medication on the specialty medication list.
(h) This section shall apply to all contracts and agreements
for pharmacy benefits management services executed or renewed on
or after the effective date of this section.
(i) Any information disclosed or produced by a pharmacy
benefits manager or a medical assistance managed care
organization to the department under this section shall not be
subject to the act of February 14, 2008 (P.L.6, No.3), known as
the Right-to-Know Law.
(j) As used in this section, the following words and phrases
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shall have the meanings given to them in this subsection:
"NADAC" means the National Average Drug Acquisition Cost.
"NADAC per unit" means the current National Average Drug
Acquisition Cost per unit.
"Pharmacy benefits management" means any of the following:
(1) Procurement of prescription drugs at a negotiated
contracted rate for distribution within this Commonwealth to
covered individuals.
(2) Administration or management of prescription drug
benefits provided by a covered entity for the benefit of covered
individuals.
(3) Administration of pharmacy benefits, including:
(i) Operating a mail-service pharmacy.
(ii) Claims processing.
(iii) Managing a retail pharmacy network management.
(iv) Paying claims to pharmacies for prescription drugs
dispensed to covered individuals via retail, specialty or mail-
order pharmacy.
(v) Developing and managing a clinical formulary,
utilization management and quality assurance programs.
(vi) Rebate contracting and administration.
(vii) Managing a patient compliance, therapeutic
intervention and generic substitution program.
(viii) Operating a disease management program.
(ix) Setting pharmacy reimbursement pricing and
methodologies, including maximum allowable cost, and determining
single or multiple source drugs.
"Pharmacy benefits manager" means a person, business or other
entity that performs pharmacy benefits management. The term
shall include a wholly owned subsidiary of a medical assistance
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managed care organization that performs pharmacy benefits
management.
Section 2. This act shall take effect in 60 days.
Section 1. Section 449 of the act of June 13, 1967 (P.L.31,
No.21), known as the Human Services Code, is amended to read:
Section 449. Medical Assistance Pharmacy Services.--(a) Any
managed care [entity] organization under contract to the
department must contract on an equal basis with any pharmacy
qualified to participate in the Medical Assistance Program that
is willing to comply with the managed care [entity's]
organization's pharmacy payment rates and terms and to adhere to
quality standards established by the managed care [entity]
organization.
(b) The department may conduct an audit or review of an
entity. In the course of an audit or review under this
subsection, a managed care organization utilizing a pharmacy
benefit manager shall provide medical assistance-specific
information from a pharmacy contract or agreement to the
department.
(c) A contract or agreement between an entity and a pharmacy
may not include any of the following:
(1) A confidentiality provision that prohibits the
disclosure of information to the department.
(2) Any provision that restricts the disclosure of
information to or communication with a managed care organization
or the department.
(d) An entity shall maintain records sufficient to disclose,
upon the department's request, information regarding the
provision of pharmacy services eligible for payment by the
medical assistance program.
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(e) Information disclosed or produced by an entity to the
department under this section shall not be subject to the act of
February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law.
(f) If an entity approves a claim for payment under the
medical assistance program, the entity may not retroactively
deny or modify the payment unless any of the following apply:
(1) The claim was fraudulent.
(2) The claim was duplicative of a previously paid claim.
(3) The pharmacy did not dispense the pharmacy service on
the claim.
(g) A managed care organization or pharmacy benefit manager
may not do any of the following:
(1) Mandate that a medical assistance recipient use a
specific pharmacy or other entity if any of the following apply:
(i) The managed care organization or pharmacy benefit
manager has an ownership interest in the pharmacy or other
entity.
(ii) The pharmacy or other entity has an ownership interest
in the managed care organization or pharmacy benefit manager.
(2) Provide an incentive to a medical assistance recipient
to encourage the use of a specific pharmacy.
(h) A pharmacy benefit manager or pharmacy services
administration organization may not do any of the following:
(1) Require that a pharmacist or pharmacy participate in a
network managed by the pharmacy benefit manager or pharmacy
services administration organization as a condition for the
pharmacist or pharmacy to participate in another network managed
by the same pharmacy benefit manager or pharmacy services
administration organization.
(2) A utomatically enroll or disenroll a pharmacist or
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pharmacy without cause in a contract or modify an existing
agreement without written agreement of the pharmacist or
pharmacy.
(3) Charge or retain a differential between what is billed
to a managed care organization as a reimbursement for a pharmacy
service and what is paid to pharmacies by the pharmacy benefit
manager or pharmacy services administration organization for the
pharmacy service.
(4) Charge pharmacy transmission fees.
(i) A managed care organization or pharmacy benefit manager
shall provide payment for a pharmacy service that is a covered
benefit if the pharmacy service is performed by a licensed
pharmacist in accordance with all of the following:
(1) The pharmacy service performed is within the scope of
practice of the licensed pharmacist.
(2) The managed care organization or pharmacy benefit
manager would cover the pharmacy service if the pharmacy service
was performed by a physician, an advanced practice registered
nurse or a physician assistant.
(j) As used in this section, the following words and phrases
shall have the meanings given to them in this subsection:
"Entity" means a pharmacy, pharmacy benefit manager, pharmacy
services administration organization or other entity that
manages, processes, influences the payment for or dispenses
pharmacy services to medical assistance recipients in the
managed care delivery system.
"Pharmacy benefit management" means any of the following:
(1) The procurement of prescription drugs at a negotiated
contracted rate for distribution within this Commonwealth.
(2) The administration or management of prescription drug
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benefits provided by a managed care organization.
(3) The administration of pharmacy benefits, including any
of the following:
(i) Operating a mail-service pharmacy.
(ii) Processing claims.
(iii) Managing a retail pharmacy network.
(iv) Paying claims to pharmacies, including retail,
specialty or mail-order pharmacies, for prescription drugs
dispensed to medical assistance recipients receiving services in
the managed care delivery system via a retail or mail-order
pharmacy.
(v) Developing and managing a clinical formulary or
preferred drug list, utilization management or quality assurance
programs.
(vi) Rebate contracting and administration.
(vii) Managing a patient compliance, therapeutic
intervention and generic substitution program.
(viii) Operating a disease management program.
(ix) Setting pharmacy payment pricing and methodologies,
including maximum allowable cost and determining single or
multiple source drugs.
"Pharmacy benefit manager" means a person, business or other
entity that performs pharmacy benefit management. The term
includes a wholly-owned subsidiary of a managed care
organization that performs pharmacy benefits management.
"Pharmacy services administration organization" means a
person, business or other entity that performs any of the
following:
(1) Negotiates or contracts with a managed care organization
or pharmacy benefit manager on behalf of its pharmacy members.
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(2) Negotiates payment rates, payments or audit terms on
behalf of its pharmacy members.
(3) Collects or reconciles payments on behalf of its
pharmacy members.
Section 2. The amendment of section 449 of the act shall
apply to any agreement or contract relating to pharmacy services
to medical assistance recipients in the managed care delivery
system entered into or amended on or after the effective date of
this section.
Section 3. This act shall take effect in 60 days.
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