Sen. David Koehler

Filed: 4/12/2021

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 2008

2    AMENDMENT NO. ______. Amend Senate Bill 2008 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Insurance Code is amended by
5changing Sections 155.37, 424, and 513b1 and by adding
6Sections 513b1.1, 513b1.3, 513b7, and 513b8 as follows:
 
7    (215 ILCS 5/155.37)
8    Sec. 155.37. Drug formulary; notice.
9    (a) As used in this Section:
10    "Brand name drug" means a prescription drug marketed under
11a proprietary name or registered trademark name, including a
12biological product.
13    "Formulary" means a list of prescription drugs that is
14developed by clinical and pharmacy experts and represents the
15carrier's medically appropriate and cost-effective
16prescription drugs approved for use.

 

 

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1    "Generic drug" means a prescription drug, whether
2identified by its chemical, proprietary, or nonproprietary
3name, that is not a brand name drug and is therapeutically
4equivalent to a brand name drug in dosage, safety, strength,
5method of consumption, quality, performance, and intended use.
6"Generic drug" includes a biosimilar product.
7    (b) Insurance companies that transact the kinds of
8insurance authorized under Class 1(b) or Class 2(a) of Section
94 of this Code and provide coverage for prescription drugs
10through the use of a drug formulary must notify insureds of any
11change in the formulary. A company may comply with this
12Section by posting changes in the formulary on its website.
13    (c) If a generic equivalent for a brand name drug is
14approved by the federal Food and Drug Administration,
15insurance companies with plans that provide coverage for
16prescription drugs through the use of a drug formulary that
17are amended, delivered, issued, or renewed in this State on or
18after January 1, 2022 shall:
19        (1) immediately substitute the brand name drug with
20    the generic equivalent; or
21        (2) move the brand name drug to a formulary tier that
22    reduces an enrollee's cost.
23    (d) The Department of Insurance may adopt rules to
24implement this Section.
25(Source: P.A. 92-440, eff. 8-17-01; 92-651, eff. 7-11-02.)
 

 

 

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1    (215 ILCS 5/424)  (from Ch. 73, par. 1031)
2    Sec. 424. Unfair methods of competition and unfair or
3deceptive acts or practices defined. The following are hereby
4defined as unfair methods of competition and unfair and
5deceptive acts or practices in the business of insurance:
6        (1) The commission by any person of any one or more of
7    the acts defined or prohibited by Sections 134, 143.24c,
8    147, 148, 149, 151, 155.22, 155.22a, 155.42, 236, 237,
9    364, and 469, and 513b7 of this Code.
10        (2) Entering into any agreement to commit, or by any
11    concerted action committing, any act of boycott, coercion
12    or intimidation resulting in or tending to result in
13    unreasonable restraint of, or monopoly in, the business of
14    insurance.
15        (3) Making or permitting, in the case of insurance of
16    the types enumerated in Classes 1, 2, and 3 of Section 4,
17    any unfair discrimination between individuals or risks of
18    the same class or of essentially the same hazard and
19    expense element because of the race, color, religion, or
20    national origin of such insurance risks or applicants. The
21    application of this Article to the types of insurance
22    enumerated in Class 1 of Section 4 shall in no way limit,
23    reduce, or impair the protections and remedies already
24    provided for by Sections 236 and 364 of this Code or any
25    other provision of this Code.
26        (4) Engaging in any of the acts or practices defined

 

 

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1    in or prohibited by Sections 154.5 through 154.8 of this
2    Code.
3        (5) Making or charging any rate for insurance against
4    losses arising from the use or ownership of a motor
5    vehicle which requires a higher premium of any person by
6    reason of his physical disability, race, color, religion,
7    or national origin.
8        (6) Failing to meet any requirement of the Unclaimed
9    Life Insurance Benefits Act with such frequency as to
10    constitute a general business practice.
11(Source: P.A. 99-143, eff. 7-27-15; 99-893, eff. 1-1-17.)
 
12    (215 ILCS 5/513b1)
13    Sec. 513b1. Pharmacy benefit manager contracts.
14    (a) As used in this Section:
15    "Biological product" has the meaning ascribed to that term
16in Section 19.5 of the Pharmacy Practice Act.
17    "Covered person" means a member, policyholder, subscriber,
18enrollee, beneficiary, dependent, or other individual
19participating in a health benefit plan.
20    "Health benefit plan" means a policy, contract,
21certificate, or agreement entered into, offered, or issued by
22an insurer to provide, deliver, arrange for, pay for, or
23reimburse any of the costs of physical, mental, or behavioral
24health care services.
25    "Maximum allowable cost" means any listing of

 

 

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1pharmaceutical products or method for calculating
2reimbursement amounts used by a pharmacy benefit manager,
3directly or indirectly, setting the maximum allowable cost on
4which reimbursement payment to a pharmacy or pharmacist may be
5based for dispensing a prescription pharmaceutical product and
6includes, without limitation: the maximum amount that a
7pharmacy benefit manager will reimburse a pharmacy for the
8cost of a drug.
9        (1) average acquisition cost, including national
10    average drug acquisition cost;
11        (2) average manufacturer price;
12        (3) average wholesale price;
13        (4) brand effective rate or generic effective rate;
14        (5) discount indexing;
15        (6) federal upper limits;
16        (7) wholesale acquisition cost; or
17        (8) any other term that a pharmacy benefit manager or
18    a third-party payer may use to establish reimbursement
19    rates to a pharmacist or pharmacy for pharmaceutical
20    products.
21    "Maximum allowable cost list" means a list of drugs for
22which a maximum allowable cost has been established by a
23pharmacy benefit manager.
24    "Pharmaceutical product" means a generic drug, brand name
25drug, biologic, or other prescription drug, vaccine, or
26device.

 

 

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1    "Pharmaceutical wholesaler" means a person or entity that
2sells and distributes, directly or indirectly, prescription
3pharmaceutical products, including, without limitation, brand
4name, generic, and over-the-counter pharmaceuticals, and that
5offers regular or private delivery to a pharmacy.
6    "Pharmacy acquisition cost" means the amount that a
7pharmaceutical wholesaler charges for a pharmaceutical product
8as listed on the pharmacy's billing invoice.
9    "Pharmacy benefit manager" means a person, business, or
10entity, including a wholly or partially owned or controlled
11subsidiary of a pharmacy benefit manager, that provides claims
12processing services or other prescription drug or device
13services, or both, for health benefit plans. "Pharmacy benefit
14manager" does not include:
15        (1) a health care facility licensed in this State;
16        (2) a health care professional licensed in this State;
17    or
18        (3) a consultant who only provides advice as to the
19    selection or performance of a pharmacy benefit manager.
20    "Pharmacy benefit manager affiliate" means a pharmacy or
21pharmacist that directly or indirectly, through one or more
22intermediaries, owns or controls, is owned or controlled by,
23or is under common ownership or control with a pharmacy
24benefit manager.
25    "Pharmacy services administrative organization" means an
26entity operating within the State that contracts with

 

 

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1independent pharmacies to conduct business on their behalf
2with third-party payers.
3    "Retail price" means the price an individual without
4prescription drug coverage would pay at a retail pharmacy, not
5including a pharmacist dispensing fee.
6    "Spread pricing" means the model of prescription drug
7pricing in which the pharmacy benefits manager charges a
8health benefit plan a contracted price for prescription drugs,
9and the contracted price for the prescription drugs differs
10from the amount the pharmacy benefits manager directly or
11indirectly pays the pharmacist or pharmacy for pharmacist
12services.
13    "Third-party payer" means any entity involved in the
14financing of a pharmacy benefit plan or program other than the
15patient, health care provider, or sponsor of a plan subject to
16regulation under Medicare Part D, 42 U.S.C. 1395w101, et al.
17    (b) A contract between a health insurer and a pharmacy
18benefit manager must require that the pharmacy benefit
19manager:
20        (1) Update and publish maximum allowable cost pricing
21    information at least every 7 calendar days and at least 7
22    calendar days from an increase of 10% or more in the
23    pharmacy acquisition cost from 60% or more of the
24    pharmaceutical wholesalers doing business in the State or
25    a change in the methodology on which the maximum allowable
26    cost list is based or in the value of a variable involved

 

 

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1    in the methodology.
2        (2) Maintain a process that will, in a timely manner,
3    eliminate drugs from maximum allowable cost lists or
4    modify drug prices to remain consistent with changes in
5    pricing data used in formulating maximum allowable cost
6    prices and product availability.
7        (3) Provide access to its maximum allowable cost list
8    to each pharmacy or pharmacy services administrative
9    organization subject to the maximum allowable cost list.
10    Access may include a real-time pharmacy website portal to
11    be able to view the maximum allowable cost list. As used in
12    this Section, "pharmacy services administrative
13    organization" means an entity operating within the State
14    that contracts with independent pharmacies to conduct
15    business on their behalf with third-party payers.
16        (3.5) A pharmacy services administrative organization
17        may provide administrative services to pharmacies and
18        negotiate and enter into contracts with third-party
19        payers or pharmacy benefit managers on behalf of
20        pharmacies.
21        (4) Provide a reasonable administrative appeal
22    procedure to allow contracted pharmacies to challenge
23    maximum allowable costs and reimbursements made under a
24    maximum allowable cost for a specific pharmaceutical
25    product or pharmaceutical products as: Provide a process
26    by which a contracted pharmacy can appeal the provider's

 

 

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1    reimbursement for a drug subject to maximum allowable cost
2    pricing.
3            (i) not meeting the requirements of this Section;
4        or
5            (ii) being below the pharmacy acquisition cost.
6        The appeals process must, at a minimum, include the
7    following:
8            (A) A requirement that a contracted pharmacy has
9        14 calendar days after the applicable fill date to
10        appeal a maximum allowable cost if the reimbursement
11        for the drug is less than the net amount that the
12        network provider paid to the supplier of the drug.
13            (B) A requirement that a pharmacy benefit manager
14        must respond to a challenge within 14 calendar days of
15        the contracted pharmacy making the claim for which the
16        appeal has been submitted.
17            (C) An up-to-date and active A telephone number,
18        and e-mail address, and or website to network
19        providers, at which the provider can contact the
20        pharmacy benefit manager to process and submit an
21        appeal.
22            (D) A requirement that, if an appeal is denied,
23        the pharmacy benefit manager must provide the reason
24        for the denial and the name and the national drug code
25        number from national or regional wholesalers operating
26        in Illinois that have the pharmaceutical product

 

 

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1        currently in stock at a price below the maximum
2        allowable cost list. If the national drug code number
3        provided by the pharmacy benefit manager is not
4        available below the pharmacy acquisition cost from the
5        pharmaceutical wholesaler from whom the pharmacy or
6        pharmacist purchases the majority of prescription
7        pharmaceutical products for resale, then the pharmacy
8        benefit manager shall adjust the maximum allowable
9        cost list above the challenging pharmacy's pharmacy
10        acquisition cost and permit the pharmacy to reverse
11        and rebill each claim affected by the inability to
12        procure the pharmaceutical product at a cost that is
13        equal to or less than the previously challenged
14        maximum allowable cost.
15            (E) A requirement that, if an appeal is sustained,
16        the pharmacy benefit manager must permit the
17        challenging pharmacy or pharmacist to reverse and
18        rebill the claim in question make an adjustment in the
19        drug price effective the date the challenge is
20        resolved and make the adjustment applicable to all
21        similarly situated network pharmacy providers, as
22        determined by the managed care organization or
23        pharmacy benefit manager.
24        (5) Allow a plan sponsor contracting with a pharmacy
25    benefit manager an annual right to audit compliance with
26    the terms of the contract by the pharmacy benefit manager,

 

 

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1    including, but not limited to, full disclosure of any and
2    all rebate amounts secured, whether product specific or
3    generalized rebates, that were provided to the pharmacy
4    benefit manager by a pharmaceutical manufacturer.
5        (6) Allow a plan sponsor contracting with a pharmacy
6    benefit manager to request that the pharmacy benefit
7    manager disclose the actual amounts paid by the pharmacy
8    benefit manager to the pharmacy.
9        (7) Provide notice to the party contracting with the
10    pharmacy benefit manager of any consideration that the
11    pharmacy benefit manager receives from the manufacturer
12    for dispense as written prescriptions once a generic or
13    biologically similar product becomes available.
14    (c) In order to place a particular prescription drug on a
15maximum allowable cost list, the pharmacy benefit manager
16must, at a minimum, ensure that:
17        (1) if the drug is a generically equivalent drug, it
18    is listed as therapeutically equivalent and
19    pharmaceutically equivalent "A" or "B" rated in the United
20    States Food and Drug Administration's most recent version
21    of the "Orange Book" or "Green Book" or have an NR or NA
22    rating by Medi-Span, Gold Standard, or a similar rating by
23    a nationally recognized reference;
24        (2) the drug is available for purchase by each
25    pharmacy in the State from national or regional
26    wholesalers operating in Illinois; and

 

 

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1        (3) the drug is not obsolete.
2    (d) A pharmacy benefit manager is prohibited from limiting
3a pharmacist's ability to disclose to a covered person:
4        (1) whether the cost-sharing obligation exceeds the
5    retail price for a covered prescription drug, and the
6    availability of a more affordable alternative drug, if one
7    is available in accordance with Section 42 of the Pharmacy
8    Practice Act; or .
9        (2) any health care information that the pharmacy or
10    pharmacist deems appropriate regarding:
11            (i) the nature of treatment, risks, or
12        alternatives thereto, if such disclosure is consistent
13        with the permissible practice of pharmacy under the
14        Pharmacy Practice Act;
15            (ii) the availability of alternative therapies,
16        consultations, or tests if such disclosure is
17        consistent with the permissible practice of pharmacy
18        under the Pharmacy Practice Act;
19            (iii) the decision of utilization reviewers or
20        similar persons to authorize or deny services;
21            (iv) the process that is used to authorize or deny
22        health care services or benefits; or
23            (v) information on financial incentives and
24        structures used by the insurer.
25    (e) A pharmacy benefit manager shall not prohibit a
26pharmacist or pharmacy from, or indirectly punish a pharmacist

 

 

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1or pharmacy for, making any written or oral statement or
2otherwise disclosing information to any federal, State,
3county, or municipal official, including the Director or law
4enforcement, or before any State, county, or municipal
5committee, body, or proceeding if:
6        (1) the recipient of the information represents that
7    it has the authority, to the extent provided by State or
8    federal law, to maintain proprietary information as
9    confidential; and
10        (2) before disclosure of information designated as
11    confidential the pharmacist or pharmacy:
12            (A) marks as confidential any document in which
13        the information appears; or
14            (B) requests confidential treatment for any oral
15        communication of the information.
16    This includes sharing any portion of the pharmacy benefit
17manager contract with the Director pursuant to a complaint or
18a query regarding whether the contract is in compliance with
19this Article.
20    (f) (e) A health insurer or pharmacy benefit manager shall
21not require an insured to make a payment for a prescription
22drug at the point of sale in an amount that exceeds the lesser
23of:
24        (1) the applicable cost-sharing amount; or
25        (2) the retail price of the drug in the absence of
26    prescription drug coverage.

 

 

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1    (g) A pharmacy benefit manager may not prohibit a pharmacy
2or pharmacist from selling a more affordable alternative to
3the covered person if a more affordable alternative is
4available.
5    (h) A pharmacy benefit manager shall not reimburse a
6pharmacy or pharmacist in this State an amount less than the
7amount that the pharmacy benefit manager reimburses a pharmacy
8benefit manager affiliate for providing the same
9pharmaceutical product. The amount shall be calculated on a
10per unit basis based on the same generic product identifier or
11generic code number. The amount shall not be less than the
12current national average drug acquisition cost listing for the
13same pharmaceutical product.
14    (i) A pharmacy benefit manager shall pay a pharmacy a
15professional dispensing fee at a rate not less than the
16fee-for-service rate paid under the State's Medical Assistance
17Program established under Article V of the Illinois Public Aid
18Code for each prescription pharmaceutical product that is
19dispensed (on a per unit basis based on the same generic
20product identifier or generic code number) to the patient by
21the pharmacy. This dispensing fee shall be in addition to the
22amount that the pharmacy benefit manager reimburses a
23pharmacy, consistent with the provisions of this Article, for
24the cost of the pharmaceutical product that the pharmacy
25dispenses to the patient.
26    (j) A pharmacy benefit manager shall not:

 

 

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1        (1) assess, charge, or collect any form of
2    remuneration that passes from a pharmacy or pharmacist to
3    the pharmacy benefit manager, including, but not limited
4    to, claim-processing fees, performance-based fees,
5    network-participation fees, or accreditation fees;
6        (2) condition payment, reimbursement, or network
7    participation on any type of accreditation, certification,
8    or credentialing standard beyond those required by the
9    State Board of Pharmacy or applicable State or federal
10    law;
11        (3) prohibit or otherwise restrict a pharmacist or
12    pharmacy from offering prescription delivery services to
13    any covered person; or
14        (4) require any additional requirement for a
15    prescription claim that is more restrictive than the
16    standards established under the Illinois Food, Drug and
17    Cosmetic Act; the Pharmacy Practice Act; or the Illinois
18    Controlled Substances Act.
19    (k) A pharmacy benefit manager is prohibited from
20conducting spread pricing in this State.
21    (l) (f) This Section applies to contracts entered into or
22renewed on or after July 1, 2020.
23    (m) (g) This Section applies to any group or individual
24policy of accident and health insurance or managed care plan
25that provides coverage for prescription drugs and that is
26amended, delivered, issued, or renewed on or after July 1,

 

 

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12020.
2(Source: P.A. 101-452, eff. 1-1-20.)
 
3    (215 ILCS 5/513b1.1 new)
4    Sec. 513b1.1. Pharmacy network participation.
5    (a) As used in this Section:
6    "Claims processing services" means the administrative
7services performed in connection with the processing and
8adjudicating of claims relating to pharmacist services that
9include:
10        (1) receiving payments for pharmacist services; or
11        (2) making payments to a pharmacist or pharmacy for
12    pharmacist services.
13    "Pharmacy benefit manager affiliate" means a pharmacy or
14pharmacist that directly or indirectly, through one or more
15intermediaries, owns or controls, is owned or controlled by,
16or is under common ownership or control with a pharmacy
17benefit manager. "Pharmacy benefit manager affiliate" includes
18any mail-order pharmacy that is directly or indirectly owned
19or controlled by a pharmacy benefit manager.
20    (b) A pharmacy benefit manager shall not:
21        (1) prohibit or limit a participant or beneficiary of
22    pharmacy services under a health benefit plan from
23    selecting a pharmacy or pharmacist of his or her choice if
24    the pharmacy or pharmacist is willing and agrees to accept
25    the same terms and conditions that the pharmacy benefit

 

 

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1    manager has established for at least one of the networks
2    of pharmacies that the pharmacy benefit manager has
3    established to serve patients within the State;
4        (2) prohibit a pharmacy from participating in any
5    given network of pharmacies within the State if the
6    pharmacy is licensed by the Department of Financial and
7    Professional Regulation and agrees to the same terms and
8    conditions, including the terms of reimbursement, that the
9    pharmacy benefit manager has established for other
10    pharmacies participating within the network that the
11    pharmacy wishes to join;
12        (3) charge a participant or beneficiary of a pharmacy
13    benefits plan or program that the pharmacy benefit manager
14    serves a different copayment obligation or additional fee
15    for using any pharmacy within a given network of
16    pharmacies established by the pharmacy benefit manager to
17    serve patients within the State;
18        (4) impose a monetary advantage, incentive, or penalty
19    under a health benefit plan that would affect or influence
20    a beneficiary's choice among those pharmacies or
21    pharmacists who have agreed to participate in the plan
22    according to the terms offered by the insurer;
23        (5) require a participant or beneficiary to use or
24    otherwise obtain services exclusively from a mail-order
25    pharmacy or one or more pharmacy benefit manager
26    affiliates;

 

 

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1        (6) impose upon a beneficiary any copayment obligation
2    or other limitation, restriction, or condition, including
3    number of days of a drug supply for which coverage will be
4    allowed, that is more costly or more restrictive than that
5    which would be imposed upon the beneficiary if such
6    services were purchased from a pharmacy benefit manager
7    affiliate or any other pharmacy within a given network of
8    pharmacies established by the pharmacy benefit manager to
9    serve patients within the State;
10        (7) require participation in additional networks for a
11    pharmacy to enroll in an individual network;
12        (8) impose upon a pharmacy participating in the
13    federal Drug Pricing Program under Section 340B of the
14    federal Public Health Service Act, directly or as a
15    contracted pharmacy any process, claim modifier, fee,
16    charge, adjustment, or other condition that is not imposed
17    on pharmacies not participating in the Drug Pricing
18    Program;
19        (9) include in any manner on any material, including,
20    but not limited to, mail and identifications cards, the
21    name of any pharmacy, hospital, or other providers unless
22    it specifically lists all pharmacies, hospitals, and
23    providers participating in the given network of pharmacies
24    established by the pharmacy benefit manager to serve
25    patients within the State; or
26        (10) share, transfer, or otherwise utilize patient

 

 

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1    information or pharmacy service data collected pursuant to
2    the provision of claims processing services for the
3    purpose of referring a participant or beneficiary to a
4    pharmacy benefit manager affiliate.
5    (c) A pharmacy licensed in or holding a nonresident
6pharmacy permit in Illinois shall be prohibited from:
7        (1) transferring or sharing records relative to
8    prescription information containing patient identifiable
9    and prescriber identifiable data to or from an affiliate
10    for any commercial purpose; however, nothing shall be
11    construed to prohibit the exchange of prescription
12    information between a pharmacy and its affiliate for the
13    limited purposes of pharmacy reimbursement, formulary
14    compliance, pharmacy care, public health activities
15    otherwise authorized by law, or utilization review by a
16    health care provider; or
17        (2) presenting a claim for payment to any individual,
18    third-party payer, affiliate, or other entity for a
19    service furnished pursuant to a referral from an affiliate
20    or other person licensed under this Article.
21    (d) If a pharmacy licensed or holding a nonresident
22pharmacy permit in this State has an affiliate, it shall
23annually file with the Department a disclosure statement
24identifying all such affiliates.
25    (e) This Section shall not be construed to prohibit a
26pharmacy from entering into an agreement with an affiliate to

 

 

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1provide pharmacy care to patients if the pharmacy does not
2receive referrals in violation of subsection (c) and the
3pharmacy provides the disclosure statement required in
4subsection (d).
5    (f) In addition to any other remedy provided by law, a
6violation of this Section by a pharmacy shall be grounds for
7disciplinary action by the Department.
8    (g) A pharmacist who fills a prescription that violates
9subsection (c) shall not be liable under this Section.
10    (h) This Section shall not apply to:
11        (1) any hospital or related institution; or
12        (2) any referrals by an affiliate for pharmacy
13    services and prescriptions to patients in skilled nursing
14    facilities, intermediate care facilities, continuing care
15    retirement communities, home health agencies, or hospices.
 
16    (215 ILCS 5/513b1.3 new)
17    Sec. 513b1.3. Fiduciary responsibility. A pharmacy benefit
18manager is a fiduciary to a contracted health insurer and
19shall:
20        (1) discharge that duty in accordance with federal and
21    State law;
22        (2) notify the covered entity in writing of any
23    activity, policy, or practice of the pharmacy benefit
24    manager that directly or indirectly presents any conflict
25    of interest and inability to comply with the duties

 

 

10200SB2008sam001- 21 -LRB102 17298 BMS 24992 a

1    imposed by this Section, but in no event does this
2    notification exempt the pharmacy benefit manager from
3    compliance with all other Sections of this Code; and
4        (3) disclose all direct or indirect payments related
5    to the dispensation of prescription drugs or classes or
6    brands of drugs to the covered entity.
 
7    (215 ILCS 5/513b7 new)
8    Sec. 513b7. Pharmacy audits.
9    (a) As used in this Section:
10    "Audit" means any physical on-site, remote electronic, or
11concurrent review of a pharmacist service submitted to the
12pharmacy benefit manager or pharmacy benefit manager affiliate
13by a pharmacist or pharmacy for payment.
14    "Auditing entity" means a person or company that performs
15a pharmacy audit.
16    "Extrapolation" means the practice of inferring a
17frequency of dollar amount of overpayments, underpayments,
18nonvalid claims, or other errors on any portion of claims
19submitted, based on the frequency of dollar amount of
20overpayments, underpayments, nonvalid claims, or other errors
21actually measured in a sample of claims.
22    "Misfill" means a prescription that was not dispensed; a
23prescription that was dispensed but was an incorrect dose,
24amount, or type of medication; a prescription that was
25dispensed to the wrong person; a prescription in which the

 

 

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1prescriber denied the authorization request; or a prescription
2in which an additional dispensing fee was charged.
3    "Pharmacy audit" means an audit conducted of any records
4of a pharmacy for prescriptions dispensed or non-proprietary
5drugs or pharmacist services provided by a pharmacy or
6pharmacist to a covered person.
7    "Pharmacy record" means any record stored electronically
8or as a hard copy by a pharmacy that relates to the provision
9of a prescription or pharmacy services or other component of
10pharmacist care that is included in the practice of pharmacy.
11    (b) Notwithstanding any other law, when conducting a
12pharmacy audit, an auditing entity shall:
13        (1) not conduct an on-site audit of a pharmacy at any
14    time during the first 3 business days of a month or the
15    first 2 weeks and final 2 weeks of the calendar year or
16    during a declared State or federal public health
17    emergency;
18        (2) notify the pharmacy or its contracting agent no
19    later than 30 days before the date of initial on-site
20    audit; the notification to the pharmacy or its contracting
21    agent shall be in writing and delivered either:
22            (A) by mail or common carrier, return receipt
23        requested; or
24            (B) electronically with electronic receipt
25        confirmation, addressed to the supervising pharmacist
26        of record and pharmacy corporate office, if

 

 

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1        applicable, at least 30 days before the date of an
2        initial on-site audit;
3        (3) limit the audit period to 24 months after the date
4    a claim is submitted to or adjudicated by the pharmacy
5    benefit manager;
6        (4) include in the written advance notice of an
7    on-site audit the list of specific prescription numbers to
8    be included in the audit that may or may not include the
9    final 2 digits of the prescription numbers;
10        (5) use the written and verifiable records of a
11    hospital, physician, or other authorized practitioner that
12    are transmitted by any means of communication to validate
13    the pharmacy records in accordance with State and federal
14    law;
15        (6) limit the number of prescriptions audited to no
16    more than 100 randomly selected in a 12-month period and
17    no more than one on-site audit per quarter of the calendar
18    year, except in cases of fraud;
19        (7) provide the pharmacy or its contracting agent with
20    a copy of the preliminary audit report within 45 days
21    after the conclusion of the audit;
22        (8) be allowed to conduct a follow-up audit on site if
23    a remote or desk audit reveals the necessity for a review
24    of additional claims;
25        (9) accept invoice audits as validation invoices from
26    any wholesaler registered with the Department of Financial

 

 

10200SB2008sam001- 24 -LRB102 17298 BMS 24992 a

1    and Professional Regulation from which the pharmacy has
2    purchased prescription drugs or, in the case of durable
3    medical equipment or sickroom supplies, invoices from an
4    authorized distributor other than a wholesaler;
5        (10) provide the pharmacy or its contracting agent
6    with the ability to provide documentation to address a
7    discrepancy or audit finding if the documentation is
8    received by the pharmacy benefit manager no later than the
9    45th day after the preliminary audit report was provided
10    to the pharmacy or its contracting agent; the pharmacy
11    benefit manager shall consider a reasonable request from
12    the pharmacy for an extension of time to submit
13    documentation to address or correct any findings in the
14    report;
15        (11) be required to provide the pharmacy or its
16    contracting agent with the final audit report no later
17    than 60 days after the initial audit report was provided
18    to the pharmacy or its contracting agent;
19        (12) conduct the audit in consultation with a
20    pharmacist if the audit involves clinical or professional
21    judgment;
22        (13) not chargeback, recoup, or collect penalties from
23    a pharmacy until the time period to file an appeal of the
24    final pharmacy audit report has passed or the appeals
25    process has been exhausted, whichever is later, unless the
26    identified discrepancy is expected to exceed $25,000, in

 

 

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1    which case the auditing entity may withhold future
2    payments in excess of that amount until the final
3    resolution of the audit;
4        (14) not compensate the employee or contractor
5    conducting the audit based on a percentage of the amount
6    claimed or recouped pursuant to the audit;
7        (15) not use extrapolation to calculate penalties or
8    amounts to be charged back or recouped unless otherwise
9    required by federal law or regulation; any amount to be
10    charged back or recouped due to overpayment may not exceed
11    the amount the pharmacy was overpaid;
12        (16) not include dispensing fees in the calculation of
13    overpayments unless a prescription is considered a
14    misfill; or
15        (17) conduct a pharmacy audit under the same standards
16    and parameters as conducted for other similarly situated
17    pharmacies audited by the auditing entity.
18    (c) Except as otherwise provided by State or federal law,
19an auditing entity conducting a pharmacy audit may have access
20to a pharmacy's previous audit report only if the report was
21prepared by that auditing entity.
22    (d) Information collected during a pharmacy audit shall be
23confidential by law, except that the auditing entity
24conducting the pharmacy audit may share the information with
25the health benefit plan for which a pharmacy audit is being
26conducted and with any regulatory agencies and law enforcement

 

 

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1agencies as required by law.
2    (e) A pharmacy may not be subject to a chargeback or
3recoupment for a clerical or recordkeeping error in a required
4document or record, including a typographical error or
5computer error, unless the pharmacy benefit manager can
6provide proof of intent to commit fraud or such error results
7in actual financial harm to the pharmacy benefit manager, a
8health plan managed by the pharmacy benefit manager, or a
9consumer.
10    (f) A pharmacy shall have the right to file a written
11appeal of a preliminary and final pharmacy audit report in
12accordance with the procedures established by the entity
13conducting the pharmacy audit.
14    (g) No interest shall accrue for any party during the
15audit period, beginning with the notice of the pharmacy audit
16and ending with the conclusion of the appeals process.
17    (h) A contract between a pharmacy or pharmacist and a
18pharmacy benefit manager must contain a provision allowing,
19during the course of a pharmacy audit conducted by or on behalf
20of a pharmacy benefit manager, a pharmacy or pharmacist to
21withdraw and resubmit a claim within 30 days after:
22        (1) the preliminary written audit report is delivered
23    if the pharmacy or pharmacist does not request an internal
24    appeal; or
25        (2) the conclusion of the internal audit appeals
26    process if the pharmacy or pharmacist requests an internal

 

 

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1    audit appeal.
2    (i) This Section shall not apply to:
3        (1) audits in which suspected fraudulent activity or
4    other intentional or willful misrepresentation is
5    evidenced by a physical review, review of claims data or
6    statements, or other investigative methods;
7        (2) audits of claims paid for by federally funded
8    programs; or
9        (3) concurrent reviews or desk audits that occur
10    within 3 business days after transmission of a claim and
11    where no chargeback or recoupment is demanded.
12    (j) A violation of this Section shall be an unfair and
13deceptive act or practice under Section 424.
 
14    (215 ILCS 5/513b8 new)
15    Sec. 513b8. Pharmacy benefit manager transparency.
16    (a) A pharmacy benefit manager shall report to the
17Director on a quarterly basis for each health care insurer the
18following information:
19        (1) the aggregate amount of rebates received by the
20    pharmacy benefit manager;
21        (2) the aggregate amount of rebates distributed to the
22    appropriate health care insurer;
23        (3) the aggregate amount of rebates passed on to the
24    enrollees of each health care insurer at the point of sale
25    that reduced the enrollees' applicable deductible,

 

 

10200SB2008sam001- 28 -LRB102 17298 BMS 24992 a

1    copayment, coinsurance, or other cost-sharing amount;
2        (4) the individual and aggregate amount paid by the
3    health care insurer to the pharmacy benefit manager for
4    pharmacist services itemized by pharmacy, by product, and
5    by goods and services; and
6        (5) the individual and aggregate amount a pharmacy
7    benefit manager paid for pharmacist services itemized by
8    pharmacy, by product, and by goods and services.
9    (b) The report made to the Department required under this
10subsection is confidential and not subject to disclosure under
11the Freedom of Information Act.
 
12    Section 10. The Network Adequacy and Transparency Act is
13amended by adding Section 35 as follows:
 
14    (215 ILCS 124/35 new)
15    Sec. 35. Pharmacy benefit manager network adequacy.
16    (a) As used in this Section:
17    "Pharmacy benefit manager" has the meaning ascribed to
18that term in Section 513b1 of the Illinois Insurance Code.
19    "Pharmacy benefit manager network" means the group or
20groups of preferred providers of pharmacy services to a
21network plan.
22    "Pharmacy benefit manager network plan" means an
23individual or group policy of accident and health insurance
24that either requires a covered person to use or creates

 

 

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1incentives, including financial incentives, for a covered
2person to use providers of pharmacy services managed, owned,
3under contract with, or employed by the insurer.
4    "Pharmacy services" means products, goods, and services or
5any combination of products, goods, and services, provided as
6a part of the practice of pharmacy. "Pharmacy services"
7includes "pharmacist care" as defined in the Pharmacy Practice
8Act.
9    (b) A pharmacy benefit manager shall provide a reasonably
10adequate and accessible pharmacy benefit manager network for
11the provision of prescription drugs for a health benefit plan
12that shall provide for convenient patient access to pharmacies
13within a reasonable distance from a patient's residence.
14    (c) Pharmacy benefit managers must file for review by the
15Director a pharmacy benefit manager network plan describing
16the pharmacy benefit manager network and the pharmacy benefit
17manager network's accessibility in this State in the time and
18manner required by rule issued by the Department.
19        (1) A mail-order pharmacy shall not be included in the
20    calculations determining pharmacy benefit manager network
21    adequacy.
22        (2) A pharmacy benefit manager network plan shall
23    comply with the following retail pharmacy network access
24    standards:
25            (A) at least 90% of covered individuals residing
26        in an urban service area live within 2 miles of a

 

 

10200SB2008sam001- 30 -LRB102 17298 BMS 24992 a

1        retail pharmacy participating in the pharmacy benefit
2        manager's retail pharmacy network;
3            (B) at least 90% of covered individuals residing
4        in an urban service area live within 5 miles of a
5        retail pharmacy designated as a preferred
6        participating pharmacy in the pharmacy benefit
7        manager's retail pharmacy network;
8            (C) at least 90% of covered individuals residing
9        in a suburban service area live within 5 miles of a
10        retail pharmacy participating in the pharmacy benefit
11        manager's retail pharmacy network;
12            (D) at least 90% of covered individuals residing
13        in a suburban service area live within 7 miles of a
14        retail pharmacy designated as a preferred
15        participating pharmacy in the pharmacy benefit
16        manager's retail pharmacy network;
17            (E) at least 70% of covered individuals residing
18        in a rural service area live within 15 miles of a
19        retail pharmacy participating in the pharmacy benefit
20        manager's retail pharmacy network; and
21            (F) at least 70% of covered individuals residing
22        in a rural service area live within 18 miles of a
23        retail pharmacy designated as a preferred
24        participating pharmacy in the pharmacy benefit
25        manager's retail pharmacy network.
26    (d) The Director shall establish a process for the review

 

 

10200SB2008sam001- 31 -LRB102 17298 BMS 24992 a

1of the adequacy of the standards required under this Section.
 
2    Section 15. The Illinois Public Aid Code is amended by
3changing Sections 5-5.12 and 5-36 as follows:
 
4    (305 ILCS 5/5-5.12)  (from Ch. 23, par. 5-5.12)
5    Sec. 5-5.12. Pharmacy payments.
6    (a) Every request submitted by a pharmacy for
7reimbursement under this Article for prescription drugs
8provided to a recipient of aid under this Article shall
9include the name of the prescriber or an acceptable
10identification number as established by the Department of
11Healthcare and Family Services.
12    (b) Pharmacies providing prescription drugs under this
13Article shall be reimbursed at a rate which shall include a
14professional dispensing fee as determined by the Illinois
15Department of Healthcare and Family Services, plus the current
16acquisition cost of the prescription drug dispensed. The
17Illinois Department of Healthcare and Family Services shall
18update its information on the acquisition costs of all
19prescription drugs no less frequently than every 30 days. The
20Department of Healthcare and Family Services shall not
21reimburse a pharmacy or pharmacist in this State an amount
22less than the current national average drug acquisition cost
23listing for the pharmaceutical product. Notwithstanding the
24foregoing, the Department may reimburse a pharmacy owned by an

 

 

10200SB2008sam001- 32 -LRB102 17298 BMS 24992 a

1entity participating in the federal Drug Pricing Program under
2Section 340B of the federal Public Health Service Act for
3drugs purchased under that Drug Pricing Program an amount
4equal to or greater than the ceiling price calculated under
5that Section 340B in addition to the professional dispensing
6fee described in this subsection. However, the Illinois
7Department may set the rate of reimbursement for the
8acquisition cost, by rule, at a percentage of the current
9average wholesale acquisition cost.
10    (b-5) The Department of Healthcare and Family Services
11shall pay a pharmacy or pharmacist a professional dispensing
12fee at a rate not less than the amount determined by a pharmacy
13profession-recognized national or state survey of pharmacies
14for each prescription pharmaceutical product that is dispensed
15(on a per unit basis based on the same generic product
16identifier or generic code number) to the patient by the
17pharmacy. This dispensing fee shall be in addition to the
18amount that the Department of Healthcare and Family Services
19reimburses a pharmacy for the cost of the pharmaceutical
20product that the pharmacy dispenses to the patient. If a
21vendor is utilized for conducting the survey or data analysis,
22the vendor may not be a wholly or partially owned or controlled
23subsidiary of a pharmacy benefit manager or managed care
24organization.
25    (b-10) All Medicaid managed care organizations must
26reimburse pharmacy provider professional dispensing fees and

 

 

10200SB2008sam001- 33 -LRB102 17298 BMS 24992 a

1acquisition costs at no less than the amounts established
2under the fee-for-service program whether the Medicaid managed
3care organization directly reimburses pharmacy providers or
4contracts with a pharmacy benefit manager to reimburse
5pharmacy providers. The reimbursement requirement specified in
6this subsection applies to all pharmacy services for persons
7receiving benefits under this Code, including services
8reimbursed under Section 5-36. Notwithstanding the foregoing,
9all Medicaid managed care organizations must reimburse a
10pharmacy participating in the federal Drug Pricing Program
11under Section 340B of the federal Public Health Service Act,
12directly or as a contracted pharmacy, whether the Medicaid
13managed care organization directly reimburses the provider or
14contracts with a pharmacy benefit manager to reimburse
15pharmacy providers, for drugs purchased under that Drug
16Pricing Program an amount equal to or greater than the current
17national average drug acquisition cost listing for the
18pharmaceutical product in addition to the professional
19dispensing fee described in this subsection.
20    (c) (Blank).
21    (c-5) The Department, a Medicaid managed care
22organization, and a pharmacy benefit manager under contract
23with a Medicaid managed care provider to reimburse pharmacy
24providers shall not prohibit any entity or pharmacy
25participating in the federal Drug Pricing Program under
26Section 340B of the federal Public Health Service Act,

 

 

10200SB2008sam001- 34 -LRB102 17298 BMS 24992 a

1directly or as a contracted pharmacy, from using drugs
2purchased under Section 340B when submitting claims for
3pharmaceutical reimbursement.
4    (d) The Department shall review utilization of narcotic
5medications in the medical assistance program and impose
6utilization controls that protect against abuse.
7    (e) When making determinations as to which drugs shall be
8on a prior approval list, the Department shall include as part
9of the analysis for this determination, the degree to which a
10drug may affect individuals in different ways based on factors
11including the gender of the person taking the medication.
12    (f) The Department shall cooperate with the Department of
13Public Health and the Department of Human Services Division of
14Mental Health in identifying psychotropic medications that,
15when given in a particular form, manner, duration, or
16frequency (including "as needed") in a dosage, or in
17conjunction with other psychotropic medications to a nursing
18home resident or to a resident of a facility licensed under the
19ID/DD Community Care Act or the MC/DD Act, may constitute a
20chemical restraint or an "unnecessary drug" as defined by the
21Nursing Home Care Act or Titles XVIII and XIX of the Social
22Security Act and the implementing rules and regulations. The
23Department shall require prior approval for any such
24medication prescribed for a nursing home resident or to a
25resident of a facility licensed under the ID/DD Community Care
26Act or the MC/DD Act, that appears to be a chemical restraint

 

 

10200SB2008sam001- 35 -LRB102 17298 BMS 24992 a

1or an unnecessary drug. The Department shall consult with the
2Department of Human Services Division of Mental Health in
3developing a protocol and criteria for deciding whether to
4grant such prior approval.
5    (g) The Department may by rule provide for reimbursement
6of the dispensing of a 90-day supply of a generic or brand
7name, non-narcotic maintenance medication in circumstances
8where it is cost effective.
9    (g-5) On and after July 1, 2012, the Department may
10require the dispensing of drugs to nursing home residents be
11in a 7-day supply or other amount less than a 31-day supply.
12The Department shall pay only one dispensing fee per 31-day
13supply.
14    (h) Effective July 1, 2011, the Department shall
15discontinue coverage of select over-the-counter drugs,
16including analgesics and cough and cold and allergy
17medications.
18    (h-5) On and after July 1, 2012, the Department shall
19impose utilization controls, including, but not limited to,
20prior approval on specialty drugs, oncolytic drugs, drugs for
21the treatment of HIV or AIDS, immunosuppressant drugs, and
22biological products in order to maximize savings on these
23drugs. The Department may adjust payment methodologies for
24non-pharmacy billed drugs in order to incentivize the
25selection of lower-cost drugs. For drugs for the treatment of
26AIDS, the Department shall take into consideration the

 

 

10200SB2008sam001- 36 -LRB102 17298 BMS 24992 a

1potential for non-adherence by certain populations, and shall
2develop protocols with organizations or providers primarily
3serving those with HIV/AIDS, as long as such measures intend
4to maintain cost neutrality with other utilization management
5controls such as prior approval. For hemophilia, the
6Department shall develop a program of utilization review and
7control which may include, in the discretion of the
8Department, prior approvals. The Department may impose special
9standards on providers that dispense blood factors which shall
10include, in the discretion of the Department, staff training
11and education; patient outreach and education; case
12management; in-home patient assessments; assay management;
13maintenance of stock; emergency dispensing timeframes; data
14collection and reporting; dispensing of supplies related to
15blood factor infusions; cold chain management and packaging
16practices; care coordination; product recalls; and emergency
17clinical consultation. The Department may require patients to
18receive a comprehensive examination annually at an appropriate
19provider in order to be eligible to continue to receive blood
20factor.
21    (i) On and after July 1, 2012, the Department shall reduce
22any rate of reimbursement for services or other payments or
23alter any methodologies authorized by this Code to reduce any
24rate of reimbursement for services or other payments in
25accordance with Section 5-5e.
26    (j) On and after July 1, 2012, the Department shall impose

 

 

10200SB2008sam001- 37 -LRB102 17298 BMS 24992 a

1limitations on prescription drugs such that the Department
2shall not provide reimbursement for more than 4 prescriptions,
3including 3 brand name prescriptions, for distinct drugs in a
430-day period, unless prior approval is received for all
5prescriptions in excess of the 4-prescription limit. Drugs in
6the following therapeutic classes shall not be subject to
7prior approval as a result of the 4-prescription limit:
8immunosuppressant drugs, oncolytic drugs, anti-retroviral
9drugs, and, on or after July 1, 2014, antipsychotic drugs. On
10or after July 1, 2014, the Department may exempt children with
11complex medical needs enrolled in a care coordination entity
12contracted with the Department to solely coordinate care for
13such children, if the Department determines that the entity
14has a comprehensive drug reconciliation program.
15    (k) No medication therapy management program implemented
16by the Department shall be contrary to the provisions of the
17Pharmacy Practice Act.
18    (l) Any provider enrolled with the Department that bills
19the Department for outpatient drugs and is eligible to enroll
20in the federal Drug Pricing Program under Section 340B of the
21federal Public Health Service Services Act shall enroll in
22that program. No entity participating in the federal Drug
23Pricing Program under Section 340B of the federal Public
24Health Service Services Act shall may exclude Medicaid from
25their participation in that program, although the Department
26may exclude entities defined in Section 1905(l)(2)(B) of the

 

 

10200SB2008sam001- 38 -LRB102 17298 BMS 24992 a

1Social Security Act from this requirement.
2(Source: P.A. 98-463, eff. 8-16-13; 98-651, eff. 6-16-14;
399-180, eff. 7-29-15; revised 9-2-20.)
 
4    (305 ILCS 5/5-36)
5    Sec. 5-36. Pharmacy benefits.
6    (a)(1) The Department may enter into a contract with a
7third party on a fee-for-service reimbursement model for the
8purpose of administering pharmacy benefits as provided in this
9Section for members not enrolled in a Medicaid managed care
10organization; however, these services shall be approved by the
11Department. The Department shall ensure coordination of care
12between the third-party administrator and managed care
13organizations as a consideration in any contracts established
14in accordance with this Section. Any managed care techniques,
15principles, or administration of benefits utilized in
16accordance with this subsection shall comply with State law.
17    (2) The following shall apply to contracts between
18entities contracting relating to the Department's third-party
19administrators and pharmacies:
20        (A) the Department shall approve any contract between
21    a third-party administrator and a pharmacy;
22        (B) the Department's third-party administrator shall
23    not change the terms of a contract between a third-party
24    administrator and a pharmacy without written approval by
25    the Department; and

 

 

10200SB2008sam001- 39 -LRB102 17298 BMS 24992 a

1        (C) the Department's third-party administrator shall
2    not create, modify, implement, or indirectly establish any
3    fee on a pharmacy, pharmacist, or a recipient of medical
4    assistance without written approval by the Department.
5    (b) The provisions of this Section shall not apply to
6outpatient pharmacy services provided by a health care
7facility registered as a covered entity pursuant to 42 U.S.C.
8256b or any pharmacy owned by or contracted with the covered
9entity. A Medicaid managed care organization shall, either
10directly or through a pharmacy benefit manager, administer and
11reimburse outpatient pharmacy claims submitted by a health
12care facility registered as a covered entity pursuant to 42
13U.S.C. 256b, its owned pharmacies, and contracted pharmacies
14in accordance with the contractual agreements the Medicaid
15managed care organization or its pharmacy benefit manager has
16with such facilities and pharmacies. Any pharmacy benefit
17manager that contracts with a Medicaid managed care
18organization to administer and reimburse pharmacy claims as
19provided in this Section must be registered with the Director
20of Insurance in accordance with Section 513b2 of the Illinois
21Insurance Code.
22    (c) On at least an annual basis, the Director of the
23Department of Healthcare and Family Services shall submit a
24report beginning no later than one year after January 1, 2020
25(the effective date of Public Act 101-452) this amendatory Act
26of the 101st General Assembly that provides an update on any

 

 

10200SB2008sam001- 40 -LRB102 17298 BMS 24992 a

1contract, contract issues, formulary, dispensing fees, and
2maximum allowable cost concerns regarding a third-party
3administrator and managed care. The requirement for reporting
4to the General Assembly shall be satisfied by filing copies of
5the report with the Speaker, the Minority Leader, and the
6Clerk of the House of Representatives and with the President,
7the Minority Leader, and the Secretary of the Senate. The
8Department shall take care that no proprietary information is
9included in the report required under this Section.
10    (d) A pharmacy benefit manager shall notify the Department
11in writing of any activity, policy, or practice of the
12pharmacy benefit manager that directly or indirectly presents
13a conflict of interest that interferes with the discharge of
14the pharmacy benefit manager's duty to a managed care
15organization to exercise its contractual duties. "Conflict of
16interest" shall be defined by rule by the Department.
17    (e) A pharmacy benefit manager shall, upon request,
18disclose to the Department the following information:
19        (1) whether the pharmacy benefit manager has a
20    contract, agreement, or other arrangement with a
21    pharmaceutical manufacturer to exclusively dispense or
22    provide a drug to a managed care organization's enrollees,
23    and the aggregate amounts of consideration of economic
24    benefits collected or received pursuant to that
25    arrangement;
26        (2) the percentage of claims payments made by the

 

 

10200SB2008sam001- 41 -LRB102 17298 BMS 24992 a

1    pharmacy benefit manager to pharmacies owned, managed, or
2    controlled by the pharmacy benefit manager or any of the
3    pharmacy benefit manager's management companies, parent
4    companies, subsidiary companies, or jointly held
5    companies;
6        (3) the aggregate amount of the fees or assessments
7    imposed on, or collected from, pharmacy providers; and
8        (4) the average annualized percentage of revenue
9    collected by the pharmacy benefit manager as a result of
10    each contract it has executed with a managed care
11    organization contracted by the Department to provide
12    medical assistance benefits which is not paid by the
13    pharmacy benefit manager to pharmacy providers and
14    pharmaceutical manufacturers or labelers or in order to
15    perform administrative functions pursuant to its contracts
16    with managed care organizations.
17    (f) The information disclosed under subsection (e) shall
18include all retail, mail order, specialty, and compounded
19prescription products. All information made available to the
20Department under subsection (e) is confidential and not
21subject to disclosure under the Freedom of Information Act.
22All information made available to the Department under
23subsection (e) shall not be reported or distributed in any way
24that compromises its competitive, proprietary, or financial
25value. The information shall only be used by the Department to
26assess the contract, agreement, or other arrangements made

 

 

10200SB2008sam001- 42 -LRB102 17298 BMS 24992 a

1between a pharmacy benefit manager and a pharmacy provider,
2pharmaceutical manufacturer or labeler, managed care
3organization, or other entity, as applicable.
4    (g) A pharmacy benefit manager shall disclose directly in
5writing to a pharmacy provider or pharmacy services
6administrative organization contracting with the pharmacy
7benefit manager of any material change to a contract provision
8that affects the terms of the reimbursement, the process for
9verifying benefits and eligibility, dispute resolution,
10procedures for verifying drugs included on the formulary, and
11contract termination at least 30 days prior to the date of the
12change to the provision. The terms of this subsection shall be
13deemed met if the pharmacy benefit manager posts the
14information on a website, viewable by the public. A pharmacy
15service administration organization shall notify all contract
16pharmacies of any material change, as described in this
17subsection, within 2 days of notification. As used in this
18Section, "pharmacy services administrative organization" means
19an entity operating within the State that contracts with
20independent pharmacies to conduct business on their behalf
21with third-party payers. A pharmacy services administrative
22organization may provide administrative services to pharmacies
23and negotiate and enter into contracts with third-party payers
24or pharmacy benefit managers on behalf of pharmacies.
25    (h) A pharmacy benefit manager shall not include the
26following in a contract with a pharmacy provider:

 

 

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1        (1) a provision prohibiting the provider from
2    informing a patient of a less costly alternative to a
3    prescribed medication; or
4        (2) a provision that prohibits the provider from
5    dispensing a particular amount of a prescribed medication,
6    if the pharmacy benefit manager allows that amount to be
7    dispensed through a pharmacy owned or controlled by the
8    pharmacy benefit manager, unless the prescription drug is
9    subject to restricted distribution by the United States
10    Food and Drug Administration or requires special handling,
11    provider coordination, or patient education that cannot be
12    provided by a retail pharmacy.
13    (i) Nothing in this Section shall be construed to prohibit
14a pharmacy benefit manager from requiring the same
15reimbursement and terms and conditions for a pharmacy provider
16as for a pharmacy owned, controlled, or otherwise associated
17with the pharmacy benefit manager. Reimbursement must not be
18less than the dispensing fees and acquisition costs under the
19fee-for-service program as required under subsection (b-10) of
20Section 5-5.12.
21    (j) A pharmacy benefit manager shall establish and
22implement a process for the resolution of disputes arising out
23of this Section, which shall be approved by the Department.
24    (k) The Department shall adopt rules establishing
25reasonable dispensing fees for fee-for-service payments in
26accordance with guidance or guidelines from the federal

 

 

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1Centers for Medicare and Medicaid Services.
2(Source: P.A. 101-452, eff. 1-1-20; revised 10-22-19.)".