Sen. David Koehler

Filed: 2/1/2022





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



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1prescription drugs approved for use.
2    "Generic drug" means a prescription drug, whether
3identified by its chemical, proprietary, or nonproprietary
4name, that is not a brand name drug and is therapeutically
5equivalent to a brand name drug in dosage, safety, strength,
6method of consumption, quality, performance, and intended use.
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 the maximum amount that a



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1pharmacy benefit manager will reimburse a pharmacy for the
2cost of a drug.
3    "Maximum allowable cost list" means a list of drugs for
4which a maximum allowable cost has been established by a
5pharmacy benefit manager.
6    "Pharmacy benefit manager" means a person, business, or
7entity, including a wholly or partially owned or controlled
8subsidiary of a pharmacy benefit manager, that provides claims
9processing services or other prescription drug or device
10services, or both, for health benefit plans. "Pharmacy benefit
11manager" does not include:
12        (1) a health care facility licensed in this State;
13        (2) a health care professional licensed in this State;
14    or
15        (3) a consultant who only provides advice as to the
16    selection or performance of a pharmacy benefit manager.
17    "Pharmacy benefit manager affiliate" means a pharmacy or
18pharmacist that directly or indirectly, through one or more
19intermediaries, owns or controls, is owned or controlled by,
20or is under common ownership or control with a pharmacy
21benefit manager.
22    "Retail price" means the price an individual without
23prescription drug coverage would pay at a retail pharmacy, not
24including a pharmacist dispensing fee.
25    "Spread pricing" means the model of prescription drug
26pricing in which the pharmacy benefits manager charges a



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1health benefit plan a contracted price for prescription drugs,
2and the contracted price for the prescription drugs differs
3from the amount the pharmacy benefits manager directly or
4indirectly pays the pharmacist or pharmacy for pharmacist
6    "Third-party payer" means any entity involved in the
7financing of a pharmacy benefit plan or program other than the
8patient, health care provider, or sponsor of a plan subject to
9regulation under Medicare Part D, 42 U.S.C. 1395w101, et al.
10    (b) A contract between a health insurer and a pharmacy
11benefit manager must require that the pharmacy benefit
13        (1) Update maximum allowable cost pricing information
14    at least every 7 calendar days.
15        (2) Maintain a process that will, in a timely manner,
16    eliminate drugs from maximum allowable cost lists or
17    modify drug prices to remain consistent with changes in
18    pricing data used in formulating maximum allowable cost
19    prices and product availability.
20        (3) Provide access to its maximum allowable cost list
21    to each pharmacy or pharmacy services administrative
22    organization subject to the maximum allowable cost list.
23    Access may include a real-time pharmacy website portal to
24    be able to view the maximum allowable cost list. As used in
25    this Section, "pharmacy services administrative
26    organization" means an entity operating within the State



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1    that contracts with independent pharmacies to conduct
2    business on their behalf with third-party payers. A
3    pharmacy services administrative organization may provide
4    administrative services to pharmacies and negotiate and
5    enter into contracts with third-party payers or pharmacy
6    benefit managers on behalf of pharmacies.
7        (4) Provide a process by which a contracted pharmacy
8    can appeal the provider's reimbursement for a drug subject
9    to maximum allowable cost pricing.
10        The appeals process must, at a minimum, include the
11    following:
12            (A) A requirement that a contracted pharmacy has
13        14 calendar days after the applicable fill date to
14        appeal a maximum allowable cost if the reimbursement
15        for the drug is less than the net amount that the
16        network provider paid to the supplier of the drug.
17            (B) A requirement that a pharmacy benefit manager
18        must respond to a challenge within 14 calendar days of
19        the contracted pharmacy making the claim for which the
20        appeal has been submitted.
21            (C) A telephone number and e-mail address or
22        website to network providers, at which the provider
23        can contact the pharmacy benefit manager to process
24        and submit an appeal.
25            (D) A requirement that, if an appeal is denied,
26        the pharmacy benefit manager must provide the reason



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1        for the denial and the name and the national drug code
2        number from national or regional wholesalers.
3            (E) A requirement that, if an appeal is sustained,
4        the pharmacy benefit manager must make an adjustment
5        in the drug price effective the date the challenge is
6        resolved and make the adjustment applicable to all
7        similarly situated network pharmacy providers, as
8        determined by the managed care organization or
9        pharmacy benefit manager.
10        (5) Allow a plan sponsor contracting with a pharmacy
11    benefit manager an annual right to audit compliance with
12    the terms of the contract by the pharmacy benefit manager,
13    including, but not limited to, full disclosure of any and
14    all rebate amounts secured, whether product specific or
15    generalized rebates, that were provided to the pharmacy
16    benefit manager by a pharmaceutical manufacturer.
17        (6) Allow a plan sponsor contracting with a pharmacy
18    benefit manager to request that the pharmacy benefit
19    manager disclose the actual amounts paid by the pharmacy
20    benefit manager to the pharmacy.
21        (7) Provide notice to the party contracting with the
22    pharmacy benefit manager of any consideration that the
23    pharmacy benefit manager receives from the manufacturer
24    for dispense as written prescriptions once a generic or
25    biologically similar product becomes available.
26    (c) In order to place a particular prescription drug on a



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1maximum allowable cost list, the pharmacy benefit manager
2must, at a minimum, ensure that:
3        (1) if the drug is a generically equivalent drug, it
4    is listed as therapeutically equivalent and
5    pharmaceutically equivalent "A" or "B" rated in the United
6    States Food and Drug Administration's most recent version
7    of the "Orange Book" or have an NR or NA rating by
8    Medi-Span, Gold Standard, or a similar rating by a
9    nationally recognized reference;
10        (2) the drug is available for purchase by each
11    pharmacy in the State from national or regional
12    wholesalers operating in Illinois; and
13        (3) the drug is not obsolete.
14    (d) A pharmacy benefit manager is prohibited from limiting
15a pharmacist's ability to disclose to a covered person:
16        (1) whether the cost-sharing obligation exceeds the
17    retail price for a covered prescription drug, and the
18    availability of a more affordable alternative drug, if one
19    is available in accordance with Section 42 of the Pharmacy
20    Practice Act; or .
21        (2) any health care information that the pharmacy or
22    pharmacist deems appropriate regarding:
23            (A) the nature of treatment, risks, or
24        alternatives thereto, if such disclosure is consistent
25        with the permissible practice of pharmacy under the
26        Pharmacy Practice Act;



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1            (B) the availability of alternative therapies,
2        consultations, or tests if such disclosure is
3        consistent with the permissible practice of pharmacy
4        under the Pharmacy Practice Act;
5            (C) the decision of utilization reviewers or
6        similar persons to authorize or deny services;
7            (D) the process that is used to authorize or deny
8        health care services or benefits; or
9            (E) information on financial incentives and
10        structures used by the insurer.
11    (e) A pharmacy benefit manager shall not prohibit a
12pharmacist or pharmacy from, or indirectly punish a pharmacist
13or pharmacy for, making any written or oral statement or
14otherwise disclosing information to any federal, State,
15county, or municipal official, including the Director or law
16enforcement, or before any State, county, or municipal
17committee, body, or proceeding if:
18        (1) the recipient of the information represents that
19    it has the authority, to the extent provided by State or
20    federal law, to maintain proprietary information as
21    confidential; and
22        (2) before disclosure of information designated as
23    confidential the pharmacist or pharmacy:
24            (A) marks as confidential any document in which
25        the information appears; or
26            (B) requests confidential treatment for any oral



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1        communication of the information.
2    This includes sharing any portion of the pharmacy benefit
3manager contract with the Director pursuant to a complaint or
4a query regarding whether the contract is in compliance with
5this Article.
6    (f) (e) A health insurer or pharmacy benefit manager shall
7not require an insured to make a payment for a prescription
8drug at the point of sale in an amount that exceeds the lesser
10        (1) the applicable cost-sharing amount; or
11        (2) the retail price of the drug in the absence of
12    prescription drug coverage.
13    (g) A pharmacy benefit manager may not prohibit a pharmacy
14or pharmacist from selling a more affordable alternative to
15the covered person if a more affordable alternative is
17    (h) A pharmacy benefit manager shall not reimburse a
18pharmacy or pharmacist in this State an amount less than the
19amount that the pharmacy benefit manager reimburses a pharmacy
20benefit manager affiliate for providing the same
21pharmaceutical product.
22    (i) A pharmacy benefit manager shall not:
23        (1) condition payment, reimbursement, or network
24    participation on any type of accreditation, certification,
25    or credentialing standard beyond those required by the
26    State Board of Pharmacy or applicable State or federal



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1    law;
2        (2) prohibit or otherwise restrict a pharmacist or
3    pharmacy from offering prescription delivery services to
4    any covered person; or
5        (3) require any additional requirement for a
6    prescription claim that is more restrictive than the
7    standards established under the Illinois Food, Drug and
8    Cosmetic Act; the Pharmacy Practice Act; or the Illinois
9    Controlled Substances Act.
10    (j) A pharmacy benefit manager is prohibited from
11conducting spread pricing in this State.
12    (k) The Department of Insurance, the Department of
13Healthcare and Family Services, and the Department of
14Financial and Professional Regulation shall jointly conduct a
15statewide survey and report that examines the following:
16        (1) the cost of dispensing in order to make
17    recommendations for a professional dispensing fee;
18        (2) factors impeding pharmacists' ability to practice
19    to their full scope of practice in the best interest of the
20    patient;
21        (3) factors impacting pharmacy workload and workplace
22    conditions, including impact on pharmacy personnel
23    well-being; and
24        (4) factors impacting the safe delivery of medications
25    and patient care services by pharmacists.
26    The Departments shall utilize the expertise and services



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1of the Chicago State University College of Pharmacy, the
2Southern Illinois University Edwardsville School of Pharmacy,
3and the University of Illinois Chicago College of Pharmacy to
4achieve the survey measures and recommendations. The survey
5and report shall be delivered to the General Assembly no later
6than December 31, 2022.
7    (l) (f) This Section applies to contracts entered into or
8renewed on or after July 1, 2020.
9    (m) (g) This Section applies to any group or individual
10policy of accident and health insurance or managed care plan
11that provides coverage for prescription drugs and that is
12amended, delivered, issued, or renewed on or after July 1,
14(Source: P.A. 101-452, eff. 1-1-20.)
15    (215 ILCS 5/513b1.1 new)
16    Sec. 513b1.1. Pharmacy network participation.
17    (a) As used in this Section:
18    "Claims processing services" means the administrative
19services performed in connection with the processing and
20adjudicating of claims relating to pharmacist services that
22        (1) receiving payments for pharmacist services; or
23        (2) making payments to a pharmacist or pharmacy for
24    pharmacist services.
25    "Pharmacy benefit manager affiliate" means a pharmacy or



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1pharmacist that directly or indirectly, through one or more
2intermediaries, owns or controls, is owned or controlled by,
3or is under common ownership or control with a pharmacy
4benefit manager. "Pharmacy benefit manager affiliate" includes
5any mail-order pharmacy that is directly or indirectly owned
6or controlled by a pharmacy benefit manager.
7    (b) A pharmacy benefit manager shall not:
8        (1) prohibit or limit a participant or beneficiary of
9    pharmacy services under a health benefit plan from
10    selecting a pharmacy or pharmacist of his or her choice if
11    the pharmacy or pharmacist is willing and agrees to accept
12    the same terms and conditions that the pharmacy benefit
13    manager has established for at least one of the networks
14    of pharmacies that the pharmacy benefit manager has
15    established to serve patients within the State;
16        (2) prohibit a pharmacy from participating in any
17    given network of pharmacies within the State if the
18    pharmacy is licensed by the Department of Financial and
19    Professional Regulation and agrees to the same terms and
20    conditions, including the terms of reimbursement, that the
21    pharmacy benefit manager has established for other
22    pharmacies participating within the network that the
23    pharmacy wishes to join;
24        (3) charge a participant or beneficiary of a pharmacy
25    benefits plan or program that the pharmacy benefit manager
26    serves a different copayment obligation or additional fee



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1    for using any pharmacy within a given network of
2    pharmacies established by the pharmacy benefit manager to
3    serve patients within the State;
4        (4) impose a monetary advantage, incentive, or penalty
5    under a health benefit plan that would affect or influence
6    a beneficiary's choice among those pharmacies or
7    pharmacists who have agreed to participate in the plan
8    according to the terms offered by the insurer;
9        (5) require a participant or beneficiary to use or
10    otherwise obtain services exclusively from a mail-order
11    pharmacy or one or more pharmacy benefit manager
12    affiliates;
13        (6) impose upon a beneficiary any copayment obligation
14    or other limitation, restriction, or condition, including
15    number of days of a drug supply for which coverage will be
16    allowed, that is more costly or more restrictive than that
17    which would be imposed upon the beneficiary if such
18    services were purchased from a pharmacy benefit manager
19    affiliate or any other pharmacy within a given network of
20    pharmacies established by the pharmacy benefit manager to
21    serve patients within the State;
22        (7) require participation in additional networks for a
23    pharmacy to enroll in an individual network;
24        (8) include in any manner on any material, including,
25    but not limited to, mail and identifications cards, the
26    name of any pharmacy, hospital, or other providers unless



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1    it specifically lists all pharmacies, hospitals, and
2    providers participating in the given network of pharmacies
3    established by the pharmacy benefit manager to serve
4    patients within the State; or
5        (9) share, transfer, or otherwise utilize patient
6    information or pharmacy service data collected pursuant to
7    the provision of claims processing services for the
8    purpose of referring a participant or beneficiary to a
9    pharmacy benefit manager affiliate.
10    (c) A pharmacy licensed in or holding a nonresident
11pharmacy permit in Illinois shall be prohibited from:
12        (1) transferring or sharing records relative to
13    prescription information containing patient identifiable
14    and prescriber identifiable data to or from an affiliate
15    for any commercial purpose; however, nothing shall be
16    construed to prohibit the exchange of prescription
17    information between a pharmacy and its affiliate for the
18    limited purposes of pharmacy reimbursement, formulary
19    compliance, pharmacy care, public health activities
20    otherwise authorized by law, or utilization review by a
21    health care provider; or
22        (2) presenting a claim for payment to any individual,
23    third-party payer, affiliate, or other entity for a
24    service furnished pursuant to a referral from an affiliate
25    or other person licensed under this Article.
26    (d) If a pharmacy licensed or holding a nonresident



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1pharmacy permit in this State has an affiliate, it shall
2annually file with the Department a disclosure statement
3identifying all such affiliates.
4    (e) This Section shall not be construed to prohibit a
5pharmacy from entering into an agreement with an affiliate to
6provide pharmacy care to patients if the pharmacy does not
7receive referrals in violation of subsection (c) and the
8pharmacy provides the disclosure statement required in
9subsection (d).
10    (f) In addition to any other remedy provided by law, a
11violation of this Section by a pharmacy shall be grounds for
12disciplinary action by the Department.
13    (g) A pharmacist who fills a prescription that violates
14subsection (c) shall not be liable under this Section.
15    (h) This Section shall not apply to:
16        (1) any hospital or related institution; or
17        (2) any referrals by an affiliate for pharmacy
18    services and prescriptions to patients in skilled nursing
19    facilities, intermediate care facilities, continuing care
20    retirement communities, home health agencies, or hospices.
21    (215 ILCS 5/513b1.3 new)
22    Sec. 513b1.3. Fiduciary responsibility. A pharmacy benefit
23manager is a fiduciary to a contracted health insurer and
25        (1) discharge that duty in accordance with federal and



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1    State law;
2        (2) notify the covered entity in writing of any
3    activity, policy, or practice of the pharmacy benefit
4    manager that directly or indirectly presents any conflict
5    of interest and inability to comply with the duties
6    imposed by this Section, but in no event does this
7    notification exempt the pharmacy benefit manager from
8    compliance with all other Sections of this Code; and
9        (3) disclose all direct or indirect payments related
10    to the dispensation of prescription drugs or classes or
11    brands of drugs to the covered entity.
12    (215 ILCS 5/513b7 new)
13    Sec. 513b7. Pharmacy audits.
14    (a) As used in this Section:
15    "Audit" means any physical on-site, remote electronic, or
16concurrent review of a pharmacist service submitted to the
17pharmacy benefit manager or pharmacy benefit manager affiliate
18by a pharmacist or pharmacy for payment.
19    "Auditing entity" means a person or company that performs
20a pharmacy audit.
21    "Extrapolation" means the practice of inferring a
22frequency of dollar amount of overpayments, underpayments,
23nonvalid claims, or other errors on any portion of claims
24submitted, based on the frequency of dollar amount of
25overpayments, underpayments, nonvalid claims, or other errors



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



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1            (A) by mail or common carrier, return receipt
2        requested; or
3            (B) electronically with electronic receipt
4        confirmation, addressed to the supervising pharmacist
5        of record and pharmacy corporate office, if
6        applicable, at least 30 days before the date of an
7        initial on-site audit;
8        (3) limit the audit period to 24 months after the date
9    a claim is submitted to or adjudicated by the pharmacy
10    benefit manager;
11        (4) include in the written advance notice of an
12    on-site audit the list of specific prescription numbers to
13    be included in the audit that may or may not include the
14    final 2 digits of the prescription numbers;
15        (5) use the written and verifiable records of a
16    hospital, physician, or other authorized practitioner that
17    are transmitted by any means of communication to validate
18    the pharmacy records in accordance with State and federal
19    law;
20        (6) limit the number of prescriptions audited to no
21    more than 100 randomly selected in a 12-month period and
22    no more than one on-site audit per quarter of the calendar
23    year, except in cases of fraud;
24        (7) provide the pharmacy or its contracting agent with
25    a copy of the preliminary audit report within 45 days
26    after the conclusion of the audit;



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1        (8) be allowed to conduct a follow-up audit on site if
2    a remote or desk audit reveals the necessity for a review
3    of additional claims;
4        (9) accept invoice audits as validation invoices from
5    any wholesaler registered with the Department of Financial
6    and Professional Regulation from which the pharmacy has
7    purchased prescription drugs or, in the case of durable
8    medical equipment or sickroom supplies, invoices from an
9    authorized distributor other than a wholesaler;
10        (10) provide the pharmacy or its contracting agent
11    with the ability to provide documentation to address a
12    discrepancy or audit finding if the documentation is
13    received by the pharmacy benefit manager no later than the
14    45th day after the preliminary audit report was provided
15    to the pharmacy or its contracting agent; the pharmacy
16    benefit manager shall consider a reasonable request from
17    the pharmacy for an extension of time to submit
18    documentation to address or correct any findings in the
19    report;
20        (11) be required to provide the pharmacy or its
21    contracting agent with the final audit report no later
22    than 60 days after the initial audit report was provided
23    to the pharmacy or its contracting agent;
24        (12) conduct the audit in consultation with a
25    pharmacist if the audit involves clinical or professional
26    judgment;



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1        (13) not chargeback, recoup, or collect penalties from
2    a pharmacy until the time period to file an appeal of the
3    final pharmacy audit report has passed or the appeals
4    process has been exhausted, whichever is later, unless the
5    identified discrepancy is expected to exceed $25,000, in
6    which case the auditing entity may withhold future
7    payments in excess of that amount until the final
8    resolution of the audit;
9        (14) not compensate the employee or contractor
10    conducting the audit based on a percentage of the amount
11    claimed or recouped pursuant to the audit;
12        (15) not use extrapolation to calculate penalties or
13    amounts to be charged back or recouped unless otherwise
14    required by federal law or regulation; any amount to be
15    charged back or recouped due to overpayment may not exceed
16    the amount the pharmacy was overpaid;
17        (16) not include dispensing fees in the calculation of
18    overpayments unless a prescription is considered a
19    misfill; or
20        (17) conduct a pharmacy audit under the same standards
21    and parameters as conducted for other similarly situated
22    pharmacies audited by the auditing entity.
23    (c) Except as otherwise provided by State or federal law,
24an auditing entity conducting a pharmacy audit may have access
25to a pharmacy's previous audit report only if the report was
26prepared by that auditing entity.



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



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



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1        (2) the aggregate amount of rebates distributed to the
2    appropriate health care insurer;
3        (3) the aggregate amount of rebates passed on to the
4    enrollees of each health care insurer at the point of sale
5    that reduced the enrollees' applicable deductible,
6    copayment, coinsurance, or other cost-sharing amount;
7        (4) the individual and aggregate amount paid by the
8    health care insurer to the pharmacy benefit manager for
9    pharmacist services itemized by pharmacy, by product, and
10    by goods and services; and
11        (5) the individual and aggregate amount a pharmacy
12    benefit manager paid for pharmacist services itemized by
13    pharmacy, by product, and by goods and services.
14    (b) The report made to the Department required under this
15subsection is confidential and not subject to disclosure under
16the Freedom of Information Act.
17    Section 10. The Network Adequacy and Transparency Act is
18amended by adding Section 35 as follows:
19    (215 ILCS 124/35 new)
20    Sec. 35. Pharmacy benefit manager network adequacy.
21    (a) As used in this Section:
22    "Pharmacy benefit manager" has the meaning ascribed to
23that term in Section 513b1 of the Illinois Insurance Code.
24    "Pharmacy benefit manager network" means the group or



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



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



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1        in a rural service area live within 18 miles of a
2        retail pharmacy designated as a preferred
3        participating pharmacy in the pharmacy benefit
4        manager's retail pharmacy network.
5    (d) The Director shall establish a process for the review
6of the adequacy of the standards required under this