Illinois General Assembly - Full Text of SB3729
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Full Text of SB3729  102nd General Assembly

SB3729 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3729

 

Introduced 1/21/2022, by Sen. Mattie Hunter and Sara Feigenholtz

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Insurance Code. Provides that a contract between a pharmacy benefit manager or third-party payer and a covered entity under Section 340B of the federal Public Health Service Act shall not contain specified provisions. Provides that a violation by a pharmacy benefit manager constitutes an unfair or deceptive act or practice in the business of insurance, and that a provision that violates the prohibition on certain provisions in a contract between a pharmacy benefit manager or a third-party payer and a 340B covered entity that is entered into, amended, or renewed after July 1, 2022 shall be void and unenforceable. Defines terms. Amends the Illinois Public Aid Code. In provisions concerning pharmacy payments, provides that no later than January 1, 2023, the Department of Healthcare and Family Services shall implement a mechanism for entities participating in the federal drug pricing program and their contracted pharmacies to submit quarterly retrospective utilization files containing the minimum fields necessary to accurately identify the drugs to the Department or its contractor for processing Medicaid drug rebate requests to Medicaid beneficiaries or Medicaid managed care organization enrollees. Provides that the Department or its contractor shall use the utilization files to remove 340B claims from the Department's Medicaid drug rebate requests and that the Department shall not require the entities or their contracted pharmacies to use any other method or billing code to identify 340B drugs billed to Medicaid or Medicaid managed care organizations. In provisions concerning pharmacy benefits, provides that a Medicaid managed care organization or pharmacy benefit manager administering or managing benefits on behalf of a Medicaid managed organization shall not include specified provisions in a contract with a covered entity or with any pharmacy owned by or contracted with the covered entity. Provides that a violation by a Medicaid managed care organization or its pharmacy benefit manager constitutes an unfair or deceptive act or practice in the business of insurance, and that a provision that violates the prohibition on certain provisions in a contract between a Medicaid managed care organization or its pharmacy benefit manager and a 340B covered entity entered into, amended, or renewed after July 1, 2022 shall be void and unenforceable. Effective July 1, 2022.


LRB102 24376 BMS 33610 b

 

 

A BILL FOR

 

SB3729LRB102 24376 BMS 33610 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 424 and 513b1 as follows:
 
6    (215 ILCS 5/424)  (from Ch. 73, par. 1031)
7    Sec. 424. Unfair methods of competition and unfair or
8deceptive acts or practices defined. The following are hereby
9defined as unfair methods of competition and unfair and
10deceptive acts or practices in the business of insurance:
11        (1) The commission by any person of any one or more of
12    the acts defined or prohibited by Sections 134, 143.24c,
13    147, 148, 149, 151, 155.22, 155.22a, 155.42, 236, 237,
14    364, and 469, and 513b1 of this Code.
15        (2) Entering into any agreement to commit, or by any
16    concerted action committing, any act of boycott, coercion
17    or intimidation resulting in or tending to result in
18    unreasonable restraint of, or monopoly in, the business of
19    insurance.
20        (3) Making or permitting, in the case of insurance of
21    the types enumerated in Classes 1, 2, and 3 of Section 4,
22    any unfair discrimination between individuals or risks of
23    the same class or of essentially the same hazard and

 

 

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1    expense element because of the race, color, religion, or
2    national origin of such insurance risks or applicants. The
3    application of this Article to the types of insurance
4    enumerated in Class 1 of Section 4 shall in no way limit,
5    reduce, or impair the protections and remedies already
6    provided for by Sections 236 and 364 of this Code or any
7    other provision of this Code.
8        (4) Engaging in any of the acts or practices defined
9    in or prohibited by Sections 154.5 through 154.8 of this
10    Code.
11        (5) Making or charging any rate for insurance against
12    losses arising from the use or ownership of a motor
13    vehicle which requires a higher premium of any person by
14    reason of his physical disability, race, color, religion,
15    or national origin.
16        (6) Failing to meet any requirement of the Unclaimed
17    Life Insurance Benefits Act with such frequency as to
18    constitute a general business practice.
19        (7) Committing any act prohibited by subsection (h-5)
20    of Section 5-36 of the Illinois Public Aid Code.
21(Source: P.A. 99-143, eff. 7-27-15; 99-893, eff. 1-1-17.)
 
22    (215 ILCS 5/513b1)
23    Sec. 513b1. Pharmacy benefit manager contracts.
24    (a) As used in this Section:
25    "340B covered entity" means an entity authorized to

 

 

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1participate in the 340B drug discount program, including any
2pharmacy owned, operated by, or under contract with the entity
3to dispense drugs on behalf of the entity.
4    "340B drug discount program" means the program established
5under Section 340B of the federal Public Health Service Act,
642 U.S.C. 256b.
7    "Biological product" has the meaning ascribed to that term
8in Section 19.5 of the Pharmacy Practice Act.
9    "Maximum allowable cost" means the maximum amount that a
10pharmacy benefit manager will reimburse a pharmacy for the
11cost of a drug.
12    "Maximum allowable cost list" means a list of drugs for
13which a maximum allowable cost has been established by a
14pharmacy benefit manager.
15    "Pharmacy benefit manager" means a person, business, or
16entity, including a wholly or partially owned or controlled
17subsidiary of a pharmacy benefit manager, that provides claims
18processing services or other prescription drug or device
19services, or both, for health benefit plans.
20    "Retail price" means the price an individual without
21prescription drug coverage would pay at a retail pharmacy, not
22including a pharmacist dispensing fee.
23    "Third-party payer" means any entity that pays for
24prescription drugs on behalf of a patient other than a health
25care provider or sponsor of a plan subject to regulation under
26Medicare Part D, 42 U.S.C. 1395w–101, et seq.

 

 

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1    (b) A contract between a health insurer and a pharmacy
2benefit manager must require that the pharmacy benefit
3manager:
4        (1) Update maximum allowable cost pricing information
5    at least every 7 calendar days.
6        (2) Maintain a process that will, in a timely manner,
7    eliminate drugs from maximum allowable cost lists or
8    modify drug prices to remain consistent with changes in
9    pricing data used in formulating maximum allowable cost
10    prices and product availability.
11        (3) Provide access to its maximum allowable cost list
12    to each pharmacy or pharmacy services administrative
13    organization subject to the maximum allowable cost list.
14    Access may include a real-time pharmacy website portal to
15    be able to view the maximum allowable cost list. As used in
16    this Section, "pharmacy services administrative
17    organization" means an entity operating within the State
18    that contracts with independent pharmacies to conduct
19    business on their behalf with third-party payers. A
20    pharmacy services administrative organization may provide
21    administrative services to pharmacies and negotiate and
22    enter into contracts with third-party payers or pharmacy
23    benefit managers on behalf of pharmacies.
24        (4) Provide a process by which a contracted pharmacy
25    can appeal the provider's reimbursement for a drug subject
26    to maximum allowable cost pricing. The appeals process

 

 

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1    must, at a minimum, include the following:
2            (A) A requirement that a contracted pharmacy has
3        14 calendar days after the applicable fill date to
4        appeal a maximum allowable cost if the reimbursement
5        for the drug is less than the net amount that the
6        network provider paid to the supplier of the drug.
7            (B) A requirement that a pharmacy benefit manager
8        must respond to a challenge within 14 calendar days of
9        the contracted pharmacy making the claim for which the
10        appeal has been submitted.
11            (C) A telephone number and e-mail address or
12        website to network providers, at which the provider
13        can contact the pharmacy benefit manager to process
14        and submit an appeal.
15            (D) A requirement that, if an appeal is denied,
16        the pharmacy benefit manager must provide the reason
17        for the denial and the name and the national drug code
18        number from national or regional wholesalers.
19            (E) A requirement that, if an appeal is sustained,
20        the pharmacy benefit manager must make an adjustment
21        in the drug price effective the date the challenge is
22        resolved and make the adjustment applicable to all
23        similarly situated network pharmacy providers, as
24        determined by the managed care organization or
25        pharmacy benefit manager.
26        (5) Allow a plan sponsor contracting with a pharmacy

 

 

SB3729- 6 -LRB102 24376 BMS 33610 b

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

 

 

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1    pharmacy in the State from national or regional
2    wholesalers operating in Illinois; and
3        (3) the drug is not obsolete.
4    (d) A pharmacy benefit manager is prohibited from limiting
5a pharmacist's ability to disclose whether the cost-sharing
6obligation exceeds the retail price for a covered prescription
7drug, and the availability of a more affordable alternative
8drug, if one is available in accordance with Section 42 of the
9Pharmacy Practice Act.
10    (e) A health insurer or pharmacy benefit manager shall not
11require an insured to make a payment for a prescription drug at
12the point of sale in an amount that exceeds the lesser of:
13        (1) the applicable cost-sharing amount; or
14        (2) the retail price of the drug in the absence of
15    prescription drug coverage.
16    (f) A contract between a pharmacy benefit manager or
17third-party payer and a 340B covered entity shall not contain
18any provision that:
19        (1) reimburses a 340B covered entity for drugs
20    purchased at a 340B drug discount program at a rate lower
21    than that paid for the same drug to pharmacies similar in
22    prescription volume that are not 340B covered entities;
23        (2) imposes any fee, chargeback, or rate adjustment
24    that is not imposed on a pharmacy that is not a 340B
25    covered entity;
26        (3) imposes any fee, chargeback, or rate adjustment

 

 

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1    that exceeds the fee, chargeback, or rate adjustment
2    imposed on a pharmacy that is not a 340B covered entity;
3        (4) prevents or interferes with an individual's choice
4    to receive a prescription drug from a 340B covered entity,
5    including the administration of the drug, whether in
6    person or via delivery, mail, or shipment;
7        (5) excludes a 340B covered entity from a pharmacy
8    network based on the 340B covered entity's participation
9    in the 340B drug discount program, or on a basis that
10    differs from that applied to pharmacies that are not 340B
11    covered entities;
12        (6) requires a 340B covered entity to use a billing
13    modifier to indicate that the drug claim is for a drug
14    purchased under the 340B drug discount program;
15        (7) prevents a 340B covered entity from using a drug
16    purchased under the 340B drug discount program; or
17        (8) any other provision that discriminates against a
18    340B covered entity.
19    (g) A violation of this Section by a pharmacy benefit
20manager constitutes an unfair or deceptive act or practice in
21the business of insurance under Section 424.
22    (h) A provision that violates subsection (f) in a contract
23between a pharmacy benefit manager or a third-party payer and
24a 340B covered entity that is entered into, amended, or
25renewed after July 1, 2022 shall be void and unenforceable.
26    (i) (f) This Section applies to contracts entered into or

 

 

SB3729- 9 -LRB102 24376 BMS 33610 b

1renewed on or after July 1, 2020.
2    (j) (g) This Section applies to any group or individual
3policy of accident and health insurance or managed care plan
4that provides coverage for prescription drugs and that is
5amended, delivered, issued, or renewed on or after July 1,
62020.
7(Source: P.A. 101-452, eff. 1-1-20.)
 
8    Section 10. The Illinois Public Aid Code is amended by
9changing Sections 5-5.12 and 5-36 as follows:
 
10    (305 ILCS 5/5-5.12)  (from Ch. 23, par. 5-5.12)
11    Sec. 5-5.12. Pharmacy payments.
12    (a) Every request submitted by a pharmacy for
13reimbursement under this Article for prescription drugs
14provided to a recipient of aid under this Article shall
15include the name of the prescriber or an acceptable
16identification number as established by the Department.
17    (b) Pharmacies providing prescription drugs under this
18Article shall be reimbursed at a rate which shall include a
19professional dispensing fee as determined by the Illinois
20Department, plus the current acquisition cost of the
21prescription drug dispensed. The Illinois Department shall
22update its information on the acquisition costs of all
23prescription drugs no less frequently than every 30 days.
24However, the Illinois Department may set the rate of

 

 

SB3729- 10 -LRB102 24376 BMS 33610 b

1reimbursement for the acquisition cost, by rule, at a
2percentage of the current average wholesale acquisition cost.
3    (c) (Blank).
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

 

 

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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

 

 

SB3729- 12 -LRB102 24376 BMS 33610 b

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

 

 

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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 Act shall enroll in that
22program. No entity participating in the federal Drug Pricing
23Program under Section 340B of the federal Public Health
24Service Act may exclude fee-for-service Medicaid from their
25participation in that program, however, although the
26Department may exclude entities defined in Section

 

 

SB3729- 14 -LRB102 24376 BMS 33610 b

11905(l)(2)(B) of the Social Security Act are excluded from
2this requirement. This subsection does not apply to outpatient
3drugs billed to Medicaid managed care organizations.
4    (m) No later than January 1, 2023, the Department shall
5implement a mechanism for entities participating in the
6federal Drug Pricing Program under Section 340B of the federal
7Public Health Service Act and their contracted pharmacies to
8submit quarterly retrospective utilization files containing
9the minimum fields necessary to accurately identify the drugs
10to the Department or its contractor for processing Medicaid
11drug rebate requests reflecting 340B drug dispensing to
12Medicaid beneficiaries or Medicaid managed care organization
13enrollees. The Department or its contractor shall use the
14utilization files to remove 340B claims from the Department's
15Medicaid drug rebate requests. The Department shall not
16require the entities or their contracted pharmacies to use any
17other method or billing code to identify 340B drugs billed to
18Medicaid or Medicaid managed care organizations.
19(Source: P.A. 102-558, eff. 8-20-21.)
 
20    (305 ILCS 5/5-36)
21    Sec. 5-36. Pharmacy benefits.
22    (a)(1) The Department may enter into a contract with a
23third party on a fee-for-service reimbursement model for the
24purpose of administering pharmacy benefits as provided in this
25Section for members not enrolled in a Medicaid managed care

 

 

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1organization; however, these services shall be approved by the
2Department. The Department shall ensure coordination of care
3between the third-party administrator and managed care
4organizations as a consideration in any contracts established
5in accordance with this Section. Any managed care techniques,
6principles, or administration of benefits utilized in
7accordance with this subsection shall comply with State law.
8    (2) The following shall apply to contracts between
9entities contracting relating to the Department's third-party
10administrators and pharmacies:
11        (A) the Department shall approve any contract between
12    a third-party administrator and a pharmacy;
13        (B) the Department's third-party administrator shall
14    not change the terms of a contract between a third-party
15    administrator and a pharmacy without written approval by
16    the Department; and
17        (C) the Department's third-party administrator shall
18    not create, modify, implement, or indirectly establish any
19    fee on a pharmacy, pharmacist, or a recipient of medical
20    assistance without written approval by the Department.
21    (b) The provisions of this Section shall not apply to
22outpatient pharmacy services provided by a health care
23facility registered as a covered entity pursuant to 42 U.S.C.
24256b or any pharmacy owned by or contracted with the covered
25entity. A Medicaid managed care organization shall, either
26directly or through a pharmacy benefit manager, administer and

 

 

SB3729- 16 -LRB102 24376 BMS 33610 b

1reimburse outpatient pharmacy claims submitted by a health
2care facility registered as a covered entity pursuant to 42
3U.S.C. 256b, its owned pharmacies, and contracted pharmacies
4in accordance with the contractual agreements the Medicaid
5managed care organization or its pharmacy benefit manager has
6with such facilities and pharmacies and in accordance with
7subsection (h-5).
8    (b-5) Any pharmacy benefit manager that contracts with a
9Medicaid managed care organization to administer and reimburse
10pharmacy claims as provided in this Section must be registered
11with the Director of Insurance in accordance with Section
12513b2 of the Illinois Insurance Code.
13    (c) On at least an annual basis, the Director of the
14Department of Healthcare and Family Services shall submit a
15report beginning no later than one year after January 1, 2020
16(the effective date of Public Act 101-452) that provides an
17update on any contract, contract issues, formulary, dispensing
18fees, and maximum allowable cost concerns regarding a
19third-party administrator and managed care. The requirement
20for reporting to the General Assembly shall be satisfied by
21filing copies of the report with the Speaker, the Minority
22Leader, and the Clerk of the House of Representatives and with
23the President, the Minority Leader, and the Secretary of the
24Senate. The Department shall take care that no proprietary
25information is included in the report required under this
26Section.

 

 

SB3729- 17 -LRB102 24376 BMS 33610 b

1    (d) A pharmacy benefit manager shall notify the Department
2in writing of any activity, policy, or practice of the
3pharmacy benefit manager that directly or indirectly presents
4a conflict of interest that interferes with the discharge of
5the pharmacy benefit manager's duty to a managed care
6organization to exercise its contractual duties. "Conflict of
7interest" shall be defined by rule by the Department.
8    (e) A pharmacy benefit manager shall, upon request,
9disclose to the Department the following information:
10        (1) whether the pharmacy benefit manager has a
11    contract, agreement, or other arrangement with a
12    pharmaceutical manufacturer to exclusively dispense or
13    provide a drug to a managed care organization's enrollees,
14    and the aggregate amounts of consideration of economic
15    benefits collected or received pursuant to that
16    arrangement;
17        (2) the percentage of claims payments made by the
18    pharmacy benefit manager to pharmacies owned, managed, or
19    controlled by the pharmacy benefit manager or any of the
20    pharmacy benefit manager's management companies, parent
21    companies, subsidiary companies, or jointly held
22    companies;
23        (3) the aggregate amount of the fees or assessments
24    imposed on, or collected from, pharmacy providers; and
25        (4) the average annualized percentage of revenue
26    collected by the pharmacy benefit manager as a result of

 

 

SB3729- 18 -LRB102 24376 BMS 33610 b

1    each contract it has executed with a managed care
2    organization contracted by the Department to provide
3    medical assistance benefits which is not paid by the
4    pharmacy benefit manager to pharmacy providers and
5    pharmaceutical manufacturers or labelers or in order to
6    perform administrative functions pursuant to its contracts
7    with managed care organizations.
8    (f) The information disclosed under subsection (e) shall
9include all retail, mail order, specialty, and compounded
10prescription products. All information made available to the
11Department under subsection (e) is confidential and not
12subject to disclosure under the Freedom of Information Act.
13All information made available to the Department under
14subsection (e) shall not be reported or distributed in any way
15that compromises its competitive, proprietary, or financial
16value. The information shall only be used by the Department to
17assess the contract, agreement, or other arrangements made
18between a pharmacy benefit manager and a pharmacy provider,
19pharmaceutical manufacturer or labeler, managed care
20organization, or other entity, as applicable.
21    (g) A pharmacy benefit manager shall disclose directly in
22writing to a pharmacy provider or pharmacy services
23administrative organization contracting with the pharmacy
24benefit manager of any material change to a contract provision
25that affects the terms of the reimbursement, the process for
26verifying benefits and eligibility, dispute resolution,

 

 

SB3729- 19 -LRB102 24376 BMS 33610 b

1procedures for verifying drugs included on the formulary, and
2contract termination at least 30 days prior to the date of the
3change to the provision. The terms of this subsection shall be
4deemed met if the pharmacy benefit manager posts the
5information on a website, viewable by the public. A pharmacy
6service administration organization shall notify all contract
7pharmacies of any material change, as described in this
8subsection, within 2 days of notification. As used in this
9Section, "pharmacy services administrative organization" means
10an entity operating within the State that contracts with
11independent pharmacies to conduct business on their behalf
12with third-party payers. A pharmacy services administrative
13organization may provide administrative services to pharmacies
14and negotiate and enter into contracts with third-party payers
15or pharmacy benefit managers on behalf of pharmacies.
16    (h) A pharmacy benefit manager shall not include the
17following in a contract with a pharmacy provider:
18        (1) a provision prohibiting the provider from
19    informing a patient of a less costly alternative to a
20    prescribed medication; or
21        (2) a provision that prohibits the provider from
22    dispensing a particular amount of a prescribed medication,
23    if the pharmacy benefit manager allows that amount to be
24    dispensed through a pharmacy owned or controlled by the
25    pharmacy benefit manager, unless the prescription drug is
26    subject to restricted distribution by the United States

 

 

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1    Food and Drug Administration or requires special handling,
2    provider coordination, or patient education that cannot be
3    provided by a retail pharmacy.
4    (h-5) A Medicaid managed care organization or pharmacy
5benefit manager administering or managing benefits on behalf
6of a Medicaid managed organization shall not include in a
7contract with a 340B covered entity or with any pharmacy owned
8by or contracted with the 340B covered entity, a provision
9that:
10        (1) reimburses a 340B covered entity for drugs
11    purchased at 340B drug discount program at a rate lower
12    than that paid for the same drug to pharmacies similar in
13    prescription volume that are not 340B covered entities;
14        (2) imposes any fee, chargeback, or rate adjustment
15    that is not imposed on a pharmacy that is not a 340B
16    covered entity;
17        (3) imposes any fee, chargeback, or rate adjustment
18    that exceeds the fee, chargeback, or rate adjustment
19    imposed on a pharmacy that is not a 340B covered entity;
20        (4) prevents or interferes with an individual's choice
21    to receive a prescription drug from a 340B covered entity,
22    including the administration of the drug, whether in
23    person or via delivery, mail, or shipment;
24        (5) excludes a 340B covered entity from a pharmacy
25    network based on the 340B covered entity's participation
26    in the 340B drug discount program, or on a basis that

 

 

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1    differs from that applied to pharmacies that are not 340B
2    covered entities;
3        (6) requires a 340B covered entity to use a billing
4    modifier to indicate that the drug claim is for a drug
5    purchased under the 340B drug discount program;
6        (7) prevents a 340B covered entity from using a drug
7    purchased under the 340B drug discount program; or
8        (8) any other provision that discriminates against a
9    340B covered entity.
10    A violation of this subsection by a Medicaid managed care
11organization or its pharmacy benefit manager constitutes an
12unfair or deceptive act or practice in the business of
13insurance under Section 424 of the Illinois Insurance Code.
14    A provision that violates this subsection in any contract
15between a Medicaid managed care organization or its pharmacy
16benefit manager and a 340B covered entity entered into,
17amended, or renewed after July 1, 2022 shall be void and
18unenforceable.
19    In this subsection (h-5), "340B covered entity" means a
20covered entity described in Section 340B(a)(4) of the Public
21Health Service Act, 42 U.S.C. 256(a)(4).
22    (i) Nothing in this Section shall be construed to prohibit
23a pharmacy benefit manager from requiring the same
24reimbursement and terms and conditions for a pharmacy provider
25as for a pharmacy owned, controlled, or otherwise associated
26with the pharmacy benefit manager.

 

 

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1    (j) A pharmacy benefit manager shall establish and
2implement a process for the resolution of disputes arising out
3of this Section, which shall be approved by the Department.
4    (k) The Department shall adopt rules establishing
5reasonable dispensing fees for fee-for-service payments in
6accordance with guidance or guidelines from the federal
7Centers for Medicare and Medicaid Services.
8(Source: P.A. 101-452, eff. 1-1-20; 102-558, eff. 8-20-21.)
 
9    Section 99. Effective date. This Act takes effect July 1,
102022.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    215 ILCS 5/424from Ch. 73, par. 1031
4    215 ILCS 5/513b1
5    305 ILCS 5/5-5.12from Ch. 23, par. 5-5.12
6    305 ILCS 5/5-36