Florida Senate - 2020              PROPOSED COMMITTEE SUBSTITUTE
       Bill No. CS for SB 1338
       
       
       
       
       
                               Ì599864]Î599864                          
       
       576-04163-20                                                    
       Proposed Committee Substitute by the Committee on Appropriations
       (Appropriations Subcommittee on Health and Human Services)
    1                        A bill to be entitled                      
    2         An act relating to prescription drug coverage;
    3         amending s. 624.3161, F.S.; authorizing the Office of
    4         Insurance Regulation to examine pharmacy benefit
    5         managers; specifying that certain examination costs
    6         are payable by persons examined; transferring,
    7         renumbering, and amending s. 465.1885, F.S.; revising
    8         entities conducting pharmacy audits to which certain
    9         requirements and restrictions apply; authorizing
   10         audited pharmacies to appeal certain findings;
   11         providing that health insurers and health maintenance
   12         organizations that transfer a certain payment
   13         obligation to pharmacy benefit managers remain
   14         responsible for certain violations; creating s.
   15         624.492, F.S.; providing applicability; requiring
   16         health insurers and health maintenance organizations,
   17         or pharmacy benefit managers on behalf of health
   18         insurers and health maintenance organizations, to
   19         annually report specified information to the office;
   20         requiring reporting pharmacy benefit managers to also
   21         provide the information to health insurers and health
   22         maintenance organizations they contract with;
   23         authorizing the Financial Services Commission to adopt
   24         rules; amending ss. 627.64741, 627.6572, and 641.314,
   25         F.S.; authorizing the office to require health
   26         insurers or health maintenance organizations to submit
   27         to the office certain contracts or contract amendments
   28         entered into with pharmacy benefit managers;
   29         authorizing the office to order insurers or health
   30         maintenance organizations to cancel such contracts
   31         under certain circumstances; authorizing the
   32         commission to adopt rules; revising applicability;
   33         providing an effective date.
   34          
   35  Be It Enacted by the Legislature of the State of Florida:
   36  
   37         Section 1. Subsections (1) and (3) of section 624.3161,
   38  Florida Statutes, are amended to read:
   39         624.3161 Market conduct examinations.—
   40         (1) As often as it deems necessary, the office shall
   41  examine each pharmacy benefit manager, each licensed rating
   42  organization, each advisory organization, each group,
   43  association, carrier, as defined in s. 440.02, or other
   44  organization of insurers which engages in joint underwriting or
   45  joint reinsurance, and each authorized insurer transacting in
   46  this state any class of insurance to which the provisions of
   47  chapter 627 are applicable. The examination shall be for the
   48  purpose of ascertaining compliance by the person examined with
   49  the applicable provisions of chapters 440, 624, 626, 627, and
   50  635.
   51         (3) The examination may be conducted by an independent
   52  professional examiner under contract to the office, in which
   53  case payment shall be made directly to the contracted examiner
   54  by the insurer or person examined in accordance with the rates
   55  and terms agreed to by the office and the examiner.
   56         Section 2. Section 465.1885, Florida Statutes, is
   57  transferred, renumbered as s. 624.491, Florida Statutes, and
   58  amended to read:
   59         624.491 465.1885 Pharmacy audits; rights.—
   60         (1) A health insurer or health maintenance organization
   61  providing pharmacy benefits through a major medical individual
   62  or group health insurance policy or health maintenance contract,
   63  respectively, shall comply with the requirements of this section
   64  when the insurer or health maintenance organization or any
   65  entity acting on behalf of the insurer or health maintenance
   66  organization, including, but not limited to, a pharmacy benefit
   67  manager, audits the records of a pharmacy licensed under chapter
   68  465. Such audit must comply with the following requirements If
   69  an audit of the records of a pharmacy licensed under this
   70  chapter is conducted directly or indirectly by a managed care
   71  company, an insurance company, a third-party payor, a pharmacy
   72  benefit manager, or an entity that represents responsible
   73  parties such as companies or groups, referred to as an “entity”
   74  in this section, the pharmacy has the following rights:
   75         (a) The pharmacy must To be notified at least 7 calendar
   76  days before the initial onsite audit for each audit cycle.
   77         (b) An To have the onsite audit may not be scheduled during
   78  after the first 3 calendar days of a month unless the pharmacist
   79  consents otherwise.
   80         (c) The scope of To have the audit period must be limited
   81  to 24 months after the date a claim is submitted to or
   82  adjudicated by the entity.
   83         (d) To have An audit that requires clinical or professional
   84  judgment must be conducted by or in consultation with a
   85  pharmacist.
   86         (e) A pharmacy may To use the written and verifiable
   87  records of a hospital, physician, or other authorized
   88  practitioner, which are transmitted by any means of
   89  communication, to validate the pharmacy records in accordance
   90  with state and federal law.
   91         (f) A pharmacy must To be reimbursed for a claim that was
   92  retroactively denied for a clerical error, typographical error,
   93  scrivener’s error, or computer error if the prescription was
   94  properly and correctly dispensed, unless a pattern of such
   95  errors exists, fraudulent billing is alleged, or the error
   96  results in actual financial loss to the entity.
   97         (g) A copy of To receive the preliminary audit report must
   98  be provided to the pharmacy within 120 days after the conclusion
   99  of the audit.
  100         (h) A pharmacy may To produce documentation to address a
  101  discrepancy or audit finding within 10 business days after the
  102  preliminary audit report is delivered to the pharmacy.
  103         (i) A copy of To receive the final audit report must be
  104  provided to the pharmacy within 6 months after receipt of
  105  receiving the preliminary audit report.
  106         (j) Any To have recoupment or penalties must be calculated
  107  based on actual overpayments and not according to the accounting
  108  practice of extrapolation.
  109         (2) The rights contained in This section does do not apply
  110  to:
  111         (a) Audits in which suspected fraudulent activity or other
  112  intentional or willful misrepresentation is evidenced by a
  113  physical review, review of claims data or statements, or other
  114  investigative methods;
  115         (b) Audits of claims paid for by federally funded programs;
  116  or
  117         (c) Concurrent reviews or desk audits that occur within 3
  118  business days after of transmission of a claim and where no
  119  chargeback or recoupment is demanded.
  120         (3) An entity that audits a pharmacy located within a
  121  Health Care Fraud Prevention and Enforcement Action Team (HEAT)
  122  Task Force area designated by the United States Department of
  123  Health and Human Services and the United States Department of
  124  Justice may dispense with the notice requirements of paragraph
  125  (1)(a) if such pharmacy has been a member of a credentialed
  126  provider network for less than 12 months.
  127         (4)Pursuant to s. 408.7057 and after receipt of the final
  128  audit report issued by the health insurer or health maintenance
  129  organization, a pharmacy may appeal the findings of the final
  130  audit as to whether a claim payment is due or the amount of a
  131  claim payment.
  132         (5)If a health insurer or health maintenance organization
  133  transfers to a pharmacy benefit manager through a contract the
  134  obligation to pay any pharmacy licensed under chapter 465 for
  135  any pharmacy benefit claims arising from services provided to or
  136  for the benefit of any insured or subscriber, the health insurer
  137  or health maintenance organization remains responsible for any
  138  violations of this section, s. 627.6131, or s. 641.3155.
  139         Section 3. Section 624.492, Florida Statutes, is created to
  140  read:
  141         624.492Health insurer, health maintenance organization,
  142  and pharmacy benefit manager reporting requirements.—
  143         (1)This section applies to:
  144         (a)A health insurer or health maintenance organization
  145  issuing, delivering, or issuing for delivery comprehensive major
  146  medical individual or group insurance policies or health
  147  maintenance contracts, respectively, in this state; and
  148         (b)A pharmacy benefit manager providing pharmacy benefit
  149  management services on behalf of a health insurer or health
  150  maintenance organization described in paragraph (a) and managing
  151  prescription drug coverage under a contract with the health
  152  insurer or health maintenance organization.
  153         (2)By March 1 annually, a health insurer or health
  154  maintenance organization, or a pharmacy benefit manager on
  155  behalf of a health insurer or health maintenance organization,
  156  shall report, in a form and manner as prescribed by the
  157  commission, the following information to the office with respect
  158  to services provided by the health insurer or health maintenance
  159  organization, or the pharmacy benefit manager on behalf of the
  160  insurer or health maintenance organization, for the immediately
  161  preceding policy or contract year:
  162         (a)The total number of prescriptions that were dispensed.
  163         (b)The number and percentage of all prescriptions that
  164  were provided through retail pharmacies compared to mail-order
  165  pharmacies. This paragraph applies to pharmacies licensed under
  166  chapter 465 which dispense drugs to the general public and which
  167  were paid by the health insurer, health maintenance
  168  organization, or pharmacy benefit manager under the contract.
  169         (c)For retail pharmacies and mail-order pharmacies
  170  described in paragraph (b), the general dispensing rate, which
  171  is the number and percentage of prescriptions for which a
  172  generic drug was available and dispensed.
  173         (d)The aggregate amount and types of rebates, discounts,
  174  price concessions, or other earned revenues that the health
  175  insurer, health maintenance organization, or pharmacy benefit
  176  manager negotiated for and are attributable to patient
  177  utilization under the plan, excluding bona fide service fees
  178  that include, but are not limited to, distribution service fees,
  179  inventory management fees, product stocking allowances, and fees
  180  associated with administrative services agreements and patient
  181  care programs.
  182         (e)If negotiated by the pharmacy benefit manager, the
  183  aggregate amount of the rebates, discounts, or price concessions
  184  under paragraph (d) which were passed through to the health
  185  insurer or health maintenance organization.
  186         (f)If the health insurer or health maintenance
  187  organization contracted with a pharmacy benefit manager, the
  188  aggregate amount of the difference between the amount the health
  189  insurer or health maintenance organization paid the pharmacy
  190  benefit manager and the amount the pharmacy benefit manager paid
  191  retail pharmacies and mail order pharmacies.
  192         (3)A pharmacy benefit manager that reports the information
  193  under subsection (2) to the office shall also provide the
  194  information to the health insurer or health maintenance
  195  organization with which the pharmacy benefit manager is under
  196  contract.
  197         (4)The commission may adopt rules to administer this
  198  section.
  199         Section 4. Section 627.64741, Florida Statutes, is amended
  200  to read:
  201         627.64741 Pharmacy benefit manager contracts.—
  202         (1) As used in this section, the term:
  203         (a) “Maximum allowable cost” means the per-unit amount that
  204  a pharmacy benefit manager reimburses a pharmacist for a
  205  prescription drug, excluding dispensing fees, prior to the
  206  application of copayments, coinsurance, and other cost-sharing
  207  charges, if any.
  208         (b) “Pharmacy benefit manager” means a person or entity
  209  doing business in this state which contracts to administer or
  210  manage prescription drug benefits on behalf of a health insurer
  211  to residents of this state.
  212         (2) A health insurer may contract only with a pharmacy
  213  benefit manager that A contract between a health insurer and a
  214  pharmacy benefit manager must require that the pharmacy benefit
  215  manager:
  216         (a) Updates Update maximum allowable cost pricing
  217  information at least every 7 calendar days.
  218         (b) Maintains Maintain a process that will, in a timely
  219  manner, eliminate drugs from maximum allowable cost lists or
  220  modify drug prices to remain consistent with changes in pricing
  221  data used in formulating maximum allowable cost prices and
  222  product availability.
  223         (c)(3)Does not limit A contract between a health insurer
  224  and a pharmacy benefit manager must prohibit the pharmacy
  225  benefit manager from limiting a pharmacist’s ability to disclose
  226  whether the cost-sharing obligation exceeds the retail price for
  227  a covered prescription drug, and the availability of a more
  228  affordable alternative drug, pursuant to s. 465.0244.
  229         (d)(4)Does not require A contract between a health insurer
  230  and a pharmacy benefit manager must prohibit the pharmacy
  231  benefit manager from requiring an insured to make a payment for
  232  a prescription drug at the point of sale in an amount that
  233  exceeds the lesser of:
  234         1.(a) The applicable cost-sharing amount; or
  235         2.(b) The retail price of the drug in the absence of
  236  prescription drug coverage.
  237         (3)The office may require a health insurer to submit to
  238  the office any contract, or amendments to a contract, for the
  239  administration or management of prescription drug benefits by a
  240  pharmacy benefit manager on behalf of the insurer.
  241         (4)After review of a contract under subsection (3), the
  242  office may order the insurer to cancel the contract in
  243  accordance with the terms of the contract and applicable law if
  244  the office determines that any of the following conditions
  245  exist:
  246         (a)The fees to be paid by the insurer are so unreasonably
  247  high as compared with similar contracts entered into by
  248  insurers, or as compared with similar contracts entered into by
  249  other insurers in similar circumstances, that the contract is
  250  detrimental to the policyholders of the insurer.
  251         (b)The contract does not comply with the Florida Insurance
  252  Code.
  253         (c)The pharmacy benefit manager is not registered with the
  254  office pursuant to s. 624.490.
  255         (5)The commission may adopt rules to administer this
  256  section.
  257         (6)(5) This section applies to contracts entered into,
  258  amended, or renewed on or after July 1, 2020 2018.
  259         Section 5. Section 627.6572, Florida Statutes, is amended
  260  to read:
  261         627.6572 Pharmacy benefit manager contracts.—
  262         (1) As used in this section, the term:
  263         (a) “Maximum allowable cost” means the per-unit amount that
  264  a pharmacy benefit manager reimburses a pharmacist for a
  265  prescription drug, excluding dispensing fees, prior to the
  266  application of copayments, coinsurance, and other cost-sharing
  267  charges, if any.
  268         (b) “Pharmacy benefit manager” means a person or entity
  269  doing business in this state which contracts to administer or
  270  manage prescription drug benefits on behalf of a health insurer
  271  to residents of this state.
  272         (2) A health insurer may contract only with a pharmacy
  273  benefit manager that A contract between a health insurer and a
  274  pharmacy benefit manager must require that the pharmacy benefit
  275  manager:
  276         (a) Updates Update maximum allowable cost pricing
  277  information at least every 7 calendar days.
  278         (b) Maintains Maintain a process that will, in a timely
  279  manner, eliminate drugs from maximum allowable cost lists or
  280  modify drug prices to remain consistent with changes in pricing
  281  data used in formulating maximum allowable cost prices and
  282  product availability.
  283         (c)(3)Does not limit A contract between a health insurer
  284  and a pharmacy benefit manager must prohibit the pharmacy
  285  benefit manager from limiting a pharmacist’s ability to disclose
  286  whether the cost-sharing obligation exceeds the retail price for
  287  a covered prescription drug, and the availability of a more
  288  affordable alternative drug, pursuant to s. 465.0244.
  289         (d)(4)Does not require A contract between a health insurer
  290  and a pharmacy benefit manager must prohibit the pharmacy
  291  benefit manager from requiring an insured to make a payment for
  292  a prescription drug at the point of sale in an amount that
  293  exceeds the lesser of:
  294         1.(a) The applicable cost-sharing amount; or
  295         2.(b) The retail price of the drug in the absence of
  296  prescription drug coverage.
  297         (3)The office may require a health insurer to submit to
  298  the office any contract, or amendments to a contract, for the
  299  administration or management of prescription drug benefits by a
  300  pharmacy benefit manager on behalf of the insurer.
  301         (4)After review of a contract under subsection (3), the
  302  office may order the insurer to cancel the contract in
  303  accordance with the terms of the contract and applicable law if
  304  the office determines that any of the following conditions
  305  exist:
  306         (a)The fees to be paid by the insurer are so unreasonably
  307  high as compared with similar contracts entered into by
  308  insurers, or as compared with similar contracts entered into by
  309  other insurers in similar circumstances, that the contract is
  310  detrimental to the policyholders of the insurer.
  311         (b)The contract does not comply with the Florida Insurance
  312  Code.
  313         (c)The pharmacy benefit manager is not registered with the
  314  office pursuant to s. 624.490.
  315         (5)The commission may adopt rules to administer this
  316  section.
  317         (6)(5) This section applies to contracts entered into,
  318  amended, or renewed on or after July 1, 2020 2018.
  319         Section 6. Section 641.314, Florida Statutes, is amended to
  320  read:
  321         641.314 Pharmacy benefit manager contracts.—
  322         (1) As used in this section, the term:
  323         (a) “Maximum allowable cost” means the per-unit amount that
  324  a pharmacy benefit manager reimburses a pharmacist for a
  325  prescription drug, excluding dispensing fees, prior to the
  326  application of copayments, coinsurance, and other cost-sharing
  327  charges, if any.
  328         (b) “Pharmacy benefit manager” means a person or entity
  329  doing business in this state which contracts to administer or
  330  manage prescription drug benefits on behalf of a health
  331  maintenance organization to residents of this state.
  332         (2) A health maintenance organization may contract only
  333  with a pharmacy benefit manager that A contract between a health
  334  maintenance organization and a pharmacy benefit manager must
  335  require that the pharmacy benefit manager:
  336         (a) Updates Update maximum allowable cost pricing
  337  information at least every 7 calendar days.
  338         (b) Maintains Maintain a process that will, in a timely
  339  manner, eliminate drugs from maximum allowable cost lists or
  340  modify drug prices to remain consistent with changes in pricing
  341  data used in formulating maximum allowable cost prices and
  342  product availability.
  343         (c)(3)Does not limit A contract between a health
  344  maintenance organization and a pharmacy benefit manager must
  345  prohibit the pharmacy benefit manager from limiting a
  346  pharmacist’s ability to disclose whether the cost-sharing
  347  obligation exceeds the retail price for a covered prescription
  348  drug, and the availability of a more affordable alternative
  349  drug, pursuant to s. 465.0244.
  350         (d)(4)Does not require A contract between a health
  351  maintenance organization and a pharmacy benefit manager must
  352  prohibit the pharmacy benefit manager from requiring a
  353  subscriber to make a payment for a prescription drug at the
  354  point of sale in an amount that exceeds the lesser of:
  355         1.(a) The applicable cost-sharing amount; or
  356         2.(b) The retail price of the drug in the absence of
  357  prescription drug coverage.
  358         (3)The office may require a health maintenance
  359  organization to submit to the office any contract, or amendments
  360  to a contract, for the administration or management of
  361  prescription drug benefits by a pharmacy benefit manager on
  362  behalf of the health maintenance organization.
  363         (4)After review of a contract under subsection (3), the
  364  office may order the health maintenance organization to cancel
  365  the contract in accordance with the terms of the contract and
  366  applicable law if the office determines that any of the
  367  following conditions exist:
  368         (a)The fees to be paid by the health maintenance
  369  organization are so unreasonably high as compared with similar
  370  contracts entered into by health maintenance organizations, or
  371  as compared with similar contracts entered into by other health
  372  maintenance organizations in similar circumstances, that the
  373  contract is detrimental to the subscribers of the health
  374  maintenance organization.
  375         (b)The contract does not comply with the Florida Insurance
  376  Code.
  377         (c)The pharmacy benefit manager is not registered with the
  378  office pursuant to s. 624.490.
  379         (5)The commission may adopt rules to administer this
  380  section.
  381         (6)(5) This section applies to pharmacy benefit manager
  382  contracts entered into, amended, or renewed on or after July 1,
  383  2020 2018.
  384         Section 7. This act shall take effect July 1, 2020.