83R24982 PMO-D

By: Miller of Comal H.B. No. 3262

Substitute the following for H.B. No. 3262:

By: Sheffield of Coryell C.S.H.B. No. 3262

A BILL TO BE ENTITLED

AN ACT

relating to pharmacy benefit managers contracting with the child health plan program, the Medicaid managed care program, and health plans for certain government employees.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 531, Government Code, is amended by adding Subchapter Y to read as follows:

SUBCHAPTER Y. PHARMACY BENEFIT MANAGERS

Sec. 531.990. APPLICABILITY. This subchapter applies only to a Medicaid managed care program under Chapter 533 and the child health plan program.

Sec. 531.991. TRANSPARENCY IN PHARMACY BENEFIT MANAGEMENT. (a) In this section, "maximum allowable cost" means a maximum reimbursement amount for a group of therapeutically and pharmaceutically equivalent multiple source medications.

(b) Each contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to:

(1) establish:

(A) a method of calculating, updating, and revising a maximum allowable cost for each covered medication;

(B) intervals not to exceed seven days for updating or revising the maximum allowable cost for each medication on the maximum allowable cost list; and

(C) for that contract a single maximum allowable cost list that uniformly serves as a basis for the calculation of reimbursement amounts for pharmacy claims covered by the child health plan program or Medicaid managed care program;

(2) develop and maintain a public Internet website and post and maintain on the website the information required by Subdivision (1)(C);

(3) notify each retail pharmacy affected by a modification of a maximum allowable cost of the modification on the date of the modification;

(4) disclose the data sources from which the pharmacy benefit manager obtains pricing data used in establishing a maximum allowable cost; and

(5) not less frequently than once a week, notify each retail pharmacy affected by the pharmacy benefit manager's substitution or deletion of, or addition to, a data source from which the pharmacy benefit manager obtains pricing data used in establishing a maximum allowable cost of the substitution, deletion, or addition.

(c) A contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to provide to the commission the information described by Subsections (b)(1)(B) and (C). On request, the commission shall provide the information to a pharmacist or pharmacy.

(d) A contract to provide pharmacy benefit manager services must require that each medication on a maximum allowable cost list:

(1) is listed as "A" or "B" rated in the most recent version of the United States Food and Drug Administration's Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book;

(2) is rated "NR" or "NA" by Medi-Span; or

(3) has a similar rating by a nationally recognized reference.

(e) A contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to:

(1) provide a procedure for a retail pharmacy to challenge a listed maximum allowable cost;

(2) respond to a challenge under that procedure not later than the 15th day after the date the challenge is made;

(3) if the challenge is successful, adjust the maximum allowable cost effective on the date the challenge is resolved and apply the adjustment to all retail pharmacies under the contract;

(4) if the challenge is denied, provide each reason for the denial; and

(5) report every 90 days to the commission the total number of challenges made and denied in the preceding 90-day period to the maximum allowable cost for each medication the maximum allowable cost of which was challenged during that period.

SECTION 2. Subchapter B, Chapter 1551, Insurance Code, is amended by adding Section 1551.0671 to read as follows:

Sec. 1551.0671. TRANSPARENCY IN PHARMACY BENEFIT MANAGEMENT. (a) In this section, "maximum allowable cost" means a maximum reimbursement amount for a group of therapeutically and pharmaceutically equivalent multiple source medications.

(b) Each contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to:

(1) establish:

(A) a method of calculating, updating, and revising a maximum allowable cost for each covered medication;

(B) intervals not to exceed seven days for updating or revising the maximum allowable cost for each medication on the maximum allowable cost list; and

(C) for that contract a single maximum allowable cost list that uniformly serves as a basis for the calculation of reimbursement amounts for pharmacy claims covered by the group benefits program;

(2) develop and maintain a public Internet website and post and maintain on the website the information required by Subdivision (1)(C);

(3) notify each retail pharmacy affected by a modification of a maximum allowable cost of the modification on the date of the modification;

(4) disclose the data sources from which the pharmacy benefit manager obtains pricing data used in establishing a maximum allowable cost; and

(5) not less frequently than once a week, notify each retail pharmacy affected by the pharmacy benefit manager's substitution or deletion of, or addition to, a data source from which the pharmacy benefit manager obtains pricing data used in establishing a maximum allowable cost of the substitution, deletion, or addition.

(c) A contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to provide to the board of trustees the information described by Subsections (b)(1)(B) and (C). On request, the board of trustees shall provide the information to a pharmacist or pharmacy.

(d) A contract to provide pharmacy benefit manager services must require that each medication on a maximum allowable cost list:

(1) is listed as "A" or "B" rated in the most recent version of the United States Food and Drug Administration's Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book;

(2) is rated "NR" or "NA" by Medi-Span; or

(3) has a similar rating by a nationally recognized reference.

(e) A contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to:

(1) provide a procedure for a retail pharmacy to challenge a listed maximum allowable cost;

(2) respond to a challenge under that procedure not later than the 15th day after the date the challenge is made;

(3) if the challenge is successful, adjust the maximum allowable cost effective on the date the challenge is resolved and apply the adjustment to all retail pharmacies under the contract;

(4) if the challenge is denied, provide each reason for the denial; and

(5) report every 90 days to the board of trustees the total number of challenges made and denied in the preceding 90-day period to the maximum allowable cost for each medication the maximum allowable cost of which was challenged during that period.

SECTION 3. Subchapter C, Chapter 1575, Insurance Code, is amended by adding Section 1575.111 to read as follows:

Sec. 1575.111. TRANSPARENCY IN PHARMACY BENEFIT MANAGEMENT. (a) In this section, "maximum allowable cost" means a maximum reimbursement amount for a group of therapeutically and pharmaceutically equivalent multiple source medications.

(b) Each contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to:

(1) establish:

(A) a method of calculating, updating, and revising a maximum allowable cost for each covered medication;

(B) intervals not to exceed seven days for updating or revising the maximum allowable cost for each medication on the maximum allowable cost list; and

(C) for that contract a single maximum allowable cost list that uniformly serves as a basis for the calculation of reimbursement amounts for pharmacy claims covered by the group program;

(2) develop and maintain a public Internet website and post and maintain on the website the information required by Subdivision (1)(C);

(3) notify each retail pharmacy affected by a modification of a maximum allowable cost of the modification on the date of the modification;

(4) disclose the data sources from which the pharmacy benefit manager obtains pricing data used in establishing a maximum allowable cost; and

(5) not less frequently than once a week, notify each retail pharmacy affected by the pharmacy benefit manager's substitution or deletion of, or addition to, a data source from which the pharmacy benefit manager obtains pricing data used in establishing a maximum allowable cost of the substitution, deletion, or addition.

(c) A contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to provide to the trustee the information described by Subsections (b)(1)(B) and (C). On request, the trustee shall provide the information to a pharmacist or pharmacy.

(d) A contract to provide pharmacy benefit manager services must require that each medication on a maximum allowable cost list:

(1) is listed as "A" or "B" rated in the most recent version of the United States Food and Drug Administration's Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book;

(2) is rated "NR" or "NA" by Medi-Span; or

(3) has a similar rating by a nationally recognized reference.

(e) A contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to:

(1) provide a procedure for a retail pharmacy to challenge a listed maximum allowable cost;

(2) respond to a challenge under that procedure not later than the 15th day after the date the challenge is made;

(3) if the challenge is successful, adjust the maximum allowable cost effective on the date the challenge is resolved and apply the adjustment to all retail pharmacies under the contract;

(4) if the challenge is denied, provide each reason for the denial; and

(5) report every 90 days to the trustee the total number of challenges made and denied in the preceding 90-day period to the maximum allowable cost for each medication the maximum allowable cost of which was challenged during that period.

SECTION 4. Subchapter B, Chapter 1579, Insurance Code, is amended by adding Section 1579.058 to read as follows:

Sec. 1579.058. TRANSPARENCY IN PHARMACY BENEFIT MANAGEMENT. (a) In this section, "maximum allowable cost" means a maximum reimbursement amount for a group of therapeutically and pharmaceutically equivalent multiple source medications.

(b) Each contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to:

(1) establish:

(A) a method of calculating, updating, and revising a maximum allowable cost for each covered medication;

(B) intervals not to exceed seven days for updating or revising the maximum allowable cost for each medication on the maximum allowable cost list; and

(C) for that contract a single maximum allowable cost list that uniformly serves as a basis for the calculation of reimbursement amounts for pharmacy claims covered by a health coverage plan;

(2) develop and maintain a public Internet website and post and maintain on the website the information required by Subdivision (1)(C);

(3) notify each retail pharmacy affected by a modification of a maximum allowable cost of the modification on the date of the modification;

(4) disclose the data sources from which the pharmacy benefit manager obtains pricing data used in establishing a maximum allowable cost; and

(5) not less frequently than once a week, notify each retail pharmacy affected by the pharmacy benefit manager's substitution or deletion of, or addition to, a data source from which the pharmacy benefit manager obtains pricing data used in establishing a maximum allowable cost of the substitution, deletion, or addition.

(c) A contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to provide to the trustee the information described by Subsections (b)(1)(B) and (C). On request, the trustee shall provide the information to a pharmacist or pharmacy.

(d) A contract to provide pharmacy benefit manager services must require that each medication on a maximum allowable cost list:

(1) is listed as "A" or "B" rated in the most recent version of the United States Food and Drug Administration's Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book;

(2) is rated "NR" or "NA" by Medi-Span; or

(3) has a similar rating by a nationally recognized reference.

(e) A contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to:

(1) provide a procedure for a retail pharmacy to challenge a listed maximum allowable cost;

(2) respond to a challenge under that procedure not later than the 15th day after the date the challenge is made;

(3) if the challenge is successful, adjust the maximum allowable cost effective on the date the challenge is resolved and apply the adjustment to all retail pharmacies under the contract;

(4) if the challenge is denied, provide each reason for the denial; and

(5) report every 90 days to the trustee the total number of challenges made and denied in the preceding 90-day period to the maximum allowable cost for each medication the maximum allowable cost of which was challenged during that period.

SECTION 5. Subchapter B, Chapter 1601, Insurance Code, is amended by adding Section 1601.065 to read as follows:

Sec. 1601.065. TRANSPARENCY IN PHARMACY BENEFIT MANAGEMENT. (a) In this section, "maximum allowable cost" means a maximum reimbursement amount for a group of therapeutically and pharmaceutically equivalent multiple source medications.

(b) Each contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to:

(1) establish:

(A) a method of calculating, updating, and revising a maximum allowable cost for each covered medication;

(B) intervals not to exceed seven days for updating or revising the maximum allowable cost for each medication on the maximum allowable cost list; and

(C) for that contract a single maximum allowable cost list that uniformly serves as a basis for the calculation of reimbursement amounts for pharmacy claims covered by the basic coverage;

(2) develop and maintain a public Internet website and post and maintain on the website the information required by Subdivision (1)(C);

(3) notify each retail pharmacy affected by a modification of a maximum allowable cost of the modification on the date of the modification;

(4) disclose the data sources from which the pharmacy benefit manager obtains pricing data used in establishing a maximum allowable cost; and

(5) not less frequently than once a week, notify each retail pharmacy affected by the pharmacy benefit manager's substitution or deletion of, or addition to, a data source from which the pharmacy benefit manager obtains pricing data used in establishing a maximum allowable cost of the substitution, deletion, or addition.

(c) A contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to provide to the governing board of the system the information described by Subsections (b)(1)(B) and (C). On request, the system shall provide the information to a pharmacist or pharmacy.

(d) A contract to provide pharmacy benefit manager services must require that each medication on a maximum allowable cost list:

(1) is listed as "A" or "B" rated in the most recent version of the United States Food and Drug Administration's Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book;

(2) is rated "NR" or "NA" by Medi-Span; or

(3) has a similar rating by a nationally recognized reference.

(e) A contract to provide pharmacy benefit manager services must require the pharmacy benefit manager to:

(1) provide a procedure for a retail pharmacy to challenge a listed maximum allowable cost;

(2) respond to a challenge under that procedure not later than the 15th day after the date the challenge is made;

(3) if the challenge is successful, adjust the maximum allowable cost effective on the date the challenge is resolved and apply the adjustment to all retail pharmacies under the contract;

(4) if the challenge is denied, provide each reason for the denial; and

(5) report every 90 days to the system the total number of challenges made and denied in the preceding 90-day period to the maximum allowable cost for each medication the maximum allowable cost of which was challenged during that period.

SECTION 6. Subchapter Y, Chapter 531, Government Code, and Sections 1551.0671, 1575.111, 1579.058, and 1601.065, Insurance Code, as added by this Act, apply only to a contract with a pharmacy benefit manager entered into or renewed on or after the effective date of this Act.

SECTION 7. This Act takes effect September 1, 2013.