Alaska 2023-2024 Regular Session

Alaska House Bill HB226 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	Enrolled HB 226
2		-	LAWS OF ALASKA
3	1
4		-	2024
	2	+	HB0226D -1- SCS CSHB 226(L&C)
	3	+	New Text Underlined [DELETED TEXT BRACKETED]
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6		-
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8		-	Source Chapter No.
9		-	SCS CSHB 226(L&C) _______
	5	+	33-LS0955\H
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13	9
14		-	~~AN ACT~~
	10	+	SENATE CS FOR CS FOR HOUSE BILL NO. 226(L&C)
15	11
16		-	Relating to insurance; relating to pharmacy benefits managers; relating to dispensing fees; and
17		-	providing for an effective date.
	12	+	IN THE LEGISLATURE OF THE STATE OF ALASKA
18	13
	14	+	THIRTY-THIRD LEGISLATURE - SECOND SESSION
19	15
20		-	~~_______________~~
	16	+	BY THE SENATE LABOR AND COMMERCE COMMITTEE
21	17
	18	+	Offered: 5/10/24
	19	+	Referred: Rules
22	20
23		-	~~BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA~~:
	21	+	Sponsor(s): REPRESENTATIVES SUMNER, Galvin, Himschoot, Josephson, Ortiz, Ruffridge, Wright
24	22
	23	+	SENATOR Myers
	24	+	A BILL
25	25
	26	+	FOR AN ACT ENTITLED
26	27
27		-	THE ACT FOLLOWS ON PAGE 1
28		-	-1- Enrolled HB 226
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48		-
49		-
50		-	AN ACT
51		-
52		-
53		-	Relating to insurance; relating to pharmacy benefits managers; relating to dispensing fees; and 1
54		-	providing for an effective date. 2
55		-	_______________ 3
	28	+	"An Act relating to insurance; relating to pharmacy benefits managers; relating to 1
	29	+	dispensing fees; and providing for an effective date." 2
	30	+	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 3
56	31		* Section 1. AS 08.80.297(d)(2) is amended to read: 4
57	32		(2) "pharmacy benefits manager" has the meaning given in 5
58		-	AS 21.27.975 [AS 21.27.955].
	33	+	AS 21.27.975 [21.27.955].
59	34		6
60	35		* Sec. 2. AS 21.27.901 is amended to read: 7
61	36		Sec. 21.27.901. Registration of pharmacy benefits managers; scope of 8
62	37		business practice. (a) A person may not conduct business in the state as a pharmacy 9
63	38		benefits manager unless the person is registered with the director [AS A THIRD-10
64	39		PARTY ADMINISTRATOR UNDER AS 21.27.630]. 11
65	40		(b) A pharmacy benefits manager registered under this section 12
66	41		[AS 21.27.630] may 13
67		-	(1) contract with an insurer to administer or manage pharmacy benefits 14
68		-	Enrolled HB 226 -2-
	42	+	(1) contract with an insurer to administer or manage pharmacy benefits 14 33-LS0955\H
	43	+	SCS CSHB 226(L&C) -2- HB0226D
	44	+	New Text Underlined [DELETED TEXT BRACKETED]
	45	+
69	46		provided by an insurer for a covered person, including claims processing services for 1
70	47		and audits of payments for prescription drugs and medical devices and supplies; and 2
71	48		(2) contract with network pharmacies [; 3
72	49		(3) SET THE COST OF MULTI-SOURCE GENERIC DRUGS 4
73	50		UNDER AS 21.27.945; AND 5
74	51		(4) ADJUDICATE APPEALS RELATED TO MULTI-SOURCE 6
75	52		GENERIC DRUG REIMBURSEMENT]. 7
76	53		* Sec. 3. AS 21.27.901 is amended by adding new subsections to read: 8
77	54		(c) A pharmacy benefits manager 9
78	55		(1) shall apply for registration following the same procedures for 10
79	56		licensure set out in AS 21.27.040; 11
80	57		(2) is subject to hearings and orders on violations; denial, nonrenewal, 12
81	58		suspension, or revocation of registration; penalties; and surrender of registration under 13
82	59		the procedures set out in AS 21.27.405 - 21.27.460. 14
83	60		(d) Each day that a pharmacy benefits manager conducts business in the state 15
84	61		as a pharmacy benefits manager without being registered is a separate violation of this 16
85	62		section, and each separate violation is subject to the maximum civil penalty under 17
86	63		AS 21.97.020. 18
87	64		* Sec. 4. AS 21.27.905(a) is amended to read: 19
88	65		(a) A pharmacy benefits manager shall biennially renew a registration with the 20
89	66		director following the procedures for license renewal in AS 21.27.380. 21
90	67		* Sec. 5. AS 21.27 is amended by adding a new section to read: 22
91	68		Sec. 21.27.907. Duty of care. (a) A pharmacy benefits manager owes a duty of 23
92	69		care to a plan sponsor, benefits administrator, and covered person. A pharmacy 24
93	70		benefits manager shall adhere to the practices set out in this section. 25
94	71		(b) A pharmacy benefits manager shall 26
95	72		(1) perform the manager's duties with care, skill, prudence, diligence, 27
96	73		fairness, transparency, and professionalism and in the best interest of the plan sponsor, 28
97	74		benefits administrator, and covered person as required by this section; and 29
98	75		(2) notify the plan sponsor in writing of any activity, policy, or practice 30
99		-	of the pharmacy benefits manager that directly or indirectly presents any conflict of 31
100		-	-3- Enrolled HB 226
	76	+	of the pharmacy benefits manager that directly or indirectly presents any conflict of 31 33-LS0955\H
	77	+	HB0226D -3- SCS CSHB 226(L&C)
	78	+	New Text Underlined [DELETED TEXT BRACKETED]
	79	+
101	80		interest with the duties imposed by this chapter. 1
102	81		(c) The duty of care owed to a covered person under this section takes 2
103	82		precedence over the duty of care owed to any other person. 3
104	83		(d) A pharmacy benefits manager that receives from a drug manufacturer or 4
105	84		labeler a payment or benefit of any kind in connection with the use of a prescription 5
106	85		drug by a covered person, including a payment or benefit based on volume of sales or 6
107	86		market share, shall pass that payment or benefit on in full to the plan sponsor. 7
108	87		(e) Upon request by a plan sponsor, a pharmacy benefits manager shall 8
109	88		(1) provide information showing the quantity of drugs purchased by 9
110	89		the covered person and the net cost to the covered person for the drugs; the 10
111	90		information must include all rebates, discounts, and other similar payments; if 11
112	91		requested by the plan sponsor, the pharmacy benefits manager shall provide the 12
113	92		quantity and net cost information on a drug-by-drug basis by National Drug Code 13
114	93		registration number rather than on an aggregated basis; and 14
115	94		(2) disclose to the plan sponsor all financial terms and arrangements 15
116	95		for remuneration of any kind that apply between the pharmacy benefits manager and a 16
117	96		prescription drug manufacturer or labeler, including formulary management and drug-17
118	97		substitution programs, educational support, claims processing, and data sales fees. 18
119	98		(f) A pharmacy benefits manager providing information to a plan sponsor 19
120	99		under (e) of this section may designate that information as confidential. Information 20
121	100		designated as confidential may not be disclosed by the plan sponsor to another person 21
122	101		without the consent of the pharmacy benefits manager, unless ordered by a court. 22
123	102		(g) If a pharmacy dispenses a substitute prescription drug for a prescribed drug 23
124	103		to a covered person and the substitute prescription drug costs more than the prescribed 24
125	104		drug, the pharmacy benefits manager shall disclose to the plan sponsor the cost of both 25
126	105		drugs and any benefit or payment directly or indirectly accruing to the pharmacy 26
127	106		benefits manager as a result of the substitution. The pharmacy benefits manager shall 27
128	107		transfer in full to the plan sponsor a benefit or payment received in any form by the 28
129	108		pharmacy benefits manager as a result of a prescription drug substitution.
130	109		29
131	110		* Sec. 6. AS 21.27.940 is amended to read: 30
132		-	Sec. 21.27.940. Pharmacy audits; restrictions. The requirements of 31
133		-	Enrolled HB 226 -4-
	111	+	Sec. 21.27.940. Pharmacy audits; restrictions. The requirements of 31 33-LS0955\H
	112	+	SCS CSHB 226(L&C) -4- HB0226D
	113	+	New Text Underlined [DELETED TEXT BRACKETED]
	114	+
134	115		AS 21.27.901 - 21.27.975 [21.27.955] do not apply to an audit 1
135	116		(1) in which suspected fraudulent activity or other intentional or wilful 2
136	117		misrepresentation is evidenced by a physical review, a review of claims data, a 3
137	118		statement, or another investigative method; or 4
138	119		(2) of claims paid for under the medical assistance program under 5
139	120		AS 47.07. 6
140	121		* Sec. 7. AS 21.27.945(a) is amended to read: 7
141	122		(a) A pharmacy benefits manager shall 8
142	123		(1) provide [MAKE AVAILABLE] to each network pharmacy at the 9
143	124		beginning of the term of the network pharmacy's contract, and upon renewal of the 10
144	125		contract, the methodology and sources used to determine the [DRUG PRICING] list; 11
145	126		(2) provide the list to a network pharmacy without charge; 12
146	127		(3) [(2)] provide and keep current a telephone number at which a 13
147	128		network pharmacy may contact an employee of a pharmacy benefits manager [TO 14
148	129		DISCUSS THE PHARMACY'S APPEAL]; 15
149	130		(4) [(3)] provide a process for a network pharmacy to have ready 16
150	131		access to the list specific to that pharmacy; 17
151	132		(5) [(4)] review and update applicable list information at least once 18
152	133		every seven business days to reflect modification of list pricing; 19
153	134		(6) [(5)] update list prices within one business day after a significant 20
154	135		price update or modification provided by the pharmacy benefits manager's national 21
155	136		drug database provider; and 22
156	137		(7) [(6)] ensure that dispensing fees are not included in the calculation 23
157	138		of the list pricing. 24
158	139		* Sec. 8. AS 21.27.945(b) is repealed and reenacted to read: 25
159	140		(b) Before placing or maintaining a specific drug on the list, a pharmacy 26
160	141		benefits manager shall ensure that 27
161	142		(1) if the drug is therapeutically equivalent and pharmaceutically 28
162	143		equivalent to a prescribed drug, the drug is listed as therapeutically equivalent and 29
163	144		pharmaceutically equivalent "A" or "B" rated in the most recent edition or supplement 30
164		-	of the United States Food and Drug Administration's Approved Drug Products with 31
165		-	-5- Enrolled HB 226
	145	+	of the United States Food and Drug Administration's Approved Drug Products with 31 33-LS0955\H
	146	+	HB0226D -5- SCS CSHB 226(L&C)
	147	+	New Text Underlined [DELETED TEXT BRACKETED]
	148	+
166	149		Therapeutic Equivalence Evaluations, also known as the Orange Book; 1
167	150		(2) if the drug is a different biological product than a prescribed drug, 2
168	151		the drug is an interchangeable biological product; 3
169	152		(3) the drug is readily available for purchase from national or regional 4
170	153		wholesalers operating in the state; and 5
171	154		(4) the drug is not obsolete or temporarily unavailable. 6
172	155		* Sec. 9. AS 21.27.945 is amended by adding new subsections to read: 7
173	156		(c) The list a pharmacy benefits manager provides to a network pharmacy 8
174	157		under (a) of this section must 9
175	158		(1) be maintained in a searchable electronic format that is accessible 10
176	159		with a computer; 11
177	160		(2) identify each drug for which a reimbursement amount is 12
178	161		established; 13
179	162		(3) specify for each drug 14
180	163		(A) the national drug code; 15
181	164		(B) the national average drug acquisition cost, if available; 16
182	165		(C) the wholesale acquisition cost, if available; and 17
183	166		(D) the reimbursement amount; and 18
184		-	(4) specify the date on which a drug is added to or removed from the 19
185		-	list. 20
186		-	(d) In this section, 21
187		-	(1) "interchangeable biological product" has the meaning given in 22
188		-	AS 08.80.480; 23
189		-	(2) "pharmaceutically equivalent" means a drug has identical amounts 24
190		-	of the same active chemical ingredients in the same dosage form and meets the 25
191		-	standards of strength, quality, and purity according to the United States Pharmacopeia 26
192		-	published by the United States Pharmacopeial Convention or another similar 27
193		-	nationally recognized publication; 28
194		-	(3) "significant price update or modification" means 29
195		-	(A) an increase or decrease of 10 percent or more in the 30
196		-	pharmacy acquisition cost; 31
197		-	Enrolled HB 226 -6-
198		-	(B) a change in the methodology in which the maximum 1
199		-	allowable cost for a drug is determined; or 2
200		-	(C) a change in the value of a variable involved in the 3
201		-	methodology used to determine the maximum allowable cost for a drug; 4
202		-	(4) "therapeutically equivalent" means a drug is from the same 5
203		-	therapeutic class as another drug and, when administered in an appropriate amount, 6
204		-	provides the same therapeutic effect as, and is identical in duration and intensity to, 7
205		-	the other drug; 8
206		-	(5) "therapeutic class" means a group of similar drug products that 9
207		-	have the same or similar mechanisms of action and are used to treat a specific 10
208		-	condition. 11
209		-	* Sec. 10. AS 21.27 is amended by adding new sections to read: 12
210		-	Sec. 21.27.951. Patient access to clinician-administered drugs. (a) An 13
211		-	insurer or its pharmacy benefits manager may not 14
212		-	(1) refuse to authorize, approve, or pay a provider for providing 15
213		-	covered clinician-administered drugs and related services to a covered person if the 16
214		-	provider has agreed to participate in the insurer's health care insurance policy 17
215		-	according to the terms offered by the insurer or its pharmacy benefits manager; 18
216		-	(2) if the criteria for medical necessity are met, condition, deny, 19
217		-	restrict, or refuse to authorize or approve a provider for a clinician-administered drug 20
218		-	because the provider obtained the clinician-administered drug from a pharmacy that is 21
219		-	not a network pharmacy in the insurer's or its pharmacy benefits manager's network; 22
220		-	(3) require a pharmacy to dispense a clinician-administered drug 23
221		-	directly to a covered person or agent of the insured with the intention that the covered 24
222		-	person or the agent of the insured will transport the medication to a provider for 25
223		-	administration; 26
224		-	(4) require or encourage the dispensing of a clinician-administered 27
225		-	drug to a covered person in a manner that is inconsistent with the supply chain security 28
226		-	controls and chain of distribution set by 21 U.S.C. 360eee - 360eee-4 (Drug Supply 29
227		-	Chain Security Act); 30
228		-	(5) require that a clinician-administered drug be dispensed or 31
229		-	-7- Enrolled HB 226
230		-	administered to a covered person in the residence of the covered person or require use 1
231		-	of an infusion site external to the office, department, or clinic of the provider of the 2
232		-	covered person; nothing in this paragraph prohibits the insurer or its pharmacy 3
233		-	benefits manager, or an agent of the insurer or its pharmacy benefits manager, from 4
234		-	offering the use of a home infusion pharmacy or external infusion site. 5
235		-	(b) If a health insurance policy provides in-network and out-of-network 6
236		-	benefits and there is not an in-network health care provider or health care facility 7
237		-	within a 50-mile radius of the primary residence of a covered person, the health 8
238		-	insurance policy must provide coverage to the covered person for clinician-9
239		-	administered drugs at the minimum in-network benefit level. 10
240		-	(c) In this section, "clinician-administered drug" means a drug, other than a 11
241		-	vaccine, that requires administration by a provider and that the United States Food and 12
242		-	Drug Administration or the drug's manufacturer has not approved for self-13
243		-	administration. 14
244		-	Sec. 21.27.952. Penalties. In addition to any other penalty provided by law, if 15
245		-	a person violates AS 21.27.945 - 21.27.975, the director may, after notice and hearing, 16
246		-	impose a penalty in accordance with AS 21.27.440. 17
247		-	Sec. 21.27.953. Regulations relating to pharmacy benefits manager claims, 18
248		-	grievances, activities, and appeals. The director shall adopt regulations that provide 19
249		-	standards and criteria for 20
250		-	(1) the structure and operation of pharmacy benefits manager 21
251		-	reimbursement of pharmacy claims under this chapter; 22
252		-	(2) procedures maintained by a pharmacy benefits manager to ensure 23
253		-	that a pharmacy has the opportunity for appropriate resolution of grievances; 24
254		-	(3) an independent review of pharmacy benefits manager activities 25
255		-	under this title; and 26
256		-	(4) requiring a pharmacy benefits manager to hear pricing appeals. 27
257		-	* Sec. 11. AS 21.27 is amended by adding a new section to article 9 to read: 28
258		-	Sec. 21.27.975. Definitions. In AS 21.27.901 - 21.27.975, 29
259		-	(1) "affiliate" means a business, pharmacy, pharmacist, or pro
260		-	vider 30
261		-	who, directly or indirectly through one or more intermediaries, controls, is controlled 31
262		-	Enrolled HB 226 -8-
263		-	by, or is under common control with a pharmacy benefits manager; 1
264		-	(2) "audit" means an official examination and verification of accounts 2
265		-	and records; 3
266		-	(3) "claim" means a request from a pharmacy or pharmacist to be 4
267		-	reimbursed for the cost of filling or refilling a prescription for a drug or for providing 5
268		-	a medical supply or device; 6
269		-	(4) "covered person" means an individual receiving medication 7
270		-	coverage or reimbursement provided by an insurer or its pharmacy benefits manager 8
271		-	under a health care insurance policy; 9
272		-	(5) "drug" means a prescription drug; 10
273		-	(6) "extrapolation" means the practice of inferring a frequency or 11
274		-	dollar amount of overpayments, underpayments, invalid claims, or other errors on any 12
275		-	portion of claims submitted, based on the frequency or dollar amount of 13
276		-	overpayments, underpayments, invalid claims, or other errors actually measured in a 14
277		-	sample of claims; 15
278		-	(7) "insurer" has the meaning given to "health care insurer" in 16
279		-	AS 21.54.500; 17
280		-	(8) "list" means a list of drugs for which a pharmacy benefits manager 18
281		-	has established predetermined reimbursement amounts, or methods for determining 19
282		-	reimbursement amounts, to be paid to a network pharmacy or pharmacist for 20
283		-	pharmacy services, such as a maximum allowable cost or maximum allowable cost list 21
284		-	or any other list of prices used by a pharmacy benefits manager; 22
285		-	(9) "maximum allowable cost" means the maximum amount that a 23
286		-	pharmacy benefits manager will reimburse a pharmacy for the cost of a drug; 24
287		-	(10) "national average drug acquisition cost" means the average 25
288		-	acquisition cost for outpatient drugs covered by Medicaid, as determined by a monthly 26
289		-	survey of retail pharmacies conducted by the federal Centers for Medicare and 27
290		-	Medicaid Services; 28
291		-	(11) "network" means an entity that, through contracts or agreements 29
292		-	with providers, provides or arranges for access by groups of covered persons to health 30
293		-	care services by providers who are not otherwise or individually contracted directly 31
294		-	-9- Enrolled HB 226
295		-	with an insurer or its pharmacy benefits manager; 1
296		-	(12) "network pharmacy" means a pharmacy that provides covered 2
297		-	health care services or supplies to an insured or a member under a contract with a 3
298		-	network plan to act as a participating provider; 4
299		-	(13) "pharmacy" has the meaning given in AS 08.80.480; 5
300		-	(14) "pharmacy acquisition cost" means the amount that a 6
301		-	pharmaceutical wholesaler or distributor charges for a pharmaceutical product as listed 7
302		-	on the pharmacy's invoice; 8
303		-	(15) "pharmacy benefits manager" means a person that contracts with a 9
304		-	pharmacy on behalf of an insurer to process claims or pay pharmacies for prescription 10
305		-	drugs or medical devices and supplies or provide network management for 11
306		-	pharmacies; 12
307		-	(16) "plan sponsor" has the meaning given in AS 21.54.500; 13
308		-	(17) "provider" means a physician, pharmacist, hospital, clinic, 14
309		-	hospital outpatient department, pharmacy, or other person licensed or otherwise 15
310		-	authorized in this state to furnish health care services; 16
311		-	(18) "recoupment" means the amount that a pharmacy must remit to a 17
312		-	pharmacy benefits manager when the pharmacy benefits manager has determined that 18
313		-	an overpayment to the pharmacy has occurred; 19
314		-	(19) "wholesale acquisition cost" has the meaning given in 42 U.S.C. 20
315		-	1395w-3a(c)(6)(B). 21
316		-	* Sec. 12. AS 21.36 is amended by adding a new section to article 5 to read: 22
317		-	Sec. 21.36.520. Unfair trade practices. (a) An insurer providing a health care 23
318		-	insurance policy or its pharmacy benefits manager may not 24
319		-	(1) interfere with a covered person's right to choose a pharmacy or 25
320		-	provider; 26
321		-	(2) interfere with a covered person's right of access to a clinician-27
322		-	administered drug; 28
323		-	(3) interfere with the right of a pharmacy or pharmacist to participate 29
324		-	as a network pharmacy; 30
325		-	(4) reimburse a pharmacy or pharmacist an amount less than the 31
326		-	Enrolled HB 226 -10-
327		-	amount the pharmacy benefits manager reimburses an affiliate for providing the same 1
328		-	pharmacy services, calculated on a per-unit basis using the same generic product 2
329		-	identifier or generic code number; 3
330		-	(5) impose a reduction in reimbursement for pharmacy services 4
331		-	because of the person's choice among pharmacies that have agreed to participate in the 5
332		-	plan according to the terms offered by the insurer or its pharmacy benefits manager; 6
333		-	(6) use a covered person's pharmacy services data collected under the 7
334		-	provision of claims processing services for the purpose of soliciting, marketing, or 8
335		-	referring the person to an affiliate of the pharmacy benefits manager; 9
336		-	(7) prohibit or limit a pharmacy from mailing, shipping, or delivering 10
337		-	drugs to a patient as an ancillary service; however, the insurer or its pharmacy benefits 11
338		-	manager 12
339		-	(A) is not required to reimburse a delivery fee charged by a 13
340		-	pharmacy unless the fee is specified in the contract between the pharmacy 14
341		-	benefits manager and the pharmacy; 15
342		-	(B) may not require a patient signature as proof of delivery of a 16
343		-	mailed or shipped drug if the pharmacy 17
344		-	(i) maintains a mailing or shipping log signed by a 18
345		-	representative of the pharmacy or keeps a record of each notification of 19
346		-	delivery provided by the United States mail or a package delivery 20
347		-	service; and 21
348		-	(ii) is responsible for the cost of mailing, shipping, or 22
349		-	delivering a replacement for a drug that was mailed or shipped but not 23
350		-	received by the covered person; 24
351		-	(8) prohibit or limit a network pharmacy from informing an insured 25
352		-	person of the difference between the out-of-pocket cost to the covered person to 26
353		-	purchase a drug, medical device, or supply using the covered person's pharmacy 27
354		-	benefits and the pharmacy's usual and customary charge for the drug, medical device, 28
355		-	or supply; 29
356		-	(9) conduct or participate in spread pricing in the state; 30
357		-	(10) assess, charge, or collect a form of remuneration that passes from 31
358		-	-11- Enrolled HB 226
359		-	a pharmacy or a pharmacist in a pharmacy network to the pharmacy benefits manager, 1
360		-	including claim processing fees, performance-based fees, network participation fees, 2
361		-	or accreditation fees; 3
362		-	(11) reverse and resubmit the claim of a pharmacy more than 90 days 4
363		-	after the date the claim was first adjudicated, and may not reverse and resubmit the 5
364		-	claim of a pharmacy unless the insurer or pharmacy benefits manager 6
365		-	(A) provides prior written notification to the pharmacy; 7
366		-	(B) has just cause; 8
367		-	(C) first attempts to reconcile the claim with the pharmacy; and 9
368		-	(D) provides to the pharmacy, at the time of the reversal and 10
369		-	resubmittal, a written description that includes details of and justification for 11
370		-	the reversal and resubmittal. 12
371		-	(b) A provision of a contract between a pharmacy benefits manager and a 13
372		-	pharmacy or pharmacist that is contrary to a requirement of this section is null, void, 14
373		-	and unenforceable in this state. 15
374		-	(c) A violation of this section or a regulation adopted under this section is an 16
375		-	unfair trade practice and subject to penalty under this chapter. 17
376		-	(d) For purposes of this section, a violation has occurred each time a 18
377		-	prohibited act is committed. 19
378		-	(e) Nothing in this section may interfere with or violate a patient's right under 20
379		-	AS 08.80.297 to know where the patient may have access to the lowest-cost drugs or 21
380		-	the requirement that a patient must receive notice of a change to a pharmacy network, 22
381		-	including the addition of a new pharmacy or removal of an existing pharmacy from a 23
382		-	pharmacy network. 24
383		-	(f) The director may adopt regulations to provide an appeals process for 25
384		-	claims adjudicated under this section. 26
385		-	(g) In this section, 27
386		-	(1) "affiliate" has the meaning given in AS 21.27.975; 28
387		-	(2) "clinician-administered drug" has the meaning given in 29
388		-	AS 21.27.951(c); 30
389		-	(3) "covered person" has the meaning given in AS 21.27.975; 31
390		-	Enrolled HB 226 -12-
391		-	(4) "drug" has the meaning given in AS 21.27.975; 1
392		-	(5) "insurer" has the meaning given to "health care insurer" in 2
393		-	AS 21.54.500; 3
394		-	(6) "network pharmacy" has the meaning given in AS 21.27.975; 4
395		-	(7) "out-of-pocket cost" means a deductible, coinsurance, copayment, 5
396		-	or similar expense owed by a covered person under the terms of the covered person's 6
397		-	health care insurance policy; 7
398		-	(8) "provider" has the meaning given in AS 21.27.975; 8
399		-	(9) "spread pricing" means the method of pricing a drug in which the 9
400		-	contracted price for a drug that a pharmacy benefits manager charges a health care 10
401		-	insurance policy differs from the amount the pharmacy benefits manager directly or 11
402		-	indirectly pays the pharmacist or pharmacy for pharmacist services. 12
403		-	* Sec. 13. AS 21.27.950 and 21.27.955 are repealed. 13
404		-	* Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to 14
405		-	read: 15
406		-	APPLICABILITY. This Act applies to an insurance policy or contract, including a 16
407		-	contract between a pharmacy benefits manager and a pharmacy or pharmacist, issued, 17
408		-	delivered, entered into, renewed, or amended on or after the effective date of secs. 1 - 13 of 18
409		-	this Act. 19
410		-	* Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to 20
411		-	read: 21
412		-	TRANSITION: REGULATIONS. The director of the division of insurance may adopt 22
413		-	regulations necessary to implement the changes made by this Act under AS 21.06.090. The 23
414		-	regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the 24
415		-	effective date of the law implemented by the regulation. 25
416		-	* Sec. 16. Section 15 of this Act takes effect immediately under AS 01.10.070(c). 26
417		-	* Sec. 17. Except as provided in sec. 16 of this Act, this Act takes effect January 1, 2025. 27
	167	+	(4) specify the date on which a drug is added or removed from the list. 19
	168	+	(d) In this section, 20
	169	+	(1) "interchangeable biological product" has the meaning given in 21
	170	+	AS 08.80.480; 22
	171	+	(2) "pharmaceutically equivalent" means a drug has identical amounts 23
	172	+	of the same active chemical ingredients in the same dosage form and meets the 24
	173	+	standards of strength, quality, and purity according to the United States Pharmacopeia 25
	174	+	published by the United States Pharmacopeial Convention or another similar 26
	175	+	nationally recognized publication; 27
	176	+	(3) "significant price update or modification" means 28
	177	+	(A) an increase or decrease of 10 percent or more in the 29
	178	+	pharmacy acquisition cost; 30
	179	+	(B) a change in the methodology in which the maximum 31 33-LS0955\H
	180	+	SCS CSHB 226(L&C) -6- HB0226D
	181	+	New Text Underlined [DELETED TEXT BRACKETED]
	182	+
	183	+	allowable cost for a drug is determined; or 1
	184	+	(C) a change in the value of a variable involved in the 2
	185	+	methodology used to determine the maximum allowable cost for a drug; 3
	186	+	(4) "therapeutically equivalent" means a drug is from the same 4
	187	+	therapeutic class as another drug and, when administered in an appropriate amount, 5
	188	+	provides the same therapeutic effect as, and is identical in duration and intensity to, 6
	189	+	the other drug; 7
	190	+	(5) "therapeutic class" means a group of similar drug products that 8
	191	+	have the same or similar mechanisms of action and are used to treat a specific 9
	192	+	condition. 10
	193	+	* Sec. 10. AS 21.27 is amended by adding new sections to read: 11
	194	+	Sec. 21.27.951. Patient access to clinician-administered drugs. (a) An 12
	195	+	insurer or its pharmacy benefits manager may not 13
	196	+	(1) refuse to authorize, approve, or pay a provider for providing 14
	197	+	covered clinician-administered drugs and related services to a covered person if the 15
	198	+	provider has agreed to participate in the insurer's health care insurance policy 16
	199	+	according to the terms offered by the insurer or its pharmacy benefits manager; 17
	200	+	(2) if the criteria for medical necessity is met, condition, deny, restrict, 18
	201	+	or refuse to authorize or approve a provider for a clinician-administered drug because 19
	202	+	the provider obtained the clinician-administered drug from a pharmacy that is not a 20
	203	+	network pharmacy in the insurer's or its pharmacy benefits manager's network; 21
	204	+	(3) require a pharmacy to dispense a clinician-administered drug 22
	205	+	directly to a covered person or agent of the insured with the intention that the covered 23
	206	+	person or the agent of the insured will transport the medication to a provider for 24
	207	+	administration; 25
	208	+	(4) require or encourage the dispensing of a clinician-administered 26
	209	+	drug to a covered person in a manner that is inconsistent with the supply chain security 27
	210	+	controls and chain of distribution set by 21 U.S.C. 360eee - 360eee-4 (Drug Supply 28
	211	+	Chain Security Act); 29
	212	+	(5) require that a clinician-administered drug be dispensed or 30
	213	+	administered to a covered person in the residence of the covered person or require use 31 33-LS0955\H
	214	+	HB0226D -7- SCS CSHB 226(L&C)
	215	+	New Text Underlined [DELETED TEXT BRACKETED]
	216	+
	217	+	of an infusion site external to the office, department, or clinic of the provider of the 1
	218	+	covered person; nothing in this paragraph prohibits the insurer or its pharmacy 2
	219	+	benefits manager, or an agent of the insurer or its pharmacy benefits manager, from 3
	220	+	offering the use of a home infusion pharmacy or external infusion site. 4
	221	+	(b) If a health insurance policy provides in-network and out-of-network 5
	222	+	benefits and there is not an in-network health care provider or health care facility 6
	223	+	within a 50-mile radius of the primary residence of a covered person, the health 7
	224	+	insurance policy must provide coverage to the covered person for clinician-8
	225	+	administered drugs at the minimum in-network benefit level. 9
	226	+	(c) In this section, "clinician-administered drug" means a drug, other than a 10
	227	+	vaccine, that requires administration by a provider and that the United States Food and 11
	228	+	Drug Administration or the drug's manufacturer has not approved for self-12
	229	+	administration. 13
	230	+	Sec. 21.27.952. Penalties. In addition to any other penalty provided by law, if 14
	231	+	a person violates AS 21.27.945 - 21.27.975, the director may, after notice and hearing, 15
	232	+	impose a penalty in accordance with AS 21.27.440. 16
	233	+	Sec. 21.27.953. Regulations relating to pharmacy benefits manager claims, 17
	234	+	grievances, activities, and appeals. The director shall adopt regulations that provide 18
	235	+	standards and criteria for 19
	236	+	(1) the structure and operation of pharmacy benefits manager 20
	237	+	reimbursement of pharmacy claims under this chapter; 21
	238	+	(2) procedures maintained by a pharmacy benefits manager to ensure 22
	239	+	that a pharmacy has the opportunity for appropriate resolution of grievances; 23
	240	+	(3) an independent review of pharmacy benefits manager activities 24
	241	+	under this title; and 25
	242	+	(4) requiring a pharmacy benefits manager to hear pricing appeals. 26
	243	+	* Sec. 11. AS 21.27 is amended by adding a new section to article 9 to read: 27
	244	+	Sec. 21.27.975. Definitions. In AS 21.27.901 - 21.27.975, 28
	245	+	(1) "affiliate" means a business, pharmacy, pharmacist, or provider 29
	246	+	who, directly or indirectly through one or more intermediaries,
	247	+	controls, is controlled 30
	248	+	by, or is under common control with a pharmacy benefits manager; 31 33-LS0955\H
	249	+	SCS CSHB 226(L&C) -8- HB0226D
	250	+	New Text Underlined [DELETED TEXT BRACKETED]
	251	+
	252	+	(2) "audit" means an official examination and verification of accounts 1
	253	+	and records; 2
	254	+	(3) "claim" means a request from a pharmacy or pharmacist to be 3
	255	+	reimbursed for the cost of filling or refilling a prescription for a drug or for providing 4
	256	+	a medical supply or device; 5
	257	+	(4) "covered person" means an individual receiving medication 6
	258	+	coverage or reimbursement provided by an insurer or its pharmacy benefits manager 7
	259	+	under a health care insurance policy; 8
	260	+	(5) "drug" means a prescription drug; 9
	261	+	(6) "extrapolation" means the practice of inferring a frequency or 10
	262	+	dollar amount of overpayments, underpayments, invalid claims, or other errors on any 11
	263	+	portion of claims submitted, based on the frequency or dollar amount of 12
	264	+	overpayments, underpayments, invalid claims, or other errors actually measured in a 13
	265	+	sample of claims; 14
	266	+	(7) "insurer" has the meaning given to "health care insurer" in 15
	267	+	AS 21.54.500; 16
	268	+	(8) "list" means a list of drugs for which a pharmacy benefits manager 17
	269	+	has established predetermined reimbursement amounts, or methods for determining 18
	270	+	reimbursement amounts, to be paid to a network pharmacy or pharmacist for 19
	271	+	pharmacy services, such as a maximum allowable cost or maximum allowable cost list 20
	272	+	or any other list of prices used by a pharmacy benefits manager; 21
	273	+	(9) "maximum allowable cost" means the maximum amount that a 22
	274	+	pharmacy benefits manager will reimburse a pharmacy for the cost of a drug; 23
	275	+	(10) "national average drug acquisition cost" means the average 24
	276	+	acquisition cost for outpatient drugs covered by Medicaid, as determined by a monthly 25
	277	+	survey of retail pharmacies conducted by the federal Centers for Medicare and 26
	278	+	Medicaid Services; 27
	279	+	(11) "network" means an entity that, through contracts or agreements 28
	280	+	with providers, provides or arranges for access by groups of covered persons to health 29
	281	+	care services by providers who are not otherwise or individually contracted directly 30
	282	+	with an insurer or its pharmacy benefits manager; 31 33-LS0955\H
	283	+	HB0226D -9- SCS CSHB 226(L&C)
	284	+	New Text Underlined [DELETED TEXT BRACKETED]
	285	+
	286	+	(12) "network pharmacy" means a pharmacy that provides covered 1
	287	+	health care services or supplies to an insured or a member under a contract with a 2
	288	+	network plan to act as a participating provider; 3
	289	+	(13) "pharmacy" has the meaning given in AS 08.80.480; 4
	290	+	(14) "pharmacy acquisition cost" means the amount that a 5
	291	+	pharmaceutical wholesaler or distributor charges for a pharmaceutical product as listed 6
	292	+	on the pharmacy's invoice; 7
	293	+	(15) "pharmacy benefits manager" means a person that contracts with a 8
	294	+	pharmacy on behalf of an insurer to process claims or pay pharmacies for prescription 9
	295	+	drugs or medical devices and supplies or provide network management for 10
	296	+	pharmacies; 11
	297	+	(16) "plan sponsor" has the meaning given in AS 21.54.500; 12
	298	+	(17) "provider" means a physician, pharmacist, hospital, clinic, 13
	299	+	hospital outpatient department, pharmacy, or other person licensed or otherwise 14
	300	+	authorized in this state to furnish health care services; 15
	301	+	(18) "recoupment" means the amount that a pharmacy must remit to a 16
	302	+	pharmacy benefits manager when the pharmacy benefits manager has determined that 17
	303	+	an overpayment to the pharmacy has occurred; 18
	304	+	(19) "wholesale acquisition cost" has the meaning given in 42 U.S.C. 19
	305	+	1395w-3a(c)(6)(B). 20
	306	+	* Sec. 12. AS 21.36 is amended by adding a new section to article 5 to read: 21
	307	+	Sec. 21.36.520. Unfair trade practices. (a) An insurer providing a health care 22
	308	+	insurance policy or its pharmacy benefits manager may not 23
	309	+	(1) interfere with a covered person's right to choose a pharmacy or 24
	310	+	provider; 25
	311	+	(2) interfere with a covered person's right of access to a clinician-26
	312	+	administered drug; 27
	313	+	(3) interfere with the right of a pharmacy or pharmacist to participate 28
	314	+	as a network pharmacy; 29
	315	+	(4) reimburse a pharmacy or pharmacist an amount less than the 30
	316	+	amount the pharmacy benefits manager reimburses an affiliate for providing the same 31 33-LS0955\H
	317	+	SCS CSHB 226(L&C) -10- HB0226D
	318	+	New Text Underlined [DELETED TEXT BRACKETED]
	319	+
	320	+	pharmacy services, calculated on a per-unit basis using the same generic product 1
	321	+	identifier or generic code number; 2
	322	+	(5) impose a reduction in reimbursement for pharmacy services 3
	323	+	because of the person's choice among pharmacies that have agreed to participate in the 4
	324	+	plan according to the terms offered by the insurer or its pharmacy benefits manager; 5
	325	+	(6) use a covered person's pharmacy services data collected under the 6
	326	+	provision of claims processing services for the purpose of soliciting, marketing, or 7
	327	+	referring the person to an affiliate of the pharmacy benefits manager; 8
	328	+	(7) prohibit or limit a pharmacy from mailing, shipping, or delivering 9
	329	+	drugs to a patient as an ancillary service; however, the insurer or its pharmacy benefits 10
	330	+	manager 11
	331	+	(A) is not required to reimburse a delivery fee charged by a 12
	332	+	pharmacy unless the fee is specified in the contract between the pharmacy 13
	333	+	benefits manager and the pharmacy; 14
	334	+	(B) may not require a patient signature as proof of delivery of a 15
	335	+	mailed or shipped drug if the pharmacy 16
	336	+	(i) maintains a mailing or shipping log signed by a 17
	337	+	representative of the pharmacy or keeps a record of each notification of 18
	338	+	delivery provided by the United States mail or a package delivery 19
	339	+	service; and 20
	340	+	(ii) is responsible for the cost of mailing, shipping, or 21
	341	+	delivering a replacement for a drug that was mailed or shipped but not 22
	342	+	received by the covered person; 23
	343	+	(8) prohibit or limit a network pharmacy from informing an insured 24
	344	+	person of the difference between the out-of-pocket cost to the covered person to 25
	345	+	purchase a drug, medical device, or supply using the covered person's pharmacy 26
	346	+	benefits and the pharmacy's usual and customary charge for the drug, medical device, 27
	347	+	or supply; 28
	348	+	(9) conduct or participate in spread pricing in the state; 29
	349	+	(10) assess, charge, or collect a form of remuneration that passes from 30
	350	+	a pharmacy or a pharmacist in a pharmacy network to the pharmacy benefits manager, 31 33-LS0955\H
	351	+	HB0226D -11- SCS CSHB 226(L&C)
	352	+	New Text Underlined [DELETED TEXT BRACKETED]
	353	+
	354	+	including claim processing fees, performance-based fees, network participation fees, 1
	355	+	or accreditation fees; 2
	356	+	(11) reverse and resubmit the claim of a pharmacy more than 90 days 3
	357	+	after the date the claim was first adjudicated, and may not reverse and resubmit the 4
	358	+	claim of a pharmacy unless the insurer or pharmacy benefits manager 5
	359	+	(A) provides prior written notification to the pharmacy; 6
	360	+	(B) has just cause; 7
	361	+	(C) first attempts to reconcile the claim with the pharmacy; and 8
	362	+	(D) provides to the pharmacy, at the time of the reversal and 9
	363	+	resubmittal, a written description that includes details of and justification for 10
	364	+	the reversal and resubmittal. 11
	365	+	(b) A provision of a contract between a pharmacy benefits manager and a 12
	366	+	pharmacy or pharmacist that is contrary to a requirement of this section is null, void, 13
	367	+	and unenforceable in this state. 14
	368	+	(c) A violation of this section or a regulation adopted under this section is an 15
	369	+	unfair trade practice and subject to penalty under this chapter. 16
	370	+	(d) For purposes of this section, a violation has occurred each time a 17
	371	+	prohibited act is committed. 18
	372	+	(e) Nothing in this section may interfere with or violate a patient's right under 19
	373	+	AS 08.80.297 to know where the patient may have access to the lowest cost drugs or 20
	374	+	the requirement that a patient must receive notice of a change to a pharmacy network, 21
	375	+	including the addition of a new pharmacy or removal of an existing pharmacy from a 22
	376	+	pharmacy network. 23
	377	+	(f) The director may adopt regulations to provide an appeals process for 24
	378	+	claims adjudicated under this section. 25
	379	+	(g) In this section, 26
	380	+	(1) "affiliate" has the meaning given in AS 21.27.975; 27
	381	+	(2) "clinician-administered drug" has the meaning given in 28
	382	+	AS 21.27.951(c); 29
	383	+	(3) "covered person" has the meaning given in AS 21.27.975; 30
	384	+	(4) "drug" has the meaning given in AS 21.27.975; 31 33-LS0955\H
	385	+	SCS CSHB 226(L&C) -12- HB0226D
	386	+	New Text Underlined [DELETED TEXT BRACKETED]
	387	+
	388	+	(5) "insurer" has the meaning given to "health care insurer" in 1
	389	+	AS 21.54.500; 2
	390	+	(6) "network pharmacy" has the meaning given in AS 21.27.975; 3
	391	+	(7) "out-of-pocket cost" means a deductible, coinsurance, copayment, 4
	392	+	or similar expense owed by a covered person under the terms of the covered person's 5
	393	+	health care insurance policy; 6
	394	+	(8) "provider" has the meaning given in AS 21.27.975; 7
	395	+	(9) "spread pricing" means the method of pricing a drug in which the 8
	396	+	contracted price for a drug that a pharmacy benefits manager charges a health care 9
	397	+	insurance policy differs from the amount the pharmacy benefits manager directly or 10
	398	+	indirectly pays the pharmacist or pharmacy for pharmacist services. 11
	399	+	* Sec. 13. AS 21.27.950 and 21.27.955 are repealed. 12
	400	+	* Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to 13
	401	+	read: 14
	402	+	APPLICABILITY. This Act applies to an insurance policy or contract, including a 15
	403	+	contract between a pharmacy benefits manager and a pharmacy or pharmacist, issued, 16
	404	+	delivered, entered into, renewed, or amended on or after the effective date of secs. 1 - 13 of 17
	405	+	this Act. 18
	406	+	* Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to 19
	407	+	read: 20
	408	+	TRANSITION: REGULATIONS. The director of the division of insurance may adopt 21
	409	+	regulations necessary to implement the changes made by this Act under AS 21.06.090. The 22
	410	+	regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the 23
	411	+	effective date of the law implemented by the regulation. 24
	412	+	* Sec. 16. Section 15 of this Act takes effect immediately under AS 01.10.070(c). 25
	413	+	* Sec. 17. Except as provided in sec. 16 of this Act, this Act takes effect January 1, 2025. 26