Alabama 2025 Regular Session

Alabama Senate Bill SB99 Compare Versions

Only one version of the bill is available at this time.

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1	1	SB99INTRODUCED
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3	3	SB99
4	4	DA1KHNT-1
5	5	By Senators Stutts, Gudger, Beasley, Smitherman, Coleman,
6	6	Singleton, Melson, Bell, Butler, Sessions, Williams, Price,
7	7	Hatcher, Figures, Allen, Chesteen, Stewart, Kelley,
8	8	Coleman-Madison, Roberts, Livingston
9	9	RFD: Banking and Insurance
10	10	First Read: 05-Feb-25
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18	18	8 DA1KHNT-1 01/30/2025 JC (L)JC 2025-82
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20	20	First Read: 05-Feb-25
21	21	SYNOPSIS:
22	22	Pharmacy benefits managers are the intermediary
23	23	between health insurance plans and their network
24	24	pharmacies which process claims and determine the
25	25	amount pharmacies are reimbursed for dispensing covered
26	26	prescriptions. They deal directly with drug
27	27	manufacturers by negotiating discounts or rebates on
28	28	drug prices. Pharmacy benefits managers may also be
29	29	affiliated with particular pharmacies that also
30	30	participate in the network. Under existing law, they
31	31	are licensed and regulated by the Department of
32	32	Insurance.
33	33	This bill would expand oversight by the
34	34	Department of Insurance by setting benchmarks for the
35	35	amounts that pharmacy benefits managers reimburse
36	36	pharmacies, and by regulating how they process claims,
37	37	determine payment amounts, and use manufacturer
38	38	rebates.
39	39	This bill would prohibit pharmacy benefits
40	40	managers from requiring or influencing health insurance
41	41	beneficiaries to purchase a particular variant of a
42	42	prescription drug or only use certain pharmacies within
43	43	a health plan network.
44	44	This bill would authorize a health insurance
45	45	plan, a plan beneficiary, or a pharmacy to bring a
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75	75	plan, a plan beneficiary, or a pharmacy to bring a
76	76	cause of action against a pharmacy benefits manager for
77	77	damages due to a violation of this act.
78	78	This bill would also further regulate the audit
79	79	of a pharmacy by a pharmacy benefits manager under The
80	80	Pharmacy Audit Integrity Act by specifying the
81	81	circumstances under which a pharmacy benefits manager
82	82	may recoup funds from a pharmacy that was overpaid for
83	83	claims.
84	84	A BILL
85	85	TO BE ENTITLED
86	86	AN ACT
87	87	Relating to pharmacy benefits managers; to amend
88	88	Sections 27-45A-1, 27-54A-3, 27-45A-5, 27-45A-6, 27-45A-7,
89	89	27-45A-8, 27-45A-9, and 27-45A-10, Code of Alabama 1975; to
90	90	further regulate pharmacy benefits managers in relation to
91	91	health insurance plans, covered individuals, and plan network
92	92	pharmacies; to add Section 27-45A-13 to the Code of Alabama
93	93	1975, to provide a civil action against pharmacy benefits
94	94	managers for violations of this act and to provide remedies;
95	95	to amend Sections 34-23-181 and 34-23-184, Code of Alabama
96	96	1975, to further regulate recoupment of funds from pharmacies
97	97	pursuant to The Pharmacy Audit Integrity Act; and to make
98	98	conforming changes.
99	99	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
100	100	Section 1. Sections 27-45A-1, 27-45A-3, 27-45A-5,
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130	130	Section 1. Sections 27-45A-1, 27-45A-3, 27-45A-5,
131	131	27-45A-6, 27-45A-7, 27-45A-8, 27-45A-9, and 27-45A-10, Code of
132	132	Alabama 1975, are amended to read as follows:
133	133	"§27-45A-1
134	134	This chapter shall be known as and may be cited as the
135	135	Alabama Pharmacy Benefits Manager Licensure ,and Regulation,
136	136	and Accountability Act."
137	137	"§27-45A-3
138	138	For purposes of this chapter, the following words shall
139	139	have the following meanings:
140	140	(1) BENEFICIARY. A covered individual who receives
141	141	prescription drug benefits under a health benefit plan.
142	142	(1)(2) CLAIMS PROCESSING SERVICES. The administrative
143	143	services performed in connection with the processing and
144	144	adjudicating of claims relating to pharmacist services that
145	145	include any of the following:
146	146	a. Receiving payments for pharmacist services.
147	147	b. Making payments to pharmacists or pharmacies for
148	148	pharmacist services.
149	149	c. Both paragraphs a. and b.
150	150	(3) CLIENT. An employer, employer group, health
151	151	insurer, health benefit plan, or other payor that has a
152	152	contract with a pharmacy benefits manager or PBM affiliate for
153	153	pharmacy benefits services, including claims processing.
154	154	(4) COMMISSIONER. The Commissioner of the Department of
155	155	Insurance of the State of Alabama.
156	156	(2)(5) COVERED INDIVIDUAL. A member, policyholder,
157	157	subscriber, enrollee, beneficiary, dependent, or other
158	158	individual participating in a health benefit plan.
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188	188	individual participating in a health benefit plan.
189	189	(3)(6) HEALTH BENEFIT PLAN. A policy, contract,
190	190	certificate, or agreement entered into, offered, or issued by
191	191	a health insurer to provide, deliver, arrange for, pay for, or
192	192	reimburse any of the costs of physical, mental, or behavioral
193	193	health care services As defined in Section 34-23-181 .
194	194	(4)(7) HEALTH INSURER. An entity subject to the
195	195	insurance laws of this state and rules of the department, or
196	196	subject to the jurisdiction of the department, that contracts
197	197	or offers to contract to provide, deliver, arrange for, pay
198	198	for, or reimburse any of the costs of health care services,
199	199	including, but not limited to, a sickness and accident
200	200	insurance company, a health maintenance organization operating
201	201	pursuant to Chapter 21A, a nonprofit hospital or health
202	202	service corporation, a health care service plan organized
203	203	pursuant to Article 6, Chapter 20 of Title 10A, or any other
204	204	entity providing a plan of health insurance, health benefits,
205	205	or health services.
206	206	(8) IN-NETWORK PHARMACY. A pharmacy that fills a
207	207	prescription for a beneficiary and which, either as an entity
208	208	or in the name of an owner or employee, does not appear on the
209	209	list of excluded individuals and entities maintained by the
210	210	Office of Inspector General, U.S. Health and Human Services,
211	211	pursuant to 42 U.S.C. § 1320a-7.
212	212	(9) NATIONAL AVERAGE DRUG ACQUISITION COST. The average
213	213	acquisition cost of a drug product as determined by the
214	214	Centers for Medicare & Medicaid Services (CMS) from survey
215	215	data collected from retail community pharmacies nationwide.
216	216	(5)(10) OTHER PRESCRIPTION DRUG OR DEVICE SERVICES.
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246	246	(5)(10) OTHER PRESCRIPTION DRUG OR DEVICE SERVICES.
247	247	Services, other than claims processing services, provided
248	248	directly or indirectly, whether in connection with or separate
249	249	from claims processing services, including, but not limited
250	250	to, any of the following:
251	251	a. Negotiating rebates, discounts, or other financial
252	252	incentives and arrangements with drug companies.
253	253	b. Disbursing or distributing rebates.
254	254	c. Managing or participating in incentive programs or
255	255	arrangements for pharmacist services.
256	256	d. Negotiating or entering into contractual
257	257	arrangements with pharmacists or pharmacies, or both.
258	258	e. Developing formularies.
259	259	f. Designing prescription benefit programs.
260	260	g. Advertising or promoting services.
261	261	(11) PBM AFFILIATE. An entity, including a pharmacy,
262	262	that, directly or indirectly, through one or more
263	263	intermediaries, is affiliated with a pharmacy benefits manager
264	264	in one of the following ways:
265	265	a. Owns, controls, or has an investment interest in a
266	266	pharmacy benefits manager.
267	267	b. Owned, controlled by, or has an investment holder
268	268	that is a pharmacy benefits manager.
269	269	c. Shares common ownership by another entity with a
270	270	pharmacy benefits manager.
271	271	(6)(12) PHARMACIST. As defined in Section 34-23-1.
272	272	(7)(13) PHARMACIST SERVICES. Products, goods, and
273	273	services, including the dispensing of prescription drugs, or
274	274	any combination of products, goods, and services, provided as
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304	304	any combination of products, goods, and services, provided as
305	305	a part of the practice of pharmacy.
306	306	(8)(14) PHARMACY. As defined in Section 34-23-1.
307	307	(15) PHARMACY BENEFITS MANAGEMENT SERVICES. The term
308	308	includes:
309	309	a. The management or administration of a plan or
310	310	program pursuant to a health benefit plan that pays for,
311	311	reimburses, or covers the cost of prescription drugs and
312	312	medical devices.
313	313	b. Claims processing services and the adjudication of
314	314	appeals or grievances related to prescription drug benefits.
315	315	(9)(16) PHARMACY BENEFITS MANAGER. a. A person,
316	316	including a wholly or partially owned or controlled subsidiary
317	317	of a pharmacy benefits manager, that provides pharmacy
318	318	benefits management services, claims processing services or
319	319	other prescription drug or device services, or both, to
320	320	covered individuals who are employed in or are residents of
321	321	this state, for health benefit plans.
322	322	b. Pharmacy benefits manager does not include any of
323	323	the following:
324	324	1. A healthcare facility licensed in this state.
325	325	2. A healthcare professional licensed in this state.
326	326	3. A consultant who only provides advice as to the
327	327	selection or performance of a pharmacy benefits manager.
328	328	(10) PBM AFFILIATE. A pharmacy or pharmacist that,
329	329	directly or indirectly, through one or more intermediaries, is
330	330	owned or controlled by, or is under common control by, a
331	331	pharmacy benefits manager.
332	332	(11)(17) PRESCRIPTION DRUGS. Drugs covered by a health
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362	362	(11)(17) PRESCRIPTION DRUGS. Drugs covered by a health
363	363	benefit plan which are dispensed by an in-network pharmacy to
364	364	a beneficiary. The term Includesincludes, but is not limited
365	365	to, certain infusion, compounded, and long-term care
366	366	prescription drugs. The term does not include specialty drugs.
367	367	(18) REBATE. Any direct or indirect payment or
368	368	concession, including a discount, administration fee, credit,
369	369	incentive, or penalty that is made by a pharmaceutical
370	370	manufacturer, its affiliate, subsidiary, or intermediary to a
371	371	pharmacy benefits manager, a PBM affiliate, or a client, and
372	372	which is associated in any way with claims administered by a
373	373	pharmacy benefits manager under a health benefit plan.
374	374	(12)(19) SPECIALTY DRUGS. Prescription medications that
375	375	require special handling, administration, or monitoring and
376	376	are used for the treatment of patients with serious health
377	377	conditions requiring complex therapies, and that are eligible
378	378	for specialty tier placement by the Centers for Medicare and&
379	379	Medicaid Services pursuant to 42 C.F.R. § 423.560 .
380	380	(20) SPREAD PRICING. When a pharmacy benefits manager
381	381	charges a client a price for prescription drugs which is
382	382	higher than the amount the pharmacy benefits manager pays the
383	383	pharmacy or pharmacist for the prescription drugs, including
384	384	any post-sale or post-adjudication fees, discounts, or
385	385	adjustments, provided that the post-sale or post-adjudication
386	386	fees, discounts, or adjustments are not otherwise prohibited
387	387	by law.
388	388	(21) STEERING. The term includes:
389	389	a. Directing, ordering, or requiring a beneficiary to
390	390	use a specific pharmacy, including a PBM affiliate pharmacy,
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420	420	use a specific pharmacy, including a PBM affiliate pharmacy,
421	421	for the purpose of filling a prescription or receiving
422	422	pharmacist services.
423	423	b. Inducing a beneficiary to use a designated pharmacy,
424	424	including a PBM affiliate pharmacy, by increasing costs to the
425	425	health benefit plan or charging the beneficiary up to the full
426	426	cost for a prescription drug if the beneficiary fails to use
427	427	the pharmacy designated by the pharmacy benefits manager.
428	428	c. Advertising, marketing, or promoting a pharmacy,
429	429	including a PBM affiliate pharmacy, over another in-network
430	430	pharmacy.
431	431	d. Engaging in any practice that results in excluding,
432	432	restricting, or inhibiting an in-network pharmacy from
433	433	providing prescription drugs to beneficiaries under a health
434	434	benefit plan, which may involve, but not be limited to, the
435	435	use of credentialing or accreditation standards, day supply
436	436	limitations, or delivery method limitations.
437	437	e. Engaging in any practice aimed at directly or
438	438	indirectly influencing a pharmaceutical manufacturer to limit
439	439	its distribution of a prescription drug to certain pharmacies
440	440	or to restrict distribution of the drug to non-PBM affiliate
441	441	pharmacies."
442	442	"§27-45A-5
443	443	(a) The commissioner may adopt rules necessary to
444	444	implement this chapter It shall be the responsibility of the
445	445	commissioner to enforce this chapter and any conduct arising
446	446	from any action taken by a pharmacy benefits manager or PBM
447	447	affiliate pursuant to an audit conducted under Article 8,
448	448	Chapter 23 of Title 34 which violates this chapter .
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478	478	Chapter 23 of Title 34 which violates this chapter .
479	479	(b) The commissioner shall adopt rules necessary to
480	480	implement and enforce this chapter, both independently and in
481	481	conjunction with the conduct of an audit by a pharmacy
482	482	benefits manager or PBM affiliate under Article 8 of Chapter
483	483	23 of Title 34.
484	484	(c) The commissioner shall set and impose civil
485	485	penalties, of not less than one thousand dollars ($1,000) per
486	486	violation for violations of this chapter, including conduct
487	487	arising from an action taken by a pharmacy benefits manager or
488	488	PBM affiliate pursuant to Article 8, Chapter 23 of Title 34
489	489	which violates this chapter.
490	490	(b)(d) The powers and duties set forth in this chapter
491	491	shall be in addition to all other authority of the
492	492	commissioner.
493	493	(c)(e) The commissioner shall enforce compliance with
494	494	the requirements of this chapter and rules adopted thereunder.
495	495	(d)(f)(1) The commissioner may examine or audit ,
496	496	including on an annual basis, any books and records of a
497	497	pharmacy benefits manager providing claims processing services
498	498	or other prescription drug or device services for a health
499	499	benefit plan as may be deemed relevant and necessary by the
500	500	commissioner to determine compliance with this chapter and
501	501	Article 8 of Chapter 23 of Title 34 .
502	502	(2) Examinations conducted by the commissioner shall be
503	503	pursuant to the same examination authority of the commissioner
504	504	relative to insurers as provided in Chapter 2, including, but
505	505	not limited to, the confidentiality of documents and
506	506	information submitted as provided in Section 27-2-24;
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536	536	information submitted as provided in Section 27-2-24;
537	537	examination expenses shall be processed in accordance with
538	538	Section 27-2-25; and pharmacy benefits managers shall have the
539	539	same rights as insurers to request a hearing in accordance
540	540	with Sections 27-2-28 et seq., and to appeal as provided in
541	541	Section 27-2-32.
542	542	(3) The commissioner may contract the services of a
543	543	third party to perform an audit under this subsection.
544	544	(e)(g) The commissioner's examination expenses shall be
545	545	collected from pharmacy benefits managers in the same manner
546	546	as those collected from insurers."
547	547	"§27-45A-6
548	548	(a) Nothing in this chapter is intended or shall be
549	549	construed to do any of the following:
550	550	(1) Be in conflict with existing relevant federal law.
551	551	(2) Apply to any specialty drug.
552	552	(3)(2) Impact the ability of a hospital to mandate its
553	553	employees use of a hospital-owned pharmacy .
554	554	(b) The following provisions shall not apply to the
555	555	administration by a person of any term, including prescription
556	556	drug benefits, of a self-funded health benefit plan that is
557	557	governed by the federal Employee Retirement Income Security
558	558	Act of 1974, 29 U.S.C. §1001 et. seq.:
559	559	(1) Subdivisions (1) and (5) of Section 27-45A-8.
560	560	(2) Subdivisions (2), (3), (6), and (7) of Section
561	561	27-45A-10."
562	562	"§27-45A-7
563	563	ReservedA pharmacy benefits manager, either directly or
564	564	through a PBM affiliate, when administering prescription drug
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594	594	through a PBM affiliate, when administering prescription drug
595	595	benefits on behalf of a health benefit plan, shall do all of
596	596	the following:
597	597	(1) Reimburse every claim of an in-network pharmacy for
598	598	the ingredient cost of a prescription drug in an amount
599	599	greater than or equal to the sum of:
600	600	a. The National Average Drug Acquisition Cost for the
601	601	drug on the day of claim adjudication or, in the case of a
602	602	drug not listed on the National Average Drug Acquisition Cost
603	603	index, the wholesale acquisition cost; plus
604	604	b. An amount equal to two percent of the applicable
605	605	amount in paragraph a. or twenty-five dollars ($25), whichever
606	606	is less.
607	607	(2) Pay an in-network pharmacy a professional
608	608	dispensing fee that is greater than or equal to the current
609	609	professional dispensing fee paid by the Medicaid Agency of the
610	610	State of Alabama under Title XIX of the Social Security Act
611	611	for dispensing a prescription drug.
612	612	(3) Uniformly and equally apply reimbursements pursuant
613	613	to subdivisions (1) and (2) to all in-network pharmacies,
614	614	including PBM affiliates, servicing a health benefit plan.
615	615	(4)a. Pass on to a client 100 percent of all rebates
616	616	received, directly or indirectly, from a pharmaceutical
617	617	manufacturer in connection with claims administered unless the
618	618	client directs the pharmacy benefits manager or PBM affiliate
619	619	to apply the rebates to purchases of prescription drugs by
620	620	covered individuals at the point of sale.
621	621	b. Notwithstanding paragraph a., nothing shall be
622	622	construed in this subdivision to allow a rebate from a
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652	652	construed in this subdivision to allow a rebate from a
653	653	pharmaceutical manufacturer, directly or indirectly, to a
654	654	pharmacy benefits manager, its PBM affiliate, or a client
655	655	where otherwise prohibited by law.
656	656	(5) Reimburse an in-network pharmacy all amounts due
657	657	for a prescription drug claim pursuant to subdivisions (1) and
658	658	(2) according to the payment terms contained in the contract
659	659	governing the pharmacy benefit manager or PBM affiliate ."
660	660	"§27-45A-8
661	661	A pharmacy benefits manager may not do any of the
662	662	following:
663	663	(1) Require a covered individual, as a condition of
664	664	payment or reimbursement, to purchase pharmacist services,
665	665	including, but not limited to, prescription drugs, exclusively
666	666	through a mail-order pharmacy or pharmacy benefits manager PBM
667	667	affiliate.
668	668	(2) Prohibit or limit any covered individual from
669	669	selecting an in-network pharmacy or pharmacist of his or her
670	670	choice who meets and agrees to the terms and conditions,
671	671	including reimbursements, in the pharmacy benefits manager's
672	672	contract.
673	673	(3) Impose a monetary advantage or penalty under a
674	674	health benefit plan that would affect a covered individual's
675	675	choice of pharmacy among those pharmacies that have chosen to
676	676	contract with the pharmacy benefits manager under the same
677	677	terms and conditions, including reimbursements. For purposes
678	678	of this subdivision, "monetary advantage or penalty" includes,
679	679	but is not limited to, a higher copayment, a waiver of a
680	680	copayment, a reduction in reimbursement services, a
681	681	309
682	682	310
683	683	311
684	684	312
685	685	313
686	686	314
687	687	315
688	688	316
689	689	317
690	690	318
691	691	319
692	692	320
693	693	321
694	694	322
695	695	323
696	696	324
697	697	325
698	698	326
699	699	327
700	700	328
701	701	329
702	702	330
703	703	331
704	704	332
705	705	333
706	706	334
707	707	335
708	708	336 SB99 INTRODUCED
709	709	Page 13
710	710	copayment, a reduction in reimbursement services, a
711	711	requirement or limit on the number of days of a drug supply
712	712	for which reimbursement will be allowed, or a promotion of one
713	713	participating pharmacy over another by these methods.
714	714	(4)a. Use a covered individual's pharmacy services data
715	715	collected pursuant to the provision of claims processing
716	716	services for the purpose of soliciting, marketing, or
717	717	referring the covered individual to a mail-order pharmacy or
718	718	PBM affiliate.
719	719	b. This subdivision shall not limit a health benefit
720	720	plan's use of pharmacy services data for the purpose of
721	721	administering the health benefit plan.
722	722	c. This subdivision shall not prohibit a pharmacy
723	723	benefits manager from notifying a covered individual that a
724	724	less costly option for a specific prescription drug is
725	725	available through a mail-order pharmacy or PBM affiliate,
726	726	provided the notification shall state that switching to the
727	727	less costly option is not mandatory. The commissioner, by
728	728	rule, may determine the language of the notification
729	729	authorized under this paragraph made by a pharmacy benefits
730	730	manager to a covered individual.
731	731	(5) Require a covered individual to make a payment for
732	732	a prescription drug at the point of sale in an amount that
733	733	exceeds the lessorlesser of the following:
734	734	a. The contracted cost share amount.
735	735	b. An amount an individual would pay for a prescription
736	736	if that individual were paying without insurance .
737	737	(6) Charge a beneficiary more for a prescription drug
738	738	than the amount of reimbursement made to the pharmacy or
739	739	337
740	740	338
741	741	339
742	742	340
743	743	341
744	744	342
745	745	343
746	746	344
747	747	345
748	748	346
749	749	347
750	750	348
751	751	349
752	752	350
753	753	351
754	754	352
755	755	353
756	756	354
757	757	355
758	758	356
759	759	357
760	760	358
761	761	359
762	762	360
763	763	361
764	764	362
765	765	363
766	766	364 SB99 INTRODUCED
767	767	Page 14
768	768	than the amount of reimbursement made to the pharmacy or
769	769	pharmacist that dispenses the drug.
770	770	(7) Require a beneficiary to obtain a brand-name
771	771	prescription drug when a lower cost, therapeutically
772	772	equivalent version or an FDA-designated interchangeable
773	773	biological product of the brand-name drug is available.
774	774	(8) Recoup any increased cost incurred for the
775	775	dispensing fee required under Section 27-45A-7(2) by
776	776	increasing the copayment, coinsurance, or deductible of the
777	777	beneficiary.
778	778	(9) Otherwise seek to limit, control, or influence the
779	779	utilization of pharmacist services by a covered individual or
780	780	beneficiary through the practice of steering ."
781	781	"§27-45A-9
782	782	(a) For purposes of this section, client means a health
783	783	insurer, payor, or health benefit plan.
784	784	(b) If requested by a client under subsection (d), a
785	785	pharmacy benefits manager shall prepare an annual report by
786	786	June 1 which discloses all of the following with respect to
787	787	that client:
788	788	(1) The aggregate amount of all rebates that the
789	789	pharmacy benefits manager received from pharmaceutical
790	790	manufacturers on behalf of the client.
791	791	(2) The aggregate amount of the rebates the pharmacy
792	792	benefits manager received from pharmaceutical manufacturers
793	793	that did not pass through to the client.
794	794	(3) If a pharmacy benefits manager or any consultant
795	795	providing pharmacy benefits management services engages in
796	796	spread pricing, the aggregated amount of the difference
797	797	365
798	798	366
799	799	367
800	800	368
801	801	369
802	802	370
803	803	371
804	804	372
805	805	373
806	806	374
807	807	375
808	808	376
809	809	377
810	810	378
811	811	379
812	812	380
813	813	381
814	814	382
815	815	383
816	816	384
817	817	385
818	818	386
819	819	387
820	820	388
821	821	389
822	822	390
823	823	391
824	824	392 SB99 INTRODUCED
825	825	Page 15
826	826	spread pricing, the aggregated amount of the difference
827	827	between the amount paid by the client for prescription drugs
828	828	and the actual amount paid to the pharmacy or pharmacist for
829	829	pharmacist services. For purposes of this subdivision, "spread
830	830	pricing" means the model of prescription drug reimbursement in
831	831	which a pharmacy benefits manager charges a client a
832	832	contracted price for prescription drugs, and the contract
833	833	price for the prescription drugs differs from the amount the
834	834	pharmacy benefits manager, directly or indirectly, pays the
835	835	pharmacy or pharmacist for pharmacist services.
836	836	(c)(b) Confidentiality of a report submitted under this
837	837	section shall be governed by contract between the pharmacy
838	838	benefits manager and the client.
839	839	(d)(c) A pharmacy benefits manager shall annually
840	840	notify all its clients in a timely manner that a report
841	841	described in subsection (b) will be made available to the
842	842	client by the pharmacy benefits manager if requested by the
843	843	client."
844	844	"§27-45A-10
845	845	A pharmacy benefits manager may not do any of the
846	846	following:
847	847	(1) Reimburse an in-network pharmacy or pharmacist in
848	848	the state an amount less than the amount that the pharmacy
849	849	benefits manager reimburses a similarly situated PBM affiliate
850	850	for providing the same pharmacist services to covered
851	851	individuals in the same health benefit plan.
852	852	(2) Deny a pharmacy or pharmacist the right to
853	853	participate as a contract provider if the pharmacy or
854	854	pharmacist meets and agrees to the terms and conditions,
855	855	393
856	856	394
857	857	395
858	858	396
859	859	397
860	860	398
861	861	399
862	862	400
863	863	401
864	864	402
865	865	403
866	866	404
867	867	405
868	868	406
869	869	407
870	870	408
871	871	409
872	872	410
873	873	411
874	874	412
875	875	413
876	876	414
877	877	415
878	878	416
879	879	417
880	880	418
881	881	419
882	882	420 SB99 INTRODUCED
883	883	Page 16
884	884	pharmacist meets and agrees to the terms and conditions,
885	885	including reimbursements, in the pharmacy benefits manager's
886	886	contract.
887	887	(3) Impose credentialing standards on a pharmacist or
888	888	pharmacy beyond or more onerous than the licensing standards
889	889	set by the Alabama State Board of Pharmacy or charge a
890	890	pharmacy a fee in connection with network enrollment, provided
891	891	this subdivision shall not prohibit a pharmacy benefits
892	892	manager from setting minimum requirements for participating in
893	893	a pharmacy network.
894	894	(4) Prohibit a pharmacist or pharmacy from providing a
895	895	client or covered individual specific information on the
896	896	amount of the covered individual's cost share for the covered
897	897	individual's prescription drug , the reimbursement amount or
898	898	acquisition cost of a prescription drug, and the clinical
899	899	efficacy of a more affordable alternative drug if one is
900	900	available, or penalize a pharmacist or pharmacy for disclosing
901	901	this information to a client or covered individual or for
902	902	selling to a covered individual a more affordable alternative
903	903	if one is available.
904	904	(5) Prohibit a pharmacist or pharmacy from offering and
905	905	providing delivery services to a covered individual as an
906	906	ancillary service of the pharmacy, provided all of the
907	907	following requirements are met:
908	908	a. The pharmacist or pharmacy can demonstrate quality,
909	909	stability, and safety standards during delivery.
910	910	b. The pharmacist or pharmacy does not charge any
911	911	delivery or service fee to a pharmacy benefits manager or
912	912	health insurer.
913	913	421
914	914	422
915	915	423
916	916	424
917	917	425
918	918	426
919	919	427
920	920	428
921	921	429
922	922	430
923	923	431
924	924	432
925	925	433
926	926	434
927	927	435
928	928	436
929	929	437
930	930	438
931	931	439
932	932	440
933	933	441
934	934	442
935	935	443
936	936	444
937	937	445
938	938	446
939	939	447
940	940	448 SB99 INTRODUCED
941	941	Page 17
942	942	health insurer.
943	943	c. The pharmacist or pharmacy alerts the covered
944	944	individual that he or she will be responsible for any delivery
945	945	service fee associated with the delivery service, and that the
946	946	pharmacy benefits manager or health insurer will not reimburse
947	947	the delivery service fee.
948	948	(6) Charge or hold a pharmacist or pharmacy responsible
949	949	for a fee or penalty relating to an audit conducted pursuant
950	950	to The Pharmacy Audit Integrity Act, Article 8 of Chapter 23
951	951	of Title 34, provided this prohibition does not restrict
952	952	recoupments made in accordance with the Pharmacy Audit
953	953	Integrity Act.
954	954	(7) Charge a pharmacist or pharmacy a point-of-sale or
955	955	retroactive fee or otherwise recoup funds from a pharmacy in
956	956	connection with claims for which the pharmacy has already been
957	957	paid,Impose any fee or adjust a prescription drug claim at or
958	958	after the time the claim for the drug is adjudicated that
959	959	reduces the amount an in-network pharmacy is reimbursed
960	960	pursuant to the requirements of Section 27-45A-7(1), including
961	961	any fee that is not tied to a prescription drug claim, unless
962	962	the recoupmentfee or adjustment is made pursuant to an audit
963	963	conducted in accordance with the Pharmacy Audit Integrity Act.
964	964	(8) Impose any fee on an in-network pharmacy for claims
965	965	processing services.
966	966	(8)(9) Except for a drug reimbursed, directly or
967	967	indirectly, by the Medicaid program, vary the amount a
968	968	pharmacy benefits manager reimburses an entity for a drug,
969	969	including each and every prescription medication that is
970	970	eligible for specialty tier placement by the Centers for
971	971	449
972	972	450
973	973	451
974	974	452
975	975	453
976	976	454
977	977	455
978	978	456
979	979	457
980	980	458
981	981	459
982	982	460
983	983	461
984	984	462
985	985	463
986	986	464
987	987	465
988	988	466
989	989	467
990	990	468
991	991	469
992	992	470
993	993	471
994	994	472
995	995	473
996	996	474
997	997	475
998	998	476 SB99 INTRODUCED
999	999	Page 18
1000	1000	eligible for specialty tier placement by the Centers for
1001	1001	Medicare and Medicaid Services pursuant to 42 C.F.R. §
1002	1002	423.560, regardless of any provision of law to the contrary,
1003	1003	on the basis of whether:
1004	1004	a. The drug is subject to an agreement under 42 U.S.C.
1005	1005	§ 256b; or
1006	1006	b. The entity participates in the program set forth in
1007	1007	42 U.S.C. § 256b.
1008	1008	(9)(10) If an entity participates, directly or
1009	1009	indirectly, in the program set forth in 42 U.S.C. § 256b, do
1010	1010	any of the following:
1011	1011	a. Assess a fee, charge-back, or other adjustment on
1012	1012	the entity.
1013	1013	b. Restrict access to the pharmacy benefits manager's
1014	1014	pharmacy network.
1015	1015	c. Require the entity to enter into a contract with a
1016	1016	specific pharmacy to participate in the pharmacy benefits
1017	1017	manager's pharmacy network.
1018	1018	d. Create a restriction or an additional charge on a
1019	1019	patient who chooses to receive drugs from the entity.
1020	1020	e. Create any additional requirements or restrictions
1021	1021	on the entity.
1022	1022	(10)(11) Require a claim for a drug to include a
1023	1023	modifier to indicate that the drug is subject to an agreement
1024	1024	under 42 U.S.C. § 256b.
1025	1025	(12) Base or tie reimbursement for a prescription drug
1026	1026	on outcomes, scores, or metrics relating to the pharmacy, the
1027	1027	provision of pharmacist services, or a beneficiary, provided
1028	1028	that the pharmacist or pharmacy provides pharmacist services
1029	1029	477
1030	1030	478
1031	1031	479
1032	1032	480
1033	1033	481
1034	1034	482
1035	1035	483
1036	1036	484
1037	1037	485
1038	1038	486
1039	1039	487
1040	1040	488
1041	1041	489
1042	1042	490
1043	1043	491
1044	1044	492
1045	1045	493
1046	1046	494
1047	1047	495
1048	1048	496
1049	1049	497
1050	1050	498
1051	1051	499
1052	1052	500
1053	1053	501
1054	1054	502
1055	1055	503
1056	1056	504 SB99 INTRODUCED
1057	1057	Page 19
1058	1058	that the pharmacist or pharmacy provides pharmacist services
1059	1059	within the scope of practice as defined by law and
1060	1060	professional standards.
1061	1061	(13) Impose any legal, financial, or other means of
1062	1062	influence on a pharmacist to dispense a particular
1063	1063	prescription drug or to practice pharmacy in a way that would
1064	1064	be potentially harmful to a covered individual.
1065	1065	(14) Initiate a fraud, waste, or abuse investigation of
1066	1066	a pharmacist or pharmacy under Article 8 of Chapter 23 of
1067	1067	Title 34 without first notifying the pharmacist or pharmacy
1068	1068	and receiving approval from the commissioner based upon an
1069	1069	articulable suspicion of fraud, waste, or abuse.
1070	1070	(15) Impose a recoupment or charge back on a pharmacist
1071	1071	or pharmacy pursuant to an audit under Article 8 of Chapter 23
1072	1072	of Title 34 which violates the conditions governing a
1073	1073	recoupment or charge back under that article.
1074	1074	(11)(16) Penalize or retaliate against a pharmacist or
1075	1075	pharmacy for exercising rights under this chapter or the
1076	1076	Pharmacy Audit Integrity Act .
1077	1077	(17) Practice spread pricing in this state ."
1078	1078	Section 2. Section 27-45A-13 is added to the Code of
1079	1079	Alabama 1975, to read as follows:
1080	1080	§27-45A-13
1081	1081	(a) Any pharmacy or pharmacist, health care provider,
1082	1082	health insurer, covered individual, or beneficiary who is
1083	1083	injured by any violation of this chapter, alone or in
1084	1084	conjunction with an audit performed by a pharmacy benefits
1085	1085	manager or PBM affiliate pursuant to Article 8 of Chapter 23
1086	1086	of Title 34, may bring a civil action against the pharmacy
1087	1087	505
1088	1088	506
1089	1089	507
1090	1090	508
1091	1091	509
1092	1092	510
1093	1093	511
1094	1094	512
1095	1095	513
1096	1096	514
1097	1097	515
1098	1098	516
1099	1099	517
1100	1100	518
1101	1101	519
1102	1102	520
1103	1103	521
1104	1104	522
1105	1105	523
1106	1106	524
1107	1107	525
1108	1108	526
1109	1109	527
1110	1110	528
1111	1111	529
1112	1112	530
1113	1113	531
1114	1114	532 SB99 INTRODUCED
1115	1115	Page 20
1116	1116	of Title 34, may bring a civil action against the pharmacy
1117	1117	benefits manager or PBM affiliate, for the remedies provided
1118	1118	under this section.
1119	1119	(b) In any action brought under this section, the
1120	1120	injured person may recover any of the following:
1121	1121	(1) Actual damages, including reimbursement for costs
1122	1122	incurred due to reductions in payment, delays, or denials.
1123	1123	(2) No less than one thousand dollars ($1,000) per
1124	1124	violation of this chapter, or treble the amount of actual
1125	1125	damages, whichever is greater, if the pharmacy benefits
1126	1126	manager or PBM affiliate is found to have knowingly or
1127	1127	recklessly committed the violation.
1128	1128	(3) Injunctive relief upon a finding by the court that
1129	1129	the pharmacy benefits manager or PBM affiliate has, or is
1130	1130	about to, violate this chapter.
1131	1131	(4) Attorney fees and costs.
1132	1132	(c) No class action or joint action may be brought
1133	1133	under this section unless each proposed class member or
1134	1134	plaintiff has given notice of the prospective action to the
1135	1135	pharmacy benefits manager or PBM affiliate and the pharmacy
1136	1136	benefits manager or PBM affiliate is afforded 30 days to cure
1137	1137	the alleged violation.
1138	1138	(d) An action under this section must be brought within
1139	1139	two years from the date on which the alleged violation
1140	1140	occurred or within one year of the discovery of the alleged
1141	1141	violation, whichever period is longer.
1142	1142	Section 3. Sections 34-23-181 and 34-23-184, Code of
1143	1143	Alabama 1975, are amended to read as follows:
1144	1144	"§34-23-181
1145	1145	533
1146	1146	534
1147	1147	535
1148	1148	536
1149	1149	537
1150	1150	538
1151	1151	539
1152	1152	540
1153	1153	541
1154	1154	542
1155	1155	543
1156	1156	544
1157	1157	545
1158	1158	546
1159	1159	547
1160	1160	548
1161	1161	549
1162	1162	550
1163	1163	551
1164	1164	552
1165	1165	553
1166	1166	554
1167	1167	555
1168	1168	556
1169	1169	557
1170	1170	558
1171	1171	559
1172	1172	560 SB99 INTRODUCED
1173	1173	Page 21
1174	1174	"§34-23-181
1175	1175	The following words shall have the following meanings
1176	1176	as used in this article:
1177	1177	(1) COMMISSIONER. The Commissioner of the Department of
1178	1178	Insurance of the State of Alabama.
1179	1179	(1)(2) HEALTH BENEFIT PLAN. Any individual or group
1180	1180	plan, employee welfare benefit plan, policy, or contract for
1181	1181	health care services issued, delivered, issued for delivery,
1182	1182	or renewed in this state by a health care insurer, health
1183	1183	maintenance organization, accident and sickness insurer,
1184	1184	fraternal benefit society, nonprofit hospital service
1185	1185	corporation, nonprofit medical service corporation, health
1186	1186	care service plan, or any other person, firm, corporation,
1187	1187	joint venture, or other similar business entity that pays for
1188	1188	insureds or beneficiaries in this state. The term includes,
1189	1189	but is not limited to, entities created pursuant to Article 6
1190	1190	of Chapter 20 of Title 10A. A health benefit plan located or
1191	1191	domiciled outside of the State of Alabama is deemed to be
1192	1192	subject to this article if it receives, processes,
1193	1193	adjudicates, pays, or denies claims for health care services
1194	1194	submitted by or on behalf of patients, insureds, or
1195	1195	beneficiaries who reside in Alabama.
1196	1196	(2)(3) PHARMACY. A place licensed by the Alabama State
1197	1197	Board of Pharmacy in which prescriptions, drugs, medicines,
1198	1198	medical devices, chemicals, and poisons are sold, offered for
1199	1199	sale, compounded, or dispensed and shall include all places
1200	1200	whose title may imply the sale, offering for sale,
1201	1201	compounding, or dispensing of prescriptions, drugs, medicines,
1202	1202	chemicals, or poisons.
1203	1203	561
1204	1204	562
1205	1205	563
1206	1206	564
1207	1207	565
1208	1208	566
1209	1209	567
1210	1210	568
1211	1211	569
1212	1212	570
1213	1213	571
1214	1214	572
1215	1215	573
1216	1216	574
1217	1217	575
1218	1218	576
1219	1219	577
1220	1220	578
1221	1221	579
1222	1222	580
1223	1223	581
1224	1224	582
1225	1225	583
1226	1226	584
1227	1227	585
1228	1228	586
1229	1229	587
1230	1230	588 SB99 INTRODUCED
1231	1231	Page 22
1232	1232	chemicals, or poisons.
1233	1233	(3)(4) PHARMACY BENEFITBENEFITS MANAGEMENT PLAN. An
1234	1234	arrangement for the delivery of pharmacist services in which a
1235	1235	pharmacy benefitbenefits manager undertakes to administer the
1236	1236	payment or reimbursement of any of the costs of pharmacist
1237	1237	services for an enrollee on a prepaid or insured basis that
1238	1238	contains one or more incentive arrangements intended to
1239	1239	influence the cost or level of pharmacist services between the
1240	1240	plan sponsor and one or more pharmacies with respect to the
1241	1241	delivery of pharmacist services and requires or creates
1242	1242	benefit payment differential incentives for enrollees to use
1243	1243	under contract with the pharmacy benefitbenefits manager.
1244	1244	(4)(5) PHARMACY BENEFITBENEFITS MANAGER. A business
1245	1245	that administers the prescription drug or device portion of
1246	1246	pharmacy benefitbenefits management plans or health insurance
1247	1247	plans on behalf of plan sponsors, insurance companies, unions,
1248	1248	and health maintenance organizations. The term includes a
1249	1249	person or entity acting for a pharmacy benefitbenefits manager
1250	1250	in a contractual or employment relationship in the performance
1251	1251	of pharmacy benefitbenefits management for a managed care
1252	1252	company, nonprofit hospital or medical service organization,
1253	1253	insurance company, or third-party payor.
1254	1254	(5)(6) PHARMACIST SERVICES. Offering for sale,
1255	1255	compounding, or dispensing of prescriptions, drugs, medicines,
1256	1256	chemicals, or poisons pursuant to a prescription. Pharmacist
1257	1257	services also includes the sale or provision of, counseling
1258	1258	of, or fitting of medical devices, including prosthetics and
1259	1259	durable medical equipment."
1260	1260	"§34-23-184
1261	1261	589
1262	1262	590
1263	1263	591
1264	1264	592
1265	1265	593
1266	1266	594
1267	1267	595
1268	1268	596
1269	1269	597
1270	1270	598
1271	1271	599
1272	1272	600
1273	1273	601
1274	1274	602
1275	1275	603
1276	1276	604
1277	1277	605
1278	1278	606
1279	1279	607
1280	1280	608
1281	1281	609
1282	1282	610
1283	1283	611
1284	1284	612
1285	1285	613
1286	1286	614
1287	1287	615
1288	1288	616 SB99 INTRODUCED
1289	1289	Page 23
1290	1290	"§34-23-184
1291	1291	(a) The entity conducting an audit shall follow these
1292	1292	procedures:
1293	1293	(1) The pharmacy contract shall identify and describe
1294	1294	in detail the audit procedures.
1295	1295	(2) The entity conducting the on-site audit shall give
1296	1296	the pharmacy written notice at least two weeks before
1297	1297	conducting the initial on-site audit for each audit cycle. If
1298	1298	the pharmacy benefitbenefits manager does not include their
1299	1299	auditing guidelines within their provider manual, then the
1300	1300	notice must include a documented checklist of all items being
1301	1301	audited and the manual, including the name, date, and edition
1302	1302	or volume, applicable to the audit and auditing guidelines.
1303	1303	For on-site audits a pharmacy benefitbenefits manager shall
1304	1304	also provide a list of material that is copied or removed
1305	1305	during the course of an audit to the pharmacy. The pharmacy
1306	1306	benefitbenefits manager may document this material on either a
1307	1307	checklist or on an audit acknowledgement form. The pharmacy
1308	1308	shall produce any items during the course of the audit or
1309	1309	within 30 days of the on-site audit.
1310	1310	(3) The entity conducting the on-site audit may not
1311	1311	interfere with the delivery of pharmacist services to a
1312	1312	patient and shall utilize every effort to minimize
1313	1313	inconvenience and disruption to pharmacy operations during the
1314	1314	audit process.
1315	1315	(4) An audit that involves clinical or professional
1316	1316	judgment shall be conducted by or in consultation with a
1317	1317	licensed pharmacist.
1318	1318	(5) The audit shall not consider as fraud any clerical
1319	1319	617
1320	1320	618
1321	1321	619
1322	1322	620
1323	1323	621
1324	1324	622
1325	1325	623
1326	1326	624
1327	1327	625
1328	1328	626
1329	1329	627
1330	1330	628
1331	1331	629
1332	1332	630
1333	1333	631
1334	1334	632
1335	1335	633
1336	1336	634
1337	1337	635
1338	1338	636
1339	1339	637
1340	1340	638
1341	1341	639
1342	1342	640
1343	1343	641
1344	1344	642
1345	1345	643
1346	1346	644 SB99 INTRODUCED
1347	1347	Page 24
1348	1348	(5) The audit shall not consider as fraud any clerical
1349	1349	or recordkeeping error, such as a typographical error,
1350	1350	scrivener's error, or computer error regarding a required
1351	1351	document or record ; subject to the provisions of subsection
1352	1352	(b). however, such errors may be subject to recoupment,
1353	1353	provided that a pharmacy shall not be subject to a charge-back
1354	1354	or recoupment for a clerical or recordkeeping error in a
1355	1355	required document or record, including a typographical or
1356	1356	computer error, unless the error resulted in overpayment to
1357	1357	the pharmacy. The pharmacy shall have the right to submit
1358	1358	amended claims through an online submission to correct
1359	1359	clerical or recordkeeping errors in lieu of recoupment of a
1360	1360	claim pursuant to subsection (b) where no actual financial
1361	1361	harm to the patient or plan has occurred, provided that the
1362	1362	prescription was dispensed according to prescription
1363	1363	documentation requirements set forth by the Alabama Pharmacy
1364	1364	Act and within the plan limits. The pharmacy shall not be
1365	1365	subject to recoupment of funds by the pharmacy benefit manager
1366	1366	unless the pharmacy benefit manager can provide proof of
1367	1367	intent to commit fraud or such error results in actual
1368	1368	financial harm to the pharmacy benefit manager, a health
1369	1369	insurance plan managed by the pharmacy benefit manager, or a
1370	1370	consumer. A person A pharmacist or pharmacy shall not be
1371	1371	subject to criminal penalties for errors provided for in this
1372	1372	subsection without proof of intent to commit fraud, waste, or
1373	1373	abuse.
1374	1374	a. Any amount to be charged back or recouped due to
1375	1375	overpayment shall not exceed the amount the pharmacy was
1376	1376	overpaid.
1377	1377	645
1378	1378	646
1379	1379	647
1380	1380	648
1381	1381	649
1382	1382	650
1383	1383	651
1384	1384	652
1385	1385	653
1386	1386	654
1387	1387	655
1388	1388	656
1389	1389	657
1390	1390	658
1391	1391	659
1392	1392	660
1393	1393	661
1394	1394	662
1395	1395	663
1396	1396	664
1397	1397	665
1398	1398	666
1399	1399	667
1400	1400	668
1401	1401	669
1402	1402	670
1403	1403	671
1404	1404	672 SB99 INTRODUCED
1405	1405	Page 25
1406	1406	overpaid.
1407	1407	b. The auditing entity shall not include the dispensing
1408	1408	fee in the calculation of an overpayment unless a prescription
1409	1409	is considered a misfill. As used in this paragraph, misfill
1410	1410	means a prescription that was not dispensed, a prescription in
1411	1411	which the prescriber denied the authorization request, a
1412	1412	prescription in which an additional dispensing fee was
1413	1413	charged, or a prescription error.
1414	1414	(6) An entity conducting an audit shall not require any
1415	1415	documentation that is not required by state and federal law.
1416	1416	The information shall be considered to be valid if documented
1417	1417	on the prescription, computerized treatment notes, pharmacy
1418	1418	system, or other acceptable medical records.
1419	1419	(7) Unless superseded by state or federal law, auditors
1420	1420	shall only have access to previous audit reports on a
1421	1421	particular pharmacy conducted by the auditing entity for the
1422	1422	same pharmacy benefitbenefits manager, health plan, or
1423	1423	insurer. An auditing vendor contracting with multiple pharmacy
1424	1424	benefitbenefits managers or health insurance plans shall not
1425	1425	use audit reports or other information gained from an audit on
1426	1426	a particular pharmacy to conduct another audit for a different
1427	1427	pharmacy benefitbenefits manager or health insurance plan.
1428	1428	(8) Audit results shall be disclosed to the health
1429	1429	benefit plan in a manner pursuant to contract terms.
1430	1430	(9) A pharmacy may use the records of a hospital,
1431	1431	physician, or other authorized practitioner of the healing
1432	1432	arts for drugs or medicinal supplies written or transmitted by
1433	1433	any means of communication for the purposes of validating the
1434	1434	pharmacy record with respect to orders or refills of a legend
1435	1435	673
1436	1436	674
1437	1437	675
1438	1438	676
1439	1439	677
1440	1440	678
1441	1441	679
1442	1442	680
1443	1443	681
1444	1444	682
1445	1445	683
1446	1446	684
1447	1447	685
1448	1448	686
1449	1449	687
1450	1450	688
1451	1451	689
1452	1452	690
1453	1453	691
1454	1454	692
1455	1455	693
1456	1456	694
1457	1457	695
1458	1458	696
1459	1459	697
1460	1460	698
1461	1461	699
1462	1462	700 SB99 INTRODUCED
1463	1463	Page 26
1464	1464	pharmacy record with respect to orders or refills of a legend
1465	1465	or narcotic drug.
1466	1466	(10) If the pharmacy benefitbenefits manager or its
1467	1467	representative conducts an audit, the sample size shall comply
1468	1468	with both of the following conditions:
1469	1469	a. not be greater than Not exceed 150 prescriptions,
1470	1470	provided that a refill does not constitute a separate
1471	1471	prescription for the purposes of this subdivision.
1472	1472	b. The sample size shall not include prescriptions for
1473	1473	brand-name or high-cost drugs at a rate that exceeds the
1474	1474	percentage of brand-name or high-cost drugs in relation to all
1475	1475	prescription drugs dispensed by the pharmacy during the period
1476	1476	audited.
1477	1477	(11) Reasonable costs associated with the audit shall
1478	1478	be the responsibility of the auditing entity if the claims
1479	1479	sample exceeds 100 unique prescription hard copies.
1480	1480	(12) A finding of an overpayment or an underpayment may
1481	1481	be a projection based on the number of patients served having
1482	1482	a similar diagnosis or on the number of similar orders or
1483	1483	refills for similar drugs, except that recoupment pursuant to
1484	1484	subsection (b) shall be based on the actual overpayment or
1485	1485	underpayment of actual claims.
1486	1486	(13) A finding of an overpayment may not include the
1487	1487	cost of the drugs that were dispensed in accordance with the
1488	1488	prescriber's orders, provided the prescription was dispensed
1489	1489	according to prescription documentation requirements set forth
1490	1490	by the Alabama Pharmacy Act and within the plan limits. A
1491	1491	finding of an overpayment may not include the dispensing fee
1492	1492	amount unless any of the following apply:
1493	1493	701
1494	1494	702
1495	1495	703
1496	1496	704
1497	1497	705
1498	1498	706
1499	1499	707
1500	1500	708
1501	1501	709
1502	1502	710
1503	1503	711
1504	1504	712
1505	1505	713
1506	1506	714
1507	1507	715
1508	1508	716
1509	1509	717
1510	1510	718
1511	1511	719
1512	1512	720
1513	1513	721
1514	1514	722
1515	1515	723
1516	1516	724
1517	1517	725
1518	1518	726
1519	1519	727
1520	1520	728 SB99 INTRODUCED
1521	1521	Page 27
1522	1522	amount unless any of the following apply:
1523	1523	a. A prescription was not actually dispensed.
1524	1524	b. The prescriber denied authorization.
1525	1525	c. The prescription dispensed was a medication error by
1526	1526	the pharmacy.
1527	1527	d. The identified overpayment is solely based on an
1528	1528	extra dispensing fee.
1529	1529	(14) Each pharmacy shall be audited under the same
1530	1530	standards and parameters as other similarly situated
1531	1531	pharmacies audited by the entity and must be audited under
1532	1532	rules applicable to the contractor and time period of the
1533	1533	prescription.
1534	1534	(15) A pharmacy benefits manager may not audit a
1535	1535	pharmacy that is not a PBM affiliate as defined in Section
1536	1536	27-45A-3 more frequently than a pharmacy that is a PBM
1537	1537	affiliate or use procedures when auditing a pharmacy which are
1538	1538	different than those when auditing a pharmacy that is a PBM
1539	1539	affiliate.
1540	1540	(15)(16) Where not superseded by state or federal law,
1541	1541	the period covered by an audit may not exceed two years from
1542	1542	the date the claim was submitted to or adjudicated by a
1543	1543	managed care company, nonprofit hospital or medical service
1544	1544	organization, health benefit plan, third-party payor, pharmacy
1545	1545	benefitbenefits manager, a health program administered by a
1546	1546	department of the state, or any entity that represents those
1547	1547	companies, groups, or department. An audit may not be
1548	1548	conducted six months past the date the pharmacy
1549	1549	benefitbenefits management plan terminated its contract to
1550	1550	adjudicate claims with a pharmacy benefitbenefits manager,
1551	1551	729
1552	1552	730
1553	1553	731
1554	1554	732
1555	1555	733
1556	1556	734
1557	1557	735
1558	1558	736
1559	1559	737
1560	1560	738
1561	1561	739
1562	1562	740
1563	1563	741
1564	1564	742
1565	1565	743
1566	1566	744
1567	1567	745
1568	1568	746
1569	1569	747
1570	1570	748
1571	1571	749
1572	1572	750
1573	1573	751
1574	1574	752
1575	1575	753
1576	1576	754
1577	1577	755
1578	1578	756 SB99 INTRODUCED
1579	1579	Page 28
1580	1580	adjudicate claims with a pharmacy benefitbenefits manager,
1581	1581	health plan administrator, or any other entity representing
1582	1582	those companies.
1583	1583	(16)(17) An audit may not be initiated or scheduled
1584	1584	during the first five calendar days of any month.
1585	1585	(b)(1) An auditing entity has the right to charge back
1586	1586	or recoup funds from a pharmacy when an audit discloses an
1587	1587	overpayment at the expense of, or which financially harms, the
1588	1588	auditing entity, or the beneficiary of a health benefit plan,
1589	1589	due to one of the following:
1590	1590	a. Fraud.
1591	1591	b. Error, including a misfill. As used in this
1592	1592	paragraph, a "misfill" means a prescription that was not
1593	1593	dispensed, a prescription in which the prescriber denied the
1594	1594	authorization request, a prescription in which an additional
1595	1595	dispensing fee was charged, or a prescription error.
1596	1596	(2) Recoupment of an overpayment may not include the
1597	1597	amount of the professional dispensing fee if the prescription
1598	1598	was dispensed to the customer.
1599	1599	(3) Any amount to be recouped, or charged back, shall
1600	1600	not exceed the amount the pharmacy was overpaid.
1601	1601	(4) If the auditing entity is a pharmacy benefits
1602	1602	manager, the pharmacy benefits manager shall ensure that
1603	1603	funds recouped pursuant to an audit shall be remitted to the
1604	1604	health benefit plan or the beneficiary as provided under the
1605	1605	terms of any contract governing pharmacy benefits management
1606	1606	services as defined in Section 27-45A-3 or the pharmacy
1607	1607	benefits management plan.
1608	1608	(5) If the auditing entity is a pharmacy benefits
1609	1609	757
1610	1610	758
1611	1611	759
1612	1612	760
1613	1613	761
1614	1614	762
1615	1615	763
1616	1616	764
1617	1617	765
1618	1618	766
1619	1619	767
1620	1620	768
1621	1621	769
1622	1622	770
1623	1623	771
1624	1624	772
1625	1625	773
1626	1626	774
1627	1627	775
1628	1628	776
1629	1629	777
1630	1630	778
1631	1631	779
1632	1632	780
1633	1633	781
1634	1634	782
1635	1635	783
1636	1636	784 SB99 INTRODUCED
1637	1637	Page 29
1638	1638	(5) If the auditing entity is a pharmacy benefits
1639	1639	manager claiming a recoupment or charge back, the pharmacy
1640	1640	benefits manager shall notify the commissioner of its intent
1641	1641	to recover the funds from the pharmacy at the time it delivers
1642	1642	the preliminary audit report provided in subsection (c) to the
1643	1643	pharmacy.
1644	1644	(b)(c) The entity shall provide the pharmacy with a
1645	1645	written report of the audit and comply with all of the
1646	1646	following requirements:
1647	1647	(1) The preliminary audit report shall be delivered to
1648	1648	the pharmacy within 90 days after the conclusion of the audit,
1649	1649	with a reasonable extension to be granted upon request.
1650	1650	(2) A pharmacy shall be allowed at least 30 days
1651	1651	following receipt of the preliminary audit report in which to
1652	1652	produce documentation to address any discrepancy found during
1653	1653	the audit, with a reasonable extension to be granted upon
1654	1654	request.
1655	1655	(3) A final audit report shall be delivered to the
1656	1656	pharmacy within 180 days after receipt of the preliminary
1657	1657	audit report or final appeal, as provided for in Section
1658	1658	34-23-185, whichever is later.
1659	1659	(4) The audit documents shall be signed by the auditors
1660	1660	assigned to the audit. The acknowledgement or receipt shall be
1661	1661	signed by the auditor and the audit report shall contain clear
1662	1662	contact information of the representative of the auditing
1663	1663	organization.
1664	1664	(5) Recoupments of any disputed funds, or repayment of
1665	1665	funds to the entity by the pharmacy if permitted pursuant to
1666	1666	contractual agreement, shall occur after final internal
1667	1667	785
1668	1668	786
1669	1669	787
1670	1670	788
1671	1671	789
1672	1672	790
1673	1673	791
1674	1674	792
1675	1675	793
1676	1676	794
1677	1677	795
1678	1678	796
1679	1679	797
1680	1680	798
1681	1681	799
1682	1682	800
1683	1683	801
1684	1684	802
1685	1685	803
1686	1686	804
1687	1687	805
1688	1688	806
1689	1689	807
1690	1690	808
1691	1691	809
1692	1692	810
1693	1693	811
1694	1694	812 SB99 INTRODUCED
1695	1695	Page 30
1696	1696	contractual agreement, shall occur after final internal
1697	1697	disposition of the audit, including the appeals process as
1698	1698	provided for in Section 34-23-185. If the identified
1699	1699	discrepancy for an individual audit exceeds twenty-five
1700	1700	thousand dollars ($25,000), future payments in excess of that
1701	1701	amount to the pharmacy may be withheld pending finalization of
1702	1702	the audit.
1703	1703	(6) Interest shall not accrue during the audit period.
1704	1704	(7) Each entity conducting an audit shall provide a
1705	1705	copy of the final audit report, after completion of any review
1706	1706	process, to the plan sponsor in a manner pursuant to a
1707	1707	contract."
1708	1708	Section 4. This act shall become effective on October
1709	1709	1, 2025.
1710	1710	813
1711	1711	814
1712	1712	815
1713	1713	816
1714	1714	817
1715	1715	818
1716	1716	819
1717	1717	820
1718	1718	821
1719	1719	822
1720	1720	823
1721	1721	824
1722	1722	825