HOUSE BILL 23-1201
BY REPRESENTATIVE(S) Daugherty and Soper, Bacon, Bird,
Boesenecker, Brown, Duran, Garcia, Jodeh, Lieder, Lindsay, McCormick,
Sharbini, Sirota, Snyder, Titone, Valdez, Velasco, Woodrow, McCluskie;
also SENATOR(S) Mullica and Smallwood, Bridges, Ginal, Hinrichsen,
Priola.
C
ONCERNING PRESCRIPTION DRUG BENEFITS CONTRACT TERM
REQUIREMENTS
, AND, IN CONNECTION THEREWITH , MAKING AN
APPROPRIATION
.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, add 10-16-163 as
follows:
10-16-163. Contracts - health benefit plans - pharmacy benefit
managers - policyholders - transparency requirements - rules -
definitions. (1) F
OR A CONTRACT BETWEEN A CARRIER OR PHARMACY
BENEFIT MANAGER AND A CERTIFICATE HOLDER OR POLICYHOLDER THAT IS
ISSUED OR RENEWED ON OR AFTER
JANUARY 1, 2025, THE AMOUNT CHARGED
BY THE CARRIER OR
PBM TO THE CERTIFICATE HOLDER OR POLICYHOLDER
FOR A PRESCRIPTION DRUG DISPENSED TO A COVERED PERSON MUST BE
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act. EQUAL TO OR LESS THAN THE AMOUNT PAID BY THE CARRIER OR PBM TO A
CONTRACTED PHARMACY FOR SUCH PRESCRIPTION DRUG DISPENSED TO SUCH
COVERED PERSON RESIDING IN
COLORADO.
(2) (a) F
OR GROUP HEALTH BENEFIT PLANS IN EFFECT DURING
CALENDAR YEAR
2025, AND EACH CALENDAR YEAR THEREAFTER , A CARRIER
OR PHARMACY BENEFIT MANAGER SHALL DISCLOSE TO EACH POLICYHOLDER
OR THE POLICYHOLDER
'S SPECIFICALLY DESIGNATED BROKER OR
CONSULTANT THE PRESCRIPTION DRUG CONTRACT TERMS REQUIRED BY THIS
SUBSECTION
(2). FOR GROUP HEALTH BENEFIT PLANS IN EFFECT DURING
CALENDAR YEAR
2023 OR 2024, OR BOTH, THE DISCLOSURE MUST ALSO
INCLUDE ANY CHANGES IN TERMS BETWEEN EACH CALENDAR YEAR
.
(b) T
HE DISCLOSURES REQUIRED PURSUANT TO THIS SUBSECTION (2)
MUST INCLUDE:
(I) T
HE INGREDIENT COST AVERAGE REIMBURSEMENT RATE FOR :
(A) G
ENERIC DRUGS DISPENSED AT RETAIL PHARMACIES ;
(B) B
RAND-NAME DRUGS DISPENSED AT RETAIL PHARMACIES ;
(C) S
PECIALTY DRUGS DISPENSED AT RETAIL PHARMACIES ;
(D) G
ENERIC DRUGS DISPENSED AT MAIL-ORDER PHARMACIES;
(E) B
RAND-NAME DRUGS DISPENSED AT MAIL-ORDER PHARMACIES;
(F) S
PECIALTY DRUGS DISPENSED AT MAIL-ORDER PHARMACIES; AND
(G) SPECIALTY DRUGS DISPENSED AT ANY SPECIALTY PHARMACY ,
INCLUDING A PHARMACY THAT IS FULLY OR PARTIALLY OWNED BY A
CONTRACTING
PBM, CARRIER, OR THE PBM'S OR CARRIER'S HOLDING
COMPANIES OR AFFILIATES
;
(II) T
HE AVERAGE DISPENSING FEE PAID TO EACH TYPE OF
PHARMACY
, INCLUDING EACH RETAIL , MAIL-ORDER, AND SPECIALTY
PHARMACY
;
(III) T
HE CHARGE PER PRIOR AUTHORIZATION ;
PAGE 2-HOUSE BILL 23-1201 (IV) UTILIZATION MANAGEMENT PROGRAMS AND ASSOCIATED FEES ;
(V) A
NY OTHER CONTRACTED SERVICES AND ASSOCIATED FEES ;
(VI) T
HE AVERAGE REBATE ACROSS ALL PAID PRESCRIPTIONS FOR
THE RESPECTIVE GROUP HEALTH BENEFIT PLAN AND THE AVERAGE REBATE
ACROSS ALL PAID PRESCRIPTIONS THAT PAY A REBATE FOR THE RESPECTIVE
GROUP HEALTH BENEFIT PLAN
; AND
(VII) THE REBATE GUARANTEE, WHERE APPLICABLE.
(c) F
OR CONTRACTS BETWEEN A CARRIER OR PHARMACY BENEFIT
MANAGER AND A CERTIFICATE HOLDER OR POLICYHOLDER THAT ARE
RENEWED IN CALENDAR YEAR
2025, AND EACH CALE NDAR YEAR
THEREAFTER
, THE CARRIER OR PBM SHALL CALCULATE AND COMMUNICATE
TO THE CERTIFICATE HOLDER OR POLICYHOLDER THE VALUE OF THE
DIFFERENCE BETWEEN THE CONTRACT TERMS IN THE RENEWED CONTRACTS
AND THE CONTRACTS THAT WERE IN EFFECT THE PREVIOUS CALENDAR YEAR
,
ANNUALIZING THE PREVIOUS YEAR 'S ACTUAL DATA FOR EACH RESPECTIVE
CERTIFICATE HOLDER OR POLICYHOLDER
. THE VALUE COMMUNICATED
SHALL INCLUDE ANNUAL AGGREGATE SAVINGS
, ANNUAL AGGREGATE
SAVINGS PER EMPLOYEE PER YEAR
, AND ANNUAL AGGREGATE SAVINGS PER
COVERED PERSON PER YEAR
.
(d) A
CARRIER OR PHARMACY BENEFIT MANAGER SHALL PROVIDE TO
EACH CERTIFICATE HOLDER OR POLICYHOLDER
, FOR VOLUNTARY
CONSIDERATION
, OPTIONS TO REPURPOSE AGGREGATE SAVINGS IN THE FORM
OF REDUCTIONS TO OUT
-OF-POCKET COSTS SUCH AS DEDUCTIBLES ,
COPAYMENT AMOUNTS , COINSURANCE, OR PREMIUM CONTRIBUTIONS. THE
CARRIER OR
PBM SHALL PROVIDE THE INFORMATION TO CERTIFICATE
HOLDERS OR POLICYHOLDERS NO LESS THAN NINETY DAYS BEFORE THE DATE
OF THE CONTRACT RENEWAL
.
(e) A
CARRIER OR PBM SHALL PROVIDE THE INFORMATION SPECIFIED
IN SUBSECTIONS
(2)(b), (2)(c), AND (2)(d) OF THIS SECTION TO ALL
CERTIFICATE HOLDERS AND POLICYHOLDERS FOR CONTRACTS IN EFFECT
DURING CALENDAR YEAR
2025, INCLUDING CERTIFICATE HOLDERS AND
POLICYHOLDERS THAT MAY NOT RECEIVE A RENEWAL NOTICE DUE TO A
MULTIYEAR CONTRACTUAL AGREEMENT OR FOR ANY OTHER REASON
, EXCEPT
NOTICE OF TERMINATION
.
PAGE 3-HOUSE BILL 23-1201 (f) THE DISCLOSURES REQUIRED IN SUBSECTIONS (2)(b)(VI) AND
(2)(b)(VII) OF THIS SECTION MUST NOT DISCLOSE ANY PROPRIETARY REBATE
INFORMATION BETWEEN A DRUG MANUFACTURER AND THE PHARMACY
BENEFIT MANAGER OR ITS CARRIER AFFILIATE
. THE DISCLOSURE OF DATA
REQUIRED BY THESE SUBSECTIONS MUST REPRESENT THE AGGREGATE VALUE
OF REBATES PASSING THROUGH FROM THE PHARMACY BENEFIT MANAGER OR
ITS CARRIER AFFILIATE TO THE HEALTH BENEFIT PLAN AS DEFINED BY RULE
OF THE COMMISSIONER
.
(g) A
CARRIER MAY EXEMPT A SEGMENT OF ITS BUSINESS FROM THIS
SUBSECTION
(2). THE CARRIER'S EXEMPTED BUSINESS SEGMENT MUST
PROVIDE THE MAJORITY OF COVERED MEDICAL PROFESSIONAL SERVICES
THROUGH A SINGLE
, CONTRACTED MEDICAL GROUP AND OPERATE ITS OWN
PHARMACIES THROUGH WHICH AT LEAST EIGHTY
-FIVE PERCENT OF ITS
AGGREGATE PRESCRIPTION DRUG CLAIMS ARE FILLED
. ON AND AFTER THE
EFFECTIVE DATE OF THIS SECTION
, A CARRIER THAT MEETS THE EXEMPTION
CRITERIA IN THIS SUBSECTION
(2)(g) SHALL SUBMIT AN ATTESTATION TO THE
DIVISION OF SUCH COMPLIANCE WITH EACH RATE FILING REQUIRED
PURSUANT TO SECTION
10-16-107. THE CARRIER OR PBM SHALL DISCLOSE
ALL DATA REQUIREMENTS AS OUTLINED IN THIS SUBSECTION
(2) TO THE
CARRIER
'S GROUP POLICYHOLDERS THAT ARE PRIMARILY ACCESSING
PRESCRIPTION DRUG BENEFITS THROUGH A THIRD
-PARTY PBM CONTRACTED
WITH THE CARRIER
.
(3) T
HE COMMISSIONER SHALL PROMULGATE RULES TO IMPLEMENT
THIS SECTION
.
(4) (a) T
HE COMMISSIONER MAY CONDUCT AN AUDIT OR MARKET
CONDUCT EXAMINATION OF A CARRIER OR PHARMACY BENEFIT MANAGER TO
ENSURE COMPLIANCE WITH THIS SECTION
. THE COMMISSIONER, PURSUANT
TO ANY RULES PROMULGATED BY THE DIVISION
, MAY AUDIT A CARRIER OR
PBM ANNUALLY TO DETERMINE IF THERE IS A VIOLATION OF THIS SECTION .
(b) T
HE COMMISSIONER MAY DETERMINE A CARRIER 'S OR PBM'S
COMPLIANCE WITH THIS SECTION BASED ON A SAMPLING OF DATA OR BASED
ON A FULL CLAIMS AUDIT
. THE SAMPLING OF DATA AND ANY
EXTRAPOLATION FROM THE DATA USED TO DETERMINE PENALTIES MUST BE
REASONABLY VALID FROM A STATISTICAL ST ANDPOINT AND IN ACCORDANCE
WITH GENERALLY ACCEPTED AUDITING STANDARDS
. A CARRIER OR PBM
THAT DOES NOT COMPLY WITH A DIVISION REQUEST FOR THE DATA REQUIRED
PAGE 4-HOUSE BILL 23-1201 TO COMPLETE AN AUDIT VIOLATES THIS SECTION AND MAY BE SUBJECT TO
PENALTIES
.
(c) I
NFORMATION OBTAINED THROUGH AN AUDIT CONDUCTED
PURSUANT TO THIS SUBSECTION
(4) IS PROPRIETARY AND CONFIDENTIAL
INFORMATION
, AVAILABLE ONLY TO THE COMMISSIONER AND THE
COMMISSIONER
'S AUDITING DESIGNEE AND IS NOT SUBJECT TO DISCLOSURE
UNLESS SPECIFICALLY REQUIRED BY STATE OR FEDERAL LAW
.
(5) T
HE FAILURE OF A CARRIER OR PBM TO COMPLY WITH THIS
SECTION IS AN UNFAIR METHOD OF COMPETITION AND AN UNFAIR OR A
DECEPTIVE ACT OR PRACTICE IN THE BUSINESS OF INSURANCE PURSUANT TO
SECTION
10-3-1104 (1).
(6) (a) T
HE REQUIREMENTS OF SUBSECTIONS (1), (2), AND (4) OF THIS
SECTION APPLY TO AN EMPLOYER
-SPONSORED HEALTH BENEFIT PLAN , AN
ASSOCIATED PHARMACY BENEFIT MANAGER
, AND THE HEALTH BENEFIT PLAN
MEMBERS ONLY IF A PERSON
, TAFT-HARTLEY TRUST, MUNICIPALITY, STATE,
LABOR UNION, PLAN SPONSOR, OR EMPLOYER THAT PROVIDES THE
EMPLOYER
-SPONSORED HEALTH BENEFIT PLAN ELECTS TO BE SUBJECT TO
SUBSECTIONS
(1), (2), AND (4) OF THIS SECTION FOR ITS MEMBERS THAT
RESIDE IN
COLORADO.
(b) A
S USED IN THIS SUBSECTION (6), "PHARMACY BENEFIT
MANAGER
" MEANS AN ENTITY DOING BUSINESS IN THIS STATE THAT
ADMINISTERS OR MANAGES PRESCRIPTION DRUG BENEFITS
, INCLUDING
CLAIMS PROCESSING SERVICES AND OTHER PRESCRIPTION DRUG OR DEVICE
SERVICES AS DEFINED IN SECTION
10-16-122.1, THAT IS IN A CONTRACTUAL
RELATIONSHIP DIRECTLY OR INDIRECTLY THROUGH AN AFFILIATE WITH AN
EMPLOYER
-SPONSORED HEALTH BENEFIT PLAN , WHICH INCLUDES PLANS
THAT ARE SELF
-INSURED OR REGULATED BY THE FEDERAL "EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974", 29 U.S.C. SEC. 1001 ET SEQ.,
AS AMENDED, OFFERED BY:
(I) A
PERSON;
(II) A
TAFT-HARTLEY TRUST;
(III) A
MUNICIPALITY;
PAGE 5-HOUSE BILL 23-1201 (IV) THE STATE;
(V) A
LABOR UNION;
(VI) A
PLAN SPONSOR;
(VII) A
N EMPLOYER; OR
(VIII) A COALITION OF EMPLOYERS OR AGGREGATION OF EMPLOYERS
WORKING TOGETHER TO NEGOTIATE IMPROVED CONTRACT TERMS WITH A
PHARMACY BENEFIT MANAGER
.
(7) A
S USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE
REQUIRES
:
(a) "C
ONTRACTED PHARMACY " MEANS A PHARMACY THAT HAS
CONTRACTED WITH A CARRIER
, A PHARMACY BENEFIT MANAGER , OR AN
AFFILIATE OF THE CARRIER OR
PBM.
(b) "I
NGREDIENT COST" MEANS THE ACTUAL AMOUNT PAID TO A
PHARMACY BY A PHARMACY BENEFIT MANAGER FOR A PRESCRIPTION DRUG
,
NOT INCLUDING A DISPENSING FEE OR PATIENT COST -SHARING AMOUNT.
(c) "P
HARMACY" MEANS AN ENTITY WHERE MEDICINAL DRUGS ARE
DISPENSED AND SOLD
, INCLUDING A RETAIL PHARMACY , MAIL-ORDER
PHARMACY
, SPECIALTY PHARMACY, HOSPITAL OUTPATIENT SETTING , OR
OTHER RELATED PHARMACY
.
SECTION 2. In Colorado Revised Statutes, add 25.5-1-134 as
follows:
25.5-1-134. Prescription benefits - department and pharmacy
manager - contracts - audit - rules. (1) F
OR CONTRACTS BETWEEN A
PHARMACY BENEFIT MANAGER AND THE STATE DEPARTMENT OR ONE OF ITS
AFFILIATED MANAGED CARE ORGANIZATIONS OFFERING A PRESCRIPTION
BENEFIT PLAN THAT IS ISSUED OR RENEWED ON OR AFTER
JANUARY 1, 2025,
THE AMOUNT CHARGED BY THE PHARMACY BENEFIT M ANAGER TO THE STATE
DEPARTMENT OR MANAGED CARE ORGANIZATION FOR A PRESCRIPTION DRUG
DISPENSED TO AN ENROLLEE IN THE PROGRAM OF MEDICAL ASSISTANCE
CREATED PURSUANT TO SECTION
25.5-4-104 MUST BE EQUAL TO OR LESS
PAGE 6-HOUSE BILL 23-1201 THAN THE AMOUNT PAID BY THE PHARMACY BENEFIT M ANAGER TO A
MEDICAID PHARMACY FOR THE PRESCRIPTION DRUG DISPENSED TO THE
ENROLLEE
.
(2) T
HE STATE BOARD SHALL PROMULGATE RULES TO IMPLEMENT
THIS SECTION
, INCLUDING RULES GUIDING AN AUDIT OF MANAGED CARE OR
FEE
-FOR-SERVICE CLAIMS, TO ENSURE THAT THERE IS NO VIOLATION OF
SUBSECTION
(1) OF THIS SECTION.
SECTION 3. Appropriation. For the 2023-24 state fiscal year,
$10,000 is appropriated to the department of regulatory agencies for use by
the division of insurance. This appropriation is from the division of
insurance cash fund created in section 10-1-103 (3), C.R.S. To implement
this act, the division may use this appropriation for personal services.
SECTION 4. Act subject to petition - effective date. This act
takes effect at 12:01 a.m. on the day following the expiration of the
ninety-day period after final adjournment of the general assembly; except
that, if a referendum petition is filed pursuant to section 1 (3) of article V
of the state constitution against this act or an item, section, or part of this act
within such period, then the act, item, section, or part will not take effect
PAGE 7-HOUSE BILL 23-1201 unless approved by the people at the general election to be held in
November 2024 and, in such case, will take effect on the date of the official
declaration of the vote thereon by the governor.
____________________________ ____________________________
Julie McCluskie Steve Fenberg
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Robin Jones Cindi L. Markwell
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 8-HOUSE BILL 23-1201