Illinois 2023-2024 Regular Session

Illinois House Bill HB3761 Compare Versions

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

Old	New	Differences
1	1	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3761 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED: 215 ILCS 5/155.37 215 ILCS 5/513b1215 ILCS 5/513b1.1 new215 ILCS 5/513b1.3 new215 ILCS 5/513b1.5 new215 ILCS 124/35 new Amends the Pharmacy Benefit Managers Article of the Illinois Insurance Code. Provides that a pharmacy benefit manager may not prohibit a pharmacy or pharmacist from selling a more affordable alternative to the covered person if a more affordable alternative is available. Provides that a pharmacy benefit manager shall not reimburse a pharmacy or pharmacist in this State an amount less than the amount that the pharmacy benefit manager reimburses a pharmacy benefit manager affiliate for providing the same pharmaceutical product. Provides that a pharmacy benefit manager is prohibited from conducting spread pricing in the State. Sets forth provisions concerning pharmacy network participation, fiduciary responsibility, and pharmacy benefit manager transparency. Provides that a pharmacy benefit manager shall report to the Director on a quarterly basis and that the report is confidential and not subject to disclosure under the Freedom of Information Act. Provides that the provisions apply to contracts entered into or renewed on or after July 1, 2023 (rather than July 1, 2022). Defines terms. Amends the Network Adequacy and Transparency Act. Sets forth provisions concerning pharmacy benefit manager network adequacy. Makes other changes. LRB103 30051 BMS 56474 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3761 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED: 215 ILCS 5/155.37 215 ILCS 5/513b1215 ILCS 5/513b1.1 new215 ILCS 5/513b1.3 new215 ILCS 5/513b1.5 new215 ILCS 124/35 new 215 ILCS 5/155.37 215 ILCS 5/513b1 215 ILCS 5/513b1.1 new 215 ILCS 5/513b1.3 new 215 ILCS 5/513b1.5 new 215 ILCS 124/35 new Amends the Pharmacy Benefit Managers Article of the Illinois Insurance Code. Provides that a pharmacy benefit manager may not prohibit a pharmacy or pharmacist from selling a more affordable alternative to the covered person if a more affordable alternative is available. Provides that a pharmacy benefit manager shall not reimburse a pharmacy or pharmacist in this State an amount less than the amount that the pharmacy benefit manager reimburses a pharmacy benefit manager affiliate for providing the same pharmaceutical product. Provides that a pharmacy benefit manager is prohibited from conducting spread pricing in the State. Sets forth provisions concerning pharmacy network participation, fiduciary responsibility, and pharmacy benefit manager transparency. Provides that a pharmacy benefit manager shall report to the Director on a quarterly basis and that the report is confidential and not subject to disclosure under the Freedom of Information Act. Provides that the provisions apply to contracts entered into or renewed on or after July 1, 2023 (rather than July 1, 2022). Defines terms. Amends the Network Adequacy and Transparency Act. Sets forth provisions concerning pharmacy benefit manager network adequacy. Makes other changes. LRB103 30051 BMS 56474 b LRB103 30051 BMS 56474 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3761 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED:
3	3	215 ILCS 5/155.37 215 ILCS 5/513b1215 ILCS 5/513b1.1 new215 ILCS 5/513b1.3 new215 ILCS 5/513b1.5 new215 ILCS 124/35 new 215 ILCS 5/155.37 215 ILCS 5/513b1 215 ILCS 5/513b1.1 new 215 ILCS 5/513b1.3 new 215 ILCS 5/513b1.5 new 215 ILCS 124/35 new
4	4	215 ILCS 5/155.37
5	5	215 ILCS 5/513b1
6	6	215 ILCS 5/513b1.1 new
7	7	215 ILCS 5/513b1.3 new
8	8	215 ILCS 5/513b1.5 new
9	9	215 ILCS 124/35 new
10	10	Amends the Pharmacy Benefit Managers Article of the Illinois Insurance Code. Provides that a pharmacy benefit manager may not prohibit a pharmacy or pharmacist from selling a more affordable alternative to the covered person if a more affordable alternative is available. Provides that a pharmacy benefit manager shall not reimburse a pharmacy or pharmacist in this State an amount less than the amount that the pharmacy benefit manager reimburses a pharmacy benefit manager affiliate for providing the same pharmaceutical product. Provides that a pharmacy benefit manager is prohibited from conducting spread pricing in the State. Sets forth provisions concerning pharmacy network participation, fiduciary responsibility, and pharmacy benefit manager transparency. Provides that a pharmacy benefit manager shall report to the Director on a quarterly basis and that the report is confidential and not subject to disclosure under the Freedom of Information Act. Provides that the provisions apply to contracts entered into or renewed on or after July 1, 2023 (rather than July 1, 2022). Defines terms. Amends the Network Adequacy and Transparency Act. Sets forth provisions concerning pharmacy benefit manager network adequacy. Makes other changes.
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13	13	A BILL FOR
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16	16	1 AN ACT concerning regulation.
17	17	2 Be it enacted by the People of the State of Illinois,
18	18	3 represented in the General Assembly:
19	19	4 Section 5. The Illinois Insurance Code is amended by
20	20	5 changing Sections 155.37 and 513b1 and by adding Sections
21	21	6 513b1.1, 513b1.3, and 513b1.5 as follows:
22	22	7 (215 ILCS 5/155.37)
23	23	8 Sec. 155.37. Drug formulary; notice.
24	24	9 (a) As used in this Section:
25	25	10 "Brand name drug" means a prescription drug marketed under
26	26	11 a proprietary name or registered trademark name.
27	27	12 "Formulary" means a list of prescription drugs that is
28	28	13 developed by clinical and pharmacy experts and represents the
29	29	14 carrier's medically appropriate and cost-effective
30	30	15 prescription drugs approved for use.
31	31	16 "Generic drug" means a prescription drug, whether
32	32	17 identified by its chemical, proprietary, or nonproprietary
33	33	18 name, that is not a brand name drug and is therapeutically
34	34	19 equivalent to a brand name drug in dosage, safety, strength,
35	35	20 method of consumption, quality, performance, and intended use.
36	36	21 (b) Insurance companies that transact the kinds of
37	37	22 insurance authorized under Class 1(b) or Class 2(a) of Section
38	38	23 4 of this Code and provide coverage for prescription drugs
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42	42	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3761 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED:
43	43	215 ILCS 5/155.37 215 ILCS 5/513b1215 ILCS 5/513b1.1 new215 ILCS 5/513b1.3 new215 ILCS 5/513b1.5 new215 ILCS 124/35 new 215 ILCS 5/155.37 215 ILCS 5/513b1 215 ILCS 5/513b1.1 new 215 ILCS 5/513b1.3 new 215 ILCS 5/513b1.5 new 215 ILCS 124/35 new
44	44	215 ILCS 5/155.37
45	45	215 ILCS 5/513b1
46	46	215 ILCS 5/513b1.1 new
47	47	215 ILCS 5/513b1.3 new
48	48	215 ILCS 5/513b1.5 new
49	49	215 ILCS 124/35 new
50	50	Amends the Pharmacy Benefit Managers Article of the Illinois Insurance Code. Provides that a pharmacy benefit manager may not prohibit a pharmacy or pharmacist from selling a more affordable alternative to the covered person if a more affordable alternative is available. Provides that a pharmacy benefit manager shall not reimburse a pharmacy or pharmacist in this State an amount less than the amount that the pharmacy benefit manager reimburses a pharmacy benefit manager affiliate for providing the same pharmaceutical product. Provides that a pharmacy benefit manager is prohibited from conducting spread pricing in the State. Sets forth provisions concerning pharmacy network participation, fiduciary responsibility, and pharmacy benefit manager transparency. Provides that a pharmacy benefit manager shall report to the Director on a quarterly basis and that the report is confidential and not subject to disclosure under the Freedom of Information Act. Provides that the provisions apply to contracts entered into or renewed on or after July 1, 2023 (rather than July 1, 2022). Defines terms. Amends the Network Adequacy and Transparency Act. Sets forth provisions concerning pharmacy benefit manager network adequacy. Makes other changes.
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53	53	A BILL FOR
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59	59	215 ILCS 5/155.37
60	60	215 ILCS 5/513b1
61	61	215 ILCS 5/513b1.1 new
62	62	215 ILCS 5/513b1.3 new
63	63	215 ILCS 5/513b1.5 new
64	64	215 ILCS 124/35 new
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83	83	1 through the use of a drug formulary must notify insureds of any
84	84	2 change in the formulary. A company may comply with this
85	85	3 Section by posting changes in the formulary on its website.
86	86	4 (c) If a generic equivalent for a brand name drug is
87	87	5 approved by the U.S. Food and Drug Administration, then
88	88	6 insurance companies with plans that provide coverage for
89	89	7 prescription drugs through the use of a drug formulary that
90	90	8 are amended, delivered, issued, or renewed in this State on or
91	91	9 after January 1, 2024 shall:
92	92	10 (1) immediately make the generic equivalent available
93	93	11 on the formulary to the brand name drug; or
94	94	12 (2) move the brand name drug to a formulary tier that
95	95	13 reduces an enrollee's cost.
96	96	14 (d) Nothing in this Section shall interfere with a
97	97	15 pharmacist complying with the Pharmacy Practice Act.
98	98	16 (e) The Department may adopt rules to implement this
99	99	17 Section.
100	100	18 (Source: P.A. 92-440, eff. 8-17-01; 92-651, eff. 7-11-02.)
101	101	19 (215 ILCS 5/513b1)
102	102	20 Sec. 513b1. Pharmacy benefit manager contracts.
103	103	21 (a) As used in this Section:
104	104	22 "340B drug discount program" means the program established
105	105	23 under Section 340B of the federal Public Health Service Act,
106	106	24 42 U.S.C. 256b.
107	107	25 "340B entity" means a covered entity as defined in 42
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118	118	1 U.S.C. 256b(a)(4) authorized to participate in the 340B drug
119	119	2 discount program.
120	120	3 "340B pharmacy" means any pharmacy used to dispense 340B
121	121	4 drugs for a covered entity, whether entity-owned or external.
122	122	5 "Biological product" has the meaning ascribed to that term
123	123	6 in Section 19.5 of the Pharmacy Practice Act.
124	124	7 "Covered person" means a member, policyholder, subscriber,
125	125	8 enrollee, beneficiary, dependent, or other individual
126	126	9 participating in a health benefit plan.
127	127	10 "Health benefit plan" means a policy, contract,
128	128	11 certificate, or agreement entered into, offered, or issued by
129	129	12 an insurer to provide, deliver, arrange for, pay for, or
130	130	13 reimburse any of the costs of physical, mental, or behavioral
131	131	14 health care services.
132	132	15 "Maximum allowable cost" means the maximum amount that a
133	133	16 pharmacy benefit manager will reimburse a pharmacy for the
134	134	17 cost of a drug.
135	135	18 "Maximum allowable cost list" means a list of drugs for
136	136	19 which a maximum allowable cost has been established by a
137	137	20 pharmacy benefit manager.
138	138	21 "Pharmacy benefit manager" means a person, business, or
139	139	22 entity, including a wholly or partially owned or controlled
140	140	23 subsidiary of a pharmacy benefit manager, that provides claims
141	141	24 processing services or other prescription drug or device
142	142	25 services, or both, for health benefit plans.
143	143	26 "Retail price" means the price an individual without
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154	154	1 prescription drug coverage would pay at a retail pharmacy, not
155	155	2 including a pharmacist dispensing fee.
156	156	3 "Spread pricing" means the model of prescription drug
157	157	4 pricing in which the pharmacy benefits manager charges a
158	158	5 health benefit plan a contracted price for prescription drugs,
159	159	6 and the contracted price for the prescription drugs differs
160	160	7 from the amount the pharmacy benefits manager directly or
161	161	8 indirectly pays the pharmacist or pharmacy for pharmacist
162	162	9 services.
163	163	10 "Third-party payer" means any entity that pays for
164	164	11 prescription drugs on behalf of a patient other than a health
165	165	12 care provider or sponsor of a plan subject to regulation under
166	166	13 Medicare Part D, 42 U.S.C. 1395w-101, et seq.
167	167	14 (b) A contract between a health insurer and a pharmacy
168	168	15 benefit manager must require that the pharmacy benefit
169	169	16 manager:
170	170	17 (1) Update maximum allowable cost pricing information
171	171	18 at least every 7 calendar days.
172	172	19 (2) Maintain a process that will, in a timely manner,
173	173	20 eliminate drugs from maximum allowable cost lists or
174	174	21 modify drug prices to remain consistent with changes in
175	175	22 pricing data used in formulating maximum allowable cost
176	176	23 prices and product availability.
177	177	24 (3) Provide access to its maximum allowable cost list
178	178	25 to each pharmacy or pharmacy services administrative
179	179	26 organization subject to the maximum allowable cost list.
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190	190	1 Access may include a real-time pharmacy website portal to
191	191	2 be able to view the maximum allowable cost list. As used in
192	192	3 this Section, "pharmacy services administrative
193	193	4 organization" means an entity operating within the State
194	194	5 that contracts with independent pharmacies to conduct
195	195	6 business on their behalf with third-party payers. A
196	196	7 pharmacy services administrative organization may provide
197	197	8 administrative services to pharmacies and negotiate and
198	198	9 enter into contracts with third-party payers or pharmacy
199	199	10 benefit managers on behalf of pharmacies.
200	200	11 (4) Provide a process by which a contracted pharmacy
201	201	12 can appeal the provider's reimbursement for a drug subject
202	202	13 to maximum allowable cost pricing. The appeals process
203	203	14 must, at a minimum, include the following:
204	204	15 (A) A requirement that a contracted pharmacy has
205	205	16 14 calendar days after the applicable fill date to
206	206	17 appeal a maximum allowable cost if the reimbursement
207	207	18 for the drug is less than the net amount that the
208	208	19 network provider paid to the supplier of the drug.
209	209	20 (B) A requirement that a pharmacy benefit manager
210	210	21 must respond to a challenge within 14 calendar days of
211	211	22 the contracted pharmacy making the claim for which the
212	212	23 appeal has been submitted.
213	213	24 (C) A telephone number and e-mail address or
214	214	25 website to network providers, at which the provider
215	215	26 can contact the pharmacy benefit manager to process
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226	226	1 and submit an appeal.
227	227	2 (D) A requirement that, if an appeal is denied,
228	228	3 the pharmacy benefit manager must provide the reason
229	229	4 for the denial and the name and the national drug code
230	230	5 number from national or regional wholesalers.
231	231	6 (E) A requirement that, if an appeal is sustained,
232	232	7 the pharmacy benefit manager must make an adjustment
233	233	8 in the drug price effective the date the challenge is
234	234	9 resolved and make the adjustment applicable to all
235	235	10 similarly situated network pharmacy providers, as
236	236	11 determined by the managed care organization or
237	237	12 pharmacy benefit manager.
238	238	13 (5) Allow a plan sponsor contracting with a pharmacy
239	239	14 benefit manager an annual right to audit compliance with
240	240	15 the terms of the contract by the pharmacy benefit manager,
241	241	16 including, but not limited to, full disclosure of any and
242	242	17 all rebate amounts secured, whether product specific or
243	243	18 generalized rebates, that were provided to the pharmacy
244	244	19 benefit manager by a pharmaceutical manufacturer.
245	245	20 (6) Allow a plan sponsor contracting with a pharmacy
246	246	21 benefit manager to request that the pharmacy benefit
247	247	22 manager disclose the actual amounts paid by the pharmacy
248	248	23 benefit manager to the pharmacy.
249	249	24 (7) Provide notice to the party contracting with the
250	250	25 pharmacy benefit manager of any consideration that the
251	251	26 pharmacy benefit manager receives from the manufacturer
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262	262	1 for dispense as written prescriptions once a generic or
263	263	2 biologically similar product becomes available.
264	264	3 (c) In order to place a particular prescription drug on a
265	265	4 maximum allowable cost list, the pharmacy benefit manager
266	266	5 must, at a minimum, ensure that:
267	267	6 (1) if the drug is a generically equivalent drug, it
268	268	7 is listed as therapeutically equivalent and
269	269	8 pharmaceutically equivalent "A" or "B" rated in the United
270	270	9 States Food and Drug Administration's most recent version
271	271	10 of the "Orange Book" or have an NR or NA rating by
272	272	11 Medi-Span, Gold Standard, or a similar rating by a
273	273	12 nationally recognized reference;
274	274	13 (2) the drug is available for purchase by each
275	275	14 pharmacy in the State from national or regional
276	276	15 wholesalers operating in Illinois; and
277	277	16 (3) the drug is not obsolete.
278	278	17 (d) A pharmacy benefit manager is prohibited from limiting
279	279	18 a pharmacist's ability to disclose to a covered person:
280	280	19 (1) whether the cost-sharing obligation exceeds the
281	281	20 retail price for a covered prescription drug, and the
282	282	21 availability of a more affordable alternative drug, if one
283	283	22 is available in accordance with Section 42 of the Pharmacy
284	284	23 Practice Act; or .
285	285	24 (2) any health care information that the pharmacy or
286	286	25 pharmacist deems appropriate regarding:
287	287	26 (i) the nature of treatment, risks, or
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298	298	1 alternatives thereto, if such disclosure is consistent
299	299	2 with the permissible practice of pharmacy under the
300	300	3 Pharmacy Practice Act;
301	301	4 (ii) the availability of alternative therapies,
302	302	5 consultations, or tests if such disclosure is
303	303	6 consistent with the permissible practice of pharmacy
304	304	7 under the Pharmacy Practice Act;
305	305	8 (iii) the decision of utilization reviewers or
306	306	9 similar persons to authorize or deny services;
307	307	10 (iv) the process that is used to authorize or deny
308	308	11 health care services or benefits; or
309	309	12 (v) information on financial incentives and
310	310	13 structures used by the insurer.
311	311	14 (e) A health insurer or pharmacy benefit manager shall not
312	312	15 require an insured to make a payment for a prescription drug at
313	313	16 the point of sale in an amount that exceeds the lesser of:
314	314	17 (1) the applicable cost-sharing amount; or
315	315	18 (2) the retail price of the drug in the absence of
316	316	19 prescription drug coverage.
317	317	20 (f) Unless required by law, a contract between a pharmacy
318	318	21 benefit manager or third-party payer and a 340B entity or 340B
319	319	22 pharmacy shall not contain any provision that:
320	320	23 (1) distinguishes between drugs purchased through the
321	321	24 340B drug discount program and other drugs when
322	322	25 determining reimbursement or reimbursement methodologies,
323	323	26 or contains otherwise less favorable payment terms or
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334	334	1 reimbursement methodologies for 340B entities or 340B
335	335	2 pharmacies when compared to similarly situated non-340B
336	336	3 entities;
337	337	4 (2) imposes any fee, chargeback, or rate adjustment
338	338	5 that is not similarly imposed on similarly situated
339	339	6 pharmacies that are not 340B entities or 340B pharmacies;
340	340	7 (3) imposes any fee, chargeback, or rate adjustment
341	341	8 that exceeds the fee, chargeback, or rate adjustment that
342	342	9 is not similarly imposed on similarly situated pharmacies
343	343	10 that are not 340B entities or 340B pharmacies;
344	344	11 (4) prevents or interferes with an individual's choice
345	345	12 to receive a covered prescription drug from a 340B entity
346	346	13 or 340B pharmacy through any legally permissible means,
347	347	14 except that nothing in this paragraph shall prohibit the
348	348	15 establishment of differing copayments or other
349	349	16 cost-sharing amounts within the benefit plan for covered
350	350	17 persons who acquire covered prescription drugs from a
351	351	18 nonpreferred or nonparticipating provider;
352	352	19 (5) excludes a 340B entity or 340B pharmacy from a
353	353	20 pharmacy network on any basis that includes consideration
354	354	21 of whether the 340B entity or 340B pharmacy participates
355	355	22 in the 340B drug discount program;
356	356	23 (6) prevents a 340B entity or 340B pharmacy from using
357	357	24 a drug purchased under the 340B drug discount program; or
358	358	25 (7) any other provision that discriminates against a
359	359	26 340B entity or 340B pharmacy by treating the 340B entity
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370	370	1 or 340B pharmacy differently than non-340B entities or
371	371	2 non-340B pharmacies for any reason relating to the
372	372	3 entity's participation in the 340B drug discount program.
373	373	4 As used in this subsection, "pharmacy benefit manager" and
374	374	5 "third-party payer" do not include pharmacy benefit managers
375	375	6 and third-party payers acting on behalf of a Medicaid program.
376	376	7 (g) A violation of this Section by a pharmacy benefit
377	377	8 manager constitutes an unfair or deceptive act or practice in
378	378	9 the business of insurance under Section 424.
379	379	10 (h) A provision that violates subsection (f) in a contract
380	380	11 between a pharmacy benefit manager or a third-party payer and
381	381	12 a 340B entity that is entered into, amended, or renewed after
382	382	13 July 1, 2022 shall be void and unenforceable.
383	383	14 (i) A pharmacy benefit manager may not prohibit a pharmacy
384	384	15 or pharmacist from selling a more affordable alternative to
385	385	16 the covered person if a more affordable alternative is
386	386	17 available.
387	387	18 (j) A pharmacy benefit manager shall not reimburse a
388	388	19 pharmacy or pharmacist in this State an amount less than the
389	389	20 amount that the pharmacy benefit manager reimburses a pharmacy
390	390	21 benefit manager affiliate for providing the same
391	391	22 pharmaceutical product.
392	392	23 (k) A pharmacy benefit manager shall not:
393	393	24 (1) condition payment, reimbursement, or network
394	394	25 participation on any type of accreditation, certification,
395	395	26 or credentialing standard beyond those required by the
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406	406	1 State Board of Pharmacy or applicable State or federal
407	407	2 law;
408	408	3 (2) prohibit or otherwise restrict a pharmacist or
409	409	4 pharmacy from offering prescription delivery services to
410	410	5 any covered person; or
411	411	6 (3) require any additional requirement for a
412	412	7 prescription claim that is more restrictive than the
413	413	8 standards established under the Illinois Food, Drug and
414	414	9 Cosmetic Act; the Pharmacy Practice Act; or the Illinois
415	415	10 Controlled Substances Act.
416	416	11 (l) A pharmacy benefit manager is prohibited from
417	417	12 conducting spread pricing in this State.
418	418	13
419	419	14 (m) (i) This Section applies to contracts entered into or
420	420	15 renewed on or after July 1, 2023 2022.
421	421	16 (n) (j) This Section applies to any group or individual
422	422	17 policy of accident and health insurance or managed care plan
423	423	18 that provides coverage for prescription drugs and that is
424	424	19 amended, delivered, issued, or renewed on or after July 1,
425	425	20 2020.
426	426	21 (Source: P.A. 101-452, eff. 1-1-20; 102-778, eff. 7-1-22;
427	427	22 revised 8-19-22.)
428	428	23 (215 ILCS 5/513b1.1 new)
429	429	24 Sec. 513b1.1. Pharmacy network participation.
430	430	25 (a) As used in this Section:
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441	441	1 "Claims processing services" means the administrative
442	442	2 services performed in connection with the processing and
443	443	3 adjudicating of claims relating to pharmacist services that
444	444	4 include:
445	445	5 (1) receiving payments for pharmacist services; or
446	446	6 (2) making payments to a pharmacist or pharmacy for
447	447	7 pharmacist services.
448	448	8 "Pharmacy benefit manager affiliate" means a pharmacy or
449	449	9 pharmacist that directly or indirectly, through one or more
450	450	10 intermediaries, owns or controls, is owned or controlled by,
451	451	11 or is under common ownership or control with a pharmacy
452	452	12 benefit manager. "Pharmacy benefit manager affiliate" includes
453	453	13 any mail-order pharmacy that is directly or indirectly owned
454	454	14 or controlled by a pharmacy benefit manager.
455	455	15 (b) A pharmacy benefit manager shall not:
456	456	16 (1) prohibit or limit a participant or beneficiary of
457	457	17 pharmacy services under a health benefit plan from
458	458	18 selecting a pharmacy or pharmacist of his or her choice if
459	459	19 the pharmacy or pharmacist is willing and agrees to accept
460	460	20 the same terms and conditions that the pharmacy benefit
461	461	21 manager has established for at least one of the networks
462	462	22 of pharmacies that the pharmacy benefit manager has
463	463	23 established to serve patients within this State;
464	464	24 (2) prohibit a pharmacy from participating in any
465	465	25 given network of pharmacies within the State if the
466	466	26 pharmacy is licensed by the Department of Financial and
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477	477	1 Professional Regulation and agrees to the same terms and
478	478	2 conditions, including the terms of reimbursement, that the
479	479	3 pharmacy benefit manager has established for other
480	480	4 pharmacies participating within the network that the
481	481	5 pharmacy wishes to join;
482	482	6 (3) charge a participant or beneficiary of a pharmacy
483	483	7 benefits plan or program that the pharmacy benefit manager
484	484	8 serves a different copayment obligation or additional fee
485	485	9 for using any pharmacy within a given network of
486	486	10 pharmacies established by the pharmacy benefit manager to
487	487	11 serve patients within this State;
488	488	12 (4) impose a monetary advantage, incentive, or penalty
489	489	13 under a health benefit plan that would affect or influence
490	490	14 a beneficiary's choice among those pharmacies or
491	491	15 pharmacists who have agreed to participate in the plan
492	492	16 according to the terms offered by the insurer;
493	493	17 (5) require a participant or beneficiary to use or
494	494	18 otherwise obtain services exclusively from a mail-order
495	495	19 pharmacy or one or more pharmacy benefit manager
496	496	20 affiliates;
497	497	21 (6) impose upon a beneficiary any copayment obligation
498	498	22 or other limitation, restriction, or condition, including
499	499	23 the number of days of a drug supply for which coverage will
500	500	24 be allowed, that is more costly or more restrictive than
501	501	25 that which would be imposed upon the beneficiary if such
502	502	26 services were purchased from a pharmacy benefit manager
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513	513	1 affiliate or any other pharmacy within a given network of
514	514	2 pharmacies established by the pharmacy benefit manager to
515	515	3 serve patients within this State;
516	516	4 (7) require participation in additional networks for a
517	517	5 pharmacy to enroll in an individual network;
518	518	6 (8) include in any manner on any material, including,
519	519	7 but not limited to, mail and identifications cards, the
520	520	8 name of any pharmacy, hospital, or other providers unless
521	521	9 it specifically lists all pharmacies, hospitals, and
522	522	10 providers participating in the given network of pharmacies
523	523	11 established by the pharmacy benefit manager to serve
524	524	12 patients within this State; or
525	525	13 (9) share, transfer, or otherwise utilize patient
526	526	14 information or pharmacy service data collected pursuant to
527	527	15 the provision of claims processing services for the
528	528	16 purpose of referring a participant or beneficiary to a
529	529	17 pharmacy benefit manager affiliate.
530	530	18 (c) A pharmacy licensed in or holding a nonresident
531	531	19 pharmacy permit in Illinois shall be prohibited from:
532	532	20 (1) transferring or sharing records relative to
533	533	21 prescription information containing patient identifiable
534	534	22 and prescriber identifiable data to or from an affiliate
535	535	23 for any commercial purpose; however, nothing shall be
536	536	24 construed to prohibit the exchange of prescription
537	537	25 information between a pharmacy and its affiliate for the
538	538	26 limited purposes of pharmacy reimbursement, formulary
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549	549	1 compliance, pharmacy care, public health activities
550	550	2 otherwise authorized by law, or utilization review by a
551	551	3 health care provider; or
552	552	4 (2) presenting a claim for payment to any individual,
553	553	5 third-party payer, affiliate, or other entity for a
554	554	6 service furnished pursuant to a referral from an affiliate
555	555	7 or other person licensed under this Article.
556	556	8 (d) If a pharmacy licensed or holding a nonresident
557	557	9 pharmacy permit in this State has an affiliate, it shall
558	558	10 annually file with the Department a disclosure statement
559	559	11 identifying all such affiliates.
560	560	12 (e) This Section shall not be construed to prohibit a
561	561	13 pharmacy from entering into an agreement with an affiliate to
562	562	14 provide pharmacy care to patients if the pharmacy does not
563	563	15 receive referrals in violation of subsection (c) and the
564	564	16 pharmacy provides the disclosure statement required in
565	565	17 subsection (d).
566	566	18 (f) In addition to any other remedy provided by law, a
567	567	19 violation of this Section by a pharmacy shall be grounds for
568	568	20 disciplinary action by the Department.
569	569	21 (g) A pharmacist who fills a prescription that violates
570	570	22 subsection (c) shall not be liable under this Section.
571	571	23 (h) This Section does not apply to:
572	572	24 (1) any hospital or related institution; or
573	573	25 (2) any referrals by an affiliate for pharmacy
574	574	26 services and prescriptions to patients in skilled nursing
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585	585	1 facilities, intermediate care facilities, continuing care
586	586	2 retirement communities, home health agencies, or hospices.
587	587	3 (215 ILCS 5/513b1.3 new)
588	588	4 Sec. 513b1.3. Fiduciary responsibility. A pharmacy benefit
589	589	5 manager is a fiduciary to a contracted health insurer and
590	590	6 shall:
591	591	7 (1) discharge that duty in accordance with federal and
592	592	8 State law;
593	593	9 (2) notify the covered entity in writing of any
594	594	10 activity, policy, or practice of the pharmacy benefit
595	595	11 manager that directly or indirectly presents any conflict
596	596	12 of interest and inability to comply with the duties
597	597	13 imposed by this Section, but in no event does this
598	598	14 notification exempt the pharmacy benefit manager from
599	599	15 compliance with all other Sections of this Code; and
600	600	16 (3) disclose all direct or indirect payments related
601	601	17 to the dispensation of prescription drugs or classes or
602	602	18 brands of drugs to the covered entity.
603	603	19 (215 ILCS 5/513b1.5 new)
604	604	20 Sec. 513b1.5. Pharmacy benefit manager transparency.
605	605	21 (a) A pharmacy benefit manager shall report to the
606	606	22 Director on a quarterly basis for each health care insurer the
607	607	23 following information:
608	608	24 (1) the aggregate amount of rebates received by the
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619	619	1 pharmacy benefit manager;
620	620	2 (2) the aggregate amount of rebates distributed to the
621	621	3 appropriate health care insurer;
622	622	4 (3) the aggregate amount of rebates passed on to the
623	623	5 enrollees of each health care insurer at the point of sale
624	624	6 that reduced the enrollees' applicable deductible,
625	625	7 copayment, coinsurance, or other cost-sharing amount;
626	626	8 (4) the individual and aggregate amount paid by the
627	627	9 health care insurer to the pharmacy benefit manager for
628	628	10 pharmacist services itemized by pharmacy, by product, and
629	629	11 by goods and services; and
630	630	12 (5) the individual and aggregate amount a pharmacy
631	631	13 benefit manager paid for pharmacist services itemized by
632	632	14 pharmacy, by product, and by goods and services.
633	633	15 (b) The report made to the Department required under this
634	634	16 Section is confidential and not subject to disclosure under
635	635	17 the Freedom of Information Act.
636	636	18 Section 10. The Network Adequacy and Transparency Act is
637	637	19 amended by adding Section 35 as follows:
638	638	20 (215 ILCS 124/35 new)
639	639	21 Sec. 35. Pharmacy benefit manager network adequacy.
640	640	22 (a) As used in this Section:
641	641	23 "Pharmacy benefit manager" has the meaning ascribed to
642	642	24 that term in Section 513b1 of the Illinois Insurance Code.
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653	653	1 "Pharmacy benefit manager network" means the group or
654	654	2 groups of preferred providers of pharmacy services to a
655	655	3 network plan.
656	656	4 "Pharmacy benefit manager network plan" means an
657	657	5 individual or group policy of accident and health insurance
658	658	6 that either requires a covered person to use or creates
659	659	7 incentives, including financial incentives, for a covered
660	660	8 person to use providers of pharmacy services managed, owned,
661	661	9 under contract with, or employed by the insurer.
662	662	10 "Pharmacy services" means products, goods, and services or
663	663	11 any combination of products, goods, and services, provided as
664	664	12 a part of the practice of pharmacy. "Pharmacy services"
665	665	13 includes pharmacist care as defined in the Pharmacy Practice
666	666	14 Act.
667	667	15 (b) A pharmacy benefit manager shall provide a reasonably
668	668	16 adequate and accessible pharmacy benefit manager network for
669	669	17 the provision of prescription drugs for a health benefit plan
670	670	18 that shall provide for convenient patient access to pharmacies
671	671	19 within a reasonable distance from a patient's residence.
672	672	20 (c) Pharmacy benefit managers must file for review by the
673	673	21 Director a pharmacy benefit manager network plan describing
674	674	22 the pharmacy benefit manager network and the pharmacy benefit
675	675	23 manager network's accessibility in this State in the time and
676	676	24 manner required by rule issued by the Department.
677	677	25 (1) A mail-order pharmacy shall not be included in the
678	678	26 calculations determining pharmacy benefit manager network
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689	689	1 adequacy.
690	690	2 (2) A pharmacy benefit manager network plan shall
691	691	3 comply with the following retail pharmacy network access
692	692	4 standards:
693	693	5 (A) at least 90% of covered individuals residing
694	694	6 in an urban service area live within 2 miles of a
695	695	7 retail pharmacy participating in the pharmacy benefit
696	696	8 manager's retail pharmacy network;
697	697	9 (B) at least 90% of covered individuals residing
698	698	10 in an urban service area live within 5 miles of a
699	699	11 retail pharmacy designated as a preferred
700	700	12 participating pharmacy in the pharmacy benefit
701	701	13 manager's retail pharmacy network;
702	702	14 (C) at least 90% of covered individuals residing
703	703	15 in a suburban service area live within 5 miles of a
704	704	16 retail pharmacy participating in the pharmacy benefit
705	705	17 manager's retail pharmacy network;
706	706	18 (D) at least 90% of covered individuals residing
707	707	19 in a suburban service area live within 7 miles of a
708	708	20 retail pharmacy designated as a preferred
709	709	21 participating pharmacy in the pharmacy benefit
710	710	22 manager's retail pharmacy network;
711	711	23 (E) at least 70% of covered individuals residing
712	712	24 in a rural service area live within 15 miles of a
713	713	25 retail pharmacy participating in the pharmacy benefit
714	714	26 manager's retail pharmacy network; and
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725	725	1 (F) at least 70% of covered individuals residing
726	726	2 in a rural service area live within 18 miles of a
727	727	3 retail pharmacy designated as a preferred
728	728	4 participating pharmacy in the pharmacy benefit
729	729	5 manager's retail pharmacy network.
730	730	6 (d) The Director shall establish a process for the review
731	731	7 of the adequacy of the standards required under this Section.
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