UNOFFICIAL COPY 23 RS BR 338
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AN ACT relating to patient access to pharmacy benefits. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 304.17A-164 is amended to read as follows: 3
(1) As used in this section: 4
(a) "Cost sharing": 5
1. Means the cost to an[ individual] insured under a health plan, according 6
to any coverage limit, copayment, coinsurance, deductible, or other out-7
of-pocket expense requirements imposed by the plan[, which may be 8
subject to annual limitations on cost sharing, including those imposed 9
under 42 U.S.C. secs. 18022(c) and 300gg-6(b)], in order for the 10
insured[an individual] to receive a specific health care service covered 11
by the plan; and 12
2. May be subject to annual limitations, including those imposed under 13
42 U.S.C. secs. 18022(c) and 300gg-6(b); 14
(b) "Generic alternative" means a drug that is designated to be therapeutically 15
equivalent by the United States Food and Drug Administration's Approved 16
Drug Products with Therapeutic Equivalence Evaluations, except that a drug 17
shall not be considered a generic alternative until the drug is nationally 18
available; 19
(c) "Health plan" has the same meaning as in Section 2 of this Act[: 20
1. Means a policy, contract, certificate, or agreement offered or issued by 21
an insurer to provide, deliver, arrange for, pay for, or reimburse any of 22
the cost of health care services; and 23
2. Includes a health benefit plan as defined in KRS 304.17A-005]; 24
(d) "Insured" means any individual who is enrolled in a health plan and on whose 25
behalf the insurer is obligated to pay for or provide pharmacy or 26
pharmacist[health care] services; 27 UNOFFICIAL COPY 23 RS BR 338
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(e) "Insurer"[ includes]: 1
1. Means any of the following persons or entities that offer or issue a 2
health plan: 3
a. An insurance company; 4
b. A health maintenance organization; 5
c. A limited health service organization; 6
d. A self-insurer, including a governmental plan, church plan, or 7
multiple employer welfare arrangement, except any sponsor or 8
other entity that provides a self-insured plan if the sponsor or 9
entity owns a pharmacy; 10
e. A provider-sponsored integrated health delivery network; 11
f. A self-insured employer-organized association; 12
g. A nonprofit hospital, medical-surgical, dental, and health service 13
corporation; or 14
h. Any other third-party payor that is: 15
i. Authorized to transact health insurance business in this 16
state; or 17
ii. Not exempt by federal law from regulation under the 18
insurance laws of this state; and[An insurer offering a 19
health plan providing coverage for pharmacy benefits; or] 20
2. Includes any person or entity that has contracted with a state or 21
federal agency to provide coverage in this state for pharmacy or 22
pharmacist services, except persons or entities that have contracted to 23
provide services under KRS Chapter 205[Any other administrator of 24
pharmacy benefits under a health plan]; 25
(f) "Person" means a natural person, corporation, mutual company, 26
unincorporated association, partnership, joint venture, limited liability 27 UNOFFICIAL COPY 23 RS BR 338
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company, trust, estate, foundation, nonprofit corporation, unincorporated 1
organization, government, or governmental subdivision or agency; 2
(g) "Pharmacy" includes: 3
1. A pharmacy, as defined in KRS Chapter 315; 4
2. A pharmacist, as defined in KRS Chapter 315; or 5
3. Any employee of a pharmacy or pharmacist;[ and] 6
(h) "Pharmacy benefit manager" has the same meaning as in KRS 304.9-020, 7
except that for purposes of this section, the term does not include a 8
pharmacy benefit manager that is contracted by and acting under the 9
direction of any sponsor or other entity that provides a self-insured plan if 10
the sponsor or entity owns a pharmacy; and[304.17A-161] 11
(i) "Pharmacy or pharmacist services" has the same meaning as in Section 2 12
of this Act. 13
(2) To the extent permitted under federal law, an insurer, [issuing or renewing a health 14
plan on or after January 1, 2022, or ]a pharmacy benefit manager, or any other 15
administrator of pharmacy benefits shall not: 16
(a) Require an insured[ purchasing a prescription drug] to: 17
1. Pay a cost-sharing amount for pharmacy or pharmacist services greater 18
than the amount the insured would pay for the services[drug] if he or she 19
were to purchase the services[drug] without coverage; or 20
2. a. Use a mail-order pharmaceutical distributor, including a mail-21
order pharmacy, in order to receive coverage under the health 22
plan. 23
b. Conduct prohibited under this subparagraph includes but is not 24
limited to requiring the use of a mail-order pharmaceutical 25
distributor, including a mail-order pharmacy, to furnish a health 26
care provider a prescription drug by the United States Postal 27 UNOFFICIAL COPY 23 RS BR 338
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Service or a common carrier for subsequent administration in a 1
hospital, clinic, pharmacy, or infusion center; 2
(b) Impose upon an insured any cost-sharing requirement, fee, or other 3
condition relating to: 4
1. Pharmacy or pharmacist services received from a retail pharmacy that 5
is greater, or more restrictive, than what would otherwise be imposed 6
if: 7
a. The insured used a mail-order pharmaceutical distributor, 8
including a mail-order pharmacy; and 9
b. The retail pharmacy has agreed to accept reimbursement at no 10
more than the amount that would have been reimbursed to the 11
mail-order pharmaceutical distributer; 12
2. Prescription drugs furnished by a health care provider for 13
administration in a hospital, clinic, pharmacy, or infusion center that 14
is greater, or more restrictive, than what would otherwise be imposed 15
if a mail-order pharmaceutical distributor, including a mail-order 16
pharmacy, furnished the prescription drugs to the health care 17
provider; or 18
3. Pharmacy or pharmacist services that is not equally imposed upon all 19
insureds in the same benefit category, class, or cost-sharing level 20
under the health plan, unless otherwise required or permitted under 21
this section; 22
(c) Exclude any cost-sharing amounts paid by an insured, or on behalf of an 23
insured by another person, for a prescription drug, including any amount paid 24
under paragraph (a)1. of this subsection, when calculating an insured's 25
contribution to any applicable cost-sharing requirement. The requirements of 26
this paragraph shall not apply: 27 UNOFFICIAL COPY 23 RS BR 338
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1. In the case of a prescription drug for which there is a generic alternative, 1
unless the insured has obtained access to the brand prescription drug 2
through prior authorization, a step therapy protocol, or the insurer's 3
exceptions and appeals process; or 4
2. To any fully insured health benefit plan or self-insured plan provided 5
to an employee under KRS 18A.225; 6
(d)[(c)] Prohibit a pharmacy from discussing any information under subsection 7
(3) of this section; or 8
(e)[(d)] Impose a penalty on a pharmacy for complying with this section. 9
(3) A pharmacist shall have the right to provide an insured information regarding the 10
applicable limitations on his or her cost sharing[cost-sharing] pursuant to this 11
section[ for a prescription drug]. 12
[(4) Subsection (2)(b) of this section shall not apply to any fully insured health benefit 13
plan or self-insured plan provided to an employee under KRS 18A.225.] 14
SECTION 2. A NEW SECTION OF SUBTITLE 17A OF KRS CHAPTER 304 15
IS CREATED TO READ AS FOLLOWS: 16
(1) As used in this section: 17
(a) "Health plan": 18
1. Means any policy, certificate, contract, or plan that offers or provides 19
coverage in this state for pharmacy or pharmacist services, whether 20
such coverage is by direct payment, reimbursement, or otherwise; 21
2. Includes a health benefit plan; and 22
3. Does not include a policy, certificate, contract, or plan that offers or 23
provides services under KRS Chapter 205; 24
(b) "Pharmacy affiliate" means any pharmacy, including a specialty 25
pharmacy: 26
1. With which the pharmacy benefit manager shares common ownership, 27 UNOFFICIAL COPY 23 RS BR 338
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management, or control; 1
2. Which is owned, managed, or controlled by any of the pharmacy 2
benefit manager's management companies, parent companies, 3
subsidiary companies, jointly held companies, or companies otherwise 4
affiliated by a common owner, manager, or holding company; 5
3. Which shares any common members on its board of directors with the 6
pharmacy benefit manager; or 7
4. Which shares managers in common with the pharmacy benefit 8
manager; 9
(c) "Pharmacy benefit manager" has the same meaning as in KRS 304.9-020, 10
except that for purposes of this section, the term does not include a 11
pharmacy benefit manager that is contracted by and acting under the 12
direction of any sponsor or other entity that provides a self-insured plan if 13
the sponsor or entity owns a pharmacy; and 14
(d) "Pharmacy or pharmacist services": 15
1. Means any health care procedures, treatments within the scope of 16
practice of a pharmacist, or services provided by a pharmacy or 17
pharmacist; and 18
2. Includes the sale and provision of the following by a pharmacy or 19
pharmacist: 20
a. Prescription drugs, as defined in KRS 315.010; and 21
b. Home medical equipment, as defined in KRS 309.402. 22
(2) To the extent permitted under federal law, a pharmacy benefit manager providing 23
pharmacy benefit management services on behalf of a health plan: 24
(a) 1. Shall not require or incentivize an insured to receive pharmacy or 25
pharmacist services from a pharmacy affiliate. 26
2. Conduct prohibited under this paragraph includes the offer or 27 UNOFFICIAL COPY 23 RS BR 338
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implementation of a plan design that requires or incentivizes insureds 1
to use pharmacy affiliates, including but not limited to: 2
a. Requiring or incentivizing an insured to obtain a specialty drug 3
from a pharmacy affiliate; 4
b. Charging less cost sharing to insureds that use pharmacy 5
affiliates than the pharmacy benefit manager charges to 6
insureds that use nonaffiliated pharmacies; and 7
c. Providing any incentives for insureds that use pharmacy 8
affiliates that are not provided for insureds that use nonaffiliated 9
pharmacies. 10
3. This paragraph shall not be construed to prohibit: 11
a. Communications to insureds regarding pharmacy networks and 12
prices if the communication is accurate and includes 13
information about all eligible nonaffiliated pharmacies; or 14
b. Requiring an insured to utilize a pharmacy network that may 15
include pharmacy affiliates in order to receive coverage under 16
the plan, or providing financial incentives for utilizing that 17
network, if the pharmacy benefit manager complies with 18
paragraph (b) of this subsection and KRS 304.17A-515; and 19
(b) 1. Shall provide equal access and incentives to all pharmacies within the 20
health plan's or pharmacy benefit manager's network. 21
2. Conduct prohibited under this paragraph includes but is not limited to 22
interfering with an insured's right to choose the insured's network 23
pharmacy of choice. 24
3. For purposes of subparagraph 2. of this paragraph, interfering 25
includes inducement, steering, offering financial or other incentives, 26
or imposing a penalty. 27 UNOFFICIAL COPY 23 RS BR 338
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SECTION 3. A NEW SECTION OF SUBTITLE 17C OF KRS CHAPTER 304 1
IS CREATED TO READ AS FOLLOWS: 2
Sections 1 and 2 of this Act shall apply to limited health service benefit plans, 3
including limited health service contracts as defined in KRS 304.38A-010. 4
SECTION 4. A NEW SECTION OF SUBTITLE 38A OF KRS CHAPTER 304 5
IS CREATED TO READ AS FOLLOWS: 6
A limited health service organization shall comply with Section 1 of this Act. 7
Section 5. Section 1 of this Act applies to health plans issued or renewed on or 8
after January 1, 2024. 9
Section 6. Section 2 of this Act applies to contracts issued, delivered, entered, 10
renewed, extended, or amended on or after January 1, 2024. 11
Section 7. If any provision of this Act, or this Act's application to any person or 12
circumstance, is held invalid, the invalidity shall not affect other provisions or 13
applications of the Act, which shall be given effect without the invalid provision or 14
application, and to this end the provisions and applications of this Act are severable. 15
Section 8. Sections 1 to 6 of this Act take effect on January 1, 2024. 16