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AN ACT relating to pharmacy benefits. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. 2024 Ky. Acts ch. 104, sec. 3 (2024 RS SB 188/GA, sec. 3) is 3
amended to read as follows: 4
(1) As used in this section: 5
(a) "Actual overpayment" means the portion of any amount paid for pharmacy or 6
pharmacist services that: 7
1. Is duplicative because the pharmacy or pharmacist has already been paid 8
for the services; or 9
2. Was erroneously paid because the services were not rendered in 10
accordance with the prescriber's order, in which case only the amount 11
paid for that portion of the prescription that was filled incorrectly or in 12
excess of the prescriber's order may be deemed an actual overpayment. 13
The amount denied, refunded, or recouped shall not include the 14
dispensing fee paid to the pharmacy if the correct medication was 15
dispensed to the patient; 16
(b) "Ambulatory pharmacy" means a pharmacy that: 17
1. Is open to the general public; and 18
2. Dispenses outpatient prescription drugs; 19
(c) "National average drug acquisition cost" means the national average drug 20
acquisition cost, or NADAC, for a prescription drug or other service that is: 21
1. Determined by a survey of retail pharmacies; and 22
2. Published by the federal Centers for Medicare and Medicaid Services; 23
(d) "National drug code number" means the unique national drug code number 24
that identifies a specific approved drug, its manufacturer, and its package 25
presentation; 26
(e)[(d)] "Net amount" means the amount paid to the pharmacy or pharmacist by 27 UNOFFICIAL COPY 24 RS HB 190/EN
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the insurer, pharmacy benefit manager, or other administrator less any fees, 1
price concessions, and all other revenue passing from the pharmacy or 2
pharmacist to the insurer, pharmacy benefit manager, or other administrator; 3
and 4
(f)[(e)] "Wholesale acquisition cost" means the manufacturer's list price for the 5
drug to wholesalers or direct purchasers in the United States, not including 6
prompt pay or other discounts, rebates, or reductions in price, for the most 7
recent month for which the information is available, as reported in wholesale 8
price guides or other publications of drug pricing data. 9
(2) To the extent permitted under federal law, every contract between a pharmacy or 10
pharmacist and an insurer, a pharmacy benefit manager, or any other administrator 11
of pharmacy benefits for the provision of pharmacy or pharmacist services under a 12
health plan, either directly or through a pharmacy services administration 13
organization or group purchasing organization, shall: 14
(a) Outline the terms and conditions for the provision of pharmacy or pharmacist 15
services; 16
(b) Prohibit the insurer, pharmacy benefit manager, or other administrator from: 17
1. Reducing payment for pharmacy or pharmacist services, directly or 18
indirectly, under a reconciliation process to an effective rate of 19
reimbursement. This prohibition shall include, without limitation, 20
creating, imposing, or establishing direct or indirect remuneration fees, 21
generic effective rates, dispensing effective rates, brand effective rates, 22
any other effective rates, in-network fees, performance fees, point-of-23
sale fees, retroactive fees, pre-adjudication fees, post-adjudication fees, 24
and any other mechanism that reduces, or aggregately reduces, payment 25
for pharmacy or pharmacist services; 26
2. Retroactively denying, reducing reimbursement for, or seeking any 27 UNOFFICIAL COPY 24 RS HB 190/EN
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refunds or recoupments for a claim for pharmacy or pharmacist services, 1
in whole or in part, from the pharmacy or pharmacist after returning a 2
paid claim response as part of the adjudication of the claim, including 3
claims for the cost of a medication or dispensed product and claims for 4
pharmacy or pharmacist services that are deemed ineligible for 5
coverage, unless one (1) or more of the following occurred: 6
a. The original claim was submitted fraudulently; or 7
b. The pharmacy or pharmacist received an actual overpayment; 8
3. Reimbursing the pharmacy or pharmacist for a prescription drug or other 9
service at a net amount that is lower than the amount the insurer, 10
pharmacy benefit manager, or other administrator reimburses itself or a 11
pharmacy affiliate for the same: 12
a. Prescription drug by national drug code number; or 13
b. Service; 14
4. Collecting cost sharing from a pharmacy or pharmacist that was 15
provided to the pharmacy or pharmacist by an insured for the provision 16
of pharmacy or pharmacist services under the health plan; and 17
5. Designating a prescription drug as a specialty drug unless the drug is a 18
limited distribution drug that: 19
a. Requires special handling; and 20
b. Is not commonly carried at retail pharmacies or oncology clinics 21
or practices; and 22
(c) Notwithstanding any other law, provide the following minimum 23
reimbursements to the pharmacy or pharmacist for each prescription drug or 24
other service provided by the pharmacy or pharmacist: 25
1. a. Except as provided in subdivision b. of this subparagraph, 26
reimbursement for the cost of the drug or other service at an 27 UNOFFICIAL COPY 24 RS HB 190/EN
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amount that is not less than: 1
i. The national average drug acquisition cost for the drug or 2
service at the time the drug or service is administered, 3
dispensed, or provided; or 4
ii. If the national average drug acquisition cost is not available 5
at the time a drug is administered or dispensed, the wholesale 6
acquisition cost for the drug at the time the drug is 7
administered or dispensed. 8
b. The minimum reimbursement for the cost of a drug or other 9
service required under this subparagraph shall not apply to a 10
pharmacy permitted under KRS Chapter 315 with a designated 11
pharmacy type of "retail chain" on file with the Kentucky Board 12
of Pharmacy, or a pharmacist practicing at such a pharmacy, 13
until a determination by the commissioner under subparagraph 14
2.a. of this paragraph has taken effect. 15
c. For purposes of complying with this subparagraph, the insurer, 16
pharmacy benefit manager, or other administrator shall utilize the 17
most recently published monthly national average drug acquisition 18
cost as a point of reference for the ingredient drug product 19
component of a pharmacy's or pharmacist's reimbursement for 20
drugs appearing on the national average drug acquisition cost list; 21
and 22
2. a. Except as provided in subdivision b. of this subparagraph, for 23
health plan years beginning on or after January 1, 2027, 24
reimbursement for a professional dispensing fee that is not less 25
than the average cost to dispense a prescription drug in an 26
ambulatory pharmacy located in Kentucky, as determined by the 27 UNOFFICIAL COPY 24 RS HB 190/EN
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commissioner in an administrative regulation promulgated in 1
accordance with KRS Chapter 13A. 2
b. i. The minimum dispensing fee required under subdivision a. 3
of this subparagraph shall not apply to a mail-order 4
pharmaceutical distributor, including a mail-order pharmacy. 5
ii. For health plan years beginning prior to January 1, 2027, and 6
for any future health plan years for which a determination by 7
the commissioner under subdivision a. of this subparagraph 8
has not taken effect, the minimum dispensing fee for a 9
pharmacy permitted under KRS Chapter 315 with a 10
designated pharmacy type of "retail independent" on file 11
with the Kentucky Board of Pharmacy, or a pharmacist 12
practicing at such a pharmacy, shall be not less than ten 13
dollars and sixty-four cents ($10.64). 14
c. In acquiring data for, and making, the determination required 15
under subdivision a. of this subparagraph, the commissioner shall: 16
i. Promulgate an administrative regulation in accordance with 17
KRS Chapter 13A that establishes the data elements to be 18
collected by the Kentucky Board of Pharmacy under Section 19
16 of this Act; 20
ii. Conduct a study of the dispensing data submitted to the 21
commissioner by the Kentucky Board of Pharmacy in 22
accordance with Section 16 of this Act; 23
iii. Repeat the study every two (2) years to obtain updated 24
information; 25
iv. Adjust the determination every two (2) years as appropriate 26
based upon the results of each study; and 27 UNOFFICIAL COPY 24 RS HB 190/EN
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v. Comply with all requirements of Section 16 of this Act. 1
d. In carrying out his or her duties under this subparagraph, the 2
commissioner shall cooperate and consult with the Kentucky 3
Board of Pharmacy. 4
Section 2. Section 1 of this Act applies to contracts issued, delivered, entered, 5
renewed, extended, or amended on or after January 1, 2025. 6
Section 3. This Act takes effect on January 1, 2025. 7