GREEN SHEET REDIGEST
HB 244 2021 Regular Session Turner
INSURANCE/HEALTH: Provides for the regulation of pharmacy services
administrative organizations.
DIGEST
Proposed law defines "pharmacy services administrative organization", "pharmacy services
administrative organization contract", and "clean claim".
Proposed law requires a pharmacy services administrative organization operating within the
state of La. to be registered and licensed with the Dept. of Insurance by submission of an
application and registration fee to the commissioner of insurance. Requires a pharmacy
services administrative organization to file an annual report. Further sets a $300.00 licensing
fee and a $150.00 annual report filing fee.
Proposed law prohibits a person from acting as a pharmacy services administrative
organization in this state without a valid license issued by the commissioner. Requires a
pharmacy services administrative organization's application for licensure to include certain
documents and pertinent information. Authorizes the commissioner, upon his request, to
inspect copies of certain contracts in order to determine qualification for licensure. Further
authorizes the commissioner to deny or revoke a license for certain cause.
Proposed law provides for a license to remain valid as long as the pharmacy services
administrative organization continues business in this state and remains in compliance with
proposed law. Exempts a pharmacy services administrative organization from La. licensure
requirements when certain out-of-state conditions apply.
Proposed law requires a pharmacy services administrative organization to notify the
commissioner of any material changes in fact or circumstance relative to its license
qualification.
Proposed law requires the commissioner to suspend, revoke, or deny the license or a
pharmacy services administrative organization, or to impose a fine for violations not in
excess of $500.00 per violation when the pharmacy services administrative organization has
failed to timely pay a judgment rendered against it. Further authorizes the commissioner to
suspend, revoke, or deny the license or a pharmacy services administrative organization or
impose a fine for certain other violations.
Proposed law authorizes the commissioner to access the books and records maintained by
a pharmacy services administrative organization for the purposes of examination, audit, and
inspection, and authorizes the commissioner to cause an examination of a pharmacy services
administrative organization, when deemed necessary. Requires the commissioner to keep
any trade secrets contained in books and records confidential; however, the commissioner
is authorized to use such information in any proceeding instituted against the pharmacy
services administrative organization.
Proposed law requires information provided to the commissioner by a pharmacy services
administrative organization and certain terms and contracts between certain parties to remain
confidential. This information is not subject to subpoena and is not public information,
except it may be provided to insurance departments in other states for certain purposes.
Authorizes the commissioner to adopt rules and regulations necessary to implement proposed
law.
Proposed law provides that pharmacy services administrative organization the contracts with
a pharmacy to perform activities related to prescription drug benefit or to act as the
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Prepared by Thomas L. Tyler. pharmacy's agent is obligated to the pharmacy for the duties of care, competence, good faith
and fair dealing and loyalty.
Proposed law requires the pharmacy services administrative organization to notify the
contracted pharmacy in writing of any activity, policy, or practice that presents a conflict of
interest that interferes with the duties imposed in proposed law and prohibits the pharmacy
services administrative organization from engaging in any acts, methods, or practices
prohibited as unfair trade practices in the La. Insurance Code.
Proposed law creates an exception to present law, Public Records Law (R.S. 44:4.1(B)).
(Adds R.S. 22:1660.1-1660.9)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Insurance to the original
bill:
1. Specify for the commissioner's registration fee to not exceed $300.00.
2. Delete language that would have subjected pharmacy services administrative
organizations to present law (R.S. 40:2861 et seq.) regulations for pharmacy
benefits managers.
3. Delete language with respect to conflicts of interests, other conduct, and the duty
of a fiduciary relationship owed by a pharmacy services administrative
organization to a pharmacy.
4. Provide that a pharmacy services administrative organization is not responsible
for the activities solely within the purview of a pharmacy benefits manager.
5. Require the commissioner of insurance to promulgate rules to define the roles
and responsibilities solely within the purview of pharmacy benefits managers and
pharmacy services administrative organizations.
6. Define the term "clean claim" and prohibit a plan sponsor or pharmacy benefits
manager from retroactively reducing payments on clean claims unless certain
conditions apply; however, if a written agreement exists, retroactive increases in
payment to a pharmacy are allowable.
7. Require a pharmacy services administrative organization to provide a contracted
pharmacy with access to the pharmacy’s complete and unredacted contracts upon
the pharmacy's request.
8. Provide that when a pharmacy services administrative organization has not yet
received final payment, retroactive adjustments, or reconciliations from a plan
sponsor or pharmacy benefits manager, or funds are being held to pay amounts
owed by the pharmacy, proposed law (R.S. 22:1660.5) does not apply.
9. Make technical changes.
The House Floor Amendments to the engrossed bill:
1. Set a $300.00 licensing fee and a $150.00 annual report filing fee payable by
pharmacy services administrative organizations to the commissioner of insurance.
2. Prohibit a person from acting as a pharmacy services administrative organization
in this state without a valid license issued by the commissioner. Require a
pharmacy services administrative organization's application for licensure to
include certain documents and pertinent information.
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Prepared by Thomas L. Tyler. 3. Authorize the commissioner, upon his request, to inspect copies of certain
contracts in order to determine qualification for licensure. Authorize the
commissioner to deny or revoke a license for certain cause.
4. Provide for a license to remain valid as long as the pharmacy services
administrative organization continues business in this state and remains in
compliance.
5. Exempt a pharmacy services administrative organization from La. licensure
requirements when certain out-of-state conditions apply.
6. Require a pharmacy services administrative organization to notify the
commissioner of any material changes in fact or circumstance relative to license
qualification.
7. Require a pharmacy services administrative organization to file with the
commissioner an annual report for the preceding calendar year. Require the
report to meet certain conditions of verification.
8. Require the commissioner to suspend, revoke, or deny the license or a pharmacy
services administrative organization, or to impose a fine for violations not in
excess of $500.00 per violation when the pharmacy services administrative
organization has failed to timely pay a judgment rendered against it. Authorize
the commissioner to suspend, revoke, or deny the license or a pharmacy services
administrative organization, or impose a fine for certain other violations.
9. Authorize the commissioner to access the books and records maintained by a
pharmacy services administrative organization for the purposes of examination,
audit, and inspection, and authorize an examination of the pharmacy services
administrative organization when deemed necessary. Require the commissioner
to keep any trade secrets contained in such books and records confidential;
however, the commissioner is authorized to use such information in any
proceeding instituted against the pharmacy services administrative organization.
10.Require information provided to the commissioner by a pharmacy services
administrative organization and certain terms and contracts between certain
parties to remain confidential. Such information is not subject to subpoena and
is not public information, except it may be provided to insurance departments in
other states for certain purposes.
11.Provide for exception to present law, Public Records Law, with respect to
information provided to the commissioner.
12.Change "a reasonable amount to time" to "five business days" with respect to the
amount of time a pharmacy services administrative organization has to remit
certain reimbursements to contracted pharmacies.
13.Authorize the commissioner to promulgate and adopt rules in accordance with
the APA to implement proposed law.
14.Make technical changes with respect to the title, citations, and exceptions to
public records requests (R.S. 44:4.1(B)).
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Insurance to the reengrossed
bill
1. Removes provisions that a pharmacy services administrative organization is not
responsible for activities within the purview of a pharmacy benefits manager.
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Prepared by Thomas L. Tyler. 2. Removes specific authority of commissioner to promulgate rules defining the
roles and responsibilities of pharmacy benefit managers and pharmacy services
administrative organizations.
3 Removes provisions regarding contractual agreements and the receipt and
payment of claims.
4. Removes provisions regarding reimbursement of fees.
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Prepared by Thomas L. Tyler.