HLS 22RS-994 ORIGINAL
2022 Regular Session
HOUSE BILL NO. 674
BY REPRESENTATIVE JORDAN
INSURANCE/HEALTH: Provides for the regulation of pharmacy services administrative
organizations
1 AN ACT
2To amend and reenact R.S. 22:1660.1, 1660.2, and 1660.9, relative to the Louisiana
3 Pharmacy Services Administrative Organization Licensing Act; to provide for
4 technical changes; and to provide for related matters.
5Be it enacted by the Legislature of Louisiana:
6 Section 1. R.S. 22:1660.1, 1660.2, and 1660.9 are hereby amended and reenacted
7to read as follows:
8 §1660.1. Short title; definitions
9 A. This Part may be known and cited as the "Louisiana Pharmacy Services
10 Administrative Organization Licensing Act".
11 B. As used in this Part, the following definitions apply:
12 (1) "Pharmacy services administrative organization" means an entity that
13 provides a contracted pharmacy with administrative, contracting, or payment
14 services relating to prescription drug benefits.
15 (2) "Pharmacy services administrative organization contract" means a
16 contractual agreement between a pharmacy services administrative organization and
17 a pharmacy under which a pharmacy services administrative organization agrees to
18 negotiate with pharmacy benefit managers or third-party payers on behalf of one or
19 more pharmacies.
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1 §1660.2. Licensing requirements; fees; penalties
2 A. No A person shall not act as, or offer to act as, or hold himself out to be
3 a pharmacy services administrative organization in this state without a valid license
4 as a pharmacy services administrative organization issued by the commissioner of
5 insurance. The commissioner may impose a fine of five hundred dollars per violation
6 against any person who acts as a pharmacy services administrative organization
7 without a valid license, and each day shall be considered a separate violation.
8 B. Applicants subject to the provisions of this Section shall pay a licensing
9 fee in an amount set forth in R.S. 22:821 and shall make an application to the
10 commissioner upon a form to be furnished by the commissioner. The application
11 shall include or be accompanied by the following information and documents:
12 (1) All basic organizational documents of the pharmacy services
13 administrative organization, including any articles of incorporation, articles of
14 association, partnership agreements, trade name certificates, trust agreements,
15 shareholders' agreements, and other applicable documents, and all amendments to
16 such documents.
17 (2) The bylaws, rules, regulations, or similar documents regulating the
18 internal affairs of the pharmacy services administrative organization.
19 (3) The names, addresses, official positions, and professional qualifications
20 of the individuals who are responsible for the conduct of affairs of the pharmacy
21 services administrative organization, including all members of the board of directors,
22 board of trustees, executive committee or other governing board or committee, the
23 principal officers in the case of a corporation or the partners or members in the case
24 of a partnership or association, shareholders holding directly or indirectly ten percent
25 or more of the voting securities of the pharmacy services administrative
26 organization, and any other person who exercises control or influence over the affairs
27 of the pharmacy services administrative organization.
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1 (4) An affidavit signed by the president or other authorized officer stating
2 that the pharmacy services administrative organization has its latest financial
3 statement available for inspection by the commissioner.
4 (5) Summary information concerning its business organization and
5 employees sufficient to fulfill the requirements of this Part.
6 (6) Such other pertinent information as may be required by the commissioner.
7 C. Upon request by the commissioner, the applicant shall make available for
8 inspection by the commissioner copies of contracts with pharmacists, pharmacies,
9 pharmacy benefit managers, or other persons utilizing the services of the pharmacy
10 services administrative organization in order to determine qualification for licensure.
11 D. The commissioner may refuse to issue a license if the commissioner
12 determines that the pharmacy services administrative organization, or any individual
13 responsible for the conduct of affairs of the pharmacy services administrative
14 organization as defined in this Part, is not competent, trustworthy, financially
15 responsible or of good personal and business reputation, or has had an insurance or
16 a pharmacy services administrative organization license denied or revoked for cause
17 by any state.
18 E. A license issued pursuant to this Section shall remain valid, unless
19 surrendered, suspended, or revoked by the commissioner, as long as the pharmacy
20 services administrative organization continues in business in this state and remains
21 in compliance with this Part.
22 F. A pharmacy services administrative organization is not required to hold
23 a license as a pharmacy services administrative organization in this state if the
24 pharmacy services administrative organization meets both of the following
25 conditions:
26 (1) The pharmacy services administrative organization has its principal place
27 of business in another state.
28 (2) The pharmacy services administrative organization is not soliciting
29 business as a pharmacy services administrative organization in this state.
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1 G. On an annual basis, a licensed pharmacy services administrative
2 organization shall notify the commissioner if there is any material change in fact or
3 circumstance affecting its qualification for a license in this state. The notice shall
4 include any documentation as the commissioner may require upon a form to be
5 furnished by the commissioner.
6 * * *
7 §1660.9. Duties and responsibilities; nonimposition of liability; rulemaking authority
8 A. A pharmacy services administrative organization that contracts with a
9 pharmacy to perform any activity related to prescription drug benefits or to act as the
10 pharmacy's agent is obligated to that pharmacy for the duties of care, competence,
11 good faith and fair dealing, and loyalty.
12 B. A pharmacy services administrative organization is not responsible for
13 any of the activities that are solely within the purview of a pharmacy benefits benefit
14 manager.
15 C. The commissioner of insurance shall promulgate rules that define the
16 roles and responsibilities solely within the purview of both of the following:
17 (1) Pharmacy benefits benefit managers.
18 (2) Pharmacy services administrative organizations.
19 D. A pharmacy services administrative organization shall notify the
20 contracted pharmacy in writing of any activity, policy, or practice that presents a
21 conflict of interest that interferes with the duties imposed by this Section.
22 E. A pharmacy services administrative organization shall not engage in any
23 acts, methods, or practices prohibited by Part IV of Chapter 7 of this Title.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 674 Original 2022 Regular Session Jordan
Abstract: Modifies the Louisiana Pharmacy Services Administrative Organization
Licensing Act.
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Present law provides for the licensing and regulation of pharmacy services administrative
organizations. Provides for definitions, fees, filing requirements, penalties, and authorized
examinations by the commissioner. Proposed law provides for technical changes and
otherwise retains present law.
(Amends R.S. 22:1660.1, 1660.2, and 1660.9)
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