HLS 24RS-923 REENGROSSED
2024 Regular Session
HOUSE BILL NO. 704
BY REPRESENTATIVES CHASSION, ADAMS, BAYHAM, CARPENTER,
DOMANGUE, FISHER, GREEN, KNOX, MARCELLE, MENA, NEWELL,
OWEN, STAGNI, WALTERS, AND YOUNG
PHARMACIES: Creates the pharmacy benefit managers quality incentive program
1 AN ACT
2To amend and reenact R.S. 22:1860.2(A)(introductory paragraph) and to enact R.S.
3 22:1657.2, relative to pharmacy benefit manager quality incentive pilot programs;
4 to provide for a quality incentive pilot program to be established by licensed
5 pharmacy benefit managers; to provide for legislative findings; to provide for
6 utilization of the expertise of the colleges of pharmacy; to provide for minimum
7 requirements of a program; to provide for reporting to the commissioner of
8 insurance; to provide for voluntary participation by pharmacies; to provide for
9 program parameters; to provide for a prohibition on certain fees; to provide for
10 definitions; to provide relative to certain pharmacy claims fees; to provide for an
11 effective date; to provide for a termination date; and to provide for related matters.
12Be it enacted by the Legislature of Louisiana:
13 Section 1. R.S. 22:1860.2(A)(introductory paragraph) is hereby amended and
14reenacted and R.S. 22:1657.2 is hereby enacted to read as follows:
15 §1657.2. Pharmacy benefit manager quality incentive pilot program
16 A. The legislature finds and declares all of the following:
17 (1) Louisiana residents continue to face health challenges according to the
18 2022 Louisiana Department of Health's Health Report Card which shows that
19 Louisiana ranks forty-second in the country for cardiovascular disease, forty-seventh
20 in percentage of adults with obesity, forty-sixth in percentage of adults with diabetes,
Page 1 of 8
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 24RS-923 REENGROSSED
HB NO. 704
1 forty-ninth in rate of low birthweight babies, forty-eighth for sexually transmitted
2 infections, forty-third for substance use disorder, and nearly ten percent of
3 Louisiana's adult population has asthma which results in costly emergency
4 department visits. These chronic diseases and conditions put a strain on the overall
5 wellness of Louisiana residents.
6 (2) The intent of the legislature is to improve the health outcomes of
7 Louisiana residents and one way to address these challenges is a quality incentive
8 pilot program, hereinafter referred to as "quality incentive program", established by
9 licensed pharmacy benefit managers with a focus on increasing patient awareness,
10 expanding pharmacy education, medication adherence, and cost avoidance.
11 (3) In conjunction with health insurance plans, pharmacy benefit managers
12 administer pharmacy benefit plans for Louisiana residents through a contracted
13 network of pharmacies throughout the state. Pharmacy benefit managers support
14 access to quality prescription drug coverage, which enables better health outcomes,
15 secures savings, and promotes competition.
16 (4) Local pharmacists perform direct patient care activities such as
17 counseling, medication management, condition monitoring, and preventative care
18 screenings.
19 (5) There is an opportunity to improve the health outcomes of Louisiana
20 residents served by pharmacy benefit managers and local pharmacies through
21 strengthening the existing relationship between pharmacy benefit managers and local
22 pharmacies with a focus on the best health outcomes for the patient. This can be
23 achieved by creating an affordable future for prescription drugs by promoting
24 pharmacy networks, full availability and use of electronic pharmacy benefit tools and
25 offerings, patient-focused pharmacy care, and advance use of real-world evidence
26 to protect patient safety.
27 (6) To meet these goals and achieve the desired results, the legislature shall
28 implement a Louisiana-specific quality incentive program that prioritizes patient
29 health and rewards pharmacists who participate.
Page 2 of 8
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 24RS-923 REENGROSSED
HB NO. 704
1 B.(1) Each pharmacy benefit manager licensed by the commissioner shall
2 develop a program in consultation with the plan sponsor to provide incentive
3 payments to eligible independent network pharmacies for meeting benchmarks or
4 complying with strategies aimed at improving the health of Louisiana residents
5 covered by the pharmacy benefit manager. The quality incentive program should
6 focus on the health concerns most affecting Louisiana residents and include but not
7 be limited to encouraging the use of new technology and obtaining education on best
8 practices.
9 (2) A pharmacy benefit manager may consult with the University of
10 Louisiana at Monroe College of Pharmacy and the Xavier College of Pharmacy to
11 design a quality incentive program, educate pharmacy students and pharmacists
12 about the value of electronic pharmacy benefit tools, and provide for other
13 educational components of the role of the pharmacist in patient healthcare.
14 (3) Incentive programs may be designed to reflect the unique needs of the
15 state as designated by each of the nine Louisiana Department of Health regions.
16 (4) Each pharmacy benefit manager shall create a toolkit for participating
17 independent network pharmacies that includes the option to display signage that the
18 pharmacy is a quality incentive program participant.
19 (5) A pharmacy benefit manager, in consultation with the plan sponsor, may
20 implement educational and training components into the quality incentive program
21 to educate pharmacists on best practices to reduce or eliminate adverse drug events
22 including but not limited to dispensing errors and drug interactions. In determining
23 success of any educational or training component included in the quality incentive
24 program, the pharmacy benefit manager may request necessary reporting from the
25 pharmacist to verify eligibility to receive the designated quality incentive payment
26 available pursuant to this Paragraph.
27 C.(1) On or before October 1, 2024, and no later than October first of each
28 year thereafter, each pharmacy benefit manager shall report to the commissioner the
29 details of its program including but not limited to the quality incentive criteria, how
Page 3 of 8
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 24RS-923 REENGROSSED
HB NO. 704
1 those criteria are anticipated to improve the quality of care for the individuals
2 covered by the pharmacy benefit manager, how costs will be reduced, the eligibility
3 criteria for participating independent network pharmacies, what efforts will be made
4 to invite independent network pharmacies to participate, the number of pharmacies
5 enrolled or planning to enroll in its quality incentive program, and the aggregate
6 amount of incentive payments expected to be made to the pharmacies participating
7 in the quality incentive program.
8 (2) Each pharmacy benefit manager shall implement the quality incentive
9 program as reported to the commissioner pursuant to Paragraph (1) of this
10 Subsection on January first of the following year.
11 D. On or before April 1, 2025, and no later than April first of each year
12 thereafter, each pharmacy benefit manager shall report to the commissioner the
13 results of its quality incentive criteria from the previous calendar year. The report
14 shall contain at a minimum an aggregate-level description of the impact of the
15 program on the health of Louisiana residents, the actual cost savings, the number of
16 pharmacies enrolled or planning to enroll in its quality incentive program, and the
17 amount of incentive payments actually made to pharmacies participating in the
18 quality incentive program. The pharmacy benefit manager shall not include any
19 personally identifiable information or any details concerning the health or treatment
20 of a particular individual.
21 E.(1)(a) The pharmacy benefit manager quality incentive program is strictly
22 voluntary and limited only to network pharmacies.
23 (b) An independent network pharmacy shall not be penalized for declining
24 to participate in a quality incentive program nor incur any charge, fee, or payment
25 reduction for its participation or nonparticipation in a quality incentive program.
26 (c) The opportunity to participate in a pharmacy benefit manager's quality
27 incentive program shall be separate and apart from the contract entered into between
28 the pharmacist and the pharmacy benefit manager to be in the pharmacy benefit
29 manager's network. The terms of participation including but not limited to
Page 4 of 8
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 24RS-923 REENGROSSED
HB NO. 704
1 incentives, outcomes, deliverables, and all expenses or obligations, if applicable, of
2 the pharmacy shall be fully disclosed by the pharmacy benefit manager prior to the
3 pharmacy agreeing to participate in the quality incentive program. Once a pharmacy
4 agrees to participate in a quality incentive program, terms of participation shall be
5 executed in a contract addendum or related contractual supplement. A pharmacy may
6 be in the pharmacy benefit manager's network and not participate in the quality
7 incentive program, but shall be in the network in order to be eligible to participate.
8 (d) Terms of reimbursement for the acquisition and dispensing of
9 prescription drugs are not part of the quality incentive program.
10 (e) Failure of a participating independent network pharmacy to meet the
11 terms of the quality incentive program may make it ineligible for incentive payments
12 and may make it ineligible to continue participating in the quality incentive program.
13 However, failure of the independent network pharmacy to meet the terms and
14 benchmarks of the quality incentive program shall not result in penalties imposed
15 upon the independent network pharmacy.
16 (f) The pharmacy benefit manager shall not use direct or indirect
17 remuneration or clawbacks as a penalty or means of implementing the terms agreed
18 upon with the pharmacy as participation in the quality incentive program.
19 (2) Implementation of the quality incentive program shall be considered a
20 proactive plan design component aimed at improving health outcomes with the
21 ultimate goal of reducing overall costs by creating a healthier population. In
22 conducting plan design, the pharmacy benefit manager shall advise the plan sponsor
23 on recommended incentive program components that have the greatest opportunity
24 to achieve savings and slow the customary rate of premium growth over a reasonable
25 amount of time in which improved health outcomes could realistically be achieved.
26 Any financial analysis conducted by a pharmacy benefit manager pursuant to this
27 Paragraph in order to recommend specific quality incentive payments to participating
28 pharmacists shall be in addition to regular review and analysis of appropriate
29 existing relationships with independent network pharmacies.
Page 5 of 8
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 24RS-923 REENGROSSED
HB NO. 704
1 (3) Nothing provided for in this Section shall be construed to expand the
2 scope of practice of a participating pharmacist.
3 F. For the purposes of this Section, "independent network pharmacy" means
4 a pharmacy operating within the state which meets all of the following criteria:
5 (1) Is a member of a pharmacy benefit manager's network.
6 (2) Is considered to be in good standing by the pharmacy benefit manager.
7 (3) Is under common ownership with not more than two other pharmacies.
8 G.(1) In accordance with the provisions of R.S. 22:1016, this Section does
9 not apply to a pharmacy benefit manager that is contracted with the Louisiana
10 Department of Health to provide pharmacy benefit manager services for the
11 Louisiana Medicaid Program or a pharmacy benefit manager that is a subcontractor
12 of a Medicaid managed care organization that is contracted with the Louisiana
13 Department of Health to provide managed care for the Louisiana Medicaid Program.
14 (2) On or before October 1, 2024, and no later than October first of each
15 year thereafter, a pharmacy benefit manager claiming an exemption pursuant to this
16 Subsection shall submit written notice to the commissioner stating that it does not
17 administer pharmacy benefit manager services for Louisiana residents other than
18 individuals enrolled in the Louisiana Medicaid Program.
19 (3) If a pharmacy benefit manager claims an exemption pursuant to this
20 Subsection and subsequently begins providing pharmacy benefit manager services
21 to Louisiana residents other than individuals enrolled in the Louisiana Medicaid
22 Program, it shall immediately begin complying with provisions of this Section.
23 H. The provisions of this Section shall terminate on January 1, 2028.
24 * * *
25 §1860.2. Certain pharmacy claims fees prohibited
26 A. A health insurance issuer or a pharmacy benefit manager shall not directly
27 or indirectly charge or hold a pharmacist or pharmacy responsible for any fee related
28 to a claim that is any of the following:
29 * * *
Page 6 of 8
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 24RS-923 REENGROSSED
HB NO. 704
1 Section 2. This Act shall become effective upon signature by the governor or, if not
2signed by the governor, upon expiration of the time for bills to become law without signature
3by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
4vetoed by the governor and subsequently approved by the legislature, this Act shall become
5effective on the day following such approval.
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 704 Reengrossed 2024 Regular Session Chassion
Abstract: Provides a quality incentive pilot program for pharmacy benefit managers.
Present law provides for the licensing of pharmacy benefit managers (PBMs) by the
commissioner of insurance (commissioner).
Proposed law (R.S. 22:1657.2) retains present law and requires each PBM licensed by the
commissioner to develop a quality incentive pilot program in consultation with a plan
sponsor to provide incentive payments to eligible independent network pharmacies for
meeting benchmarks or complying with strategies aimed at improving the health of La.
residents covered by the PBM.
Proposed law provides that the quality incentive pilot program should focus on the health
concerns most affecting La. residents, may be designed in consultation with La. colleges of
pharmacy, and may reflect the unique needs of the state as designated by each of the nine
La. Dept. of Health regions.
Proposed law requires a PBM to report to the commissioner, on or before Oct.1, 2024, the
details of its program and provides minimum reporting requirements. Further requires the
program to be implemented on the following Jan. 1, 2025.
Proposed law requires, on or before April 1st of the following year, a PBM to report to the
commissioner the results of its quality incentive criteria from the previous calendar year.
Proposed law further provides for the minimum content of the report.
Proposed law provides that the PBM quality incentive program is strictly voluntary and
prohibits an independent network pharmacy from incurring any penalty for participation or
nonparticipation.
Proposed law requires a PBM to disclose to a pharmacy all terms of a pharmacy's
participation, including but not limited to incentives and expenses, prior to a pharmacy
agreeing to participate. Further prohibits a PBM from using direct or indirect remuneration
as a penalty or means of implementing the terms agreed upon with the pharmacy regarding
participation.
Proposed law provides for additional parameters of the PBM quality incentive program,
including the use of education and training programs.
Page 7 of 8
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 24RS-923 REENGROSSED
HB NO. 704
Present law exempts Medicaid managed care organizations from certain provisions of the
La. Insurance Code. Proposed law retains present law and provides that Medicaid managed
care organization PBMs are exempt from proposed law.
Proposed law requires exempt PBMs to submit a notice of exemption to the commissioner
and provides that the PBM is no longer exempt if it renders services to La. residents who are
not enrolled in the Medicaid program.
Proposed law does not expand the scope of practice of a participating pharmacist.
Proposed law defines "independent network pharmacy" as a pharmacy operating within the
state which is a member of a PBM's network, considered to be in good standing by the PBM,
and under common ownership with not more than two other pharmacies.
Proposed law (R.S. 22:1657.2) terminates on Jan. 1, 2028.
Present law (R.S. 22:1860.2) prohibits the charge of certain pharmacy claim fees. Proposed
law modifies present law to authorize the charge of such pharmacy claim fees.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 22:1860.2(A)(intro. para.); Adds R.S. 22:1657.2)
Summary of Amendments Adopted by House
The House Floor Amendments to the engrossed bill:
1. Specify the quality incentive program of proposed law as a pilot program.
2. Prohibit a pharmacy from being penalized or incurring a financial penalty
regardless of participation in a quality incentive program.
3. Require a PBM to disclose to a pharmacy all terms of a pharmacy's participation,
including but not limited to incentives and expenses, prior to the pharmacy
agreeing to participate in a quality incentive program.
4. Prohibit a PBM from using direct or indirect remuneration or clawbacks as a
penalty or means of implementing the terms agreed upon with the pharmacy
regarding participation in a quality incentive program.
5. Terminate proposed law (R.S. 22:1657.2) on Jan. 1, 2028.
6. Modify present law (R.S. 22:1860.2) to authorize the charge of certain pharmacy
claim fees.
7. Make technical changes.
Page 8 of 8
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.