Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S715 Compare Versions

Only one version of the bill is available at this time.

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2	2	SENATE DOCKET, NO. 193 FILED ON: 1/12/2023
3	3	SENATE . . . . . . . . . . . . . . No. 715
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Bruce E. Tarr
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act to ensure access to prescription medications.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :Bruce E. TarrFirst Essex and Middlesex 1 of 7
16	16	SENATE DOCKET, NO. 193 FILED ON: 1/12/2023
17	17	SENATE . . . . . . . . . . . . . . No. 715
18	18	By Mr. Tarr, a petition (accompanied by bill, Senate, No. 715) of Bruce E. Tarr for legislation to
19	19	ensure access to prescription medications. Financial Services.
20	20	The Commonwealth of Massachusetts
21	21	_______________
22	22	In the One Hundred and Ninety-Third General Court
23	23	(2023-2024)
24	24	_______________
25	25	An Act to ensure access to prescription medications.
26	26	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
27	27	of the same, as follows:
28	28	1 SECTION 1. Chapter 176D is hereby amended by adding, after section3B, the following
29	29	2section:-
30	30	3 Section 3C. (a) For the purposes of this section the term "maximum allowable cost list"
31	31	4shall mean a list of drugs, medical products or devices, or both medical products and devices, for
32	32	5which a maximum allowable cost has been established by a pharmacy benefits manager or
33	33	6covered entity. The term "maximum allowable cost" shall mean the maximum amount that a
34	34	7pharmacy benefits manager or covered entity will reimburse a pharmacy for the cost of a drug or
35	35	8a medical product or device inclusive of all discounts when the claim is processed or taken
36	36	9retroactively
37	37	10 (b) Before a pharmacy benefits manager or covered entity may place a drug on a
38	38	11maximum allowable cost list the drug must be listed as "A" or "AB" rated in the most recent
39	39	12version of the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations, also 2 of 7
40	40	13known as the Orange Book, or has an "NR" or "NA" rating or a similar rating by a nationally
41	41	14recognized reference; and that there are at least two therapeutically equivalent, multiple source
42	42	15drugs, or at least one generic drug available from one manufacturer, available for purchase by
43	43	16network pharmacies from national or regional wholesalers.
44	44	17 (c) If a drug that has been placed on a maximum allowable cost list no longer meets the
45	45	18requirements of subsection (a), the drug shall be removed from the maximum allowable cost list
46	46	19by the pharmacy benefits manager or covered entity within 3 business days after the drug no
47	47	20longer meets the requirements of subsection (a).
48	48	21 (d) A pharmacy benefits manager or covered entity shall make available to each
49	49	22pharmacy with which the pharmacy benefits manager or covered entity has a contract and to
50	50	23each pharmacy included in a network of pharmacies served by a pharmacy services
51	51	24administrative organization with which the pharmacy benefits manager or covered entity has a
52	52	25contract, at the beginning of the term of a contract upon renewal of a contract, or upon request:
53	53	26 (1) The sources used to determine the maximum allowable costs for the drugs and
54	54	27medical products and devices on each maximum allowable cost list;
55	55	28 (2) Every maximum allowable cost for individual drugs used by that pharmacy benefits
56	56	29manager or covered entity for patients served by that contracted pharmacy; and
57	57	30 (3) Upon request, every maximum allowable cost list used by that pharmacy benefits
58	58	31manager or covered entity for patients served by that contracted pharmacy.
59	59	32 (e) A pharmacy benefits manager or covered entity shall: 3 of 7
60	60	33 (1) Ensure the maxim allowable cost (if used) or the ingredient cost (if not used) is equal
61	61	34to or greater than the pharmacies acquisition cost for all covered medications. A maximum
62	62	35allowable cost equal to or greater than the National Average Drug Acquisition Cost shall be
63	63	36deemed in compliance with the requirement to ensure it is greater than or equal to the pharmacies
64	64	37acquisition cost.
65	65	38 (2) Ensure the maximum allowable cost for non-affiliated pharmacies is equal to or
66	66	39greater than the maximum allowable cost to pharmacies affiliated with or owned by the
67	67	40pharmacy benefit manager.
68	68	41 (3) The pharmacy benefit manager shall update each maximum allowable cost list at least
69	69	42every 3 business days(4) Make the updated lists available to every pharmacy with which the
70	70	43pharmacy benefits manager or covered entity has a contract and to every pharmacy included in a
71	71	44network of pharmacies served by a pharmacy services administrative organization with which
72	72	45the pharmacy benefits manager or covered entity has a contract, in a readily accessible, secure
73	73	46and usable web-based format or other comparable format or process; and
74	74	47 (5) Utilize the updated maximum allowable costs to calculate the payments made to the
75	75	48contracted pharmacies within 2 business days.
76	76	49 (f) A pharmacy benefits manager or covered entity shall establish a clearly defined
77	77	50process through which a pharmacy may contest the cost for a particular drug or medical product
78	78	51or device.
79	79	52 (g) A pharmacy may base its appeal on one or more of the following: 4 of 7
80	80	53 (1) The ingredient cost established for a particular drug or medical product or device is
81	81	54below the cost at which the drug or medical product or device is generally available for purchase
82	82	55by Massachusetts licensed wholesalers currently operating in the state; or
83	83	56 (2) The pharmacy benefits manager or covered entity has placed a drug on the maximum
84	84	57allowable cost list without properly determining that the requirements of subsection (a).
85	85	58 (h) The pharmacy must file its appeal within seven business days of its submission of the
86	86	59initial claim for reimbursement for the drug or medical product or device. A Pharmacy Services
87	87	60Administrative Organization (PSAO) may appeal on behalf of a pharmacy or group of
88	88	61pharmacies. The pharmacy benefits manager or covered entity must make a final determination
89	89	62resolving the pharmacy's appeal within seven business days of the pharmacy benefits manager or
90	90	63covered entity's receipt of the appeal.
91	91	64 (i) If the final determination is a denial of the pharmacy's appeal, the pharmacy benefits
92	92	65manager or covered entity must state the reason for the denial and provide the national drug code
93	93	66of an equivalent drug that is generally available for purchase by pharmacies in this state from
94	94	67national or regional wholesalers licensed by the state at a price which is equal to or less than the
95	95	68cost for that drug.
96	96	69 (j) If a pharmacy's appeal is determined to be valid by the pharmacy benefits manager or
97	97	70covered entity, the pharmacy benefits manager or covered entity shall retroactively adjust the
98	98	71cost of the drug or medical product or device and reprocess all claims that were paid incorrectly.
99	99	72The adjustment shall be effective from the date the pharmacy's appeal was filed, and the
100	100	73pharmacy benefits manager or covered entity shall provide reimbursement for all reprocessed
101	101	74claims. 5 of 7
102	102	75 (k) Once a pharmacy's appeal is determined to be valid by the pharmacy benefits manager
103	103	76or covered entity, the pharmacy benefits manager or covered entity shall adjust the cost of the
104	104	77drug or medical product or device for all similar pharmacies in the network as determined by the
105	105	78pharmacy benefits manager within 3 business days.
106	106	79 (l) A pharmacy benefits manager or covered entity shall make available on its secure web
107	107	80site information about the appeals process, including, but not limited to, a telephone number or
108	108	81process that a pharmacy may use to submit cost appeals. The medical products and devices
109	109	82subject to the requirements of this part are limited to the medical products and devices included
110	110	83as a pharmacy benefit under the pharmacy benefits contract.
111	111	84 (m) A pharmacy shall not disclose to any third party the cost lists and any related
112	112	85information it receives from a pharmacy benefits manager or covered entity; provided, a
113	113	86pharmacy may share such lists and related information with a pharmacy services administrative
114	114	87organization or similar entity with which the pharmacy has a contract to provide administrative
115	115	88services for that pharmacy. If a pharmacy shares this information with a pharmacy services
116	116	89administrative organization or similar entity, that organization or entity shall not disclose the
117	117	90information to any third party.
118	118	91 (n) A pharmacy benefits manager or covered entity is prohibited from applying
119	119	92retroactive discounts including but not limited to Generic Effective Rate and Brand Effective
120	120	93Rate. All discounts must be applied when the claim is paid.
121	121	94 (o) A pharmacy benefits manager or covered entity shall include payment for covered
122	122	95medications in its explanation of benefits
123	123	96 SECTION 2. Chapter 118E Section 9B is hereby amended by adding:- 6 of 7
124	124	97 All MassHealth Managed Care Organizations and Accountable Care Organizations are
125	125	98required to reimburse pharmacies at the same rate as described in the MassHealth Pharmacy
126	126	99Provider Manual.
127	127	100 The Insurance Commissioner shall enforce this Act and shall promulgate regulations to
128	128	101enforce the provisions of this act. The commissioner may examine or audit the books and records
129	129	102of a pharmacy benefits manager providing claims processing services or other prescription drug
130	130	103or device services for a health benefit plan to determine if the pharmacy benefits manager is in
131	131	104compliance with this Act. The information or data acquired during an examination is:
132	132	105 (i) Considered proprietary and confidential; and
133	133	106 (ii) Not subject to the Freedom of Information Act of Massachusetts
134	134	107 (o) In any participation contracts between pharmacy benefits managers and pharmacists
135	135	108or pharmacies providing prescription drug coverage for health benefit plans, no pharmacy or
136	136	109pharmacist may be prohibited, restricted, or penalized in any way from disclosing to any covered
137	137	110person any healthcare information that the pharmacy or pharmacist deems appropriate regarding
138	138	111the nature of treatment, risks, or alternatives thereto, the availability of alternate therapies,
139	139	112consultations, or tests, the decision of utilization reviewers or similar persons to authorize or
140	140	113deny services, the process that is used to authorize or deny healthcare services or benefits, or
141	141	114information on financial incentives and structures used by the insurer.
142	142	115 (p) Further any such contract as stated above shall not prohibit a pharmacist or pharmacy
143	143	116from providing an insured individual information on the amount of the insured's cost share for
144	144	117such insured's prescription drug and the clinical efficacy of a more affordable alternative drug if
145	145	118one is available. Neither a pharmacy nor a pharmacist shall be penalized by a pharmacy benefits 7 of 7
146	146	119manager for disclosing such information to an insured or for selling to an insured a more
147	147	120affordable alternative if one is available.