EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0382*
HOUSE BILL 382
J5 EMERGENCY BILL 3lr0477
CF SB 895
By: Delegate Kipke Delegates Kipke, Alston, Bagnall, Bhandari, Chisholm,
Cullison, Guzzone, Hill, Hutchinson, S. Johnson, Kaiser, Kerr, R. Lewis,
Lopez, Martinez, M. Morgan, Pena–Melnyk, Reilly, Rosenberg, Szeliga,
Taveras, White, and Woods
Introduced and read first time: January 26, 2023
Assigned to: Health and Government Operations
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 5, 2023
CHAPTER ______
AN ACT concerning 1
Pharmacy Benefits Administration – Maryland Medical Assistance Program and 2
Pharmacy Benefits Managers 3
Maryland Department of Health and Prescription Drug Affordability Board – 4
Managed Care Organizations and Prescription Drug Claims – Study 5
FOR the purpose of altering the reimbursement levels for drug products that the Maryland 6
Medical Assistance Program is required to establish and that pharmacy benefits 7
managers that contract with a pharmacy on behalf of a managed care organization 8
are required to reimburse the pharmacy; altering the definition of “purchaser” for 9
purposes of certain provisions of law regulating pharmacy benefits managers to 10
include certain insurers, nonprofit health services plans, and health maintenance 11
organizations requiring the Maryland Department of Health and the Prescription 12
Drug Affordability Board jointly to study certain information regarding the payment 13
of prescription drug claims under the Maryland Medical Assistance Program during 14
certain calendar years and how to address certain inconsistencies; and generally 15
relating to pharmacy benefits administration managed care organizations and the 16
payment of prescription drug claims. 17
BY repealing and reenacting, with amendments, 18
Article – Health – General 19
Section 15–118(b) 20
Annotated Code of Maryland 21 2 HOUSE BILL 382
(2019 Replacement Volume and 2022 Supplement) 1
BY adding to 2
Article – Health – General 3
Section 15–118(f) 4
Annotated Code of Maryland 5
(2019 Replacement Volume and 2022 Supplement) 6
BY repealing and reenacting, with amendments, 7
Article – Insurance 8
Section 15–1601(s) 9
Annotated Code of Maryland 10
(2017 Replacement Volume and 2022 Supplement) 11
BY adding to 12
Article – Insurance 13
Section 15–1632 14
Annotated Code of Maryland 15
(2017 Replacement Volume and 2022 Supplement) 16
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That the Laws of Maryland read as follows: 18
Article – Health – General 19
15–118. 20
(b) (1) [Except] SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION A ND 21
EXCEPT as provided under paragraph [(2)] (3) of this subsection, the Program shall 22
establish [maximum] reimbursement levels for the drug products for which there is a 23
generic equivalent authorized under § 12–504 of the Health Occupations Article[, based on 24
the cost of the generic product]. 25
(2) EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS SUBSECTION , 26
MINIMUM REIMBURSEMEN T LEVELS ESTABLISHED UNDER PARAGRAPH (1) OF THIS 27
SUBSECTION SHALL BE AT LEAST EQUAL TO THE NATIONAL AVERAGE DRUG 28
ACQUISITION COST OF THE GENERIC P RODUCT PLUS THE 29
FEE–FOR–SERVICE PROFESSIONAL DISPENSING FEE DETER MINED BY THE 30
DEPARTMENT IN ACCORDA NCE WITH THE MOST RE CENT IN –STATE 31
COST–OF–DISPENSING SURVEY . 32
[(2)] (3) [If] EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS 33
SUBSECTION, IF a prescriber directs a specific brand name drug, the reimbursement level 34
shall be based on the [cost] NATIONAL AVERAGE DRUG ACQUISITION COST of the 35
brand name product PLUS THE FEE–FOR–SERVICE PROFESS IONAL DISPENSING FEE 36 HOUSE BILL 382 3
DETERMINED BY THE DEPARTMENT IN ACCORDA NCE WITH THE MOST RE CENT 1
IN–STATE COST–OF–DISPENSING SURVEY . 2
(4) PARAGRAPHS (2) AND (3) OF THIS SUBSECTION D O NOT APPLY TO: 3
(I) A PHARMACY OWNED BY , OR UNDER THE SAME CO RPORATE 4
AFFILIATION, AS A PHARMACY BENEFI TS MANAGER; OR 5
(II) A MAIL ORDER PHARMACY . 6
(F) THE PROVISIONS OF § 15–1632 OF THE INSURANCE ARTICLE APPLY TO 7
A MANAGED CARE ORGAN IZATION THAT USES A PHARMACY BENEFITS MA NAGER TO 8
MANAGE PRESCRIPTION DRUG COVERAGE BENEFI TS ON BEHALF OF THE MANAGE D 9
CARE ORGANIZATION . 10
Article – Insurance 11
15–1601. 12
(s) (1) “Purchaser” means a person that offers a plan or program in the State, 13
including the State Employee and Retiree Health and Welfare Benefits Program, AN 14
INSURER, A NONPROFIT H EALTH SERVICE PLAN , OR A HEALTH MAINTENA NCE 15
ORGANIZATION , that: 16
[(1)] (I) provides prescription drug coverage or benefits in the State; and 17
[(2)] (II) enters into an agreement with a pharmacy benefits manager for 18
the provision of pharmacy benefits management services. 19
(2) “PURCHASER” DOES NOT INCLUDE A N ONPROFIT HEALTH 20
MAINTENANCE ORGANIZA TION THAT: 21
(I) OPERATES AS A GROUP MODEL; 22
(II) PROVIDES SERVICES SO LELY TO A MEMBER OR PATIENT OF 23
THE NONPROFIT HEALTH MAINTENANCE ORGANIZA TION; AND 24
(III) FURNISHES SERVICES T HROUGH THE INTERNAL PHARMACY 25
OPERATIONS OF THE NO NPROFIT HEALTH MAINT ENANCE ORGANIZATION . 26
15–1632. 27
A PHARMACY BENEFITS MA NAGER THAT CONTRACTS WITH A PHARMACY ON 28
BEHALF OF A MANAGED CARE ORGANIZATION , AS DEFINED IN § 15–101 OF THE 29
HEALTH – GENERAL ARTICLE, SHALL REIMBURSE THE PHARMACY AN AMOUNT 30 4 HOUSE BILL 382
THAT IS AT LEAST EQU AL TO THE NATIONAL AVERAGE DRUG ACQUISITION COST 1
PLUS THE FEE–FOR–SERVICE PROFESSIONAL DISPENSING FEE DETER MINED BY THE 2
MARYLAND DEPARTMENT OF HEALTH FOR THE MARYLAND MEDICAL ASSISTANCE 3
PROGRAM IN ACCORDANCE WITH THE MOST RECENT IN–STATE 4
COST–OF–DISPENSING SURVEY . 5
(a) The Maryland Department of Health and the Prescription Drug Affordability 6
Board jointly shall study: 7
(1) (i) the total amount the managed care organizations in the State 8
paid pharmacies for prescription drug claims in calendar years 2021 and 2022; and 9
(ii) what the total amount paid to pharmacies would have been, in 10
calendar years 2021 and 2022, if the prescription drug claims had been reimbursed at the 11
Maryland Medical Assistance Program fee–for–service rates; and 12
(2) how to best address the inconsistency in the amounts studied under 13
item (1) of this subsection by: 14
(i) considering the total cost to the State; and 15
(ii) recommending a methodology for determining the most accurate 16
ingredient cost of a drug and an appropriate dispensing fee. 17
(b) On or before October 31, 2023, the Maryland Department of Health and the 18
Prescription Drug Affordability Board jointly shall report its findings to the Maryland 19
Medicaid Administration and, in accordance with § 2–1257 of the State Government 20
Article, the Senate Budget and Taxation Committee, the Senate Finance Committee, the 21
House Appropriations Committee, and the House Health and Government Operat ions 22
Committee. 23
SECTION 2. AND BE IT FURTHER ENACTED, That this Act is an emergency 24
measure, is necessary for the immediate preservation of the public health or safety, has 25
been passed by a yea and nay vote supported by three–fifths of all the members elected to 26
each of the two Houses of the General Assembly, and shall take effect from the date it is 27
enacted. 28