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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 3514 By: McEntire
COMMITTEE SUBSTITUTE
An Act relating to professions and occupations;
amending 59 O.S. 2021, Section s 357, 358 and 360,
which relate to pharmacy benefit plans; modifying
definitions; adding definition; modifying powers of
Oklahoma Insurance D epartment; modifying denial of
certain appeal; and providing an eff ective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 59 O.S. 2021, Section 357,
is amended to read as follows:
Section 357. As used in this act:
1. "Covered entity" mean s:
a. a nonprofit hospital or medical service organization,
insurer, health coverage plan or health maintenance
organization;
b. a health program administered by the state in the
capacity of provider of health coverage; or
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c. an employer, labor union, o r other entity organized in
the state that provides health co verage to covered
individuals who are employed or reside in the state.
This term does not include a health plan that provides coverage onl y
for accidental injury, specified disease, hospital in demnity,
disability income, or other limited benefit health i nsurance
policies and contracts that do not include prescription drug
coverage;
2. "Covered individual" means a member, participant, enroll ee,
contract holder or policy holder or beneficiary of a covered entity
who is provided health coverage by the cover ed entity. A covered
individual includes any dependent or other person provided health
coverage through a policy, contract or plan for a co vered
individual;
3. "Department" means the Oklahoma I nsurance Department;
4. "Maximum allowable cost" or "MAC" me ans the list of drug
products delineating the maximum per -unit reimbursement for
multiple-source prescription drugs, medical product or devi ce;
5. "Multisource drug product reimbursement" (reimb ursement)
means the total amount paid to a pharmacy inclusive of any reduction
in payment to the pharmacy, excluding prescription dispense fees;
6. "Pharmacy benefits management" means a service provi ded to
covered entities to facilitate the provision of prescription drug
benefits to covered individuals within the state, including
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negotiating pricing and other terms with drug manufacturers and
providers. Pharmacy benefits management may include any or all of
the following services:
a. claims processing, r etail network management and
payment of claims to pharmacies for prescription drugs
dispensed to covered individuals,
b. clinical formulary development and management
services,
c. rebate contracting an d administration,
d. certain patient compliance, therap eutic intervention
and generic substitution programs, or
e. disease management programs;
7. "Pharmacy benefits manager" or "PBM" means a person,
business or other entity that performs pharmacy benefit s management.
The term includes a person or entity act ing for a PBM in a
contractual or employment relationship in the performance of
pharmacy benefits management for a managed care company, nonprofit
hospital, medical service organization, insurance comp any, third-
party payor, or a health program administere d by an agency of this
state;
8. "Plan sponsor" means the em ployers, insurance companies,
unions and health maintenance organizations or any other entity
responsible for establishing, maintaining, or administering a health
benefit plan on behalf of covere d individuals; and
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9. "Provider" means a pharmacy licensed by the State Board of
Pharmacy, or an agent or representative of a pharmacy, including,
but not limited to, the pharmacy's contracting agent, which
dispenses prescription drugs or devices to cover ed individuals; and
10. "Retail pharmacy" or "pharmacy" means a pharmacy, as
defined in Section 353.1 of this title.
SECTION 2. AMENDATORY 59 O.S. 2021, Section 358, is
amended to read as follows:
Section 358. A. In order to provide pharmacy benefits
management or any of the services inc luded under the definition of
pharmacy benefits management in this state, a phar macy benefits
manager or any entity acting as one in a contrac tual or employment
relationship for a covered entity shall first obtain a license from
the Oklahoma Insurance Depa rtment, and the Department may charge a
fee for such licensure.
B. The Department shall establish, by regulation, licensure
procedures, required disclosures for pharmacy benefits managers
(PBMs) and other rules as may be necessary for carrying out and
enforcing the provisions of this act. The licensure procedures
shall, at a minimum, include the completion of an application form
that shall include the name and address of an agent for service of
process, the payment of a requisite fee, and evidence of the
procurement of a surety bond.
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C. The Department may subpoena witnesses and info rmation. Its
compliance officers may take and copy records fo r investigative use
and prosecutions. Nothing in this subsection shall limit the Office
of the Attorney General f rom using its investigative demand
authority to investigate and prosecute violat ions of the law.
D. The Department may issue a cease and desist order, place on
probation, suspend, revoke or refuse to issue or renew a license for
noncompliance with any of the provisions hereby established or with
the rules promulgated by the D epartment; for conduct likely to
mislead, deceive or defraud th e public or the Department; for unfair
or deceptive business practices or for nonpayment of a renewal fee
or fine. The Department may also issue or order a reprimand,
require restitution, and levy administrative fines not to exceed Ten
Thousand Dollars ($10,000.00) for each count of which a PBM has been
convicted in a Department hearing any pharmacy benefits manager has
violated any of the provisions hereby established or with the rules
promulgated by the Department .
SECTION 3. AMENDATORY 59 O.S. 2021, Section 360, is
amended to read as follows:
Section 360. A. The pharmacy benefits manager shall, wit h
respect to contracts between a pharmacy be nefits manager and a
provider, including a pharmacy service administrative organization :
1. Include in such contracts the specific sources utilized to
determine the maximum allowable cost (MAC) pricing of the ph armacy,
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update MAC pricing at least every se ven (7) calendar days, and
establish a process for providers to readily access the MAC list
specific to that provider;
2. In order to place a drug on the MAC list, ensure that the
drug is listed as "A" or "B" ra ted in the most recent version of the
FDA's Approved Drug Products with Therapeutic Equivalence
Evaluations, also known as the Orange Book , and the drug is
generally available for pur chase by pharmacies in the state from
national or regional wholesalers an d is not obsolete;
3. Ensure dispensing fee s are not included in the calculation
of MAC price reimbursement to pharmacy providers;
4. Provide a reasonable administration appeal s procedure to
allow a provider, a provider's representative and a pharmacy service
administrative organization to contest reimbursement amounts within
fourteen (14) business days of the final adjusted payment date . The
pharmacy benefits manager shall not pr event the pharmacy or the
pharmacy service administrative organization from filing
reimbursement appeals in an electron ic batch format. The pharmacy
benefits manager must respond to a provider , a provider's
representative and a pharmacy service administra tive organization
who have contested a reimbursement amount through this pr ocedure
within ten (10) business days . The pharmacy benefits manager must
respond in an electronic batch format to reimbursement appeals filed
in an electronic batch format . The pharmacy benefits manager shall
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not require a pharmacy or pharmacy services administrative
organization to log into a sy stem to upload individual claim appeals
or to download individual appeal responses . If a price update is
warranted, the pharmacy benefit s manager shall make the change in
the reimbursement amount, permit th e dispensing pharmacy to reverse
and rebill the claim in question, and make the reimbursement amount
change retroactive and effective for all contracted providers; and
5. If a below-cost reimbursement appeal is denied, the PBM
shall provide the reason for the denial, including the National Drug
Code number from and the specific national or regional wholesalers
where from which the drug is was available for purchase by the
dispensing pharmacy at a price below the PBM's reimbursement price
as of the date the adju dication of the claim was made. If the
pharmacy benefits manager cannot fails to provide a specific
national or regional wholesaler where from which the drug can be
purchased was available for purchase by the dispensing pharmacy at a
price below the pharm acy benefits manager's reimbursement price, the
pharmacy benefits manag er shall immediately adjust the reimbursement
amount, permit the di spensing pharmacy to reverse and rebill the
claim in question, and make the reimbursement amount adjustment
retroactive and effective for all contracted providers .
B. The pharmacy benefits manager shall not place a drug on a
MAC list, unless there are at least two therapeutically equivalent,
multiple-source drugs, generally available for purchase b y
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dispensing retail pharmacies from national or regional wholesale rs
which are listed as accre dited drug distributors on the National
Association of Boards of Ph armacy (NABP) website or other website as
recognized and approved by the State Board of Pharmacy.
C. The pharmacy benefits manager shall not require
accreditation or licensing of provider s, or any entity licensed or
regulated by the State Board of Pharma cy, other than by the State
Board of Pharmacy or federal government entity as a condition for
participation as a netwo rk provider.
D. A pharmacy or pharmacist may decline to provide the
pharmacist clinical or dispensing services to a patient or pharmacy
benefits manager if the pharmacy or pharmacist is to be pa id less
than the pharmacy's cost for providing the pharmacist clinical or
dispensing services.
E. The pharmacy benefits manager sha ll provide a dedicated
telephone number, email address and names of the personnel with
decision-making authority regarding M AC appeals and pricing .
SECTION 4. This act shall become effective November 1, 202 2.
58-2-10889 LRB 03/02/22