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STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
CONFERENCE COMMITTEE SUBSTITUTE
FOR ENGROSSED
SENATE BILL 737 By: McCortney of the Senate
and
McEntire and Phillips of
the House
CONFERENCE COMMITTEE SUBSTITUTE
An Act relating to pharmacy benefits management;
amending Section 3, Chapter 426, O.S.L. 2019 (3 6 O.S.
Supp. 2020, Section 6960), which relates to
definitions; adding defin ition of provider and spread
pricing; deleting definition; amending Section 5,
Chapter 426, O.S.L. 2019 (36 O.S. Supp. 2020, Section
6962), which relates to compliance review; updating
reference; adding prohibited activities; adding
duties of pharmacy benefits managers; authorizing
Commissioner to take certain actions o n PBM licenses
for certain violations; authorizing fine for
violation of certain acts; authorizing Insurance
Commissioner to enforce Patient ’s Right to Pharmacy
Choice Act and investigate violations of certain
acts; specifying that operating without a PBM license
is a violation of Patient’s Right to Pharmacy Choice
Act; specifying certain hearings be conducted
pursuant to Administrative Procedures Act;
establishing procedures for certain hearings;
authorizing full stenographic record of hearing
proceedings in certain circumstances ; providing for
payment of certain costs and fees; authorizing appeal
from certain final order of Commissioner ; authorizing
Commissioner to require certain reporting from PBMs
in certain circumstances; providing for codification;
and declaring an emergency .
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BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 3, Chapter 426, O.S.L.
2019 (36 O.S. Supp. 2020, Section 6960), is amended to read as
follows:
Section 6960. For purposes of the Patient’s Right to Pharmacy
Choice Act:
1. “Health insurer” means any corporation, association, benefit
society, exchange, partnership or individual licensed by the
Oklahoma Insurance Code;
2. “Health insurer payor” means a health insurance company,
health maintenance organization, union, hospital and medical
services organization or any entity providing or administering a
self-funded health benefit plan;
3. “Mail-order pharmacy” means a pharmacy licensed by this
state that primarily dispenses and delivers c overed drugs via common
carrier;
3. 4. “Pharmacy benefits manager ” or “PBM” means a person that
performs pharmacy benefits management and any other person acting
for such person under a contractual or employment rel ationship in
the performance of pharmacy benefits management for a managed -care
company, nonprofit hospital, medical service organization, insurance
company, third-party payor or a health program administered by a
department of this state;
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4. “Pharmacy and therapeutics committee” or “P&T committee”
means a committee at a hospital or a health insurance plan that
decides which drugs will appear on that entity ’s drug formulary
5. “Provider” means a pharmacy, as defined in Section 353.1 of
Title 59 of the Oklahoma Statutes or an agent or representat ive of a
pharmacy;
5. 6. “Retail pharmacy network” means retail pharmacy providers
contracted with a PBM in which the pharmacy primarily fills and
sells prescriptions via a retail, storefront location;
6. 7. “Rural service area” means a five-digit ZIP code in which
the population density is less t han one thousand (1,000) individuals
per square mile;
7. 8. “Spread pricing” means a prescription drug pricing model
utilized by a pharmacy benefits manager in which the PBM charges a
health benefit plan a contr acted price for prescription drugs that
differs from the amount t he PBM directly or indirectly pays the
pharmacy or pharmacist for providing pharmacy services;
9. “Suburban service area ” means a five-digit ZIP code in which
the population density is betwe en one thousand (1,000) and three
thousand (3,000) individuals pe r square mile; and
9. 10. “Urban service area” means a five-digit ZIP code in
which the population density is greater than three thousand (3,000)
individuals per square mile.
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SECTION 2. AMENDATORY Section 5, Chapter 426, O.S.L.
2019 (36 O.S. Supp. 2020, Section 6962), is amended to read as
follows:
Section 6962. A. The Oklahoma Insurance Department shall
review and approve retail pharmacy network a ccess for all pharmacy
benefits managers (PBMs) to ensure compliance with Section 4 of this
act 6961 of this title.
B. A PBM, or an agent of a PBM, shall n ot:
1. Cause or knowingly permit the use of advertisement,
promotion, solicitation, representation, proposal or offer that is
untrue, deceptive or misleading;
2. Charge a pharmacist or pharmacy a fee related to the
adjudication of a claim , including without limitation a fee for:
a. the submission of a claim,
b. enrollment or participation in a retail p harmacy
network, or
c. the development or management of claims processing
services or claims payment services related to
participation in a retail pharmacy network;
3. Reimburse a pharmacy or pharmacist in the state an amount
less than the amount that the PBM reimburses a pharmacy owned by or
under common ownership with a PBM for provid ing the same covered
services. The reimbursement amount paid to the phar macy shall be
equal to the reimbursement amount calculated on a per -unit basis
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using the same generi c product identifier or generic code number
paid to the PBM-owned or PBM-affiliated pharmacy;
4. Deny a pharmacy provider the opportunity to participate in
any pharmacy network at preferred participation status if the
pharmacy provider is willing to accept the terms and c onditions that
the PBM has established f or other pharmacies providers as a
condition of preferred network participation status;
5. Deny, limit or terminate a pharmacy’s provider’s contract
based on employment status of any employee who has an active licen se
to dispense, despite probation status, with the State Boar d of
Pharmacy;
6. Retroactively deny or red uce reimbursement for a covered
service claim after returning a paid clai m response as part of the
adjudication of the claim, unless:
a. the original claim was submitted fraudulently, or
b. to correct errors iden tified in an audit, so long as
the audit was conducted in compliance with Sections
356.2 and 356.3 of Title 59 of the Oklahoma Statutes;
or
7. Fail to make any payment due to a pharmacy or pharm acist for
covered services properly rendered in the event a P BM terminates a
pharmacy or pharmacist provider from a pharmacy benefits manager
network;
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8. Conduct or practice spread pricing , as defined in Section 1
of this act, in this state ; or
9. Charge a pharmacist or pharmacy a fee related to
participation in a retail pharmacy network including but not limited
to the following:
a. an application fee,
b. an enrollment or participation fee ,
c. a credentialing or re -credentialing fee,
d. a change of ownership fee, or
e. a fee for the development or management of claims
processing services or claims payment servi ces.
C. The prohibitions under this sect ion shall apply to contracts
between pharmacy benefits managers and pharmacists or pharm acies
providers for participation in retail pharmacy networks.
1. A PBM contract shall:
a. not restrict, directly or indirectly, any pharmacy
that dispenses a prescription drug from informing, or
penalize such pharmacy fo r informing, an individual of
any differential between the individual’s out-of-
pocket cost or coverage with respect to acquisition of
the drug and the amount an individual woul d pay to
purchase the drug directly, and
b. ensure that any entity that provides pharmacy benefits
management services under a contract with any such
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health plan or health insurance coverage does not,
with respect to such plan or coverage, restrict,
directly or indirectly, a pharmacy that di spenses a
prescription drug from informing, or penalize such
pharmacy for informing, a c overed individual of any
differential between the individual ’s out-of-pocket
cost under the plan or coverage with respect to
acquisition of the drug and the amount an i ndividual
would pay for acquisition of the d rug without using
any health plan or health insurance coverage.
2. A pharmacy benefits manager ’s contract with a participating
pharmacist or pharmacy provider shall not prohibit, restrict or
limit disclosure of informati on to the Insurance Commissioner, law
enforcement or state and federal governmental of ficials
investigating or examining a complaint or conducting a review of a
pharmacy benefits manager ’s compliance with the re quirements under
the Patient’s Right to Pharmacy Choice Act.
3. D. A pharmacy benefits m anager shall establish:
1. Establish and maintain an electronic claim inquiry
processing system using the National Council for Prescription Drug
Programs’ current standards to communicate information to pharmacies
submitting claim inquiries;
2. Fully disclose to insurers, self-funded employers, unions or
other PBM clients the existence of the respective aggregate
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prescription drug discounts, rebates received from drug
manufacturers and pharmacy audit recoupment s;
3. Provide the Insurance Commissioner, insurers, self-funded
employer plans and unions unrestricted audit rights of and access to
the respective PBM pharmaceutical manufacturer and provider
contracts, plan utilization data, plan pricing dat a, pharmacy
utilization data and pharmacy pricing data ;
4. Maintain, for no less than three (3) years, documentation of
all network development activities including but not limited to
contract negotiations and any denials to providers to join networks.
This documentation shall be made available to the Comm issioner upon
request;
5. Report to the Commissioner, on a quarterly basis for each
health insurer payor, on the following information:
a. the aggregate amount of rebates received by the PBM,
b. the aggregate amount of rebates distributed to the
appropriate health insurer payor,
c. the aggregate amount of rebates passed on to the
enrollees of each health insurer payor at the point of
sale that reduced the applicable deductible,
copayment, coinsure or other cost sharing amount of
the enrollee,
d. the individual and aggregat e amount paid by the health
insurer payor to the PBM for pharmacy services
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itemized by pharmacy , drug product and service
provided, and
e. the individual and aggrega te amount a PBM paid a
provider for pharmacy services itemized by pharmacy ,
drug product and service provided.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 6966.1 of Title 36, unless there
is created a duplicati on in numbering, reads as follows:
A. The Insurance Commissioner may censure, suspend, revoke or
refuse to issue or renew a license of or levy a civil penalty
against any person lice nsed under the insurance laws of this state
for any violation of the Pati ent’s Right to Pharmacy Choice Act,
Section 6958 et seq. of Title 6 of the Oklahoma Statutes.
B. 1. If the Commissioner finds, after notice and opportunity
for hearing, that a pharm acy benefits manager (PBM) violated one or
more provisions of the Patient’s Right to Pharmacy Choice Act , the
Pharmacy Audit Integrity Act or the provisions of Sections 357
through 360 of Title 59 of the Oklahoma Statues, the PBM may be
censured, his or her license may be suspended or revoked and a
penalty or remedy authorized by this act may be imposed .
2. In addition to or in lieu of any censure, suspension o r
revocation of a license, a PBM may be subject to a civil fine of not
less than One Hundred Doll ars ($100.00) and not greater than Ten
Thousand Dollars ($10,000.00) for each violation of the provisions
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of the Patient’s Right to Pharmacy Choice Act, the Pharmacy Audit
Integrity Act or the provisions of Sections 357 through 360 of Title
59 of the Oklahoma Statues, following notice and an opportunity f or
a hearing.
C. Notwithstanding whether the license of a PBM has been
issued, suspended, revoked, surrendered or lap sed by operation of
law, the Commissioner is hereby authorized to enforce the provisions
of the Patient’s Right to Pharmacy Choice Act and impose any penalty
or remedy authorized under th e Act against a PBM und er investigation
for or charged with a violation of the Patient’s Right to Pharmacy
Choice Act, the Pharmacy Audit Integrity Act, the provisions of
Sections 357 through 360 of Title 59 of the Oklahoma Statue s or any
provision of the insurance laws of this state .
D. Each day that a PBM conducts busine ss in this state without
a license from the Insurance Department shall be deemed a violation
of the Patient’s Right to Pharmacy Choice A ct.
E. 1. All hearings conducted by the Insura nce Department
pursuant to this section shall be public and held in acco rdance with
the Administrative Procedures Act.
2. Hearings shall be held at the office of the Insurance
Commissioner or any other place the Commissioner may dee m
convenient.
3. The Commissioner, upon written request from a PB M affected
by the hearing, shall cause a full stenographic record of the
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proceedings to be made by a competent court reporter. This record
shall be at the expense of the PBM.
4. The ordinary fees and costs of the hearing examiner
appointed pursuant to Se ction 319 of Title 36 of the Oklahoma
Statutes may be assessed by the hearing examiner against the
respondent unless the respondent is the prevailing party.
F. Any PBM whose license has bee n censured, suspended, revoked
or denied renewal or who has had a fine levied against him or he r
shall have the right of appeal from the final order of the Insurance
Commissioner, pursuant to Section 318 et seq. of Title 75 of t he
Oklahoma Statutes.
G. If the Insurance Commissioner determines, based upon an
investigation of complaints, that a PBM h as engaged in violations of
the provisions of the Patient’s Right to Pharmacy Choice Act with
such frequency as to indicate a general business practice, and that
the PBM should be subjected to closer supervision with respect to
those practices, the Commiss ioner may require the PBM to file a
report at any periodic interval the Commissioner dee ms necessary.
SECTION 4. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
58-1-2211 CB 5/20/2021 2:16:44 PM