Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB737 Compare Versions

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Version 2 (New)

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3		-	An Act
4		-	ENROLLED SENATE
5		-	BILL NO. 737 By: McCortney, Taylor, Rader,
6		-	Standridge, Pederson,
7		-	Burns, Kidd, Murdock,
8		-	Garvin, Rogers, and Jech of
9		-	the Senate
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	27	+
	28	+	STATE OF OKLAHOMA
	29	+
	30	+	1st Session of the 58th Legislature (2021)
	31	+
	32	+	CONFERENCE COMMITTEE SUBSTITUTE
	33	+	FOR ENGROSSED
	34	+	SENATE BILL 737 By: McCortney of the Senate
10	35
11	36		and
12	37
13		-	McEntire~~, Phillips,~~ and
14		-	~~Randleman of~~ the House
	38	+	McEntire and Phillips of
	39	+	the House
15	40
16	41
17	42
18	43
	44	+	CONFERENCE COMMITTEE SUBSTITUTE
	45	+
19	46		An Act relating to pharmacy benefits management;
20		-	amending 36 O.S. 2021, Section 6960, which relates to
	47	+	amending Section 3, Chapter 426, O.S.L. 2019 (3 6 O.S.
	48	+	Supp. 2020, Section 6960), which relates to
21	49		definitions; adding defin ition of provider and spread
22		-	pricing; deleting definition; amending 36 O.S. 202 1,
23		-	Section 6962, which relates to compliance review;
24		-	updating reference; addi ng prohibited activities ;
25		-	adding duties of pharmacy benefits managers;
26		-	authorizing Commissioner to take certain actions on
27		-	PBM licenses for certain violations; authorizing fine
28		-	for violation of certain acts; authorizing Insurance
	50	+	pricing; deleting definition; amending Section 5,
	51	+	Chapter 426, O.S.L. 2019 (36 O.S. Supp. 2020, Section
	52	+	6962), which relates to compliance review; updating
	53	+	reference; adding prohibited activities; adding
	54	+	duties of pharmacy benefits managers; authorizing
	55	+	Commissioner to take certain actions o n PBM licenses
	56	+	for certain violations; authorizing fine for
	57	+	violation of certain acts; authorizing Insurance
29	58		Commissioner to enforce Patient ’s Right to Pharmacy
30	59		Choice Act and investigate violations of certain
31	60		acts; specifying that operating without a PBM license
32	61		is a violation of Patient’s Right to Pharmacy Choice
33	62		Act; specifying certain hearings be conducted
34	63		pursuant to Administrative Procedures Act;
35	64		establishing procedures for certain hearings;
36	65		authorizing full stenographic record of hearing
37	66		proceedings in certain circumstances ; providing for
38	67		payment of certain costs and fees; authorizing appeal
39	68		from certain final order of Commissioner ; authorizing
40	69		Commissioner to require certain reporting from PBMs
41	70		in certain circumstances; providing for codification;
42	71		and declaring an emergency .
43	72
44	73
45	74
46	75
47		-	ENR. S. B. NO. 737 Page 2
48		-
49		-	SUBJECT: Pharmacy benefits management
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51	101		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
52		-
53		-	SECTION 1. AMENDATORY 36 O.S. 202 1, Section 6960, is
54		-	amended to read as follows:
55		-
	102	+	SECTION 1. AMENDATORY Section 3, Chapter 426, O.S.L.
	103	+	2019 (36 O.S. Supp. 2020, Section 6960), is amended to read as
	104	+	follows:
56	105		Section 6960. For purposes of the Patient’s Right to Pharmacy
57	106		Choice Act:
58		-
59	107		1. “Health insurer” means any corporation, association, benefit
60	108		society, exchange, partnership or individual licensed by the
61	109		Oklahoma Insurance Code;
62		-
63	110		2. “Health insurer payor” means a health insurance company,
64	111		health maintenance organization, union, hospital and medical
65	112		services organization or any entity providing or administering a
66	113		self-funded health benefit plan;
67		-
68	114		3. “Mail-order pharmacy” means a pharmacy licensed by this
69	115		state that primarily dispenses and delivers c overed drugs via common
70	116		carrier;
71		-
72	117		3. 4. “Pharmacy benefits manager ” or “PBM” means a person that
73	118		performs pharmacy benefits management and any other person acting
74	119		for such person under a contractual or employment rel ationship in
75	120		the performance of pharmacy benefits management for a managed -care
76	121		company, nonprofit hospital, medical service organization, insurance
77	122		company, third-party payor or a health program administered by a
78	123		department of this state;
79	124
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80	150		4. “Pharmacy and therapeutics committee” or “P&T committee”
81	151		means a committee at a hospital or a health insurance plan that
82	152		decides which drugs will appear on that entity ’s drug formulary
83		-
84	153		5. “Provider” means a pharmacy, as defined in Section 353.1 of
85	154		Title 59 of the Oklahoma Statutes or an agent or representat ive of a
86	155		pharmacy;
87		-
88		-
89		-	ENR. S. B. NO. 737 Page 3
90	156		5. 6. “Retail pharmacy network” means retail pharmacy providers
91	157		contracted with a PBM in which the pharmacy primarily fills and
92	158		sells prescriptions via a retail, storefront location;
93		-
94	159		6. 7. “Rural service area” means a five-digit ZIP code in which
95	160		the population density is less t han one thousand (1,000) individuals
96	161		per square mile;
97		-
98	162		7. 8. “Spread pricing” means a prescription drug pricing model
99	163		utilized by a pharmacy benefits manager in which the PBM charges a
100	164		health benefit plan a contr acted price for prescription drugs that
101	165		differs from the amount t he PBM directly or indirectly pays the
102	166		pharmacy or pharmacist for providing pharmacy services;
103		-
104		-	8. 9. “Suburban service area” means a five -digit ZIP code in
105		-	which the population density is between one thousand (1,000) and
106		-	three thousand (3,000) individuals per square mile; and
107		-
	167	+	9. “Suburban service area ” means a five-digit ZIP code in which
	168	+	the population density is betwe en one thousand (1,000) and three
	169	+	thousand (3,000) individuals pe r square mile; and
108	170		9. 10. “Urban service area” means a five-digit ZIP code in
109	171		which the population density is greater than three thousand (3,000)
110	172		individuals per square mile.
111	173
112		-	SECTION 2. AMENDATORY 36 O.S. 202 1, Section 6962, is
113		-	amended to read as follows:
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	199	+	SECTION 2. AMENDATORY Section 5, Chapter 426, O.S.L.
	200	+	2019 (36 O.S. Supp. 2020, Section 6962), is amended to read as
	201	+	follows:
115	202		Section 6962. A. The Oklahoma Insurance Department shall
116	203		review and approve retail pharmacy network a ccess for all pharmacy
117	204		benefits managers (PBMs) to ensure compliance with Section 4 of this
118	205		act 6961 of this title.
119		-
120	206		B. A PBM, or an agent of a PBM, shall n ot:
121		-
122	207		1. Cause or knowingly permit the use of advertisement,
123	208		promotion, solicitation, representation, proposal or offer that is
124	209		untrue, deceptive or misleading;
125		-
126	210		2. Charge a pharmacist or pharmacy a fee related to the
127	211		adjudication of a claim , including without limitation a fee for:
128		-
129	212		a. the submission of a claim,
130		-
131		-
132		-	ENR. S. B. NO. 737 Page 4
133	213		b. enrollment or participation in a retail p harmacy
134	214		network, or
135		-
136	215		c. the development or management of claims processing
137	216		services or claims payment services related to
138	217		participation in a retail pharmacy network;
139		-
140	218		3. Reimburse a pharmacy or pharmacist in the state an amount
141	219		less than the amount that the PBM reimburses a pharmacy owned by or
142	220		under common ownership with a PBM for provid ing the same covered
143	221		services. The reimbursement amount paid to the phar macy shall be
144	222		equal to the reimbursement amount calculated on a per -unit basis
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145	249		using the same generi c product identifier or generic code number
146	250		paid to the PBM-owned or PBM-affiliated pharmacy;
147		-
148	251		4. Deny a pharmacy provider the opportunity to participate in
149	252		any pharmacy network at preferred participation status if the
150	253		pharmacy provider is willing to accept the terms and c onditions that
151	254		the PBM has established f or other pharmacies providers as a
152	255		condition of preferred network participation status;
153		-
154	256		5. Deny, limit or terminate a pharmacy’s provider’s contract
155	257		based on employment status of any employee who has an active licen se
156	258		to dispense, despite probation status, with the State Boar d of
157	259		Pharmacy;
158		-
159	260		6. Retroactively deny or red uce reimbursement for a covered
160	261		service claim after returning a paid clai m response as part of the
161	262		adjudication of the claim, unless:
162		-
163	263		a. the original claim was submitted fraudulently, or
164		-
165	264		b. to correct errors iden tified in an audit, so long as
166	265		the audit was conducted in compliance with Sections
167	266		356.2 and 356.3 of Title 59 of the Oklahoma Statutes;
168	267		or
169		-
170	268		7. Fail to make any payment due to a pharmacy or pharm acist for
171	269		covered services properly rendered in the event a P BM terminates a
172	270		pharmacy or pharmacist provider from a pharmacy benefits manager
173	271		network;
174	272
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176		-	ENR. S. B. NO. 737 Page 5
177	298		8. Conduct or practice spread pricing , as defined in Section 1
178	299		of this act, in this state ; or
179		-
180	300		9. Charge a pharmacist or pharmacy a fee related to
181	301		participation in a retail pharmacy network including but not limited
182	302		to the following:
183		-
184	303		a. an application fee,
185		-
186	304		b. an enrollment or participation fee ,
187		-
188	305		c. a credentialing or re -credentialing fee,
189		-
190	306		d. a change of ownership fee, or
191		-
192	307		e. a fee for the development or management of claims
193	308		processing services or claims payment servi ces.
194		-
195	309		C. The prohibitions under this sect ion shall apply to contracts
196	310		between pharmacy benefits managers and pharmacists or pharm acies
197	311		providers for participation in retail pharmacy networks.
198		-
199	312		1. A PBM contract shall:
200		-
201	313		a. not restrict, directly or indirectly, any pharmacy
202	314		that dispenses a prescription drug from informing, or
203	315		penalize such pharmacy fo r informing, an individual of
204	316		any differential between the individual’s out-of-
205	317		pocket cost or coverage with respect to acquisition of
206	318		the drug and the amount an individual woul d pay to
207	319		purchase the drug directly, and
208		-
209	320		b. ensure that any entity that provides pharmacy benefits
210	321		management services under a contract with any such
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211	348		health plan or health insurance coverage does not,
212	349		with respect to such plan or coverage, restrict,
213	350		directly or indirectly, a pharmacy that di spenses a
214	351		prescription drug from informing, or penalize such
215	352		pharmacy for informing, a c overed individual of any
216	353		differential between the individual ’s out-of-pocket
217	354		cost under the plan or coverage with respect to
218	355		acquisition of the drug and the amount an i ndividual
219		-
220		-	ENR. S. B. NO. 737 Page 6
221	356		would pay for acquisition of the d rug without using
222	357		any health plan or health insurance coverage.
223		-
224	358		2. A pharmacy benefits manager ’s contract with a participating
225	359		pharmacist or pharmacy provider shall not prohibit, restrict or
226	360		limit disclosure of informati on to the Insurance Commissioner, law
227	361		enforcement or state and federal governmental of ficials
228	362		investigating or examining a complaint or conducting a review of a
229	363		pharmacy benefits manager ’s compliance with the re quirements under
230	364		the Patient’s Right to Pharmacy Choice Act.
231		-
232	365		3. D. A pharmacy benefits m anager shall establish:
233		-
234	366		1. Establish and maintain an electronic claim inquiry
235	367		processing system using the National Council for Prescription Drug
236	368		Programs’ current standards to communicate information to pharmacies
237	369		submitting claim inquiries;
238		-
239	370		2. Fully disclose to insurers, self-funded employers, unions or
240	371		other PBM clients the existence of the respective aggregate
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241	398		prescription drug discounts, rebates received from drug
242	399		manufacturers and pharmacy audit recoupment s;
243		-
244	400		3. Provide the Insurance Commissioner, insurers, self-funded
245	401		employer plans and unions unrestricted audit rights of and access to
246	402		the respective PBM pharmaceutical manufacturer and provider
247	403		contracts, plan utilization data, plan pricing dat a, pharmacy
248	404		utilization data and pharmacy pricing data ;
249		-
250	405		4. Maintain, for no less than three (3) years, documentation of
251	406		all network development activities including but not limited to
252	407		contract negotiations and any denials to providers to join networks.
253	408		This documentation shall be made available to the Comm issioner upon
254	409		request;
255		-
256	410		5. Report to the Commissioner, on a quarterly basis for each
257	411		health insurer payor, on the following information:
258		-
259	412		a. the aggregate amount of rebates received by the PBM,
260		-
261	413		b. the aggregate amount of rebates distributed to the
262	414		appropriate health insurer payor,
263		-
264		-	ENR. S. B. NO. 737 Page 7
265		-
266	415		c. the aggregate amount of rebates passed on to the
267	416		enrollees of each health insurer payor at the point of
268	417		sale that reduced the applicable deductible,
269	418		copayment, coinsure or other cost sharing amount of
270	419		the enrollee,
271		-
272	420		d. the individual and aggregat e amount paid by the health
273	421		insurer payor to the PBM for pharmacy services
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274	448		itemized by pharmacy , drug product and service
275	449		provided, and
276		-
277	450		e. the individual and aggrega te amount a PBM paid a
278	451		provider for pharmacy services itemized by pharmacy ,
279	452		drug product and service provided.
280		-
281	453		SECTION 3. NEW LAW A new section of law to be codified
282	454		in the Oklahoma Statutes as Section 6966.1 of Title 36, unless there
283	455		is created a duplicati on in numbering, reads as follows:
284		-
285	456		A. The Insurance Commissioner may censure, suspend, revoke or
286	457		refuse to issue or renew a license of or levy a civil penalty
287	458		against any person lice nsed under the insurance laws of this state
288	459		for any violation of the Pati ent’s Right to Pharmacy Choice Act,
289	460		Section 6958 et seq. of Title 6 of the Oklahoma Statutes.
290		-
291	461		B. 1. If the Commissioner finds, after notice and opportunity
292	462		for hearing, that a pharm acy benefits manager (PBM) violated one or
293	463		more provisions of the Patient’s Right to Pharmacy Choice Act , the
294	464		Pharmacy Audit Integrity Act or the provisions of Sections 357
295	465		through 360 of Title 59 of the Oklahoma Statues, the PBM may be
296	466		censured, his or her license may be suspended or revoked and a
297	467		penalty or remedy authorized by this act may be imposed .
298		-
299	468		2. In addition to or in lieu of any censure, suspension o r
300	469		revocation of a license, a PBM may be subject to a civil fine of not
301	470		less than One Hundred Doll ars ($100.00) and not greater than Ten
302	471		Thousand Dollars ($10,000.00) for each violation of the provisions
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303	498		of the Patient’s Right to Pharmacy Choice Act, the Pharmacy Audit
304	499		Integrity Act or the provisions of Sections 357 through 360 of Title
305	500		59 of the Oklahoma Statues, following notice and an opportunity f or
306	501		a hearing.
307		-
308		-	ENR. S. B. NO. 737 Page 8
309		-
310	502		C. Notwithstanding whether the license of a PBM has been
311	503		issued, suspended, revoked, surrendered or lap sed by operation of
312	504		law, the Commissioner is hereby authorized to enforce the provisions
313	505		of the Patient’s Right to Pharmacy Choice Act and impose any penalty
314	506		or remedy authorized under th e Act against a PBM und er investigation
315	507		for or charged with a violation of the Patient’s Right to Pharmacy
316	508		Choice Act, the Pharmacy Audit Integrity Act, the provisions of
317	509		Sections 357 through 360 of Title 59 of the Oklahoma Statue s or any
318	510		provision of the insurance laws of this state .
319		-
320	511		D. Each day that a PBM conducts busine ss in this state without
321	512		a license from the Insurance Department shall be deemed a violation
322	513		of the Patient’s Right to Pharmacy Choice A ct.
323		-
324	514		E. 1. All hearings conducted by the Insura nce Department
325	515		pursuant to this section shall be public and held in acco rdance with
326	516		the Administrative Procedures Act.
327		-
328	517		2. Hearings shall be held at the office of the Insurance
329	518		Commissioner or any other place the Commissioner may dee m
330	519		convenient.
331		-
332	520		3. The Commissioner, upon written request from a PB M affected
333	521		by the hearing, shall cause a full stenographic record of the
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334	548		proceedings to be made by a competent court reporter. This record
335	549		shall be at the expense of the PBM.
336		-
337	550		4. The ordinary fees and costs of the hearing examiner
338	551		appointed pursuant to Se ction 319 of Title 36 of the Oklahoma
339	552		Statutes may be assessed by the hearing examiner against the
340	553		respondent unless the respondent is the prevailing party.
341		-
342	554		F. Any PBM whose license has bee n censured, suspended, revoked
343	555		or denied renewal or who has had a fine levied against him or he r
344	556		shall have the right of appeal from the final order of the Insurance
345	557		Commissioner, pursuant to Section 318 et seq. of Title 75 of t he
346	558		Oklahoma Statutes.
347		-
348	559		G. If the Insurance Commissioner determines, based upon an
349	560		investigation of complaints, that a PBM h as engaged in violations of
350	561		the provisions of the Patient’s Right to Pharmacy Choice Act with
351		-
352		-	ENR. S. B. NO. 737 Page 9
353	562		such frequency as to indicate a general business practice, and that
354	563		the PBM should be subjected to closer supervision with respect to
355	564		those practices, the Commiss ioner may require the PBM to file a
356	565		report at any periodic interval the Commissioner dee ms necessary.
357		-
358	566		SECTION 4. It being immediately necessary for the preservation
359	567		of the public peace, health or safety, an emergency is hereby
360	568		declared to exist, by reason whereof this act shall take effect and
361	569		be in full force from and after its passage and approval.
362	570
363		-	ENR. S. B. NO. 737 Page 10
364		-	Passed the Senate the 1st day of March, 2022.
365		-
366		-
367		-
368		-	Presiding Officer of the Senate
369		-
370		-
371		-	Passed the House of Representatives the 18th day of April, 2022.
372		-
373		-
374		-
375		-	Presiding Officer of the House
376		-	of Representatives
377		-
378		-	OFFICE OF THE GOVERNOR
379		-	Received by the Office of the Governor this ____________________
380		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
381		-	By: _________________________________
382		-	Approved by the Governor of the State of Oklahoma this _______ __
383		-	day of ___________________, 20_______, at _______ o'c lock _______ M.
384		-
385		-	_________________________________
386		-	Governor of the State of Oklahoma
387		-
388		-
389		-	OFFICE OF THE SECRETARY OF STATE
390		-	Received by the Office of the Secretary of State this _______ ___
391		-	day of _________________ _, 20 _______, at _______ o'clock _______ M.
392		-	By: _________________________________
393		-
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