Oklahoma 2024 Regular Session

Oklahoma Senate Bill SB1670 Compare Versions

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Version 2 (New)

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3		-
4		-
5		-	An Act
6		-	ENROLLED SENATE
7		-	BILL NO. 1670 By: McCortney, Prieto, Jett,
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	28	+	ENGROSSED HOUSE AMENDME NT
	29	+	TO
	30	+	ENGROSSED SENATE BILL NO . 1670 By: McCortney, Prieto, Jett,
8	31		Coleman, Hamilton, and
9	32		Alvord of the Senate
10	33
11	34		and
12	35
13	36		McEntire of the House
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18		-	An Act relating to pharmacy benefits management;
	41	+
	42	+	[ pharmacy benefits management - pharmacy
	43	+	reimbursement - rule promulgation - audit - notice
	44	+	and reporting - fines and fees - recouped funds -
	45	+	emergency ]
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	52	+	AMENDMENT NO. 1. Strike the stricken title, enacting clause, and
	53	+	entire bill and insert:
	54	+
	55	+
	56	+	"An Act relating to pharmacy benefits management;
19	57		amending 59 O.S. 2021, Sections 35 6.1, 356.2, 356.3,
20	58		357, 358, and 360, which relate to the Pharmacy Audit
21	59		Integrity Act and pharmacy reimbursement; providing
22	60		for rule promulgation; modi fying audit notice
23	61		requirements; requiring notice and reporting to the
24	62		Office of the Attorney General; p roviding for fines
25	63		and fees; modifying definitions; requiring certa in
26	64		recouped funds from audit to be paid to patients
27	65		first; making certain audits null and void; requiring
28	66		certain notice to include certain declaration;
29	67		modifying definition; modifying reim bursement appeal
30	68		process; requiring reimbursement at certain rate
31	69		under certain circumstances; updating statutory
32	70		references; and declaring an emergency .
33	71
34	72
35	73
36	74
37		-	SUBJECT: Pharmacy Audit Integrity Act
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38	100
39	101		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
40		-
41	102		SECTION 1. AMENDATORY 59 O.S. 2021, Section 356.1, is
42	103		amended to read as follows:
43		-
44	104		Section 356.1. A. For purposes of the Pharmacy Audit Integrity
45	105		Act, “pharmacy benefits manager ” or “PBM” means a person, business,
46	106		or other entity that performs pharmacy b enefits management. The
47	107		term includes a person or entity acting for a PBM in a contractual
48		-
49		-	ENR. S. B. NO. 1670 Page 2
50	108		or employment relationship in the perfo rmance of pharmacy benefits
51	109		management for a managed care compa ny, nonprofit hospital, medical
52	110		service organization, insuranc e company, third-party payor, or a
53	111		health program administered by a department of this state shall have
54	112		the same meaning as in Section 6960 of Title 36 of the Oklahoma
55	113		Statutes.
56		-
57	114		B. The purpose of the Pharmacy Audit Integrity Act is to
58	115		establish minimum and uniform standards and criteria for the audit
59	116		of pharmacy records by or on behalf of certain entities.
60		-
61	117		C. The Pharmacy Audit Integrity Act shall apply to any audit of
62	118		the records of a pharmacy conducted by a managed care company,
63	119		nonprofit hospital, medi cal service organization, insurance company,
64	120		third-party payor, pharmacy benefits manager, a health program
65	121		administered by a department of this state, or any entity that
66	122		represents these compan ies, groups, or departments.
67		-
68	123		D. The Attorney General may promu lgate rules to implement the
69	124		provisions of the Pharmacy Audit Integrity Act.
70	125
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71	151		SECTION 2. AMENDATORY 59 O.S. 2021, Section 356.2, is
72	152		amended to read as follows:
73		-
74	153		Section 356.2. A. The entity conducting an audi t of a pharmacy
75	154		shall:
76		-
77	155		1. Identify and specifically describe the audit and appeal
78	156		procedures in the pharmacy contract. Prescription claim
79	157		documentation and record -keeping requirements shall not exceed the
80	158		requirements set forth by the Oklahoma Pharmacy Act or other
81	159		applicable state or federal laws or regulations;
82		-
83	160		2. Give the pharmacy written notice by certified letter to the
84	161		pharmacy and the pharmacy ’s contracting agent, including
85	162		identification of specific prescr iption numbers and fill dates to be
86	163		audited, at least two (2) weeks fourteen (14) calendar days prior to
87	164		conducting the audit, including, but not limited to, an on -site
88	165		audit, a desk audit, or a wholesale purchase audit, request for
89	166		documentation related t o the dispensing of a prescription drug or
90	167		any reimbursed activ ity by a pharmacy provider; provided, however,
91	168		that wholesale purchase audits shall require a minimum of thirty
92		-
93		-	ENR. S. B. NO. 1670 Page 3
94	169		(30) days’ calendar days’ written notice. For an on-site audit, the
95	170		audit date shall be the date the on-site audit occurs. For all
96	171		other audit types, the audit date shall be the date the pharmacy
97	172		provides the documentation requested in the audit notice. The
98	173		pharmacy shall have the opportunity to reschedule the audit no more
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99	200		than seven (7) calendar days from the date designated on the
100	201		original audit notification;
101		-
102	202		3. Not interfere with the delivery of pharmacist services to a
103	203		patient and shall utilize every reasonable effort to minimize
104	204		inconvenience and disruption to pharmacy operatio ns during the audit
105	205		process;
106		-
107	206		4. Conduct any audit involving clini cal or professional
108	207		judgment by means of or in consultation with a licensed pharmacist;
109		-
110	208		5. Not consider as fraud any clerical or record -keeping error,
111	209		such as a typographical error, scriven er’s error or computer error,
112	210		including, but not limited to, a mis calculated day supply,
113	211		incorrectly billed prescription written date or prescription origin
114	212		code, and such errors shall not be subject to recoupment. The
115	213		pharmacy shall have the right to sub mit amended claims
116	214		electronically to correct clerical or record -keeping errors in lieu
117	215		of recoupment. To the extent that an audit results in the
118	216		identification of any clerical or record -keeping errors such as
119	217		typographical errors, scrivener ’s errors or computer errors in a
120	218		required document or record, the pharmacy shall not be subject to
121	219		recoupment of funds by the pharmacy benefits manager unless the
122	220		pharmacy benefits manager can provide proof of intent to commit
123	221		fraud. A person shall not be subject to cr iminal penalties for
124	222		errors provided for in this paragraph without proof of intent to
125	223		commit fraud;
126	224
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127	250		6. Permit a pharmacy to use the records of a hospital,
128	251		physician, or other authorized practitioner of the healing arts for
129	252		drugs or medicinal supplies writ ten or transmitted by any means of
130	253		communication for purposes of v alidating the pharmacy record with
131	254		respect to orders or refills of a legend or narcotic drug;
132		-
133	255		7. Not include the dispensing fee amount or the actual invoice
134	256		cost of the prescription dispens ed in a finding of an audit
135		-
136		-	ENR. S. B. NO. 1670 Page 4
137	257		recoupment unless a prescription was n ot actually dispensed or a
138	258		physician denied authorization of a dispensing order;
139		-
140	259		8. Audit each pharmacy under identical standards, regularity
141	260		and parameters as other similarly situated phar macies and all
142	261		pharmacies owned or managed by the pharmacy benefit s manager
143	262		conducting or having conducted the audit;
144		-
145	263		9. Not exceed one (1) year from the date the claim was
146	264		submitted to or adjudicated by a managed care company, nonprofit
147	265		hospital or medical service organization, insurance company, third-
148	266		party payor, pharmacy benefits manager, a health program
149	267		administered by a department of this state, or any entity that
150	268		represents the companies, groups, or departments for the period
151	269		covered by an audit;
152		-
153	270		10. Not schedule or initiate an audit during the first seven
154	271		(7) calendar days of any month unless otherwise consented to by the
155	272		pharmacy;
156	273
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157	299		11. Disclose to any plan sponsor whose claims were included in
158	300		the audit any money recouped in the audit; and
159		-
160	301		12. Not require pharmacists to break open packaging labeled
161	302		“for single-patient-use only”. Packaging labeled “for single-
162	303		patient-use only” shall be deemed to be the smallest package size
163	304		available; and
164		-
165	305		13. Upon recoupment of funds from a pharmacy, refund firs t to
166	306		the patient the portion of the recovered funds that were orig inally
167	307		paid by the patient, provided such funds were part of the
168	308		recoupment.
169		-
170	309		B. 1. Any entity that conducts wholesale purchase review
171	310		during an audit of a pharmacist or pharmacy shall not require the
172	311		pharmacist or pharmacy to pro vide a full dispensing re port.
173	312		Wholesaler invoice reviews shall be limited to verification of
174	313		purchase inventory specific to the pharmacy claims paid by the
175	314		health benefits plan or pharmacy benefits manager conduct ing the
176	315		audit.
177		-
178		-
179		-	ENR. S. B. NO. 1670 Page 5
180	316		2. Any entity conducting an audit shall not identi fy or label a
181	317		prescription claim as an audit discrepancy when:
182		-
183	318		a. the National Drug Code for the dispensed drug is in a
184	319		quantity that is a subunit or multiple of the drug
185	320		purchased by the pharmacist or pharmacy as supported
186	321		by a wholesale invoice,
187	322
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188	348		b. the pharmacist or pharmacy dispensed the correct
189	349		quantity of the drug according to the prescription,
190	350		and
191		-
192	351		c. the drug dispensed by the pharmacist or pharmacy
193	352		shares all but the last two digits of the National
194	353		Drug Code of the drug reflec ted on the supplier
195	354		invoice.
196		-
197	355		3. An entity conducting an audit shall accept as evidence,
198	356		subject to validation, to support the validity of a pharmacy claim
199	357		related to a dispensed drug:
200		-
201	358		a. redacted copies of supplier invoices in the
202	359		pharmacist’s or pharmacy’s possession, or
203		-
204	360		b. invoices and any supporting documents from any
205	361		supplier as authorized by federal or state law to
206	362		transfer ownership of the drug acquired by the
207	363		pharmacist or pharmacy.
208		-
209	364		4. An entity conducting a n audit shall provide, no later than
210	365		five (5) business calendar days after the date of a request by the
211	366		pharmacist or pharmacy, all supporting documents the pharmacist ’s or
212	367		pharmacy’s purchase suppliers provided to the health benefits plan
213	368		issuer or pharmacy benefits manager.
214		-
215	369		C. A pharmacy shall be allowed to provide th e pharmacy’s
216	370		computerized patterned medical records or the records of a hospital,
217	371		physician, or other authorized practitioner of the healing arts for
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218	398		drugs or medicinal supplies written or t ransmitted by any means of
219	399		communication for purposes of supportin g the pharmacy record with
220	400		respect to orders or refills of a legend or narcotic drug.
221		-
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223		-	ENR. S. B. NO. 1670 Page 6
224	401		D. The entity conducting the audit shall not audit more than
225	402		fifty prescriptions, with specific date of service, per calendar
226	403		year. The annual limit to the number of pr escription claims audited
227	404		shall be inclusive of all audits, including any prescription -related
228	405		documentation requests from the health insurer, pharmacy benefits
229	406		manager or any third -party company conducting audits on behalf of
230	407		any health insurer or pharmac y benefits manager during a calendar
231	408		year.
232		-
233	409		E. If paper copies of records are requested by the entity
234	410		conducting the audit, the entity shall pay twenty -five cents ($0.25)
235	411		per page to cover the costs incurred by the pharmacy. The e ntity
236	412		conducting the audit shall provide the pharmacy with accurate
237	413		instructions, including any required form for obtaining
238	414		reimbursement for the copied records.
239		-
240	415		F. The entity conducting the audit shall:
241		-
242	416		1. Deliver a preliminary audit findings report to the pharmacy
243	417		and the pharmacy’s contracting agent within forty-five (45) calendar
244	418		days of conducting the audit;
245		-
246	419		2. Allow the pharmacy at least ninety (90) calendar days
247	420		following receipt of the preliminary audit fi ndings report in which
248	421		to produce documentation to address any dis crepancy found during the
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249	448		audit; provided, however, a pharm acy may request an extension, not
250	449		to exceed an additional forty -five (45) calendar days;
251		-
252	450		3. Deliver a final audit findings report to the pharmacy and
253	451		the pharmacy’s contracting agent signed by the auditor within ten
254	452		(10) calendar days after receipt of additional documentation
255	453		provided by the pharmacy, as provided for in Section 356.3 of this
256	454		title;
257		-
258	455		4. Allow the pharmacy to reverse a nd resubmit claims
259	456		electronically within thirty (30) calendar days of receipt of the
260	457		final audit report in lieu of the auditing entity recouping
261	458		discrepant claim amounts from the pharmacy;
262		-
263	459		5. Not recoup any disputed funds until after final disposition
264	460		of the audit findings, including the appeals process as provided for
265	461		in Section 356.3 of this title; and
266		-
267		-	ENR. S. B. NO. 1670 Page 7
268		-
269	462		6. Not accrue interest during the audit and appeal period.
270		-
271	463		G. Each entity conducting an audit shall provide a copy of the
272	464		final audit results, and a fin al audit report upon request, after
273	465		completion of any review proce ss to the plan sponsor.
274		-
275	466		H. 1. The full amount of any recoupment on an audit shall be
276	467		refunded to the plan sponsor. Except as provided for in paragraph 2
277	468		of this subsection, a charge or as sessment for an audit shall not be
278	469		based, directly or indirectly, on amounts recouped.
279		-
280	470		2. This subsection does not prevent the entity conducting the
281	471		audit from charging or assessing the responsible party, directly or
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282	498		indirectly, based on amounts recouped if both of the following
283	499		conditions are met:
284		-
285	500		a. the plan sponsor and the entity conducting the audit
286	501		have a contract that explicitly s tates the percentage
287	502		charge or assessment to the plan sponsor, and
288		-
289	503		b. a commission to an agent or employee of the entity
290	504		conducting the audit is not based, directl y or
291	505		indirectly, on amoun ts recouped.
292		-
293	506		I. Unless superseded by state or federal law, auditors shall
294	507		only have access to previous audit reports on a particular pharmacy
295	508		conducted by the auditing entity for the same p harmacy benefits
296	509		manager, health plan or insurer. An auditing ven dor contracting
297	510		with multiple pharmacy benefits managers or health i nsurance plans
298	511		shall not use audit reports or other information gained from an
299	512		audit on a pharmacy to conduct another audi t for a different
300	513		pharmacy benefits manag er or health insurance pl an.
301		-
302	514		J. Sections A through I of this section shall not apply to any
303	515		audit initiated based on or that involves fraud, willful
304	516		misrepresentation, or abuse.
305		-
306	517		K. If the Attorney General, after notice and opportunity for
307	518		hearing, finds that the entity conducting the audit fa iled to follow
308	519		any of the requirements pursuant to the Pharmacy Audit Integrity
309	520		Act, the audit shall be considered null and void. Any monies
310		-
311		-	ENR. S. B. NO. 1670 Page 8
312	521		recouped from a null and void audit shall be returned to the
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313	548		affected pharmacy within fourteen (14) calendar days. Any violation
314	549		of this section by a pharmacy benefit s manager or auditing entity
315	550		shall be deemed a violation of the Pharmacy Audit Integrity Act.
316		-
317	551		SECTION 3. AMENDATORY 59 O.S. 2021, Section 356.3, is
318	552		amended to read as follows:
319		-
320	553		Section 356.3. A. Each entity conducting an audit sh all
321	554		establish a written appeals proce ss under which a pharmacy may
322	555		appeal an unfavorable preliminary audit report and/or final audit
323	556		report to the entity.
324		-
325	557		B. Following an appeal, if the entity finds tha t an unfavorable
326	558		audit report or any portion thereof is unsubstantiated, the entity
327	559		shall dismiss the audit report or the unsubstan tiated portion of the
328	560		audit report without any further action.
329		-
330	561		C. Any final audit report, following the final audit appeal
331	562		period, with a finding of fraud or willful misrepresen tation shall
332	563		be referred to the distr ict attorney having proper jurisdiction o r
333	564		the Attorney General for prosecution upon completion of the appeals
334	565		process.
335		-
336	566		D. This act does not apply to any audit , review or
337	567		investigation that is For any audit initiated based on or that
338	568		involves fraud, willful misrepres entation, or abuse, the auditing
339	569		entity shall provide, in writing, at the time of the audit, a clear
340	570		and conspicuous declaration to the pharmacy being audited that the
341	571		audit is being conducted under suspicion of fraud, willful
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	579	+	7
	580	+	8
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342	598		misrepresentation, or abu se and a statement of fac ts that supports
343	599		the reasonable suspicion .
344		-
345	600		E. Any entity conducting an audit that is based on or involves
346	601		fraud, willful misrepresen tation, or abuse shall provide to the
347	602		Office of the Attorney General:
348		-
349	603		1. Notice at least two (2) calendar days prior to beginning
350	604		performance of an audit pursuant to this section;
351		-
352	605		2. A preliminary report within thirty (30) calendar days of
353	606		performing the audit pursuant to this section; and
354		-
355		-	ENR. S. B. NO. 1670 Page 9
356		-
357	607		3. A final report within thirty (30) calendar days following
358	608		the closure of the final appeal period for an audit performed
359	609		pursuant to this section.
360		-
361	610		F. The Attorney General , authorized employees, and examiners
362	611		shall have access to any pharmacy benefits manager’s files and
363	612		records that may relate to an audit that is based on or involves
364	613		fraud, willful misrepresentation, or abuse.
365		-
366	614		G. The Attorney General may levy a civil or administrative fine
367	615		of not less than One Hundred Dollars ($100.00) and not greater than
368	616		Ten Thousand Dollars ($10,000.00) for each violation of t his section
369	617		and assess any other penalty or remedy authorized by law .
370		-
371	618		SECTION 4. AMENDATORY 59 O.S. 2021, Section 357, is
372	619		amended to read as follows:
373		-
374	620		Section 357. A. As used in this act Sections 357 through 360
375	621		of this title:
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376	647
377	648		1. “Covered entity” means a nonprofit hospital or medical
378	649		service organization, for-profit hospital or medical service
379	650		organization, insurer, health coverage benefit plan or, health
380	651		maintenance organization ; a, health program administered by the
381	652		state in the capacity o f provider of providing health coverage;, or
382	653		an employer, labor union, or other entity organized in the state
383	654		group of persons that provides health coverage to covered
384	655		individuals who are employe d or reside in the persons in this state.
385	656		This term does not include a health benefit plan that provides
386	657		coverage only for accidental injury, specified disease, hospital
387	658		indemnity, disability income, or ot her limited benefit health
388	659		insurance policies and contracts that do not include prescriptio n
389	660		drug coverage;
390		-
391	661		2. “Covered individual” means a member, participant, enrollee,
392	662		contract holder or policy holder or beneficiary of a covered entity
393	663		who is provided health coverage by the covered entity. A covered
394	664		individual includes any dependent or othe r person provided he alth
395	665		coverage through a policy, contract or plan for a covere d
396	666		individual;
397		-
398		-
399		-	ENR. S. B. NO. 1670 Page 10
400	667		3. “Department” means the Oklahoma Insurance Department;
401		-
402	668		4. “Maximum allowable cost” or, “MAC”, or “MAC list” means the
403	669		list of drug products delineating the m aximum per-unit reimbursement
404	670		for multiple-source prescription drugs, medical pro duct, or device;
405	671
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406	697		5. “Multisource drug product reimbursement ” (reimbursement)
407	698		means the total amount paid to a pharmacy inclusive of a ny reduction
408	699		in payment to the pharmacy, excluding prescripti on dispense fees;
409		-
410	700		6. “Office” means the Office of the Attorn ey General;
411		-
412	701		7. “Pharmacy benefits management” means a service provided to
413	702		covered entities to facilitate the provision of prescriptio n drug
414	703		benefits to covered individuals wi thin the state, incl uding
415	704		negotiating pricing and other terms with drug manufactu rers and
416	705		providers. Pharmacy benefits management may include any or all of
417	706		the following services:
418		-
419	707		a. claims processing, retail netwo rk management and
420	708		payment of claims to ph armacies for prescri ption drugs
421	709		dispensed to covered individuals,
422		-
423	710		b. clinical formulary development and management
424	711		services, or
425		-
426	712		c. rebate contracting and administrat ion,
427		-
428	713		d. certain patient compliance, therapeutic intervention
429	714		and generic substitution programs, or
430		-
431	715		e. disease management pr ograms;
432		-
433	716		7. 8. “Pharmacy benefits manager ” or “PBM” means a person,
434	717		business, or other entity that performs pharmacy benefits
435	718		management. The term includes shall include a person or entity
436	719		acting for on behalf of a PBM in a contractual or employment
437	720		relationship in the performance of pharmacy benefits managem ent for
	721	+
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438	747		a managed care company, nonprofit hospital, medical service
439	748		organization, insurance company, third-party payor, or a health
440	749		program administered by an agency or department of this state;
441		-
442		-
443		-	ENR. S. B. NO. 1670 Page 11
444	750		8. 9. “Plan sponsor” means the employers, insurance companie s,
445	751		unions and health maintenance organizations or an y other entity
446	752		responsible for establishing, maintaining, or administering a health
447	753		benefit plan on behalf of covered individuals; and
448		-
449	754		9. 10. “Provider” means a pharmacy licensed by the State Board
450	755		of Pharmacy, or an agent or representative of a pharmacy, including,
451	756		but not limited to, the pharmacy’s contracting agent, which
452	757		dispenses prescription drugs or devices to co vered individuals.
453		-
454	758		B. Nothing in the definition of pharmacy benefits management or
455	759		pharmacy benefits manager in the Patient’s Right to Pharmacy Choice
456	760		Act, Pharmacy Audit Integrity Act, or Sections 357 through 360 of
457	761		this title shall deem an employer a “pharmacy benefits manager” of
458	762		its own self-funded health benefit plan, except, to the ex tent
459	763		permitted by applicable law, where the employer , without the
460	764		utilization of a third party and unrelated to the employer’s own
461	765		pharmacy:
462		-
463	766		a. negotiates directly with d rug manufacturers,
464		-
465	767		b. processes claims on behalf of its members, or
466		-
467	768		c. manages its own retail network of pharmacies.
	769	+
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468	795
469	796		SECTION 5. AMENDATORY 59 O.S. 2021, Section 358, is
470	797		amended to read as f ollows:
471		-
472	798		Section 358. A. In order to pro vide pharmacy benefits
473	799		management or any of the services included under the definiti on of
474	800		pharmacy benefits management in this state, a pha rmacy benefits
475	801		manager or any entity acting as one in a contractual or emplo yment
476	802		relationship for a covered entity s hall first obtain a license from
477	803		the Oklahoma Insurance Department, and the Departme nt may charge a
478	804		fee for such licensure.
479		-
480	805		B. The Department shall establish, b y regulation, licensure
481	806		procedures, required disclosur es for pharmacy benefits managers
482	807		(PBMs) and other rules as may be necessary for carrying out and
483	808		enforcing the provisions of this act this title. The licensure
484	809		procedures shall, at a minimum, include the completion of an
485	810		application form that shall include the name and address of an agent
486		-
487		-	ENR. S. B. NO. 1670 Page 12
488	811		for service of process, the payment of a requisite fee, and eviden ce
489	812		of the procurement of a surety bond.
490		-
491	813		C. The Department or the Office of the Attorney General may
492	814		subpoena witnesses and information. Its compliance officers may
493	815		take and copy records for investigative use and pros ecutions.
494	816		Nothing in this subsection shall limit the Office of the Attorney
495	817		General from using its investigative demand authority to investigate
496	818		and prosecute violations of the law.
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497	844
498	845		D. The Department may suspend, revoke or refuse to issue or
499	846		renew a license for noncompliance with any of the provisions hereby
500	847		established or with the rules promulgated by the Department; for
501	848		conduct likely to mislead, deceive or defraud the public or the
502	849		Department; for unfair or decepti ve business practices or for
503	850		nonpayment of a an application or renewal fee or fine. The
504	851		Department may also levy administrative fines for each count of
505	852		which a PBM has been convicted in a Department hearing.
506		-
507	853		E. 1. The Office of the Attorney General, after notice and
508	854		opportunity for hearing, may instruct the Insurance Commission er
509	855		that the PBM’s license be censured, suspended, or revoked for
510	856		conduct likely to mislead, deceive, or defraud the public or the
511	857		State of Oklahoma; or for unfair or deceptive busi ness practices, or
512	858		for any violation of the Patient’s Right to Pharmacy Choi ce Act, the
513	859		Pharmacy Audit Integrity Act, or Sections 357 through 360 of this
514	860		title. The Office of the Attorney General may also levy
515	861		administrative fines for each count of which a PBM has been
516	862		convicted following a hearing before the Attorney Ge neral. If the
517	863		Attorney General makes such instruction, the Commissioner shall
518	864		enforce the instructed action within thirty (30) calendar days.
519		-
520	865		2. In addition to or in lieu of any censure, suspension, or
521	866		revocation of a license by the Commissioner, the Attorney Gen eral
522	867		may levy a civil or administrative fine of not less than One Hundred
523	868		Dollars ($100.00) and not greater than Ten Thousand Dollars
	869	+
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524	895		($10,000.00) for each violation of this subsec tion and/or assess any
525	896		other penalty or remedy authorized by this section. For purposes of
526	897		this section, each day a PBM fails to comply with an investiga tion
527	898		or inquiry may be considered a separate violation.
528		-
529		-
530		-	ENR. S. B. NO. 1670 Page 13
531	899		F. The Attorney General may promulgate rules to implement the
532	900		provisions of Sections 357 through 360 of this title.
533		-
534	901		SECTION 6. AMENDATORY 59 O.S. 2 021, Section 360, is
535	902		amended to read as follows:
536		-
537	903		Section 360. A. The pharmacy benefit s manager shall, with
538	904		respect to contracts between a pharmacy benefits manager and a
539	905		provider, including a pharmacy s ervice administrative organization:
540		-
541	906		l. Include in such contracts the specific sources utilized to
542	907		determine the maximum allowable cost (MAC) pricing of the pharmacy,
543	908		update MAC pricing at least every seven (7) calendar days, and
544	909		establish a process for pr oviders to readily access the MAC list
545	910		specific to that provider;
546		-
547	911		2. In order to place a drug on the MAC list, ensure that the
548	912		drug is listed as “A” or “B” rated in the most recen t version of the
549	913		FDA’s Approved Drug Products with Therapeutic Equivalence
550	914		Evaluations, also known as the Orange Book, and the d rug is
551	915		generally available for purchase by pharmacies in the state from
552	916		national or regional wholesalers and is not obsolete;
553		-
554	917		3. Ensure dispensing fees are not included in the calculation
555	918		of MAC price reimbursement to pharmacy providers;
	919	+
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556	944
557	945		4. Provide a reasonable administration app eals procedure to
558	946		allow a provider, a provider ’s representative and a pharmacy service
559	947		administrative organization to contest reimbursement amounts within
560	948		fourteen (14) business calendar days of the final adjusted payment
561	949		date. The pharmacy benefits manager shall not prevent the pharmacy
562	950		or the pharmacy service administrative organization from filing
563	951		reimbursement appeals in an electronic batch format. The pharmacy
564	952		benefits manager must respond to a provi der, a provider’s
565	953		representative and a pharmacy service administrative organization
566	954		who have contested a reimbur sement amount through this procedure
567	955		within ten (10) business calendar days. The pharmacy benefits
568	956		manager must respond in an electronic batch format to reimbursement
569	957		appeals filed in an electronic batch format. The pharmacy benefits
570	958		manager shall not require a pharmacy or pharmacy services
571	959		administrative organization to log into a system to upload
572	960		individual claim app eals or to download individual appea l responses.
573		-
574		-	ENR. S. B. NO. 1670 Page 14
575	961		If a price update is warranted, the pharmacy benefits manager shall
576	962		make the change in th e reimbursement amount, permit the dispen sing
577	963		pharmacy to reverse and rebill the claim in question, and make the
578	964		reimbursement amount change retroactive and effective for all
579	965		contracted providers; and
580		-
581	966		5. If a below-cost reimbursement appeal is denied, th e PBM
582	967		shall provide the reason for the den ial, including the National Drug
583	968		Code (NDC) number from, and the name of, the specific national or
	969	+
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	971	+	2
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	978	+	9
	979	+	10
	980	+	11
	981	+	12
	982	+	13
	983	+	14
	984	+	15
	985	+	16
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	990	+	21
	991	+	22
	992	+	23
	993	+	24
	994	+
584	995		regional wholesalers doing business in this state where the drug is
585	996		currently in stock and available for purchase by the dispensing
586	997		pharmacy at a price below the PBM’s reimbursement price. If the
587	998		pharmacy benefits manager cannot pro vide a specific national or
588	999		regional wholesaler where the drug can be pu rchased by the
589	1000		dispensing pharmacy at a price below the pharmacy be nefits manager’s
590	1001		reimbursement price If the NDC number provided by the pharmacy
591	1002		benefits manager is not available bel ow the acquisition cost
592	1003		obtained from the pharmaceutical wholesaler from whom the dispensing
593	1004		pharmacy purchases the majority of the prescri ption drugs that are
594	1005		dispensed, the pharmacy benefits manager shall immediately adjust
595	1006		the reimbursement amount, perm it the dispensing pharmacy to reverse
596	1007		and rebill the claim in question, and make the reimbursement amount
597	1008		adjustment retroactive and effect ive for all contracted providers.
598		-
599	1009		B. The reimbursement appeal requirements in this section shall
600	1010		apply to all drugs, medical products, or devices reimbursed
601	1011		according to any payment methodology, including, but not limited to:
602		-
603	1012		1. Average acquisition cost , including the National Average
604	1013		Drug Acquisition Cost;
605		-
606	1014		2. Average manufacturer price;
607		-
608	1015		3. Average wholesale price ;
609		-
610	1016		4. Brand effective rate or generic effective rate ;
611		-
612	1017		5. Discount indexing;
613		-
614	1018		6. Federal upper limits;
615	1019
	1020	+	ENGR. H. A. to ENGR. S. B. NO. 1670 Page 21 1
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	1032	+	13
	1033	+	14
	1034	+	15
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616	1045		7. Wholesale acquisition cost ; and
617		-
618		-	ENR. S. B. NO. 1670 Page 15
619		-
620	1046		8. Any other term that a pharmacy benefits manager or an
621	1047		insurer of a health benefit plan may use to establish reimbursement
622	1048		rates to a pharmacist or pharmacy for pharmacist servic es.
623		-
624	1049		C. The pharmacy benefits manager shall not place a drug on a
625	1050		MAC list, unless there are at least two therapeutica lly equivalent,
626	1051		multiple-source drugs, generally available for purch ase by
627	1052		dispensing retail pharmacies from national or regional whol esalers.
628		-
629	1053		C. D. In the event that a drug is placed on the FDA Drug
630	1054		Shortages Database, pharmacy benefits managers shall re imburse
631	1055		claims to pharmacies at no less than the wholesale acquisition cost
632	1056		for the specific NDC number being di spensed.
633		-
634	1057		E. The pharmacy benefits manager shall not require
635	1058		accreditation or licensing of providers, o r any entity licensed or
636	1059		regulated by the State Board of Pharmacy, other than by the State
637	1060		Board of Pharmacy or federal government entity as a condition for
638	1061		participation as a network provider.
639		-
640	1062		D. F. A pharmacy or pharmacist may decline to provide the
641	1063		pharmacist clinical or dispensing services t o a patient or pharmacy
642	1064		benefits manager if the pharmacy or pharmacist is to be paid less
643	1065		than the pharmacy’s cost for providing the p harmacist clinical or
644	1066		dispensing services.
645	1067
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	1080	+	13
	1081	+	14
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	1092	+
646	1093		E. G. The pharmacy benefits manager s hall provide a dedicated
647	1094		telephone number, email address and names of the personnel with
648	1095		decision-making authority regarding MAC appeals and pricing.
649		-
650	1096		SECTION 7. It being immediately necessary for the preservation
651	1097		of the public peace, healt h or safety, an emergency is hereby
652	1098		declared to exist, by reason whereof this act shall take effect and
	1099	+	be in full force from and after its passage and a pproval."
	1100	+
	1101	+	Passed the House of Representa tives the 25th day of April, 2024.
	1102	+
	1103	+
	1104	+
	1105	+
	1106	+
	1107	+	Presiding Officer of the House of
	1108	+	Representatives
	1109	+
	1110	+
	1111	+	Passed the Senate the ____ day of _______ ___, 2024.
	1112	+
	1113	+
	1114	+
	1115	+
	1116	+
	1117	+	Presiding Officer of the Senate
	1118	+
	1119	+
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	1128	+	9
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	1144	+
	1145	+	ENGROSSED SENATE
	1146	+	BILL NO. 1670 By: McCortney, Prieto, Jett,
	1147	+	Coleman, Hamilton, and
	1148	+	Alvord of the Senate
	1149	+
	1150	+	and
	1151	+
	1152	+	McEntire of the House
	1153	+
	1154	+
	1155	+
	1156	+
	1157	+	[ pharmacy benefits management - pharmacy
	1158	+	reimbursement - rule promulgation - audit - notice
	1159	+	and reporting - fines and fees - recouped funds -
	1160	+	emergency ]
	1161	+
	1162	+
	1163	+
	1164	+
	1165	+	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OK LAHOMA:
	1166	+	SECTION 8. AMENDATORY 59 O.S. 2021, Section 356.1, is
	1167	+	amended to read as follows:
	1168	+	Section 356.1. A. For purposes of the Pharmacy Audit Integrity
	1169	+	Act, “pharmacy benefits manager ” or “PBM” means a person, business,
	1170	+	or other entity that performs pharmacy benefits management. The
	1171	+	term includes a person or entity acting for a PBM in a contractual
	1172	+	or employment relationship in the perfo rmance of pharmacy benefits
	1173	+	management for a managed care company, nonprofit hospital, medic al
	1174	+	service organization, insurance company, third -party payor, or a
	1175	+	health program administered by a department of this state.
	1176	+	B. The purpose of the Pharmacy Audit Integrity Act is to
	1177	+	establish minimum and uniform standards and criteria for the audit
	1178	+	of pharmacy records by or on behalf of certain entities.
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	1205	+	C. The Pharmacy Audit Integrity Act shall apply to any audit of
	1206	+	the records of a pharmacy conducted by a manag ed care company,
	1207	+	nonprofit hospital, medi cal service organization, insurance company,
	1208	+	third-party payor, pharmacy benefits manager, a health program
	1209	+	administered by a department of this state, or any entity that
	1210	+	represents these companies, groups, or depar tments.
	1211	+	D. The Attorney General may promulgate rules to implement the
	1212	+	provisions of the Pha rmacy Audit Integrity Act.
	1213	+	SECTION 9. AMENDATORY 59 O.S. 2021, Section 356.2, is
	1214	+	amended to read as follows:
	1215	+	Section 356.2. A. The entit y conducting an audit of a pharmacy
	1216	+	shall:
	1217	+	1. Identify and specifically describe the audit and appeal
	1218	+	procedures in the pharmacy contract. Prescription claim
	1219	+	documentation and record -keeping requirements shall not exceed the
	1220	+	requirements set forth by the Oklahoma Pharmacy Act or other
	1221	+	applicable state or federal laws or regulations;
	1222	+	2. Give the pharmacy written notice by certified letter to the
	1223	+	pharmacy and the pharmacy ’s contracting agent, including
	1224	+	identification of specific prescription numbers and fi ll dates to be
	1225	+	audited, at least two (2) weeks fourteen (14) calendar days prior to
	1226	+	conducting the audit, including, but not limited to, an on -site
	1227	+	audit, a desk audit, or a wholesale purchase audit, request for
	1228	+	documentation related to the dispensing of a prescription drug or
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	1255	+	any reimbursed activity by a pharmacy provider; provided, however,
	1256	+	that wholesale purchase audits shall require a minimum of thirty
	1257	+	(30) calendar days’ written notice. For an on-site audit, the audit
	1258	+	date shall be the date the on -site audit occurs. For all other
	1259	+	audit types, the audit date shall be the date the pharmacy pr ovides
	1260	+	the documentation requested in the audit notice. The pharmacy shall
	1261	+	have the opportunity to reschedule the audit no more than seven (7)
	1262	+	calendar days from the date designated on the original audit
	1263	+	notification;
	1264	+	3. Not interfere with the delivery o f pharmacist services to a
	1265	+	patient and shall utilize every reasonable effort to minimize
	1266	+	inconvenience and disruption to pharmacy operations during the audit
	1267	+	process;
	1268	+	4. Conduct any audit involving clinic al or professional
	1269	+	judgment by means of or in consu ltation with a licensed pharmacist;
	1270	+	5. Not consider as fraud any clerical or record -keeping error,
	1271	+	such as a typographical error, scrivener ’s error or computer err or,
	1272	+	including, but not limited to, a miscalculated day supply,
	1273	+	incorrectly billed prescripti on written date or prescription origin
	1274	+	code, and such errors shall not be subject to recoupment. The
	1275	+	pharmacy shall have the right to submit amended claims
	1276	+	electronically to correct clerical or record -keeping errors in lieu
	1277	+	of recoupment. To the extent t hat an audit results in the
	1278	+	identification of any clerical or record -keeping errors such as
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	1305	+	typographical errors, scrivener ’s errors or computer errors in a
	1306	+	required document or record, the pharmacy shall not be subject to
	1307	+	recoupment of funds by the pharma cy benefits manager unless the
	1308	+	pharmacy benefits manager can provide proof of intent to commit
	1309	+	fraud. A person shall not be subject to criminal penalties for
	1310	+	errors provided for in this paragraph without proof of intent to
	1311	+	commit fraud;
	1312	+	6. Permit a pharmacy to use the records of a hospital,
	1313	+	physician, or other authorized practitioner of the healing arts for
	1314	+	drugs or medicinal supplies written or transmitted by any means of
	1315	+	communication for purposes of validating the pharmacy record with
	1316	+	respect to orders or refills of a legend or narcotic drug;
	1317	+	7. Not include the dispensing fee amount or the actual invoice
	1318	+	cost of the prescription dispensed in a finding of an audi t
	1319	+	recoupment unless a prescription was no t actually dispensed or a
	1320	+	physician denied authoriz ation of a dispensing order;
	1321	+	8. Audit each pharmacy under identical standards, regularity
	1322	+	and parameters as other similarly situated pharmacies and all
	1323	+	pharmacies owned or managed by the pharmacy benefits manager
	1324	+	conducting or having conducted the audit;
	1325	+	9. Not exceed one (1) year from the date the claim was
	1326	+	submitted to or adjudicated by a managed care company, nonprofit
	1327	+	hospital or medical service organization, i nsurance company, third -
	1328	+	party payor, pharmacy benefits manager, a health program
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	1355	+	administered by a department of this state, or any entity that
	1356	+	represents the companies, groups, or departments for the period
	1357	+	covered by an audit;
	1358	+	10. Not schedule or initia te an audit during the first seven
	1359	+	(7) calendar days of any month unless otherwise consented to by the
	1360	+	pharmacy;
	1361	+	11. Disclose to any plan sponsor whose claims were included in
	1362	+	the audit any money recouped in the audit; and
	1363	+	12. Not require pharmacists to break open packaging labeled
	1364	+	“for single-patient-use only”. Packaging labeled “for single-
	1365	+	patient-use only” shall be deemed to be the smallest package size
	1366	+	available; and
	1367	+	13. Upon recoupment of funds from a pharmacy, refund first to
	1368	+	the patient the porti on of the recovered funds that were originally
	1369	+	paid by the patient.
	1370	+	B. 1. Any entity that conducts wholesale purchase review
	1371	+	during an audit of a pharmacist or pharmacy shall not require the
	1372	+	pharmacist or pharmacy to provide a full dispensing report.
	1373	+	Wholesaler invoice reviews shall be limited to verification of
	1374	+	purchase inventory specific to the pharmacy claims paid by the
	1375	+	health benefits plan or pharmacy benefits manager conducting the
	1376	+	audit.
	1377	+	2. Any entity conducting an audit shall not identify or lab el a
	1378	+	prescription claim as an audit discrepancy when:
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	1405	+	a. the National Drug Code for the disp ensed drug is in a
	1406	+	quantity that is a subunit or multiple of the drug
	1407	+	purchased by the pharmacist or pharmacy as supported
	1408	+	by a wholesale invoice,
	1409	+	b. the pharmacist or pharmacy dispensed the correct
	1410	+	quantity of the drug according to the prescription,
	1411	+	and
	1412	+	c. the drug dispensed by the pharmacist or pharmacy
	1413	+	shares all but the last two digits of the National
	1414	+	Drug Code of the drug reflected on the supplier
	1415	+	invoice.
	1416	+	3. An entity conducting an audit shall accept as evidence,
	1417	+	subject to validation, to support the validity of a pharmacy claim
	1418	+	related to a dispensed drug:
	1419	+	a. redacted copies of supplier invoices in the
	1420	+	pharmacist’s or pharmacy’s possession, or
	1421	+	b. invoices and any supporting documents from any
	1422	+	supplier as authorized by federal or state law to
	1423	+	transfer ownership of the drug acquired by the
	1424	+	pharmacist or pharmacy.
	1425	+	4. An entity conducting an audit shall provide, no later than
	1426	+	five (5) business days after the date of a request by the pharmacist
	1427	+	or pharmacy, all supporting documents the pharmacist ’s or pharmacy’s
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	1454	+	purchase suppliers provided to the health benefits plan issuer or
	1455	+	pharmacy benefits manager.
	1456	+	C. A pharmacy shall be allowed to provide the pharmacy ’s
	1457	+	computerized patterned medical records or the records of a hospital,
	1458	+	physician, or other authoriz ed practitioner of the healing arts for
	1459	+	drugs or medicinal supplies written or transmitted by any means of
	1460	+	communication for purposes of supporting the pharmacy rec ord with
	1461	+	respect to orders or refills of a legend or narcotic drug.
	1462	+	D. The entity conductin g the audit shall not audit more than
	1463	+	fifty prescriptions, with specific date of service, per calendar
	1464	+	year. The annual limit to the number of prescription claims audited
	1465	+	shall be inclusive of all audits, including any prescription -related
	1466	+	documentation requests from the health insurer, pharmacy benefits
	1467	+	manager or any third -party company conducting audits on behalf of
	1468	+	any health insurer or pharmacy benefits manager during a calendar
	1469	+	year.
	1470	+	E. If paper copies of records are requested by the entity
	1471	+	conducting the audit, the entity shall pay twenty -five cents ($0.25)
	1472	+	per page to cover the costs incurred by the pharmacy. The entity
	1473	+	conducting the audit shall provide th e pharmacy with accurate
	1474	+	instructions, including any required form for obtaining
	1475	+	reimbursement for the copied records.
	1476	+	F. The entity conducting the audit shall:
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	1503	+	1. Deliver a preliminary audit findings report to the pharmacy
	1504	+	and the pharmacy’s contracting agent within forty-five (45) calendar
	1505	+	days of conducting the audit;
	1506	+	2. Allow the pharmacy at least ninety (90) calendar days
	1507	+	following receipt of the preliminary audit findings report in which
	1508	+	to produce documentation to address any discrepancy found dur ing the
	1509	+	audit; provided, however, a pharm acy may request an extension, not
	1510	+	to exceed an additional forty-five (45) calendar days;
	1511	+	3. Deliver a final audit findings report to the pharmacy and
	1512	+	the pharmacy’s contracting agent signed by the auditor within te n
	1513	+	(10) calendar days after receipt of additional documentation
	1514	+	provided by the pharmacy, as provided for in Section 356.3 of this
	1515	+	title;
	1516	+	4. Allow the pharmacy to reverse and resubmit claims
	1517	+	electronically within thirty (30) days of receipt of the final au dit
	1518	+	report in lieu of the auditing entity recouping discrepant claim
	1519	+	amounts from the pharma cy;
	1520	+	5. Not recoup any disputed funds until after final disposition
	1521	+	of the audit findings, including the appeals process as provided for
	1522	+	in Section 356.3 of this ti tle; and
	1523	+	6. Not accrue interest during the audit and appeal period.
	1524	+	G. Each entity conduct ing an audit shall provide a copy of the
	1525	+	final audit results, and a final audit report upon request, after
	1526	+	completion of any review process to the plan sponsor.
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	1553	+	H. 1. The full amount of any recoupment on an audit shall be
	1554	+	refunded to the plan sponsor. E xcept as provided for in paragraph 2
	1555	+	of this subsection, a charge or assessment for an audit shall not be
	1556	+	based, directly or indirectly, on amounts recouped.
	1557	+	2. This subsection does not prevent the entity conducting the
	1558	+	audit from charging or assessing th e responsible party, directly or
	1559	+	indirectly, based on amounts recouped if both of the following
	1560	+	conditions are met:
	1561	+	a. the plan sponsor and the entity conducting th e audit
	1562	+	have a contract that explicitly s tates the percentage
	1563	+	charge or assessment to the pl an sponsor, and
	1564	+	b. a commission to an agent or employee of the entity
	1565	+	conducting the audit is not based, directly or
	1566	+	indirectly, on amounts recouped.
	1567	+	I. Unless superseded by state or federal law, auditors shall
	1568	+	only have access to previous audit reports o n a particular pharmacy
	1569	+	conducted by the auditing entity for the same pharmacy benefits
	1570	+	manager, health plan or insurer. An auditing vendor contracting
	1571	+	with multiple pharmacy benefits managers or health i nsurance plans
	1572	+	shall not use audit reports or other information gained from an
	1573	+	audit on a pharmacy to conduct another audit for a different
	1574	+	pharmacy benefits manager or health insurance plan.
	1575	+	J. An audit shall be c onsidered null and void if the entity
	1576	+	conducting the audit fails to follow any of the requir ements under
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	1603	+	this section. Any violation of this section by a pharmacy benefits
	1604	+	manager or auditing entity shall be deemed a violation of the
	1605	+	Pharmacy Audit Integr ity Act.
	1606	+	SECTION 10. AMENDATORY 59 O.S. 2021, Section 356.3, is
	1607	+	amended to read as follows:
	1608	+	Section 356.3. A. Each entity conducting an audit shall
	1609	+	establish a written appeals process under which a pharmacy may
	1610	+	appeal an unfavorable preliminary audit report and/or final audit
	1611	+	report to the entity.
	1612	+	B. Following an appea l, if the entity finds that an unfavorable
	1613	+	audit report or any portion thereof is unsubstantiated, the entity
	1614	+	shall dismiss the audit report or the unsubstantiated portion of the
	1615	+	audit report without any f urther action.
	1616	+	C. Any final audit report, followin g the final audit appeal
	1617	+	period, with a finding of fraud or willful misrepresentation shall
	1618	+	be referred to the district attorney having proper jurisdiction or
	1619	+	the Attorney General for prosecution upon completion of the appeals
	1620	+	process.
	1621	+	D. This act does section and Section 356.2 of this title do not
	1622	+	apply to any audit, review or investigation that is initiated based
	1623	+	on or that involves fraud, willful misrepresentatio n or abuse so
	1624	+	long as the auditing entity provides in writing at the time of the
	1625	+	audit, a clear and conspicuous declaration that the audit is being
	1626	+	conducted under suspicion of fraud, willful misrepresentation, or
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	1653	+	abuse and a statement of facts that suppor ts the reasonable
	1654	+	suspicion. Any monies recouped from a null and void audit shall be
	1655	+	returned to the affected pharmacy within fourteen (14) calendar
	1656	+	days.
	1657	+	E. Any entity conducting an audit based on or that involves
	1658	+	fraud, willful misrepresentation, or ab use shall provide to the
	1659	+	Office of the Attorney General:
	1660	+	1. Notice at least two (2) busines s days prior to beginning
	1661	+	performance of an audit under this section;
	1662	+	2. A preliminary report within thirty (30) days of performing
	1663	+	the audit; and
	1664	+	3. A final report within thirty (30) days following the closure
	1665	+	of the final audit appeal period.
	1666	+	F. The Attorney General shall have unrestricted access to any
	1667	+	documents relevant to an audit that is based on or that involves
	1668	+	fraud, willful misrepresentation, or abuse.
	1669	+	G. The Attorney General may levy a civil or administrative fine
	1670	+	not less than One Hundred Dollars ($100.00) and not greater than Ten
	1671	+	Thousand Dollars ($10,000.00) for each violation of this section and
	1672	+	assess any other penalty or remedy authorized by law.
	1673	+	SECTION 11. AMENDATORY 59 O.S. 2021, Section 357, is
	1674	+	amended to read as follows:
	1675	+	Section 357. As used in this act section through Section 360 of
	1676	+	this title:
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	1702	+
	1703	+	1. “Covered entity” means a nonprofit hospital or medical
	1704	+	service organization, insurer, health coverage benefit plan, or
	1705	+	health maintenance organization ; a, health program administered by
	1706	+	the state in the capacity of provider of providing health coverage;,
	1707	+	or an employer, labor union, or other entity organized in the state
	1708	+	group of persons that provides health coverage to covered
	1709	+	individuals who are employed or resi de in the persons in this state.
	1710	+	This term does not include a health benefit plan that provides
	1711	+	coverage only for accidental injury, specified disease, hospital
	1712	+	indemnity, disability income, or other limi ted benefit health
	1713	+	insurance policies and contracts that do not include prescription
	1714	+	drug coverage;
	1715	+	2. “Covered individual” means a member, participant, enrollee,
	1716	+	contract holder or policy holder or beneficiary of a covered entity
	1717	+	who is provided health coverage by the covered entity. A covered
	1718	+	individual includes any dependent or other person provided health
	1719	+	coverage through a policy, contract or plan for a covered
	1720	+	individual;
	1721	+	3. “Department” means the Oklahoma Insurance Department;
	1722	+	4. “Maximum allowable cost”, or “MAC”, or “MAC list” means the
	1723	+	list of drug products delineating the maximum per -unit reimbursement
	1724	+	for multiple-source prescription drugs, medical product products, or
	1725	+	device devices including, but not limited to:
	1726	+
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	1752	+	a. average acquisition cost, including the national drug
	1753	+	acquisition cost,
	1754	+	b. average manufacturer price,
	1755	+	c. average wholesale price,
	1756	+	d. brand effective rate or generic effective rate,
	1757	+	e. discount indexing,
	1758	+	f. federal upper limits,
	1759	+	g. wholesale acquisition cost, and
	1760	+	h. any other term that a pharmacy benefits manager or an
	1761	+	insurer of a health benefit plan may use to establish
	1762	+	reimbursement rates to a pharmacist or pharmacy for
	1763	+	pharmacist services;
	1764	+	5. “Multisource drug product reimbursement ” (reimbursement)
	1765	+	means the total amount paid to a pharmacy inclusive of any reduction
	1766	+	in payment to the pharmacy, excluding prescription dispense fees;
	1767	+	6. “Office” means the Office of the Attorney General;
	1768	+	7. “Pharmacy benefits management ” means a service provided to
	1769	+	covered entities to facilitate the provision of prescription drug
	1770	+	benefits to covered individuals within the state, including
	1771	+	negotiating pricing and other terms with drug manufacturers and
	1772	+	providers. Pharmacy benefits management may include any or all of
	1773	+	the following services:
	1774	+
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	1800	+	a. claims processing, retail network management and
	1801	+	payment of claims to pharmacies for prescription drugs
	1802	+	dispensed to covered individuals,
	1803	+	b. administration or management of pharmacy discount
	1804	+	cards or programs,
	1805	+	c. clinical formulary development and management
	1806	+	services,
	1807	+	c. d. rebate contracting and administrati on,
	1808	+	d. e. certain patient compliance, therapeutic intervention
	1809	+	and generic substitution programs, or
	1810	+	e. f. administration or management of mail -order pharmacy
	1811	+	programs, or
	1812	+	g. disease management programs;
	1813	+	7. 8. “Pharmacy benefits manager ” or “PBM” means a person,
	1814	+	business, or other entity that performs pharmacy benefits
	1815	+	management. The term includes shall include a person or entity
	1816	+	acting for on behalf of a PBM in a contractual or employment
	1817	+	relationship in the performance of pharmacy benefits management f or
	1818	+	a managed care company, nonprofit hospital, medical service
	1819	+	organization, insurance company, third -party payor, or a health
	1820	+	program administered by an agency or department of this state;
	1821	+	8. 9. “Plan sponsor” means the employers, insurance companies,
	1822	+	unions and health maintenance organizations or any other entity
	1823	+
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	1849	+	responsible for establishing, maintaining, or administering a health
	1850	+	benefit plan on behalf of covered individuals; and
	1851	+	9. 10. “Provider” means a pharmacy licensed by the State Board
	1852	+	of Pharmacy, or an agent or representative of a pharmacy, including,
	1853	+	but not limited to, the pharmacy ’s contracting agent, which
	1854	+	dispenses prescription drugs or devices to co vered individuals.
	1855	+	SECTION 12. AMENDATORY 59 O.S. 2021, Section 358 , is
	1856	+	amended to read as follows:
	1857	+	Section 358. A. In order to provide pharmacy benefits
	1858	+	management or any of the services included under the definition of
	1859	+	pharmacy benefits management in this state, a pha rmacy benefits
	1860	+	manager or any entity acting as one in a contractual or employment
	1861	+	relationship for a covered entity shall first obtain a license from
	1862	+	the Oklahoma Insurance Department, and the Department may charge a
	1863	+	fee for such licensure.
	1864	+	B. The Department shall establish, by regulation, licensure
	1865	+	procedures, required disclosures for pharmacy benefits managers
	1866	+	(PBMs) and other rules as may be necessary for carrying out and
	1867	+	enforcing the provisions of this act the Oklahoma Pharmacy Act . The
	1868	+	licensure procedures shall, at a minimum, include the completion of
	1869	+	an application form that shall include the name and address of an
	1870	+	agent for service of process, the payment of a requisite fee, and
	1871	+	evidence of the procurement of a surety bond.
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	1898	+	C. The Department may subpoena witnesses and information. Its
	1899	+	compliance officers may take and copy records for investigative use
	1900	+	and prosecutions. Nothing in this subsection shall limit the Office
	1901	+	of the Attorney General from using it s investigative demand
	1902	+	authority to investigate and prosecute violations of the law.
	1903	+	D. The Department may suspend, revoke or refuse to issue or
	1904	+	renew a license for noncompliance with any of the provisions hereby
	1905	+	established or with the rules promulgated by the Department; for
	1906	+	conduct likely to mislead, deceive or defraud the public or the
	1907	+	Department; for unfair or deceptive business practices or for
	1908	+	nonpayment of a renewal fee or fine. The Department may also levy
	1909	+	administrative fines for each count of w hich a PBM has been
	1910	+	convicted in a Depart ment hearing.
	1911	+	E. The Attorney General may promulga te rules to implement the
	1912	+	provisions of Sections 357 through 360 of this title.
	1913	+	SECTION 13. AMENDATORY 59 O.S. 2021, Section 360, is
	1914	+	amended to read as follows:
	1915	+	Section 360. A. The pharmacy benefits manager shall, with
	1916	+	respect to contracts between a pharmacy benefits manager and a
	1917	+	provider, including a pharmacy service administrative organization:
	1918	+	l. Include in such contracts the specific sources utilized to
	1919	+	determine the maximum allowable cost (MAC) pricing of the pharmacy,
	1920	+	update MAC pricing at least every seven (7) calendar days, and
	1921	+
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	1947	+	establish a process for providers to readily access the MAC list
	1948	+	specific to that provider;
	1949	+	2. In order to place a drug on the MAC list, ensure that the
	1950	+	drug is listed as “A” or “B” rated in the most recent version of the
	1951	+	FDA’s Approved Drug Products with Therapeutic Equivalence
	1952	+	Evaluations, also known as the Orange Book, and the drug is
	1953	+	generally available for purchase by pharmacies in the state f rom
	1954	+	national or regional wholesalers and is not obs olete;
	1955	+	3. Ensure dispensing fees are not included in the calculation
	1956	+	of MAC price reimbursement to pharmacy providers;
	1957	+	4. Provide a reasonable administration appe als procedure to
	1958	+	allow a provider, a provider ’s representative and a pharmacy service
	1959	+	administrative organization to contest reimbursement amounts within
	1960	+	fourteen (14) business days of the final adjusted payment date. The
	1961	+	pharmacy benefits manager shall n ot prevent the pharmacy or the
	1962	+	pharmacy service administrative organization from filing
	1963	+	reimbursement appeals in an electronic batch format. The pharmacy
	1964	+	benefits manager must respond to a provider, a provider ’s
	1965	+	representative and a pharmacy service admin istrative organization
	1966	+	who have contested a reimbursement amount through this procedure
	1967	+	within ten (10) business days. The pharmacy benefits manager must
	1968	+	respond in an electronic batch format to reimbursement appeals filed
	1969	+	in an electronic batch format. The pharmacy benefits manager shall
	1970	+	not require a pharmacy or pharmacy services administrati ve
	1971	+
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	1997	+	organization to log into a system to upload individual claim appeals
	1998	+	or to download individual appeal responses. If a price update is
	1999	+	warranted, the pharmacy be nefits manager shall make the change in
	2000	+	the reimbursement amount, permit the dispensing phar macy to reverse
	2001	+	and rebill the claim in question, and make the reimbursement amount
	2002	+	change retroactive and effective for all contracted providers; and
	2003	+	5. If a below-cost reimbursement appeal is denied, th e PBM
	2004	+	shall provide the reason for the denial, incl uding the National Drug
	2005	+	Code (NDC) number from and the name of the specific national or
	2006	+	regional wholesalers doing business in this state where the drug is
	2007	+	currently in stock and available for purchase by the dispensing
	2008	+	pharmacy at a price below the PBM ’s reimbursement price. If the
	2009	+	pharmacy benefits manager cannot provide a specific national or
	2010	+	regional wholesaler where the drug can be purchased by the
	2011	+	dispensing pharmacy at a price below the pharmacy ben efits manager’s
	2012	+	reimbursement price If the NDC number provided by the pharmacy
	2013	+	benefits manager is not available below the acquisition cost
	2014	+	obtained from the pharmaceutical wholesaler from whom the dispensing
	2015	+	pharmacy purchases the majority of the prescription drugs that are
	2016	+	dispensed, the pharmacy benefit s manager shall immediately adjust
	2017	+	the reimbursement amount, permit the dispensing pharmacy to reverse
	2018	+	and rebill the claim in question, and make the reimbursement amount
	2019	+	adjustment retroactive and effecti ve for all contracted providers.
	2020	+
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	2046	+	B. The pharmacy benefits manager shall not place a drug on a
	2047	+	MAC list, unless there are at least two therapeutically equivalent,
	2048	+	multiple-source drugs, generally available for purch ase by
	2049	+	dispensing retail pharmacies from national or regional wholesalers.
	2050	+	C. In the event that a drug is placed on the FDA Drug Shortage s
	2051	+	Database, pharmacy benefits managers shall reimburse claims to
	2052	+	pharmacies at no less than the wholesale acquisition cost for the
	2053	+	specific NDC number being di spensed.
	2054	+	D. The pharmacy benefits manager shall no t require
	2055	+	accreditation or licensing of providers, or any entity licensed or
	2056	+	regulated by the State Board of Pharmacy, other than by the State
	2057	+	Board of Pharmacy or federal government entity as a condition for
	2058	+	participation as a network provider.
	2059	+	D. E. A pharmacy or pharmacist may decline to provide the
	2060	+	pharmacist clinical or dispensing services to a patient or pharmacy
	2061	+	benefits manager if the pharmacy or pharmacist is to be paid less
	2062	+	than the pharmacy’s cost for providing the pharmacist clinical or
	2063	+	dispensing services.
	2064	+	E. F. The pharmacy benefits manager shall provide a dedicated
	2065	+	telephone number, email address and names of the personnel with
	2066	+	decision-making authority regarding MAC appeals and pricing.
	2067	+	SECTION 14. It being immediately neces sary for the preservation
	2068	+	of the public peace, health or safety, an emergency is hereby
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	2095	+	declared to exist, by reason whereof this act shall take effect and
653	2096		be in full force from and after its passage and a pproval.
654		-
655		-
656		-
657		-
658		-	ENR. S. B. NO. 1670 Page 16
659		-	Passed the Senate the 14th day of May, 2024.
	2097	+	Passed the Senate the 12th day of March, 2024.
660	2098
661	2099
662	2100
663	2101		Presiding Officer of the Senate
664	2102
665	2103
666		-	Passed the House of Representatives the 25th day of April, 2024.
	2104	+	Passed the House of Representatives the ____ day of __________,
	2105	+	2024.
667	2106
668	2107
669	2108
670	2109		Presiding Officer of the House
671	2110		of Representatives
672	2111
673		-	OFFICE OF THE GOVERNOR
674		-	Received by the Office of the Governor this _______ _____________
675		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
676		-	By: _________________________________
677		-	Approved by the Governor of the State of Oklahoma this _________
678		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
679		-
680		-	_________________________________
681		-	Governor of the State of Oklahoma
682		-
683		-
684		-	OFFICE OF THE SECRETARY OF STATE
685		-	Received by the Office of the Secretary of State this _______ ___
686		-	day of _________________ _, 20 _______, at _______ o'clock _______ M.
687		-	By: _________________________________
	2112	+