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ENGROSSED SENATE
BILL NO. 789 By: Gollihare, Coleman, Alvord,
Jech, Murdock, Guthrie,
Bullard, Standridge,
Weaver, Pugh, Pederson,
Hamilton, Deevers, Paxton,
Prieto, Kern, Boren, Burns,
Stewart, Stanley, Haste,
Seifried, McIntosh, Kirt,
Brooks, Hines, Sacchieri,
Goodwin, Reinhardt, Hall,
Gillespie, and Bergstrom of
the Senate
and
Stinson, Marti, and Moore
of the House
[ pharmacy benefit managers - pharmacy audit -
records - network sharing - reimbursement rates - fee
increase - contracts - penalties - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 59 O.S. 2021, Section 356.2, as
amended by Section 2, Chapter 332, O.S.L. 2024 (59 O.S. Supp. 2024,
Section 356.2), is amended to read as follows:
Section 356.2. A. The entity conducting an audit of a pharmacy
shall:
1. Identify and specifically describe the audit and appeal
procedures in the pharmacy contract. Prescription claim
documentation and record -keeping requirements shall not exceed the
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requirements set forth by the Oklahoma Pharmacy Act or other
applicable state or federal laws or regulations;
2. Give the pharmacy written notice by certified letter to the
pharmacy and the pharmacy ’s contracting agent, including
identification of specific prescription numbers and fill dates to be
audited, at least fourteen (14) calendar days prior to conducting
the audit, including, but not limited to, an on -site audit, a desk
audit, or a wholesale purchase audit, request for document ation
related to the dispensing of a prescription drug or any reimbursed
activity by a pharmacy provider; provided, however, that wholesale
purchase audits shall require a minimum of thirty (30) calendar
days’ written notice. For an on -site audit, the audit date shall be
the date the on-site audit occurs. For all other audit types, the
audit date shall be the date the pharmacy provides the documentation
requested in the audit notice. The pharmacy shall have the
opportunity to reschedule the audit no more than seven (7) calend ar
days from the date designated on the original audit notification;
3. Not interfere with the delivery of pharmacist services to a
patient and shall utilize every reasonable effort to minimize
inconvenience and disruption to pharmac y operations during the audit
process;
4. Conduct any audit involving clinical or professional
judgment by means of or in consultation with a licensed pharmacist;
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5. Not consider as fraud any clerical or record -keeping error,
such as a typographical erro r, scrivener’s error or computer error,
including, but not limited to, a miscalculated day supply,
incorrectly billed prescription written date or prescription origin
code, and such errors shall not be subject to recoupment. The
pharmacy shall have the ri ght to submit amended claims
electronically to correct clerical or record -keeping errors in lieu
of recoupment. To the extent that an audit results in the
identification of any clerical or record -keeping errors such as
typographical errors, scrivener ’s errors or computer error s in a
required document or record, the pharmacy shall not be subject to
recoupment of funds by the pharmacy benefits manager unless the
pharmacy benefits manager can provide proof of intent to commit
fraud. A person shall not be sub ject to criminal penalties for
errors provided for in this paragraph without proof of intent to
commit fraud;
6. Permit a pharmacy to use the records of a hospital,
physician, or other authorized practitioner of the healing arts for
drugs or medicinal sup plies written or trans mitted by any means of
communication for purposes of validating the pharmacy record with
respect to orders or refills of a legend or narcotic drug;
7. Permit a pharmacy to use drug purchase records without
limitation of date or sourc e to validate the dispensing of a
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prescription drug or a controlled dangerous substance, provided the
drug purchase was done in accordance with state or federal law;
8. Not include the dispensing fee amount or the actual invoice
cost of the prescription d ispensed in a finding of an audit
recoupment unless a prescription was not actually dispensed or a
physician denied authorization of a dispensing order;
8. 9. Audit each pharmacy under identical standards, regularity
and parameters as other similarly situ ated pharmacies and all
pharmacies owned or managed by the pharmacy benefits manager
conducting or having conducted the audit;
9. 10. Not exceed one (1) year from the date the claim was
submitted to or adjudicated by a managed care company, nonprofit
hospital or medical servic e organization, insurance company, third -
party payor, pharmacy benefits manager, a health program
administered by a department of this state, or any entity that
represents the companies, groups, or departments for the period
covered by an audit;
10. 11. Not schedule or initiate an audit during the first
seven (7) calendar days of any month unless otherwise consented to
by the pharmacy;
11. 12. Disclose to any plan sponsor whose claims were included
in the audit any money recouped in the audit;
12. 13. Not require pharmacists to break open packaging labeled
“for single-patient-use only”. Packaging labeled “for single-
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patient-use only” shall be deemed to be the smallest package size
available; and
13. 14. Upon recoupment of funds fro m a pharmacy, refund first
to the patient the portion of the recovered funds that were
originally paid by the patient, provided such funds were part of the
recoupment.
B. 1. Any entity that conducts wholesale purchase review
during an audit of a pharmaci st or pharmacy shall n ot require the
pharmacist or pharmacy to provide a full dispensing report.
Wholesaler invoice reviews shall be limited to verification of
purchase inventory specific to the pharmacy claims paid by the
health benefits plan or pharmacy benefits manager conducting the
audit without limitation to date or source of purchase .
2. Any entity conducting an audit shall not identify or label a
prescription claim as an audit discrepancy when:
a. the National Drug Code for the dispensed drug is i n a
quantity that is a subunit or multiple of the drug
purchased by the pharmacist or pharmacy as supported
by a wholesale invoice,
b. the pharmacist or pharmacy dispensed the correct
quantity of the drug according to the prescription,
and
c. the drug dispensed by the pharmacist or pharmacy
shares all but the last two digits of the National
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Drug Code of the drug reflected on the supplier
invoice.
3. An entity conducting an audit shall accept as evidence,
without limitation on date or source of purchase subject to
validation, to support the validity of a pharmacy claim related to a
dispensed drug:
a. redacted copies of supplier invoices in the
pharmacist’s or pharmacy’s possession, or
b. invoices and any supporting documents from any
supplier as authorized b y federal or state law to
transfer ownership of the drug acquired by the
pharmacist or pharmacy.
4. An entity conducting an audit shall provide, no later than
five (5) calendar days after the date of a request by the pharmacist
or pharmacy, all supporting documents the pharmac ist’s or pharmacy’s
purchase suppliers provided to the health benefits plan issuer or
pharmacy benefits manager.
C. A pharmacy shall be allowed to provide the pharmacy ’s
computerized patterned medical records or the records of a hosp ital,
physician, or other authorized practitioner of the healing arts for
drugs or medicinal supplies written or transmitted by any means of
communication for purposes of supporting the pharmacy record with
respect to orders or refills of a legend or narco tic drug.
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D. The entity conducting the audit shall not audit more than
fifty prescriptions, with specific date of service, per calendar
year. The annual limit to the number of prescription claims audited
shall be inclusive of all audits, including any pr escription-related
documentation requests from the health insurer, pharmacy benefits
manager or any third -party company conducting audits on behalf of
any health insurer or pharmacy benefits manager during a calendar
year.
E. If paper copies of records ar e requested by the ent ity
conducting the audit, the entity shall pay twenty -five cents ($0.25)
per page to cover the costs incurred by the pharmacy. The entity
conducting the audit shall provide the pharmacy with accurate
instructions, including any requi red form for obtaining
reimbursement for the copied records.
F. The entity conducting the audit shall:
1. Deliver a preliminary audit findings report to the pharmacy
and the pharmacy’s contracting agent within forty -five (45) calendar
days of conducting the audit;
2. Allow the pharmacy at least ninety (90) calendar days
following receipt of the preliminary audit findings report in which
to produce documentation to address any discrepancy found during the
audit; provided, however, a pharmacy may request a n extension, not
to exceed an additional forty -five (45) calendar days;
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3. Deliver a final audit findings report to the pharmacy and
the pharmacy’s contracting agent signed by the auditor within ten
(10) calendar days after receipt of additional documenta tion
provided by the pharmacy, as provided for in Section 356.3 of this
title;
4. Allow the pharmacy to reverse and resubmit claims
electronically within thirty (30) calendar days of receipt of the
final audit report in lieu of the auditing entity recoupi ng
discrepant claim amounts from the pharmacy;
5. Not recoup any disputed funds until after final disposition
of the audit findings, including the appeals process as provided for
in Section 356.3 of this title; and
6. Not accrue interest during the audit and appeal period.
G. Each entity conducting an audit shall provide a copy of the
final audit results, and a final audit report upon request, after
completion of any review process to the plan sponsor.
H. 1. The full amount of any recoupment on an audi t shall be
refunded to the plan sponsor. Except as provided for in paragraph 2
of this subsection, a charge or assessment for an audit shall not be
based, directly or indirectly, on amounts recouped.
2. This subsection does not prevent the entity conduct ing the
audit from charging or assessing the responsible party, directly or
indirectly, based on amounts recouped if both of the following
conditions are met:
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a. the plan sponsor and the entity conducting the audit
have a contract that explicitly states th e percentage
charge or assessment to the plan sponsor, and
b. a commission to an agent or employee of the entity
conducting the audit is not based, directly or
indirectly, on amounts recouped.
I. Unless superseded by state or federal law, auditors shall
only have access to pre vious audit reports on a particular pharmacy
conducted by the auditing entity for the same pharmacy benefits
manager, health plan or insurer. An auditing vendor contracting
with multiple pharmacy benefits managers or health insurance plans
shall not use audit reports or other information gained from an
audit on a pharmacy to conduct another audit for a different
pharmacy benefits manager or health insurance plan.
J. Sections A through I of this section shall not apply to any
audit initiated based on or th at involves fraud, willful
misrepresentation, or abuse.
K. If the Attorney General, after notice and opportunity for
hearing, finds that the entity conducting the audit failed to follow
any of the requirements pursuant to the Pharmac y Audit Integrity
Act, the audit shall be considered null and void. Any monies
recouped from a null and void audit shall be returned to the
affected pharmacy within fourteen (14) calendar days. Any violation
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of this section by a pharmacy benefits manager or auditing entity
shall be deemed a violation of the Pharmacy Audit Integrity Act.
SECTION 2. AMENDATORY 59 O.S. 2021, Section 357, as
amended by Section 4, Chapter 332, O.S.L. 2024 (59 O.S. Supp. 2024,
Section 357), is amended to read as follows:
Section 357. A. As used in Sections 357 through 360 of this
title:
1. “Covered entity” means a nonprofit hospital or medical
service organization, for -profit hospital or medical service
organization, insurer, health benefit plan, hea lth maintenance
organization, health program administered by the state in the
capacity of providing health coverage, or an employer, labor union,
or other group of persons that provides health coverage to persons
in this state. This term does not include a health benefit plan
that provides coverage only for accidental injury, specified
disease, hospital indemnity, disability income, or other limited
benefit health insurance policies and contracts that do not include
prescription drug coverage;
2. “Covered individual” means a member, participant, enrollee,
contract holder or policy holder or beneficiary of a covered entity
who is provided health coverage by the covered entity. A covered
individual includes any dependent or other person provided health
coverage through a policy, contract or plan for a covered
individual;
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3. “Department” means the Insurance Department;
4. “Effective rate contracting” means any agreement or
arrangement between a pharmacy or contracting agent acting on behalf
of a pharmacy and a pharmacy benefits manager for pharmaceuticals
based on the effective rate of payment rather than a predetermined
fixed price or fixed discount percentage;
5. “Maximum allowable cost ”, “MAC”, or “MAC list” means the
list of drug products delineating th e maximum per-unit reimbursement
for multiple-source prescription drugs, medical product, or device;
5. 6. “Multisource drug product reimbursement ” (reimbursement)
means the total amount paid to a pharmacy inclusive of any reduction
in payment to the phar macy, excluding prescr iption dispense fees and
professional fees;
6. 7. “Office” means the Office of the Attorney General;
7. 8. “Pharmacy benefits management ” means a service provided
to covered entities to facilitate the provision of prescription drug
benefits to covered individuals within the state, including
negotiating pricing and other terms with drug manufacturers and
providers. Pharmacy benefits management may include any or all of
the following services:
a. claims processing, retail network mana gement and
payment of claims to pharmacies for prescription drugs
dispensed to covered individuals,
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b. clinical formulary development and management
services, or
c. rebate contracting and administration;
8. 9. “Pharmacy benefits manager ” or “PBM” means a person,
business, or other entity that performs pharmacy benefits
management. The term shall include a person or entity acting on
behalf of a PBM in a contractual or employment relationship in the
performance of pharmacy benefits management for a managed care
company, nonprofit hospital, medical service organization, insurance
company, third-party payor, or a health program administered by an
agency or department of this state;
9. 10. “Plan sponsor” means the employers, insurance companies,
unions and health maintenance organizations or any other entity
responsible for establishing, maintaining, or administering a health
benefit plan on behalf of covered individuals; and
10. 11. “Provider” means a pharmacy licensed by the State Board
of Pharmacy, or an ag ent or representative of a pharmacy, including,
but not limited to, the pharmacy ’s contracting agent, which
dispenses prescription drugs or devices to covered individuals.
B. Nothing in the definition of pharmacy benefits management or
pharmacy benefits manager in the Patient ’s Right to Pharmacy Choice
Act, Pharmacy Audit Integrity Act, or Sections 357 through 360 of
this title shall deem an employer a “pharmacy benefits manager ” of
its own self-funded health benefit plan, except, to the extent
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permitted by applicable law, wher e the employer, without the
utilization of a third party and unrelated to the employer ’s own
pharmacy:
a. negotiates directly with drug manufacturers,
b. processes claims on behalf of its members, or
c. manages its own retail network of pharmacies.
SECTION 3. AMENDATORY 59 O.S. 2021, Section 360, as
amended by Section 6, Chapter 332, O.S.L. 2024 (59 O.S. Supp. 2024,
Section 360), is amended to read as follows:
Section 360. A. The pharmacy benefits manager sh all, with
respect to contracts between a pharmacy benefits manager and a
provider, including a pharmacy service administrative organization:
l. Include in such contracts the specific sources utilized to
determine the maximum allowable cost (MAC) pricing o f the pharmacy,
update MAC pricing at least every seven (7) calendar days, and
establish a process for providers to readily access the MAC list
specific to that provider;
2. In order to place a drug on the MAC list, ensure that the
drug is listed as “A” or “B” rated in the most recent version of the
FDA’s Approved Drug Products with Therapeutic Equivalence
Evaluations, also known as the Orange Book, and the drug is
generally available for purchase by pharmacies in the state from
national or regional wholes alers and is not obsolete;
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3. Ensure dispensing fees are not included in the calculation
of MAC price reimbursement to pharmacy providers;
4. Provide a reasonable administration appeals procedure to
allow a provider, a provider ’s representative and a pha rmacy service
administrative organization to contest reimbursement amounts within
fourteen (14) calendar days of the final adjusted payment date. The
pharmacy benefits manager shall not prevent the pharmacy or the
pharmacy service administrative organizat ion from filing
reimbursement appeals in an electronic batch format. The pharmacy
benefits manager must respond to a provider, a provider ’s
representative and a pharmacy service administrative organization
who have contested a reimbursement amount through this procedure
within ten (10) calendar days. The pharmacy benefits manager must
respond in an electronic batch format to reimbursement appeals filed
in an electronic batch format. The pharmacy benefits manager shall
not require a pharmacy or pharmacy s ervices administrative
organization to log into a system to upload individual claim appeals
or to download individual appeal responses. If a price update is
warranted, the pharmacy benefits manager shall make the change in
the reimbursement amount, permit the dispensing pharma cy to reverse
and rebill the claim in question, and make the reimbursement amount
change retroactive and effective for all contracted providers; and
5. If a below-cost reimbursement appeal is denied, the PBM
shall provide the reason for the denial, including the National Drug
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Code (NDC) number from, and the name of, the specific national or
regional wholesalers doing business in this state where the drug is
currently in stock and available for purchase by the dispensing
pharmacy at a price below the PBM’s reimbursement price. If the NDC
number provided by the pharmacy benefits manager is not available
below the acquisition cost obtained from the pharmaceutical
wholesaler from whom the dispensing pharmacy purchases the majority
of the prescription drugs that are dispensed, the pharmacy benefits
manager shall immediately adjust the reimbursement amount, permit
the dispensing pharmacy to reverse and rebill the claim in question,
and make the reimbursement amount adjustment retroactive and
effective in effect for all contracted providers for future claims
billed.
B. The reimbursement appeal requirements in this section shall
apply to all drugs, medical products, or devices reimbursed
according to any payment methodology, including, but not limited to:
1. Average acquisition cost, including the National Average
Drug Acquisition Cost;
2. Average manufacturer price;
3. Average wholesale price;
4. Brand effective rate or generic effective rate;
5. Discount indexing;
6. Federal upper limit s;
7. Wholesale acquisition cost; and
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8. Any other term that a pharmacy benefits manager or an
insurer of a health benefit plan may use to establish reimbursement
rates to a pharmacist or pharmacy for pharmacist services.
C. The pharmacy benefits manage r shall not place a drug on a
MAC list, unless there are at least two therapeutically equivalent,
multiple-source drugs, generally available for purchase by
dispensing retail pharmacies from national or regional wholesalers.
D. In the event that a drug is placed on the FDA Dru g Shortages
Database, pharmacy benefits managers shall reimburse claims to
pharmacies at no less than the wholesale acquisition cost for the
specific NDC number being dispensed.
E. The pharmacy benefits manager shall not require
accreditation or licensing of providers, or any entity licensed or
regulated by the State Board of Pharmacy, other than by the State
Board of Pharmacy or federal government entity as a condition for
participation as a network provider.
F. A pharmacy or pharma cist may decline to pr ovide the
pharmacist clinical or dispensing services to a patient or pharmacy
benefits manager if the pharmacy or pharmacist is to be paid less
than the pharmacy’s cost for providing the pharmacist clinical or
dispensing services.
G. The pharmacy benefits manager shall provide a dedicated
telephone number, email address and names of the personnel with
decision-making authority regarding MAC appeals and pricing.
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H. No pharmacy benefit s manager (PBM) shall lease, rent, or
otherwise make its provider network available to another pharmacy
benefits manager. Prohibited activities shall include, but not be
limited to:
1. Entering into agreements or contracts that allow another PBM
to use the provider network; and
2. Facilitating access to the provider network though any form
of leasing or renting arrangement.
I. The PBM shall, with respect to contracts between a PBM and a
provider, including contracts with pharmacy service administrative
organization, ensure that reimbursement to pharmaci es for each drug
dispensed is no less than one hundred six percent (106%) of the
National Average Drug Acquisition Cost (NADAC) plus a professional
fee of Fifteen Dollars ($15.00). The NADAC price shall be the price
published in effect for the date the dr ug claim was billed by the
pharmacy. If a particular drug does not have a published NADAC
price, the reimbursement shall be one hundred ten percent (110%) of
the wholesale acquisition cost (WAC) plus a professional fee of
Fifteen Dollars ($15.00) for generic drugs and one hund red (100%)
percent of the WAC plus a professional fee of Fifteen Dollars
($15.00) for brand-name drugs. The professional fee shall
automatically increase on January 1 of each year at a percentage
equal to the inflation rate measured by the Consumer Price Index for
the previous twelve-month period.
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J. 1. Effective rate contracting is hereby prohibited in all
agreements between pharmacies or contracting agents acting on behalf
of a pharmacy and a PBM or third -party payers. No PBM or third-
party payer shall enter into any contract that establishes payment
for services or medications based on an effective rate of
reimbursement.
2. Any PBM or third-party payer found to be in violation of
this section shall be subject to penalties, inclu ding, but not
limited to, fines, revocation of licensure, or other disciplinary
actions.
K. The provisions of this section shall not be waived, voided,
or nullified by contract.
SECTION 4. This act shall become effective November 1, 2025.
Passed the Senate the 27th day of March, 2025.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2025.
Presiding Officer of the House
of Representatives