Wisconsin 2023-2024 Regular Session

Wisconsin Assembly Bill AB773 Compare Versions

Only one version of the bill is available at this time.

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 ASSEMBLY BILL 773
5	5	December 8, 2023 - Introduced by Representatives SCHRAA, ROZAR, TITTL, CONLEY,
6	6	DITTRICH, DONOVAN, EDMING, GOEBEN, GOYKE, GUNDRUM, JACOBSON,
7	7	MAGNAFICI, MURSAU, NOVAK, O'CONNOR, OLDENBURG, PALMERI, SNYDER, TUSLER,
8	8	WICHGERS and RETTINGER, cosponsored by Senators FELZKOWSKI, QUINN,
9	9	JAMES, PFAFF and TAYLOR. Referred to Committee on Health, Aging and
10	10	Long-Term Care.
11	11	*AUTHORS SUBJECT TO CHANGE*
12	12	AN ACT to repeal 632.865 (2) and 632.865 (5) (e); to renumber 632.865 (4); to
13	13	amend 40.51 (8), 40.51 (8m), 66.0137 (4), 120.13 (2) (g), 185.983 (1) (intro.),
14	14	609.83, 632.861 (4) (a), 632.865 (1) (ae) and 632.865 (6) (c) 3.; and to create
15	15	632.861 (1m), 632.861 (3g), 632.861 (3r), 632.861 (4) (e), 632.862, 632.865 (1)
16	16	(ab) and (ac), 632.865 (1) (an), (aq), and (at), 632.865 (1) (bm), 632.865 (1) (cg)
17	17	and (cr), 632.865 (2d), 632.865 (2h), 632.865 (2p), 632.865 (2t), 632.865 (4) (b),
18	18	632.865 (5d), (5h), (5p) and (5t), 632.865 (6) (bm), 632.865 (6) (c) 3m., 632.865
19	19	(6g), 632.865 (6r) and 632.865 (8) of the statutes; relating to: regulation of
20	20	pharmacy benefit managers, fiduciary and disclosure requirements on
21	21	pharmacy benefit managers, and application of prescription drug payments to
22	22	health insurance cost-sharing requirements.
23	23	Analysis by the Legislative Reference Bureau
24	24	This bill makes several changes to the regulation of pharmacy benefit
25	25	managers and their interactions with pharmacies and pharmacists. Under current
26	26	law, pharmacy benefit managers are generally required to be licensed as a pharmacy
27	27	benefit manager or an employee benefit plan administrator by the commissioner of
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41	41	insurance. A pharmacy benefit manager is an entity that contracts to administer or
42	42	manage prescription drug benefits on behalf of an insurer, a cooperative, or another
43	43	entity that provides prescription drug benefits to Wisconsin residents. Major
44	44	provisions of the bill are summarized below.
45	45	Pharmacy benefit manager regulation
46	46	The bill requires a pharmacy benefit manager to pay a pharmacy or pharmacist
47	47	a professional dispensing fee at a rate not less than is paid by the state under the
48	48	Medical Assistance program for each pharmaceutical product that the pharmacy or
49	49	pharmacist dispenses to an individual. The professional dispensing fee is required
50	50	to be paid in addition to the amount the pharmacy benefit manager reimburses the
51	51	pharmacy or pharmacist for the cost of the pharmaceutical product that the
52	52	pharmacy or pharmacist dispenses. The Medical Assistance program is a joint state
53	53	and federal program that provides health services to individuals who have limited
54	54	financial resources.
55	55	The bill prohibits a pharmacy benefit manager from assessing, charging, or
56	56	collecting from a pharmacy or pharmacist any form of remuneration that passes from
57	57	the pharmacy or pharmacist to the pharmacy benefit manager including
58	58	claim-processing fees, performance-based fees, network-participation fees, or
59	59	accreditation fees.
60	60	Further, under the bill, a pharmacy benefit manager may not use any
61	61	certification or accreditation requirement as a determinant of pharmacy network
62	62	participation that is inconsistent with, more stringent than, or in addition to the
63	63	federal requirements for licensure as a pharmacy and the requirements for licensure
64	64	as a pharmacy provided under state law.
65	65	The bill requires a pharmacy benefit manager to allow a participant or
66	66	beneficiary of a pharmacy benefits plan or program that the pharmacy benefit
67	67	manager serves to use any pharmacy or pharmacist in this state that is licensed to
68	68	dispense the pharmaceutical product that the participant or beneficiary seeks to
69	69	obtain if the pharmacy or pharmacist accepts the same terms and conditions that the
70	70	pharmacy benefit manager establishes for at least one of the networks of pharmacies
71	71	or pharmacists that the pharmacy benefit manager has established to serve
72	72	individuals in the state. A pharmacy benefit manager may establish a preferred
73	73	network of pharmacies or pharmacists and a nonpreferred network of pharmacies
74	74	or pharmacists, however, under the bill, a pharmacy benefit manager may not
75	75	prohibit a pharmacy or pharmacist from participating in either type of network
76	76	provided that the pharmacy or pharmacist is licensed by this state and the federal
77	77	government and accepts the same terms and conditions that the pharmacy benefit
78	78	manager establishes for other pharmacies or pharmacists participating in the
79	79	network that the pharmacy or pharmacist wants to join. Under the bill, a pharmacy
80	80	benefit manager may not charge a participant or beneficiary of a pharmacy benefits
81	81	plan or program that the pharmacy benefit manager serves a different copayment
82	82	obligation or additional fee, or provide any inducement or financial incentive, for the
83	83	participant or beneficiary to use a pharmacy or pharmacist in a particular network
84	84	of pharmacies or pharmacists that the pharmacy benefit manager has established
85	85	to serve individuals in the state. Further, the bill prohibits a pharmacy benefit - 3 -2023 - 2024 Legislature
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89	89	manager, 3rd-party payer, or health benefit plan from excluding a pharmacy or
90	90	pharmacist from its network because the pharmacy or pharmacist serves less than
91	91	a certain portion of the population of the state or serves a population living with
92	92	certain health conditions.
93	93	The bill provides that a pharmacy benefit manager may neither prohibit a
94	94	pharmacy or pharmacist that dispenses a pharmaceutical product from, nor penalize
95	95	a pharmacy or pharmacist that dispenses a pharmaceutical product for, informing
96	96	an individual about the cost of the pharmaceutical product, the amount in
97	97	reimbursement that the pharmacy or pharmacist receives for dispensing the
98	98	pharmaceutical product, or any difference between the cost to the individual under
99	99	the individual's pharmacy benefits plan or program and the cost to the individual if
100	100	the individual purchases the pharmaceutical product without making a claim for
101	101	benefits under the individual's pharmacy benefits plan or program.
102	102	The bill prohibits any pharmacy benefit manager or any insurer or self-insured
103	103	health plan from requiring or penalizing a person who is covered under a health
104	104	insurance policy or plan for using or for not using a specific retail, mail-order, or
105	105	other pharmacy provider within the network of pharmacy providers under the policy
106	106	or plan. Prohibited penalties include an increase in premium, deductible,
107	107	copayment, or coinsurance.
108	108	Pharmaceutical product reimbursements
109	109	The bill provides that a pharmacy benefit manager that uses a maximum
110	110	allowable cost list must include all of the following information on the list: 1) the
111	111	average acquisition cost of each pharmaceutical product and the cost of the
112	112	pharmaceutical product set forth in the national average drug acquisition cost data
113	113	published by the federal centers for medicare and medicaid services; 2) the average
114	114	manufacturer price of each pharmaceutical product; 3) the average wholesale price
115	115	of each pharmaceutical product; 4) the brand effective rate or generic effective rate
116	116	for each pharmaceutical product; 5) any applicable discount indexing; 6) the federal
117	117	upper limit for each pharmaceutical product published by the federal centers for
118	118	medicare and medicaid services; 7) the wholesale acquisition cost of each
119	119	pharmaceutical product; and 8) any other terms that are used to establish the
120	120	maximum allowable costs.
121	121	The bill provides that a pharmacy benefit manager may place or continue a
122	122	particular pharmaceutical product on a maximum allowable cost list only if the
123	123	pharmaceutical product 1) is listed as a drug product equivalent or is rated by a
124	124	nationally recognized reference as “not rated” or “not available”; 2) is available for
125	125	purchase by all pharmacies and pharmacists in the state from national or regional
126	126	pharmaceutical wholesalers operating in the state; and 3) has not been determined
127	127	by the drug manufacturer to be obsolete. Further, the bill provides that any
128	128	pharmacy benefit manager that uses a maximum allowable cost list must provide
129	129	access to the maximum allowable cost list to each pharmacy or pharmacist subject
130	130	to the maximum allowable cost list, update the maximum allowable cost list on a
131	131	timely basis, provide a process for a pharmacy or pharmacist subject to the maximum
132	132	allowable cost list to receive notification of an update to the maximum allowable cost
133	133	list, and update the maximum allowable cost list no later than seven days after the - 4 -2023 - 2024 Legislature LRB-5112/1
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136	136	pharmacy acquisition cost of the pharmaceutical product increases by 10 percent or
137	137	more from at least 60 percent of the pharmaceutical wholesalers doing business in
138	138	the state or there is a change in the methodology on which the maximum allowable
139	139	cost list is based or in the value of a variable involved in the methodology. A
140	140	maximum allowable cost list is a list of pharmaceutical products that sets forth the
141	141	maximum amount that a pharmacy benefit manager will pay to a pharmacy or
142	142	pharmacist for dispensing a pharmaceutical product. A maximum allowable cost list
143	143	may directly establish maximum costs or may set forth a method for how the
144	144	maximum costs are calculated.
145	145	The bill further provides that a pharmacy benefit manager that uses a
146	146	maximum allowable cost list must provide a process for a pharmacy or pharmacist
147	147	to appeal and resolve disputes regarding claims that the maximum payment amount
148	148	for a pharmaceutical product is below the pharmacy acquisition cost. A pharmacy
149	149	benefit manager that receives an appeal from or on behalf of a pharmacy or
150	150	pharmacist under this bill is required to resolve the appeal and notify the pharmacy
151	151	or pharmacist of the pharmacy benefit manager's determination no later than seven
152	152	business days after the appeal is received. If the pharmacy benefit manager grants
153	153	the relief requested in the appeal, the bill requires the pharmacy benefit manager
154	154	to make the requested change in the maximum allowable cost, allow the pharmacy
155	155	or pharmacist to reverse and rebill the relevant claim, provide to the pharmacy or
156	156	pharmacist the national drug code number published in a directory by the federal
157	157	Food and Drug Administration on which the increase or change is based, and make
158	158	the change effective for each similarly situated pharmacy or pharmacist subject to
159	159	the maximum allowable cost list. If the pharmacy benefit manager denies the relief
160	160	requested in the appeal, the bill requires the pharmacy benefit manager to provide
161	161	the pharmacy or pharmacist a reason for the denial, the national drug code number
162	162	published in a directory by the FDA for the pharmaceutical product to which the
163	163	claim relates, and the name of a national or regional wholesaler that has the
164	164	pharmaceutical product currently in stock at a price below the amount specified in
165	165	the pharmacy benefit manager's maximum allowable cost list.
166	166	The bill provides that a pharmacy benefit manager may not deny a pharmacy's
167	167	or pharmacist's appeal if the relief requested in the appeal relates to the maximum
168	168	allowable cost for a pharmaceutical product that is not available for the pharmacy
169	169	or pharmacist to purchase at a cost that is below the pharmacy acquisition cost from
170	170	the pharmaceutical wholesaler from which the pharmacy or pharmacist purchases
171	171	the majority of pharmaceutical products for resale. If a pharmaceutical product is
172	172	not available for a pharmacy or pharmacist to purchase at a cost that is below the
173	173	pharmacy acquisition cost from the pharmaceutical wholesaler from which the
174	174	pharmacy or pharmacist purchases the majority of pharmaceutical products for
175	175	resale, the pharmacy benefit manager must revise the maximum allowable cost list
176	176	to increase the maximum allowable cost for the pharmaceutical product to an
177	177	amount equal to or greater than the pharmacy's or pharmacist's pharmacy
178	178	acquisition cost and allow the pharmacy or pharmacist to reverse and rebill each
179	179	claim affected by the pharmacy's or pharmacist's inability to procure the - 5 -2023 - 2024 Legislature
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183	183	pharmaceutical product at a cost that is equal to or less than the maximum allowable
184	184	cost that was the subject of the pharmacy's or pharmacist's appeal.
185	185	The bill prohibits a pharmacy benefit manager from reimbursing a pharmacy
186	186	or pharmacist in the state an amount less than the amount that the pharmacy
187	187	benefit manager reimburses a pharmacy benefit manager affiliate for providing the
188	188	same pharmaceutical product. Under the bill, a pharmacy benefit manager affiliate
189	189	is a pharmacy or pharmacist that is an affiliate of a pharmacy benefit manager.
190	190	Finally, the bill allows a pharmacy or pharmacist to decline to provide a
191	191	pharmaceutical product to an individual or pharmacy benefit manager if, as a result
192	192	of a maximum allowable cost list, the pharmacy or pharmacist would be paid less
193	193	than the pharmacy acquisition cost of the pharmacy or pharmacist providing the
194	194	pharmaceutical product.
195	195	Drug formularies
196	196	This bill makes several changes with respect to drug formularies. Under
197	197	current law, a disability insurance policy that offers a prescription drug benefit, a
198	198	self-insured health plan that offers a prescription drug benefit, or a pharmacy
199	199	benefit manager acting on behalf of a disability insurance policy or self-insured
200	200	health plan must provide to an enrollee advanced written notice of a formulary
201	201	change that removes a prescription drug from the formulary of the policy or plan or
202	202	that reassigns a prescription drug to a benefit tier for the policy or plan that has a
203	203	higher deductible, copayment, or coinsurance. The advanced written notice of a
204	204	formulary change must be provided no fewer than 30 days before the expected date
205	205	of the removal or reassignment.
206	206	This bill provides that a disability insurance policy or self-insured health plan
207	207	that provides a prescription drug benefit shall make the formulary and all drug costs
208	208	associated with the formulary available to plan sponsors and individuals prior to
209	209	selection or enrollment. Further, the bill provides that no disability insurance policy,
210	210	self-insured health plan, or pharmacy benefit manager acting on behalf of a
211	211	disability insurance policy or self-insured health plan may remove a prescription
212	212	drug from the formulary except at the time of coverage renewal. Finally, the bill
213	213	provides that advanced written notice of a formulary change must be provided no
214	214	fewer than 90 days before the expected date of the removal or reassignment of a
215	215	prescription drug on the formulary.
216	216	Pharmacy networks
217	217	Under the bill, if an enrollee utilizes a pharmacy or pharmacist in a preferred
218	218	network of pharmacies or pharmacists, no disability insurance policy or self-insured
219	219	health plan that provides a prescription drug benefit or pharmacy benefit manager
220	220	that provides services under a contract with a policy or plan may require the enrollee
221	221	to pay any amount or impose on the enrollee any condition that would not be required
222	222	if the enrollee utilized a different pharmacy or pharmacist in the same preferred
223	223	network. Further, the bill provides that any disability insurance policy or
224	224	self-insured health plan that provides a prescription drug benefit, or any pharmacy
225	225	benefit manager that provides services under a contract with a policy or plan, that
226	226	has established a preferred network of pharmacies or pharmacists must reimburse
227	227	each pharmacy or pharmacist in the same network at the same rates. - 6 -2023 - 2024 Legislature LRB-5112/1
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230	230	Audits of pharmacists and pharmacies
231	231	This bill makes several changes to audits of pharmacists and pharmacies. The
232	232	bill requires an entity that conducts audits of pharmacists and pharmacies to ensure
233	233	that each pharmacist or pharmacy audited by the entity is audited under the same
234	234	standards and parameters as other similarly situated pharmacists or pharmacies
235	235	audited by the entity, that the entity randomizes the prescriptions that the entity
236	236	audits and the entity audits the same number of prescriptions in each prescription
237	237	benefit tier, and that each audit of a prescription reimbursed under Part D of the
238	238	federal Medicare program is conducted separately from audits of prescriptions
239	239	reimbursed under other policies or plans. The bill prohibits any pharmacy benefit
240	240	manager from recouping reimbursements made to a pharmacist or pharmacy for
241	241	errors that involve no actual financial harm to an enrollee, policy, or plan unless the
242	242	error is the result of the pharmacist or pharmacy failing to comply with a formal
243	243	corrective action plan. The bill further prohibits any pharmacy benefit manager
244	244	from using extrapolation in calculating reimbursements that it may recoup, and
245	245	instead requires a pharmacy benefit manager to base the finding of errors for which
246	246	reimbursements will be recouped on an actual error in reimbursement and not a
247	247	projection of the number of patients served having a similar diagnosis or on a
248	248	projection of the number of similar orders or refills for similar prescription drugs.
249	249	The bill requires that a pharmacy benefit manager that recoups any reimbursements
250	250	made to a pharmacist or pharmacy for an error that was the cause of financial harm
251	251	must return the recouped reimbursement to the individual or the policy or plan
252	252	sponsor who was harmed by the error.
253	253	Pharmacy benefit manager fiduciary and disclosure requirements
254	254	The bill provides that a pharmacy benefit manager owes a fiduciary duty to a
255	255	health benefit plan sponsor. The bill also requires that a pharmacy benefit manager
256	256	annually disclose all of the following information to the health benefit plan sponsor:
257	257	1. The indirect profit received by the pharmacy benefit manager from owning
258	258	a pharmacy or service provider.
259	259	2. Any payments made to a consultant or broker who works on behalf of the plan
260	260	sponsor.
261	261	3. From the amounts received from drug manufacturers, the amounts retained
262	262	by the pharmacy benefit manager that are related to the plan sponsor's claims or
263	263	bona fide service fees.
264	264	4. The amounts received from network pharmacies and pharmacists and the
265	265	amount retained by the pharmacy benefit manager.
266	266	Discriminatory reimbursement of 340B entities
267	267	The bill prohibits a pharmacy benefit manager from taking certain actions with
268	268	respect to 340B covered entities, pharmacies and pharmacists contracted with 340B
269	269	covered entities, and patients who obtain prescription drugs from 340B covered
270	270	entities. The 340B drug pricing program is a federal program that requires
271	271	pharmaceutical manufacturers that participate in the federal Medicaid program to
272	272	sell outpatient drugs at discounted prices to certain health care organizations that
273	273	provide health care for uninsured and low-income patients. Entities that are eligible
274	274	for discounted prices under the 340B drug pricing program include - 7 -2023 - 2024 Legislature
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278	278	federally-qualified health centers, critical access hospitals, and certain public and
279	279	nonprofit disproportionate share hospitals. The bill prohibits pharmacy benefit
280	280	managers from doing any of the following:
281	281	1. Refusing to reimburse a 340B covered entity or a pharmacy or pharmacist
282	282	contracted with a 340B covered entity for dispensing 340B drugs.
283	283	2. Imposing requirements or restrictions on 340B covered entities or
284	284	pharmacies or pharmacists contracted with 340B covered entities that are not
285	285	imposed on other entities, pharmacies, or pharmacists.
286	286	3. Reimbursing a 340B covered entity or a pharmacy or pharmacist contracted
287	287	with a 340B covered entity for a 340B drug at a rate lower than the amount paid for
288	288	the same drug to pharmacies or pharmacists that are not 340B covered entities or
289	289	pharmacies or pharmacists contracted with a 340B covered entity.
290	290	4. Restricting the access of a 340B covered entity or a pharmacy or pharmacist
291	291	contracted with a 340B covered entity to a 3rd-party payer's pharmacy network
292	292	solely because the 340B covered entity or the pharmacy or pharmacist contracted
293	293	with a 340B covered entity participates in the 340B drug pricing program.
294	294	5. Requiring a 340B covered entity or a pharmacy or pharmacist contracted
295	295	with a 340B covered entity to contract with a specific pharmacy or pharmacist or
296	296	health benefit plan in order to access a 3rd-party payer's pharmacy network.
297	297	6. Restricting the methods by which a 340B covered entity or a pharmacy or
298	298	pharmacist contracted with a 340B covered entity may dispense or deliver 340B
299	299	drugs.
300	300	Application of prescription drug payments
301	301	Health insurance policies and plans often apply deductibles and out-of-pocket
302	302	maximum amounts to the benefits covered by the policy or plan. A deductible is an
303	303	amount that an enrollee in a policy or plan must pay out of pocket before attaining
304	304	the full benefits of the policy or plan. An out-of-pocket maximum amount is a limit
305	305	specified by a policy or plan on the amount that an enrollee pays, and, once that limit
306	306	is reached, the policy or plan covers the benefit entirely. The bill generally requires
307	307	health insurance policies that offer prescription drug benefits, self-insured health
308	308	plans, and pharmacy benefit managers acting on behalf of policies or plans to apply
309	309	amounts paid by or on behalf of an individual covered under the policy or plan for
310	310	brand name prescription drugs to any cost-sharing requirement or to any
311	311	calculation of an out-of-pocket maximum amount of the policy or plan. Health
312	312	insurance policies are referred to in the bill as disability insurance policies.
313	313	Prohibited retaliation
314	314	The bill prohibits a pharmacy benefit manager from retaliating against a
315	315	pharmacy or pharmacist for reporting an alleged violation of certain laws applicable
316	316	to pharmacy benefit managers or for exercising certain rights or remedies.
317	317	Retaliation includes terminating or refusing to renew a contract with a pharmacy or
318	318	pharmacist, subjecting a pharmacy or pharmacist to increased audits, or failing to
319	319	promptly pay a pharmacy or pharmacist any money that the pharmacy benefit
320	320	manager owes to the pharmacy or pharmacist. The bill provides that a pharmacy or
321	321	pharmacist may bring an action in court for injunctive relief if a pharmacy benefit
322	322	manager is retaliating against the pharmacy or pharmacist as provided in the bill. - 8 -2023 - 2024 Legislature LRB-5112/1
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325	325	In addition to equitable relief, the court may award a pharmacy or pharmacist that
326	326	prevails in such an action reasonable attorney fees and costs.
327	327	For further information see the state fiscal estimate, which will be printed as
328	328	an appendix to this bill.
329	329	The people of the state of Wisconsin, represented in senate and assembly, do
330	330	enact as follows:
331	331	SECTION 1. 40.51 (8) of the statutes is amended to read:
332	332	40.51 (8) Every health care coverage plan offered by the state under sub. (6)
333	333	shall comply with ss. 631.89, 631.90, 631.93 (2), 631.95, 632.72 (2), 632.729, 632.746
334	334	(1) to (8) and (10), 632.747, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853,
335	335	632.855, 632.861, 632.862, 632.867, 632.87 (3) to (6), 632.885, 632.89, 632.895 (5m)
336	336	and (8) to (17), and 632.896.
337	337	SECTION 2. 40.51 (8m) of the statutes is amended to read:
338	338	40.51 (8m) Every health care coverage plan offered by the group insurance
339	339	board under sub. (7) shall comply with ss. 631.95, 632.729, 632.746 (1) to (8) and (10),
340	340	632.747, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.861,
341	341	632.862, 632.867, 632.885, 632.89, and 632.895 (11) to (17).
342	342	SECTION 3. 66.0137 (4) of the statutes is amended to read:
343	343	66.0137 (4) SELF-INSURED HEALTH PLANS. If a city, including a 1st class city, or
344	344	a village provides health care benefits under its home rule power, or if a town
345	345	provides health care benefits, to its officers and employees on a self-insured basis,
346	346	the self-insured plan shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2),
347	347	632.729, 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.798, 632.85, 632.853, 632.855,
348	348	632.861, 632.862, 632.867, 632.87 (4) to (6), 632.885, 632.89, 632.895 (9) to (17),
349	349	632.896, and 767.513 (4).
350	350	SECTION 4. 120.13 (2) (g) of the statutes is amended to read:
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375	375	120.13 (2) (g) Every self-insured plan under par. (b) shall comply with ss.
376	376	49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.729, 632.746 (10) (a) 2. and (b) 2.,
377	377	632.747 (3), 632.798, 632.85, 632.853, 632.855, 632.861, 632.862, 632.867, 632.87 (4)
378	378	to (6), 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4).
379	379	SECTION 5. 185.983 (1) (intro.) of the statutes is amended to read:
380	380	185.983 (1) (intro.) Every voluntary nonprofit health care plan operated by a
381	381	cooperative association organized under s. 185.981 shall be exempt from chs. 600 to
382	382	646, with the exception of ss. 601.04, 601.13, 601.31, 601.41, 601.42, 601.43, 601.44,
383	383	601.45, 611.26, 611.67, 619.04, 623.11, 623.12, 628.34 (10), 631.17, 631.89, 631.93,
384	384	631.95, 632.72 (2), 632.729, 632.745 to 632.749, 632.775, 632.79, 632.795, 632.798,
385	385	632.85, 632.853, 632.855, 632.861, 632.862, 632.867, 632.87 (2) to (6), 632.885,
386	386	632.89, 632.895 (5) and (8) to (17), 632.896, and 632.897 (10) and chs. 609, 620, 630,
387	387	635, 645, and 646, but the sponsoring association shall:
388	388	SECTION 6. 609.83 of the statutes is amended to read:
389	389	609.83 Coverage of drugs and devices; application of payments .
390	390	Limited service health organizations, preferred provider plans, and defined network
391	391	plans are subject to ss. 632.853, 632.861, 632.862, and 632.895 (16t) and (16v).
392	392	SECTION 7. 632.861 (1m) of the statutes is created to read:
393	393	632.861 (1m) REQUIRED DISCLOSURES. A disability insurance policy or
394	394	self-insured health plan that provides a prescription drug benefit shall make the
395	395	formulary and all drug costs associated with the formulary available to plan sponsors
396	396	and individuals prior to selection or enrollment.
397	397	SECTION 8. 632.861 (3g) of the statutes is created to read:
398	398	632.861 (3g) CHOICE OF PROVIDER; PENALTY PROHIBITED. No insurer, self-insured
399	399	health plan, or pharmacy benefit manager may require, or penalize a person who is
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426	426	SECTION 8 ASSEMBLY BILL 773
427	427	covered under a disability insurance policy or self-insured health plan for using or
428	428	for not using, a specific retail, specific mail-order, or other specific pharmacy
429	429	provider within the network of pharmacy providers under the policy or plan. A
430	430	prohibited penalty under this subsection includes an increase in premium,
431	431	deductible, copayment, or coinsurance.
432	432	SECTION 9. 632.861 (3r) of the statutes is created to read:
433	433	632.861 (3r) PHARMACY NETWORKS. (a) If an enrollee utilizes a pharmacy or
434	434	pharmacist in a preferred network of pharmacies or pharmacists, no disability
435	435	insurance policy or self-insured health plan that provides a prescription drug benefit
436	436	or pharmacy benefit manager that provides services under a contract with a policy
437	437	or plan may require the enrollee to pay any amount or impose on the enrollee any
438	438	condition that would not be required if the enrollee utilized a different pharmacy or
439	439	pharmacist in the same preferred network.
440	440	(b) Any disability insurance policy or self-insured health plan that provides a
441	441	prescription drug benefit, or any pharmacy benefit manager that provides services
442	442	under a contract with a policy or plan, that has established a preferred network of
443	443	pharmacies or pharmacists shall reimburse each pharmacy or pharmacist in the
444	444	same network at the same rates.
445	445	SECTION 10. 632.861 (4) (a) of the statutes is amended to read:
446	446	632.861 (4) (a) Except as provided in par. (b) and subject to par. (e), a disability
447	447	insurance policy that offers a prescription drug benefit, a self-insured health plan
448	448	that offers a prescription drug benefit, or a pharmacy benefit manager acting on
449	449	behalf of a disability insurance policy or self-insured health plan shall provide to an
450	450	enrollee advanced written notice of a formulary change that removes a prescription
451	451	drug from the formulary of the policy or plan or that reassigns a prescription drug
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479	479	SECTION 10
480	480	ASSEMBLY BILL 773
481	481	to a benefit tier for the policy or plan that has a higher deductible, copayment, or
482	482	coinsurance. The advanced written notice of a formulary change under this
483	483	paragraph shall be provided no fewer than 30 90 days before the expected date of the
484	484	removal or reassignment and shall include information on the procedure for the
485	485	enrollee to request an exception to the formulary change. The policy, plan, or
486	486	pharmacy benefit manager is required to provide the advanced written notice under
487	487	this paragraph only to those enrollees in the policy or plan who are using the drug
488	488	at the time the notification must be sent according to available claims history.
489	489	SECTION 11. 632.861 (4) (e) of the statutes is created to read:
490	490	632.861 (4) (e) No disability insurance policy, self-insured health plan, or
491	491	pharmacy benefit manager acting on behalf of a disability insurance policy or
492	492	self-insured health plan may remove a prescription drug from the formulary except
493	493	at the time of coverage renewal.
494	494	SECTION 12. 632.862 of the statutes is created to read:
495	495	632.862 Application of prescription drug payments. (1) DEFINITIONS. In
496	496	this section:
497	497	(a) “Brand name” has the meaning given in s. 450.12 (1) (a).
498	498	(b) “Brand name drug” means any of the following:
499	499	1. A prescription drug that contains a brand name and that has no medically
500	500	appropriate generic equivalent.
501	501	2. A prescription drug that contains a brand name and that has a medically
502	502	appropriate generic equivalent but to which the enrollee or other covered individual
503	503	has obtained access through any of the following:
504	504	a. Prior authorization.
505	505	b. A step therapy protocol.
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532	532	SECTION 12 ASSEMBLY BILL 773
533	533	c. The exceptions and appeals process of the disability insurance policy,
534	534	self-insured health plan, or pharmacy benefit manager.
535	535	(c) “Cost-sharing requirement” means a deductible, copayment, or
536	536	coinsurance.
537	537	(d) “Disability insurance policy” has the meaning given in s. 632.895 (1) (a).
538	538	(e) “Generic equivalent” means a drug product equivalent, as defined in s.
539	539	450.13 (1e), that is nationally available.
540	540	(f) “Pharmacy benefit manager” has the meaning given in s. 632.865 (1) (c).
541	541	(g) “Self-insured health plan” has the meaning given in s. 632.85 (1) (c).
542	542	(2) APPLICATION OF PAYMENTS. Except as provided in sub. (4), a disability
543	543	insurance policy that offers a prescription drug benefit, a self-insured health plan,
544	544	or a pharmacy benefit manager acting on behalf of a disability insurance policy or
545	545	self-insured health plan shall apply to any cost-sharing requirement or to any
546	546	calculation of an out-of-pocket maximum amount of the disability insurance policy
547	547	or self-insured health plan, including the annual limitations on cost sharing
548	548	established under 42 USC 18022 (c) and 42 USC 300gg-6 (b), any amounts paid by
549	549	an enrollee or other individual covered under the disability insurance policy or
550	550	self-insured health plan, or by any person on behalf of the enrollee or individual, for
551	551	brand name drugs that are covered under the disability insurance policy or
552	552	self-insured health plan.
553	553	(3) CALCULATION OF COST-SHARING ANNUAL LIMITATIONS. For purposes of
554	554	calculating an enrollee's contribution to the annual limitation on cost sharing under
555	555	42 USC 18022 (c) and 42 USC 300gg-6 (b), a disability insurance policy that offers
556	556	a prescription drug benefit, a self-insured health plan, or a pharmacy benefit
557	557	manager acting on behalf of a disability insurance policy or self-insured health plan
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585	585	SECTION 12
586	586	ASSEMBLY BILL 773
587	587	shall include expenditures for any item or service covered under the disability
588	588	insurance policy or self-insured health plan if the item or service is included within
589	589	a category of essential health benefits, as described in 42 USC 18022 (b) (1), and
590	590	regardless of whether the disability insurance policy, self-insured health plan, or
591	591	pharmacy benefit manager classifies the item or service as an essential health
592	592	benefit.
593	593	(4) EXCEPTION; HIGH DEDUCTIBLE HEALTH PLANS. If applying the requirement
594	594	under sub. (2) to payments made by or on behalf of an enrollee or other individual
595	595	covered under a high deductible health plan, as defined under 26 USC 223 (c) (2),
596	596	would result in the enrollee failing to meet the definition of an eligible individual
597	597	under 26 USC 223 (c) (1), the disability insurance policy, self-insured health plan,
598	598	or pharmacy benefit manager shall begin applying the requirement under sub. (2)
599	599	to the disability insurance policy or self-insured health plan's deductible after the
600	600	enrollee has satisfied the minimum deductible requirement under 26 USC 223 (c) (2)
601	601	(A) (i). This subsection does not apply to any amounts paid for items or services that
602	602	are preventive care, as described in 26 USC 223 (c) (2) (C).
603	603	SECTION 13. 632.865 (1) (ab) and (ac) of the statutes are created to read:
604	604	632.865 (1) (ab) “340B covered entity” has the meaning given for “covered
605	605	entity” under 42 USC 256b (a) (4).
606	606	(ac) “340B drug” has the meaning given for “covered drug” under 42 USC 256b
607	607	(b) (2).
608	608	SECTION 14. 632.865 (1) (ae) of the statutes is amended to read:
609	609	632.865 (1) (ae) “Health benefit plan” has the meaning given means a health
610	610	benefit plan, as defined in s. 632.745 (11), that is not prescription drug coverage
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636	636	SECTION 14 ASSEMBLY BILL 773
637	637	provided under part D of medicare under Title XVIII of the federal Social Security
638	638	Act, 42 USC 1395 to 1395lll.
639	639	SECTION 15. 632.865 (1) (an), (aq), and (at) of the statutes are created to read:
640	640	632.865 (1) (an) “Maximum allowable cost list” means a list of pharmaceutical
641	641	products that sets forth the maximum amount a pharmacy benefit manager will pay
642	642	to a pharmacy or pharmacist for dispensing a pharmaceutical product. The list may
643	643	directly establish the maximum amounts or set forth a method for how the maximum
644	644	amounts are calculated.
645	645	(aq) “Pharmaceutical product” means a prescription generic drug, prescription
646	646	brand-name drug, prescription biologic, or other prescription drug, vaccine, or
647	647	device.
648	648	(at) “Pharmaceutical wholesaler” means a person that sells and distributes,
649	649	directly or indirectly, a pharmaceutical product and that offers to deliver the
650	650	pharmaceutical product to a pharmacy or pharmacist.
651	651	SECTION 16. 632.865 (1) (bm) of the statutes is created to read:
652	652	632.865 (1) (bm) “Pharmacy acquisition cost” means the amount that a
653	653	pharmaceutical wholesaler charges a pharmacy or pharmacist for a pharmaceutical
654	654	product as listed on the pharmacy's or pharmacist's billing invoice.
655	655	SECTION 17. 632.865 (1) (cg) and (cr) of the statutes are created to read:
656	656	632.865 (1) (cg) “Pharmacy benefit manager affiliate” means a pharmacy or
657	657	pharmacist that is an affiliate of a pharmacy benefit manager.
658	658	(cr) “Pharmacy services administrative organization” means an entity that
659	659	provides contracting and other administrative services to pharmacies or
660	660	pharmacists to assist them in their interactions with 3rd-party payers, pharmacy
661	661	benefit managers, pharmaceutical wholesalers, and other entities.
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689	689	SECTION 18
690	690	ASSEMBLY BILL 773
691	691	SECTION 18. 632.865 (2) of the statutes is repealed.
692	692	SECTION 19. 632.865 (2d) of the statutes is created to read:
693	693	632.865 (2d) PHARMACEUTICAL PRODUCT REIMBURSEMENTS. (ag) Contents of
694	694	maximum allowable cost lists. A pharmacy benefit manager that uses a maximum
695	695	allowable cost list shall include all of the following information on the maximum
696	696	allowable cost list:
697	697	1. The average acquisition cost of each pharmaceutical product and the cost of
698	698	the pharmaceutical product set forth in the national average drug acquisition cost
699	699	data published by the federal centers for medicare and medicaid services.
700	700	2. The average manufacturer price of each pharmaceutical product.
701	701	3. The average wholesale price of each pharmaceutical product.
702	702	4. The brand effective rate or generic effective rate for each pharmaceutical
703	703	product.
704	704	5. Any applicable discount indexing.
705	705	6. The federal upper limit for each pharmaceutical product published by the
706	706	federal centers for medicare and medicaid services.
707	707	7. The wholesale acquisition cost of each pharmaceutical product.
708	708	8. Any other terms that are used to establish the maximum allowable costs.
709	709	(ar) Regulation of maximum allowable cost lists. A pharmacy benefit manager
710	710	may place or continue a particular pharmaceutical product on a maximum allowable
711	711	cost list only if all of the following apply to the pharmaceutical product:
712	712	1. The pharmaceutical product is listed as a drug product equivalent, as defined
713	713	in s. 450.13 (1e), or is rated by a nationally recognized reference, such as Medi-Span
714	714	or Gold Standard Drug Database, as “not rated” or “not available.”
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740	740	SECTION 19 ASSEMBLY BILL 773
741	741	2. The pharmaceutical product is available for purchase by all pharmacies and
742	742	pharmacists in this state from national or regional pharmaceutical wholesalers
743	743	operating in this state.
744	744	3. The pharmaceutical product has not been determined by the drug
745	745	manufacturer to be obsolete.
746	746	(b) Access and update obligations. A pharmacy benefit manager that uses a
747	747	maximum allowable cost list shall do all of the following:
748	748	1. Provide access to the maximum allowable cost list to each pharmacy or
749	749	pharmacist subject to the maximum allowable cost list.
750	750	2. Update the maximum allowable cost list on a timely basis.
751	751	3. Update the maximum allowable cost list no later than 7 days after any of the
752	752	following occurs:
753	753	a. The pharmacy acquisition cost of a pharmaceutical product increases by 10
754	754	percent or more from at least 60 percent of the pharmaceutical wholesalers doing
755	755	business in this state.
756	756	b. There is a change in the methodology on which the maximum allowable cost
757	757	list is based or in the value of a variable involved in the methodology.
758	758	4. Provide a process for a pharmacy or pharmacist subject to the maximum
759	759	allowable cost list to receive prompt notification of an update to the maximum
760	760	allowable cost list.
761	761	(c) Appeal process. 1. A pharmacy benefit manager that uses a maximum
762	762	allowable cost list shall provide a process for a pharmacy or pharmacist to appeal and
763	763	resolve disputes regarding claims that the maximum payment amount for a
764	764	pharmaceutical product is below the pharmacy acquisition cost.
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791	791	SECTION 19
792	792	ASSEMBLY BILL 773
793	793	2. A pharmacy benefit manager required to provide an appeal process under
794	794	subd. 1. shall do all of the following:
795	795	a. Provide a dedicated telephone number and email address or website that a
796	796	pharmacy or pharmacist may use to submit an appeal.
797	797	b. Allow a pharmacy or pharmacist to submit an appeal directly on the
798	798	pharmacy's or pharmacist's own behalf.
799	799	c. Allow a pharmacy services administrative organization to submit an appeal
800	800	on behalf of a pharmacy or pharmacist.
801	801	d. Provide at least 7 business days after a customer transaction for a pharmacy
802	802	or pharmacist to submit an appeal under this paragraph concerning a
803	803	pharmaceutical product involved in the transaction.
804	804	3. A pharmacy benefit manager that receives an appeal from or on behalf of a
805	805	pharmacy or pharmacist under this paragraph shall resolve the appeal and notify
806	806	the pharmacy or pharmacist of the pharmacy benefit manager's determination no
807	807	later than 7 business days after the appeal is received by doing any of the following:
808	808	a. If the pharmacy benefit manager grants the relief requested in the appeal,
809	809	the pharmacy benefit manager shall make the requested change in the maximum
810	810	allowable cost; allow the pharmacy or pharmacist to reverse and rebill the relevant
811	811	claim; provide to the pharmacy or pharmacist the national drug code number
812	812	published in a directory by the federal food and drug administration on which the
813	813	increase or change is based; and make the change effective for each similarly situated
814	814	pharmacy or pharmacist subject to the maximum allowable cost list.
815	815	b. If the pharmacy benefit manager denies the relief requested in the appeal,
816	816	the pharmacy benefit manager shall provide to the pharmacy or pharmacist a reason
817	817	for the denial, the national drug code number published in a directory by the federal
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844	844	SECTION 19 ASSEMBLY BILL 773
845	845	food and drug administration for the pharmaceutical product to which the claim
846	846	relates, and the name of a national or regional pharmaceutical wholesaler operating
847	847	in this state that has the pharmaceutical product currently in stock at a price below
848	848	the amount specified in the pharmacy benefit manager's maximum allowable cost
849	849	list.
850	850	4. Notwithstanding subd. 3. b., a pharmacy benefit manager may not deny a
851	851	pharmacy's or pharmacist's appeal under this paragraph if the relief requested in the
852	852	appeal relates to the maximum allowable cost for a pharmaceutical product that is
853	853	not available for the pharmacy or pharmacist to purchase at a cost that is below the
854	854	pharmacy acquisition cost from the pharmaceutical wholesaler from which the
855	855	pharmacy or pharmacist purchases the majority of pharmaceutical products for
856	856	resale. If this subdivision applies, the pharmacy benefit manager shall revise the
857	857	maximum allowable cost list to increase the maximum allowable cost for the
858	858	pharmaceutical product to an amount equal to or greater than the pharmacy's or
859	859	pharmacist's pharmacy acquisition cost and allow the pharmacy or pharmacist to
860	860	reverse and rebill each claim affected by the pharmacy's or pharmacist's inability to
861	861	procure the pharmaceutical product at a cost that is equal to or less than the
862	862	maximum allowable cost that was the subject of the pharmacy's or pharmacist's
863	863	appeal.
864	864	(d) Affiliated reimbursements. A pharmacy benefit manager may not
865	865	reimburse a pharmacy or pharmacist in this state an amount less than the amount
866	866	that the pharmacy benefit manager reimburses a pharmacy benefit manager
867	867	affiliate for providing the same pharmaceutical product. The reimbursement
868	868	amount shall be calculated on a per unit basis based on the same generic product
869	869	identifier or generic code number, if applicable.
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897	897	SECTION 19
898	898	ASSEMBLY BILL 773
899	899	(e) Declining to dispense. A pharmacy or pharmacist may decline to provide a
900	900	pharmaceutical product to an individual or pharmacy benefit manager if, as a result
901	901	of the applicable maximum allowable cost list, the pharmacy or pharmacist would
902	902	be paid less than the pharmacy acquisition cost of the pharmacy or pharmacist
903	903	providing the pharmaceutical product.
904	904	SECTION 20. 632.865 (2h) of the statutes is created to read:
905	905	632.865 (2h) PROFESSIONAL DISPENSING FEES. A pharmacy benefit manager
906	906	shall pay a pharmacy or pharmacist a professional dispensing fee at a rate not less
907	907	than is paid by this state under the medical assistance program under subch. IV of
908	908	ch. 49 for each pharmaceutical product that the pharmacy or pharmacist dispenses
909	909	to an individual. The fee shall be calculated on a per unit basis based on the same
910	910	generic product identifier or generic code number, if applicable. The pharmacy
911	911	benefit manager shall pay the professional dispensing fee in addition to the amount
912	912	the pharmacy benefit manager reimburses the pharmacy or pharmacist for the cost
913	913	of the pharmaceutical product that the pharmacy or pharmacist dispenses to the
914	914	individual.
915	915	SECTION 21. 632.865 (2p) of the statutes is created to read:
916	916	632.865 (2p) PHARMACY BENEFIT MANAGER-IMPOSED FEES PROHIBITED. A
917	917	pharmacy benefit manager may not assess, charge, or collect any form of
918	918	remuneration that passes from a pharmacy or pharmacist to the pharmacy benefit
919	919	manager, including claim-processing fees, performance-based fees,
920	920	network-participation fees, or accreditation fees.
921	921	SECTION 22. 632.865 (2t) of the statutes is created to read:
922	922	632.865 (2t) FIDUCIARY DUTY AND DISCLOSURES TO HEALTH BENEFIT PLAN SPONSORS.
923	923	(a) A pharmacy benefit manager owes a fiduciary duty to the health benefit plan
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950	950	SECTION 22 ASSEMBLY BILL 773
951	951	sponsor to act according to the health benefit plan sponsor's instructions and in the
952	952	best interests of the health benefit plan sponsor.
953	953	(b) A pharmacy benefit manager shall annually provide, no later than the date
954	954	and using the method prescribed by the commissioner by rule, the health benefit plan
955	955	sponsor with all of the following information from the previous calendar year:
956	956	1. The indirect profit received by the pharmacy benefit manager from owning
957	957	any interest in a pharmacy or service provider.
958	958	2. Any payment made by the pharmacy benefit manager to a consultant or
959	959	broker who works on behalf of the health benefit plan sponsor.
960	960	3. From the amounts received from all drug manufacturers, the amounts
961	961	retained by the pharmacy benefit manager, and not passed through to the health
962	962	benefit plan sponsor, that are related to the health benefit plan sponsor's claims or
963	963	bona fide service fees.
964	964	4. The amounts, including pharmacy access and audit recovery fees, received
965	965	from all pharmacies and pharmacists that are in the pharmacy benefit manager's
966	966	network or have a contract to be in the network and, from these amounts, the amount
967	967	retained by the pharmacy benefit manager and not passed through to the health
968	968	benefit plan sponsor.
969	969	SECTION 23. 632.865 (4) of the statutes is renumbered 632.865 (4) (a).
970	970	SECTION 24. 632.865 (4) (b) of the statutes is created to read:
971	971	632.865 (4) (b) A pharmacy benefit manager may not use any certification or
972	972	accreditation requirement as a determinant of pharmacy network participation that
973	973	is inconsistent with, more stringent than, or in addition to the federal requirements
974	974	for licensure as a pharmacy and the requirements for licensure as a pharmacy under
975	975	s. 450.06 or 450.065.
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1003	1003	SECTION 25
1004	1004	ASSEMBLY BILL 773
1005	1005	SECTION 25. 632.865 (5) (e) of the statutes is repealed.
1006	1006	SECTION 26. 632.865 (5d), (5h), (5p) and (5t) of the statutes are created to read:
1007	1007	632.865 (5d) DISCRIMINATORY REIMBURSEMENT PROHIBITED. (a) In this
1008	1008	subsection, “3rd-party payer” means an entity, other than a patient or health care
1009	1009	provider, that reimburses for and manages health care expenses.
1010	1010	(b) A pharmacy benefit manager may not do any of the following:
1011	1011	1. Refuse to reimburse a 340B covered entity or a pharmacy or pharmacist
1012	1012	contracted with a 340B covered entity for dispensing 340B drugs.
1013	1013	2. Impose requirements or restrictions on 340B covered entities or pharmacies
1014	1014	or pharmacists contracted with 340B covered entities that are not imposed on other
1015	1015	entities, pharmacies, or pharmacists.
1016	1016	3. Reimburse a 340B covered entity or a pharmacy or pharmacist contracted
1017	1017	with a 340B covered entity for a 340B drug at a rate lower than the amount paid for
1018	1018	the same drug to pharmacies or pharmacists that are not 340B covered entities or
1019	1019	pharmacies or pharmacists contracted with a 340B covered entity.
1020	1020	4. Assess a fee, charge back, or other adjustment against a 340B covered entity
1021	1021	or a pharmacy or pharmacist contracted with a 340B covered entity after a claim has
1022	1022	been paid or adjudicated.
1023	1023	5. Restrict the access of a 340B covered entity or a pharmacy or pharmacist
1024	1024	contracted with a 340B covered entity to a 3rd-party payer's pharmacy network
1025	1025	solely because the 340B covered entity or the pharmacy or pharmacist contracted
1026	1026	with a 340B covered entity participates in the 340B drug pricing program under 42
1027	1027	USC 256b.
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1052	1052	SECTION 26 ASSEMBLY BILL 773
1053	1053	6. Require a 340B covered entity or a pharmacy or pharmacist contracted with
1054	1054	a 340B covered entity to contract with a specific pharmacy or pharmacist or health
1055	1055	benefit plan in order to access a 3rd-party payer's pharmacy network.
1056	1056	7. Impose a restriction or an additional charge on a patient who obtains a 340B
1057	1057	drug from a 340B covered entity or a pharmacy or pharmacist contracted with a 340B
1058	1058	covered entity.
1059	1059	8. Restrict the methods by which a 340B covered entity or a pharmacy or
1060	1060	pharmacist contracted with a 340B covered entity may dispense or deliver 340B
1061	1061	drugs.
1062	1062	9. Require a 340B covered entity or a pharmacy or pharmacist contracted with
1063	1063	a 340B covered entity to share pharmacy bills or invoices with a pharmacy benefit
1064	1064	manager, a 3rd-party payer, or a health benefit plan.
1065	1065	(5h) REGULATION OF PHARMACY NETWORKS AND INDIVIDUAL CHOICE. All of the
1066	1066	following apply to a pharmacy benefit manager that sells access to networks of
1067	1067	pharmacies or pharmacists that operate in this state:
1068	1068	(a) The pharmacy benefit manager shall allow a participant or beneficiary of
1069	1069	a pharmacy benefits plan or program that the pharmacy benefit manager serves to
1070	1070	use any pharmacy or pharmacist in this state that is licensed to dispense the
1071	1071	pharmaceutical product that the participant or beneficiary seeks to obtain, provided
1072	1072	that the pharmacy or pharmacist accepts the same terms and conditions that the
1073	1073	pharmacy benefit manager has established for at least one of the networks of
1074	1074	pharmacies or pharmacists the pharmacy benefit manager has established to serve
1075	1075	individuals in this state.
1076	1076	(b) The pharmacy benefit manager may establish a preferred network of
1077	1077	pharmacies or pharmacists and a nonpreferred network of pharmacies or
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1105	1105	SECTION 26
1106	1106	ASSEMBLY BILL 773
1107	1107	pharmacists, but the pharmacy benefit manager may not prohibit a pharmacy or
1108	1108	pharmacist from participating in either type of network in this state, provided that
1109	1109	the pharmacy or pharmacist is licensed by this state and the federal government and
1110	1110	accepts the same terms and conditions that the pharmacy benefit manager has
1111	1111	established for other pharmacies or pharmacists participating in the network that
1112	1112	the pharmacy or pharmacist wants to join.
1113	1113	(c) The pharmacy benefit manager may not charge a participant or beneficiary
1114	1114	of a pharmacy benefits plan or program that the pharmacy benefit manager serves
1115	1115	a different copayment obligation or additional fee, or provide any inducement or
1116	1116	financial incentive, for the participant or beneficiary to use a pharmacy or
1117	1117	pharmacist in a particular network of pharmacies or pharmacists the pharmacy
1118	1118	benefit manager has established to serve individuals in this state.
1119	1119	(5p) GAG CLAUSES PROHIBITED. A pharmacy benefit manager may not prohibit
1120	1120	a pharmacy or pharmacist that dispenses a pharmaceutical product from, nor may
1121	1121	a pharmacy benefit manager penalize the pharmacy or pharmacist for, informing an
1122	1122	individual about the cost of the pharmaceutical product, the amount in
1123	1123	reimbursement that the pharmacy or pharmacist receives for dispensing the
1124	1124	pharmaceutical product, the cost and clinical efficacy of a less expensive alternative
1125	1125	to the pharmaceutical product, or any difference between the cost to the individual
1126	1126	under the individual's pharmacy benefits plan or program and the cost to the
1127	1127	individual if the individual purchases the pharmaceutical product without making
1128	1128	a claim for benefits under the individual's pharmacy benefits plan or program.
1129	1129	(5t) EXCLUSION OF PHARMACIES PROHIBITED. No pharmacy benefit manager,
1130	1130	3rd-party payer, or health benefit plan may exclude a pharmacy or pharmacist from
1131	1131	its network because the pharmacy or pharmacist serves less than a certain portion
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1158	1158	SECTION 26 ASSEMBLY BILL 773
1159	1159	of the population of the state or serves a population living with certain health
1160	1160	conditions.
1161	1161	SECTION 27. 632.865 (6) (bm) of the statutes is created to read:
1162	1162	632.865 (6) (bm) Requirements of audits. An entity that conducts audits of
1163	1163	pharmacists of pharmacies shall ensure all of the following:
1164	1164	1. Each pharmacist or pharmacy audited by the entity is audited under the
1165	1165	same standards and parameters as other similarly situated pharmacists or
1166	1166	pharmacies audited by the entity.
1167	1167	2. The entity randomizes the prescriptions that the entity audits and the entity
1168	1168	audits the same number of prescriptions in each prescription benefit tier.
1169	1169	3. Each audit of a prescription reimbursed under Part D of Medicare under 42
1170	1170	USC 1395w-101 et seq. is conducted separately from audits of prescriptions
1171	1171	reimbursed under other policies or plans.
1172	1172	SECTION 28. 632.865 (6) (c) 3. of the statutes is amended to read:
1173	1173	632.865 (6) (c) 3. Deliver to the pharmacist or pharmacy a final audit report,
1174	1174	which may be delivered electronically, within 90 days of the date the pharmacist or
1175	1175	pharmacy receives the preliminary report or the date of the final appeal of the audit,
1176	1176	whichever is later. The final audit report under this subdivision shall include specific
1177	1177	documentation of any alleged errors and shall include any response provided to the
1178	1178	auditor by the pharmacy or pharmacist and consider and address the pharmacy's or
1179	1179	pharmacist's response.
1180	1180	SECTION 29. 632.865 (6) (c) 3m. of the statutes is created to read:
1181	1181	632.865 (6) (c) 3m. If an entity delivers to the pharmacist or pharmacy a
1182	1182	preliminary report of the audit or final audit report that references a billing code,
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1209	1209	SECTION 29
1210	1210	ASSEMBLY BILL 773
1211	1211	drug code, or other code associated with audits, the entity shall provide an electronic
1212	1212	link to a plain language explanation of the code.
1213	1213	SECTION 30. 632.865 (6g) of the statutes is created to read:
1214	1214	632.865 (6g) RECOUPMENT. (a) No pharmacy benefit manager may recoup
1215	1215	reimbursement made to a pharmacist or pharmacy for errors that have no actual
1216	1216	financial harm to an enrollee, policy, or plan unless the error is the result of the
1217	1217	pharmacist or pharmacy failing to comply with a formal corrective action plan.
1218	1218	(b) No pharmacy benefit manager may use extrapolation in calculating
1219	1219	reimbursements that it may recoup. The finding of errors for which reimbursement
1220	1220	will be recouped shall be based on an actual error in reimbursement and not on a
1221	1221	projection of the number of patients served having a similar diagnosis or on a
1222	1222	projection of the number of similar orders or refills for similar prescription drugs.
1223	1223	(c) A pharmacy benefit manager that recoups any reimbursement made to a
1224	1224	pharmacist or pharmacy for an error that was the cause of financial harm shall
1225	1225	return the recouped reimbursement to the individual or the policy or plan sponsor
1226	1226	who was harmed by the error.
1227	1227	SECTION 31. 632.865 (6r) of the statutes is created to read:
1228	1228	632.865 (6r) QUALITY PROGRAMS. No pharmacy benefit manager may base any
1229	1229	criteria of a quality program in a contract between a pharmacy and a pharmacy
1230	1230	benefit manager on a factor for which the pharmacy does not have complete and
1231	1231	exclusive control.
1232	1232	SECTION 32. 632.865 (8) of the statutes is created to read:
1233	1233	632.865 (8) RETALIATION PROHIBITED. (a) In this subsection, “retaliate” includes
1234	1234	any of the following actions taken by a pharmacy benefit manager:
1235	1235	1. Terminating or refusing to renew a contract with a pharmacy or pharmacist.
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1262	1262	SECTION 32 ASSEMBLY BILL 773
1263	1263	2. Subjecting a pharmacy or pharmacist to increased audits.
1264	1264	3. Failing to promptly pay a pharmacy or pharmacist any money the pharmacy
1265	1265	benefit manager owes to the pharmacy or pharmacist.
1266	1266	(b) A pharmacy benefit manager may not retaliate against a pharmacy or
1267	1267	pharmacist for reporting an alleged violation of this section or for exercising a right
1268	1268	or remedy under this section.
1269	1269	(c) In addition to any other remedies provided by law, a pharmacy or
1270	1270	pharmacist may bring an action in court for injunctive relief based on a violation of
1271	1271	par. (b). In addition to equitable relief, the court may, notwithstanding s. 814.04 (1),
1272	1272	award a pharmacy or pharmacist that prevails in such an action reasonable attorney
1273	1273	fees and costs in prosecuting the action.
1274	1274	SECTION 33.0Initial applicability.
1275	1275	(1) AFFILIATED REIMBURSEMENTS. Except as provided in sub. (4), the treatment
1276	1276	of s. 632.865 (2d) (d) first applies to a reimbursement amount paid for on a claim for
1277	1277	reimbursement submitted on the effective date of this subsection.
1278	1278	(2) PROFESSIONAL DISPENSING FEES. Except as provided in sub. (4), the treatment
1279	1279	of s. 632.865 (2h) first applies to a pharmaceutical product that is dispensed on the
1280	1280	effective date of this subsection.
1281	1281	(3) PHARMACY BENEFIT MANAGER-IMPOSED FEES. Except as provided in sub. (4),
1282	1282	the treatment of s. 632.865 (2p) first applies to remuneration collected by a pharmacy
1283	1283	benefit manager on the effective date of this subsection.
1284	1284	(4) CONTRACTS. The treatment of ss. 632.861 (1m), (3g), (3r), and (4) (a) and (e)
1285	1285	and 632.865 (1) (ab), (ac), (ae), (an), (aq), (at), (bm), (cg), and (cr), (2), (2d), (2h), (2p),
1286	1286	(2t), (5) (e), (5d), (5h), (5p), (5t), (6) (bm) and (c) 3. and 3m., (6g), (6r), and (8), the
1287	1287	renumbering of s. 632.865 (4), and the creation of s. 632.865 (4) (b) first apply to a
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1315	1315	SECTION 33
1316	1316	ASSEMBLY BILL 773
1317	1317	pharmacy benefit manager that is affected by a contract that contains a provisions
1318	1318	inconsistent with those treatments on the day on which the contract expires or is
1319	1319	extended, modified, or renewed, whichever occurs first.
1320	1320	(5) APPLICATION OF PRESCRIPTION DRUG PAYMENTS.
1321	1321	(a) For policies and plans containing provisions inconsistent with the
1322	1322	treatment of s. 632.862, that treatment first applies to policy or plan years beginning
1323	1323	on January 1 of the year following the year in which this paragraph takes effect,
1324	1324	except as provided in par. (b).
1325	1325	(b) For policies or plans that are affected by a collective bargaining agreement
1326	1326	containing provisions inconsistent with the treatment of s. 632.862, that treatment
1327	1327	first applies to policy or plan years beginning on the effective date of this paragraph
1328	1328	or on the day on which the collective bargaining agreement is newly established,
1329	1329	extended, modified, or renewed, whichever is later.
1330	1330	SECTION 34.0Effective dates. This act takes effect on the day after publication,
1331	1331	except as follows:
1332	1332	(1) APPLICATION OF PRESCRIPTION DRUG PAYMENTS. The treatment of s. 632.862
1333	1333	takes effect on the first day of the 4th month beginning after publication.
1334	1334	(END)
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