Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB737 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 SENATE BILL 737
5	5	December 1, 2023 - Introduced by Senators FELZKOWSKI, QUINN, JAMES, PFAFF and
6	6	TAYLOR, cosponsored by Representatives SCHRAA, ROZAR, TITTL, CONLEY,
7	7	CONSIDINE, DITTRICH, DONOVAN, EDMING, GOEBEN, GOYKE, GUNDRUM, JACOBSON,
8	8	MAGNAFICI, MURSAU, NOVAK, O'CONNOR, OLDENBURG, PALMERI, SNYDER, TUSLER
9	9	and WICHGERS. Referred to Committee on Insurance and Small Business.
10	10	AN ACT to repeal 632.865 (2) and 632.865 (5) (e); to renumber 632.865 (4); to
11	11	amend 40.51 (8), 40.51 (8m), 66.0137 (4), 120.13 (2) (g), 185.983 (1) (intro.),
12	12	609.83, 632.861 (4) (a), 632.865 (1) (ae) and 632.865 (6) (c) 3.; and to create
13	13	632.861 (1m), 632.861 (3g), 632.861 (3r), 632.861 (4) (e), 632.862, 632.865 (1)
14	14	(ab) and (ac), 632.865 (1) (an), (aq), and (at), 632.865 (1) (bm), 632.865 (1) (cg)
15	15	and (cr), 632.865 (2d), 632.865 (2h), 632.865 (2p), 632.865 (2t), 632.865 (4) (b),
16	16	632.865 (5d), (5h), (5p) and (5t), 632.865 (6) (bm), 632.865 (6) (c) 3m., 632.865
17	17	(6g), 632.865 (6r) and 632.865 (8) of the statutes; relating to: regulation of
18	18	pharmacy benefit managers, fiduciary and disclosure requirements on
19	19	pharmacy benefit managers, and application of prescription drug payments to
20	20	health insurance cost-sharing requirements.
21	21	Analysis by the Legislative Reference Bureau
22	22	This bill makes several changes to the regulation of pharmacy benefit
23	23	managers and their interactions with pharmacies and pharmacists. Under current
24	24	law, pharmacy benefit managers are generally required to be licensed as a pharmacy
25	25	benefit manager or an employee benefit plan administrator by the commissioner of
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39	39	insurance. A pharmacy benefit manager is an entity that contracts to administer or
40	40	manage prescription drug benefits on behalf of an insurer, a cooperative, or another
41	41	entity that provides prescription drug benefits to Wisconsin residents. Major
42	42	provisions of the bill are summarized below.
43	43	Pharmacy benefit manager regulation
44	44	The bill requires a pharmacy benefit manager to pay a pharmacy or pharmacist
45	45	a professional dispensing fee at a rate not less than is paid by the state under the
46	46	Medical Assistance program for each pharmaceutical product that the pharmacy or
47	47	pharmacist dispenses to an individual. The professional dispensing fee is required
48	48	to be paid in addition to the amount the pharmacy benefit manager reimburses the
49	49	pharmacy or pharmacist for the cost of the pharmaceutical product that the
50	50	pharmacy or pharmacist dispenses. The Medical Assistance program is a joint state
51	51	and federal program that provides health services to individuals who have limited
52	52	financial resources.
53	53	The bill prohibits a pharmacy benefit manager from assessing, charging, or
54	54	collecting from a pharmacy or pharmacist any form of remuneration that passes from
55	55	the pharmacy or pharmacist to the pharmacy benefit manager including
56	56	claim-processing fees, performance-based fees, network-participation fees, or
57	57	accreditation fees.
58	58	Further, under the bill, a pharmacy benefit manager may not use any
59	59	certification or accreditation requirement as a determinant of pharmacy network
60	60	participation that is inconsistent with, more stringent than, or in addition to the
61	61	federal requirements for licensure as a pharmacy and the requirements for licensure
62	62	as a pharmacy provided under state law.
63	63	The bill requires a pharmacy benefit manager to allow a participant or
64	64	beneficiary of a pharmacy benefits plan or program that the pharmacy benefit
65	65	manager serves to use any pharmacy or pharmacist in this state that is licensed to
66	66	dispense the pharmaceutical product that the participant or beneficiary seeks to
67	67	obtain if the pharmacy or pharmacist accepts the same terms and conditions that the
68	68	pharmacy benefit manager establishes for at least one of the networks of pharmacies
69	69	or pharmacists that the pharmacy benefit manager has established to serve
70	70	individuals in the state. A pharmacy benefit manager may establish a preferred
71	71	network of pharmacies or pharmacists and a nonpreferred network of pharmacies
72	72	or pharmacists, however, under the bill, a pharmacy benefit manager may not
73	73	prohibit a pharmacy or pharmacist from participating in either type of network
74	74	provided that the pharmacy or pharmacist is licensed by this state and the federal
75	75	government and accepts the same terms and conditions that the pharmacy benefit
76	76	manager establishes for other pharmacies or pharmacists participating in the
77	77	network that the pharmacy or pharmacist wants to join. Under the bill, a pharmacy
78	78	benefit manager may not charge a participant or beneficiary of a pharmacy benefits
79	79	plan or program that the pharmacy benefit manager serves a different copayment
80	80	obligation or additional fee, or provide any inducement or financial incentive, for the
81	81	participant or beneficiary to use a pharmacy or pharmacist in a particular network
82	82	of pharmacies or pharmacists that the pharmacy benefit manager has established
83	83	to serve individuals in the state. Further, the bill prohibits a pharmacy benefit - 3 -2023 - 2024 Legislature
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87	87	manager, 3rd-party payer, or health benefit plan from excluding a pharmacy or
88	88	pharmacist from its network because the pharmacy or pharmacist serves less than
89	89	a certain portion of the population of the state or serves a population living with
90	90	certain health conditions.
91	91	The bill provides that a pharmacy benefit manager may neither prohibit a
92	92	pharmacy or pharmacist that dispenses a pharmaceutical product from, nor penalize
93	93	a pharmacy or pharmacist that dispenses a pharmaceutical product for, informing
94	94	an individual about the cost of the pharmaceutical product, the amount in
95	95	reimbursement that the pharmacy or pharmacist receives for dispensing the
96	96	pharmaceutical product, or any difference between the cost to the individual under
97	97	the individual's pharmacy benefits plan or program and the cost to the individual if
98	98	the individual purchases the pharmaceutical product without making a claim for
99	99	benefits under the individual's pharmacy benefits plan or program.
100	100	The bill prohibits any pharmacy benefit manager or any insurer or self-insured
101	101	health plan from requiring or penalizing a person who is covered under a health
102	102	insurance policy or plan for using or for not using a specific retail, mail-order, or
103	103	other pharmacy provider within the network of pharmacy providers under the policy
104	104	or plan. Prohibited penalties include an increase in premium, deductible,
105	105	copayment, or coinsurance.
106	106	Pharmaceutical product reimbursements
107	107	The bill provides that a pharmacy benefit manager that uses a maximum
108	108	allowable cost list must include all of the following information on the list: 1) the
109	109	average acquisition cost of each pharmaceutical product and the cost of the
110	110	pharmaceutical product set forth in the national average drug acquisition cost data
111	111	published by the federal centers for medicare and medicaid services; 2) the average
112	112	manufacturer price of each pharmaceutical product; 3) the average wholesale price
113	113	of each pharmaceutical product; 4) the brand effective rate or generic effective rate
114	114	for each pharmaceutical product; 5) any applicable discount indexing; 6) the federal
115	115	upper limit for each pharmaceutical product published by the federal centers for
116	116	medicare and medicaid services; 7) the wholesale acquisition cost of each
117	117	pharmaceutical product; and 8) any other terms that are used to establish the
118	118	maximum allowable costs.
119	119	The bill provides that a pharmacy benefit manager may place or continue a
120	120	particular pharmaceutical product on a maximum allowable cost list only if the
121	121	pharmaceutical product 1) is listed as a drug product equivalent or is rated by a
122	122	nationally recognized reference as “not rated” or “not available”; 2) is available for
123	123	purchase by all pharmacies and pharmacists in the state from national or regional
124	124	pharmaceutical wholesalers operating in the state; and 3) has not been determined
125	125	by the drug manufacturer to be obsolete. Further, the bill provides that any
126	126	pharmacy benefit manager that uses a maximum allowable cost list must provide
127	127	access to the maximum allowable cost list to each pharmacy or pharmacist subject
128	128	to the maximum allowable cost list, update the maximum allowable cost list on a
129	129	timely basis, provide a process for a pharmacy or pharmacist subject to the maximum
130	130	allowable cost list to receive notification of an update to the maximum allowable cost
131	131	list, and update the maximum allowable cost list no later than seven days after the - 4 -2023 - 2024 Legislature LRB-1683/1
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134	134	pharmacy acquisition cost of the pharmaceutical product increases by 10 percent or
135	135	more from at least 60 percent of the pharmaceutical wholesalers doing business in
136	136	the state or there is a change in the methodology on which the maximum allowable
137	137	cost list is based or in the value of a variable involved in the methodology. A
138	138	maximum allowable cost list is a list of pharmaceutical products that sets forth the
139	139	maximum amount that a pharmacy benefit manager will pay to a pharmacy or
140	140	pharmacist for dispensing a pharmaceutical product. A maximum allowable cost list
141	141	may directly establish maximum costs or may set forth a method for how the
142	142	maximum costs are calculated.
143	143	The bill further provides that a pharmacy benefit manager that uses a
144	144	maximum allowable cost list must provide a process for a pharmacy or pharmacist
145	145	to appeal and resolve disputes regarding claims that the maximum payment amount
146	146	for a pharmaceutical product is below the pharmacy acquisition cost. A pharmacy
147	147	benefit manager that receives an appeal from or on behalf of a pharmacy or
148	148	pharmacist under this bill is required to resolve the appeal and notify the pharmacy
149	149	or pharmacist of the pharmacy benefit manager's determination no later than seven
150	150	business days after the appeal is received. If the pharmacy benefit manager grants
151	151	the relief requested in the appeal, the bill requires the pharmacy benefit manager
152	152	to make the requested change in the maximum allowable cost, allow the pharmacy
153	153	or pharmacist to reverse and rebill the relevant claim, provide to the pharmacy or
154	154	pharmacist the national drug code number published in a directory by the federal
155	155	Food and Drug Administration on which the increase or change is based, and make
156	156	the change effective for each similarly situated pharmacy or pharmacist subject to
157	157	the maximum allowable cost list. If the pharmacy benefit manager denies the relief
158	158	requested in the appeal, the bill requires the pharmacy benefit manager to provide
159	159	the pharmacy or pharmacist a reason for the denial, the national drug code number
160	160	published in a directory by the FDA for the pharmaceutical product to which the
161	161	claim relates, and the name of a national or regional wholesaler that has the
162	162	pharmaceutical product currently in stock at a price below the amount specified in
163	163	the pharmacy benefit manager's maximum allowable cost list.
164	164	The bill provides that a pharmacy benefit manager may not deny a pharmacy's
165	165	or pharmacist's appeal if the relief requested in the appeal relates to the maximum
166	166	allowable cost for a pharmaceutical product that is not available for the pharmacy
167	167	or pharmacist to purchase at a cost that is below the pharmacy acquisition cost from
168	168	the pharmaceutical wholesaler from which the pharmacy or pharmacist purchases
169	169	the majority of pharmaceutical products for resale. If a pharmaceutical product is
170	170	not available for a pharmacy or pharmacist to purchase at a cost that is below the
171	171	pharmacy acquisition cost from the pharmaceutical wholesaler from which the
172	172	pharmacy or pharmacist purchases the majority of pharmaceutical products for
173	173	resale, the pharmacy benefit manager must revise the maximum allowable cost list
174	174	to increase the maximum allowable cost for the pharmaceutical product to an
175	175	amount equal to or greater than the pharmacy's or pharmacist's pharmacy
176	176	acquisition cost and allow the pharmacy or pharmacist to reverse and rebill each
177	177	claim affected by the pharmacy's or pharmacist's inability to procure the - 5 -2023 - 2024 Legislature
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181	181	pharmaceutical product at a cost that is equal to or less than the maximum allowable
182	182	cost that was the subject of the pharmacy's or pharmacist's appeal.
183	183	The bill prohibits a pharmacy benefit manager from reimbursing a pharmacy
184	184	or pharmacist in the state an amount less than the amount that the pharmacy
185	185	benefit manager reimburses a pharmacy benefit manager affiliate for providing the
186	186	same pharmaceutical product. Under the bill, a pharmacy benefit manager affiliate
187	187	is a pharmacy or pharmacist that is an affiliate of a pharmacy benefit manager.
188	188	Finally, the bill allows a pharmacy or pharmacist to decline to provide a
189	189	pharmaceutical product to an individual or pharmacy benefit manager if, as a result
190	190	of a maximum allowable cost list, the pharmacy or pharmacist would be paid less
191	191	than the pharmacy acquisition cost of the pharmacy or pharmacist providing the
192	192	pharmaceutical product.
193	193	Drug formularies
194	194	This bill makes several changes with respect to drug formularies. Under
195	195	current law, a disability insurance policy that offers a prescription drug benefit, a
196	196	self-insured health plan that offers a prescription drug benefit, or a pharmacy
197	197	benefit manager acting on behalf of a disability insurance policy or self-insured
198	198	health plan must provide to an enrollee advanced written notice of a formulary
199	199	change that removes a prescription drug from the formulary of the policy or plan or
200	200	that reassigns a prescription drug to a benefit tier for the policy or plan that has a
201	201	higher deductible, copayment, or coinsurance. The advanced written notice of a
202	202	formulary change must be provided no fewer than 30 days before the expected date
203	203	of the removal or reassignment.
204	204	This bill provides that a disability insurance policy or self-insured health plan
205	205	that provides a prescription drug benefit shall make the formulary and all drug costs
206	206	associated with the formulary available to plan sponsors and individuals prior to
207	207	selection or enrollment. Further, the bill provides that no disability insurance policy,
208	208	self-insured health plan, or pharmacy benefit manager acting on behalf of a
209	209	disability insurance policy or self-insured health plan may remove a prescription
210	210	drug from the formulary except at the time of coverage renewal. Finally, the bill
211	211	provides that advanced written notice of a formulary change must be provided no
212	212	fewer than 90 days before the expected date of the removal or reassignment of a
213	213	prescription drug on the formulary.
214	214	Pharmacy networks
215	215	Under the bill, if an enrollee utilizes a pharmacy or pharmacist in a preferred
216	216	network of pharmacies or pharmacists, no disability insurance policy or self-insured
217	217	health plan that provides a prescription drug benefit or pharmacy benefit manager
218	218	that provides services under a contract with a policy or plan may require the enrollee
219	219	to pay any amount or impose on the enrollee any condition that would not be required
220	220	if the enrollee utilized a different pharmacy or pharmacist in the same preferred
221	221	network. Further, the bill provides that any disability insurance policy or
222	222	self-insured health plan that provides a prescription drug benefit, or any pharmacy
223	223	benefit manager that provides services under a contract with a policy or plan, that
224	224	has established a preferred network of pharmacies or pharmacists must reimburse
225	225	each pharmacy or pharmacist in the same network at the same rates. - 6 -2023 - 2024 Legislature LRB-1683/1
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228	228	Audits of pharmacists and pharmacies
229	229	This bill makes several changes to audits of pharmacists and pharmacies. The
230	230	bill requires an entity that conducts audits of pharmacists and pharmacies to ensure
231	231	that each pharmacist or pharmacy audited by the entity is audited under the same
232	232	standards and parameters as other similarly situated pharmacists or pharmacies
233	233	audited by the entity, that the entity randomizes the prescriptions that the entity
234	234	audits and the entity audits the same number of prescriptions in each prescription
235	235	benefit tier, and that each audit of a prescription reimbursed under Part D of the
236	236	federal Medicare program is conducted separately from audits of prescriptions
237	237	reimbursed under other policies or plans. The bill prohibits any pharmacy benefit
238	238	manager from recouping reimbursements made to a pharmacist or pharmacy for
239	239	errors that involve no actual financial harm to an enrollee, policy, or plan unless the
240	240	error is the result of the pharmacist or pharmacy failing to comply with a formal
241	241	corrective action plan. The bill further prohibits any pharmacy benefit manager
242	242	from using extrapolation in calculating reimbursements that it may recoup, and
243	243	instead requires a pharmacy benefit manager to base the finding of errors for which
244	244	reimbursements will be recouped on an actual error in reimbursement and not a
245	245	projection of the number of patients served having a similar diagnosis or on a
246	246	projection of the number of similar orders or refills for similar prescription drugs.
247	247	The bill requires that a pharmacy benefit manager that recoups any reimbursements
248	248	made to a pharmacist or pharmacy for an error that was the cause of financial harm
249	249	must return the recouped reimbursement to the individual or the policy or plan
250	250	sponsor who was harmed by the error.
251	251	Pharmacy benefit manager fiduciary and disclosure requirements
252	252	The bill provides that a pharmacy benefit manager owes a fiduciary duty to a
253	253	health benefit plan sponsor. The bill also requires that a pharmacy benefit manager
254	254	annually disclose all of the following information to the health benefit plan sponsor:
255	255	1. The indirect profit received by the pharmacy benefit manager from owning
256	256	a pharmacy or service provider.
257	257	2. Any payments made to a consultant or broker who works on behalf of the plan
258	258	sponsor.
259	259	3. From the amounts received from drug manufacturers, the amounts retained
260	260	by the pharmacy benefit manager that are related to the plan sponsor's claims or
261	261	bona fide service fees.
262	262	4. The amounts received from network pharmacies and pharmacists and the
263	263	amount retained by the pharmacy benefit manager.
264	264	Discriminatory reimbursement of 340B entities
265	265	The bill prohibits a pharmacy benefit manager from taking certain actions with
266	266	respect to 340B covered entities, pharmacies and pharmacists contracted with 340B
267	267	covered entities, and patients who obtain prescription drugs from 340B covered
268	268	entities. The 340B drug pricing program is a federal program that requires
269	269	pharmaceutical manufacturers that participate in the federal Medicaid program to
270	270	sell outpatient drugs at discounted prices to certain health care organizations that
271	271	provide health care for uninsured and low-income patients. Entities that are eligible
272	272	for discounted prices under the 340B drug pricing program include - 7 -2023 - 2024 Legislature
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276	276	federally-qualified health centers, critical access hospitals, and certain public and
277	277	nonprofit disproportionate share hospitals. The bill prohibits pharmacy benefit
278	278	managers from doing any of the following:
279	279	1. Refusing to reimburse a 340B covered entity or a pharmacy or pharmacist
280	280	contracted with a 340B covered entity for dispensing 340B drugs.
281	281	2. Imposing requirements or restrictions on 340B covered entities or
282	282	pharmacies or pharmacists contracted with 340B covered entities that are not
283	283	imposed on other entities, pharmacies, or pharmacists.
284	284	3. Reimbursing a 340B covered entity or a pharmacy or pharmacist contracted
285	285	with a 340B covered entity for a 340B drug at a rate lower than the amount paid for
286	286	the same drug to pharmacies or pharmacists that are not 340B covered entities or
287	287	pharmacies or pharmacists contracted with a 340B covered entity.
288	288	4. Restricting the access of a 340B covered entity or a pharmacy or pharmacist
289	289	contracted with a 340B covered entity to a 3rd-party payer's pharmacy network
290	290	solely because the 340B covered entity or the pharmacy or pharmacist contracted
291	291	with a 340B covered entity participates in the 340B drug pricing program.
292	292	5. Requiring a 340B covered entity or a pharmacy or pharmacist contracted
293	293	with a 340B covered entity to contract with a specific pharmacy or pharmacist or
294	294	health benefit plan in order to access a 3rd-party payer's pharmacy network.
295	295	6. Restricting the methods by which a 340B covered entity or a pharmacy or
296	296	pharmacist contracted with a 340B covered entity may dispense or deliver 340B
297	297	drugs.
298	298	Application of prescription drug payments
299	299	Health insurance policies and plans often apply deductibles and out-of-pocket
300	300	maximum amounts to the benefits covered by the policy or plan. A deductible is an
301	301	amount that an enrollee in a policy or plan must pay out of pocket before attaining
302	302	the full benefits of the policy or plan. An out-of-pocket maximum amount is a limit
303	303	specified by a policy or plan on the amount that an enrollee pays, and, once that limit
304	304	is reached, the policy or plan covers the benefit entirely. The bill generally requires
305	305	health insurance policies that offer prescription drug benefits, self-insured health
306	306	plans, and pharmacy benefit managers acting on behalf of policies or plans to apply
307	307	amounts paid by or on behalf of an individual covered under the policy or plan for
308	308	brand name prescription drugs to any cost-sharing requirement or to any
309	309	calculation of an out-of-pocket maximum amount of the policy or plan. Health
310	310	insurance policies are referred to in the bill as disability insurance policies.
311	311	Prohibited retaliation
312	312	The bill prohibits a pharmacy benefit manager from retaliating against a
313	313	pharmacy or pharmacist for reporting an alleged violation of certain laws applicable
314	314	to pharmacy benefit managers or for exercising certain rights or remedies.
315	315	Retaliation includes terminating or refusing to renew a contract with a pharmacy or
316	316	pharmacist, subjecting a pharmacy or pharmacist to increased audits, or failing to
317	317	promptly pay a pharmacy or pharmacist any money that the pharmacy benefit
318	318	manager owes to the pharmacy or pharmacist. The bill provides that a pharmacy or
319	319	pharmacist may bring an action in court for injunctive relief if a pharmacy benefit
320	320	manager is retaliating against the pharmacy or pharmacist as provided in the bill. - 8 -2023 - 2024 Legislature LRB-1683/1
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323	323	In addition to equitable relief, the court may award a pharmacy or pharmacist that
324	324	prevails in such an action reasonable attorney fees and costs.
325	325	For further information see the state fiscal estimate, which will be printed as
326	326	an appendix to this bill.
327	327	The people of the state of Wisconsin, represented in senate and assembly, do
328	328	enact as follows:
329	329	SECTION 1. 40.51 (8) of the statutes is amended to read:
330	330	40.51 (8) Every health care coverage plan offered by the state under sub. (6)
331	331	shall comply with ss. 631.89, 631.90, 631.93 (2), 631.95, 632.72 (2), 632.729, 632.746
332	332	(1) to (8) and (10), 632.747, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853,
333	333	632.855, 632.861, 632.862, 632.867, 632.87 (3) to (6), 632.885, 632.89, 632.895 (5m)
334	334	and (8) to (17), and 632.896.
335	335	SECTION 2. 40.51 (8m) of the statutes is amended to read:
336	336	40.51 (8m) Every health care coverage plan offered by the group insurance
337	337	board under sub. (7) shall comply with ss. 631.95, 632.729, 632.746 (1) to (8) and (10),
338	338	632.747, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.861,
339	339	632.862, 632.867, 632.885, 632.89, and 632.895 (11) to (17).
340	340	SECTION 3. 66.0137 (4) of the statutes is amended to read:
341	341	66.0137 (4) SELF-INSURED HEALTH PLANS. If a city, including a 1st class city, or
342	342	a village provides health care benefits under its home rule power, or if a town
343	343	provides health care benefits, to its officers and employees on a self-insured basis,
344	344	the self-insured plan shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2),
345	345	632.729, 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.798, 632.85, 632.853, 632.855,
346	346	632.861, 632.862, 632.867, 632.87 (4) to (6), 632.885, 632.89, 632.895 (9) to (17),
347	347	632.896, and 767.513 (4).
348	348	SECTION 4. 120.13 (2) (g) of the statutes is amended to read:
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353	353	5
354	354	6
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357	357	9
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371	371	SECTION 4
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373	373	120.13 (2) (g) Every self-insured plan under par. (b) shall comply with ss.
374	374	49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.729, 632.746 (10) (a) 2. and (b) 2.,
375	375	632.747 (3), 632.798, 632.85, 632.853, 632.855, 632.861, 632.862, 632.867, 632.87 (4)
376	376	to (6), 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4).
377	377	SECTION 5. 185.983 (1) (intro.) of the statutes is amended to read:
378	378	185.983 (1) (intro.) Every voluntary nonprofit health care plan operated by a
379	379	cooperative association organized under s. 185.981 shall be exempt from chs. 600 to
380	380	646, with the exception of ss. 601.04, 601.13, 601.31, 601.41, 601.42, 601.43, 601.44,
381	381	601.45, 611.26, 611.67, 619.04, 623.11, 623.12, 628.34 (10), 631.17, 631.89, 631.93,
382	382	631.95, 632.72 (2), 632.729, 632.745 to 632.749, 632.775, 632.79, 632.795, 632.798,
383	383	632.85, 632.853, 632.855, 632.861, 632.862, 632.867, 632.87 (2) to (6), 632.885,
384	384	632.89, 632.895 (5) and (8) to (17), 632.896, and 632.897 (10) and chs. 609, 620, 630,
385	385	635, 645, and 646, but the sponsoring association shall:
386	386	SECTION 6. 609.83 of the statutes is amended to read:
387	387	609.83 Coverage of drugs and devices; application of payments .
388	388	Limited service health organizations, preferred provider plans, and defined network
389	389	plans are subject to ss. 632.853, 632.861, 632.862, and 632.895 (16t) and (16v).
390	390	SECTION 7. 632.861 (1m) of the statutes is created to read:
391	391	632.861 (1m) REQUIRED DISCLOSURES. A disability insurance policy or
392	392	self-insured health plan that provides a prescription drug benefit shall make the
393	393	formulary and all drug costs associated with the formulary available to plan sponsors
394	394	and individuals prior to selection or enrollment.
395	395	SECTION 8. 632.861 (3g) of the statutes is created to read:
396	396	632.861 (3g) CHOICE OF PROVIDER; PENALTY PROHIBITED. No insurer, self-insured
397	397	health plan, or pharmacy benefit manager may require, or penalize a person who is
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424	424	SECTION 8 SENATE BILL 737
425	425	covered under a disability insurance policy or self-insured health plan for using or
426	426	for not using, a specific retail, specific mail-order, or other specific pharmacy
427	427	provider within the network of pharmacy providers under the policy or plan. A
428	428	prohibited penalty under this subsection includes an increase in premium,
429	429	deductible, copayment, or coinsurance.
430	430	SECTION 9. 632.861 (3r) of the statutes is created to read:
431	431	632.861 (3r) PHARMACY NETWORKS. (a) If an enrollee utilizes a pharmacy or
432	432	pharmacist in a preferred network of pharmacies or pharmacists, no disability
433	433	insurance policy or self-insured health plan that provides a prescription drug benefit
434	434	or pharmacy benefit manager that provides services under a contract with a policy
435	435	or plan may require the enrollee to pay any amount or impose on the enrollee any
436	436	condition that would not be required if the enrollee utilized a different pharmacy or
437	437	pharmacist in the same preferred network.
438	438	(b) Any disability insurance policy or self-insured health plan that provides a
439	439	prescription drug benefit, or any pharmacy benefit manager that provides services
440	440	under a contract with a policy or plan, that has established a preferred network of
441	441	pharmacies or pharmacists shall reimburse each pharmacy or pharmacist in the
442	442	same network at the same rates.
443	443	SECTION 10. 632.861 (4) (a) of the statutes is amended to read:
444	444	632.861 (4) (a) Except as provided in par. (b) and subject to par. (e), a disability
445	445	insurance policy that offers a prescription drug benefit, a self-insured health plan
446	446	that offers a prescription drug benefit, or a pharmacy benefit manager acting on
447	447	behalf of a disability insurance policy or self-insured health plan shall provide to an
448	448	enrollee advanced written notice of a formulary change that removes a prescription
449	449	drug from the formulary of the policy or plan or that reassigns a prescription drug
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477	477	SECTION 10
478	478	SENATE BILL 737
479	479	to a benefit tier for the policy or plan that has a higher deductible, copayment, or
480	480	coinsurance. The advanced written notice of a formulary change under this
481	481	paragraph shall be provided no fewer than 30 90 days before the expected date of the
482	482	removal or reassignment and shall include information on the procedure for the
483	483	enrollee to request an exception to the formulary change. The policy, plan, or
484	484	pharmacy benefit manager is required to provide the advanced written notice under
485	485	this paragraph only to those enrollees in the policy or plan who are using the drug
486	486	at the time the notification must be sent according to available claims history.
487	487	SECTION 11. 632.861 (4) (e) of the statutes is created to read:
488	488	632.861 (4) (e) No disability insurance policy, self-insured health plan, or
489	489	pharmacy benefit manager acting on behalf of a disability insurance policy or
490	490	self-insured health plan may remove a prescription drug from the formulary except
491	491	at the time of coverage renewal.
492	492	SECTION 12. 632.862 of the statutes is created to read:
493	493	632.862 Application of prescription drug payments. (1) DEFINITIONS. In
494	494	this section:
495	495	(a) “Brand name” has the meaning given in s. 450.12 (1) (a).
496	496	(b) “Brand name drug” means any of the following:
497	497	1. A prescription drug that contains a brand name and that has no medically
498	498	appropriate generic equivalent.
499	499	2. A prescription drug that contains a brand name and that has a medically
500	500	appropriate generic equivalent but to which the enrollee or other covered individual
501	501	has obtained access through any of the following:
502	502	a. Prior authorization.
503	503	b. A step therapy protocol.
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530	530	SECTION 12 SENATE BILL 737
531	531	c. The exceptions and appeals process of the disability insurance policy,
532	532	self-insured health plan, or pharmacy benefit manager.
533	533	(c) “Cost-sharing requirement” means a deductible, copayment, or
534	534	coinsurance.
535	535	(d) “Disability insurance policy” has the meaning given in s. 632.895 (1) (a).
536	536	(e) “Generic equivalent” means a drug product equivalent, as defined in s.
537	537	450.13 (1e), that is nationally available.
538	538	(f) “Pharmacy benefit manager” has the meaning given in s. 632.865 (1) (c).
539	539	(g) “Self-insured health plan” has the meaning given in s. 632.85 (1) (c).
540	540	(2) APPLICATION OF PAYMENTS. Except as provided in sub. (4), a disability
541	541	insurance policy that offers a prescription drug benefit, a self-insured health plan,
542	542	or a pharmacy benefit manager acting on behalf of a disability insurance policy or
543	543	self-insured health plan shall apply to any cost-sharing requirement or to any
544	544	calculation of an out-of-pocket maximum amount of the disability insurance policy
545	545	or self-insured health plan, including the annual limitations on cost sharing
546	546	established under 42 USC 18022 (c) and 42 USC 300gg-6 (b), any amounts paid by
547	547	an enrollee or other individual covered under the disability insurance policy or
548	548	self-insured health plan, or by any person on behalf of the enrollee or individual, for
549	549	brand name drugs that are covered under the disability insurance policy or
550	550	self-insured health plan.
551	551	(3) CALCULATION OF COST-SHARING ANNUAL LIMITATIONS. For purposes of
552	552	calculating an enrollee's contribution to the annual limitation on cost sharing under
553	553	42 USC 18022 (c) and 42 USC 300gg-6 (b), a disability insurance policy that offers
554	554	a prescription drug benefit, a self-insured health plan, or a pharmacy benefit
555	555	manager acting on behalf of a disability insurance policy or self-insured health plan
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583	583	SECTION 12
584	584	SENATE BILL 737
585	585	shall include expenditures for any item or service covered under the disability
586	586	insurance policy or self-insured health plan if the item or service is included within
587	587	a category of essential health benefits, as described in 42 USC 18022 (b) (1), and
588	588	regardless of whether the disability insurance policy, self-insured health plan, or
589	589	pharmacy benefit manager classifies the item or service as an essential health
590	590	benefit.
591	591	(4) EXCEPTION; HIGH DEDUCTIBLE HEALTH PLANS. If applying the requirement
592	592	under sub. (2) to payments made by or on behalf of an enrollee or other individual
593	593	covered under a high deductible health plan, as defined under 26 USC 223 (c) (2),
594	594	would result in the enrollee failing to meet the definition of an eligible individual
595	595	under 26 USC 223 (c) (1), the disability insurance policy, self-insured health plan,
596	596	or pharmacy benefit manager shall begin applying the requirement under sub. (2)
597	597	to the disability insurance policy or self-insured health plan's deductible after the
598	598	enrollee has satisfied the minimum deductible requirement under 26 USC 223 (c) (2)
599	599	(A) (i). This subsection does not apply to any amounts paid for items or services that
600	600	are preventive care, as described in 26 USC 223 (c) (2) (C).
601	601	SECTION 13. 632.865 (1) (ab) and (ac) of the statutes are created to read:
602	602	632.865 (1) (ab) “340B covered entity” has the meaning given for “covered
603	603	entity” under 42 USC 256b (a) (4).
604	604	(ac) “340B drug” has the meaning given for “covered drug” under 42 USC 256b
605	605	(b) (2).
606	606	SECTION 14. 632.865 (1) (ae) of the statutes is amended to read:
607	607	632.865 (1) (ae) “Health benefit plan” has the meaning given means a health
608	608	benefit plan, as defined in s. 632.745 (11), that is not prescription drug coverage
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634	634	SECTION 14 SENATE BILL 737
635	635	provided under part D of medicare under Title XVIII of the federal Social Security
636	636	Act, 42 USC 1395 to 1395lll.
637	637	SECTION 15. 632.865 (1) (an), (aq), and (at) of the statutes are created to read:
638	638	632.865 (1) (an) “Maximum allowable cost list” means a list of pharmaceutical
639	639	products that sets forth the maximum amount a pharmacy benefit manager will pay
640	640	to a pharmacy or pharmacist for dispensing a pharmaceutical product. The list may
641	641	directly establish the maximum amounts or set forth a method for how the maximum
642	642	amounts are calculated.
643	643	(aq) “Pharmaceutical product” means a prescription generic drug, prescription
644	644	brand-name drug, prescription biologic, or other prescription drug, vaccine, or
645	645	device.
646	646	(at) “Pharmaceutical wholesaler” means a person that sells and distributes,
647	647	directly or indirectly, a pharmaceutical product and that offers to deliver the
648	648	pharmaceutical product to a pharmacy or pharmacist.
649	649	SECTION 16. 632.865 (1) (bm) of the statutes is created to read:
650	650	632.865 (1) (bm) “Pharmacy acquisition cost” means the amount that a
651	651	pharmaceutical wholesaler charges a pharmacy or pharmacist for a pharmaceutical
652	652	product as listed on the pharmacy's or pharmacist's billing invoice.
653	653	SECTION 17. 632.865 (1) (cg) and (cr) of the statutes are created to read:
654	654	632.865 (1) (cg) “Pharmacy benefit manager affiliate” means a pharmacy or
655	655	pharmacist that is an affiliate of a pharmacy benefit manager.
656	656	(cr) “Pharmacy services administrative organization” means an entity that
657	657	provides contracting and other administrative services to pharmacies or
658	658	pharmacists to assist them in their interactions with 3rd-party payers, pharmacy
659	659	benefit managers, pharmaceutical wholesalers, and other entities.
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687	687	SECTION 18
688	688	SENATE BILL 737
689	689	SECTION 18. 632.865 (2) of the statutes is repealed.
690	690	SECTION 19. 632.865 (2d) of the statutes is created to read:
691	691	632.865 (2d) PHARMACEUTICAL PRODUCT REIMBURSEMENTS. (ag) Contents of
692	692	maximum allowable cost lists. A pharmacy benefit manager that uses a maximum
693	693	allowable cost list shall include all of the following information on the maximum
694	694	allowable cost list:
695	695	1. The average acquisition cost of each pharmaceutical product and the cost of
696	696	the pharmaceutical product set forth in the national average drug acquisition cost
697	697	data published by the federal centers for medicare and medicaid services.
698	698	2. The average manufacturer price of each pharmaceutical product.
699	699	3. The average wholesale price of each pharmaceutical product.
700	700	4. The brand effective rate or generic effective rate for each pharmaceutical
701	701	product.
702	702	5. Any applicable discount indexing.
703	703	6. The federal upper limit for each pharmaceutical product published by the
704	704	federal centers for medicare and medicaid services.
705	705	7. The wholesale acquisition cost of each pharmaceutical product.
706	706	8. Any other terms that are used to establish the maximum allowable costs.
707	707	(ar) Regulation of maximum allowable cost lists. A pharmacy benefit manager
708	708	may place or continue a particular pharmaceutical product on a maximum allowable
709	709	cost list only if all of the following apply to the pharmaceutical product:
710	710	1. The pharmaceutical product is listed as a drug product equivalent, as defined
711	711	in s. 450.13 (1e), or is rated by a nationally recognized reference, such as Medi-Span
712	712	or Gold Standard Drug Database, as “not rated” or “not available.”
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738	738	SECTION 19 SENATE BILL 737
739	739	2. The pharmaceutical product is available for purchase by all pharmacies and
740	740	pharmacists in this state from national or regional pharmaceutical wholesalers
741	741	operating in this state.
742	742	3. The pharmaceutical product has not been determined by the drug
743	743	manufacturer to be obsolete.
744	744	(b) Access and update obligations. A pharmacy benefit manager that uses a
745	745	maximum allowable cost list shall do all of the following:
746	746	1. Provide access to the maximum allowable cost list to each pharmacy or
747	747	pharmacist subject to the maximum allowable cost list.
748	748	2. Update the maximum allowable cost list on a timely basis.
749	749	3. Update the maximum allowable cost list no later than 7 days after any of the
750	750	following occurs:
751	751	a. The pharmacy acquisition cost of a pharmaceutical product increases by 10
752	752	percent or more from at least 60 percent of the pharmaceutical wholesalers doing
753	753	business in this state.
754	754	b. There is a change in the methodology on which the maximum allowable cost
755	755	list is based or in the value of a variable involved in the methodology.
756	756	4. Provide a process for a pharmacy or pharmacist subject to the maximum
757	757	allowable cost list to receive prompt notification of an update to the maximum
758	758	allowable cost list.
759	759	(c) Appeal process. 1. A pharmacy benefit manager that uses a maximum
760	760	allowable cost list shall provide a process for a pharmacy or pharmacist to appeal and
761	761	resolve disputes regarding claims that the maximum payment amount for a
762	762	pharmaceutical product is below the pharmacy acquisition cost.
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789	789	SECTION 19
790	790	SENATE BILL 737
791	791	2. A pharmacy benefit manager required to provide an appeal process under
792	792	subd. 1. shall do all of the following:
793	793	a. Provide a dedicated telephone number and email address or website that a
794	794	pharmacy or pharmacist may use to submit an appeal.
795	795	b. Allow a pharmacy or pharmacist to submit an appeal directly on the
796	796	pharmacy's or pharmacist's own behalf.
797	797	c. Allow a pharmacy services administrative organization to submit an appeal
798	798	on behalf of a pharmacy or pharmacist.
799	799	d. Provide at least 7 business days after a customer transaction for a pharmacy
800	800	or pharmacist to submit an appeal under this paragraph concerning a
801	801	pharmaceutical product involved in the transaction.
802	802	3. A pharmacy benefit manager that receives an appeal from or on behalf of a
803	803	pharmacy or pharmacist under this paragraph shall resolve the appeal and notify
804	804	the pharmacy or pharmacist of the pharmacy benefit manager's determination no
805	805	later than 7 business days after the appeal is received by doing any of the following:
806	806	a. If the pharmacy benefit manager grants the relief requested in the appeal,
807	807	the pharmacy benefit manager shall make the requested change in the maximum
808	808	allowable cost; allow the pharmacy or pharmacist to reverse and rebill the relevant
809	809	claim; provide to the pharmacy or pharmacist the national drug code number
810	810	published in a directory by the federal food and drug administration on which the
811	811	increase or change is based; and make the change effective for each similarly situated
812	812	pharmacy or pharmacist subject to the maximum allowable cost list.
813	813	b. If the pharmacy benefit manager denies the relief requested in the appeal,
814	814	the pharmacy benefit manager shall provide to the pharmacy or pharmacist a reason
815	815	for the denial, the national drug code number published in a directory by the federal
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842	842	SECTION 19 SENATE BILL 737
843	843	food and drug administration for the pharmaceutical product to which the claim
844	844	relates, and the name of a national or regional pharmaceutical wholesaler operating
845	845	in this state that has the pharmaceutical product currently in stock at a price below
846	846	the amount specified in the pharmacy benefit manager's maximum allowable cost
847	847	list.
848	848	4. Notwithstanding subd. 3. b., a pharmacy benefit manager may not deny a
849	849	pharmacy's or pharmacist's appeal under this paragraph if the relief requested in the
850	850	appeal relates to the maximum allowable cost for a pharmaceutical product that is
851	851	not available for the pharmacy or pharmacist to purchase at a cost that is below the
852	852	pharmacy acquisition cost from the pharmaceutical wholesaler from which the
853	853	pharmacy or pharmacist purchases the majority of pharmaceutical products for
854	854	resale. If this subdivision applies, the pharmacy benefit manager shall revise the
855	855	maximum allowable cost list to increase the maximum allowable cost for the
856	856	pharmaceutical product to an amount equal to or greater than the pharmacy's or
857	857	pharmacist's pharmacy acquisition cost and allow the pharmacy or pharmacist to
858	858	reverse and rebill each claim affected by the pharmacy's or pharmacist's inability to
859	859	procure the pharmaceutical product at a cost that is equal to or less than the
860	860	maximum allowable cost that was the subject of the pharmacy's or pharmacist's
861	861	appeal.
862	862	(d) Affiliated reimbursements. A pharmacy benefit manager may not
863	863	reimburse a pharmacy or pharmacist in this state an amount less than the amount
864	864	that the pharmacy benefit manager reimburses a pharmacy benefit manager
865	865	affiliate for providing the same pharmaceutical product. The reimbursement
866	866	amount shall be calculated on a per unit basis based on the same generic product
867	867	identifier or generic code number, if applicable.
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895	895	SECTION 19
896	896	SENATE BILL 737
897	897	(e) Declining to dispense. A pharmacy or pharmacist may decline to provide a
898	898	pharmaceutical product to an individual or pharmacy benefit manager if, as a result
899	899	of the applicable maximum allowable cost list, the pharmacy or pharmacist would
900	900	be paid less than the pharmacy acquisition cost of the pharmacy or pharmacist
901	901	providing the pharmaceutical product.
902	902	SECTION 20. 632.865 (2h) of the statutes is created to read:
903	903	632.865 (2h) PROFESSIONAL DISPENSING FEES. A pharmacy benefit manager
904	904	shall pay a pharmacy or pharmacist a professional dispensing fee at a rate not less
905	905	than is paid by this state under the medical assistance program under subch. IV of
906	906	ch. 49 for each pharmaceutical product that the pharmacy or pharmacist dispenses
907	907	to an individual. The fee shall be calculated on a per unit basis based on the same
908	908	generic product identifier or generic code number, if applicable. The pharmacy
909	909	benefit manager shall pay the professional dispensing fee in addition to the amount
910	910	the pharmacy benefit manager reimburses the pharmacy or pharmacist for the cost
911	911	of the pharmaceutical product that the pharmacy or pharmacist dispenses to the
912	912	individual.
913	913	SECTION 21. 632.865 (2p) of the statutes is created to read:
914	914	632.865 (2p) PHARMACY BENEFIT MANAGER-IMPOSED FEES PROHIBITED. A
915	915	pharmacy benefit manager may not assess, charge, or collect any form of
916	916	remuneration that passes from a pharmacy or pharmacist to the pharmacy benefit
917	917	manager, including claim-processing fees, performance-based fees,
918	918	network-participation fees, or accreditation fees.
919	919	SECTION 22. 632.865 (2t) of the statutes is created to read:
920	920	632.865 (2t) FIDUCIARY DUTY AND DISCLOSURES TO HEALTH BENEFIT PLAN SPONSORS.
921	921	(a) A pharmacy benefit manager owes a fiduciary duty to the health benefit plan
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948	948	SECTION 22 SENATE BILL 737
949	949	sponsor to act according to the health benefit plan sponsor's instructions and in the
950	950	best interests of the health benefit plan sponsor.
951	951	(b) A pharmacy benefit manager shall annually provide, no later than the date
952	952	and using the method prescribed by the commissioner by rule, the health benefit plan
953	953	sponsor with all of the following information from the previous calendar year:
954	954	1. The indirect profit received by the pharmacy benefit manager from owning
955	955	any interest in a pharmacy or service provider.
956	956	2. Any payment made by the pharmacy benefit manager to a consultant or
957	957	broker who works on behalf of the health benefit plan sponsor.
958	958	3. From the amounts received from all drug manufacturers, the amounts
959	959	retained by the pharmacy benefit manager, and not passed through to the health
960	960	benefit plan sponsor, that are related to the health benefit plan sponsor's claims or
961	961	bona fide service fees.
962	962	4. The amounts, including pharmacy access and audit recovery fees, received
963	963	from all pharmacies and pharmacists that are in the pharmacy benefit manager's
964	964	network or have a contract to be in the network and, from these amounts, the amount
965	965	retained by the pharmacy benefit manager and not passed through to the health
966	966	benefit plan sponsor.
967	967	SECTION 23. 632.865 (4) of the statutes is renumbered 632.865 (4) (a).
968	968	SECTION 24. 632.865 (4) (b) of the statutes is created to read:
969	969	632.865 (4) (b) A pharmacy benefit manager may not use any certification or
970	970	accreditation requirement as a determinant of pharmacy network participation that
971	971	is inconsistent with, more stringent than, or in addition to the federal requirements
972	972	for licensure as a pharmacy and the requirements for licensure as a pharmacy under
973	973	s. 450.06 or 450.065.
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1000	1000	KRP&JPC:cjs
1001	1001	SECTION 25
1002	1002	SENATE BILL 737
1003	1003	SECTION 25. 632.865 (5) (e) of the statutes is repealed.
1004	1004	SECTION 26. 632.865 (5d), (5h), (5p) and (5t) of the statutes are created to read:
1005	1005	632.865 (5d) DISCRIMINATORY REIMBURSEMENT PROHIBITED. (a) In this
1006	1006	subsection, “3rd-party payer” means an entity, other than a patient or health care
1007	1007	provider, that reimburses for and manages health care expenses.
1008	1008	(b) A pharmacy benefit manager may not do any of the following:
1009	1009	1. Refuse to reimburse a 340B covered entity or a pharmacy or pharmacist
1010	1010	contracted with a 340B covered entity for dispensing 340B drugs.
1011	1011	2. Impose requirements or restrictions on 340B covered entities or pharmacies
1012	1012	or pharmacists contracted with 340B covered entities that are not imposed on other
1013	1013	entities, pharmacies, or pharmacists.
1014	1014	3. Reimburse a 340B covered entity or a pharmacy or pharmacist contracted
1015	1015	with a 340B covered entity for a 340B drug at a rate lower than the amount paid for
1016	1016	the same drug to pharmacies or pharmacists that are not 340B covered entities or
1017	1017	pharmacies or pharmacists contracted with a 340B covered entity.
1018	1018	4. Assess a fee, charge back, or other adjustment against a 340B covered entity
1019	1019	or a pharmacy or pharmacist contracted with a 340B covered entity after a claim has
1020	1020	been paid or adjudicated.
1021	1021	5. Restrict the access of a 340B covered entity or a pharmacy or pharmacist
1022	1022	contracted with a 340B covered entity to a 3rd-party payer's pharmacy network
1023	1023	solely because the 340B covered entity or the pharmacy or pharmacist contracted
1024	1024	with a 340B covered entity participates in the 340B drug pricing program under 42
1025	1025	USC 256b.
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1050	1050	SECTION 26 SENATE BILL 737
1051	1051	6. Require a 340B covered entity or a pharmacy or pharmacist contracted with
1052	1052	a 340B covered entity to contract with a specific pharmacy or pharmacist or health
1053	1053	benefit plan in order to access a 3rd-party payer's pharmacy network.
1054	1054	7. Impose a restriction or an additional charge on a patient who obtains a 340B
1055	1055	drug from a 340B covered entity or a pharmacy or pharmacist contracted with a 340B
1056	1056	covered entity.
1057	1057	8. Restrict the methods by which a 340B covered entity or a pharmacy or
1058	1058	pharmacist contracted with a 340B covered entity may dispense or deliver 340B
1059	1059	drugs.
1060	1060	9. Require a 340B covered entity or a pharmacy or pharmacist contracted with
1061	1061	a 340B covered entity to share pharmacy bills or invoices with a pharmacy benefit
1062	1062	manager, a 3rd-party payer, or a health benefit plan.
1063	1063	(5h) REGULATION OF PHARMACY NETWORKS AND INDIVIDUAL CHOICE. All of the
1064	1064	following apply to a pharmacy benefit manager that sells access to networks of
1065	1065	pharmacies or pharmacists that operate in this state:
1066	1066	(a) The pharmacy benefit manager shall allow a participant or beneficiary of
1067	1067	a pharmacy benefits plan or program that the pharmacy benefit manager serves to
1068	1068	use any pharmacy or pharmacist in this state that is licensed to dispense the
1069	1069	pharmaceutical product that the participant or beneficiary seeks to obtain, provided
1070	1070	that the pharmacy or pharmacist accepts the same terms and conditions that the
1071	1071	pharmacy benefit manager has established for at least one of the networks of
1072	1072	pharmacies or pharmacists the pharmacy benefit manager has established to serve
1073	1073	individuals in this state.
1074	1074	(b) The pharmacy benefit manager may establish a preferred network of
1075	1075	pharmacies or pharmacists and a nonpreferred network of pharmacies or
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1103	1103	SECTION 26
1104	1104	SENATE BILL 737
1105	1105	pharmacists, but the pharmacy benefit manager may not prohibit a pharmacy or
1106	1106	pharmacist from participating in either type of network in this state, provided that
1107	1107	the pharmacy or pharmacist is licensed by this state and the federal government and
1108	1108	accepts the same terms and conditions that the pharmacy benefit manager has
1109	1109	established for other pharmacies or pharmacists participating in the network that
1110	1110	the pharmacy or pharmacist wants to join.
1111	1111	(c) The pharmacy benefit manager may not charge a participant or beneficiary
1112	1112	of a pharmacy benefits plan or program that the pharmacy benefit manager serves
1113	1113	a different copayment obligation or additional fee, or provide any inducement or
1114	1114	financial incentive, for the participant or beneficiary to use a pharmacy or
1115	1115	pharmacist in a particular network of pharmacies or pharmacists the pharmacy
1116	1116	benefit manager has established to serve individuals in this state.
1117	1117	(5p) GAG CLAUSES PROHIBITED. A pharmacy benefit manager may not prohibit
1118	1118	a pharmacy or pharmacist that dispenses a pharmaceutical product from, nor may
1119	1119	a pharmacy benefit manager penalize the pharmacy or pharmacist for, informing an
1120	1120	individual about the cost of the pharmaceutical product, the amount in
1121	1121	reimbursement that the pharmacy or pharmacist receives for dispensing the
1122	1122	pharmaceutical product, the cost and clinical efficacy of a less expensive alternative
1123	1123	to the pharmaceutical product, or any difference between the cost to the individual
1124	1124	under the individual's pharmacy benefits plan or program and the cost to the
1125	1125	individual if the individual purchases the pharmaceutical product without making
1126	1126	a claim for benefits under the individual's pharmacy benefits plan or program.
1127	1127	(5t) EXCLUSION OF PHARMACIES PROHIBITED. No pharmacy benefit manager,
1128	1128	3rd-party payer, or health benefit plan may exclude a pharmacy or pharmacist from
1129	1129	its network because the pharmacy or pharmacist serves less than a certain portion
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1156	1156	SECTION 26 SENATE BILL 737
1157	1157	of the population of the state or serves a population living with certain health
1158	1158	conditions.
1159	1159	SECTION 27. 632.865 (6) (bm) of the statutes is created to read:
1160	1160	632.865 (6) (bm) Requirements of audits. An entity that conducts audits of
1161	1161	pharmacists of pharmacies shall ensure all of the following:
1162	1162	1. Each pharmacist or pharmacy audited by the entity is audited under the
1163	1163	same standards and parameters as other similarly situated pharmacists or
1164	1164	pharmacies audited by the entity.
1165	1165	2. The entity randomizes the prescriptions that the entity audits and the entity
1166	1166	audits the same number of prescriptions in each prescription benefit tier.
1167	1167	3. Each audit of a prescription reimbursed under Part D of Medicare under 42
1168	1168	USC 1395w-101 et seq. is conducted separately from audits of prescriptions
1169	1169	reimbursed under other policies or plans.
1170	1170	SECTION 28. 632.865 (6) (c) 3. of the statutes is amended to read:
1171	1171	632.865 (6) (c) 3. Deliver to the pharmacist or pharmacy a final audit report,
1172	1172	which may be delivered electronically, within 90 days of the date the pharmacist or
1173	1173	pharmacy receives the preliminary report or the date of the final appeal of the audit,
1174	1174	whichever is later. The final audit report under this subdivision shall include specific
1175	1175	documentation of any alleged errors and shall include any response provided to the
1176	1176	auditor by the pharmacy or pharmacist and consider and address the pharmacy's or
1177	1177	pharmacist's response.
1178	1178	SECTION 29. 632.865 (6) (c) 3m. of the statutes is created to read:
1179	1179	632.865 (6) (c) 3m. If an entity delivers to the pharmacist or pharmacy a
1180	1180	preliminary report of the audit or final audit report that references a billing code,
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1207	1207	SECTION 29
1208	1208	SENATE BILL 737
1209	1209	drug code, or other code associated with audits, the entity shall provide an electronic
1210	1210	link to a plain language explanation of the code.
1211	1211	SECTION 30. 632.865 (6g) of the statutes is created to read:
1212	1212	632.865 (6g) RECOUPMENT. (a) No pharmacy benefit manager may recoup
1213	1213	reimbursement made to a pharmacist or pharmacy for errors that have no actual
1214	1214	financial harm to an enrollee, policy, or plan unless the error is the result of the
1215	1215	pharmacist or pharmacy failing to comply with a formal corrective action plan.
1216	1216	(b) No pharmacy benefit manager may use extrapolation in calculating
1217	1217	reimbursements that it may recoup. The finding of errors for which reimbursement
1218	1218	will be recouped shall be based on an actual error in reimbursement and not on a
1219	1219	projection of the number of patients served having a similar diagnosis or on a
1220	1220	projection of the number of similar orders or refills for similar prescription drugs.
1221	1221	(c) A pharmacy benefit manager that recoups any reimbursement made to a
1222	1222	pharmacist or pharmacy for an error that was the cause of financial harm shall
1223	1223	return the recouped reimbursement to the individual or the policy or plan sponsor
1224	1224	who was harmed by the error.
1225	1225	SECTION 31. 632.865 (6r) of the statutes is created to read:
1226	1226	632.865 (6r) QUALITY PROGRAMS. No pharmacy benefit manager may base any
1227	1227	criteria of a quality program in a contract between a pharmacy and a pharmacy
1228	1228	benefit manager on a factor for which the pharmacy does not have complete and
1229	1229	exclusive control.
1230	1230	SECTION 32. 632.865 (8) of the statutes is created to read:
1231	1231	632.865 (8) RETALIATION PROHIBITED. (a) In this subsection, “retaliate” includes
1232	1232	any of the following actions taken by a pharmacy benefit manager:
1233	1233	1. Terminating or refusing to renew a contract with a pharmacy or pharmacist.
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1260	1260	SECTION 32 SENATE BILL 737
1261	1261	2. Subjecting a pharmacy or pharmacist to increased audits.
1262	1262	3. Failing to promptly pay a pharmacy or pharmacist any money the pharmacy
1263	1263	benefit manager owes to the pharmacy or pharmacist.
1264	1264	(b) A pharmacy benefit manager may not retaliate against a pharmacy or
1265	1265	pharmacist for reporting an alleged violation of this section or for exercising a right
1266	1266	or remedy under this section.
1267	1267	(c) In addition to any other remedies provided by law, a pharmacy or
1268	1268	pharmacist may bring an action in court for injunctive relief based on a violation of
1269	1269	par. (b). In addition to equitable relief, the court may, notwithstanding s. 814.04 (1),
1270	1270	award a pharmacy or pharmacist that prevails in such an action reasonable attorney
1271	1271	fees and costs in prosecuting the action.
1272	1272	SECTION 33.0Initial applicability.
1273	1273	(1) AFFILIATED REIMBURSEMENTS. Except as provided in sub. (4), the treatment
1274	1274	of s. 632.865 (2d) (d) first applies to a reimbursement amount paid for on a claim for
1275	1275	reimbursement submitted on the effective date of this subsection.
1276	1276	(2) PROFESSIONAL DISPENSING FEES. Except as provided in sub. (4), the treatment
1277	1277	of s. 632.865 (2h) first applies to a pharmaceutical product that is dispensed on the
1278	1278	effective date of this subsection.
1279	1279	(3) PHARMACY BENEFIT MANAGER-IMPOSED FEES. Except as provided in sub. (4),
1280	1280	the treatment of s. 632.865 (2p) first applies to remuneration collected by a pharmacy
1281	1281	benefit manager on the effective date of this subsection.
1282	1282	(4) CONTRACTS. The treatment of ss. 632.861 (1m), (3g), (3r), and (4) (a) and (e)
1283	1283	and 632.865 (1) (ab), (ac), (ae), (an), (aq), (at), (bm), (cg), and (cr), (2), (2d), (2h), (2p),
1284	1284	(2t), (5) (e), (5d), (5h), (5p), (5t), (6) (bm) and (c) 3. and 3m., (6g), (6r), and (8), the
1285	1285	renumbering of s. 632.865 (4), and the creation of s. 632.865 (4) (b) first apply to a
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1313	1313	SECTION 33
1314	1314	SENATE BILL 737
1315	1315	pharmacy benefit manager that is affected by a contract that contains a provisions
1316	1316	inconsistent with those treatments on the day on which the contract expires or is
1317	1317	extended, modified, or renewed, whichever occurs first.
1318	1318	(5) APPLICATION OF PRESCRIPTION DRUG PAYMENTS.
1319	1319	(a) For policies and plans containing provisions inconsistent with the
1320	1320	treatment of s. 632.862, that treatment first applies to policy or plan years beginning
1321	1321	on January 1 of the year following the year in which this paragraph takes effect,
1322	1322	except as provided in par. (b).
1323	1323	(b) For policies or plans that are affected by a collective bargaining agreement
1324	1324	containing provisions inconsistent with the treatment of s. 632.862, that treatment
1325	1325	first applies to policy or plan years beginning on the effective date of this paragraph
1326	1326	or on the day on which the collective bargaining agreement is newly established,
1327	1327	extended, modified, or renewed, whichever is later.
1328	1328	SECTION 34.0Effective dates. This act takes effect on the day after publication,
1329	1329	except as follows:
1330	1330	(1) APPLICATION OF PRESCRIPTION DRUG PAYMENTS. The treatment of s. 632.862
1331	1331	takes effect on the first day of the 4th month beginning after publication.
1332	1332	(END)
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