ARIZONA HOUSE OF REPRESENTATIVES Fifty-fifth Legislature First Regular Session
	Senate: HHS DP 8-0-0-0 | 3^rd Read 28-1-1-0 House: HHS DP 9-0-0-0

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SB 1356: pharmacy benefit managers; prohibited fees

Sponsor:  Senator Barto, LD 15

Committee on Commerce

Overview

Prohibits a pharmacy benefit manager (PBM) from charging a pharmacist a fee relating to the claims adjudication process.

History

A PBM is a person, business or other entity that, pursuant to a contract or under an employment relationship with an insurer or other third-party payor, manages the prescription drug coverage provided by the insurer or other third-party payor, including:

1) Processing and payment of claims for prescription drugs;

2) Performance of drug utilization review;

3) Processing of drug prior authorization requests;

4) Adjudication of appeals or grievances related to prescription drug coverage;

5) Contracting with network pharmacies; and

6) Controlling the cost of covered prescription drugs (A.R.S. § 20-3321).

Pursuant to A.R.S. § 20-3331, a PBM must do all of the following:

1) Update the price and drug information for each list that the PBM maintains every seven business days;

2) At specified times, make available to each network pharmacy the sources used to determine maximum allowable cost pricing;

3) Establish a process by which a network pharmacy may appeal its reimbursement for a drug subject to maximum allowable cost pricing; and

4) Allow a pharmacy services administrative organization that is contracted with the PBM to file an appeal of a drug on behalf of the organization's contract pharmacies.

Under current law, with deference to federal law, a PBM may not prohibit a pharmacist or pharmacy from providing an insured individual information on the insured's cost share for the prescription drugs and the clinical efficiency of more affordable alternatives or penalize a pharmacy or pharmacist for disclosing such information or for selling more affordable alternatives to the insured. Additionally, a PBM may not require a pharmacist or pharmacy to charge or collect a copayment that exceeds the total submitted charges by the network pharmacy (A.R.S. 44-1752).

Provisions

1. Prohibits a PBM from, on behalf of itself, a plan sponsor or an insurer, charging or holding a pharmacist or pharmacy responsible for a fee for any step of, component or mechanism related to the claims adjudication process, including:

a) Adjudicating a pharmacy benefit claim;

b) Processing or transmitting a benefit claim; or

c) Developing, managing, or participating in a claims processing or adjudication network. (Sec. 1)

2. Permits a pharmacy to submit a complaint of a violation to the Director of the Department of Insurance and Financial Institutions (Director).

a) Requires the pharmacy to include supporting documentation when filing the complaint.

b) Instructs the Director to investigate the complaint.

c) Allows the Director to examine and audit the books and records of a PBM to determine if a violation has occurred. (Sec. 1)

3. Permits the Director, upon finding that a violation has been committed by a PBM, to:

a) Seek an injunction and apply for temporary and permanent orders that are necessary to restrain the PBM from continuing the violation; and

b) Issue a cease and desist order on the PBM. (Sec. 1)

4. Subjects a PBM found in violation to statutory civil penalties relating to prohibited practices. (Sec. 1)

5. Allows any person who is damaged by a violation committed by a PBM to bring a civil action for damages against the PBM found in violation. (Sec. 1)

6. Contains an applicability clause. (Sec. 2)

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10.                   SB 1356

11. Initials PRB           Page 0 Commerce

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