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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
pharmacy benefit managers; prohibited fees
Purpose
Prohibits pharmacy benefits managers (PBMs) from charging a fee related to the claims adjudication process and establishes a complaint process for violations.
Background
A PBM is a person, business or other entity that, pursuant to a contract or under an employment relationship with a carrier or other third-party payer, either directly or through an intermediary manages the prescription drug coverage provided by the carrier or other third-party payer, including: 1) the processing and payment of claims for prescription drugs; 2) the performance of drug utilization review; 3) processing of drug prior authorization requests; 4) the 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).
PBMs are prohibited from: 1) prohibiting a pharmacist or pharmacy from providing an insured individual information on the amount of the insured's cost share for the insured prescription drug and the clinical efficacy of a more affordable alternative drug if one is available; 2) penalizing a pharmacy or pharmacist for disclosing such information to an insured or for selling to an insured a more affordable alternative if one is available; and 3) requiring a pharmacist or pharmacy to change or collect a copayment from an insured if it exceeds the total submitted charges by the network pharmacy (A.R.S. § 44-1752).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Precludes a PBM, on behalf of itself, an insurance plan sponsor or insurer, from charging or holding a pharmacist or pharmacy responsible for a fee associated with any step, component or mechanism related to the claims adjudication process, including:
a) adjudicating a pharmacy benefit claim;
b) processing or transmitting a pharmacy benefit claim; and
c) developing, managing or participating in a claims processing or adjudication network.
2. Permits a pharmacy to submit a complaint regarding PBM claims adjudication fees to the Director of the Department of Financial Institutions (Director).
3. Specifies that a complaint must include supporting documentation at the time the complaint is filed.
4. Requires the Director to investigate a complaint and permits the Director to examine and audit PBM records to determine if a violation has occurred.
5. Allows the Director to do the following upon a determination that a violation has occurred:
a) seek an injunction in court and apply for permanent and temporary orders as deemed necessary by the Director to restrain a PBM from continuing to commit a violation; and
b) issue a cease and desist order on the PBM.
6. Subjects a PBM who commits a violation the of claims adjudication fee prohibition to penalties prescribed for other defined prohibited practices.
7. Permits any person who is damaged by the acts of a PBM who violates the fee prohibition to bring a civil action for damages against the PBM in court.
8. Becomes effective on the general effective date.
Prepared by Senate Research
February 1, 2021
CRS/gs