MISSISSIPPI LEGISLATURE
2022 Regular Session
To: Public Health and Welfare
By: Senator(s) Harkins
AN ACT TO AMEND SECTION 73-21-153, MISSISSIPPI CODE OF 1972, TO AMEND CERTAIN DEFINITIONS OF THE PHARMACY BENEFIT PROMPT PAY ACT; TO DELETE PHARMACY BENEFIT MANAGER AFFILIATE FROM THE DEFINITIONS; TO AMEND SECTION 73-21-155, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A PHARMACY BENEFIT MANAGER OR THIRD-PARTY PAYER SHALL NOT CHARGE A PATIENT A COPAYMENT IN EXCESS OF THE AMOUNT REIMBURSED TO THE PHARMACY FOR THE CLAIM; TO SET CERTAIN PROHIBITIONS ON PHARMACY BENEFIT MANAGERS; TO AMEND SECTION 73-21-156, MISSISSIPPI CODE OF 1972, TO REQUIRE THE STATE BOARD OF PHARMACY TO COORDINATE AUDITS OF APPEALS TO PHARMACY BENEFIT MANAGERS INCLUSIVE OF ALL RELATED EVIDENCE; TO PROHIBIT A PHARMACY BENEFIT MANAGER FROM RETALIATING AGAINST A PHARMACY OR PHARMACY BASED ON THE PHARMACIST'S OR PHARMACY'S EXERCISE OF ANY RIGHT OR REMEDY UNDER THE CHAPTER; TO INCLUDE CERTAIN EXEMPTIONS FROM WHAT IS CONSIDERED AS RETALIATION; TO AMEND SECTION 73-21-161, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A PHARMACY OR PHARMACY BENEFIT MANAGER SHALL BE PROHIBITED FROM INTERFERING WITH THE PATIENT'S RIGHT TO CHOOSE THE PATIENT'S PHARMACY OR PROVIDER OF CHOICE; TO AMEND SECTION 73-21-163, MISSISSIPPI CODE OF 1972, TO CONFORM TO THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 73-21-153, Mississippi Code of 1972, is amended as follows:
73-21-153. For purposes of Sections 73-21-151 through 73-21-163, the following words and phrases shall have the meanings ascribed herein unless the context clearly indicates otherwise:
(a) "Board" means the State Board of Pharmacy.
(b) "Commissioner" means the Mississippi Commissioner of Insurance.
(c) "Day" means a calendar day, unless otherwise defined or limited.
(d) "Electronic claim" means the transmission of data for purposes of payment of covered prescription drugs, other products and supplies, and pharmacist services in an electronic data format specified by a pharmacy benefit manager and approved by the department.
(e) "Electronic adjudication" means the process of electronically receiving, reviewing and accepting or rejecting an electronic claim.
(f) "Enrollee" means an individual who has been enrolled in a pharmacy benefit management plan.
(g) "Health insurance plan" means benefits consisting of prescription drugs, other products and supplies, and pharmacist services provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as prescription drugs, other products and supplies, and pharmacist services under any hospital or medical service policy or certificate, hospital or medical service plan contract, preferred provider organization agreement, or health maintenance organization contract offered by a health insurance issuer.
(h) "Pharmacy
benefit manager" shall have the same definition as provided in Section 73-21-179.
However, through June 30, 2014, the term "pharmacy benefit manager"
shall not include an insurance company that provides an integrated health
benefit plan and that does not separately contract for pharmacy benefit
management services. From and after July 1, 2014, the term "pharmacy
benefit manager" shall not include an insurance company unless the
insurance company is providing services as a pharmacy benefit manager as
defined in Section 73-21-179, in which case the insurance company shall be
subject to Sections 73-21-151 through 73-21-159 only for those pharmacy benefit
manager services. In addition, the term "pharmacy benefit manager"
shall not include the pharmacy benefit manager of * * * the Mississippi Division of Medicaid or its
contractors when performing pharmacy benefit manager services for the Division
of Medicaid. In addition, the term "pharmacy benefit manager"
shall include, Pharmacy Services Administrative Organizations, pharmacy benefit
administrator and pharmacy cash discount cards as defined by 83-9-6.1.
* * *
( * * *i) "Pharmacy benefit management
plan" shall have the same definition as provided in Section 73-21-179.
( * * *j) "Pharmacist," "pharmacist
services" and "pharmacy" or "pharmacies" shall have
the same definitions as provided in Section 73-21-73.
( * * *k) "Uniform claim form"
means a form prescribed by rule by the State Board of Pharmacy; however,
for purposes of Sections 73-21-151 through 73-21-159, the board shall adopt the
same definition or rule where the State Department of Insurance has adopted a
rule covering the same type of claim. The board may modify the terminology of
the rule and form when necessary to comply with the provisions of Sections 73-21-151
through 73-21-159.
( * * *l) "Plan sponsors" means the
employers, insurance companies, unions and health maintenance organizations
that contract with a pharmacy benefit manager for delivery of prescription
services.
(m) "340B drug pricing" means the program established under Section 602 of the Veterans Health Care Act of 1992, Public Law No. 102-585.
SECTION 2. Section 73-21-155, Mississippi Code of 1972, is amended as follows:
73-21-155. (1) Reimbursement under a contract to a pharmacist or pharmacy for prescription drugs and other products and supplies that is calculated according to a formula that uses Medi-Span, Gold Standard or a nationally recognized reference that has been approved by the board in the pricing calculation shall use the most current reference price or amount in the actual or constructive possession of the pharmacy benefit manager, its agent, or any other party responsible for reimbursement for prescription drugs and other products and supplies on the date of electronic adjudication or on the date of service shown on the nonelectronic claim.
(2) Pharmacy benefit managers, their agents and other parties responsible for reimbursement for prescription drugs and other products and supplies shall be required to update the nationally recognized reference prices or amounts used for calculation of reimbursement for prescription drugs and other products and supplies no less than every three (3) business days.
(3) (a) All benefits payable under a pharmacy benefit management plan shall be paid within seven (7) days after receipt of due written proof of a clean claim where claims are submitted electronically, and shall be paid within thirty-five (35) days after receipt of due written proof of a clean claim where claims are submitted in paper format. Benefits due under the plan and claims are overdue if not paid within seven (7) days or thirty-five (35) days, whichever is applicable, after the pharmacy benefit manager receives a clean claim containing necessary information essential for the pharmacy benefit manager to administer preexisting condition, coordination of benefits and subrogation provisions under the plan sponsor's health insurance plan. A "clean claim" means a claim received by any pharmacy benefit manager for adjudication and which requires no further information, adjustment or alteration by the pharmacist or pharmacies or the insured in order to be processed and paid by the pharmacy benefit manager. A claim is clean if it has no defect or impropriety, including any lack of substantiating documentation, or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this subsection. A clean claim includes resubmitted claims with previously identified deficiencies corrected.
(b) A clean claim does not include any of the following:
(i) A duplicate claim, which means an original claim and its duplicate when the duplicate is filed within thirty (30) days of the original claim;
(ii) Claims which are submitted fraudulently or that are based upon material misrepresentations;
(iii) Claims that require information essential for the pharmacy benefit manager to administer preexisting condition, coordination of benefits or subrogation provisions under the plan sponsor's health insurance plan; or
(iv) Claims submitted by a pharmacist or pharmacy more than thirty (30) days after the date of service; if the pharmacist or pharmacy does not submit the claim on behalf of the insured, then a claim is not clean when submitted more than thirty (30) days after the date of billing by the pharmacist or pharmacy to the insured.
(c) Not later than seven (7) days after the date the pharmacy benefit manager actually receives an electronic claim, the pharmacy benefit manager shall pay the appropriate benefit in full, or any portion of the claim that is clean, and notify the pharmacist or pharmacy (where the claim is owed to the pharmacist or pharmacy) of the reasons why the claim or portion thereof is not clean and will not be paid and what substantiating documentation and information is required to adjudicate the claim as clean. Not later than thirty-five (35) days after the date the pharmacy benefit manager actually receives a paper claim, the pharmacy benefit manager shall pay the appropriate benefit in full, or any portion of the claim that is clean, and notify the pharmacist or pharmacy (where the claim is owed to the pharmacist or pharmacy) of the reasons why the claim or portion thereof is not clean and will not be paid and what substantiating documentation and information is required to adjudicate the claim as clean. Any claim or portion thereof resubmitted with the supporting documentation and information requested by the pharmacy benefit manager shall be paid within twenty (20) days after receipt.
(4) If the board finds that any pharmacy benefit manager, agent or other party responsible for reimbursement for prescription drugs and other products and supplies has not paid ninety-five percent (95%) of clean claims as defined in subsection (3) of this section received from all pharmacies in a calendar quarter, he shall be subject to administrative penalty of not more than Twenty-five Thousand Dollars ($25,000.00) to be assessed by the State Board of Pharmacy.
(a) Examinations to determine compliance with this subsection may be conducted by the board. The board may contract with qualified impartial outside sources to assist in examinations to determine compliance. The expenses of any such examinations shall be paid by the pharmacy benefit manager examined.
(b) Nothing in the provisions of this section shall require a pharmacy benefit manager to pay claims that are not covered under the terms of a contract or policy of accident and sickness insurance or prepaid coverage.
(c) If the claim is not denied for valid and proper reasons by the end of the applicable time period prescribed in this provision, the pharmacy benefit manager must pay the pharmacy (where the claim is owed to the pharmacy) or the patient (where the claim is owed to a patient) interest on accrued benefits at the rate of one and one-half percent (1-1/2%) per month accruing from the day after payment was due on the amount of the benefits that remain unpaid until the claim is finally settled or adjudicated. Whenever interest due pursuant to this provision is less than One Dollar ($1.00), such amount shall be credited to the account of the person or entity to whom such amount is owed.
(d) Any pharmacy benefit manager and a pharmacy may enter into an express written agreement containing timely claim payment provisions which differ from, but are at least as stringent as, the provisions set forth under subsection (3) of this section, and in such case, the provisions of the written agreement shall govern the timely payment of claims by the pharmacy benefit manager to the pharmacy. If the express written agreement is silent as to any interest penalty where claims are not paid in accordance with the agreement, the interest penalty provision of subsection (4)(c) of this section shall apply.
(e) The State Board of Pharmacy may adopt rules and regulations necessary to ensure compliance with this subsection.
(5) (a) For purposes of this subsection (5), "network pharmacy" means a licensed pharmacy in this state that has a contract with a pharmacy benefit manager to provide covered drugs at a negotiated reimbursement rate. A network pharmacy or pharmacist may decline to provide a brand name drug, multisource generic drug, or service, if the network pharmacy or pharmacist is paid less than that network pharmacy's acquisition cost for the product. If the network pharmacy or pharmacist declines to provide such drug or service, the pharmacy or pharmacist shall provide the customer with adequate information as to where the prescription for the drug or service may be filled.
(b) The State Board of Pharmacy shall adopt rules and regulations necessary to implement and ensure compliance with this subsection, including, but not limited to, rules and regulations that address access to pharmacy services in rural or underserved areas in cases where a network pharmacy or pharmacist declines to provide a drug or service under paragraph (a) of this subsection. The board shall promulgate the rules and regulations required by this paragraph (b) not later than October 1, 2016.
(6) A pharmacy benefit manager shall not directly or indirectly retroactively deny or reduce reimbursement of a claim or aggregate of claims after the claim or aggregate of claims has been adjudicated. Retroactive denial or reduction of claims shall include, but is not limited to: fees charged to the pharmacy that are not apparent at the time of claim processing, fees not reported on a remittance advice or within an adjudicated claim or any related performance fees.
(7) A pharmacist or pharmacy who is a member of a pharmacy service administration organization (PSAO) shall be given a copy of those contracts requested and entered into by the PSAO and its pharmacy benefits manager or third-party payer related to any claims the pharmacy or pharmacist submitted to the pharmacy benefits manager for the PSAO within five (5) days.
(8) A pharmacy benefits manager or third-party payer shall not charge a patient a copayment in excess of the amount reimbursed to the pharmacy for the claim. If a patient pays a copayment, the dispensing provider or pharmacy shall retain the adjudicated cost, and the pharmacy benefits manager or third-party payer may not redact, reduce or omit payment of the adjudicated cost.
(9) For purposes of this subsection, "same drug" means those drugs having the same ingredients, same strength and bear the same National Drug Code (NDC) on the label. A pharmacy benefit manager or third-party payer shall not:
(a) Reimburse a 340B entity or pharmacy for pharmacy-dispensed drugs at a rate lower than the rate paid for the same drug to pharmacies that are not 340B entities or dispensing pharmacies;
(b) Assess a fee, chargeback or adjustment upon a 340B entity or claim that is not equally assessed on non-340B entities or dispensing pharmacies;
(c) Exclude 340B entities or pharmacies that process 340B claims from its network of participating pharmacies based on criteria that is not applied to non-340B entities or dispensing pharmacies; or
(d) Require a claim to include a modifier to identify that the claim is submitted on behalf of a 340B qualified entity and is for a 340B qualifying patient or event.
SECTION 3. Section 73-21-156, Mississippi Code of 1972, is amended as follows:
73-21-156. (1) As used in this section, the following terms shall be defined as provided in this subsection:
(a) "Maximum allowable cost list" means a listing of drugs or other methodology used by a pharmacy benefit manager, directly or indirectly, setting the maximum allowable payment to a pharmacy or pharmacist for a generic drug, brand-name drug, biologic product or other prescription drug. The term "maximum allowable cost list" includes, without limitation:
(i) Average acquisition cost, including national average drug acquisition cost;
(ii) Average manufacturer price;
(iii) Average wholesale price;
(iv) Brand effective rate or generic effective rate;
(v) Discount indexing;
(vi) Federal upper limits;
(vii) Wholesale acquisition cost; and
(viii) Any other term that a pharmacy benefit manager or a health care insurer may use to establish reimbursement rates to a pharmacist or pharmacy for pharmacist services.
(b) "Pharmacy acquisition cost" means the amount that a pharmaceutical wholesaler charges for a pharmaceutical product as listed on the pharmacy's billing invoice.
(2) Before a pharmacy benefit manager places or continues a particular drug on a maximum allowable cost list, the drug:
(a) If the drug is a generic equivalent drug product as defined in 73-21-73, shall be listed as therapeutically equivalent and pharmaceutically equivalent "A" or "B" rated in the United States Food and Drug Administration's most recent version of the "Orange Book" or "Green Book" or have an NR or NA rating by Medi-Span, Gold Standard, or a similar rating by a nationally recognized reference approved by the board;
(b) Shall be available for purchase by each pharmacy in the state from national or regional wholesalers operating in Mississippi; and
(c) Shall not be obsolete.
(3) A pharmacy benefit manager shall:
(a) Provide access to its maximum allowable cost list to each pharmacy subject to the maximum allowable cost list;
(b) Update its maximum allowable cost list on a timely basis, but in no event longer than three (3) calendar days; and
(c) Provide a process for each pharmacy subject to the maximum allowable cost list to receive prompt notification of an update to the maximum allowable cost list.
(4) A pharmacy benefit manager shall:
(a) Provide a reasonable administrative appeal procedure to allow pharmacies to challenge a maximum allowable cost list and reimbursements made under a maximum allowable cost list for a specific drug or drugs as:
(i) Not meeting the requirements of this section; or
(ii) Being below the pharmacy acquisition cost.
(b) The reasonable administrative appeal procedure shall include the following:
(i) A dedicated telephone number, email address and website for the purpose of submitting administrative appeals;
(ii) The ability to submit an administrative appeal directly to the pharmacy benefit manager regarding the pharmacy benefit management plan or through a pharmacy service administrative organization; and
(iii) A period of not less than thirty (30) business days to file an administrative appeal.
(c) The pharmacy benefit manager shall respond to the challenge under paragraph (a) of this subsection (4) within thirty (30) business days after receipt of the challenge.
(d) If a challenge is made under paragraph (a) of this subsection (4), the pharmacy benefit manager shall within thirty (30) business days after receipt of the challenge either:
(i) If the appeal is upheld:
1. Make the change in the maximum allowable cost list payment to at least the pharmacy acquisition cost;
2. Permit the challenging pharmacy or pharmacist to reverse and rebill the claim in question;
3. Provide the National Drug Code that the increase or change is based on to the pharmacy or pharmacist; and
4. Make the change under item 1 of this subparagraph (i) effective for each similarly situated pharmacy as defined by the payor subject to the maximum allowable cost list; or
(ii) If the appeal is denied, provide the challenging pharmacy or pharmacist the National Drug Code and the name of the national or regional pharmaceutical wholesalers operating in Mississippi that have the drug currently in stock at a price below the maximum allowable cost as listed on the maximum allowable cost list; or
(iii) If the National Drug Code provided by the pharmacy benefit manager is not available below the pharmacy acquisition cost from the pharmaceutical wholesaler from whom the pharmacy or pharmacist purchases the majority of prescription drugs for resale, then the pharmacy benefit manager shall adjust the maximum allowable cost as listed on the maximum allowable cost list above the challenging pharmacy's pharmacy acquisition cost and permit the pharmacy to reverse and rebill each claim affected by the inability to procure the drug at a cost that is equal to or less than the previously challenged maximum allowable cost.
(5) * * * A pharmacy benefit manager shall not reimburse
a pharmacy or pharmacist in the state an amount less than the amount that the pharmacy
benefit manager reimburses * * * another pharmacy * * * for providing the same
pharmacist services.
* * *
(6) (a) The board may coordinate audits of appeals to pharmacy benefit managers inclusive of all related evidence. Requested documents should be produced within seven (7) days of request.
(b) The pharmacy benefit manager being examined shall pay all costs of examination. The cost of examination shall be deposited into a special fund held by the board and shall be sufficient to provide for all expenses for the licensing, supervision and examination of all pharmacy benefit managers subject to regulation under Sections 73-21-71 through 73-21-129 and Sections 73-21-151 through 73-21-163.
(c) The board is authorized to hire independent consultants to conduct appeal examinations of a pharmacy benefit manager and expend funds collected under this section to pay the cost of such examination.
(7) A pharmacy benefit manager shall not retaliate against a pharmacist or pharmacy based on the pharmacist's or pharmacy's exercise of any right or remedy under this chapter. Retaliation prohibited by this section includes:
(a) Terminating or refusing to renew a contract with the pharmacist or pharmacy;
(b) Subjecting the pharmacist or pharmacy to an increased frequency of audits, number of claims audited, or amount of monies for claims audited; or
(c) Failing to promptly pay the pharmacist or pharmacy any money owed by the pharmacy benefit manager to the pharmacist or pharmacy.
(8) For the purposes of this section, a pharmacy benefit manager is not considered to have retaliated against a pharmacy if the pharmacy benefit manager:
(a) Takes an action in response to a credible allegation of fraud against the pharmacist or pharmacy; and
(b) Provides reasonable notice to the pharmacist or pharmacy of the allegation of fraud and the basis of the allegation before initiating an action.
SECTION 4. Section 73-21-161, Mississippi Code of 1972, is amended as follows:
73-21-161. (1) As used in this section, the term "referral" means:
(a) Ordering of a patient
to a pharmacy by a pharmacy benefit manager * * * either orally or in writing, including
online messaging;
(b) Offering or implementing
plan designs that require patients to use * * * specific pharmacies; or
(c) Patient or prospective
patient specific advertising, marketing, or promotion of a pharmacy * * *.
The term "referral"
does not include a pharmacy's inclusion by a pharmacy benefit manager * * * in communications to patients, including
patient and prospective patient specific communications, regarding network pharmacies
and prices, provided that the * * * information regarding eligible * * * pharmacies in those communications
and the information provided is accurate.
(2) A pharmacy * * * or pharmacy benefit manager * * * licensed
or operating in Mississippi shall be prohibited from:
(a) Making referrals;
(b) Transferring or sharing
records relative to prescription information containing patient identifiable and
prescriber identifiable data to or from a pharmacy benefit manager * * * for any commercial purpose; however,
nothing in this section shall be construed to prohibit the exchange of prescription
information between a pharmacy and * * * the pharmacy benefit manager
for the limited purposes of pharmacy reimbursement; formulary compliance; pharmacy
care; public health activities otherwise authorized by law; or utilization review
by a health care provider; * * *
(c) Presenting a claim
for payment to any individual, third-party payor * * * or other entity for a service furnished
pursuant to a referral * * *; or
(d) Interfering with the patient's right to choose the patient's pharmacy or provider of choice, including inducement, required referrals or offering financial or other incentives.
(3) This section shall not be
construed to prohibit a pharmacy from entering into an agreement with a pharmacy
benefit manager * * *
to provide pharmacy care to patients, provided that the pharmacy does not receive
referrals in violation of subsection (2) of this section and the pharmacy provides
the disclosures required in subsection (1) of this section.
* * *
( * * *4) In addition to any other remedy provided
by law, a violation of this section by a pharmacy shall be grounds for disciplinary
action by the board under its authority granted in this chapter.
( * * *5) A pharmacist who fills a prescription
that violates subsection (2) of this section shall not be liable under this section.
SECTION 5. Section 73-21-163, Mississippi Code of 1972, is amended as follows:
73-21-163. Whenever the board
has reason to believe that a pharmacy benefit manager or pharmacy * * * is using, has used, or
is about to use any method, act or practice prohibited in Sections 73-21-151 through
73-21-163 and that proceedings would be in the public
interest, it may bring an action in the name of the board against the pharmacy benefit
manager or pharmacy * * * to restrain by temporary or permanent injunction the
use of such method, act or practice. The action shall be brought in the Chancery
Court of the First Judicial District of Hinds County, Mississippi. The court is
authorized to issue temporary or permanent injunctions to restrain and prevent violations
of Sections 73-21-151 through 73-21-163 and such injunctions shall be issued without
bond.
(2) The board may impose a monetary
penalty on a pharmacy benefit manager or a pharmacy * * *
for noncompliance with the provisions of the Sections 73-21-151 through 73-21-163,
in amounts of not less than One Thousand Dollars ($1,000.00) per violation and not
more than Twenty-five Thousand Dollars ($25,000.00) per violation. Each day a violation
continues for the same brand or generic product identifier or brand or generic code
number is a separate violation. The board shall prepare a record entered upon its
minutes that states the basic facts upon which the monetary penalty was imposed.
Any penalty collected under this subsection (2) shall be deposited into the special
fund of the board.
(3) The board may assess a monetary penalty for those reasonable costs that are expended by the board in the investigation and conduct of a proceeding if the board imposes a monetary penalty under subsection (2) of this section. A monetary penalty assessed and levied under this section shall be paid to the board by the licensee, registrant or permit holder upon the expiration of the period allowed for appeal of those penalties under Section 73-21-101, or may be paid sooner if the licensee, registrant or permit holder elects. Any penalty collected by the board under this subsection (3) shall be deposited into the special fund of the board.
(4) When payment of a monetary penalty assessed and levied by the board against a licensee, registrant or permit holder in accordance with this section is not paid by the licensee, registrant or permit holder when due under this section, the board shall have the power to institute and maintain proceedings in its name for enforcement of payment in the chancery court of the county and judicial district of residence of the licensee, registrant or permit holder, or if the licensee, registrant or permit holder is a nonresident of the State of Mississippi, in the Chancery Court of the First Judicial District of Hinds County, Mississippi. When those proceedings are instituted, the board shall certify the record of its proceedings, together with all documents and evidence, to the chancery court and the matter shall be heard in due course by the court, which shall review the record and make its determination thereon in accordance with the provisions of Section 73-21-101. The hearing on the matter may, in the discretion of the chancellor, be tried in vacation.
(5) The board shall develop and implement a uniform penalty policy that sets the minimum and maximum penalty for any given violation of Sections 73-21-151 through 73-21-163. The board shall adhere to its uniform penalty policy except in those cases where the board specifically finds, by majority vote, that a penalty in excess of, or less than, the uniform penalty is appropriate. That vote shall be reflected in the minutes of the board and shall not be imposed unless it appears as having been adopted by the board.
SECTION 6. This act shall take effect and be in force from and after July 1, 2022.