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HOUSE OF REPRESENTATIVES |
H.B. NO. |
275 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO PHARMACY BENEFIT MANAGEMENT COMPANIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that numerous states are proposing or considering legislation to regulate pharmacy benefit management companies. Pharmacy benefit management companies are the intermediaries that negotiate services and costs between pharmaceutical companies and third party payors, such as insurance companies, businesses, and cash-paying customers. Proposals seek to ensure financial reliability, regulate the licensing of pharmacy benefit management companies, mandate full disclosure of drug costs and financial contracts while eliminating the term "mandatory" from any pharmacy benefit contract. In addition, pharmacy providers, such as chain drug stores and independent pharmacies, are currently subjected to unregulated auditing practices, and additional legislation would establish a more regimented and reliable audit procedure.
The purpose of this Act is to require pharmacy benefit management companies to register with the insurance commissioner before administering pharmacy benefits of health insurers and implement regulations on pharmacy benefit management companies in the State.
SECTION 2. The Hawaii Revised Statutes, is amended by adding a new chapter to be appropriately designated and to read as follows:
"CHAPTER
PHARMACY BENEFIT MANAGEMENT COMPANIES
§ -1 Registration. (a) No later than July 1, 2011, a pharmacy benefit management company shall register with the insurance commissioner before providing services to residents of the State. Registrations shall be effective for two years and may be renewed for an additional two years.
(b) The insurance commissioner may deny, suspend, revoke, or refuse to renew a registration in circumstances specified in rules adopted pursuant to this part.
§ -2 Prohibited activities. (a) A pharmacy benefit management company shall not exclude any willing provider from any contract offered within the State, including the Hawaii employer-union health benefits trust fund, public assistance programs, and commercial entities.
(b) A pharmacy benefit management program shall take no action that would restrict a patient's choice of pharmacy from which to receive prescription medications, including requiring patients to receive prescription medications from mail-order pharmacies located outside the State.
(c) A pharmacy benefit management company shall not manipulate the amounts of drug co-payments that it charges in a manner that would encourage patients to receive prescription medications from a mail-order pharmacy located outside the State.
(d) A pharmacy benefit management company shall not offer different dispensing reimbursement amounts among willing providers for the same prescription medications.
(e) A pharmacy benefit management company shall not establish reimbursement amounts for providers that are less than a provider's acquisition cost plus a professional dispensing fee.
(f) A pharmacy benefit management company shall not charge or receive reimbursement for rebranded pharmaceutical products or pharmaceutical products with an altered National Drug Code.
(g) A pharmacy benefit management company shall not ship, mail, or deliver drugs or devices to a person in the State through a non-resident pharmacy unless that non-resident pharmacy is registered with or has a permit issued by the board of pharmacy.
§ -3 Violations; penalties. (a) The insurance commissioner may assess a pharmacy benefit management company in violation of this part a fine of up to $10,000 for each violation. In addition, the insurance commissioner may direct the pharmacy benefit management company to cease and desist prohibited activity, take specific affirmative corrective action, or make restitution of money, property, or other assets.
(b) A pharmacy benefit management company may appeal any decision made by the insurance commissioner under this part, whereupon the opportunity for an administrative hearing under chapter 91 shall be afforded. Any pharmacy benefit management company aggrieved by the final decision and order shall be entitled to judicial review in accordance with chapter 91 or may submit the matter to binding arbitration.
§ -4 Formularies. A pharmacy benefit management company registered under this chapter shall work with the insurance commissioner to provide access to formularies.
§ -5 Annual Reports. Beginning in 2012, the insurance commissioner shall submit reports annually to the legislature no later than twenty days prior to the convening of each regular session regarding the status of pharmacy benefit management companies registered under this chapter.
§ -6 Rules. The insurance commissioner shall adopt rules pursuant to chapter 91 for the purposes of implementing this part, including a schedule of allowable acquisition costs and professional dispensing fees."
SECTION 3. This Act shall take effect July 1, 2050.
Report Title:
Pharmacy Benefit Management Companies
Description:
Requires registration of and regulates practices of pharmacy benefit management companies. Requires pharmacy benefit management companies to work with the Insurance Commissioner to provide access to formularies, and requires an annual report to the legislature regarding the status of pharmacy benefit management companies. Effective July 1, 2050. (HB275 HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.