07 LC 21
9344
House
Bill 798
By:
Representatives Scott of the
153rd,
Stephens of the
164th,
Parham of the
141st,
and Carter of the
159th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Chapter 4 of Title 26 of the Official Code of Georgia Annotated, the
"Georgia Pharmacy Practice Act," so as to provide for registration of any person
or entity acting as a pharmacy benefits manager; to provide a short title; to
define certain terms; to provide requirements for registration; to provide for
the review of contracts; to provide for a fidelity bond; to provide that a
pharmacy benefits manager shall not intervene in the delivery of prescriptions;
to provide for the dispensing of a substitute prescription drug; to provide that
a pharmacy network provider shall be protected in the event of a dispute with a
pharmacy benefits manager; to provide the duties of a pharmacy benefits manager;
to provide for the dispensation of certain payments; to provide for the
protection of certain information; to provide for audits; to provide for
contracts; to provide for notification; to provide for penalties for violations;
to provide for rules and regulations; to provide for related matters; to repeal
conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Chapter
4 of Title 26 of the Official Code of Georgia Annotated, the "Georgia Pharmacy
Practice Act," is amended by adding a new article to read as
follows:
"ARTICLE
12
26-4-210.
This
article shall be known and may be cited as the 'Pharmacy Consumer Protection and
Transparency Act.'
26-4-211.
As
used in this article, the term:
(1)
'Commissioner' means the Commissioner of Insurance.
(2)
'Covered entity' means a nonprofit hospital or medical service organization, an
insurer, a health coverage plan or health maintenance organization, a health
program administered by the department or this state in the capacity of provider
of health coverage, or an employer, labor union, or other group of persons
organized in this state that provides health coverage to covered individuals who
are employed or reside in this state. Such term shall not include a health plan
that provides coverage only for accidental injury, specified disease, hospital
indemnity, medicare supplement, disability income, long-term care, or other
limited benefit health insurance policies and contracts.
(3)
'Covered individual' means a dependent or other person provided health coverage
through a policy, contract, or plan for a principal other than himself or
herself.
(4)
'Covered person' means a member, participant, enrollee, contract holder, policy
holder, or beneficiary of a covered entity who is provided health coverage by
the covered entity.
(5)
'Department' means the Department of Insurance.
(6)
'Health benefit plan' means a policy, contract, certificate, or agreement
offered or issued by a health carrier to provide, deliver, arrange for, pay for,
or reimburse any of the cost of health care services including prescription drug
benefits.
(7)
'Pharmacist services' means drug therapy and other patient care services
provided by a licensed pharmacist intended to achieve outcomes related to the
cure or prevention of a disease, elimination or reduction of a patient´s
symptoms, or the arresting or slowing of a disease process, all as defined in
rules promulgated by the board.
(8)
'Pharmacy benefits management' means the administration or management of
prescription drug benefits provided by a covered entity for the benefit of
covered individuals.
(9)
'Pharmacy benefits manager' means a person, business, or other entity that
performs pharmacy benefits management. The term includes a person or entity
acting for a pharmacy benefits manager in a contractual or employment
relationship in the performance of pharmacy benefits management for a covered
entity.
(10)
'Pharmacy network provider' means a pharmacist or pharmacy that has a
contractual relationship with a health benefit plan or pharmacy benefits manager
to provide prescription drugs to covered persons.
26-4-212.
(a)
No person or organization shall act or operate as a pharmacy benefits manager in
this state without a valid certificate of registration issued by the department
as provided in this article. In addition, every pharmacy benefits manager shall
comply with the provisions of Code Section 26-4-110.1.
(b)
Each person seeking a certificate of registration to act as a pharmacy benefits
manager shall file with the department an application form and include the
following information:
(1)
All basic organizational documents of the pharmacy benefits manager, including,
without limitation, the articles of incorporation, articles of association,
bylaws, and other applicable documents and all amendments to those
documents;
(2)
The names, addresses, official positions, and professional qualifications of the
individuals who are responsible for the conduct of the affairs of the pharmacy
benefits manager, including all members of the board of directors, board of
trustees, executive committee, other governing board or committee, the principal
officers in the case of a corporation, the partners or members in the case of a
partnership or association, and any other person who exercises control or
influence over the affairs of the pharmacy benefits manager;
(3)
The name and address of the agent for service of process in this
state;
(4)
A detailed description of the claims processing services, pharmacist services,
insurance services, other prescription drug or device services, audit procedures
for network pharmacies, and other administrative services to be
provided;
(5)
Such other information as the Commissioner may require; and
(6)
A filing fee of $1,000.00.
(c)
The applicant shall make available for review by the department copies of all
contract forms used by the pharmacy benefits manager to contract with insurers,
pharmaceutical manufacturers, pharmacies, or other persons utilizing the
pharmacy benefits manager for pharmacy benefits management
services.
(d)
The pharmacy benefits manager´s plan of operation shall be consistent with
the provisions of this chapter and rules and regulations promulgated pursuant to
this chapter.
(e)
A pharmacy benefits manager shall maintain a fidelity bond equal to at least 1
percent of the amount of the funds handled or managed annually by the pharmacy
benefits manager.
(f)
The pharmacy benefits manager shall renew its registration on an annual basis
and the Commissioner may promulgate rules to set forth the requirements for
renewals.
26-4-213.
(a)
A pharmacy benefits manager shall not intervene in the delivery or transmission
of prescriptions from the prescriber to the pharmacist or pharmacy for the
purpose of influencing the prescriber´s choice of therapy, influencing the
patient´s choice of pharmacist or pharmacy, or altering the prescription
information, including, but not limited to, switching the prescribed drug
without the express authorization of the prescriber.
(b)
With regard to the dispensation of a substitute prescription drug for a
prescribed drug to a covered individual, the following provisions
apply:
(1)
If a pharmacy benefits manager makes a substitution in which the substitute drug
costs more than the prescribed drug, the pharmacy benefits manager shall
disclose to the covered entity and covered person the cost of both drugs and any
benefit or payment directly or indirectly accruing to the pharmacy benefits
manager as a result of the substitution; and
(2)
The pharmacy benefits manager shall transfer in full to the covered entity any
benefit or payment received in any form by the pharmacy benefits manager either
as a result of a prescription drug substitution under paragraph (1) of this
subsection or as a result of the pharmacy benefits manager´s substituting a
lower-priced generic and therapeutically equivalent drug for a higher-priced
prescribed drug.
(c)
A pharmacy network provider may not be terminated or penalized because it
expresses disagreement with the pharmacy benefits manager´s decision to
deny or limit benefits to a covered person or because the pharmacy network
provider assists a covered person to seek reconsideration of the pharmacy
benefits manager´s decision or because the pharmacy network provider
discusses alternative medications with the covered person.
26-4-214.
(a)
A pharmacy benefits manager shall:
(1)
Owe a fiduciary duty to a covered entity and shall discharge that duty in
accordance with the provisions of state and federal law;
(2)
Perform its duties with care, skill, prudence, and diligence and in accordance
with the standards of conduct applicable to a fiduciary in an enterprise of a
like character and with like aims;
(3)
Notify the covered entity in writing of any activity, policy, practice,
ownership, interest, or affiliation of the pharmacy benefits manager that
directly or indirectly presents any conflict of interest;
(4)
Provide to a covered entity all financial and utilization information requested
by the covered entity relating to the provision of benefits to covered
individuals through that covered entity and all financial and utilization
information relating to services to that covered entity; and
(5)
Disclose to the covered entity all financial terms and arrangements for
remuneration of any kind that apply between the pharmacy benefits manager and
any prescription drug manufacturer or labeler, including, without limitation,
formulary management and drug-switch programs, educational support, claims
processing and pharmacy network fees that are charged from retail pharmacies,
and data sales fees. A pharmacy benefits manager shall disclose to the covered
entity whether there is a difference between the price paid to a retail pharmacy
and the amount billed to the covered entity for said purchase.
(b)
A pharmacy benefits manager that derives any payment or benefit for the
dispensation of prescription drugs within this state based on volume of sales
for certain prescription drugs or classes or brands of drugs within this state
shall pass that payment or benefit on in full to the covered
entity.
(c)
A pharmacy benefits manager providing information under paragraphs (3) and (4)
of subsection (a) of this Code section may designate that material as
confidential. Information designated confidential by a pharmacy benefits
manager and provided to a covered entity under this article may not be disclosed
to any person without the consent of the pharmacy benefits manager, except that
disclosure may be ordered by a court of this state for good cause shown or made
in a court filing under seal. Nothing in this article limits the Attorney
General´s use of civil investigative demand authority under Part 2 of
Article 15 of Chapter 1 of Title 10, the "Fair Business Practices Act," to
investigate violations of this article.
(d)
A covered entity may audit the pharmacy benefits manager´s books and
records related to the rebates or other information provided in this Code
section.
(e)
All contracts for pharmacy benefits management entered into in this state on or
after July 1, 2007, shall comply with the provisions of this
article.
26-4-215.
(a)
No pharmacy benefits manager may mandate basic record keeping that is more
stringent than that required by state laws including this chapter or by federal
laws or regulations.
(b)
No pharmacy network provider may be denied participation in the network of
providers if said provider is willing to accept the terms and conditions offered
to all other providers in the network.
(c)
After a pharmacy benefits manager affirmatively establishes a payment for a
covered benefit, it may not thereafter retroactively void such established
payment and recoup funds from the pharmacy network provider.
(d)
When a pharmacy benefits manager receives notice from a covered entity that it
is terminating its contract, the pharmacy benefits manager shall notify within
ten business days all pharmacy network providers of the effective date of said
termination.
(e)
Within 24 hours of a price increase notification by a manufacturer or supplier,
the pharmacy benefits manager shall adjust its payment to the pharmacy network
provider consistent with the price increase.
26-4-216.
(a)
A violation of this article shall be an unfair or deceptive act within the
meaning Part 2 of Article 15 of Chapter 1 of Title 10, the "Fair Business
Practices Act," and may be enforced under the provisions of such
part.
(b)
Any covered person or pharmacy network provider who suffers as a result of an
act or practice declared unlawful herein may bring a private right of action
individually, but not in a representative capacity, to recover actual damages
under this article.
(c)
A pharmacy benefits manager who acts without registering as provided in this
article shall, in addition to any other penalty, be subject to a civil fine of
not less than $1,500.00.
26-4-217.
The
Commissioner may promulgate rules and regulations to carry out the provisions of
this article."
SECTION
2.
All
laws and parts of laws in conflict with this Act are repealed.