Market Conduct Requirements for Pharmacy Benefit Managers effective 1/1/21

Oregon HB2185 Enrolled    Relating to pharmacy benefit managers; creating new provisions; and amending ORS 735.530 and 735.534.

ID_10-2020   Market Conduct Requirements for Pharmacy Benefit Managers effective 1/1/21

House Bill 2185 and Associated Rules for Regulation of Pharmacy Benefits Managers

Effective date: 01/01/2021

Applicable law: ORS 735.530-735.552

Bills and Laws Oregon Revised Statutes (oregonlegislature.gov)

Applicable rules: OAR 836-200-0440

State of Oregon: State Archives – Oregon Administrative Rules (OARs)

Enforcement: Department of Consumer and Business Services (DCBS).  They may suspend or revoke the license of a PBM for non-compliance with the law.

Summary Points of Law

  • PBM may not require a prescription be filled or refilled at a mail order pharmacy
  • PBM shall reimburse cost of a specialty drug filled through a LTC pharmacy for a LTC patient
  • Shall allow a network pharmacy to mail ship or deliver prescriptions drugs to its patients as an ancillary service (see rules).
  • May not require patient signature as proof of deliver for mailed or shipped prescriptions (there are record keeping requirements and other obligations)
  • May not penalize a network pharmacy for informing patients of lower priced options other than using their prescription benefit (removes gag clause)
  • May not reimburse a 340B pharmacy differently than other network pharmacies
  • May not retroactively deny or reduce payment of a claim after the claim has been adjudicated (no more retroactive DIR fees! All fees must be part of adjudication or be assessed before claims are submitted)
  • Below cost reimbursement changes
    • Language changed from MAC only to apply to all prescription and benefit types. No below cost payments for any benefit plan, brand, generic, or specialty.  DCBS has stated that this is their interpretation of the language provided that the pharmacy can show there was not a product available for below the PBM reimbursement amount.
    • If PBM denies a price appeal based on availability of a lower priced product, the PBM must overturn and uphold the appeal if the pharmacy can show that a lower priced product was not available to them (see language).
    • Pharmacies now have 60 days after adjudication of a claim to file an appeal with the PBM

Commentary on Rules

  • We were unable to establish compromise language on the definition of ancillary service for mailed prescriptions. The PBMs were able to get a clause in the rules which states they may establish limits and parameters of a pharmacy’s mail order business. However, DCBS was clear that these limits should not affect patient access to mailing as an option at their local pharmacy.  If contracts get too restrictive, these should be reported to DCBS.
  • Specialty Pharmacy and Specialty Drugs definitions (see rule text)- this was a protracted point of debate and it is important to know and remember that these definitions only apply to the provisions of HB 2185. They have nothing to do with the definition of a specialty pharmacy for inclusion in a pharmacy network, payment, or for credentialling standards of practice.  However, we should be wary of referencing these definitions for use in other laws.

What new laws don’t do:

  • Eliminate DIR fees- The law only requires that DIR fees not be charged retroactively. They can be charged at point of adjudication or as part of pharmacy fee schedule.  The benefit of this law change is that PBMs cannot take money out of your bank later and you know upfront how much you will get paid or charged.
  • The laws do not apply to Medicare Part D plans (yet). An ERISA exception to state laws for federal benefit plans has existed until challenged in the Supreme Court last year by the Arkansas pharmacy association.  Arkansas won the case, but the ruling was specific to Arkansas.  It is yet to be determined how this ruling will get applied to other states and in what circumstances.  Maybe we will see some proactive voluntary compliance?  Stay tuned.

What do you do if a PBM is in violation of the law?

  • Step 1- make an appeal to the PBM or contact them directly about the violation of the law.
  • Step 2- escalate the appeal if you don’t get results. Give them written quotes or copies of the law.  Get your PSAO (Pharmacy Services Administration Organization) involved if you have one.  PBMs do want to be compliant if you can get to someone of responsibility.
  • Step 3- file a complaint with the Department of Consumer and Business Services

Division of Financial Regulation : File a complaint : File a complaint or check a license : State of Oregon

  • Contact OSPA for help or advise. We want to know what is happening and if complaints are being filed with DCBS.

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