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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by | |||||||||||||||||||
5 | changing Sections 424 and 513b1 as follows:
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6 | (215 ILCS 5/424) (from Ch. 73, par. 1031)
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7 | Sec. 424. Unfair methods of competition and unfair or | |||||||||||||||||||
8 | deceptive acts or
practices defined. The following are hereby | |||||||||||||||||||
9 | defined as unfair methods of
competition and unfair and | |||||||||||||||||||
10 | deceptive acts or practices in the business of
insurance:
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11 | (1) The commission by any person of any one or more of | |||||||||||||||||||
12 | the acts
defined or prohibited by Sections 134, 143.24c, | |||||||||||||||||||
13 | 147, 148, 149, 151, 155.22,
155.22a, 155.42,
236, 237, | |||||||||||||||||||
14 | 364, and 469 , and 513b1 of this Code.
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15 | (2) Entering into any agreement to commit, or by any | |||||||||||||||||||
16 | concerted
action committing, any act of boycott, coercion | |||||||||||||||||||
17 | or intimidation
resulting in or tending to result in | |||||||||||||||||||
18 | unreasonable restraint of, or
monopoly in, the business of | |||||||||||||||||||
19 | insurance.
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20 | (3) Making or permitting, in the case of insurance of | |||||||||||||||||||
21 | the types
enumerated in Classes 1, 2, and 3 of Section 4, | |||||||||||||||||||
22 | any unfair discrimination
between individuals or risks of | |||||||||||||||||||
23 | the same class or of essentially the same
hazard and |
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1 | expense element because of the race, color, religion, or | ||||||
2 | national
origin of such insurance risks or applicants. The | ||||||
3 | application of this Article
to the types of insurance | ||||||
4 | enumerated in Class 1 of Section 4 shall in no way
limit, | ||||||
5 | reduce, or impair the protections and remedies already | ||||||
6 | provided for by
Sections 236 and 364 of this Code or any | ||||||
7 | other provision of this Code.
| ||||||
8 | (4) Engaging in any of the acts or practices defined | ||||||
9 | in or prohibited by
Sections 154.5 through 154.8 of this | ||||||
10 | Code.
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11 | (5) Making or charging any rate for insurance against | ||||||
12 | losses arising
from the use or ownership of a motor | ||||||
13 | vehicle which requires a higher
premium of any person by | ||||||
14 | reason of his physical disability, race, color,
religion, | ||||||
15 | or national origin.
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16 | (6) Failing to meet any requirement of the Unclaimed | ||||||
17 | Life Insurance Benefits Act with such frequency as to | ||||||
18 | constitute a general business practice. | ||||||
19 | (7) Committing any act prohibited by subsection (h-5) | ||||||
20 | of Section 5-36 of the Illinois Public Aid Code. | ||||||
21 | (Source: P.A. 99-143, eff. 7-27-15; 99-893, eff. 1-1-17 .)
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22 | (215 ILCS 5/513b1) | ||||||
23 | Sec. 513b1. Pharmacy benefit manager contracts. | ||||||
24 | (a) As used in this Section: | ||||||
25 | "340B covered entity" means an entity authorized to |
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1 | participate in the 340B drug discount program, including any | ||||||
2 | pharmacy owned, operated by, or under contract with the entity | ||||||
3 | to dispense drugs on behalf of the entity. | ||||||
4 | "340B drug discount program" means the program established | ||||||
5 | under Section 340B of the federal Public Health Service Act, | ||||||
6 | 42 U.S.C. 256b. | ||||||
7 | "Biological product" has the meaning ascribed to that term | ||||||
8 | in Section 19.5 of the Pharmacy Practice Act. | ||||||
9 | "Maximum allowable cost" means the maximum amount that a | ||||||
10 | pharmacy benefit manager will reimburse a pharmacy for the | ||||||
11 | cost of a drug. | ||||||
12 | "Maximum allowable cost list" means a list of drugs for | ||||||
13 | which a maximum allowable cost has been established by a | ||||||
14 | pharmacy benefit manager. | ||||||
15 | "Pharmacy benefit manager" means a person, business, or | ||||||
16 | entity, including a wholly or partially owned or controlled | ||||||
17 | subsidiary of a pharmacy benefit manager, that provides claims | ||||||
18 | processing services or other prescription drug or device | ||||||
19 | services, or both, for health benefit plans. | ||||||
20 | "Retail price" means the price an individual without | ||||||
21 | prescription drug coverage would pay at a retail pharmacy, not | ||||||
22 | including a pharmacist dispensing fee. | ||||||
23 | "Third-party payer" means any entity that pays for | ||||||
24 | prescription drugs on behalf of a patient other than a health | ||||||
25 | care provider or sponsor of a plan subject to regulation under | ||||||
26 | Medicare Part D, 42 U.S.C. 1395w–101, et seq. |
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1 | (b) A contract between a health insurer and a pharmacy | ||||||
2 | benefit manager must require that the pharmacy benefit | ||||||
3 | manager: | ||||||
4 | (1) Update maximum allowable cost pricing information | ||||||
5 | at least every 7 calendar days. | ||||||
6 | (2) Maintain a process that will, in a timely manner, | ||||||
7 | eliminate drugs from maximum allowable cost lists or | ||||||
8 | modify drug prices to remain consistent with changes in | ||||||
9 | pricing data used in formulating maximum allowable cost | ||||||
10 | prices and product availability. | ||||||
11 | (3) Provide access to its maximum allowable cost list | ||||||
12 | to each pharmacy or pharmacy services administrative | ||||||
13 | organization subject to the maximum allowable cost list. | ||||||
14 | Access may include a real-time pharmacy website portal to | ||||||
15 | be able to view the maximum allowable cost list. As used in | ||||||
16 | this Section, "pharmacy services administrative | ||||||
17 | organization" means an entity operating within the State | ||||||
18 | that contracts with independent pharmacies to conduct | ||||||
19 | business on their behalf with third-party payers. A | ||||||
20 | pharmacy services administrative organization may provide | ||||||
21 | administrative services to pharmacies and negotiate and | ||||||
22 | enter into contracts with third-party payers or pharmacy | ||||||
23 | benefit managers on behalf of pharmacies. | ||||||
24 | (4) Provide a process by which a contracted pharmacy | ||||||
25 | can appeal the provider's reimbursement for a drug subject | ||||||
26 | to maximum allowable cost pricing. The appeals process |
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1 | must, at a minimum, include the following: | ||||||
2 | (A) A requirement that a contracted pharmacy has | ||||||
3 | 14 calendar days after the applicable fill date to | ||||||
4 | appeal a maximum allowable cost if the reimbursement | ||||||
5 | for the drug is less than the net amount that the | ||||||
6 | network provider paid to the supplier of the drug. | ||||||
7 | (B) A requirement that a pharmacy benefit manager | ||||||
8 | must respond to a challenge within 14 calendar days of | ||||||
9 | the contracted pharmacy making the claim for which the | ||||||
10 | appeal has been submitted. | ||||||
11 | (C) A telephone number and e-mail address or | ||||||
12 | website to network providers, at which the provider | ||||||
13 | can contact the pharmacy benefit manager to process | ||||||
14 | and submit an appeal. | ||||||
15 | (D) A requirement that, if an appeal is denied, | ||||||
16 | the pharmacy benefit manager must provide the reason | ||||||
17 | for the denial and the name and the national drug code | ||||||
18 | number from national or regional wholesalers. | ||||||
19 | (E) A requirement that, if an appeal is sustained, | ||||||
20 | the pharmacy benefit manager must make an adjustment | ||||||
21 | in the drug price effective the date the challenge is | ||||||
22 | resolved and make the adjustment applicable to all | ||||||
23 | similarly situated network pharmacy providers, as | ||||||
24 | determined by the managed care organization or | ||||||
25 | pharmacy benefit manager. | ||||||
26 | (5) Allow a plan sponsor contracting with a pharmacy |
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1 | benefit manager an annual right to audit compliance with | ||||||
2 | the terms of the contract by the pharmacy benefit manager, | ||||||
3 | including, but not limited to, full disclosure of any and | ||||||
4 | all rebate amounts secured, whether product specific or | ||||||
5 | generalized rebates, that were provided to the pharmacy | ||||||
6 | benefit manager by a pharmaceutical manufacturer. | ||||||
7 | (6) Allow a plan sponsor contracting with a pharmacy | ||||||
8 | benefit manager to request that the pharmacy benefit | ||||||
9 | manager disclose the actual amounts paid by the pharmacy | ||||||
10 | benefit manager to the pharmacy. | ||||||
11 | (7) Provide notice to the party contracting with the | ||||||
12 | pharmacy benefit manager of any consideration that the | ||||||
13 | pharmacy benefit manager receives from the manufacturer | ||||||
14 | for dispense as written prescriptions once a generic or | ||||||
15 | biologically similar product becomes available. | ||||||
16 | (c) In order to place a particular prescription drug on a | ||||||
17 | maximum allowable cost list, the pharmacy benefit manager | ||||||
18 | must, at a minimum, ensure that: | ||||||
19 | (1) if the drug is a generically equivalent drug, it | ||||||
20 | is listed as therapeutically equivalent and | ||||||
21 | pharmaceutically equivalent "A" or "B" rated in the United | ||||||
22 | States Food and Drug Administration's most recent version | ||||||
23 | of the "Orange Book" or have an NR or NA rating by | ||||||
24 | Medi-Span, Gold Standard, or a similar rating by a | ||||||
25 | nationally recognized reference; | ||||||
26 | (2) the drug is available for purchase by each |
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1 | pharmacy in the State from national or regional | ||||||
2 | wholesalers operating in Illinois; and | ||||||
3 | (3) the drug is not obsolete. | ||||||
4 | (d) A pharmacy benefit manager is prohibited from limiting | ||||||
5 | a pharmacist's ability to disclose whether the cost-sharing | ||||||
6 | obligation exceeds the retail price for a covered prescription | ||||||
7 | drug, and the availability of a more affordable alternative | ||||||
8 | drug, if one is available in accordance with Section 42 of the | ||||||
9 | Pharmacy Practice Act. | ||||||
10 | (e) A health insurer or pharmacy benefit manager shall not | ||||||
11 | require an insured to make a payment for a prescription drug at | ||||||
12 | the point of sale in an amount that exceeds the lesser of: | ||||||
13 | (1) the applicable cost-sharing amount; or | ||||||
14 | (2) the retail price of the drug in the absence of | ||||||
15 | prescription drug coverage. | ||||||
16 | (f) A contract between a pharmacy benefit manager or | ||||||
17 | third-party payer and a 340B covered entity shall not contain | ||||||
18 | any provision that: | ||||||
19 | (1) reimburses a 340B covered entity for drugs | ||||||
20 | purchased at a 340B drug discount program at a rate lower | ||||||
21 | than that paid for the same drug to pharmacies similar in | ||||||
22 | prescription volume that are not 340B covered entities; | ||||||
23 | (2) imposes any fee, chargeback, or rate adjustment | ||||||
24 | that is not imposed on a pharmacy that is not a 340B | ||||||
25 | covered entity; | ||||||
26 | (3) imposes any fee, chargeback, or rate adjustment |
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1 | that exceeds the fee, chargeback, or rate adjustment | ||||||
2 | imposed on a pharmacy that is not a 340B covered entity; | ||||||
3 | (4) prevents or interferes with an individual's choice | ||||||
4 | to receive a prescription drug from a 340B covered entity, | ||||||
5 | including the administration of the drug, whether in | ||||||
6 | person or via delivery, mail, or shipment; | ||||||
7 | (5) excludes a 340B covered entity from a pharmacy | ||||||
8 | network based on the 340B covered entity's participation | ||||||
9 | in the 340B drug discount program, or on a basis that | ||||||
10 | differs from that applied to pharmacies that are not 340B | ||||||
11 | covered entities; | ||||||
12 | (6) requires a 340B covered entity to use a billing | ||||||
13 | modifier to indicate that the drug claim is for a drug | ||||||
14 | purchased under the 340B drug discount program; | ||||||
15 | (7) prevents a 340B covered entity from using a drug | ||||||
16 | purchased under the 340B drug discount program; or | ||||||
17 | (8) any other provision that discriminates against a | ||||||
18 | 340B covered entity. | ||||||
19 | (g) A violation of this Section by a pharmacy benefit | ||||||
20 | manager constitutes an unfair or deceptive act or practice in | ||||||
21 | the business of insurance under Section 424. | ||||||
22 | (h) A provision that violates subsection (f) in a contract | ||||||
23 | between a pharmacy benefit manager or a third-party payer and | ||||||
24 | a 340B covered entity that is entered into, amended, or | ||||||
25 | renewed after July 1, 2022 shall be void and unenforceable. | ||||||
26 | (i) (f) This Section applies to contracts entered into or |
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1 | renewed on or after July 1, 2020. | ||||||
2 | (j) (g) This Section applies to any group or individual | ||||||
3 | policy of accident and health insurance or managed care plan | ||||||
4 | that provides coverage for prescription drugs and that is | ||||||
5 | amended, delivered, issued, or renewed on or after July 1, | ||||||
6 | 2020.
| ||||||
7 | (Source: P.A. 101-452, eff. 1-1-20 .) | ||||||
8 | Section 10. The Illinois Public Aid Code is amended by | ||||||
9 | changing Sections 5-5.12 and 5-36 as follows:
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10 | (305 ILCS 5/5-5.12) (from Ch. 23, par. 5-5.12)
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11 | Sec. 5-5.12. Pharmacy payments.
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12 | (a) Every request submitted by a pharmacy for | ||||||
13 | reimbursement under this
Article for prescription drugs | ||||||
14 | provided to a recipient of aid under this
Article shall | ||||||
15 | include the name of the prescriber or an acceptable
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16 | identification number as established by the Department.
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17 | (b) Pharmacies providing prescription drugs under
this | ||||||
18 | Article shall be reimbursed at a rate which shall include
a | ||||||
19 | professional dispensing fee as determined by the Illinois
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20 | Department, plus the current acquisition cost of the | ||||||
21 | prescription
drug dispensed. The Illinois Department shall | ||||||
22 | update its
information on the acquisition costs of all | ||||||
23 | prescription drugs
no less frequently than every 30 days. | ||||||
24 | However, the Illinois
Department may set the rate of |
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1 | reimbursement for the acquisition
cost, by rule, at a | ||||||
2 | percentage of the current average wholesale
acquisition cost.
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3 | (c) (Blank).
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4 | (d) The Department shall review utilization of narcotic | ||||||
5 | medications in the medical assistance program and impose | ||||||
6 | utilization controls that protect against abuse.
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7 | (e) When making determinations as to which drugs shall be | ||||||
8 | on a prior approval list, the Department shall include as part | ||||||
9 | of the analysis for this determination, the degree to which a | ||||||
10 | drug may affect individuals in different ways based on factors | ||||||
11 | including the gender of the person taking the medication. | ||||||
12 | (f) The Department shall cooperate with the Department of | ||||||
13 | Public Health and the Department of Human Services Division of | ||||||
14 | Mental Health in identifying psychotropic medications that, | ||||||
15 | when given in a particular form, manner, duration, or | ||||||
16 | frequency (including "as needed") in a dosage, or in | ||||||
17 | conjunction with other psychotropic medications to a nursing | ||||||
18 | home resident or to a resident of a facility licensed under the | ||||||
19 | ID/DD Community Care Act or the MC/DD Act, may constitute a | ||||||
20 | chemical restraint or an "unnecessary drug" as defined by the | ||||||
21 | Nursing Home Care Act or Titles XVIII and XIX of the Social | ||||||
22 | Security Act and the implementing rules and regulations. The | ||||||
23 | Department shall require prior approval for any such | ||||||
24 | medication prescribed for a nursing home resident or to a | ||||||
25 | resident of a facility licensed under the ID/DD Community Care | ||||||
26 | Act or the MC/DD Act, that appears to be a chemical restraint |
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1 | or an unnecessary drug. The Department shall consult with the | ||||||
2 | Department of Human Services Division of Mental Health in | ||||||
3 | developing a protocol and criteria for deciding whether to | ||||||
4 | grant such prior approval. | ||||||
5 | (g) The Department may by rule provide for reimbursement | ||||||
6 | of the dispensing of a 90-day supply of a generic or brand | ||||||
7 | name, non-narcotic maintenance medication in circumstances | ||||||
8 | where it is cost effective. | ||||||
9 | (g-5) On and after July 1, 2012, the Department may | ||||||
10 | require the dispensing of drugs to nursing home residents be | ||||||
11 | in a 7-day supply or other amount less than a 31-day supply. | ||||||
12 | The Department shall pay only one dispensing fee per 31-day | ||||||
13 | supply. | ||||||
14 | (h) Effective July 1, 2011, the Department shall | ||||||
15 | discontinue coverage of select over-the-counter drugs, | ||||||
16 | including analgesics and cough and cold and allergy | ||||||
17 | medications. | ||||||
18 | (h-5) On and after July 1, 2012, the Department shall | ||||||
19 | impose utilization controls, including, but not limited to, | ||||||
20 | prior approval on specialty drugs, oncolytic drugs, drugs for | ||||||
21 | the treatment of HIV or AIDS, immunosuppressant drugs, and | ||||||
22 | biological products in order to maximize savings on these | ||||||
23 | drugs. The Department may adjust payment methodologies for | ||||||
24 | non-pharmacy billed drugs in order to incentivize the | ||||||
25 | selection of lower-cost drugs. For drugs for the treatment of | ||||||
26 | AIDS, the Department shall take into consideration the |
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1 | potential for non-adherence by certain populations, and shall | ||||||
2 | develop protocols with organizations or providers primarily | ||||||
3 | serving those with HIV/AIDS, as long as such measures intend | ||||||
4 | to maintain cost neutrality with other utilization management | ||||||
5 | controls such as prior approval.
For hemophilia, the | ||||||
6 | Department shall develop a program of utilization review and | ||||||
7 | control which may include, in the discretion of the | ||||||
8 | Department, prior approvals. The Department may impose special | ||||||
9 | standards on providers that dispense blood factors which shall | ||||||
10 | include, in the discretion of the Department, staff training | ||||||
11 | and education; patient outreach and education; case | ||||||
12 | management; in-home patient assessments; assay management; | ||||||
13 | maintenance of stock; emergency dispensing timeframes; data | ||||||
14 | collection and reporting; dispensing of supplies related to | ||||||
15 | blood factor infusions; cold chain management and packaging | ||||||
16 | practices; care coordination; product recalls; and emergency | ||||||
17 | clinical consultation. The Department may require patients to | ||||||
18 | receive a comprehensive examination annually at an appropriate | ||||||
19 | provider in order to be eligible to continue to receive blood | ||||||
20 | factor. | ||||||
21 | (i) On and after July 1, 2012, the Department shall reduce | ||||||
22 | any rate of reimbursement for services or other payments or | ||||||
23 | alter any methodologies authorized by this Code to reduce any | ||||||
24 | rate of reimbursement for services or other payments in | ||||||
25 | accordance with Section 5-5e. | ||||||
26 | (j) On and after July 1, 2012, the Department shall impose |
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1 | limitations on prescription drugs such that the Department | ||||||
2 | shall not provide reimbursement for more than 4 prescriptions, | ||||||
3 | including 3 brand name prescriptions, for distinct drugs in a | ||||||
4 | 30-day period, unless prior approval is received for all | ||||||
5 | prescriptions in excess of the 4-prescription limit. Drugs in | ||||||
6 | the following therapeutic classes shall not be subject to | ||||||
7 | prior approval as a result of the 4-prescription limit: | ||||||
8 | immunosuppressant drugs, oncolytic drugs, anti-retroviral | ||||||
9 | drugs, and, on or after July 1, 2014, antipsychotic drugs. On | ||||||
10 | or after July 1, 2014, the Department may exempt children with | ||||||
11 | complex medical needs enrolled in a care coordination entity | ||||||
12 | contracted with the Department to solely coordinate care for | ||||||
13 | such children, if the Department determines that the entity | ||||||
14 | has a comprehensive drug reconciliation program. | ||||||
15 | (k) No medication therapy management program implemented | ||||||
16 | by the Department shall be contrary to the provisions of the | ||||||
17 | Pharmacy Practice Act. | ||||||
18 | (l) Any provider enrolled with the Department that bills | ||||||
19 | the Department for outpatient drugs and is eligible to enroll | ||||||
20 | in the federal Drug Pricing Program under Section 340B of the | ||||||
21 | federal Public Health Service Act shall enroll in that | ||||||
22 | program. No entity participating in the federal Drug Pricing | ||||||
23 | Program under Section 340B of the federal Public Health | ||||||
24 | Service Act may exclude fee-for-service Medicaid from their | ||||||
25 | participation in that program, however, although the | ||||||
26 | Department may exclude entities defined in Section |
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1 | 1905(l)(2)(B) of the Social Security Act are excluded from | ||||||
2 | this requirement. This subsection does not apply to outpatient | ||||||
3 | drugs billed to Medicaid managed care organizations. | ||||||
4 | (m) No later than January 1, 2023, the Department shall | ||||||
5 | implement a mechanism for entities participating in the | ||||||
6 | federal Drug Pricing Program under Section 340B of the federal | ||||||
7 | Public Health Service Act and their contracted pharmacies to | ||||||
8 | submit quarterly retrospective utilization files containing | ||||||
9 | the minimum fields necessary to accurately identify the drugs | ||||||
10 | to the Department or its contractor for processing Medicaid | ||||||
11 | drug rebate requests reflecting 340B drug dispensing to | ||||||
12 | Medicaid beneficiaries or Medicaid managed care organization | ||||||
13 | enrollees. The Department or its contractor shall use the | ||||||
14 | utilization files to remove 340B claims from the Department's | ||||||
15 | Medicaid drug rebate requests. The Department shall not | ||||||
16 | require the entities or their contracted pharmacies to use any | ||||||
17 | other method or billing code to identify 340B drugs billed to | ||||||
18 | Medicaid or Medicaid managed care organizations. | ||||||
19 | (Source: P.A. 102-558, eff. 8-20-21.)
| ||||||
20 | (305 ILCS 5/5-36) | ||||||
21 | Sec. 5-36. Pharmacy benefits. | ||||||
22 | (a)(1) The Department may enter into a contract with a | ||||||
23 | third party on a fee-for-service reimbursement model for the | ||||||
24 | purpose of administering pharmacy benefits as provided in this | ||||||
25 | Section for members not enrolled in a Medicaid managed care |
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1 | organization; however, these services shall be approved by the | ||||||
2 | Department. The Department shall ensure coordination of care | ||||||
3 | between the third-party administrator and managed care | ||||||
4 | organizations as a consideration in any contracts established | ||||||
5 | in accordance with this Section. Any managed care techniques, | ||||||
6 | principles, or administration of benefits utilized in | ||||||
7 | accordance with this subsection shall comply with State law. | ||||||
8 | (2) The following shall apply to contracts between | ||||||
9 | entities contracting relating to the Department's third-party | ||||||
10 | administrators and pharmacies: | ||||||
11 | (A) the Department shall approve any contract between | ||||||
12 | a third-party administrator and a pharmacy; | ||||||
13 | (B) the Department's third-party administrator shall | ||||||
14 | not change the terms of a contract between a third-party | ||||||
15 | administrator and a pharmacy without written approval by | ||||||
16 | the Department; and | ||||||
17 | (C) the Department's third-party administrator shall | ||||||
18 | not create, modify, implement, or indirectly establish any | ||||||
19 | fee on a pharmacy, pharmacist, or a recipient of medical | ||||||
20 | assistance without written approval by the Department. | ||||||
21 | (b) The provisions of this Section shall not apply to | ||||||
22 | outpatient pharmacy services provided by a health care | ||||||
23 | facility registered as a covered entity pursuant to 42 U.S.C. | ||||||
24 | 256b or any pharmacy owned by or contracted with the covered | ||||||
25 | entity. A Medicaid managed care organization shall, either | ||||||
26 | directly or through a pharmacy benefit manager, administer and |
| |||||||
| |||||||
1 | reimburse outpatient pharmacy claims submitted by a health | ||||||
2 | care facility registered as a covered entity pursuant to 42 | ||||||
3 | U.S.C. 256b, its owned pharmacies, and contracted pharmacies | ||||||
4 | in accordance with the contractual agreements the Medicaid | ||||||
5 | managed care organization or its pharmacy benefit manager has | ||||||
6 | with such facilities and pharmacies and in accordance with | ||||||
7 | subsection (h-5) . | ||||||
8 | (b-5) Any pharmacy benefit manager that contracts with a | ||||||
9 | Medicaid managed care organization to administer and reimburse | ||||||
10 | pharmacy claims as provided in this Section must be registered | ||||||
11 | with the Director of Insurance in accordance with Section | ||||||
12 | 513b2 of the Illinois Insurance Code. | ||||||
13 | (c) On at least an annual basis, the Director of the | ||||||
14 | Department of Healthcare and Family Services shall submit a | ||||||
15 | report beginning no later than one year after January 1, 2020 | ||||||
16 | (the effective date of Public Act 101-452) that provides an | ||||||
17 | update on any contract, contract issues, formulary, dispensing | ||||||
18 | fees, and maximum allowable cost concerns regarding a | ||||||
19 | third-party administrator and managed care. The requirement | ||||||
20 | for reporting to the General Assembly shall be satisfied by | ||||||
21 | filing copies of the report with the Speaker, the Minority | ||||||
22 | Leader, and the Clerk of the House of Representatives and with | ||||||
23 | the President, the Minority Leader, and the Secretary of the | ||||||
24 | Senate. The Department shall take care that no proprietary | ||||||
25 | information is included in the report required under this | ||||||
26 | Section. |
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1 | (d) A pharmacy benefit manager shall notify the Department | ||||||
2 | in writing of any activity, policy, or practice of the | ||||||
3 | pharmacy benefit manager that directly or indirectly presents | ||||||
4 | a conflict of interest that interferes with the discharge of | ||||||
5 | the pharmacy benefit manager's duty to a managed care | ||||||
6 | organization to exercise its contractual duties. "Conflict of | ||||||
7 | interest" shall be defined by rule by the Department. | ||||||
8 | (e) A pharmacy benefit manager shall, upon request, | ||||||
9 | disclose to the Department the following information: | ||||||
10 | (1) whether the pharmacy benefit manager has a | ||||||
11 | contract, agreement, or other arrangement with a | ||||||
12 | pharmaceutical manufacturer to exclusively dispense or | ||||||
13 | provide a drug to a managed care organization's enrollees, | ||||||
14 | and the aggregate amounts of consideration of economic | ||||||
15 | benefits collected or received pursuant to that | ||||||
16 | arrangement; | ||||||
17 | (2) the percentage of claims payments made by the | ||||||
18 | pharmacy benefit manager to pharmacies owned, managed, or | ||||||
19 | controlled by the pharmacy benefit manager or any of the | ||||||
20 | pharmacy benefit manager's management companies, parent | ||||||
21 | companies, subsidiary companies, or jointly held | ||||||
22 | companies; | ||||||
23 | (3) the aggregate amount of the fees or assessments | ||||||
24 | imposed on, or collected from, pharmacy providers; and | ||||||
25 | (4) the average annualized percentage of revenue | ||||||
26 | collected by the pharmacy benefit manager as a result of |
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1 | each contract it has executed with a managed care | ||||||
2 | organization contracted by the Department to provide | ||||||
3 | medical assistance benefits which is not paid by the | ||||||
4 | pharmacy benefit manager to pharmacy providers and | ||||||
5 | pharmaceutical manufacturers or labelers or in order to | ||||||
6 | perform administrative functions pursuant to its contracts | ||||||
7 | with managed care organizations. | ||||||
8 | (f) The information disclosed under subsection (e) shall | ||||||
9 | include all retail, mail order, specialty, and compounded | ||||||
10 | prescription products. All information made
available to the | ||||||
11 | Department under subsection (e) is confidential and not | ||||||
12 | subject to disclosure under the Freedom of Information Act. | ||||||
13 | All information made available to the Department under | ||||||
14 | subsection (e) shall not be reported or distributed in any way | ||||||
15 | that compromises its competitive, proprietary, or financial | ||||||
16 | value. The information shall only be used by the Department to | ||||||
17 | assess the contract, agreement, or other arrangements made | ||||||
18 | between a pharmacy benefit manager and a pharmacy provider, | ||||||
19 | pharmaceutical manufacturer or labeler, managed care | ||||||
20 | organization, or other entity, as applicable. | ||||||
21 | (g) A pharmacy benefit manager shall disclose directly in | ||||||
22 | writing to a pharmacy provider or pharmacy services | ||||||
23 | administrative organization contracting with the pharmacy | ||||||
24 | benefit manager of any material change to a contract provision | ||||||
25 | that affects the terms of the reimbursement, the process for | ||||||
26 | verifying benefits and eligibility, dispute resolution, |
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1 | procedures for verifying drugs included on the formulary, and | ||||||
2 | contract termination at least 30 days prior to the date of the | ||||||
3 | change to the provision. The terms of this subsection shall be | ||||||
4 | deemed met if the pharmacy benefit manager posts the | ||||||
5 | information on a website, viewable by the public. A pharmacy | ||||||
6 | service administration organization shall notify all contract | ||||||
7 | pharmacies of any material change, as described in this | ||||||
8 | subsection, within 2 days of notification. As used in this | ||||||
9 | Section, "pharmacy services administrative organization" means | ||||||
10 | an entity operating within the State that contracts with | ||||||
11 | independent pharmacies to conduct business on their behalf | ||||||
12 | with third-party payers. A pharmacy services administrative | ||||||
13 | organization may provide administrative services to pharmacies | ||||||
14 | and negotiate and enter into contracts with third-party payers | ||||||
15 | or pharmacy benefit managers on behalf of pharmacies. | ||||||
16 | (h) A pharmacy benefit manager shall not include the | ||||||
17 | following in a contract with a pharmacy provider: | ||||||
18 | (1) a provision prohibiting the provider from | ||||||
19 | informing a patient of a less costly alternative to a | ||||||
20 | prescribed medication; or | ||||||
21 | (2) a provision that prohibits the provider from | ||||||
22 | dispensing a particular amount of a prescribed medication, | ||||||
23 | if the pharmacy benefit manager allows that amount to be | ||||||
24 | dispensed through a pharmacy owned or controlled by the | ||||||
25 | pharmacy benefit manager, unless the prescription drug is | ||||||
26 | subject to restricted distribution by the United States |
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1 | Food and Drug Administration or requires special handling, | ||||||
2 | provider coordination, or patient education that cannot be | ||||||
3 | provided by a retail pharmacy. | ||||||
4 | (h-5) A Medicaid managed care organization or pharmacy | ||||||
5 | benefit manager administering or managing benefits on behalf | ||||||
6 | of a Medicaid managed organization shall not include in a | ||||||
7 | contract with a 340B covered entity or with any pharmacy owned | ||||||
8 | by or contracted with the 340B covered entity, a provision | ||||||
9 | that: | ||||||
10 | (1) reimburses a 340B covered entity for drugs | ||||||
11 | purchased at 340B drug discount program at a rate lower | ||||||
12 | than that paid for the same drug to pharmacies similar in | ||||||
13 | prescription volume that are not 340B covered entities; | ||||||
14 | (2) imposes any fee, chargeback, or rate adjustment | ||||||
15 | that is not imposed on a pharmacy that is not a 340B | ||||||
16 | covered entity; | ||||||
17 | (3) imposes any fee, chargeback, or rate adjustment | ||||||
18 | that exceeds the fee, chargeback, or rate adjustment | ||||||
19 | imposed on a pharmacy that is not a 340B covered entity; | ||||||
20 | (4) prevents or interferes with an individual's choice | ||||||
21 | to receive a prescription drug from a 340B covered entity, | ||||||
22 | including the administration of the drug, whether in | ||||||
23 | person or via delivery, mail, or shipment; | ||||||
24 | (5) excludes a 340B covered entity from a pharmacy | ||||||
25 | network based on the 340B covered entity's participation | ||||||
26 | in the 340B drug discount program, or on a basis that |
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1 | differs from that applied to pharmacies that are not 340B | ||||||
2 | covered entities; | ||||||
3 | (6) requires a 340B covered entity to use a billing | ||||||
4 | modifier to indicate that the drug claim is for a drug | ||||||
5 | purchased under the 340B drug discount program; | ||||||
6 | (7) prevents a 340B covered entity from using a drug | ||||||
7 | purchased under the 340B drug discount program; or | ||||||
8 | (8) any other provision that discriminates against a | ||||||
9 | 340B covered entity. | ||||||
10 | A violation of this subsection by a Medicaid managed care | ||||||
11 | organization or its pharmacy benefit manager constitutes an | ||||||
12 | unfair or deceptive act or practice in the business of | ||||||
13 | insurance under Section 424 of the Illinois Insurance Code. | ||||||
14 | A provision that violates this subsection in any contract | ||||||
15 | between a Medicaid managed care organization or its pharmacy | ||||||
16 | benefit manager and a 340B covered entity entered into, | ||||||
17 | amended, or renewed after July 1, 2022 shall be void and | ||||||
18 | unenforceable. | ||||||
19 | In this subsection (h-5), "340B covered entity" means a | ||||||
20 | covered entity described in Section 340B(a)(4) of the Public | ||||||
21 | Health Service Act, 42 U.S.C. 256(a)(4). | ||||||
22 | (i) Nothing in this Section shall be construed to prohibit | ||||||
23 | a pharmacy benefit manager from requiring the same | ||||||
24 | reimbursement and terms and conditions for a pharmacy provider | ||||||
25 | as for a pharmacy owned, controlled, or otherwise associated | ||||||
26 | with the pharmacy benefit manager. |
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1 | (j) A pharmacy benefit manager shall establish and | |||||||||||||||||||||||||||||||||||||||||||||
2 | implement a process for the resolution of disputes arising out | |||||||||||||||||||||||||||||||||||||||||||||
3 | of this Section, which shall be approved by the Department. | |||||||||||||||||||||||||||||||||||||||||||||
4 | (k) The Department shall adopt rules establishing | |||||||||||||||||||||||||||||||||||||||||||||
5 | reasonable dispensing fees for fee-for-service payments in | |||||||||||||||||||||||||||||||||||||||||||||
6 | accordance with guidance or guidelines from the federal | |||||||||||||||||||||||||||||||||||||||||||||
7 | Centers for Medicare and Medicaid Services.
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8 | (Source: P.A. 101-452, eff. 1-1-20; 102-558, eff. 8-20-21.)
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9 | Section 99. Effective date. This Act takes effect July 1, | |||||||||||||||||||||||||||||||||||||||||||||
10 | 2022.
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