Sen. John J. Cullerton
Filed: 5/20/2008
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1 | AMENDMENT TO HOUSE BILL 1432
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2 | AMENDMENT NO. ______. Amend House Bill 1432 on page 1, by | ||||||
3 | replacing line 5 with the following: | ||||||
4 | "changing Sections 370c, 512-1, 512-2, 512-3, 512-4, 512-5, | ||||||
5 | 512-6, 512-7, 512-8, 512-9, and 512-10, by adding Sections | ||||||
6 | 512-7.5, 512-7.10, 512-11, and 512-12, and by changing the | ||||||
7 | heading of Article XXXI 1/2 as follows:"; and | ||||||
8 | on page 7, immediately below line 1, by inserting the | ||||||
9 | following: | ||||||
10 | "(215 ILCS 5/Art. XXXI.5 heading) | ||||||
11 | ARTICLE XXXI 1/2.
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12 | PHARMACY BENEFITS MANAGEMENT
THIRD PARTY PRESCRIPTION
PROGRAMS
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13 | (215 ILCS 5/512-1) (from Ch. 73, par. 1065.59-1)
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14 | Sec. 512-1. Short Title. This Article shall be known and | ||||||
15 | may be cited
as the " Pharmacy Benefits Management Programs Law
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1 | Third Party Prescription Program Act ".
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2 | (Source: P.A. 82-1005.)
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3 | (215 ILCS 5/512-2) (from Ch. 73, par. 1065.59-2)
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4 | Sec. 512-2. Purpose. It is hereby determined and declared | ||||||
5 | that the
purpose of this Article is to regulate pharmacy | ||||||
6 | benefits management programs
certain practices engaged in by | ||||||
7 | third-party
prescription
program administrators .
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8 | (Source: P.A. 82-1005.)
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9 | (215 ILCS 5/512-3) (from Ch. 73, par. 1065.59-3)
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10 | Sec. 512-3. Definitions. For the purposes of this Article, | ||||||
11 | unless the
context otherwise requires, the terms defined in | ||||||
12 | this Article have the meanings
ascribed
to them herein:
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13 | "Covered entity" means any entity that has entered into an | ||||||
14 | agreement, directly or indirectly, with a pharmacy benefits | ||||||
15 | manager to provide a pharmacy benefits management program. | ||||||
16 | "Covered entity" includes, but is not limited to, a person or | ||||||
17 | entity that has entered into a contract for prescription health | ||||||
18 | care services with an insurer, Health Maintenance | ||||||
19 | Organization, Limited Health Services Organization, or | ||||||
20 | Voluntary Health Services Plan under which the pharmacy | ||||||
21 | benefits manager is contractually obligated to provide a | ||||||
22 | pharmacy benefits management program. | ||||||
23 | "Covered individual" means a member, participant, | ||||||
24 | enrollee, contract holder, policy holder, or beneficiary of a |
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1 | covered entity who is provided prescription health coverage by | ||||||
2 | the covered entity. "Covered individual" includes, but is not | ||||||
3 | limited to, a dependent or other person who is provided health | ||||||
4 | coverage though a policy, contract, or plan for a covered | ||||||
5 | individual. | ||||||
6 | "Director" means the Director of the Division of Insurance | ||||||
7 | of the Department of Financial and Professional Regulation. | ||||||
8 | "Division" means the Division of Insurance of the | ||||||
9 | Department of Financial and Professional Regulation. | ||||||
10 | "Maximum allowable cost" or "MAC" means the maximum | ||||||
11 | allowable cost for a prescribed generic drug dispensed under | ||||||
12 | PBM Program Networks as determined by the program administrator | ||||||
13 | from time to time pursuant to a MAC list to be provided | ||||||
14 | electronically to pharmacy network participants at least | ||||||
15 | quarterly or more frequently upon a pharmacy request. The MAC | ||||||
16 | is based upon the average published wholesale price of at least | ||||||
17 | 2 different manufacturers of the applicable generic drug (for | ||||||
18 | the same strength), or as published in 2 nationally recognized | ||||||
19 | drug databases and identified in the approved pharmacy network | ||||||
20 | contract. | ||||||
21 | "Pharmacy benefits management program" or "program" means | ||||||
22 | a system providing for the administration of or reimbursement | ||||||
23 | for pharmacy services and prescription drug products offered in | ||||||
24 | this State by a PBM for or on behalf of a covered entity. | ||||||
25 | "Pharmacy benefits manager" or "PBM" means any person, | ||||||
26 | partnership, or corporation that issues or causes to be issued |
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1 | any payment or reimbursement to a provider for services | ||||||
2 | rendered pursuant to a pharmacy benefits management program or | ||||||
3 | an entity that procures prescription drugs at a negotiated | ||||||
4 | rate. "Pharmacy benefits manager "or "PBM" does not include the | ||||||
5 | Director of Healthcare and Family Services or any agent | ||||||
6 | authorized by the Director of Healthcare and Family Services to | ||||||
7 | reimburse or procure prescription drugs at a negotiated rate | ||||||
8 | pursuant to a program of which the Department of Healthcare and | ||||||
9 | Family Services is the third party or covered entity, nor does | ||||||
10 | it include a pharmacy or pharmacy network provider. | ||||||
11 | "Pharmacy" has the meaning given to the term in the | ||||||
12 | Pharmacy Practice Act. | ||||||
13 | "Pharmacy network provider" means a pharmacist or pharmacy | ||||||
14 | that has a contractual relationship with a health benefit plan | ||||||
15 | or pharmacy benefit manager to provide pharmacist services or | ||||||
16 | medication therapy management services, as defined in the | ||||||
17 | Pharmacy Practice Act. | ||||||
18 | "Pharmacy reimbursement rate" means the amount a PBM pays | ||||||
19 | to a pharmacy or pharmacy network provider for prescription | ||||||
20 | drugs and services provided by the pharmacy or pharmacy network | ||||||
21 | provider to the PBM. | ||||||
22 | "Rebates" means any valuable consideration or inducement | ||||||
23 | to directly affect or influence the dispensing of pharmacy | ||||||
24 | drugs, supplies, or services. | ||||||
25 | (a) "Third party prescription program" or "program" means | ||||||
26 | any system of
providing for the reimbursement of pharmaceutical |
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1 | services and prescription
drug products offered or operated in | ||||||
2 | this State under a contractual arrangement
or agreement between | ||||||
3 | a provider of such services and another party who is
not the | ||||||
4 | consumer of those services and products. Such programs may | ||||||
5 | include, but need not be limited to, employee benefit
plans | ||||||
6 | whereby a consumer receives prescription drugs or other | ||||||
7 | pharmaceutical
services and those services are paid for by
an | ||||||
8 | agent of the employer or others.
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9 | (b) "Third party program administrator" or "administrator" | ||||||
10 | means any person,
partnership or corporation who issues or | ||||||
11 | causes to be issued any payment
or reimbursement to a provider | ||||||
12 | for services rendered pursuant to a third
party prescription | ||||||
13 | program, but does not include the Director of Healthcare and | ||||||
14 | Family Services or any agent authorized by
the Director to | ||||||
15 | reimburse a provider of services rendered pursuant to a
program | ||||||
16 | of which the Department of Healthcare and Family Services is | ||||||
17 | the third party.
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18 | (Source: P.A. 95-331, eff. 8-21-07.)
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19 | (215 ILCS 5/512-4) (from Ch. 73, par. 1065.59-4)
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20 | Sec. 512-4. Licensure; application and fees Registration . | ||||||
21 | (a) No person, partnership, corporation, or other entity | ||||||
22 | may act as a PBM or provide a pharmacy benefits management | ||||||
23 | program in this State without being licensed by the Division. | ||||||
24 | (b) Each applicant for licensure must file with the | ||||||
25 | Director the following information and documents: |
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1 | (1) the name of the company and the state or country | ||||||
2 | under the laws of which the company is organized or | ||||||
3 | authorized; | ||||||
4 | (2) the title of the Act under or by which the company | ||||||
5 | was incorporated or organized, the date of its | ||||||
6 | incorporation or organization, and, if a corporation, the | ||||||
7 | period of its duration; | ||||||
8 | (3) an organizational chart; | ||||||
9 | (4) a list of the names, addresses, titles, and | ||||||
10 | biographical affidavits of the officers of the PBM; | ||||||
11 | (5) a sample copy of contracts utilized by the PBM | ||||||
12 | between the PBM and covered entities and between the PBM | ||||||
13 | and its pharmacy network providers; and | ||||||
14 | (6) such other information as the Director may | ||||||
15 | reasonably request. | ||||||
16 | (c) A licensee shall keep current the information required | ||||||
17 | under items (1) through (5) of subsection (b) of this Section | ||||||
18 | by reporting all material changes or additions to the Director | ||||||
19 | within 30 calendar days after the end of the month of each | ||||||
20 | change or addition. A material change or addition includes any | ||||||
21 | modification of the information that has a significant effect | ||||||
22 | on the operation of the PBM or pharmacy benefit management | ||||||
23 | program. | ||||||
24 | (d) Beginning on January 1, 2009, each PBM doing business | ||||||
25 | in this State must pay to the Director an initial licensure fee | ||||||
26 | of $1,000. Thereafter, annually on or before January 1 of each |
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1 | year, a PBM doing business in this State that seeks to renew a | ||||||
2 | PBM license must pay to the Director a renewal fee of $250. All | ||||||
3 | fees collected under this Section shall be deposited into the | ||||||
4 | Insurance Producer Administration Fund. | ||||||
5 | (e) This Section does not apply to licensed insurance | ||||||
6 | companies, Health Maintenance Organizations, Limited Health | ||||||
7 | Services Organizations, and Voluntary Health Services Plans. | ||||||
8 | All
third party prescription programs and
administrators doing | ||||||
9 | business in the State shall register with the Director
of | ||||||
10 | Insurance. The Director
shall promulgate regulations | ||||||
11 | establishing criteria
for registration in accordance with the | ||||||
12 | terms of this Article. The Director
may by rule establish an | ||||||
13 | annual registration fee for each
third party administrator.
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14 | (Source: P.A. 82-1005.)
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15 | (215 ILCS 5/512-5) (from Ch. 73, par. 1065.59-5)
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16 | Sec. 512-5. License denial, non-renewal, or revocation | ||||||
17 | Fiduciary and Bonding Requirements . | ||||||
18 | (a) The Director may place on probation, suspend, revoke, | ||||||
19 | or refuse
to issue or renew a PBM license or may levy a civil | ||||||
20 | penalty in accordance with this Section or take any combination | ||||||
21 | of actions for any one or more of the following causes: | ||||||
22 | (1) Intentionally providing incorrect, misleading, or | ||||||
23 | materially untrue information in the license application. | ||||||
24 | (2) Intentionally violating any provision of this Law | ||||||
25 | or the insurance laws of this or another state or violating |
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1 | any rule, subpoena, or order of the Director or another | ||||||
2 | appropriate state regulator. | ||||||
3 | (3) Obtaining or attempting to obtain a license through | ||||||
4 | misrepresentation or fraud. | ||||||
5 | (4) Improperly withholding, misappropriating, or | ||||||
6 | converting any moneys or properties received in the course | ||||||
7 | of doing business. | ||||||
8 | (5) Intentionally misrepresenting the terms of any | ||||||
9 | contract or agreement
between a PBM and a covered entity. | ||||||
10 | (6) Having admitted to or been found to have committed | ||||||
11 | any unfair trade practice or fraud. | ||||||
12 | (7) Using fraudulent, coercive, or dishonest practices | ||||||
13 | or demonstrating incompetence, untrustworthiness, or | ||||||
14 | financial irresponsibility in the conduct of business in | ||||||
15 | this State or elsewhere. | ||||||
16 | (8) Having a professional license or registration that | ||||||
17 | is comparable to a license issued under this Law denied, | ||||||
18 | suspended, or revoked in any other state, province, | ||||||
19 | district,
or territory. | ||||||
20 | (9) Forging a name to an application. | ||||||
21 | (10) Failing to pay any tax or fee, as required by law. | ||||||
22 | (b) If the action by the Director is to deny renewal, | ||||||
23 | suspend, or revoke a license or to deny an application for | ||||||
24 | licensure, the Director shall notify the licensee or applicant | ||||||
25 | and advise, in writing, the licensee or applicant of the reason | ||||||
26 | for the suspension, revocation, or denial. The applicant or |
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1 | licensee may make written demand upon the Director within 30 | ||||||
2 | calendar days after the date of mailing of notice for a hearing | ||||||
3 | before the Director to determine the reasonableness of the | ||||||
4 | Director's action. The hearing must be held within not fewer | ||||||
5 | than 20 calendar days nor more than 30 calendar days after the | ||||||
6 | mailing of the notice of hearing and shall be held pursuant to | ||||||
7 | the Illinois Administrative Code.
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8 | (c) In addition to or instead of any applicable denial, | ||||||
9 | suspension, or revocation of a license, an applicant or | ||||||
10 | licensee may, after hearing, be subject to a civil penalty. | ||||||
11 | (d) The Director has the authority to enforce and, by | ||||||
12 | order, require compliance with the provisions of this Article | ||||||
13 | against any person or PBM who is under investigation for or | ||||||
14 | charged with a violation of this Law or Code even if the | ||||||
15 | license has been surrendered or has lapsed by operation of law. | ||||||
16 | (e) Upon the suspension, denial, or revocation of a | ||||||
17 | license, the licensee having possession or custody of the | ||||||
18 | license shall promptly deliver it to the Director in person or | ||||||
19 | by mail. The Director shall publish all suspensions, denials, | ||||||
20 | or revocations after the suspension, denial, or revocation | ||||||
21 | becomes final. | ||||||
22 | (f) A licensee whose license is revoked or applicant whose | ||||||
23 | application is denied pursuant to this Section is ineligible to | ||||||
24 | apply for any pharmacy benefits management program or PBM | ||||||
25 | license under this Law for 3 years after the revocation or | ||||||
26 | denial. A PBM whose license as a pharmacy benefits management |
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1 | program has been revoked, suspended, or denied may not be | ||||||
2 | employed, contracted, or engaged in any related capacity during | ||||||
3 | the time the revocation, suspension, or denial is in effect. | ||||||
4 | (g) A PBM must inform the Director in a manner acceptable | ||||||
5 | to the Director of a change of address within 30 calendar days | ||||||
6 | after the change. A
third party prescription program | ||||||
7 | administrator
shall (1) establish and
maintain a fiduciary | ||||||
8 | account, separate and apart from any and all other
accounts, | ||||||
9 | for the receipt and disbursement of funds for reimbursement of
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10 | providers of services under the program, or (2) post,
or cause | ||||||
11 | to be posted, a bond of indemnity in an amount equal to not | ||||||
12 | less
than 10% of the total estimated annual reimbursements | ||||||
13 | under the program.
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14 | The establishment of such fiduciary accounts and bonds | ||||||
15 | shall be consistent
with applicable State law.
If a bond of | ||||||
16 | indemnity is posted, it shall be held by the Director of | ||||||
17 | Insurance
for the benefit and indemnification of the providers | ||||||
18 | of services under the
third party prescription program.
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19 | (h) Any PBM
An administrator who operates more than one | ||||||
20 | pharmacy benefits management
third party prescription
program
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21 | may establish and maintain a separate fiduciary account or bond | ||||||
22 | of indemnity
for each such program, or may operate and maintain | ||||||
23 | a consolidated fiduciary
account or bond of indemnity for all | ||||||
24 | such programs.
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25 | The requirements of this subsection (h) Section do not | ||||||
26 | apply to any pharmacy benefits management
third party |
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1 | prescription
program administered by or on behalf of any | ||||||
2 | insurance company, Health Maintenance Organization, Limited | ||||||
3 | Health Service Organization, or Voluntary Health Services Plan
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4 | Care
Service Plan Corporation or Pharmaceutical Service Plan | ||||||
5 | Corporation
authorized
to do business in the State of Illinois.
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6 | (Source: P.A. 82-1005.)
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7 | (215 ILCS 5/512-6) (from Ch. 73, par. 1065.59-6)
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8 | Sec. 512-6. Notice. Notice of any change in the terms | ||||||
9 | of a pharmacy benefits management
third party prescription
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10 | program,
including but not limited to drugs covered, | ||||||
11 | reimbursement rates, co-payments,
and dosage quantity, shall | ||||||
12 | be given to each enrolled pharmacy as soon as possible at least | ||||||
13 | 30
days prior to the time it becomes effective.
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14 | (Source: P.A. 82-1005.)
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15 | (215 ILCS 5/512-7) (from Ch. 73, par. 1065.59-7)
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16 | Sec. 512-7. Required program and contractual Contractual | ||||||
17 | provisions.
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18 | (a) Any agreement or contract entered into in this State | ||||||
19 | between a PBM the
administrator of a program and a pharmacy | ||||||
20 | under a pharmacy benefits management program shall include a | ||||||
21 | statement of the
method of calculating and amount of | ||||||
22 | reimbursement to be paid to to the pharmacy for services | ||||||
23 | rendered to
persons enrolled in the program, the frequency of | ||||||
24 | payment by the PBM program
administrator to the pharmacy for |
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1 | those services, and a method for the
adjudication of complaints | ||||||
2 | and the settlement of disputes between the
contracting parties.
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3 | (b) Every pharmacy benefit management program shall do each | ||||||
4 | of the following: | ||||||
5 | (1) Provide A program shall provide an annual period | ||||||
6 | of at least 30 days
during which any pharmacy licensed | ||||||
7 | under the Pharmacy Practice Act
may elect to participate in | ||||||
8 | the program under the program terms for at
least one year. | ||||||
9 | Beginning January 1, 2009, all agreements between a | ||||||
10 | pharmacy benefits management program and any other person | ||||||
11 | shall comply with the requirements of this Law. To the | ||||||
12 | extent that any such agreement renewed or extended after | ||||||
13 | December 31, 2008 fails to comply with the requirements of | ||||||
14 | this Law, such requirements shall be deemed to be | ||||||
15 | incorporated into those agreements by operation of law as | ||||||
16 | of the date of the renewal of execution.
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17 | (2) Keep current the information required to be | ||||||
18 | disclosed in its application for licensure by reporting all | ||||||
19 | material changes or additions to the Director within 30 | ||||||
20 | days after each change or addition. If compliance with the | ||||||
21 | requirements of this subsection (b) would
impair any | ||||||
22 | provision of a contract between a program and any other | ||||||
23 | person,
and if the contract provision was in existence | ||||||
24 | before January 1, 1990,
then immediately after the | ||||||
25 | expiration of those contract provisions the
program shall | ||||||
26 | comply with the requirements of this subsection (b).
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1 |
(3) Cause to be issued an identification card to | ||||||
2 | covered individuals. The identification card shall comply | ||||||
3 | with the Uniform Prescription Drug Information Card Act. | ||||||
4 | This subsection (b) does not apply if:
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5 | (A) the program administrator is a licensed health | ||||||
6 | maintenance
organization that owns or controls a | ||||||
7 | pharmacy and that enters into an
agreement or contract | ||||||
8 | with that pharmacy in accordance with subsection (a); | ||||||
9 | or
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10 | (B) the program administrator is a licensed health | ||||||
11 | maintenance
organization that is owned or controlled | ||||||
12 | by another entity that also owns
or controls a | ||||||
13 | pharmacy, and the administrator enters into an | ||||||
14 | agreement or
contract with that pharmacy in accordance | ||||||
15 | with subsection (a).
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16 | (4) Make changes to a formulary or a prescription drug | ||||||
17 | list (PDL) only on the anniversary date of the contract or | ||||||
18 | through mutual consent of the PBM and the covered entity. | ||||||
19 | The PBM shall establish a grievance process and an appeals | ||||||
20 | procedure for covered individuals effected by a formulary | ||||||
21 | or PDL change. This subsection (b) shall be inoperative | ||||||
22 | after October 31,
1992.
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23 | (c) (Blank). The program administrator shall cause to be | ||||||
24 | issued an identification
card to each person enrolled in the | ||||||
25 | program. The identification card
shall include:
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26 | (1) the name of the individual enrolled in the program; |
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1 | and
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2 | (2) an expiration date if required under the | ||||||
3 | contractual arrangement or
agreement between a provider of | ||||||
4 | pharmaceutical services and prescription
drug products and | ||||||
5 | the third party prescription program administrator.
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6 | (Source: P.A. 95-689, eff. 10-29-07.)
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7 | (215 ILCS 5/512-7.5 new)
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8 | Sec. 512-7.5. Disclosures. | ||||||
9 | (a) A PBM shall disclose to the covered entity the | ||||||
10 | aggregate total amount of any rebates received by the PBM from | ||||||
11 | a pharmaceutical product manufacturer or labeler as a result of | ||||||
12 | providing
services to the covered entity and its covered | ||||||
13 | individuals. A PBM providing information under this subsection | ||||||
14 | (a) shall designate that information as confidential. | ||||||
15 | Information designated as confidential by a PBM and provided to | ||||||
16 | a covered entity under this subsection (a) may not be disclosed | ||||||
17 | by the covered entity to any person without the consent of the | ||||||
18 | PBM, except that disclosure may be made in a court filing or | ||||||
19 | when authorized by law or ordered by a court of this State for | ||||||
20 | good cause. | ||||||
21 | (b) A PBM shall disclose to a covered entity the source and | ||||||
22 | amount of any claims processing and pharmacy network fees that | ||||||
23 | are collected from retail pharmacies to the extent that such | ||||||
24 | amounts relate directly to the services provided by the PBM to | ||||||
25 | the covered entity and its covered individuals. Any and all |
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1 | information disclosed under this subsection (b) may be | ||||||
2 | designated as confidential. Information designated as | ||||||
3 | confidential by a PBM and provided to a covered entity under | ||||||
4 | this subsection (b) may not be disclosed by the covered entity | ||||||
5 | to any person without the consent of the PBM, except as may be | ||||||
6 | required in a court of law with proper jurisdiction or as | ||||||
7 | authorized by law. | ||||||
8 | (c) Except in the case of non-rebate sharing contracts, a | ||||||
9 | PBM shall disclose to a covered entity the reimbursement rates, | ||||||
10 | including, where applicable, MAC levels, paid to pharmacy | ||||||
11 | network providers for services provided to the covered entity | ||||||
12 | and its covered individuals. Any and all information disclosed | ||||||
13 | under this subsection (c) may be designated as confidential and | ||||||
14 | such information may not be disclosed by a covered entity | ||||||
15 | without the consent of the PBM except as may be required by a | ||||||
16 | court of law with proper jurisdiction or as authorized by law, | ||||||
17 | and further provided that nothing contained herein shall (i) | ||||||
18 | prevent a covered entity from verifying with pharmacy network | ||||||
19 | providers the actual amount of reimbursement that they are | ||||||
20 | receiving from the PBM for services provided to the covered | ||||||
21 | entity and its covered individuals and (ii) prevent a pharmacy | ||||||
22 | network provider from disclosing to the covered entity the | ||||||
23 | amount of reimbursement that it has actually received from the | ||||||
24 | PBM for services provided to the covered entity and its covered | ||||||
25 | individuals. Any provision contained in any contract, | ||||||
26 | agreement or understanding of any type between a PBM and a |
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1 | covered entity or between a PBM and a pharmacy network provider | ||||||
2 | contrary to this subsection (c) shall be null, void, and | ||||||
3 | unenforceable. | ||||||
4 | (d) Nothing in this Section shall prohibit a pharmacy | ||||||
5 | network provider from advising a covered individual of (i) | ||||||
6 | generic prescription drugs that might be available to the | ||||||
7 | covered individual at a lower out-of-pocket level and (ii) that | ||||||
8 | the covered individual may contact his or her prescribing | ||||||
9 | provider to determine whether there is an acceptable generic | ||||||
10 | prescription drug that can be used to treat the covered | ||||||
11 | individual's disease or medical condition that is available at | ||||||
12 | a lower out-of-pocket level. | ||||||
13 | (215 ILCS 5/512-7.10 new)
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14 | Sec. 512-7.10. Recoupment; audits. | ||||||
15 | (a) A PBM shall provide the pharmacy or pharmacy network | ||||||
16 | provider a remittance advice which must include an explanation | ||||||
17 | of a recoupment or offset taken by a PBM, if any. All pharmacy | ||||||
18 | audits and recoupments must be conducted in person or, in the | ||||||
19 | alternative, an official notice of audit must be sent by | ||||||
20 | certified mail to the pharmacy with specific requests for | ||||||
21 | information, and a minimum of 30 days must be granted for a | ||||||
22 | pharmacy response from date of receipt of official request. The | ||||||
23 | recoupment explanation shall, at a minimum, include the name of | ||||||
24 | the patient, the date of dispersing, the prescription drug or | ||||||
25 | drugs dispensed, the recoupment amount, and the reason for the |
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1 | recoupment or offset. In addition, a PBM shall provide with the | ||||||
2 | remittance advice a telephone number or mailing address to | ||||||
3 | initiate an appeal of the recoupment or offset. The | ||||||
4 | requirements of this Section shall be deemed fulfilled by a PBM | ||||||
5 | if the information required in the recoupment explanation is | ||||||
6 | provided to a pharmacy or pharmacy network provider in a notice | ||||||
7 | prior to the actual recoupment. | ||||||
8 | Written notice must be given to the pharmacy network | ||||||
9 | provider or pharmacist at least 2 weeks before the performance | ||||||
10 | of the initial on-site audit for each audit cycle. Any audit | ||||||
11 | performed that involves clinical or professional judgment must | ||||||
12 | be conducted in consultation with a pharmacist who has | ||||||
13 | knowledge of the provisions of this Article. | ||||||
14 | (b) Any clerical or record keeping error, including | ||||||
15 | typographical errors, scrivener's errors, or computer errors, | ||||||
16 | regarding a required document or record may not, in and of | ||||||
17 | itself, constitute fraud; however, such claims may be subject | ||||||
18 | to recoupment. Notwithstanding any other provision of law to | ||||||
19 | the contrary, no such claim shall be subject to criminal | ||||||
20 | penalties without proof of intent to commit fraud. | ||||||
21 | (c) A pharmacy network provider or pharmacist may use the | ||||||
22 | records of a hospital, physician, or other authorized | ||||||
23 | practitioner of the healing arts for drugs or medical supplies | ||||||
24 | written or transmitted by any means of communication for | ||||||
25 | purposes of validating pharmacy records with respect to orders | ||||||
26 | or refills of a legend or narcotic drug. |
| |||||||
| |||||||
1 | (d) Extrapolation audits may not be conducted for the | ||||||
2 | purpose of pharmacy audits. A finding of overpayment or | ||||||
3 | underpayment may be a projection based on the number of | ||||||
4 | patients served having a similar diagnosis or on the number of | ||||||
5 | similar orders or refills for similar drugs; however, | ||||||
6 | recoupment of claims must be based on the actual overpayment or | ||||||
7 | underpayment unless the projection for overpayment or | ||||||
8 | underpayment is part of a settlement as agreed to by the | ||||||
9 | pharmacy network provider. | ||||||
10 | (e) Each pharmacy network provider or pharmacist shall be | ||||||
11 | audited under the standards and parameters as other similarly | ||||||
12 | situated pharmacies or pharmacists audited by a covered entity, | ||||||
13 | a PBM, or a representative of a covered entity or a PBM. | ||||||
14 | (f) The period covered by an audit may not exceed 2 years | ||||||
15 | from the date the claim was submitted to or adjudicated by a | ||||||
16 | covered entity, a PBM, or a representative of a covered entity | ||||||
17 | or PBM, except that this subsection (f) does not apply where a | ||||||
18 | longer period is required by a federal law. | ||||||
19 | (g) An audit shall not be initiated or scheduled during the | ||||||
20 | first 7 calendar days of any month due to the high volume of | ||||||
21 | prescriptions filled during that time, unless otherwise | ||||||
22 | consented to by the pharmacy network provider or pharmacist. | ||||||
23 | (h) Each PBM conducting an audit must establish an appeals | ||||||
24 | process under which a pharmacy network provider or pharmacist | ||||||
25 | may appeal an unfavorable preliminary audit report to the PBM | ||||||
26 | on whose behalf the audit was conducted. The PBM conducting an |
| |||||||
| |||||||
1 | audit shall provide to the pharmacy network provider or its | ||||||
2 | representative, before or at the time of delivery of the | ||||||
3 | preliminary audit report, a written explanation of the appeals | ||||||
4 | process, including the name, address, and telephone number of | ||||||
5 | the person to whom an appeal should be addressed. If, following | ||||||
6 | the appeal, it is determined that an unfavorable audit report | ||||||
7 | or any portion thereof is unsubstantiated, the audit report or | ||||||
8 | such portion shall be dismissed without the necessity of | ||||||
9 | further proceedings. | ||||||
10 | (i) Reimbursement by a PBM under a contract to a pharmacy | ||||||
11 | network provider for prescription drugs and other products and | ||||||
12 | supplies that is calculated according to a formula that uses a | ||||||
13 | nationally recognized reference in the pricing calculation | ||||||
14 | shall use the most current nationally recognized reference | ||||||
15 | prices or amount in the actual or constructive possession of | ||||||
16 | the pharmacy benefits manager or its agent.
| ||||||
17 | (215 ILCS 5/512-8) (from Ch. 73, par. 1065.59-8)
| ||||||
18 | Sec. 512-8. Cancellation procedures. | ||||||
19 | (a) The
administrator of a program
shall notify all | ||||||
20 | pharmacies enrolled in the program of any cancellation
of the | ||||||
21 | coverage of benefits of any group enrolled in the program at | ||||||
22 | least
30 days prior to the effective date of such cancellation.
| ||||||
23 | However, if the
administrator of a program is not notified at | ||||||
24 | least 45
days prior to the effective date of such cancellation, | ||||||
25 | the
administrator
shall notify all pharmacies enrolled in the |
| |||||||
| |||||||
1 | program of the cancellation
as soon as practicable after having | ||||||
2 | received notice.
| ||||||
3 | (a) (b) When a program is terminated, all persons enrolled | ||||||
4 | therein shall be
so notified by the covered entity , and the | ||||||
5 | employer shall make every reasonable effort to gain
possession | ||||||
6 | of any plan identification cards in such persons' possession .
| ||||||
7 | (b) (c) Any covered individual person who intentionally | ||||||
8 | uses a program identification card to
obtain services from a | ||||||
9 | pharmacy after having received notice of the cancellation
of | ||||||
10 | his or her benefits shall be guilty of a Class C misdemeanor. | ||||||
11 | Persons shall
be liable to the PBM
program administrator for | ||||||
12 | all monies paid by the PBM
program
administrator for any | ||||||
13 | services received pursuant to
any improper use of
the | ||||||
14 | identification card.
| ||||||
15 | (Source: P.A. 82-1005.)
| ||||||
16 | (215 ILCS 5/512-9) (from Ch. 73, par. 1065.59-9)
| ||||||
17 | Sec. 512-9. Denial of Payment. | ||||||
18 | (a) No PBM
administrator shall deny payment
to any pharmacy | ||||||
19 | for covered pharmaceutical services or prescription drug
| ||||||
20 | products that were in real-time approved to be dispensed | ||||||
21 | pursuant to an on-line adjudication program. rendered as a | ||||||
22 | result of the misuse, fraudulent or illegal use of
an | ||||||
23 | identification card unless such identification card had | ||||||
24 | expired, been
noticeably altered, or the pharmacy was notified | ||||||
25 | of the cancellation of
such card. In lieu of notifying |
| |||||||
| |||||||
1 | pharmacies which have a common ownership,
the
administrator may | ||||||
2 | notify a party designated by the pharmacy to receive
such | ||||||
3 | notice, in which case, notification shall not become effective | ||||||
4 | until
5 calendar days after the designee receives notification.
| ||||||
5 | (b) No PBM
program administrator may withhold any payment | ||||||
6 | to any pharmacy
for covered pharmaceutical services or | ||||||
7 | prescription drug products beyond
the time period specified in | ||||||
8 | the payment schedule provisions of the agreement,
except for | ||||||
9 | individual claims for payment which have been returned to the | ||||||
10 | pharmacy
as incomplete or illegible. Such returned claims shall | ||||||
11 | be paid if resubmitted
by the pharmacy to the PBM
program | ||||||
12 | administrator with the appropriate corrections made. | ||||||
13 | (c) When a PBM utilizes a method of pharmacy reimbursement | ||||||
14 | that utilizes a MAC calculation, it shall attempt to reimburse | ||||||
15 | the dispensing network pharmacy at an amount not less than the | ||||||
16 | pharmacy acquisition cost plus an acceptable dispensing fee, as | ||||||
17 | set out in the pharmacy network agreement. In the event the MAC | ||||||
18 | rate is less that the network pharmacy acquisition cost, the | ||||||
19 | PBM shall have an appeal procedure in place to respond to | ||||||
20 | pharmacy requests for rate review. This process must provide | ||||||
21 | for a written response explaining the outcome of the review to | ||||||
22 | the requesting pharmacy within 30 days. If the rate is | ||||||
23 | adjusted, the adjustment will be made retroactive to the date | ||||||
24 | of the appeal request. In the event the appeal is not upheld or | ||||||
25 | acknowledged in a timely manner, a third party independent | ||||||
26 | review panel may review the claims as submitted by the |
| |||||||
| |||||||
1 | pharmacies and submit periodic reports to the Director for | ||||||
2 | further determination.
| ||||||
3 | (Source: P.A. 82-1005.)
| ||||||
4 | (215 ILCS 5/512-10) (from Ch. 73, par. 1065.59-10)
| ||||||
5 | Sec. 512-10. Failure to obtain licensure Register . Any PBM | ||||||
6 | that fails to obtain a license from the Director and pay the | ||||||
7 | fee set forth in this Law
third party prescription program
or
| ||||||
8 | administrator which operates without a certificate of | ||||||
9 | registration or
fails to register with the Director and pay the | ||||||
10 | fee prescribed by this Article
shall be construed to be an | ||||||
11 | unauthorized insurer as defined in Article VII
of this Code and | ||||||
12 | shall be subject to all penalties contained therein.
| ||||||
13 | The provisions of
the Article shall apply to all pharmacy | ||||||
14 | benefits management programs and PBMs existing and established | ||||||
15 | as of the effective date of this amendatory Act of the 95th | ||||||
16 | General Assembly. new programs established
on or after January | ||||||
17 | 1,
1983.
Existing programs shall comply with the provisions
of | ||||||
18 | this Article
on the anniversary date of the programs that | ||||||
19 | occurs on or
after January 1,
1983.
| ||||||
20 | (Source: P.A. 82-1005.)
| ||||||
21 | (215 ILCS 5/512-11 new) | ||||||
22 | Sec. 512-11. Examination of business and affairs. | ||||||
23 | (a) The Director may, when and as often as the Director | ||||||
24 | deems it reasonably necessary to protect the interests of the |
| |||||||
| |||||||
1 | public, examine the business and affairs of any licensed PBM. | ||||||
2 | (b) Licensees shall maintain for a period of 5 years copies | ||||||
3 | of all documents, books, records, accounts, papers, and any or | ||||||
4 | all computer or other recordings relating to the licensee's | ||||||
5 | business and affairs of operating a pharmacy benefit management | ||||||
6 | program. | ||||||
7 | (c) Every licensee or person from whom information is | ||||||
8 | sought, including all officers, directors, employees and | ||||||
9 | agents of any licensee or person from whom information is | ||||||
10 | sought, shall provide to the examiners timely, convenient, and | ||||||
11 | free access at all reasonable hours at the licensee's or | ||||||
12 | person's offices to all books, records, accounts, papers, | ||||||
13 | documents, assets, and computer or other recordings relating to | ||||||
14 | the property, assets, business, and affairs of the licensee | ||||||
15 | being examined. The officers, directors, employees, and agents | ||||||
16 | of the licensee or person shall facilitate the examination and | ||||||
17 | aid in the examination so far as it is in their power to do so. | ||||||
18 | The refusal of a licensee, by its officers, directors, | ||||||
19 | employees, or agents, to submit to examination or to comply | ||||||
20 | with any reasonable written request of the Director shall be | ||||||
21 | grounds for suspension, revocation, or denial of issuance or | ||||||
22 | renewal of any license or authority held by the licensee | ||||||
23 | pursuant to this Law. | ||||||
24 | (d) The Director or his or her designee shall have the | ||||||
25 | power to issue subpoenas, administer oaths, and examine under | ||||||
26 | oath any person as to any matter pertinent to the examination. |
| |||||||
| |||||||
1 | Upon the failure or refusal of a person to obey a subpoena, the | ||||||
2 | Director may petition a court of competent jurisdiction, and, | ||||||
3 | upon proper showing, the court may enter an order compelling | ||||||
4 | the witness to appear and testify or produce documentary | ||||||
5 | evidence. | ||||||
6 | (e) When making an examination under this Law, the Director | ||||||
7 | may retain attorneys, appraisers, independent actuaries, | ||||||
8 | independent certified public accountants, or other | ||||||
9 | professionals and specialists as examiners. The costs of | ||||||
10 | retaining the examiners, including their work, travel, and | ||||||
11 | living expenses shall be borne by the licensee that is the | ||||||
12 | subject of the examination. | ||||||
13 | (215 ILCS 5/512-12 new) | ||||||
14 | Sec. 512-12. Fines and penalties. In addition to or instead | ||||||
15 | of any applicable denial, suspension, or revocation of a | ||||||
16 | license issued under this Law, a licensee may, after a hearing, | ||||||
17 | be subject to a civil penalty of up to $50,000 for each cause | ||||||
18 | of denial, suspension, or revocation. | ||||||
19 | Any licensee or other person who willfully or repeatedly | ||||||
20 | fails to observe or who otherwise violates any of the | ||||||
21 | provisions of this Law or this Code or any rule adopted or | ||||||
22 | final order entered thereunder shall, by civil penalty, forfeit | ||||||
23 | to the Division a sum not to exceed $5,000. Each day during | ||||||
24 | which a violation occurs constitutes a separate offense. ".
|