Illinois General Assembly - Full Text of HB4595
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Full Text of HB4595  102nd General Assembly




HB4595 EnrolledLRB102 23475 BMS 32651 b

1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 424 and 513b1 as follows:
6    (215 ILCS 5/424)  (from Ch. 73, par. 1031)
7    Sec. 424. Unfair methods of competition and unfair or
8deceptive acts or practices defined. The following are hereby
9defined as unfair methods of competition and unfair and
10deceptive acts or practices in the business of insurance:
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.
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.
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.
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.
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(Source: P.A. 99-143, eff. 7-27-15; 99-893, eff. 1-1-17.)
20    (215 ILCS 5/513b1)
21    Sec. 513b1. Pharmacy benefit manager contracts.
22    (a) As used in this Section:
23    "340B drug discount program" means the program established
24under Section 340B of the federal Public Health Service Act,
2542 U.S.C. 256b.



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1    "340B entity" means a covered entity as defined in 42
2U.S.C. 256b(a)(4) authorized to participate in the 340B drug
3discount program.
4    "340B pharmacy" means any pharmacy used to dispense 340B
5drugs for a covered entity, whether entity-owned or external.
6    "Biological product" has the meaning ascribed to that term
7in Section 19.5 of the Pharmacy Practice Act.
8    "Maximum allowable cost" means the maximum amount that a
9pharmacy benefit manager will reimburse a pharmacy for the
10cost of a drug.
11    "Maximum allowable cost list" means a list of drugs for
12which a maximum allowable cost has been established by a
13pharmacy benefit manager.
14    "Pharmacy benefit manager" means a person, business, or
15entity, including a wholly or partially owned or controlled
16subsidiary of a pharmacy benefit manager, that provides claims
17processing services or other prescription drug or device
18services, or both, for health benefit plans.
19    "Retail price" means the price an individual without
20prescription drug coverage would pay at a retail pharmacy, not
21including a pharmacist dispensing fee.
22    "Third-party payer" means any entity that pays for
23prescription drugs on behalf of a patient other than a health
24care provider or sponsor of a plan subject to regulation under
25Medicare Part D, 42 U.S.C. 1395w–101, et seq.
26    (b) A contract between a health insurer and a pharmacy



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1benefit manager must require that the pharmacy benefit
3        (1) Update maximum allowable cost pricing information
4    at least every 7 calendar days.
5        (2) Maintain a process that will, in a timely manner,
6    eliminate drugs from maximum allowable cost lists or
7    modify drug prices to remain consistent with changes in
8    pricing data used in formulating maximum allowable cost
9    prices and product availability.
10        (3) Provide access to its maximum allowable cost list
11    to each pharmacy or pharmacy services administrative
12    organization subject to the maximum allowable cost list.
13    Access may include a real-time pharmacy website portal to
14    be able to view the maximum allowable cost list. As used in
15    this Section, "pharmacy services administrative
16    organization" means an entity operating within the State
17    that contracts with independent pharmacies to conduct
18    business on their behalf with third-party payers. A
19    pharmacy services administrative organization may provide
20    administrative services to pharmacies and negotiate and
21    enter into contracts with third-party payers or pharmacy
22    benefit managers on behalf of pharmacies.
23        (4) Provide a process by which a contracted pharmacy
24    can appeal the provider's reimbursement for a drug subject
25    to maximum allowable cost pricing. The appeals process
26    must, at a minimum, include the following:



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1            (A) A requirement that a contracted pharmacy has
2        14 calendar days after the applicable fill date to
3        appeal a maximum allowable cost if the reimbursement
4        for the drug is less than the net amount that the
5        network provider paid to the supplier of the drug.
6            (B) A requirement that a pharmacy benefit manager
7        must respond to a challenge within 14 calendar days of
8        the contracted pharmacy making the claim for which the
9        appeal has been submitted.
10            (C) A telephone number and e-mail address or
11        website to network providers, at which the provider
12        can contact the pharmacy benefit manager to process
13        and submit an appeal.
14            (D) A requirement that, if an appeal is denied,
15        the pharmacy benefit manager must provide the reason
16        for the denial and the name and the national drug code
17        number from national or regional wholesalers.
18            (E) A requirement that, if an appeal is sustained,
19        the pharmacy benefit manager must make an adjustment
20        in the drug price effective the date the challenge is
21        resolved and make the adjustment applicable to all
22        similarly situated network pharmacy providers, as
23        determined by the managed care organization or
24        pharmacy benefit manager.
25        (5) Allow a plan sponsor contracting with a pharmacy
26    benefit manager an annual right to audit compliance with



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1    the terms of the contract by the pharmacy benefit manager,
2    including, but not limited to, full disclosure of any and
3    all rebate amounts secured, whether product specific or
4    generalized rebates, that were provided to the pharmacy
5    benefit manager by a pharmaceutical manufacturer.
6        (6) Allow a plan sponsor contracting with a pharmacy
7    benefit manager to request that the pharmacy benefit
8    manager disclose the actual amounts paid by the pharmacy
9    benefit manager to the pharmacy.
10        (7) Provide notice to the party contracting with the
11    pharmacy benefit manager of any consideration that the
12    pharmacy benefit manager receives from the manufacturer
13    for dispense as written prescriptions once a generic or
14    biologically similar product becomes available.
15    (c) In order to place a particular prescription drug on a
16maximum allowable cost list, the pharmacy benefit manager
17must, at a minimum, ensure that:
18        (1) if the drug is a generically equivalent drug, it
19    is listed as therapeutically equivalent and
20    pharmaceutically equivalent "A" or "B" rated in the United
21    States Food and Drug Administration's most recent version
22    of the "Orange Book" or have an NR or NA rating by
23    Medi-Span, Gold Standard, or a similar rating by a
24    nationally recognized reference;
25        (2) the drug is available for purchase by each
26    pharmacy in the State from national or regional



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1    wholesalers operating in Illinois; and
2        (3) the drug is not obsolete.
3    (d) A pharmacy benefit manager is prohibited from limiting
4a pharmacist's ability to disclose whether the cost-sharing
5obligation exceeds the retail price for a covered prescription
6drug, and the availability of a more affordable alternative
7drug, if one is available in accordance with Section 42 of the
8Pharmacy Practice Act.
9    (e) A health insurer or pharmacy benefit manager shall not
10require an insured to make a payment for a prescription drug at
11the point of sale in an amount that exceeds the lesser of:
12        (1) the applicable cost-sharing amount; or
13        (2) the retail price of the drug in the absence of
14    prescription drug coverage.
15    (f) Unless required by law, a contract between a pharmacy
16benefit manager or third-party payer and a 340B entity or 340B
17pharmacy shall not contain any provision that:
18        (1) distinguishes between drugs purchased through the
19    340B drug discount program and other drugs when
20    determining reimbursement or reimbursement methodologies,
21    or contains otherwise less favorable payment terms or
22    reimbursement methodologies for 340B entities or 340B
23    pharmacies when compared to similarly situated non-340B
24    entities;
25        (2) imposes any fee, chargeback, or rate adjustment
26    that is not similarly imposed on similarly situated



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1    pharmacies that are not 340B entities or 340B pharmacies;
2        (3) imposes any fee, chargeback, or rate adjustment
3    that exceeds the fee, chargeback, or rate adjustment that
4    is not similarly imposed on similarly situated pharmacies
5    that are not 340B entities or 340B pharmacies;
6        (4) prevents or interferes with an individual's choice
7    to receive a covered prescription drug from a 340B entity
8    or 340B pharmacy through any legally permissible means,
9    except that nothing in this paragraph shall prohibit the
10    establishment of differing copayments or other
11    cost-sharing amounts within the benefit plan for covered
12    persons who acquire covered prescription drugs from a
13    nonpreferred or nonparticipating provider;
14        (5) excludes a 340B entity or 340B pharmacy from a
15    pharmacy network on any basis that includes consideration
16    of whether the 340B entity or 340B pharmacy participates
17    in the 340B drug discount program;
18        (6) prevents a 340B entity or 340B pharmacy from using
19    a drug purchased under the 340B drug discount program; or
20        (7) any other provision that discriminates against a
21    340B entity or 340B pharmacy by treating the 340B entity
22    or 340B pharmacy differently than non-340B entities or
23    non-340B pharmacies for any reason relating to the
24    entity's participation in the 340B drug discount program.
25    As used in this subsection, "pharmacy benefit manager" and
26"third-party payer" do not include pharmacy benefit managers



HB4595 Enrolled- 9 -LRB102 23475 BMS 32651 b

1and third-party payers acting on behalf of a Medicaid program.
2    (g) A violation of this Section by a pharmacy benefit
3manager constitutes an unfair or deceptive act or practice in
4the business of insurance under Section 424.
5    (h) A provision that violates subsection (f) in a contract
6between a pharmacy benefit manager or a third-party payer and
7a 340B entity that is entered into, amended, or renewed after
8July 1, 2022 shall be void and unenforceable.
9    (i) (f) This Section applies to contracts entered into or
10renewed on or after July 1, 2022 2020.
11    (j) (g) This Section applies to any group or individual
12policy of accident and health insurance or managed care plan
13that provides coverage for prescription drugs and that is
14amended, delivered, issued, or renewed on or after July 1,
16(Source: P.A. 101-452, eff. 1-1-20.)
17    Section 10. The Illinois Public Aid Code is amended by
18changing Sections 5-5.12 and 5-36 as follows:
19    (305 ILCS 5/5-5.12)  (from Ch. 23, par. 5-5.12)
20    Sec. 5-5.12. Pharmacy payments.
21    (a) Every request submitted by a pharmacy for
22reimbursement under this Article for prescription drugs
23provided to a recipient of aid under this Article shall
24include the name of the prescriber or an acceptable



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1identification number as established by the Department.
2    (b) Pharmacies providing prescription drugs under this
3Article shall be reimbursed at a rate which shall include a
4professional dispensing fee as determined by the Illinois
5Department, plus the current acquisition cost of the
6prescription drug dispensed. The Illinois Department shall
7update its information on the acquisition costs of all
8prescription drugs no less frequently than every 30 days.
9However, the Illinois Department may set the rate of
10reimbursement for the acquisition cost, by rule, at a
11percentage of the current average wholesale acquisition cost.
12    (c) (Blank).
13    (d) The Department shall review utilization of narcotic
14medications in the medical assistance program and impose
15utilization controls that protect against abuse.
16    (e) When making determinations as to which drugs shall be
17on a prior approval list, the Department shall include as part
18of the analysis for this determination, the degree to which a
19drug may affect individuals in different ways based on factors
20including the gender of the person taking the medication.
21    (f) The Department shall cooperate with the Department of
22Public Health and the Department of Human Services Division of
23Mental Health in identifying psychotropic medications that,
24when given in a particular form, manner, duration, or
25frequency (including "as needed") in a dosage, or in
26conjunction with other psychotropic medications to a nursing



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1home resident or to a resident of a facility licensed under the
2ID/DD Community Care Act or the MC/DD Act, may constitute a
3chemical restraint or an "unnecessary drug" as defined by the
4Nursing Home Care Act or Titles XVIII and XIX of the Social
5Security Act and the implementing rules and regulations. The
6Department shall require prior approval for any such
7medication prescribed for a nursing home resident or to a
8resident of a facility licensed under the ID/DD Community Care
9Act or the MC/DD Act, that appears to be a chemical restraint
10or an unnecessary drug. The Department shall consult with the
11Department of Human Services Division of Mental Health in
12developing a protocol and criteria for deciding whether to
13grant such prior approval.
14    (g) The Department may by rule provide for reimbursement
15of the dispensing of a 90-day supply of a generic or brand
16name, non-narcotic maintenance medication in circumstances
17where it is cost effective.
18    (g-5) On and after July 1, 2012, the Department may
19require the dispensing of drugs to nursing home residents be
20in a 7-day supply or other amount less than a 31-day supply.
21The Department shall pay only one dispensing fee per 31-day
23    (h) Effective July 1, 2011, the Department shall
24discontinue coverage of select over-the-counter drugs,
25including analgesics and cough and cold and allergy



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1    (h-5) On and after July 1, 2012, the Department shall
2impose utilization controls, including, but not limited to,
3prior approval on specialty drugs, oncolytic drugs, drugs for
4the treatment of HIV or AIDS, immunosuppressant drugs, and
5biological products in order to maximize savings on these
6drugs. The Department may adjust payment methodologies for
7non-pharmacy billed drugs in order to incentivize the
8selection of lower-cost drugs. For drugs for the treatment of
9AIDS, the Department shall take into consideration the
10potential for non-adherence by certain populations, and shall
11develop protocols with organizations or providers primarily
12serving those with HIV/AIDS, as long as such measures intend
13to maintain cost neutrality with other utilization management
14controls such as prior approval. For hemophilia, the
15Department shall develop a program of utilization review and
16control which may include, in the discretion of the
17Department, prior approvals. The Department may impose special
18standards on providers that dispense blood factors which shall
19include, in the discretion of the Department, staff training
20and education; patient outreach and education; case
21management; in-home patient assessments; assay management;
22maintenance of stock; emergency dispensing timeframes; data
23collection and reporting; dispensing of supplies related to
24blood factor infusions; cold chain management and packaging
25practices; care coordination; product recalls; and emergency
26clinical consultation. The Department may require patients to



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1receive a comprehensive examination annually at an appropriate
2provider in order to be eligible to continue to receive blood
4    (i) On and after July 1, 2012, the Department shall reduce
5any rate of reimbursement for services or other payments or
6alter any methodologies authorized by this Code to reduce any
7rate of reimbursement for services or other payments in
8accordance with Section 5-5e.
9    (j) On and after July 1, 2012, the Department shall impose
10limitations on prescription drugs such that the Department
11shall not provide reimbursement for more than 4 prescriptions,
12including 3 brand name prescriptions, for distinct drugs in a
1330-day period, unless prior approval is received for all
14prescriptions in excess of the 4-prescription limit. Drugs in
15the following therapeutic classes shall not be subject to
16prior approval as a result of the 4-prescription limit:
17immunosuppressant drugs, oncolytic drugs, anti-retroviral
18drugs, and, on or after July 1, 2014, antipsychotic drugs. On
19or after July 1, 2014, the Department may exempt children with
20complex medical needs enrolled in a care coordination entity
21contracted with the Department to solely coordinate care for
22such children, if the Department determines that the entity
23has a comprehensive drug reconciliation program.
24    (k) No medication therapy management program implemented
25by the Department shall be contrary to the provisions of the
26Pharmacy Practice Act.



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1    (l) Any provider enrolled with the Department that bills
2the Department for outpatient drugs and is eligible to enroll
3in the federal Drug Pricing Program under Section 340B of the
4federal Public Health Service Act shall enroll in that
5program. No entity participating in the federal Drug Pricing
6Program under Section 340B of the federal Public Health
7Service Act may exclude fee-for-service Medicaid from their
8participation in that program, however, although the
9Department may exclude entities defined in Section
101905(l)(2)(B) of the Social Security Act are excluded from
11this requirement. This subsection does not apply to outpatient
12drugs billed to Medicaid managed care organizations.
13(Source: P.A. 102-558, eff. 8-20-21.)
14    (305 ILCS 5/5-36)
15    Sec. 5-36. Pharmacy benefits.
16    (a)(1) The Department may enter into a contract with a
17third party on a fee-for-service reimbursement model for the
18purpose of administering pharmacy benefits as provided in this
19Section for members not enrolled in a Medicaid managed care
20organization; however, these services shall be approved by the
21Department. The Department shall ensure coordination of care
22between the third-party administrator and managed care
23organizations as a consideration in any contracts established
24in accordance with this Section. Any managed care techniques,
25principles, or administration of benefits utilized in



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1accordance with this subsection shall comply with State law.
2    (2) The following shall apply to contracts between
3entities contracting relating to the Department's third-party
4administrators and pharmacies:
5        (A) the Department shall approve any contract between
6    a third-party administrator and a pharmacy;
7        (B) the Department's third-party administrator shall
8    not change the terms of a contract between a third-party
9    administrator and a pharmacy without written approval by
10    the Department; and
11        (C) the Department's third-party administrator shall
12    not create, modify, implement, or indirectly establish any
13    fee on a pharmacy, pharmacist, or a recipient of medical
14    assistance without written approval by the Department.
15    (b) The provisions of this Section shall not apply to
16outpatient pharmacy services provided by a health care
17facility registered as a covered entity pursuant to 42 U.S.C.
18256b or any pharmacy owned by or contracted with the covered
19entity. A Medicaid managed care organization shall, either
20directly or through a pharmacy benefit manager, administer and
21reimburse outpatient pharmacy claims submitted by a health
22care facility registered as a covered entity pursuant to 42
23U.S.C. 256b, its owned pharmacies, and contracted pharmacies
24in accordance with the contractual agreements the Medicaid
25managed care organization or its pharmacy benefit manager has
26with such facilities and pharmacies and in accordance with



HB4595 Enrolled- 16 -LRB102 23475 BMS 32651 b

1subsection (h-5).
2    (b-5) Any pharmacy benefit manager that contracts with a
3Medicaid managed care organization to administer and reimburse
4pharmacy claims as provided in this Section must be registered
5with the Director of Insurance in accordance with Section
6513b2 of the Illinois Insurance Code.
7    (c) On at least an annual basis, the Director of the
8Department of Healthcare and Family Services shall submit a
9report beginning no later than one year after January 1, 2020
10(the effective date of Public Act 101-452) that provides an
11update on any contract, contract issues, formulary, dispensing
12fees, and maximum allowable cost concerns regarding a
13third-party administrator and managed care. The requirement
14for reporting to the General Assembly shall be satisfied by
15filing copies of the report with the Speaker, the Minority
16Leader, and the Clerk of the House of Representatives and with
17the President, the Minority Leader, and the Secretary of the
18Senate. The Department shall take care that no proprietary
19information is included in the report required under this
21    (d) A pharmacy benefit manager shall notify the Department
22in writing of any activity, policy, or practice of the
23pharmacy benefit manager that directly or indirectly presents
24a conflict of interest that interferes with the discharge of
25the pharmacy benefit manager's duty to a managed care
26organization to exercise its contractual duties. "Conflict of



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1interest" shall be defined by rule by the Department.
2    (e) A pharmacy benefit manager shall, upon request,
3disclose to the Department the following information:
4        (1) whether the pharmacy benefit manager has a
5    contract, agreement, or other arrangement with a
6    pharmaceutical manufacturer to exclusively dispense or
7    provide a drug to a managed care organization's enrollees,
8    and the aggregate amounts of consideration of economic
9    benefits collected or received pursuant to that
10    arrangement;
11        (2) the percentage of claims payments made by the
12    pharmacy benefit manager to pharmacies owned, managed, or
13    controlled by the pharmacy benefit manager or any of the
14    pharmacy benefit manager's management companies, parent
15    companies, subsidiary companies, or jointly held
16    companies;
17        (3) the aggregate amount of the fees or assessments
18    imposed on, or collected from, pharmacy providers; and
19        (4) the average annualized percentage of revenue
20    collected by the pharmacy benefit manager as a result of
21    each contract it has executed with a managed care
22    organization contracted by the Department to provide
23    medical assistance benefits which is not paid by the
24    pharmacy benefit manager to pharmacy providers and
25    pharmaceutical manufacturers or labelers or in order to
26    perform administrative functions pursuant to its contracts



HB4595 Enrolled- 18 -LRB102 23475 BMS 32651 b

1    with managed care organizations.
2    (f) The information disclosed under subsection (e) shall
3include all retail, mail order, specialty, and compounded
4prescription products. All information made available to the
5Department under subsection (e) is confidential and not
6subject to disclosure under the Freedom of Information Act.
7All information made available to the Department under
8subsection (e) shall not be reported or distributed in any way
9that compromises its competitive, proprietary, or financial
10value. The information shall only be used by the Department to
11assess the contract, agreement, or other arrangements made
12between a pharmacy benefit manager and a pharmacy provider,
13pharmaceutical manufacturer or labeler, managed care
14organization, or other entity, as applicable.
15    (g) A pharmacy benefit manager shall disclose directly in
16writing to a pharmacy provider or pharmacy services
17administrative organization contracting with the pharmacy
18benefit manager of any material change to a contract provision
19that affects the terms of the reimbursement, the process for
20verifying benefits and eligibility, dispute resolution,
21procedures for verifying drugs included on the formulary, and
22contract termination at least 30 days prior to the date of the
23change to the provision. The terms of this subsection shall be
24deemed met if the pharmacy benefit manager posts the
25information on a website, viewable by the public. A pharmacy
26service administration organization shall notify all contract



HB4595 Enrolled- 19 -LRB102 23475 BMS 32651 b

1pharmacies of any material change, as described in this
2subsection, within 2 days of notification. As used in this
3Section, "pharmacy services administrative organization" means
4an entity operating within the State that contracts with
5independent pharmacies to conduct business on their behalf
6with third-party payers. A pharmacy services administrative
7organization may provide administrative services to pharmacies
8and negotiate and enter into contracts with third-party payers
9or pharmacy benefit managers on behalf of pharmacies.
10    (h) A pharmacy benefit manager shall not include the
11following in a contract with a pharmacy provider:
12        (1) a provision prohibiting the provider from
13    informing a patient of a less costly alternative to a
14    prescribed medication; or
15        (2) a provision that prohibits the provider from
16    dispensing a particular amount of a prescribed medication,
17    if the pharmacy benefit manager allows that amount to be
18    dispensed through a pharmacy owned or controlled by the
19    pharmacy benefit manager, unless the prescription drug is
20    subject to restricted distribution by the United States
21    Food and Drug Administration or requires special handling,
22    provider coordination, or patient education that cannot be
23    provided by a retail pharmacy.
24    (h-5) Unless required by law, a Medicaid managed care
25organization or pharmacy benefit manager administering or
26managing benefits on behalf of a Medicaid managed care



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1organization shall not refuse to contract with a 340B entity
2or 340B pharmacy for refusing to accept less favorable payment
3terms or reimbursement methodologies when compared to
4similarly situated non-340B entities and shall not include in
5a contract with a 340B entity or 340B pharmacy a provision
7        (1) imposes any fee, chargeback, or rate adjustment
8    that is not similarly imposed on similarly situated
9    pharmacies that are not 340B entities or 340B pharmacies;
10        (2) imposes any fee, chargeback, or rate adjustment
11    that exceeds the fee, chargeback, or rate adjustment that
12    is not similarly imposed on similarly situated pharmacies
13    that are not 340B entities or 340B pharmacies;
14        (3) prevents or interferes with an individual's choice
15    to receive a prescription drug from a 340B entity or 340B
16    pharmacy through any legally permissible means;
17        (4) excludes a 340B entity or 340B pharmacy from a
18    pharmacy network on the basis of whether the 340B entity
19    or 340B pharmacy participates in the 340B drug discount
20    program;
21        (5) prevents a 340B entity or 340B pharmacy from using
22    a drug purchased under the 340B drug discount program so
23    long as the drug recipient is a patient of the 340B entity;
24    nothing in this Section exempts a 340B pharmacy from
25    following the Department's preferred drug list or from any
26    prior approval requirements of the Department or the



HB4595 Enrolled- 21 -LRB102 23475 BMS 32651 b

1    Medicaid managed care organization that are imposed on the
2    drug for all pharmacies; or
3        (6) any other provision that discriminates against a
4    340B entity or 340B pharmacy by treating a 340B entity or
5    340B pharmacy differently than non-340B entities or
6    non-340B pharmacies for any reason relating to the
7    entity's participation in the 340B drug discount program.
8    A provision that violates this subsection in any contract
9between a Medicaid managed care organization or its pharmacy
10benefit manager and a 340B entity entered into, amended, or
11renewed after July 1, 2022 shall be void and unenforceable.
12    In this subsection (h-5):
13    "340B entity" means a covered entity as defined in 42
14U.S.C. 256b(a)(4) authorized to participate in the 340B drug
15discount program.
16    "340B pharmacy" means any pharmacy used to dispense 340B
17drugs for a covered entity, whether entity-owned or external.
18    (i) Nothing in this Section shall be construed to prohibit
19a pharmacy benefit manager from requiring the same
20reimbursement and terms and conditions for a pharmacy provider
21as for a pharmacy owned, controlled, or otherwise associated
22with the pharmacy benefit manager.
23    (j) A pharmacy benefit manager shall establish and
24implement a process for the resolution of disputes arising out
25of this Section, which shall be approved by the Department.
26    (k) The Department shall adopt rules establishing



HB4595 Enrolled- 22 -LRB102 23475 BMS 32651 b

1reasonable dispensing fees for fee-for-service payments in
2accordance with guidance or guidelines from the federal
3Centers for Medicare and Medicaid Services.
4(Source: P.A. 101-452, eff. 1-1-20; 102-558, eff. 8-20-21.)
5    Section 99. Effective date. This Act takes effect July 1,