Full Text of SB2008 102nd General Assembly
SB2008sam003 102ND GENERAL ASSEMBLY | Sen. David Koehler Filed: 2/1/2022
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| 1 | | AMENDMENT TO SENATE BILL 2008
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 2008, AS AMENDED, | 3 | | by replacing everything after the enacting clause with the | 4 | | following:
| 5 | | "Section 5. The Illinois Insurance Code is amended by | 6 | | changing Sections 155.37, 424, and 513b1 and by adding | 7 | | Sections 513b1.1, 513b1.3, 513b7, and 513b8 as follows:
| 8 | | (215 ILCS 5/155.37)
| 9 | | Sec. 155.37. Drug formulary; notice. | 10 | | (a) As used in this Section: | 11 | | "Brand name drug" means a prescription drug marketed under | 12 | | a proprietary name or registered trademark name, including a | 13 | | biological product. | 14 | | "Formulary" means a list of prescription drugs that is | 15 | | developed by clinical and pharmacy experts and represents the | 16 | | carrier's medically appropriate and cost-effective |
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| 1 | | prescription drugs approved for use. | 2 | | "Generic drug" means a prescription drug, whether | 3 | | identified by its chemical, proprietary, or nonproprietary | 4 | | name, that is not a brand name drug and is therapeutically | 5 | | equivalent to a brand name drug in dosage, safety, strength, | 6 | | method of consumption, quality, performance, and intended use. | 7 | | (b) Insurance
companies that transact the kinds of | 8 | | insurance authorized under Class 1(b) or
Class 2(a) of Section | 9 | | 4 of this Code and provide coverage for prescription
drugs | 10 | | through the use of a drug formulary must notify insureds of any | 11 | | change in
the formulary. A company may comply with this | 12 | | Section by posting changes in
the formulary on its website.
| 13 | | (c) If a generic equivalent for a brand name drug is | 14 | | approved by the federal Food and Drug Administration, | 15 | | insurance companies with plans that provide coverage for | 16 | | prescription drugs through the use of a drug formulary that | 17 | | are amended, delivered, issued, or renewed in this State on or | 18 | | after January 1, 2022 shall: | 19 | | (1) immediately substitute the brand name drug with | 20 | | the generic equivalent; or | 21 | | (2) move the brand name drug to a formulary tier that | 22 | | reduces an enrollee's cost. | 23 | | (d) The Department of Insurance may adopt rules to | 24 | | implement this Section. | 25 | | (Source: P.A. 92-440, eff. 8-17-01; 92-651, eff. 7-11-02.)
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| 1 | | (215 ILCS 5/424) (from Ch. 73, par. 1031)
| 2 | | Sec. 424. Unfair methods of competition and unfair or | 3 | | deceptive acts or
practices defined. The following are hereby | 4 | | defined as unfair methods of
competition and unfair and | 5 | | deceptive acts or practices in the business of
insurance:
| 6 | | (1) The commission by any person of any one or more of | 7 | | the acts
defined or prohibited by Sections 134, 143.24c, | 8 | | 147, 148, 149, 151, 155.22,
155.22a, 155.42,
236, 237, | 9 | | 364, and 469 , and 513b7 of this Code.
| 10 | | (2) Entering into any agreement to commit, or by any | 11 | | concerted
action committing, any act of boycott, coercion | 12 | | or intimidation
resulting in or tending to result in | 13 | | unreasonable restraint of, or
monopoly in, the business of | 14 | | insurance.
| 15 | | (3) Making or permitting, in the case of insurance of | 16 | | the types
enumerated in Classes 1, 2, and 3 of Section 4, | 17 | | any unfair discrimination
between individuals or risks of | 18 | | the same class or of essentially the same
hazard and | 19 | | expense element because of the race, color, religion, or | 20 | | national
origin of such insurance risks or applicants. The | 21 | | application of this Article
to the types of insurance | 22 | | enumerated in Class 1 of Section 4 shall in no way
limit, | 23 | | reduce, or impair the protections and remedies already | 24 | | provided for by
Sections 236 and 364 of this Code or any | 25 | | other provision of this Code.
| 26 | | (4) Engaging in any of the acts or practices defined |
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| 1 | | in or prohibited by
Sections 154.5 through 154.8 of this | 2 | | Code.
| 3 | | (5) Making or charging any rate for insurance against | 4 | | losses arising
from the use or ownership of a motor | 5 | | vehicle which requires a higher
premium of any person by | 6 | | reason of his physical disability, race, color,
religion, | 7 | | or national origin.
| 8 | | (6) Failing to meet any requirement of the Unclaimed | 9 | | Life Insurance Benefits Act with such frequency as to | 10 | | constitute a general business practice. | 11 | | (Source: P.A. 99-143, eff. 7-27-15; 99-893, eff. 1-1-17 .)
| 12 | | (215 ILCS 5/513b1) | 13 | | Sec. 513b1. Pharmacy benefit manager contracts. | 14 | | (a) As used in this Section: | 15 | | "Biological product" has the meaning ascribed to that term | 16 | | in Section 19.5 of the Pharmacy Practice Act. | 17 | | "Covered person" means a member, policyholder, subscriber, | 18 | | enrollee, beneficiary, dependent, or other individual | 19 | | participating in a health benefit plan. | 20 | | "Health benefit plan" means a policy, contract, | 21 | | certificate, or agreement entered into, offered, or issued by | 22 | | an insurer to provide, deliver, arrange for, pay for, or | 23 | | reimburse any of the costs of physical, mental, or behavioral | 24 | | health care services. | 25 | | "Maximum allowable cost" means the maximum amount that a |
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| 1 | | pharmacy benefit manager will reimburse a pharmacy for the | 2 | | cost of a drug. | 3 | | "Maximum allowable cost list" means a list of drugs for | 4 | | which a maximum allowable cost has been established by a | 5 | | pharmacy benefit manager. | 6 | | "Pharmacy benefit manager" means a person, business, or | 7 | | entity, including a wholly or partially owned or controlled | 8 | | subsidiary of a pharmacy benefit manager, that provides claims | 9 | | processing services or other prescription drug or device | 10 | | services, or both, for health benefit plans. "Pharmacy benefit | 11 | | manager" does not include: | 12 | | (1) a health care facility licensed in this State; | 13 | | (2) a health care professional licensed in this State; | 14 | | or | 15 | | (3) a consultant who only provides advice as to the | 16 | | selection or performance of a pharmacy benefit manager. | 17 | | "Pharmacy benefit manager affiliate" means a pharmacy or | 18 | | pharmacist that directly or indirectly, through one or more | 19 | | intermediaries, owns or controls, is owned or controlled by, | 20 | | or is under common ownership or control with a pharmacy | 21 | | benefit manager. | 22 | | "Retail price" means the price an individual without | 23 | | prescription drug coverage would pay at a retail pharmacy, not | 24 | | including a pharmacist dispensing fee. | 25 | | "Spread pricing" means the model of prescription drug | 26 | | pricing in which the pharmacy benefits manager charges a |
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| 1 | | health benefit plan a contracted price for prescription drugs, | 2 | | and the contracted price for the prescription drugs differs | 3 | | from the amount the pharmacy benefits manager directly or | 4 | | indirectly pays the pharmacist or pharmacy for pharmacist | 5 | | services. | 6 | | "Third-party payer" means any entity involved in the | 7 | | financing of a pharmacy benefit plan or program other than the | 8 | | patient, health care provider, or sponsor of a plan subject to | 9 | | regulation under Medicare Part D, 42 U.S.C. 1395w–101, et al. | 10 | | (b) A contract between a health insurer and a pharmacy | 11 | | benefit manager must require that the pharmacy benefit | 12 | | manager: | 13 | | (1) Update maximum allowable cost pricing information | 14 | | at least every 7 calendar days. | 15 | | (2) Maintain a process that will, in a timely manner, | 16 | | eliminate drugs from maximum allowable cost lists or | 17 | | modify drug prices to remain consistent with changes in | 18 | | pricing data used in formulating maximum allowable cost | 19 | | prices and product availability. | 20 | | (3) Provide access to its maximum allowable cost list | 21 | | to each pharmacy or pharmacy services administrative | 22 | | organization subject to the maximum allowable cost list. | 23 | | Access may include a real-time pharmacy website portal to | 24 | | be able to view the maximum allowable cost list. As used in | 25 | | this Section, "pharmacy services administrative | 26 | | organization" means an entity operating within the State |
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| 1 | | that contracts with independent pharmacies to conduct | 2 | | business on their behalf with third-party payers. A | 3 | | pharmacy services administrative organization may provide | 4 | | administrative services to pharmacies and negotiate and | 5 | | enter into contracts with third-party payers or pharmacy | 6 | | benefit managers on behalf of pharmacies. | 7 | | (4) Provide a process by which a contracted pharmacy | 8 | | can appeal the provider's reimbursement for a drug subject | 9 | | to maximum allowable cost pricing. | 10 | | The appeals process must, at a minimum, include the | 11 | | following: | 12 | | (A) A requirement that a contracted pharmacy has | 13 | | 14 calendar days after the applicable fill date to | 14 | | appeal a maximum allowable cost if the reimbursement | 15 | | for the drug is less than the net amount that the | 16 | | network provider paid to the supplier of the drug. | 17 | | (B) A requirement that a pharmacy benefit manager | 18 | | must respond to a challenge within 14 calendar days of | 19 | | the contracted pharmacy making the claim for which the | 20 | | appeal has been submitted. | 21 | | (C) A telephone number and e-mail address or | 22 | | website to network providers, at which the provider | 23 | | can contact the pharmacy benefit manager to process | 24 | | and submit an appeal. | 25 | | (D) A requirement that, if an appeal is denied, | 26 | | the pharmacy benefit manager must provide the reason |
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| 1 | | for the denial and the name and the national drug code | 2 | | number from national or regional wholesalers. | 3 | | (E) A requirement that, if an appeal is sustained, | 4 | | the pharmacy benefit manager must make an adjustment | 5 | | in the drug price effective the date the challenge is | 6 | | resolved and make the adjustment applicable to all | 7 | | similarly situated network pharmacy providers, as | 8 | | determined by the managed care organization or | 9 | | pharmacy benefit manager. | 10 | | (5) Allow a plan sponsor contracting with a pharmacy | 11 | | benefit manager an annual right to audit compliance with | 12 | | the terms of the contract by the pharmacy benefit manager, | 13 | | including, but not limited to, full disclosure of any and | 14 | | all rebate amounts secured, whether product specific or | 15 | | generalized rebates, that were provided to the pharmacy | 16 | | benefit manager by a pharmaceutical manufacturer. | 17 | | (6) Allow a plan sponsor contracting with a pharmacy | 18 | | benefit manager to request that the pharmacy benefit | 19 | | manager disclose the actual amounts paid by the pharmacy | 20 | | benefit manager to the pharmacy. | 21 | | (7) Provide notice to the party contracting with the | 22 | | pharmacy benefit manager of any consideration that the | 23 | | pharmacy benefit manager receives from the manufacturer | 24 | | for dispense as written prescriptions once a generic or | 25 | | biologically similar product becomes available. | 26 | | (c) In order to place a particular prescription drug on a |
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| 1 | | maximum allowable cost list, the pharmacy benefit manager | 2 | | must, at a minimum, ensure that: | 3 | | (1) if the drug is a generically equivalent drug, it | 4 | | is listed as therapeutically equivalent and | 5 | | pharmaceutically equivalent "A" or "B" rated in the United | 6 | | States Food and Drug Administration's most recent version | 7 | | of the "Orange Book" or have an NR or NA rating by | 8 | | Medi-Span, Gold Standard, or a similar rating by a | 9 | | nationally recognized reference; | 10 | | (2) the drug is available for purchase by each | 11 | | pharmacy in the State from national or regional | 12 | | wholesalers operating in Illinois; and | 13 | | (3) the drug is not obsolete. | 14 | | (d) A pharmacy benefit manager is prohibited from limiting | 15 | | a pharmacist's ability to disclose to a covered person: | 16 | | (1) whether the cost-sharing obligation exceeds the | 17 | | retail price for a covered prescription drug, and the | 18 | | availability of a more affordable alternative drug, if one | 19 | | is available in accordance with Section 42 of the Pharmacy | 20 | | Practice Act ; or . | 21 | | (2) any health care information that the pharmacy or | 22 | | pharmacist deems appropriate regarding: | 23 | | (A) the nature of treatment, risks, or | 24 | | alternatives thereto, if such disclosure is consistent | 25 | | with the permissible practice of pharmacy under the | 26 | | Pharmacy Practice Act; |
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| 1 | | (B) the availability of alternative therapies, | 2 | | consultations, or tests if such disclosure is | 3 | | consistent with the permissible practice of pharmacy | 4 | | under the Pharmacy Practice Act; | 5 | | (C) the decision of utilization reviewers or | 6 | | similar persons to authorize or deny services; | 7 | | (D) the process that is used to authorize or deny | 8 | | health care services or benefits; or | 9 | | (E) information on financial incentives and | 10 | | structures used by the insurer. | 11 | | (e) A pharmacy benefit manager shall not prohibit a | 12 | | pharmacist or pharmacy from, or indirectly punish a pharmacist | 13 | | or pharmacy for, making any written or oral statement or | 14 | | otherwise disclosing information to any federal, State, | 15 | | county, or municipal official, including the Director or law | 16 | | enforcement, or before any State, county, or municipal | 17 | | committee, body, or proceeding if: | 18 | | (1) the recipient of the information represents that | 19 | | it has the authority, to the extent provided by State or | 20 | | federal law, to maintain proprietary information as | 21 | | confidential; and | 22 | | (2) before disclosure of information designated as | 23 | | confidential the pharmacist or pharmacy: | 24 | | (A) marks as confidential any document in which | 25 | | the information appears; or | 26 | | (B) requests confidential treatment for any oral |
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| 1 | | communication of the information. | 2 | | This includes sharing any portion of the pharmacy benefit | 3 | | manager contract with the Director pursuant to a complaint or | 4 | | a query regarding whether the contract is in compliance with | 5 | | this Article. | 6 | | (f) (e) A health insurer or pharmacy benefit manager shall | 7 | | not require an insured to make a payment for a prescription | 8 | | drug at the point of sale in an amount that exceeds the lesser | 9 | | of: | 10 | | (1) the applicable cost-sharing amount; or | 11 | | (2) the retail price of the drug in the absence of | 12 | | prescription drug coverage. | 13 | | (g) A pharmacy benefit manager may not prohibit a pharmacy | 14 | | or pharmacist from selling a more affordable alternative to | 15 | | the covered person if a more affordable alternative is | 16 | | available. | 17 | | (h) A pharmacy benefit manager shall not reimburse a | 18 | | pharmacy or pharmacist in this State an amount less than the | 19 | | amount that the pharmacy benefit manager reimburses a pharmacy | 20 | | benefit manager affiliate for providing the same | 21 | | pharmaceutical product. | 22 | | (i) A pharmacy benefit manager shall not: | 23 | | (1) condition payment, reimbursement, or network | 24 | | participation on any type of accreditation, certification, | 25 | | or credentialing standard beyond those required by the | 26 | | State Board of Pharmacy or applicable State or federal |
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| 1 | | law; | 2 | | (2) prohibit or otherwise restrict a pharmacist or | 3 | | pharmacy from offering prescription delivery services to | 4 | | any covered person; or | 5 | | (3) require any additional requirement for a | 6 | | prescription claim that is more restrictive than the | 7 | | standards established under the Illinois Food, Drug and | 8 | | Cosmetic Act; the Pharmacy Practice Act; or the Illinois | 9 | | Controlled Substances Act. | 10 | | (j) A pharmacy benefit manager is prohibited from | 11 | | conducting spread pricing in this State. | 12 | | (k) The Department of Insurance, the Department of | 13 | | Healthcare and Family Services, and the Department of | 14 | | Financial and Professional Regulation shall jointly conduct a | 15 | | statewide survey and report that examines the following: | 16 | | (1) the cost of dispensing in order to make | 17 | | recommendations for a professional dispensing fee; | 18 | | (2) factors impeding pharmacists' ability to practice | 19 | | to their full scope of practice in the best interest of the | 20 | | patient; | 21 | | (3) factors impacting pharmacy workload and workplace | 22 | | conditions, including impact on pharmacy personnel | 23 | | well-being; and | 24 | | (4) factors impacting the safe delivery of medications | 25 | | and patient care services by pharmacists. | 26 | | The Departments shall utilize the expertise and services |
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| 1 | | of the Chicago State University College of Pharmacy, the | 2 | | Southern Illinois University Edwardsville School of Pharmacy, | 3 | | and the University of Illinois Chicago College of Pharmacy to | 4 | | achieve the survey measures and recommendations. The survey | 5 | | and report shall be delivered to the General Assembly no later | 6 | | than December 31, 2022. | 7 | | (l) (f) This Section applies to contracts entered into or | 8 | | renewed on or after July 1, 2020. | 9 | | (m) (g) This Section applies to any group or individual | 10 | | policy of accident and health insurance or managed care plan | 11 | | that provides coverage for prescription drugs and that is | 12 | | amended, delivered, issued, or renewed on or after July 1, | 13 | | 2020.
| 14 | | (Source: P.A. 101-452, eff. 1-1-20 .) | 15 | | (215 ILCS 5/513b1.1 new) | 16 | | Sec. 513b1.1. Pharmacy network participation. | 17 | | (a) As used in this Section: | 18 | | "Claims processing services" means the administrative | 19 | | services performed in connection with the processing and | 20 | | adjudicating of claims relating to pharmacist services that | 21 | | include: | 22 | | (1) receiving payments for pharmacist services; or | 23 | | (2) making payments to a pharmacist or pharmacy for | 24 | | pharmacist services. | 25 | | "Pharmacy benefit manager affiliate" means a pharmacy or |
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| 1 | | pharmacist that directly or indirectly, through one or more | 2 | | intermediaries, owns or controls, is owned or controlled by, | 3 | | or is under common ownership or control with a pharmacy | 4 | | benefit manager. "Pharmacy benefit manager affiliate" includes | 5 | | any mail-order pharmacy that is directly or indirectly owned | 6 | | or controlled by a pharmacy benefit manager. | 7 | | (b) A pharmacy benefit manager shall not: | 8 | | (1) prohibit or limit a participant or beneficiary of | 9 | | pharmacy services under a health benefit plan from | 10 | | selecting a pharmacy or pharmacist of his or her choice if | 11 | | the pharmacy or pharmacist is willing and agrees to accept | 12 | | the same terms and conditions that the pharmacy benefit | 13 | | manager has established for at least one of the networks | 14 | | of pharmacies that the pharmacy benefit manager has | 15 | | established to serve patients within the State; | 16 | | (2) prohibit a pharmacy from participating in any | 17 | | given network of pharmacies within the State if the | 18 | | pharmacy is licensed by the Department of Financial and | 19 | | Professional Regulation and agrees to the same terms and | 20 | | conditions, including the terms of reimbursement, that the | 21 | | pharmacy benefit manager has established for other | 22 | | pharmacies participating within the network that the | 23 | | pharmacy wishes to join; | 24 | | (3) charge a participant or beneficiary of a pharmacy | 25 | | benefits plan or program that the pharmacy benefit manager | 26 | | serves a different copayment obligation or additional fee |
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| 1 | | for using any pharmacy within a given network of | 2 | | pharmacies established by the pharmacy benefit manager to | 3 | | serve patients within the State; | 4 | | (4) impose a monetary advantage, incentive, or penalty | 5 | | under a health benefit plan that would affect or influence | 6 | | a beneficiary's choice among those pharmacies or | 7 | | pharmacists who have agreed to participate in the plan | 8 | | according to the terms offered by the insurer; | 9 | | (5) require a participant or beneficiary to use or | 10 | | otherwise obtain services exclusively from a mail-order | 11 | | pharmacy or one or more pharmacy benefit manager | 12 | | affiliates; | 13 | | (6) impose upon a beneficiary any copayment obligation | 14 | | or other limitation, restriction, or condition, including | 15 | | number of days of a drug supply for which coverage will be | 16 | | allowed, that is more costly or more restrictive than that | 17 | | which would be imposed upon the beneficiary if such | 18 | | services were purchased from a pharmacy benefit manager | 19 | | affiliate or any other pharmacy within a given network of | 20 | | pharmacies established by the pharmacy benefit manager to | 21 | | serve patients within the State; | 22 | | (7) require participation in additional networks for a | 23 | | pharmacy to enroll in an individual network; | 24 | | (8) include in any manner on any material, including, | 25 | | but not limited to, mail and identifications cards, the | 26 | | name of any pharmacy, hospital, or other providers unless |
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| 1 | | it specifically lists all pharmacies, hospitals, and | 2 | | providers participating in the given network of pharmacies | 3 | | established by the pharmacy benefit manager to serve | 4 | | patients within the State; or | 5 | | (9) share, transfer, or otherwise utilize patient | 6 | | information or pharmacy service data collected pursuant to | 7 | | the provision of claims processing services for the | 8 | | purpose of referring a participant or beneficiary to a | 9 | | pharmacy benefit manager affiliate. | 10 | | (c) A pharmacy licensed in or holding a nonresident | 11 | | pharmacy permit in Illinois shall be prohibited from: | 12 | | (1) transferring or sharing records relative to | 13 | | prescription information containing patient identifiable | 14 | | and prescriber identifiable data to or from an affiliate | 15 | | for any commercial purpose; however, nothing shall be | 16 | | construed to prohibit the exchange of prescription | 17 | | information between a pharmacy and its affiliate for the | 18 | | limited purposes of pharmacy reimbursement, formulary | 19 | | compliance, pharmacy care, public health activities | 20 | | otherwise authorized by law, or utilization review by a | 21 | | health care provider; or | 22 | | (2) presenting a claim for payment to any individual, | 23 | | third-party payer, affiliate, or other entity for a | 24 | | service furnished pursuant to a referral from an affiliate | 25 | | or other person licensed under this Article. | 26 | | (d) If a pharmacy licensed or holding a nonresident |
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| 1 | | pharmacy permit in this State has an affiliate, it shall | 2 | | annually file with the Department a disclosure statement | 3 | | identifying all such affiliates. | 4 | | (e) This Section shall not be construed to prohibit a | 5 | | pharmacy from entering into an agreement with an affiliate to | 6 | | provide pharmacy care to patients if the pharmacy does not | 7 | | receive referrals in violation of subsection (c) and the | 8 | | pharmacy provides the disclosure statement required in | 9 | | subsection (d). | 10 | | (f) In addition to any other remedy provided by law, a | 11 | | violation of this Section by a pharmacy shall be grounds for | 12 | | disciplinary action by the Department. | 13 | | (g) A pharmacist who fills a prescription that violates | 14 | | subsection (c) shall not be liable under this Section. | 15 | | (h) This Section shall not apply to: | 16 | | (1) any hospital or related institution; or | 17 | | (2) any referrals by an affiliate for pharmacy | 18 | | services and prescriptions to patients in skilled nursing | 19 | | facilities, intermediate care facilities, continuing care | 20 | | retirement communities, home health agencies, or hospices. | 21 | | (215 ILCS 5/513b1.3 new) | 22 | | Sec. 513b1.3. Fiduciary responsibility. A pharmacy benefit | 23 | | manager is a fiduciary to a contracted health insurer and | 24 | | shall: | 25 | | (1) discharge that duty in accordance with federal and |
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| 1 | | State law; | 2 | | (2) notify the covered entity in writing of any | 3 | | activity, policy, or practice of the pharmacy benefit | 4 | | manager that directly or indirectly presents any conflict | 5 | | of interest and inability to comply with the duties | 6 | | imposed by this Section, but in no event does this | 7 | | notification exempt the pharmacy benefit manager from | 8 | | compliance with all other Sections of this Code; and | 9 | | (3) disclose all direct or indirect payments related | 10 | | to the dispensation of prescription drugs or classes or | 11 | | brands of drugs to the covered entity. | 12 | | (215 ILCS 5/513b7 new) | 13 | | Sec. 513b7. Pharmacy audits. | 14 | | (a) As used in this Section: | 15 | | "Audit" means any physical on-site, remote electronic, or | 16 | | concurrent review of a pharmacist service submitted to the | 17 | | pharmacy benefit manager or pharmacy benefit manager affiliate | 18 | | by a pharmacist or pharmacy for payment. | 19 | | "Auditing entity" means a person or company that performs | 20 | | a pharmacy audit. | 21 | | "Extrapolation" means the practice of inferring a | 22 | | frequency of dollar amount of overpayments, underpayments, | 23 | | nonvalid claims, or other errors on any portion of claims | 24 | | submitted, based on the frequency of dollar amount of | 25 | | overpayments, underpayments, nonvalid claims, or other errors |
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| 1 | | actually measured in a sample of claims. | 2 | | "Misfill" means a prescription that was not dispensed; a | 3 | | prescription that was dispensed but was an incorrect dose, | 4 | | amount, or type of medication; a prescription that was | 5 | | dispensed to the wrong person; a prescription in which the | 6 | | prescriber denied the authorization request; or a prescription | 7 | | in which an additional dispensing fee was charged. | 8 | | "Pharmacy audit" means an audit conducted of any records | 9 | | of a pharmacy for prescriptions dispensed or non-proprietary | 10 | | drugs or pharmacist services provided by a pharmacy or | 11 | | pharmacist to a covered person. | 12 | | "Pharmacy record" means any record stored electronically | 13 | | or as a hard copy by a pharmacy that relates to the provision | 14 | | of a prescription or pharmacy services or other component of | 15 | | pharmacist care that is included in the practice of pharmacy. | 16 | | (b) Notwithstanding any other law, when conducting a | 17 | | pharmacy audit, an auditing entity shall: | 18 | | (1) not conduct an on-site audit of a pharmacy at any | 19 | | time during the first 3 business days of a month or the | 20 | | first 2 weeks and final 2 weeks of the calendar year or | 21 | | during a declared State or federal public health | 22 | | emergency; | 23 | | (2) notify the pharmacy or its contracting agent no | 24 | | later than 30 days before the date of initial on-site | 25 | | audit; the notification to the pharmacy or its contracting | 26 | | agent shall be in writing and delivered either: |
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| 1 | | (A) by mail or common carrier, return receipt | 2 | | requested; or | 3 | | (B) electronically with electronic receipt | 4 | | confirmation, addressed to the supervising pharmacist | 5 | | of record and pharmacy corporate office, if | 6 | | applicable, at least 30 days before the date of an | 7 | | initial on-site audit; | 8 | | (3) limit the audit period to 24 months after the date | 9 | | a claim is submitted to or adjudicated by the pharmacy | 10 | | benefit manager; | 11 | | (4) include in the written advance notice of an | 12 | | on-site audit the list of specific prescription numbers to | 13 | | be included in the audit that may or may not include the | 14 | | final 2 digits of the prescription numbers; | 15 | | (5) use the written and verifiable records of a | 16 | | hospital, physician, or other authorized practitioner that | 17 | | are transmitted by any means of communication to validate | 18 | | the pharmacy records in accordance with State and federal | 19 | | law; | 20 | | (6) limit the number of prescriptions audited to no | 21 | | more than 100 randomly selected in a 12-month period and | 22 | | no more than one on-site audit per quarter of the calendar | 23 | | year, except in cases of fraud; | 24 | | (7) provide the pharmacy or its contracting agent with | 25 | | a copy of the preliminary audit report within 45 days | 26 | | after the conclusion of the audit; |
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| 1 | | (8) be allowed to conduct a follow-up audit on site if | 2 | | a remote or desk audit reveals the necessity for a review | 3 | | of additional claims; | 4 | | (9) accept invoice audits as validation invoices from | 5 | | any wholesaler registered with the Department of Financial | 6 | | and Professional Regulation from which the pharmacy has | 7 | | purchased prescription drugs or, in the case of durable | 8 | | medical equipment or sickroom supplies, invoices from an | 9 | | authorized distributor other than a wholesaler; | 10 | | (10) provide the pharmacy or its contracting agent | 11 | | with the ability to provide documentation to address a | 12 | | discrepancy or audit finding if the documentation is | 13 | | received by the pharmacy benefit manager no later than the | 14 | | 45th day after the preliminary audit report was provided | 15 | | to the pharmacy or its contracting agent; the pharmacy | 16 | | benefit manager shall consider a reasonable request from | 17 | | the pharmacy for an extension of time to submit | 18 | | documentation to address or correct any findings in the | 19 | | report; | 20 | | (11) be required to provide the pharmacy or its | 21 | | contracting agent with the final audit report no later | 22 | | than 60 days after the initial audit report was provided | 23 | | to the pharmacy or its contracting agent; | 24 | | (12) conduct the audit in consultation with a | 25 | | pharmacist if the audit involves clinical or professional | 26 | | judgment; |
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| 1 | | (13) not chargeback, recoup, or collect penalties from | 2 | | a pharmacy until the time period to file an appeal of the | 3 | | final pharmacy audit report has passed or the appeals | 4 | | process has been exhausted, whichever is later, unless the | 5 | | identified discrepancy is expected to exceed $25,000, in | 6 | | which case the auditing entity may withhold future | 7 | | payments in excess of that amount until the final | 8 | | resolution of the audit; | 9 | | (14) not compensate the employee or contractor | 10 | | conducting the audit based on a percentage of the amount | 11 | | claimed or recouped pursuant to the audit; | 12 | | (15) not use extrapolation to calculate penalties or | 13 | | amounts to be charged back or recouped unless otherwise | 14 | | required by federal law or regulation; any amount to be | 15 | | charged back or recouped due to overpayment may not exceed | 16 | | the amount the pharmacy was overpaid; | 17 | | (16) not include dispensing fees in the calculation of | 18 | | overpayments unless a prescription is considered a | 19 | | misfill; or | 20 | | (17) conduct a pharmacy audit under the same standards | 21 | | and parameters as conducted for other similarly situated | 22 | | pharmacies audited by the auditing entity. | 23 | | (c) Except as otherwise provided by State or federal law, | 24 | | an auditing entity conducting a pharmacy audit may have access | 25 | | to a pharmacy's previous audit report only if the report was | 26 | | prepared by that auditing entity. |
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| 1 | | (d) Information collected during a pharmacy audit shall be | 2 | | confidential by law, except that the auditing entity | 3 | | conducting the pharmacy audit may share the information with | 4 | | the health benefit plan for which a pharmacy audit is being | 5 | | conducted and with any regulatory agencies and law enforcement | 6 | | agencies as required by law. | 7 | | (e) A pharmacy may not be subject to a chargeback or | 8 | | recoupment for a clerical or recordkeeping error in a required | 9 | | document or record, including a typographical error or | 10 | | computer error, unless the pharmacy benefit manager can | 11 | | provide proof of intent to commit fraud or such error results | 12 | | in actual financial harm to the pharmacy benefit manager, a | 13 | | health plan managed by the pharmacy benefit manager, or a | 14 | | consumer. | 15 | | (f) A pharmacy shall have the right to file a written | 16 | | appeal of a preliminary and final pharmacy audit report in | 17 | | accordance with the procedures established by the entity | 18 | | conducting the pharmacy audit. | 19 | | (g) No interest shall accrue for any party during the | 20 | | audit period, beginning with the notice of the pharmacy audit | 21 | | and ending with the conclusion of the appeals process. | 22 | | (h) A contract between a pharmacy or pharmacist and a | 23 | | pharmacy benefit manager must contain a provision allowing, | 24 | | during the course of a pharmacy audit conducted by or on behalf | 25 | | of a pharmacy benefit manager, a pharmacy or pharmacist to | 26 | | withdraw and resubmit a claim within 30 days after: |
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| 1 | | (1) the preliminary written audit report is delivered | 2 | | if the pharmacy or pharmacist does not request an internal | 3 | | appeal; or | 4 | | (2) the conclusion of the internal audit appeals | 5 | | process if the pharmacy or pharmacist requests an internal | 6 | | audit appeal. | 7 | | (i) This Section shall not apply to: | 8 | | (1) audits in which suspected fraudulent activity or | 9 | | other intentional or willful misrepresentation is | 10 | | evidenced by a physical review, review of claims data or | 11 | | statements, or other investigative methods; | 12 | | (2) audits of claims paid for by federally funded | 13 | | programs; or | 14 | | (3) concurrent reviews or desk audits that occur | 15 | | within 3 business days after transmission of a claim and | 16 | | where no chargeback or recoupment is demanded. | 17 | | (j) A violation of this Section shall be an unfair and | 18 | | deceptive act or practice under Section 424. | 19 | | (215 ILCS 5/513b8 new) | 20 | | Sec. 513b8. Pharmacy benefit manager transparency. | 21 | | (a) A pharmacy benefit manager shall report to the | 22 | | Director on a quarterly basis for each health care insurer the | 23 | | following information: | 24 | | (1) the aggregate amount of rebates received by the | 25 | | pharmacy benefit manager; |
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| 1 | | (2) the aggregate amount of rebates distributed to the | 2 | | appropriate health care insurer; | 3 | | (3) the aggregate amount of rebates passed on to the | 4 | | enrollees of each health care insurer at the point of sale | 5 | | that reduced the enrollees' applicable deductible, | 6 | | copayment, coinsurance, or other cost-sharing amount; | 7 | | (4) the individual and aggregate amount paid by the | 8 | | health care insurer to the pharmacy benefit manager for | 9 | | pharmacist services itemized by pharmacy, by product, and | 10 | | by goods and services; and | 11 | | (5) the individual and aggregate amount a pharmacy | 12 | | benefit manager paid for pharmacist services itemized by | 13 | | pharmacy, by product, and by goods and services. | 14 | | (b) The report made to the Department required under this | 15 | | subsection is confidential and not subject to disclosure under | 16 | | the Freedom of Information Act. | 17 | | Section 10. The Network Adequacy and Transparency Act is | 18 | | amended by adding Section 35 as follows: | 19 | | (215 ILCS 124/35 new) | 20 | | Sec. 35. Pharmacy benefit manager network adequacy. | 21 | | (a) As used in this Section: | 22 | | "Pharmacy benefit manager" has the meaning ascribed to | 23 | | that term in Section 513b1 of the Illinois Insurance Code. | 24 | | "Pharmacy benefit manager network" means the group or |
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| 1 | | groups of preferred providers of pharmacy services to a | 2 | | network plan. | 3 | | "Pharmacy benefit manager network plan" means an | 4 | | individual or group policy of accident and health insurance | 5 | | that either requires a covered person to use or creates | 6 | | incentives, including financial incentives, for a covered | 7 | | person to use providers of pharmacy services managed, owned, | 8 | | under contract with, or employed by the insurer. | 9 | | "Pharmacy services" means products, goods, and services or | 10 | | any combination of products, goods, and services, provided as | 11 | | a part of the practice of pharmacy. "Pharmacy services" | 12 | | includes "pharmacist care" as defined in the Pharmacy Practice | 13 | | Act. | 14 | | (b) A pharmacy benefit manager shall provide a reasonably | 15 | | adequate and accessible pharmacy benefit manager network for | 16 | | the provision of prescription drugs for a health benefit plan | 17 | | that shall provide for convenient patient access to pharmacies | 18 | | within a reasonable distance from a patient's residence. | 19 | | (c) Pharmacy benefit managers must file for review by the | 20 | | Director a pharmacy benefit manager network plan describing | 21 | | the pharmacy benefit manager network and the pharmacy benefit | 22 | | manager network's accessibility in this State in the time and | 23 | | manner required by rule issued by the Department. | 24 | | (1) A mail-order pharmacy shall not be included in the | 25 | | calculations determining pharmacy benefit manager network | 26 | | adequacy. |
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| 1 | | (2) A pharmacy benefit manager network plan shall | 2 | | comply with the following retail pharmacy network access | 3 | | standards: | 4 | | (A) at least 90% of covered individuals residing | 5 | | in an urban service area live within 2 miles of a | 6 | | retail pharmacy participating in the pharmacy benefit | 7 | | manager's retail pharmacy network; | 8 | | (B) at least 90% of covered individuals residing | 9 | | in an urban service area live within 5 miles of a | 10 | | retail pharmacy designated as a preferred | 11 | | participating pharmacy in the pharmacy benefit | 12 | | manager's retail pharmacy network; | 13 | | (C) at least 90% of covered individuals residing | 14 | | in a suburban service area live within 5 miles of a | 15 | | retail pharmacy participating in the pharmacy benefit | 16 | | manager's retail pharmacy network; | 17 | | (D) at least 90% of covered individuals residing | 18 | | in a suburban service area live within 7 miles of a | 19 | | retail pharmacy designated as a preferred | 20 | | participating pharmacy in the pharmacy benefit | 21 | | manager's retail pharmacy network; | 22 | | (E) at least 70% of covered individuals residing | 23 | | in a rural service area live within 15 miles of a | 24 | | retail pharmacy participating in the pharmacy benefit | 25 | | manager's retail pharmacy network; and | 26 | | (F) at least 70% of covered individuals residing |
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| 1 | | in a rural service area live within 18 miles of a | 2 | | retail pharmacy designated as a preferred | 3 | | participating pharmacy in the pharmacy benefit | 4 | | manager's retail pharmacy network. | 5 | | (d) The Director shall establish a process for the review | 6 | | of the adequacy of the standards required under this | 7 | | Section. ".
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