Amends TCA Title 4; Title 56 and Title 71.

This bill revises various provisions governing pharmacy benefits and pharmacy benefits managers, as discussed below. This bill prohibits: (1) Health insurance issuers, managed health insurance issuers, pharmacy benefits managers, and other third-party payers from: (A) Reimbursing a 340B entity for pharmacy-dispensed drugs at a rate lower than the rate paid for the same drug by national drug code number to pharmacies that are not 340B entities; (B) Assessing a fee, chargeback, or adjustment upon a 340B entity that is not equally assessed on non-340B entities; and (C) Excluding 340B entities from its network of participating pharmacies based on criteria that is not applied to non-340B entities; and (2) With respect to a patient eligible to receive drugs subject to an agreement under the federal law provisions governing limitations on prices of drugs purchased by covered entities, a pharmacy benefits manager, or third party that makes payment for those drugs, from discriminating against a 340B entity in a manner that prevents or interferes with the patient's choice to receive those drugs from the 340B entity. The above provisions will not apply to TennCare, the CoverKids Act of 2006, or the present law Volunteer Rx prescription drug discount program. For purposes of the above provisions, a "340B entity" is a covered entity participating in the federal 340B drug discount program, under the federal Public Health Service Act, including the entity's pharmacy or pharmacies, or any pharmacy or pharmacies under contract with the 340B covered entity to dispense drugs on behalf of the 340B covered entity. This bill requires a pharmacy benefits manager to permit a person covered under a group medical benefit contract, or a pharmacy benefit contract, that provides coverage for prescription drugs to obtain prescription drugs, including specialty drugs, from a physician's office, hospital outpatient infusion center providing and administering the prescription drug, or pharmacy. This bill prohibits a pharmacy benefits manager from: (1) Imposing coverage or benefits limitations, or requiring a person covered under a group medical benefit contract, or a pharmacy benefit contract, that provides coverage for prescription drugs, including specialty drugs, to pay an additional fee, higher copay, higher coinsurance, second copay, second coinsurance, or other penalty when obtaining prescription drugs, including specialty drugs, from a physician's office, hospital outpatient infusion center providing and administering the prescription drug, or pharmacy; and (2) Interfering with the patient's right to choose the patient's pharmacy or provider of choice, including inducement, steering, or offering financial or other incentives. This bill requires a pharmacy benefits manager or a covered entity to base the calculation of any coinsurance for a prescription drug or device on the allowed amount of the drug or device. A "covered entity" is a health insurance issuer, managed health insurance issuer, nonprofit hospital, medication service organization, insurer, health coverage plan, health maintenance organization, a health program administered by the state or its political subdivisions, including TennCare, nonprofit insurance companies, prepaid plans, self-insured entities, and all other corporations, entities or persons, or an employer, labor union, or other group of persons organized in the state that provides health coverage to covered individuals who are employed or reside in the state. “Covered entity” does not include a health plan that provides coverage only for accidental injury, specified disease, hospital indemnity, medicare supplement, disability income, or other long-term care. This bill prohibits a pharmacy benefits manager from charging a covered entity an amount greater than the reimbursement paid by a pharmacy benefits manager to a contracted pharmacy for the prescription drug or device. "Allowed amount" means the cost of a prescription drug or device after applying all pharmacy benefits manager or covered entity discounts. This bill also: (1) Specifies that a pharmacy benefits manager has a fiduciary responsibility to report to the plan and the patient any benefit percentage that either is entitled to as a benefit as a covered person; (2) Requires a covered entity to, upon request of an enrollee, enrollee's healthcare provider, or authorized representative of an enrollee, furnish the cost, benefit, and coverage data (described below in (3)) to the enrollee, enrollee's healthcare provider, or authorized representative of the enrollee and to ensure that the data is accurate as of the most recent change to the data that was made prior to the date of request, provided in real time, and provided in the format designated by the requesting party; (3) Specifies that a covered entity that receives a request for data that complies with item (2) must provide the following data for each drug covered under the enrollee's health plan: (A) The enrollee's eligibility information for the drug; (B) A list of any clinically appropriate alternatives to drugs covered under the enrollee's health plan; (C) Cost-sharing information for the drugs and the clinically appropriate alternatives; and (D) Applicable utilization management requirements for the drugs or clinically appropriate alternatives, including prior authorization, step therapy, quantity limits, and site-of-service restrictions; and (4) Prohibits a covered entity that furnishes data as provided in item (3) from: (A) Restricting, prohibiting, or otherwise hindering a healthcare provider from communicating or sharing the above-described data; additional information on lower-cost or clinically appropriate alternative drugs, whether or not the drugs are covered under the enrollee's plan; or additional payment or cost-sharing information that may reduce the patient's out-of-pocket costs, such as cash price or patient assistance, and support programs sponsored by a manufacturer, foundation, or other entity; (B) Except as may be required by law, interfering with, preventing, or materially discouraging access to, exchange of, or the use of the data including charging fees, failing to respond to a request at the time made when such a response is reasonably possible, implementing technology in nonstandard ways, or instituting enrollee consent requirements, processes, policies, procedures, or renewals that are likely to substantially increase the complexity or burden of accessing, exchanging, or using the data; and (C) Penalizing a healthcare provider for disclosing the information described above in (4)(A) to an enrollee or prescribing, administering, or ordering a clinically appropriate or lower-cost alternative drug. ON MAY 4, 2021, THE HOUSE ADOPTED AMENDMENT #2 AND PASSED HOUSE BILL 1398, AS AMENDED. AMENDMENT #2 rewrites this bill. This bill revises various provisions governing pharmacy benefits and pharmacy benefits managers, as discussed below. This bill prohibits: (1) Health insurance issuers, managed health insurance issuers, pharmacy benefits managers, and other third-party payers from: (A) Reimbursing a 340B entity for pharmacy-dispensed drugs at a rate lower than the rate paid for the same drug by national drug code number to pharmacies that are not 340B entities; (B) Assessing a fee, chargeback, or adjustment upon a 340B entity that is not equally assessed on non-340B entities; (C) Excluding 340B entities from its network of participating pharmacies based on criteria that is not applied to non-340B entities; (D) Requiring a claim for a drug by national drug code number to include a modifier to identify that the drug is a 340B drug; and (2) With respect to a patient eligible to receive drugs subject to an agreement under the federal law provisions governing limitations on prices of drugs purchased by covered entities, a pharmacy benefits manager, or third party that makes payment for those drugs, from discriminating against a 340B entity in a manner that: (A) Violates the present law prohibitions against health insurance issuers and managed health insurance issuers denying licensed pharmacies or pharmacists to participate as a participating provider in a policy under the same conditions offered to other providers and preventing policy beneficiaries from selecting the participating pharmacy of their choice; or (B) Prevents or interferes with the patient's choice to receive those drugs from the 340B entity. The above provisions will not apply to TennCare, the CoverKids Act of 2006, or the present law Volunteer Rx prescription drug discount program. For purposes of the above provisions, a "340B entity" is a covered entity participating in the federal 340B drug discount program, under the federal Public Health Service Act, including the entity's pharmacy or pharmacies, or any pharmacy or pharmacies under contract with the 340B covered entity to dispense drugs on behalf of the 340B covered entity. This amendment requires a pharmacy benefits manager or a covered entity to base the calculation of any coinsurance or deductible (but not copayment) for a prescription drug or device on the allowed amount of the drug or device. For purposes of this amendment, "covered entity" has the same meaning as described in the Bill Summary, and "allowed amount" means the cost of a prescription drug or device after applying all pharmacy benefits manager or covered entity discounts. This amendment prohibits a pharmacy benefits manager or a covered entity from: (1) Requiring a person covered under a pharmacy benefit contract, that provides coverage for prescription drugs, including specialty drugs, to pay an additional fee, higher copay, higher coinsurance, second copay, second coinsurance, or other penalty when obtaining prescription drugs, including specialty drugs from a contracted pharmacy; and (2) Interfering with the patient's right to choose a contracted pharmacy or contracted provider of choice in a manner: (A) That violates the present law prohibitions against health insurance issuers and managed health insurance issuers denying licensed pharmacies or pharmacists to participate as a participating provider in a policy under the same conditions offered to other providers and preventing policy beneficiaries from selecting the participating pharmacy of their choice; or (B) By other means, including inducement, steering, or offering financial or other incentives. This amendment also prohibits a pharmacy benefits manager from: (1) Charging a covered entity an amount greater than the reimbursement paid by a pharmacy benefits manager to a contracted pharmacy for the prescription drug or device; and (2) Reimbursing a contracted pharmacy for a prescription drug or device an amount that is less than the actual cost to that pharmacy for the prescription drug or device. This provision will not apply to a pharmacy benefits manager when utilizing a reimbursement methodology that is identical to the methodology provided for in the state plan for medical assistance approved by the federal centers for medicare and medicaid services. If a pharmacy benefits manager utilizes a reimbursement methodology that is identical to the methodology provided for in the state plan for medical assistance approved by the federal centers for medicare and medicaid services, then the pharmacy benefits manager must establish a process for a pharmacy to appeal a reimbursement paid at average acquisition cost and receive an adjusted payment by providing valid and reliable evidence that the reimbursement does not reflect the actual cost to the pharmacy for the prescription drug or device. Also, the prohibition will not apply to a covered entity or pharmacy benefits manager that establishes a clearly defined process through which a pharmacy may contest the actual reimbursement received for a particular drug or medical product or device. If a pharmacy chooses to contest the actual reimbursement cost for a particular drug or medical product or device, then the pharmacy will have the right to designate a pharmacy services administrative organization or other agent to file and handle its appeal of the actual reimbursement. This amendment provides that a covered entity's or pharmacy benefits manager's appeals process must be approved by the commissioner of commerce and insurance and comply with the timing and notice requirements of the present law provision governing the procedure for appeals by pharmacies of costs of particular drugs or devices on maximum allowable cost list. This amendment also: (1) Specifies that a pharmacy benefits manager has a responsibility to report to the plan and the patient any benefit percentage that either is entitled to as a benefit as a covered person; (2) Requires a covered entity to, upon request of an enrollee, enrollee's healthcare provider, or authorized third party, furnish the cost, benefit, and coverage data (the coverage data under this amendment is the same as that described in the Bill Summary) to the enrollee, enrollee's healthcare provider, or authorized third party and to ensure that the data is accurate as of the most recent change to the data that was made prior to the date of request, provided in real time, and provided in the same format in which the request is made; (3) Requires that a request for coverage data be in a format that uses established industry content and transport standards as published by certain entities or organizations, as identified in this amendment; (4) Provides that the following will not be acceptable formats for requests for coverage data under this amendment: a facsimile or use of proprietary payor or patient portal or other electronic form; and (5) Prohibits a covered entity that furnishes data as provided in item (2) from acts described in (4)(A)-(C) of the Bill Summary, except that this amendment prohibits (unless required by other law) institution of any requirements, processes, policies, procedures, or renewals that are likely to substantially increase the complexity or burden of accessing, exchanging, or using the data, instead of instituting "enrollee consent" requirements, processes, policies, procedures, or renewals that are likely to have such effect.