Amends TCA Title 4; Title 10, Chapter 7, Part 5; Title 38; Title 53; Title 56; Title 63 and Title 71.

ON APRIL 27, 2022, THE HOUSE ADOPTED AMENDMENT #2 AND PASSED HOUSE BILL 2661, AS AMENDED. AMENDMENT #2 rewrites this bill and revises various provisions governing pharmacy benefits and pharmacy benefits managers, as follows: (1) Generally under present law, a pharmacy benefits manager is prohibited from 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. Present law provides that: (A) The prohibition does 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; and (B) If a pharmacy chooses to contest the actual reimbursement cost for a particular drug or medical product or device, then the pharmacy has the right to designate a pharmacy services administrative organization or other agent to file and handle its appeal of the actual reimbursement. This amendment deletes (A) and (B) above and instead provides the following: (AA) A pharmacy benefits manager must establish a process for a pharmacy to appeal a reimbursement for failing to pay at least the actual cost to the pharmacy for the prescription drug or device. This amendment sets out in detail the requirements for the appeals process. If a pharmacy chooses to contest a reimbursement for failing to pay at least the actual cost the pharmacy incurred for a particular drug or medical product or device, then the pharmacy has the right to designate a pharmacy services administrative organization or other agent to file and handle its appeal; (BB) If a pharmacy or agent acting on behalf of a pharmacy prevails in an appeal, then within seven business days after notice of the appeal is received by the pharmacy benefits manager or covered entity, the pharmacy benefits manager or covered entity must: make the necessary change to the challenged rate of reimbursement or actual cost; if the product involved in the appeal is a drug, then provide to the pharmacy or agent the national drug code number for the drug on which the change is based; permit the challenging pharmacy to reverse and rebill the claim upon which the appeal is based; pay or waive the cost of any transaction fee required to reverse and rebill the claim; reimburse the pharmacy at least the pharmacy's actual cost for the prescription drug or device; and apply the findings from the appeal as to the rate of reimbursement and actual cost for the particular drug or medical product or device to other similarly situated pharmacies; (CC) It will be a violation if, after an appeal in which a pharmacy or agent acting on behalf of a pharmacy prevails, a pharmacy benefits manager or covered entity fails to reimburse the pharmacy at least actual cost; and (DD) If a pharmacy or agent acting on behalf of a pharmacy loses or is denied an appeal, then: (i) if the product associated with the national drug code number or unique device identifier is available at a cost that is less than the challenged rate of reimbursement from a pharmaceutical wholesaler in this state, then within seven business days after notice of the appeal is received by the pharmacy benefits manager or covered entity, the pharmacy benefits manager or covered entity shall provide the appealing pharmacy or agent with: the name of the national or regional pharmaceutical wholesalers operating in this state that have the particular drug or medical product or device currently in stock at a price that is less than the amount of the challenged rate of reimbursement; and if the product involved in the appeal is a drug, then the national drug code number for the drug; or if the product involved is a medical device, then the unique device identifier for the device; and (ii) If the product associated with the national drug code number or unique device identifier is not available at a cost that is less than the challenged rate of reimbursement from the pharmaceutical wholesaler from whom the pharmacy purchases the majority of prescription pharmaceutical products for resale, then the pharmacy benefits manager must adjust the challenged rate of reimbursement to an amount equal to or greater than the appealing pharmacy's actual cost and permit the pharmacy to reverse and rebill each claim affected by the inability to procure the pharmaceutical product at a cost that is equal to or less than the previously challenged rate of reimbursement. The pharmacy benefits manager must pay or waive the cost of any transaction fee required to reverse and rebill the claim. (2) This amendment specifies that the provisions described above do 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 pay at least the actual cost to the pharmacy for the prescription drug or device. (3) This amendment prohibits a pharmacy benefits manager from including within the amount calculated to reimburse a pharmacy for actual cost, pursuant to the provisions described above under item (1), the amount of any professional dispensing fee that is payable to the pharmacy. (4) This amendment requires a pharmacy benefits manager to pay a professional dispensing fee at a rate that is not less than the amount paid by the TennCare program to a pharmacy, if: the pharmacy dispenses a prescription drug or device pursuant to an agreement with the pharmacy benefits manager or a covered entity; and the pharmacy's annual prescription volume is at a level that, if the pharmacy were a TennCare-participating ambulatory pharmacy, would qualify the pharmacy for the enhanced amount of professional dispensing fee for a low-volume pharmacy under the operative version of the Division of TennCare Pharmacy Provider Manual, or a successor manual. (5) This amendment requires the commissioner of commerce and insurance to institute an external appeals process for any appeal denied by a pharmacy benefits manager. (6) This amendment clarifies that a "covered entity" means an individual or entity that provides health coverage to covered individuals who are employed or reside in this state and specifically includes plans governed by ERISA and specifically excludes plans subject to regulation under medicare part D. This amendment also specifies that "pharmacy benefits manager" include plans governed by ERISA. (7) Present law prohibits a pharmacy benefits manager or a covered entity from interfering with the patient's right to choose a contracted pharmacy or contracted provider of choice in a manner that violates the present governing pharmacy access or by means such as inducement, steering, or offering financial or other incentives. This amendment rewrites this provision to prohibit a pharmacy benefits manager or a covered entity from: (A) Interfering with the right of a patient, participant, or beneficiary to choose a contracted pharmacy or contracted provider of choice in a manner that violates present governing pharmacy access; or (B) Offering financial or other incentives to a patient, participant, or beneficiary to persuade the patient, participant, or beneficiary to utilize a pharmacy owned by or financially beneficial to the pharmacy benefits manager or covered entity.