SB 453 — Requiring pricing and payment transparency from pharmacy benefits managers contracting with PEIA

SB453WEST HFINVIRGINIA AMMcOTheLEGISLATURE CommitteeREGULAR onSESSION FinanceEnrolled movesCommittee toSubstitute amendfor theCommittee billSubstitute onfor pageSenate six,Bill section453 nine,BY beginningSENATORST onARR, lineOODRUM one, hundredGRADY, twenty-two,UCKER, bySTUART, strikingMARONEY, outROBERTS, theEEDS,AND sentencePHILLIPS “A[Passed WestMarch Virginia9, pharmacy2024; is a domestic business entity as registered with the West Virginia Secretary of State.”. ADOPTEDREJECTED

in effect 90 days from passage (June 7, 2024)] Enr CS for CS for SB 453 AN ACT to amend and reenact §5-16-9 of the Code of West Virginia, 1931, as amended, relating to the Public Employees Insurance Agency;

prohibiting a pharmacy benefit manager from reimbursing certain pharmacies or pharmacists in an amount less than the national average drug acquisition cost for a prescription drug or pharmacy service;

requiring the pharmacy benefit manager to pay a dispensing fee at least equal to the fee paid by West Virginia Medicaid;

providing for alternative payment calculation in the event that the national average drug acquisition cost is not available;

defining terms;

providing effective date;

requiring additional pharmacy data variables be reported to the Public Employees Insurance Agency;

removing language requiring data provided by the pharmacy benefit manager to be kept confidential;

requiring the director of the Public Employees Insurance Agency to report on an annual basis;

requiring the Public Employees Insurance Agency to require specific terms in its contract with a pharmacy benefit manager;

requiring a study;

providing for a due date for the findings in the study;

and making technical corrections.

Be it enacted by the Legislature of West Virginia:

ARTICLE 16.

WEST VIRGINIA PUBLIC EMPLOYEES INSURANCE ACT.

§5-16-9.

Authorization to execute contracts.

(a) The director is given exclusive authorization to execute such contract or contracts as are necessary to carry out the provisions of this article.

(b) The provisions of §5A-3-1 et seq.

of this code, relating to the Division of Purchasing of the Department of Finance and Administration, shall not apply to any contracts for any insurance coverage or professional services authorized to be executed under the provisions of this article.

Before entering into any contract for any insurance coverage, as authorized in this article, the director shall invite competent bids from all qualified and licensed insurance companies or carriers that may wish to offer plans for the insurance coverage desired.

The director shall negotiate and contract directly with health care providers and other entities, organizations, and vendors in order to secure competitive premiums, prices, and other financial advantages.

The director shall deal Enr CS for CS for SB 453 directly with insurers or health care providers and other entities, organizations, and vendors in presenting specifications and receiving quotations for bid purposes.

No commission or finder’s fee, or any combination thereof, shall be paid to any individual or agent:

Provided, That this shall not preclude an underwriting insurance company or companies, at their own expense, from appointing a licensed resident agent within this state to service the companies’ contracts awarded under the provisions of this article.

Commissions reasonably related to actual service rendered for the agent or agents may be paid by the underwriting company or companies.

In no event shall payment be made to any agent or agents when no actual services are rendered or performed.

The director shall award the contract or contracts on a competitive basis.

In awarding the contract or contracts, the director shall consider the experience of the offering agency, corporation, insurance company, or service organization in the group hospital and surgical insurance field, group major medical insurance field, group prescription drug field, and group life and accidental death insurance field, and its facilities for the handling of claims.

In evaluating these factors, the director may employ the services of impartial, professional insurance analysts or actuaries, or both.

Any contract executed by the director with a selected carrier shall be a contract to govern all eligible employees subject to the provisions of this article.

Nothing contained in this article shall prohibit any insurance carrier from soliciting employees covered hereunder to purchase additional hospital and surgical, major medical, or life and accidental death insurance coverage.

(c) The director may authorize the carrier with whom a primary contract is executed to reinsure portions of the contract with other carriers which elect to be a reinsurer and who are legally qualified to enter into a reinsurance agreement under the laws of this state.

(d) Each employee who is covered under any contract or contracts shall receive a statement of benefits to which the employee, his or her spouse, and his or her dependents are entitled under the contract, setting forth the information as to whom the benefits are payable, to whom claims shall be submitted, and a summary of the provisions of the contract or contracts as they affect the employee, his or her spouse, and his or her dependents.

Enr CS for CS for SB 453 (e) The director may at the end of any contract period discontinue any contract or contracts it has executed with any carrier and replace the same with a contract or contracts with any other carrier or carriers meeting the requirements of this article.

(f) The director shall include language in all contracts for pharmacy benefits management, as defined by §33-51-3 of this code, requiring the pharmacy benefit manager to report quarterly to the agency the following:

(1) The overall total amount charged to the agency for all claims processed by the pharmacy benefit manager during the quarter;

(2) The overall total amount of reimbursements paid to pharmacy providers during the quarter;