SB 20 — Enacting the Kansas consumer prescription protection and accountability act and providing for regulation and registration of pharmacy benefits managers.

Amendments(2) during tothe suchfirst planfive ordays plansof shallany bemonth, prepared,initiate andor filedschedule anda reviewedpharmacy inaudit thefor sameany mannerpharmacy asaveraging hereinmore providedthan in600 thisprescriptions sectionfilled withper respectweek towithout the originalexpress planconsent orof plans.the pharmacy;

(2) If(3) use noextrapolation plan meeting the standards set forth in (a), (b), (c) and (d) subsections (a)(1) through (a)(4) is submitted to thecalculate commissionerpenalties withinor theamounts period stated in any order disapproving an existing plan, the commissioner shall, if necessary to carrybe outcharged theback purposeor ofrecouped thisunless sectionotherwise afterrequired hearing,by preparefederal andlaw; promulgate a plan meeting such requirements.

If,(4) include afterdispensing afees hearing conducted in accordance with the provisionscalculation of theoverpayments Kansasunless administrativea procedureprescription act, the commissioner finds that any activity or practice of any insurer or rating organization in connection with the operation of such plan or plans is unfairconsidered or unreasonable or otherwise inconsistent with the provisions of this subsection, the commissioner may issue a writtenmisfill; order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this subsection and requiring discontinuance of such activity or practice.

and (5) (A) seek any fine, charge back, recoupment or other adjustment for a dispensed product or any portion of a dispensed product unless one or more of the following has occurred:

(i) Fraud or other intentional and willful misrepresentation has been committed by the pharmacy, as evidenced by a review of the claims data, statements, physical review or other investigative method;

(ii) the pharmacy has dispensed a product in excess of the benefit design as established by the plan sponsor;

(iii) the pharmacy has not filled prescriptions in accordance with the prescriber's order;

or (iv) an actual underpayment or overpayment has been made to the pharmacy;

and (B) any fee, charge back, recoupment or other adjustment shall be limited to the actual financial harm associated with the dispensed product or portion of the dispensed product or the actual underpayment or overpayment, pursuant to subparagraph (A).

(d) A pharmacy audit that involves clinical judgment shall be conducted by or in consultation with a pharmacist.

Such pharmacy audit shall not cover:

(1) A period of more than 24 months after the date that a claim was submitted by the pharmacy to the pharmacy benefits manager or covered entity unless a longer period is required by law;

or (2) more than 250 prescriptions.

A refill does not constitute a separate prescription for the purposes of this paragraph.

(e) When a pharmacy audit is performed, a pharmacy may use:

(1) Authentic and verifiable statements or records, including, but not limited to, medication administration records of a nursing home, assisted living facility, hospital or healthcare provider with prescriptive authority to validate the pharmacy record and delivery;

or (2) any valid prescription, including, but not limited to, medication administration records, facsimiles, electronic prescriptions, electronically stored images of prescriptions, electronically created annotations or documentation of telephone calls from the prescribing healthcare provider or practitioner's agent to validate claims in connection with prescriptions or changes in prescriptions or refills of prescription or nonproprietary drugs.

Documentation of an oral prescription order that has been verified by the prescribing healthcare SENATE BILL No.

20—page 3 provider shall be deemed to meet the provisions of this subsection for the initial audit review.

(f) A pharmacy that is the subject of a pharmacy audit may not be subject to a charge back or recoupment for a clerical or recordkeeping error in a required document or record, including a typographical or computer error, unless the error resulted in overpayment to the pharmacy.

Such pharmacy may appeal a final audit report in accordance with procedures established by the entity conducting the pharmacy audit.

(g) If an identified discrepancy in a pharmacy audit exceeds $25,000, future payments made by the pharmacy benefits manager to the pharmacy in excess of such amount may be withheld pending adjudication of an appeal.

(h) No interest may accrue for any party during an audit period, beginning with the notice of the pharmacy audit and ending with the conclusion of the appeals process.

(i) Except for medicare claims, approval of drug, prescriber or patient eligibility upon adjudication of a claim may not be reversed unless the pharmacy or pharmacist obtained adjudication by fraud or misrepresentation of claims elements.

(j) The provisions of this section shall not apply to a pharmacy audit if:

(1) Fraud, waste, abuse or other intentional misconduct is indicated by physical review or review of claims data or statements;

or (2) other investigative methods indicate that the pharmacy is or has been engaged in criminal wrongdoing, fraud or other intentional or willful misrepresentation.

(k) This section shall be a part of and supplemental to the Kansas consumer prescription protection and accountability act.

New Sec.

2. (a) No person shall act or operate as an auditing entity without first registering with the commissioner.

(b) Each person seeking to register as an auditing entity shall file with the commissioner an application upon a form prescribed by the commissioner accompanied by a nonrefundable registration fee in an amount of not to exceed $500.

At a minimum, the application form shall include the following:

(1) Identity, address and telephone number of the applicant;

(2) name, business address and telephone number of the contact person for the applicant;

and (3) federal employer identification number for the applicant, if applicable.

(c) The commissioner shall issue a certificate of registration to an applicant if the commissioner determines that the applicant has submitted a completed application and paid the required registration fee.

(d) The certificate of registration is nontransferable and shall prominently list the expiration date of the registration.

(e) Each auditing entity registration shall expire on March 31 of each year and may be renewed annually at the request of the pharmacy auditing entity on or before March 31 of each year.

The application for renewal shall be submitted by the auditing entity on a form prescribed by the commissioner and accompanied by a renewal fee in an amount of not to exceed $250.

(f) If a registered auditing entity fails to provide a completed application for renewal by March 31 or if the renewal fee is not paid by March 31, then a penalty fee shall be assessed in an amount of not to exceed $250.

The auditing entity shall remit the renewal fee plus penalty fee before the commissioner shall issue such auditing entity's registration renewal.

SENATE BILL No.

20—page 4 (g) An auditing entity's registration may be suspended by the commissioner until the renewal application has been received and the renewal fee and any penalty assessed has been paid.

(h) Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register the fees required pursuant to this section for the next calendar year.

(i) This section shall be a part of and supplemental to the Kansas consumer prescription protection and accountability act.

New Sec.

3. (a) Each pharmacy benefits manager shall:

(1) For each health plan or covered entity for which such pharmacy benefits manager provides pharmacy benefits management services, annually or more frequently upon the commissioner's request, report to the commissioner the aggregate:

(A) Amount of rebates received by the pharmacy benefits manager;

(B) amount of rebates distributed to each health plan or covered entity contracted with the pharmacy benefits manager;

(C) and individual amount paid by the health plan or covered entity to the pharmacy benefits manager for pharmacist services itemized by pharmacy, product and goods and services;

and (D) and individual amount that a pharmacy benefits manager paid for pharmacist services itemized by pharmacy, product and goods and services;

(2) annually, report to the commissioner and each contracted health plan or covered entity the aggregate difference between the amount that the pharmacy benefits manager reimbursed pharmacies and the amount that the pharmacy benefits manager charged such health plan;

and (3) (A) quarterly, report to the commissioner on all drugs appearing on the national average drug acquisition cost list that are reimbursed at 10% and below the national average drug acquisition cost and all drugs that are reimbursed at 10% and above the national average drug acquisition cost and the net acquisition cost for each class of drug appearing on the national average acquisition cost list that the pharmacy benefits manager charged each health benefit plan.

(B) For each drug in the report, the pharmacy benefits manager shall include:

(i) The month that the drug was dispensed;

(ii) the quantity of the drug dispensed;

(iii) the amount that the pharmacy was reimbursed;

(iv) whether the dispensing pharmacy was an affiliate of the pharmacy benefits manager;

(v) whether the drug was dispensed pursuant to a government health plan;

and (vi) the average national drug acquisition cost for the month that the drug was dispensed.

(C)  The pharmacy benefits manager shall publish a copy of this report on the pharmacy benefits manager's publicly available website for at least 24 months.

(D) This report shall be exempt from the confidentiality provisions of subsection (d).

(b) (1) Annually, each health benefit plan or covered entity shall report to the commissioner the aggregate amount of credits, rebates, discounts or other such payments received by the health benefit plan or covered entity from a pharmacy benefits manager or drug manufacturer.

(2) Use of annual reporting provided pursuant to this subsection by health benefit plans and covered entities shall be limited to verification of data pursuant to this subsection for compliance SENATE BILL No.

20—page 5 purposes.

(c) No report provided to the commissioner shall include the protected health information of any individual.

(d) The reports required by this section shall be filed electronically on a form and in a manner prescribed by the commissioner.

(e) With the exception of the report described in subsection (a)(3), all data and information provided by the pharmacy benefits manager, health plan or covered entity, pursuant to the reporting requirements established by this section, shall:

(1) Be considered proprietary and confidential;

and (2) not be subject to disclosure under the Kansas open records act, K.S.A.

45-215 et seq., and amendments thereto.

(f) This section shall be a part of and supplemental to the Kansas consumer prescription protection and accountability act.

New Sec.

4. (a) The commissioner may examine the affairs of a pharmacy benefits manager for compliance with the requirements of this act.

(b) Every examination conducted under this section shall follow the examination procedures and requirements provided in K.S.A.

40- 222, and amendments thereto.

The commissioner may assess the costs of the examination to the pharmacy benefits manager.

(c) (1) A pharmacy benefits manager shall not be subject to the provisions of K.S.A.

40-222(a), and amendments thereto, pertaining to the frequency of financial examinations of insurers.

(2) The commissioner may examine a pharmacy benefits manager, pursuant to this section, whenever the commissioner believes it is reasonably necessary to ensure compliance with this act.

(d) (1) No protected health information shall be provided to the commissioner pursuant to this section.

(2) The information and data obtained by the commissioner from a pharmacy benefits manager under this section shall be considered confidential by law and exempt from disclosure in accordance with K.S.A.

40-222, and amendments thereto, and shall not be subject to disclosure under the Kansas open records act, K.S.A.

45-215 et seq., and amendments thereto.

(e) This section shall be a part of and supplemental to the Kansas consumer prescription protection and accountability act.  New Sec.

5. (a)Apharmacy benefits manager shall not:

(1) Collect from a pharmacy, pharmacist or pharmacy technician any cost share charged to a covered person that exceeds the total submitted charges by the pharmacy or pharmacist to the pharmacy benefits manager;

(2) (A) reimburse a pharmacy, pharmacist or pharmacy technician for a prescription drug or pharmacy service any amount that is less than the national average drug acquisition cost for the prescription drug or pharmacy service at the time that the drug is administered or dispensed, plus a professional dispensing fee that is the greater of $10.50 or the dispensing fee calculated pursuant to K.A.R.

30-5-94;

or (B) if the national average drug acquisition cost is not available at the time that a drug is administered or dispensed, a pharmacy benefits manager shall not reimburse a pharmacy, pharmacist or pharmacy technician an amount that is less than the wholesale acquisition cost of the drug as defined in 42 U.S.C.

§ 1395w-3a(c)(6)(B) plus a professional dispensing that is the greater of $10.50 or the dispensing fee calculated pursuant to K.A.R.

30-5-94;

(3) reimburse a pharmacy or pharmacist for a prescription drug or pharmacy service any amount less than the amount that the pharmacy benefits manager would reimburse itself or an affiliate for the same prescription drug or pharmacy service;

and SENATE BILL No.

20—page 6 (4) engage in any practice that:

(A) Includes imposing a point-of-sale fee or retroactive fee;

or (B) derives any revenue from a pharmacy or covered person in connection with performing pharmacy benefits management services.

The provisions of this section shall not be construed to prohibit pharmacy benefits managers from processing deductibles or copayments approved by a covered person's health benefit plan.

(b) Apharmacy benefits manager shall:

(1) Charge a health benefit plan the same price for a prescription drug as such pharmacy benefits manager pays a pharmacy for the prescription drug;

and (2) for purposes of complying with the provisions of subsection (a)(2), utilize the most recently published monthly national average drug acquisition cost as a point of reference for the ingredient drug product component of a pharmacy's reimbursement for drugs appearing on the national average drug acquisition cost list.

(c) (1) Any methodology utilized by a pharmacy benefits manager in connection with reimbursement shall be filed with the commissioner at the time of initial licensure and at any time thereafter that any methodology is changed by the pharmacy benefits manager.

(2) A methodology shall not be subject to disclosure and shall be treated as confidential and exempt from disclosure under the Kansas open records act, K.S.A.

45-215 et seq., and amendments thereto.

(3) Every filed methodology shall comply with the provisions of subsection (a)(2), and no pharmacy benefits manager shall enter into a contract with a pharmacy that provides for reimbursement methodology that is impermissible under the provisions of subsection (a)(2).

(d) Any rebate not applied to reduce a covered individual's defined cost sharing by the insurer shall be passed on to the health plan.

Nothing in this act shall be deemed to require or preclude an insurer from decreasing a covered individual's defined cost sharing by the application of rebates.

(e) The provisions of this section shall not apply to self-funded health plans subject to the provisions of ERISA, the federal employee retirement income security act of 1974.

(f) The commissioner may order reimbursement to a covered person, pharmacy or dispenser who has incurred a monetary loss as a result of a violation of this act.

(g) This section shall be a part of and supplemental to the Kansas consumer prescription protection and accountability act.

New Sec.

6. (a) Every pharmacy benefits manager contract between a pharmacy benefits manager and a pharmacy shall include a requirement that the pharmacy benefits manager provide to the pharmacy a copy of any contract, amendment, payment schedule or reimbursement rate within 10 calendar days after the execution or amendment to such contract.

(b) This section shall be a part of and supplemental to the Kansas consumer prescription protection and accountability act.

New Sec.

7. (a) If any provision of this act or application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this act that can be given effect without the invalid provision or application, and to this end the provisions of this act are declared to be severable.

(b) This section shall be a part of and supplemental to the Kansas consumer prescription protection and accountability act.

2. K.S.A.8. K.S.A.

40-21092025 isSupp. hereby amended to read as follows:

40-40-202 2109.is hereby amended to read as follows:

(a)40-202. Every insurer undertaking to transact in this state the business of either workers compensation or employer's liability insurance or both, and every rating organization which that files rates for such insurance shall cooperate in the preparation and submission preparing and submitting a plan to the commissioner of insurance of a plan or plans, for the equitable apportionment among insurers of applicants for insurance who are, in good faith, are entitled to but who are unable to procure such insurance through ordinary methods, such insurance.

SuchExcept planas orprovided plansin the Kansas consumer prescription protection and accountability act, nothing contained in this code shall provide:apply to:

(a)(1) ReasonableSENATE rulesBILL governingNo. the equitable distribution of risks by direct insurance, reinsurance or otherwise and their assignment to insurers;

(b)(2) rates20—page and7 rate(a) Grand modificationsor applicablesubordinate tolodges suchof risksany whichfraternal benefit society that shalladmits beto reasonable,membership adequateonly persons engaged in one or more hazardous occupations in the same or similar line of business or to fraternal benefit societies as defined in and notorganized unfairlyunder discriminatory;article 7 of chapter 40 of the Kansas Statutes Annotated, and amendments thereto, unless they be expressly designated;

(c)(3) a(b) the methodemployees wherebyof by which applicants for insurance, insured and insurers may have a hearingparticular onperson, grievancesfirm, andor thecorporation; right of appeal to the commissioner;

and(c) mercantile (d) forassociations everythat suchsimply planguarantee orinsurance plans, there shall be (4) a governing board to beeach appointedother byin the commissionersame lines of insurancetrade which that shall meet at least annually to review and prescribedo operatingnot rules,solicit andinsurance whichfrom shall consist of the followinggeneral members:.public;

(b)(d) the (1) PriorSwedish tomutual Januaryaid 1,association 2026, such board shall consist of theRapp, followingOsage ninecounty, members:Kansas;

SB(e) the 20—Am.Scandia mutual protective insurance company of Chanute, Kansas;

by(f) the HCSeneca 4and (1)(A)St. (i) Seven members who shall be appointed prior to December 31, 2025, as follows:

(a) ThreeBenedict ofmutual suchfire membersinsurance shallcompany be representatives of foreignNemaha insurancecounty, companies,;Kansas;

(b) two(g) the membersmutual shallinsurance besystem representativespracticed in the Mennonite church, in accordance with an old custom, either by the congregation themselves or by special associations, of domesticits insurancemembers companies;in Kansas;

and(h) the (c) twoKansas membersstate shallhigh-school beactivities licensedassociation; independent insurance agents.

(ii) Such(i) the sevenmutual membersaid shallassociation be appointed for a term of three years, except that the initialchurch appointmentof shall include two members appointed for a two-year term and two members appointed for a one-year term, as designated by the commissioner;brethren;

and(j) a (2)(B) twovoluntary membersnoncontractual representativemutual ofaid arrangement whereby the generalneeds publicof interestparticipants withare suchannounced membersand toaccommodated bethrough appointedsubscriptions forto a termmonthly ofpublication; two years.

(2) The(k) a termsself-funded ofhealth theplan membersestablished appointedor andmaintained servingfor onits employees by the governingstate boardor asa subdivision of Julythe 1,state, 2025,a shallschool expiredistrict, onany Decemberpublic 31,authority 2025.or by a county or city government or any political subdivision, agency or instrumentality thereof;

(c)or (1) The(l) a commissionerself-funded shallhealth appointplan aestablished governingor boardmaintained for theits planemployees thatby shalla servechurch onor andby aftera Januaryconvention 1,or 2026,association andof churches that shallis haveexempt thefrom sametax powers,under dutiessection and501 functionsof asthe itsinternal predecessor.revenue code.

On and after January 1, 2026, all members of such governing board shall serve three- year terms, except that such members shall be removable by the commissioner for inefficiency, neglect of duty or malfeasance.

Such governing board shall consist of seven members to be appointed as follows:

(A) Four members shall be representatives of insurance companies;

(B) two members shall be licensed insurance agents;

and (C) one member shall be a representative of the general public interest.

(2) In selecting the members who shall be representatives of insurers, the commissioner shall consider if foreign and domestic insurers are fairly represented.

(d) (1) The commissioner shall review the plan as soon as reasonably possible after filing in order to determine whether it meets the requirements set forth in subsections (a) and (c) above(1) through (a)(3).

As soon as reasonably possible after the plan has been filed the commissioner shall in writing approve or disapprove the same such plan, except that any plan shall be deemed approved unless disapproved within 45 days.

Subsequent to the waiting period the commissioner may disapprove any plan on the ground that it does not meet the requirements set forth in subsections (a), (b) and (c) above(1) through (a)(3), but only after a hearing held upon not less than 10 days' written notice to every insurer and rating organization affected specifying the matter to be considered at such hearing, and only by an order specifying in what respect the commissioner finds that such plan fails to meet such SB 20—Am.

by HC 5 requirements and stating when within a reasonable period thereafter such plan shall be deemed no longer effective.

Such order shall not affect any assignment made or policy issued or made prior to the expiration of the period set forth in such order.

Amendments to such plan or plans shall be prepared, and filed and reviewed in the same manner as herein provided in this section with respect to the original plan or plans.

(2) If no plan meeting the standards set forth in subsections (a), (b) and (c)(1) through (a)(3) is submitted to the commissioner within the period stated in any order, disapproving an existing plan the commissioner shall, if necessary to carry out the purpose of this section after hearing, prepare and promulgate a plan meeting such requirements.

When such plan or plans or amendments thereto have been approved or promulgated, no insurer shall thereafter issue a policy of workers compensation or employer's liability insurance or undertake to transact such business in this state unless such insurer shall participate in such an approved or promulgated plan.

If, after a hearing conducted in accordance with the provisions of the Kansas administrative procedure act, the commissioner finds that any activity or practice of any insurer or rating organization in connection with the operation of such plan or plans is unfair or unreasonable or otherwise inconsistent with the provisions of this section, the commissioner may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this section and requiring discontinuance of such activity or practice.

(e) The commissioner shall approve rates and rate modifications for each plan that provides workers compensation insurance.

This provision shall not prohibit the application of surcharges, experience modifications or other rating variables.

3. K.S.A.9. K.S.A.

40-311640-222 is hereby amended to read as follows:

40- 3116.222.

(a) InsurersWhenever andthe self-insurerscommissioner areof herebyinsurance directeddeems toit organizenecessary andbut maintainat anleast assignedonce claimsevery planfive years, the commissioner may make, or direct to providebe thatmade, anya person,financial whoexamination suffersof injuryany insurance company in thisthe stateprocess mayof obtainorganization, personalor injuryapplying protectionfor benefitsadmission throughor suchdoing planbusiness if:in this state.

(1) PersonalIn injuryaddition, protectionat benefitsthe arecommissioner's notdiscretion available to the injuredcommissioner person,may exceptmake, thator personaldirect injuryto protection benefits shall not be deemedmade, unavailablea tomarket anyregulation personexamination suffering injury while such person was the operator of aany motorcycleinsurance orcompany motor-drivendoing cycle,business forin whichthis thestate. owner thereof has rejected personal injury protection benefits pursuant to subsection (f) of K.S.A.

40-3107,(b) Whenever andthe amendmentscommissioner thereto;deems it necessary, the commissioner may make or direct to be made a financial examination or market regulation examination of any pharmacy benefits manager that conducts business in Kansas.

(2) Motor(c) In vehiclescheduling liabilityand insurancedetermining the nature, scope and frequency of examinations of financial condition, the commissioner shall consider such matters as the results of financial statement analyses and ratios, changes in management or self-insuranceownership, applicableactuarial toopinions, reports of independent certified public accountants and other criteria as set forth in the injuryexaminer's cannothandbook beadopted identified;by the national association of insurance commissioners and in effect at the time of such examination as announced by the commissioner pursuant to K.S.A.

(3) Personal40-2,256, injuryand protectionamendments benefitsthereto, applicablewhen to the injurycommissioner areexercises inadequatediscretion tounder providethis thesubsection. contracted-for benefits because of financial SB 20—Am.

(c)(d) For the purpose of such examination examinations, the commissioner of insurance or the persons appointed by HCthe 6commissioner, inabilityfor the purpose of anmaking insurersuch orexamination self-insurershall have free access at no cost to fulfillthe books and papers of any such insurance company or pharmacy benefits manager that relate relates to its obligation;such insurance company's or pharmacy benefits manager's business and to SENATE BILL No.

however,20—page except8 thatthe benefitsbooks availableand throughpapers kept by any of its agents and may examine under oath, which the assignedcommissioner claimsor planthe shallpersons beappointed excessby overthe commissioner are empowered to administer, the directors, officers, agents or employees of any benefitssuch paidinsurance company or payablepharmacy throughbenefits themanager Kansasin relation to its such insurance guarantycompany's association.or pharmacy benefits manager's affairs, transactions and condition.

If(d)(e) The commissioner may also examine or investigate any person, or the personalbusiness injuryof protectionany benefitsperson, arein notso paidfar byas such examination or investigation is, in the Kansassole insurancediscretion guarantyof associationthe withincommissioner, necessary or material to the limitationexamination of timethe specifiedinsurance incompany thisor act,pharmacy benefits manager, but such benefitsexamination or investigation shall benot paidinfringe byupon theor assignedextend claimsto plan.any communications or information accorded privileged or confidential status under any other laws of this state.

Payments(e)(f) In lieu of examining the financial condition of a foreign or alien insurance company or pharmacy benefits manager, the commissioner of insurance may accept the report of the an examination made by or upon the assignedauthority claimsof planthe pursuantcompany's tostate thisof sectiondomicile shallor constituteport-of-entry coveredstate claimsuntil underJanuary K.S.A.1, 1994.

40-2901etThereafter, seq.,such andreports amendmentsas thereto.they relate to financial condition may only be accepted if:

(b) If(1) At athe claimtime qualifiesof forthe assignmentexamination, under this section, the assignedinsurance claimsdepartment planconducting or any insurer or self-insurer to whom the claimexamination iswas assignedat shall be subrogated to all of the rightstime of the claimantexamination againstaccredited anyunder insurer or self-insurer, its successor in interest or substitute, legally obligated to provide personal injury protection benefits to the claimant,national forassociation any of suchinsurance benefitscommissioners' providedfinancial byregulation thestandards assignment.and accreditation program;

(c) Aor person(2) the shallexamination notis bewas entitledperformed tounder personalthe injurysupervision protectionof benefitsan throughaccredited theinsurance assigneddepartment, claimsor plan with respectthe toparticipation injuryof whichone thator suchmore personexaminers haswho sustainedare if,employed atby thesuch timean ofaccredited suchinsurance injury,department suchand personwho, wasafter thea ownerreview of athe motorexamination vehiclework forpapers whichand areport, policystate ofunder motoroath vehiclethat liabilitythe insuranceexamination iswas requiredperformed underin thisa actmanner andconsistent suchwith personthe failedstandards toand haveprocedures required by their such policyinsurance incompany's effect.insurance department.

(d) The(f)(g) Upon assigneddetermining claimsthat planan shallexamination should be governedconducted, bythe suchcommissioner rulesor andthe regulationscommissioner's asdesignee areshall necessaryappoint forone itsor operationmore andexaminers forto perform the assessmentexamination ofand costs,instruct whichthem shallsuch beexaminer approvedas byto the commissioner.scope of the examination.

AnyIn claimconducting brought through said plan shall be assigned to an insurerexamination or self-insurer, in accordance with the approved regulations of operation,financial andcondition, such insurer or self-insurer, after the assignment,examiner shall haveobserve thethose sameguidelines rights and obligationsprocedures asset itforth wouldin havethe if,version priorof tothe suchexaminers' assignment,handbook itadopted hadpromulgated issuedby athe motornational vehicleassociation liabilityof insurance policycommissioners providingin personaleffect injuryat protection benefits applicable to the losstime orof expensessuch incurredexamination oras wasannounced aby self-insurerthe providingcommissioner suchpursuant benefits.to K.S.A.

Any40-2,256, party accepting benefits hereunder under this section shall have such rights and obligationsamendments asthereto. such person would have if a motor vehicle liability insurance policy providing personal injury protection benefits were issued to such person.

(e) NoThe insurercommissioner shallmay writealso anyemploy motorsuch vehicleother liabilityguidelines insuranceor policyprocedures inas this state unless the insurercommissioner participatesmay indeem theappropriate. assigned claims plan organized pursuant to this section, nor shall any person qualify as a self- insurer pursuant to subsection (f) of K.S.A.

40-3104,(g)(h) The andrefusal amendmentsof thereto,any unlessinsurance suchcompany personor agreespharmacy benefits manager, by its officers, directors, employees or agents, to participatesubmit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension or refusal of, or nonrenewal of any license or authority held by the company to engage in suchan assignedinsurance claimsor plan.other business subject to the commissioner's jurisdiction.

Any insurersuch orproceedings self-insurerfor requiredsuspension, torevocation participateor inrefusal theof assignedany claimslicense planor whoauthority violates this subsection shall be assessedconducted ain civilaccordance penaltywith ofthe notprovisions moreof thanthe $5,000Kansas foradministrative eachprocedure policyact. issued or self-insurance certificate obtained in violation thereof.

SB(h)(i) When 20—Am.making an examination under this act, the commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as examiners, the reasonable cost of which shall be borne by the insurance company which or pharmacy benefits manager that is the subject of the examination.

by(i)(j) Nothing HCcontained 7in (f)this (1) Onact and after January 1, 2026, the governing committee of the assigned claims plan shall consist of five members, who shall be removableconstrued byto limit the commissionercommissioner's forauthority inefficiency,to: neglect of duty or malfeasance.

MembersSENATE shallBILL beNo. appointed as follows:

(A) Three20—page members9 shall(1) Terminate beor representativessuspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of insurers;this state.

(B) one(j) Nothing membercontained in this act shall be aconstrued representativeto oflimit independentthe insurancecommissioner's agents;authority to;

andor (C) one(2) use memberand, shallif beappropriate, ato representativemake public any final or preliminary examination report in the furtherance of any legal or regulatory action which the generalcommissioner public.may, in the commissioner's sole discretion, deem appropriate.

(2) In(k) selecting(1) No thelater membersthan who30 shalldays befollowing representativescompletion of insurers,the examination or at such earlier time as the commissioner shall considerprescribe, whetherthe foreignexaminer andin domesticcharge insurersshall arefile fairlywith represented.the department a verified written report of examination under oath.

No later than 30 days following receipt of the verified report, the department shall transmit the report to the insurance company or pharmacy benefits manager examined, together with a notice which shall afford such insurance company or pharmacy benefits manager examined a reasonable opportunity of not more than 30 days to make a written submission or rebuttal with respect to any matters contained in the examination report.

(2) Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiners workpapers and enter an order:

(A) Adopting the examination report as filed or with modification or corrections.

If the examination report reveals that the insurance company or pharmacy benefits manager is operating in violation of any law, regulation or prior order of the commissioner, the commissioner may order the insurance company or pharmacy benefits manager to take any action the commissioner considers necessary and appropriate to cure such violations;

or (B) rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation or information, and refiling pursuant to subsection (k);

or (C) call and conduct a fact-finding hearing in accordance with K.S.A.

40-281, and amendments thereto, for purposes of obtaining additional documentation, data, information and testimony.

(3) All orders entered as a result of revelations contained in the examination report shall be accompanied by findings and conclusions resulting from the commissioner's consideration and review of the examination report, relevant examiner workpapers and any written submissions or rebuttals.

Within 30 days of the issuance of the adopted report, the insurance company or pharmacy benefits manager shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders.

(4) Upon the adoption of the examination report, the commissioner shall hold the content of the examination report as private and confidential information for a period of 30 days except to the extent provided in paragraph (5).

Thereafter, the commissioner may open the report for public inspection so long as no court of competent jurisdiction has stayed its publication.

(5) (A) Except as provided in paragraph (B), nothing contained in this act shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, at any time to:

(i) The insurance department of this or any other state or country;

(ii) law enforcement officials of this or any other state or agency of the federal government or any other country;

or SENATE BILL No.

20—page 10 (iii) officials of any agency of another country.

(B) The commissioner shall not share any information listed in paragraph (A) unless the agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this act.

(6) In the event the commissioner determines that regulatory action is appropriate as a result of any examination, the commissioner may initiate any proceedings or actions as provided by law.

(7) All working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this act including analysis by the commissioner pertaining to either the financial condition or the market regulation of a an insurance company or pharmacy benefits manager must be given confidential treatment and are not subject to subpoena and may not be made public by the commissioner or any other person, except to the extent otherwise specifically provided in K.S.A.

45-215 et seq., and amendments thereto.

Access may also be granted to the national association of insurance commissioners and its affiliates.

Such parties must agree in writing prior to receiving the information to provide to it the same confidential treatment as required by this section, unless the prior written consent of the insurance company or pharmacy benefits manager to which it pertains has been obtained.

(8) Whenever it appears to the commissioner of insurance from such examination or other satisfactory evidence that the solvency of any such insurance company is impaired, or that it is doing business in violation of any of the laws of this state, or that its affairs are in an unsound condition so as to endanger its policyholders, the commissioner of insurance shall give the company a notice and an opportunity for a hearing in accordance with the provisions of the Kansas administrative procedure act.

If the hearing confirms the report of the examination, the commissioner shall suspend the certificate of authority of such company until its solvency shall have been fully restored and the laws of the state fully complied with.

The commissioner may, if there is an unreasonable delay in restoring the solvency of such company and in complying with the law, revoke the certificate of authority of such company to do business in this state.

Upon revoking any such certificate the commissioner shall commence an action to dissolve such company or to enjoin the same from doing or transacting business in this state.

4. K.S.A.10. K.S.A.

40-34132025 isSupp. hereby amended to read as follows:

40-40-3821 3413.is hereby amended to read as follows:

(a)40-3821. Every insurer and every rating organization shall cooperate in the preparation of preparing a plan or plans for the equitable apportionment among such insurers of applicants for professional liability insurance and such other liability insurance as may be included in or added to the plan, who are, in good faith, are entitled to such insurance but are unable to procure the same through ordinary methods.

Such(a) planK.S.A. or plans shall be prepared and filed with the commissioner and the board of governors within a reasonable time but not exceeding 60 calendar days from the effective date of this act.

Such40-3821 planthrough or40-3828, plansand shallamendments provide:thereto, and K.S.A.

(1) Reasonable2025 rulesSupp. governing the equitable distribution of risks by direct insurance, reinsurance or otherwise including the authority to make assessments against the insurers participating in the plan or plans;

(2) rates40-3828a andet rateseq., modificationsand applicableamendments tothereto, suchshall risksbe whichknown thatand shallmay be reasonable,cited adequateas andthe notpharmacy unfairlybenefits discriminatory;manager licensure Kansas consumer prescription protection and accountability act.

(3) a(b) On methodand wherebyafter periodicallyJanuary the1, plan2023, aNo person shall comparenot theperform, premiumsact earnedor todo thebusiness lossesin andthis expensesstate sustainedas a pharmacy benefits manager unless such person has a valid license issued by the plan.commissioner pursuant to this act.

If(c) This thereact isshall apply to any surpluspharmacy ofbenefits premiumsmanager overthat lossesprovides andclaims expensesprocessing receivedservices, forother thatprescription yeardrug suchor surplusdevice shallservices, beor transferredboth, to thecovered fund.persons who are residents of this state.

If(d) This thereact is any excess of losses and expenses over premiums earned such losses shall benot transferredapply fromto theany fund,pharmacy howeverbenefits exceptmanager that suchholds transfersa shallcertificate notof occurregistration moreas oftenan thanadministrator oncepursuant eachto threeK.S.A. months;

(4) the40-3810, limitsand ofamendments liabilitytheretoThis whichact thatshall also apply to any audit of the planrecords shallof bea requiredpharmacy toconducted provide,by buta inmanaged nocare eventcompany, shallthird-party exceptpayer, thatpharmacy suchbenefits limitsmanager shallor notany beentity lessthat thanrepresents thosea limitscovered providedentity foror inhealth subsectionbenefit (a)plan ofand K.S.A.the registration SENATE BILL No.

40-3402,20—page and11 amendmentsof thereto;auditing entities.

and(e) A (5) alicense methodissued wherebyin byaccordance whichwith applicantsthe forpharmacy insurance,benefits insuredsmanager andlicensure insurersKansas mayconsumer haveprescription aprotection hearing on grievances and theaccountability rightact ofshall appealbe tonontransferrable. the commissioner.

(b) (1) For every such plan or plans, there shall be a governing board which that shall meet at least annually to review and prescribe operating rules.

Prior to December 31, 2025, such board of directors shall consist of SB 20—Am.

by HC 8 nine members to be appointed, for terms of four years, by the commissioner as follows:

(1)(A) Two members who shall be representatives of foreign insurers;

(2)(B) two members who shall be representatives of domestic insurers;

(3)(C) two members who shall be health care healthcare providers;

(4)(D) one member who shall be a licensed insurance agent actively engaged in the solicitation of casualty insurance;

(5)(E) one member who shall be the chairperson of the board of governors or the chairperson's designee;

and (6)(F) one member who shall be a representative of the general public.

(2) The members of the governing board appointed on or before July 1, 2025, shall serve their current terms that shall expire on December 31, 2025.

On and after January 1, 2026, the governing board shall consist of five members who shall be appointed for a term of four years except that such members shall be removable by the commissioner for inefficiency, neglect of duty or malfeasance as follows:

(i) One member who shall be a representative of foreign insurers;

(ii) one member who shall be a representative of domestic insurers;

(iii) one member shall be a healthcare provider;

(iv) one member who shall be a licensed insurance agent engaged in the solicitation of casualty insurance;

and (v) one member who shall be chairperson of the board or the chairperson's designee.

(c) The commissioner and board of directors governing board shall review the plan as soon as reasonably possible after filing in order to determine whether it if such plan meets the requirements set forth in subsection (a).

As soon as reasonably possible after the plan has been filed, the commissioner, consistent with the recommendations of the board of directors governing board, shall in writing approve or disapprove the plan in writing.

Any plan shall be deemed approved unless disapproved within 30 days.

Subsequent to the waiting period the commissioner may disapprove any plan on the ground grounds that it such plan does not meet the requirements set forth in subsection (a), but only after a hearing held upon not less than 10 days' written notice to every insurer and rating organization affected specifying in what respect the commissioner finds that such plan fails to meet such requirements, and stating when, within a reasonable period thereafter, such plan shall be deemed no longer effective.

Such order shall not affect any assignment made or policy issued or made prior to the expiration of the period set forth in the order.

Amendments to such plan or plans shall be prepared, and filed and reviewed in the same manner as herein provided in this section with SB 20—Am.

by HC 9 respect to the original plan or plans.

(d) If no plan meeting the standards set forth in subsection (a) is submitted to the commissioner and board of directors within 60 calendar days from the effective date of this act July 1, 1982, or within the period stated in any order disapproving an existing plan, the commissioner with the assistance of the board of directors shall after a hearing, if necessary to carry out the purpose of this act, prepare and promulgate a plan meeting such requirements.

(e) If, after a hearing conducted in accordance with the provisions of the Kansas administrative procedure act, the commissioner and board of directors find that any activity or practice of any insurer or rating organization in connection with the operation of such plan or plans is unfair or unreasonable or otherwise inconsistent with the provisions of this act, the commissioner and board of directors may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this act and requiring discontinuance of such activity or practice.

(f) An insurer participating in the plan approved by the commissioner may pay a commission with respect to insurance written under the plan to an insurance agent licensed for any other insurer participating in the plan or to any insurer participating in the plan.

Such commission shall be reasonably equivalent to the usual customary commission paid on similar types of policies issued in the voluntary market.

(g) Notwithstanding the provisions of K.S.A.

40-3402, and amendments thereto, the plan shall make available policies of professional liability insurance covering prior acts.

Such professional liability insurance policies shall have limits of coverage not exceeding $1,000,000 per claim, subject to not more than $3,000,000 annual aggregate liability for all claims made as a result of personal injury or death arising out of the rendering of or the failure to render professional services within this state on or before December 31, 2014.

Such professional liability insurance policies shall be made available only to physician assistants licensed by the state board of healing arts, licensed advanced practice registered nurses authorized by the state board of nursing to practice as an advanced practice registered nurse in the classification of a nurse-midwife, nursing facilities licensed by the state of Kansas, assisted living facilities licensed by the state of Kansas and residential health care facilities licensed by the state of Kansas that will be in compliance with K.S.A.

40-3402, and amendments thereto, on January 1, 2015.

The premiums for such professional liability insurance policies shall be based upon reasonably prudent actuarial principles.

The provisions of this subsection shall expire on January 1, 2016.

5. K.S.A.11. K.S.A.

75-41012025 isSupp. hereby amended to read as follows:

75-40-3822 SBis 20—Am.hereby amended to read as follows:

by40-3822.As HCused 10in 4101.this act:

(a)(a) "Act" Theremeans isthe herebypharmacy createdbenefits amanager committeelicensure onKansas suretyconsumer bondsprescription andprotection insurance, which shall consist of the state treasurer, the attorney general and theaccountability commissioneract. of insurance or their respective designees.

The(b) "Affiliate" commissionermeans ofa insurancepharmacy, shallpharmacist beor thepharmacy chairpersontechnician ofwhich, theeither committeedirectly andor theindirectly directorthrough ofone purchases or themore director'sintermediaries: designee shall be the ex officio secretary.

The(1) Has committeean shallinvestment meetor uponownership theinterest callin ofa thepharmacy chairpersonbenefits andmanager atlicensed suchunder otherthis timeschapter; as the committee shall determine but at least once each month on the second Monday in each month.

Meetings(2) shares shallcommon beownership heldwith ina thepharmacy officebenefits ofmanager thelicensed commissionerunder ofthis insurance.chapter;

Theor members(3) has ofan theinvestor committeeor shallownership serveinterest withoutholder compensation.that is a pharmacy benefits manager licensed under this article.

The(c) "Auditing secretaryentity" shallmeans bea theperson custodianthat ofperforms alla property,pharmacy recordsaudit, andincluding proceedingsa ofpharmacy thebenefits committee.manager, managed care organization or third-party payer.

Except(b)(d) "Commissioner" asmeans providedthe incommissioner thisof sectioninsurance andas defined by K.S.A.

74-4925,40-102, 74-4927, 75-6501 through 75-6511 and 76-749, and amendments thereto,thereto. no state agency shall purchase any insurance of any kind or nature or any surety bonds upon state officers or employees, except as provided in this act.

Except(c)(e) as(1) "Covered otherwiseentity" providedmeans: in this section, health care healthcare coverage and health care healthcare services of a health maintenance organization for state officers and employees designated under K.S.A.

75-6501(c),(A) A andnonprofit amendmentshospital thereto,or shallmedical beservice providedcorporation, inhealth accordanceinsurer, withhealth thebenefit provisionsplan ofor K.S.A.health maintenance organization;

75-6501(B) a throughhealth 75-6511,program andadministered amendmentsby thereto.a department or the state in the capacity of provider of health coverage;

(b) Theor Kansas(C) an turnpikeemployer, authoritylabor mayunion purchaseor other group life,of persons organized in the state that provides health andcoverage accidentto insurancecovered individuals who are employed or healthreside carein servicesthe ofstate a health insurance company, health maintenance organizationorganization, forhospital, itsmedical employeesor dental corporation, healthcare corporation, any entity that provides, administers or membersmanages ofa theself-funded highwayhealth patrolbenefit assigned,plan byincluding contracta governmental plan or agreementany enteredother pursuantentity tothat K.S.A.provides prescription drug coverages unless specifically excluded in paragraph (2).

68-2025,(2) "Covered andentity" amendmentsdoes thereto,not toinclude policeany: toll or turnpike facilities, independent of the committee on surety bonds and insurance and of the provisions of K.S.A.

75-6501(A) Self-funded throughplan 75-6511,that andis amendmentsexempt thereto.from state regulation pursuant to ERISA;

Such(B) plan authorityissued mayfor purchasecoverage liabilityfor insurancefederal coveringemployees; all or any part of its operations and may purchase liability and related insurance upon all vehicles owned or operated by the authority independent of the committee on surety bonds and insurance and such insurance may be purchased without complying with K.S.A.

75-3738or through(C) health 75-3744,plan that provides coverage only for accidental injury, specified disease, hospital indemnity, medicare supplement, disability income, long-term care or other limited benefit health insurance policies and amendmentscontracts thereto.insurers that provide coverage under a policy of property or casualty insurance or workers compensation insurance.

Any(d)(f) "Covered boardperson" ofmeans countya commissionersmember, maypolicyholder, purchasesubscriber, suchenrollee, insurancebeneficiary, dependent or healthother careindividual healthcareparticipating services,in independenta ofhealth suchbenefit committee,plan. for district court officers and employees any part of whose total salary is payable by the county.

Nothing(g) "Defined incost anysharing" othermeans provisiona ofdeductible thepayment, lawscopayment ofor thiscoinsurance stateamount shallimposed beon construedan asenrollee prohibitingfor membersa ofcovered theprescription highwaydrug patrolunder so assigned to police toll or turnpike facilities from receiving compensation in the formenrollee's of insurance or health maintenanceplan. organization coverage as herein authorized.

(c) The(e)(h) "Department" agenciesmeans of the stateinsurance sponsoringdepartment aKansas fosterdepartment grandparent or senior companion program, or both, shall procure a policy of accident,insurance. personal liability and excess automobile liability insurance insuring volunteers SB 20—Am.

by(f)(i) "ERISA" HCmeans 11the participatingfederal inemployee suchretirement programsincome againstsecurity lossact in accordance with specifications of federal1974. grant guidelines.

Such(g)(j) "Health agenciesbenefit mayplan" purchasemeans such policy of insurance independent of the committeesame onas suretydefined bondsin and insurance and without complying with K.S.A.

75-373840-4602, throughand 75-amendments 3744,thereto andor amendments"health thereto.plan" means any hospital or medical expense policy, health, hospital or medical service corporation contract, a plan provided by a municipal group-funded pool, a policy or agreement entered into by a health insurer or a health SENATE BILL No.

(d) Any20—page state12 educationalmaintenance institutionorganization ascontract definedoffered by K.S.A.an employer or any certificate issued under any such policies, contracts or plans.

76-711,"Health andbenefit amendmentsplan" thereto,or may"health purchaseplan" does not include policies or certificates covering only accident, credit, dental, disability income, long-term care, hospital indemnity, medicare supplement, specified disease, vision care, coverage issued as a supplement to liability insurance, insurance arising out of anya kindworkers compensation or naturesimilar exceptlaw, employeeautomobile healthmedical-payment insurance.insurance or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.

Such(h)(k) "Health insuranceinsurer" shallmeans bethe purchasedsame onas adefined competitively bid or competitively negotiated basis in accordanceK.S.A. with procedures prescribed by the state board of regents.

Such40- insurance4602, may be purchased independent of the committee on surety bonds and insuranceamendments andthereto. without complying with K.S.A.

75-3738(i) "Maximum throughallowable 75-3744,cost" andor amendments"MAC" thereto.means any term or methodology that a pharmacy benefits manager or a healthcare insurer may use to establish the maximum amount that a pharmacy benefits manager will reimburse a pharmacy or a pharmacist for generic drugs(l) "Misfill" means a prescription:

(e)(1) That (1) Thewas statenot boarddispensed; of regents may enter into one or more group insurance contracts to provide health and accident insurance coverage or health care healthcare services of a health maintenance organization for all students attending a state educational institution as defined in K.S.A.

76-(2) error; 711, and amendments thereto, and such students' dependents, except that such insurance shall not provide coverage for elective procedures that are not medically necessary as determined by a treating physician.

The(3) that participationhad a request by athe studentpharmacy into authorize the filling of such coverageprescription shallthat bewas voluntary.denied by the prescriber;

Inor the(4) that casehad ofan studentsextra whodispensing arefee employedcharged. by a state educational institution in a student position, the level of employer contributions toward such coverage shall be determined by the board of regents.

(2) The(m) "National stateaverage boarddrug ofacquisition regentscost" ismeans herebythe authorizedmonthly tosurvey independentlyof provide,retail throughpharmacies self-insuranceconducted orby the purchasefederal ofcenters insurance contracts, health care healthcare benefits for employeesmedicare ofand amedicaid stateservices educationalto institution,determine asthe suchaverage termacquisition iscost definedfor inmedicaid-covered K.S.A.outpatient drugs.

76-711,(n) "Nonproprietary anddrug" amendmentsmeans thereto,a whendrug thecontaining stateany healthquantity careof healthcareany benefitscontrolled programsubstance or any drug that is insufficientrequired toby satisfyany theapplicable requirementsfederal ofor 22state C.F.R.law to be dispensed only by prescription.

§(o) "Person" 62.14,means asan inindividual, effectpartnership, uponcorporation, theorganization effectiveor dateother ofbusiness thisentity. section April 13, 2017.

Such(p) "Pharmacy healthcareaudit" benefitsmeans shallan beaudit limitedconducted toby onlyor thoseon forbehalf whomof thean stateauditing healthentity careof healthcareany benefitsrecords programof doesa notpharmacy meetfor federalprescription requirements.or nonproprietary drugs dispensed by a pharmacy to a covered person.

(3) The(j)(q) "Pharmacy statebenefits boardmanagement" ofmeans: regents may purchase cybersecurity insurance as it deems necessary to protect student records, labor information and other statutorily protected data that the board maintains, independent of the committee on surety bonds and insurance and without complying with the provisions of K.S.A.

75-3738(1) Any throughof 75-3744,the andfollowing amendmentsservices thereto.provided with regard to the administration of the following pharmacy benefits:

As(A) Mail used in this paragraph, "cybersecurity insurance" includes, but is not limited to, first-party coverage against losses such as data destruction, denial of service attacks,pharmacy; theft, hacking and liability coverage guaranteeing compensation for damages from errors such as the failure to safeguard data.

SB(B) claims 20—Am.processing, retail network management and payment of claims to pharmacies for prescription drugs dispensed to covered individuals;

by(C) clinical HCformulary 12development (4) The state board of regents may adopt rules and regulationsmanagement necessaryservices; to administer and implement the provisions of this section.

(D) rebate contracting and administration;

(E) certain patient compliance, therapeutic intervention and generic substitution programs;

or (F) disease management programs involving prescription drug utilization;

and (2) (A) the procurement of prescription drugs by a prescription benefits manager at a negotiated rate for dispensation to covered individuals within this state;

or (B) the administration or management of prescription drug benefits provided by a covered insurance entity for the benefit of covered individuals.

(k)(r) "Pharmacy benefits manager" means a person, business or other entity that performs pharmacy benefits management.

"Pharmacy benefits manager" includes any person or entity acting in a contractual or employment relationship for a pharmacy benefits manager in the performance of pharmacy benefits management for a covered entity.

SENATE BILL No.

20—page 13 "Pharmacy benefits manager" does not include a covered insurance entity.

(l) "Person" means an individual, partnership, corporation, organization or other business entity(s) "Pharmacy record" means any record stored electronically or as a hard copy by a pharmacy relating to the provision of prescription or nonproprietary drugs, pharmacy services or other component of pharmacist care that is included in the practice of pharmacy as defined in K.S.A.

65-1626a, and amendments thereto.

(t) "Pharmacy services administration organization" means any entity that contracts with a pharmacy to assist with covered entity interactions and that may provide a variety of other administrative services, including contracting with pharmacy benefits managers on behalf of pharmacies and managing pharmacies' claims payments from covered entities.

(u) "Rebate" means any and all payments that accrue to a pharmacy benefits manager or such pharmacy benefits manager's health plan client, directly or indirectly, from a pharmaceutical manufacturer, including, but not limited to, discounts, administration fees, credits, incentives or penalties associated directly or indirectly in any way with claims administered on behalf of a health plan client.

"Rebate" does not include any discount or payment that may be provided to or made to any 340B entity through such program.

6. K.S.A.12. K.S.A.

40-2102,2025 40-2109,Supp. 40-3116, 40-3413 and 75-4101 are hereby repealed.

40-3823 is hereby amended to read as follows:

40-3823.

(a) No person shall act or operate as a pharmacy benefits manager without first obtaining a valid license issued by the commissioner.

(b) Each person seeking a license to act as a pharmacy benefits manager shall file with the commissioner an application for a license upon a form to be furnished by the commissioner.

At a minimum, the application form shall include the following information:

(1) The name, address and telephone number of the pharmacy benefits manager;

(2) the name, address, official position and professional qualifications of each individual who is responsible for the conduct of the affairs of the pharmacy benefits manager, including all members of the board of directors, board of trustees, executive committee, other governing board or committee, the principal officers in the case of a corporation, the partners or members in the case of a partnership or association;

(3) the name and address of the applicant's agent for service of process in the state;

(4) the name, address, phone number, email address and official position of the employee who will serve as the primary contact for the department;

(5) a copy of the pharmacy benefits manager's corporate charter, articles of incorporation or other charter document;

(6) a any template contract including a dispute resolution process, that ultimately involves an independent fact finder between:

(A) The pharmacy benefits manager and the health insurer;

or (B) the pharmacy benefits manager and the pharmacy or a pharmacy's contracting agent;

and (7) an affidavit, executed by an officer or director of the pharmacy benefits manager affirming that any template contract submitted pursuant to this subsection is the accurate and complete contract used;

and (8) a network adequacy report on a form prescribed by the department through rules and regulations.

(c) A nonrefundable application fee in an amount of not to exceed SENATE BILL No.

20—page 14 $2,500.

Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register such fee for the next calendar year.

(d) The licensee shall inform the commissioner, by any means acceptable to the commissioner, of any material change in the information required by this subsection within 90 days of such change.

Failure to timely inform the commissioner of a material change may result in a penalty against the licensee in the amount of $500 an amount of not to exceed $2,000 per occurrence.

(e) Within 90 days after receipt of a completed application, the network adequacy report and the applicable license fee, the commissioner shall review the application and issue a license if the applicant is deemed qualified under this section.

If the commissioner determines that the applicant is not qualified, the commissioner shall notify the applicant and shall specify the reason for the denial.

(f) (1) All documents, materials or other information and copies thereof in the possession or control of the department or any other governmental entity that are obtained by or disclosed to the commissioner or any other person in the course of an application, examination or investigation made pursuant to this act shall be confidential by law and privileged, shall not be subject to any open records, freedom of information, sunshine or other public record disclosure laws and shall not be subject to subpoena or discovery.

(2) The provisions of paragraph (1) shall only apply to the disclosure of the confidential documents described in paragraph (1) by the department or any other governmental entity and shall not be construed to create any privilege in favor of any other party.

(3) The provisions of this subsection shall expire on July 1, 2027, unless the legislature reviews and reenacts this provision pursuant to K.S.A.

45-229, and amendments thereto, prior to July 1, 2027.

7. This13. K.S.A. act shall take effect and be in force from and after its publication in the statute book Kansas register.

2025 Supp.

40-3824 is hereby amended to read as follows:

40-3824.

(a) Each pharmacy benefits manager license shall expire on March 31 of each year and may be renewed annually on the request of the licensee.

The application for renewal shall be submitted on a form furnished by the commissioner and accompanied by a renewal fee of not to exceed $2,500.

The application for renewal shall be in such form and contain such matters as the commissioner prescribes.

(b) (1) Within 90 days after receipt of a completed renewal application, the commissioner shall review the application and any relevant information received pursuant to the provisions of this act, including quarterly and annual reports.

If the commissioner determines the application is incomplete or the pharmacy benefits manager is not in compliance with the act, the commissioner shall notify the applicant and shall specify the reason for the denial of the renewal application.

(2) If a registered auditing entity fails to provide a completed application for renewal by March 31, or if the license renewal fee is not paid by March 31, then a penalty fee shall be assessed in an amount of not to exceed $250.

The auditing entity shall remit the renewal fee plus the penalty fee before the commissioner issues such auditing entity's registration renewal.

(c) If a pharmacy benefits manager fails to provide a completed application for renewal by March 31, or if a license renewal fee is not paid by the prescribed date March 31, then the amount of the fee, plus a penalty fee shall be assessed in an amount of not to exceed $2,500 shall be paid.

The pharmacy benefits manager's license may be revoked or suspended by the commissioner until the renewal fee and any penalty assessed has been paid.

(c) Any person who performs or is performing any pharmacy SENATE BILL No.

20—page 15 benefits management service shall be required to obtain a license as a pharmacy benefits manager from the commissioner not later than January 1, 2023, in order to continue to do business in Kansas.

The pharmacy benefits manager shall remit the renewal fee plus the penalty fee before the commissioner issues such pharmacy benefits manager's license renewal.

(d) The pharmacy benefits manager's license may be revoked or suspended by the commissioner until the renewal fee and any penalty assessed has been paid.

(d)(e) Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register the fees required pursuant to this section for the next calendar year.

Sec.

14. K.S.A.

2025 Supp.

40-3825 is hereby amended to read as follows:

40-3825.

(a) In accordance with the provisions of the rules and regulations filing act, K.S.A.

77-415 et seq., and amendments thereto, the commissioner may adopt, amend and revoke rules and regulations governing the administration and enforcement of this act, limited to:

(1)(a) The content of the application form;

(2)(b) the content of any other form or report required to implement this act;

and (3)(c) such other rules and regulations as the commissioner may deem necessary to carry out the provisions of this act.

(b) The commissioner shall adopt, amend and revoke all such necessary rules and regulations not later than July 1, 2023.

Sec.

15. K.S.A.

2025 Supp.

40-3826 is hereby amended to read as follows:

40-3826.

(a) If the commissioner has reason to believe that a pharmacy benefits manager has been engaged in this state or is engaging in this state in activity that violates the pharmacy benefits manager licensure Kansas consumer prescription protection and accountability act, the commissioner shall issue and serve upon such pharmacy benefits manager a statement of the charges of any such violation and conduct a hearing thereon in accordance with the provisions of the Kansas administrative procedure act.

(b) If, after such a hearing, the commissioner determines that the pharmacy benefits manager charged has violated the act, the commissioner may, in the exercise of discretion, order any one or more of the following:

(1) (A) Payment of a monetary penalty in an amount of not more than to exceed $1,000 for each and every act or violation.

The total of the monetary penalties for such violations shall not exceed $10,000;

(B) if the pharmacy benefits manager knew or reasonably should have known that such manager was in violation of this act, payment of a monetary penalty in an amount of not more than to exceed $5,000 for each and every act or violation.

The total of the monetary penalties for such violations shall not exceed $50,000 in any six-month period;

(2) if such manager knew or reasonably should have known such person was in violation of this act, the suspension or revocation of the pharmacy benefits manager's license;

or (3) the assessment of any costs incurred as a result of conducting the administrative hearing authorized by the provisions of this section against the pharmacy benefits manager.

(c) As used in this section, "costs" includes witness fees, mileage allowances, any costs associated with reproduction of documents that become a part of the hearing record and expenses of making a record of the hearing.

(d) (1) If the deadline for filing a petition for review has expired and no such petition has been filed, the commissioner may reopen and modify or set aside any portion or the entirety of any administrative order issued under this section.

SENATE BILL No.

20—page 16 (2) The reopening of any such order may occur if, in the commissioner's opinion, the conditions of fact or law have changed to warrant such an action or if such an action is warranted in the public interest.

(e) In addition to any other penalty provided by this act, any person who acts as a pharmacy benefits manager without being licensed as required by this act shall be subject to a fine of $5,000 not to exceed $100,000 for the period in which the pharmacy benefits manager is found to be in violation.

Sec.

16. K.S.A.

2025 Supp.

40-3827 is hereby amended to read as follows:

40-3827.

(a) There is hereby established in the state treasury the pharmacy benefits manager licensure fund.

Such fund shall be administered by the commissioner for costs related to administering the pharmacy benefits manager licensing Kansas consumer prescription protection and accountability act.

All expenditures from the pharmacy benefits manager licensure fund shall be made in accordance with appropriation acts upon warrants of the director of accounts and reports issued pursuant to vouchers approved by the commissioner or by the commissioner's designee.

(b) The commissioner shall remit all moneys received by or for the commissioner under the provisions of this act to the state treasurer in accordance with the provisions of K.S.A.

75-4215, and amendments thereto.

Upon receipt of each such remittance, the state treasurer shall deposit the entire amount thereof in the state treasury and such amount shall be credited to the pharmacy benefits manager licensure fund.

Sec.

17. K.S.A.

2025 Supp.

40-3828a is hereby amended to read as follows:

40-3828a.

(a) A pharmacy benefits manager's license may be revoked, suspended or limited, the licensee may be censured or placed under probationary conditions or an application for a license or for reinstatement of a license may be denied upon a finding that the:

(1) Applicant or licensee committed fraud or misrepresentation in applying for or securing an original, renewal or reinstated license;

(2) licensee has violated any lawful rule or regulation promulgated by the commissioner or violated any lawful order or directive of the commissioner previously entered by the commissioner;

(3) pharmacy benefits manager has engaged in fraudulent activity that constitutes a violation of state or federal law;

(4) licensee has failed to furnish any information legally requested by the commissioner to the commissioner or the commissioner's investigators or representatives, including information requested during an examination pursuant to section 4, and amendments thereto;

(5) pharmacy benefits manager has been determined by the commissioner to be in violation of or noncompliance with state or federal law;

or (6) pharmacy benefits manager has failed to timely submit a renewal application and the information required under K.S.A.

40- 3824, and amendments thereto.

In lieu of a denial of a renewal application, the commissioner may permit the pharmacy benefits manager to submit to the commissioner a corrective action plan to correct or cure any deficiencies;

or (7) pharmacy benefits manager has failed to timely submit the reporting required by section 3, and amendments thereto.

(b) This section shall be a part of and supplemental to the pharmacy benefits manager licensure Kansas prescription protection and accountability act.

Sec.

18. K.S.A.

40-3831 is hereby amended to read as follows:

40- 3831.

(a) This section shall be known and may be cited as the Kansas pharmacy patients fair practices act.

(b) As used in this section:

SENATE BILL No.

20—page 17 (1) "Covered person" means the same as defined in K.S.A.

40- 3822, and amendments thereto.

(2) "Health carrier" means the same as defined in K.S.A.

40- 2,195, and amendments thereto.

(3) "Pharmacy benefits manager" means the same as defined in K.S.A.

40-3822, and amendments thereto.

(c)(1) Co-payments Copayments applied by a health carrier for a prescription drug may shall not exceed the total submitted charges by the network pharmacy.

(2) A pharmacy or pharmacist shall have the right to provide a covered person with information regarding the amount of the covered person's cost share for a prescription drug.

Neither a pharmacy nor a pharmacist shall be proscribed by a pharmacy benefits manager from discussing any such information or for selling a more affordable alternative to the covered person if such an alternative is available.

(d)(b) (1) This section applies to any contract between a pharmacy benefits manager and a pharmacy, a pharmacy services administration organization or a group purchasing organization that is entered into or renewed on and after January 1, 2019.

(2) The provisions of this section shall not apply to any policy or certificate that provides coverage for any specified disease, specified accident or accident only coverage, credit, dental, disability income, hospital indemnity, long-term care insurance as defined by K.S.A.

40- 2227, and amendments thereto, vision care or any other limited supplemental benefit nor to any medicare supplement policy of insurance as defined by the commissioner of insurance by rule and regulation, any coverage issued as a supplement to liability insurance, workers compensation or similar insurance, automobile medical- payment insurance or any insurance under which benefits are payable with or without regard to fault, whether written on a group, blanket or individual basis.

Sec.

19. K.S.A.

40-222, 40-3828, 40-3831, 65-16,121, 65-16,122, 65-16,123, 65-16,124, 65-16,125 and 65-16,126 and K.S.A.

2025 Supp.

40-202, 40-3821, 40-3822, 40-3823, 40-3824, 40-3825, 40-3826, 40- 3827, 40-3828a, 40-3829 and 40-3830 are hereby repealed.

SENATE BILL No.

20—page 18 Sec.

20. This act shall take effect and be in force from and after its publication in the statute book.

I hereby certify that the abovILLoriginated in the SENATE, and passed that body __________________________ SENATE adopted Conference Committee Report ________________ _________________________ President of the Senate.

_________________________ Secretary of the Senate.

Passed the HOUSE as amended _________________________ H OUSEadopted Conference Committee Report ________________ _________________________ Speaker of the House.

_________________________ Chief Clerk of the House.

A PPROVED_____________________________ _________________________ Governor.