Kentucky 2020 Regular Session Status: Enacted

SB 50 — AN ACT relating to pharmacy benefits in the Medicaid program and declaring an emergency.

Last action — signed by Governor (Acts ch. 70)

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    Passed Senate
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    Passed House
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    To Executive
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    Enacted

This bill has been enacted into law. Introduced January 28, 2020. Enacted.

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    Passed 3 recorded votes so far.

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UNOFFICIAL COPY 20 RS BR 1095 AN ACT relating to outpatient pharmacy benefits in the Medicaid program and declaring an emergency.
UNOFFICIAL COPY 20 RS SB 50/EN AN ACT relating to pharmacy benefits in the Medicaid program and declaring an emergency.
Section 1.
SECTION 1.
KRS 205.647 is amended to read as follows:
A NEW SECTION OF KRS 205.510 TO 205.560 IS CREATED TO READ AS FOLLOWS:
(1) As used in this section:[, ] (a) "Average reimbursement" means a statistical methodology selected by the department via any administrative regulations promulgated pursuant to this section, which shall include, at a minimum, the median and mean;
As used in Sections 1 to 6 of this Act, unless context otherwise requires:
(b) "Department" means the Department for Medicaid Services;
(1) "Department" means the Department for Medicaid Services;
and (c) "Pharmacy benefit manager" has the same meaning as in KRS 304.9-020.
(2) "Managed care organization" has the same meaning as in KRS 205.532;
(2) (a) Except as provided pursuant to subsections (4) and (5) of this section, beginning on the effective date of this Act the department shall directly administer all outpatient pharmacy benefits for all Medicaid recipients.
(3) "Pharmacy benefit manager" has the same meaning as in KRS 304.9-020;
(b) The department shall, through the promulgation of administrative regulations, establish an outpatient pharmacy benefits program that includes:
(4) "Spread pricing" means any technique by which a pharmacy benefit manager or other administrator of pharmacy benefits charges or claims an amount from an insurer or managed care organization for pharmacy or pharmacist services, including payment for a prescription drug, that is different than the amount the pharmacy benefit manager or other administrator pays to the pharmacy or pharmacist that provided the services;
and (5) "State pharmacy benefit manager" means the pharmacy benefit manager contracted by the department, pursuant to Section 2 of this Act, to administer pharmacy benefits for all Medicaid recipients enrolled in a managed care organization in the Commonwealth.
SECTION 2.
A NEW SECTION OF KRS 205.510 TO 205.560 IS CREATED TO READ AS FOLLOWS:
(1) By December 31, 2020, the department, in accordance with KRS Chapter 45A, shall select and contract with a third-party administrator to serve as the state pharmacy benefit manager for every managed care organization with whom the department contracts for the delivery of Medicaid services.
(2) The state pharmacy benefit manager shall be responsible for administering all pharmacy benefits for Medicaid recipients enrolled in a managed care Page 1 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN organization with whom the department contracts for the delivery of Medicaid services.
(3) Each contract entered into or renewed by the department for the delivery of Medicaid services by a managed care organization after the cabinet has selected and contracted with the state pharmacy benefit manager shall require the managed care organization to contract with and utilize the state pharmacy benefit manager for the purpose of administering all pharmacy benefits for Medicaid recipients enrolled with the managed care organization.
(4) As part of the procurement process to select the state pharmacy benefit manager, the department shall:
(a) Establish eligibility criteria that an entity shall meet in order to be eligible to become the state pharmacy benefit manager;
(b) Accept proposals from eligible entities seeking to become the state pharmacy benefit manager;
(c) Establish a master contract to be used by the department when contracting with the state pharmacy benefit manager, which shall:
A formulary;
Establish the state pharmacy benefit manager's fiduciary duty owed to the department;
Reimbursement methodologies;
Comply with the provisions of subsection (4) of Section 3 of this Act;
and 3.
3.
A dispensing fee which shall take into account applicable guidance by the Centers for Medicare and Medicaid Services.
Require:
(3) The department shall ensure coordination of care between the outpatient pharmacy benefits program established pursuant to subsection (2) of this section or a third-party administrator with which the department has contracted pursuant to subsection (4) of this section, if any, and managed care organizations.
a.
Any managed care techniques, principles, or administration of benefits utilized pursuant to this section shall comply with Kentucky law.
The use of pass-through pricing;
(4) (a) The department may contract with a third party on a fee-for-service Page 1 of 8 XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1095 reimbursement basis for the purpose of administering the outpatient pharmacy benefits program for all Medicaid recipients established pursuant to subsection (2) of this section;
and b.
however, these services shall be approved by the department.
The state pharmacy benefit manager to use the preferred drug list, reimbursement methodologies, and dispensing fees established by the department pursuant to subsection (1) of Section 3 of this Act;
(b) KRS 304.17A-162(10), (11), (12), and (13) shall not apply to a third-party administrator contracted directly with the department to administer the outpatient pharmacy benefits program.
and 4.
(c) The following shall apply to contracts between a third-party administrator and pharmacies:
Prohibit:
a.
The use of spread pricing;
and Page 2 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN b.
The state pharmacy benefit manager from:
i.
Reducing payment for pharmacy or pharmacist services, directly or indirectly, under a reconciliation process to an effective rate of reimbursement.
This prohibition shall include without limitation creating, imposing, or establishing direct or indirect remuneration fees, generic effective rates, dispensing effective rates, brand effective rates, any other effective rates, in-network fees, performance fees, pre-adjudication fees, post-adjudication fees, or any other mechanism that reduces, or aggregately reduces, payment for pharmacy or pharmacist services;
ii.
Creating, modifying, implementing, or indirectly establishing any fee on a pharmacy, pharmacist, or a Medicaid recipient without first seeking and obtaining written approval from the department to do so;
iii.
Requiring a Medicaid recipient to obtain a specialty drug from a specialty pharmacy owned by or otherwise associated with the state pharmacy benefit manager;
iv.
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Requiring or incentivizing a Medicaid recipient to use a pharmacy owned by or otherwise associated with the state pharmacy benefit manager;
and v.
Requiring a Medicaid recipient to use a mail-order pharmaceutical distributor or mail-order pharmacy;
and (d) Select and contract with a single third-party administrator to serve as the state pharmacy benefit manager to administer all pharmacy benefits for Medicaid recipients enrolled in a managed care organization with whom the department contracts for the delivery of Medicaid services.
Page 3 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN (5) As part of the procurement process to select the state pharmacy benefit manager, an entity seeking to become the state pharmacy benefit manager shall disclose the following information:
(a) Any activity, policy, practice, contract including any national pharmacy contract, or agreement of the entity that may directly or indirectly present a conflict of interest in the entity's relationship with the department or a managed care organization with whom the department contracts for the delivery of Medicaid services;
(b) Any direct or indirect fees, charges, or any kind of assessments imposed by the pharmacy benefit manager on pharmacies licensed in Kentucky:
The department shall approve any contract between a third-party administrator and a pharmacy;
With which the pharmacy benefit manager shares common ownership, management, or control;
A third-party administrator shall not change the terms of a contract between the third-party administrator and a pharmacy without written approval from the department;
Which are owned, managed, or controlled by any of the pharmacy benefit manager's management companies, parent companies, subsidiary companies, jointly held companies, or companies otherwise affiliated by a common owner, manager, or holding company;
A third-party administrator shall not create, modify, implement, or indirectly establish any fee on a pharmacy, pharmacist, or a Medicaid recipient without written approval from the department;
Which share any common members on the board of directors;
and 4.
or 4.
A third-party administrator shall utilize the formulary, reimbursement methodologies, and dispensing fee established by the department pursuant to subsection (2) of this section.
Which share managers in common;
(5) (a) The provisions of this section shall not apply to outpatient pharmacy services provided by a health care facility that is registered as a covered entity pursuant to 42 U.S.C.
(c) Any direct or indirect fees, charges, or any kind of assessments imposed by the pharmacy benefit manager on pharmacies licensed in Kentucky which operate:
1.
More than ten (10) locations in the Commonwealth;
2.
Ten (10) or fewer locations in the Commonwealth;
and (d) All common ownership, management, common members of a board of directors, shared managers, or control of a pharmacy benefit manager, or any of the pharmacy benefit manager's management companies, parent companies, subsidiary companies, jointly held companies, or companies Page 4 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN otherwise affiliated by a common owner, manager, or holding company with:
1.
A managed care organization and its affiliated companies;
2.
An entity that contracts on behalf of a pharmacy or any pharmacy services administration organization and its affiliated companies;
3.
A drug wholesaler or distributor and its affiliated companies;
4.
A third-party payor and its affiliated companies;
and 5.
A pharmacy and its affiliated companies.
(6) The contract between the department and the state pharmacy benefit manager shall be submitted to the Government Contract Review Committee of the Legislative Research Commission for comment and review.
SECTION 3.
A NEW SECTION OF KRS 205.510 TO 205.560 IS CREATED TO READ AS FOLLOWS:
(1) The department shall:
(a) Establish a single preferred drug list to be used by the state pharmacy benefit manager for each managed care organization with whom the department contracts for the delivery of Medicaid services;
and (b) Promulgate administrative regulations that establish:
1.
Reimbursement methodologies;
and 2.
Dispensing fees which may take into account applicable guidance by the Centers for Medicare and Medicaid Services and which may, to the extent permitted under federal law, vary by pharmacy type, including rural and independently owned pharmacies, chain pharmacies, and pharmacies owned or contracted by a health care facility that is registered as a covered entity pursuant to 42 U.S.C.
256b or any pharmacy owned by or contracted with such a covered entity.
256b.
(b) Pursuant to administrative regulations promulgated by the department, a Medicaid managed care organization, either directly or through a pharmacy benefit manager, shall administer and reimburse outpatient pharmacy Page 2 of 8 XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1095 claims submitted by a health care facility that is registered as a covered entity pursuant to 42 U.S.C.
Reimbursement methodologies established by administrative regulations Page 5 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN shall not discriminate against pharmacies owned or contracted by a health care facility that is registered as a covered entity pursuant to 42 U.S.C.
256b or any pharmacy owned or contracted with such a covered entity in accordance with the contractual agreements that the Medicaid managed care organization or its pharmacy benefit manager has with such facilities and pharmacies.
256b, to the extent allowable by the Centers for Medicare and Medicaid Services.
(c) A Medicaid managed care organization or its pharmacy benefit manager shall not exclude any health care facility that is registered as a covered entity pursuant to 42 U.S.C.
(2) The reimbursement methodologies and dispensing fees established by the department pursuant to subsection (1) of this section shall be used by the state pharmacy benefit manager for each managed care organization with whom the department contracts for the delivery of Medicaid services.
(3) The state pharmacy benefit manager shall administer, adjudicate, and reimburse pharmacy benefit claims submitted by pharmacies to the state pharmacy benefit manager in accordance with:
(a) The terms of any contract between a health care facility that is registered as a covered entity pursuant to 42 U.S.C.
256b from its pharmacy network.
256b and a Medicaid managed care organization;
(d) The department shall promulgate administrative regulations necessary to carry out the provisions of this subsection.
(b) The terms and conditions of the contract between the state pharmacy benefit manager and the Commonwealth;
(6) A pharmacy benefit manager contracted with a managed care organization to administer outpatient pharmacy benefits pursuant to subsection (5) of this section [that provides Medicaid benefits pursuant to this chapter ]shall:
and (c) The reimbursement methodologies and dispensing fees established by the department, pursuant to subsection (1) of this section.
(a) Comply with the provisions of this section and KRS 304.9-053, 304.9-054, 304.9-055, and 304.17A-162;
(4) The following shall apply to the state pharmacy benefit manager, the contract between the state pharmacy benefit manager and the department, and, where applicable, any contract between the state pharmacy benefit manager and a pharmacy:
and[.
(a) The department shall be responsible for reviewing and shall approve or deny:
(3) KRS 304.17A-162(10), (11), (12), and (13) shall not apply to a pharmacy benefit manager contracted directly with the cabinet to provide Medicaid benefits.] (b)[(4)] [A pharmacy benefit manager contracting with a managed care organization to administer Medicaid benefits shall ]Provide the following information to the Department for Medicaid Services no later than August 15, 2018, and for each year thereafter that the pharmacy benefit manager is contracted with a managed care organization to administer Medicaid benefits:
1.
1.[(a)] The total Medicaid dollars paid to the pharmacy benefit manager by a managed care organization and the total amount of Medicaid dollars paid to the pharmacy benefit manager by a managed care organization which were not subsequently paid to a pharmacy licensed in Kentucky;
Any contract, any change in the terms of a contract, or suspension or termination of a contract between the state pharmacy benefit manager and a pharmacy licensed under KRS Chapter 315;
2.[(b)1.] The average reimbursement, by drug ingredient cost, dispensing Page 3 of 8 XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1095 fee, and any other fee paid by a pharmacy benefit manager to licensed pharmacies with which the pharmacy benefit manager shares common ownership, management, or control;
and Page 6 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN 2.
or which are owned, managed, or controlled by any of the pharmacy benefit manager's management companies, parent companies, subsidiary companies, jointly held companies, or companies otherwise affiliated by a common owner, manager, or holding company;
Any contract, any change in the terms of a contract, or suspension or termination of a contract between the state pharmacy benefit manager and an entity that contacts on behalf of a pharmacy licensed under KRS Chapter 315;
(b) The state pharmacy benefit manager shall comply with KRS 304.9-053, 304.9-054, and 304.9-055;
(c) After December 1, 2020, the state pharmacy benefit manager shall not enter into, renew, extend, or amend a national contract with any pharmacy that is inconsistent with:
1.
The terms and conditions of the contract between the state pharmacy benefit manager and the Commonwealth;
or 2.
The reimbursement methodologies and dispensing fees established by the department, pursuant to subsection (1) of this section;
(d) 1.
When creating or establishing a pharmacy network for a managed care organization with whom the department contracts for the delivery of Medicaid services, the state pharmacy benefit manager shall not discriminate against any pharmacy or pharmacist that is:
a.
Located within the geographic coverage area of the managed care organization;
and b.
Willing to agree to or accept reasonable terms and conditions established by the state pharmacy benefit manager, or other administrator for network participation, including obtaining preferred participation status.
2.
Discrimination prohibited by this paragraph shall include denying a pharmacy the opportunity to participate in a pharmacy network at preferred participation status;
and (e) A contract between the state pharmacy benefit manager and a pharmacy Page 7 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN shall not release the state pharmacy benefit manager from the obligation to make any payments owed to the pharmacy for services rendered prior to the termination of the contract between the state pharmacy benefit manager and the pharmacy or removal of the pharmacy from the pharmacy network.
SECTION 4.
A NEW SECTION OF KRS 205.510 TO 205.560 IS CREATED TO READ AS FOLLOWS:
All payment arrangements between the department, managed care organizations, and the state pharmacy benefit manager shall comply with state and federal statutes, regulations adopted by the Centers for Medicare and Medicaid Services, and any other agreement between the department and the Centers for Medicare and Medicaid Services.
The department may change a payment arrangement in order to comply with state and federal statutes, regulations adopted by the Centers for Medicare and Medicaid services, or any other agreement between the department and the Centers for Medicare and Medicaid services.
SECTION 5.
A NEW SECTION OF KRS 205.510 to 205.560 IS CREATED TO READ AS FOLLOWS:
(1) Notwithstanding any provisions of law to the contrary, beginning on the effective date of this Act and continuing until December 31, 2020, a pharmacy benefit manager contracted with a managed care organization to administer Medicaid benefits shall not:
(a) Adjust, modify, change, or amend reimbursement methodologies, dispensing fees, and any other fees paid by the pharmacy benefit manager to pharmacies licensed in the Commonwealth;
(b) Create, modify, implement, or indirectly establish any fee on a pharmacy, pharmacist, or a Medicaid recipient in the Commonwealth;
and (c) Make any adjustments, modifications, or changes to a pharmacy network for the managed care organization with whom the pharmacy benefit Page 8 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN manager has contracted to administer Medicaid benefits.
(2) Notwithstanding any provisions of law to the contrary, beginning on the effective date of this Act and continuing until December 31, 2020, a pharmacy benefit manager contracted with a managed care organization to administer Medicaid benefits shall:
(a) Administer, adjudicate, and, when appropriate, reimburse any pharmacy benefit claim submitted to the managed care organization prior to the termination of the contract between the pharmacy benefit manager and the managed care organization in accordance with the contract between the pharmacy benefit manager and the managed care organization;
and (b) Not be released from its obligation to make any payments owed to a pharmacy licensed in the Commonwealth for pharmacy services rendered prior to the termination of the contract between the pharmacy benefit manager and the managed care organization.
(3) The department shall impose a fine of twenty-five thousand dollars ($25,000) per day per separate violation on a pharmacy benefit manager who violates subsection (1) or (2) of this section.
SECTION 6.
A NEW SECTION OF KRS 205.510 to 205.560 IS CREATED TO READ AS FOLLOWS:
By December 1, 2020, and at least annually thereafter, the Technical Advisory Committee on Pharmacy established in Section 7 of this Act shall make recommendations to the department regarding the reimbursement methodologies and dispensing fees used by the state pharmacy benefit manager pursuant to Section 3 of this Act.
Section 7.
KRS 205.590 is amended to read as follows:
(1) The following technical advisory committees shall be established for the purpose of acting in an advisory capacity to the council with respect to the administration of the Page 9 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN medical assistance program and in performing the function of peer review:
(a) A Technical Advisory Committee on Physician Services consisting of five (5) physicians appointed by the council of the Kentucky State Medical Association;
(b) A Technical Advisory Committee on Hospital Care consisting of five (5) hospital administrators appointed by the board of trustees of the Kentucky Hospital Association;
(c) A Technical Advisory Committee on Dental Care consisting of five (5) dentists appointed by the Kentucky Dental Association;
(d) A Technical Advisory Committee on Nursing Service consisting of five (5) nurses appointed by the board of directors of the Kentucky State Association of Registered Nurses;
(e) A Technical Advisory Committee on Nursing Home Care consisting of six (6) members of which five (5) members shall be appointed by the Kentucky Association of Health Care Facilities, and one (1) member shall be appointed by the Kentucky Association of Nonprofit Homes and Services for the Aging, Inc.;
(f) A Technical Advisory Committee on Optometric Care consisting of five (5) members appointed by the Kentucky Optometric Association;
(g) A Technical Advisory Committee on Podiatric Care consisting of five (5) podiatrists appointed by the Kentucky Podiatry Association;
(h) A Technical Advisory Committee on Primary Care consisting of five (5) primary care providers, two (2) of whom shall represent licensed health maintenance organizations, appointed by the Governor, until such time as an association of primary care providers is established, whereafter the association shall appoint the members;
(i) A Technical Advisory Committee on Home Health Care consisting of five (5) Page 10 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN members appointed by the board of directors of the Kentucky Home Health Association;
(j) A Technical Advisory Committee on Consumer Rights and Client Needs consisting of five (5) members, with one (1) member to be appointed by each of the following organizations:
the Kentucky Combined Committee on Aging, the Kentucky Legal Services Corporation, the Arc of Kentucky, the Department of Public Advocacy, and the National Association of Social Workers-Kentucky Chapter;
(k) A Technical Advisory Committee on Behavioral Health consisting of six (6) members, with one (1) member to be appointed by each of the following organizations:
the Kentucky Mental Health Coalition, the Kentucky Association of Regional Programs, the National Alliance on Mental Illness (NAMI) Kentucky, a statewide mental health consumer organization, the People Advocating Recovery (PAR), and the Kentucky Brain Injury Alliance;
(l) A Technical Advisory Committee on Children's Health consisting of ten (10) members, with one (1) member to be appointed by each of the following organizations:
the Kentucky Chapter of the American Academy of Pediatrics, the Kentucky PTA, the Kentucky Psychological Association, the Kentucky School Nurses Association, the Kentucky Association for Early Childhood Education, the Family Resource and Youth Services Coalition of Kentucky, the Kentucky Youth Advocates, the Kentucky Association of Hospice and Palliative Care, a parent of a child enrolled in Medicaid or the Kentucky Children's Health Insurance Program appointed by the Kentucky Head Start Association, and a pediatric dentist appointed by the Kentucky Dental Association;
(m) A Technical Advisory Committee on Intellectual and Developmental Disabilities consisting of nine (9) members, one (1) of whom shall be a Page 11 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN consumer who participates in a nonresidential community Medicaid waiver program, one (1) of whom shall be a consumer who participates in a residential community Medicaid waiver program, one (1) of whom shall be a consumer representative of a family member who participates in a community Medicaid waiver program, and one (1) of whom shall be a consumer representative of a family member who resides in an ICF/ID facility that accepts Medicaid payments, all of whom shall be appointed by the Governor;
one (1) member shall be appointed by the Arc of Kentucky;
one (1) member shall be appointed by the Commonwealth Council on Developmental Disabilities;
one (1) member shall be appointed by the Kentucky Association of Homes and Services for the Aging;
and two (2) members shall be appointed by the Kentucky Association of Private Providers, one (1) of whom shall be a nonprofit provider and one (1) of whom shall be a for-profit provider;
(n) A Technical Advisory Committee on Therapy Services consisting of six (6) members, two (2) of whom shall be occupational therapists and shall be appointed by the Kentucky Occupational Therapists Association, two (2) of whom shall be physical therapists and shall be appointed by the Kentucky Physical Therapy Association, and two (2) of whom shall be speech therapists and shall be appointed by the Kentucky Speech-Language-Hearing Association;
and (o) A Technical Advisory Committee on Pharmacy consisting of seven (7)[five (5)] members, two (2) of whom shall be Kentucky licensed pharmacists who own fewer than ten (10) pharmacies in the Commonwealth and shall be appointed by the Kentucky Independent Pharmacy Alliance, two (2) of whom shall be Kentucky licensed pharmacists and shall be appointed by the Kentucky Pharmacy Association, and one (1) member to be appointed by each of the following organizations:
the Kentucky Hospital Association, the Page 12 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN Kentucky Primary Care Association, and the National Association of Chain Drug Stores[pharmacists appointed by the Kentucky Pharmacists Association].
(2) The members of the technical advisory committees shall serve until their successors are appointed and qualified.
(3) Each appointive member of a committee shall serve without compensation but shall be entitled to reimbursement for actual and necessary expenses in carrying out his duties with reimbursement for expenses being made in accordance with state regulations relating to travel reimbursement.
Section 8.
KRS 205.647 is amended to read as follows:
(1) As used in this section, "state pharmacy benefit manager" means a pharmacy benefit manager, [has the same meaning] as defined in KRS 304.9-020, contracted by the department, pursuant to Section 2 of this Act, to administer pharmacy benefits for all Medicaid recipients enrolled in a managed care organization in the Commonwealth.
(2) [A pharmacy benefit manager contracted with a managed care organization that provides Medicaid benefits pursuant to this chapter shall comply with the provisions of this section and KRS 304.9-053, 304.9-054, 304.9-055, and 304.17A- 162.
(3) KRS 304.17A-162(10), (11), (12), and (13) shall not apply to a pharmacy benefit manager contracted directly with the cabinet to provide Medicaid benefits.
(4) ]The state[A] pharmacy benefit manager [contracting with a managed care organization to administer Medicaid benefits ]shall, upon receipt of a request from the Department for Medicaid Services, provide the following information to the Department for Medicaid Services in a form and manner prescribed by the Department for Medicaid Services[no later than August 15, 2018, and for each year thereafter that the pharmacy benefit manager is contracted with a managed care Page 13 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN organization to administer Medicaid benefits]:
(a) The total Medicaid dollars paid to the state pharmacy benefit manager by a managed care organization and the total amount of Medicaid dollars paid to the pharmacy benefit manager by a managed care organization which were not subsequently paid to a pharmacy licensed in Kentucky;
(b) 1.
The average reimbursement, by drug ingredient cost, dispensing fee, and any other fee paid by the state[a] pharmacy benefit manager to licensed pharmacies with which the state pharmacy benefit manager shares common ownership, management, or control;
or which are owned, managed, or controlled by any of the state pharmacy benefit manager's management companies, parent companies, subsidiary companies, jointly held companies, or companies otherwise affiliated by a common owner, manager, or holding company;
or which share managers in common[.
or which share managers in common.
For the purposes of this subsection, "average reimbursement" means a statistical methodology selected by the Department for Medicaid Services via any administrative regulations promulgated pursuant to this section which shall include, at a minimum, the median and mean];
For the purposes of this subsection, "average reimbursement" means a statistical methodology selected by the Department for Medicaid Services via any administrative regulations promulgated pursuant to this section which shall include, at a minimum, the median and mean;
3.[(c)] The average reimbursement, by drug ingredient cost, dispensing fee, and any other fee, paid by a pharmacy benefit manager to pharmacies licensed in Kentucky which operate more than ten (10) locations;
(c) The average reimbursement, by drug ingredient cost, dispensing fee, and any other fee, paid by the state[a] pharmacy benefit manager to pharmacies licensed in Kentucky which operate more than ten (10) locations;
4.[(d)] The average reimbursement by drug ingredient cost, dispensing fee, and any other fee, paid by a pharmacy benefit manager to pharmacies licensed in Kentucky which operate ten (10) or fewer locations;
(d) The average reimbursement by drug ingredient cost, dispensing fee, and any other fee, paid by the state[a] pharmacy benefit manager to pharmacies licensed in Kentucky which operate ten (10) or fewer locations;
5.[(e)] Any direct or indirect fees, charges, or any kind of assessments imposed by the pharmacy benefit manager on pharmacies licensed in Kentucky with which the pharmacy benefit manager shares common ownership, management, or control;
and (e) [Any direct or indirect fees, charges, or any kind of assessments imposed by the pharmacy benefit manager on pharmacies licensed in Kentucky with Page 14 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN which the pharmacy benefit manager shares common ownership, management, or control;
or which are owned, managed, or controlled by any of the pharmacy benefit manager's management Page 4 of 8 XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1095 companies, parent companies, subsidiary companies, jointly held companies, or companies otherwise affiliated by a common owner, manager, or holding company;
or which are owned, managed, or controlled by any of the pharmacy benefit manager's management companies, parent companies, subsidiary companies, jointly held companies, or companies otherwise affiliated by a common owner, manager, or holding company;
6.[(f)] Any direct or indirect fees, charges, or any kind of assessments imposed by the pharmacy benefit manager on pharmacies licensed in Kentucky which operate more than ten (10) locations;
(f) Any direct or indirect fees, charges, or any kind of assessments imposed by the pharmacy benefit manager on pharmacies licensed in Kentucky which operate more than ten (10) locations;
7.[(g)] Any direct or indirect fees, charges, or any kind of assessments imposed by the pharmacy benefit manager on pharmacies licensed in Kentucky which operate ten (10) or fewer locations;
(g) Any direct or indirect fees, charges, or any kind of assessments imposed by the pharmacy benefit manager on pharmacies licensed in Kentucky which operate ten (10) or fewer locations;
and 8.[(h)] All common ownership, management, common members of a board of directors, shared managers, or control of a pharmacy benefit manager, or any of the pharmacy benefit manager's management companies, parent companies, subsidiary companies, jointly held companies, or companies otherwise affiliated by a common owner, manager, or holding company with any managed care organization contracted to administer Kentucky Medicaid benefits, any entity which contracts on behalf of a pharmacy, or any pharmacy services administration organization;
and (h) ]All common ownership, management, common members of a board of directors, shared managers, or control of the state[a] pharmacy benefit manager, or any of the state pharmacy benefit manager's management companies, parent companies, subsidiary companies, jointly held companies, or companies otherwise affiliated by a common owner, manager, or holding company with any managed care organization contracted to administer Kentucky Medicaid benefits, any entity which contracts on behalf of a pharmacy, or any pharmacy services administration organization;
or any common ownership, management, common members of a board of directors, shared managers, or control of a pharmacy services administration organization that is contracted with a pharmacy benefit manager, with any drug wholesaler or distributor or any of the pharmacy services administration organization's management companies, parent companies, subsidiary companies, jointly held companies, or companies otherwise affiliated by a common owner, common members of a board of directors, manager, or holding company.
or any common ownership, management, common members of a board of directors, shared managers, or control of a pharmacy services administration organization that is contracted with the state[a] pharmacy benefit manager, with any drug wholesaler or distributor or any of the pharmacy services administration organization's management companies, parent companies, subsidiary companies, jointly held companies, or companies otherwise Page 15 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN affiliated by a common owner, common members of a board of directors, manager, or holding company.
Page 5 of 8 XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1095 (7)[(5)] All information provided by a pharmacy benefit manager pursuant to subsection (6)[(4)] of this section shall reflect data for the most recent full calendar year and shall be divided by month.
(3)[(5)] All information provided by the state[a] pharmacy benefit manager pursuant to subsection (2)[(4)] of this section shall reflect data for the most recent full calendar year and shall be divided by month.
(8)[(6)] Any contract entered into or renewed for the delivery of Medicaid services by a managed care organization on or after July 1, 2018, shall comply with the following requirements:
(4)[(6)] Any contract entered into or renewed for the delivery of Medicaid services by a managed care organization on or after the effective date of this Act[July 1, 2018], shall comply with the following requirements:
(a) The Department for Medicaid Services shall set, create, or approve, and may change at any time for any reason, reimbursement rates between a pharmacy benefit manager and a contracted pharmacy, or an entity which contracts on behalf of a pharmacy.
(a) The Department for Medicaid Services shall, in accordance with Section 3 of this Act, set or[,] create,[ or approve,] and may change at any time for any reason, reimbursement rates between the state[a] pharmacy benefit manager and a contracted pharmacy, or an entity which contracts on behalf of a pharmacy.
Reimbursement rates shall include dispensing fees which take into account applicable guidance by the Center for Medicare and Medicaid Services.
Reimbursement rates shall include dispensing fees which take into account applicable guidance by the Center for Medicare and Medicaid Services[.
The Department for Medicaid Services may disallow the change within thirty (30) days of this notification;
The Department for Medicaid Services may disallow the change within thirty (30) days of this notification];
(c) The Department for Medicaid Services shall approve any contract between the managed care organization and a pharmacy benefit manager;
(c) The Department for Medicaid Services shall review and may approve or deny any contract between the managed care organization and the state[a] pharmacy benefit manager;
(d) The Department for Medicaid Services shall approve any contract, any change in the terms of a contract, or suspension or termination of a contract between a pharmacy benefit manager contracted with a managed care organization to administer Medicaid benefits and an entity which contracts on behalf of a Page 6 of 8 XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1095 pharmacy, or any contract or any change in the terms of a contract, or any suspension or termination of a contract between a pharmacy benefit manager and a pharmacy or pharmacist;
Page 16 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN (d) [The Department for Medicaid Services shall approve any contract, any change in the terms of a contract, or suspension or termination of a contract between a pharmacy benefit manager contracted with a managed care organization to administer Medicaid benefits and an entity which contracts on behalf of a pharmacy, or any contract or any change in the terms of a contract, or any suspension or termination of a contract between a pharmacy benefit manager and a pharmacy or pharmacist;
and (e) Any fee established, modified, or implemented directly or indirectly by a managed care organization, pharmacy benefit manager, or entity which contracts on behalf of a pharmacy that is directly or indirectly charged to, passed onto, or required to be paid by a pharmacy services administration organization, pharmacy, or Medicaid recipient shall be submitted to the Department for Medicaid Services for approval.
and (e) ]Any fee established, modified, or implemented directly or indirectly by a managed care organization, the state pharmacy benefit manager, or entity which contracts on behalf of a pharmacy that is directly or indirectly charged to, passed onto, or required to be paid by a pharmacy services administration organization, pharmacy, or Medicaid recipient shall be submitted to the Department for Medicaid Services for approval.
This paragraph shall not apply to any membership fee or service fee established, modified, or implemented by a pharmacy services administration organization on a pharmacy licensed in Kentucky that is not directly or indirectly related to product reimbursement.
This paragraph shall not apply to any membership fee or service fee established, modified, or implemented by a pharmacy services administration organization on a pharmacy licensed in Kentucky that is not directly or indirectly related to product reimbursement;
(9)[(7)] The Department for Medicaid Services may promulgate administrative regulations pursuant to KRS Chapter 13A as necessary to implement and administer its responsibilities under this section.
and (e) The provisions of Sections 2 and 3 of this Act.
(5)[(7)] The Department for Medicaid Services may promulgate administrative regulations pursuant to KRS Chapter 13A as necessary to implement and administer its responsibilities under this section.
(10)[(8)] The Department for Medicaid Services may consider any information ascertained pursuant to this section in the setting, creation, or approval of reimbursement rates used by a pharmacy benefit manager or an entity which contracts on behalf of a pharmacy.
(6)[(8)] The Department for Medicaid Services may consider any information ascertained pursuant to this section in the setting, creation, or approval of reimbursement rates used by a pharmacy benefit manager or an entity which contracts on behalf of a pharmacy.
Section 2.
Page 17 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN Section 9.
If the Cabinet for Health and Family Services determines that a waiver or authorization from a federal agency is necessary prior to the implementation of any provisions of this Act, the Cabinet for Health and Family Services shall, within ninety (90) days of the effective date of this Act, request the waiver or authorization and may delay implementing any provision deemed to require a waiver or authorization only until Page 7 of 8 XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1095 the waiver or authorization is granted.
If the Cabinet for Health and Family Services determines that a waiver or any other authorization from a federal agency is necessary prior to the implementation of any provision of this Act, the Cabinet for Health and Family Services shall, within 90 days of the effective date of this Act, request the waiver or authorization and may delay implementing any provision deemed to require a waiver or authorization only until the waiver or authorization is granted.
Section 3.
Section 10.
Whereas there is urgent need to improve the administration and provision of outpatient pharmacy benefits to Medicaid recipients, an emergency is declared to exist, and this Act takes effect on July 1, 2020.
Whereas there is urgent need to improve the administration and provision of pharmacy benefits for Medicaid recipients in the Commonwealth, an emergency is declared to exist, and this Act takes effect upon its passage and approval by the Governor or upon its otherwise becoming a law.
Page 8 of 8 XXXX Jacketed
Page 18 of 18 XXXX Engrossed
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Action History

  1. signed by Governor (Acts ch. 70)

  2. delivered to Governor

  3. enrolled, signed by Speaker of the House

  4. enrolled, signed by President of the Senate

  5. passed 30-1

  6. Senate concurred in House Committee Substitute (1) and committee amendment (1-title)

  7. posted for passage for concurrence in House Committee Substitute (1) and House committee amendment (1-title)

  8. received in Senate

  9. 3rd reading, passed 95-0 with Committee Substitute (1) and committee amendment (1-title)

  10. posted for passage in the Regular Orders of the Day for Thursday, March 12, 2020

  11. 2nd reading, to Rules

  12. reported favorably, 1st reading, to Calendar with Committee Substitute (1) and committee amendment (1-title)

  13. posted in committee

  14. to Appropriations & Revenue (H)

  15. received in House

  16. 3rd reading, passed 33-0 with Committee Substitute (1)

  17. posted for passage in the Regular Orders of the Day for Thursday, February 20, 2020

  18. reported favorably, to Rules with Committee Substitute (1)

  19. recommitted to Health & Welfare (S)

  20. posted for passage in the Regular Orders of the Day for Wednesday, February 19, 2020

  21. 2nd reading, to Rules

  22. reported favorably, 1st reading, to Calendar

  23. to Health & Welfare (S)

  24. introduced in Senate

Sponsorship breakdown

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0 sponsors · 0 co-sponsors · 138 not signed on · 1 voted No

Sponsors (0)

None.

Co-sponsors (0)

None.

Not signed on (138)

138 members have not signed on to this bill.

Show all 138 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

Passed 30 Yea · 1 Nay · 7 Other
Party YeaNayPresentNot Voting
Unaffiliated 17006
Republican 13100
Democrat 0001
Total 30107
% of votes cast 79%3%0%18%
How each member voted (38)
Member Party Vote
Alvarado — Yea
Robinson — Yea
Turner — Yea
Buford — Yea
Hornback — Yea
Schickel — Yea
Humphries — Yea
Schroder — Yea
Carroll D — Yea
Westerfield — Yea
Castlen — Yea
McGarvey — Yea
Meredith — Yea
Thayer — Yea
Thomas — Yea
Harris — Yea
Nemes — Yea
Embry — Not Voting
Kerr — Not Voting
Parrett — Not Voting
Clark — Not Voting
Harper Angel — Not Voting
Miller J — Not Voting
Gerald A. Neal Democrat Not Voting
Brandon Smith Republican Yea
Christian McDaniel Republican Yea
David P. Givens Republican Yea
Jared Carpenter Republican Yea
Jimmy Higdon Republican Yea
Julie Raque Adams Republican Nay
Max Wise Republican Yea
Mike Wilson Republican Yea
Phillip Wheeler Republican Yea
Rick Girdler Republican Yea
Robby Mills Republican Yea
Robert Stivers Republican Yea
Robin L. Webb Republican Yea
Stephen West Republican Yea

Official roll call →

Pass

Passed 95 Yea · 0 Nay · 6 Other
Party YeaNayPresentNot Voting
Republican 31000
Unaffiliated 57006
Democrat 7000
Total 95006
% of votes cast 94%0%0%6%
How each member voted (101)
Member Party Vote
Fischer — Yea
Huff T — Yea
Sheldon — Yea
Bechler — Yea
Flood — Yea
Jenkins — Yea
Sims — Yea
Bentley — Yea
Frazier — Yea
Minter — Yea
Sorolis — Yea
Koenig — Yea
Nemes — Yea
Stewart — Yea
Booker — Yea
Stone — Yea
Glenn — Yea
Lee — Yea
Branham Clark — Yea
Goforth — Yea
Lewis D — Yea
Pratt — Yea
Lewis S — Yea
Prunty — Yea
Thomas — Yea
Brenda — Yea
Graham — Yea
Rand — Yea
Graviss — Yea
Raymond — Yea
Turner — Yea
Brown G — Yea
Massey — Yea
Burch — Yea
Harris — Yea
Webber — Yea
Cantrell — Yea
McCoy — Yea
Westrom — Yea
Donohue — Yea
Hatton — Yea
Rothenburger — Yea
Wheatley — Yea
Heath — Yea
Meeks — Yea
Rowland — Yea
DuPlessis — Yea
Meredith — Yea
Wiederstein — Yea
Hinkle — Yea
Meyer — Yea
Santoro — Yea
Schamore — Yea
Yates — Yea
Carney — Not Voting
Hoover — Not Voting
Howard — Not Voting
Palumbo — Not Voting
Scott — Not Voting
COMMONWEALTH OF KENTUCKY SENATE — Not Voting
Huff R — Yea
Miller C — Yea
Miller J — Yea
Al Gentry Democrat Yea
Ashley Tackett Laferty Democrat Yea
Lisa Willner Democrat Yea
Mary Lou Marzian Democrat Yea
Nima Kulkarni Democrat Yea
Pamela Stevenson Democrat Yea
Tina Bojanowski Democrat Yea
Aaron Reed Republican Yea
Adam Bowling Republican Yea
Bobby McCool Republican Yea
Chris Freeland Republican Yea
Chris Fugate Republican Yea
Daniel Elliott Republican Yea
David Hale Republican Yea
David Meade Republican Yea
David W. Osborne Republican Yea
Greg Elkins Republican Yea
James Tipton Republican Yea
Jason Petrie Republican Yea
Jim Gooch Jr. Republican Yea
John Blanton Republican Yea
Ken Upchurch Republican Yea
Kim Banta Republican Yea
Kim King Republican Yea
Kimberly Poore Moser Republican Yea
Mark Hart Republican Yea
Matthew Koch Republican Yea
Myron Dossett Republican Yea
Nancy Tate Republican Yea
Randy Bridges Republican Yea
Richard White Republican Yea
Samara Heavrin Republican Yea
Savannah Maddox Republican Yea
Steve Bratcher Republican Yea
Steve Riley Republican Yea
Steven Rudy Republican Yea
Suzanne Miles Republican Yea
T.J. Roberts Republican Yea

Official roll call →

PASS SB 50 W/ scs1

Passed 33 Yea · 0 Nay · 5 Other
Party YeaNayPresentNot Voting
Unaffiliated 19004
Democrat 1000
Republican 13001
Total 33005
% of votes cast 87%0%0%13%
How each member voted (38)
Member Party Vote
Alvarado — Yea
Harris — Yea
Thayer — Yea
Buford — Yea
Nemes — Yea
Thomas — Yea
Hornback — Yea
Turner — Yea
Carroll D — Yea
Humphries — Yea
Robinson — Yea
Schickel — Yea
Westerfield — Yea
Clark — Yea
McGarvey — Yea
Schroder — Yea
Meredith — Yea
Castlen — Not Voting
Kerr — Not Voting
Parrett — Not Voting
Embry — Not Voting
Harper Angel — Yea
Miller J — Yea
Gerald A. Neal Democrat Yea
Brandon Smith Republican Yea
Christian McDaniel Republican Yea
David P. Givens Republican Yea
Jared Carpenter Republican Yea
Jimmy Higdon Republican Yea
Julie Raque Adams Republican Yea
Max Wise Republican Yea
Mike Wilson Republican Yea
Phillip Wheeler Republican Yea
Rick Girdler Republican Yea
Robby Mills Republican Yea
Robert Stivers Republican Yea
Robin L. Webb Republican Yea
Stephen West Republican Not Voting

Official roll call →

Subjects

Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

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