AN ACT relating to pharmacy benefits in the Medicaid program and declaring an emergency.
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SB 50 — AN ACT relating to pharmacy benefits in the Medicaid program and declaring an emergency.
Last action — signed by Governor (Acts ch. 70)
No card. One bill, free forever — alerts when it moves.
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✓Introduced
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✓In Committee
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✓Passed Senate
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✓Passed House
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✓To Executive
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6Enacted
This bill has been enacted into law. Introduced January 28, 2020. Enacted.
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Enacted
Current position in the legislative process.
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Cleared a recorded vote
Passed 3 recorded votes so far.
Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.
Bill Text
What changed in the latest version
522 added · 216 removed522 line(s) added, 216 removed.
UNOFFICIAL COPY 20 RS BRSB 109550/EN AN ACT relating to outpatient pharmacy benefits in the Medicaid program and declaring an emergency.
SectionSECTION 1.
A NEW SECTION OF KRS 205.647205.510 isTO amended205.560 toIS readCREATED asTO follows:READ AS FOLLOWS:
(1) As used in thisSections section:[,1 ]to (a)6 "Averageof reimbursement" means a statistical methodology selected by the department via any administrative regulations promulgated pursuant to this section,Act, whichunless shallcontext include,otherwise atrequires: a minimum, the median and mean;
(b)(1) "Department" means the Department for Medicaid Services;
and(2) (c)"Managed "Pharmacycare benefitorganization" manager" has the same meaning as in KRS 304.9-020.205.532;
(2)(3) (a)"Pharmacy Exceptbenefit asmanager" providedhas pursuant to subsections (4) and (5) of this section, beginning on the effectivesame datemeaning ofas thisin ActKRS the304.9-020; department shall directly administer all outpatient pharmacy benefits for all Medicaid recipients.
(b)(4) The"Spread departmentpricing" shall,means throughany thetechnique promulgationby which a pharmacy benefit manager or other administrator of administrativepharmacy regulations,benefits establishcharges or claims an outpatientamount from an insurer or managed care organization for pharmacy benefitsor programpharmacist services, including payment for a prescription drug, that includes: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:
AEstablish formulary;the state pharmacy benefit manager's fiduciary duty owed to the department;
ReimbursementComply methodologies;with the provisions of subsection (4) of Section 3 of this Act;
and 3.
ARequire: dispensing fee which shall take into account applicable guidance by the Centers for Medicare and Medicaid Services.
(3)a. 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.
AnyThe manageduse care techniques, principles, or administration of benefitspass-through utilizedpricing; pursuant to this section shall comply with Kentucky law.
(4)and (a)b. 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;
however,The thesestate servicespharmacy shallbenefit bemanager approvedto use the preferred drug list, reimbursement methodologies, and dispensing fees established by the department.department pursuant to subsection (1) of Section 3 of this Act;
(b) KRS 304.17A-162(10), (11), (12), and (13)4. shall not apply to a third-party administrator contracted directly with the department to administer the outpatient pharmacy benefits program.
(c)Prohibit: The following shall apply to contracts between a third-party administrator and pharmacies:
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.
Show all 190 changed lines (150 more)
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:
TheWith departmentwhich shallthe approvepharmacy anybenefit contractmanager betweenshares acommon third-partyownership, administratormanagement, andor acontrol; pharmacy;
AWhich third-partyare administratorowned, shallmanaged, notor changecontrolled theby termsany of athe contractpharmacy betweenbenefit themanager's third-partymanagement administratorcompanies, andparent acompanies, pharmacysubsidiary withoutcompanies, writtenjointly approvalheld fromcompanies, theor department;companies otherwise affiliated by a common owner, manager, or holding company;
AWhich third-partyshare administrator shall not create, modify, implement, or indirectly establish any feecommon members on athe pharmacy,board pharmacist,of ordirectors; a Medicaid recipient without written approval from the department;
andor 4.
AWhich third-partyshare administratormanagers shallin utilizecommon; the formulary, reimbursement methodologies, and dispensing fee established by the department pursuant to subsection (2) of this section.
(5)(c) (a)Any Thedirect provisionsor ofindirect thisfees, sectioncharges, shallor notany applykind toof outpatientassessments pharmacyimposed services provided by athe healthpharmacy carebenefit facilitymanager thaton ispharmacies registeredlicensed asin aKentucky coveredwhich entityoperate: pursuant to 42 U.S.C.
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.
256b256b. or any pharmacy owned by or contracted with such a covered entity.
(b)Reimbursement Pursuantmethodologies toestablished by 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 25 of 818 XXXX JacketedEngrossed UNOFFICIAL COPY 20 RS BRSB 109550/EN claimsshall submittednot discriminate against pharmacies owned or contracted by a health care facility that is registered as a covered entity pursuant to 42 U.S.C.
256b256b, orto any pharmacy owned or contracted with such a covered entity in accordance with the contractualextent agreementsallowable thatby the MedicaidCenters managedfor careMedicare organization or its pharmacy benefit manager has with such facilities and pharmacies.Medicaid Services.
(c)(2) AThe Medicaidreimbursement managedmethodologies careand organizationdispensing orfees itsestablished pharmacyby benefitthe managerdepartment pursuant to subsection (1) of this section shall notbe excludeused anyby healththe state pharmacy benefit manager for each managed care facilityorganization thatwith iswhom registeredthe asdepartment acontracts coveredfor entitythe pursuantdelivery toof 42Medicaid U.S.C.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 fromand itsa pharmacyMedicaid network.managed care organization;
(d)(b) The departmentterms shalland promulgateconditions administrativeof regulationsthe necessarycontract tobetween carrythe outstate thepharmacy provisionsbenefit ofmanager thisand subsection.the Commonwealth;
(6)and A(c) pharmacyThe benefitreimbursement managermethodologies contractedand withdispensing afees managedestablished careby organizationthe todepartment, administer outpatient pharmacy benefits pursuant to subsection (5)(1) of this sectionsection. [that provides Medicaid benefits pursuant to this chapter ]shall:
(a)(4) ComplyThe withfollowing shall apply to the provisionsstate ofpharmacy thisbenefit sectionmanager, the contract between the state pharmacy benefit manager and KRSthe 304.9-053,department, 304.9-054,and, 304.9-055,where applicable, any contract between the state pharmacy benefit manager and 304.17A-162;a pharmacy:
and[.(a) The department shall be responsible for reviewing and shall approve or deny:
(3)1. 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.[(a)]Any Thecontract, totalany Medicaidchange dollarsin paid to the pharmacyterms benefitof manager by a managedcontract, careor organizationsuspension andor thetermination total amount of Medicaida dollarscontract paidbetween to the state pharmacy benefit manager byand a managed care organization which were not subsequently paid to a pharmacy licensed inunder Kentucky;KRS Chapter 315;
2.[(b)1.]and The average reimbursement, by drug ingredient cost, dispensing Page 36 of 818 XXXX JacketedEngrossed UNOFFICIAL COPY 20 RS BRSB 109550/EN fee,2. 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;
orAny whichcontract, areany owned,change managed,in orthe controlledterms byof anya ofcontract, theor pharmacysuspension benefitor manager'stermination managementof companies,a parentcontract companies,between subsidiarythe companies,state jointlypharmacy heldbenefit companies,manager orand companiesan otherwiseentity affiliatedthat bycontacts on behalf of a commonpharmacy owner,licensed manager,under orKRS holdingChapter company;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[.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];mean;
3.[(c)](c) The average reimbursement, by drug ingredient cost, dispensing fee, and any other fee, paid by athe state[a] pharmacy benefit manager to pharmacies licensed in Kentucky which operate more than ten (10) locations;
4.[(d)](d) The average reimbursement by drug ingredient cost, dispensing fee, and any other fee, paid by athe state[a] pharmacy benefit manager to pharmacies licensed in Kentucky which operate ten (10) or fewer locations;
5.[(e)]and Any(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;
6.[(f)](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)](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)](h) All]All common ownership, management, common members of a board of directors, shared managers, or control of athe 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 athe 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(3)[(5)] 5 of 8 XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1095 (7)[(5)] All information provided by athe state[a] pharmacy benefit manager pursuant to subsection (6)[(4)](2)[(4)] of this section shall reflect data for the most recent full calendar year and shall be divided by month.
(8)[(6)](4)[(6)] Any contract entered into or renewed for the delivery of Medicaid services by a managed care organization on or after Julythe effective date of this Act[July 1, 2018,2018], shall comply with the following requirements:
(a) The Department for Medicaid Services shallshall, set,in create,accordance with Section 3 of this Act, set or[,] create,[ or approve,approve,] and may change at any time for any reason, reimbursement rates between athe 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.Services[.
The Department for Medicaid Services may disallow the change within thirty (30) days of this notification;notification];
(c) The Department for Medicaid Services shall review and may approve or deny any contract between the managed care organization and athe state[a] pharmacy benefit manager;
Page 16 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN (d) The[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;
and (e) Any]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.reimbursement;
(9)[(7)]and (e) The Departmentprovisions forof MedicaidSections Services2 may promulgate administrative regulations pursuant to KRS Chapter 13A as necessary to implement and administer3 itsof responsibilities under this section.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)](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.
Page 17 of 18 XXXX Engrossed UNOFFICIAL COPY 20 RS SB 50/EN Section 2.9.
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 provisionsprovision of this Act, the Cabinet for Health and Family Services shall, within ninety90 (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.
Section 3.10.
Whereas there is urgent need to improve the administration and provision of outpatient pharmacy benefits tofor Medicaid recipients,recipients in the Commonwealth, an emergency is declared to exist, and this Act takes effect onupon Julyits 1,passage 2020.and approval by the Governor or upon its otherwise becoming a law.
Page 818 of 818 XXXX JacketedEngrossed
Show all 190 changed rows (150 more)
Action History
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signed by Governor (Acts ch. 70)
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delivered to Governor
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enrolled, signed by Speaker of the House
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enrolled, signed by President of the Senate
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passed 30-1
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Senate concurred in House Committee Substitute (1) and committee amendment (1-title)
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posted for passage for concurrence in House Committee Substitute (1) and House committee amendment (1-title)
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received in Senate
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3rd reading, passed 95-0 with Committee Substitute (1) and committee amendment (1-title)
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posted for passage in the Regular Orders of the Day for Thursday, March 12, 2020
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2nd reading, to Rules
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reported favorably, 1st reading, to Calendar with Committee Substitute (1) and committee amendment (1-title)
-
posted in committee
-
to Appropriations & Revenue (H)
-
received in House
-
3rd reading, passed 33-0 with Committee Substitute (1)
-
posted for passage in the Regular Orders of the Day for Thursday, February 20, 2020
-
reported favorably, to Rules with Committee Substitute (1)
-
recommitted to Health & Welfare (S)
-
posted for passage in the Regular Orders of the Day for Wednesday, February 19, 2020
-
2nd reading, to Rules
-
reported favorably, 1st reading, to Calendar
-
to Health & Welfare (S)
-
introduced in Senate
Sponsorship breakdown
Export CSV (upgrade) →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.
Votes
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 17 | 0 | 0 | 6 |
| Republican | 13 | 1 | 0 | 0 |
| Democrat | 0 | 0 | 0 | 1 |
| Total | 30 | 1 | 0 | 7 |
| % 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 |
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Republican | 31 | 0 | 0 | 0 |
| Unaffiliated | 57 | 0 | 0 | 6 |
| Democrat | 7 | 0 | 0 | 0 |
| Total | 95 | 0 | 0 | 6 |
| % 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 |
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 19 | 0 | 0 | 4 |
| Democrat | 1 | 0 | 0 | 0 |
| Republican | 13 | 0 | 0 | 1 |
| Total | 33 | 0 | 0 | 5 |
| % 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 |
Subjects
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