SB 415 — PHARMACY BENEFITS MANAGER ACT CHANGES
Last action — Signed
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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 30, 2019. Enacted.
Prognosis
Where this bill stands today.
Odds of enactment
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Enacted
Current position in the legislative process.
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1 sponsor
1 primary, 0 co-sponsors signed on.
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Bill Text
What changed in the latest version
367 added · 636 removedPlain-language change summary
The changes to SB 415 primarily involve clarifying definitions and requirements regarding the regulation of pharmacy benefits managers (PBMs). The updated bill emphasizes the need for transparency by introducing a searchable list of maximum allowable costs for generic drugs and includes a more structured approach to the appeals process. These modifications aim to protect consumers by ensuring fair reimbursement practices and increasing accountability within the pharmacy benefits management industry, which helps keep drug costs in check.
SENATE JUDICIARY COMMITTEE SUBSTITUTE FOR SENATE CORPORATIONS AND TRANSPORTATION COMMITTEE SUBSTITUTE FOR SENATE BILL 415 54TH LEGISLATURE - STATEOFNEWMEXICO- FIRST SESSION, 2019 4 6 8 10 AN ACT RELATING TO HEALTH CARE;
REQUIRING DISCLOSURE OF 14 DOCUMENTS DURING AN INVESTIGATION;
REQUIRING THE e t 17 PROVISION OF CERTAIN DOCUMENTS OR INFORMATION UPON REQUEST;
w l n d 18 REQUIRING CERTAIN CONTRACTUAL PROVISIONS;
LIMITING PHARMACY = = 19 BENEFITS MANAGER CHARGES TO THOSE ITEMIZED IN A CONTRACT.
a l i a e r 20 a t m m 21 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
d r e 22 SECTION 1.
Section 59A-61-2 NMSA 1978 (being Laws 2014, c e s k 23 Chapter 14, Section 2) is amended to read:
e a n b 24 "59A-61-2.
DEFINITIONS.--As used in the Pharmacy Benefits u [ Manager Regulation Act:
.214315.3A. SJC/SCORC/SB 415 [A.
"covered entity" means a nonprofit hospital or medical service corporation, health insurer, health benefit plan or health maintenance organization;
a health program administered by the state as a provider of health coverage;
any type of group health care coverage, including any form of self- insurance offered, issued or renewed pursuant to the Health Care Purchasing Act;
or an employer, labor union or other group of persons organized in the state that provides health coverage to covered individuals who are employed or reside in the state.
"Covered entity" does not include a self-funded plan that is exempt from state regulation pursuant to the federal Employee Retirement Income Security Act of 1974;
a plan issued for coverage for federal employees;
or a health plan that provides coverage only for accidental injury, specified disease, hospital indemnity, medicare supplement, disability income, long-term care or other limited benefit health insurance e e 17 policies and contracts;
e e n d 18 B.
"covered individual" means a member, = = l ] 19 participant, enrollee, contract holder, policy holder or a l r i 20 beneficiary of a covered entity who is provided health coverage t e a t by the covered entity and includes a dependent or other person m m 21 e d provided health coverage through a policy, contract or plan for r e 22 c e r c 23 a covered individual;
e a n b 24 C.
"medicare advantage plan" or "MA-PD" means a u [ prescription drug program authorized pursuant to Part C of .214315.3 - 2 - SJC/SCORC/SB 415 Title 18 of the federal Medicare Prescription Drug, Improvement, and Modernization Act of 2003 that provides qualified prescription drug coverage;] A.
SJC/SCORC/SB 415 Page 1 C.
"pharmacist" means an individual licensed as a e e 17 pharmacist by the board of pharmacy;
e e n d 18 E.
"pharmacy" means a licensed place of business = = l ] 19 where drugs are compounded or dispensed and pharmacist services a l r i 20 are provided;
t e a t F.
"pharmacy benefits management" means [thea m m 21 e d service provided to a health benefit plan or healthconducted insurer,by r e 22 c e r c 23 directly or through another person, including the procurement e a nhealth bplan 24as ofdefined prescriptionin drugsSection to59A-16-21.1 beNMSA dispensed1978 to patients, or thehealth uinsurer [that administrationinvolves: or management of prescription drug benefits, .214315.3 - 3 - SJC/SCORC/SB 415 including:
(1) mail service pharmacies;
and (2) claims processing, retail network management or payment of claims to pharmacies for dispensing dangerous drugs, as those drugs are defined in the New Mexico Drug, Device and Cosmetic Act] a service provided to or conducted by a health plan as defined in Section 59A-16-21.1 NMSA 1978 or health insurer that involves:
(6) payment of claims to pharmacies for e e 17 dispensing prescription drugs;
e e n d 18 (7) negotiation or administration of contracts = = l ] 19 relating to pharmacy operations or prescription benefits;
or aSJC/SCORC/SB l415 rPage i2 20 (8) any other service determined by the t e a t superintendent as specified by rule to be a pharmacy benefits m m 21 e d management activity;
r e 22 c e r c 23 G.
"pharmacy benefits manager" means [aan personentity or a e a n b 24 wholly or partially owned or controlled subsidiary of a person u [ that provides claims administration, benefit design and .214315.3 - 4 - SJC/SCORC/SB 415 management, pharmacy network management, negotiation and administration of product discounts, rebates and other benefits accruingmanagement toservices; the pharmacy benefits manager or other prescription drug or device services to third parties, but "pharmacy benefits manager" does not include licensed health care facilities, pharmacies, licensed health care professionals, health insurers, unions, health maintenance organizations, medicare advantage plans or prescription drug plans when providing formulary services to their own patients, employees, members or beneficiaries;
"prescription"pharmacy drugbenefits plan"manager oraffiliate" "PDP" means prescription drug coverage that is offered pursuant to a policy,pharmacy contract or planpharmacist that hasdirectly beenor approvedindirectly, asthrough specifiedone inor 42more CFRintermediaries, Partowns 423or andcontrols, that is offeredowned byor acontrolled prescriptionby drugor planis sponsorunder thatcommon hasownership aor contractcontrol with thea federal centers for medicare and medicaid services of the United States department e e 17 of health and human services] an entity that provides pharmacy e e n d 18 benefits managementmanager; services;
=I. = l ] 19 H.
"pharmacy benefitsservices manageradministrative affiliate"organization" means aan aentity lthat rcontracts iwith 20a pharmacy or pharmacist thatto directlyact oras indirectly,the throughpharmacy oneor tpharmacist's eagent awith trespect orto morematters intermediaries,involving ownsa orpharmacy controls,benefits ismanager owned or mthird-party mpayor, 21including enegotiating, dexecuting controlled by or isadministering undercontracts common ownership or control with athe rpharmacy ebenefits 22manager cor ethird-party rpayor; c 23 pharmacy benefits manager;
eand aJ. n b 24 I.
"pharmacy services administrative organization" u [ means an entity that contracts with a pharmacy or pharmacist to .214315.3 - 5 - SJC/SCORC/SB 415 act as the pharmacy or pharmacist's agent with respect to matters involving a pharmacy benefits manager or third-party payor, including negotiating, executing or administering contracts with the pharmacy benefits manager or third-party payor;
Show all 112 changed lines (72 more)
and [I.] J.
[LICENSE ] LICENSURE--INITIAL APPLICATION--APPLICATION--ANNUAL ANNUAL RENEWAL REQUIRED--REVOCATION.-- A.
A person shall not operate as a pharmacy benefits manager unless licensed by the superintendent in SJC/SCORC/SB 415 Page 3 accordance with the Pharmacy Benefits Manager Regulation Act and applicable federal and state laws.
e e 17 B.
An initial application and a renewal application e e n d 18 for licensure as a pharmacy benefits manager shall be made on a = = l ] 19 form and in a manner provided for by the superintendent, but at a l r i 20 a minimum shall requirerequire: [only the following information]:
t e a t (1) the identity of the pharmacy benefits m m 21 e d manager;
r e 22 c e r c 23 (2) the name and business address of the e a n b 24 contact person for the pharmacy benefits manager;
[and ] u [ (3) where applicable, the federal employer .214315.3 - 6 - SJC/SCORC/SB 415 identification number for the pharmacy benefits manager;
(1) the pharmacy benefits manager is operating [materially] in contravention of its application;
(2) the pharmacy benefits manager has failed to continuously meet or [substantially ] comply with the requirements for SJC/SCORC/SB 415 Page 4 issuance or maintenance of a license;
or (3) the pharmacy benefits manager has failed to [substantially ] comply with applicable state or federal laws or rules.
[or e e 17 (4) the pharmacy benefits manager has e e n d 18 transacted insurance in the state without authorization or has = = l ] 19 transacted insurance for a product that is not issued by an a l r i 20 authorized insurer.] t e a t D.
If the license of a pharmacy benefits manager is m m 21 e d revoked, the manager shall proceed, immediately following the r e 22 c e r c 23 effective date of the order of revocation, to [wind up ] e a n b 24 conclude its affairs, notify each pharmacy in its network and u [ conduct no further [business ] pharmacy benefits management .214315.3 - 7 - SJC/SCORC/SB 415 services in the statestate, , except as may be essential to the orderly conclusion of its affairs.
The superintendent may permit further operation of the pharmacy benefits manager if the superintendent finds it to be in the best interest of patientspatients. [to obtain pharmacist services ].
[MAXIMUM ALLOWABLE COST PRICING REQUIREMENTS] PHARMACY REIMBURSEMENT PRACTICES FOR GENERIC DRUGS--APPEALS e e 17 PROCESS REQUIRED.-- e e n d 18 A.
A pharmacy benefits manager shall determine a =SJC/SCORC/SB =415 lPage ]5 19 reimbursement amount for a generic drug based on objective and a l r i 20 verifiable sources.
t e a t B.
A pharmacy benefits manager shall reimburse a m m 21 e d pharmacy an amount no less than the amount that the pharmacy r e 22 c e r c 23 benefits manager reimburses a pharmacy benefits manager e a n b 24 affiliate in the same network for providing the same or u [ equivalent service.
.214315.3 - 8 - SJC/SCORC/SB 415 [A.] C.
A pharmacy benefits manager using maximum allowable cost pricing [shall:may place a drug on a maximum allowable cost list if the drug:
(1) to]is maylisted placeas a"A" drugor on"B" arated maximumin allowablethe costmost listrecent [ensureversion thatof the United States food and drug ]administration's ifapproved drug products with therapeutic equivalence evaluations, also known as the drug:"orange book", or has an "NR" or "NA" rating or a similar rating by a nationally recognized reference;
[(a)](2) (1) is listedavailable asfor "A"purchase orby "B"pharmacies rated in the moststate recentat version of the Unitedtime Statesof foodclaim andsubmission drugfrom administration'snational approved drug products with therapeutic equivalence evaluations, also known as the "orange book", [(b) ] or hasregional anwholesalers "NR"and oris "NA"not ratingobsolete; or a similar rating by a nationally recognized reference;
[andand (c)](3) (2) is [generally]a availabledrug forwith purchasenot byfewer pharmaciesthan two "A" or "B" rated therapeutically equivalent drugs in the statemost atrecent version of the timeUnited ofStates claimfood submissionand fromdrug nationaladministration's orapproved regionaldrug wholesalersproducts andwith istherapeutic notequivalence obsolete;evaluations, also known as the "orange book".
andD. (3) is a drug with not fewer than two "A" or "B" rated therapeutically equivalent drugs in the most recent version of the United States food and drug administration's e e 17 approved drug products with therapeutic equivalence e e n d 18 evaluations, also known as the "orange book".
=A =pharmacy lbenefits ]manager 19using D.maximum SJC/SCORC/SB 415 Page 6 allowable cost pricing shall:
A(1) upon a network pharmacy's request, provide that network pharmacy benefitswith managerthe usingsources used to determine the maximum aallowable lcost rpricing ifor 20the maximum allowable cost pricinglist shall:specific to that provider;
t(2) ereview aand tupdate [(2)]maximum (1)allowable uponcost aprice networkinformation pharmacy's request, m m 21 e d provide [to a] that network pharmacy [provider, at theleast timeonce aevery rseven ebusiness 22days c e r c 23 contract is entered into or renewed] with [the network pharmacy e a n b 24 provider] the sources used to determinereflect theany maximummodification allowableof u [ cost pricing for the maximum allowable cost listpricing; specific to .214315.3 - 9 - SJC/SCORC/SB 415 that provider;
[(3)](3) (2)establish review and updatemaintain a process for eliminating products from the maximum allowable cost pricelist informationor atmodifying leastmaximum onceallowable everycost prices in at least seven business days to reflectremain anyconsistent modificationwith ofpricing maximumchanges allowableand costproduct pricing;availability in the marketplace;
[(4)](4) (3)provide establisha andprocedure maintainthat allows a processpharmacy forto eliminatingchoose products from the maximumentity allowable cost list or modifying maximum allowable cost prices in [a timely manner ] at least seven business days to remainwhich consistentit withwill pricingappeal changesreimbursement andfor productgeneric availabilitydrugs. in the marketplace;
[(5) provide a procedure under which a network pharmacy provider may challenge a listed maximum allowable cost price for a drug and respond to a challenge not later than the fifteenth day after the date the challenge is made.
If the challenge is successful, a pharmacy benefits manager using maximum allowable cost pricing shall make an adjustment in the drug price effective one day after the challenge is resolved, e e 17 and make the adjustment applicable to all similarly situated e e n d 18 network pharmacy providers, as determined by the managed care = = l ] 19 organization or pharmacy benefits manager, as appropriate.
If a l r i 20 the challenge is denied, the pharmacy benefits manager using t e a t maximum allowable cost pricing shall provide the reason for the m m 21 e d denial;
and] r e 22 c e r c 23 (4) provide a procedure that allows a pharmacy e a n b 24 to choose the entity to which it will appeal reimbursement for u [ generic drugs.
.214315.3 - 10 - SJC/SCORC/SB 415 (a) directly to the pharmacy benefits manager;
SJC/SCORC/SB 415 Page 7 (b) the ability to submit an appeal directly to the pharmacy benefits manager;
(6) grant an appeal if the pharmacy benefits manager fails to respond to a complete submission as defined by e e 17 rules promulgated by the superintendent of the appealing party e e n d 18 in writing within fourteen business days after the pharmacy = = l ] 19 benefits manager receives the appeal;
a l r i 20 (7) if an appeal is granted, notify the t e a t challenging pharmacy and its pharmacy services administrative m m 21 e d organization, if any, that the appeal is granted and make the r e 22 c e r c 23 change in the maximum allowable cost effective for the e a n b 24 appealing pharmacy and for each other pharmacy in its network u [ and permit the appealing pharmacy to reverse and bill again the .214315.3 - 11 - SJC/SCORC/SB 415 claim or claims that formed the basis of the appeal;
SJC/SCORC/SB 415 Page 8 (10) upon granting an appeal, allow other similarly situated network pharmacies to reverse and bill again for like claims that formed the basis of the granted appeal;
and [(6)] (11) provide for each of its network pharmacy providers and the superintendent a process [for each of its network pharmacy providers] and mechanism to readily e e 17 access the maximum allowable cost list specific to that e e n d 18 provider.
= = l ] 19 [B.] E.
A maximum allowable cost list specific to a a l r i 20 provider and maintained by a managed care organization or t e a t pharmacy benefits manager is confidential.
mF. m 21 e d [C.
AsPursuant usedto inSection this59A-4-3 section,NMSA "maximum1978, allowable r e 22 c e r c 23 cost" means the maximum amount that a pharmacy benefits manager eshall aprovide ninformation bcontained 24in willa reimbursemaximum aallowable pharmacycost forlist to the costsuperintendent ofupon arequest genericby drug.]the usuperintendent." [SECTION F.4.
Pursuant to Section 59A-4-3 NMSA 1978, a .214315.3 - 12 - SJC/SCORC/SB 415 pharmacy benefits manager shall provide information contained in a maximum allowable cost list to the superintendent upon request by the superintendent." SECTION 4.
[Each ] A pharmacy benefits manager shall provide to [the pharmacies ] a pharmacy by electronic mail, facsimile or certified mail, at SJC/SCORC/SB 415 Page 9 least thirty calendar days prior to its execution, a contract written in plain English.
A contract between a pharmacy benefits manager e e 17 and a pharmacy shall [provide specific time limits for the e e n d 18 pharmacy benefits manager to pay the pharmacy for services = = l ] 19 rendered] identify the industry standard reimbursement practice a l r i 20 that the pharmacy benefits manager will use to determine a t e a t reimbursement amount, unless the contract is modified in m m 21 e d writing to specify another industry standard practice.
r e 22 c e r c 23 D.
The provisions of the Pharmacy Benefits Manager e a n b 24 Regulation Act shall not be waived, voided or nullified by u [ contract.
.214315.3 - 13 - SJC/SCORC/SB 415 E.
or SJC/SCORC/SB 415 Page 10 (c) discussing information regarding the total cost for pharmacist services for a prescription drug or e e 17 from selling a more affordable alternative to the insured if a e e n d 18 more affordable alternative is available;
= = l ] 19 (4) require or prefer a generic drug over its a l r i 20 generic therapeutic equivalent;
t e a t (5) prohibit, restrict or limit disclosure of m m 21 e d information by a pharmacist or pharmacy to the superintendent;
r e 22 c e r c 23 or e a n b 24 (6) prohibit, restrict or limit pharmacies or u [ pharmacists from providing to state or federal government .214315.3 - 14 - SJC/SCORC/SB 415 officials general information for public policy purposes.
SJC/SCORC/SB 415 Page 11 (3) a claim appeal document;
(4) a disputed claim transaction document or e e 17 price list;
or e e n d 18 (5) any other information specified by law.
= = l ] 19 H.
In a time and manner required by rules a l r i 20 promulgated by the superintendent, a pharmacy benefits manager t e a t shall issue to the superintendent a network adequacy report m m 21 e d describing the pharmacy benefits manager network and the r e 22 c e r c 23 pharmacy benefits manager network's accessibility to insureds e a n b 24 statewide.
u [ I.
Pursuant to the provisions of Section 59A-4-3 .214315.3 - 15 - SJC/SCORC/SB 415 NMSA 1978, the superintendent, or the superintendent's designee, may examine the books, documents, policies, procedures and records of a pharmacy benefits manager to determine compliance with applicable law.
AUDIT--PHARMACY BENEFITS MANAGER.--A pharmacy benefits manager [whether ] licensed pursuant to the Pharmacy Benefits Manager Regulation Act [or exempt from licensure pursuant to that act] shall be subject to Section 61-11-18.2 NMSA 1978.
A pharmacy benefits manager shall not SJC/SCORC/SB 415 Page 12 reduce or eliminate payment on an adjudicated claim except as permitted e e 17 by Section 61-11-18.2 NMSA 1978." e e n d 18 SECTION 6.
Section 59A-61-7 NMSA 1978 (being Laws 2017, = = l ] 19 Chapter 16, Section 2) is amended to read:
a l r i 20 "59A-61-7.
PHARMACY BENEFITS MANAGERS--PROHIBITED t e a t PHARMACY FEES.-- m m 21 e d r e 22 A.
A pharmacy benefits manager shall not charge a c e r c 23 [pharmacist or ] pharmacy a fee related to the adjudication of a e a n b 24 claim, including:
u [ [A.] (1) the receipt and processing of a .214315.3 - 16 - SJC/SCORC/SB 415 pharmacy claim;
[B.] (2) the development or management of a claim processing or adjudication network;
or [C.] (3) participation in a claim processing or claim adjudication network.
"[NEW"REGISTRATION MATERIAL] REGISTRATION OF PHARMACY SERVICES ADMINISTRATIVE ORGANIZATIONS REQUIRED.--A pharmacy services administrative organization shall register with the superintendent on a form and in a time frame and method of submission specified by the superintendent." SJC/SCORC/SB 415 Page 13 SECTION 8.
EFFECTIVE DATE.--The effective date of the e e 17 provisions of this act is July 1, 2019.
eSJC/SCORC/SB e415 nPage d14 184 -6 178 -25 = = l ] 19 a l r i 20 t e a t m m 21 e d r e 22 c e r c 23 e a n b 24 u [ .214315.3
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View plain text versions (4)
- Final Version View text Current pdf
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- Substitute CT substitute pdf
- Introduced introduced version pdf
Action History
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Signed
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passed House
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DO PASS committee report adopted
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Sent to House Health & Human Services Committee
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passed Senate
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DO NOT PASS, replaced with committee substitute
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DO NOT PASS, replaced with committee substitute
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Sent to Senate Corporations and Transportation Committee & Senate Judiciary Committee
Sponsors
- Bill B. O'Neill · Primary
Sponsorship breakdown
Export CSV (upgrade) →1 sponsors · 0 co-sponsors · 111 not signed on
Sponsors (1)
- O'Neill, Bill B.
Co-sponsors (0)
None.
Not signed on (111)
111 members have not signed on to this bill.
Show all 111 →"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.
Subjects
Frequently asked questions
- Who sponsors SB 415?
- SB 415 is sponsored by O'Neill, Bill B..
- What is the current status of SB 415?
- This bill has been enacted into law. Introduced January 30, 2019. Enacted.
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