Bill Text: IA HSB137 | 2023-2024 | 90th General Assembly | Introduced

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Bill Title: A bill for an act relating to contract pharmacies and covered entities that participate in the 340B drug program.(See HF 423.)

Spectrum: Committee Bill

Status: (Introduced - Dead) 2023-02-22 - Committee report approving bill, renumbered as HF 423. [HSB137 Detail]

Download: Iowa-2023-HSB137-Introduced.html

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House Study Bill 137 - Introduced
HOUSE FILE _____
BY (PROPOSED COMMITTEE ON
HEALTH AND HUMAN SERVICES
BILL BY CHAIRPERSON MEYER)
A BILL FOR
An Act relating to contract pharmacies and covered entities
that participate in the 340B drug program.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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Section 1. Section 507B.4, subsection 3, Code 2023, is
amended by adding the following new paragraph:
NEW PARAGRAPH . u. 340B drug program. Any violation of
chapter 510D by a group health plan, a health carrier that
offers group or individual health insurance coverage, a
third-party administrator, or a pharmacy benefits manager.
Sec. 2. NEW SECTION . 510D.1 Definitions.
As used in this chapter, unless the context otherwise
requires:
1. “340B program” means the program created pursuant to
the Veterans Health Care Act of 1992, Pub. L. No. 102-585,
§602, and codified as section 340B of the federal Public Health
Services Act.
2. “Commissioner” means the commissioner of insurance.
3. “Contract pharmacy” means a pharmacy that has executed a
contract with a covered entity to dispense covered outpatient
drugs, purchased by the covered entity through the 340B
program, to eligible patients of the covered entity.
4. “Covered entity” means the same as defined in 42 U.S.C.
§256b(a)(4).
5. “Group health plan” means the same as defined in section
513B.2.
6. “Medicaid managed care organization” means an entity
acting pursuant to a contract with the department of health and
human services to administer the medical assistance program
under chapter 249A, and that meets the definition of “health
maintenance organization” under section 514B.1.
7. “Pharmacy benefits manager” means the same as defined in
section 510B.1.
8. “Similarly situated entity or pharmacy” means an entity
or pharmacy located in Iowa that is of a generally comparable
size, and that operates in a market with similar demographic
characteristics, including population size, density,
distribution, and vital statistics, and reasonably similar
economic and geographic conditions.
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9. “Third-party administrator” means the same as defined in
section 510.11.
Sec. 3. NEW SECTION . 510D.2 340B drug program —— contract
pharmacies and covered entities.
1. Group health plans, health carriers that offer
group or individual health insurance coverage, third-party
administrators, and pharmacy benefits managers shall not
discriminate against a covered entity or a contract pharmacy
by reimbursing the covered entity or the contract pharmacy
for a prescription drug or a dispensing fee in an amount
less than the group health plan, health carrier, third-party
administrator, or pharmacy benefits manager reimburses a
similarly situated entity or pharmacy that is not a covered
entity or a contract pharmacy.
2. a. Group health plans, health carriers that offer
group or individual health insurance coverage, third-party
administrators, and pharmacy benefits managers shall not,
on the basis that an entity is a covered entity or that a
pharmacy is a contract pharmacy, or that a covered entity or
contract pharmacy participate in the 340B program, impose
any of the following contractual terms and conditions on the
covered entity or the contract pharmacy that differ from those
imposed on a similarly situated entity or pharmacy that is not
a covered entity or a contract pharmacy:
(1) Fees or other assessments that are not required by state
law or the Iowa administrative code.
(2) Chargebacks, clawbacks, or other reimbursement
adjustments that are not required by state law or the Iowa
administrative code.
(3) Professional dispensing fees that are not required by
state law or the Iowa administrative code.
(4) Restrictions or requirements related to participation
in standard or preferred pharmacy networks.
(5) Requirements related to the frequency or scope of
audits.
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(6) Requirements related to inventory management systems
that utilize generally accepted accounting principles.
(7) Requirements related to mandatory disclosure either
directly or through a third party, except disclosures required
by federal law, of prescription orders that are filled with
covered outpatient drugs obtained through the 340B program.
b. Paragraph “a” , subparagraphs (1) and (2), shall not be
construed to prohibit adjustments for overpayments or other
errors associated with an adjudicated claim.
c. Paragraph “a” , subparagraph (7), shall not be construed
to prohibit requirements related to statutorily required
modifiers or other identifiers on claims submitted for drugs
purchased through the 340B program.
3. Group health plans, health carriers that offer
group or individual health insurance coverage, third-party
administrators, and pharmacy benefits managers shall not do any
of the following:
a. Place any restrictions or impose any requirements on
an individual that chooses to obtain a covered outpatient
drug from a covered entity or a contract pharmacy, whether in
person, via courier or the United States post office, or any
other form of delivery.
b. Refuse to contract with a covered entity or a contract
pharmacy based on any criteria that is not applied equally to a
contract with a similarly situated entity or pharmacy that does
not participate in the 340B drug program.
c. Impose any restriction or condition on a covered entity
that interferes with the covered entity’s ability to maximize
the value of the discounts obtained by the covered entity
through the covered entity’s participation in the 340B drug
program.
Sec. 4. NEW SECTION . 510D.3 Enforcement.
1. The commissioner may take any enforcement action under
the commissioner’s authority to enforce compliance with this
chapter.
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2. After notice and hearing, the commissioner may issue any
order or impose any penalty pursuant to section 507B.7 upon a
finding that a group health plan, a health carrier that offers
group or individual health insurance coverage, a third-party
administrator, or a pharmacy benefits manager violated this
chapter.
3. A violation of this chapter shall be an unfair or
deceptive act or practice in the business of insurance pursuant
to section 507B.4, subsection 3.
Sec. 5. NEW SECTION . 510D.4 Rules.
The commissioner of insurance may adopt rules as necessary
to implement the chapter.
Sec. 6. NEW SECTION . 510D.5 Conflict of laws.
If any provision of this chapter is inconsistent or in
conflict with applicable state or federal law or rule, or the
state Medicaid plan, the applicable state or federal law or
rule, or the state Medicaid plan, shall prevail to the extent
necessary to eliminate the inconsistency or conflict.
Sec. 7. NEW SECTION . 510D.6 Applicability.
This chapter shall apply to covered entities, contract
pharmacies, group health plans, health carriers that offer
group or individual health insurance coverage, third-party
administrators, and pharmacy benefits managers, but shall not
apply to their operations under a contract with the state
Medicaid agency or a Medicaid managed care organization,
regardless of whether the covered entity or contract pharmacy
is eligible to retain the 340B discounts generated by the
covered entities and contract pharmacies.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill relates to contract pharmacies and covered
entities that participate in the 340B program. The bill
defines “340B program”, “contract pharmacy”, and “covered
entity”.
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Group health plans (plans), health carriers that offer group
or individual health insurance coverage (carriers), third-party
administrators (administrators), and pharmacy benefits managers
(PBM) are prohibited from discriminating against a covered
entity or a contract pharmacy by reimbursing the covered
entity or the contract pharmacy for a prescription drug or
a dispensing fee in an amount less than the plan, carrier,
administrator, or PBM reimburses a similarly situated entity or
pharmacy that is not a covered entity or a contract pharmacy.
“Similarly situated entity or pharmacy” is defined in the bill.
Plans, carriers, administrators, and PBMs shall not, on the
basis that an entity is a covered entity or that a pharmacy
is a contract pharmacy, or that a covered entity or contract
pharmacy participates in the 340B program, impose certain
contractual terms and conditions, as described in the bill,
on the covered entity or contract pharmacy that differ from
those imposed on a similarly situated entity or pharmacy
that is not a covered entity or a contract pharmacy. Plans,
carriers, administrators, and PBMs are also prohibited from
placing restrictions or imposing requirements on individuals
that choose to obtain a covered outpatient drug from a
covered entity or a contract pharmacy, whether in person, via
courier or the United States post office, or any other form
of delivery; refusing to contract with a covered entity or a
contract pharmacy based on any criteria that is not applied
equally to a contract with a similarly situated entity or
pharmacy that does not participate in the 340B program; or
imposing any restriction or condition on a covered entity that
interferes with the covered entity’s ability to maximize the
value of the discounts obtained by the covered entity through
the covered entity’s participation in the 340B program.
“Group health plan” and “third-party administrator” are
defined in the bill.
The commissioner of insurance (commissioner) may take any
enforcement action under the commissioner’s authority to
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enforce compliance with the bill. After notice and hearing,
the commissioner may issue any order or impose any penalty
pursuant to Code section 507B.7 upon a finding that a plan, a
carrier, an administrator, or a PBM violated any provision of
the bill.
A violation of the bill shall be an unfair or deceptive
act or practice in the business of insurance pursuant to Code
section 507B.4(3).
The commissioner may adopt rules as necessary to implement
the bill.
If any provision of the bill is inconsistent or in conflict
with applicable state or federal law or rule, or the state
Medicaid plan, the state or federal law or rule, or the
state Medicaid plan, shall prevail to the extent necessary to
eliminate the inconsistency or conflict.
The bill applies to covered entities, contract pharmacies,
plans, carriers, administrators, and PBM, but shall not apply
to their operations under a contract with the state Medicaid
agency or a Medicaid managed care organization, regardless of
whether the covered entity or contract pharmacy is eligible to
retain the 340B discounts generated by the covered entities and
contract pharmacies. “Medicaid managed care organization” is
defined in the bill.
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