Illinois-2021-SB2420-Introduced

102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 SB2420

Introduced 2/26/2021, by Sen. Napoleon Harris, III

SYNOPSIS AS INTRODUCED:

`305 ILCS 5/5-5.12`	`from Ch. 23, par. 5-5.12`
`305 ILCS 5/5-36`

Amends the Medical Assistance Article of the Illinois Public Aid Code. Requires all Medicaid managed care organizations to reimburse pharmacy provider dispensing fees and acquisition costs at no less than the amounts established under the fee-for-service program whether the Medicaid managed care organization directly reimburses pharmacy providers or contracts with a pharmacy benefit manager to reimburse pharmacy providers. Provides that the reimbursement requirement applies to all pharmacy services for persons receiving benefits under the Code including pharmacy services. Effective immediately.

LRB102 13202 KTG 18546 b

FISCAL NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning public aid.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Illinois Public Aid Code is amended by

5 changing Sections 5-5.12 and 5-36 as follows:

6 (305 ILCS 5/5-5.12) (from Ch. 23, par. 5-5.12)

7 Sec. 5-5.12. Pharmacy payments.

8 (a) Every request submitted by a pharmacy for

9 reimbursement under this Article for prescription drugs

10 provided to a recipient of aid under this Article shall

11 include the name of the prescriber or an acceptable

12 identification number as established by the Department.

13 (b) Pharmacies providing prescription drugs under this

14 Article shall be reimbursed at a rate which shall include a

15 professional dispensing fee as determined by the Illinois

16 Department, plus the current acquisition cost of the

17 prescription drug dispensed. The Illinois Department shall

18 update its information on the acquisition costs of all

19 prescription drugs no less frequently than every 30 days.

20 However, the Illinois Department may set the rate of

21 reimbursement for the acquisition cost, by rule, at a

22 percentage of the current average wholesale acquisition cost.

23 All Medicaid managed care organizations must reimburse

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1 pharmacy provider dispensing fees and acquisition costs at no

2 less than the amounts established under the fee-for-service

3 program whether the Medicaid managed care organization

4 directly reimburses pharmacy providers or contracts with a

5 pharmacy benefit manager to reimburse pharmacy providers. The

6 reimbursement requirement specified in this paragraph applies

7 to all pharmacy services for persons receiving benefits under

8 this Code including services reimbursed under Section 5-36.

9 (c) (Blank).

10 (d) The Department shall review utilization of narcotic

11 medications in the medical assistance program and impose

12 utilization controls that protect against abuse.

13 (e) When making determinations as to which drugs shall be

14 on a prior approval list, the Department shall include as part

15 of the analysis for this determination, the degree to which a

16 drug may affect individuals in different ways based on factors

17 including the gender of the person taking the medication.

18 (f) The Department shall cooperate with the Department of

19 Public Health and the Department of Human Services Division of

20 Mental Health in identifying psychotropic medications that,

21 when given in a particular form, manner, duration, or

22 frequency (including "as needed") in a dosage, or in

23 conjunction with other psychotropic medications to a nursing

24 home resident or to a resident of a facility licensed under the

25 ID/DD Community Care Act or the MC/DD Act, may constitute a

26 chemical restraint or an "unnecessary drug" as defined by the

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1 Nursing Home Care Act or Titles XVIII and XIX of the Social

2 Security Act and the implementing rules and regulations. The

3 Department shall require prior approval for any such

4 medication prescribed for a nursing home resident or to a

5 resident of a facility licensed under the ID/DD Community Care

6 Act or the MC/DD Act, that appears to be a chemical restraint

7 or an unnecessary drug. The Department shall consult with the

8 Department of Human Services Division of Mental Health in

9 developing a protocol and criteria for deciding whether to

10 grant such prior approval.

11 (g) The Department may by rule provide for reimbursement

12 of the dispensing of a 90-day supply of a generic or brand

13 name, non-narcotic maintenance medication in circumstances

14 where it is cost effective.

15 (g-5) On and after July 1, 2012, the Department may

16 require the dispensing of drugs to nursing home residents be

17 in a 7-day supply or other amount less than a 31-day supply.

18 The Department shall pay only one dispensing fee per 31-day

19 supply.

20 (h) Effective July 1, 2011, the Department shall

21 discontinue coverage of select over-the-counter drugs,

22 including analgesics and cough and cold and allergy

23 medications.

24 (h-5) On and after July 1, 2012, the Department shall

25 impose utilization controls, including, but not limited to,

26 prior approval on specialty drugs, oncolytic drugs, drugs for

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1 the treatment of HIV or AIDS, immunosuppressant drugs, and

2 biological products in order to maximize savings on these

3 drugs. The Department may adjust payment methodologies for

4 non-pharmacy billed drugs in order to incentivize the

5 selection of lower-cost drugs. For drugs for the treatment of

6 AIDS, the Department shall take into consideration the

7 potential for non-adherence by certain populations, and shall

8 develop protocols with organizations or providers primarily

9 serving those with HIV/AIDS, as long as such measures intend

10 to maintain cost neutrality with other utilization management

11 controls such as prior approval. For hemophilia, the

12 Department shall develop a program of utilization review and

13 control which may include, in the discretion of the

14 Department, prior approvals. The Department may impose special

15 standards on providers that dispense blood factors which shall

16 include, in the discretion of the Department, staff training

17 and education; patient outreach and education; case

18 management; in-home patient assessments; assay management;

19 maintenance of stock; emergency dispensing timeframes; data

20 collection and reporting; dispensing of supplies related to

21 blood factor infusions; cold chain management and packaging

22 practices; care coordination; product recalls; and emergency

23 clinical consultation. The Department may require patients to

24 receive a comprehensive examination annually at an appropriate

25 provider in order to be eligible to continue to receive blood

26 factor.

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1 (i) On and after July 1, 2012, the Department shall reduce

2 any rate of reimbursement for services or other payments or

3 alter any methodologies authorized by this Code to reduce any

4 rate of reimbursement for services or other payments in

5 accordance with Section 5-5e.

6 (j) On and after July 1, 2012, the Department shall impose

7 limitations on prescription drugs such that the Department

8 shall not provide reimbursement for more than 4 prescriptions,

9 including 3 brand name prescriptions, for distinct drugs in a

10 30-day period, unless prior approval is received for all

11 prescriptions in excess of the 4-prescription limit. Drugs in

12 the following therapeutic classes shall not be subject to

13 prior approval as a result of the 4-prescription limit:

14 immunosuppressant drugs, oncolytic drugs, anti-retroviral

15 drugs, and, on or after July 1, 2014, antipsychotic drugs. On

16 or after July 1, 2014, the Department may exempt children with

17 complex medical needs enrolled in a care coordination entity

18 contracted with the Department to solely coordinate care for

19 such children, if the Department determines that the entity

20 has a comprehensive drug reconciliation program.

21 (k) No medication therapy management program implemented

22 by the Department shall be contrary to the provisions of the

23 Pharmacy Practice Act.

24 (l) Any provider enrolled with the Department that bills

25 the Department for outpatient drugs and is eligible to enroll

26 in the federal Drug Pricing Program under Section 340B of the

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1 federal Public Health Service ~~Services~~ Act shall enroll in

2 that program. No entity participating in the federal Drug

3 Pricing Program under Section 340B of the federal Public

4 Health Service ~~Services~~ Act may exclude Medicaid from their

5 participation in that program, although the Department may

6 exclude entities defined in Section 1905(l)(2)(B) of the

7 Social Security Act from this requirement.

8 (Source: P.A. 98-463, eff. 8-16-13; 98-651, eff. 6-16-14;

9 99-180, eff. 7-29-15; revised 9-2-20.)

10 (305 ILCS 5/5-36)

11 Sec. 5-36. Pharmacy benefits.

12 (a)(1) The Department may enter into a contract with a

13 third party on a fee-for-service reimbursement model for the

14 purpose of administering pharmacy benefits as provided in this

15 Section for members not enrolled in a Medicaid managed care

16 organization; however, these services shall be approved by the

17 Department. The Department shall ensure coordination of care

18 between the third-party administrator and managed care

19 organizations as a consideration in any contracts established

20 in accordance with this Section. Any managed care techniques,

21 principles, or administration of benefits utilized in

22 accordance with this subsection shall comply with State law.

23 (2) The following shall apply to contracts between

24 entities contracting relating to the Department's third-party

25 administrators and pharmacies:

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1 (A) the Department shall approve any contract between

2 a third-party administrator and a pharmacy;

3 (B) the Department's third-party administrator shall

4 not change the terms of a contract between a third-party

5 administrator and a pharmacy without written approval by

6 the Department; and

7 (C) the Department's third-party administrator shall

8 not create, modify, implement, or indirectly establish any

9 fee on a pharmacy, pharmacist, or a recipient of medical

10 assistance without written approval by the Department.

11 (b) The provisions of this Section shall not apply to

12 outpatient pharmacy services provided by a health care

13 facility registered as a covered entity pursuant to 42 U.S.C.

14 256b or any pharmacy owned by or contracted with the covered

15 entity. A Medicaid managed care organization shall, either

16 directly or through a pharmacy benefit manager, administer and

17 reimburse outpatient pharmacy claims submitted by a health

18 care facility registered as a covered entity pursuant to 42

19 U.S.C. 256b, its owned pharmacies, and contracted pharmacies

20 in accordance with the contractual agreements the Medicaid

21 managed care organization or its pharmacy benefit manager has

22 with such facilities and pharmacies. Any pharmacy benefit

23 manager that contracts with a Medicaid managed care

24 organization to administer and reimburse pharmacy claims as

25 provided in this Section must be registered with the Director

26 of Insurance in accordance with Section 513b2 of the Illinois

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1 Insurance Code.

2 (c) On at least an annual basis, the Director of the

3 Department of Healthcare and Family Services shall submit a

4 report beginning no later than one year after January 1, 2020

5 (the effective date of Public Act 101-452) ~~this amendatory Act~~

6 ~~of the 101st General Assembly~~ that provides an update on any

7 contract, contract issues, formulary, dispensing fees, and

8 maximum allowable cost concerns regarding a third-party

9 administrator and managed care. The requirement for reporting

10 to the General Assembly shall be satisfied by filing copies of

11 the report with the Speaker, the Minority Leader, and the

12 Clerk of the House of Representatives and with the President,

13 the Minority Leader, and the Secretary of the Senate. The

14 Department shall take care that no proprietary information is

15 included in the report required under this Section.

16 (d) A pharmacy benefit manager shall notify the Department

17 in writing of any activity, policy, or practice of the

18 pharmacy benefit manager that directly or indirectly presents

19 a conflict of interest that interferes with the discharge of

20 the pharmacy benefit manager's duty to a managed care

21 organization to exercise its contractual duties. "Conflict of

22 interest" shall be defined by rule by the Department.

23 (e) A pharmacy benefit manager shall, upon request,

24 disclose to the Department the following information:

25 (1) whether the pharmacy benefit manager has a

26 contract, agreement, or other arrangement with a

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1 pharmaceutical manufacturer to exclusively dispense or

2 provide a drug to a managed care organization's enrollees,

3 and the aggregate amounts of consideration of economic

4 benefits collected or received pursuant to that

5 arrangement;

6 (2) the percentage of claims payments made by the

7 pharmacy benefit manager to pharmacies owned, managed, or

8 controlled by the pharmacy benefit manager or any of the

9 pharmacy benefit manager's management companies, parent

10 companies, subsidiary companies, or jointly held

11 companies;

12 (3) the aggregate amount of the fees or assessments

13 imposed on, or collected from, pharmacy providers; and

14 (4) the average annualized percentage of revenue

15 collected by the pharmacy benefit manager as a result of

16 each contract it has executed with a managed care

17 organization contracted by the Department to provide

18 medical assistance benefits which is not paid by the

19 pharmacy benefit manager to pharmacy providers and

20 pharmaceutical manufacturers or labelers or in order to

21 perform administrative functions pursuant to its contracts

22 with managed care organizations.

23 (f) The information disclosed under subsection (e) shall

24 include all retail, mail order, specialty, and compounded

25 prescription products. All information made available to the

26 Department under subsection (e) is confidential and not

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1 subject to disclosure under the Freedom of Information Act.

2 All information made available to the Department under

3 subsection (e) shall not be reported or distributed in any way

4 that compromises its competitive, proprietary, or financial

5 value. The information shall only be used by the Department to

6 assess the contract, agreement, or other arrangements made

7 between a pharmacy benefit manager and a pharmacy provider,

8 pharmaceutical manufacturer or labeler, managed care

9 organization, or other entity, as applicable.

10 (g) A pharmacy benefit manager shall disclose directly in

11 writing to a pharmacy provider or pharmacy services

12 administrative organization contracting with the pharmacy

13 benefit manager of any material change to a contract provision

14 that affects the terms of the reimbursement, the process for

15 verifying benefits and eligibility, dispute resolution,

16 procedures for verifying drugs included on the formulary, and

17 contract termination at least 30 days prior to the date of the

18 change to the provision. The terms of this subsection shall be

19 deemed met if the pharmacy benefit manager posts the

20 information on a website, viewable by the public. A pharmacy

21 service administration organization shall notify all contract

22 pharmacies of any material change, as described in this

23 subsection, within 2 days of notification. As used in this

24 Section, "pharmacy services administrative organization" means

25 an entity operating within the State that contracts with

26 independent pharmacies to conduct business on their behalf

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1 with third-party payers. A pharmacy services administrative

2 organization may provide administrative services to pharmacies

3 and negotiate and enter into contracts with third-party payers

4 or pharmacy benefit managers on behalf of pharmacies.

5 (h) A pharmacy benefit manager shall not include the

6 following in a contract with a pharmacy provider:

7 (1) a provision prohibiting the provider from

8 informing a patient of a less costly alternative to a

9 prescribed medication; or

10 (2) a provision that prohibits the provider from

11 dispensing a particular amount of a prescribed medication,

12 if the pharmacy benefit manager allows that amount to be

13 dispensed through a pharmacy owned or controlled by the

14 pharmacy benefit manager, unless the prescription drug is

15 subject to restricted distribution by the United States

16 Food and Drug Administration or requires special handling,

17 provider coordination, or patient education that cannot be

18 provided by a retail pharmacy.

19 (i) Nothing in this Section shall be construed to prohibit

20 a pharmacy benefit manager from requiring the same

21 reimbursement and terms and conditions for a pharmacy provider

22 as for a pharmacy owned, controlled, or otherwise associated

23 with the pharmacy benefit manager. Reimbursement must not be

24 less than the dispensing fees and acquisition costs under the

25 fee-for-service program as required under subsection (b) of

26 Section 5-5.12.

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1 (j) A pharmacy benefit manager shall establish and

2 implement a process for the resolution of disputes arising out

3 of this Section, which shall be approved by the Department.

4 (k) The Department shall adopt rules establishing

5 reasonable dispensing fees for fee-for-service payments in

6 accordance with guidance or guidelines from the federal

7 Centers for Medicare and Medicaid Services.

8 (Source: P.A. 101-452, eff. 1-1-20; revised 10-22-19.)

9 Section 99. Effective date. This Act takes effect upon

10 becoming law.