SB 222-FN - AS INTRODUCED

2019 SESSION

19-0892

10/03

SENATE BILL 222-FN

AN ACT relative to licensure of pharmacy benefits managers.

SPONSORS Sen. Rosenwald, Dist 13; Sen. Soucy, Dist 18; Sen. Sherman, Dist 24; Sen. Cavanaugh, Dist 16; Sen. Feltes, Dist 15; Sen. Fuller Clark, Dist 21; Sen. Hennessey, Dist 5; Sen. Kahn, Dist 10; Sen. Levesque, Dist 12; Sen. Watters, Dist 4; Rep. Hennessey, Graf. 1; Rep. Muscatel, Graf. 12; Rep. Luneau, Merr. 10; Rep. Butler, Carr. 7; Rep. McBeath, Rock. 26

COMMITTEE: Executive Departments and Administration

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ANALYSIS

This bill establishes the licensure and regulation of pharmacy benefits managers by the insurance commissioner.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

19-0892

10/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nineteen

AN ACT relative to licensure of pharmacy benefits managers.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1  Short Title.  This act shall be known as and may be cited as the New Hampshire pharmacy benefits manager licensure and regulation act.

2  New Chapter; Pharmacy Benefits Managers.  Amend RSA by inserting after chapter 318-E the following new chapter:

CHAPTER 318-F

PHARMACY BENEFITS MANAGERS

318-F:1  Definitions.  In this chapter:

I.  "Claims processing services" means the administrative services performed in connection with the processing and adjudicating of claims relating to pharmacist

services that include:

(a)  Receiving payments for pharmacist services.

(b)  Making payments to pharmacists or pharmacies for pharmacist services.

II.  "Commissioner" means the commissioner of the insurance department.

III.  "Other prescription drug or device services" means services other than claims processing services, provided directly or indirectly, whether in connection with or

separate from claims processing services, including without limitation:

(a)  Negotiating rebates, discounts, or other financial incentives and arrangements with drug companies;

(b)  Disbursing or distributing rebates;

(c)  Managing or participating in incentive programs or arrangements for pharmacist services;

(d)  Negotiating or entering into contractual arrangements with pharmacists or pharmacies, or both;

(e)  Developing formularies;

(f)  Designing prescription benefit programs; or

(g)  Advertising or promoting services.

IV.  "Pharmacist" means an individual licensed as a pharmacist by the pharmacy board.

V.  "Pharmacist services" means products, goods, and services, or any combination of products, goods, and services, provided as a part of the practice of pharmacy.

VI.  "Pharmacy" means the place licensed by the pharmacy board in which drugs, chemicals, medicines, prescriptions, and poisons are compounded, dispensed, or sold at retail.

VII.(a)  "Pharmacy benefits manager" means a person, business, or entity, including a wholly or partially owned or controlled subsidiary of a pharmacy benefits manager, that provides claims processing services or other prescription drug or device services, or both, for health benefit plans.

(b)  "Pharmacy benefits manager" shall not include any:

(1)  Healthcare facility licensed in this state;

(2)  Healthcare professional licensed in this state;

(3) Consultant who only provides advice as to the selection or performance of a pharmacy benefits manager; or

(4)  Any service provided to the Centers for Medicare and Medicaid Services.

VIII.  "Pharmacy board" means the New Hampshire pharmacy board under RSA 318.

318-F:2  License to do Business; Rulemaking; Penalties.

I.  A person or organization shall not establish or operate as a pharmacy benefits manager in this state for health benefit plans without obtaining a license from the insurance commissioner under this chapter.

II.  The commissioner shall adopt rules under RSA 541-A to:

(a)  Prescribe the application for a license to operate in this state as a pharmacy benefits manager and shall charge application fees and renewal fees as established in rules.

(b)  Establish licensing fees, financial standards, and reporting requirements of pharmacy benefits managers.

(c)  Establish the following:

(1)  Pharmacy benefits manager network adequacy.

(2)  Prohibited market conduct practices.

(3)  Data reporting requirements under relevant state laws.

(4)  Rebates.

(5)  Procedures for pharmacy audits conducted by or on behalf of a

pharmacy benefits manager.

(6) Affiliate information sharing;

(7)  Lists of health benefit plans administered by a pharmacy benefits manager in this state.

III.  If the commissioner finds after notice and hearing that any person has violated any provision of this chapter, or rules adopted pursuant to this chapter, the commissioner may order:

(a)  For each separate violation, a penalty in an amount of $2,500.

(b)  Revocation or suspension of the pharmacy benefits manager license.

318-F:3  Enforcement; Audits.

I.  In order to enforce the provisions of this chapter, the commissioner may examine or audit the books and records of a pharmacy benefits manager providing claims processing services or other prescription drug or device services for a health benefit plan to determine if the pharmacy benefits manager is in compliance with this chapter.

II.  The information or data acquired during an examination or audit under paragraph I is considered proprietary and confidential and shall not be subject to disclosure under the right-to-know law in RSA 91-A.

318-F:4  Severability.  If any provision of this chapter or the application of this chapter to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provisions or application, and to this end, the provisions of this chapter are declared severable.

3  Pharmacists and Pharmacies; Definition of Pharmacy Benefits Manager.  Amend RSA 318:1, XI-a to read as follows:

XI-a.  "Pharmacy benefits manager" means any person or entity licensed under RSA 318-F and practicing as defined in RSA 420-J:3, XXVIII-a.

4  Managed Care Law; Definition of Pharmacy Benefits Manager.  Amend RSA 420-J:3, XXVIII-a to read as follows:

XXVIII-a.  "Pharmacy benefits manager" means a person licensed under RSA 318-F who performs pharmacy benefits management services, including a person acting on behalf of a pharmacy benefits manager in a contractual or employment relationship in the performance of pharmacy benefits management services for a covered entity.  "Pharmacy benefits manager" shall not include a health insurer licensed in this state if the health insurer or its subsidiary is providing pharmacy benefits management services exclusively to its own insureds, or a private single employer self-funded plan that provides such benefits or services directly to its beneficiaries.  "Pharmacy benefits management" means the administration of prescription drug benefits provided by a covered entity under the terms and conditions of the contract between the pharmacy benefits manager and the covered entity and the provision of mail order pharmacy services.

5  Effective Date.  This act shall take effect July 1, 2019.

LBAO

19-0892

1/18/19

SB 222-FN- FISCAL NOTE

AS INTRODUCED

AN ACT relative to licensure of pharmacy benefits managers.

FISCAL IMPACT:      [ X ] State              [ X ] County               [ X ] Local              [    ] None

METHODOLOGY:

This bill requires the Insurance Department to license and regulate pharmacy benefits managers.  The Department reports being unable to ascertain how many pharmacy benefits managers would require licensure under this bill.  Therefore, the Department is unable to determine if the requirements of this bill could be implemented using existing resources or result in an increase to state expenditures.  Also, the Department reports this bill may impact insurance premiums, which would impact premium tax revenue and insurance premium expenditures for county and local government entities by an indeterminable amount.  Further, licensing fees and fines established in this bill would increase general fund revenue by an indeterminable amount.

The Office of Professional Licensure and Certification reported this bill would have no fiscal impact to their operations.

AGENCIES CONTACTED:

Insurance Department and Office of Professional Licensure and Certification