Bill Text: NJ A5410 | 2020-2021 | Regular Session | Introduced
Bill Title: "New Jersey Pharmacy Benefits Manager Licensure and Regulation Act."
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2021-03-01 - Introduced, Referred to Assembly Financial Institutions and Insurance Committee [A5410 Detail]
Download: New_Jersey-2020-A5410-Introduced.html
Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
"New Jersey Pharmacy Benefits Manager Licensure and Regulation Act."
CURRENT VERSION OF TEXT
As introduced.
An Act concerning pharmacy benefits managers and supplementing Title 17B of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known as and may be cited as the "New Jersey Pharmacy Benefits Manager Licensure and Regulation Act."
2. The purpose of this act is to:
a. promote, preserve, and protect the public health, safety, and welfare through effective regulation and licensure of pharmacy benefits managers;
b. promote the solvency of the commercial health insurance industry, the regulation of which is reserved to the states by the "McCarran-Ferguson Act" (15 U.S.C. s.1011 et seq.), as well as provide for consumer savings, and fairness in prescription benefits;
c. provide for powers and duties of the Commissioner of Banking and Insurance; and
d. prescribe penalties and fines for violations of this act.
3. As used in this act:
"Claims processing services" means the administrative services performed in connection with the processing and adjudicating of claims relating to pharmacist services that include:
(1) receiving payments for pharmacist services; and
(2) making payments to pharmacists or pharmacies for pharmacist services.
"Commissioner" means the Commissioner of Banking and Insurance.
"Department" means the Department of Banking and Insurance.
"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:
(1) negotiating rebates, discounts, or other financial incentives and arrangements with drug companies;
(2) disbursing or distributing rebates;
(3) managing or participating in incentive programs or arrangements for pharmacist services;
(4) negotiating or entering into contractual arrangements with pharmacists or pharmacies, or both;
(5) developing formularies;
(6) designing prescription benefit programs; and
(7) advertising or promoting services.
"Pharmacist" means an individual currently licensed by this State to engage in the practice of pharmacy.
"Pharmacist services" means products, goods, and services, or any combination of products, goods, and services, provided as a part of the practice of pharmacy.
"Pharmacy" means any place in this State where drugs are dispensed or pharmaceutical care is provided by a licensed pharmacist, but shall not include a medical office under the control of a licensed physician.
"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. "Pharmacy benefits manager" does not include a:
(1) health care facility as defined in section 2 of P.L.1971, c.136 (C.26:2H-2);
(2) health care professional licensed to practice a health care profession pursuant to Title 45 of the Revised Statutes; or
(3) consultant who only provides advice as to the selection or performance of a pharmacy benefits manager.
4. a. (1) 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 commissioner pursuant to this act.
(2) The commissioner shall prescribe the application for a license to operate in this State as a pharmacy benefits manager and may charge application fees and renewal fees.
b. The commissioner shall establish the licensing, fees, application, financial standards, and reporting requirements of pharmacy benefits managers pursuant to this act.
5. a. In a participation contract between a pharmacy benefits manager and a pharmacist or pharmacy providing prescription drug coverage for health benefit plans, a pharmacy or pharmacist shall not be prohibited, restricted, or penalized in any way from disclosing to a covered person:
(1) any health care information that the pharmacy or pharmacist deems appropriate regarding the nature of treatment, risks, or alternatives thereto;
(2) the availability of alternate therapies, consultations, or tests;
(3) the decision of utilization reviewers or similar persons to authorize or deny services;
(4) the process used to authorize or deny health care services or benefits; or
(5) information on financial incentives and structures used by the insurer.
b. A pharmacy or pharmacist may provide to an insured information regarding the insured's total cost for pharmacist services for a prescription drug.
c. A pharmacy benefits manager shall not prohibit a pharmacy or pharmacist from:
(1) providing information regarding the total cost for pharmacist services for a prescription drug; or
(2) selling a more affordable alternative to an insured if a more affordable alternative is available.
d. A pharmacy benefits manager contract with a participating pharmacist or pharmacy shall not prohibit, restrict, or limit disclosure of information to the commissioner, law enforcement, or state and federal governmental officials investigating or examining a complaint or conducting a review of a pharmacy benefits manager's compliance with the requirements of this act.
6. a. The commissioner shall enforce the provisions of this act.
b. (1) 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 the provisions of this act.
(2) The information or data acquired during an examination pursuant to paragraph (1) of this subsection is:
(a) considered proprietary and confidential; and
(b) not subject to the provisions of P.L.1963, c.73 (C.47:1A-1 et seq.).
7. a. The commissioner shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt any rules and regulations as the commissioner deems necessary to carry out the provisions of this act.
b. Rules and regulations adopted pursuant to this act shall set penalties or fines, including without limitation monetary fines, suspension of licensure, and revocation of licensure for violations of this act and rules and regulations adopted pursuant to this act.
8. a. This act is applicable to a contract or health benefit plan that is delivered, issued, executed, or renewed in this State on or after January 1, 2022.
b. A contract existing on the date of licensure of the pharmacy benefits manager shall comply with the requirements of this act as a condition of licensure for the pharmacy benefits manager.
c. Nothing in this act is intended or shall be construed to be in conflict with existing relevant federal law.
9. This act shall take effect on the 90th day after the date of enactment.
STATEMENT
This bill provides for the licensure of pharmacy benefits managers. Under the bill, the Commissioner of Banking and Insurance is to create the application for a license to operate in this State as a pharmacy benefits manager and may charge application fees and renewal fees. The commissioner is also to establish the licensing, fees, application, financial standards, and reporting requirements of pharmacy benefits managers.
The bill provides that, in any participation contracts between pharmacy benefits managers and pharmacists or pharmacies providing prescription drug coverage for health benefit plans, no pharmacy or pharmacist may be prohibited, restricted, or penalized in any way from disclosing to any covered person any health care information that the pharmacy or pharmacist deems appropriate regarding the nature of treatment, risks, or alternatives thereto, the availability of alternate therapies, consultations, or tests, the decision of utilization reviewers or similar persons to authorize or deny services, the process that is used to authorize or deny health care services or benefits, or information on financial incentives and structures used by the insurer.
Under the bill, a pharmacy or pharmacist may provide to an insured information regarding the insured's total cost for pharmacist services for a prescription drug. A pharmacy benefits manager is not to prohibit a pharmacy or pharmacist from discussing information regarding the total cost for pharmacist services for a prescription drug or from selling a more affordable alternative to the insured if a more affordable alternative is available.
Pursuant to the bill, 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 the provisions of the bill. The information or data acquired during such an examination is to be considered proprietary and confidential and is not to be subject to the provisions of the open public records act.
The bill applies to contracts or health benefit plans that are delivered, issued, executed, or renewed in the State on or after January 1, 2022.
