provider. A. The pharmacy benefits manager shall, with respect to contracts between a pharmacy benefits manager and a provider, including a pharmacy service administrative organization: l. Include in such contracts the specific sources utilized to determine the maximum allowable cost (MAC) pricing of the pharmacy, update MAC pricing at least every seven (7) calendar days, and establish a process for providers to readily access the MAC list specific to that provider; 2. In order to place a drug on the MAC list, ensure that the drug is listed as “A” or “B” rated in the most recent version of the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book, and the drug is generally available for purchase by pharmacies in the state from national or regional wholesalers and is not obsolete; 3. Ensure dispensing fees are not included in the calculation of MAC price reimbursement to pharmacy providers; 4. Provide a reasonable administration appeals procedure to allow a provider, a provider’s representative and a pharmacy service administrative organization to contest reimbursement amounts within fourteen (14) calendar days of the final adjusted payment date. The pharmacy benefits manager shall not prevent the pharmacy or the pharmacy service administrative organization from filing reimbursement appeals in an electronic batch format. The pharmacy benefits manager must respond to a provider, a provider’s representative and a pharmacy service administrative organization who have contested a reimbursement amount through this procedure within ten (10) calendar days. The pharmacy benefits manager must respond in an electronic batch format to reimbursement appeals filed in an electronic batch format. The pharmacy benefits manager shall not require a pharmacy or pharmacy services administrative organization to log into a system to upload individual claim appeals or to download individual appeal responses. If a price update is warranted, the pharmacy benefits manager shall make the change in the reimbursement amount, permit the dispensing pharmacy to reverse and rebill the claim in question, and make the reimbursement amount change retroactive and effective for all contracted providers; and 5. If a below-cost reimbursement appeal is denied, the PBM shall provide the reason for the denial, including the National Drug Code (NDC) number from, and the name of, the specific national or regional wholesalers doing business in this state where the drug is currently in stock and available for purchase by the dispensing pharmacy at a price below the PBM’s reimbursement price. If the NDC number provided by the pharmacy benefits manager is not available below the acquisition cost obtained from the pharmaceutical wholesaler from whom the dispensing pharmacy purchases the majority of the prescription drugs that are dispensed, the pharmacy benefits manager shall immediately adjust the reimbursement amount, permit the dispensing pharmacy to reverse and rebill the claim in question, and make the reimbursement amount adjustment retroactive and in effect for all contracted providers for future claims billed. B. The reimbursement appeal requirements in this section shall apply to all drugs, medical products, or devices reimbursed according to any payment methodology, including, but not limited to: 1. Average acquisition cost, including the National Average Drug Acquisition Cost; 2. Average manufacturer price; 3. Average wholesale price; 4. Brand effective rate or generic effective rate; 5. Discount indexing; 6. Federal upper limits; 7. Wholesale acquisition cost; and 8. Any other term that a pharmacy benefits manager or an insurer of a health benefit plan may use to establish reimbursement rates to a pharmacist or pharmacy for pharmacist services. C. The pharmacy benefits manager shall not place a drug on a MAC list, unless there are at least two therapeutically equivalent, multiple-source drugs, generally available for purchase by dispensing retail pharmacies from national or regional wholesalers. D. In the event that a drug is placed on the FDA Drug Shortages Database, pharmacy benefits managers shall reimburse claims to pharmacies at no less than the wholesale acquisition cost for the specific NDC number being dispensed. E. The pharmacy benefits manager shall not require accreditation or licensing of providers, or any entity licensed or regulated by the State Board of Pharmacy, other than by the State Board of Pharmacy or federal government entity as a condition for participation as a network provider. F. A pharmacy or pharmacist may decline to provide the pharmacist clinical or dispensing services to a patient or pharmacy benefits manager if the pharmacy or pharmacist is to be paid less than the pharmacy’s cost for providing the pharmacist clinical or dispensing services. G. The pharmacy benefits manager shall provide a dedicated telephone number, email address and names of the personnel with decision-making authority regarding MAC appeals and pricing. H. Any pharmacy benefits manager (PBM) that leases, rents, or otherwise makes its provider network or contracts available to another pharmacy benefits manager shall: 1. Provide notice to all contracted providers of the lease arrangement and the responsibilities of each party involved; and 2. Provide contact information in each paid or rejected claim response that notifies the provider which contract the claim is adjudicating against, who is processing the claim, and a phone number to address provider issues; and 3. Transmit the network reimbursement identification information with each claim response in NCPDP field 545-2F. I. Any pharmacy benefits manager (PBM) that leases, rents, or otherwise makes its provider network or contracts available to another pharmacy benefits manager shall not combine any Employee Retirement Income Security Act (ERISA) or government plans with any non-ERISA or nongovernment plans. J. 1. Effective rate contracting is hereby prohibited in all agreements between pharmacies or contracting agents acting on behalf of a pharmacy and a PBM or third-party payors. No PBM or third- party payor shall enter into any contract that establishes payment for services or medications based on an effective rate of reimbursement. 2. Any PBM or third-party payor found to be in violation of this section shall be subject to penalties, including, but not limited to, fines, revocation of licensure, or other disciplinary actions. K. The provisions of this section shall not be waived, voided, or nullified by contract. Added by Laws 2014, c. 263, § 4, eff. July 1, 2014. Amended by Laws 2016, c. 285, § 8, eff. Nov. 1, 2016; Laws 2021, c. 409, § 5, emerg. eff. May 4, 2021; Laws 2024, c. 332, § 6, emerg. eff. May 22, 2024;
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