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SB 5/FN (BR 216) - M. Wise, R. Alvarado, J. Bowen, D. Carroll, C. Embry Jr., R. Girdler, P. Hornback, S. Meredith, R. Thomas, S. West, M. Wilson

     AN ACT relating to pharmacy benefits in the Medicaid program.
     Create a new section of KRS Chapter 205 to require the Department for Medicaid Services to directly administer all outpatient pharmacy benefits; prohibit renewal or negotiation of new contracts to provide Medicaid managed care that allow administration of outpatient benefits by any entity but the Department for Medicaid Services; reduce costs of future Medicaid managed care contracts by costs of all outpatient pharmacy benefits as they existed on January 1, 2017; allow the department to utilize managed care principles and techniques to assist with member medication adherence and cost control; require the department to establish a reasonable dispensing fee pursuant to Centers for Medicare and Medicaid Services guidelines; EFFECTIVE January 1, 2019.


AMENDMENTS

     SCS1 - Delete original provisions; create a new section of KRS Chapter 205 to require the Department for Medicaid Services to directly administer all outpatient pharmacy benefits and authorize the DMS to use a third party to administer certain benefits; require the department to establish a reasonable dispensing fee pursuant to Centers for Medicare and Medicaid Services guidelines; clarify how future contracts between third party administrators and pharmacies are required to operate; prohibit renewal or negotiation of new contracts to provide Medicaid managed care that allow administration of outpatient benefits by any entity but the Department for Medicaid Services; reduce costs of future Medicaid managed care contracts by costs of all outpatient pharmacy benefits as they existed on January 1, 2017; exempt certain covered entities and contracted pharmacies operating under 42 U.S.C. section 256b; allow the department to utilize managed care principles and techniques to assist with member medication adherence and cost control; require an annual update from the commissioner of Medicaid relating to contracts, contract issues, formularies, dispensing fees, and maximum allowable cost concerns relating to third party administrators and managed care; amend KRS 205.647 to include additional requirements on pharmacy benefit managers and reporting requirements to the Cabinet for Health and Family Services, including a requirement to inform the CHFS about all potential conflicts of interest, required disclosures to the CHFS relating to contracts with pharmaceutical manufacturers, percentage of claims payments made to pharmacies owned, managed, or controlled by the PBM; aggregate amount of any fees or assessments imposed on or collected from pharmacy providers; require information to include all retail, mail order, specialty, and compounded prescription products; require direct disclosure by a PBM to a pharmacy provider of any material changes to a contract affecting terms of reimbursement, process for verifying benefits and eligibility, dispute resolution, and procedures for verifying drugs included on the formulary; prohibit certain provisions in PBM contracts with pharmacy providers including prohibiting the provider from informing a patient of a less costly alternative to a prescribed medication, prohibiting a provider from dispensing a particular amount of a prescribed medication if the PBM allows that amount to be prescribed through a pharmacy owned or controlled by that PBM; clarify that this section does not require additional reimbursement, terms, and conditions for a pharmacy provider as for a pharmacy owned, controlled, or otherwise associated with the PBM; require a PBM to establish and implement a process for the resolution of disputes arising out of KRS 205.647; make Section 1 EFFECTIVE January 1, 2019.
     SFA1( M. Wise ) - Retain provisions of the Senate Committee Substitute, except remove a provision requiring pharmacy benefit managers to disclose certain agreements with pharmaceutical manufacturers.

     Sep 25, 2017 - Prefiled by the sponsor(s).
     Jan 02, 2018 - introduced in Senate
     Jan 03, 2018 - to Health & Welfare (S)
     Feb 14, 2018 - reported favorably, 1st reading, to Calendar with Committee Substitute (1)
     Feb 15, 2018 - 2nd reading, to Rules
     Feb 16, 2018 - floor amendment (1) filed to Committee Substitute