A violation of present law concerning pharmacy benefits managers ("PBMs") may subject the individual or entity that provides health coverage to covered individuals (a "covered entity") or the person who administers the medication or device portion of pharmacy benefits coverage provided by the covered entity (a "pharmacy benefits manager") to sanctions applicable to violations of the laws applicable to insurance companies, which include a monetary penalty of up to $1,000 per violation, not to exceed $100,000 in the aggregate, or, for knowing violations, $25,000 per violation, not to exceed $250,000 in the aggregate. This bill removes the aggregate penalty limits for violations of law concerning PBMs. This bill establishes the following prompt payment standards for PBMs: (1) Pay a clean claim, or portion of a claim that is a clean claim, within 30 days of receipt of a claim submitted on paper from a provider. This bill defines "clean claim" to mean a claim received by a PBM for adjudication that: (A) Requires no further information, adjustment, or alteration by the provider of the services in order to be processed and paid by the PBM, and has no defect or impropriety, including a lack of any required substantiating documentation or particular circumstance requiring special treatment that prevents timely payment from being made on the claim; (B) Includes resubmitted paper claims with previously identified deficiencies corrected; and (C) Does not include a duplicate claim or a claim submitted more than 90 days after the date of service; (2) Notify a provider within 30 days of receipt of a claim as described in (1) of reasons why a claim or portion of a claim is not a clean claim and will not be paid; (3) Pay a clean claim, or portion of a claim that is a clean claim, within 14 days of receipt of a claim submitted electronically by a provider. A PBM that does not comply with this requirement will be required to pay 1 percent interest per month, accruing from the day after the payment was due, on that amount of the claim that remains unpaid; (4) Notify a provider within 14 days of receipt of an electronically-submitted claim as described in (3) of reasons why a claim or portion of a claim is not a clean claim and will not be paid; (5) A paper claim must not be denied upon resubmission for lack of substantiating documentation or information that has been previously provided by the healthcare provider; and (6) A PBM shall timely provide contracted providers with all necessary information to properly submit a claim. This bill authorizes the commissioner of commerce and insurance to exercise the following regulatory oversight authority over PBMs: (1) Ensure, as part of the department's ongoing regulatory oversight of PBMs, that PBMs properly process and pay claims; (2) Upon a finding that a PBM has failed during any calendar year to properly process and pay 95% of all clean claims received from all providers during that year, and giving reasonable notice, levy an aggregate penalty up to $10,000; (3) Upon a finding that a PBM has failed during any calendar year to properly process and pay 85% of all clean claims received from all providers during that year, and giving reasonable notice, levy an aggregate penalty of $10,000 to $100,000; (4) Upon a finding that a PBM has failed during any calendar year to properly process and pay 60% of all clean claims received from all providers during that year, and giving reasonable notice, levy an aggregate penalty of $100,000 to $200,000; (5) Issue an order directing a PBM or a representative of a PBM to cease and desist from engaging in a prohibited act or practice; and (6) Conduct compliance examinations. This bill authorizes the commissioner to contract with impartial outside sources to assist in compliance examinations. This bill specifies that a PMB against whom the commissioner levies a penalty or issues a cease and desist order may obtain review of such action in an administrative hearing. This bill adds that, if a pharmacy or agent acting on behalf of a pharmacy prevails in appealing a reimbursement for failing to pay at least the actual cost to the pharmacy for the prescription drug or device, then within seven business days after notice of the appeal is received by the PBM or covered entity, the PBM or covered entity is required to apply the findings from the appeal as to the rate of the reimbursement and actual cost for the particular drug or medical product or device to all remaining refills on the issued prescription drug or medical product or device, if the reimbursement aligns with the appeal. ON MARCH 31, 2025, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 881, AS AMENDED. AMENDMENT #1 rewrites the bill to, instead, make the following revisions to present law:  Removes the aggregate penalty limits for violations of law concerning pharmacy benefits managers.  Provides that a pharmacy benefits manager regulated under law relative to pharmacy benefits managers is subject to the insurance laws relative to timely reimbursement of health insurance claims and its requirements for timing of payments to pharmacists.  Provides that a violation of the prompt pay standards is governed by the penalties set out in insurance laws relative to timely reimbursement of health insurance claims.  Applies this amendment to conduct occurring on or after the effective date of the bill.

Statutes affected:
Introduced: 56-7-3110, 56-2-305(c), 56-2-305, 56-7-3102, 56-7-3206(c)(3)(A), 56-7-3206