Bill Summary – FastDemocracy

WEST VIRGINIA LEGISLATURE
       2021 REGULAR SESSION
         Committee Substitute for House Bill 2263
   BY DELEGATES J. PACK, ROHRBACH, SUMMERS, G.
         WARD, FORSHT, SMITH, AND WORRELL
  [Originating in the Committee on Health and Human Resources; Reported on February 13, 2021]
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 A BILL to amend and reenact §5-16-9 of the Code of West Virginia, 1931, as amended; to amend
        and reenact §33-51-3, §33-51-8, and §33-51-9 of said code; and to amend said code by
        adding thereto a new section, designated §33-51-11, all relating generally to the regulation
        of pharmacy benefit managers;    expanding certain definitions;   regulating the
        reimbursements of pharmacy benefit managers; providing certain effective dates; defining
        certain methodologies utilized by pharmacy benefit managers; protecting consumer
        choice for pharmacies; setting guidelines for pharmacy benefit plans; and requiring
        rebates to be passed on to the consumer.
    Be it enacted by the Legislature of West Virginia:
           CHAPTER 5. GENERAL POWERS AND AUTHORITY OF THE
      GOVERNOR, SECRETARY OF STATE, AND ATTORNEY GENERAL;
           BOARD OF PUBLIC WORKS; MISCELLANEOUS AGENCIES,
                     COMMISSIONS, OFFICES, PROGRAMS, ETC.
    ARTICLE 16. WEST VIRGINIA PUBLIC EMPLOYEES INSURANCE ACT.
    §5-16-9. Authorization to execute contracts for group hospital and surgical insurance,
           group major medical insurance, group prescription drug insurance, group life and accidental death insurance, and other accidental death insurance; mandated benefits; limitations; awarding of contracts; reinsurance; certificates for covered employees; discontinuance of contracts.
        (a) The director is hereby given exclusive authorization to execute such contract or
 contracts as are necessary to carry out the provisions of this article and to provide the plan or
 plans of group hospital and surgical insurance coverage, group major medical insurance
 coverage, group prescription drug insurance coverage, and group life and accidental death
 insurance coverage selected in accordance with the provisions of this article, such contract or
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 contracts to be executed with one or more agencies, corporations, insurance companies or
 service organizations licensed to sell group hospital and surgical insurance, group major medical
 insurance, group prescription drug insurance and group life and accidental death insurance in this
 state.
          (b) The group hospital or surgical insurance coverage and group major medical insurance
 coverage herein provided shall include coverages and benefits for X-ray and laboratory services
 in connection with mammogram and pap smears when performed for cancer screening or
 diagnostic services and annual checkups for prostate cancer in men age 50 and over. Such
 benefits shall include, but not be limited to, the following:
          (1) Mammograms when medically appropriate and consistent with the current guidelines
 from the United States Preventive Services Task Force;
          (2) A pap smear, either conventional or liquid-based cytology, whichever is medically
 appropriate and consistent with the current guidelines from the United States Preventive Services
 Task Force or The American College of Obstetricians and Gynecologists, for women age 18 and
 over;
          (3) A test for the human papilloma virus (HPV) for women age 18 or over, when medically
 appropriate and consistent with the current guidelines from either the United States Preventive
 Services Task Force or the American College of Obstetricians and Gynecologists for women age
 18 and over;
          (4) A checkup for prostate cancer annually for men age 50 or over; and
          (5) Annual screening for kidney disease as determined to be medically necessary by a
 physician using any combination of blood pressure testing, urine albumin or urine protein testing,
 and serum creatinine testing as recommended by the National Kidney Foundation.
          (6) Coverage for general anesthesia for dental procedures and associated outpatient
 hospital or ambulatory facility charges provided by appropriately licensed healthcare individuals
 in conjunction with dental care if the covered person is:
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        (A) Seven years of age or younger or is developmentally disabled and is either an
 individual for whom a successful result cannot be expected from dental care provided under local
 anesthesia because of a physical, intellectual, or other medically compromising condition of the
 individual and for whom a superior result can be expected from dental care provided under
 general anesthesia; or
        (B) A child who is 12 years of age or younger with documented phobias, or with
 documented mental illness, and with dental needs of such magnitude that treatment should not
 be delayed or deferred and for whom lack of treatment can be expected to result in infection, loss
 of teeth or other increased oral or dental morbidity and for whom a successful result cannot be
 expected from dental care provided under local anesthesia because of such condition and for
 whom a superior result can be expected from dental care provided under general anesthesia.
        (7) (A) A policy, plan, or contract that is issued or renewed on or after January 1, 2019,
 and that is subject to this section, shall provide coverage, through the age of 20, for amino acid-
 based formula for the treatment of severe protein-allergic conditions or impaired absorption of
 nutrients caused by disorders affecting the absorptive surface, function, length, and motility of the
 gastrointestinal tract. This includes the following conditions, if diagnosed as related to the disorder
 by a physician licensed to practice in this state pursuant to either §30-3-1 et seq. or §30-14-1 et
 seq. of this code:
        (i) Immunoglobulin E and Nonimmunoglobulin E-medicated allergies to multiple food
 proteins;
        (ii) Severe food protein-induced enterocolitis syndrome;
        (iii) Eosinophilic disorders as evidenced by the results of a biopsy; and
        (iv) Impaired absorption of nutrients caused by disorders affecting the absorptive surface,
 function, length, and motility of the gastrointestinal tract (short bowel).
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        (B) The coverage required by §15-16-9(b)(7)(A) of this code shall include medical foods
 for home use for which a physician has issued a prescription and has declared them to be
 medically necessary, regardless of methodology of delivery.
        (C) For purposes of this subdivision, “medically necessary foods” or “medical foods” shall
 mean prescription amino acid-based elemental formulas obtained through a pharmacy: Provided,
 That these foods are specifically designated and manufactured for the treatment of severe allergic
 conditions or short bowel.
        (D) The provisions of this subdivision shall not apply to persons with an intolerance for
 lactose or soy.
        (c) The group life and accidental death insurance herein provided shall be in the amount
 of $10,000 for every employee. The amount of the group life and accidental death insurance to
 which an employee would otherwise be entitled shall be reduced to $5,000 upon such employee
 attaining age 65.
        (d) All of the insurance coverage to be provided for under this article may be included in
 one or more similar contracts issued by the same or different carriers.
        (e) The provisions of §5A-3-1 et seq. of this code, relating to the Division of Purchasing of
 the Department of Finance and Administration, shall not apply to any contracts for any insurance
 coverage or professional services authorized to be executed under the provisions of this article.
 Before entering into any contract for any insurance coverage, as authorized in this article, the
 director shall invite competent bids from all qualified and licensed insurance companies or
 carriers, who may wish to offer plans for the insurance coverage desired: Provided, That the
 director shall negotiate and contract directly with healthcare providers and other entities,
 organizations and vendors in order to secure competitive premiums, prices, and other financial
 advantages. The director shall deal directly with insurers or healthcare providers and other
 entities, organizations, and vendors in presenting specifications and receiving quotations for bid
 purposes. No commission or finder’s fee, or any combination thereof, shall be paid to any
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 individual or agent; but this shall not preclude an underwriting insurance company or companies,
 at their own expense, from appointing a licensed resident agent, within this state, to service the
  companies’ contracts awarded under the provisions of this article. Commissions reasonably
  related to actual service rendered for the agent or agents may be paid by the underwriting
  company or companies: Provided, however, That in no event shall payment be made to any agent
  or agents when no actual services are rendered or performed. The director shall award the
  contract or contracts on a competitive basis. In awarding the contract or contracts the director
  shall take into account the experience of the offering agency, corporation, insurance company, or
  service organization in the group hospital and surgical insurance field, group major medical
  insurance field, group prescription drug field, and group life and accidental death insurance field,
  and its facilities for the handling of claims. In evaluating these factors, the director may employ
  the services of impartial, professional insurance analysts or actuaries or both. Any contract
  executed by the director with a selected carrier shall be a contract to govern all eligible employees
  subject to the provisions of this article. Nothing contained in this article shall prohibit any insurance
  carrier from soliciting employees covered hereunder to purchase additional hospital and surgical,
  major medical or life and accidental death insurance coverage.
          (f) The director may authorize the carrier with whom a primary contract is executed to
  reinsure portions of the contract with other carriers which elect to be a reinsurer and who are
 legally qualified to enter into a reinsurance agreement under the laws of this state.
         (g) Each employee who is covered under any contract or contracts shall receive a
 statement of benefits to which the employee, his or her spouse and his or her dependents are
 entitled under the contract, setting forth the information as to whom the benefits are payable, to
 whom claims shall be submitted and a summary of the provisions of the contract or contracts as
 they affect the employee, his or her spouse and his or her dependents.
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         (h) The director may at the end of any contract period discontinue any contract or contracts
 it has executed with any carrier and replace the same with a contract or contracts with any other
 carrier or carriers meeting the requirements of this article.
         (i) The director shall provide by contract or contracts entered into under the provisions of
 this article the cost for coverage of children’s immunization services from birth through age 16
 years to provide immunization against the following illnesses: Diphtheria, polio, mumps, measles,
 rubella, tetanus, hepatitis-b, hemophilia influenzae-b, and whooping cough. Additional
 immunizations may be required by the Commissioner of the Bureau for Public Health for public
 health purposes. Any contract entered into to cover these services shall require that all costs
 associated with immunization, including the cost of the vaccine, if incurred by the healthcare
 provider, and all costs of vaccine administration be exempt from any deductible, per visit charge
 and/or copayment provisions which may be in force in these policies or contracts. This section
 does not require that other healthcare services provided at the time of immunization be exempt
 from any deductible and/or copayment provisions.
         (j) The director shall include language in all contracts for pharmacy benefits management,
 as defined by §33-51-3 of this code, requiring the pharmacy benefit manager to report quarterly
 to the agency for all pharmacy claims the amount paid to the pharmacy provider per claim,
 including, but not limited to the following:
         (1) The overall total amount charged to the agency for all claims processed by the
 pharmacy benefit manager during the quarter;
         (2) The overall total amount of reimbursements paid to pharmacy providers during the
 quarter;
         (3) The overall total number of claims in which the pharmacy benefits manager reimbursed
 a pharmacy provider for less than the amount charged to the agency for all claims processed by
 the pharmacy benefit manager during the quarter; and
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         (4) For all pharmacy claims, the total amount paid to the pharmacy provider per claim,
 including, but not limited to, the following:
         (1) (A) The cost of drug reimbursement;
         (2) (B) Dispensing fees;
         (3) (C) Copayments; and
         (4) (D) The amount charged to the agency for each claim by the pharmacy benefit
 manager.
         In the event there is a difference between these amounts for any claim the amount for any
 pharmacy claim paid to the pharmacy provider and the amount reimbursed to the agency, the
 pharmacy benefit manager shall report an itemization of all administrative fees, rebates, or
 processing charges associated with the claim. All data and information provided by the pharmacy
 benefit manager shall be kept secure, and notwithstanding any other provision of this code to the
 contrary, the agency shall maintain the confidentiality of the proprietary information and not share
 or disclose the proprietary information contained in the report or data collected with persons
 outside the agency.
         All data and information provided by the pharmacy benefit manager shall be considered
 proprietary and confidential and exempt from disclosure under the West Virginia Freedom of
 Information Act pursuant to §29B-1-4(a)(1) of this code. Only those agency employees involved
 in collecting, securing, and analyzing the data for the purpose of preparing the report provided for
 herein shall have access to the proprietary data. The director shall using aggregated, non-
 proprietary data only, report at least quarterly to the Joint Committee on Government and Finance
 on the implementation of this subsection and its impact on program expenditures provide a
 quarterly report to the Joint Committee on Government and Finance and the Joint Committee on
 Health detailing the information required by this section, including any difference or spread
 between the overall amount paid by pharmacy benefit managers to the pharmacy providers and
 the overall amount charged to the agency for each claim by the pharmacy benefit manager. To
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 the extent necessary, the director shall use aggregated, nonproprietary data only: Provided, That
 the director must provide a clear and concise summary of the total amounts charged to the agency
 and reimbursed to pharmacy providers on a quarterly basis.
        (k) If the information required herein is not provided, the agency may terminate the contract
 with the pharmacy benefit manager and the Office of the Insurance Commissioner shall discipline
 the pharmacy benefit manager as provided in §33-51-8(e) of this code.
                                    CHAPTER 33. INSURANCE
      ARTICLE 51. PHARMACY AUDIT INTEGRITY ACT.
      §33-51-3. Definitions.
        For purposes of this article:
        “340B entity” means an entity participating in the federal 340B drug discount program, as
  described in 42 U.S.C. §256b, including its pharmacy or pharmacies, or any pharmacy or
  pharmacies, contracted with the participating entity to dispense drugs purchased through such
  program.
         “Affiliate” means a pharmacy, pharmacist, or pharmacy technician that directly or
  indirectly, through one or more intermediaries, owns or controls, is owned or controlled by, or is
  under common ownership or control with a pharmacy benefit manager
         “Affiliate” means a pharmacy, pharmacist, or pharmacy technician which, either directly or
  indirectly through one or more intermediaries: (A) Has an investment or ownership interest in a
  pharmacy benefits manager licensed under this chapter; (B) shares common ownership with a
  pharmacy benefits manager licensed under this chapter; or (C) has an investor or ownership
  interest holder which is a pharmacy benefits manager licensed under this article.
         “Auditing entity” means a person or company that performs a pharmacy audit, including a
  covered entity, pharmacy benefits manager, managed care organization, or third-party
  administrator.
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        “Business day” means any day of the week excluding Saturday, Sunday, and any legal
 holiday as set forth in §2-2-1 of this code.
        “Claim level information” means data submitted by a pharmacy or required by a payer or
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