WEST VIRGINIA LEGISLATURE
2024 REGULAR SESSION
Enrolled Committee Substitute for Committee Substitute for Senate Bill 453
BY SENATORS TARR, WOODRUM, GRADY, RUCKER,
STUART, MARONEY, ROBERTS, DEEDS, AND PHILLIPS
[Passed March 9, 2024; in effect 90 days from passage (June 7, 2024)]
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1 AN ACT to amend and reenact §5-16-9 of the Code of West Virginia, 1931, as amended, relating
2 to the Public Employees Insurance Agency; prohibiting a pharmacy benefit manager from
3 reimbursing certain pharmacies or pharmacists in an amount less than the national
4 average drug acquisition cost for a prescription drug or pharmacy service; requiring the
5 pharmacy benefit manager to pay a dispensing fee at least equal to the fee paid by West
6 Virginia Medicaid; providing for alternative payment calculation in the event that the
7 national average drug acquisition cost is not available; defining terms; providing effective
8 date; requiring additional pharmacy data variables be reported to the Public Employees
9 Insurance Agency; removing language requiring data provided by the pharmacy benefit
10 manager to be kept confidential; requiring the director of the Public Employees Insurance
11 Agency to report on an annual basis; requiring the Public Employees Insurance Agency
12 to require specific terms in its contract with a pharmacy benefit manager; requiring a study;
13 providing for a due date for the findings in the study; and making technical corrections.
Be it enacted by the Legislature of West Virginia:
ARTICLE 16. WEST VIRGINIA PUBLIC EMPLOYEES INSURANCE ACT.
§5-16-9. Authorization to execute contracts.
1 (a) The director is given exclusive authorization to execute such contract or contracts as
2 are necessary to carry out the provisions of this article.
3 (b) The provisions of §5A-3-1 et seq. of this code, relating to the Division of Purchasing of
4 the Department of Finance and Administration, shall not apply to any contracts for any insurance
5 coverage or professional services authorized to be executed under the provisions of this article.
6 Before entering into any contract for any insurance coverage, as authorized in this article, the
7 director shall invite competent bids from all qualified and licensed insurance companies or carriers
8 that may wish to offer plans for the insurance coverage desired. The director shall negotiate and
9 contract directly with health care providers and other entities, organizations, and vendors in order
10 to secure competitive premiums, prices, and other financial advantages. The director shall deal
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11 directly with insurers or health care providers and other entities, organizations, and vendors in
12 presenting specifications and receiving quotations for bid purposes. No commission or finder’s
13 fee, or any combination thereof, shall be paid to any individual or agent: Provided, That this shall
14 not preclude an underwriting insurance company or companies, at their own expense, from
15 appointing a licensed resident agent within this state to service the companies’ contracts awarded
16 under the provisions of this article. Commissions reasonably related to actual service rendered
17 for the agent or agents may be paid by the underwriting company or companies. In no event shall
18 payment be made to any agent or agents when no actual services are rendered or performed.
19 The director shall award the contract or contracts on a competitive basis. In awarding the contract
20 or contracts, the director shall consider the experience of the offering agency, corporation,
21 insurance company, or service organization in the group hospital and surgical insurance field,
22 group major medical insurance field, group prescription drug field, and group life and accidental
23 death insurance field, and its facilities for the handling of claims. In evaluating these factors, the
24 director may employ the services of impartial, professional insurance analysts or actuaries, or
25 both. Any contract executed by the director with a selected carrier shall be a contract to govern
26 all eligible employees subject to the provisions of this article. Nothing contained in this article shall
27 prohibit any insurance carrier from soliciting employees covered hereunder to purchase additional
28 hospital and surgical, major medical, or life and accidental death insurance coverage.
29 (c) The director may authorize the carrier with whom a primary contract is executed to
30 reinsure portions of the contract with other carriers which elect to be a reinsurer and who are
31 legally qualified to enter into a reinsurance agreement under the laws of this state.
32 (d) Each employee who is covered under any contract or contracts shall receive a
33 statement of benefits to which the employee, his or her spouse, and his or her dependents are
34 entitled under the contract, setting forth the information as to whom the benefits are payable, to
35 whom claims shall be submitted, and a summary of the provisions of the contract or contracts as
36 they affect the employee, his or her spouse, and his or her dependents.
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37 (e) The director may at the end of any contract period discontinue any contract or contracts
38 it has executed with any carrier and replace the same with a contract or contracts with any other
39 carrier or carriers meeting the requirements of this article.
40 (f) The director shall include language in all contracts for pharmacy benefits management,
41 as defined by §33-51-3 of this code, requiring the pharmacy benefit manager to report quarterly
42 to the agency the following:
43 (1) The overall total amount charged to the agency for all claims processed by the
44 pharmacy benefit manager during the quarter;
45 (2) The overall total amount of reimbursements paid to pharmacy providers during the
46 quarter;
47 (3) The overall total number of claims in which the pharmacy benefits manager reimbursed
48 a pharmacy provider for less than the amount charged to the agency for all claims processed by
49 the pharmacy benefit manager during the quarter; and
50 (4) For all pharmacy claims, the total amount paid to the pharmacy provider per claim,
51 including, but not limited to, the following:
52 (A) The cost of drug reimbursement;
53 (B) Dispensing fees;
54 (C) Copayments;
55 (D) The amount charged to the agency for each claim by the pharmacy benefit manager;
56 (E) Date of service;
57 (F) NDC-11;
58 (G) Drug name;
59 (H) Drug strength;
60 (I) Quantity;
61 (J) Days of therapy;
62 (K) Rx count;
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63 (L) Mail/retail code;
64 (M) Brand/generic indicator;
65 (N) Specialty drug indicator;
66 (O) Compound indicator;
67 (P) Formulary indicator;
68 (Q) Gross cost;
69 (R) Member cost;
70 (S) Plan cost;
71 (T) Dispense as written;
72 (U) Pharmacy NPI number;
73 (V) Pharmacy Claim ID;
74 (W) Prescriber NPI number;
75 (X) Pharmacy name; and
76 (Y) Ingredient cost.
77 In the event there is a difference between the amount for any pharmacy claim paid to the
78 pharmacy provider and the amount reimbursed to the agency, the pharmacy benefit manager
79 shall report an itemization of all administrative fees, rebates, or processing charges associated
80 with the claim. The director shall provide an annual report to the Joint Committee on Health
81 detailing the information required by this section, including any difference or spread between the
82 overall amount paid by pharmacy benefit managers to the pharmacy providers and the overall
83 amount charged to the agency for each claim by the pharmacy benefit manager. To the extent
84 necessary, the director shall use aggregated, nonproprietary data only: Provided, That the director
85 must provide a clear and concise summary of the total amounts charged to the agency and
86 reimbursed to pharmacy providers on an annual basis.
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87 (g) If the information required herein is not provided, the agency may terminate the
88 contract with the pharmacy benefit manager and the Office of the Insurance Commissioner shall
89 discipline the pharmacy benefit manager as provided in §33-51-8(e) of this code.
90 (h) The Public Employees Insurance Agency shall contract with networks to provide care
91 to its members out of state.
92 (i) The Public Employees Insurance Agency shall require each of the following in its
93 requests for proposals and contracts with a pharmacy benefit manager:
94 (1) The pharmacy benefit manager shall disclose all information and data related to
95 contracting, reimbursement, networks, rebates, fees, and any other information and data
96 requested by the Public Employees Insurance Agency, the Legislature, and vendors for the
97 purpose of performing study and analysis. Effective with the changes made to this section during
98 the regular session of the Legislature, 2024, a comprehensive pharmacy business intelligence
99 study and analysis shall be conducted by an organization with expertise in studying and analyzing
100 pharmacy benefit managers to determine what, if any, changes could be made to facilitate savings
101 with respect to the Public Employees Insurance Agency's pharmacy benefit manager services. A
102 final report, including recommendations, shall be presented no later than December 31, 2024, to
103 the Public Employees Insurance Agency and the Joint Committee on Government and Finance.
104 (2) A pharmacy benefit manager shall not reimburse a West Virginia pharmacy or
105 pharmacist for a prescription drug or pharmacy service in an amount less than the national
106 average drug acquisition cost for a prescription drug or pharmacy service at the time the drug is
107 administered or dispensed, plus a professional dispensing fee at least equal to the professional
108 dispensing fee paid by West Virginia Medicaid for outpatient drugs. Increases to the professional
109 dispensing fee may be set by the Director in accordance with this subdivision: Provided, That if
110 the national average drug acquisition cost is not available at the time a drug is administered or
111 dispensed, a pharmacy benefit manager may not reimburse a West Virginia pharmacy or
112 pharmacist in an amount that is less than the wholesale acquisition cost of the drug, as defined
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113 in 42 U.S.C. § 1395w-3a(c)(6)(B), plus a dispensing fee as described in this subdivision. A West
114 Virginia pharmacy is a domestic business entity as registered with the West Virginia Secretary of
115 State. The provisions in this subdivision shall be effective for the Public Employees Insurance
116 Agency plan year beginning on July 1, 2024.
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The Clerk of the Senate and the Clerk of the House of Delegates hereby certify that the foregoing bill is correctly enrolled.
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Clerk of the Senate
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Clerk of the House of Delegates Originated in the Senate.
In effect 90 days from passage.
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President of the Senate
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Speaker of the House of Delegates __________
The within is ................................................ this the...........................................
Day of ..........................................................................................................., 2024.
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Governor
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Statutes affected:
Introduced Version: 5-16-9
Committee Substitute: 5-16-9
Committee Substitute for the Committee Substitute: 5-16-9
Enrolled Version: 5-16-9