SENATE BILL 14

56th legislature - STATE OF NEW MEXICO - first session, 2023

INTRODUCED BY

Elizabeth "Liz" Stefanics and Elizabeth "Liz" Thomson and

David M. Gallegos

 

 

 

 

AN ACT

RELATING TO INSURANCE; AMENDING AND ENACTING SECTIONS OF THE PHARMACY BENEFITS MANAGER REGULATION ACT; ADDING NEW REQUIREMENTS FOR RENEWAL OF PHARMACY BENEFITS MANAGER LICENSES; REQUIRING DISCLOSURE OF DOCUMENTS DURING AN INVESTIGATION; REQUIRING TRANSPARENCY IN PHARMACY BENEFITS REIMBURSEMENT; PROVIDING FOR CONFIDENTIALITY; PROVIDING FOR CHANGES IN THE REIMBURSEMENT PROCESS; ADDRESSING THE APPEALS PROCESS; REQUIRING THE PROVISION OF CERTAIN INFORMATION UPON REQUEST; REQUIRING THE INCLUSION OF CERTAIN CONTRACT PROVISIONS; LIMITING CHARGES TO THOSE ITEMIZED IN A CONTRACT; ADDRESSING COST SHARING; MAKING AN APPROPRIATION.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 59A-61-2 NMSA 1978 (being Laws 2014, Chapter 14, Section 2, as amended) is amended to read:

     "59A-61-2. DEFINITIONS.--As used in the Pharmacy Benefits Manager Regulation Act:

          A. "health benefits plan" means a policy or agreement entered into or offered or issued by an insurer to provide, deliver, arrange for, pay for or reimburse any of the costs of health care services; provided that "health benefits plan" does not include any of the following:

                (1) an accident-only policy;

                (2) a credit-only policy;

                (3) a long- or short-term care or disability income policy;

                (4) a specified disease policy;

                (5) coverage provided pursuant to Title 18 of the federal Social Security Act, as amended;

                (6) coverage provided pursuant to Title 19 of the federal Social Security Act and the Public Assistance Act;

                (7) a federal TRICARE policy, including a federal civilian health and medical program of the uniformed services supplement;

                (8) a fixed or hospital indemnity policy;

                (9) a dental-only policy;

                (10) a vision-only policy;

                (11) a workers' compensation policy;

                (12) an automobile medical payment policy; or

                (13) any other policy specified in rules of the superintendent;

          B. "insured" means an individual who is entitled to receive health care benefits provided by a health benefits plan;

          C. "insurer" means a health insurance plan or multiple welfare arrangement subject to the Health Care Purchasing Act, Chapter 59A, Article 22 or 23 NMSA 1978, the Health Maintenance Organization Law or the Nonprofit Health Care Plan Law;

          [A.] D. "maximum allowable cost" means the maximum amount that a pharmacy benefits manager will reimburse a pharmacy for the cost of a generic drug;

          [B.] E. "maximum allowable cost list" means a searchable, electronic and internet-based listing of drugs used by a pharmacy benefits manager setting the maximum allowable cost on which reimbursement to a pharmacy or pharmacist is made;

          [C.] F. "obsolete" means a product that is listed in national drug pricing compendia but is no longer available to be dispensed based on the expiration date of the last lot manufactured;

          [D.] G. "pharmacist" means an individual licensed as a pharmacist by the board of pharmacy;

          [E.] H. "pharmacy" means a licensed place of business where drugs are compounded or dispensed and pharmacist services are provided;

          [F.] I. "pharmacy benefits management" means a service provided to or conducted by [a health plan as defined in Section 59A-16-21.1 NMSA 1978] an insurer or [health insurer] plan sponsor that involves:

                (1) prescription drug claim administration;

                (2) pharmacy network management;

                (3) negotiation and administration of prescription drug discounts, rebates and other benefits;

                (4) design, administration or management of prescription drug benefits;

                (5) formulary management;

                (6) payment of claims to pharmacies for dispensing prescription drugs;

                (7) negotiation or administration of contracts relating to pharmacy operations or prescription benefits; or

                (8) any other service determined by the superintendent as specified by rule to be a pharmacy benefits management activity;

          [G.] J. "pharmacy benefits manager" means an entity that provides pharmacy benefits management services;

          [H.] K. "pharmacy benefits manager affiliate" means a pharmacy or pharmacist 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 benefits manager;

          [I.] L. "pharmacy services administrative organization" means an entity that contracts with a pharmacy or pharmacist to act as the pharmacy or pharmacist's agent with respect to matters involving a pharmacy benefits manager or third-party payor, including negotiating, executing or administering contracts with the pharmacy benefits manager or third-party payor; [and

          J. "superintendent" means the superintendent of insurance.]

          M. "plan sponsor" means an employer organization that offers group health plans to its employees or members;

          N. "rebate" means all price concessions paid by a manufacturer to a pharmacy benefits manager or insurer that are based on the:

                (1) actual or estimated use of a prescription drug; or

                (2) effectiveness of a prescription drug pursuant to the terms of a value-based or performance-based contract; and

          O. "spread pricing" means the model of prescription drug pricing in which a pharmacy benefits manager charges a health benefits plan a contracted price for prescription drugs, and the contracted price for the prescription drugs differs from the amount the pharmacy benefits manager directly or indirectly pays a pharmacist or pharmacy for pharmacist services."

     SECTION 2. Section 59A-61-3 NMSA 1978 (being Laws 2014, Chapter 14, Section 3, as amended) is amended to read:

     "59A-61-3. LICENSURE--INITIAL APPLICATION--ANNUAL RENEWAL REQUIRED--REVOCATION.--

          A. A person shall not operate as a pharmacy benefits manager unless licensed by the superintendent in accordance with the Pharmacy Benefits Manager Regulation Act and applicable federal and state laws. A licensee shall renew the licensee's pharmacy benefits manager license annually.

          B. An initial application and a renewal application for licensure as a pharmacy benefits manager shall be made on a form and in a manner provided for by the superintendent, but at a minimum shall require:

                (1) the identity of the pharmacy benefits manager;

                (2) the name and business address of the contact person for the pharmacy benefits manager;

                (3) where applicable, the federal employer identification number for the pharmacy benefits manager; and

                (4) any other information specified in rules promulgated by the superintendent.

          C. The superintendent shall enforce and promulgate rules to implement the provisions of the Pharmacy Benefits Manager Regulation Act and may suspend or revoke a license issued to a pharmacy benefits manager or deny an application for a license or renewal of a license if:

                (1) the pharmacy benefits manager is operating in contravention of its application;

                (2) the pharmacy benefits manager has failed to continuously meet or comply with the requirements for issuance or maintenance of a license; or

                (3) the pharmacy benefits manager has failed to comply with applicable state or federal laws or rules.

          D. If the license of a pharmacy benefits manager is revoked, the manager shall proceed, immediately following the effective date of the order of revocation, to conclude its affairs, notify each pharmacy in its network and conduct no further pharmacy benefits management services in the state, except as may be essential to the orderly conclusion of its affairs. The superintendent may permit further operation of the pharmacy benefits manager if the superintendent finds it to be in the best interest of patients.

          E. [A person] An entity whose pharmacy benefits manager license has been denied, suspended or revoked may seek review of the denial, suspension or revocation pursuant to the provisions of Chapter 59A, Article 4 NMSA 1978.

          F. Nothing in the Pharmacy Benefits Manager Regulation Act shall be construed to authorize a pharmacy benefits manager to transact the business of insurance.

          G. A pharmacy benefits manager that subcontracts with another pharmacy benefits manager to perform pharmacy benefits management services shall be independently licensed and comply with the provisions of the Pharmacy Benefits Manager Regulation Act.

          H. The superintendent shall not require a licensed pharmacy benefits manager to also be licensed as an insurance administrator pursuant to Chapter 59A, Article 12A NMSA 1978, unless the pharmacy benefits manager provides insurance administration services beyond the scope of the Pharmacy Benefits Manager Regulation Act.

          I. An entity licensed as a pharmacy benefits manager shall comply with the applicable provisions of Chapter 59A, Articles 12 and 12A NMSA 1978, unless the entity provides insurance administration.

          J. As a condition of licensure, the superintendent may require a pharmacy benefits manager to report compliance with any portion of the Pharmacy Benefits Manager Regulation Act in a time and manner required by rule."

     SECTION 3. Section 59A-61-4 NMSA 1978 (being Laws 2014, Chapter 14, Section 4, as amended) is amended to read:

     "59A-61-4. PHARMACY REIMBURSEMENT PRACTICES FOR [GENERIC] DRUGS--APPEALS PROCESS REQUIRED.--

          A. A pharmacy benefits manager shall determine a reimbursement amount for a [generic] drug based on objective and verifiable sources.

          B. A pharmacy benefits manager shall reimburse a pharmacy an amount no less than the amount that the pharmacy benefits manager reimburses itself or a pharmacy benefits manager affiliate in the same network for providing the same or equivalent service. The amount shall be calculated on a per-unit basis using the same generic product identifier or generic code number.

          C. A pharmacy benefits manager using maximum allowable cost pricing may place a drug on a maximum allowable cost list if the drug:

                (1) is listed as "A" or "B" rated in the most recent version of the United States food and drug administration's approved drug products with therapeutic equivalence evaluations, also known as the "orange book", or has an "NR" or "NA" rating or a similar rating by a nationally recognized reference;

                (2) is available for purchase by pharmacies in the state at the time of claim submission from national or regional wholesalers and is not obsolete; and

                (3) is a drug with not fewer than two "A" or "B" rated therapeutically equivalent drugs in the most recent v