1 STATE OF OKLAHOMA
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2 1st Session of the 59th Legislature (2023)
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3 SENATE BILL 549 By: Montgomery
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6 AS INTRODUCED
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7 An Act relating to pharmacy benefits management;
7 amending 36 O.S. 2021, Sections 319, 6960, as amended
8 by Section 1, Chapter 38, O.S.L. 2022, 6962, as
8 amended by Section 2, Chapter 38, O.S.L. 2022, 6965,
9 6966, and 6967 (36 O.S. Supp. 2022, Sections 6960 and
9 6962), which relate to hearings by the Patient’s
10 Right to Pharmacy Choice Commission and the Patient’s
10 Right to Pharmacy Choice Act; updating statutory
11 reference; conforming language; modifying
11 definitions; requiring certain insurer and pharmacy
12 benefits manager to submit certain audit;
12 establishing submission means for certain audit and
13 fee; providing time period to constitute certain
13 violation; prohibiting pharmacy benefits manager
14 contracts from certain amendment, revision, or
14 cancellation without certain notice and agreement;
15 establishing minimum for certain fines; amending 59
15 O.S. 2021, Sections 356.1, 357, and 360, which relate
16 to definitions and maximum allowable cost list;
16 modifying definitions; requiring pharmacy benefits
17 manager to adjust maximum allowable cost under
17 certain circumstances; updating statutory reference;
18 and providing an effective date.
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21 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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22 SECTION 1. AMENDATORY 36 O.S. 2021, Section 319, is
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23 amended to read as follows:
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 1 Section 319. A. In conducting any hearing pursuant to the
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2 Insurance Code, the Insurance Commissioner may appoint an
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3 independent hearing examiner who shall sit as a quasi-judicial
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4 officer. The ordinary fees and costs of such hearing examiner shall
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5 be assessed by the hearing examiner against the respondent, unless
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6 the respondent is the prevailing party. Within thirty (30) days
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7 after termination of the hearing or of any rehearing thereof or
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8 reargument thereon, unless such time is extended by stipulation, a
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9 final order shall be issued.
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10 B. 1. The Patient’s Right to Pharmacy Choice Commission
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11 established pursuant to Section 10 of this act shall conduct any
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12 hearing pursuant to the Patient’s Right to Pharmacy Choice Act or
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13 relating to the oversight of pharmacy benefits managers pursuant to
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14 the Pharmacy Audit Integrity Act and Sections 357 through 360 of
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15 Title 59 of the Oklahoma Statutes hearings in accordance with
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16 Section 6966 of this title. Within thirty (30) days after
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17 termination of a hearing or of any rehearing thereof or reargument
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18 thereon, unless such time is extended by stipulation, a final order
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19 shall be issued.
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20 2. The Pharmacy Choice Commission members shall not be entitled
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21 to receive any compensation related to conducting a hearing pursuant
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22 to this section including per diem or mileage for any travel or
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23 expenses related to appointment on the Commission.
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 1 SECTION 2. AMENDATORY 36 O.S. 2021, Section 6960, as
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2 amended by Section 1, Chapter 38, O.S.L. 2022 (36 O.S. Supp. 2022,
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3 Section 6960), is amended to read as follows:
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4 Section 6960. For purposes of the Patient’s Right to Pharmacy
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5 Choice Act:
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6 1. “Health insurer” means any corporation, association, benefit
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7 society, exchange, partnership or individual licensed by the
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8 Oklahoma Insurance Code;
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9 2. “Health insurer payor” means a health insurance company,
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10 health maintenance organization, union, hospital and medical
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11 services organization or any entity providing or administering a
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12 self-funded health benefit plan;
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13 3. “Mail-order pharmacy” means a pharmacy licensed by this
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14 state that primarily dispenses and delivers covered drugs via common
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15 carrier;
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16 4. “Pharmacy benefits manager” or “PBM” means a person,
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17 business, or entity that performs pharmacy benefits management, as
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18 defined pursuant to Section 357 of Title 59 of the Oklahoma
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19 Statutes, and any other person, business, or entity acting for such
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20 person the PBM under a contractual or employment relationship in the
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21 performance of pharmacy benefits management for a managed-care
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22 company, nonprofit hospital, medical service organization, insurance
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23 company, third-party payor or a health program administered by a
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 1 department of this state provider or covered entity, as defined by
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2 Section 357 of Title 59 of the Oklahoma Statutes;
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3 5. “Provider” means a pharmacy, as defined in Section 353.1 357
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4 of Title 59 of the Oklahoma Statutes or an agent or representative
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5 of a pharmacy;
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6 6. “Retail pharmacy network” means retail pharmacy providers
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7 contracted with a PBM in which the pharmacy primarily fills and
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8 sells prescriptions via a retail, storefront location;
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9 7. “Rural service area” means a five-digit ZIP code in which
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10 the population density is less than one thousand (1,000) individuals
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11 per square mile;
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12 8. “Spread pricing” means a prescription drug pricing model
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13 utilized by a pharmacy benefits manager in which the PBM charges a
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14 health benefit plan a contracted price for prescription drugs that
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15 differs from the amount the PBM directly or indirectly pays the
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16 pharmacy or pharmacist for providing pharmacy services;
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17 9. “Suburban service area” means a five-digit ZIP code in which
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18 the population density is between one thousand (1,000) and three
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19 thousand (3,000) individuals per square mile; and
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20 10. “Urban service area” means a five-digit ZIP code in which
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21 the population density is greater than three thousand (3,000)
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22 individuals per square mile.
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 1 SECTION 3. AMENDATORY 36 O.S. 2021, Section 6962, as
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2 amended by Section 2, Chapter 38, O.S.L. 2022 (36 O.S. Supp. 2022,
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3 Section 6962), is amended to read as follows:
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4 Section 6962. A. The Oklahoma Insurance Department shall
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5 review and approve retail pharmacy network access for all pharmacy
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6 benefits managers (PBMs) to ensure compliance with Section 6961 of
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7 this title.
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8 1. On a semi-annual basis, each health insurer payor that
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9 utilizes the services of a PBM that is licensed in this state and
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10 each PBM licensed in this state shall electronically submit a
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11 network adequacy audit and any fees assessed to the Department in
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12 the manner and form prescribed by the Insurance Commissioner.
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13 2. Each calendar day in a single 5-digit postal code where a
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14 PBM or insurer has failed to comply with the provisions of Section
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15 6961 et seq. of this title shall be deemed an instance of violation.
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16 B. A PBM, or an agent of a PBM, shall not:
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17 1. Cause or knowingly permit the use of advertisement,
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18 promotion, solicitation, representation, proposal or offer that is
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19 untrue, deceptive or misleading;
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20 2. Charge a pharmacist or pharmacy a fee related to the
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21 adjudication of a claim including without limitation a fee for:
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22 a. the submission of a claim,
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23 b. enrollment or participation in a retail pharmacy
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24 network, or
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 1 c. the development or management of claims processing
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2 services or claims payment services related to
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3 participation in a retail pharmacy network;
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4 3. Reimburse a pharmacy or pharmacist in the state an amount
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5 less than the amount that the PBM reimburses a pharmacy owned by or
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6 under common ownership with a PBM for providing the same covered
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7 services. The reimbursement amount paid to the pharmacy shall be
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8 equal to the reimbursement amount calculated on a per-unit basis
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9 using the same generic product identifier or generic code number
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10 paid to the PBM-owned or PBM-affiliated pharmacy;
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11 4. Deny a provider the opportunity to participate in any
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12 pharmacy network at preferred participation status if the provider
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13 is willing to accept the terms and conditions that the PBM has
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14 established for other providers as a condition of preferred network
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15 participation status;
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16 5. Deny, limit or terminate a provider’s contract based on
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17 employment status of any employee who has an active license to
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18 dispense, despite probation status, with the State Board of
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19 Pharmacy;
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20 6. Retroactively deny or reduce reimbursement for a covered
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21 service claim after returning a paid claim response as part of the
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22 adjudication of the claim, unless:
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23 a. the original claim was submitted fraudulently, or
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 1 b. to correct errors identified in an audit, so long as
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2 the audit was conducted in compliance with Sections
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3 356.2 and 356.3 of Title 59 of the Oklahoma Statutes;
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4 7. Fail to make any payment due to a pharmacy or pharmacist for
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5 covered services properly rendered in the event a PBM terminates a
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6 provider from a pharmacy benefits manager network;
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7 8. Conduct or practice spread pricing, as defined in Section 1
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8 of this act, in this state; or
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9 9. Charge a pharmacist or pharmacy a fee related to
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10 participation in a retail pharmacy network including but not limited
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11 to the following:
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12 a. an application fee,
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13 b. an enrollment or participation fee,
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14 c. a credentialing or re-credentialing fee,
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15 d. a change of ownership fee, or
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16 e. a fee for the development or management of claims
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17 processing services or claims payment services.
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18 C. The prohibitions under this section shall apply to contracts
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19 between pharmacy benefits managers and providers for participation
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20 in retail pharmacy networks.
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21 1. A PBM contract shall:
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22 a. not restrict, directly or indirectly, any pharmacy
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23 that dispenses a prescription drug from informing, or
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24 penalize such pharmacy for informing, an individual of
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 1 any differential between the individual’s out-of-
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2 pocket cost or coverage with respect to acquisition of
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3 the drug and the amount an individual would pay to
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4 purchase the drug directly, and
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5 b. ensure that any entity that provides pharmacy benefits
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6 management services under a contract with any such
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7 health plan or health insurance coverage does not,
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8 with respect to such plan or coverage, restrict,
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9 directly or indirectly, a pharmacy that dispenses a
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10 prescription drug from informing, or penalize such
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11 pharmacy for informing, a covered individual of any
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12 differential between the individual’s out-of-pocket
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13 cost under the plan or coverage with respect to
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14 acquisition of the drug and the amount an individual
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15 would pay for acquisition of the drug without using
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16 any health plan or health insurance coverage,
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17 c. not be amended or modified unilaterally by any party
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18 to the original or subsequent contract without
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19 providing proper notice, in the form and manner
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20 prescribed by the Department, to all other parties to
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21 the contract and agreement to the changes by all
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22 parties to the contract. Agreement shall be evidenced
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23 by the signature of a party to the contract affixed to
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24 the amendment or modification, and
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 1 d. not be unilaterally cancelled by any party to a
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2 contract on or before the date of renewal without
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3 providing proper notice in the form and manner
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4 prescribed by the Department to all other parties to
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5 the contract.
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6 2. A pharmacy benefits manager’s contract with a provider shall
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7 not prohibit, restrict or limit disclosure of information to the
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8 Insurance Commissioner, law enforcement or state and federal
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9 governmental officials investigating or examining a complaint or
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10 conducting a review of a pharmacy benefits manager’s compliance with
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11 the requirements under the Patient’s Right to Pharmacy Choice Act.
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12 D. A pharmacy benefits manager shall:
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13 1. Establish and maintain an electronic claim inquiry
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14 processing system using the National Council for Prescription Drug
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15 Programs’ current standards to communicate information to pharmacies
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16 submitting claim inquiries;
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17 2. Fully disclose to insurers, self-funded employers, unions or
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18 other PBM clients the existence of the respective aggregate
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19 prescription drug discounts, rebates received from drug
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20 manufacturers and pharmacy audit recoupments;
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21 3. Provide the Insurance Commissioner, insurers, self-funded
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22 employer plans and unions unrestricted audit rights of and access to
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23 the respective PBM pharmaceutical manufacturer and provider
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 1 contracts, plan utilization data, plan pricing data, pharmacy
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2 utilization data and pharmacy pricing data;
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3 4. Maintain, for no less than three (3) years, documentation of
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4 all network development activities including but not limited to
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5 contract negotiations and any denials to providers to join networks.
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6 This documentation shall be made available to the Commissioner upon
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7 request; and
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8 5. Report to the Commissioner, on a quarterly basis for each
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9 health insurer payor, in the manner and form prescribed by the
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10 Commissioner, accompanied by payment of any fees assessed, on the
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11 following information:
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12 a. the aggregate amount of rebates received by the PBM,
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13 b. the aggregate amount of rebates distributed to the
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14 appropriate health insurer payor,
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15 c. the aggregate amount of rebates passed on to the
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16 enrollees of each health insurer payor at the point of
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17 sale that reduced the applicable deductible,
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18 copayment, coinsure or other cost sharing amount of
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19 the enrollee,
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20 d. the individual and aggregate amount paid by the health
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21 insurer payor to the PBM for pharmacy services
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22 itemized by pharmacy, drug product and service
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23 provided, and
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 1 e. the individual and aggregate amount a PBM paid a
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2 provider for pharmacy services itemized by pharmacy,
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3 drug product and service provided.
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4 SECTION 4. AMENDATORY 36 O.S. 2021, Section 6965, is
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5 amended to read as follows:
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6 Section 6965. A. The Insurance Commissio