Bill Summary – FastDemocracy

S-3501.1
                                 SENATE BILL 5811
     State of Washington         67th Legislature     2022 Regular Session
     By Senators Rivers, Keiser, and Short
     Read first time 01/11/22.     Referred to Committee on Health & Long
     Term Care.
     AN ACT Relating to freedom of pharmacy choice; amending RCW
 48.200.020 and 48.200.280; and adding a new section to chapter 48.200
 RCW.
 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
     NEW SECTION. Sec. 1. A new section is added to chapter 48.200
 RCW to read as follows:
     (1) A pharmacy benefit manager that administers a prescription
 drug benefit may not:
     (a) Require or coerce a covered person to use a mail order
 pharmacy;
     (b) Require a covered person to contact the pharmacy benefit
 manager or mail order pharmacy in order to fill the prescription drug
 at a pharmacy of a covered person's choice;
     (c) Impose different cost-sharing, different days allowance to
 fill, monetary advantages, or penalties for using one participating
 pharmacy over another participating pharmacy;
     (d) Prohibit or limit a covered person from selecting a pharmacy
 of the covered person's choice who has agreed to participate in the
 participating pharmacy;
                                       p. 1                         SB 5811
     (e) Require a covered person to obtain prescriptions from a mail
 order pharmacy unless the prescription drug is a specialty or limited
 distribution prescription drug;
     (f) Reimburse a covered person's chosen participating pharmacy an
 amount less than the amount the pharmacy benefit manager reimburses
 participating affiliated pharmacies; or
     (g) Limit a covered person's access to prescription drugs at the
 participating pharmacy of their choice by adding a prescription drug
 to a specialty tier or limited distribution tier formulary unless the
 drug is a specialty or limited distribution prescription drug.
     (2) A pharmacy benefit manager shall:
     (a) Provide fair and reasonable reimbursement to the covered
 person's participating pharmacy of choice that is not less than a
 pharmacy's cost;
     (b)   Include  a   provision   in  contracts   with   participating
 pharmacies and pharmacy services administrative organizations that
 authorizes the pharmacy to decline to fill a prescription if the
 pharmacy benefit manager refuses to reimburse the pharmacy at a rate
 that is at least equal to the pharmacy's acquisition cost of the
 drug;
     (c) Maintain an adequate and accessible pharmacy network for the
 provision of prescription drugs for a health benefit plan. The
 pharmacy network must provide for convenient access for covered
 persons to pharmacies and critical access pharmacies;
     (d) Regardless of the participating pharmacy, including mail
 order pharmacies, where the covered person obtains the prescription
 drug, apply the same cost-sharing, fees, and other conditions upon
 the enrollee; and
     (e) Permit the covered person to receive delivery or mail order
 of a medication through any participating pharmacy.
     (3) A pharmacy services administration organization must include
 a   provision   in  contracts   with  participating   pharmacies   that
 authorizes the pharmacy to decline to fill a prescription if the
 pharmacy services administration organization refuses to reimburse
 the pharmacy at a rate that is at least equal to the pharmacy's
 acquisition cost of the drug.
     (4) If a covered person is using a mail order pharmacy, the
 pharmacy benefit manager must:
                                      p. 2                          SB 5811
     (a) Allow for dispensing at local participating pharmacies under
 the following circumstances to ensure patient access to prescription
 drugs:
     (i) If there are delays in mail order;
     (ii) If the prescription drug arrives in an unusable condition;
 or
     (iii) If the prescription drug does not arrive; and
     (b) Ensure patients have easy and timely access to prescription
 counseling by a pharmacist.
     (5) Subsection (1)(a) of this section does not apply to a health
 maintenance organization that is an integrated delivery system in
 which enrollees primarily use pharmacies that are owned and operated
 by the health maintenance organization.
     (6) For purposes of this section:
     (a) "Affiliated pharmacy" means a pharmacy that directly or
 indirectly through one or more intermediaries is owned by, controlled
 by, or is under common ownership or control of a pharmacy benefit
 manager, or where the pharmacy benefit manager has financial interest
 in the pharmacy.
     (b) "Health benefit plan" means any entity or program that
 provides reimbursement for pharmaceutical services.
     (c) "Participating pharmacy" means a pharmacy that has entered
 into an agreement to provide prescription drugs to the pharmacy
 benefit manager's covered persons.
     (d) "Pharmacy network" means the pharmacies located in and
 licensed by the state and contracted by the pharmacy benefit manager
 to sell prescription drugs to covered persons.
     (e) "Specialty or limited distribution prescription drug" means a
 drug that's distribution is limited by a federal food and drug
 administration's element to assure safe use.
     (7) This section applies to health benefit plans issued on or
 renewed after January 1, 2023.
     Sec. 2.   RCW 48.200.020 and 2020 c 240 s 2 are each amended to
 read as follows:
     The definitions in this section apply throughout this chapter
 unless the context clearly requires otherwise.
     (1) "Affiliate" or "affiliated employer" means a person who
 directly or indirectly through one or more intermediaries, controls
                                     p. 3                          SB 5811
 or is controlled by, or is under common control with, another
 specified person.
     (2) "Certification" has the same meaning as in RCW 48.43.005.
     (3) "Employee benefits programs" means programs under both the
 public employees' benefits board established in RCW 41.05.055 and the
 school employees' benefits board established in RCW 41.05.740.
     (4)(a) "Health care benefit manager" means a person or entity
 providing services to, or acting on behalf of, a health carrier or
 employee benefits programs, that directly or indirectly impacts the
 determination or utilization of benefits for, or patient access to,
 health care services, drugs, and supplies including, but not limited
 to:
     (i) Prior authorization or preauthorization of benefits or care;
     (ii) Certification of benefits or care;
     (iii) Medical necessity determinations;
     (iv) Utilization review;
     (v) Benefit determinations;
     (vi) Claims processing and repricing for services and procedures;
     (vii) Outcome management;
     (viii) Provider credentialing and recredentialing;
     (ix) Payment or authorization of payment to providers and
 facilities for services or procedures;
     (x) Dispute resolution, grievances, or appeals relating to
 determinations or utilization of benefits;
     (xi) Provider network management; or
     (xii) Disease management.
     (b) "Health care benefit manager" includes, but is not limited
 to, health care benefit managers that specialize in specific types of
 health care benefit management such as pharmacy benefit managers,
 radiology benefit managers, laboratory benefit managers, and mental
 health benefit managers.
     (c) "Health care benefit manager" does not include:
     (i) Health care service contractors as defined in RCW 48.44.010;
     (ii)   Health  maintenance   organizations  as   defined   in  RCW
 48.46.020;
     (iii) Issuers as defined in RCW 48.01.053;
     (iv) The public employees' benefits board established in RCW
 41.05.055;
     (v) The school employees' benefits board established in RCW
 41.05.740;
                                     p. 4                          SB 5811
     (vi) Discount plans as defined in RCW 48.155.010;
     (vii) Direct patient-provider primary care practices as defined
 in RCW 48.150.010;
     (viii) An employer administering its employee benefit plan or the
 employee benefit plan of an affiliated employer under common
 management and control;
     (ix) A union administering a benefit plan on behalf of its
 members;
     (x) An insurance producer selling insurance or engaged in related
 activities within the scope of the producer's license;
     (xi) A creditor acting on behalf of its debtors with respect to
 insurance, covering a debt between the creditor and its debtors;
     (xii) A behavioral health administrative services organization or
 other county-managed entity that has been approved by the state
 health care authority to perform delegated functions on behalf of a
 carrier;
     (xiii) A hospital licensed under chapter 70.41 RCW or ambulatory
 surgical facility licensed under chapter 70.230 RCW;
     (xiv) The Robert Bree collaborative under chapter 70.250 RCW;
     (xv) The health technology clinical committee established under
 RCW 70.14.090; or
     (xvi) The prescription drug purchasing consortium established
 under RCW 70.14.060.
     (5) "Health care provider" or "provider" has the same meaning as
 in RCW 48.43.005.
     (6) "Health care service" has the same meaning as in RCW
 48.43.005.
     (7) "Health carrier" or "carrier" has the same meaning as in RCW
 48.43.005.
     (8) "Laboratory benefit manager" means a person or entity
 providing service to, or acting on behalf of, a health carrier,
 employee benefits programs, or another entity under contract with a
 carrier, that directly or indirectly impacts the determination or
 utilization of benefits for, or patient access to, health care
 services, drugs, and supplies relating to the use of clinical
 laboratory services and includes any requirement for a health care
 provider to submit a notification of an order for such services.
     (9) "Mental health benefit manager" means a person or entity
 providing service to, or acting on behalf of, a health carrier,
 employee benefits programs, or another entity under contract with a
                                     p. 5                          SB 5811
 carrier, that directly or indirectly impacts the determination of
 utilization of benefits for, or patient access to, health care
 services, drugs, and supplies relating to the use of mental health
 services and includes any requirement for a health care provider to
 submit a notification of an order for such services.
     (10) "Network" means the group of participating providers,
 pharmacies, and suppliers providing health care services, drugs, or
 supplies to beneficiaries of a particular carrier or plan.
     (11) "Person" includes, as applicable, natural persons, licensed
 health care providers, carriers, corporations, companies, trusts,
 unincorporated associations, and partnerships.
     (12)(a) "Pharmacy benefit manager" means a person that contracts
 with pharmacies on behalf of an insurer, a third-party payor, or the
 prescription drug purchasing consortium established under RCW
 70.14.060 to:
     (i) Process claims for prescription drugs or medical supplies or
 provide retail network management for pharmacies or pharmacists;
     (ii) Pay pharmacies or pharmacists for prescription drugs or
 medical supplies;
     (iii) Negotiate rebates with manufacturers for drugs paid for or
 procured as described in this subsection;
     (iv) Manage pharmacy networks; or
     (v) Make credentialing determinations.
     (b) "Pharmacy benefit manager" does not include a health care
 service contractor as defined in RCW 48.44.010.
     (13)(a) "Radiology benefit manager" means any person or entity
 providing service to, or acting on behalf of, a health carrier,
 employee benefits programs, or another entity under contract with a
 carrier, that directly or indirectly impacts the determination or
 utilization of benefits for, or patient access to, the services of a
 licensed radiologist or to advanced diagnostic imaging services
 including, but not limited to:
     (i) Processing claims for services and procedures performed by a
 licensed radiologist or advanced diagnostic imaging service provider;
 or
     (ii) Providing payment or payment authorization to radiology
 clinics, radiologists, or advanced diagnostic imaging service
 providers for services or procedures.
     (b) "Radiology benefit manager" does not include a health care
 service contractor as defined in RCW 48.44.010, a health maintenance
                                     p. 6                          SB 5811
 organization as defined in RCW 48.46.020, or an issuer as defined in
 RCW 48.01.053.
     (14) "Utilization review" has the same meaning as in RCW
 48.43.005.
     (15) "Critical access pharmacy" means a pharmacy in Washington
 that is further than a 10-mile radius from any other pharmacy, is the
 only pharmacy on an island, or provides critical services to
 vulnerable populations. If one critical access pharmacy's 10-mile
 radius intersects with that of another critical access pharmacy, both
 shall be considered a critical access pharmacy if either critical
 access pharmacy's closure could result in impaired access for rural
 areas or for vulnerable populations. The health care authority's
 chief pharmacy officer may also further identify pharmacies as
 critical access based on their unique ability to care for a
 population.
      Sec. 3. RCW 48.200.280 and 2020 c 240 s 15 are each amended to
 read as follows:
      (1) The definitions in this subsection apply throughout this
 section unless the context clearly requires otherwise.
     (a) "List" means the list of drugs for which predetermined
 reimbursement costs have been established, such as a maximum
 allowable cost or maximum allowable cost list or any other benchmark
 prices utilized by the pharmacy benefit manager and must include the
 basis of the methodology and sources utilized to determine
 multisource generic drug reimbursement amounts.
     (b) "Multiple source drug" means a therapeutically equivalent
 drug that is available from at least two manufacturers.
      (c) "Multisource generic drug" means any covered outpatient
 prescription drug for which there is at least one other drug product
 that is rated as therapeutically equivalent under the food and drug
 administration's most recent publication of "Approved Drug Products
 with    Therapeutic Equivalence   Evaluations;"  is   pharmaceutically
 equivalent or bioequivalent, as determined by the food and drug
 administration; and is sold or marketed in the state during the
 period.
     (d) "Network pharmacy" means a retail drug outlet licensed as a
 pharmacy under RCW 18.64.043 that contracts with a pharmacy benefit
 manager.
                                     p. 7                          SB 5811
     (e) "Therapeutically equivalent" has the same meaning as in RCW
 69.41.110.
     (2) A pharmacy benefit manager:
     (a) May not place a drug on a list unless there are at least two
 therapeutically equivalent multiple source drugs, or at least one
 generic drug available from only one manufacturer, generally
 available for purchase by network pharmacies from national or
 regional wholesalers;
     (b) Shall ensure that all drugs on a list are readily available
 for purchase by pharmacies in this state from national or regional
 wholesalers that serve pharmacies in Washington;
     (c) Shall ensure that all drugs on a list are not obsolete;
     (d) Shall make available to each network pharmacy at the
 beginning of the term of a contract, and upon renewal of a contract,
 the sources utilized to determine the predetermined reimbursement
 costs for multisource generic drugs of the pharmacy benefit manager;
     (e) Shall make a list available to a network pharmacy upon
 request in a format that is readily accessible to and usable by the
 network pharmacy;
     (f) Shall update each list maintained by the pharmacy benefit
 manager every seven business days and make the updated lists,
 including all changes in the price of drugs, available to network
 pharmacies in a readily accessible and usable format;
     (g) Shall ensure that dispensing fees are not included in the
 calculation of the predetermined reimbursement costs for multisource
 generic drugs;
     (h) May not cause or knowingly permit the use of any
 advertisement, promotion, solicitation, representation, proposal, or
 offer that is untrue, deceptive, or misleading;
     (i) May not charge a pharmacy a fee related to the adjudication
 of    a    claim,   credentialing,    participation,   certification,
 accreditation, or enrollment in a network including, but not limited
 to, a fee for the receipt and processing of a pharmacy claim, for the
 development or management of claims processing services in a pharmacy
 benefit manager network, or for participating in a pharmacy benefit
 manager network;
     (j) May not r