2018 Kentucky Revised Statutes CHAPTER 205 - PUBLIC ASSISTANCE AND MEDICAL ASSISTANCE .647 Pharmacy benefit managers providing Medicaid benefits -- Annual reports to Department for Medicaid Services -- Requirements for Medicaid services contracts entered into or renewed on or after July 1, 2018 -- Reimbursement rates between pharmacy benefit manager and contracted pharmacy.
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205.647 Pharmacy benefit managers providing Medicaid benefits -- Annual reports
to Department for Medicaid Services -- Requirements for Medicaid services
contracts entered into or renewed on or after July 1, 2018 -- Reimbursement
rates between pharmacy benefit manager and contracted pharmacy.
(1)
(2)
(3)
(4)
As used in this section, "pharmacy benefit manager" has the same meaning as in
KRS 304.9-020.
A pharmacy benefit manager contracted with a managed care organization that
provides Medicaid benefits pursuant to this chapter shall comply with the
provisions of this section and KRS 304.9-053, 304.9-054, 304.9-055, and 304.17A162.
KRS 304.17A-162(10), (11), (12), and (13) shall not apply to a pharmacy benefit
manager contracted directly with the cabinet to provide Medicaid benefits.
A pharmacy benefit manager contracting with a managed care organization to
administer Medicaid benefits shall provide the following information to the
Department for Medicaid Services no later than August 15, 2018, and for each year
thereafter that the pharmacy benefit manager is contracted with a managed care
organization to administer Medicaid benefits:
(a) The total Medicaid dollars paid to the pharmacy benefit manager by a
managed care organization and the total amount of Medicaid dollars paid to
the pharmacy benefit manager by a managed care organization which were not
subsequently paid to a pharmacy licensed in Kentucky;
(b) 1.
The average reimbursement, by drug ingredient cost, dispensing fee, and
any other fee paid by a pharmacy benefit manager to licensed
pharmacies with which the pharmacy benefit manager shares common
ownership, management, or control; or which are owned, managed, or
controlled by any of the pharmacy benefit manager's management
companies, parent companies, subsidiary companies, jointly held
companies, or companies otherwise affiliated by a common owner,
manager, or holding company; or which share any common members on
the board of directors; or which share managers in common.
2.
For the purposes of this subsection, "average reimbursement" means a
statistical methodology selected by the Department for Medicaid
Services via any administrative regulations promulgated pursuant to this
section which shall include, at a minimum, the median and mean;
(c) The average reimbursement, by drug ingredient cost, dispensing fee, and any
other fee, paid by a pharmacy benefit manager to pharmacies licensed in
Kentucky which operate more than ten (10) locations;
(d) The average reimbursement by drug ingredient cost, dispensing fee, and any
other fee, paid by a pharmacy benefit manager to pharmacies licensed in
Kentucky which operate ten (10) or fewer locations;
(e) Any direct or indirect fees, charges, or any kind of assessments imposed by
the pharmacy benefit manager on pharmacies licensed in Kentucky with
which the pharmacy benefit manager shares common ownership,
(5)
(6)
management, or control; or which are owned, managed, or controlled by any
of the pharmacy benefit manager's management companies, parent companies,
subsidiary companies, jointly held companies, or companies otherwise
affiliated by a common owner, manager, or holding company; or which share
any common members on the board of directors; or which share managers in
common;
(f) Any direct or indirect fees, charges, or any kind of assessments imposed by
the pharmacy benefit manager on pharmacies licensed in Kentucky which
operate more than ten (10) locations;
(g) Any direct or indirect fees, charges, or any kind of assessments imposed by
the pharmacy benefit manager on pharmacies licensed in Kentucky which
operate ten (10) or fewer locations; and
(h) All common ownership, management, common members of a board of
directors, shared managers, or control of a pharmacy benefit manager, or any
of the pharmacy benefit manager's management companies, parent companies,
subsidiary companies, jointly held companies, or companies otherwise
affiliated by a common owner, manager, or holding company with any
managed care organization contracted to administer Kentucky Medicaid
benefits, any entity which contracts on behalf of a pharmacy, or any pharmacy
services administration organization; or any common ownership,
management, common members of a board of directors, shared managers, or
control of a pharmacy services administration organization that is contracted
with a pharmacy benefit manager, with any drug wholesaler or distributor or
any of the pharmacy services administration organization's management
companies, parent companies, subsidiary companies, jointly held companies,
or companies otherwise affiliated by a common owner, common members of a
board of directors, manager, or holding company.
All information provided by a pharmacy benefit manager pursuant to subsection (4)
of this section shall reflect data for the most recent full calendar year and shall be
divided by month. This information shall be managed by the Department for
Medicaid Services in accordance with applicable law and shall be exempt from
KRS 61.870 to 61.884 in accordance with KRS 61.878(1)(c).
Any contract entered into or renewed for the delivery of Medicaid services by a
managed care organization on or after July 1, 2018, shall comply with the following
requirements:
(a) The Department for Medicaid Services shall set, create, or approve, and may
change at any time for any reason, reimbursement rates between a pharmacy
benefit manager and a contracted pharmacy, or an entity which contracts on
behalf of a pharmacy. Reimbursement rates shall include dispensing fees
which take into account applicable guidance by the Center for Medicare and
Medicaid Services. A pharmacy benefit manager shall notify the Department
for Medicaid Services thirty (30) days in advance of any proposed change of
over five percent (5%) in the product reimbursement rates for a pharmacy
licensed in Kentucky. The Department for Medicaid Services may disallow
(7)
(8)
the change within thirty (30) days of this notification;
(b) All laws and administrative regulations promulgated by the Department for
Medicaid Services, including but not limited to the regulation of maximum
allowable costs;
(c) The Department for Medicaid Services shall approve any contract between the
managed care organization and a pharmacy benefit manager;
(d) The Department for Medicaid Services shall approve any contract, any change
in the terms of a contract, or suspension or termination of a contract between a
pharmacy benefit manager contracted with a managed care organization to
administer Medicaid benefits and an entity which contracts on behalf of a
pharmacy, or any contract or any change in the terms of a contract, or any
suspension or termination of a contract between a pharmacy benefit manager
and a pharmacy or pharmacist; and
(e) Any fee established, modified, or implemented directly or indirectly by a
managed care organization, pharmacy benefit manager, or entity which
contracts on behalf of a pharmacy that is directly or indirectly charged to,
passed onto, or required to be paid by a pharmacy services administration
organization, pharmacy, or Medicaid recipient shall be submitted to the
Department for Medicaid Services for approval. This paragraph shall not
apply to any membership fee or service fee established, modified, or
implemented by a pharmacy services administration organization on a
pharmacy licensed in Kentucky that is not directly or indirectly related to
product reimbursement.
The Department for Medicaid Services may promulgate administrative regulations
pursuant to KRS Chapter 13A as necessary to implement and administer its
responsibilities under this section. These administrative regulations may include but
are not limited to the assessment of fines, penalties, or sanctions for noncompliance.
The Department for Medicaid Services may consider any information ascertained
pursuant to this section in the setting, creation, or approval of reimbursement rates
used by a pharmacy benefit manager or an entity which contracts on behalf of a
pharmacy.
Effective: July 1, 2018
History: Amended 2018 Ky. Acts ch. 157, sec. 1, effective July 1, 2018. -- Created
2016 Ky. Acts ch. 79, sec. 7, effective July 15, 2016.
2018-2020 Budget Reference. See State/Executive Branch Budget, 2018 Ky. Acts ch.
169, Pt. I, G, 3, b, (15) at 1321.
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