Pharmacy Audit Integrity Act passes both houses, sent to Governor for his signature

Senate Bill 489, sought by West Virginia Pharmacists Association to regulate pharmacy benefit managers (PBMs), has passed both the Senate and House of Delegates and sent to Governor Jim Justice for his signing into law.

If enacted by the Governor, the new law requires PBMs to obtain a license from the West Virginia Insurance Commissioner before doing business in the state, and establishes terms and fees for licensing of PBMs. It calls for the Commissioner to promulgate rules for legislative approval relating ti licensing, fees, application, financial standards and reporting requirements of PBMs.

Of major importance to pharmacies and pharmacists is that the bill prohibits an auditing entity from seeking a fee, charge-back, recoupment or other adjustment from a pharmacy or pharmacist except in certain circumstances, such as fraud.

It also prohibits a PBM or third-party entity from reimbursing an entity participating in the federal 340B drug discount program for pharmacy-dispensed drugs at a rate lower than that paid for the same drug to pharmacies similar in prescription volume that are not 340B entities and shall not assess any fee, charge-back, or other adjustment upon the 340B entity on the basis that the 340B entity program set form in 2 U.S.C. 256b.

Senate Bill 489 establishes reporting requirements of PBMs, and prohibits them from providing a network comprised only of mail-order benefits. It also clarifies that certain prescription drug plans, such as Medicare and Medicaid, do not apply to the enforcement of this law.

The West Virginia Public Employees Insurance Agency (PEIA) shall include language in all contracts with PBMs requiring the PBM report quarterly to PEIA all pharmacy claims paid to the provider per claim, including the following: the cost of drug reimbursement; dispensing fee, copayments and the amount charged the agency for each claim by the PBM. This may include itemization of all administrative fees, rebates, or processing charges associated with the claim.

The entity conducting a pharmacy audit may not seek adjustment for a dispensed product unless the following has occurred: fraud or willful misrepresentation, dispensing in excess of the benefit design; prescriptions not filled in accordance with the prescriber’s order; or actual overpayment to the pharmacy.