Regulating Pharmacy Services Administrative Organizations

Introduced February 7, House Bill 4739 promotes transparency in the operation of pharmacy services administrative organizations (PSAO) by establishing a licensure requirement and providing for the regulation of the same by the Insurance Commission.

A PSAO pharmacy contract shall include a provision that requires the PSAO to provide to the independent pharmacy a copy of any contract amendments, payment schedules or reimbursement rates with three calendar days after the execution of a contract or an amendment to a contract signed on behalf of the independent pharmacy.

Each PSAO shall disclose to the Insurance Commissioner the extent of any ownership or control of the PSAO administrative organization by any parent company, subsidiary or other organization.

Prior to entering into a PSAO pharmacy contract, a PSAO shall furnish to an independent pharmacy a written disclosure of ownership or control in order to assist the independent pharmacy in making an informed decision regarding its relationship with the PSAO. Such disclosure shall include the extent of any ownership or control by any parent company, subsidiary or other organization that does any of the following: (1) provides pharmacy services; (2) provides prescription drug or device services; or (3) manufacturers, sells, or distributes prescription drugs, biologicals or medical devices.

A PSAO shall notify the independent pharmacy in writing within five calendar days of any material change in its ownership or control related to any company, subsidiary or other organization.

Prior to entering into a contract with a third-party payer, a PSAO shall furnish to a pharmacy benefits manager (PBM) or third-party payer a written disclosure of ownership or control to assist the pharmacy benefit manager or third-party payer in making an informed decision regarding its relationship with the PSAO and the independent pharmacy or pharmacies for which the PSAO is negotiating.