SB689 (2020) Detail

Relative to the pharmacy anti-steering law.


SB 689-FN - AS AMENDED BY THE SENATE

 

03/11/2020   1067s

2020 SESSION

20-2742

10/01

 

SENATE BILL 689-FN

 

AN ACT relative to the pharmacy anti-steering law.

 

SPONSORS: Sen. Sherman, Dist 24; Sen. Morgan, Dist 23; Sen. Kahn, Dist 10; Sen. Fuller Clark, Dist 21; Rep. Muscatel, Graf. 12

 

COMMITTEE: Commerce

 

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ANALYSIS

 

This bill prohibits a referral of a patient to a pharmacy by a health carrier or pharmacy benefit manager for pharmacy care.

 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/11/2020   1067s 20-2742

10/01

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty

 

AN ACT relative to the pharmacy anti-steering law.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  Findings.  The general court finds that the referral of a patient to a pharmacy with a mutually beneficial financial relationship not limited to but including investment in or ownership with a health carrier or pharmacy benefit manager for pharmacy care represents a potential conflict of interest.  These referral practices may limit or eliminate competitive alternatives in the health care services market, may result in overutilization of health care services, may increase costs to the health care system, may adversely affect the quality of health care, may disproportionately harm patients in rural and medically underserved areas, and are against the public policy of this state.

2  New Subdivision; Pharmacy Anti-Steering and Transparency.  Amend RSA 318 by inserting after section 66 the following new subdivision:

Pharmacy Anti-Steering and Transparency

318:67  Definitions.  In this subdivision:

I.  "Affiliate" means a person or entity licensed as a health carrier as defined in RSA 420-J:3, XXIII or registered as pharmacy benefit manager as defined in RSA 402-N:1, VIII, which, either directly or indirectly through one or more intermediaries:

(a)  Has a significant financial relationship with or an investment or ownership interest in a pharmacy licensed in this state;

(b)  Shares common ownership with a pharmacy licensed in this state; or

(c)  Has as an investor or ownership interest holder a pharmacy licensed in this state.

II.(a)  "Referral" means:

(1)  Ordering of a patient to a pharmacy by an affiliate either orally or in writing, including online messaging;

(2)  Offering or implementing plan designs that require or incentivize patients to utilize affiliated pharmacies; or

(3)  Patient or prospective patient specific advertising, marketing, or promotion of a pharmacy by an affiliate.

(b)  The term "referral" shall not include a pharmacy's inclusion by an affiliate in communications to patients, including patient and prospective patient specific communications, regarding network pharmacies and prices, provided that the affiliate includes information regarding eligible nonaffiliate pharmacies in such communications and the information provided is accurate.

318:68  Pharmacy Anti-Steering and Transparency.

I.  A pharmacy shall be prohibited from presenting a claim for payment to any individual, third-party payor, affiliate, or other entity for a service furnished pursuant to a referral from an affiliate; provided, however, that this shall not apply to referrals from an affiliate for limited distribution prescription drugs or specialty prescription drugs, unless the pharmacy is a Utilization Review Accreditation Commission (URAC), Accreditation Commission for Health Care (ACHC), or the Center for Pharmacy Practice Accreditation (CPPA) accredited specialty pharmacy, in which case such prohibition shall apply.

II.  This section shall not be construed to prohibit a pharmacy from entering into an agreement with an affiliate to provide pharmacy care to patients, provided that the pharmacy does not receive referrals in violation of paragraph I and the pharmacy provides the disclosures required in paragraph III.

III.  If a pharmacy has an affiliate, it shall annually file with the board a disclosure statement identifying all such affiliates.

IV.  In addition to any other remedy provided by law, a violation of this section by a pharmacy shall be grounds for disciplinary action by the board.

V.  This section shall not apply to any hospital or related entity, or to any referrals by an affiliate for pharmacy services and prescriptions to patients in skilled nursing facilities, intermediate care facilities, continuing care facilities, home health agencies, or hospices, or to requirements for pharmacy benefits in affiliate's health plans for its own employees.

3  Effective Date.  This act shall take effect January 1, 2021.  

 

LBAO

20-2742

Amended 6/16/20

 

SB 689-FN- FISCAL NOTE

AS AMENDED BY THE SENATE (AMENDMENT #2020-1067s)

 

AN ACT relative to the pharmacy anti-steering law.

 

FISCAL IMPACT:      [ X ] State              [    ] County               [    ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

   Appropriation

$0

$0

$0

$0

   Revenue

$0

Indeterminable

Indeterminable

Indeterminable

   Expenditures

$0

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Funding Source:

  [ X ] General            [    ] Education            [    ] Highway           [ X ] Other - Insurance Premium Tax (RSA 400-A:32) and Office of Professional Licensure Certification Fund  (RSA 310-A:1-e,I(b))

 

METHODOLOGY:

This bill prohibits pharmacies from making a claim for payment for services made pursuant to a referral from an affiliate, defined as a person or entity licensed as a health carrier or registered as a pharmacy benefit manager.  The proposal allows for referrals from an affiliate for limited distribution prescription drugs or specialty prescription drugs.  A pharmacy may enter into an agreement with an affiliate to provide pharmacy care to patients provided the pharmacy does not receive prohibited referrals and files an annual disclosure statement identifying all such affiliates.  The bill provides for exceptions for hospitals or related entities, or to referrals by an affiliate for pharmacy services and prescriptions to patients in skilled nursing facilities, intermediate care facilities, continuing care facilities, home health agencies or hospices, or to requirements for pharmacy benefits in affiliate's health plans for its own employees.  Pharmacies are subject to disciplinary action by the Board of Pharmacy for violations.

 

The Department of Health and Human Services states Medicaid managed care organizations (MCOs) have mail order requirements on some medications.  The legislation may prohibit the use of an MCO's contracted pharmacy.  This in turn may increase costs for services which could impact the Department in higher member monthly premiums.  Such increase is indeterminable.

 

The Department of Administrative Services indicates the State Employee and Retiree Health Benefit (HBP) is a self-funded health plan that contracts with Express Scripts as its pharmacy benefit manager and uses an exclusive mail order pharmacy owned by Express Scripts for approximately 37,000 plan members.  In calendar year 2018, the HBP spent over $88 million on approximately 600,000 prescriptions, of these, 257,000 were filled through the Express Scripts mail order pharmacy.  If the HBP were unable to require the use of the exclusive mail order pharmacy, costs would be expected to rise by an indeterminable amount and negatively impact the viability of the HBP.

 

The Insurance Department indicates that to the extent the bill may affect claim costs,  premium rates and premium tax revenue may also be impacted by an indeterminable amount.

 

The Office of Professional Licensure and Certification indicates there may be unknown indeterminable costs associated with complaints and investigations.  The Board of Pharmacy does not have regulatory oversight of pharmacy benefit managers, the Insurance Department is responsible for such oversight, therefore the Board of Pharmacy may have difficulty enforcing the provisions of the bill.

 

AGENCIES CONTACTED:

Departments of Health and Human Services, Administrative Services and Insurance, and Office of Professional Licensure and Certification

 

Links

SB689 at GenCourtMobile
SB689 Discussion

Action Dates

Date Body Type
Jan. 21, 2020 Senate Hearing
March 12, 2020 Senate Floor Vote
March 11, 2020 Senate Floor Vote

Bill Text Revisions

SB689 Revision: 8322 Date: June 18, 2020, 6:34 a.m.
SB689 Revision: 8007 Date: Jan. 14, 2020, 4:15 p.m.

Docket

Date Status
Jan. 8, 2020 Introduced 01/08/2020 and Referred to Commerce; SJ 2
Jan. 21, 2020 Hearing: 01/21/2020, Room 100, SH, 02:00 pm; SC 3
March 12, 2020 Committee Report: Ought to Pass with Amendment # 2020-1067s, 03/12/2020; SC 10
March 11, 2020 Committee Report: Ought to Pass with Amendment # 2020-1067s, 03/11/2020; SC 10
March 11, 2020 Committee Amendment # 2020-1067s, AA, VV; 03/11/2020; SJ 6
March 11, 2020 Ought to Pass with Amendment 2020-1067s, MA, VV; OT3rdg; 03/11/2020; SJ 6
June 30, 2020 Introduced and Laid on Table MA VV 06/30/2020