Ky. Capitol DomeFRANKFORT, Ky. (2/21/20) — After years of claims and counter claims and several attempts to legislate controls over Pharmacy Benefit Managers, the Kentucky Senate appears to be ready to throw in the towel and fire the PBMs managing Medicaid for the commonwealth.

Independent pharmacies are celebrating the unanimous approval by the Senate Health and Welfare vote to forward to the House. Gov. Andy Beshear has indicated support.

The state will hire one PBM or establish its own PBM and strictly control its operations.

Here is an excerpt from the bill:

(1) The department shall establish a single preferred drug list to be used by the state pharmacy benefit manager for each managed care organization with whom the department contracts for the delivery of Medicaid services.

(2) (a) The department shall promulgate administrative regulations, to be used by the state pharmacy benefit manager for each managed care organization, that establish:

1. Reimbursement methodologies; and

2. Dispensing fees which may take into account applicable guidance by the Centers for Medicare and Medicaid Services and which may, to the extent permitted under federal law, vary by pharmacy type, including rural and independently owned pharmacies, chain pharmacies, and pharmacies owned or contracted by a health care facility that is registered as a covered entity pursuant to 42 U.S.C. sec. 256b.

Reimbursement methodologies established by administrative regulations shall not discriminate against pharmacies owned or contracted by a health care facility that is registered as a covered entity pursuant to 42 U.S.C. sec. 256b, to the extent allowable by the Centers for Medicare and Medicaid Services.

(b) The reimbursement methodologies and dispensing fees established by the department pursuant to paragraph (a) of this subjection shall be used by the state pharmacy benefit manager for each managed care organization.

(3) (a) The state pharmacy benefit manager shall administer, adjudicate, and reimburse pharmacy benefit claims submitted to a Medicaid managed care organization with whom the department contracts for the delivery of Medicaid services in accordance with:

1. The terms of any contract between a health care facility that is registered as a covered entity pursuant to 42 U.S.C. sec. 256b and a Medicaid managed care organization; and

2. The terms and conditions of the contract between the state pharmacy benefit manager and the commonwealth.

(b) The state pharmacy benefit manager shall utilize the reimbursement methodologies and dispensing fees established by the department, pursuant to subsection (2) of this section.

(4) The following shall apply to the state pharmacy benefit manager, the contract between the state pharmacy benefit manager and the department, and, where applicable, any contract between the state pharmacy benefit manager and a pharmacy:

(a) The department shall approve any contract between the state pharmacy benefit manager and a pharmacy licensed under KRS Chapter 315;

(b) The state pharmacy benefit manager shall not change the terms of a contract between the state pharmacy benefit manager and a pharmacy without first obtaining written approval from the department to do so;

(c) The state pharmacy benefit manager shall not create, modify, implement, or indirectly establish any fee on a pharmacy, pharmacist, or a Medicaid recipient without first obtaining written approval from the department to do so; and

(d) 1. When creating or establishing a pharmacy network for a managed care organization with whom the department contracts for the delivery of Medicaid services, the state pharmacy benefit manager shall not discriminate against any pharmacy or pharmacist that is:

a. Located within the geographic coverage area of the managed care organization; and

b. Willing to agree to or accept reasonable terms and conditions established by the state pharmacy benefit manager, or other administrator for network participation, including obtaining preferred participation status.

2. Discrimination prohibited by this paragraph shall include denying a pharmacy the opportunity to participate in a pharmacy network at preferred participation status.

Ron Sanders
SurfKY News

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