Across the country, several states continue to implement new laws, rules, and regulations to regulate Pharmacy Benefit Mangers (“PBMs”). PBMs act as middlemen between pharmacies and patients and have come under scrutiny in the last several years. In light of this recent scrutiny, many states have implemented measures to regulate PBMs and promote transparency as it relates to the cost of healthcare attributable to prescription medications. Beginning in 2019, Oklahoma established the Patient’s Right to Pharmacy Choice Act, House Bill 2632, to regulate PBMs. As outlined in the Patient’s Right to Pharmacy Choice Act, the purpose of Oklahoma’s regulation is to establish minimum and uniform access to a provider and prohibit restrictions on a patient’s right to choose a pharmacy provider. [1] Oklahoma also recently established the new Pharmacy Audit Integrity Act, which is a series of laws regulating Pharmacy Benefit Plans. [2] A summary of some of the key components of these new regulations are provided below.
Summary of New Regulations
A. PBMs Required to be Licensed in Oklahoma
Firstly, the Oklahoma Insurance Department now requires PBMs to be licensed by the Insurance Department before providing PBM services in Oklahoma. A license is required for any entity acting as a PBM in a contractual or employment relationship for a covered entity. In addition, the Insurance Department has the authority to suspend, revoke, or refuse to issue or renew a PBM license for any noncompliance with any provisions that regulate PBMs in the state. Specifically, the Insurance Department can revoke a license if a PBM misleads, deceives or defrauds the public or the Insurance Department or for any unfair or deceptive business practices. The Insurance Department can also levy administrative fines to a PBM for noncompliance with the laws. The licensing authority also gives the Insurance Department and the Attorney General the power to investigation PBMs and issue subpoenas.
B. Prohibitions on PBMs Control Over Pharmacy Network
Also contained in the new regulations are restrictions on PBMs’ control over participation in a pharmacy network. Contained within the Oklahoma’s regulations is an “Any Willing Provider Law” that prohibits a PBM from denying a provider the opportunity to participate in a pharmacy network if the provider is willing to accept the terms and conditions that the PBM has established. Any Willing Provider Laws, both at the federal and state level, have proven to be an effective tool in combatting improper PBM practices.
C. PBMs Limitation on Reimbursement
Oklahoma’s regulations create new standards for pharmacy contracts regarding legal rights related to reimbursement as well. A PBM cannot reimburse an independent pharmacy an amount less than the amount a PBM reimburses an affiliated pharmacy for the same covered service. In addition, the reimbursement amount paid to an independent pharmacy must be equal to the reimbursement amount calculated on a “per-unit basis using the same generic product identified or generic code number” paid to the PBM affiliated pharmacy.
D. Regulations Limiting PBMs Audit Practices
Lastly, another main area of concern that Oklahoma is working to regulate is PBM audits of pharmacies. PBM audits can be daunting for many independent pharmacies as PBMs often attempt to terminate pharmacies from their pharmacy network based on audit findings. The new regulations set standards for audits such as notice and timeframe requirements. The regulations state a PBM cannot consider any clerical or record-keeping error as fraud. This includes a typographical error, scrivener’s error or computer error. A pharmacy also has a right to submit amended claims to correct clerical or record-keeping errors in lieu of recoupment by a PBM. A PBM operating in Oklahoma must also audit independent pharmacies under the same standards as an affiliated pharmacy.
How Frier Levitt Can Help
Frier Levitt represents numerous pharmacies across the United States in challenging unfair and aggressive PBM practices as well as in understanding new legislation. Contact us to speak with an attorney about how your pharmacy can leverage the protections afforded by the Pharmacy Benefit Reform Law and other laws governing PBMs. Independent pharmacies should familiarize themselves with the Law and consider hiring qualified legal counsel to ensure they are maximizing the protections and legal rights afforded to Oklahoma pharmacies.
[1] Okla. Stat. tit. 36, § 6959
[2] Okla. Stat. tit. 59, § 356
