As discussed in an earlier article, Illinois has joined a growing number of states including Florida and Pennsylvania that are taking action to regulate the conduct of Pharmacy Benefit Managers (“PBMs”) and their corresponding business practices. Illinois House Bill HB4548 takes aim at one of the most critical issues for independent pharmacies: reimbursement. Specifically, House Bill H.B. 4548 includes provisions aimed at addressing below-cost reimbursement and payment of excessively low dispensing fees (or in many cases no dispensing fee) to independent pharmacy providers.
If enacted, H.B. 4548 would require a PBM to reimburse a pharmacy at or above the National Average Drug Acquisition Cost (“NADAC”) methodology and also provide a $10.49 professional pharmacy dispensing fee. If NADAC is not available at the time a drug is administered or dispensed, H.B. 4548 requires reimbursement at wholesale acquisition cost plus payment of the $10.49 dispensing fee. Professional dispensing fees are crucial to account for the reasonable costs associated with dispensing medications in a safe manner. Such costs include storage costs, which can be crucial to ensuring the safe dispensing and effective administration of medications. Reimbursement alone is not meant to replace a professional dispensing fee and PBMs often do not pay a professional dispensing fee. Nonpayment of dispensing fees by PBMs forces the pharmacy to bear the costs associated with dispensing medications to its patients which can jeopardize the ability of independent pharmacies to sustain their operations.
Excessively low or below-cost reimbursement is one of the most troublesome PBM business practices that harm independent pharmacies. Often, independent pharmacies may be forced to choose between dispensing medication at a total loss or transferring the prescription to a pharmacy that is able to dispense it, which often is a PBM-affiliated pharmacy. Illinois’ proposed bill will help to improve the terms and conditions of reimbursement for independent pharmacies.
How Frier Levitt Can Help
Frier Levitt represents pharmacies across the United States in challenging PBM audits, network access, reimbursement practices and other complex issues such as DIR fees. Our attorneys have extensive knowledge in all aspects of the pharmacy-PBM relationship. Contact us to speak to an attorney about how your pharmacy can leverage the various applicable laws and protections afforded to pharmacies that regulate PBM conduct.
