Since going into effect on October 1, 2021, North Carolina Senate Bill 257 (SB 257) has provided independent pharmacies with significant protections against unfair PBM conduct and improved the landscape for pharmacies in North Carolina. The most notable provisions of the bill include:
(1) prohibiting PBMs from penalizing or retaliating against pharmacies for exercising their valid legal rights;
(2) prohibiting PBMs from retroactively denying or reducing a pharmacy’s service claims with limited exceptions; and
(3) restricting PBMs from denying properly licensed pharmacies from participating in a network.
Having an affirmative prohibition against PBM retaliation is a substantial improvement to prior North Carolina law to ensure pharmacies feel protected against retaliation by a PBM solely for invoking valid legal rights. Additionally, the bill prohibits PBMs from retroactively denying or reducing pharmacist services claims after adjudication of a claim unless specific exceptions apply including:
(1) the original claim was submitted fraudulently;
(2) the original claim payment was incorrect because the pharmacy or pharmacist had already been paid for the pharmacist services;
(3) the pharmacist services were not rendered by the pharmacy or pharmacist;
(4) the adjustments were agreed to by the pharmacy or pharmacist, or
(5) the adjustments were part of an attempt to limit overpayment recovery efforts by a PBM.
Thus, setting aside an exception, pharmacies can challenge PBMs’ retroactive clawbacks and as discussed above, PBMs are restricted from retaliating against a pharmacy for challenging such conduct.
Furthermore, the bill prohibits PBMs from denying any properly licensed pharmacy from participating in a network on the same terms and conditions as other participants in the network. Thus, properly licensed independent pharmacies are given the same opportunity to join a PBM network whether they are affiliated to the PBM or are independent. North Carolina’s recently enacted law has provided its independent pharmacies valuable tools to gain access to PBM networks and protect them once inside the network. Independent pharmacies should ensure they are taking full advantage of the laws in North Carolina as needed.
How Frier Levitt Can Help
Frier Levitt represents numerous pharmacies across the United States in challenging PBM audits, network access, reimbursement practices and has extensive knowledge on all aspects of the pharmacy-PBM relationship. Contact us to speak with an attorney about how your pharmacy can leverage the various laws and protections afforded to pharmacies, including North Carolina’s current PBM laws in addition to federal laws which regulate PBM conduct.
