Many States have enacted “any willing provider” (AWP) legislation seeking to protect independent pharmacies. But, do these state laws work?
AWP laws generally require health insurers, managed care organizations and other health plans to accept a pharmacy into their network if the pharmacy is willing to accept the terms and conditions of the contract. Contract terms include the fee schedule, covered expenses and the network’s quality standards.
A typical any willing provider statute may read, “no pharmacy or pharmacist shall be denied the right to participate as a preferred provider . . . under the same terms and conditions currently applicable to all other preferred or contracting providers . . . provided the pharmacy or pharmacist is registered…and accepts the terms and conditions of the contract”. N.J.S.A. 17:48-6j(a)(2). This New Jersey law, for example, seemingly mandates that a New Jersey pharmacy cannot be prohibited from filling its patient’s prescriptions regardless of whether the patient’s health plan has entered into an exclusive agreement with another pharmacy, including the larger retail pharmacy chains and mail order pharmacies such as CVS, Walgreens, etc. The rise of exclusive provider networks seems to be at odds with AWP laws, and there are certain circumstances where a State’s AWP laws may not apply.
The Employee Retirement Income Security Act (“ERISA”) may preempt state AWP laws. ERISA preempts state laws, including AWP laws, that “relate to any employee benefit plan”, unless the laws are “saved” from preemption. ERISA’s savings clause saves from preemption state laws governing the “business of insurance” so long as your State’s AWP law is “limited to entities within the insurance industry” (e.g., limited to entities such as insurance companies). There are various exceptions to the savings clause, including self-funded employer plans. However, where a State’s AWP law applies, your pharmacy stands to substantially benefit because you cannot be excluded from filling prescriptions by the PBMs or insurers.
To see if your State has enacted “Any Willing Provider” legislation, to determine whether such legislation may be preempted by ERISA, or if your pharmacy has been improperly excluded from the network of a health insurer, managed care organization or other health plan, contact Frier Levitt.