BULLETIN NO. 5-2022
| To: | ALL PHARMACY BENEFITS MANAGERS LICENSED IN OKLAHOMA |
| Re: | SENATE BILL 737 |
| From: | GLEN MULREADY, INSURANCE COMMISSIONER |
| Date: | June 8, 2022 |
PURPOSE OF THIS BULLETIN
Oklahoma SB 737 was codified into Title 36 § 6962 of the Oklahoma Statutes and includes a declaration of emergency, thus taking effect immediately upon Governor Stitt’s signature on April 21, 2022. This measure includes new requirements which will have a significant impact on the Pharmacy Benefits Management industry. The Department hopes that this bulletin will clarify what is required.
Overview
SB 737 prohibits any pharmacy benefits manager (PBM) from engaging in the practice of spread pricing as defined in the measure and from charging a pharmacist or pharmacy certain fees as they relate to participation in a retail pharmacy network. Additionally, PBMs must disclose to insurers, self-funded employers, unions or other PBM clients the existence of the respective aggregate prescription drug discounts, rebates received from drug manufacturers, and pharmacy audit recoupments. PBMs must also provide the Insurance Commissioner with certain data pertaining to pharmaceutical manufacturer and provider contracts, plan utilization data, plan pricing data, pharmacy utilization data, and pharmacy pricing data. Such reports to the Commissioner will occur on a quarterly basis.
The measure empowers the Insurance Commissioner to suspend or revoke a PBM’s license and to censure such managers for any violation relating to the Patient’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, or other relevant statutes. The Commissioner may assess an administrative fine on top of any other fines levied against a manager ranging from $100.00 to $10,000.00. Each day that a PBM operates without a license from the Insurance Department will be deemed a violation of the Patient’s Right to Pharmacy Choice Act.
Spread pricing prohibition: Oklahoma statutes define spread pricing as “a prescription drug pricing model utilized by a pharmacy benefits manager in which the PBM charges a health benefit plan a contracted price for prescription drugs that differs from the amount the PBM directly or indirectly pays the pharmacy or pharmacist for providing pharmacy services”. Oklahoma statute now prohibits spread pricing. PBMs must cease all spread pricing, even if it is permitted in their contract with an Oklahoma pharmacy. If a PBM does have a spread pricing provision in their contract, they must remove that language when the contract is renewed.
Participation fees: 36 O.S. § 6962 now prohibits PBMs from charging Oklahoma pharmacies fees related to: an application fee, an enrollment or participation fee, a credentialing or recredentialing fee, a change of ownership fee, or a fee for the development or management of claims processing services or claims payment services.
Disclosures: SB 737 requires certain disclosures to organizations that the PBM conducts business with. A PBM must now “fully disclose to insurers, self-funded employers, unions or other PBM clients the existence of the respective aggregate prescription drug discounts, rebates received from drug manufacturers and pharmacy audit recoupments”
Every PBM must also Provide the Insurance Commissioner, insurers, self-funded employer plans and unions unrestricted audit rights of and access to the respective PBM pharmaceutical manufacturer and provider contracts, plan utilization data, plan pricing data, pharmacy utilization data and pharmacy pricing data;
Additionally, PBMs are also required to maintain, for no less than three (3) years, documentation of all network development activities including but not limited to contract negotiations and any denials to providers to join networks. This documentation shall be made available to the Commissioner upon request;
Reporting: Every Pharmacy Benefits Manager licensed in the State of Oklahoma must report to the Commissioner, on a quarterly basis for each health insurer payor, the following information:
| a. | the aggregate amount of rebates received by the PBM, |
| b. | the aggregate amount of rebates distributed to the appropriate health insurer payor, |
| c. | the aggregate amount of rebates passed on to the enrollees of each health insurer payor at the point of sale that reduced the applicable deductible, copayment, coinsure or other cost sharing amount of the enrollee, |
| d. | the individual and aggregate amount paid by the health insurer payor to the PBM for pharmacy services itemized by pharmacy, drug product and service provided, and |
| e. | the individual and aggregate amount a PBM paid a provider for pharmacy services itemized by pharmacy, drug product and service provided. |
Each PBM licensed in the State of Oklahoma will be required to submit its “Oklahoma Pharmacy Benefits Manager Quarterly Data Report” to the Oklahoma Insurance Department (“Department”) beginning in October 2022.
Every Oklahoma Pharmacy Benefits Manager Quarterly Data Report submitted to the Department by a PBM must be in Excel software spreadsheet format that is searchable and in a manner which allows for the data to be arranged and organized. All other file types will be rejected. Each report submitted by a PBM must also specify the time-period to which the data included in the report pertains.
For reporting purposes, please go to the following link to access an acceptable template as required by the Department: https://www.oid.ok.gov/regulated-entities/pbm/. This is the only reporting format which will be accepted by the Department. Each report submitted by a PBM should have a file name identifying the PBM’s license number, the year and the specific quarter (time-period) for which the report is being submitted. For example, if XYZ Company (OK PBM License #999999) is submitting a report for the third (3rd) quarter of 2022, the ideal file name of the report would be as follows: “999999-2022.3rd Qtr.OK PBM Data Report.xlsx” in Excel.
On or before the last day of each month in which it is due, each report submitted by a PBM should be delivered electronically to the Department at PBMReporting@oid.ok.gov in a manner that is without redaction and which is neither encrypted nor password protected.
Accompanying each report submission, a PBM must also provide the contact information for a specific representative of the PBM who may be contacted by the Department with regards to the report submitted should the need arise. The PBM representative’s contact information provided should include their direct telephone number and email address. Additionally, each report submission must be accompanied by a general attestation of authenticity (see below) signed by the representative of the PBM who prepares the report.
Attestation Example:
“In compliance with Title 36 O.S. § 6962 (D)(5), the PBM Quarterly Aggregate Data Report herein attached is submitted to be filed with the Oklahoma Insurance Department and I hereby attest to the accuracy of the data and facts represented within this document as of [Date submitted].”
Questions applicable to this bulletin should be directed to:
the PBM Compliance and Enforcement Division, Oklahoma Insurance Department at PBMReporting@oid.ok.gov.