"Pharmacy Benefit Manager Guide - Full Review" - Kentucky

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Kentucky Department of Insurance
Pharmacy Benefit Manager Guide – Full Review
PBM ENTITY NAME________________________________________________________________________________ Incorporation/Formation Date _____________________
PBM Entity ID #: ______________________________________
Date of Receipt: _____________________
FEIN: ______________________________
UR Registration # (if applicable): ____________________________
Website Address _______________________________________________________________________
Address of Home Office: __________________________________________________________City____________________________ State________ Zip Code_____________
Business Address: _______________________________________________________________ City____________________________ State ________Zip Code_____________
Mailing Address: _____________________________________________P.O. Box____________ City ____________________________ State ________ Zip Code ____________
Phone Number _____________ Fax Number ________________________ Business E-Mail Address______________________________________________________________
Contact Person ________________________________Contact’s Phone Number _______________ Contact’s E-mail address__________________________________________
KRS 304.17A-162 (01) (a &b)
KRS 304.17A-162 (07)
KRS 304.17A-162 (13)
PBM identify sources used to calculate
Policy to notify contractees with weekly updates
Reimbursement for drug products are
reimbursement and establish process to appeal
to MAC and the actual cost
available
MAC pricing – appeal process
KRS 304.17A-162 (02)
KRS 304.17A-162 (08)
45 CFR 156.22
Appeal grants result in price update
Drug products and TEEs subject to MAC are
Exceptions policy and policy to access
available
retail pharmacy
KRS 304.17A-162 (03)
KRS 304.17A-162 (09)
Other Policies: Sample response letter
Identify sources used to establish MAC to
Reimbursements are for specific drug products
for MAC appeals, and Pharmacy and
detemine reimbursement
and TEEs
Therapeutics Committee
KRS 304.17A-162 (04)
KRS 304.17A-162 (10)
Paid $1,000 to Kentucky State
Make lists available display each drug subject to
Reimbursement for “B” drug products and TEEs
Treasurer Application fee
MAC and actual MAC
KRS 304.17A-162 (05) & 304.2-165
KRS 304.17A-162 (11)
Proof of financial responsibility in
Policy to provide requested info to department in
Reimbursement for “NR” or ”NA” drug products
amount of $1,000,000
order to resolve appeals
and TEEs
KRS 304.17A-162 (06)
KRS 304.17A-162 (12)
Proof of registration with the
Policy to update and utilize updated MAC pricing
Reimbursement for drug product without TEE
Kentucky Secretary of State office in
every 7 days and notify all contractees
order to business in Kentucky
_________________________________
Reviewer signature
1
Kentucky Department of Insurance
Pharmacy Benefit Manager Guide – Full Review
PBM ENTITY NAME________________________________________________________________________________ Incorporation/Formation Date _____________________
PBM Entity ID #: ______________________________________
Date of Receipt: _____________________
FEIN: ______________________________
UR Registration # (if applicable): ____________________________
Website Address _______________________________________________________________________
Address of Home Office: __________________________________________________________City____________________________ State________ Zip Code_____________
Business Address: _______________________________________________________________ City____________________________ State ________Zip Code_____________
Mailing Address: _____________________________________________P.O. Box____________ City ____________________________ State ________ Zip Code ____________
Phone Number _____________ Fax Number ________________________ Business E-Mail Address______________________________________________________________
Contact Person ________________________________Contact’s Phone Number _______________ Contact’s E-mail address__________________________________________
KRS 304.17A-162 (01) (a &b)
KRS 304.17A-162 (07)
KRS 304.17A-162 (13)
PBM identify sources used to calculate
Policy to notify contractees with weekly updates
Reimbursement for drug products are
reimbursement and establish process to appeal
to MAC and the actual cost
available
MAC pricing – appeal process
KRS 304.17A-162 (02)
KRS 304.17A-162 (08)
45 CFR 156.22
Appeal grants result in price update
Drug products and TEEs subject to MAC are
Exceptions policy and policy to access
available
retail pharmacy
KRS 304.17A-162 (03)
KRS 304.17A-162 (09)
Other Policies: Sample response letter
Identify sources used to establish MAC to
Reimbursements are for specific drug products
for MAC appeals, and Pharmacy and
detemine reimbursement
and TEEs
Therapeutics Committee
KRS 304.17A-162 (04)
KRS 304.17A-162 (10)
Paid $1,000 to Kentucky State
Make lists available display each drug subject to
Reimbursement for “B” drug products and TEEs
Treasurer Application fee
MAC and actual MAC
KRS 304.17A-162 (05) & 304.2-165
KRS 304.17A-162 (11)
Proof of financial responsibility in
Policy to provide requested info to department in
Reimbursement for “NR” or ”NA” drug products
amount of $1,000,000
order to resolve appeals
and TEEs
KRS 304.17A-162 (06)
KRS 304.17A-162 (12)
Proof of registration with the
Policy to update and utilize updated MAC pricing
Reimbursement for drug product without TEE
Kentucky Secretary of State office in
every 7 days and notify all contractees
order to business in Kentucky
_________________________________
Reviewer signature
1
Need Additional
Policy
Compliant
Information RE:
Reference
Administration and Operation
KRS 304.17A-162 (1) (a) PBM IDENTIFY SOURCES AND ESTABLISH APPEALS PROCESS RE: MAC PRICING
Have a policy that PBM shall identify sources used to calculate drug reimbursement and establish a
process to appeal and resolve disputes regarding maximum allowable cost pricing.
806 KAR 17:575 Process for MAC appeals process and process for the review of complaint associated
YES or NO
with MAC appeal and requirements for the cost listings made available by a PBM.
KRS 304.17A-162 (1) (b) APPEAL PROCESS & 806 KAR 17:575
Have a policy with detailed description of the MAC Pricing Dispute Appeal Process to be used by
YES or NO
contracted pharmacies, pharmacy services and administration organizations of group purchasing
organization, including the appeals policy and procedure, pursuant to KRS.17A-162 (1) (b) and 806
KAR 17:575.
806 KAR 17:575 (2) PBM shall establish a MAC pricing appeal process where a contracted pharmacy or
YES or NO
the pharmacy's designee may appeal if
(a) The maximum allowable cost established for a drug reimbursement is below the cost at which the
drug is available for purchase by pharmacists and pharmacies in Kentucky from national or regional
wholesalers licensed in Kentucky by the Kentucky Board of Pharmacy; or
(b) The pharmacy benefit manager has placed a drug on the maximum allowable cost list in violation
of KRS 304.17A-162(8).
Right to appeal limited to 60 days following initial claim and PBM shall accept an appeal on or before
YES or NO
60 days of initial claim per 806 KAR 17:575 (2) (a)
Per 806 KAR 17:575 (2)C) A provision allowing a contracted pharmacy, pharmacy service
YES or NO
administration organization or group purchasing organization, to initiate the appeal process,
regardless if an appeal has previously been submitted by a pharmacy or the pharmacy’s designee
outside of Kentucky, by contacting the pharmacy benefit manager’s designated contact person
electronically, by mail, or telephone. If the appeal process is initiated by telephone, the appealing
party shall follow up with a written request within three (3) days.
Per 806 KAR 17:575 (3) The pharmacy benefit manager’s maximum allowable cost pricing appeal
YES or NO
process shall be readily accessible to contracted pharmacies electronically through publication on the
pharmacy benefit manager’s website, and in either the contracted pharmacy’s contract with the
pharmacy benefit manager or through a pharmacy provider manual distributed to contracted
pharmacies, pharmacy service administration organizations, and group purchasing organizations.
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Per 806 KAR 17:575 (5) The pharmacy benefit manager shall investigate, resolve, and respond to the
YES or NO
appeal within ten (10) calendar days of receipt of the appeal. Upon resolution, the pharmacy benefit
manager shall issue a written response to the appealing party that shall include the following:
(a) The date of the decision;
(b) The name, phone number, mailing address, email address, and title of the person making the
decision; and
(c) A statement setting forth the specific reason for the decision, including specific requirements for
appeals denied and granted. (Listed below)
Detailed description of the MAC Pricing Dispute Appeal Process to be used by contracted pharmacies,
pharmacy services and administration organizations of group purchasing organization, including the
YES or NO
appeals policy and procedure, pursuant to KRS.17A-162 (1) (b).
Appeals process should include following provisions:
 Right to appeal limited to appeal received on or before 60 days following initial claim;
 The appeal shall be investigated and resolved by PBM within 10 calendar days;
 The PBM shall respond to all appeals in a manner approved by the department
 If an appeal is denied the PBM shall provide the following:
 a.) the reason for the denial per KRS 17A-162 and additional requirements for 806
KAR 17:575 including
 (a) The date of the decision;
 (b) The name, phone number, mailing address, email address, and title of the
person making the decision; and
 (c) A statement setting forth the specific reason for the decision, including:
(i) The NDC or the NDC of a therapeutically equivalent drug as defined in KRS
304.17A-162(9) of the same dosage, dosage form, and strength of the appealed
drug and
(ii) identify the source where (NDC) may be purchased from the Kentucky licensed
wholesaler offering the drug at or below MAC on the date of fill the reason for the
denial and
 C.) identify the source where (NDC) may be purchased from a licensed wholesaler
by contracted pharmacies at a price at or below the maximum allowable cost; and
 If an appeal is granted the all provisions in KRS 304.17A-162 (2) (a-f) shall apply (See next
section below):
KRS 304.17A-162 (2) (a-f) APPEAL GRANTS RESULT IN PRICE UPDATE
 KRS 304/17A-162 (a) and 806 KAR 17:575 (5)(c)(1) If the appeal is granted: Per 806 KAR
17:575 (5) The pharmacy benefit manager shall investigate, resolve, and respond to the
YES or NO
appeal within ten (10) calendar days of receipt of the appeal. Upon resolution, the pharmacy
benefit manager shall issue a written response to the appealing party that shall include the
following:
(a) The date of the decision;
 (b) The name, phone number, mailing address, email address, and title of the person making
the decision; and
3
 (c) A statement setting forth the specific reason for the decision, including: KRS 304/17A-162
(a) and 806 KAR 17:575 (5)(c)(1) If the appeal is granted:
 (i) The amount of the adjustment to be paid retroactive to the initial date of service to the
appealing pharmacy, (which is the date appealed drug was dispensed);
(ii) The drug name, national drug code, and prescription number of the appealed drug;
(iii) The appeal number assigned by the pharmacy benefit manager, if applicable
PLUS (a-f of statute 162) items listed below.
 If a price update is warranted as a result of an appeal granted the PBM shall:
A.) make the change in the maximum allowable cost to the initial date of service
the appealed drug was dispensed;
 B.) adjust the maximum allowable cost of the drug for the appealing pharmacy and
for all other contracted pharmacies in the network of that PBM that filled a
prescription for patients covered under the same health benefit plan to the initial
date of service the appealed drug was dispensed;
 C.) individually notify all other contracted pharmacies in the network of that PBM
that a retroactive maximum allowable cost adjustment has been made as a result of
a granted appeal effective to the initial date of service the appealed drug was
dispensed;
 D.) adjust the drug product reimbursement for contracted pharmacies that resubmit
claims to reflect the adjusted maximum allowable cost if applicable to their
contract;
 E.) allow the appealing pharmacy and all other contracted pharmacies in the
network that filled prescriptions for patients covered under the same health benefit
plan to reverse and resubmit claims and receive payment based on the adjusted
maximum allowable cost from the initial date of service the appealed drub was
dispensed; and
 F.) make retroactive price adjustments in the next payment cycle.
YES or NO
The PBM shall respond to all appeals in a manner approved by the department. Per 806 KAR 17:575
(8) A pharmacy benefit manager shall submit the maximum allowable cost pricing appeal process and
a template response satisfying the requirements of subsection (5) of this section to the department
for review and approval. The PBM shall respond to all appeals in a manner approved by the
department.
Section 3. Department Review of Maximum Allowable Cost Pricing Appeal. (1) A contracted pharmacy
or the pharmacy’s designee may file a complaint following a final decision of the pharmacy benefit
YES or NO
manager to the department in accordance with KRS 304.2-160 and 304.2-165.
(2) A complaint shall be submitted to the department no later than thirty (30) calendar days from
the date of the pharmacy benefit manager’s final decision.
(3) The department shall be entitled to request additional information necessary to resolve a
complaint from any party in accordance with KRS 304.2-165 and 304.17A-162(5).
The PBM shall respond to all appeals in a manner approved by the department. Per 806 KAR 17:575
4
KRS 304.17A-162 (3) NATIONAL DRUG SOURCES USED TO ESTABLISH MAC FOR REIMBURSEMENT
Identify the national drug pricing compendia or sources used to obtain drug price data (in a manner
established by administrative regulations promulgated by the department) for every drug for which
YES or NO
the PBM establishes a maximum allowable cost to determine the drug product reimbursement.
Section 6. Data Source Availability. Each pharmacy benefit manager shall identify electronically or
within contracts to all contracted pharmacies the national drug pricing compendia or sources used to
obtain drug price data for those drugs subject to maximum allowable cost provisions. If any changes
are made to the data sources following the execution of a contract, the pharmacy benefit manager
shall individually notify the contracted pharmacies of the changes either through correspondence
submitted electronically, facsimile, or mail courier.
KRS 304.17A-162 (4) EACH DRUG SUBJECT TO MAC AND ACTUAL MAC
Identify the location of the PBM’s comprehensive list of every drug subject to MAC for each drug and
YES or NO
the actual maximum allowable cost for each drug
Make available the PBM’s comprehensive list of every drug subject to MAC for each drug and the actual
YES or NO
maximum allowable cost for each drug.
Section 4. Maximum allowable cost list availability and format. (1) The pharmacy benefit manager shall
make available to the contracted pharmacy a comprehensive list of drugs subject to maximum allowable
cost pricing.
(2) The comprehensive maximum allowable cost pricing list shall:
(a) Be a complete listing by drug in an electronically accessible format, unless, upon a pharmacy’s
written request the list be provided in a paper or other agreed format within two (2) business days upon
receiving the necessary information required for each list requested;
(b) Identify the applicable health plan for which the pricing is applicable;
(c) Be electronically searchable and sortable by individual drug name, national drug code, and generic
code number;
(d) Contain data elements including the drug name, national drug code, per unit price, and strength of
drug;
(e) List a specific maximum allowable cost for each drug that will be reimbursed by the pharmacy
benefit manager;
(f) Provide the effective date for that maximum allowable cost price; and
(g) Provide the date the maximum allowable cost list was updated.
(3) The pharmacy benefit manager shall retain in accordance with subsection (2)(a) of this section
historical pricing data for a minimum of 120 days.
KRS 304.17A-162 (5) & 304.2-165 REQUESTED INFO TO RESOLVE APPEAL PROVIDED TO DEPARTMENT
Have a policy that upon request, information that is needed to resolve an appeal shall be made
YES or NO
available to the department within 15 calendar days and if the department is unable to obtain
information from the PBM appeal shall be granted to the appealing pharmacy.
KRS 304.17A-162 (6) UPDATE MAC PRICING EVERY 7 DAYS AND NOTIFY CONTRACTEES
Have a policy and procedure to be used for updating MAC pricing (for every drug PBM establishes
YES or NO
MAC to determine reimbursement) every 7 days and the PBM’s ability to provide notification to all
contractees.
KRS 304.17A-162 (7) & 806 KAR 17:575 NOTIFY CONTRACTEES WITH WEEKLY UPDATES TO MAC AND ACTUAL COST
5