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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
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HB 2196: pharmacists; pharmacies; reimbursement costs; appeals
Sponsor: Representative Bliss, LD 1
Committee on Health & Human Services
Overview
Prohibits pharmacy benefit managers (PBM) from reimbursing nonaffiliated pharmacists or pharmacies for prescription drugs or devices at an amount less than the actual cost paid by the pharmacists or pharmacy. Requires pharmacy benefit managers to pay a professional dispensing fee at a rate not less than the fee-for-service methodology used in the state plan for medical assistance. Outlines requirements for appeals, defines terms and contains an applicability clause.
History
A PBM means a person, business or other entity that, pursuant to a contract or under an employment relationship with an insurer or other third-party payor, either directly or through an intermediary manages the prescription drug coverage provided by the insurer or other third-party payor, including the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies and controlling the cost of covered prescription drugs (A.R.S. § 20-3321).
A PBM must do all of the following: 1) update the price and drug information for each list that the PBM maintains every seven business days; 2) at the beginning of the term of a contract, on renewal of a contract and at least once annually during the term of a contract, make available to each network pharmacy the sources used to determine maximum allowable cost pricing; 3) establish a process by which a network pharmacy may appeal its reimbursement for a drug subject to maximum allowable cost pricing; and 4) allow a pharmacy services administrative organization that is contracted with the PBM to file an appeal of a drug on behalf of the organization's contracted pharmacies (A.R.S. § 20-3331).
Statute prohibits a PBM from: 1) limiting a pharmacist or pharmacy from providing an insured individual information on the amount of the insured’s cost share for the insured’s prescription drug and the clinical efficacy of a more affordable alternative; 2) penalizing a pharmacy or pharmacist for disclosing such information to an insured; and 3) requiring a pharmacist or pharmacy to charge or collect from an insured a copayment that exceeds the total submitted charged by the network pharmacy (A.R.S. § 44-1752).
The Arizona Health Care Cost Containment System (AHCCCS) reimburses providers on a Fee-For-Service basis for services rendered to members eligible for AHCCCS or Arizona Long Term Care System, who are not enrolled with a contractor or covered under prior period coverage (AHCCCS).
Provisions
1. Prohibits a PBM from reimbursing a nonaffiliated pharmacist or pharmacy that is under contract with the PBM for a prescription drug or device in an amount that is less than the actual cost paid by the nonaffiliated pharmacist or pharmacy. (Sec. 1)
2. Exempts a PBM, that uses ingredient cost reimbursement methodology for a prescription drug or device that is identical to the fee-for-service methodology used in the state plan for medical assistance as approved by Centers for Medicare and Medicaid Services, from the reimbursement restrictions. (Sec. 1)
3. Prohibits a PBM from including a professional dispensing fee in the amount that is calculated to reimburse a pharmacy for a prescription drug or device in order to satisfy the requirements. (Sec. 1)
4. Requires a PBM to pay a contracted pharmacy a professional dispensing fee at a rate no less than the fee-for-service methodology used in the state plan for medical assistance. (Sec. 1)
5. Requires a PBM to include in the contract with each pharmacist or pharmacy a procedure that outlines how a pharmacist or pharmacy can appeal a reimbursement rate that allegedly does not comply with the reimbursement restrictions. (Sec. 1)
6. Requires a pharmacist or pharmacy to file an appeal within seven business days after the date on which the pharmacist or pharmacy was reimbursed for a prescription drug or device. (Sec. 1)
7. Requires a PBM, beginning January 1, 2027, to file its appeal procedures with the Department of Insurance and Financial Institutions (DIFI) and in a manner prescribed by the DIFI. (Sec. 1)
8. Requires DIFI to approve or deny a PBM's appeal procedure. (Sec. 1)
9. Requires the appeal procedure to include a provision that allows an agent of a pharmacist or pharmacy to submit an appeal on behalf of the pharmacist or pharmacy. (Sec. 1)
10. Allows a pharmacist or pharmacy to designate a pharmacy services administrative organization or other agent to file and conduct the appeal. (Sec. 1)
11. Requires a PBM to complete the following within seven business days after the date a nonaffiliated pharmacist or pharmacy prevails in an appeal of a reimbursement cost:
a. make the necessary change to the challenged reimbursement or actual cost;
b. provide the pharmacist or pharmacy with the national drug code number for a prescription drug, if the appeal was based on a prescription drug;
c. allow the pharmacist or pharmacy to reverse and rebill the claim;
d. reimburse the pharmacist's or pharmacy's actual cost for the prescription drug or device; and
e. apply the findings of the appeal to the reimbursement rate and actual cost for the prescription drug or device to other similarly situated pharmacists and pharmacies that are reimbursed at or below the appealed rate. (Sec. 1)
12. Requires a PBM to provide both of the following no later than seven business days after prevailing on an appeal of a reimbursement cost and the prescription drug or device that was the subject of the appeal and is available at a cost that is equal to or less than the challenged reimbursement cost:
a. the name of the national or regional pharmaceutical wholesaler that does business in this state and has the prescription drug or device in stock at a price that is equal to or less than the challenged reimbursement cost; and
b. the national drug code number for the prescription drug or the unique identifier for the device, as applicable. (Sec. 1)
13. Requires a PBM that does not comply with the prohibitions to:
a. adjust the challenged reimbursement cost to an amount that is equal to or greater than the pharmacist's or pharmacy's actual cost; and
b. allow the pharmacist or pharmacy to reverse and rebill each claim that is affected by the inability to obtain the prescription drug or device at a cost that is equal to or less than the challenge reimbursement. (Sec. 1)
14. Permits the DIFI Director to establishes by rule a fee for the costs to administer the pharmacy appeals process. (Sec. 1)
15. Excludes health and accident insurance coverage that is procured by the Arizona Department of Administration from these restrictions. (Sec. 1)
16. Defines the following terms:
a. nonaffiliated pharmacist or pharmacy;
b. similarly situated pharmacist or pharmacies; and
c. state plan. (Sec. 1)
17. Applies these provisions to contracts that are entered, amended, extended or renewed on or after December 31, 2026. (Sec. 2)
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21. Initials AG HB 2196
22. 1/23/2026 Page 0 Health & Human Services
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