SB 2576

Present law prohibits a pharmacy benefits manager (PBM) from reimbursing a contracted pharmacy for a prescription drug or device in an amount that is less than the actual cost to that pharmacy for the prescription drug or device. This bill prohibits a p harmacy benefits manager from reimbursing a contracted pharmacy for a prescription drug or device in an amount that is less than the greatest of the following:  The actual cost to the pharmacy for the prescription drug or device or pharmacy service.  105% of the national average drug acquisition cost (NADC) as calculated by the centers for medicare and medicaid services and reflected in the most recently released public file for the prescription drug or device or pharmacy service at the time the drug was dispensed or service is rendered.  The wholesale acquisition cost (WAC) of the drug, if the NADC is not available at the time the drug is dispensed.  The amount the PBM reimburses itself or an affiliate for the same prescription drug or device or pharmacy service on a per-unit basis using the same generic product identifier or generic code number. REIMBURSEMENT DISPUTES Present law requires a PBM to establish a process for a pharmacy to appeal a reimbursement for failing to pay at least the actual cost to the pharmacy for the prescription drug or device. This bill also includes such a requirement. However, if a PBM fa ils to pay at least the amount required above for the prescription drug or device or pharmacy service, then the pharmacy may file a complaint against the PBM with the department of commerce and insurance. A PBM must pay a pharmacy twice the amount owed i f the PBM fails to reimburse a pharmacy at least the amount required above for the prescription drug or device or pharmacy service. This bill provides that a PBM violates its provisions if, after an appeal in which a pharmacy prevails, the PBM fails to reimburse the pharmacy at least the actual cost of the drug or device or pharmacy service within 14 days. If such payment is not mad e, then the PBM must pay the pharmacy twice the amount owed. Present law requires a PBM to provide information to an appealing pharmacy that loses such appeal if the product associated with the national drug code number or unique device identifier is available at a cost that is less than the challenged rate of rei mbursement from a pharmaceutical wholesaler in this state. This bill requires a PBM to adjust the challenged rate of reimbursement to an amount equal to or greater than an appealing pharmacy's actual cost, if a pharmacy loses or is denied an appeal, and th e product associated with the national drug code number or unique device identifier is not available at a cost less than the challenged rate of reimbursement from the pharmaceutical wholesaler where the pharmacy purchases the majority of its prescription drug products. Further, a PBM must remit all additional monies owed for these adjustments within seven business days of the appeal determination. Present law exempts a PBM utilizing a reimbursement methodology provided for in the state plan for medical assistance approved by the federal centers for medicare and medicaid services from the appeal and reimbursement challenge requirements. This bill e liminates that exemption. Present law prohibits a PBM from including within the amount calculated to reimburse a pharmacy for actual cost the amount of any professional dispensing fee that is payable to the pharmacy. This bill clarifies that this prohibition also includes the ad ditional reimbursement amounts as described above. Present law requires a PBM to permit a pharmacy challenging a reimbursement to reverse and rebill a claim for an appeal in which a pharmacy prevails. This bill, instead, prohibits a PBM from requiring a challenging pharmacy to reverse and rebill the cla im upon which the appeal is based. Further, the PBM must waive the cost of any transaction fee or other fees required to reverse and rebill the claim. This bill requires a PBM to pay all additional monies owed to a prevailing pharmacy and provide claim- le vel details for the transaction within seven business days. Further, a PBM must apply the findings from a successful appeal as to the rate of reimbursement and actual cost for the particular drug or medical product or device to all remaining refills on t he issued prescription drug or medical product or device. PROFESSIONAL DISPENSING FEES Present law requires a PBM to pay a professional dispensing fee at a rate that is not less than the amount paid by the TennCare program to any pharmacy if certain conditions are met. This bill requires a PBM to pay a professional dispensing fee at a rat e that is not less than the amount paid by the TennCare program to a pharmacy if the pharmacy dispenses a prescription drug or device pursuant to an agreement with the PBM. However, the PBM is prohibited from adding such a fee on to the patient's copayme nt cost share, deductible, or otherwise passing the payment on to the patient through an out-of-pocket payment. APPLICABILITY This bill applies to policies, plans, and contracts entered into, renewed, amended, or modified on or after July 1, 2026.