Section 449 - Medical assistance pharmacy services(a) Any managed care organization under contract to the department, or an entity with which the managed care organization contracts, must contract on an equal basis with any pharmacy qualified to participate in the Medical Assistance Program that is willing to comply with the managed care organization's or entity's pharmacy payment rates and terms and to adhere to quality standards established by the managed care organization or entity.(b) The following shall apply: (1) The department may conduct an audit or review of an entity for the purpose of determining compliance with this section.(2) In the course of an audit or review under paragraph (1), an entity shall provide medical assistance-specific information from a pharmacy contract or agreement to the department.(c) A contract or agreement between an entity and a pharmacy may not include any of the following: (1) A confidentiality provision that prohibits the disclosure of information to the department.(2) Any provision that restricts the disclosure of information to or communication with a managed care organization or the department.(d) An entity shall maintain records regarding pharmacy services eligible for payment by the medical assistance program and shall disclose the information to the department upon its request.(e) Information disclosed or produced by an entity to the department under this section shall not be subject to public access under the act of February 14, 2008 ( P.L. 6, No.3), known as the "Right-to-Know Law."(f) The following shall apply: (1) If an entity approves a claim for payment under the medical assistance program, the entity may not retroactively deny or modify the adjudicated claim unless any of the following apply: (i) The claim was fraudulent.(ii) The claim was duplicative of a previously paid claim.(iii) The pharmacy did not dispense the pharmacy service on the claim.(2) Nothing in this subsection shall be construed to prohibit the recovery of an adjudicated claim that was determined to be an overpayment or underpayment resulting from audit, review or investigation by a Federal or State agency or managed care organization.(g) A managed care organization or pharmacy benefit manager may not mandate that a medical assistance recipient use a specific pharmacy unless it is consistent with subsection (a) and is preapproved by the department.(h) A pharmacy benefit manager or pharmacy services administration organization may not do any of the following: (1) Require that a pharmacist or pharmacy participate in a network managed by the pharmacy benefit manager or pharmacy services administration organization as a condition for the pharmacist or pharmacy to participate in another network managed by the same pharmacy benefit manager or pharmacy services administration organization.(2) Automatically enroll or disenroll a pharmacist or pharmacy without cause.(3) Charge or retain a differential between what is billed to a managed care organization as a reimbursement for a pharmacy service and what is paid to pharmacies by the pharmacy benefit manager or pharmacy services administration organization for the pharmacy service.(4) Charge pharmacy transmission fees unless the amount of the fee is disclosed and applied at the time of claim adjudication.(i) A managed care organization shall submit its policies and procedures, and any revisions, for development of network pharmacy payment methodology to the department. The department shall review all changes to pharmacy payment methodology prior to implementation.(j) A managed care organization utilizing a pharmacy benefit manager shall report to the department information related to each outpatient drug encounter, including the following: (1) The amount paid to the pharmacy benefit manager by the managed care organization.(2) The amount paid by the pharmacy benefit manager to the pharmacy.(3) Any differences between the amount paid in paragraph (1) and the amount paid in paragraph (2).(4) Other information as requested by the department.(k) A pharmacy shall, upon request by the department, submit the actual acquisition cost of prescriptions dispensed to medical assistance beneficiaries.(l) As used in this section, the following words and phrases shall have the meanings given to them in this subsection: "Adjudicated claim" means a claim that has been processed to payment or denial.
"Entity" means a pharmacy, pharmacy benefit manager, pharmacy services administration organization or other entity that manages, processes, or influences the payment for or dispenses pharmacy services to medical assistance recipients in the managed care delivery system.
"Pharmacy benefit management" means any of the following:
(1) The procurement of prescription drugs at a negotiated contracted rate for distribution within this Commonwealth.(2) The administration or management of prescription drug benefits provided by a managed care organization.(3) The administration of pharmacy benefits, including any of the following:(i) Operating a mail-service pharmacy.(iii) Managing a retail pharmacy network.(iv) Paying claims to pharmacies, including retail, specialty or mail-order pharmacies, for prescription drugs dispensed to medical assistance recipients receiving services in the managed care delivery system via a retail or mail-order pharmacy.(v) Developing and managing a clinical formulary or preferred drug list, utilization management or quality assurance programs.(vi) Rebate contracting and administration.(vii) Managing a patient compliance, therapeutic intervention and generic substitution program.(viii) Operating a disease management program.(ix) Setting pharmacy payment pricing and methodologies, including maximum allowable cost and determining single or multiple source drugs. "Pharmacy benefit manager" means a business that performs pharmacy benefit management. The term does not include a business that holds a valid license from the Insurance Department with accident and health authority to issue a health insurance policy and governed under any of the following:
(1) The act of May 17, 1921 ( P.L. 682, No.284), known as "The Insurance Company Law of 1921."(2) The act of December 29, 1972 ( P.L. 1701, No.364), known as the "Health Maintenance Organization Act."(3) 40 Pa.C.S. Ch. 61 (relating to hospital plan corporations) or 63 (relating to professional health services plan corporations). "Pharmacy services administration organization" means an organization comprised of pharmacy members that performs any of the following:
(1) Negotiates or contracts with a managed care organization or pharmacy benefit manager on behalf of its pharmacy members.(2) Negotiates payment rates, payments or audit terms on behalf of its pharmacy members.(3) Collects or reconciles payments on behalf of its pharmacy members.Amended by P.L. TBD 2020 No. 120, § 1, eff. 1/24/2021.1967, June 13, P.L. 31, No. 21, art. 4, § 449, added 1996, May 16, P.L. 175, No. 35, § 16, imd. effective.