New pharmacy benefit manager regulations go into effect in Florida July 1st
Florida pharmacies will receive a new set of audit protections from pharmacy benefit managers (PBMs) next month, thanks to a bill passed by the General Assembly last legislative session. Gov. Ron DeSantis signed HB 357, otherwise known as the Florida Pharmacy Act, on June 20th.
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PBMs represent health insurers, government purchasers, and other payers in the obtainment, purchase, and distribution of prescription drugs. However, an analysis of HB 357 notes that PBMs have operated without much regulation at the state or federal level.
PBMs conduct audits to review payments to pharmacies by conducting inventory checks, prescriber or member claim information checks, or over the phone checks. These audits ensure that reimbursement procedures between pharmacies and PBMs are consistent with contractual or regulatory requirements.
Administrative fees from clients, rebates from drug companies, and fees charged to pharmacies generate revenue for PBMs. In recent years, pharmacies and pharmacists alleged that contracts with PBMs often hide price transparency from patients and retain rebate shares that ultimately lead to lower reimbursement for pharmacies.
The Florida Pharmacy Act establishes certain protections for pharmacies that have submitted complaints “in relation to perceived inequity, unfairness, or burdensome practices involved in such audits,” according to the analysis.
Under the act, pharmacies will:
- Receive a 7-day notice prior to an initial onsite audit
- Be reimbursed for a retroactively denied claim due to computer error if the patient received their correct medication and dosage
- Receive a preliminary report from a PBM within 120 days after the audit, and a final report within 6 months after that
- Have penalties and recoupments based on actual overpayments, instead of based on accounting estimates
The Pharmacy Act, however, does not provide a way for the enforcement of these protections, according to the analysis. The Florida Board of Pharmacy is tasked with setting practice standards for the new rules, but cannot currently regulate the actions of PBMs or insurers.
The bill also established a $10,000 financial penalty for PBMs that fail to register with the Office of Insurance Regulation (OIR). This allows OIR to enforce the requirement that PBMs register to conduct business in the state.
Sponsored by Rep. Jackie Toledo (R – Hillsborough), the bill received unanimous support from both the House and Senate.
“The signage of HB 357 sends a clear message: Enough is enough,” said outgoing Florida Pharmacy Association CEO Michael Jackson in a statement. “Long overdue, PBMs will now be subject to existing regulation under the Office of Insurance Regulation, ensuring they comply with strict requirements intended to protect community and independent pharmacies, patients in need, and hard-working taxpayers.”
The bill joins other statutes aimed at regulating PBMs. These include limits on cost-sharing and the prohibition of “gag clauses,” or contractual requirements that prevent pharmacies from informing patients when it would cost less to pay for a prescription in cash, rather than the copayment under their health insurance.