NY State Senate Bill 2015-S2530

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2016	referred to insurance
Jan 26, 2015	referred to insurance

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2015-S2530 (ACTIVE) - Details

See Assembly Version of this Bill:: A6194
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3216, 3221 & 4303, Ins L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S3995, A5723
2017-2018: S1743, A3119
2019-2020: S4463, A3043
2021-2022: S3566, A5854

2015-S2530 (ACTIVE) - Summary

Relates to the purchase of prescription drugs.

2015-S2530 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S2530

TITLE OF BILL:  An act to amend the insurance law, in relation to the
purchase of prescription drugs

PURPOSE OR GENERAL IDEA OF BILL:

To clarify and strengthen provisions in current law to ensure that
consumers have the option to access every covered medication from a
local network participating pharmacy and are not forced to use a mail
order pharmacy.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of this bill amends paragraph 28 of subsection (i) of
section 3216 of the Insurance Law to provide new definitions and to
remove certain requirements that have become impediments to the
Legislature's intent in this area.

The new definitions are as follows: "Same reimbursement amount" is
defined as the same benchmark index, the same 'maximum allowable cost'
and the same 'national drug code' used to reimburse all pharmacies
participating in the insurance network regardless of whether a
pharmacy is a mail order pharmacy or a non-mail order pharmacy.
'Maximum allowable cost' and 'national drug code' are very specific
terms that have meaning in the prescription market. "Mail order

pharmacy" is defined as any pharmacy whose primary business is to
receive prescriptions by mail, telefax or through electronic
submissions and to deliver medications through the US mail or common
carriers.

Regarding the removal of provisions in the current law, this amendment
removes the requirements that a non-mail order retail pharmacy agree
"in advance through a contractual network agreement" to the same
"terms and conditions" as those imposed on network mail order
pharmacies and other non-retail pharmacies. These provisions are being
removed because they have served to impose extra requirements on
network community pharmacies as a precondition for providing certain
covered medications otherwise available by mail order.

Section 2 of this bill amends paragraph 18 of subsection (I) of
section 3221 of the Insurance Law in the same manner and to the same
extent as section 1 of this bill amends paragraph 28 of subsection (i)
of section 3216 of the Insurance Law.

Section 3 of this bill amends subsection (kk) of section 4303 of the
Insurance Law in the same manner and to the same extent as section 1
of this bill amends paragraph 28 of subsection (i) of section 3216 of
the Insurance Law and as section 2 of this bill amends paragraph 18 of
subsection (I) of section 3221 of the Insurance Law.

Section 4 of this bill provides that this act shall take effect
immediately.

JUSTIFICATION:


In January 2012, the current provisions of Insurance Law took effect
guaranteeing that consumers would always have the choice of obtaining
covered prescription drugs from a local network participating
pharmacy.

Over the course of the year, however, it became clear that the law was
not working as intended. Consumers received letters from pharmacy
benefit managers directing them to out-of-state "specialty"
pharmacies. Consumers returning to their local participating pharmacy
could no longer obtain their prescription drugs there because the
claim was blocked. The pharmacy was notified that coverage for that
medication was no longer covered in the "retail" pharmacy network.
The patient was to be directed to the "specialty" pharmacy.

Contrary to the intent of the law, beneficiaries are forced into
mandatory mail order programs based upon the medications that they are
prescribed. These medications are being deemed to be "specialty"
medications and, thus, cannot be filled at a non-specialty retail
pharmacy. Local pharmacies in the network were not considered
"specialty" pharmacies and, thus, were excluded from the new
"restricted" network. This allowed pharmacy benefit managers to steer
prescription volume out of the network retail pharmacies into their
wholly owned pharmacy subsidiaries. Defining "mail order pharmacy" is
necessary so that its meaning cannot be manipulated by self-promoting
pharmacy benefit managers.

Community pharmacy owners took action. They contacted plan sponsors
and pharmacy benefit managers asking for contracts that would allow
them to continue to dispense covered medications available to them
from their wholesalers. The phone calls, letters, and e-mails that
followed document that large pharmacy benefit managers were using
"terms and conditions" as a legal roadblock against community
pharmacies. These included unreasonable and onerous "terms" such as
costly accreditations, on-call 24-hour nursing services, and excessive
liability insurance demands. Some threatened to exclude community
pharmacies from the retail network in order to be enrolled as a mail
order pharmacy. For these reasons, it is necessary to remove "terms
and conditions" from current law.

The term "in advance through a contractual network agreement" has
served as another roadblock to the community pharmacies envisioned in
the original law. A close reading of the law allows a local network
pharmacy to agree to accept the same reimbursement amount, but nothing
in the law requires the pharmacy benefit manager to grant the
participating community pharmacy an additional contract to meet the
mail order reimbursement price. The present statute must be amended to
resolve this contradiction and restore the original legislative
intent.

Consumers have had many issues with mail order pharmacies. When
medication requires refrigeration, spoilage is an issue for consumers.
Because many consumers are employed and cannot control the time that
the medication will be delivered, medication that requires
refrigeration could be left outside in the sun for an extended period
of time melting whatever cold packaging was included to keep the
medication refrigerated.


Additionally, many medications have been lost in the mail or stolen.
When medication that a person relies on in order to maintain his or
her health is lost or stolen, that person's health is placed at risk.
This risk is intensified by the fact that the only replacement option
is the mail order pharmacy, which means that the replacement
medication may not arrive for days. Because many prescriptions cannot
be refilled more than one week ahead of time, a person could run out
of the medication while he or she waits for a second delivery. While
it could be argued that the person could simply wait at home for the
medication to be delivered, this argument ignores some practical
realities such as employment and the inability to simply take a day
off from work to wait for a package to be delivered.

The original intent of the law has been distorted. These proposed
amendments are reasonable and fair. With these amendments, the
original legislative intent will be restored. Consumers will finally
have the ability to use in-network community pharmacies for their
prescriptions, regardless of whether the medication is considered to
be a "specialty" medication.

LEGISLATIVE HISTORY:

2014: S.3995B - Referred to Insurance
2013: S.3995B - Referred to Insurance

FISCAL IMPLICATIONS:

None

EFFECTIVE DATE:

This act shall take effect immediately.

2015-S2530 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2530

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            January 26, 2015
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance  law,  in  relation  to  the  purchase  of
  prescription drugs

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 28 of subsection  (i)  of  section  3216  of  the
insurance  law, as amended by chapter 11 of the laws of 2012, is amended
to read as follows:
  (28) (A) DEFINITIONS. FOR THE PURPOSE OF THIS PARAGRAPH:
  (1) "SAME REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY COVERAGE DESCRIBED
UNDER SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL PROVIDE THE  SAME  BENCH-
MARK  INDEX,  INCLUDING THE SAME AVERAGE WHOLESALE PRICE, MAXIMUM ALLOW-
ABLE COST AND NATIONAL PRESCRIPTION DRUG CODES TO REIMBURSE ALL  PHARMA-
CIES  PARTICIPATING  IN  THE  INSURANCE  NETWORK REGARDLESS OF WHETHER A
PHARMACY IS A MAIL ORDER PHARMACY OR A NON-MAIL ORDER PHARMACY.
  (2) "MAIL ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY  BUSINESS  IS
TO   RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH  ELECTRONIC
SUBMISSIONS AND TO DISPENSE MEDICATION TO PATIENTS THROUGH  THE  USE  OF
THE  UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES AND
PROVIDES ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER  THAN
FACE-TO-FACE.
  (B)  Any  policy  that  provides coverage for prescription drugs shall
permit each insured  to  fill  any  covered  prescription  that  may  be
obtained at a network participating mail order or other non-retail phar-
macy, at the insured's option, at a network participating non-mail order
retail  pharmacy  provided that the network participating non-mail order
retail pharmacy agrees [in advance, through a contractual network agree-
ment,] to the same reimbursement amount[, as well as the same applicable
terms and conditions,] that the insurer has established for the  network
participating  mail  order or other non-retail pharmacy. In such a case,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01495-01-5

S. 2530                             2

the policy shall not impose a co-payment fee or other condition  on  any
insured who elects to purchase prescription drugs from a network partic-
ipating  non-mail  order  retail  pharmacy  which is not also imposed on
insureds  electing  to  purchase drugs from a network participating mail
order or other non-retail pharmacy.
  S 2. Paragraph 18 of subsection (l) of section 3221 of  the  insurance
law, as amended by chapter 11 of the laws of 2012, is amended to read as
follows:
  (18) (A) DEFINITIONS. FOR THE PURPOSE OF THIS PARAGRAPH:
  (1) "SAME REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY COVERAGE DESCRIBED
UNDER  SUBPARAGRAPH  (B) OF THIS PARAGRAPH SHALL PROVIDE THE SAME BENCH-
MARK INDEX, INCLUDING THE SAME AVERAGE WHOLESALE PRICE,  MAXIMUM  ALLOW-
ABLE  COST AND NATIONAL PRESCRIPTION DRUG CODES TO REIMBURSE ALL PHARMA-
CIES PARTICIPATING IN THE INSURANCE  NETWORK  REGARDLESS  OF  WHETHER  A
PHARMACY IS A MAIL ORDER PHARMACY OR A NON-MAIL ORDER PHARMACY.
  (2)  "MAIL  ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY BUSINESS IS
TO  RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH   ELECTRONIC
SUBMISSIONS  AND  TO  DISPENSE MEDICATION TO PATIENTS THROUGH THE USE OF
THE UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES  AND
PROVIDES  ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER THAN
FACE-TO-FACE.
  (B) Any insurer delivering a group or  blanket  policy  or  issuing  a
group  or blanket policy for delivery in this state that provides cover-
age for prescription drugs shall permit each insured to fill any covered
prescription that may be obtained at a network participating mail  order
or  other  non-retail  pharmacy,  at  the insured's option, at a network
participating non-mail order retail pharmacy provided that  the  network
participating non-mail order retail pharmacy agrees [in advance, through
a  contractual network agreement,] to the same reimbursement amount[, as
well as the same applicable terms and conditions,] that the insurer  has
established for the network participating mail order or other non-retail
pharmacy.  In  such a case, the policy shall not impose a co-payment fee
or other condition on any insured who elects to purchase  drugs  from  a
network  participating  non-mail order retail pharmacy which is not also
imposed on insureds electing to purchase drugs from  a  network  partic-
ipating mail order or other non-retail pharmacy; provided, however, that
the  provisions  of  this  section  shall  not  supersede the terms of a
collective bargaining agreement or apply to a policy that is the  result
of  a  collective  bargaining agreement between an employer and a recog-
nized or certified employee organization.
  S 3. Subsection (kk) of section 4303 of the insurance law, as  amended
by  chapter  11  of  the laws of 2012 and as relettered by section 55 of
part D of chapter 56 of the laws of 2013, is amended to read as follows:
  (kk) (1) DEFINITIONS. FOR THE PURPOSE OF THIS SUBSECTION:
  (A) "SAME REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY COVERAGE DESCRIBED
UNDER PARAGRAPH TWO OF THIS SUBSECTION SHALL PROVIDE THE SAME  BENCHMARK
INDEX,  INCLUDING  THE  SAME  AVERAGE WHOLESALE PRICE, MAXIMUM ALLOWABLE
COST AND NATIONAL PRESCRIPTION DRUG CODES TO  REIMBURSE  ALL  PHARMACIES
PARTICIPATING IN THE HEALTH BENEFIT PLAN REGARDLESS OF WHETHER A PHARMA-
CY IS A MAIL ORDER PHARMACY OR A NON-MAIL ORDER PHARMACY.
  (B)  "MAIL  ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY BUSINESS IS
TO  RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH   ELECTRONIC
SUBMISSIONS  AND  TO  DISPENSE MEDICATION TO PATIENTS THROUGH THE USE OF
THE UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES  AND
PROVIDES  ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER THAN
FACE-TO-FACE.

S. 2530                             3

  (2) Any contract issued by a medical expense indemnity corporation,  a
hospital  service  corporation  or  a  health  services corporation that
provides coverage for  prescription  drugs  shall  permit  each  covered
person  to  fill  any  covered  prescription  that  may be obtained at a
network  participating  mail  order or other non-retail pharmacy, at the
covered person's option,  at  a  network  participating  non-mail  order
retail  pharmacy  provided that the network participating non-mail order
retail pharmacy agrees [in advance, through a contractual network agree-
ment,] to the same reimbursement amount[, as well as the same applicable
terms and conditions,] that the  corporation  has  established  for  the
network  participating mail order or other non-retail pharmacy.  In such
a case, the contract shall not impose a copayment fee or other condition
on any covered person who  elects  to  purchase  drugs  from  a  network
participating  non-mail  order retail pharmacy which is not also imposed
on covered persons electing to purchase drugs from a network participat-
ing mail order or other non-retail pharmacy; provided, however, that the
provisions of this section shall not supersede the terms of a collective
bargaining agreement or apply to a contract that  is  the  result  of  a
collective  bargaining agreement between an employer and a recognized or
certified employee organization.
  S 4. This act shall take effect immediately.

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Senate Bill S2530

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

co-Sponsors

2015-S2530 (ACTIVE) - Details

2015-S2530 (ACTIVE) - Summary

2015-S2530 (ACTIVE) - Sponsor Memo

2015-S2530 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S2530

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Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

co-Sponsors

2015-S2530 (ACTIVE) - Details

2015-S2530 (ACTIVE) - Summary

2015-S2530 (ACTIVE) - Sponsor Memo

2015-S2530 (ACTIVE) - Bill Text download pdf

Comments