NY State Senate Bill 2017-S1743

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 03, 2018	referred to insurance
Jan 10, 2017	referred to insurance

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2017-S1743 (ACTIVE) - Details

See Assembly Version of this Bill:: A3119
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
2015-2016: S2530, A6194
2019-2020: S4463, A3043
2021-2022: S3566, A5854

2017-S1743 (ACTIVE) - Summary

Relates to the purchase of prescription drugs.

2017-S1743 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S1743

 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 :

2016: S.2530 - Referred to Insurance
2015: S.2530 - Referred to Insurance
2014: S.3995-B - Referred to Insurance
2013: S.3995-A - Referred to Insurance

 FISCAL IMPLICATIONS :

None

 EFFECTIVE DATE :
This act shall take effect immediately.

2017-S1743 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1743
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             January 10, 2017
                                ___________
 
 Introduced  by  Sens.  GOLDEN,  ADDABBO,  BRESLIN, LANZA, O'MARA -- 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD04215-01-7

 S. 1743                             2
 
 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 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.
   §  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.
   § 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

 S. 1743                             3
 
 PROVIDES ANY CONSULTATION WITH PATIENTS ELECTRONICALLY RATHER THAN FACE-
 TO-FACE.
   (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.
   § 4. This act shall take effect immediately.

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Senate Bill S1743

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

co-Sponsors

2017-S1743 (ACTIVE) - Details

2017-S1743 (ACTIVE) - Summary

2017-S1743 (ACTIVE) - Sponsor Memo

2017-S1743 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S1743

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Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

co-Sponsors

2017-S1743 (ACTIVE) - Details

2017-S1743 (ACTIVE) - Summary

2017-S1743 (ACTIVE) - Sponsor Memo

2017-S1743 (ACTIVE) - Bill Text download pdf

Comments