Sec. 202. Ensuring accurate payments to pharmacies under Medicaid

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Section 1927(f) of the Social Security Act ( 42 U.S.C. 1396r–8(f) ) is amended— in paragraph (1)(A)— by redesignating clause

(ii)as clause (iii); and by striking and after the semicolon at the end of clause

(i)and all that precedes it through

(1)and inserting the following: The Secretary shall conduct a survey of retail community pharmacy drug prices and applicable non-retail pharmacy drug prices to determine national average drug acquisition cost benchmarks as follows: The Secretary may contract services for— with respect to retail community pharmacies, the determination of retail survey prices of the national average drug acquisition cost for covered outpatient drugs that represent a nationwide average of consumer purchase prices for such drugs, net of all discounts and rebates (to the extent any information with respect to such discounts and rebates is available) based on a monthly survey of such pharmacies; with respect to applicable non-retail pharmacies— the determination of survey prices, separate from the survey prices described in clause (i), of the non-retail national average drug acquisition cost for covered outpatient drugs that represent a nationwide average of consumer purchase prices for such drugs, net of all discounts and rebates (to the extent any information with respect to such discounts and rebates is available) based on a monthly survey of such pharmacies; and at the discretion of the Secretary, for each type of applicable non-retail pharmacy (as identified pursuant to the type indicators established by the Secretary under subsection (k)(12)(B)(ii)), the determination of survey prices, separate from the survey prices described in clause

(i)or subclause

(I)of this clause, of the national average drug acquisition cost for such type of pharmacy for covered outpatient drugs that represent a nationwide average of consumer purchase prices for such drugs, net of all discounts and rebates (to the extent any information with respect to such discounts and rebates is available) based on a monthly survey of such pharmacies; and ; in subparagraph

(D)of paragraph (1), by striking clauses

(ii)and

(iii)and inserting the following: The vendor must update the Secretary no less often than monthly on the survey prices for covered outpatient drugs. The vendor must differentiate, in collecting and reporting survey data, the relevant pharmacy type indicator for all cost information collected, including whether a pharmacy is owned by, operated by, or otherwise affiliated with a pharmacy benefit manager and whether a pharmacy is a retail community pharmacy or an applicable non-retail pharmacy, and, in the case of an applicable non-retail pharmacy, which type of applicable non-retail pharmacy (as identified pursuant to the type indicators established by the Secretary under subsection (k)(12)(B)(ii)) it is. ; by adding at the end of paragraph

(1)the following: In order to meet the requirement of section 1902(a)(54), a State shall require that any retail community pharmacy or applicable non-retail pharmacy in the State that receives any payment, reimbursement, administrative fee, discount, or rebate related to the dispensing of covered outpatient drugs to individuals receiving benefits under this title, regardless of whether such payment, reimbursement, administrative fee, discount, or rebate is received from the State or a managed care entity or other specified entity (as such terms are defined in section 1903(m)(9)(D)) directly or from a pharmacy benefit manager or another entity that has a contract with the State or a managed care entity or other specified entity (as so defined), shall respond to surveys conducted under this paragraph. Information on national drug acquisition prices obtained under this paragraph shall be made publicly available and shall include at least the following: The monthly response rate to the survey including a list of pharmacies not in compliance with subparagraph (F). The sampling frame and number of pharmacies sampled monthly. Information on price concessions to the pharmacy, including discounts, rebates, and other price concessions, to the extent that such information may be publicly released and has been collected by the Secretary as part of the survey. The Secretary, in consultation with the Office of the Inspector General of the Department of Health and Human Services, shall enforce the provisions of this paragraph with respect to a pharmacy through the establishment of appropriate civil monetary penalties, which may be assessed with respect to each violation or survey non-response, and with respect to each non-compliant pharmacy (including a pharmacy that is part of a chain), until compliance with this paragraph has been completed. The provisions of section 1128A (other than subsections

(a)and (b)) shall apply to a civil money penalty under the preceding sentence in the same manner as such provisions apply to a civil money penalty or proceeding under section 1128A(a). No State shall use pricing information reported by applicable non-retail pharmacies under paragraph (1)(A)(ii) to develop or inform reimbursement rates for retail community pharmacies. ; in paragraph (2)— in subparagraph (A), by inserting , including payment rates under managed care entities or other specified entities (as such terms are defined in section 1903(m)(9)(D)), after under this title ; and in subparagraph (B), by inserting and the basis for such dispensing fees before the semicolon; by redesignating paragraph

(4)as paragraph (5); by inserting after paragraph

(3)the following new paragraph: The Inspector General of the Department of Health and Human Services shall conduct periodic studies of the survey data reported under this subsection, as appropriate, including with respect to substantial variations in acquisition costs or other applicable costs, as well as with respect to how internal transfer prices and related party transactions may influence the costs reported by pharmacies affiliated with pharmacy benefit managers, wholesalers, distributors, and other entities that acquire covered outpatient drugs relative to costs reported by pharmacies not affiliated with such entities. The Inspector General shall provide periodic updates to Congress on the results of such studies, as appropriate, in a manner that does not disclose trade secrets or other proprietary information. There is appropriated to the Inspector General of the Department of Health and Human Services, out of any money in the Treasury not otherwise appropriated, $5,000,000 for fiscal year 2024, to remain available until expended, to carry out this paragraph. ; and in paragraph (5), as so redesignated, by inserting , and $9,000,000 for fiscal year 2024 and each fiscal year thereafter, after 2010 . Section 1927(k) of the Social Security Act ( 42 U.S.C. 1396r–8(k) ) is amended by adding the following— The term applicable non-retail pharmacy means a pharmacy that is licensed as a pharmacy by the State and that is not a retail community pharmacy, including a pharmacy that dispenses prescription medications to patients primarily through mail and specialty pharmacies. Such term does not include nursing home pharmacies, long-term care facility pharmacies, hospital pharmacies, clinics, charitable or not-for-profit pharmacies, government pharmacies, or low dispensing pharmacies (as defined by the Secretary). For purposes of subsection (f), the Secretary shall, not later than January 1, 2025, in consultation with stakeholders as appropriate, issue guidance specifying pharmacies that meet the definition of applicable non-retail pharmacies and that will be subject to the survey requirements under subsection (f)(1). The guidance promulgated under clause

(i)shall include pharmacy type indicators to distinguish between different types of applicable non-retail pharmacies, such as pharmacies that dispense prescriptions primarily through the mail and pharmacies that dispense prescriptions that require special handling or distribution. An applicable non-retail pharmacy may be identified through multiple pharmacy type indicators. The term pharmacy benefit manager means any person or entity that, either directly or through an intermediary, acts as a price negotiator or group purchaser on behalf of a State, managed care entity or other specified entity (as such terms are defined in section 1903(m)(9)(D)), or manages the prescription drug benefits provided by such State, managed care entity, or other specified entity, including the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the managing of appeals or grievances related to the prescription drug benefits, contracting with pharmacies, controlling the cost of covered outpatient drugs, or the provision of services related thereto. Such term includes any person or entity that carries out 1 or more of the activities described in the preceding sentence, irrespective of whether such person or entity calls itself a pharmacy benefit manager . . The amendments made by this section take effect on the first day of the first quarter that begins on or after the date that is 18 months after the date of enactment of this Act.

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42 USC 1396r–8(f)
42 USC 1396r–8(k)

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Sec. 202

Ensuring accurate payments to pharmacies under Medicaid

Cite42 USC 1396r–8(f)

Cite42 USC 1396r–8(k)

Cites 2Cited by 0 across 0 sources