Sec. 44123. 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 such term is defined by the Secretary) 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, rebates, and other price concessions (to the extent any information with respect to such discounts, rebates, and other price concessions 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, rebates, and other price concessions (to the extent any information with respect to such discounts, rebates, and other price concessions 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, 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, rebates, and other price concessions (to the extent any information with respect to such discounts, rebates, and other price concessions is available) based on a monthly survey of such pharmacies; and ; in subparagraph

(B)of paragraph (1), by striking subparagraph (A)(ii) and inserting subparagraph (A)(iii) ; 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, for all cost information collected, whether a pharmacy is a retail community pharmacy or an applicable non-retail pharmacy, including whether such pharmacy is an affiliate (as defined in subsection (k)(14)), and, in the case of an applicable non-retail pharmacy, which type of applicable non-retail pharmacy it is using the relevant pharmacy type indicators included in the guidance required by subsection (d)(2) of section 44123 of the Act titled An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14 . ; 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, rebate, or other price concession related to the dispensing of covered outpatient drugs to individuals receiving benefits under this title, regardless of whether such payment, reimbursement, administrative fee, discount, rebate, or other price concession 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 in a form and manner to be determined by the Secretary 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 methodology and number of pharmacies sampled monthly. Information on price concessions to pharmacies, 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. Subject to clauses (ii), (iii), and (iv), the Secretary shall enforce the provisions of this paragraph with respect to a pharmacy through the establishment of civil money penalties applicable to a retail community pharmacy or an applicable non-retail pharmacy. The Secretary shall impose a civil money penalty established under this subparagraph on a retail community pharmacy or applicable non-retail pharmacy if— the retail pharmacy or applicable non-retail pharmacy refuses or otherwise fails to respond to a request for information about prices in connection with a survey under this subsection; knowingly provides false information in response to such a survey; or otherwise fails to comply with the requirements established under this paragraph. A civil money penalty established under this subparagraph may be assessed with respect to each violation, and with respect to each non-compliant retail community pharmacy (including a pharmacy that is part of a chain) or non-compliant applicable non-retail pharmacy (including a pharmacy that is part of a chain), in an amount not to exceed $100,000 for each such violation. In determining the amount of a civil money penalty imposed under this subparagraph, the Secretary may consider the size, business structure, and type of pharmacy involved, as well as the type of violation and other relevant factors, as determined appropriate by the Secretary. The provisions of section 1128A (other than subsections

(a)and (b)) shall apply to a civil money penalty under this subparagraph 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 subparagraph (A)(ii) to develop or inform payment methodologies for retail community pharmacies. ; in paragraph (2)— in subparagraph (A), by inserting , including payment rates and methodologies for determining ingredient cost reimbursement 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 that are affiliates (as defined in subsection (k)(13)) or are owned by, controlled by, or related under a common ownership structure with a wholesaler, distributor, or other entity that acquires 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 2026, to remain available until expended, to carry out this paragraph. ; and in paragraph (5), as so redesignated— by inserting , and $8,000,000 for each of fiscal years 2026 through 2033, after 2010 ; and by inserting Funds appropriated under this paragraph for each of fiscal years 2026 through 2033 shall remain available until expended. after the period. Section 1927(k) of the Social Security Act ( 42 U.S.C. 1396r–8(k) ) is amended— in the matter preceding paragraph (1), by striking In the section and inserting In this section ; and by adding at the end the following new paragraphs: 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). The term affiliate means any entity that is owned by, controlled by, or related under a common ownership structure with a pharmacy benefit manager or a managed care entity or other specified entity (as such terms are defined in section 1903(m)(9)(D)). . Subject to paragraph (2), the amendments made by this section shall apply beginning on the first day of the first quarter that begins on or after the date that is 6 months after the date of enactment of this section. The pharmacy survey requirements established by the amendments to section 1927(f) of the Social Security Act ( 42 U.S.C. 1396r–8(f) ) made by this section shall apply to retail community pharmacies beginning on the effective date described in paragraph (1), but shall not apply to applicable non-retail pharmacies until 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 section. Not later than January 1, 2027, the Secretary of Health and Human Services shall publish guidance specifying pharmacies that meet the definition of applicable non-retail pharmacies (as such term is defined in subsection (k)(12) of section 1927 of the Social Security Act ( 42 U.S.C. 1396r–8 ), as added by subsection (b)), and that will be subject to the survey requirements under subsection (f)(1) of such section, as amended by subsection (a). The guidance published under paragraph

(1)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. Implementation of the amendments made by this section shall be exempt from the requirements of section 553 of title 5, United States Code. Chapter 35 of title 44, United States Code, shall not apply to any data collection undertaken by the Secretary of Health and Human Services under section 1927(f) of the Social Security Act ( 42 U.S.C. 1396r–8(f) ), as amended by this section.

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42 USC 1396r–8(f)
42 USC 1396r–8(k)
42 USC 1396r–8

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cites case law

Sec. 44123

Ensuring accurate payments to pharmacies under Medicaid

Cite42 USC 1396r–8(f)

Cite42 USC 1396r–8(k)

Cite42 USC 1396r–8

Cites 3Cited by 0 across 0 sources