Sec. 902. Full rebate pass through to plan; exception for innocent plan fiduciaries
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Section 408(b)(2) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1108(b)(2) ) is amended— in subparagraph (B)(viii)— by redesignating subclauses
(II)through
(IV)as subclauses
(III)through (V), respectively; in subclause (I)— by striking subclause
(II)and inserting subclause
(III); and by striking subclauses
(II)and
(III)and inserting subclauses
(III)and
(IV); and by inserting after subclause
(I)the following: Pursuant to subsection (a), subparagraphs
(C)and
(D)of section 406(a)(1) shall not apply to a responsible plan fiduciary, notwithstanding any failure to remit required amounts under subparagraph (C)(i), if the following conditions are met: The responsible plan fiduciary did not know that the covered service provider failed or would fail to make required remittances and reasonably believed that the covered service provider remitted such required amounts. The responsible plan fiduciary, upon discovering that the covered service provider failed to remit the required amounts, requests in writing that the covered service provider remit such amounts. If the covered service provider fails to comply with a written request described in subclause
(III)within 90 days of the request, the responsible plan fiduciary notifies the Secretary of the covered service provider’s failure, in accordance with subclauses
(III)and (IV). ; and by adding at the end the following: For plan years beginning on or after the date that is 30 months after the date of enactment of this subparagraph (referred to in this clause as the effective date ), no contract or arrangement or renewal or extension of a contract or arrangement, entered into on or after the effective date, for services between a covered plan and a covered service provider, through a health insurance issuer offering group health insurance coverage, a third-party administrator, an entity providing pharmacy benefit management services, or other entity, for pharmacy benefit management services, is reasonable within the meaning of this paragraph unless such entity providing pharmacy benefit management services— remits 100 percent of rebates, fees, alternative discounts, and other remuneration received from any applicable entity that are related to utilization of drugs or drug spending under such health plan or health insurance coverage, to the group health plan or health insurance issuer offering group health insurance coverage; and does not enter into any contract for pharmacy benefit management services on behalf of such a plan or coverage, with an applicable entity unless 100 percent of rebates, fees, alternative discounts, and other remuneration received under such contract that are related to the utilization of drugs or drug spending under such group health plan or health insurance coverage are remitted to the group health plan or health insurance issuer by the entity providing pharmacy benefit management services. Nothing in subclause
(I)shall be construed to affect the term of a contract or arrangement, as in effect on the effective date (as described in such subclause), except that such subclause shall apply to any renewal or extension of such a contract or arrangement entered into on or after such effective date, as so described. With respect to such rebates, fees, alternative discounts, and other remuneration— the rebates, fees, alternative discounts, and other remuneration under clause (i)(I) shall be— remitted— on a quarterly basis, to the group health plan or the group health insurance issuer, not later than 90 days after the end of each quarter; or in the case of an underpayment in a remittance for a prior quarter, as soon as practicable, but not later than 90 days after notice of the underpayment is first given; fully disclosed and enumerated to the group health plan or health insurance issuer; and returned to the covered service provider for pharmacy benefit management services on behalf of the group health plan if any audit by a plan sponsor, issuer or a third party designated by a plan sponsor, indicates that the amounts received are incorrect after such amounts have been paid to the group health plan or health insurance issuer; the Secretary may establish procedures for the remittance of rebates fees, alternative discounts, and other remuneration under subclause (I)(aa) and the disclosure of rebates, fees, alternative discounts, and other remuneration under subclause (I)(bb); and the records of such rebates, fees, alternative discounts, and other remuneration shall be available for audit by the plan sponsor, issuer, or a third party designated by a plan sponsor, not less than once per plan year. To ensure that an entity providing pharmacy benefit management services is able to meet the requirements of clause (ii)(I), a rebate aggregator (or other purchasing entity designed to aggregate rebates) and an applicable group purchasing organization shall remit such rebates to the entity providing pharmacy benefit management services not later than 45 days after the end of each quarter. A third-party administrator of a group health plan, a health insurance issuer offering group health insurance coverage, or a covered service provider for pharmacy benefit management services under such health plan or health insurance coverage shall make rebate contracts with rebate aggregators or drug manufacturers available for audit by such plan sponsor or designated third party, subject to reasonable restrictions (as determined by the Secretary) on confidentiality to prevent re-disclosure of such contracts or use of such information in audits for purposes unrelated to this section. Audits carried out under clauses (ii)(III) and
(iv)shall be performed by an auditor selected by the responsible plan fiduciary. Payment for such audits shall not be made, whether directly or indirectly, by the entity providing pharmacy benefit management services. Nothing in this subparagraph shall be construed to— prohibit reasonable payments to entities offering pharmacy benefit management services for bona fide services using a fee structure not described in this subparagraph, provided that such fees are transparent and quantifiable to group health plans and health insurance issuers; require a third-party administrator of a group health plan or covered service provider for pharmacy benefit management services under such health plan or health insurance coverage to remit bona fide service fees to the group health plan; limit the ability of a group health plan or health insurance issuer to pass through rebates, fees, alternative discounts, and other remuneration to the participant or beneficiary; or modify the requirements for the creation, receipt, maintenance, or transmission of protected health information under the privacy regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 in part 160 and subparts A and E of part 164 of title 45, Code of Federal Regulations (or successor regulations). For purposes of this subparagraph— the terms applicable entity and applicable group purchasing organization have the meanings given such terms in section 726(e); the terms covered plan , covered service provider , and responsible plan fiduciary have the meanings given such terms in subparagraph (B); and the terms group health insurance coverage , health insurance coverage , and health insurance issuer have the meanings given such terms in section 733. . Subclause (II)(aa) of section 408(b)(2)(B)(viii) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1108(b)(2)(B)(viii) ), as amended by subsection (a), shall not be construed to relieve or limit a responsible plan fiduciary from the duty to monitor the practices of any covered service provider that contracts with the applicable covered plan, including for the purposes of ensuring the reasonableness of compensation. For purposes of this subsection, the terms covered plan , covered service provider , and responsible plan fiduciary have the meanings given such terms in section 408(b)(2)(B)(ii) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1108(b)(2)(B)(ii) ). Section 408(b)(2)(B)(ii)(I)(bb) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(2)(B)(ii)(I)(bb)) is amended— in subitem
(AA)by striking Brokerage services, and inserting Services (including brokerage services), ; and in subitem (BB)— by striking Consulting, and inserting Other services, ; and by striking related to the development or implementation of plan design and all that follows through the period at the end and inserting including any of the following: plan design, insurance or insurance product selection (including vision and dental), recordkeeping, medical management, benefits administration selection (including vision and dental), stop-loss insurance, pharmacy benefit management services, wellness design and management services, transparency tools, group purchasing organization agreements and services, participation in and services from preferred vendor panels, disease management, compliance services, employee assistance programs, or third-party administration services, or consulting services related to any such services. . It is the sense of Congress that the amendment made by subparagraph
(A)clarifies the existing requirement of covered service providers with respect to services described in section 408(b)(2)(B)(ii)(I)(bb)(BB) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(2)(B)(ii)(I)(bb)(BB)) that were in effect since the application date described in section 202(e) of the No Surprises Act ( Public Law 116–260 ; 29 U.S.C. 1108 note), and does not impose any additional requirement under section 408(b)(2)(B) of such Act. Section 408(b)(2)(B)(i) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1108(b)(2)(B)(i) ) is amended— by striking requirements of this clause and inserting requirements of this subparagraph ; and by adding at the end the following: For purposes of applying section 406(a)(1)(C) with respect to a transaction described under this subparagraph or subparagraph (C), a contract or arrangement for services between a covered plan and an entity providing services to the plan, including a health insurance issuer providing health insurance coverage in connection with the covered plan, in which such entity contracts, in connection with such plan, with a service provider for pharmacy benefit management services, shall be considered an indirect furnishing of goods, services, or facilities between the covered plan and the service provider for pharmacy benefit management services acting as the party in interest. . Section 408(b)(2)(B)(ii)(I)(aa) of such Act (29 U.S.C. 1108(b)(2)(B)(ii)(I)(aa)) is amended by inserting before the period at the end and the terms . health insurance coverage and health insurance issuer have the meanings given such terms in section 733(b) Section 408(b)(2)(B)(ii)(I)(aa) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(2)(B)(ii)(I)(aa)) is amended by inserting in after defined .
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Sec. 902
Full rebate pass through to plan; exception for innocent plan fiduciaries
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