18A.2258 Pharmacy and health care benefit claims monitoring -- Contract
929 words·~4 min read·
/ky/18a-2258A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
provisions -- Requirements -- Administrative regulations.
(a)By December 31, 2022, the secretary of the Finance and Administration
Cabinet shall, upon the recommendation of the secretary of the Personnel
Cabinet and in accordance with KRS Chapter 45A, select and contract with,
the effective date of which shall not be later than January 1, 2023, a single
independent entity for the purpose of monitoring all pharmacy benefit claims
for every individual enrolled in the Public Employee Health Insurance
Program.
(b)By December 31, 2023, in addition to the contract in paragraph
(a)of this
subsection, the secretary of the Finance and Administration Cabinet shall,
upon the recommendation of the secretary of the Personnel Cabinet and in
accordance with KRS Chapter 45A, select and contract with a single
independent entity for the purpose of monitoring all health care service
benefit claims, other than pharmacy benefit claims, for every individual
enrolled in the Public Employee Health Insurance Program.
(c)Any contract entered into pursuant to this subsection shall:
1. Not be for a term longer than two
(2)years but may be renewed for like
or lesser periods; and
2. Limit compensation paid to the contracted entity to not more than thirty
percent (30%) of the total savings generated by the contracted entity as
determined by the Personnel Cabinet.
(2)To be eligible to receive a contract pursuant to subsection
(1)of this section, an
entity shall:
(a)Be capable of performing the analysis of benefit claims to validate accuracy
and identify errors in near real time;
(b)Not be an entity that performs annual retroactive audits of benefit claims for
the Public Employee Health Insurance Program; and
(c)Not be affiliated by common parent company or holding company, share any
common members of the board of directors, or share managers in common
with:
1. An insurer contracted pursuant to KRS 18A.225;
2. A third-party administrator contracted pursuant to KRS 18A.2254; or
3. A pharmacy benefit manager contracted by:
a. The Personnel Cabinet;
b. An insurer contracted pursuant to KRS 18A.225; or
c. A third-party administrator contracted pursuant to KRS 18A.2254.
(3)The entity or entities contracted pursuant to subsection
(1)of this section shall:
(a)Be granted full access to:
1. Any contract awarded to a third-party administrator or pharmacy benefit
manager for the purpose of administering benefits in the Public
Employee Health Insurance Program and all pertinent reference
documents within that contract, including but not limited to any
pharmacy price lists or specialty drug price lists which shall be provided
to the monitoring entity contracted pursuant to this section by the
Personnel Cabinet and which shall be updated by the Personnel Cabinet
within five
(5)days of the effective date of any pricing changes;
2. Any other contract that defines an insurer's, third-party administrator's,
or pharmacy benefit manager's obligations and responsibilities as it
relates to processing Public Employee Health Insurance Program benefit
claims, including any contract between a pharmacy benefit manager and
an insurer contracted pursuant to KRS 18A.225 or a third-party
administrator contracted pursuant to KRS 18A.2254; and
3. Invoices and unaltered claims files associated with benefits under the
Public Employee Health Insurance Program;
(b)Analyze one hundred percent (100%) of invoices or claims submitted for
payment by the Public Employee Health Insurance Program. The entity shall
not utilize statistical sampling methods in lieu of analyzing all invoices and
claims;
(c)Identify and correct errors in benefit claims in order to avoid or reduce
erroneous overpayments by an insurer contracted pursuant to KRS 18A.225, a
third-party administrator contracted pursuant to KRS 18A.2254, or a
pharmacy benefit manager contracted to administer pharmacy benefits in the
Public Employee Health Insurance Program;
(d)Identify underpayments made by an insurer contracted pursuant to KRS
18A.225, a third-party administrator contracted pursuant to KRS 18A.2254, or
a pharmacy benefit manager contracted to administer pharmacy benefits in the
Public Employee Health Insurance Program;
(e)Identify inappropriate or erroneous fees imposed by an insurer contracted
pursuant to KRS 18A.225, a third-party administrator contracted pursuant to
KRS 18A.2254, or a pharmacy benefit manager contracted to administer
pharmacy benefits in the Public Employee Health Insurance Program; and
(f)Submit a quarterly report to the Legislative Research Commission. The report
shall include a summary of the analysis and errors identified pursuant to
paragraphs (c), (d), and
(e)of this subsection during the previous quarter.
(4)The entity or entities contracted pursuant to subsection
(1)of this section shall not
perform drug utilization reviews and shall not exercise any authority over the
provision of health care benefits for Medicare eligible retirees.
(5)The analysis of claims and the identification of potential errors required by
subsection (3)(b), (c), and
(d)of this section shall:
(a)Occur prior to the due date of each claim or invoice submitted by an insurer
contracted pursuant to KRS 18A.225, a third-party administrator contracted
pursuant to KRS 18A.2254, or a pharmacy benefit manager contracted to
administer pharmacy benefits in the Public Employee Health Insurance
Program or within five
(5)days of receipt of the claim or invoice, whichever
is later; and
(b)Consider at least the following:
1. Compliance with all relevant administrative regulations promulgated by
the Personnel Cabinet;
2. Compliance with all state and federal laws relating to or applicable to
the Public Employee Health Insurance Program;
3. Compliance with any contract with an insurer, third-party administrator,
or pharmacy benefit manager; and
4. The market competitiveness of benefit payments, including the
adequacy of payments to pharmacies and other health care providers.
(6)The Personnel Cabinet may promulgate administrative regulations necessary to
carry out this section.