In this subtitle the following words have the meanings indicated.
“Agent” means a pharmacy, a pharmacist, a mail order pharmacy, or a nonresident pharmacy acting on behalf or at the direction of a pharmacy benefits manager.
“Beneficiary” means an individual who receives prescription drug coverage or benefits from a purchaser.
“Carrier” means the State Employee and Retiree Health and Welfare Benefits Program, an insurer, a nonprofit health service plan, or a health maintenance organization that:
provides prescription drug coverage or benefits in the State; and
enters into an agreement with a pharmacy benefits manager for the provision of pharmacy benefits management services.
“Carrier” does not include a person that provides prescription drug coverage or benefits through plans subject to ERISA and does not provide prescription drug coverage or benefits through insurance, unless the person is a multiple employer welfare arrangement as defined in § 514(b)(6)(a)(ii) of ERISA.
“Compensation program” means a program, policy, or process through which sources and pricing information are used by a pharmacy benefits manager to determine the terms of payment as stated in a participating pharmacy contract.
“Contracted pharmacy” means a pharmacy that participates in the network of a pharmacy benefits manager through a contract with:
the pharmacy benefits manager; or
a pharmacy services administration organization or a group purchasing organization.
“ERISA” has the meaning stated in § 8–301 of this article.
“Formulary” means a list of prescription drugs used by a purchaser.
“Manufacturer payments” means any compensation or remuneration a pharmacy benefits manager receives from or on behalf of a pharmaceutical manufacturer.
“Manufacturer payments” includes:
payments received in accordance with agreements with pharmaceutical manufacturers for formulary placement and, if applicable, drug utilization;
rebates, regardless of how categorized;
market share incentives;
commissions;
fees under products and services agreements;
any fees received for the sale of utilization data to a pharmaceutical manufacturer; and
administrative or management fees.
“Manufacturer payments” does not include purchase discounts based on invoiced purchase terms.
“Nonprofit health maintenance organization” has the meaning stated in § 6–121(a) of this article.
“Nonresident pharmacy” has the meaning stated in § 12–403 of the Health Occupations Article.
“Participating pharmacy contract” means a contract filed with the Commissioner in accordance with § 15–1628(b) of this subtitle.
“Pharmacist” has the meaning stated in § 12–101 of the Health Occupations Article.
“Pharmacy” has the meaning stated in § 12–101 of the Health Occupations Article.
“Pharmacy and therapeutics committee” means a committee established by a pharmacy benefits manager to:
objectively appraise and evaluate prescription drugs; and
make recommendations to a purchaser regarding the selection of drugs for the purchaser’s formulary.
“Pharmacy benefits management services” means:
the procurement of prescription drugs at a negotiated rate for dispensation within the State to beneficiaries;
the administration or management of prescription drug coverage provided by a purchaser for beneficiaries; and
any of the following services provided with regard to the administration of prescription drug coverage:
mail service pharmacy;
claims processing, retail network management, and payment of claims to pharmacies for prescription drugs dispensed to beneficiaries;
clinical formulary development and management services;
rebate contracting and administration;
patient compliance, therapeutic intervention, and generic substitution programs; or
disease management programs.
“Pharmacy benefits management services” does not include any service provided by a nonprofit health maintenance organization that operates as a group model, provided that the service:
is provided solely to a member of the nonprofit health maintenance organization; and
is furnished through the internal pharmacy operations of the nonprofit health maintenance organization.
“Pharmacy benefits manager” means a person that performs pharmacy benefits management services.
“Proprietary information” means:
a trade secret;
confidential commercial information; or
confidential financial information.
“Purchaser” means a person that offers a plan or program in the State, including the State Employee and Retiree Health and Welfare Benefits Program, that:
provides prescription drug coverage or benefits in the State; and
enters into an agreement with a pharmacy benefits manager for the provision of pharmacy benefits management services.
“Rebate sharing contract” means a contract between a pharmacy benefits manager and a purchaser under which the pharmacy benefits manager agrees to share manufacturer payments with the purchaser.
“Therapeutic interchange” means any change from one prescription drug to another.
“Therapeutic interchange” does not include:
a change initiated pursuant to a drug utilization review;
a change initiated for patient safety reasons;
a change required due to market unavailability of the currently prescribed drug;
a change from a brand name drug to a generic drug in accordance with § 12–504 of the Health Occupations Article; or
a change required for coverage reasons because the originally prescribed drug is not covered by the beneficiary’s formulary or plan.
“Therapeutic interchange solicitation” means any communication by a pharmacy benefits manager for the purpose of requesting a therapeutic interchange.
“Trade secret” has the meaning stated in § 11–1201 of the Commercial Law Article.
A pharmacy benefits manager shall register with the Commissioner as a pharmacy benefits manager before providing pharmacy benefits management services in the State to purchasers.
An applicant for registration shall:
file with the Commissioner an application on the form that the Commissioner provides; and
pay to the Commissioner a registration fee set by the Commissioner.
The Commissioner may require any additional information or submissions from a pharmacy benefits manager that may be reasonably necessary to verify the information contained in the application.
Subject to the provisions of § 15–1607 of this part, the Commissioner shall register each pharmacy benefits manager that meets the requirements of this section.
A pharmacy benefits manager registration expires on the second September 30 after its effective date unless it is renewed as provided under this section.
A pharmacy benefits manager may renew its registration for an additional 2–year term, if the pharmacy benefits manager:
otherwise is entitled to be registered;
files with the Commissioner a renewal application on the form that the Commissioner requires; and
pays to the Commissioner a renewal fee set by the Commissioner.
An application for renewal of a pharmacy benefits manager registration shall be considered made in a timely manner if it is postmarked on or before the date the pharmacy benefits manager’s registration expires.
Subject to the provisions of § 15–1607 of this part, the Commissioner shall renew the registration of each pharmacy benefits manager that meets the requirements of this section.
The Commissioner may require any additional information or submissions from a pharmacy benefits manager that may be reasonably necessary to verify the information contained in the application.
A carrier may not enter into an agreement with a pharmacy benefits manager that has not registered with the Commissioner.
Subject to the applicable hearing provisions of Title 2 of this article, the Commissioner may deny a registration to a pharmacy benefits manager applicant or refuse to renew, suspend, or revoke the registration of a pharmacy benefits manager if the pharmacy benefits manager, or an officer, director, or employee of the pharmacy benefits manager:
makes a material misstatement or misrepresentation in an application for registration;
fraudulently or deceptively obtains or attempts to obtain a registration;
in connection with the administration of pharmacy benefits management services, commits fraud or engages in illegal or dishonest activities; or
violates any provision of this part or a regulation adopted under this part.
This section does not limit any other regulatory authority of the Commissioner under this article.
A pharmacy benefits manager shall maintain adequate books and records about each purchaser for which the pharmacy benefits manager provides pharmacy benefits management services:
in accordance with prudent standards of record keeping;
for the duration of the agreement between the pharmacy benefits manager and the purchaser; and
for 3 years after the pharmacy benefits manager ceases to provide pharmacy benefits management services for the purchaser.
Whenever the Commissioner considers it advisable, the Commissioner may examine the affairs, transactions, accounts, and records of a registered pharmacy benefits manager.
The examination shall be conducted in accordance with § 2–207 of this article.
The expense of the examination shall be paid in accordance with § 2–208 of this article.
The reports of the examination and investigation shall be issued in accordance with § 2–209 of this article.
A pharmacy benefits manager may not ship, mail, or deliver prescription drugs or devices to a person in the State through a nonresident pharmacy unless the nonresident pharmacy holds a permit issued in accordance with the provisions of § 12–403 of the Health Occupations Article.
This section applies only to a pharmacy benefits manager that provides pharmacy benefits management services on behalf of a carrier.
A pharmacy benefits manager may not prohibit a pharmacy or pharmacist from:
providing a beneficiary with information regarding the retail price for a prescription drug or the amount of the cost share for which the beneficiary is responsible for a prescription drug;
discussing with a beneficiary information regarding the retail price for a prescription drug or the amount of the cost share for which the beneficiary is responsible for a prescription drug; or
if a more affordable drug is available than one on the purchaser’s formulary and the requirements for a therapeutic interchange under §§ 15–1633.1 through 15–1639 of this subtitle are met, selling the more affordable alternative to the beneficiary.
This section may not be construed to alter the requirements for a therapeutic interchange under §§ 15–1633.1 through 15–1639 of this subtitle.
This section applies only to a pharmacy benefits manager that provides pharmacy benefits management services on behalf of a carrier.
Except as provided in subsection (c) of this section, a pharmacy benefits manager may not require that a beneficiary use a specific pharmacy or entity to fill a prescription if:
the pharmacy benefits manager or a corporate affiliate of the pharmacy benefits manager has an ownership interest in the pharmacy or entity; or
the pharmacy or entity has an ownership interest in the pharmacy benefits manager or a corporate affiliate of the pharmacy benefits manager.
Except as provided in § 15–847.2 of this title, a pharmacy benefits manager may require a beneficiary to use a specific pharmacy or entity for a specialty drug as defined in § 15–847 of this title.
In this section the following words have the meanings indicated.
“Covered entity” has the meaning stated in § 602 of the federal Veterans Health Care Act of 1992.
“Pharmacies or pharmacists that participate in the 340B Program” means:
a pharmacy owned or operated by a covered entity that is eligible to or is actively participating in the 340B Program; or
a pharmacy or pharmacist under contract with a covered entity to dispense drugs purchased under the 340B Program to patients of the covered entity.
“340B Program” means the drug pricing program established under § 602 of the federal Veterans Health Care Act of 1992.
A pharmacy benefits manager shall:
make formulary and coverage decisions for a pharmacy or pharmacist that participates in the 340B Program based on the normal course of business of the pharmacy benefits manager; and
allow a beneficiary to use any in–network pharmacy or pharmacist that the beneficiary choses, without regard to whether the pharmacy or pharmacist participates in the 340B Program.
A pharmacy benefits manager may not:
transfer the 340B Program savings from a pharmacy or pharmacist that participates in the 340B Program to a pharmacy benefits manager;
offer lower reimbursement for a prescription drug purchased under the 340B Program than the reimbursement it offers for the same prescription drug if it is not purchased under the 340B Program;
refuse to cover the prescription drugs purchased under the 340B Program;
refuse to allow pharmacies or pharmacists that participate in the 340B Program to participate in the pharmacy benefits manager’s network on the sole basis that the pharmacy or pharmacist participates in the 340B Program;
impose different reimbursement or network participation contract terms on pharmacies or pharmacists that participate in a pharmacy benefits manager’s network based on whether a pharmacy or pharmacist participates in the 340B Program;
impose different fees, chargebacks, or other adjustments on pharmacies or pharmacists based on whether a pharmacy or pharmacist participates in the 340B Program;
modify a beneficiary’s copayment on the basis of whether a pharmacy or pharmacist participates in the 340B Program;
establish or set network adequacy requirements based on whether a pharmacy or pharmacist participates in the 340B Program; or
prohibit a covered entity authorized to participate in the 340B Program or a pharmacy or pharmacist under contract with a covered entity authorized to participate in the 340B Program from participating in the pharmacy benefits manager’s network on the basis of the covered entity’s participation in the 340B Program.
A pharmacy benefits manager may not base formulary or prescription drug coverage decisions on:
the price of the prescription drug under the 340B Program; or
whether the dispensing pharmacy or pharmacist participates in the 340B Program.
This section applies only to a pharmacy benefits manager that provides pharmacy benefits management services on behalf of a carrier.
This section does not apply to reimbursement:
except as provided in § 15–847.2 of this title, for specialty drugs;
for mail order drugs; or
to a chain pharmacy with more than 15 stores or a pharmacist who is an employee of the chain pharmacy.
A pharmacy benefits manager may not reimburse a pharmacy or pharmacist for a pharmaceutical product or pharmacist service in an amount less than the amount that the pharmacy benefits manager reimburses itself or an affiliate for providing the same product or service.
A pharmacy and therapeutics committee established by a pharmacy benefits manager performing pharmacy benefits management services on behalf of a carrier shall meet the requirements of this part.
A pharmacy and therapeutics committee shall:
include clinical specialists that represent the needs of a purchaser’s beneficiaries; and
include at least one practicing pharmacist and one practicing physician who are independent of any developer or manufacturer of prescription drugs.
A majority of the members of a pharmacy and therapeutics committee shall be practicing physicians or practicing pharmacists.
Each member of a pharmacy and therapeutics committee shall sign a conflict of interest statement updated at least annually disclosing any economic interest or relationship that could influence the pharmacy and therapeutics committee’s decisions.
A pharmacy benefits manager may not require a pharmacist to participate on its pharmacy and therapeutics committee.
On request of a purchaser for which the pharmacy and therapeutics committee makes recommendations, a pharmacy benefits manager shall disclose information about the composition of its pharmacy and therapeutics committee to the purchaser.
A pharmacy benefits manager shall ensure that its pharmacy and therapeutics committee has:
policies and procedures, including disclosure requirements, to address potential conflicts of interest that members of the pharmacy and therapeutics committee may have with developers or manufacturers of prescription drugs;
a process to evaluate medical and scientific evidence concerning the safety and effectiveness of prescription drugs, including available comparative information on clinically similar prescription drugs, when deciding what prescription drugs to recommend to include on a formulary;
a process to evaluate medical and scientific evidence concerning the safety and effectiveness of prescription drugs when recommending utilization review requirements, dose restrictions, and step therapy requirements; and
a process to enable the pharmacy and therapeutics committee to consider the need to recommend a formulary change to a purchaser in a timely manner but at least annually.
The Commissioner may consider a pharmacy and therapeutics committee of a pharmacy benefits manager as having met the requirements of §§ 15–1614 and 15–1617 of this part if the pharmacy benefits manager has obtained accreditation from an accrediting organization approved by the Commissioner.
The Commissioner may adopt regulations to implement this part.
Except as provided for in subsection (b) of this section, the provisions of §§ 15–1623 and 15–1624 of this subtitle apply only to a pharmacy benefits manager that provides pharmacy benefits management services on behalf of a carrier.
The provisions of §§ 15–1623 and 15–1624 of this subtitle do not apply to a pharmacy benefits manager when providing pharmacy benefits management services to a purchaser that is affiliated with the pharmacy benefits manager through common ownership within an insurance holding company.
Before entering into a contract with a purchaser, a pharmacy benefits manager:
as applicable, shall inform the purchaser that the pharmacy benefits manager may:
solicit and receive manufacturer payments;
pass through or retain the manufacturer payments depending on the contract terms with a purchaser;
sell aggregate utilization information; and
share aggregate utilization information with other entities; and
shall offer to provide to the purchaser a report that contains the:
net revenue of the pharmacy benefits manager from sales of prescription drugs to purchasers made through the pharmacy benefits manager’s network of contractually affiliated retail pharmacies or through the pharmacy benefits manager’s mail order pharmacies, with respect to the pharmacy benefits manager’s entire client base of purchasers; and
amount of all manufacturer payments earned by the pharmacy benefits manager.
If a purchaser requests the information described in subsection (a)(2) of this section, a pharmacy benefits manager shall provide the information before entering into a contract with the purchaser.
Notwithstanding the provisions of paragraph (1) of this subsection, if a pharmacy benefits manager requires a nondisclosure agreement under which a purchaser agrees that the information described in subsection (a)(2) of this section is proprietary information, the pharmacy benefits manager may not be required to provide the information until the purchaser has signed the nondisclosure agreement.
If a purchaser has a rebate sharing contract, a pharmacy benefits manager shall offer to provide the purchaser a report for each fiscal quarter and each fiscal year that contains the amount of the:
net revenue of the pharmacy benefits manager from sales of prescription drugs to purchasers made through the pharmacy benefits manager’s network of contractually affiliated retail pharmacies or through the pharmacy benefits manager’s mail order pharmacies, with respect to the pharmacy benefits manager’s entire client base of purchasers;
total prescription drug expenditures applicable to the purchaser;
total manufacturer payments earned by the pharmacy benefits manager during the applicable reporting period; and
total rebates applicable to the purchaser during the applicable reporting period.
If the exact amount of each item to be reported under subsection (a) of this section is not known by the pharmacy benefits manager at the time of its report, the pharmacy benefits manager shall offer to provide:
its current best estimate of the amount of each item; and
an updated report containing the exact amount of each item immediately after it becomes available.
A pharmacy benefits manager shall provide the information described in subsections (a) and (b) of this section if requested by the purchaser.
Notwithstanding the provisions of paragraph (1) of this subsection, if a pharmacy benefits manager requires a nondisclosure agreement under which a purchaser agrees that the information in subsections (a) and (b) of this section is proprietary information, the pharmacy benefits manager may not be required to provide the information until the purchaser has signed the nondisclosure agreement.
This part does not diminish the authority of the Office of the Attorney General or the Commissioner to obtain information relating to a pharmacy benefits manager and use the information in any proceeding.
At the time of entering into a contract with a pharmacy or a pharmacist, and at least 30 working days before any contract change, a pharmacy benefits manager shall disclose to the pharmacy or pharmacist:
the applicable terms, conditions, and reimbursement rates;
the process and procedures for verifying pharmacy benefits and beneficiary eligibility;
the dispute resolution and audit appeals process; and
the process and procedures for verifying the prescription drugs included on the formularies used by the pharmacy benefits manager.
This paragraph does not apply to a requirement that a specialty pharmacy obtain national certification to be considered a specialty pharmacy in a pharmacy benefits manager’s or carrier’s network.
For purposes of credentialing a pharmacy or a pharmacist as a condition for participating in a pharmacy benefits manager’s network for a carrier, the pharmacy benefits manager may not:
require a pharmacy or pharmacist to renew credentialing more frequently than once every 3 years; or
charge a pharmacy or pharmacist a fee for the initial credentialing or renewing credentialing.
Each contract form or an amendment to a contract form between a pharmacy benefits manager and a pharmacy or a pharmacy services administrative organization, as defined in § 15–2001 of this title, acting on behalf of a pharmacy may not become effective unless at least 30 days before the contract form or amendment to the contract form is to become effective, the pharmacy benefits manager files an informational filing with the Commissioner in the manner required by the Commissioner that includes a copy of the contract form or amendment to the contract form.
The Commissioner is not required to review the informational filing to evaluate whether a contract form or amendment to a contract form is in violation of this subtitle at the time the informational filing is made.
The Commissioner may review and disapprove a contract form or amendment to a contract form at any time after the contract form or amendment to the contract form has been submitted as part of an informational filing.
In this section the following words have the meanings indicated.
“Drug shortage list” means a list of drug products listed on the federal Food and Drug Administration’s Drug Shortages website.
“Maximum allowable cost” means the maximum amount that a pharmacy benefits manager or a purchaser will reimburse a contracted pharmacy for the cost of a multisource generic drug, a medical product, or a device.
“Maximum allowable cost” does not include dispensing fees.
“Maximum allowable cost list” means a list of multisource generic drugs, medical products, and devices for which a maximum allowable cost has been established by a pharmacy benefits manager or a purchaser.
In each participating pharmacy contract, the pharmacy benefits manager shall include the sources used to determine maximum allowable cost pricing.
A pharmacy benefits manager shall:
update its pricing information at least every 7 days;
establish a reasonable process by which a contracted pharmacy has access to the current and applicable maximum allowable cost price lists in an electronic format as updated in accordance with the requirements of this section; and
immediately after a pricing information update under item (1) of this subsection, use the updated pricing information in calculating the payments made to all contracted pharmacies.
A pharmacy benefits manager shall maintain a procedure to eliminate products from the list of drugs subject to maximum allowable cost pricing as necessary to:
remain consistent with pricing changes;
remove from the list drugs that no longer meet the requirements of subsection (e) of this section; and
reflect the current availability of drugs in the marketplace.
A product on the maximum allowable cost list shall be eliminated from the list by the pharmacy benefits manager within 7 days after the pharmacy benefits manager knows of a change in the availability of the product.
Before placing a prescription drug on a maximum allowable cost list, a pharmacy benefits manager shall ensure that:
the drug is listed as “A” or “B” rated in the most recent version of the U.S. Food and Drug Administration’s approved drug products with therapeutic equivalence evaluations, also known as the Orange Book, or has an “NR” or “NA” rating or similar rating by a nationally recognized reference;
if a drug is manufactured by more than one manufacturer, the drug is generally available for purchase by contracted pharmacies, including contracted retail pharmacies, in the State from a wholesale distributor with a permit in the State; or
if a drug is manufactured by only one manufacturer, the drug is generally available for purchase by contracted pharmacies, including contracted retail pharmacies, in the State from at least two wholesale distributors with a permit in the State; and
the drug is not obsolete, temporarily unavailable, or listed on a drug shortage list as currently in shortage.
For disputes regarding maximum allowable cost pricing, each participating pharmacy contract must include a process to appeal, investigate, and resolve disputes regarding maximum allowable cost pricing that includes:
a requirement that an appeal be filed by the contract pharmacy no later than 21 days after the date of the initial adjudicated claim;
a requirement that, within 21 days after the date the appeal is filed, the pharmacy benefits manager investigate and resolve the appeal and report to the contracted pharmacy on the pharmacy benefits manager’s determination on the appeal;
a requirement that a pharmacy benefits manager make available on its website information about the appeal process, including:
a telephone number at which the contracted pharmacy may directly contact the department or office responsible for processing appeals for the pharmacy benefits manager to speak to an individual or leave a message for an individual who is responsible for processing appeals;
an e–mail address of the department or office responsible for processing appeals to which an individual who is responsible for processing appeals has access; and
a notice indicating that the individual responsible for processing appeals shall return a call or an e–mail made by a contracted pharmacy to the individual within 3 business days or less of receiving the call or e–mail;
a requirement that a pharmacy benefits manager provide:
a reason for any appeal denial;
the national drug code of a drug and the name of the wholesale distributor from which the drug was available on the date the claim was adjudicated at a price at or below the maximum allowable cost determined by the pharmacy benefits manager; and
the mathematical calculation used to determine the maximum allowable cost; and
if an appeal is upheld, a requirement that a pharmacy benefits manager:
for the appealing pharmacy:
adjust the maximum allowable cost for the drug as of the date of the original claim for payment; and
without requiring the appealing pharmacy to reverse and rebill the claims, provide reimbursement for the claim and any subsequent and similar claims under similarly applicable contracts with the pharmacy benefits manager:
for the original claim, in the first remittance to the pharmacy after the date the appeal was determined; and
for subsequent and similar claims under similarly applicable contracts, in the second remittance to the pharmacy after the date the appeal was determined; and
for a similarly situated contracted pharmacy in the State:
adjust the maximum allowable cost for the drug as of the date the appeal was determined; and
provide notice to the pharmacy or pharmacy’s contracted agent that:
an appeal has been upheld; and
without filing a separate appeal, the pharmacy or the pharmacy’s contracted agent may reverse and rebill a similar claim.
A pharmacy benefits manager may not retaliate against a contracted pharmacy for exercising its right to appeal under this section or filing a complaint with the Commissioner under this subsection.
A pharmacy benefits manager may not charge a contracted pharmacy a fee related to the readjudication of a claim or claims resulting from carrying out the requirement of a contract specified in subsection (f)(5) of this section or the upholding of an appeal under subsection (i) of this section.
If a pharmacy benefits manager denies an appeal and a contracted pharmacy or a designee of the contracted pharmacy files a complaint with the Commissioner, the Commissioner shall:
review the compensation program of the pharmacy benefits manager to ensure that the reimbursement for pharmacy benefits management services paid to the pharmacist or a pharmacy complies with this subtitle and the terms of the participating pharmacy contract; and
based on a determination made by the Commissioner under item (i) of this paragraph, dismiss the appeal or uphold the appeal and order the pharmacy benefits manager to pay the claim or claims in accordance with the Commissioner’s findings.
On request, the pharmacy benefits manager shall provide to the Commissioner all mathematical calculations, accounts, records, documents, files, logs, correspondence, or other information necessary to complete the Commissioner’s review under paragraph (1) of this subsection.
All information and data collected by the Commissioner during a review:
is considered to be confidential and proprietary information; and
is not subject to disclosure under the Public Information Act.
For disputes regarding cost pricing and reimbursement under a participating pharmacy contract, each participating pharmacy contract must include a process to appeal, investigate, and resolve disputes regarding cost pricing and reimbursement that includes:
a requirement that an appeal be filed by the contract pharmacy not later than 21 days after:
the date a direct or indirect remuneration fee is charged; or
another date as determined by the Commissioner;
a requirement that a pharmacy benefits manager make available on its website information about the appeal process, including:
a telephone number at which the contracted pharmacy may directly contact the department or office responsible for processing appeals for the pharmacy benefits manager to speak to an individual or leave a message for an individual who is responsible for processing appeals;
an e–mail address of the department or office responsible for processing appeals to which an individual who is responsible for processing appeals has access; and
a notice indicating that the individual responsible for processing appeals shall return a call or an e–mail made by a contracted pharmacy to the individual within 3 business days or less after receiving the call or e–mail;
a requirement that a pharmacy benefits manager provide:
a reason for any appeal denial; and
the mathematical calculation used to determine the amount of reimbursement; and
if an appeal is upheld, a requirement that a pharmacy benefits manager:
make adjustments as necessary to comply with the compensation program as stated in the participating pharmacy contract as of the date the appeal was determined; and
provide notice to the pharmacy or pharmacy’s contracted agent that an appeal has been upheld.
A pharmacy benefits manager may not retaliate against a contracted pharmacy for exercising its right to appeal under this section or filing a complaint with the Commissioner under this section.
A pharmacy benefits manager may not charge a contracted pharmacy a fee related to the readjudication of a claim or claims resulting from the upholding of an appeal under subsection (d) of this section.
If a pharmacy benefits manager denies an appeal and a contracted pharmacy or a designee of the contracted pharmacy files a complaint with the Commissioner, the Commissioner shall:
review the compensation program of the pharmacy benefits manager to ensure that the reimbursement for pharmacy services paid to the pharmacist or a pharmacy complies with this subtitle and the terms of the participating pharmacy contract; and
based on a determination made by the Commissioner under item (i) of this paragraph, dismiss the appeal or uphold the appeal and order the pharmacy benefits manager to pay the claim or claims in accordance with the Commissioner’s findings.
On request, the pharmacy benefits manager shall provide to the Commissioner all mathematical calculations, accounts, records, documents, files, logs, correspondence, or other information necessary to complete the Commissioner’s review.
All information and data collected by the Commissioner during a review:
is considered to be confidential and proprietary information; and
is not subject to disclosure under the Public Information Act.
A pharmacy benefits manager or a carrier may not directly or indirectly charge a contracted pharmacy, or hold a contracted pharmacy responsible for, a fee or performance–based reimbursement related to the adjudication of a claim or an incentive program.
A pharmacy benefits manager or carrier may not make or allow any reduction in payment for pharmacy services by a pharmacy benefits manager or carrier or directly or indirectly reduce a payment for a pharmacy service under a reconciliation process to an effective rate of reimbursement, including generic effective rates, brand effective rates, direct and indirect remuneration fees, or any other reduction or aggregate reduction of payments.
This section applies only to a pharmacy benefits manager that provides pharmacy benefits management services on behalf of a carrier.
This section does not apply to an audit that involves probable or potential fraud or willful misrepresentation by a pharmacy or pharmacist.
A pharmacy benefits manager shall conduct an audit of a pharmacy or pharmacist under contract with the pharmacy benefits manager in accordance with this section.
A pharmacy benefits manager may conduct an audit through an auditing entity.
The Commissioner may adopt regulations to carry out this subsection.
A pharmacy benefits manager may not schedule an onsite audit to begin during the first 5 calendar days of a month unless requested by the pharmacy or pharmacist.
When conducting an audit, a pharmacy benefits manager shall:
if the audit is onsite, provide written notice to the pharmacy or pharmacist at least 2 weeks before conducting the initial onsite audit for each audit cycle;
employ the services of a pharmacist if the audit requires the clinical or professional judgment of a pharmacist;
allow its auditors to enter the prescription area of a pharmacy only when accompanied by or authorized by a member of the pharmacy staff;
allow a pharmacist or pharmacy to use any prescription, or authorized change to a prescription, that meets the requirements of COMAR 10.34.20.02 to validate claims submitted for reimbursement for dispensing of original and refill prescriptions;
for purposes of validating the pharmacy record with respect to orders or refills of a drug, allow the pharmacy or pharmacist to use records of a hospital or a physician or other prescriber authorized by law that are:
written; or
transmitted electronically or by any other means of communication authorized by contract between the pharmacy and the pharmacy benefits manager;
accept a completed cash register transaction to serve as proof of delivery or pickup for a pharmacy customer unless there is contradictory information;
audit each pharmacy and pharmacist under the same standards and parameters as other similarly situated pharmacies or pharmacists audited by the pharmacy benefits manager;
only audit claims submitted or adjudicated within the 2–year period immediately preceding the audit, unless a longer period is authorized under federal or State law;
deliver the preliminary audit report to the pharmacy or pharmacist within 120 calendar days after the completion of the audit, with reasonable extensions allowed;
in accordance with subsection (m) of this section, allow a pharmacy or pharmacist to produce documentation to address any discrepancy found during the audit; and
deliver the final audit report to the pharmacy or pharmacist:
within 6 months after delivery of the preliminary audit report if the pharmacy or pharmacist does not request an internal appeal under subsection (m) of this section; or
within 30 days after the conclusion of the internal appeals process under subsection (m) of this section if the pharmacy or pharmacist requests an internal appeal.
If a contract between a pharmacy or pharmacist and a pharmacy benefits manager specifies a period of time in which a pharmacy or pharmacist is allowed to withdraw and resubmit a claim and that period of time expires before the pharmacy benefits manager delivers a preliminary audit report that identifies discrepancies, the pharmacy benefits manager shall allow the pharmacy or pharmacist to withdraw and resubmit a claim within 30 days after:
the preliminary audit report is delivered if the pharmacy or pharmacist does not request an internal appeal under subsection (m) of this section; or
the conclusion of the internal appeals process under subsection (m) of this section if the pharmacy or pharmacist requests an internal appeal.
During an audit, a pharmacy benefits manager may not disrupt the provision of services to the customers of a pharmacy.
A pharmacy benefits manager may not:
use the accounting practice of extrapolation to calculate overpayments or underpayments;
except as provided in paragraph (2) of this subsection:
share information from an audit with another pharmacy benefits manager; or
use information from an audit conducted by another pharmacy benefits manager;
recoup any funds from or charge any fees to a pharmacy or pharmacist for a prescription with regard to an incorrect days of supply calculation if the package size of the medication is unbreakable and the pharmacy benefits manager cannot accept the correct mathematically calculable days’ supply during prescription adjudication;
have or request access to a pharmacy’s or pharmacist’s bank, credit card, or depository statements or data as it relates to cost–sharing; or
audit claims that were reversed or for which there was no remuneration by the purchaser or cost to the pharmacy customer except if necessary to evaluate compliance to a contract.
Paragraph (1)(ii) of this subsection does not apply to the sharing of information:
required by federal or State law;
in connection with an acquisition or merger involving the pharmacy benefits manager; or
at the payor’s request or under the terms of the agreement between the pharmacy benefits manager and the payor.
A pharmacy benefits manager or purchaser may not audit more than 125 prescriptions during a desk or site audit.
The recoupment of a claims payment from a pharmacy or pharmacist by a pharmacy benefits manager shall be based on an actual overpayment or denial of an audited claim unless the projected overpayment or denial is part of a settlement agreed to by the pharmacy or pharmacist.
In this subsection, “overpayment” means a payment by the pharmacy benefits manager to a pharmacy or pharmacist that is greater than the rate or terms specified in the contract between the pharmacy or pharmacist and the pharmacy benefits manager at the time that the payment is made.
A clerical error, record–keeping error, typographical error, or scrivener’s error in a required document or record may not constitute fraud or grounds for recoupment of a claims payment from a pharmacy or pharmacist by a pharmacy benefits manager if the prescription was otherwise legally dispensed and the claim was otherwise materially correct.
Notwithstanding paragraph (2) of this subsection, claims remain subject to recoupment of overpayment or payment of any discovered underpayment by the pharmacy benefits manager.
A pharmacy benefits manager shall establish an internal appeals process under which a pharmacy or pharmacist may appeal any disputed claim in a preliminary audit report.
Under the internal appeals process, a pharmacy benefits manager shall allow a pharmacy or pharmacist to request an internal appeal within 30 working days after receipt of the preliminary audit report, with reasonable extensions allowed.
The pharmacy benefits manager shall include in its preliminary audit report a written explanation of the internal appeals process, including the name, address, and telephone number of the person to whom an internal appeal should be addressed.
The decision of the pharmacy benefits manager on an appeal of a disputed claim in a preliminary audit report by a pharmacy or pharmacist shall be reflected in the final audit report.
The pharmacy benefits manager shall deliver the final audit report to the pharmacy or pharmacist within 30 calendar days after conclusion of the internal appeals process.
A pharmacy benefits manager may not recoup by setoff any money for an overpayment or denial of a claim until:
the pharmacy or pharmacist has an opportunity to review the pharmacy benefits manager’s findings; and
if the pharmacy or pharmacist concurs with the pharmacy benefits manager’s findings of overpayment or denial, 30 working days have elapsed after the date the final audit report has been delivered to the pharmacy or pharmacist.
If the pharmacy or pharmacist does not concur with the pharmacy benefits manager’s findings of overpayment or denial, the pharmacy benefits manager may not recoup by setoff any money pending the outcome of an appeal under subsection (m) of this section.
A pharmacy benefits manager shall remit any money due to a pharmacy or pharmacist as a result of an underpayment of a claim within 30 working days after the final audit report has been delivered to the pharmacy or pharmacist.
Notwithstanding the provisions of paragraph (1) of this subsection, a pharmacy benefits manager may withhold future payments before the date the final audit report has been delivered to the pharmacy or pharmacist if the identified discrepancy for all disputed claims in a preliminary audit report for an individual audit exceeds $25,000.
A pharmacy benefits manager shall provide a pharmacy or pharmacist being audited with a phone number and, if available, access to a secure portal that the pharmacy or pharmacist may use to ask questions regarding the audit.
An individual who is familiar with the audit shall respond to all inquiries made through a phone number or secure portal provided under paragraph (1) of this subsection within 3 business days after the inquiry was made.
The pharmacy benefits manager shall give the pharmacy or pharmacist the option to provide requested audit documentation by postal mail, e–mail, or facsimile.
If a document is requested regarding an audit, the pharmacy benefits manager shall provide a secure facsimile number and a mechanism for receiving secure e–mails.
On or before October 1, 2025, a pharmacy benefits manager shall provide a mechanism for secure electronic communication for pharmacies and pharmacists to communicate with and submit documents to the auditing entity.
The Commissioner may adopt regulations regarding:
the documentation that may be requested during an audit; and
the process a pharmacy benefits manager may use to conduct an audit.
On request of the Commissioner or the Commissioner’s designee, a pharmacy benefits manager shall provide a copy of its audit procedures or internal appeals process.
This section applies only to a pharmacy benefits manager that provides pharmacy benefits management services on behalf of a carrier.
A pharmacy benefits manager shall establish a reasonable internal review process for a pharmacy to request the review of a failure to pay the contractual reimbursement amount of a submitted claim.
A pharmacy may request a pharmacy benefits manager to review a failure to pay the contractual reimbursement amount of a claim within 180 calendar days after the date the submitted claim was paid by the pharmacy benefits manager.
The pharmacy benefits manager shall give written notice of its review decision within 90 calendar days after receipt of a request for review from a pharmacy under this section.
If the pharmacy benefits manager determines through the internal review process established under subsection (b) of this section that the pharmacy benefits manager underpaid a pharmacy, the pharmacy benefits manager shall pay any money due to the pharmacy within 30 working days after completion of the internal review process.
This section may not be construed to limit the ability of a pharmacy and a pharmacy benefits manager to contractually agree that a pharmacy may have more than 180 calendar days to request an internal review of a failure of the pharmacy benefits manager to pay the contractual amount of a submitted claim.
Except for an overpayment as defined in § 15–1629(h) of this subtitle, if a claim has been approved by a pharmacy benefits manager through adjudication, the pharmacy benefits manager may not retroactively deny or modify reimbursement to a pharmacy or pharmacist for the approved claim unless:
the claim was fraudulent;
the pharmacy or pharmacist had been reimbursed for the claim previously; or
the services reimbursed were not rendered by the pharmacy or pharmacist.
The provisions of §§ 15–1633.1 through 15–1639 of this subtitle apply only to a pharmacy benefits manager performing pharmacy benefits management services on behalf of a carrier.
A pharmacy benefits manager or its agent may not request a therapeutic interchange unless:
the proposed therapeutic interchange is for medical reasons that benefit the beneficiary; or
the proposed therapeutic interchange will result in financial savings and benefits to the purchaser or the beneficiary.
Before making a therapeutic interchange, a pharmacy benefits manager or its agent shall obtain authorization from a prescriber or an individual authorized by the prescriber.
In any therapeutic interchange solicitation, the following shall be disclosed to the prescriber:
that a therapeutic interchange is being solicited;
the circumstances under which the originally prescribed drug will be covered by the purchaser;
the difference in copayments or coinsurance to be paid by the beneficiary to obtain the proposed drug;
the circumstances and extent to which health care costs related to the therapeutic interchange will be compensated; and
any clinically significant differences, as determined by a pharmacy and therapeutics committee of the pharmacy benefits manager, with respect to efficacy, side effects, and potential impact on health and safety.
When soliciting a therapeutic interchange from a prescriber, a pharmacy benefits manager or its agent may not make a claim that the therapeutic interchange will save the purchaser money unless the claim can be substantiated.
If the pharmacy benefits manager or its agent receives payment for making a therapeutic interchange from a pharmaceutical manufacturer or other person, including the pharmacy benefits manager, that is not reflected in cost savings to the purchaser, the existence of the payment shall be communicated to the prescriber at the time of the therapeutic interchange solicitation.
If a therapeutic interchange occurs, the pharmacy benefits manager or its agent shall:
disclose to the beneficiary, orally or in writing:
that the pharmacy benefits manager or its agent requested a therapeutic interchange by contacting the beneficiary’s prescriber;
the prescriber approved the therapeutic interchange;
the names of the originally prescribed drug and the drug dispensed pursuant to the therapeutic interchange;
the difference in copayments or coinsurance to be paid by the beneficiary to obtain the drug dispensed pursuant to the therapeutic interchange;
the circumstances under which the originally prescribed drug will be covered;
the circumstances under and the extent to which health care costs related to the therapeutic interchange will be compensated; and
that the beneficiary may decline the therapeutic interchange if the originally prescribed drug remains on the beneficiary’s formulary, and the beneficiary is willing to pay any difference in the copayment or coinsurance; and
include with the prescription drug dispensed:
a patient package insert about potential side effects; and
a toll–free telephone number to communicate with the pharmacy benefits manager.
A pharmacy benefits manager or its agent shall cancel and reverse a therapeutic interchange on written or verbal instructions from a prescriber, the beneficiary, or the beneficiary’s representative.
If a therapeutic interchange is reversed, the pharmacy benefits manager or its agent shall:
obtain a prescription for and dispense the originally prescribed prescription drug; and
charge the beneficiary no more than one copayment.
If the therapeutic interchange occurred through a mail order pharmacy and a beneficiary will exhaust an existing supply of the originally prescribed prescription drug before a replacement shipment will arrive to the beneficiary, the pharmacy benefits manager or its agent shall arrange for dispensing of an appropriate quantity of replacement prescription drugs at a local community pharmacy at no additional cost to the beneficiary.
A pharmacy benefits manager or its agent may not be required to cancel and reverse a therapeutic interchange if a beneficiary is unwilling to pay a higher copayment or coinsurance associated with the originally prescribed prescription drug.
A pharmacy benefits manager shall maintain a toll–free telephone number Monday through Saturday for prescribers, pharmacies, pharmacists, and beneficiaries to request information regarding a therapeutic interchange.
The toll–free telephone number shall be accessible from 8 a.m. until at least 8 p.m. Eastern Standard Time.
All disclosures made under this part shall comply with the privacy standards set forth in State and federal law.
A pharmacy benefits manager shall establish appropriate policies and procedures to implement the requirements of this part.
It is a violation of this subtitle for a pharmacy benefits manager to:
misrepresent pertinent facts or policy provisions that relate to a claim or the compensation program at issue in a complaint or an appeal of a decision regarding a complaint;
refuse to pay a claim for an arbitrary or capricious reason based on all available information;
fail to settle a claim or dispute promptly whenever liability is reasonably clear under one part of a policy or contract, in order to influence settlements under other parts of the policy or contract; or
fail to act in good faith.
It is a violation of this subtitle for a pharmacy benefits manager, when committed at a frequency to indicate a general business practice, to:
misrepresent pertinent facts or policy provisions that relate to a claim, the compensation program, or the coverage at issue in a complaint or an appeal of a decision regarding a complaint;
fail to make a prompt, fair, and equitable good–faith attempt to settle claims for which liability has become reasonably clear;
fail to settle a claim promptly whenever liability is reasonably clear under one part of a policy or contract, in order to influence settlements under other parts of the policy or contract; or
refuse to pay a claim for an arbitrary or capricious reason based on all available information.
If the Commissioner determines that a pharmacy benefits manager has violated any provision of this subtitle or any regulation adopted under this subtitle, the Commissioner may issue an order that requires the pharmacy benefits manager to:
cease and desist from the identified violation and further similar violations;
take specific affirmative action to correct the violation;
make restitution of money, property, or other assets to a person that has suffered financial injury because of the violation; or
pay a fine in an amount determined by the Commissioner.
An order of the Commissioner issued under this section may be served on a pharmacy benefits manager that is registered under Part II of this subtitle in the manner provided in § 2–204 of this article.
An order of the Commissioner issued under this section may be served on a pharmacy benefits manager that is not registered under Part II of this subtitle in the manner provided in § 4–206 or § 4–207 of this article for service on an unauthorized insurer that does an act of insurance business in the State.
A request for a hearing on any order issued under this section does not stay that portion of the order that requires the pharmacy benefits manager to cease and desist from conduct identified in the order.
The Commissioner may file a petition in the circuit court of any county to enforce an order issued under this section, whether or not a hearing has been requested or, if requested, whether or not a hearing has been held.
If the Commissioner prevails in an action brought under this section, the Commissioner may recover, for the use of the State, reasonable attorney’s fees and the costs of the action.
In addition to any other enforcement action taken by the Commissioner under this section, the Commissioner may impose a civil penalty not exceeding $10,000 for each violation of this subtitle.
The Commissioner may adopt regulations:
to carry out this subtitle; and
to establish a complaint process to address grievances and appeals brought in accordance with this subtitle.
This section does not limit any other regulatory authority of the Commissioner under this article.