NY State Senate Bill 2013-S3995B

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 30, 2014	print number 3995b
Apr 30, 2014	amend and recommit to insurance
Jan 08, 2014	referred to insurance
Jun 17, 2013	print number 3995a
Jun 17, 2013	amend and recommit to insurance
Mar 04, 2013	referred to insurance

Bill Amendments

Original

B (Active)

co-Sponsors

View additional co-sponsors

2013-S3995 - Details

See Assembly Version of this Bill:: A5723
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3216, 3221 & 4303, Ins L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S2530, A6194
2017-2018: S1743, A3119
2019-2020: S4463, A3043
2021-2022: S3566, A5854

2013-S3995 - Summary

Relates to the purchase of prescription drugs.

2013-S3995 - Sponsor Memo

                                BILL NUMBER:S3995

TITLE OF BILL:  An act to amend the insurance law, in relation to the
purchase of prescription drugs

PURPOSE OR GENERAL IDEA OF BILL: To clarify and strengthen provisions
in current law to ensure that consumers have the option to access
every covered medication from a local network participating, pharmacy
and are not forced into mandatory mail order

SUMMARY OF SPECIFIC PROVISIONS: Section One of the bill provides
definitions. "Same Reimbursement Amount" is defined as the same
benchmark index, the same 'maximum allowable cost' and the same
'national drug code', very specific terms that have meaning in the
prescription market. This section also requires pharmacy benefit
managers that own mail order pharmacies to fully disclose to plan
sponsors the portion of pharmaceutical manufacturer rebates retained
by the manager or shared with the sponsor as well as any other income
from other sources in the context of the agreement between the benefit
manager and the plan sponsor. "Mail order pharmacy" is defined as any
pharmacy whose primary business is to receive prescriptions by mail,
telefax or electronically and to deliver medications through the US
mail or common carriers.

Section Two amends Paragraph 18 of subsection (1) of section 3221 of
the insurance law to remove provisions in current law that have served

to impose extra requirements on network community pharmacies as a
precondition for providing certain covered medications otherwise
available by mail order. Specifically, this section removes 'terms and
conditions' and 'in advance through a contractual network agreement'.

Section Three amends Subsection (hh) of section 4303 of the insurance
law to remove provisions in current law that have served to impose
extra requirements on network community pharmacies as a precondition
for providing certain covered medications otherwise available by mail
order. Specifically, this section removes 'terms and conditions' and
'in advance through a contractual network agreement'.

Section Four is the effective date of the bill.

JUSTIFICATION: In January, 2012 the current provisions of State
Insurance Law took effect guaranteeing that consumers would always
have the choice of obtaining covered prescription drugs from a local
network participating pharmacy.

Over the course of the year, however, it became clear that the law was
not working as intended. Consumers received letters from pharmacy
benefit managers directing them to out-of-state "specialty"
pharmacies. Consumers returning to their local participating pharmacy
could no longer obtain their prescription drugs there because the
claim was blocked. The pharmacy was notified that coverage for that
medication was no longer covered in the 'retail' pharmacy network.
The patient was to be directed to the 'specialty' pharmacy. Contrary
to the intent of the law, beneficiaries were being forced into
mandatory mail order programs on the basis of the medications they
were prescribed. Local pharmacies otherwise in the network were not in
the new 'restricted' network. Pharmacy benefit managers were steering


prescription volume out of their network pharmacies into their wholly
owned pharmacy subsidiaries.

Community pharmacy owners took action. They contacted plan sponsors
and pharmacy benefit managers asking for contracts that would allow
them to continue to dispense covered medications available to them
from their wholesalers. The phone calls, letters and e-mails that
followed document that large pharmacy benefit managers were using
"terms and conditions" as a legal roadblock against community
pharmacies. These include unreasonable and onerous 'terms' such as
costly accreditations, on-call 24-hour nursing services and excessive
liability insurance demands. Some threatened to exclude community
pharmacies from the 'retail' network in order to be enrolled as a
'mail order' pharmacy. For these reasons, it is necessary to remove
"terms and conditions" from current law.

The terms 'in advance through a contractual network agreement' have
served as another barrier to the parity between mail order and
community pharmacies envisioned in the original law. A close reading
of the law allows a local network pharmacy to agree to accept the same
reimbursement amount, but nothing in the law requires the pharmacy
benefit manager to grant the participating, community pharmacy an
additional contract to meet the mail order reimbursement price. The
present statute must be amended to resolve this contradiction and
restore original legislative intent.

The amendments proposed are reasonable and fair. Defining 'mail order'
is necessary so that its meaning, cannot be manipulated by
self-promoting pharmacy benefit managers.

Defining reimbursement in terms that have meaning in the prescription
marketplace grounds this legislation in the real world and gives
health plans the tools to accurately monitor the policies and
performance of the pharmacy benefit managers in the context of
contracted services. It is important to note that the bill adds
disclosure requirements to those pharmacy benefit managers which own
pharmacies. The required disclosure of rebates and 'direct or indirect
remuneration' to plan sponsors is an important safeguard in this bill.
The corporation, acting as a benefit manager, has access to claims
data that it can then use to its advantage to steer prescription
volume to its own subsidiary pharmacy or pharmacies. The data itself
can be valuable. Plan sponsors should be aware of revenues generated
by a third party from information about its enrollees.

LEGISLATIVE HISTORY: New Legislation

FISCAL IMPLICATIONS: None

EFFECTIVE DATE: This act shall take effect immediately.

2013-S3995 - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3995

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              March 4, 2013
                               ___________

Introduced  by  Sen. MAZIARZ -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance  law,  in  relation  to  the  purchase  of
  prescription drugs

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 28 of subsection  (i)  of  section  3216  of  the
insurance  law, as amended by chapter 11 of the laws of 2012, is amended
to read as follows:
  (28) (A) DEFINITIONS. FOR THE PURPOSE OF THIS PARAGRAPH:
  (1) "SAME REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY  PHARMACY  BENEFIT
MANAGER UNDER CONTRACT TO A HEALTH PLAN OR UNDER THE CONTROL OF A HEALTH
PLAN  SHALL UTILIZE THE SAME BENCHMARK INDEX, INCLUDING THE SAME AVERAGE
WHOLESALE PRICE, MAXIMUM ALLOWABLE COST AND NATIONAL  PRESCRIPTION  DRUG
CODES  TO  REIMBURSE  ALL PHARMACIES PARTICIPATING IN THE HEALTH BENEFIT
PLAN REGARDLESS OF WHETHER A PHARMACY IS A  MAIL  ORDER  PHARMACY  OR  A
COMMUNITY  PHARMACY.  FURTHERMORE,  THE  PHARMACY  BENEFIT MANAGER SHALL
EXPRESSLY DISCLOSE TO THE HEALTH PLAN SPONSOR IN  THE  CONTRACT  IF  THE
PHARMACY  BENEFIT  MANAGER  RETAINS  ALL  OR A GREATER PORTION OF A DRUG
MANUFACTURER'S REBATE AMOUNT OR ANY ADDITIONAL DIRECT OR INDIRECT REMUN-
ERATION FROM ANY THIRD PARTY, FOR DRUGS DISPENSED THROUGH  THE  PHARMACY
BENEFIT MANAGER OWNED MAIL ORDER PHARMACY THAN THOSE DISPENSED THROUGH A
RETAIL PHARMACY.
  (2)  "MAIL  ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY BUSINESS IS
TO  RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH   ELECTRONIC
SUBMISSIONS  AND  TO  DISPENSE MEDICATION TO PATIENTS THROUGH THE USE OF
THE UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES  AND
PROVIDES  ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER THAN
FACE-TO-FACE.
  (B) Any policy that provides coverage  for  prescription  drugs  shall
permit  each  insured  to  fill  any  covered  prescription  that may be

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09462-01-3

S. 3995                             2

obtained at a network participating mail order or other non-retail phar-
macy, at the insured's option, at a network participating non-mail order
retail pharmacy provided that the network participating  non-mail  order
retail pharmacy agrees [in advance, through a contractual network agree-
ment,] to the same reimbursement amount[, as well as the same applicable
terms  and conditions,] that the insurer has established for the network
participating mail order or other non-retail pharmacy. In such  a  case,
the  policy  shall not impose a co-payment fee or other condition on any
insured who elects to purchase prescription drugs from a network partic-
ipating non-mail order retail pharmacy which  is  not  also  imposed  on
insureds  electing  to  purchase drugs from a network participating mail
order or other non-retail pharmacy.
  S 2. Paragraph 18 of subsection (1) of section 3221 of  the  insurance
law, as amended by chapter 11 of the laws of 2012, is amended to read as
follows:
  (18) (A) DEFINITIONS. FOR THE PURPOSE OF THIS PARAGRAPH:
  (1)  "SAME  REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY PHARMACY BENEFIT
MANAGER UNDER CONTRACT TO A HEALTH PLAN OR UNDER THE CONTROL OF A HEALTH
PLAN SHALL UTILIZE THE SAME BENCHMARK INDEX, INCLUDING THE SAME  AVERAGE
WHOLESALE  PRICE,  MAXIMUM ALLOWABLE COST AND NATIONAL PRESCRIPTION DRUG
CODES TO REIMBURSE ALL PHARMACIES PARTICIPATING IN  THE  HEALTH  BENEFIT
PLAN  REGARDLESS  OF  WHETHER  A  PHARMACY IS A MAIL ORDER PHARMACY OR A
COMMUNITY PHARMACY. FURTHERMORE,  THE  PHARMACY  BENEFIT  MANAGER  SHALL
EXPRESSLY  DISCLOSE  TO  THE  HEALTH PLAN SPONSOR IN THE CONTRACT IF THE
PHARMACY BENEFIT MANAGER RETAINS ALL OR A  GREATER  PORTION  OF  A  DRUG
MANUFACTURER'S REBATE AMOUNT OR ANY ADDITIONAL DIRECT OR INDIRECT REMUN-
ERATION  FROM  ANY THIRD PARTY, FOR DRUGS DISPENSED THROUGH THE PHARMACY
BENEFIT MANAGER OWNED MAIL ORDER PHARMACY THAN THOSE DISPENSED THROUGH A
RETAIL PHARMACY.
  (2) "MAIL ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY  BUSINESS  IS
TO   RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH  ELECTRONIC
SUBMISSIONS AND TO DISPENSE MEDICATION TO PATIENTS THROUGH  THE  USE  OF
THE  UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES AND
PROVIDES ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER  THAN
FACE-TO-FACE.
  (B)  Any  insurer  delivering  a  group or blanket policy or issuing a
group or blanket policy for delivery in this state that provides  cover-
age for prescription drugs shall permit each insured to fill any covered
prescription  that may be obtained at a network participating mail order
or other non-retail pharmacy, at the  insured's  option,  at  a  network
participating  non-mail  order retail pharmacy provided that the network
participating non-mail order retail pharmacy agrees [in advance, through
a contractual network agreement,] to the same reimbursement amount[,  as
well  as the same applicable terms and conditions,] that the insurer has
established for the network participating mail order or other non-retail
pharmacy. In such a case, the policy shall not impose a  co-payment  fee
or  other  condition  on any insured who elects to purchase drugs from a
network participating non-mail order retail pharmacy which is  not  also
imposed  on  insureds  electing to purchase drugs from a network partic-
ipating mail order or other non-retail pharmacy; provided, however, that
the provisions of this section  shall  not  supersede  the  terms  of  a
collective  bargaining agreement or apply to a policy that is the result
of a collective bargaining agreement between an employer  and  a  recog-
nized or certified employee organization.
  S  3. Subsection (hh) of section 4303 of the insurance law, as amended
by chapter 11 of the laws of 2012, is amended to read as follows:

S. 3995                             3

  (hh) (1) DEFINITIONS. FOR THE PURPOSE OF THIS SUBSECTION:
  (A)  "SAME  REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY PHARMACY BENEFIT
MANAGER UNDER CONTRACT TO A HEALTH PLAN OR UNDER THE CONTROL OF A HEALTH
PLAN SHALL UTILIZE THE SAME BENCHMARK INDEX, INCLUDING THE SAME  AVERAGE
WHOLESALE  PRICE,  MAXIMUM ALLOWABLE COST AND NATIONAL PRESCRIPTION DRUG
CODES TO REIMBURSE ALL PHARMACIES PARTICIPATING IN  THE  HEALTH  BENEFIT
PLAN  REGARDLESS  OF  WHETHER  A  PHARMACY IS A MAIL ORDER PHARMACY OR A
COMMUNITY PHARMACY. FURTHERMORE,  THE  PHARMACY  BENEFIT  MANAGER  SHALL
EXPRESSLY  DISCLOSE  TO  THE  HEALTH PLAN SPONSOR IN THE CONTRACT IF THE
PHARMACY BENEFIT MANAGER RETAINS ALL OR A  GREATER  PORTION  OF  A  DRUG
MANUFACTURER'S REBATE AMOUNT OR ANY ADDITIONAL DIRECT OR INDIRECT REMUN-
ERATION  FROM  ANY THIRD PARTY, FOR DRUGS DISPENSED THROUGH THE PHARMACY
BENEFIT MANAGER OWNED MAIL ORDER PHARMACY THAN THOSE DISPENSED THROUGH A
RETAIL PHARMACY.
  (B) "MAIL ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY  BUSINESS  IS
TO   RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH  ELECTRONIC
SUBMISSIONS AND TO DISPENSE MEDICATION TO PATIENTS THROUGH  THE  USE  OF
THE  UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES AND
PROVIDES ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER  THAN
FACE-TO-FACE.
  (2)  Any contract issued by a medical expense indemnity corporation, a
hospital service corporation  or  a  health  services  corporation  that
provides  coverage  for  prescription  drugs  shall  permit each covered
person to fill any covered  prescription  that  may  be  obtained  at  a
network  participating  mail  order or other non-retail pharmacy, at the
covered person's option,  at  a  network  participating  non-mail  order
retail  pharmacy  provided that the network participating non-mail order
retail pharmacy agrees [in advance, through a contractual network agree-
ment,] to the same reimbursement amount[, as well as the same applicable
terms and conditions,] that the  corporation  has  established  for  the
network  participating mail order or other non-retail pharmacy.  In such
a case, the contract shall not impose a copayment fee or other condition
on any covered person who  elects  to  purchase  drugs  from  a  network
participating  non-mail  order retail pharmacy which is not also imposed
on covered persons electing to purchase drugs from a network participat-
ing mail order or other non-retail pharmacy; provided, however, that the
provisions of this section shall not supersede the terms of a collective
bargaining agreement or apply to a contract that  is  the  result  of  a
collective  bargaining agreement between an employer and a recognized or
certified employee organization.
  S 4. This act shall take effect immediately.

co-Sponsors

View additional co-sponsors

2013-S3995A - Details

See Assembly Version of this Bill:: A5723
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3216, 3221 & 4303, Ins L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S2530, A6194
2017-2018: S1743, A3119
2019-2020: S4463, A3043
2021-2022: S3566, A5854

2013-S3995A - Summary

Relates to the purchase of prescription drugs.

2013-S3995A - Sponsor Memo

                                BILL NUMBER:S3995A

TITLE OF BILL:  An act to amend the insurance law, in relation to the
purchase of prescription drugs

PURPOSE OR GENERAL IDEA OF BILL: To clarify and strengthen provisions
in current law to ensure that consumers have the option to access
every covered medication from a local network participating pharmacy
and are not forced into mandatory mail order.

SUMMARY OF SPECIFIC PROVISIONS: Section One of the bill provides
definitions. "Same Reimbursement Amount" is defined as :he same
benchmark index, the same Maximum allowable cost' and the same
'national drum code', very specific terms that have meaning in the
prescription market. "Mail order pharmacy" is defined as any pharmacy
whose primary business is to receive prescriptions by mail, telefax or
electronically and to deliver medications through the US mail or
common carriers.

Section Two amends Paragraph 28 of subsection (i) of section 3216 of
the insurance law to remove provisions in current law that have served
to impose extra requirements on network community pharmacies as a
precondition for providing certain covered medications otherwise
available by mail order. Specifically, this section removes 'terms and
conditions' and 'in advance through a contractual network agreement'.

Section Three amends Paragraph 18 of subsection (1) of section 3221 of
the insurance law to remove provisions in current law that have served
to impose extra requirements on network community pharmacies as a
precondition for providing certain covered medications otherwise
available by mail order. Specifically, this section removes 'terms and
conditions' and 'in advance through a contractual network agreement'.

Section Four amends Subsection (hh) of section 4303 of the insurance
law to remove provisions in current law that have served to impose
extra requirements on network community pharmacies-as a precondition
for providing certain covered medications otherwise available by mail
order. Specifically, this section removes 'terms and conditions' and
'in advance through a contractual network agreement'.

Section Five is the effective date of the bill.

JUSTIFICATION: In January, 2012 the current provisions of State
Insurance Law took effect guaranteeing that consumers would always
have the choice of obtaining covered prescription drugs from a local
network participating pharmacy.

Over the course of the year, however, it became clear that the law was
not working as intended. Consumers received letters from pharmacy
benefit managers directing them to out-of-state "specialty"
pharmacies. Consumers returning to their local participating pharmacy
could no longer obtain their prescription drugs there because the
claim was blocked. The pharmacy was notified that coverage for that
medication was no longer covered in the 'retail' pharmacy network.
The patient was to be directed to the 'specialty' pharmacy.


Contrary to the intent of the law, beneficiaries were being forced
into mandatory mail order programs on the basis of the medications
they ware prescribed. Local pharmacies otherwise in the network were
not in the new 'restricted' network. Pharmacy benefit managers were
steering prescription volume out of their network pharmacies into
their wholly owned pharmacy subsidiaries.

Community pharmacy owners took action, They contacted plan sponsors
and pharmacy benefit managers asking for contracts that would allow
them to continue to dispense covered medications available to them
from their wholesalers. The phone calls, letters and e-mails that
followed document that large pharmacy benefit managers were using
"terms and conditions" as a legal roadblock against community
pharmacies. These include unreasonable and onerous 'terms' such as
costly accreditations, on-call 24-hour nursing services and excessive
liability insurance demands. Some threatened to exclude community
pharmacies from the 'retail network in order to be enrolled as a 'mail
order' pharmacy. For these reasons, it is necessary to remove "terms
and conditions" from current law.

The terms 'in advance through a contractual network agreement have
served as another to the parity between mail order and community
Pharmacies envisioned in the original law. A close reading of the law
allows a local network pharmacy to agree to accept the same
reimbursement amount, but nothing in the law requires the pharmacy
benefit manager to grant the participating community pharmacy an
additional contract to meet the mail order reimbursement price. The
present statute must be amended to resolve this contradiction and
restore original legislative intent.  The amendments proposed are
reasonable and fair,. Defining 'mail order' is necessary so that its
meaning cannot be manipulated by self-promoting pharmacy benefit
managers.

LEGISLATIVE HISTORY:  New Legislation

FISCAL IMPLICATIONS:  None

EFFECTIVE DATE:  This act shall take effect immediately,

2013-S3995A - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3995--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              March 4, 2013
                               ___________

Introduced by Sens. MAZIARZ, ADDABBO, AVELLA, ESPAILLAT, GOLDEN, GRISAN-
  TI,  HOYLMAN,  LANZA,  LARKIN, LATIMER, MARTINS, PERALTA, RANZENHOFER,
  SAMPSON, SMITH, STAVISKY -- read twice and ordered printed,  and  when
  printed  to  be  committed  to the Committee on Insurance -- committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN ACT to amend the insurance  law,  in  relation  to  the  purchase  of
  prescription drugs

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 28 of subsection  (i)  of  section  3216  of  the
insurance  law, as amended by chapter 11 of the laws of 2012, is amended
to read as follows:
  (28) (A) DEFINITIONS. FOR THE PURPOSE OF THIS PARAGRAPH:
  (1) "SAME REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY COVERAGE DESCRIBED
UNDER SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL PROVIDE THE  SAME  BENCH-
MARK  INDEX,  INCLUDING THE SAME AVERAGE WHOLESALE PRICE, MAXIMUM ALLOW-
ABLE COST AND NATIONAL PRESCRIPTION DRUG CODES TO REIMBURSE ALL  PHARMA-
CIES  PARTICIPATING  IN  THE  INSURANCE  NETWORK REGARDLESS OF WHETHER A
PHARMACY IS A MAIL ORDER PHARMACY OR A NON-MAIL ORDER PHARMACY.
  (2) "MAIL ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY  BUSINESS  IS
TO   RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH  ELECTRONIC
SUBMISSIONS AND TO DISPENSE MEDICATION TO PATIENTS THROUGH  THE  USE  OF
THE  UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES AND
PROVIDES ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER  THAN
FACE-TO-FACE.
  (B)  Any  policy  that  provides coverage for prescription drugs shall
permit each insured  to  fill  any  covered  prescription  that  may  be
obtained at a network participating mail order or other non-retail phar-
macy, at the insured's option, at a network participating non-mail order
retail  pharmacy  provided that the network participating non-mail order

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09462-05-3

S. 3995--A                          2

retail pharmacy agrees [in advance, through a contractual network agree-
ment,] to the same reimbursement amount[, as well as the same applicable
terms and conditions,] that the insurer has established for the  network
participating  mail  order or other non-retail pharmacy. In such a case,
the policy shall not impose a co-payment fee or other condition  on  any
insured who elects to purchase prescription drugs from a network partic-
ipating  non-mail  order  retail  pharmacy  which is not also imposed on
insureds electing to purchase drugs from a  network  participating  mail
order or other non-retail pharmacy.
  S  2.  Paragraph 18 of subsection (1) of section 3221 of the insurance
law, as amended by chapter 11 of the laws of 2012, is amended to read as
follows:
  (18) (A) DEFINITIONS. FOR THE PURPOSE OF THIS PARAGRAPH:
  (1) "SAME REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY COVERAGE DESCRIBED
UNDER SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL PROVIDE THE  SAME  BENCH-
MARK  INDEX,  INCLUDING THE SAME AVERAGE WHOLESALE PRICE, MAXIMUM ALLOW-
ABLE COST AND NATIONAL PRESCRIPTION DRUG CODES TO REIMBURSE ALL  PHARMA-
CIES  PARTICIPATING  IN  THE  INSURANCE  NETWORK REGARDLESS OF WHETHER A
PHARMACY IS A MAIL ORDER PHARMACY OR A NON-MAIL ORDER PHARMACY.
  (2) "MAIL ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY  BUSINESS  IS
TO   RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH  ELECTRONIC
SUBMISSIONS AND TO DISPENSE MEDICATION TO PATIENTS THROUGH  THE  USE  OF
THE  UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES AND
PROVIDES ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER  THAN
FACE-TO-FACE.
  (B)  Any  insurer  delivering  a  group or blanket policy or issuing a
group or blanket policy for delivery in this state that provides  cover-
age for prescription drugs shall permit each insured to fill any covered
prescription  that may be obtained at a network participating mail order
or other non-retail pharmacy, at the  insured's  option,  at  a  network
participating  non-mail  order retail pharmacy provided that the network
participating non-mail order retail pharmacy agrees [in advance, through
a contractual network agreement,] to the same reimbursement amount[,  as
well  as the same applicable terms and conditions,] that the insurer has
established for the network participating mail order or other non-retail
pharmacy. In such a case, the policy shall not impose a  co-payment  fee
or  other  condition  on any insured who elects to purchase drugs from a
network participating non-mail order retail pharmacy which is  not  also
imposed  on  insureds  electing to purchase drugs from a network partic-
ipating mail order or other non-retail pharmacy; provided, however, that
the provisions of this section  shall  not  supersede  the  terms  of  a
collective  bargaining agreement or apply to a policy that is the result
of a collective bargaining agreement between an employer  and  a  recog-
nized or certified employee organization.
  S  3. Subsection (hh) of section 4303 of the insurance law, as amended
by chapter 11 of the laws of 2012, is amended to read as follows:
  (hh) (1) DEFINITIONS. FOR THE PURPOSE OF THIS SUBSECTION:
  (A) "SAME REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY COVERAGE DESCRIBED
UNDER PARAGRAPH TWO OF THIS SUBSECTION SHALL PROVIDE THE SAME  BENCHMARK
INDEX,  INCLUDING  THE  SAME  AVERAGE WHOLESALE PRICE, MAXIMUM ALLOWABLE
COST AND NATIONAL PRESCRIPTION DRUG CODES TO  REIMBURSE  ALL  PHARMACIES
PARTICIPATING IN THE HEALTH BENEFIT PLAN REGARDLESS OF WHETHER A PHARMA-
CY IS A MAIL ORDER PHARMACY OR A NON-MAIL ORDER PHARMACY.
  (B)  "MAIL  ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY BUSINESS IS
TO  RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH   ELECTRONIC
SUBMISSIONS  AND  TO  DISPENSE MEDICATION TO PATIENTS THROUGH THE USE OF

S. 3995--A                          3

THE UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES  AND
PROVIDES  ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER THAN
FACE-TO-FACE.
  (2)  Any contract issued by a medical expense indemnity corporation, a
hospital service corporation  or  a  health  services  corporation  that
provides  coverage  for  prescription  drugs  shall  permit each covered
person to fill any covered  prescription  that  may  be  obtained  at  a
network  participating  mail  order or other non-retail pharmacy, at the
covered person's option,  at  a  network  participating  non-mail  order
retail  pharmacy  provided that the network participating non-mail order
retail pharmacy agrees [in advance, through a contractual network agree-
ment,] to the same reimbursement amount[, as well as the same applicable
terms and conditions,] that the  corporation  has  established  for  the
network  participating mail order or other non-retail pharmacy.  In such
a case, the contract shall not impose a copayment fee or other condition
on any covered person who  elects  to  purchase  drugs  from  a  network
participating  non-mail  order retail pharmacy which is not also imposed
on covered persons electing to purchase drugs from a network participat-
ing mail order or other non-retail pharmacy; provided, however, that the
provisions of this section shall not supersede the terms of a collective
bargaining agreement or apply to a contract that  is  the  result  of  a
collective  bargaining agreement between an employer and a recognized or
certified employee organization.
  S 4. This act shall take effect immediately.

co-Sponsors

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2013-S3995B (ACTIVE) - Details

See Assembly Version of this Bill:: A5723
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3216, 3221 & 4303, Ins L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S2530, A6194
2017-2018: S1743, A3119
2019-2020: S4463, A3043
2021-2022: S3566, A5854

2013-S3995B (ACTIVE) - Summary

Relates to the purchase of prescription drugs.

2013-S3995B (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S3995B

TITLE OF BILL:  An act to amend the insurance law, in relation to the
purchase of prescription drugs

PURPOSE OR GENERAL IDEA OF BILL:

To clarify and strengthen provisions in current law to ensure that
consumers have the option to access every covered medication from a
local network participating pharmacy and are not forced into mandatory
mail order.

SUMMARY OF SPECIFIC PROVISIONS:

Section One of the bill provides definitions. "Same Reimbursement
Amount" is defined as the same benchmark index, the same 'Maximum
allowable cost' and the same 'national drum code', very specific terms
that have meaning in the prescription market. "Mail order pharmacy" is
defined as any pharmacy whose primary business is to receive
prescriptions by mail, telefax or electronically and to deliver
medications through the US mail or common carriers.

Amends Paragraph 28 of subsection (i) of section 3216 of the insurance
law to remove provisions in current law that have served to impose
extra requirements on network community pharmacies as a precondition
for providing certain covered medications otherwise available by mail

order. Specifically, this section removes 'terms and conditions' and
'in advance through a contractual network agreement'.

Section Two amends Paragraph 18 of subsection (l) of section 3221 of
the insurance law to remove provisions in current law that have served
to impose extra requirements on network community pharmacies as a
precondition for providing certain covered medications otherwise
available by mail order. Specifically, this section removes 'terms and
conditions' and 'in advance through a contractual network agreement'.

Section Three amends Subsection (kk) of section 4303 of the insurance
law to remove provisions in current law that have served to impose
extra requirements on network community pharmacies-as a precondition
for providing certain covered medications otherwise available by mail
order. Specifically, this section removes 'terms and conditions' and
'in advance through a contractual network agreement'.

Section Four is the effective date of the bill.

JUSTIFICATION:

In January, 2012 the current provisions of State Insurance Law took
effect guaranteeing that consumers would always have the choice of
obtaining covered prescription drugs from a local network
participating pharmacy.

Over the course of the year, however, it became clear that the law was
not working as intended. Consumers received letters from pharmacy
benefit managers directing them to out-of-state "specialty"
pharmacies. Consumers returning to their local participating pharmacy
could no longer obtain their prescription drugs there because the


claim was blocked. The pharmacy was notified that coverage for that
medication was no longer covered in the 'retail' pharmacy network.
The patient was to be directed to the 'specialty' pharmacy.

Contrary to the intent of the law, beneficiaries were being forced
into mandatory mail order programs on the basis of the medications
they ware prescribed. Local pharmacies otherwise in the network were
not in the new 'restricted' network. Pharmacy benefit managers were
steering prescription volume out of their network pharmacies into
their wholly owned pharmacy subsidiaries.

Community pharmacy owners took action. They contacted plan sponsors
and pharmacy benefit managers asking for contracts that would allow
them to continue to dispense covered medications available to them
from their wholesalers. The phone calls, letters and e-mails that
followed document that large pharmacy benefit managers were using
"terms and conditions" as a legal roadblock against community
pharmacies. These include unreasonable and onerous 'terms' such as
costly accreditations, on-call 24-hour nursing services and excessive
liability insurance demands. Some threatened to exclude community
pharmacies from the 'retail network in order to be enrolled as a 'mail
order' pharmacy. For these reasons, it is necessary to remove "terms
and conditions" from current law.

The terms 'in advance through a contractual network agreement have
served as another to the parity between mail order and community
Pharmacies envisioned in the original law. A close reading of the law
allows a local network pharmacy to agree to accept the same
reimbursement amount, but nothing in the law requires the pharmacy
benefit manager to grant the participating community pharmacy an
additional contract to meet the mail order reimbursement price. The
present statute must be amended to resolve this contradiction and
restore original legislative intent. The amendments proposed are
reasonable and fair. Defining 'mail order' is necessary so that its
meaning cannot be manipulated by self-promoting pharmacy benefit
managers.

LEGISLATIVE HISTORY:

New Legislation

FISCAL IMPLICATIONS:

None

EFFECTIVE DATE:

This act shall take effect immediately.

2013-S3995B (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3995--B

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              March 4, 2013
                               ___________

Introduced  by  Sens. MAZIARZ, ADDABBO, AVELLA, BOYLE, CARLUCCI, ESPAIL-
  LAT,  GIPSON,  GOLDEN,  GRISANTI,  HOYLMAN,  LANZA,  LARKIN,  LATIMER,
  MARTINS, PARKER, PERALTA, RANZENHOFER, RITCHIE, SAMPSON, SMITH, STAVI-
  SKY,  VALESKY,  ZELDIN  --  read  twice  and ordered printed, and when
  printed to be committed to the Committee  on  Insurance  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to  said  committee  --  recommitted  to the Committee on Insurance in
  accordance with Senate Rule 6, sec. 8 --  committee  discharged,  bill
  amended,  ordered reprinted as amended and recommitted to said commit-
  tee

AN ACT to amend the insurance  law,  in  relation  to  the  purchase  of
  prescription drugs

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 28 of subsection  (i)  of  section  3216  of  the
insurance  law, as amended by chapter 11 of the laws of 2012, is amended
to read as follows:
  (28) (A) DEFINITIONS. FOR THE PURPOSE OF THIS PARAGRAPH:
  (1) "SAME REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY COVERAGE DESCRIBED
UNDER SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL PROVIDE THE  SAME  BENCH-
MARK  INDEX,  INCLUDING THE SAME AVERAGE WHOLESALE PRICE, MAXIMUM ALLOW-
ABLE COST AND NATIONAL PRESCRIPTION DRUG CODES TO REIMBURSE ALL  PHARMA-
CIES  PARTICIPATING  IN  THE  INSURANCE  NETWORK REGARDLESS OF WHETHER A
PHARMACY IS A MAIL ORDER PHARMACY OR A NON-MAIL ORDER PHARMACY.
  (2) "MAIL ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY  BUSINESS  IS
TO   RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH  ELECTRONIC
SUBMISSIONS AND TO DISPENSE MEDICATION TO PATIENTS THROUGH  THE  USE  OF
THE  UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES AND
PROVIDES ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER  THAN
FACE-TO-FACE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09462-07-4

S. 3995--B                          2

  (B)  Any  policy  that  provides coverage for prescription drugs shall
permit each insured  to  fill  any  covered  prescription  that  may  be
obtained at a network participating mail order or other non-retail phar-
macy, at the insured's option, at a network participating non-mail order
retail  pharmacy  provided that the network participating non-mail order
retail pharmacy agrees [in advance, through a contractual network agree-
ment,] to the same reimbursement amount[, as well as the same applicable
terms and conditions,] that the insurer has established for the  network
participating  mail  order or other non-retail pharmacy. In such a case,
the policy shall not impose a co-payment fee or other condition  on  any
insured who elects to purchase prescription drugs from a network partic-
ipating  non-mail  order  retail  pharmacy  which is not also imposed on
insureds electing to purchase drugs from a  network  participating  mail
order or other non-retail pharmacy.
  S  2.  Paragraph 18 of subsection (l) of section 3221 of the insurance
law, as amended by chapter 11 of the laws of 2012, is amended to read as
follows:
  (18) (A) DEFINITIONS. FOR THE PURPOSE OF THIS PARAGRAPH:
  (1) "SAME REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY COVERAGE DESCRIBED
UNDER SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL PROVIDE THE  SAME  BENCH-
MARK  INDEX,  INCLUDING THE SAME AVERAGE WHOLESALE PRICE, MAXIMUM ALLOW-
ABLE COST AND NATIONAL PRESCRIPTION DRUG CODES TO REIMBURSE ALL  PHARMA-
CIES  PARTICIPATING  IN  THE  INSURANCE  NETWORK REGARDLESS OF WHETHER A
PHARMACY IS A MAIL ORDER PHARMACY OR A NON-MAIL ORDER PHARMACY.
  (2) "MAIL ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY  BUSINESS  IS
TO   RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH  ELECTRONIC
SUBMISSIONS AND TO DISPENSE MEDICATION TO PATIENTS THROUGH  THE  USE  OF
THE  UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES AND
PROVIDES ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER  THAN
FACE-TO-FACE.
  (B)  Any  insurer  delivering  a  group or blanket policy or issuing a
group or blanket policy for delivery in this state that provides  cover-
age for prescription drugs shall permit each insured to fill any covered
prescription  that may be obtained at a network participating mail order
or other non-retail pharmacy, at the  insured's  option,  at  a  network
participating  non-mail  order retail pharmacy provided that the network
participating non-mail order retail pharmacy agrees [in advance, through
a contractual network agreement,] to the same reimbursement amount[,  as
well  as the same applicable terms and conditions,] that the insurer has
established for the network participating mail order or other non-retail
pharmacy. In such a case, the policy shall not impose a  co-payment  fee
or  other  condition  on any insured who elects to purchase drugs from a
network participating non-mail order retail pharmacy which is  not  also
imposed  on  insureds  electing to purchase drugs from a network partic-
ipating mail order or other non-retail pharmacy; provided, however, that
the provisions of this section  shall  not  supersede  the  terms  of  a
collective  bargaining agreement or apply to a policy that is the result
of a collective bargaining agreement between an employer  and  a  recog-
nized or certified employee organization.
  S  3. Subsection (kk) of section 4303 of the insurance law, as amended
by chapter 11 of the laws of 2012 and as relettered  by  section  55  of
part D of chapter 56 of the laws of 2013, is amended to read as follows:
  (kk) (1) DEFINITIONS. FOR THE PURPOSE OF THIS SUBSECTION:
  (A) "SAME REIMBURSEMENT AMOUNT" SHALL MEAN THAT ANY COVERAGE DESCRIBED
UNDER  PARAGRAPH TWO OF THIS SUBSECTION SHALL PROVIDE THE SAME BENCHMARK
INDEX, INCLUDING THE SAME AVERAGE  WHOLESALE  PRICE,  MAXIMUM  ALLOWABLE

S. 3995--B                          3

COST  AND  NATIONAL  PRESCRIPTION DRUG CODES TO REIMBURSE ALL PHARMACIES
PARTICIPATING IN THE HEALTH BENEFIT PLAN REGARDLESS OF WHETHER A PHARMA-
CY IS A MAIL ORDER PHARMACY OR A NON-MAIL ORDER PHARMACY.
  (B)  "MAIL  ORDER PHARMACY" MEANS A PHARMACY WHOSE PRIMARY BUSINESS IS
TO  RECEIVE  PRESCRIPTIONS  BY  MAIL,  TELEFAX  OR  THROUGH   ELECTRONIC
SUBMISSIONS  AND  TO  DISPENSE MEDICATION TO PATIENTS THROUGH THE USE OF
THE UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES  AND
PROVIDES  ANY  CONSULTATION  WITH  PATIENTS  ELECTRONICALLY  RATHER THAN
FACE-TO-FACE.
  (2) Any contract issued by a medical expense indemnity corporation,  a
hospital  service  corporation  or  a  health  services corporation that
provides coverage for  prescription  drugs  shall  permit  each  covered
person  to  fill  any  covered  prescription  that  may be obtained at a
network participating mail order or other non-retail  pharmacy,  at  the
covered  person's  option,  at  a  network  participating non-mail order
retail pharmacy provided that the network participating  non-mail  order
retail pharmacy agrees [in advance, through a contractual network agree-
ment,] to the same reimbursement amount[, as well as the same applicable
terms  and  conditions,]  that  the  corporation has established for the
network participating mail order or other non-retail pharmacy.  In  such
a case, the contract shall not impose a copayment fee or other condition
on  any  covered  person  who  elects  to  purchase drugs from a network
participating non-mail order retail pharmacy which is not  also  imposed
on covered persons electing to purchase drugs from a network participat-
ing mail order or other non-retail pharmacy; provided, however, that the
provisions of this section shall not supersede the terms of a collective
bargaining  agreement  or  apply  to  a contract that is the result of a
collective bargaining agreement between an employer and a recognized  or
certified employee organization.
  S 4. This act shall take effect immediately.

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Senate Bill S3995B

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

Bill Amendments

co-Sponsors

2013-S3995 - Details

2013-S3995 - Summary

2013-S3995 - Sponsor Memo

2013-S3995 - Bill Text download pdf

co-Sponsors

2013-S3995A - Details

2013-S3995A - Summary

2013-S3995A - Sponsor Memo

2013-S3995A - Bill Text download pdf

co-Sponsors

2013-S3995B (ACTIVE) - Details

2013-S3995B (ACTIVE) - Summary

2013-S3995B (ACTIVE) - Sponsor Memo

2013-S3995B (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S3995B

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Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

Bill Amendments

co-Sponsors

2013-S3995 - Details

2013-S3995 - Summary

2013-S3995 - Sponsor Memo

2013-S3995 - Bill Text download pdf

co-Sponsors

2013-S3995A - Details

2013-S3995A - Summary

2013-S3995A - Sponsor Memo

2013-S3995A - Bill Text download pdf

co-Sponsors

2013-S3995B (ACTIVE) - Details

2013-S3995B (ACTIVE) - Summary

2013-S3995B (ACTIVE) - Sponsor Memo

2013-S3995B (ACTIVE) - Bill Text download pdf

Comments