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News & Press: State Legislation

Huge Washington State PBM Regulation Bill 2SSB 5601 Signed into Law

Wednesday, April 1, 2020   (1 Comments)
Posted by: Jenny Arnold
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After a hard fought two year battle, Governor Inslee signed 2SSB 5601 into law on March 31, 2020! The bill is the first of its kind in the nation. By defining Heath Care Benefit Managers (includes Pharmacy Benefit Managers) and creating a new statute in law specific to the registration and regulation of Health Care Benefit Managers, Washington will be the first to regulate ALL health care benefit managers who are dictating health care decisions for patients.

PBMs will still be required to register with the Office of the Insurance Commissioner (OIC), however the OIC will have more authority and there are additional regulations and provisions aimed at providing greater transparency and accountability.

Current law regulating the practice of PBMs is transferred to the regulation of HCBMs.  These provisions include regulation of formularies and drug lists; requiring the maintenance of a network pharmacy appeals process; requiring participation in audits; and prohibiting participation in an action of fraud against a pharmacy.

2SSB 5601 does contain language prohibiting certain PBM business practices. The WSPA took model NCPA language and tailored it to Washington. The bill prohibits a number of PBM activities that are harming community pharmacy and impacting pharmacist ability to provide valuable services to their patients.

As of January 1, 2022, A PBM may not:

  • Cause or knowingly permit the use of any advertisement, promotion, solicitation, representation, proposal, or offer that is untrue, deceptive or misleading.
  • Charge a pharmacy a fee related to the adjudication of a claim, or for credentialing, participating, certification, accreditation, or enrollment in a network.
  • Require pharmacy accreditation standards or certification requirements inconsistent with or more stringent than, standards required by national accreditation organizations.
  • Deny, reduce, or recoup payment from a pharmacy for pharmacy services after adjudication of a claim unless the claim was fraudulent, or the denial or reduction was the result of a pharmacy audit.

Contract Transparency - Carriers must file all contracts and contract amendments entered with a HCBM with the commissioner, within 30 days following the effective date of the contract. 

Enforcement provision - If a HCBM violates any laws or regulations pertaining to the HCBM, the commissioner is permitted to: place on probation, suspend, revoke, or refuse a registration; issue a cease and desist order; levy a fine of up to $5,000 per violation; and require corrective action.

Rulemaking for the bill will begin this Summer. Because this is a new law that regulates and entity that has never been regulated. The rulemaking process will take some time. This is new to the Office of the Insurance Commissioner and the Health Care Benefit Managers they will regulate.

Comments...

Steven M. Riddle (Riddle) PharmD BCPS FASHP says...
Posted Tuesday, May 5, 2020
Such great news! Thanks to the WSPA staff, members and others that made this happen! Once again we are leading the way for pharmacy across the nation.

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