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AN ACT relating to prescription drugs.
Be it enacted by the General Assembly of the Commonwealth of Kentucky:
Section 1. KRS 315.400 is amended to read as follows:
As used in KRS 315.400 to 315.412:
(1)
"Authorized distributor of record" means a wholesale distributor that:
(a)
Has established an ongoing relationship with a manufacturer to distribute the
manufacturer's prescription drug. An ongoing relationship exists between a
wholesale distributor and a manufacturer if the wholesale distributor,
including any affiliated group of the wholesale distributor as defined in
Section 1504 of the Internal Revenue Code, has a written agreement for
distribution in effect; and
(b)
(2)
Is listed on the manufacturer's current list of authorized distributors of record;
"Co-licensed partner" means two (2) or more entities that have the right to engage in
the manufacturing or marketing or both of a prescription drug consistent with the
Federal Drug Administration's implementation of the federal Prescription Drug
Marketing Act;
(3)
"Co-licensed product" means a prescription drug manufactured by two (2) or more
co-licensed partners;
(4)
"Counterfeit prescription drug" means a drug which, or the container or labeling of
which, without authorization, bears the trademark, trade name, or other identifying
mark, imprint, or device, or any likeness thereof, of a drug manufacturer, processor,
packer, or distributor other than the person or persons who in fact manufactured,
processed, packed, or distributed the drug and which thereby falsely purports or is
represented to be the product of, or to have been packed or distributed by, the other
drug manufacturer, processor, packer, or distributor;
(5)
"Drop shipment" means the sale of a prescription drug to a wholesale distributor by
the drug's manufacturer, the manufacturer's co-licensed partner, the manufacturer's
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third-party logistics provider, the manufacturer's exclusive distributor, or by an
authorized distributor of record that purchased the product directly from the
manufacturer, the manufacturer's co-licensed partner, the manufacturer's third-party
logistics provider, or the manufacturer's exclusive distributor, and:
(a)
The wholesale distributor takes title to but not physical possession of the drug;
(b)
The wholesale distributor invoices the pharmacy, pharmacy warehouse, or
other person authorized by law to dispense or administer a prescription drug;
and
(c)
The pharmacy, pharmacy warehouse, or other person authorized by law to
dispense or administer a prescription drug receives delivery directly from the
manufacturer, the manufacturer's co-licensed partner, the manufacturer's thirdparty logistics provider, the manufacturer's exclusive distributor, or an
authorized distributor of record;
(6)
"Emergency medical reasons" includes but is not limited to:
(a)
Transfers of a prescription drug between health-care entities or between a
health-care entity and a retail pharmacy to alleviate a temporary shortage of a
prescription drug arising from delays in or interruptions of the regular
distribution schedules;
(b)
Sales of drugs for use in the treatment of acutely ill or injured persons to
nearby emergency medical services providers, firefighting organizations, or
licensed health-care practitioners in the same marketing or service area;
(c)
The provision of emergency supplies of drugs to nearby nursing homes, home
health agencies, or hospice organizations for emergency use when necessary
drugs cannot be obtained; or
(d)
Transfers of prescription drugs by a retail pharmacy to another retail pharmacy
to alleviate a temporary shortage;
(7)
"End user" means a patient or consumer that uses a prescription drug as prescribed
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by an authorized health-care professional;
(8)
"FDA" means the United States Food and Drug Administration and any successor
agency;
(9)
"Interpharmacy medication exchange" means a trade of prescription drugs
between a registered pharmacist at one (1) pharmacy and a registered pharmacist
at another pharmacy through the use of an electronic exchange that fully tracks
the National Drug Code (NDC) and expiration date of each medication being
exchanged;
(10) "Manufacturer" means the same as defined in KRS 315.010;
(11)[(10)] "Manufacturer's exclusive distributor" means a distributor who:
(a)
Contracts with a manufacturer to provide or coordinate the warehousing,
distributing, or other similar services on behalf of a manufacturer;
(b)
Takes title of the prescription drug but does not have responsibility to direct
the sale of the manufacturer's prescription drug;
(c)
Is licensed under KRS 315.402; and
(d)
Is an authorized distributor of record;
(12)[(11)] "Normal distribution channel" means a chain of custody for a prescription
drug from a manufacturer, a manufacturer's co-licensed partner, a manufacturer's
third-party logistics provider, or a manufacturer's exclusive distributor that goes
directly, by drop shipment or by intracompany transfer, to:
(a)
A pharmacy or other designated person authorized by law to distribute a
prescription drug to an end user;
(b)
A pharmacy warehouse that performs intracompany sales or transfers of
prescription drugs to a group of pharmacies under common ownership and
control to a patient, pursuant to a prescription for a patient, or to a person
authorized by law to administer a prescription drug for use by a patient;
(c)
An authorized distributor of record:
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Then to a pharmacy or other designated person authorized by law to
distribute a prescription drug to an end user;
2.
Then to a pharmacy warehouse as specified in paragraph (b) of this
subsection; or
3.
Then to another authorized distributor of record to a licensed health-care
facility or pharmacy, or a practitioner authorized by law to distribute a
prescription drug to an end user; or
(d)
A nonprofit organization under state contract to distribute prescription drugs
to pharmacies pursuant to the state's emergency response plan and the
subsequent distribution of those prescription drugs to pharmacies;
(13)[(12)] "Pedigree" means a document or electronic file containing information that
records each distribution of a prescription drug;
(14)[(13)] "Pharmacy warehouse" means a physical location for prescription drugs that
acts as a central warehouse and performs intracompany sales or transfers of
prescription drugs to a group of pharmacies under common ownership and control;
(15)[(14)] "Prescription drug" means the same as defined in KRS 315.010;
(16)[(15)] "Reverse distributor" means every person who acts as an agent for
pharmacies, drug wholesalers, manufacturers, or other entities by receiving, taking
inventory, and managing the disposition of outdated or nonsalable drugs;
(17)[(16)] "Third-party logistics provider" means an entity that contracts with a
manufacturer to provide or coordinate the warehousing, distribution, or other
similar services on behalf of a manufacturer, but does not take title to the drug or
have responsibility to direct the sale of the manufacturer's drug. A third-party
logistics provider who is a licensed wholesale distributor under KRS 315.402 and is
a manufacturer's authorized distributor of record shall be considered as part of the
normal distribution channel;
(18)[(17)] "Wholesale distribution" means the distribution of a prescription drug to
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persons other than an end user, but does not include:
(a)
Intracompany sales or transfers;
(b)
The sale, purchase, distribution, trade, or transfer of a prescription drug for
emergency medical reasons;
(c)
The distribution of prescription drug samples by a manufacturer or authorized
distributor;
(d)
Drug returns or transfers to the original manufacturer, original wholesale
distributor, or transfers to a reverse distributor or third-party returns processor;
(e)
The sale, purchase, or trade of a drug pursuant to a prescription;
(f)
The delivery of a prescription drug by a common carrier;
(g)
The purchase or acquisition by a health-care entity or pharmacy that is a
member of a group purchasing organization of a drug for its own use from the
group purchasing organization, or health-care entities or pharmacies that are
members of the group organization;
(h)
The sale, purchase, distribution, trade, or transfer of a drug by a charitable
health-care entity to a nonprofit affiliate of the organization as otherwise
permitted by law;
(i)
The sale, transfer, merger, or consolidation of all or part of the business of a
pharmacy with another pharmacy or pharmacies;[ or]
(j)
The distribution of a prescription drug to a health-care practitioner or to
another pharmacy if the total number of units transferred during a twelve (12)
month period does not exceed five percent (5%) of the total number of all
units dispensed by the pharmacy during the immediate twelve (12) month
period; or[and]
(k)
An interpharmacy medication exchange; and
(19)[(18)] "Wholesale distributor" means an entity engaged in the wholesale distribution
of prescription drugs, including but not limited to manufacturers, manufacturers'
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exclusive distributors, authorized distributors of record, drug wholesalers or
distributors, third-party logistics providers, third-party returns processors, reverse
distributors, and pharmacy warehouses and retail pharmacies that engage in the
wholesale distribution of a prescription drug. "Wholesale distributor" does not
include an interpharmacy medication exchange.
Section 2. KRS 304.17A-515 is amended to read as follows:
(1)
As used in this section "managed care plan" includes Medicaid managed care
plans operating in the Commonwealth.
(2)
A managed care plan shall arrange for a sufficient number and type of primary care
providers and specialists throughout the plan's service area to meet the needs of
enrollees. Each managed care plan shall demonstrate that it offers:
(a)
An adequate number of accessible acute care hospital services, where
available;
(b)
An adequate number of accessible primary care providers, including family
practice
and
general
practice
physicians,
internists,
obstetricians/gynecologists, and pediatricians, where available;
(c)
An adequate number of accessible specialists and subspecialists, and when the
specialist needed for a specific condition is not represented on the plan's list of
participating specialists, enrollees have access to nonparticipating health care
providers with prior plan approval;
(d)
The availability of specialty services; and
(e)
A provider network that meets the following accessibility requirements:
1.
For urban areas, a provider network that is available to all persons
enrolled in the plan within thirty (30) miles or thirty (30) minutes of
each person's place of residence or work, to the extent that services are
available; or
2.
For areas other than urban areas, a provider network that makes
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available primary care physician services, hospital services, and
pharmacy services within thirty (30) minutes or thirty (30) miles of each
enrollee's place of residence or work, to the extent those services are
available. All other providers shall be available to all persons enrolled in
the plan within fifty (50) minutes or fifty (50) miles of each enrollee's
place of residence or work, to the extent those services are available.
(3)[(2)]
A managed care plan shall provide telephone access to the plan during
business hours to ensure plan approval of nonemergency care. A managed care plan
shall provide adequate information to enrollees regarding access to urgent and
emergency care.
(4)[(3)]
A managed care plan shall establish reasonable standards for waiting times to
obtain appointments, except as provided for emergency care.
Section 3. KRS 304.17A-625 is amended to read as follows:
(1)
In making its decision, an independent review entity conducting the external review
shall take into account all of the following:
(a)
Information submitted by the insurer, the covered person, the authorized
person, and the covered person's provider, including the following:
1.
The covered person's medical records;
2.
The standards, criteria, and clinical rationale used by the insurer to make
its decision; and
3.
(b)
The insurer's health benefit plan;
Findings, studies, research, and other relevant documents of government
agencies and nationally recognized organizations, including the National
Institutes of Health, or any board recognized by the National Institutes of
Health, the National Cancer Institute, the National Academy of Sciences, and
the United States Food and Drug Administration, the Centers for Medicare &
Medicaid Services of the United States Department of Health and Human
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Services, and the Agency for Health Care Research and Quality; and
(c)
Relevant findings in peer-reviewed medical or scientific literature, published
opinions of nationally recognized medical specialists, and clinical guidelines
adopted by relevant national medical societies.
(2)
The independent review entity shall base its decision on the information submitted
under subsection (1) of this section. In making its decision, the independent review
entity shall consider safety, appropriateness, and cost effectiveness.
(3)
The insurer shall provide any coverage determined by the independent review entity
to be medically necessary. The independent review entity shall not be permitted to
allow coverage for services specifically limited or excluded by the insurer in its
health benefit plan. The decision shall apply only to the individual covered person's
external review.
(4)
Nothing in this section shall be construed as requiring an insurer to provide
coverage for out of network services, procedures, or tests, except as set forth in
KRS 304.17A-515(2)[(1)](c) and 304.17A-550.
(5)
The insurer shall be responsible for the cost of the external review.
(6)
The independent review entity shall provide to the covered person, treating
provider, insurer, and the department a decision which shall include:
(a)
The findings for either the insurer or covered person regarding each issue
under review;
(b)
The proposed service, treatment, drug, device, or supply for which the review
was performed;
(c)
The relevant provisions in the insurer's health benefit plan and how applied;
and
(d)
The relevant provisions of any nationally recognized and peer-reviewed
medical or scientific documents used in the external review.
(7)
The decision of the independent review entity shall not be made solely for the
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convenience of the insurer, the covered person, or the provider.
(8)
Consistent with the rules of evidence, a written decision prepared by an independent
review entity shall be admissible in any civil action related to the adverse
determination. The independent review entity's decision shall be presumed to be a
scientifically valid and accurate description of the state of medical knowledge at the
time it was written.
(9)
The decision of the independent review entity shall be binding on the insurer with
respect to that covered person. Failure of the insurer to provide coverage as required
by the independent review entity shall:
(a)
Be a violation of the insurance code of a nature sufficient to warrant the
commissioner revoking or suspending the insurer's license or certificate of
authority; and
(b)
Constitute an unfair claims settlement practice as set forth in KRS 304.12230.
(10) Failure to provide coverage as required by the independent review entity shall also
subject the insurer to the provisions of KRS 304.99-010 and 304.99-020 and require
the insurer to pay the claim that was the subject of the external review, without need
for the covered person or authorized person to further establish a right as to the
payment amount. Reasonable attorney fees associated with the actions of the
insured necessary to collect amounts owed the covered person shall be assessed
against and borne by the insurer.
(11) The insurer shall implement the decision of the independent review entity whether
the covered person has disenrolled or remains enrolled with the insurer.
(12) If the covered person has been disenrolled with the insurer, the insurer shall only be
required to provide the treatment, service, drug, or device that was previously
denied by the insurer, its agent, or designee and later approved by the independent
review entity for a period not to exceed thirty (30) days.
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(13) Within thirty (30) days of the decision in favor of the covered person by the
independent review entity, the insurer shall provide written notification to the
department that the decision has been implemented in accordance with this section.
(14) An independent review entity and any medical specialist the entity utilizes in
conducting an external review shall not be liable in damages in a civil action for
injury, death, or loss to person or property and is not subject to professional
disciplinary action for making, in good faith, any finding, conclusion, or
determination required to complete the external review. This subsection does not
grant immunity from civil liability or professional disciplinary action to an
independent review entity or medical specialist for an action that is outside the
scope of authority granted in KRS 304.17A-621, 304.17A-623, and 304.17A-625.
(15) Nothing in KRS 304.17A-600 to 304.17A-633 shall be construed to create a cause
of action against any of the following:
(a)
An employer that provides health care benefits to employees through a health
benefit plan;
(b)
A medical expert, private review agent, or independent review entity that
participates in the utilization review, internal appeal, or external review
addressed in KRS 304.17A-600 to 304.17A-633; or
(c)
An insurer or provider acting in good faith and in accordance with any
finding, conclusion, or determination of an Independent Review Entity acting
within the scope of authority set forth in KRS 304.17A-621, 304.17A-623,
and 304.17A-625.
(16) The covered person, insurer, or provider in the external review may submit written
complaints to the department regarding any independent review entity's actions
believed to be an inappropriate application of the requirements set forth in KRS
304.17A-621, 304.17A-623, and 304.17A-625. The department shall promptly
review the complaint, and if the department determines that the actions of the
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independent review entity were inappropriate, the department shall take corrective
measures, including decertification or suspension of the independent review entity
from further participation in external reviews. The department's actions shall be
subject to the powers and administrative procedures set forth in Subtitle 17A of
KRS Chapter 304.
Section 4. KRS 205.6312 is amended to read as follows:
(1)
The cabinet shall institute nominal copayments or similar charges to be paid by
medical assistance recipients, their spouses, or parents, under the provisions of
Section 1916 of Title XIX of the Federal Social Security Act, 42 U.S.C. sec. 1396o.
(2)
Copayments or similar charges shall not be imposed for the following services:
(a)
All services provided to children under eighteen (18) years of age;
(b)
All services furnished to pregnant women, if the services relate to the
pregnancy or to any other medical condition which may complicate the
pregnancy;
(c)
Emergency services including hospital, clinic, office, or other facility services
which are necessary to prevent the death or serious impairment of the
individual;
(d)
Services furnished to institutionalized individuals if the individual is required,
as a condition of receiving services, to spend all but a minimal amount of
income for personal needs;
(e)
Services furnished for an individual who is receiving hospice care as defined
under Section 1905 of Title XIX of the Federal Social Security Act, 42 U.S.C.
sec. 1396d(o); and
(f)
(3)
Other services excluded from cost sharing by federal law or regulation.
Standard nominal copayments per service, not to exceed amounts allowable under
Section 1916 of Title XIX of the Federal Social Security Act, 42 U.S.C. sec. 1396o
shall be collected by the provider and charged for the following services:
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Ambulance services which are provided to recipients in need of
nonemergency health transportation services;
(b)
Nonemergency services delivered in a hospital emergency room; and
(c)
Prescription and over-the-counter drugs, subject to the limitations
in[limitation under] subsection (6) of this section.
(4)
No provider participating in the Medical Assistance Program shall deny services to
any eligible recipient due to the inability of a recipient to make the required
copayment. This provision shall not excuse the recipient from liability for payment
of the charge.
(5)
The cabinet shall promulgate administrative regulations under KRS Chapter 13A to
implement the provisions of this section.
(6)
Copayments[Any copayment] for a prescription or over-the-counter drug shall
be[not exceed] one dollar ($1) for generic drugs, two dollars ($2) for preferred
brand name drugs, and three dollars ($3) for non-preferred brand-name drugs.
(7)
The copayments required in subsection (6) of this section shall not be deducted
from any reimbursement due from either Medicaid or a Medicaid managed care
organization, but shall be in addition to such reimbursement.
(8)
The copayment requirements in subsection (6) of this section shall apply to all
Medicaid managed care organizations contracted with the cabinet to provide
benefits to Kentucky Medicaid recipients.
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