4-3-1013 - Authority to develop prescription drug programs and to contract with pharmacy benefits managers (PBMs).
4-3-1013. Authority to develop prescription drug programs and to contract with pharmacy benefits managers (PBMs).
(a) The TennCare bureau is authorized to develop prescription drug programs and to contract with one (1) or more pharmacy benefit managers (PBMs) or other appropriate third party contractors to administer all or a portion of such prescription drug programs for the TennCare program. It is the legislative intent that, insofar as practical, any such pharmacy programs shall be developed and implemented in a manner that seeks to minimize undue disruption in successful drug therapies for current TennCare enrollees.
(b) Under such a contract, a PBM may be directed by the TennCare bureau to:
(1) Provide information to the state TennCare pharmacy advisory committee for making recommendations related to a state preferred drug list (PDL);
(2) Provide claims processing and administrative services for the TennCare program;
(3) Provide data on utilization patterns to the bureau of TennCare, the department of finance and administration, TennCare managed care organizations, the University of Tennessee Health Science Center, and other entities determined by the TennCare bureau;
(4) Conduct prospective and retrospective drug utilization review as directed by the bureau of TennCare;
(5) Establish procedures for determining potential liability of third party payers, including, but not limited to, Medicare and private insurance companies, for persons receiving pharmacy services through the state of Tennessee;
(6) Maintain a retail pharmacy network to provide prescription drugs through state programs;
(7) Set pharmacy reimbursement rates and dispensing fee schedules necessary to maintain an adequate retail pharmacy network and increase the cost-effectiveness of state pharmacy purchases;
(8) Negotiate supplemental rebates with pharmaceutical manufacturers for prescription drug expenditures;
(9) Propose other initiatives to the bureau of TennCare to maintain or improve patient care while reducing prescription drug costs; and
(10) Provide other services as directed by the bureau of TennCare.
(c) The state TennCare program shall be authorized to receive one hundred percent (100%) of all rebates and any other financial incentives directly or indirectly resulting from the state's contract with any PBM.
(d) The PBM contract may include performance goals and financial incentives for success or failure in attaining those goals. It is the legislative intent that such goals and incentives shall include the reliable and timely performance of any system of prior authorization that may be implemented pursuant to pharmacy programs authorized by this section.
(e) To the extent permitted by federal law and the TennCare waiver, the bureau of TennCare may implement, either independently or in combination with a PDL, cost saving measures for pharmaceutical services including, but not limited to, tiered co-payments, reference pricing, prior authorization, step therapy requirements, exclusion from coverage of drugs or classes of drugs, mandating the use of generic drugs, and mandating the use of therapeutic equivalent drugs.
(f) The TennCare bureau shall be required to competitively procure an annual study designed to accurately assess the cost of dispensing a prescription in a retail or community pharmacy setting to a TennCare enrollee. The study shall be performed by a postsecondary academic institution with knowledge of pharmacy business operations and that has the expertise to conduct business cost allocation studies and shall include all nationally recognized and accepted parameters of a typical cost-to-dispense study. Additional parameters may be added by the researchers awarded the study contract, in order to accurately reflect the nature of pharmacy practice in the TennCare preferred drug list environment. The study shall include retrospective analyses designed to provide a current estimation of the cost to dispense. The contracted researchers shall report their findings to the TennCare oversight committee of the general assembly, the commissioner of finance and administration, and the bureau of TennCare on or before January 15th of each calendar year, beginning on January 15, 2007.
[Acts 2003, ch. 350, § 2; 2004, ch. 673, § 18; 2006, ch. 915, § 2.]