Bill > A5388

Introduced Session

This bill establishes the "Medicaid Pharmacy Benefit Transparency and Accountability Act." The bill requires the State Auditor to conduct audits of any contract or other arrangement entered into by a managed care organization, or by the Division of Medical Assistance and Health Services (division) in the Department of Human Services (DHS), for the provision of pharmacy benefits management services under the Medicaid program. The audits will review: all sources and amounts of income, payments, and financial benefits received by the pharmacy benefits manager in relation to the provision and administration of pharmacy benefits management services on behalf of the managed care organization; all ingredient costs and dispensing fees or similar payments made by the pharmacy benefits manager to any pharmacy in connection with the contract or other arrangement; the pharmacy benefits manager's payment model for administrative fees; and the amount of payment paid by the State and the amount of reimbursement paid to pharmacies for providing prescription drug services. The State Auditor will provide to the Legislature reports that: describe the findings of any audits conducted pursuant to the bill; summarize the total costs to the State for the provision of pharmacy benefits management services under the Medicaid program; and make any recommendations deemed necessary for the improvement of the administration of prescription drug benefits and the reduction of costs for the provision of pharmacy benefits management services under the Medicaid program. The bill revises current law to require pharmacy benefits managers under the scope of the bill to: 1) disclose to the department any information necessary for the State Auditor to conduct an audit required pursuant to the bill and any ownership interest or affiliation with a contracted pharmacy; 2) remit to the division all manufacturer rebates, fees, and other renumerations received by the pharmacy benefits manager; 3) provide an internal appeal mechanism to resolve any dispute raised by the division or managed care organization or pharmacy concerning drug pricing; and 4) meet standards and practices used in the creation of pharmacy networks and contracting with network pharmacies and other providers. The bill prohibits pharmacy benefits managers from engaging in the practice of steering and provides that in the case of the termination of a contracted pharmacy, a Medicaid beneficiary will be permitted to receive prescription drug services from the pharmacy for a certain period of time. The bill provides that, to the extent that the provisions of the bill do not conflict with federal law and regulation, the reimbursement rate for prescription drug services paid to a pharmacy providing prescription drug services to a beneficiary of the Medicaid program, whether such services are provided in the Medicaid fee-for-service delivery system or through the Medicaid managed care delivery system, will be no less than the national average drug acquisition cost of the drug plus a Medicaid fee-for-service professional dispensing fee of $10.92. This provision will not apply to claims, reimbursements, or contractual arrangements involving covered entities, as defined under section 340B of the federal Public Health Service Act, 42 U.S.C. s.256, or other providers serving high-need populations as designated by the division. The bill requires the division to conduct a study and prepare and submit, within 24 months of the effective date of the bill, to the Governor and to the Legislature, a written report that will describe the study's findings and provide recommendations concerning the provision of prescription drug services and pharmacy benefits management services under the Medicaid program.

AI Summary

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Heather Simmons (D)*, 

Introduced, Referred to Assembly Aging and Human Services Committee (on 09/10/2026)

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Official Document