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| Montana Administrative Register Notice 6-288 | No. 8 04/26/2024 | |
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BEFORE THE COMMISSIONER OF SECURITIES AND INSURANCE OFFICE OF THE MONTANA STATE AUDITOR
TO: All Concerned Persons
1. On May 16, 2024, at 9:00 a.m., the Commissioner of Securities and Insurance, Office of the Montana State Auditor (commissioner or CSI) will hold a public hearing in the basement conference room of CSI, at 840 Helena Avenue, Helena, Montana, to consider the proposed adoption of the above-stated rule.
2. CSI will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact CSI no later than 5:00 p.m. on May 7, 2024, to advise us of the nature of the accommodation that you need. Please contact Laura Shirtliff, Digital and Creative Services Director, 840 Helena Avenue, Helena, Montana, 59601; telephone (406) 444-2040 or 1-800-332-6148; fax (406) 444-3413; TDD (406) 444-3246; or e-mail csi@mt.gov.
3. Section 33-1-313, MCA, provides the commissioner with the authority to "make reasonable rules necessary for or as an aid to the effective administration of any provision of [the Montana Insurance Code]." Section 33-22-173(1)(a), MCA, provides that a pharmacy benefit manager (PBM) must provide to a pharmacy or pharmacy services administrative organization (PSAO) "a procedure by which a pharmacy or a pharmacy services administrative organization may appeal the price of a drug or drugs on the maximum allowable cost list."
4. In 2023, the Montana Legislature passed HB 156, which was signed into law by the Governor on April 19, 2023. HB 156 amended 33-22-173(1)(a), MCA, to clarify that PBMs' duties to pharmacies, and pharmacies' rights in dealing with PBMs, apply even when pharmacies choose to engage with PBMs collectively through a PSAO as a representative organization.
5. The rule proposed to be adopted is as follows:
NEW RULE I BATCH APPEAL PROCESS (1) A pharmacy benefit manager's appeals procedure described in 33-22-173, MCA, must allow for the submission of appeals received from a pharmacy or a pharmacy services administrative organization as part of a batch or group of appeals.
AUTH: 33-1-313, MCA IMP: 33-22-173, MCA
6. REASON: CSI has received numerous complaints from pharmacies and PSAOs that some PBMs do not accept maximum allowable cost (MAC) appeals in batch format but require such appeals to be submitted one at a time through a portal or similar online interface. However, CSI also learned that these PBMs have the capability to process, and do in fact process, such batch appeals in other states. This process is not made available to pharmacies or PSAOs in Montana. Pharmacies and PSAOs have stated to CSI that they have been discouraged from filing MAC appeals because entering appeals one by one is an onerous, time-consuming process for them.
Section 33-22-173(1)(a), MCA, requires PBMS to provide a MAC appeal process for a pharmacy or PSAO to appeal "the price of a drug or drugs on the maximum allowable cost list." (emphasis added). If the process was meant to be constrained to individual appeals of a single drug on a one-at-a-time basis, the addition of the plural modifier after "a drug" would be unnecessary. The proposed rule helps clarify existing law and the relative obligations of the entities involved.
Further, PSAOs inherently involve multiple stakeholders and therefore multiple claims. PSAOs represent multiple pharmacies, some of whom raise complaints to the PSAO about MAC pricing of the same drug or similar drugs. Because PSAOs inherently involve multiple pharmacies and therefore multiple claims, a procedure that does not account for batch submissions is inherently deficient. Clarifying the legal obligations of PBMs to require them to allow pharmacies and PSAOs in Montana to submit MAC appeals in batch format, as PBMs already allow in other states, will ensure the efficient processing of MAC appeals.
In light of the addition of PSAOs to the provisions in 33-22-173, MCA, to allow orderly submission of appeals, and to clarify the requirements of this provision, the commissioner believes this new rule is necessary for, and an aid to, the effective administration of the statutory provision above.
7. Concerned persons may submit their data, views, or arguments concerning the proposed actions in writing to: Laura Shirtliff, Digital and Creative Services Director, 840 Helena Avenue, Helena, Montana, 59601; telephone (406) 444-2040 or 1-800 332 6148; fax (406) 444-3413; TDD (406) 444-3246; or e-mail csi@mt.gov., and must be received no later than 5:00 p.m., May 24, 2024.
8. Andrew Cziok, CSI legal counsel, has been designated to preside over and conduct this hearing.
9. CSI maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list must make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Written requests may be mailed or delivered to the contact person in paragraph 7 or may be made by completing a request form at any rules hearing held by CSI.
10. An electronic copy of this proposal notice is available through the Secretary of State's website at http://sosmt.gov/ARM/Register.
11. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor was contacted by email on April 15, 2024.
12. With regard to the requirements of 2-4-111, MCA, CSI has determined that the adoption of the above-referenced rule will not significantly and directly impact small businesses.
/s/ Andrew Cziok /s/ Mary Belcher Andrew Cziok Mary Belcher Rule Reviewer Deputy Auditor Commissioner of Securities and Insurance, Office of the Montana State Auditor
Certified to the Secretary of State on April 16, 2024.
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A directory of state agencies is available online at http://www.mt.gov/govt/agencylisting.asp.
For questions about the organization of the ARM or this web site, contact sosarm@mt.gov.
