Section 0780-01-95-.04 - ACTIONS DURING AND AFTER AN INITIAL APPEAL(1) Upon filing an initial appeal with a PBM, the pharmacy shall provide the PBM with a copy of the invoice(s) demonstrating the pharmacy's actual cost as of the date of the filing of the initial appeal by the pharmacy. If the pharmacy receives any additional discounts, price concessions, rebates, or other reductions, excluding cash discounts, during the pendency of an initial appeal, the pharmacy shall inform the PBM of the additional discount, price concession, rebate, or other reduction, excluding a cash discount. The PBM may consider the additional discount, price concession, rebate, or other reduction, excluding a cash discount, when calculating the pharmacy's actual cost. Additional discounts, price concessions, rebates, or other reductions received after the resolution of an initial appeal shall not be grounds for reconsideration of any initial appeal previously considered and resolved.(2) A PBM shall request from each pharmacy filing an initial appeal the name and contact information of the wholesaler or manufacturer from which it purchased the prescription drug or device at issue. Failure of a pharmacy to provide this information shall not constitute grounds to deny an initial appeal; provided, however, if a PBM denies an initial appeal as otherwise allowed by law or this chapter and the pharmacy fails to provide this information or the PBM does not already have this information on file pursuant to Rule 0780-01-95-.03(2)(k), a PBM may presume the prescription drug or device at issue is available at a lower cost from the wholesaler or manufacturer from which the pharmacy purchased the prescription drug or device at issue.(3) If a pharmacy's initial appeal is resolved in favor of the appealing pharmacy, the PBM shall comply with the provisions of T.C.A. § 56-7-3206(c)(3) and, further, provide the pharmacy the following in writing: (a) A statement the initial appeal is granted, along with a summary outlining the basis for its decision;(b) Notification the PBM has adjusted the challenged rate of reimbursement;(c) Detailed instructions for how to reverse and rebill the claim upon which the initial appeal is based; and(d) Written notification the PBM has issued payment to the pharmacy showing the exact amount of the payment.(4)(a) When applying the findings from an initial appeal that was resolved in favor of a pharmacy to other similarly situated pharmacies as to the rate of reimbursement and actual cost for the particular drug or medical product or device that was at issue in the initial appeal, a PBM shall, within seven business days of resolution of an initial appeal, apply the findings retroactively as set out in subparagraph (b) of this paragraph to all similarly situated pharmacies that received the challenged rate of reimbursement for the particular drug or medical product or device that was at issue in the initial appeal, including any appeals pending with a PBM where the challenged rate of reimbursement is the subject of the pending appeal, by: 1. Notifying all similarly situated pharmacies of the adjusted rate of reimbursement in writing. The notice shall contain the applicable national drug code number or the unique device identifier at issue, as appropriate, and the rate of reimbursement to which the similarly situated pharmacy is now entitled for the drug or medical product or device; and2. Paying all similarly situated pharmacies the difference in the original rate of reimbursement the similarly situated pharmacy received and the adjusted rate of reimbursement that resulted from the initial appeal resolved in favor of a pharmacy. The PBM shall not charge any fees or require any additional documentation from similarly situated pharmacies to pay the difference required under this part.(b) The findings from an initial appeal resolved in favor of a pharmacy shall be applied retroactively under subparagraph (a) of this paragraph by applying the adjusted rate to all similarly situated pharmacies beginning on the date of service of the claim that was the subject of the initial appeal and continuing to apply that rate going forward until the appealing pharmacy and the similarly situated pharmacy or pharmacies were no longer entitled to the same rate of reimbursement for the drug or medical product or device at issue.(c) A PBM shall track initial appeals such that it can reasonably determine if an adjusted rate of reimbursement applies.(5) If a pharmacy's initial appeal is resolved against the appealing pharmacy, the PBM shall comply with the provisions of T.C.A. § 56-7-3206(c)(4). (a)1. The PBM shall determine whether the product associated with the national drug code number or unique device identifier is available at a cost that is less than the challenged rate of reimbursement from a pharmaceutical wholesaler in this state as of the date the initial appeal was received from the appealing pharmacy. The PBM shall make a reasonable effort to identify such information and must provide to the pharmacy any information complying with, and as set out in, T.C.A. § 56-7-3206(c)(4)(A).2. For purposes of this subparagraph (a), the product associated with the national drug code number or unique device identifier at issue shall be deemed available if, at the time the initial appeal was received by the PBM, the product was in stock with a wholesaler operating in this state.3. If, after a reasonable effort to identify the information needed to make the determination required under part 1. of this subparagraph, the PBM is unable to make the determination solely because the wholesalers contacted by the PBM failed to provide the information needed by the PBM within the timeframe within which the PBM must resolve initial appeals, the PBM shall presume that the product associated with the national drug code number or unique device identifier at issue was not available at a cost that is less than the challenged rate of reimbursement from a pharmaceutical wholesaler in this state as of the date the initial appeal was received from the appealing pharmacy.4. If a PBM fails to provide the information required under T.C.A. § 56-7-3206(c)(4)(A) within the required timeframe, it shall be deemed to have determined there is no pharmaceutical wholesaler operating in this state that offered the product associated with the national drug code number or unique device identifier at issue at a cost that is less than the challenged rate of reimbursement as of the date the initial appeal was received from the appealing pharmacy.(b)1. The pharmacy shall provide the PBM with the name of its majority wholesaler for the purpose of allowing the PBM to accurately fulfill its obligations under T.C.A. § 56-7-3206(c)(4)(B). The PBM shall then determine whether the prescription drug or device at issue is available from the pharmaceutical wholesaler at a cost that is less than the challenged rate of reimbursement as of the date the initial appeal was received from the appealing pharmacy. If the pharmacy fails to provide the name of its majority wholesaler within two business days of a request by the PBM to provide that name, the PBM may presume the prescription drug or device at issue is available at a cost that is less than the challenged rate of reimbursement from the pharmacy's majority wholesaler and take no further action pursuant to T.C.A. § 56-7-3206(c)(4) or this subparagraph (b). 2. For purposes of this subparagraph (b), the product associated with the national drug code number or unique device identifier at issue shall be deemed available if, at the time the initial appeal was received by the PBM, the product was in stock from the pharmacy's majority wholesaler.3. If, after contacting the pharmacy's majority wholesaler to identify the information needed to make the determination required under part 1. of this subparagraph, the PBM is unable to make the determination solely because the wholesaler failed to provide the information needed by the PBM within the timeframe within which the PBM must resolve initial appeals, the PBM shall presume that the product associated with the national drug code number or unique device identifier at issue was not available at a cost that is less than the challenged rate of reimbursement from the wholesaler as of the date the initial appeal was received from the appealing pharmacy.(c) The pharmacy shall cooperate with the PBM to assist in its search under subparagraphs (a) and (b) of this paragraph; provided, however, that, except as provided in part (b)1. of this paragraph, neither the pharmacy's nor a wholesaler's failure to cooperate or provide the PBM information shall be grounds for the PBM to fail to meet its obligations under T.C.A. § 56-7-3206(c)(4) or this paragraph.(d) Even if the PBM determines it has a basis to deny an initial appeal for a reason other than that the pharmacy was reimbursed actual cost, the PBM shall follow the requirements set out in T.C.A. § 56-7-3206(c)(4).(e) If a pharmacy's initial appeal is resolved against the appealing pharmacy and the PBM is required to adjust the challenged rate of reimbursement pursuant to T.C.A. § 56-7-3206(c)(4)(B), the PBM shall, to effectuate adjustment of the challenged rate, apply the findings from the appeal as to the rate of reimbursement for the drug or medical product or device at issue to other similarly situated pharmacies in the same manner as set forth in paragraph (4) of this rule.(6) If a pharmacy's initial appeal is resolved against the appealing pharmacy, the PBM shall provide the pharmacy the following in writing: (a) A statement the initial appeal is denied, along with a summary outlining the basis for its decision;(b) If applicable, evidence the PBM has adjusted the challenged rate of reimbursement;(c) If applicable, detailed instructions for how to reverse and rebill the claim upon which the initial appeal is based;(d) If applicable, written notification the PBM has issued payment to the pharmacy showing the exact amount of the payment; and(e) Instructions on how to make an external appeal of the PBM's decision to the Commissioner by: 1. Explaining how to submit an appeal, including the appropriate phone number or website address for the Department where appeals are accepted. Each PBM shall be responsible for ensuring the information provided to pharmacies pursuant to this part 1. is accurate; and2. Including the following statement: Pursuant to T.C.A. § 56-7-3206(g)(2), you have the right to appeal this decision to the Commissioner of the Tennessee Department of Commerce and Insurance.
(7)(a) If a PBM is required to pay a pharmacy any additional money upon resolution of an initial appeal, including a payment to a similarly situated pharmacy under part (4)(a)2. of this rule, the PBM shall adjust the rate of reimbursement and make such payment within seven business days after notice of the initial appeal is received by the PBM. However, subject to subparagraph (b), the timeline for making the payment(s) shall not begin until the appealing pharmacy has reversed and rebilled its claim showing the adjusted rate of reimbursement.(b) If the appealing pharmacy fails to reverse and rebill its claim pursuant to subparagraph (a), the PBM shall adjust the rate of reimbursement and make the payment(s) no later than fifteen business days after the PBM receives notice of the initial appeal.(8) A PBM shall retain all records related to an initial appeal pursuant to Rule 0780-01-95-.14. A PBM shall provide the Department access to all records upon request and comply with requests for information regardless of whether the request is part of an audit by the Department.(9) A PBM shall not assess any costs to a pharmacy for any services provided by the PBM in connection with an initial appeal.(10) An initial appeal shall not result in a pharmacy, whether the appealing pharmacy or a similarly situated pharmacy, being required to reimburse or refund a PBM any portion of a payment previously received by the pharmacy.(11) This rule applies only to initial appeals submitted to a PBM under the PBM's initial appeal process established in accordance with T.C.A. § 56-7-3206(c)(2)(A) and approved pursuant to Rule 0780-01-95-.03.Tenn. Comp. R. & Regs. 0780-01-95-.04
Emergency rules filed December 29, 2022; effective through June 27, 2023. New rules filed March 29, 2023; effective June 27, 2023. Amendments filed March 28, 2024; effective 6/26/2024.Authority: T.C.A. §§ 56-7-3101 and 56-7-3206.