W. Va. Code R. § 114-99-4

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 114-99-4 - Licensure of Pharmacy Benefit Managers

4.1. A person or organization may not establish or operate as a PBM in this state without first obtaining a license from the Commissioner.

4.1.1. A PBM shall apply for a license on a form and in a manner prescribed by the Commissioner.

4.1.2. The term of licensure shall be two years. However, the Commissioner may, in his or her discretion, fix the date of expiration regarding the initial license of a PBM in any manner as is considered by him or her to be advisable for an efficient distribution of the workload of his or her office, including fixing the date of expiration for the initial license of a PBM for a period less than or more than two years.

4.2. An initial licensure application shall be verified by an officer or authorized representative of the applicant and shall include the following:

4.2.1. The identity, address, and telephone number of the applicant;

4.2.2. The name, business address, and telephone number of the contact person for the applicant;

4.2.3. When applicable, the federal employer identification number for the applicant;

4.2.4. A nonrefundable filing fee sufficient to fund the Commissioner's regulatory duties in relation to Article 51, Chapter 33 of the West Virginia Code and this rule, not to exceed $10,000, which shall be set annually by the Commissioner via Bulletin or Notice on or before July 1;

4.2.5. Financial responsibility in an amount of $1 million evidenced by one of the following:

4.2.5.a. A cash or surety bond issued by a corporate surety authorized to issue surety bonds in the State of West Virginia;

4.2.5.b. An irrevocable letter of credit;

4.2.5.c. Securities with a minimum value of $1 million;

4.2.5.d. A written parental guarantee; or

4.2.5.e. One million dollars in working capital and/or surplus as reflected in audited financial statements submitted to the Commissioner;

4.2.6. Proof of registration with the West Virginia Secretary of State;

4.2.7. A list of the names, addresses and official positions of the persons who are to be responsible for the conduct of the affairs of the PBM applicant, including all members of the board of the directors, board of trustees, executive committee, or other governing board or committee, the principal officers in the case of a corporation, and the partners or members in the case of a partnership or association;

4.2.8. A copy of the basic organizational document of the PBM, such as the articles of incorporation, articles of association, partnership agreement, trust agreement or other applicable documents, and all amendments thereto;

4.2.9. A copy of the bylaws, rules and regulations or similar document, if any, regulating the conduct of the internal affairs of the applicant;

4.2.10. A copy of the PBM's standard, generic contract template, provider manual or other appropriate items incorporated by reference which it uses for contracts entered into by the PBM with pharmacists, pharmacies or pharmacy services administrative organizations in this state in administration of pharmacy benefits for health benefit plans, for the purpose of ensuring that such contracts comply with W. Va. Code § 33-51-9. If a PBM leases or otherwise uses, or anticipates using, a network from another PBM or health benefit plan, the PBM seeking licensure must submit a copy of the contract that it has, or anticipates having, with the other licensed PBM or health benefit plan;

4.2.11. A copy of the most recent year-end audited financial statement of the PBM, which may be a consolidated audited financial statement if applicable;

4.2.12. A description of the projected population or numbers of covered individuals to be administered by the PBM in this state on an annual basis for all health benefit plans with whom the PBM has contracted, and, if applicable, the population or numbers of covered individuals administered by the PBM in the previous year for each health benefit plan;

4.2.13. A network report describing the PBM's network service areas by county in this state for a health benefit plan and the PBM's pharmacy provider directory list for a health benefit plan, including a detailed description of any separate, sub-networks for specialty drugs. The detailed description should include a statement as to whether the PBM has restricted distribution of specialty drugs to mail-order specialty pharmacies or affiliate pharmacies, and further provide the names and addresses of any specialty pharmacies in the PBM's network that are not solely mail-order pharmacies or affiliate pharmacies and are located in West Virginia, or in an out-of-state county that is adjacent to West Virginia;

4.2.14. If the PBM is engaged in spread pricing for a health benefit plan, an explanation regarding whether or not the PBM is assuming risk for the covered benefit;

4.2.15. A statement of whether the applicant has been refused a registration, license or certification to act as (or provide the services of) a PBM or third-party administrator, has any registration, license or certification to act as such been denied, suspended, revoked or non-renewed for any reason by any state or federal entity, or has been sanctioned, fined, penalized or entered into a monetary settlement for any reason by or with any state or federal entity, including but not limited to another state's department of insurance, department of health and human services or Medicaid program, attorney general's office, board of pharmacy or other similar regulatory agency;

4.2.16. A description of whether the applicant had a business relationship with an insurance company terminated for any legal finding or judgment of fraudulent or illegal activities in connection with the administration of a pharmacy benefits plan;

4.2.17. Any and all methodologies utilized by a PBM in connection with reimbursement shall be filed at initial licensure and all reimbursement methodologies must comply with the requirements set forth in Article 51, Chapter 33 of the West Virginia Code. If a PBM was initially licensed prior to the time methodologies were required to be filed, a PBM shall file any and all methodologies utilized by a PBM in connection with reimbursement at its first renewal after January 1, 2022. All filed methodologies shall comply with the provisions of W. Va. Code § 33-51-9(e) and a PBM shall not enter into a contract with a pharmacy that provides for reimbursement methodology not permissible under the provisions of W. Va. Code § 33-51-9(e). The methodologies are confidential and exempt from disclosure under the West Virginia Freedom of Information Act, W. Va. Code § 29B-1-4(a)(1);

4.2.18. An attestation that the PBM has offered all health benefit plans for which the PBM provides pharmacy benefits management the option of pass-through pricing as required by W. Va. Code § 33-51-9(k) and, if applicable, an attestation that the PBM is charging a health benefit plan administered by or on behalf of the state or a political subdivision of the state, the same price for a prescription drug as it pays a pharmacy for the prescription drug, i.e. pass-through pricing. With the attestation, the PBM shall provide the Commissioner with a copy of the PBM's standard, generic template or form for correspondence making the mandatory offer of pass-through pricing to a health benefit plan; and

4.2.19. Any other information which is deemed necessary by the Commissioner in evaluating the application to comply with Article 51, Chapter 33 of the West Virginia Code or requirements of this rule or deemed necessary or appropriate by the Commissioner to establish the qualifications of the PBM to hold a license.

4.3. Review and Approval Process. -- For initial licensure applications, upon receipt of a complete application for items required under section 4.2 of this rule, the Commissioner shall review the application and within 90 days:

4.3.1. Approve the application and issue the applicant a PBM license;

4.3.2. Notify the applicant in writing that the application is incomplete and that additional information is needed to complete the review of the application. If the missing or necessary information is not received within 30 days from the date of the notification, the Commissioner shall deny the application unless good cause is shown; or

4.3.3. Deny the application. -- If the Commissioner determines that the PBM applicant does not meet the requirements for licensure, the Commissioner shall:

4.3.3.a. Provide written notice to the PBM applicant that the application has been denied stating or explaining the basis of the denial; and

4.3.3.b. Advise the PBM applicant that a request for a hearing may be filed with the Commissioner in accordance with W. Va. Code § 33-2-13.

4.4. Renewal. -- A PBM license shall be renewed every two years on October 1. A renewal application shall be deemed approved by the Commissioner after 45 days from the date of the receipt of the renewal application by the Commissioner, unless approved or denied by the Commissioner during that time period.

4.4.1. A renewal application shall be accompanied by the following:

4.4.1.a. A renewal filing fee sufficient to fund the Commissioner's regulatory duties in relation to Article 51, Chapter 33 of the West Virginia Code and this rule, not to exceed $10,000, which shall be set annually by the Commissioner via Bulletin or Notice on or before July 1;

4.4.1.b. A copy of the most recent year-end audited financial statement of the PBM, which may be a consolidated financial statement, if applicable;

4.4.1.c. Evidence of financial responsibility in the amount of $1 million as stated in subsection 4.2.5 of this rule;

4.4.1.d. An updated attestation that the PBM has offered all health benefit plans for which the PBM provides pharmacy benefits management the option of pass-through pricing as required by W. Va. Code § 33-51-9(k) and, if applicable, an attestation that the PBM is charging a health benefit plan administered by or on behalf of the state or a political subdivision of the state, the same price for a prescription drug as it pays a pharmacy for the prescription drug, i.e. pass-through pricing. With the attestation, the PBM shall provide the Commissioner with a copy of the PBM's standard, generic template or form for correspondence making the mandatory offer of pass-through pricing to a health benefit plan;

4.4.1.e. Any changes made to the items in section 4.2 of this rule from the date of its most recent licensure, including but not limited to any changes in methodologies utilized in connection with reimbursement made at any time since initial licensure, updated information regarding the projected number of covered individuals in this state who have pharmacy benefit management services administered by the PBM on an annual basis for all health benefit plans with whom the PBM has contracted, and an updated network report as described in subsection 4.2.13. of this rule; and

4.4.1.f. Any other information which is deemed necessary by the Commissioner in evaluating the renewal application to establish the continuing qualifications of the PBM to hold a license.

4.4.2. The Commissioner may require additional information or submissions from an applicant and may obtain any documents or information reasonably necessary to verify the information in the renewal application.

4.4.3. For disapprovals or denials of a renewal licensure by the Commissioner, the Commissioner shall:

4.4.3.a. Provide written notice to the renewal applicant that the licensure renewal was denied stating or explaining the basis of the denial; and

4.4.3.b. Advise the renewal applicant that a request for a hearing may be filed with the Commissioner in accordance with W. Va. Code § 33-2-13.

4.5. Denial of Initial or Renewal Application.

4.5.1. The Commissioner shall deny an initial application for licensure or deny license renewal of a PBM for the following reasons:

4.5.1.a. The PBM operates, or proposes to operate, in a financially hazardous condition by failing to provide or maintain evidence of financial responsibility as noted under subsection 4.2.5 of this rule;

4.5.1.b. The PBM has been determined by the Commissioner to be in violation or noncompliance with the requirements of this rule or West Virginia law;

4.5.1.c. The PBM has failed to timely submit information under section 4.2 of this rule to complete a review of the initial application or has failed to submit a renewal application and information under section 4.4 of this rule; or

4.5.1.d. The PBM fails to provide the Commissioner with its network report as required by W. Va. Code § 33-51-8(d)(2) and (3).

4.5.2. In lieu of a denial of an initial licensure or renewal application, the Commissioner may permit the PBM to submit to the Commissioner an acceptable corrective action plan to cure or correct deficiencies.

4.6. Evidence of financial responsibility as noted under subsection 4.2.5 of this rule shall be maintained at all times by the PBM during its licensure with the Commissioner, and the Commissioner shall have the right to confirm or verify the PBM's qualifications to hold a license and its financial responsibility at any time. The Commissioner may, however, reduce the amount of the financial responsibility requirement in subsection 4.2.5 of this rule if the amount required is unreasonable relative to the size of the PBM's business operations in this state and would cause a significant financial hardship.

4.7. The information and data submitted by a PBM under this section shall be considered proprietary and confidential by law and privileged, and exempt from disclosure pursuant to Chapter 29B of the West Virginia Code as a "trade secret", is not open to public inspection, is not subject to subpoena, is not subject to discovery or admissible in evidence in any criminal, private civil or administrative action and is not subject to production pursuant to court order. The Commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as part of the Commissioner's official duties.

W. Va. Code R. § 114-99-4