2022 PBM Enforcement Law & TDCI Rules
*updated as of 1/17/2023
The Tennessee Department of Commerce and Insurance (TDCI) adopted and filed emergency rules pursuant to the PBM bill supported by TPA (Public Chapter 1070), which passed after strong TPA grassroots advocacy during the 2022 legislative session. The emergency rules went into effect on January 1, 2023.
Following the passage of 2021’s Public Chapter 569, TPA saw limited enforcement capability by TDCI for issues related to medication reimbursement and patient steerage. With the 2022 legislation, the authority of TDCI to analyze, enforce, and investigate PBM complaints was clearly defined, and TDCI has hired key staff to oversee and manage the enforcement of PBMs in the state.
Summary of Emergency Rules
- Stipulations on the PBM
Much of the regulation focuses on the PBM’s initial appeals process for medication rate review. This initial appeals process must be approved by the state and follow a standardized process across all PBMs. TPA has been working closely with TDCI staff to identify PBMs in violation of these various stipulations in the rules.
2. Filing Initial Rate Appeal
A pharmacy must file its initial appeal to the PBM within seven business days of its submission of the initial claim for reimbursement. If your PSAO does this process for you, please reach out to confirm the timeliness of this process. If a pharmacy does not submit all proper information for the initial appeal, the PBM must notify the pharmacy that more information is needed within five business days. The PBM must make its final determination on the pharmacy’s initial appeal within seven business days. TDCI requires PBMs to collect standard information from pharmacies for this initial appeal.
When an initial appeal is resolved in favor of the pharmacy, the PBM will adjust the reimbursement within seven days to the pharmacy and other similarly situated pharmacies. When you file a rate review, you can help other similarly situated pharmacies such as yourself.
When an initial appeal is resolved against the pharmacy, the PBM needs to make reasonable effort to notify the pharmacy of where they can obtain the medication at the reimbursable price with a wholesaler operating in the state.
3. Filing a Complaint with TDCI
If a pharmacy chooses to file a complaint with TDCI following the denial of an initial appeal, you have 30 days to file the complaint from when the PBM denied the initial appeal. The PBM will have up to 10 business days to respond to the complaint once TDCI notifies the PBM of the complaint. TDCI has no more than 90 days to resolve the dispute.
TPA members should submit complaints of PBM violations to TDCI using this form and submit it by mail, email, or fax to TDCI.
4. Enhanced Dispensing Fee Qualifications
PBMs shall pay a professional dispensing fee at a rate not less than the current TennCare dispensing fee if the pharmacy would qualify for an enhanced dispensing fee (currently at $11.98) for low-volume pharmacies, which is currently defined by TennCare standards as less than 65,000 prescriptions per year.
For 2023, low-volume pharmacies have until January 31, 2023 to file certification stating the pharmacy expects to qualify as a low-volume pharmacy for the coming calendar year. Each certification shall contain a statement that the certification is true and accurate to the best of the knowledge of the individual filing the certification on behalf of the pharmacy. Pharmacies may use a certification process by utilizing information pulled from your pharmacy software.
Moving forward to qualify, the pharmacy must submit their pharmacy’s prescription volume from July 1 of the prior year to June 30 of the current year by December 1st for the next year. For example, certifications submitted on or before December 1, 2024, for calendar year 2025 shall be based on a pharmacy’s annual prescription volume for July 1, 2023, to June 30, 2024. TPA continues to work with TDCI to find efficiency in this process.
5. Additional Information
TPA has compiled these frequently asked questions to provide members with additional answers to common questions.
You may also access the slide deck from TPA’s Insight Into Advocacy webinar on December 14, 2022. This webinar and accompanying slide deck reviewed the proposed Emergency Rules, of which many items remained the same in the final rules.
While TDCI finalizes an updated complaint process on PBMs, TPA members should submit complaints of PBM violations to TDCI using this form.
Questions? Please contact Anthony Pudlo (Anthony@TNPharm.org) or Olivia Welter (Olivia@TNPharm.org).