2021 Legislative Recap: Status of PBM Reform Law and Other Pharmacy Legislation

August 8, 2021

Legislators were ready to get to work during the 112th General Assembly. After a year of having to put most legislative priorities on hold, Senators and Representatives were eager to reintroduce several pieces of legislation for consideration. They officially convened on January 12, 2021, but soon held a special session surrounding education, before returning to other business on February 8. The 112th General Assembly also had 12 new faces, which are listed below. Knowing and contacting your legislators was a key to pharmacy success in 2021 and will continue to be, as pharmacy will continue to face new challenges and opportunities.

•    Senate District 20 – Heidi Campbell (D-Oak Hill)
•    Senate District 26 – Page Walley (R-Bolivar)
•    House District 3 – Scotty Campbell (R-Mountain City)
•    House District 6 – Tim Hicks (R- Gray)
•    House District 7 – Rebecca Keefauver Alexander (R-Jonesborough)
•    House District 15 – Sam McKenzie (D-Knoxville)
•    House District 16 – Michele Carringer (R-Knoxville)
•    House District 18 – Eddie Mannis (R-Knoxville)
•    House District 76 – Tandy Darby (R-Greenfield)
•    House District 90 – Torrey Harris (D-Memphis)
•    House District 92 – Todd Warner (R-Chapel Hill)
•    House District 97 – John Gillespie (R-Memphis)

Pharmacy’s biggest success during this year’s legislative session was the enactment of Public Chapter 569, one of the most progressive pharmacy benefit manger (PBM) reform bills in the country. This law was a collaborative effort between TPA and a coalition of providers and patient advocacy groups to bring much-needed changes to the regulation of PBMs. By working together and placing Tennessee patients first, TPA members sent a loud and clear message to legislators and the PBM industry that patients deserve the right to choose their pharmacy provider, and protecting the pharmacy profession from Fortune 20 prescription drug middlemen is essential to the state of Tennessee. More information about the current status of the PBM law, as well as a recap of other pieces of legislation, is found below.

TPA recognizes and thanks the Legislative and Regulatory Committee members of TPA and the Tennessee Society of Health-System Pharmacists, legislative members of the Tennessee General Assembly, and especially all of our dedicated TPA members, for your ongoing efforts to improve the health and lives of fellow Tennesseans! Grassroots engagement by pharmacy advocates remains the driving force behind our legislative victories.

We want to also recognize and thank the Tennessee Pharmacists Political Action Committee (PharmPAC) leaders and contributors. Without your generous contributions, advancements in pharmacy practice in Tennessee would not be possible.

There is still much work to be done in the future. Advocacy efforts continue, and financial support for PharmPAC is NEEDED and GREATLY APPRECIATED throughout the year. PharmPAC Chair Leslie Shephard Wolfe and Vice-Chair Lacey Sexton continue to work to encourage active engagement in legislative efforts through support for PharmPAC. Giving to PharmPAC is a direct investment in your professional future. All contributions are appreciated, and no amount is too great or too small! We will need your support to ensure our legislative victories continue to make an impact. Please give today!

The legislative fight to advance, promote, and protect patient access to high-quality, pharmacist-provided care in Tennessee is a year round effort, and TPA encourages each of you to get active, to engage with your legislators, and to play a leading role in moving pharmacy forward!

PHARMACY LEGISLATION ENACTED IN 2021

2021 PBM Reform Law

• Legislation: HB 1398 / SB 1617
• Law: Public Chapter 569
• House Sponsor(s): Helton, Clemmons, Smith, Rudder, Faison, Bricken, Lafferty, Powers, Sparks, Mannis, Littleton, Grills, Warner, Hurt, Terry, Whitson, Garringer, Kumar, Moon, Eldridge, Hall, Hakeem, Ramsey, T. Hicks, Mitchell, Cepicky, Hawk, Sherrell, Griffey, Casada, Weaver, Alexander, Moody, Crawford, Reedy, Hodges, Russell, Cochran, Leatherwood, J. Sexton, Wright, Calfee, Farmer, Garrett, Freeman, Beck, Lynn, Zachary, Jernigan, Windle, Powell, Curtis Johnson, Darby, Rudd, Doggett, Ogles, Williams, Haston, Vaughan, Howell, Ragan, Harris, Shaw, Towns, Hardaway, Chism, White, Marsh, Carr, Gant, Keisling, Gloria Johnson, Lamberth, Todd, Miller, Camper 
• Senate Sponsor(s):  Reeves, Bell, Yager, Haile, Swann, Briggs, Campbell, Jackson 
• Effective Date: July 1, 2021
• Description: This act prevents discrimination by PBMs against 340B entities, prevents patient steering to only certain contracted pharmacists, prevents spread pricing, prevents reimbursements below cost, and increases transparency by allowing for real-time benefits analysis. Click here for a detailed summary of the sections of the bill. Key elements of note can be found below:
  • Section 2(b) of the act states, “A pharmacy benefits manager or a covered entity shall not interfere with the patient’s right to choose a contracted pharmacy or contracted provider of choice in a manner that violates §56-7-2359 or by other means, including inducement, steering, or offering financial or other incentives.”
    • A covered entity is defined in §56-7-3102. It includes a variety of health insurance issuers, including health programs administered by the state (i.e., state employee health plan), self-insured entities (i.e., ERISA plans), and all other corporations, entities or persons, or an employer, labor union, or other group of persons organized in the state that provides health coverage to covered individuals who are employed or reside in the state.
    • §56-7-2359 is considered the “any willing pharmacy” statute in the state of Tennessee. It states that no health insurance issuer and no managed health insurance issuer can deny any licensed pharmacy or licensed pharmacist the right to participate as a provider in any policy, contract or plan on the same terms and conditions as are offered to any other provider of pharmacy services under the policy, contract or plan.
    • In the Rutledge vs PCMA Supreme Court case, there was only a determination that ERISA plans were not exempt from state regulations around cost of prescriptions, with no mention of any willing pharmacy statutes in the state. However, on July 8, 2021, the Tennessee Department of Commerce and Insurance (TDCI) issued a bulletin stating that they believe the legislative intent is for ERISA plans to be included in the requirements of the act and will enforce accordingly.
  • In Section 3(c)(1) of the act, it states that a pharmacy benefits manager shall not reimburse a contracted pharmacy for a prescription drug or device an amount that is less than the actual cost to that pharmacy for the prescription drug or device.
    • There are some questions around the term of actual cost, which may need to be defined at a later date.
    • As mentioned above, Rutledge vs PCMA did rule that states could regulate the cost of prescriptions, so there should be no question around the application of this section. However, we are still hearing of many below-cost claims. If you are still getting paid below cost on non-Medicare and non-Medicaid claims, you should file a complaint with TDCI. You can fill out one complaint form and attach separate spreadsheets for each PBM. The complaint process allows companies 30 days to respond to TDCI, so there is a delay between when the complaint is filed and a response is received. After the response from the PBM, pharmacies are then able to file a rebuttal within 10 days. TPA is interested in what the responses are, so that we can help our members with standard rebuttals.

TPA staff met earlier this week with TDCI staff. They reported that 147 complaints were received by their office from July 1 through August 1. Before a complaint is submitted to their office, the pharmacy should first go through the MAC appeal process with the PBM. In many cases, this process occurs with the assistance of the pharmacy’s PSAO. Additionally, some of the complaints have come in incomplete. It is important that the complaint contains the claim number, BIN, date of service, and any other pertinent information. Pharmacies can submit one complaint form and attach spreadsheets, as long as the PBMs are listed separately. Finally, all complaints must be submitted through the standard online form, and e-mailed complaints will just cause duplication and delay. TDCI did ask for patience as they navigate this piece of legislation. They hope to have complaints resolved within 45 days, but this is the first time the Department has regulated ERISA plans of any sort, and the rationale they are receiving for non-compliance is different from what they have traditionally handled. TPA will continue to work with TDCI to come up with solutions and top priorities.

Please note that this act does not apply to Medicare or Medicaid. Medicare plans cannot be regulated by state policy. Additionally, this act does not apply to Medicaid (TennCare). TennCare already must follow the “any willing pharmacy” law in the state, and was excluded from Section 3 of the bill that dealt with actual cost.

TPA continues to work on implementation of this bill. In August, TPA met with TDCI and will meet later this month with PBM lobbyists in the state. TPA is also working with the Community Pharmacy Enhanced Services Network (CPESN)-TN and CPESN-Northeast Tennessee on materials for pharmacists and patients.

Regulation of Compounding Pharmacies

• Legislation: HB 0877 / SB 1269
• Law: Public Chapter 149
• House Sponsor(s): Terry, Hazlewood
• Senate Sponsor(s): Reeves
• Effective Date: April 13, 2021
• Description: This public chapter clarifies the intent of the Board of Pharmacy as it relates to some compounding practices, as well as provides additional guidance on other items regarding compounding pharmacies. Most notably, it changes that pharmacies engaged in any aspect of compounding must comply with existing and future relevant USP guidelines as adopted by Board rule. This change removed the word ‘sterile’ from current law, so all compounding could be regulated by the Board according to USP chapters, not only sterile compounding. While most USP chapters are not currently compendially applicable, with only the 2014 <795> and 2008 <797> chapters being considered applicable at this time, the Board of Pharmacy plans to make a decision on enforcement at the September 2021 Board Meeting. This chapter also allows for equivalent inspections for out-of- state pharmacy practice sites and requires them to provide most recent inspection reports at the time of licensing and renewal. It also requires compounding pharmacies to notify the Board within 14 business days of any discipline (including warning) imposed by any regulatory or licensing agency. Finally, it removed the requirement that pharmacies engaging in sterile compounding have to make certain quarterly reports to the Board. These reports must now be available upon request.

Changes for CLIA Waived Pharmacies in Tennessee

• Legislation: HB 0226 / SB 0982
• Law: Public Chapter 495
• House Sponsor(s): Vaughan, White, Hazlewood, Smith
• Senate Sponsor(s): Massey
• Effective Date: May 25, 2021
• Description: This act removed pharmacies that possess an active CLIA Certificate of Waiver for point of care testing from oversight of the Medical Laboratory Board. It also updated the definition of waived tests in line with the federal CLIA definition, removing previous restrictions on CLIA waived tests in the state of Tennessee. The passage of this act removes duplicative and burdensome requirements on pharmacies in the state of Tennessee.

TennCare Pharmacy Advisory Committee Extension

• Legislation: HB 0296 / SB 0075
• Law: Public Chapter 110
• House Sponsor(s): Ragan
• Senate Sponsor(s): Roberts
• Effective Date: April 13, 2021
• Description: This public chapter extended the TennCare pharmacy advisory committee (PAC) to June 30, 2027. The committee makes recommendations regarding a preferred drug list (PDL) to govern all state expenditures for prescription drugs for the TennCare program.

APRN and Physician Assistant Orders for Home Health Care

• Legislation: HB 0743 / SB 0478
• Law: Public Chapter 124
• House Sponsor(s): Vaughn, Ramsey, Kumar, Smith
• Senate Sponsor(s): Haile, Kyle, Rose, Reeves
• Effective Date: April 13, 2021
• Description: This public chapter adds advanced practice registered nurses and physicians assistants as healthcare providers who can place orders for home health care. Previously, only physicians could do this.

Various Minor Changes to CSMD

• Legislation: HB 0080 / SB0745
• Law: Public Chapter 136
• House Sponsor(s): Lamberth, Gant, Kumar
• Senate Sponsor(s): Johnson, Crowe
• Effective Date: April 13, 2021
• Description: This public chapter makes various minor changes to the controlled substance monitoring database (CSMD). Notably, it allows for the state chief medical examiner, a county medical examiner, a deputy or assistant state medical examiner or forensic pathologist to access the database, and further allows for CSMD data to be shared with additional state, county, or federal agencies outside of Tennessee.

Clarification of Marijuana Definition

• Legislation: HB 0976  / SB 0706
• Law: Public Chapter 230
• House Sponsor(s): Powers, Sexton C, Ragan
• Senate Sponsor(s): Walley, Massey
• Effective Date: April 22, 2021
• Description: This public chapter clarifies that ‘marijuana’ does not include a product approved as a prescription medication by the United States FDA.

Healthcare Provider Requirements for Suicidial Patients

• Legislation: HB 0180 / SB 0615
• Law: Public Chapter 259
• House Sponsor(s): Hall, Ramsey, Smith, Powell, Harris, Clemmons
• Senate Sponsor(s): Bell, Jackson
• Effective Date: July 1, 2021
• Description: This act requires that, if a patient who is an inpatient in a healthcare facility or seeking services from an emergency department expresses to a healthcare provider a recent threat or attempt at suicide or infliction of bodily harm to themselves, then the healthcare provider shall enter the attempt or threat into the patient’s medical record. When the patient is discharged from the facility, the facility shall provide the patient with contact information to access a qualified mental health professional or counseling resource, unless the patient is discharged to another facility. This requirement may be satisfied by providing contact information for the state’s mobile crisis services or the statewide crisis hotline.

State Agency Required Rule Review

• Legislation: HB 0566 / SB 1087
• Law: Public Chapter 328
• House Sponsor(s): Ragan, Howell, Crawford, Smith
• Senate Sponsor(s): Roberts
• Effective Date: July 1, 2021
• Description: This act will require that state agencies, including the Tennessee Board of Pharmacy, submit a report of current effective rules every eight years, with the first report due December 1, 2023. This report will also require the agency to provide the administrative history, as well as the determination of whether each rule adheres to current state or federal law, and if each rule should be amended or repealed, reviewed further, or continue in effect without amendment.

Although unrelated to this new Public Chapter, the Tennessee Pharmacists Association will soon be seeking input from members on current Tennessee Board of Pharmacy rules. We hope to utilize this information to send to a joint committee between TPA and the Board of Pharmacy for possible rule updates.

Collaborative Practice Agreement for COVID-19 Vaccines for TennCare Patients (For Billing Purposes)

• Legislation: HB 0778 / SB 0777
• Law: Public Chapter 346
• House Sponsor(s): Lamberth, Gant, Kumar, Hardaway, Towns, Terry
• Senate Sponsor(s): Johnson, Reeves, Pody
• Effective Date: May 6, 2021
• Description: This act makes law the collaborative pharmacy practice agreement (CPPA) between the Tennessee Chief Medical Officer and a pharmacist for the purpose of administering a COVID-19 vaccine to the State’s TennCare population, which includes CoverKids and CoverRx. This act also requires pharmacists to maintain copies of the CPPA and documentation of the vaccine administration training program on file and to make them available to the department of health on request. While the CPPA came out before the law took effect, that was possible through previous Executive Orders.

As previously noted, pharmacists are explicitly authorized under the federal Public Health Emergency PREP Act to order and administer COVID-19 vaccinations. However, pharmacists must have a Tennessee Medicaid ID in order to process COVID-19 vaccination claims for TennCare patients under the pharmacist’s NPI. Pharmacists who do not have a Tennessee Medicaid ID can apply for one at any time by following these steps:

1. Obtain Individual NPI number
2. Complete CAQH Account Information
3. Apply for Medicaid ID

For more details about completing the CAQH Account Information, please download this guide.

Changes to Volunteer Rx Prescription Drug Discount Plan

• Legislation: HB 1015 / SB 1271
• Law: Public Chapter 372
• House Sponsor(s): G. Hicks, Garrett, Smieth, Hazlewood, Helton, Weaver
• Senate Sponsor(s): Reeves
• Effective Date: July 1, 2021
• Description: This act added protections around the Volunteer Rx prescription drug discount plan that was formed in 2005 and is not currently utilized. Another organization wanted to utilize the structure of the Volunteer Rx plan to institute a similar dental and vision discount. TPA took advantage of this opportunity to require that this discount plan be regulated by the Department of Commerce and Insurance.

Co-Pay Accumulator

• Legislation: HB 0619 / SB 1397
• Law: Public Chapter 405
• House Sponsor(s): Rudder, Helton, Smith, Cepicky, Mitchell, Terry, G. Hicks, Hazlewood, Kumar, Thompson, Hawk, Bricken, Lamar, White, Freeman, Gillespie, Curtis Johnson, Carr, Littleton, Hodges, Rudd, Powers, Hall, Sherrell, Carringer, Parkinson, Eldridge, Moody, Todd 
• Senate Sponsor(s): Swann, Reeves, White, Akbari, Rose
• Effective Date: July 1, 2021
• Description: This act requires an insurer to include cost sharing amounts paid by the enrollee, or on behalf of the enrollee by another person, when calculating an enrollee’s contribution to an applicable cost sharing requirement. It does not apply to a prescription drug for which there is a generic alternative, unless the enrollee has obtained prescription by PA, a step therapy protocol, or the insurer’s exceptions and appeals process. This legislation is intended to combat insurers’ “accumulator adjustment programs” by not counting the amounts provided by the manufacturer in calculating the patient’s annual out of pocket limit.

Required Notice for Public Restrooms
*Currently enjoined and not enforceable*

• Legislation: HB 1182 / SB 1224
• Law: Public Chapter 453
• House Sponsor(s): Rudd, Cepicky, Griffey, Sherrell, Moody, Todd
• Senate Sponsor(s): Rose, Hensley, Pody
• Effective Date: July 1, 2021 *This law is has been enjoined and is not currently enforceable.*
• Description: This act requires businesses that allow members of either biological sex to use a restroom within the building post a notice at the entrance of the public restroom. This does exclude unisex, single-occupant restrooms or family restrooms intended for use by either biological sex. The signage that must be posted has specific language, color, and size requirements.

Hormone Treatment for Prepubertal Minors

• Legislation: HB 1027/ SB 0126
• Law: Public Chapter 460
• House Sponsor(s): Kumar, Cochran, Zachary, Hazlewood, Carr, Smith, Powers, White, Moody
• Senate Sponsor(s): Haile, Pody, Stevens
• Effective Date: May 18, 2021
• Description: This act prohibits healthcare prescribers from prescribing a course of treatment that involves hormone treatment for gender dysphoric or gender incongruent prepubertal minors, unless the hormone treatment is for growth deficiencies or other unrelated diagnoses. This act did not provide any guidance or requirements for pharmacists dispensing these medications, but they are considered unlawful.

COVID-19 Vaccination Prohibitions and Exemptions

• Legislation: HB 0013 / SB 0187
• Law: Public Chapter 513
• House Sponsor(s): Hulsey, Griffey, Cepicky, Reedy, Weaver, Smith, Calfee, Hall, Rudd, Grills, Lafferty, Sherrell, Lynn, Zachary, Cochran, Bricken, Faison, Eldridge, Sparks, T. Hicks, Warner, Hurt, Doggett, Todd, Moody, Keisling, Rudder, Alexander, Holsclaw 
• Senate Sponsor(s): Bowling, White, Bell, Podu, Stevens
• Effective Date: May 25, 2021
• Description: This act prohibits state and local governmental entities from forcing, requiring, or coercing a person to receive an immunization or vaccination for COVID-19 against the person’s will. However, they can be required at government-owned hospitals and public higher education institutions where students in healthcare professional programs may be subject to vaccine requirements in their internship or residency locations.

Certificate of Need Reform

• Legislation: HB 0948 / SB 1281
• Law: Public Chapter 557
• House Sponsor(s): Boyd, Vaughan, Smith, Gant, Sparks, Hall, Helton, Ramsey, Reedy, Todd, Howell
• Senate Sponsor(s): Reeves, Jackson, Walley, Watson, Gardenhire, Massey, Stevens
• Effective Date: October 1, 2021, for most sections
• Description: This act made changes to the Certificate of Need laws in the state. Certificate of Need is the term that reflects the state policy that “the establishment and modification of health care institutions, facilities and services, shall be accomplished in a manner that is orderly, economical and consistent with the effective development of necessary and adequate means of providing for the health care of the people of Tennessee.”

Medical Cannabis Commission

• Legislation: HB 0490 / SB 0118
• Law: Public Chapter 577
• House Sponsor(s): Terry, Hodges, Ramsey, Dixie, Smith, Hardaway, Curcio, Faison, Miller, Helton, Freeman, Thompson
• Senate Sponsor(s): Haile, Massey, Akbari, Rose
• Effective Date: May 27, 2021
• Description: This act establishes the medical cannabis commission that will examine federal laws and other states’ laws regarding medical use of cannabis, including issues relating to patient qualification, patient registration, role of practitioners, establishing guidelines of acceptable medical use, development of a standard of care, the role of law enforcement, as well as others. The commission will include at least two pharmacists, one appointed by the Lt. Governor and one appointed by the Speaker of the House.

OTHER RESOURCES AVAILABLE

State Agency Required Rule Review

• Tennessee Board of Pharmacy Legislative Update
• Tennessee Hospital Association Legislative Report
• Tennessee Medical Association
  • New Laws Enacted June 2021
  • New Laws Effective July 2021