                                 CODE OF VIRGINIA

CARRIER AND INTERMEDIARY CONTRACTS WITH PHARMACY PROVIDERS; DISCLOSURE AND
UPDATING OF MAXIMUM ALLOWABLE COST OF DRUGS; LIMIT ON TERMINATION OR NONRENEWAL
(§ 38.2-3407.15:3)

A. As used in this section, unless the context requires a different meaning:
			&#8220;Carrier&#8221; has the same meaning ascribed thereto in subsection A
of &#xA7; 38.2-3407.15.
			&#8220;Maximum allowable cost&#8221; means the maximum dollar amount that a
carrier or its intermediary will reimburse a pharmacy provider for a group of
drugs rated as &#8220;A&#8221;, &#8220;AB&#8221;, &#8220;NR&#8221;, or
&#8220;NA&#8221; in the most recent edition of the Approved Drug Products with
Therapeutic Equivalence Evaluations, also known as the Orange Book, published by
the U.S. Food and Drug Administration, or similarly rated by a nationally
recognized reference.
			&#8220;Provider contract&#8221; has the same meaning ascribed thereto in
subsection A of &#xA7; 38.2-3407.15.

B. Any contract between a carrier and its intermediary, pursuant to which the
intermediary has the right or obligation to establish a maximum allowable cost,
and any provider contract between a carrier and a participating pharmacy
provider or its contracting agent, pursuant to which the carrier has the right
or obligation to establish a maximum allowable cost, shall contain specific
provisions that require the intermediary or carrier to:

   1. Update, not less frequently than once every seven days, the maximum
   allowable cost list, unless there has been no change to the maximum allowable
   cost of any drug on the list since the last update;

   2. Verify, not less frequently than once every seven days, that the drugs on
   the maximum allowable cost list are available to participating pharmacy
   providers from at least one regional or national pharmacy wholesaler and that
   the amount for each drug is not obsolete and promptly revise the maximum
   allowable cost if necessary to comply with this subsection;

   3. Provide a process for each participating pharmacy provider to readily
   access the maximum allowable cost list specific to that provider; and

   4. Prohibit the intermediary or carrier from terminating or failing to renew
   its contractual relationship with a participating pharmacy provider for
   invoking its rights under any contractual provision required by this section.

C. Any contract between a carrier and its intermediary, pursuant to which the
intermediary has the right or obligation to establish a maximum allowable cost,
and any provider contract between a carrier and a participating pharmacy
provider or its contracting agent, pursuant to which the carrier has the right
or obligation to establish a maximum allowable cost, shall contain specific
provisions that require the intermediary or carrier to provide a process for an
appeal, investigation, and resolution of disputes regarding maximum allowable
cost drug pricing that includes:

   1. A time period of 14 days from the date of initial claim adjudication for
   the participating pharmacy provider to file its dispute request;

   2. A requirement that the dispute request be investigated and resolved within
   14 days of its initiation by the participating pharmacy provider;

   3. A telephone number at which the participating pharmacy provider may contact
   the carrier or its intermediary to speak to a person responsible for
   processing dispute requests;

   4. A requirement that a carrier or its intermediary, if a dispute request is
   denied, provide (i) a reason for the denial, and (ii) the national drug code
   of the drug under dispute that the carrier or its intermediary contends may be
   purchased by the participating pharmacy provider for an amount that is equal
   to or less than the maximum allowable cost; and

   5. A requirement that a carrier or its intermediary, if a dispute is
   successful, update the maximum allowable cost for the drug under dispute
   within five days of the determination of the dispute.

D. The Commission shall have no jurisdiction to adjudicate individual
controversies arising out of this section.

E. This section shall apply with respect to contracts described in subsections B
and C entered into, amended, extended, or renewed on or after January 1, 2016.

HISTORY: 2015, c. 518.