23 CAR § 146-106. Pharmacy network adequacy and compensation

(a) The provisions of this section shall apply to healthcare insurers and healthcare payors, and PBMs administrating for such health benefit plans, as defined in Arkansas Code § 23-92-503(2) and (3) to the extent as permitted by federal law. (b) Pharmacy network adequacy. (1)(A) In order to effectively implement Arkansas Code § 23-92-505, because a PBM is actually administrating a health benefit plan for a healthcare insurer, as contracted by the PBM with a healthcare insurer, the Insurance Commissioner hereby maintains that a pharmacy network is adequate if the pharmacy network meets the network adequacy distances in subdivision (b)(2) of this section. (B) A healthcare insurer shall therefore file and report its pharmacy network subject to Network Adequacy Requirements for Health Benefit Plans, 23 CAR pt. 137, requirements applicable to primary care professionals in lieu of any reporting obligations of the PBM under Arkansas Code § 23-92-505(a)(2). (C) For purposes of this reporting, pursuant to Arkansas Code § 23-92-505(a)(1)(B) and § 23-92-509(b)(2)(B), mail-order pharmacies shall not be included in the calculations determining network adequacy for pharmacists or pharmacies. (2) The network adequacy requirements applicable to pharmacies shall adhere to the standards in Arkansas Code § 23-92-509(b)(2)(B). (c) Compensation. (1)(A) Pursuant to Arkansas Code § 23-92-506(a)(1), the commissioner may, in his or her discretion, review a PBM's reimbursement program or compensation for a pharmacy benefit plan of a healthcare insurer to determine if the reimbursement is fair and reasonable to provide an adequate pharmacy benefits network for a health benefit plan. (B) A healthcare insurer using a PBM for administration of pharmacy benefits shall reasonably ensure that the reimbursement or compensation of pharmacists or pharmacies does not adversely impact participation of pharmacists or pharmacies in its health benefit plans. (2)(A)(i) The commissioner shall not review reimbursement complaints or concerns under this section on a case-by-case basis for a pharmacist or pharmacy. (ii) The commissioner’s discretion to review pharmacy compensation programs pursuant to this section shall be guided by the following factors: (a) Whether the compensation or reimbursement program adversely impacts pharmacist or pharmacy participation in a health benefit plan; and (b) The extent to which the compensation or reimbursement program has an impact on pharmacist or pharmacy participation in health benefit plans either on a statewide basis or in a significant geographical area of the state. (B) For purposes of this section, the commissioner may consider a pharmacist's or pharmacy's declination to provide covered prescription drugs under Arkansas Code § 17-92-507(e) as a circumstance negatively impacting participation, because, in this instance, the health benefit plan is unable to provide its covered member with a covered prescription drug through one (1) of its in-network pharmacists or pharmacies. (C) A healthcare insurer or payor using a PBM for administration of pharmacy benefits shall take the following measures: (i) Develop a mechanism or system with its PBM to track or monitor, on an annual basis, the number of declinations under Arkansas Code § 17-92-507(e); (ii) Develop a mechanism or system with its PBM to track or monitor, on an annual basis, the number of pharmacists or pharmacies that terminated their network participation with the healthcare insurer or PBM network due to reduction in compensation; and (iii) Report such information to the Regulatory Healthlink Division of the State Insurance Department on an annual basis, as part of the healthcare insurer's payor’s network adequacy filings. (D) In addition, for purposes of this section, for generic, prescription drugs subject to MAC requirements, the commissioner may additionally consider the extent or magnitude to which a PBM has adjusted a pharmacist's or pharmacy's reimbursement pricing, on the average on a quarterly basis, to comply with Arkansas Code § 17-92-507(c)(4)(C)(iii), as a circumstance negatively impacting participation, because, in these instances, it is reasonable to conclude that a pharmacist or pharmacy's decision to continue in participation, at a negative cost or negative reimbursement, or pattern, adversely impacts a pharmacist's or pharmacy's prospective participation with the health benefit plan. (3) The provisions in subdivision (c)(2) of this section are guidelines for the commissioner’s discretion to review pharmacy compensation or reimbursement programs under network adequacy requirements, and therefore, the existence of any of the circumstances in subdivision (c)(2) of this section, do not automatically mandate or require the commissioner to review pharmacy compensation or reimbursement programs. (4) The Regulatory Healthlink Division of the State Insurance Department shall develop a system to gather the information required in subdivision (c)(2) of this section. (5)(A) In the event the commissioner decides to review compensation or reimbursement under this section, he or she shall be restricted to reviewing the reimbursement program for purposes of compliance with Network Adequacy Requirements for Health Benefit Plans, 23 CAR pt. 137, network adequacy standards. (B) In his or her review of compensation under this section, the commissioner may review or examine either the healthcare insurer payor or PBM, or both, under the examination standards or procedures under Arkansas Code § 23-61-201 et seq. (C) If after review or examination the commissioner determines a network adequacy violation exists due to adverse impact on pharmacy participation, it shall be the responsibility of the healthcare insurer, using a PBM for administration of pharmacy benefits of its health benefit plans, to take corrective actions to avoid any penalties under 23 CAR § 137-108. (6) Confidentiality. Any information obtained by the commissioner from a review, investigation, or examination of compensation under this section shall be considered confidential under Arkansas Code § 23-61-103, § 23-61-107(a)(4), and § 23-61-207 and, in addition, shall be considered proprietary, as information that would provide an advantage to a competitor, under the Freedom of Information Act of 1967, Arkansas Code § 25-19-101 et seq., in Arkansas Code § 25-19-105(b)(9). (d) Compensation or reimbursement requirements regardless of network adequacy. (1) Pursuant to Arkansas Code § 23-92-506(b)(4) and § 17-92-507, a PBM shall not reimburse a pharmacy or pharmacist in the state in an amount less than the amount that the PBM reimburses a PBM affiliate for providing the same pharmacist services. (2) The amount shall be calculated on a per-unit basis using the same generic product identifier or generic code number.