Blue Cross and Blue Shield of Massachusetts (BCBSMA), Commercial Health Insurers, and Health Maintenance Organizations (HMO's)

PRISCILLA H. DOUGLAS SECRETARY LINDA RUTHARDT COMMISSIONER THE COMMONWEALTH OF MASSACHUSETTS EXECUTIVE OFFICE OF CONSUMER AFFAIRS DIVISION OF INSURANCE 470 ATLANTIC AVENUE BOSTON, MA 02210-2223 (617) 521-7794 TTY/TDD (617) 521-7490 # Bulletin No. 95-12 To: Blue Cross and Blue Shield of Massachusetts (BCBSMA), Commercial Health Insurers, and Health Maintenance Organizations (HMO's) From: Commissioner Linda Ruthardt RE: M.G.L. c. 176D, § 3B Date: December 1, 1995 This bulletin is intended to clarify the Division's position on M.G.L. c. 176D, § 3B added by St. 1994, c. 60, § 148, the so-called "Pharmacy Freedom of Choice-Any Willing Provider" statute. M.G.L. c. 176D, § 3B requires that a carrier, as defined by the statute, which offers insureds a restricted pharmacy network shall, in soliciting, arranging, competitively bidding and contracting for such a network, comply with certain competitive bidding requirements for the purpose of promoting fair and competitive bidding. It is the Division's determination that the statute is intended to require a competitive bidding process be used in any instance in which a carrier provides (including where it continues to provide) pharmaceutical drug benefits to insureds, which under the terms of a carrier's policy, certificate, contract or agreement of insurance or coverage either requires an insured or creates a financial incentive for an insured to obtain prescription drug benefits from one or more participating pharmacies that have entered into a contractual relationship with the carrier. The Division reminds carriers that non-network retail pharmacies, which are not offered or not participating in a carrier's restricted pharmacy network contract, have the right to provide drug benefits to a carrier's insureds if the non-network pharmacies reach certain agreements with the carrier as set forth in the statute. The only exception to the competitive bidding process requirement referred to in paragraph two is in a situation where a carrier has an "open" network in which any pharmacy that wishes to contract with the carrier to provide prescription drug benefits may do so.