TPA staff, along with several of our state legislators and pharmacy colleagues, met with representatives from the Tennessee Department of Commerce and Insurance (TDCI) on January 25, 2016, to discuss ongoing actions related to implementation of Tennessee’s Maximum Allowable Cost (MAC) law. The following is a summary of this meeting and the topics that were discussed:
Pharmacy Benefit Managers (PBMs) operating in Tennessee have received three notification letters from TDCI since the MAC law became effective on January 1, 2015. These letters informed PBMs about the law and urged their compliance going forward. TDCI has now moved from the notification phase into the penalty phase, meaning that they will begin assessing civil penalties against PBMs for non-compliance with the MAC law.
As outlined in the PBM MAC law, TDCI has the authority under TCA 56-2-305 to assess several types of penalties for non-compliance with this law, including civil monetary penalties ranging anywhere from $1,000 per occurrence, up to an aggregate maximum of $250,000, depending on the nature and intent of the violations.
TDCI is also aware of actions being taken by Medicare Part D against Cigna. It is important to remember that TDCI (or any other state entity) is prohibited from regulating federally funded programs such as Medicare or ERISA-Exempt plans. Additionally, TDCI routinely communicates with TennCare, but TennCare is under the Tennessee Department of Finance and Administration.
TPA and meeting participants suggested that TDCI establish a uniform PBM complaint process through which pharmacists would submit complaints to them directly, similar to the process established in Ohio. To access the Ohio PBM complaint form, CLICK HERE.
Information was also provided to TDCI with an update on PBM MAC laws and Pharmaceutical Care Management Association (PCMA) lawsuits in Iowa and Arkansas.
- Iowa MAC Law
- District Court Ruling Upholding their MAC Law
- Iowa Law Authorizing the Commissioner to Take Action Against PBMs
TPA and meeting participants provided TDCI with an update on the Tennessee Pharmacy Services Administrative Organization (PSAO) clean-up language related to the MAC law, which has been introduced during this 2016 Tennessee General Assembly session. To access this language, CLICK HERE.
As most community pharmacists are aware, Direct and Indirect Remuneration (DIR) fees are being implemented in many of the Medicare prescription drug plans. TPA and meeting participants provided an update to TDCI regarding DIR fees. TPA will continue to work with the National Community Pharmacists Association (NCPA) on these DIR-related issues. For more information, see NCPA’s Frequently Asked Questions (FAQ) About Pharmacy “DIR” Fees.
TPA appreciates the support of the Tennessee Department of Commerce and Insurance and will continue to work with them to ensure that PBMs follow the MAC law, and TPA especially appreciates the ongoing efforts of our members to communicate issues related to PBM MAC programs with your state and federal legislators.
TPA will continue to work on this issue and will keep members informed of any updates going forward.