Source: https://www.legiscan.com/VA/text/HB2516/2019
Timestamp: 2019-06-17 18:44:11
Document Index: 687513061

Matched Legal Cases: ['§38', '§38', '§38', '§514', '§ 1144', '§38', '§38', '§ 38', '§38', '§38', '§38', '§38', '§ 38', '§38', '§38', '§ 38', '§ 38', '§38', '§38', '§38', '§ 38', '§38', '§ 38', '§38', '§38', '§ 38', '§38', '§38', '§38', '§38', '§38', '§38', '§ 38', '§38', '§ 38', '§38', '§ 38', '§38', '§38', '§38', '§38', '§38', '§38', '§38', '§ 38', '§38', '§ 38', '§38']

Bill Text: VA HB2516 | 2019 | Regular Session | Prefiled | LegiScan
Bill Text: VA HB2516 | 2019 | Regular Session | Prefiled
Bill Title: Health insurance rate reviews; pharmacy benefit price spread.
Status: (Introduced) 2019-02-05 - Left in Commerce and Labor [HB2516 Detail]
Download: Virginia-2019-HB2516-Prefiled.html
19102959D
HOUSE BILL NO. 2516 Offered January 9, 2019 Prefiled January 9, 2019 A BILL to amend and reenact §§38.2-4214 and 38.2-4319 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 38.2-316.2, relating to the State Corporation Commission's reviews of premium rates for health benefit plans; minimum anticipated loss ratios; price spread on pharmacy benefits. ---------- Patron-- Hodges ---------- Committee Referral Pending ----------
1. That §§38.2-4214 and 38.2-4319 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 38.2-316.2 as follows:
§38.2-316.2. Approval of premium rates; calculation of anticipated loss ratio; treatment of pharmacy benefits price spread.
"Anticipated loss ratio" means the ratio of the present value of the future benefits to the present value of the future premiums of a policy form over the entire period for which rates are computed to provide health insurance coverage.
"Health insurance coverage" means benefits consisting of medical care, provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care, under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance organization contract offered by a health insurance issuer.
"Health insurance issuer" means an insurance company, or insurance organization, including a health maintenance organization, that is licensed to engage in the business of insurance in the Commonwealth and that is subject to the laws of the Commonwealth that regulate insurance within the meaning of §514(b)(2) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1144(b)(2). "Health insurance issuer" does not include a group health plan as defined in §38.2-3431.
"Pharmacy benefits manager" means a person that administers or manages prescription drug benefits provided by a health insurance issuer for the benefit of members, including processing of claims for payment for the provision of prescription drugs or pharmacy services, performing pharmacy audits, developing and managing drug formularies and preferred drug lists, administering programs for payers' prior authorization of claims for payment for the provision of prescription drugs or pharmacy services, and payment of claims to pharmacies for prescription drugs dispensed to a member.
"Price spread" means the difference between (i) the value of payments made by the health insurance issuer of the health benefit plan to its pharmacy benefits manager and (ii) the value of payments made by the pharmacy benefits manager to dispensing pharmacists for the provision of prescription drugs or pharmacy services with regard to pharmacy benefits covered by the health benefit plan.
"Qualified actuary" means a member of the American Academy of Actuaries or other individual qualified as described in the American Academy of Actuaries' U.S. Qualification Standards and the Code of Professional Conduct to render statements of actuarial opinion in the applicable area of practice.
B. The regulations promulgated by the Commission pursuant to §38.2-316.1 shall:
1. Establish minimum anticipated loss ratios to ensure that the benefits provided by policy forms under each health benefit plan are or are likely to be reasonable in relation to the premium charged;
2. Allow a health insurance issuer to include as reimbursement for clinical services, with respect to incurred claims, only the amount that a third-party vendor actually pays a medical provider or supplier for providing covered clinical services or supplies to enrollees;
3. Provide that if a third-party vendor is performing an administrative function, including eligibility and coverage verification, claims processing, utilization review, or network development, the expenditures and profits on the administrative function shall be considered a non-claims administrative expense as provided in 45 CFR 158.140(b)(3)(ii); and
4. Provide that the health insurance issuer's administrative costs shall be excluded from any calculation of the value of the benefits provided under a health benefit plan.
C. The Commission shall not approve rates applicable to a policy form if the anticipated loss ratio therefor is less than the applicable percentage set forth in the Commission's regulations promulgated under subsection B.
D. If a health benefit plan uses a pharmacy benefits manager to administer or manage prescription drug benefits provided for the benefit of members, for purposes of calculating the anticipated loss ratio of the health benefit plan or an associated policy form:
1. Any price spread shall (i) constitute an administrative cost incurred by the health insurance issuer in connection with the health benefit plan and (ii) not constitute a benefit provided under the health benefit plan; and
2. The health insurance issuer may only claim the amounts paid by the pharmacy benefits manager to a retail pharmacy as an incurred claim.
E. Each rate filing submitted by a health insurance issuer under regulations promulgated by the Commission under § 38.2-316.1 or this section with respect to a health benefit plan that provides coverage for prescription drugs or pharmacy services that is administered or managed by a pharmacy benefits manager shall include (i) a memorandum prepared by a qualified actuary describing the calculation of the price spread and (ii) such records and supporting information as the Commission reasonably determines is necessary to confirm the calculation of the price spread.
F. Health insurance issuers shall maintain records of earned premiums and incurred benefits for each calendar year for each policy form, including data for rider and endorsement forms that are used with the policy form, on the same basis, including all reserves. Such records that relate to the calculation of a price spread under a health benefit plan that provides coverage for prescription drugs or pharmacy services that is administered or managed by a pharmacy benefits manager shall be provided by the Commission, upon request, to the chair of a standing committee of the General Assembly.
No provision of this title except this chapter and, insofar as they are not inconsistent with this chapter, §§38.2-200, 38.2-203, 38.2-209 through 38.2-213, 38.2-218 through 38.2-225, 38.2-230, 38.2-232, 38.2-305, 38.2-316, 38.2-316.1, 38.2-316.2, 38.2-322, 38.2-325, 38.2-326, 38.2-400, 38.2-402 through 38.2-413, 38.2-500 through 38.2-515, 38.2-600 through 38.2-620, 38.2-700 through 38.2-705, 38.2-900 through 38.2-904, 38.2-1017, 38.2-1018, 38.2-1038, 38.2-1040 through 38.2-1044, Articles 1 (§38.2-1300 et seq.) and 2 (§38.2-1306.2 et seq.) of Chapter 13, §§38.2-1312, 38.2-1314, 38.2-1315.1, 38.2-1317 through 38.2-1328, 38.2-1334, 38.2-1340, 38.2-1400 through 38.2-1442, 38.2-1446, 38.2-1447, 38.2-1800 through 38.2-1836, 38.2-3400, 38.2-3401, 38.2-3404, 38.2-3405, 38.2-3405.1, 38.2-3406.1, 38.2-3406.2, 38.2-3407.1 through 38.2-3407.6:1, 38.2-3407.9 through 38.2-3407.19, 38.2-3409, 38.2-3411 through 38.2-3419.1, 38.2-3430.1 through 38.2-3454, 38.2-3501, 38.2-3502, subdivision 13 of § 38.2-3503, subdivision 8 of §38.2-3504, §§38.2-3514.1, 38.2-3514.2, §§ 38.2-3516 through 38.2-3520 as they apply to Medicare supplement policies, §§ 38.2-3522.1 through 38.2-3523.4, 38.2-3525, 38.2-3540.1, 38.2-3541 through 38.2-3542, 38.2-3543.2, Article 5 (§38.2-3551 et seq.) of Chapter 35, Chapter 35.1 (§38.2-3556 et seq.), §§38.2-3600 through 38.2-3607, Chapter 52 (§ 38.2-5200 et seq.), Chapter 55 (§38.2-5500 et seq.), and Chapter 58 (§ 38.2-5800 et seq.) of this title shall apply to the operation of a plan.
A. No provisions of this title except this chapter and, insofar as they are not inconsistent with this chapter, §§38.2-100, 38.2-136, 38.2-200, 38.2-203, 38.2-209 through 38.2-213, 38.2-216, 38.2-218 through 38.2-225, 38.2-229, 38.2-232, 38.2-305, 38.2-316, 38.2-316.1, 38.2-316.2, 38.2-322, 38.2-325, 38.2-326, 38.2-400, 38.2-402 through 38.2-413, 38.2-500 through 38.2-515, 38.2-600 through 38.2-620, Chapter 9 (§38.2-900 et seq.), §§ 38.2-1016.1 through 38.2-1023, 38.2-1057, 38.2-1306.1, Article 2 (§38.2-1306.2 et seq.), §38.2-1315.1, Articles 3.1 (§38.2-1316.1 et seq.), 4 (§38.2-1317 et seq.), 5 (§38.2-1322 et seq.), 5.1 (§38.2-1334.3 et seq.), and 5.2 (§ 38.2-1334.11 et seq.) of Chapter 13, Articles 1 (§38.2-1400 et seq.), 2 (§ 38.2-1412 et seq.), and 4 (§38.2-1446 et seq. ) of Chapter 14, Chapter 15 (§ 38.2-1500 et seq.), Chapter 17 (§38.2-1700 et seq.), §§38.2-1800 through 38.2-1836, 38.2-3401, 38.2-3405, 38.2-3405.1, 38.2-3406.1, 38.2-3407.2 through 38.2-3407.6:1, 38.2-3407.9 through 38.2-3407.19, 38.2-3411, 38.2-3411.2, 38.2-3411.3, 38.2-3411.4, 38.2-3412.1, 38.2-3414.1, 38.2-3418.1 through 38.2-3418.17, 38.2-3419.1, 38.2-3430.1 through 38.2-3454, 38.2-3500, subdivision 13 of §38.2-3503, subdivision 8 of §38.2-3504, §§38.2-3514.1, 38.2-3514.2, 38.2-3522.1 through 38.2-3523.4, 38.2-3525, 38.2-3540.1, 38.2-3540.2, 38.2-3541.2, 38.2-3542, 38.2-3543.2, Article 5 (§38.2-3551 et seq.) of Chapter 35, Chapter 35.1 (§38.2-3556 et seq.), Chapter 52 (§ 38.2-5200 et seq.), Chapter 55 (§38.2-5500 et seq.), and Chapter 58 (§ 38.2-5800 et seq.) shall be applicable to any health maintenance organization granted a license under this chapter. This chapter shall not apply to an insurer or health services plan licensed and regulated in conformance with the insurance laws or Chapter 42 (§38.2-4200 et seq.) except with respect to the activities of its health maintenance organization.