An Act To Restore Market-based Competition for Pharmacy Benefits Management Services
Maine Legislature, Session 125, LD 1116
Committee Amendment CA_B_H609 (House)
Amends: 22 MRSA §2699, 22 MRSA §2699-A, 24-A MRSA §4301-A, 24-A MRSA §4317

COMMITTEE AMENDMENT "..8" to H.P. 828, L.D. 1116, Bill, "An Act To 
Restore Market-based Competition for Pharmacy Benefits Management Services" 
Amend the bill by striking out the title and substituting the following: 
'An Act To Protect Pharmacies and Continue Regulation of Pharmacy Benefits 
Management' 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 22 MRSA §2699, sub-§l, ~~A-l and A-2 are enacted to read: 
A-I. "Applicable number of calendar days" means: 
(1) With respect to claims submitted electronically, 21 days; and 
(2) With respect to claims submitted otherwise, 30 days. 
A-2. "Clean claim" means a claim that has no defect or impropriety, including a lack 
of required substantiating documentation, or particular circumstance requiring special 
treatment that prevents payment within the applicable number of calendar days from 
being made on the claim under this section. 
Sec. 2. 22 MRSA §2699-A is enacted to read: 
§2699-A. Processing of clean claims; audits 
1. Payment of claims. A phannacv benefits manager shall payor deny a clean 
claim pursuant to this subsection. 
A. A pharmacy benefits manager shall pay or deny a clean claim submitted by a 
pharmacy within the applicable number of calendar days. 
A pharmacy benefits manager that fails to payor deny a clean claim in accordance 
with this subsection shall pav a penalty to the Department of Professional and 
Financial Regulation. Bureau of Insurance for the delinquent payment period, which 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ./3 .. to H.P. 828, L.D. 1116 
is the period beginning on the 45th day after receipt of the clean claim and ending on 
the clean claim payment date. The penalty is calculated as follows: the amount of the 
clean claim payment multiplied by 10% per annum multiplied by the number of days 
in the delinquent payment period divided by 365. 
B. A contract entered into by a pharmacy benefits manager with a pharmacy with 
respect to a prescription drug plan offered by a pharmacy benefits manager must 
provide that payment be issued, mailed or otherwise transmitted with respect to all 
clean claims submitted by a pharmacy, other than a pharmacy that dispenses drugs by 
mail order only or a pharmacy located in, or under contract with, a long-term care 
facility, within the applicable number of calendar days after the date on which the 
claim is received. For purposes. of this subsection, a claim is considered to have been 
received: 
(1) With respect to claims submitted electronically, on the date on which the 
claim is transferred; and 
(2) With respect to claims submitted otherwise, on the 5th day after the postmark 
date of the claim or the date specified in the time stamp of the transmission of the 
claim. 
C. 
If payment is not issued, mailed or otherwise transmitted by the pharmacy 
benefits manager within the applicable number of calendar days after a clean claim is 
received, the pharmacy benefits manager shall pay interest to the pharmacy at the rate 
of 18% per annum. 
D. 
A claim is considered to be a clean claim if the pharmacy benefits manager 
involved does not provide notice to the pharmacy of any deficiency in the claim 
within 10 days after the date on which an electronically submitted claim is received 
or within 15 days after the date on which a claim submitted otherwise is received. 
E. If a pharmacy benefits manager determines that a submitted claim is not a clean 
claim, the pharmacy benefits manager shall immediately notify the pharmacy of the 
determination. The notice must specify all defects or improprieties in the claim and 
list all additional information or documents necessary for the proper processing and 
payment of the claim. If a pharmacy receives notice from a pharmacy benefits 
manager that a claim has been determined not to be a clean claim, the pharmacy shall 
take steps to correct that claim and then resubmit the claim to the pharmacy benefits 
manager for payment. 
F. A claim resubmitted to a pharmacy benefits manager with additional information 
pursuant to paragraph E is considered to be a clean claim if the pharmacy benefits 
manager does not provide notice to the pharmacy of any defect or impropriety in the 
claim within 10 days of the date on which additional information is received if the 
claim is resubmitted electronically or within 15 days of the date on which additional 
information is received if the claim is resubmitted otherwise. 
G. 
A claim submitted to a pharmacy benefits manager that is not paid by the 
pharmacy benefits manager or contested by the covered entity within the applicable 
number of calendar days after the date on which the claim is received by the 
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pharmacy benefits manager is considered to be a clean claim and must be paid by the 
pharmacy benefits manager. 
H. Payment of a clean claim under this subsection is considered to have been made 
on the date on which the payment is transferred with respect to claims paid 
electronically and on the date on which the payment is submitted to the United States 
Postal Service or a common carrier for delivery with respect to claims paid otherwise. 
I. A pharmacy benefits manager shall pay all clean claims submitted electronically 
by electronic transfer of funds if the pharmacy so requests or has so requested 
previously. 
J. 
Beginning October 1, 2015, the Department of Professional and Financial 
II 
Regulation, Bureau of Insurance shall adopt rules that outline the collection 
procedures for the outstanding interest from claims under paragraph A. The bureau 
shall also adopt rules that transfer the remaining interest to the General Fund. Rules 
adopted pursuant to this paragraph are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
2. Exception. This section does not apply to any medical assistance or public health 
programs administered by the department, including, but not limited to, the MaineCare 
program and the elderly low-cost drug program under section 254-D. 
3. Adjustment of payments. Within 24 hours of a price increase notification by a 
pharmaceutical manufacturer or supplier, a pharmacy benefits manager shall adjust its 
payments to pharmacists or pharmacies consistent with the price increase. 
4. Retroactive denial of claims prohibited. A claim paid by a pharmacy benefits 
manager may not be retroactively denied or adjusted after 7 days from payment of the 
claim except as provided in subsection 5. In no case mayan acknowledgement of 
eligibility be retroactively reversed. 
5. Retroactive denial or adjustment allowed. A pharmacy benefits manager may 
retroactively deny or adjust a claim if: 
A. The original claim was submitted fraudulently; 
B. The original claim payment was incorrect because the pharmacist or pharmacy 
was already paid for services rendered; or 
C. The services were not rendered by the pharmacist or pharmacy. 
6. Audits. A pharmacy benefits manager's books and records relating to rebates and 
other information must be made available for audit by a covered entity or its agent. The 
auditor shall comply with the following requirements. 
A. 
A finding of overpayment or underpayment must be based on the actual 
overpayment or underpayment and not a projection based on the number of patients 
served having a similar diagnosis or on the number of similar orders or refills for 
similar drugs. 
B. Calculations of overpayments may not include dispensing fees. 
C. The auditor may not use extrapolation in calculating recoupments or penalties. 
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COMMITTEE AMENDMENT '8" to H.P. 828, L.D. 1116 
D. 
The auditor may not receive payment based on a percentage of the amount 
recovered. 
E. Interest may not accrue during the audit period. 
F. To the extent that an audit results in the identification of any clerical or record-
keeping errors in a document or record required by the auditor, the pharmacy is not 
subject to recoupment of funds by the pharmacy benefits manager unless the 
pharmacy benefits manager can provide proof of intent to commit fraud or such error 
results in actual financial harm to the pharmacy benefits manager, a covered entity or 
a covered individual. 
7. Audit information and reports. A preliminary audit report must be delivered to 
the pharmacy within 60 days after the conclusion of the audit under subsection 6. A 
pharmacy must be allowed at least 30 days following receipt of the preliminary audit to 
provide documentation to address any discrepancy found in the audit. A final audit report 
must be delivered to the pharmacy within 90 days after receipt of the preliminary audit 
report or final appeal. whichever is later. A charge-back, recoupment or other penalty 
may not be assessed until the appeals process established by rule by the Department of 
Professional and Financial Regulation, Bureau of Insurance has been exhausted and the 
final report issued. Except as provided by state or federal law, audit information may not 
be shared. Auditors may have access only to previous audit reports on a particular 
pharmacy conducted by that same entity. Rules adopted pursuant to this subsection are 
routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
Sec. 3. 24-A MRSA §4301-A, sub-§§14-A and 14-B are enacted to read: 
14-A. Pharmacy benefits management. "Pharmacy benefits management" means 
the procurement of prescription drugs at a negotiated rate for dispensation within this 
State to covered individuals, the administration or management of prescription drug 
benefits provided by a covered entity for the benefit of covered individuals or any of the 
following services provided with regard to the administration of pharmacy benefits: 
A. Mail service pharmacy; 
B. 
Claims processing, retail network management and payment of claims to 
pharmacies for prescription drugs dispensed to covered individuals; 
C. Clinical formulary development and management services: 
D. Rebate contracting and administration; 
E. 
Certain patient compliance, therapeutic intervention and generic substitution 
programs; and 
F. Disease management programs. 
14-B. Pharmacy benefits manager. "Pharmacy benefits manager" means an entity 
that performs pharmacy benefits management. "Pharmacy benefits manager" includes a 
person or entity acting for a pharmacy benefits manager in a contractual or employment 
relationship in the performance of pharmacy benefits management for a covered entity 
and includes mail service pharmacy. 
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COMMITTEE AMENDMENT .{!:>.. to H.P. 828, L.D. 1116 
Sec. 4. 24-A MRSA §4317, sub-§3, as enacted by PL 2009, c. 519, §1 and 
affected by §2, is amended to read: 
3. Exception. This seetioR does Subsections 1 and 2 do not apply to any medical 
assistance or public health programs administered by the Department of Health and 
Human Services, including, but not limited to, the Medicaid program and the elderly low-
cost drug program under Title 22, section 254-D. 
Sec. 5. 24-A MRSA §4317, sub-§§4 to 11 is enacted to read: 
4. Participation in contracts. A pharmacy benefits manager may not require a 
pharmacist or pharmacy to participate in one network in order to participate in another 
network. The pharmacy benefits manager may not exclude an otherwise qualified 
pharmacist or pharmacy from participation in one network solely because the pharmacist 
or pharmacy declined to participate in another network managed by the pharmacy 
benefits manager. 
S. Prohibition. The written contract between a carrier and a pharmacy benefits 
manager may not provide that the pharmacist or pharmacy is responsible for the actions 
of the insurer or a pharmacy benefits manager. 
6. Pharmacy benefits manager duties. All contracts must provide that. when the 
pharmacy benefits manager receives payment for the services of a pharmacist or 
pharmacy, the pharmacy benefits manager shall distribute the funds in accordance with 
the time frames provided in Title 22, section 2699-A. 
7. Complaints, grievances and appeals. A pharmacy benefits manager may not 
terminate the contract of or penalize a pharmacist or pharmacy solely as a result of the 
pharmacist's or pharmacy's filing of a complaint, grievance or appeal. This subsection is 
not intended to restrict the pharmacy's and pharmacy benefits manager's ability to enter 
into agreements that allow for mutual termination without cause. 
8. 
Denial or limitation of benefits. A pharmacy's benefits manager may not 
terminate the contract of or penalize a pharmacist or pharmacy for expressing 
disagreement with a carrier's decision to deny or limit benefits to an enrollee or because 
the pharmacist or pharmacy assists the enrollee to seek reconsideration of the carrier's 
decision or because the pharmacist or pharmacy discusses alternative medications. 
9. Written notice required. At least 60 days before a pharmacy's benefits manager 
terminates a pharmacy's or pharmacist's participation in the pharmacy benefits manager's 
plan or network, the pharmacy benefits manager shall give the pharmacy or pharmacist a 
written explanation of the reason for the termination, unless the termination is based on: 
A. 
The loss of the pharmacy's license or the pharmacist's license to practice 
pharmacy or cancellation of professional liability insurance; or 
B. A finding of fraud. 
At least 60 days before a pharmacy or pharmacist terminates its participation in a 
pharmacy benefits manager's plan or network, the pharmacy or pharmacist shall give the 
pharmacy benefits manager a written explanation of the reason for the termination. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,j!; to H.P. 828, L.D. 1116 
10. Audits. Notwithstanding any other provision of law, when an on-site audit of 
the records of a pharmacy is conducted by a pharmacy benefits manager, the audit must 
be conducted in accordance with the following criteria. 
A. 
A finding of overpayment or underpayment must be based on the actual 
overpayment or underpayment and not a projection based on the number of patients 
served having a similar diagnosis or on the number of similar orders or refills for 
similar drugs, unless the projected overpayment or denial is a part of a settlement 
agreed to by the pharmacy or pharmacist. 
B. The auditor may not use extrapolation in calculating recoupments or penalties. 
C. Any audit that involves clinical or professional judgment must be conducted by or 
in consultation with a pharmacist. 
D. Each entity conducting an audit shall establish an appeals process under which a 
pharmacy may appeal an unfavorable preliminary audit report to the entity. 
E. 
This subsection does not apply to any audit, review or investigation that is 
initiated based on or involves suspected or alleged fraud, willful misrepresentation or 
abuse. 
11. Audit information and reports. A preliminary audit report must be delivered 
to the pharmacy within 60 days after the conclusion of the audit under subsection 10. A 
pharmacy must be allowed at least 30 days following receipt of the preliminary audit to 
provide documentation to address any discrepancy found in the audit. A final audit report 
must be delivered to the pharmacy within 90 days after receipt of the preliminary audit 
report or final appeal. whichever is later. A charge-back, recoupment or other penalty 
may not be assessed until the appeal process provided by the pharmacy benefits manager 
has been exhausted and the final report issued. Except as provided by state or federal 
law, audit information may not be shared. Auditors may have access only to previous 
audit reports on a particular pharmacy conducted by that same entity.' 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or 
section number to read consecutively. 
SUMMARY 
This amendment is the minority report of the committee. This amendment strikes 
and replaces the bill. This amendment adds to the bill provisions on the processing of 
clean claims by a pharmacy benefits manager and audits of the books and records of the 
pharmacy benefits manager by the entity that contracts for the seryices of the pharmacy 
benefits manager. This amendment adds to the bill provisions that relate to the business 
relationship between a pharmacy and a pharmacy benefits manager. 
The provisions 
address the contract between the 2 entities, pharmacy benefits manager duties, 
complaints, grievances and appeals, denial or limitation of benefits, written notice and 
audits of the records of the pharmacy. 
FISCAL XOTE REQLIREQ 
(~ee att~ched) 
COMMITTEE AMENDMENT 
Approved: 06/09/11 frac:.. 
LD 1116 
LR 1589(03) 
An Act To Restore Market-based Competition for Pharmacy Benefits Management Services 
Fiscal Note for Bill as Amended by Committee Amendment "I!:J' 
Fiscal Detail and Notes 
Committee: Health and Human Services 
Fiscal Note Required: Yes 
Fiscal Note 
Potential current biennium cost impact - General Fund 
Minor cost increase - Other Special Revenue Funds 
The fiscal impact to the Department of Corrections will depend on negotiated costs and can not be determined at this 
time. Any additional costs to the Bureau ofInsurance in the Department of Professional and Financial Regulation are 
expected to be minor and can be absorbed within existing budgeted resources. 
LR1589(03) - Fiscal Note - Page 1 of 1