South Carolina Code of Regulations › Chapter 69 - DEPARTMENT OF INSURANCE › Section 69-77 - Pharmacy Benefit Managers

Current through Register Vol. 48, No. 6, June 28, 2024
Section I. Purpose
The purpose of this regulation is to implement Act No. 48 of 2019
			 ("the Act") regarding pharmacy benefits managers and to provide licensing,
			 reporting and activity standards for pharmacy benefits
			 managers.
Section II.
		  Licensure Requirements
A. Initial License and
		  Renewal. On or after January 1, 2021, a pharmacy benefits manager shall apply
		  for a license on a form and in accordance with a licensing schedule prescribed
		  by the Director or his designee. The terms "Director" and "designee" have the
		  meaning set forth in Section
		  38-1-20 of the Code of Laws of
		  South Carolina 1976, as amended.
B.
		  The initial licensing schedule shall be set by bulletin or order of the
		  Director. In 2022, and thereafter, a pharmacy benefits manager license shall be
		  renewed annually no later than March 1 of each year.
C. Each application for a license shall be
		  certified by an officer or authorized representative of the applicant and shall
		  contain a statement that certifies the pharmacy benefits manager is in
		  compliance with Section
		  38-71-2220 of the Code of Laws of
		  South Carolina 1976, as amended. All proprietary information submitted by the
		  pharmacy benefits manager under Section II of this regulation shall be
		  considered confidential under Sections
		  38-71-2250 and
		  30-4-40 of the Code of Laws of
		  South Carolina 1976, as amended.
D.
		  The pharmacy benefits manager shall provide as part of the application for
		  licensure the following:
(1) A non-refundable
		  filing fee of $1,000 for initial licensure and $500 for renewal
		  licenses;
(2) A copy of the basic
		  organizational document of the pharmacy benefits manager, such as the articles
		  of incorporation, articles of association, partnership agreement, trust
		  agreement or other applicable documents, and all amendments thereto;
(3) a copy of the bylaws, organizational or
		  similar document(s), if any, regulating the conduct or the internal affairs of
		  the applicant;
(4) A copy of the
		  pharmacy benefits manager's provider manual and written agreement(s), excluding
		  pricing information, but including audit procedures, which it uses for
		  contracts entered into with pharmacists, pharmacies or pharmacy services
		  administrative organizations in administration of pharmacy benefits for health
		  care insurers in this State or a representative written agreement and provider
		  manual, excluding pricing information, but including audit procedures, for each
		  type of network provider, which it uses for contracts entered into with
		  pharmacists, pharmacies or pharmacy services administrative organizations in
		  administration of pharmacy benefits for health care insurers in this
		  State;
(5) For the two preceding
		  calendar years, a listing of health care insurers with which the pharmacy
		  benefits manager was contracted in this State to perform claims processing
		  services and the number of enrollees or beneficiaries covered by each health
		  care insurer;
(6) The relevant
		  documentation, such as a policies and procedures manual, that demonstrates the
		  pharmacy benefits manager has adopted processes to ensure compliance with the
		  requirements in Section
		  38-71-2240 of the Code of Laws of
		  South Carolina 1976, as amended, including any written policies or procedures
		  describing the appeals dispute resolution process for in-network or contracted
		  pharmacists or pharmacies;
(7) A
		  certified statement that indicates whether the applicant or officer with
		  management or control:
(a) has been refused
		  or denied a registration, license or certification to act as or provide the
		  services of a pharmacy benefits manager or third-party administrator in any
		  state, providing specific details separately for each such refusal or denial,
		  if any, including the date, nature and disposition of the action; and
(b) has had any registration, license or
		  certification to act as such suspended, revoked or nonrenewed for any reason by
		  any state or federal entity, providing specific details separately for each
		  such suspension, revocation or nonrenewal, if any, including the date, nature
		  and disposition of the action, and attaching a copy of any relevant final order
		  or similar document imposing the suspension, revocation or
		  nonrenewal;
(8) A
		  description of whether the applicant has had a business relationship with an
		  insurer terminated for any fraudulent or illegal activities in connection with
		  the administration of a pharmacy benefits plan (if so, attach specific details
		  separately explaining this termination, including the date, and nature of the
		  termination); and
(9) The phone
		  number and any other contact information provided to pharmacies and pharmacists
		  pursuant to Section
		  38-71-2235(B)
		  through which the pharmacy or pharmacist can obtain answers during normal
		  business hours within a reasonable time to questions regarding networks,
		  patient benefits, appeals, and other contractual or service issues.
(10) The notice that is provided to
		  pharmacies or pharmacists pursuant to Section 38-72-2240(D)(2) upon the denial
		  of an internal appeal that notifies the pharmacy or pharmacist of the right to
		  request an external review of the internal appeal and the supporting documents
		  describing the external review process.
(11) Any other relevant information deemed
		  necessary by the Director or his designee to evaluate the application for
		  licensure or compliance with the requirements of the Act and this
		  regulation.
E. Review
		  Process
(1) Initial and Renewal License
		  Applications
For initial and renewal license applications, the Director or his
			 designee shall review the application under Section II.D of this regulation,
			 and may:
(a) approve the application
		  and issue the applicant a pharmacy benefits manager license; or
(b) notify the applicant, in writing, that
		  the application is incomplete and request additional information to complete
		  the review; and, if the missing or requested information is not received within
		  thirty (30) days from the date of the notification, the Director or his
		  designee may deny the application; or
(c) deny the application; and
(i) provide written notice to the applicant
		  that the application has been denied stating or explaining the basis of the
		  denial; and
(ii) advise the
		  applicant that it may appeal the denial by requesting a hearing in accordance
		  with Section
		  38-3-210 of the Code of Laws of
		  South Carolina 1976, as amended, before the South Carolina Administrative Law
		  Court.
(2)
		  Standards of Review
(a) The Director or his
		  designee shall deny an initial or renewal application for licensure for the
		  following reasons:
(i) the pharmacy benefits
		  manager operates, or proposes to operate, in a hazardous condition and the
		  services it administers, or proposes to administer, for health care insurers in
		  this State may be hazardous to the insurance-buying public; or
(ii) the pharmacy benefits manager has
		  violated the requirements of the Act, this regulation or other applicable South
		  Carolina law; or
(iii) the pharmacy
		  benefits manager has failed to timely submit information to complete review of
		  the application under Section II of this regulation.
(b) In lieu of a denial of a renewal
		  application, the Director or his designee may permit the pharmacy benefits
		  manager to submit to the Director or his designee a corrective action plan to
		  cure or correct deficiencies falling under Section II of this regulation,
		  impose an administrative penalty under Section
		  38-2-10 et seq. of the Code of
		  Laws of South Carolina, 1976 as amended, or both.