FISCAL NOTE

Senate Bill 227 as introduced would increase the administrative obligations of the Department of Insurance by an undetermined amount by requiring the Commissioner of Insurance to establish rules to implement and enforce the provisions of the bill. The bill would also increase receipts to the State General Fund by an undetermined amount dependent on the number of civil penalties ordered at the rate of $50 for each failure to inform the Commissioner of Insurance of changes within 30 days of a change, and at the rate of $5,000 for each violation of the Pharmacy Audit Integrity Act or other provisions of the bill. 

The bill requires that at least 80% of pharmacy savings and discounts be directly received at the point-of-sale and that independent providers to be paid at the same rate as affiliate providers which would affect state, county or municipally-funded health insurance programs by an undetermined amount dependent upon several variables, including but not limited to the negotiated costs of prescription drug rebates and discounts.

As substituted and reported by the Committee on Banking and Insurance, removes the provision requiring that at least 80% of pharmacy savings and discounts be directly received at the point-of-sale and the authority to levy civil penalties in the amount of $5,000 per violation of the Pharmacy Audit Integrity Act. This bill would now require the Commissioner of Insurance to adopt new rules for the licensure of pharmacy benefits managers to operate in the state, including the establishment of a fee schedule for application fees, initial license fees and license renewal fees, which could be more or less than the current $500 license and renewal fee, that will allow the regulation and oversight activities of the department to be self-supporting. This bill further authorizes the Commissioner of Insurance to audit pharmacy benefits managers to determine compliance with the provisions of the bill, the cost of which will be collected from pharmacy benefits managers in the same manner as collected from insurers.