South Carolina § 38-71-2230 - Pharmacy benefits manager prohibited from taking certain actions.

§ 38-71-2230. Pharmacy benefits manager prohibited from taking certain actions.

(A) A pharmacy benefits manager or representative of a pharmacy benefits manager shall not:

(1) cause or knowingly permit the use of any advertisement, promotion, solicitation, representation, proposal, or offer that is untrue, deceptive, or misleading;

(2) charge a pharmacist or pharmacy a fee related to the adjudication of a claim unless the fee is:

(a) agreed to by a Pharmacy Services Administrative Organization acting on behalf of a pharmacy that it represents; or

(b) identified and agreed to in contract and identified and reported on the remittance advice;

(3) engage in an anticompetitive pattern of reimbursing independent or unaffiliated pharmacies or pharmacists in this State consistently less than the amount that the pharmacy benefits manager reimburses a pharmacy benefits manager affiliate for providing the same pharmacist services or prescription drug unless the difference in reimbursement is justified according to uniform, defined standards that apply to each network provider;

(4) collect or require a pharmacy or pharmacist to collect from an insured a copayment for a prescription drug at the point of sale in an amount that exceeds the lesser of:

(a) the contracted copayment amount;

(b) the amount an individual would pay for a prescription drug if that individual was paying cash; or

(c) the contracted amount for the drug.

(5) require the use of mail order for filling prescriptions unless required to do so by the health benefit plan or the health benefit plan design;

(6) Reserved;

(7) penalize or retaliate against a pharmacist or pharmacy for exercising rights provided pursuant to the provisions of this chapter;

(8) prohibit a pharmacist or pharmacy from offering and providing direct and limited delivery services including incidental mailing services, to an insured as an ancillary service of the pharmacy; or

(9) any combination thereof.

(B) No pharmacy benefits manager shall, directly or indirectly, impose retroactive fees, reductions, or recoupments of the amount paid to a pharmacist or pharmacy for any claim for prescription drugs other than the Medicare Part D Program as set forth in 42 U.S.C. 1395w-102 and 42 C.F.R. 423 or as provided in this subsection.

(C) Notwithstanding subsection (B), a pharmacy benefits manager may make or permit a reduction or recoupment of payment for pharmacist or pharmacy services for:

(1) claims submitted fraudulently;

(2) claims where the pharmacist or pharmacy was previously paid for the same pharmacy goods or services;

(3) claims not properly rendered or billed by the pharmacy or pharmacist; or

(4) otherwise in accordance with state pharmacy audit laws.

(D) This section does not preclude a pharmacy benefits manager from engaging in claims reconciliation activities relating to brand effective rates and generic effective rates if:

(1) such activities are agreed to by a Pharmacy Services Administrative Organization acting on behalf of a pharmacy it represents and identified in the contract; or

(2) if a pharmacy is not represented by a Pharmacy Services Administrative Organization, such activities are permitted if:

(a) they are agreed to by a pharmacy and identified in a contract;

(b) they do not result in a retroactive reduction or recoupment of payment to a pharmacist or pharmacy for a previously adjudicated covered claim, unless the pharmacy or pharmacist has clearly consented to retroactive reductions as part of participation in the program and the reductions are explained in an annual reconciliation statement; and

(c) a pharmacy is allowed to choose not to participate in programs that include the activities. A pharmacy benefits manager offering different terms and conditions including, but not limited to, differing reimbursement rates, for participation versus nonparticipation in the activities shall not constitute a violation of Section 38-71-2230(A)(7).

(E) This subsection may not be construed to limit overpayment recovery efforts as set forth in Section 38-59-250.

A pharmacy may not be subject to a charge-back or recoupment for a clerical or recordkeeping error in a required document or record, including a typographical or computer error, unless the error resulted in overpayment to the pharmacy.

(F) Termination of a pharmacy or pharmacist from a pharmacy benefits manager network does not release the pharmacy benefits manager from the obligation to make any payment due to the pharmacy or pharmacist for pharmacist services properly rendered according to the contract.

(G) A pharmacy benefits manager must not directly or indirectly engage in patient steering to a pharmacy that is a pharmacy benefits manager affiliate without first making a written disclosure to the patient informing such patient of the pharmacy benefits manager's relationship with the pharmacy and providing the patient with access to information about unaffiliated, in-network pharmacies that are located near the patient. A pharmacy benefits manager must not prohibit a patient from choosing to use an alternative in-network pharmacy.

(H) Nothing in this article abridges the right of a pharmacist to refuse to fill or refill a prescription as referenced in Section 40-43-86(E)(6) of the South Carolina Pharmacy Practice Act.

HISTORY: 2019 Act No. 48 (S.359), SECTION 1, eff January 1, 2021; 2023 Act No. 30 (S.520), SECTION 2, eff January 1, 2024.

Editor's Note

2023 Act No. 30, SECTION 7, provides as follows:

"SECTION 7. This act takes effect January 1, 2024, but the recurring examinations by the Department of Insurance provided for in Sections 38-71-2250(B)(1) and 38-71-2340(B)(1) must not begin before January 1, 2025."

Effect of Amendment

2023 Act No. 30, SECTION 2, rewrote the section.