SB316 - Revises provisions relating to insurance. (BDR 57-777)

EXEMPT (Reprinted with amendments adopted on June 2, 2025) FOURTH REPRINT S.B. 316 - *SB316_R4* SENATE BILL NO. 316–SENATORS NGUYEN, STONE, TITUS; BUCK, CRUZ-CRAWFORD, DALY, KRASNER, OHRENSCHALL AND SCHEIBLE MARCH 11, 2025 ____________ JOINT SPONSORS: ASSEMBLYMEMBERS JAUREGUI AND KASAMA ____________ Referred to Committee on Commerce and Labor SUMMARY—Revises provisions relating to insurance. (BDR 57-777) FISCAL NOTE: Effect on Local Government: May have Fiscal Impact. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to insurance; requiring health insurers, pharmacy benefit managers and the Commissioner of Insurance to prepare certain reports; expanding the scope of certain provisions relating to pharmacy benefit managers; prohibiting pharmacy benefit managers from engaging in certain practices; requiring pharmacy benefit managers to make certain disclosures; imposing requirements relating to the compensation of pharmacy benefit managers; revising requirements relating to the collection of certain medical debt; providing civil and criminal penalties; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law requires a pharmacy benefit manager, which is an entity that 1 manages a pharmacy benefits plan, to obtain a certificate of registration as an 2 insurance administrator from the Commissioner of Insurance and comply with the 3 requirements that apply to insurance administrators generally. (NRS 683A.025, 4 683A.08522-683A.0893) Existing law additionally imposes certain requirements 5 specifically regulating the operation of pharmacy benefit managers. (NRS 6 683A.171-683A.179) Existing law defines “pharmacy benefits plan” to refer to 7 insurance coverage of prescription drugs. (NRS 683A.175) Section 21 of this bill 8 expands the scope of that definition to also refer to insurance coverage of 9 pharmacist services. Section 21 thereby expands the scope of provisions governing 10 pharmacy benefit managers to also apply to entities that manage such coverage. 11 Sections 3-14 of this bill define certain other terms relevant to pharmacy benefit 12 – 2 – - *SB316_R4* managers, and section 20 of this bill establishes the applicability of those 13 definitions. Section 15 of this bill prohibits a pharmacy benefit manager that 14 manages a pharmacy benefits plan which provides coverage through a network 15 from requiring a person to use a pharmacy affiliated with the pharmacy benefit 16 manager if there are other, nonaffiliated pharmacies in the network. Section 15 17 additionally prohibits a pharmacy benefit manager from engaging in certain 18 practices which are intended to steer or have the effect of steering a person towards 19 an affiliated pharmacy instead of a nonaffiliated pharmacy in the network. Section 20 15 also prohibits a pharmacy benefit manager from discriminating against a 21 nonaffiliated pharmacy. 22 Section 16 of this bill requires a pharmacy benefit manager to disclose to a 23 third party insurer for which the pharmacy benefit manager manages a pharmacy 24 benefits plan: (1) the amounts and types of fees that the pharmacy benefit manager 25 charges the third party insurer for managing the plan or otherwise receives from 26 other entities, including rebates, in connection with managing the plan; and (2) 27 certain information relating to the clinical efficacy and evidence regarding the 28 inclusion or exclusion of certain drugs in a formulary. Section 16 additionally 29 requires a pharmacy benefit manager to make certain contracts available for 30 inspection by the Commissioner. 31 Sections 25, 27-32, 35 and 36 of this bill require certain third party insurers to 32 calculate any cost-sharing obligation for a prescription drug assessed against an 33 insured for the prescription drug: (1) based on the net price that the third party 34 insurer or a pharmacy benefit manager with which the insurer has contracted pays 35 for the drug; and (2) at the point-of-sale. Section 26 of this bill authorizes the 36 Commissioner to require a domestic insurer that issues a policy of individual health 37 insurance to a person residing in another state to meet the requirements of section 38 25 in certain circumstances. Sections 33 and 37 of this bill indicate that the 39 requirements of sections 32 and 36, respectively, are inapplicable to: (1) coverage 40 provided by a managed care organization to recipients of Medicaid because existing 41 law imposes similar requirements of the Medicaid program; and (2) coverage 42 provided by a managed care organization to members of the Public Employees’ 43 Benefits Program. (NRS 422.4053) Section 41 of this bill makes the requirements 44 of section 36 inapplicable to coverage provided by the Public Employees’ Benefits 45 Program to its members. Section 34 of this bill authorizes the Commissioner to 46 suspend or revoke the certificate of a health maintenance organization that fails to 47 comply with the requirements of section 32. The Commissioner would also be 48 authorized to take such action against other third party insurers who fail to comply 49 with the requirements of sections 25, 27-32, 35 and 36. (NRS 680A.200) 50 Section 17 of this bill prohibits a pharmacy benefit manager from: (1) 51 unreasonably obstructing or interfering with the ability of a covered person to 52 timely access a prescription drug at certain pharmacies; (2) agreeing to exclusively 53 cover certain drugs; (3) restricting the ability of a nonaffiliated pharmacy to 54 contract with certain entities; and (4) making or disseminating a false or misleading 55 statement or advertisement. Section 24 of this bill additionally prohibits a 56 pharmacy benefit manager from engaging in certain practices while doing business 57 with pharmacies. 58 Section 19 of this bill requires a pharmacy benefit manager to submit to the 59 Commissioner an annual report detailing certain business practices of the pharmacy 60 benefit manager as well as certain information regarding pricing and rebates 61 relating to the prescription drugs administered by the pharmacy benefit manager. 62 Section 1 of this bill requires third party insurers that provide coverage for 63 prescription drugs to submit a similar report to the Commissioner relating to the 64 pricing of prescription drugs. Section 39 of this bill provides for the confidentiality 65 of the information contained in those reports. Sections 1 and 19 require the 66 Commissioner to compile, submit to the Legislature and publish on the Internet 67 – 3 – - *SB316_R4* biennial reports on the impact of the cost of prescription drugs on health insurance 68 premiums in this State and the overall impact of pharmacy benefit managers on the 69 cost of prescription drugs in this State, based on the reports submitted by third party 70 insurers and pharmacy benefit managers, respectively. Additionally, section 18 of 71 this bill requires the Commissioner to publish on the Internet certain consumer 72 complaints made against pharmacy benefit managers. 73 Existing law exempts certain federally regulated insurance coverage of 74 prescription drugs provided by employers for their employees from requirements 75 governing pharmacy benefit managers except where the pharmacy benefit manager 76 is required by contract to comply with those requirements. (NRS 683A.177) 77 Section 22 of this bill provides that such federally regulated coverage provided by 78 employers for their employees is also exempt from the requirements of this bill 79 governing pharmacy benefit managers, unless required by contract to comply with 80 those requirements. Additionally, sections 21.5 and 22 of this bill exempt coverage 81 of prescription drugs provided by the Public Employees’ Benefits Program, 82 insurance plans for local government employees and Medicaid managed care 83 organizations from the requirements of this bill governing pharmacy benefit 84 managers. 85 Existing law provides that a pharmacy benefit manager has an obligation of 86 good faith and fair dealing toward a third party insurer or pharmacy when 87 performing duties pursuant to a contract to which the pharmacy benefit manager is 88 a party. (NRS 683A.178) Section 23 of this bill provides that a pharmacy benefit 89 manager also has a fiduciary duty to persons covered by a third party insurer for 90 which the pharmacy benefit manager provides pharmacy benefit services. Section 91 23 also: (1) prohibits a pharmacy benefit manager from engaging in an activity that 92 may interfere with the duties and obligations of the pharmacy benefit manager 93 towards third party insurers, pharmacies and covered persons; and (2) authorizes a 94 third party insurer to audit the books and records of a pharmacy benefit manager for 95 certain purposes. 96 Section 18 provides that a pharmacy benefit manager that violates provisions of 97 law governing pharmacy benefit managers, including sections 3-24, is subject to a 98 civil penalty of not less than $1,000 but not more than $7,500 for each violation. 99 Additionally, any violation of sections 3-24 would be a misdemeanor. 100 (NRS 683A.490) 101 If enacted, sections 13-15 of Assembly Bill No. 343 (A.B. 343) of this session 102 will require a hospital to publish certain information about its prices. Section 17 of 103 A.B. 343 prohibits a hospital from taking certain action to collect medical debt 104 while the hospital is not in compliance with those requirements or certain similar 105 federal requirements. (45 C.F.R. §§ 180.40, 180.50, 180.60) Section 41.5 of this 106 bill narrows the applicability of that prohibition to only apply to certain medical 107 debt to which the failure to publish accurate pricing information is directly relevant. 108 Section 41.7 of this bill makes a conforming change to A.B. 343 to reflect the 109 revisions made by section 41.5. 110 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 679B of NRS is hereby amended by adding 1 thereto a new section to read as follows: 2 1. On or before June 1 of each year, a health insurer that 3 provides coverage for prescription drugs shall compile and submit 4 – 4 – - *SB316_R4* to the Commissioner a report which contains the following 1 information: 2 (a) Lists of: 3 (1) The 25 prescription drugs most frequently prescribed to 4 insureds in this State during the immediately preceding calendar 5 year; 6 (2) The 25 prescription drugs which accounted for the 7 largest percentage of spending on prescription drugs in this State 8 by the health insurer in the immediately preceding year; and 9 (3) The 25 prescription drugs with the largest increase in 10 the percentage of spending on prescription drugs in this State by 11 the health insurer in the immediately preceding year, as compared 12 to the previous year; and 13 (b) For each prescription drug included on a list compiled 14 pursuant to paragraph (a) for the immediately preceding year: 15 (1) The aggregate wholesale acquisition costs for the drug, 16 calculated by adding together for all units of the drug dispensed to 17 insureds in this State the wholesale acquisition cost of the drug at 18 the time each unit was dispensed; 19 (2) The aggregate amount of rebates received by a 20 pharmacy benefit manager under contract with the insurer 21 relating to the distribution of the drug to insureds in this State; 22 (3) The aggregate amount of administrative fees received 23 by a pharmacy benefit manager under contract with the insurer 24 relating to the distribution of the drug to insureds in this State; 25 (4) The aggregate amount paid or reimbursed by a 26 pharmacy benefit manager under contract with the insurer to 27 affiliated pharmacies in this State for the drug; 28 (5) The aggregate amount paid or reimbursed by a 29 pharmacy benefit manager under contract with an insurer to 30 nonaffiliated pharmacies in this State for the drug; and 31 (6) The aggregate amount of fees received from any source 32 by a pharmacy benefit manager under contract with the insurer 33 relating to the distribution of the drug to insureds in this State. 34 2. On or before July 1 of each even-numbered year, the 35 Commissioner shall: 36 (a) Compile a report on the overall impact of prescription drug 37 costs on premiums for health insurance in this State based on the 38 reports submitted to the Commissioner pursuant to subsection 1. 39 The data in the report compiled pursuant to this subsection must 40 be in aggregated form and must not reveal information specific to 41 a particular health insurer or manufacturer of a drug, including, 42 without limitation, information relating to a manufacturer’s 43 individual or aggregate discounted prices for a prescription drug. 44 – 5 – - *SB316_R4* (b) Submit the report to the Director of the Legislative Counsel 1 Bureau for transmittal to the Joint Interim Standing Committee 2 on Health and Human Services and the Joint Interim Standing 3 Committee on Commerce and Labor. 4 (c) Present the report at a meeting of the Joint Interim 5 Standing Committee on Health and Human Services. 6 (d) Post the report on an Internet website operated by the 7 Division. 8 3. Except as otherwise provided in subsection 2, any 9 information submitted by a health insurer pursuant to this section 10 is confidential and is not a public record. 11 4. As used in this section: 12 (a) “Affiliated pharmacy” has the meaning ascribed to it in 13 section 3 of this act. 14 (b) “Health insurer” means any insurer or organization 15 authorized pursuant to this title to conduct business in this State 16 that provides or arranges for the provision of health care services, 17 including, without limitation, an insurer that issues a policy of 18 health insurance, an insurer that issues a policy of group health 19 insurance, a carrier serving small employers, a fraternal benefit 20 society, a hospital or medical services corporation, a health 21 maintenance organization, a plan for dental care, a prepaid 22 limited health service organization and a managed care 23 organization. 24 (c) “Insured” means a person covered by a policy of health 25 insurance issued in this State by a health insurer. 26 (d) “Manufacturer” has the meaning ascribed to it in 42 27 U.S.C. § 1396r-8(k)(5). [Text truncated for display. Full text available on LegiScan.]