Steps to File a Complaint with the DOI

KPhA along with its pharmacy partners is proud to announce that SB117 is finally in effect. As of October 24, 2017 the Kentucky Department of Insurance (DOI) regulation describing the requirements of the maximum allowable (MAC) appeals process, the MAC list requirements and notification requirements for a granted appeal (806 KAR 17:575). 

Now pharmacies have the ability to file complaints for regulatory violations and for statutory violations. 

The Kentucky Department of Insurance wants to hear from you. If you notice that the PBMs are not following any of the legal processes required in SB 117, please file a complaint with DOI and they will make sure the PBM follows the process. 

Also, when filing a complaint it is very important to provide documentation that the PBM received the apeal and documentation of the PBMs response to the appeal. 

If you have any questions, please contact Shannon Stiglitz

Steps to File a MAC Appeal: Each PBM licensed in Kentucky must establish a maximum allowable cost appeals process to resolve disputes over PBM reimbursements of generic drugs.

  1. A contracted pharmacy or its PSAO or GPO may file an appeal to dispute a maximum allowable cost reimbursement
    1. An Appeal must be filed within 60 days of the initial claim
    2. Once the appeal has been filed the PBM has 10 calendar days to respond to the appeal. The clock starts once the PBM receives the appeal. If you request for your PSAO to file an appeal the 10-day clock regarding the PBM’s response will not start until the PBM receives the appeal from your PSAO.
    3. The PBM must send a notification to the party who submitted the appeal. The notification must include the name and contact information of the persons who can answer questions about the appeal or appeals process.
    4. The PBM shall investigate, resolve and respond to the appeal within 10 calendar days. (Remember, 10-day clock starts when the PBM receives the appeal.)
    5. Upon resolution of the appeal, the PBM must provide a written response to the appealing party with the following information:

                                          i.    Date of the decision

                                         ii.    Name and contact information of the person making the decision

iii. statement setting the specific reason for the decision

IF THE PBM FAILS TO MEET ANY OF THESE REQUIREMENTS, YOU MAY FILE A COMPLAINT WITH THE KENTUCKY DEPARTMENT OF INSURANCE


f. If the appeal is granted
, the PBM must make the change in the MAC list back to the original date of service;

                                          i.    Must inform the appealing party of the amount of the adjustment to be paid retroactive to the date of service

                                         ii.    They must include drug name, NDC, prescription number of the appealed drug

                                        iii.    Next, they must individually notify all contracted pharmacies that an appeal has been granted and that they have the right to reverse and resubmit the claim.

  1. The notification must include:
    1. The date of the granted appeal
    2. The name of the appealed drug
    3. Date of service
    4. NDC
    5. GCN
    6. Health plan identification information (such as BIN and PCN)
      2. The notification can be posted in a PBM’s web portal, but if they use a web portal they must send individual notification via e-mail to the contracted pharmacy with a hyperlink to the granted appeal.
  1. If the appeal is denied:

                                          i.    The PBM must provide:

  1. The NDC or NDC of a therapeutically equivalent drug of the same dosage, dosage form and strength of the appealed drug; and
  2. The Kentucky licensed wholesaler offering the drug at or below maximum allowable cost on the date of fill.
IF THE PBM FAILS TO MEET ANY OF THESE REQUIREMENTS, YOU MAY FILE A COMPLAINT WITH THE KENTUCKY DEPARTMENT OF INSURANCE



SB 117:

Areas Where Immediate Complaints Could Be Filed:

1. Not using proper definition of “maximum allowable cost” which in Kentucky means “…the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a generic drug and does not include a dispensing or professional fee; and”
Legislative intent was to prohibit the PBMs from just renaming MAC to something else. MAC is not an industry term we are talking about MAC as defined by KY law. If it is a reimbursement for a generic drug the law applies. (FILE MAC APPEAL First)

2. KRS 304.9-440 (reasons to Revoke or Suspend License)
a. Violating any insurance laws or violating any administrative regulation
b. Using fraudulent, coercive, or dishonest practices or demonstrating incompetence, untrustworthiness or financial irresponsibility or being a source of injury or loss to the public in conduct in this state or elsewhere (NO MAC APPEAL required)

3. KRS 304.17A-162 (FILE MAC APPEAL FIRST)
a. (a) Identify to contracted pharmacies the sources used by PBM to calculate drug product reimbursement
b. (b)Establish a process for appeals
i. 60 days to appeal following initial claim
ii. Denied appeal identify NDC of a drug product and source
c. Granted appeals (are they notifying all contracted pharmacies?)
d. Are they making the change in the MAC in cases of granted appeals?
e. Allow appealing pharmacy and other contracted pharmacies to reverse and resubmit claim
f. Make retroactive payments in next payment cycle

4. Reimbursements:
a. Are they reimbursing you using a B rated drug when an A rated drug was dispensed
(FILE MAC APPEAL and then COMPLAINT)
b. Are you being reimbursed below NADAC because they are using drugs that are temporarily unavailable, obsolete or on a drug shortage list to calculated?
(FILE MAC APPEAL and then COMPLAINT)

5. OTHER LAWS (DIRECT COMPLAINTS to DOI)
a. Any Willing Provider: KRS 304.17A-270 can’t discriminate against any health care provider willing to meet the terms and conditions of the contract
b. KRS 304.17A-578 Substantial contract changes must be sent 90 days in advance and in an orange envelope. “material change” means anything that impacts, reimbursement, has a significant administrative burden, or changes the contract or provider network.
c. Audit law KRS 304-17A-741

Directions to file a complaint with the Kentucky Department of Insurance:
1. Visit the website at http://insurance.ky.gov/Documents/pharmcomplaintform01312017.pdf
2. Complete the required information
Be sure to include any and all documentation including: 

  • PBM confirmation of a received appeal
  • PBM Response to appeal
  • Appropriate insurance plan insurance plan or claims information.

3. Follow directions to submit the form.
4. If you have questions and concerns, contact KPhA for assistance.