1.1 	A bill for an act
1.2 	relating to human services; limiting a contracting
1.3 	agreement between health plans or pharmacy benefits
1.4 	manager and pharmacies; amending Minnesota Statutes
1.5 	2004, section 295.582.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 295.582, is
1.8 	amended to read:
1.9 	295.582 AUTHORITY.
1.10 		Subdivision 1.Wholesale drug distributor tax. (a) A
1.11 	hospital, surgical center, or health care provider that is
1.12 	subject to a tax under section 295.52, or a pharmacy that has
1.13 	paid additional expense transferred under this section by a
1.14 	wholesale drug distributor, may transfer additional expense
1.15 	generated by section 295.52 obligations on to all third-party
1.16 	contracts for the purchase of health care services on behalf of
1.17 	a patient or consumer.  The additional expense transferred to
1.18 	the third-party purchaser must not exceed the tax percentage
1.19 	specified in section 295.52 multiplied against the gross
1.20 	revenues received under the third-party contract, and the tax
1.21 	percentage specified in section 295.52 multiplied against
1.22 	co-payments and deductibles paid by the individual patient or
1.23 	consumer.  The expense must not be generated on revenues derived
1.24 	from payments that are excluded from the tax under section
1.25 	295.53.  All third-party purchasers of health care services
2.1 	including, but not limited to, third-party purchasers regulated
2.2 	under chapter 60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79,
2.3 	or 79A, or under section 471.61 or 471.617, and a pharmacy
2.4 	benefits manager must pay the transferred expense in addition to
2.5 	any payments due under existing contracts with the hospital,
2.6 	surgical center, pharmacy, or health care provider, to the
2.7 	extent allowed under federal law.  A third-party purchaser of
2.8 	health care services includes, but is not limited to, a health
2.9 	carrier or community integrated service network that pays for
2.10 	health care services on behalf of patients or that reimburses,
2.11 	indemnifies, compensates, or otherwise insures patients for
2.12 	health care services and for purposes of this section, a
2.13 	pharmacy benefits manager means an entity that performs pharmacy
2.14 	benefits management.  A third-party purchaser shall comply with
2.15 	this section regardless of whether the third-party purchaser is
2.16 	a for-profit, not-for-profit, or nonprofit entity.  A wholesale
2.17 	drug distributor may transfer additional expense generated by
2.18 	section 295.52 obligations to entities that purchase from the
2.19 	wholesaler, and the entities must pay the additional expense.
2.20 	Nothing in this section limits the ability of a hospital,
2.21 	surgical center, pharmacy, wholesale drug distributor, or health
2.22 	care provider to recover all or part of the section 295.52
2.23 	obligation by other methods, including increasing fees or
2.24 	charges. Nothing shall prohibit a pharmacy from passing on
2.25 	additional fees or charges to a pharmacy benefits manager.
2.26 	(b) Each third-party purchaser regulated under any chapter
2.27 	cited in paragraph (a) shall include with its annual renewal for
2.28 	certification of authority or licensure documentation indicating
2.29 	compliance with paragraph (a).
2.30 	(c) Any hospital, surgical center, or health care provider
2.31 	subject to a tax under section 295.52 or a pharmacy that has
2.32 	paid additional expense transferred under this section by a
2.33 	wholesale drug distributor may file a complaint with the
2.34 	commissioner responsible for regulating the third-party
2.35 	purchaser if at any time the third-party purchaser fails to
2.36 	comply with paragraph (a).
3.1 	(d) If the commissioner responsible for regulating the
3.2 	third-party purchaser finds at any time that the third-party
3.3 	purchaser has not complied with paragraph (a), the commissioner
3.4 	may take enforcement action against a third-party purchaser
3.5 	which is subject to the commissioner's regulatory jurisdiction
3.6 	and which does not allow a hospital, surgical center, pharmacy,
3.7 	or provider to pass-through the tax.  The commissioner may by
3.8 	order fine or censure the third-party purchaser or revoke or
3.9 	suspend the certificate of authority or license of the
3.10 	third-party purchaser to do business in this state if the
3.11 	commissioner finds that the third-party purchaser has not
3.12 	complied with this section.  The third-party purchaser may
3.13 	appeal the commissioner's order through a contested case hearing
3.14 	in accordance with chapter 14.
3.15 		Subd. 2.Agreement. A contracting agreement between a
3.16 	health plan company or a pharmacy benefits manager and a
3.17 	resident or nonresident pharmacy registered under chapter 151,
3.18 	may not prohibit:
3.19 	(1) a pharmacy that has paid additional expense transferred
3.20 	under this section by a wholesale drug distributor from
3.21 	exercising its option under this section to transfer such
3.22 	additional expenses generated by the section 295.52 obligations
3.23 	on to the health plan company, a pharmacy benefits manager, or a
3.24 	third-party purchaser; or 
3.25 	(2) a pharmacy that is subject to tax under section 295.52,
3.26 	subdivision 4, from exercising its option under this section to
3.27 	recover all or part of the section 295.52 obligations from the
3.28 	health plan company, a pharmacy benefits manager, or a
3.29 	third-party purchaser by other methods, including increasing
3.30 	fees or charges.