AB 554

This bill requires that pharmacy services administrative organizations

(PSAOs) be licensed by the Office of the Commissioner of Insurance. Under the bill,

a PSAO is an entity operating in Wisconsin that does all of the following:

1. Contracts with an independent pharmacy to conduct business on the

pharmacy's behalf with a third-party payer.

2. Provides at least one administrative service to an independent pharmacy

and negotiates and enters into a contract with a third-party payer or pharmacy

benefit manager on the pharmacy's behalf.

The bill defines “independent pharmacy" to mean a licensed pharmacy

operating in Wisconsin that is under common ownership with no more than two other

pharmacies. “Administrative service” is defined to mean assisting with claims or

audits, providing centralized payment, performing certification in a specialized care

program, providing compliance support, setting flat fees for generic drugs, assisting

with store layout, managing inventory, providing marketing support, providing

management and analysis of payment and drug dispensing data, or providing

resources for retail cash cards. The bill defines “third-party payer” to mean an entity

operating in Wisconsin that pays or insures health, medical, or prescription drug

expenses on behalf of beneficiaries. The bill uses the current law definition of

“pharmacy benefit manager," which is an entity doing business in Wisconsin that

contracts to administer or manage prescription drug benefits on behalf of an insurer

or other entity that provides prescription drug benefits to state residents.

To obtain the license required by the bill, a person must apply to OCI and

provide the contact information for the applicant and a contact person, evidence of

financial responsibility of at least $1,000,000, and any other information required by

the commissioner. Under the bill, the license fee is set by the commissioner and the

term of a license is two years.

The bill also requires that a PSAO disclose to OCI the extent of any ownership

or control by an entity that provides pharmacy services; provides prescription drug

or device services; or manufactures, sells, or distributes prescription drugs,

biologicals, or medical devices. The PSAO must notify OCI within five days of any

material change in its ownership or control related to such an entity.