Kentucky Healthcare Legislation That May Impact You

Updated: Apr 12

The recently concluded 2021 Kentucky Legislative Session has a few items that will impact some, if not all, healthcare consumers in the Bluegrass State.(1) We will run down the main ones, grouped by their two general legislative aims and how they have progressed as of July 7, 2021.

The Kentucky State Capital in Frankfort

Pharmacy Benefit Managers

Pharmacy Benefit Managers (or Administrators) (PBMs/PBAs) is a topic that we have previously spotlighted and have come under the scrutiny of KY lawmakers with three bills.

  1. House Bill 177, which was introduced in January and last acted on March 30, is titled, “An act relating to pharmacy benefits in the Medicaid program and declaring an emergency.” It is designed to: “establish and implement a preferred drug list, reimbursement methodologies, and dispensing fees for Medicaid managed care organizations and the state pharmacy benefit manager within 30 days after the effective date of” the act. It was last recommitted to the House Appropriations & Revenue Committee.

  2. House Bill 222  provides oversight to pharmacy benefits in the Medicaid program and declaring an emergency. Furthermore, it would: “define terms; require the Department for Medicaid Services to contract with an independent entity to monitor all Medicaid pharmacy benefit claims; establish eligibility requirements for an entity seeking to contract with the department to monitor pharmacy benefit claims; establish requirements for analyzing and monitoring claims.” As of March 1, it was given to the Senate Health & Wellness Committee.

  3. House Bill 532 is, of the three, the most implicit curtailing of PBMs. The act will “…prohibit certain practices of pharmacy benefit managers; allow audits of contracts entered with pharmacy benefit managers; require certain disclosures relating to contracts with pharmacy benefit managers; require pharmacy benefit managers to file an annual report with the commissioner of insurance; provide that confidential or proprietary information disclosed to the Department of Insurance shall not be subject to disclosure under the Open Records Act; prohibit pharmacy benefit managers from sharing certain pharmacy records with pharmacy affiliates; authorize the commissioner of insurance to promulgate regulations relating to pharmacy benefit managers.” This legislation, if enacted, would be a welcome start to minimizing the misaligned incentives that PMBs create.

Coupons & Cost Sharing

There are three pieces in this category as well. Two of them have been signed by the Governor, while the third was simply introduced.

  1. House Bill 114/Senate Bill 45 “prohibits an insurer or pharmacy benefit manager from excluding any cost-sharing amount paid by or on behalf of an insured when calculating the insured’s contribution to any applicable cost-sharing requirement.”

  2. House Bill 95, “cap(s) the cost-sharing requirements for prescription insulin at $30 per 30-day supply; amend(s) KRS 18A.225 to require the Kentucky Employee Health Plan to comply,” and is effective January 1, 2022.

  3. Senate Bill 110, like HB 95, is related to insulin costs. This emergency legislation which had only been introduced to committee, states that it will, “Create various new sections of KRS Chapter 211 to define terms; establish the urgent-need insulin program and the continuing access to insulin program; establish eligibility guidelines for both programs; establish the application process; establish the process by which insulin is dispensed to eligible individuals; establish the responsibilities of insulin manufacturers for facilitating the dispensing of insulin to eligible individuals; establish the responsibilities of the Cabinet for Health and Family Services for administering the program; require manufacturers to maintain privacy of all data obtained; require manufacturers to annually report certain information to the cabinet; require the cabinet to report certain information to the General Assembly upon request; establish penalties; amend KRS 304-17A.148 to cap the cost-sharing requirements for prescription insulin at $30 per 30 day supply; amend KRS 18A.225 to require the Kentucky Employee Health Plan to comply.”

Missing Items & Final Analysis

While the previous items – whether enacted or not – were generally positive developments, surrounding states had a more comprehensive range of regulatory solutions. Among the specific topics that Kentucky did not directly confront in this session were: drug importation (24 bills introduced in 2021), general transparency (45 bills nationwide), unsupported price hikes (5), and affordability reviews (14), and price gouging (6).(2)


PBM accountability and instituting cost constraints are very welcome developments, but there is much left that can be attended to by further legislation. If, or until that day arrives, the labyrinth of regulations and opaque pricing structures will remain. Commonwealth Insurance Partners successfully navigates these issues for our clients daily. We can bypass the PBMs, obtain comparable or higher quality medication or procedures at an affordable, financially sustainable price structure. This approach makes the current employer-based health insurance system a much less expensive proposition for everyone.


References

  1. 2021 Regular Session Record, https://apps.legislature.ky.gov/record/21rs/record.html

  2. 2021 State Legislative Action to Lower Pharmaceutical Costs, https://www.nashp.org/rx-legislative-tracker/