The South Carolina General Assembly adjourned the 2018 legislative session on May 10. As provided in the adjourning resolution, the legislature will return May 23-24 and June 27-28 to address the budget and override or sustain any vetoes.

The state budget is pending in conference committee, as it did not pass in regular session. The legislature passed continuing resolution to maintain current spending into the next fiscal year.  The conference committee is not likely to me before the Primary Elections in early June.

In the budget, we are working to address a proviso that was inserted by the House late in the process. An effort is underway to remove the proviso or have it vetoed by the Governor.  The proviso states: 33.26. (DHHS: Pharmacy Reimbursements) With the funds appropriated and authorized to the department of Health and Human Services in the current fiscal year, the department shall require that any managed care organization (MCO) or pharmacy benefit manager (PBM) provide claim-level pharmacy reimbursement detail to both the department and participating pharmacy providers reflecting the amount paid to a PBM by the MCO and the amount paid by a PBM on the MCO’s behalf to a pharmacy provider to ensure transparency and fiscal integrity of the state Medicaid program. A pharmacy provider may only receive claim-level pharmacy reimbursement details for prescriptions dispensed at that provider’s location. The department is authorized to make such state plan, policy, or contract amendments as necessary to implement these provisions. 

Please check back for updates on this matter or reach out to Jim Ritchie, Executive Director, if you have any questions. 

 

Legislation that Passed:

Pharmacy Benefit Managers:  H5038 (S815) initially prohibited PBMs from barring pharmacies from disclosing certain information to insureds about cost sharing and clinical efficacy for alternative drugs, requiring mail-order pharmacy use, charging fees for adjudicating claims, and recouping certain claim funds. S815 also required PBMs to reimburse a provider within seven business days of payment by a payor unless the claim is disputed.  Sen. Ronnie Cromer provided important leadership to amend and pass the final bill. As passed, the bill provides that a PBM may not:

  • prohibit a pharmacist/pharmacy from providing an insured information on the amount of the insured’s cost share for a prescription drug, and the pharmacist/pharmacy may not be penalized for sharing this information with an insured or for selling a more affordable alternative to the insured if one is available;
  • prohibit a pharmacist/pharmacy from offering and providing direct and limited delivery services to an insured as an ancillary service of the pharmacy;
  • charge or collect a copayment from an insured that exceeds the total submitted charges by the network pharmacy;
  • charge or hold a pharmacist/pharmacy responsible for a fee relating to claim adjudication unless the fee is reported on the remittance advice of the adjudicated claim or set out in the contract; or
  • penalize or retaliate against a pharmacist or pharmacy for exercising rights provided pursuant to the provisions of this chapter.”

The Alliance, AHIP and industry allies successfully amended the bills to remove language regarding clinical efficacy of an alternative drug and provide that a PBM may not charge or hold a pharmacist or pharmacy responsible for a fee relating to the adjudication of a claim, unless the fee is reported on the remittance advice of the adjudicated claim or is set out in contract between the PBM and the pharmacy. The amendments also clarified that the bill does not apply to ERISA plans or Medicare Part D. HB 5038 passed the House on March 21, the Senate on April 25, and was signed by the Governor on May 3 (Act No. 77).

 

Cyber Security:  H4655 (S856) establishes standards for data security and standards for the investigation of and notification of a cybersecurity event to the Director of Insurance. The bill closely follows the NAIC Insurance Data Security Model Law, with differences in the exemptions section. The NAIC Model allows a limited exemption to the Information Security Program requirement of the law for HIPAA-compliant plans. The bill references HIPAA in Section 38‑99‑70(3) and states that licensees subject to HIPPA, that have established and maintain an information security program pursuant to HIPAA, will be considered compliant with “this chapter, provided that the licensee is compliant with, and submits a written statement certifying its compliance with, the provisions of this chapter.”  H4655 also provides that nothing in this chapter creates any duty or liability for a provider of communication services for the transmission of voice, data, or other information over its network. In the Senate Banking and Insurance subcommittee, Commissioner Farmer testified that the bill is a high priority for the Department of Insurance (DOI). The legislation passed the House on February 6, the Senate on April 18, and was signed by the Governor on May 3 (Act No. 71).

 

E-Prescribing/Opioids:  S918  initially required practitioners to electronically prescribe targeted controlled substance and prohibited more than five-day supplies of such substances. It also required prescribers and dispensers to review PDMP information prior to prescribing or dispensing. The bill was amended to instead provide that initial opioid prescriptions for acute pain management or postoperative pain management must not exceed a seven-day supply, except when clinically indicated for cancer pain, chronic pain, hospice care, palliative care, major trauma, major surgery, treatment of sickle cell disease, treatment of neonatal abstinence syndrome, or medication-assisted treatment for substance use disorder. Upon any subsequent consultation for the same pain, the practitioner may issue any appropriate renewal, refill, or new opioid prescription. This does not apply to opioid prescriptions to be wholly administered in a hospital, nursing home, hospice facility, or residential care facility. Requires the Department of Health and Environmental Control to develop and maintain as part of the prescription monitoring program a system to provide prescription report cards to practitioners to inform the practitioner about certain prescribing trends. S918 was signed by the Governor on May 15.

 

General Insurance:  S1042/H4987 defines “International major medical insurance” as a temporary health insurance policy that covers the expenses associated with illnesses or accidents that occur while traveling or when temporarily residing outside of a person’s home country.  Adds international major medical insurance to the definition of surplus lines insurance. H4987 was signed by the Governor on May 15.

 

Legislation that Died at the end of this Session:

Autism:  H3790/S307/S427 amends the definition of autism to any of the pervasive development disorders or autism spectrum disorders as defined by the most recent addition of the Diagnostic and Statistical Manual of Mental Disorders (DSM) or the edition in effect at the time of diagnosis.  SCAHP and industry allies successfully redirected the issue to a more successful model that provides broader benefits and seamless application with the Carolina Cares bill, S1067. It was initially supported but later strongly opposed by Autism Speaks advocates. 

H3747/S397 amends autism mandate language to remove the exemption for individual and small group policies.  Also removes the eligibility requirement that diagnosis must be made at 8 years of age or younger, and benefits are to be provided until 16 years of age.  The annual maximum benefit limit on behavioral therapy is removed.

Any Willing Provider:  S14 expands the HMO freedom to select pharmacists and any willing pharmacist statute (S.C. Code §38-71-147) to include health care providers, including pharmacies and pharmacists; physicians and physician group practices; physical therapists and physical therapy group practices; occupational therapists and occupational therapy group practices; radiological technologists or radiological technology group practices; home health providers; and clinical or diagnostic laboratory providers.

 

Balance Billing/Emergency Services/Out-of-Network Reimbursement:  S177 addresses payment methods for covered claims where an EMS agency provides emergency medical services.

 

Drug Price Transparency:  H4490 directs the Department of Health and Environmental Control (DHEC) to identify prescription drugs determined to be essential for treating diabetes and the wholesale acquisition cost, including all forms of insulin and biguanides marketed for sale.  Requires manufacturers of the listed diabetes prescription drugs to report specific information (e.g., research and development, production and administrative costs) to DHEC annually. Requires any manufacturers, distributers, or dispensers of any controlled substance to register with DHEC and submit an annual report. Requires DHEC to publish the essential diabetes drugs list on its publicly accessible website, in addition to other information including drugs for which manufacturers have notified DHEC there will be wholesale acquisition cost increases, and the usual and customary price that each pharmacy charges for each prescription drug on the list. Also addresses insurer formulary disclosures related to diabetes treatment.

 

Direct Primary Care Agreements:  H4643/H3546/S276 address direct primary care agreements and whether they are insurance and subject to regulation by the DOI.

 

Mandates

  • Air Ambulance: H4679 requires individual and group health insurance policies and HMOs to provide coverage for air ambulance transportation to a hospital or medical facility for emergency treatment or when a physician considers air transportation a medical necessity. Coverage shall be reimbursed at the Medicare rate plus 15%, retroactive for five years from the effective date of this section.
  • Cardiovascular Disease: H4839 requires coverage for early detection of cardiovascular disease for insureds who meet specified criteria. 
  • 12 Month Contraception Fills: H3809 requires insurers to cover all Food and Drug Administration approved contraceptive drugs and Medicaid plans to reimburse for 12-month refills of contraceptive drugs obtained at one time by the insured, following completion of the initial supply of the drugs. Insureds must be allowed to receive the contraceptive drugs on-site at the provider’s office. 
  • Contraceptives: H3064 addresses the prescribing and dispensing of contraceptive drugs. 
  • Infertility Treatment: S10 requires coverage for medically necessary expenses for diagnosis and treatment of infertility, including ovulation induction, intrauterine insemination, in vitro fertilization, sperm donation, embryo transfer and low tubal ovum transfer.  

 

Medicaid:  H3443 provides for expansion of Medicaid eligibility as provided for in the ACA.

Right to Shop:  S400 requires insurers to develop an incentive program whereby the insurer pays an enrollee a defined amount if the enrollee receives a service from a provider who is reimbursed for the service at less than the carriers’ average reimbursement rate for that service.

 

Third-Party Payment:  H3323 allows qualified individuals enrolled in a qualified health plan to allow certain third parties to pay any applicable premium or cost sharing owed by the qualified individual to the health insurance issuer issuing the qualified health plan, and the health insurance issuer shall accept any payments made on behalf of the qualified individual.

 

Uninsured:  H3115 enacts the “South Carolina Access to Health Care Act” to direct the SC Department of Health and Human Services (DHHS) to design a health care coverage program by accepting federal funds allowing appropriate uninsured persons to obtain private insurance with premiums paid for by federal funds. Eligible individuals are 18 to 64 years of age, with income 133% FPL or less, U.S. Citizens or documented aliens, and not determined to be more effectively covered through Medicaid program.  The program is contingent upon appropriate approvals of the program design by the U.S. DHHS, and contingent upon specified levels of federal health care funding.  The state assumes no obligation to any private insurance carrier participating in the program other than the payment of premiums as allowed pursuant to the act.

 

Long Term Care:  S51 allows a state individual income tax credit of 15% of the total amount of premiums paid by a taxpayer pursuant to a long-term care insurance contract, not to exceed $350 in a taxable year for each individual.

 

Agents:  S1010/H4523 provides that the Insurance Director only may approve ethics courses administered by the NAIC and Financial Advisors and to provide that the Department may not promulgate regulations to the contrary.

 

General Insurance:  S8 provides that a healthcare sharing ministry is a faith-based, nonprofit, tax-exempt organization that establishes criteria and procedures to facilitate matching participants having financial or medical needs with other participants who are able to assist in meeting those needs or that helps provide for the financial or medical needs of a participant through contributions of another participant and to further provide that such a healthcare sharing ministry is not engaging in the business of insurance.

 

H3306 provides that the Director of the Department of Insurance be an elected office rather than an appointed position.

HB 3131 makes amendments to the Certificate of Need program requirements, review, and application process.