Michigan Laws 550.837 – Maximum allowable costs; pharmacy benefit manager duties
Current as of: 2023 | Check for updates
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Terms Used In Michigan Laws 550.837
- Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
- Carrier: means that term as defined in section 3701 of the insurance code of 1956, 1956 PA 218, MCL 500. See Michigan Laws 550.815
- Claim: means a request for payment for administering, filling, or refilling a drug or for providing a pharmacy service or a medical supply or device to an enrollee. See Michigan Laws 550.815
- Health plan: means a qualified health plan as that term is defined in section 1261 of the insurance code of 1956, 1956 PA 218, MCL 500. See Michigan Laws 550.815
- in writing: shall be construed to include printing, engraving, and lithographing; except that if the written signature of a person is required by law, the signature shall be the proper handwriting of the person or, if the person is unable to write, the person's proper mark, which may be, unless otherwise expressly prohibited by law, a clear and classifiable fingerprint of the person made with ink or another substance. See Michigan Laws 8.3q
- Maximum allowable cost: means the maximum amount that a pharmacy benefit manager will reimburse a network pharmacy for the ingredient cost for a generic drug. See Michigan Laws 550.817
- Maximum allowable cost list: means a listing of drugs used by a pharmacy benefit manager, directly or indirectly, to set the maximum allowable cost. See Michigan Laws 550.817
- Multiple source drug: means a therapeutically equivalent drug that is available from 1 or more of the following:
(i) At least 1 brand-named manufacturer and at least 1 generic manufacturer. See Michigan Laws 550.817Pharmacy: means that term as defined in section 17707 of the public health code, 1978 PA 368, MCL 333. See Michigan Laws 550.817 pharmacy benefit manager: means an entity that contracts with a pharmacy or a pharmacy services administration organization on behalf of a health plan or carrier to provide pharmacy health services to individuals covered by the health plan or carrier or administration that includes, but is not limited to, any of the following:
(i) Contracting directly or indirectly with pharmacies to provide drugs to enrollees or other covered persons. See Michigan Laws 550.817state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o
(1) For each drug that a pharmacy benefit manager establishes a maximum allowable cost, the pharmacy benefit manager shall do all of the following:
(a) Provide each pharmacy subject to a maximum allowable cost list with access to the maximum allowable cost list and the source used to determine the maximum allowable cost for each drug.
(b) Update its maximum allowable cost list at least once every 7 calendar days.
(c) Provide a process for each pharmacy subject to the maximum allowable cost list to receive prompt notification of an update to the maximum allowable cost list.
(d) Establish and maintain a reasonable administrative appeals process to allow a pharmacy subject to the maximum allowable cost list or an agent of a pharmacy subject to the maximum allowable cost list to challenge the adjudication of a pharmacy’s claim.
(e) Investigate and resolve an appeal under this subsection within 14 calendar days after the pharmacy benefit manager receives the appeal. An appeal under this subsection must be submitted to the pharmacy benefit manager not later than 45 calendar days after the date the pharmacy’s claim for reimbursement has been adjudicated.
(f) Respond in writing to any appealing pharmacy or an appealing pharmacy’s agent not later than 30 calendar days after receipt of an appeal if the pharmacy filed the appeal more than 10 calendar days after the date the pharmacy’s claim for reimbursement is adjudicated.
(g) If an appeal is denied, provide the appealing pharmacy or the appealing pharmacy’s agent the national drug code number available for purchase in this state at or below the appealed maximum allowable cost.
(h) If an appeal is granted, permit the pharmacy to reverse and rebill the claim and all claims for the drug.
(2) Before a pharmacy benefit manager places or continues a drug on a maximum allowable cost list, all of the following conditions must be met:
(a) The drug is available for purchase by pharmacies in this state from wholesale distributors operating in this state.
(b) The drug is not obsolete.
(c) The drug is a multiple source drug.
(3) All benefits payable by a carrier, health plan, or pharmacy benefit manager to a pharmacy must be paid within 14 days after adjudication of a claim if claims are submitted electronically.