1. (a) A pharmacy benefit manager shall do the following:

   1. (1) Identify to contracted:

      1. (A) pharmacy service administration organizations; or

      2. (B) pharmacies if the pharmacy benefit manager contracts directly with pharmacies;

         the sources used by the pharmacy benefit manager to calculate the drug product reimbursement paid for covered drugs available under the pharmacy health benefit plan administered by the pharmacy benefit manager.

   2. (2) Establish an appeal process for contracted pharmacies, pharmacy services administrative organizations, or group purchasing organizations to appeal and resolve disputes concerning the maximum allowable cost pricing.

   3. (3) Update and make available to pharmacies:

      1. (A) at least every forty-five (45) days; or

      2. (B) in a different time frame if contracted between a pharmacy benefit manager and a pharmacy;

         the pharmacy benefit manager's maximum allowable cost list.

2. (b) The appeal process required by subsection (a)(2) must include the following:

   1. (1) The right to appeal a claim not to exceed sixty (60) days following the initial filing of the claim.
   2. (2) The investigation and resolution of a filed appeal by the pharmacy benefit manager in a time frame determined by the commissioner.
   3. (3) If an appeal is denied, a requirement that the pharmacy benefit manager provide the reason for the denial.

   4. (4) If an appeal is approved, a requirement that the pharmacy benefit manager do the following:

      1. (A) Change the maximum allowable cost of the drug for the pharmacy that filed the appeal as of the initial date of service that the appealed drug was dispensed.
      2. (B) Adjust the maximum allowable cost of the drug for the appealing pharmacy and for all other contracted pharmacies in the same network of the pharmacy benefit manager that filled a prescription for patients covered under the same health benefit plan beginning on the initial date of service the appealed drug was dispensed.
      3. (C) Adjust the drug product reimbursement for contracted pharmacies that resubmit claims to reflect the adjusted maximum allowable cost, if applicable.
      4. (D) Allow the appealing pharmacy and all other contracted pharmacies in the network that filled the prescriptions for patients covered under the same health benefit plan to reverse and resubmit claims and receive payment based on the adjusted maximum allowable cost from the initial date of service the appealed drug was dispensed.
      5. (E) Make retroactive price adjustments in the next payment cycle unless otherwise agreed to by the pharmacy.

   5. (5) The establishment of procedures for auditing submitted claims by a contract pharmacy in a manner established by administrative rules under IC 4-22-2 by the department. The auditing procedures:

      1. (A) may not use extrapolation or any similar methodology;
      2. (B) may not allow for recovery by a pharmacy benefit manager of a submitted claim due to clerical or other error where the patient has received the drug for which the claim was submitted;
      3. (C) must allow for recovery by a contract pharmacy for underpayments by the pharmacy benefit manager; and
      4. (D) may only allow for the pharmacy benefit manager to recover overpayments on claims that are actually audited and discovered to include a recoverable error.
3. (c) The department must approve the manner in which a pharmacy benefit manager may respond to an appeal filed under this section. The department shall establish a process for a pharmacy benefit manager to obtain approval from the department under this section.

As added by P.L.68-2020, SEC.1.