Tennessee orders PBMs to comply with MAC law

The Tennessee Department of Commerce and Insurance has notified pharmacy benefit managers (PBMs) that they must comply with all provisions of the state’s Maximum Allowable Cost (MAC) law.

“The … Department has been notified that various PBMs may have engaged in numerous violations of Tennessee law governing PBMs since the law’s July 1, 2015 effective date,” Julie Mix McPeak, commissioner of the Department, wrote in a memorandum to PBMs and affiliated health insurers, adding that “any violations of this statute will be strictly enforced by the Department and penalties will be pursued.”

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All parties accountable

“For this law to be effective, it has to contain a mechanism to enforce the law and hold all responsible parties accountable for compliance,” said Micah Cost, PharmD, executive director of the Tennessee Pharmacists Association. “The Tennessee Department of Commerce and Insurance has been vital to advancing these efforts thus far.”

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Points stressed by the department include the following:

• Every PBM must update MAC prices on each of its MAC lists at least every three business days; make the updated lists available to each contracted pharmacy, either on its website or by other comparable format or process; and use the updated MAC prices to calculate payments within five business days.

• A PBM is prohibited from establishing any MAC price in an amount that would result in reimbursement below the amount found in the source used by the PBM to set the MAC price.

• Every PBM must establish a clearly defined appeal process for contesting prices used for reimbursement.

• If the PBM denies the appeal, the PBM must state the reason for denial and provide the NDC of an equivalent drug that is available at a price equal to or below the MAC for that drug.

Ongoing efforts

Cost advises other state pharmacy associations to “proactively engage your members and work closely with your administration and legislators to educate them on the issues facing community pharmacists. Explaining in detail how MAC lists are used will make it easier to gain grassroots support.”

For a copy of the Tennessee MAC law or for more information, call Cost at 615-256-3023 or e-mail micah@tnpharm.org.