Given the importance of “any willing provider” (AWP) laws, which allow patients to select the pharmacy they prefer to fill their prescriptions, it’s imperative for specialty pharmacies—including those operating within health systems—to know the status of the legislation in their states of operation and how to factor the law into payor contracting, experts noted during a session at the NASP 2022 Annual Meeting & Expo.
At least 29 states have some type of AWP law as of the fall of 2022, noted Tiffany Jones, JD, an assistant general counsel and the vice president of regulatory and compliance at Senderra Rx Specialty Pharmacy, a national specialty pharmacy headquartered in Dallas. (That list technically includes Texas, but the state attorney general has said the law is not enforceable, Ms. Jones noted.) “Their language will differ by state, but what is current throughout is that their goal is to ensure patient access. For the pharmacy, this means that you can participate in any commercial payor’s network in any of these states if you agree to their terms and conditions.
“Only self-funded ERISA [Employee Retirement Income Security Act] plans are excluded from AWP requirements.”
To leverage AWP laws in payor contracting, Ms. Jones advised specialty pharmacies to do the following:
Ask for access to any commercial plan. This should be done in every state for which there is a state AWP law, Ms. Jones stressed. “They cannot say, ‘Our network is closed,’” she said.
Request terms and conditions for the plan in the state or states you are interested in. “We like to have the business department do that, not the legal department, because no one likes to pay attorneys, and if you send an email from your attorney then they have to use theirs,” Ms. Jones said. “They are allowed to ask you to sign a nondisclosure agreement.”
Ask for confirmation. Specifically, request the PBM to confirm in writing that you have received the same network terms and conditions under which any other pharmacy participates. “These laws generally apply that their terms and conditions have to be reasonable, so they can’t sidestep the intent of the law by saying, for example, that you can participate in this Montana network but you have to have a physical presence in Montana,” Ms. Jones said. “Terms and conditions can’t include requirements that would undermine the intent of the law, and they also have to be uniformly applied. If they require URAC accreditation, for example, every pharmacy in the network should have to have that.”
Ask about inclusion in Medicaid plans. “Typically, you can say that the state AWP law applies in the Medicaid space, and see if the payor says no,” she said. “If they say no, ask why. In most states with an AWP law, it will apply to Medicaid.”
Playing Nice With Medicare Part D
At the federal level, under the Medicare Part D statute and its implementing regulations, any pharmacy that is willing and able to meet a Part D plan’s terms and conditions must be allowed admission to the plan’s network. “This law not only says that you can have access to any network, but it also has a lot more language about what your rights are as a pharmacy,” Ms. Jones said. “For example, when you ask for their terms and conditions, they have to reply within seven days; after Sept. 15 of each year, which is the date that plans must have their contracts approved by the Centers for Medicare & Medicaid Services, they only have two days to get it to you. They should have these terms and conditions readily available.”
When Senderra Rx sends out such a request, they state: “Please provide all 2023 terms and conditions for all Part D plans and all pharmacy networks of those plans for which [name of PBM] is the PBM. For each set of standard terms and conditions provided, please 1) identify by name the Part D plans to which they apply, and 2) specific the type(s) of pharmacies (i.e., retail, specialty and/or mail) to which they apply.”
Terms and conditions also must apply to the type of business your pharmacy actually does. “We’ve often seen violations of that, where a contract’s metrics say you have to demonstrate performance in a drug or drug category that does not apply to your disease state coverage,” Ms. Jones said. “If you get that, you can say, ‘This does not apply to my line of business; please provide appropriate terms and conditions pursuant to the law.’”
Pharmacies with a specific focus on oncology, for example, might be told that because they don’t cover hepatitis C and multiple sclerosis drugs, they won’t be admitted to a certain network. “Clearly, that’s not reasonable,” said Jonathan Levitt, the co-founder of the healthcare law firm Frier Levitt, who was not part of the NASP session.
“Or a PBM in an AWP state may say, ‘To get admitted to our network, you need to get credentialed and pass our special test,’” Mr. Levitt added. “Many PBMs have tests or requirements to get into their commercial specialty network that very few pharmacies can possibly pass. I believe that’s a violation of the law, when you set a standard that only the specialty pharmacy that you own can meet. Unfortunately, many pharmacies don’t have the resources and knowledge to fight that, so they may accept being excluded. But we have had success in challenging exclusions of [specialty pharmacies] in AWP states.”
Leaving Mail Order Alone
Payors and PBMs also can’t restrict mail-order pharmacy, Ms. Jones said. “Some contracts may say that you are not entitled to participate in a network if you mail, or pack or ship in a certain way. That’s not allowed under federal AWP law. Medicare Part D law says that you can dispense drugs to a member in any way that is best suited for the pharmacy or the member. With commercial payors under state AWP laws, they may have a mail-order contract and a retail contract. Those contracts might not have the same rates, and you may have to do a little finagling, but they can’t keep you out of network. Check and see what other pharmacies in their network are mailing, confirm the information in writing, then ask for that contract.”
Any willing provider laws typically do not provide a right of action for pharmacies to sue the PBM, Ms. Jones said. “You can report the practice, and then it is in the hands of the department of insurance if they want to punish the PBM. You may not find out what the outcome is. But we have seen success in holding PBMs and plan managers accountable for clear violations, and we’ve seen PBMs totally change their contracts as a result.”
Don’t Fear Retaliation
Success is possible, Mr. Levitt agreed—and specialty pharmacies that decide to fight shouldn’t fear retaliation. “Many pharmacies express reluctance to challenge contracts that exclude specialty pharmacies. Let’s say you’re in one of the Big Three commercial networks in some states but not in other states, and the specialty pharmacy is also in the PBM’s Medicare network,” he said. “Pharmacies may have the legal right to be in commercial or Medicaid networks in other states, but many pharmacies express concern that if they challenge a PBM to gain network access, the PBM would potentially terminate the pharmacy from the other networks in retaliation. Well, there is a federal anti-retaliation provision built into the Medicare law, and there are also fair competition laws designed to protect pharmacies from aggressive PBM tactics.”
Mr. Levitt added that although “there is always a risk of losing, the true risk of retaliation is very small. SPs should know that you have statutory and contractual rights: If you’re able to stomach fighting the PBM, the AWP laws mean that your chances of success at getting into the network and getting fair reimbursement rates are quite strong.”
Author: Gina Shaw
AWP Resource: The National Conference of State Legislatures maintains a web-based resource of any willing provider laws at bit.ly/3fSVbJG.