ALL of the following

• Opaque pharmacy reimbursement methods

  • ALL of the following

    • Use of ‘lesser of’ logic or other contract-referenced price sources where pharmacies cannot determine the specific applicable discount or source at the time of dispensing (discounts may fluctuate at PBM discretion); pharmacies should be informed of the specific discount no later than dispensing.

      See discussion of ‘lesser of’ methodology and up to 25% discounts.

    • Post-sale adjustments including effective rate reconciliation (ERR), DIR fees, network fees, performance rebates, and claims processing fees that occur months after point-of-sale and may retroactively reduce payments for previously ‘clean’ claims.

      ERR processes must provide sufficient detail to permit verification; retroactive reductions may violate Iowa Code § 510B.8C.

    • PBM unilateral modifications of reimbursement terms without written consent or explicit notice to pharmacies (submission of a claim deemed acceptance may constitute a negative option contract).

• Omissions or misrepresentations of manufacturer payments

  • ALL of the following

    • Payments characterized with different names (administration fees, inflation fees, enterprise fees, data fees, etc.) or routed through rebate aggregators to conceal amounts retained by PBMs constitute omissions of material fact if PBMs represent full rebate pass-through to payors.

      Rebate definitions and examples of renamed payments are discussed; omission is deceptive.

    • The Division will interpret rebate definitions and pass-through obligations under SF 383 with the prohibition on deception in chapter 507B; 100% of rebates must be passed through to third-party payors for purposes of reducing premiums per Iowa Code § 510B.8(4).

• Affiliated vs unaffiliated pharmacy reimbursement disparities

  • ALL of the following

    • PBMs reimbursing unaffiliated pharmacies less than affiliated pharmacies for the same drug or creating networks that restrict unaffiliated pharmacies from joining may be deceptive if the PBM represents equal treatment but does not verify or disclose differential treatment.
    • Such practices may violate Iowa Code § 510B.8B and are opaque because unaffiliated pharmacies cannot determine comparative reimbursement.

• ERR transparency and clean claim protections

  • ALL of the following

    • Aggregate one-page ERR reports that omit specific excluded claims or necessary detail do not permit verification and may be deceptive.
    • Retroactive reductions of payments for claims that were submitted as clean claims may violate Iowa Code § 510B.8C.

• Legal basis and enforcement authority

  • The Division will consider closures and market impacts (e.g., pharmacy access concerns) when assessing whether practices produce substantial unavoidable injury to consumers.

ALL of the following

• ALL of the following

  • PBMs shall not engage in practices that have the effect of steering consumers to a particular pharmacy (including limiting consumer choice, imposing cost-sharing variations among pharmacies, or limiting daily fill amounts in a way that disfavors certain pharmacies).

    Iowa Code §§ 510B.4B(1)(a),(e),(f) and § 510B.8(3) prohibit steering and differing cost-sharing based on pharmacy.

• ALL of the following

  • PBMs must allow a qualified pharmacy or pharmacist to participate in a network if the pharmacy agrees to provide services that meet the third-party payor's terms and requirements; PBMs may not impose more stringent requirements than licensure or board rules absent objective justification.

    See Iowa Code §§ 510B.4B(1)(b),(c) and § 510B.4B(2) regarding reasonable qualification requirements.

• ALL of the following

  • PBMs must pass through 100% of all rebates received to the third-party payor for the purpose of reducing premiums; rebates include all discounts and negotiated price concessions paid directly or indirectly by manufacturers or other entities, including payments routed through affiliated entities or rebate aggregators.

    Iowa Code § 510B.8(4) and § 510B.1 define rebates and require pass-through.

  • PBMs are required to use a pass-through pricing model, under which payments from the third-party payor to the PBM equal the payments the PBM makes to the dispensing pharmacy, including any professional dispensing fee (Iowa Code § 510B.8D and § 510B.1(11B)).

• ALL of the following

  • A PBM must utilize the most recently published monthly NADAC price as the minimum reimbursement per unit for retail pharmacies located in Iowa (per the Division's Pharmacy List) and must not reimburse below that amount for drugs dispensed in Iowa.

    Iowa Code § 510B.8B(2) and Division guidance require NADAC as minimum reimbursement.

  • PBMs must reimburse Iowa retail pharmacies a dispensing fee of $10.68 for each claim reimbursed at the NADAC rate (Iowa Code § 510B.8B(3)).

• ALL of the following

  • When a PBM grants a pharmacy's appeal, it must adjust reimbursement for each pharmacy under common ownership with the appellant and for each Iowa pharmacy that demonstrates inability to purchase below the established reimbursement rate.

    Iowa Code § 510B.8E requires adjustment when appeals are granted.

  • When a PBM denies a pharmacy's appeal, the PBM must provide the pharmacy the name of a wholesaler from which the drug can be obtained at or below the PBM's reimbursement rate; if the pharmacy demonstrates its primary wholesaler acquisition cost is higher, the PBM must adjust reimbursement above that acquisition cost.

    Appeal disclosure and adjustment requirements and expectations for good-faith, not overly burdensome processes.