What does Preamble of S 927 do?

This bill, formally titled 'To amend title XIX of the Social Security Act to ensure accurate payments to pharmacies under Medicaid and to prevent the use of abusive spread pricing practices under Medicaid,' aims to modify title XIX of the Social Security Act. The bill intends to ensure accurate payments to pharmacies operating under Medicaid. It also seeks to prevent the use of abusive spread pricing practices within the Medicaid program.

What does SHORT TITLE. of S 927 do?

This bill is formally titled the Protecting Pharmacies in Medicaid Act.

What does ENSURING ACCURATE PAYMENTS TO PHARMACIES UNDER MEDICAID. of S 927 do?

This section amends Section 1927(f) of the Social Security Act to modify how the Secretary determines national average drug acquisition cost benchmarks. The Secretary is authorized to contract services to survey retail and non-retail community pharmacy drug prices. Pharmacies receiving payments related to covered outpatient drugs are required to respond to surveys conducted under this paragraph. The Secretary will make survey information publicly available, including response rates, sampling methodology, and information on price concessions. The Secretary may establish civil money penalties for pharmacies that fail to respond to surveys, provide false information, or otherwise fail to comply with the requirements. The amendments will take effect six months after enactment, with a delayed application to applicable non-retail pharmacies until 18 months after enactment.

What does PREVENTING THE USE OF ABUSIVE SPREAD PRICING IN MEDICAID. of S 927 do?

This section amends Section 1927 of the Social Security Act to establish requirements for transparent prescription drug pass-through pricing in contracts between states and pharmacy benefit managers (PBMs) or managed care entities. These contracts must ensure payments for drugs and related services are based on a transparent model, limiting payments to ingredient cost and a professional dispensing fee. Payments must be passed through to pharmacies or providers, except for adjustments due to waste, fraud, or abuse, and may exceed actual acquisition cost for drugs purchased through the 340B program under specific conditions. Administrative fees for PBMs or entities are limited to the fair market value of services. States and the Secretary must receive detailed cost and payment information related to covered outpatient drugs. The Secretary is authorized to publish aggregated information received, excluding entity identities, by state and category of covered entity. Section 1903(m) is amended to require compliance with Section 1927(e)(6) for contracts covering outpatient drugs. The amendments apply to contracts with an effective date 18 months after the Act's enactment. The Secretary has the authority to implement these changes through program instructions and is exempt from certain administrative procedures.

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Protecting Pharmacies in Medicaid Act — S. 927

Last updated: 3/11/2025 · Introduced: 3/11/2025

Author: Peter Welch (D-VT)

TL;DR (AI)

The bill amends the Social Security Act to modify how national average drug acquisition cost benchmarks are determined and authorizes surveys of pharmacy drug prices, with potential civil money penalties for non-compliance.
It establishes requirements for transparent prescription drug pass-through pricing in Medicaid contracts between states and pharmacy benefit managers, limiting payments to ingredient cost and a professional dispensing fee.
The bill mandates states and the Secretary to receive detailed cost and payment information related to covered outpatient drugs and allows the Secretary to publish aggregated data.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, short title., and 2 more.

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