1.1.................... moves to amend H.F. No. 1952, the second engrossment, as follows:
1.2Page 41, after line 25, insert:

1.3    "Sec. 28. [43A.3165] PROCUREMENT OF A PHARMACY BENEFIT MANAGER
1.4AND A PLATFORM TECHNOLOGY VENDOR.
1.5    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms have
1.6the meanings given.
1.7(b) "Market check" means a technology-driven evaluation of prescription drug pricing
1.8based on benchmarks derived from reverse auction processes conducted in the United States
1.9over the immediately preceding 12 months.
1.10(c) "Pharmacy benefit management services" means:
1.11(1) the procurement of prescription drugs at a negotiated rate for dispensation within
1.12the State Employees Group Insurance Program (SEGIP) to enrollees;
1.13(2) the administration and management of the prescription drug benefit under SEGIP;
1.14and
1.15(3) any of the following services provided with regard to the administration and
1.16management of the prescription drug benefit, including:
1.17(i) mail service pharmacy;
1.18(ii) claims processing, retail network management, and payment of claims to pharmacies
1.19for prescription drugs dispensed to enrollees;
1.20(iii) supplemental rebate contracting and administration;
1.21(iv) patient compliance, therapeutic intervention, and generic substitution programs; or
1.22(v) disease management programs.
2.1(d) "Pharmacy benefit manager" has the meaning given in section 62W.02, subdivision
2.215, paragraph (a).
2.3(e) "Price" means the projected cost of a bid for providing pharmacy benefit management
2.4services over the duration of the contract.
2.5(f) "Reverse auction" means an automated bidding process conducted online that starts
2.6with an opening price and allows qualified bidders to counteroffer a lower price for multiple
2.7rounds of bidding.
2.8(g) "SEGIP" is the State Employees Group Insurance Program under section 43A.316,
2.9provided to participants eligible under section 43A.24.
2.10    Subd. 2. Purpose. The purpose of this section is to optimize prescription drug savings
2.11in SEGIP through:
2.12(1) contracting with a pharmacy benefit manager to manage and administer the
2.13prescription drug benefit for SEGIP;
2.14(2) the adoption of a reverse auction process for the selection of a pharmacy benefit
2.15manager;
2.16(3) providing a process for the electronic review and validation of pharmacy benefit
2.17manager claims invoices for the purpose of reconciling pharmacy bills;
2.18(4) market checks of the pharmacy benefit manager's prescription drug pricing; and
2.19(5) limiting independent pharmacies from unsustainable reimbursement practices.
2.20    Subd. 3. Procurement of a pharmacy benefit manager. (a) Notwithstanding any law
2.21to the contrary, the commissioner of management and budget shall procure a contract for
2.22the services of a pharmacy benefit manager to administer the prescription drug benefit and
2.23pharmacy benefit management services for SEGIP participants, effective January 1, 2023.
2.24(b) The commissioner shall conduct a reverse auction as described in this section to
2.25select the pharmacy benefit manager.
2.26(c) In consultation with the technology platform vendor selected under subdivision 4
2.27and any recommendations offered by the Formulary Committee under section 256B.0625,
2.28subdivision 13c, the commissioner shall specify the terms of a participant bidding agreement
2.29that all bidders must accept as a prerequisite for participation in the reverse auction process,
2.30including:
2.31(1) common definitions;
3.1(2) prescription drug classifications;
3.2(3) retail pricing rules, including maximum allowable cost price lists and dispensing
3.3fees; and
3.4(4) any other contract terms the commissioner deems necessary to further the purpose
3.5of this section as specified under subdivision 2.
3.6(d) A pharmacy benefit manager that submits a bid under this subdivision must provide
3.7the commissioner access to complete pharmacy claims data necessary for the commissioner
3.8to conduct the reverse auction and to carry out administrative and management duties.
3.9(e) The terms of any contract entered into under this subdivision shall not be modified
3.10by the pharmacy benefit manager except with the approval of the commissioner.
3.11(f) The commissioner may structure the contract awarded under this subdivision to pay
3.12the cost of the technology platform and the associated professional services contracted for
3.13under this subdivision by assessing a per-prescription fee to be paid directly by the pharmacy
3.14benefit manager to the technology platform vendor.
3.15(g) The commissioner must perform annual market checks on pharmacy benefit manager
3.16services performed by the pharmacy benefit manager during the term of the contract. A
3.17market check performed under this paragraph may include an evaluation of the effect of
3.18alternative drug pricing metrics, such as the national average drug acquisition cost and
3.19average wholesale price, on the cost of prescription drugs and savings to the state.
3.20(h) The commissioner shall make regular, periodic payment of invoices within the time
3.21periods specified in the contract based on the automated adjudication of invoiced claims
3.22using the technology platform to validate that claims payments comply with the terms of
3.23the contract.
3.24(i) The volunteer joint labor-management committees shall designate two representatives
3.25to assist in the process through which the commissioner conducts the reverse auction and
3.26automated adjudication of invoiced claims, including but not limited to specification of the
3.27terms of the participant bidding agreement and evaluation and comparison of the competing
3.28vendor bids for award of the contract.
3.29    Subd. 4. Technology platform vendor. (a) Notwithstanding section 16C.08, at least
3.30three months before the reverse auction process is scheduled to be completed, the
3.31commissioner shall procure through a competitive bidding process a contract with a
3.32professional services vendor for a technology platform and any associated professional
3.33services necessary to operate the platform to:
4.1(1) evaluate the qualifications of prospective pharmacy benefit manager bidders for the
4.2pharmacy benefit manager procurement;
4.3(2) automatically adjudicate prescription drug claims; and
4.4(3) collect data on pharmacy reimbursement.
4.5(b) The platform procured under paragraph (a) must have the capability to:
4.6(1) host and conduct an online automated reverse auction:
4.7(i) using a software application and high-performance data infrastructure to intake,
4.8cleanse, and normalize pharmacy benefit manager data; and
4.9(ii) with development methods and information security standards that have been validated
4.10by receiving Service Organization Control 2 (SOC 2) and National Institute of Standards
4.11and Technology certification;
4.12(2) automate repricing of diverse and complex pharmacy benefit manager prescription
4.13drug pricing proposals to enable direct comparisons of the price of bids using all annual
4.14claims data available for the medical assistance program using code-based classification or
4.15prescription drugs from nationally accepted drug sources;
4.16(3) simultaneously evaluate, within one hour, diverse and complex multiple proposals
4.17from full-service pharmacy benefit managers, including average wholesale price (AWP),
4.18guaranteed net cost, and National Average Drug Acquisition Cost (NADAC) pricing models,
4.19as well as proposals from pharmacy benefit administrators and specialty drug and rebate
4.20carve-out service providers;
4.21(4) produce an automated report and analysis of bids, including ranking of bids on the
4.22comparative costs and qualitative aspects of the costs within one hour after the close of each
4.23round of reverse auction bidding; and
4.24(5) after the close of the reverse auction process, perform an electronic, line-by-line,
4.25claim-by-claim review of all invoiced pharmacy benefit manager claims within one hour
4.26of receipt that allows for an online comparison of pharmacy benefit manager invoices, an
4.27audit of other services provided by the pharmacy benefit manager services, and identifies
4.28all deviations from the specific terms of the services contract resulting from the reverse
4.29auction.
4.30(c) The commissioner shall not award the platform technology vendor contract under
4.31this subdivision to:
4.32(1) a pharmacy benefit manager;
5.1(2) a subsidiary or affiliate of a pharmacy benefit manager; or
5.2(3) a vendor that is managed by a pharmacy benefit manager or receives, directly or
5.3indirectly, remuneration from a pharmacy benefit manager for aggregating clients into a
5.4contractual relationship with a pharmacy benefit manager.
5.5(d) The vendor that is awarded the contract under this subdivision must not subcontract
5.6any part of the reverse auction process or the review described under paragraph (b), clause
5.7(5)."
5.8Renumber the sections in sequence and correct the internal references
5.9Amend the title accordingly