A. Initial License and
Renewal. On or after January 1, 2021, a pharmacy benefits manager shall apply
for a license on a form and in accordance with a licensing schedule prescribed
by the Director or his designee. The terms "Director" and "designee" have the
meaning set forth in Section
38-1-20 of
the Code of Laws of South Carolina 1976, as amended.
B. The initial licensing schedule shall be
set by bulletin or order of the Director. In 2022, and thereafter, a pharmacy
benefits manager license shall be renewed annually no later than March 1 of
each year.
C. Each application for
a license shall be certified by an officer or authorized representative of the
applicant and shall contain a statement that certifies the pharmacy benefits
manager is in compliance with Section
38-71-2220 of the Code of Laws of
South Carolina 1976, as amended. All proprietary information submitted by the
pharmacy benefits manager under Section II of this regulation shall be
considered confidential under Sections
38-71-2250
and
30-4-40
of the Code of Laws of South Carolina 1976, as amended.
D. The pharmacy benefits manager shall
provide as part of the application for licensure the following:
(1) A non-refundable filing fee of $1,000 for
initial licensure and $500 for renewal licenses;
(2) A copy of the basic organizational
document of the pharmacy benefits manager, such as the articles of
incorporation, articles of association, partnership agreement, trust agreement
or other applicable documents, and all amendments thereto;
(3) a copy of the bylaws, organizational or
similar document(s), if any, regulating the conduct or the internal affairs of
the applicant;
(4) A copy of the
pharmacy benefits manager's provider manual and written agreement(s), excluding
pricing information, but including audit procedures, which it uses for
contracts entered into with pharmacists, pharmacies or pharmacy services
administrative organizations in administration of pharmacy benefits for health
care insurers in this State or a representative written agreement and provider
manual, excluding pricing information, but including audit procedures, for each
type of network provider, which it uses for contracts entered into with
pharmacists, pharmacies or pharmacy services administrative organizations in
administration of pharmacy benefits for health care insurers in this
State;
(5) For the two preceding
calendar years, a listing of health care insurers with which the pharmacy
benefits manager was contracted in this State to perform claims processing
services and the number of enrollees or beneficiaries covered by each health
care insurer;
(6) The relevant
documentation, such as a policies and procedures manual, that demonstrates the
pharmacy benefits manager has adopted processes to ensure compliance with the
requirements in Section
38-71-2240 of
the Code of Laws of South Carolina 1976, as amended, including any written
policies or procedures describing the appeals dispute resolution process for
in-network or contracted pharmacists or pharmacies;
(7) A certified statement that indicates
whether the applicant or officer with management or control:
(a) has been refused or denied a
registration, license or certification to act as or provide the services of a
pharmacy benefits manager or third-party administrator in any state, providing
specific details separately for each such refusal or denial, if any, including
the date, nature and disposition of the action; and
(b) has had any registration, license or
certification to act as such suspended, revoked or nonrenewed for any reason by
any state or federal entity, providing specific details separately for each
such suspension, revocation or nonrenewal, if any, including the date, nature
and disposition of the action, and attaching a copy of any relevant final order
or similar document imposing the suspension, revocation or
nonrenewal;
(8) A
description of whether the applicant has had a business relationship with an
insurer terminated for any fraudulent or illegal activities in connection with
the administration of a pharmacy benefits plan (if so, attach specific details
separately explaining this termination, including the date, and nature of the
termination); and
(9) Any other
relevant information deemed necessary by the Director or his designee to
evaluate the application for licensure or compliance with the requirements of
the Act and this regulation.
E. Review Process
(1) Initial and Renewal License Applications
For initial and renewal license applications, the Director or his designee
shall review the application under Section II.D of this regulation, and may:
(a) approve the application and issue the
applicant a pharmacy benefits manager license; or
(b) notify the applicant, in writing, that
the application is incomplete and request additional information to complete
the review; and, if the missing or requested information is not received within
thirty (30) days from the date of the notification, the Director or his
designee may deny the application; or
(c) deny the application; and
(i) provide written notice to the applicant
that the application has been denied stating or explaining the basis of the
denial; and
(ii) advise the
applicant that it may appeal the denial by requesting a hearing in accordance
with Section
38-3-210
of the Code of Laws of South Carolina 1976, as amended, before the South
Carolina Administrative Law Court.
(2) Standards of Review
(a) The Director or his designee shall deny
an initial or renewal application for licensure for the following reasons:
(i) the pharmacy benefits manager operates,
or proposes to operate, in a hazardous condition and the services it
administers, or proposes to administer, for health care insurers in this State
may be hazardous to the insurance-buying public; or
(ii) the pharmacy benefits manager has
violated the requirements of the Act, this regulation or other applicable South
Carolina law; or
(iii) the pharmacy
benefits manager has failed to timely submit information to complete review of
the application under Section II of this regulation.
(b) In lieu of a denial of a renewal
application, the Director or his designee may permit the pharmacy benefits
manager to submit to the Director or his designee a corrective action plan to
cure or correct deficiencies falling under Section II of this regulation,
impose an administrative penalty under Section
38-2-10
et seq. of the Code of Laws of South Carolina, 1976 as amended, or
both.