Rules & Regulations of the State of Tennessee
Title 0780 - Commerce and Insurance
Subtitle 0780-01 - Insurance Division
Chapter 0780-01-95 - Pharmacy Benefits Managers
Section 0780-01-95-.03 - APPROVAL OF INITIAL APPEAL PROCESS

Universal Citation: TN Comp Rules and Regs 0780-01-95-.03

Current through September 24, 2024

(1) No PBM may utilize an initial appeal process until it has received approval from the Commissioner stating the PBM's initial appeal process meets the requirements of T.C.A. § 56-7-3206(c)(2) and this chapter. A PBM shall utilize only one appeal process for all initial appeals filed with the PBM.

(2) PBMs must submit the following to the Commissioner as part of an application for approval of an initial appeal process, along with the application fee required under Rule 0780-01-95-.07(1):

(a) The name of the PBM;

(b) The contact information, including phone number and email address, for the primary individual responsible for managing the application for the PBM;

(c) The contact information, including phone number and email address, for the primary individual who will manage the PBM's appeal process. This may be the same individual designated in subparagraph (b);

(d) Certification the PBM will accept from a pharmacy the standard appeal form created by the Department to file an initial appeal;

(e) The appeal form the PBM will accept from a pharmacy to file an initial appeal, if the PBM intends to offer its own appeal form in addition to the standard appeal form created by the Department;

(f) A comprehensive list of all information and documents requested from a pharmacy at the initiation of an initial appeal in addition to the standard appeal form provided by the Department or the PBM's appeal form submitted to the Department pursuant to subparagraph (e) of this paragraph, including any forms used to request such information;

(g) A list of the position(s) responsible for reviewing initial appeals received from a pharmacy, along with the training, experience, and education required of the position(s);

(h) A summary, sufficient to the Commissioner, of how the PBM will comply with the timing and notice requirements under T.C.A. § 56-7-3206(c)(2)(B)(ii) and Rule 0780-01-95-.05;

(i) Certification the PBM will not assess any costs to the pharmacy for any services provided in connection with the initial appeal;

(j) The email address to which the Commissioner shall send notice to the PBM of an external appeal to the Commissioner pursuant to T.C.A. § 56-7-3206(g)(2);

(k) Certification the PBM will require the name of a pharmacy's wholesaler or manufacturer, as applicable, from which the pharmacy purchased the drug or medical product or device at issue as part of its processing of claims for reimbursement from pharmacies. A PBM shall request this information as part of its processing of claims for reimbursement;

(l) A description, sufficient to the Commissioner, of how the PBM will track initial appeals such that it can reasonably determine, upon being provided the wholesaler or manufacturer in a claim, if an adjusted rate of reimbursement applies; and

(m) Any other documentation or information requested by the Commissioner regarding an initial appeal process.

(3)

(a) Within 60 days of receipt of a complete application for approval of an initial appeal process containing all information required and requested under paragraph (2) of this rule and the required application fee, the Commissioner may:
1. Approve the initial appeal process upon determining that, in the Commissioner's discretion, the initial appeal process:
(i) Meets the requirements of paragraph (2) of this rule; and

(ii) Is reasonable and efficient;

2. Deny an initial appeal process for failure to meet, in the Commissioner's discretion, the requirements of subparts (3)(a)1.(i) or (ii) of this rule. The Commissioner shall provide the reason for denial in writing to the applicant; or

3. Extend the timeline for rendering a decision by providing the parties with written notice that includes a good-faith estimate of the additional time needed to make a decision. The Commissioner may subsequently further extend any such extended timeline by providing additional written notice to the parties of an updated good-faith estimate of the additional time needed to make a decision prior to the expiration of the previous extension.

(b) If the Commissioner does not take one of the actions listed in subparagraph (3)(a) of this rule within 60 days of receipt of a complete application, or within the extended timeline if extended pursuant to part (3)(a)3. of this rule, the application shall be deemed approved.

(4) Denial under part (3)(a)2. of this rule shall not preclude a PBM from submitting a new application for approval of an initial appeal process, accompanied by a new application fee, upon correcting any defects that caused the previous denial.

(5) A PBM may utilize an approved initial appeal process without the need for additional review by the Commissioner unless:

(a) The PBM materially changes the structure of, or the steps contained in, its initial appeal process. Material changes include but are not limited to:
1. Changing deadlines that are not otherwise set out in law or rule;

2. Any change to the information required from pharmacies to participate in any part of an initial appeal process. Changing or editing the forms on which pharmacies submit information to a PBM, without changing the type or scope of information required on a form, is not a material change; or

3. Assessing any cost to a pharmacy for any services provided in connection with an initial appeal; or

(b) There is a change in the position(s) assigned to review an initial appeal. Staffing turnover for the position(s) that review initial appeals does not constitute a change under this subparagraph.

(6) No less than 60 days prior to the date on which a PBM plans to implement a change to its initial appeal process as described in paragraph (5) of this rule, a PBM shall notify the Commissioner and pay the fee required under Rule 0780-01-95-.07(2). The notice shall contain a detailed explanation of the change and include any supporting documentation necessary to fully explain the change. The Commissioner shall review the notice and any supporting documentation and may:

(a) Request additional information;

(b) Require the PBM submit an application under paragraph (2) of this rule, including the required application fee, that reflects the changed initial appeal process;

(c) Approve the changed initial appeal process contingent on the PBM meeting certain conditions outlined in writing and sent to the PBM;

(d) Approve the changed initial appeal process; or

(e) Deny the changed initial appeal process.

(7) Notwithstanding paragraph (5) of this rule, the Commissioner may, after notice and hearing, revoke approval of an initial appeal process that has been previously approved or deemed approved for any violation of this chapter.

(8) This rule shall not apply to a PBM that meets the requirements of T.C.A. § 56-7-3206(d) by utilizing a reimbursement methodology that is identical to the methodology provided for in the state plan for medical assistance approved by the federal Centers for Medicare and Medicaid Services.

(9) Beginning January 1, 2023, a PBM may utilize a temporary appeal process that is deemed temporarily approved as set out in this paragraph until the PBM's initial appeal process is approved by the Commissioner pursuant to paragraph (3) of this rule.

(a) In order to utilize a temporary appeal process to review initial appeals, a PBM must:
1. Prior to January 31, 2023, submit a certification, on a form provided by the Commissioner, that the PBM's temporary appeal process complies:
(i) With T.C.A. § 56-7-3206(c)(2)(B)(ii) and (iii); and

(ii) To the greatest extent possible, this chapter;

2. Submit a description of the steps involved in its temporary appeal process, and how that process differs, if at all, from the requirements of this chapter;

3. Pay the fee required under Rule 0780-01-95-.07(3); and

4. Certify that all information submitted pursuant to this subparagraph is true and accurate to the best of the PBM's knowledge.

(b) A PBM's submission of all information required under subparagraph (a) of this paragraph shall constitute the Commissioner's approval for purposes of T.C.A. § 56-7-3206(c)(2)(B)(i) and paragraph (1) of this rule. The Commissioner's approval under this paragraph constitutes only temporary, terminable permission to utilize a temporary appeal process. The Commissioner's temporary approval of a PBM's initial temporary appeal process shall expire 60 days after the PBM's first submission of all information required under subparagraph (a) of this paragraph, except as provided in subparagraph (c) of this paragraph.
1. Notwithstanding a temporary appeal process being deemed temporarily approved pursuant to subparagraph (b) of this paragraph, the Commissioner may withdraw approval of a PBM's temporary appeal process for any reason in the sole discretion of the Commissioner by providing the PBM with written notice stating the temporary approval of the PBM's temporary appeal process is withdrawn and a statement of deficiencies in the temporary appeal process that must be addressed. Upon receiving this deficiency notice from the Commissioner, the PBM shall cease utilizing the temporary appeal process for which temporary approval was withdrawn within five business days after receipt of the deficiency notice. If the PBM does not submit a corrected approval process as set out in part 2. of this subparagraph within five business days of receipt of the Commissioner's notice, the PBM shall not process initial appeals until a corrected temporary appeal process is submitted pursuant to part 2. of this subparagraph or an approved appeal process is otherwise in place.

2. The PBM may resume using a temporary appeal process after receiving a deficiency notice pursuant to part 1. of this subparagraph, if the PBM's temporary approval process is not expired pursuant to subparagraph (c) of this paragraph, by submitting a corrected temporary appeal process to the Commissioner accompanied by a signed, written statement by the PBM certifying it has addressed all deficiencies identified by the Commissioner in the deficiency notice. Upon submission of the corrected temporary appeal process and signed statement, the corrected temporary appeals process shall be deemed temporarily approved and subject to part 1. of this subparagraph. The PBM may use its corrected temporary appeal process to review any initial appeals received between the time it received a denial notice from the Commissioner pursuant to part 1. of this subparagraph and its corrected temporary appeal process was deemed temporarily approved. The Commissioner's approval of a PBM's corrected temporary appeal process shall expire 60 days after the PBM's submission of the corrected information pursuant to this part, except as provided in subparagraph (c) of this paragraph.

(c) A PBM that utilizes a temporary appeal process must submit a complete application pursuant to paragraph (2) of this rule prior to the expiration of the Commissioner's approval of its temporary appeal process. Notwithstanding subparagraph (b) of this paragraph, if a PBM submits a complete application pursuant to paragraph (2) of this rule, the PBM may, upon notice from the Commissioner that a complete application has been received, continue to utilize a temporary appeal process that has been deemed temporarily approved until the Commissioner approves its application pursuant to paragraph (3) of this rule unless the Commissioner withdraws approval of the temporary appeal process pursuant to part (b)1. of this paragraph.

Authority: T.C.A. §§ 56-7-3101 and 56-7-3206.

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