Limitation on administrator service fees and contract pharmacy fees

Section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended by adding at the end the following: (f) Requirements for TPA and contract pharmacy remuneration (1) Third-party administrator fees A third-party administrator furnishing 340B program-related services on behalf of a covered entity described in subsection (a)(4), including reviewing or processing claims or other information to identify covered outpatient drugs dispensed to individuals who are patients of the covered entity (as defined in subsection (b)(3)) may receive remuneration from such covered entity for the performance of such services only if— (A) such remuneration is a flat dollar amount not directly or indirectly based on any price of, or discount or other remuneration provided with respect to, a covered outpatient drug, paid for each unit of service furnished to the covered entity, regardless of whether a prescription was dispensed to an individual who is a patient of the covered entity; (B) the amount of such remuneration is consistent with fair market value in an arm’s-length transaction for the bona fide, itemized 340B-related services actually performed on behalf of the covered entity; and (C) such remuneration complies with applicable State and Federal law, including section 1128B(b) of the Social Security Act. (2) Contract pharmacy fees A contract pharmacy that has entered into a written agreement with a covered entity pursuant to and satisfies the applicable requirements in subsection (a)(5)(F) may receive remuneration from such covered entity for the performance of services associated with dispensing covered outpatient drugs subject to an agreement under this section to individuals who are patients of the covered entity (as defined in subsection (b)(3)) only if— (A) such remuneration is a flat dollar amount not directly or indirectly based on any price of, or discount or other remuneration provided with respect to, a covered outpatient drug, paid for each dispense of such a drug to a patient of the covered entity; (B) the amount of remuneration for each dispense does not exceed 125 percent of the average per-prescription dispensing fee paid to such pharmacy by all third-party payors, based on data from the most recent full calendar year for which such data is available; (C) the amount of such remuneration is consistent with fair market value in an arm’s-length transaction for the bona fide, itemized 340B-related services actually performed on behalf of the covered entity; and (D) such remuneration complies with applicable State and Federal law, including section 1128B(b) of the Social Security Act. For purposes of subparagraph (B), if a covered entity has entered into an agreement for contract pharmacy services pursuant to subsection (a)(5)(F) that permits the contract pharmacy service provider to dispense covered outpatient drugs on behalf of the covered entity at more than one pharmacy location, the average dispensing fee shall be calculated across all pharmacy locations subject to such agreement. (3) Auditable records A covered entity shall retain copies of written agreements with third-party administrators or contract pharmacies described in this subsection for a period of time specified by the Secretary and shall make copies of such agreements available to the Secretary or their designee upon request. (4) Civil monetary penalty A third-party administrator or contract pharmacy described in this subsection that fails to comply with the applicable requirements specified in this subsection shall be required to pay a civil monetary penalty equal to 10 times the amount such third-party administrator or contract pharmacy received for the performance of relevant services described in this subsection. The provisions of section 1128A of the Social Security Act (other than subsections (a) and (b)) shall apply to a civil monetary penalty under this paragraph in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). The Office of Inspector General of the Department of Health and Human Services shall carry out the provisions related to the imposition of civil monetary penalties under this paragraph..