By: J. Parker Zopp
The grounds of the West Virginia Capitol Complex are quieter these days now that the West Virginia Legislature’s regular and first special sessions are complete. Below are a few noteworthy bills that will become effective soon (or which recently took effect) that may considerably impact the health care industry in West Virginia.
S.B. 325 – Relating to distribution of drugs to safety net providers and contract pharmacies
Over the past few years, certain drug manufacturers have refused to sell drugs at 340B Drug Program[1] pricing unless 340B covered entities abide by certain practices with respect to their contract pharmacies. While these restrictions vary from manufacturer to manufacturer, common restrictions include limiting 340B drugs to be dispensed through a single contract pharmacy, requiring that contract pharmacies be within 40 miles of the covered entity parent site, and requiring covered entities to submit contract pharmacy claims or utilization data.
West Virginia followed the recent trend among states[2] to prevent manufacturers from creating these restrictions. S.B. 325, which becomes effective June 6, 2024, creates penalties for, and permits investigations into, manufacturers who (1) deny, restrict, or prohibit the acquisition of a 340B drug or (2) require a covered entity to submit any claims or utilization data as a condition to acquire a 340B drug.
S.B. 453 – Requiring pricing and payment transparency from pharmacy benefits managers contracting with PEIA
This bill significantly increases the reporting requirements of any pharmacy benefit manager (PBM) that contracts with the West Virginia Public Employees Insurance Agency (PEIA). S.B. 453 mandates that those PBMs must now report other, more specific characteristics associated with pharmacy claims, including date of service, NDC-11, drug name, various indicators, member and plan costs, national provider identifier (NPI) numbers and more.[3] Another of the bill’s significant transparency components is that PBM contracts are no longer confidential and exempt from the West Virginia Freedom of Information Act (FOIA). Additionally, for a prescription drug or pharmacy service, S.B. 453 prohibits a PBM from reimbursing pharmacies in an amount less than the national average drug acquisition cost.
In recent years, several states have enacted these types of PBM transparency reforms, and reforms drafted by Republicans and Democrats in Congress have been proposed.[4] Though this bill only applies to PEIA, it could indicate a step towards applying these standards to all PBM contracts more generally. S.B. 453 becomes effective June 7, 2024.
S.B. 477 – Prohibiting public disclosure of personal information on internet
This bill aims to protect health care workers in West Virgina from being “doxxed” — a tactic used to spread personal information for the purpose of inciting harassment or intimidation against them. S.B. 477 makes it a criminal violation to knowingly, willfully, and intentionally share the personal information of a health care worker or their immediate family[5] on the internet, with the intent that the information be used by others to incite harassment or violence against them.[6] The law also provides a pathway for health care workers to submit written requests to a state or local government official to have their personal information removed from records accessible on the internet if they have reason to believe the availability of the information poses an imminent threat to the safety of the healthcare worker or their immediate family members. S.B. 477 becomes effective June 4, 2024.
H.B. 5157 – Relating to contingent increase of tax rate on certain eligible acute care hospitals[7]
The Centers for Medicare and Medicaid Services (CMS) allows states to establish Directed Payment Programs (DPPs) that require (or “direct”) managed care organizations (MCOs) to pay providers according to certain rates or methods.[8] West Virginia has utilized a program, the Facility DPP, since 2011 to increase Medicaid payments to hospitals and maximize the state’s federal funding the state receives based on a “match” of the state’s health care expenditures. Instead of having the state legislature appropriate funds for the non-federal share, all eligible hospitals[9] in West Virginia pay a provider tax to fund the non-federal portion of the DPP.
Historically, CMS has limited DPP funding to what Medicare would have paid for a service, but CMS recently raised this limit to the amount of the average commercial rate. Because this funding change affects the matching formula, H.B. 5157 raises the rate of West Virginia’s tax on eligible hospitals to the maximum amount that CMS allows[10] so that the state can maximize its share of non-federal funding accordingly.
High-Profile Vetoes and Other Noteworthy Health-Related Legislation
Governor Jim Justice vetoed several bills, including some intensely watched by the industry. One of those bills was H.B. 5105, which would have removed immunization requirements for students in private and parochial schools, as well as those in virtual public schools. Another veto, S.B. 714 would have effectively merged the state’s Board of Osteopathic Medicine into the Board of Medicine. The governor also vetoed H.B. 5338, a bill that would have provided civil liability safe harbors for both for-profit and non-profit entities that experienced a data breach if the applicable entity could demonstrate that it complied with a cybersecurity program framework that met certain requirements. Important for the health care industry, the bill would have allowed entities to demonstrate such compliance if its cybersecurity program adhered to certain industry-recognized cybersecurity frameworks, such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
Other health-related legislation that was enacted this year includes (but is not limited to) the following:
- H.B. 113 – Prohibiting payment to residential substance use disorder treatment facilities that do not meet certain requirements[11]
- H.B. 4110 – Authorizing Certain Miscellaneous Agencies and Boards to Promulgate Legislative Rules[12]
- H.B. 4233 – Non-Binary Not Permitted on Birth Certificates
- H.B. 4274 – Renaming the Department of Health and Human Resources[13]
- H.B. 4667 – Prohibiting Syringe Services Programs from Distributing Listed Smoking Devices
- H.B. 4756 – Creating a State Alzheimer’s Plan Task Force
- H.B. 4768 – Relating to Increasing the Number of Out-Of-State Medical Students Receiving In-State Tuition Rates Who Agree to Practice for a Specific Time Within West Virginia.
- H.B. 4809 – Health Care Sharing Ministries Freedom to Share Act
- H.B. 4874 – Relating to Fatality and Mortality Review Team
- H.B. 4951 – To Facilitate the Interstate Practice of School Psychology in Educational or School Settings
- H.B. 4933 – Relating to Medicaid Dental Coverage
- H.B. 5117 – Relating Generally to Waiver of Initial Licensing Fees for Certain Individuals
- H.B. 5162 – Establish A Program to Promote Creation and Expansion of Registered Apprenticeship Programs
- H.B. 5347 – Relating to Establishing a Program for Emergency Medical Services Personnel to Become Certified Paramedics
- H.J.R. 28- Protection from Medically Assisted Suicide or Euthanasia in West Virginia Amendment[14]
- S.B. 36 – Authorizing Department of Homeland Security to Promulgate Legislative Rules
- S.B. 269 – Excluding Test Strips from Definition of Drug Paraphernalia
- S.B. 300 – Relating to Organization of Office of Inspector General
- S.B. 378 – Prohibiting Smoking in Vehicle When Minor 16 Or Under Is Present
- S.B. 438 – Modifying Roster Requirements of Authorizing Entities
- S.B. 445 – Reducing Certification Periods and Renewal Fees for EMS Personnel
- S.B. 475 – Relating to recovery residences
- S.B. 533 – Allowing EMS Agencies to Triage, Treat or Transport Patients to Alternate Destinations
- S.B. 602 – Cardiac Emergency Response Plan Act
- S.B. 668 – Increasing Amount of Certain Controlled Substances Persons May Purchase Annually
- S.B. 681 – Revising Service Obligation for Certain Doctoral Medical Degree Programs
- S.B. 820 – Requiring Automatic Enrollment of Substance Abuse Disorder Population into Managed Care
- S.B. 875 – Relating to certain insurance coverage provided by BRIM
- S.B. 1001 – Supplementing and amending appropriations to Department of Health and Department of Human Services[15]
As always, your Jackson Kelly health care team is ready to advise you or your organization of this new legislation or any other health care compliance matter you may encounter.
[1] The 340B Drug Pricing Program requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to eligible health care organizations (“covered entities”) such as Federally Qualified Health Centers (FQHCs), certain hospitals, and certain specialized clinics. Covered entities in the 340B program may voluntarily elect to dispense 340B drugs to patients through pharmacies with whom those covered entities have contracted (referred to as “contract pharmacies”).
[2] Preemption challenges to similar laws in other states is a subject of various ongoing litigation. See, e.g., Pharmaceutical Research and Mfrs of America v. McClain, No. 22-3675 (8th Cir. 2024).
[3] Before this bill, pursuant to their PEIA contracts, PBMs only had to report the total amount paid to the pharmacy provider per claim by providing the cost of drug reimbursement, dispensing fees, and copayments.
[4] Florida, Arkansas, and South Dakota are a few states that have passed some version of PBM reform laws over the past several years. In March 2023, the Senate Commerce Committee advanced the PBM Transparency Act, a bipartisan bill to authorize the Federal Trade Commission (FTC) to hold PBMs accountable for unfair or deceptive practices.
[5] Health care employees who fall under the protections of the statute include employees providing direct patient care, first responders, and individuals serving in a governance capacity of a health care entity. “Immediate family” includes a health care workers spouse, children, parent, or any relative living in the same residence as the health care worker.
[6] First time offenders are charged with a misdemeanor and are subject to a fine less than $500 or confinement in jail not exceeding six months if convicted. Second offenses are also charged as a misdemeanor but come with an increased penalty of a fine less than $1,000 and/or confinement in jail for a period not exceeding one year.
[7] This bill became effective from passage on February 14, 2024, and was signed by the governor on March 1, 2024.
[8] 42 C.F.R. § 438.6(c).
[9] Prior to H.B. 5157, the tax applied to “eligible acute care hospitals” as defined within W. Va. Code § 11-27-38(c). H.B. 5157 changed the tax to apply to “eligible hospitals,” which it defines as “any inpatient or outpatient hospital conducting business in this state that is not a state-owned or state designated facility.”
[10] The West Virginia Bureau for Medical Services (BMS) will calculate the CMS allowable tax rate and maximum payment pursuant to CMS approved methodology. CMS must approve West Virginia’s updated plan document before these changes can be implemented.
[11] This bill was passed during the first special session.
[12] H.B. 4110 authorizes different agencies across the government to issue and amend various regulations. A description of these changes can be found in the bill’s title.
[13] This stems from H.B. 2006 (2023), where the legislature reorganized the former Department of Health and Human Resources into three separate state agencies.
[14] H.J.R. 28 is a proposal of a constitutional amendment that voters will decide upon in the 2024 general election.
[15] S.B. 1001 passed during the first special session.