HF 4140

02/26/26   REVISOR  SGS/DG  26-07581
This Document can be made available
in alternative formats upon request  State of Minnesota
  HOUSE OF REPRESENTATIVES
  NINETY-FOURTH SESSION
  H. F. No.   4140
03/09/2026     Authored by Reyer and Bierman
  The bill was read for the first time and referred to the Committee on Health Finance and Policy
1.1A bill for an act
1.2relating to health; establishing the Minnesota Community Pharmacy Patient Access
1.3and Fair Reimbursement Act; requiring rulemaking; proposing coding for new
1.4law in Minnesota Statutes, chapter 62J.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6Section 1. [62J.901] MINNESOTA COMMUNITY PHARMACY PATIENT ACCESS
1.7AND FAIR REIMBURSEMENT ACT.
1.8Subdivision 1. Title. This section shall be known as the "Minnesota Community
1.9Pharmacy Patient Access and Fair Reimbursement Act."
1.10Subd. 2. Scope. This section is intended to protect patients' access to community
1.11pharmacies by ensuring sustainable reimbursement rates for community pharmacies and to
1.12prevent unfair reimbursement practices that cause pharmacy closures, thereby safeguarding
1.13patient access to essential pharmaceutical care and maintaining a strong community health
1.14infrastructure across the state. This section regulates pharmacy benefit manager conduct
1.15and reimbursement practices and does not alter health plan benefit design or federal program
1.16requirements.
1.17Subd. 3. Definitions. (a) For purposes of this section, the following terms have the
1.18meanings given.
1.19(b) "Community pharmacy" means an outpatient retail pharmacy licensed under chapter
1.20151 that is not owned, operated, managed, or controlled, either directly or indirectly, through
1.21an affiliate or subsidiary by a:
1.22(1) pharmacy benefit manager licensed under chapter 62W;
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2.1      (2) health carrier, as defined in section 62A.011, subdivision 2;
2.2      (3) government entity;
2.3      (4) mail-order pharmacy; or
2.4      (5) specialty pharmacy.
2.5      (c) "National Average Drug Acquisition Cost" or "NADAC" means the publicly available,
2.6  federally established benchmark reflecting the average acquisition cost of outpatient
2.7  prescription drugs purchased by retail community pharmacies, as determined by the Centers
2.8  for Medicare and Medicaid Services.
2.9      (d) "Pharmacy benefit manager" or "PBM" has the meaning given in section 62W.02,
2.10 subdivision 15.
2.11     (e) "Pharmacy reimbursement ceiling" means the maximum reimbursement rate for
2.12 prescription drugs dispensed by a pharmacy established under subdivision 4.
2.13     (f) "Professional dispensing fee" means the fee paid to a pharmacy for the cost of
2.14 dispensing a medication, excluding the cost of the drug itself. The fee is intended to cover
2.15 the professional services provided by the pharmacy dispensing the medication, in accordance
2.16 with section 256B.0625, subdivision 13e.
2.17     (g) "Wholesale acquisition cost" or "WAC" means the manufacturer's list price for a
2.18 prescription drug to wholesalers or direct purchasers in the United States, not including any
2.19 discounts, rebates, or other price concessions.
2.20     Subd. 4. Fair pharmacy reimbursement. (a) Except as provided in paragraph (c), this
2.21 subdivision applies to prescription drugs dispensed by a community pharmacy, as defined
2.22 in subdivision 3, and to claims adjudicated by a PBM under a health plan or pharmacy
2.23 benefit plan.
2.24     (b) To improve patient access to pharmacy services and support the financial viability
2.25 of community pharmacies, for any prescription drug dispensed by a community pharmacy
2.26 and for any claim adjudicated by a PBM to which this subdivision applies, the total
2.27 reimbursement to the community pharmacy must be equal to:
2.28     (1) the NADAC for the drug on the day of claim adjudication or, if the NADAC is
2.29 unavailable, the WAC for that drug on the day of claim adjudication, plus an additional
2.30 amount equal to four percent of the calculated total ingredient cost as derived from the
2.31 applicable NADAC or WAC amount, or $50, whichever is less; and
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3.1      (2) a professional dispensing fee as specified in section 256B.0625, subdivision 13e,
3.2  which must be equal to the professional dispensing fee paid by the state under the medical
3.3  assistance program and adjusted biennially based on an independent cost-of-dispensing
3.4  survey reflecting inflation, labor costs, and operational expenses.
3.5      (c) The reimbursement standard established in this subdivision constitutes both the
3.6  minimum and maximum reimbursement amount for purposes of this section and may not
3.7  be altered by contract, network design, or other reimbursement methodology.
3.8      Subd. 5. Scope of application; covered entities; exclusions. (a) Nothing in this section
3.9  requires reimbursement at or above NADAC or WAC for drugs purchased under the federal
3.10 340B Drug Pricing Program. Reimbursement for drugs purchased under the 340B program
3.11 must comply with applicable state and federal law.
3.12     (b) This section does not apply to claims paid under Medicare or Medicaid, including
3.13 claims paid under Medicare Part B, Medicare Part D, and Medicaid fee-for-service or
3.14 managed care, or under any other state or federal program for which reimbursement is
3.15 established by statute, regulation, state plan, contract approved by a federal agency, or
3.16 federal waiver.
3.17     (c) This section regulates the reimbursement practices of pharmacy benefit managers
3.18 licensed under chapter 62W with respect to claims paid under commercial health plans and
3.19 pharmacy benefit plans subject to state regulation.
3.20     Subd. 6. Prohibition on below-cost and postclaim manipulation. (a) A PBM must
3.21 not reimburse a community pharmacy in an amount below the reimbursement standard
3.22 established in this section.
3.23     (b) A PBM must not impose any fee, adjustment, recoupment, reconciliation payment,
3.24 performance metric, direct or indirect remuneration fee, or other mechanism that results in
3.25 a community pharmacy receiving less than the total reimbursement required under this
3.26 section.
3.27     Subd. 7. Ban on spread pricing. PBMs are prohibited from engaging in spread pricing
3.28 in commercial and state-regulated plans. A PBM may not retain any portion of payments
3.29 made by a health plan, insurer, government program, or other payer beyond the amount
3.30 paid to the dispensing pharmacy, less enrollee cost sharing. PBMs must remit to the
3.31 dispensing pharmacy 100 percent of payments received, less patient cost-sharing.
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4.1      Subd. 8. Prohibition of retroactive claim denials. PBMs must not retroactively deny
4.2  or reduce claim reimbursement except in cases of fraud, billing errors, or documented
4.3  overpayment verified through an audit.
4.4      Subd. 9. Prohibition on patient steering. PBMs must not require, coerce, steer, or
4.5  financially penalize an enrollee to use a PBM-owned, affiliated, or mail-order pharmacy.
4.6  A PBM must not impose higher cost-sharing, reduced benefits, or other financial or
4.7  administrative disadvantages on an enrollee who chooses to obtain prescription drugs from
4.8  a community pharmacy.
4.9      Subd. 10. Enforcement and penalties. (a) The Department of Commerce has exclusive
4.10 authority to administer and enforce this section.
4.11     (b) A community pharmacy, health carrier, plan sponsor, or enrollee may file a complaint
4.12 with the commissioner alleging a violation of this section. The commissioner shall investigate
4.13 alleged violations and may require the submission of claims data, pricing files, contracts,
4.14 and any other records necessary to determine compliance.
4.15     (c) To ensure compliance with this section, the commissioner may:
4.16     (1) conduct investigations and compel the production of unredacted records, pricing
4.17 agreements, claims data, contracts, and internal communications relevant to reimbursement
4.18 practices;
4.19     (2) order corrective action including restitution, cease-and-desist orders, and prospective
4.20 pricing adjustments to remedy and prevent violations;
4.21     (3) require annual compliance certification from PBMs attesting to full compliance with
4.22 this section. A false certification is subject to civil penalties and potential suspension of
4.23 licensure; and
4.24     (4) publish an annual compliance report summarizing:
4.25     (i) the number of violations identified;
4.26     (ii) the amount of fines and restitution collected; and
4.27     (iii) the impact on community pharmacy access and closures.
4.28     (d) A PBM found to be reimbursing below the reimbursement standard established in
4.29 subdivision 4 is subject to a civil penalty of $5,000 per violation per claim. Repeat violations
4.30 are subject to escalating penalties of up to $20,000 per claim, not to exceed $2,000,000 per
4.31 enforcement action. The Department of Commerce may impose additional sanctions,
4.32 including suspension or revocation of a PBM's license to operate in the state.
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5.1      (e) If the commissioner determines that a PBM has violated this section, the commissioner
5.2  may:
5.3      (1) order full restitution to the affected pharmacy, including interest and reasonable costs
5.4  incurred in the administrative proceeding; and
5.5      (2) impose any additional sanctions authorized under this section.
5.6      (f) A pharmacist or other individual who, in good faith, reports noncompliance, fraudulent
5.7  reimbursement practices, or retaliatory conduct by a PBM is protected from retaliation. The
5.8  commissioner shall establish a secure and confidential process for receiving reports. Verified
5.9  violations may result in additional penalties or corrective action.
5.10     (g) A final order of the commissioner is subject to judicial review under chapter 14.
5.11     Subd. 11. Rulemaking. The commissioner of commerce shall adopt necessary rules to
5.12 implement this section.
5.13     Subd. 12. Severability. If any provision of this section or its application to any person
5.14 or circumstance is held invalid, the invalidity does not affect other provisions or applications
5.15 of the section that can be given effect without the invalid provision or application.
5.16     EFFECTIVE DATE. This section is effective July 1, 2026.
Section 1.  5