The Committee on Labor, Commerce and Industry proposes the following Amendment No. 1 to S. 359 (COUNCIL\CZ\359C001.JN.CZ19):
Reference is to Printer's Date 3/17/19-S.
Amend the bill, as and if amended, SECTION 1, by striking Section 38-71-2210(A) and inserting:
/" (A)(1)A person or organization may not establish or operate as a pharmacy benefits manager in this State for health benefit plans without obtaining a license from the Director of the Department of Insurance.
(2) Before granting a license, the director or his designee must be satisfied that the pharmacy benefits manager is competent, trustworthy, financially responsible, has a good personal and business reputation, has not had a professional or business license revoked, suspended, or denied in any jurisdiction within the preceding five years, and has not been convicted of a crime involving fraud, dishonesty, or moral turpitude in any jurisdiction. For purposes of this item, 'convicted' includes a plea of guilty or of nolo contendere.
(3) T he director shall prescribe the application for a license to operate in this State as a pharmacy benefits manager and may charge an initial application fee of one thousand dollars and an annual renewal fee of five hundred dollars, provided the pharmacy benefits manager application form must collect the following information:
(a) the name, address, and telephone contact number of the pharmacy benefits manager;
(b) the name and address of the pharmacy benefits manager 's agent for service of process in the State;
(c) the name and address of each person with management or control over the pharmacy benefits manager;
(d) the name and address of each person with a beneficial ownership interest in the pharmacy benefits manager;
(e) a signed statement indicating that, to the best of their knowledge, no officer with management or control of the pharmacy benefit manager has been convicted of a felony or has violated any of the requirements of state law applicable to pharmacy benefits managers, or, if the applicant cannot provide such a statement, a signed statement describing the relevant conviction or violation; and
(f) a copy of the most recent fiscal year -end audited financial statement of the pharmacy benefits manager; and
(g) in the case of a pharmacy benefits manager applicant that is a partnership or other unincorporated association, limited liability company, or corporation, and has five or more partners, members, or stockholders:
(i) the applicant shall specify its legal structure and the total number of its partners, members, or stockholders who, directly or indirectly, own, control, hold with the power to vote, or hold proxies representing ten percent or more of the voting securities of any other person;
(ii) the applicant shall agree that, upon request by the department, it shall furnish the department with information regarding the name, address, usual occupation, and professional qualifications of any other partners, members, or stockholders who, directly or indirectly, own, control, hold with the power to vote, or hold proxies representing ten percent or more of the voting securities of any other person; and
(iii) the applicant or a pharmacy benefits manager that is licensed to conduct business in the State shall, unless otherwise provided for in this chapter, file a notice describing any material modification of this information.
(4) The director or his designee may revoke or suspend the license issued to a pharmacy benefits manager if he finds that:
(i) a condition exists which would have prohibited the issuance of the original license;
(ii) the pharmacy benefits manager has violated a provision of this chapter; or
(iii) the pharmacy benefits manager has deceived or dealt unjustly with the citizens of this State.
In lieu of revocation or suspension of a license, the director or his designee may impose an administrative monetary penalty not to exceed one thousand dollars for each offense." /
Amend the bill further, SECTION 1, by striking Section 38-71-2260 and inserting:
/"Section 38 -71-2255.Every pharmacy benefits manager shall file and maintain with the department a surety bond in favor of the State. The surety bond must be issued by a corporate surety authorized to issue surety bonds in this State in the sum of one million dollars and must be subject to lawful levy of execution by a party to whom the licensee has been found to be legally liable. The surety bond must be maintained at all time by the pharmacy benefits manager while licensed with the department. The director may reduce the required amount of the surety bond if the amount is unreasonable relative to the size of the pharmacy benefits manager 's business operations in this State and would cause a significant financial hardship.
Section 38 -71-2257.Every pharmacy benefits manager shall file by March first with the department, in the form and detail the director of his designee prescribes, a statement showing the business standing and financial condition of the pharmacy benefits manager as December thirty -first of the preceding year.
Section 38-71-2260.(A) Nothing in this act is intended or may be construed to be in conflict with existing relevant federal law.
(B) This article does not apply to the South Carolina Department of Health and Human Services in the performance of its duties in administering Medicaid under Titles XIX and XXI of the Social Security Act or to the Medicaid managed care organizations under contract with the South Carolina Department of Health and Human Services." /