The Pharmacy Benefit Manager (PBM) is TrueScripts Management Services, LLC. (TrueScripts) The individual responsible for managing the PBM application for the PBM is:

Alan Kaffenberger

Director, Clinical Programs and Compliance

Phone: 812-674-9177

alank@truescripts.com

TrueScripts can be contacted by phone at 812-674-9177 or by email at alank@truescripts.com. Notice of any external appeal received by the Commission of the Tennessee Department of Insurance may be sent to alank@truescripts.com.

The staff responsible for reviewing the initial pharmacy reimbursement have industry experience in addition to either an associates degree, four-year college degree, or Bachelor’s degree in a related field. The individuals reviewing the pharmacy appeals have extensive appeal experience including training on pharmacy claims, pricing, acquisition cost information and state-level requirements.

PBM will accept the standard appeal form created by the Tennessee Department of Insurance for a pharmacy to file an initial appeal.

PBM will not assess costs to the pharmacy for any services provided in connection with the initial appeal.

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.

The timeline for making a final determination resolving an initial appeal will not begin until all required information is received to allow the PBM to conduct an analysis of the initial appeal.

All pharmacy reimbursement appeals are tracked. Upon receiving the name of the wholesaler or manufacturer, it will be determined whether an adjusted rate of reimbursement applies. The following procedure is utilized:

• Initial pharmacy appeal is received.

• The information is reviewed for accuracy, dates, drugs, pricing, and evaluates the rate paid compared to the contractual rate or AWP and pharmacy acquisition cost. If wholesale information is provided, information is compared to multiple acquisition cost resources.

• Within seven (7) days, a response will be sent via email to the pharmacy complainant and written determination is sent to the pharmacy.

• Appeal determination is provided to the pharmacy. If the appeal is denied, a recommendation will be made on a preferred NDC.

• All Tennessee mandates concerning timing and notification are followed.

Timing and Notice Requirements pursuant to T.C.A. § 56-7-3206(c)(2)(B)(ii), T.C.A. § 56-7-3108, and Rule 0780-01-95-.05

Upon receipt of an initial appeal, the following steps will be taken to resolve the initial appeal. Information regarding the initial appeal process can be found at https://truescripts.com .

• The pharmacy must file its appeal within seven (7) business days of its submission of the initial claim for reimbursement for the drug.

• Upon receipt of an appeal:

i. The appealing pharmacy shall receive notification, with contact information, that the appeal has been received.

ii. The appeal will be investigated, resolved, and responded to within seven (7) business days.

iii. If the pharmacy submits an incomplete initial appeal, the pharmacy will be notified within five (5) business days of the information needed to complete the initial appeal and to initiate the review.

iv. The pharmacy may respond within five (5) business days of receipt of the notice outlining the requested information. If the pharmacy fails to provide the requested information within five (5) business days of receipt of the notice, the initial appeal may be denied.

• Appeals will be responded to pursuant to the state laws and regulations of the state in which the pharmacy is located.

• If the appeal is denied, the following information will be provided in the letter to the pharmacy:

i. The date of the decision.

ii. The contact information of the party making the decision.

iii. The reason for the denial.

iv. The national drug code of a drug product (NDC).

v. The source where the drug may be purchased from a licensed wholesaler by the contracted pharmacy.

vi. Instructions on how to make an external appeal to the Commissioner.

• If an appeal is successful and a price update is warranted, written notice will be given to the pharmacy, including:

i. The date of the decision

ii. The contact information of the party making the decision

iii. The drug name, national drug code, and prescription number of the appealed drug

iv. Changes will be made to the reimbursement rate as of the initial date of service of which the drug was dispensed; and .

v. Adjust the reimbursement rate of the drug for the pharmacy which filed the appeal.

MAC APPEALS PROCESS

The following procedures explain the standard process for creating, operating, and updating MAC (Maximum Allowable Cost) lists (“Pricing Methodology”)

1. Pricing Sources:

The basis of MAC pricing, also known as the Estimated Acquisition Cost (EAC), is generated from several direct and indirect sources including published Actual Acquisition Costs (AAC), wholesalers’ information collected during the course of an appeal, and independent cost researchers. These sources are used to calculate drug reimbursement and used during any appeal process to resolve disputes regarding MAC pricing, and other pharmacy pricing issues.

Information is compiled and updated daily, from various sources to determine relevant pricing updates. When a material price change occurs, the MAC price is adjusted accordingly based on current MAC pricing methodologies and in accordance with state laws and regulations. The national drug pricing compendia used is Medispan.

Reimbursement for a drug subject to MAC is based solely on a specific drug. Therapeutically equivalent drugs are listed in the most recent version of the Orange Book (USDA Approved Drug Products with Therapeutic Equivalence Evaluations).

When determining the EAC or MAC pricing for a specific drug, the following must apply:

• The drug must have sufficient supply, be available for purchase by pharmacies, and be substitutable.

• The drug must not be obsolete, temporarily unavailable, or in short supply, and it must be lawfully substitutable.

• The drug must be generally available for purchase by pharmacists and pharmacies in Tennessee from a national or regional wholesaler licensed in Tennessee.

• Reimbursement for a drug that is subject to MAC is based solely on that specific drug if there is no other therapeutically equivalent drug.

2. MAC Pricing:

MAC prices are set utilizing a confidential formula and process that at its core is based upon a ‘cost plus’ model that ensures the pharmacy receives a fair margin above the EAC. The MAC prices are automatically updated as EACs are adjusted. This adjustment may occur based on normal drug pricing research or MAC appeals. MAC pricing is subject to continuous real time reviews and updates occur weekly.

Pharmacies receive daily notifications through their switch relays when they transmit claims and/or by calling the processor help desk. Pricing requirements are subject to all state laws and regulations.

Pharmacy will be reimbursed for Covered Services based on the lesser of the Pharmacy’s Usual & Customary (U&C), MAC, or Ingredient Cost plus a Dispensing Fee less the Participant’s copayment, coinsurance or deductible. Ingredient cost is based on Average Wholesale Prices (AWPs) as reflected in the Online System at the time the prescription was filled less a discount as specified in the Participating Pharmacy Agreement.

Where a MAC is established to determine the drug product reimbursement then the reimbursement for a drug subject to MAC is not based on a drug that is obsolete, temporarily unavailable, listed on a drug shortage list, or cannot be lawfully substituted.

3. MAC Listing:

Pharmacies will be notified weekly via e-mail that the weekly update has been updated, and that a comprehensive update of the MAC list can be obtained at any time by accessing the web portal, and/or can be obtained in paper format upon written request. The MAC list is continuously updated and will identify all pricing changes. The list, in comma delimited format, including drug and price information will be provided within two (2) business days of the request.

4. MAC Appeals:

A pharmacy may submit a MAC appeal via the procedure described below.

A. A contracted pharmacy or the pharmacy’s designee may appeal if:

• The MAC established for a drug reimbursement is below the cost at which the drug is available for purchase by pharmacists and pharmacies in Tennessee from national or regional wholesalers licensed in Tennessee; or

• A drug has been placed on the MAC list in violation of § 56-7-3106.

B. All submissions are required to be provided in electronic format via the website. Invoices detailing the acquisition costs may be taken into consideration for the appeal but are not required. The MAC Pricing Dispute Appeal Process is as follows:

• Pharmacies may present an appeal up to seven (7) days following the initial claim.

• Upon receipt of an appeal:

i. The appealing party shall receive notification that the appeal has been received by the responsible parties including their contact information.

ii. The appeal shall be investigated, resolved, and responded to within seven (7) business days.

• Appeals will be responded to pursuant to the state laws and regulations of the state in which the pharmacy is located.

• If the appeal is denied, the following information will be contained in the letter to the pharmacy:

i. The date of the decision.

ii. The contact information of the party making the decision.

iii. The reason for the denial.

iv. The national drug code of a drug product (NDC).

v. The source where the drug may be purchased from a licensed wholesaler in Tennessee by the contracted pharmacy, at a price at or below the MAC.

• If an appeal is successful and a price update is warranted, notice will be provided including:

i. The date of the decision.

ii. The contact information of the party making the decision.

iii. The drug name, national drug code, and prescription number of the appealed drug.

iv. Make the change in the MAC as of the initial date of service of which the drug was dispensed.

v. Adjust the MAC of the drug for all pharmacies in the network within three (3) business days.

C. Web portal posting, advising that all appeals and questions regarding MAC should be directed to the alank@truescripts.com e-mail address and will be restricted to seven (7) days following the initial claim.

• An appeal may also be initiated by a contracted pharmacy, pharmacy service administration organization, or group purchasing organization regardless if an appeal has been previously submitted by a pharmacy or the pharmacy’s designee outside of Tennessee, by contacting the PBM’s designated contact person electronically, by mail or telephone at 330-757-0724 ext. 5229, the appealing party shall follow up with a written request within five (5) business days.

D. A pharmacy submitting an initial MAC appeal must submit the following information regarding the prescription(s) and the disputed MAC pricing:

• Appeal Date

• Contact Name

• Contact Email Address

• Pharmacy Provider NCPDP ID

• Pharmacy Provider Name

• Rx #

• Fill Date

• NDC

• GPI

• Quantity

• Acquisition Cost Per Unit

• Invoice ID #

E. Upon receipt of a MAC appeal or request, the claim information and MAC pricing, will be verified, as necessary, pursuant to the steps below:

• The claim in question will be researched to determine if the claim hit the applicable PBM network and was submitted by pharmacy within the allotted seven (7) days from initial claim date of service.

• If the claim is timely submitted, the claim will be investigated to determine whether the claim paid utilized a MAC or if it paid at another pricing type, such as AWP Discount, U&C, Other Coverage Amounts, or other potentially applicable contractually agreed upon pricing designation.

• If the claim was paid utilizing a MAC price, research will begin to determine the applicable EAC.

• If the EAC is found to be higher than the applicable MAC price, the MAC shall be adjusted accordingly using current MAC methodologies:

i. MAC pricing will be adjusted back to initial date of service.

ii. Allow resubmission of claims to reflect price update.

iii. Any adjustment to reimbursement will be applied to the next payment cycle.

iv. MAC pricing will be adjusted for all pharmacies within the network for the applicable plan.

v. Communicate MAC adjustments to all pharmacies within the network.

F. An initial response to the Pharmacy regarding the MAC appeal will be provided, no more than seven (7) business days following receipt of the complaint, or pursuant to State Laws and will include the following information:

• Request for more information, Approval, or Denial of the MAC Appeal

• If Approval of MAC Appeal:

i. Estimate of Applicable EAC.

ii. New MAC Rate for Product.

iii. Effective Date if MAC update is set to the original data of service.

iv. Notification and adjustments shall be made via each pharmacy’s switch vendor.

• If Denial of MAC Approval

i. Reason for Denial.

ii. Estimate of Applicable EAC.

iii. NDC(s) used to justify MAC rate.

iv. Source of drug pricing information.

• Additionally, information regarding the process and information required for a secondary appeal will be included.