C.R.S. Section 24-50-1204
Competitive pharmacy benefit manager

  • contract
  • requirements

(1)

Consistent with the “Procurement Code”, articles 101 to 112 of this title 24, and notwithstanding any other provision of law, the department shall enter into a contract for the services of a pharmacy benefit manager for the administration of benefits under the “State Employees Group Benefits Act”, part 6 of this article 50, in a transparent, online, and dynamically competitive process and in the manner specified in this section.

(2)

Prior to November 1, 2022, the department shall procure, through the solicitation of proposals from qualified professional services vendors, the following products and services based on price, capabilities, and other factors deemed relevant by the department:

(a)

A technology platform with the required capabilities for conducting a PBM reverse auction. The department shall ensure that the technology platform possesses, at a minimum, the capacity to:

(I)

Conduct an automated, online, reverse auction of PBM services using a software application and high-performance data infrastructure to intake, cleanse, and normalize PBM data with development methods and information security standards that have been validated by receiving SOC 2 and NIST certification or successor information technology security certifications, as identified by the office of information technology;

(II)

Automate repricing of diverse and complex PBM prescription drug pricing proposals to enable direct comparison of the comparably calculated costs to the state of PBM bids using one hundred percent of annual prescription drug claims data available for state-funded health plans or a multiple health plan prescription drug purchasing group and using code-based classification of drugs from nationally accepted drug sources;

(III)

Simultaneously evaluate, in real-time, diverse and complex multiple proposals from full service PBMs, including AWP, GNC, and NADAC pricing models, as well as proposals from pharmacy benefit administrators and specialty drug and rebate carve out service providers;

(IV)

Produce an automated report and analysis of PBM bids, including the ranking of PBM bids based on the comparative costs and qualitative aspects of the bids within a one-hour period following the close of each round of reverse auction bidding; and

(V)

Perform real-time, electronic, line-by-line, claim-by-claim review of one hundred percent of invoiced PBM prescription drug claims, and identify all deviations from the specific terms of the PBM services contract resulting from the reserve auction process; and

(b)

Related services from the operator of the technology platform identified in subsection (2)(a) of this section, which shall include, at a minimum:

(I)

Evaluation of the qualifications of PBM bidders;

(II)

Online automated reverse auction services to support the department in comparing the pricing for the PBM procurement; and

(III)

Related professional services.

(3)

The department shall not award a contract for procurement of the technology platform and technology operator services to a vendor that is a PBM or a vendor that is managed by or a subsidiary or affiliate of a PBM.

(4)

The vendor awarded the contract by the department shall not outsource any part of the PBM reverse auction or the automated, real-time, electronic, line-by-line, claim-by-claim review of invoiced PBM prescription drug claims.

(5)

With technical assistance and support provided by the technology platform operator, the department shall specify the terms of the participant bidding agreement. The terms of the participant bidding agreement shall not be modified except by specific consent of the department.

(6)

Intentionally left blank —Ed.

(a)

The technology platform used to conduct the reverse auction shall be repurposed over the duration of the PBM services contract as an automated pharmacy claims adjudication engine to perform real-time, electronic, line-by-line, claim-by-claim review of one hundred percent of invoiced PBM prescription drug claims, and identify all deviations from the specific terms of the PBM services contract.

(b)

The department shall reconcile the electronically adjudicated pharmacy claims, as described in subsection (6)(a) of this section, with PBM invoices on a monthly or quarterly basis to ensure that state payments shall not exceed the terms specified in any PBM services contract.

(c)

If following state payment to the PBM on the basis of such reconciliation, the PBM asserts that the department or its authorized representative has underpaid on the amount owed, the PBM may seek resolution through a mutually acceptable dispute resolution process, which the parties shall have agreed to previously in the terms of their contract.

(7)

Intentionally left blank —Ed.

(a)

The first PBM reverse auction shall be completed and the PBM services contract shall be awarded to the winning PBM with an effective date of July 1, 2023. Subsequent contracts must be awarded no later than three months prior to termination or expiration of the current PBM services contract for a covered group, such as the state employees benefits group, that includes only active employees and dependents, but does not include retiree participants in a medicare Part D employer group waiver program pursuant to the “Medicare Prescription Drug, Improvement, and Modernization Act of 2003”, Pub.L. 108-173.

(b)

In the event an eligible covered group that includes retiree participants in a Part D employer group waiver program pursuant to the “Medicare Prescription Drug, Improvement, and Modernization Act of 2003”, Pub.L. 108-173, opts to use the processes and procedures set forth in this part 12, the relevant PBM reverse auction shall be completed and the PBM services contract shall be awarded to the winning PBM no later than six months prior to termination or expiration of the PBM services contract currently covering the retiree employer group waiver program participants.

(8)

The department may perform a market check for providing PBM services during the term of the current PBM services contract, which shall be a technology-driven evaluation of the incumbent PBM’s prescription drug pricing based on benchmark comparators derived from PBM reverse auction processes conducted in the United States over the previous twelve months in order to ensure continuing competitiveness of incumbent prescription drug pricing over the life of a PBM services contract.

(9)

To ensure that the department does not incur additional expenditures associated with conduct of the PBM reverse auction, ongoing electronic review and validations of PBM claims, and optional periodic market checks, the department shall implement a no-pay option that obligates the winning PBM, rather than the state, to pay the cost of the technology platform and related technology platform operator services by assessing the PBM a per-prescription fee in an amount agreed to by the department and the technology operator and requiring the PBM to pay these fees to the technology operator over the duration of the PBM services contract. The obligation of the winning PBM to pay the per-prescription fees shall be incorporated as a term of the participant bidding agreement and the PBM services contract awarded to the PBM reverse auction winner.

(10)

Intentionally left blank —Ed.

(a)

The processes and procedures set forth in this part 12 apply to group benefit plans provided pursuant to the “State Employees Group Benefits Act”, part 6 of this article 50. This part 12 shall not apply in the case of a nonprofit, nongovernmental health maintenance organization with respect to managed care plans that provide a majority of covered professional services through a single contracted medical group.

(b)

Any other self-funded public sector health plan may use the processes and procedures set forth in this part 12 individually, collectively, or as a joint purchasing group with the group benefit plans provided pursuant to the “State Employees Group Benefits Act”, part 6 of this article 50.

(c)

Intentionally left blank —Ed.

(I)

After completion of the first PBM reverse auction, self-funded private sector health plans with substantial participation by Colorado employees and their dependents shall have the option to participate in a joint purchasing pool with state employees for subsequent PBM reverse auctions.

(II)

The group benefit plans provided pursuant to the “State Employees Group Benefits Act”, part 6 of this article 50, and any self-funded public sector health plans or self-funded private sector health plans that opt to participate with the state employees group benefits plan in a joint PBM reverse auction purchasing pool shall retain full autonomy over determination of their respective prescription drug formularies and pharmacy benefit designs and shall not be required to adopt a common prescription drug formulary or common prescription pharmacy benefit design. Any such entity or purchasing group shall agree, before participating in the PBM reverse auction, to accept the prescription drug pricing plan that is selected through the PBM reverse auction process.

(III)

Any PBM providing services to the department, to self-funded public sector health plans, or to self-funded private sector health plans as described in this section shall provide the department and the plan access to complete pharmacy claims data necessary to conduct the reverse auction and carry out their administrative and management duties.

(11)

Notwithstanding section 24-50-1204 (1), the department may elect to vacate the outcome of a PBM reverse auction if the lowest cost PBM bid is not less than the projected cost trend for the incumbent PBM contract as verified by the department. The department may utilize a consultant to make the verification. The cost trend shall be projected by the technology platform operator using industry-recognized data sources and is subject to review and approval by the department in advance of the reverse auction. Methodology must be applied consistently in projection of cost and savings to the state with regard to the incumbent PBM contract and competing PBM reverse auction bids.

Source: Section 24-50-1204 — Competitive pharmacy benefit manager - contract - requirements, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-24.­pdf (accessed Oct. 20, 2023).

24‑50‑101
Short title - legislative declaration - terminology
24‑50‑102
Department of personnel - state personnel director
24‑50‑103
State personnel board
24‑50‑103.5
Department of personnel - review
24‑50‑104
Job evaluation and compensation - state employee reserve fund - created - study - report - definitions - repeal
24‑50‑104.5
Compliance with federal laws
24‑50‑109.5
Fiscal emergencies - emergency orders
24‑50‑110
Budget control - personal services
24‑50‑112.5
Selection system - definitions - rules - report - repeal
24‑50‑114
Temporary appointments - term - tenure
24‑50‑116
Standards of performance and conduct
24‑50‑117
Prohibited activities of employees
24‑50‑122
Opportunities for training - professional development center cash fund - creation - rules
24‑50‑123
Grievances - review
24‑50‑124
Reduction of employees - definition
24‑50‑125
Disciplinary proceedings - appeals - hearings - procedure - definitions
24‑50‑125.3
Discrimination appeals
24‑50‑125.4
Hearings
24‑50‑125.5
Recovery for improper personnel action
24‑50‑126
Resignation - procedure and effect
24‑50‑127
Employee records - release of location information concerning individuals with outstanding felony arrest warrants - state personnel director’s duties
24‑50‑128
Certification required before salary paid
24‑50‑129
Appointing authority’s salary liability
24‑50‑130
Form of records and reports
24‑50‑131
Subpoena powers
24‑50‑132
Political considerations and prohibited activities
24‑50‑133
Subversive acts - disqualification
24‑50‑134
Moving and relocation expenses
24‑50‑135
Exemptions from personnel system
24‑50‑136
Persons brought into the personnel system
24‑50‑137
Persons holding exempted positions
24‑50‑138
Effect of transfer of powers, duties, and functions
24‑50‑140
Reports on other employment systems
24‑50‑141
Rules and regulations - limitations - affirmative action corrective remedies - implementation
24‑50‑142
Repayment of debts to state-supported institutions of higher education by state employees
24‑50‑145
Agency-based human resource innovation and management processes - legislative declaration - definitions - guidelines and goals
24‑50‑146
Colorado statewide equity office - legislative declaration
24‑50‑201
Legislative declaration
24‑50‑203
Preretirement education and counseling
24‑50‑206
Cooperation of public employees’ retirement association
24‑50‑208
Voluntary separation incentive program
24‑50‑301
Status while in military service
24‑50‑302
Rights
24‑50‑303
No compensation - rights of National Guard
24‑50‑304
Applicability
24‑50‑401
Office hours of state offices
24‑50‑402
Appointment by outgoing officers prohibited
24‑50‑501
Legislative declaration
24‑50‑502
Definitions
24‑50‑503
Personal services contracts implicating state personnel system - no separation of existing classified employees
24‑50‑504
Personal services contracts not implicating state personnel system
24‑50‑505
Liability and immunity
24‑50‑506
Applicability of other laws
24‑50‑507
Conflict of interest
24‑50‑508
Intergovernmental agreements - agreements by state institutions of higher education - excluded
24‑50‑509
Review of individual contracts by state personnel director - when not required
24‑50‑511
State personnel director procedures
24‑50‑512
State personnel board rules
24‑50‑513
Contracts of six months or less - permitted
24‑50‑601
Short title
24‑50‑602
Legislative declaration
24‑50‑603
Definitions
24‑50‑604
Powers and duties of the director
24‑50‑605
Group benefit plans - specifications - contracts
24‑50‑607
Employees - eligibility - election of coverage
24‑50‑608
Dependents - eligibility - election of coverage
24‑50‑609
State contributions - supplemental state contribution fund - creation
24‑50‑609.5
Supplemental state contribution for eligible state employees - legislative declaration - definitions
24‑50‑610
Payroll deductions - employees
24‑50‑611
Employer payments
24‑50‑612
Administrative duties
24‑50‑613
Group benefit plans reserve fund
24‑50‑614
State payments - authority of controller
24‑50‑615
Continuation of previously existing benefits for persons absorbed by the state personnel system
24‑50‑618
Group benefit plans - institutions of higher education
24‑50‑619
Continuation of dental or medical benefits - dependents of state employee - work-related death - definitions
24‑50‑620
Targets for investment in primary care
24‑50‑801
Legislative declaration
24‑50‑802
Definitions
24‑50‑804
Development of recommendations for an employee incentive program
24‑50‑805
Institutions of higher education - alternative employee incentive programs
24‑50‑901
Legislative declaration
24‑50‑902
Definitions
24‑50‑903
State employee idea application
24‑50‑1001
Definitions
24‑50‑1002
State agencies with access to federal tax information - authorization for background checks - procedure - costs
24‑50‑1003
County departments with access to federal tax information - authorization for background checks - procedure - costs
24‑50‑1004
State agencies sharing federal tax information with other state agencies
24‑50‑1101
Short title
24‑50‑1102
Definitions
24‑50‑1103
Duties and responsibilities of the division - rules
24‑50‑1104
Duties and responsibilities of the director - rules
24‑50‑1105
Partnership units
24‑50‑1106
Covered employees’ choice of certified employee organization - rules
24‑50‑1107
Rights of covered employees
24‑50‑1108
Rights of certified employee organizations
24‑50‑1109
Duties of the certified employee organization
24‑50‑1110
Executive and management rights
24‑50‑1111
Duties of the state
24‑50‑1112
Partnership agreements
24‑50‑1113
Dispute resolution
24‑50‑1114
Maintenance of the partnership relationship
24‑50‑1115
Judicial review
24‑50‑1116
Construction of other laws
24‑50‑1117
Implementation and administration - costs
24‑50‑1201
Short title
24‑50‑1202
Legislative declaration - intent
24‑50‑1203
Definitions
24‑50‑1204
Competitive pharmacy benefit manager - contract - requirements
Green check means up to date. Up to date

Current through Fall 2024

§ 24-50-1204’s source at colorado​.gov