{"data":{"id":"us-ky/krs-18a.2258","jurisdiction":"us-ky","citation":"KRS 18A.2258","heading":"Pharmacy and health care benefit claims monitoring -- Contract","body":"provisions -- Requirements -- Administrative regulations.\n(1) (a) By December 31, 2022, the secretary of the Finance and Administration\nCabinet shall, upon the recommendation of the secretary of the Personnel\nCabinet and in accordance with KRS Chapter 45A, select and contract with,\nthe effective date of which shall not be later than January 1, 2023, a single\nindependent entity for the purpose of monitoring all pharmacy benefit cla ims\nfor every individual enrolled in the Public Employee Health Insurance\nProgram.\n(b) By December 31, 2023, in addition to the contract in paragraph (a) of this\nsubsection, the secretary of the Finance and Administration Cabinet shall,\nupon the recommenda tion of the secretary of the Personnel Cabinet and in\naccordance with KRS Chapter 45A, select and contract with a single\nindependent entity for the purpose of monitoring all health care service\nbenefit claims, other than pharmacy benefit claims, for every individual\nenrolled in the Public Employee Health Insurance Program.\n(c) Any contract entered into pursuant to this subsection shall:\n1. Not be for a term longer than two (2) years but may be renewed for like\nor lesser periods; and\n2. Limit compensation paid to the contracted entity to not more than thirty\npercent (30%) of the total savings generated by the contracted entity as\ndetermined by the Personnel Cabinet.\n(2) To be eligible to receive a contract pursuant to subsection (1) of this section, an\nentity shall:\n(a) Be capable of performing the analysis of benefit claims to validate accuracy\nand identify errors in near real time;\n(b) Not be an entity that performs annual retroactive audits of benefit claims for\nthe Public Employee Health Insurance Program; and\n(c) Not be affiliated by common parent company or holding company, share any\ncommon members of the board of directors, or share  managers in common\nwith:\n1. An insurer contracted pursuant to KRS 18A.225;\n2. A third-party administrator contracted pursuant to KRS 18A.2254; or\n3. A pharmacy benefit manager contracted by:\na. The Personnel Cabinet;\nb. An insurer contracted pursuant to KRS 18A.225; or\nc. A third-party administrator contracted pursuant to KRS 18A.2254.\n(3) The entity or entities contracted pursuant to subsection (1) of this section shall:\n(a) Be granted full access to:\n1. Any contract awarded to a third-party administrator or pharmacy benefit\nmanager for the purpose of administering benefits in the Public\nEmployee Health Insurance Program and all pertinent reference\ndocuments within that contract, including but not limited to any\npharmacy price lists or specialty drug price lists which shall be provided\nto the monitoring entity contracted pursuant to this section by the\nPersonnel Cabinet and which shall be updated by the Personnel Cabinet\nwithin five (5) days of the effective date of any pricing changes;\n2. Any other contrac t that defines an insurer's, third -party administrator's,\nor pharmacy benefit manager's obligations and responsibilities as it\nrelates to processing Public Employee Health Insurance Program benefit\nclaims, including any contract between a pharmacy benefit manager and\nan insurer contracted pursuant to KRS 18A.225 or a third -party\nadministrator contracted pursuant to KRS 18A.2254; and\n3. Invoices and unaltered claims files associated with benefits under the\nPublic Employee Health Insurance Program;\n(b) Analyze one hundred percent (100%) of invoices or claims submitted for\npayment by the Public Employee Health Insurance Program. The entity shall\nnot utilize statistical sampling methods in lieu of analyzing all invoices and\nclaims;\n(c) Identify and correct error s in benefit claims in order to avoid or reduce\nerroneous overpayments by an insurer contracted pursuant to KRS 18A.225, a\nthird-party administrator contracted pursuant to KRS 18A.2254, or a\npharmacy benefit manager contracted to administer pharmacy benefi ts in the\nPublic Employee Health Insurance Program;\n(d) Identify underpayments made by an insurer contracted pursuant to KRS\n18A.225, a third-party administrator contracted pursuant to KRS 18A.2254, or\na pharmacy benefit manager contracted to administer pharmacy benefits in the\nPublic Employee Health Insurance Program;\n(e) Identify inappropriate or erroneous fees imposed by an insurer contracted\npursuant to KRS 18A.225, a third -party administrator contracted pursuant to\nKRS 18A.2254, or a pharmacy benefit m anager contracted to administer\npharmacy benefits in the Public Employee Health Insurance Program; and\n(f) Submit a quarterly report to the Legislative Research Commission. The report\nshall include a summary of the analysis and errors identified pursuant t o\nparagraphs (c), (d), and (e) of this subsection during the previous quarter.\n(4) The entity or entities contracted pursuant to subsection (1) of this section shall not\nperform drug utilization reviews and shall not exercise any authority over the\nprovision of health care benefits for Medicare eligible retirees.\n(5) The analysis of claims and the identification of potential errors required by\nsubsection (3)(b), (c), and (d) of this section shall:\n(a) Occur prior to the due date of each claim or invoice sub mitted by an insurer\ncontracted pursuant to KRS 18A.225, a third -party administrator contracted\npursuant to KRS 18A.2254, or a pharmacy benefit manager contracted to\nadminister pharmacy benefits in the Public Employee Health Insurance\nProgram or within fiv e (5) days of receipt of the claim or invoice, whichever\nis later; and\n(b) Consider at least the following:\n1. Compliance with all relevant administrative regulations promulgated by\nthe Personnel Cabinet;\n2. Compliance with all state and federal laws relat ing to or applicable to\nthe Public Employee Health Insurance Program;\n3. Compliance with any contract with an insurer, third -party administrator,\nor pharmacy benefit manager; and\n4. The market competitiveness of benefit payments, including the\nadequacy of payments to pharmacies and other health care providers.\n(6) The Personnel Cabinet may promulgate administrative regulations necessary to\ncarry out this section.","path":["KRS Chapter 18A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=53749","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:48:40Z","sha256":"ee46edc13f8081c6fc639db9bfc8f643c5e97301646bc08262c9d1e1fa09593e","source_id":"us-ky","stale":false,"prev":"us-ky/krs-18a.2257","next":"us-ky/krs-18a.2259"},"notice":"GroundRules: Original legal text. Not legal advice."}