With an overwhelming amount of bi-partisan support, on May 7, 2019, Georgia enacted the Pharmacy Anti-Steering and Transparency Act, O.C.G.A. §26-4-119 (the GA Act). The GA Act goes into effect as of January 1, 2020.

As healthcare providers are well aware, prohibitions against self-referrals are not new – federal and state laws prohibiting self-referrals by physicians and other healthcare providers have been in place for decades (e.g., federal Stark Law; Anti-Kickback Statute). However, many pharmacy benefit managers (PBMs) and insurers have leveraged their affiliations with pharmacies to steer patients to their affiliated pharmacies without much regulatory oversight or transparency resulting in increased profits for the PBMs and insurers and negatively impacting patient choice and quality of care. The GA Act seeks to address these issues by imposing self-referral and anti-steering prohibitions against pharmacies affiliated with PBMs and insurers.

Purpose and Goals

The GA Act was enacted to achieve three primary goals: (1) ensure the delivery of high quality patient care with respect to prescription medications; (2) allow patients to choose their pharmacies; and (3) increase transparency.

During the legislative session, Rep. David Knight (a sponsor of the GA Act) highlighted that PBMs and insurers are data mining patient data to steer patients to pharmacies affiliated with such PBMs and insurers resulting in limited patient choice, waste of resources, increased costs, and lower quality of care to patients.

A pharmacist and oncologist testified about PBM-owned pharmacies. As stated in testimony, these PBM-owned pharmacies mandate that patients only use certain mail-order pharmacies to fill their prescriptions. This mandate effectively strips patients of proper access to healthcare professionals to address chronic illness and manage medications. The professionals described how these rules negatively impact patient care by, for example, not providing any services for management of medications by a pharmacist or other healthcare professional, consistent incorrect dosages or incorrect medications being shipped by mail-order pharmacies, medications requiring refrigeration sitting on doorsteps for hours, and prolonged delays in receipt of medications when immediate treatment is needed.

Prohibition

In an attempt to address these concerns and promote transparency, the GA Act prohibits a pharmacy licensed or holding a non-resident permit in Georgia (GA Pharmacy), from:

  1. Transferring or sharing any records regarding prescription information containing patient or prescriber identifiable data to, or from, an “Affiliate” for any commercial purpose (i.e., non-patient care purpose). The foregoing prohibition does not apply to the exchange of prescription information between a pharmacy and its Affiliate for the limited purposes of pharmacy reimbursement, formulary compliance, pharmacy care, public health activities otherwise authorized by law, or utilization review by a healthcare provider.For purposes of the GA Act, an “Affiliate” means a person licensed as an insurer in Georgia which, either directly or indirectly through one or more intermediaries: (A) has an investment or ownership interest in GA Pharmacy; (B) shares common ownership with a GA Pharmacy; or (C) has an investor or ownership interest holder in a GA Pharmacy.
  2. Presenting a claim for payment to any individual, third-party payor, affiliate, or other entity for a service furnished pursuant to a “Referral” from an Affiliate. The foregoing prohibition does not prohibit referrals from an Affiliate for limited distribution prescription drugs requiring special handling and not commonly carried at retail pharmacies or oncology clinics or practice.For purposes of the GA Act, a “Referral” means: (A) ordering of a patient to a pharmacy by an Affiliate either orally or in writing, including online messaging; (B) offering or implementing plan designs that require patients to utilize Affiliated GA Pharmacies; or (C) patient or prospective patient specific advertising, marketing, or promotion of a GA Pharmacy by an Affiliate.

Transparency

The GA Act requires a GA Pharmacy to annually file with the Pharmacy Board a disclosure statement identifying all of its Affiliates (the Annual Disclosure).

Additionally, an Affiliate of a GA Pharmacy may include in communications to patients and prospective patients, information regarding its Affiliated GA Pharmacy(ies) and prices as long as the Affiliate also includes information regarding eligible non-Affiliate pharmacies in such communications and such information is accurate.

Exceptions

The GA Act does not:

  1. Prohibit a pharmacy from entering into an agreement with an Affiliate to provide pharmacy care to patients as long as the pharmacy: (a) does not receive Referrals in violation of the GA Act; and (b) submits the Annual Disclosure.
  2. Apply to any licensed group model health maintenance organization with an exclusive medical group contract, which operates its own pharmacy licensed under Georgia law.
  3. Apply to any hospital or related institution.
  4. Apply to any referrals by an Affiliate for pharmacy services and prescriptions to patients in skilled nursing facilities, intermediate care facilities, continuing care retirement communities, home health agencies, or hospices.
  5. Apply to any GA Medicaid care management organizations.

Violations of the GA Act by the GA Pharmacy are grounds for disciplinary actions by the Pharmacy Board. (e.g., suspension or loss of license). However, a pharmacist who fills a prescription in violation of the GA Act’s prohibitions is not subject to any liability under the GA Act.

As Georgia leads the way in prohibiting self-referrals by PBM and insurance affiliated pharmacies in its effort to increase patient choice, quality of care, and promote transparency in this segment of the healthcare industry, we will continuously monitor developments in Georgia through its implementation process and in other states.