N.Y. Comp. Codes R. & Regs. tit. 11 § 456.4

Current through Register Vol. 46, No. 53, December 31, 2024

Section 456.4 - Provisions related to termination of a pharmacy from a network

(a) No pharmacy contract shall provide for immediate termination of a pharmacy from a network, except in the following circumstances:

(1) when a pharmacy makes an assignment for the benefit of creditors;

(2) when a pharmacy files a petition in bankruptcy (voluntary or involuntary);

(3) when a pharmacy is adjudicated insolvent or bankrupt;

(4) where a receiver or trustee is appointed with respect to a substantial part of the pharmacy's property, or any proceeding is commenced against it that will substantially impair the pharmacy's ability to perform under a contract;

(5) where any court or governmental agency issues to the pharmacy an order to cease and desist from providing pharmacy services;

(6) where a levy, writ of garnishment, attachment, execution or similar item is served upon the pharmacy and not removed within 14 days from the date of service;

(7) where the pharmacy is found by a court of competent jurisdiction or a government agency to have knowingly and willingly executed, or attempted to execute, a scheme or artifice to defraud any health plan;

(8) where the pharmacy fails to maintain appropriate licensure;

(9) where the pharmacy benefit manager has good cause to believe that the pharmacy's operation poses an imminent harm to patients;

(10) where the pharmacy fails to maintain required insurance coverage;

(11) where the federal government has debarred a pharmacy from participating in a federal program; or

(12) where there is a material breach of a pharmacy contract by the pharmacy.

(b) Except as provided for in subdivision (a) of this section, in no event shall any termination of a pharmacy from a pharmacy network be effective earlier than 60 days from the receipt by the pharmacy of a written notice of termination. Such notice of termination shall be mailed or delivered by registered mail or other trackable method of delivery.

(c) If a pharmacy benefit manager makes the determination to terminate a pharmacy from a network, the pharmacy benefit manager shall provide the pharmacy with a specific explanation as to why such pharmacy contract was terminated, in writing, together with the notice of termination required by subdivision (b) of this section. Such explanation shall have a rational basis.

(d) Termination of a pharmacy from a pharmacy benefit manager network does not release the pharmacy benefit manager from the obligation to make any payment due to the pharmacy for services rendered according to the terms of the pharmacy contract prior to the date of termination.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 456.4

Adopted New York State Register November 27, 2024/Volume XLVI, Issue 48, eff. 11/27/2024