Title 58, INSURANCE

An administrator shall immediately notify the director of any material change in its ownership, control, or other fact or circumstance affecting its qualification for a license in this state. Source: SL 1992, ch 352 , § 28.

Upon request from an administrator, the director may waive the application requirements of § 58-29D-22 if the administrator has a valid license as an administrator issued in a state which has standards for administrators that are at least as stringent as those contained in this c…

For the purposes of this chapter, an insurer is any person undertaking to provide workers' compensation, life or health insurance coverage in this state. An insurer includes a licensed insurance company, a prepaid hospital or medical care plan, a health maintenance organization, …

Each administrator licensed or registered shall file an annual renewal for the preceding calendar year with the director on or before July first of each year, or within such extension of time as the director for good cause may grant. The renewal shall be in the form and contain s…

The application or annual renewal must be denied and the license or registration of an administrator must be suspended or revoked if the director finds that the administrator or applicant: (1) Is in an unsound financial condition; (2) Is using methods or practices in the conduct …

The director may, in his discretion and without advance notice of hearing thereon, immediately suspend the certificate of any administrator if the director finds that one or more of the following circumstances exist: (1) The administrator is insolvent or impaired; (2) A proceedin…

If the director denies an application or annual renewal for a license or registration, the director shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reason for the denial. The applicant or licensee may make a written request to the d…

If the director finds that one or more grounds exist for the denial of an application, suspension, or revocation of a license issued under this chapter, the director may, in lieu of denial, suspension, or revocation, impose a money penalty pursuant to § 58-4-28.1 . Source: SL 199…

The director may promulgate rules pursuant to chapter 1-26 to provide for the enforcement and administration necessary to administer this chapter. Source: SL 1992, ch 352 , § 34.

No administrator may act as such without a written agreement between the administrator and the insurer, and such written agreement shall be retained as part of the official records of both the insurer and the administrator for the duration of the agreement and for five years ther…

The written agreement shall include a statement of duties which the administrator is expected to perform on behalf of the insurer and the lines, classes, or types of insurance for which the administrator is to be authorized to administer. The agreement shall make provision with r…

The insurer or administrator may, with written notice, terminate the written agreement for cause as provided in the agreement. The insurer may suspend the underwriting authority of the administrator during the pendency of any dispute regarding the cause for termination of the wri…

If an insurer utilizes the services of an administrator, the payment to the administrator of any premiums or charges for insurance by or on behalf of the insured party shall be deemed to have been received by the insurer, and the payment of return premiums or claim payments forwa…

Every administrator shall maintain and make available to the insurer complete books and records of all transactions performed on behalf of the insurer. The books and records shall be maintained in accordance with prudent standards of insurance record keeping and must be maintaine…

The director shall have access to books and records maintained by an administrator for the purposes of examination, audit, and inspection. Any trade secrets contained in such books and records, including the identity and addresses of policyholders and certificate holders, shall b…

Terms used in this chapter mean: (1) "Brand name," the same as set forth in § 36-11-2 ; (2) "Covered individual," a member, participant, enrollee, contract holder, policy holder, or beneficiary of a third-party payor who is provided health coverage by the third-party payor. The t…

A third-party payor, 340B entity, or a pharmacy, may bring a civil action to enforce this chapter, including injunctive relief, and seek civil damages for a violation of this chapter. Source: SL 2004, ch 311 , § 10; SL 2023, ch 166 , § 11; SL 2024, ch 203 , § 3, eff. Jan. 1, 2025…

A pharmacy benefit manager may not contractually require a pharmacy that is a participating provider in a health benefit plan provided by a third-party payor, from charging a covered individual or collecting from a covered individual a cost share for a prescription drug or pharma…

A pharmacy benefit manager may not, directly or indirectly, retroactively adjust a claim for reimbursement submitted by a pharmacy for a prescription drug, unless: (1) The adjustment is necessitated by a pharmacy audit conducted in accordance with chapter 58-29F ; (2) The adjustm…

Nothing in §§ 58-29E-12 to 58-29E-15 , inclusive, shall prohibit a pharmacy benefit manager from adjusting claim payment for the benefit of a covered individual if there was an error in the adjudication of a claim submitted by or on behalf of the covered individual. Source: SL 20…

Neither a pharmacy benefit manager nor a pharmacy benefit manager affiliate may, directly or indirectly, discriminate against a 340B entity or a pharmacy under contract with a 340B entity, on the basis that the 340B entity or a pharmacy under contract with a 340B entity participa…

A pharmacy benefit manager or a pharmacy benefit manager affiliate who has engaged in a discriminatory act, as prohibited in § 58-29E-15 , is liable to the 340B entity for damages, including actual and consequential damages, and is liable for reasonable attorneys' fees and costs.…

A pharmacy benefit manager may not assess, charge, or collect, from a pharmacy or pharmacist, any remuneration or fee, including: (1) An accreditation fee; (2) A brand effective rate fee; (3) A claim processing fee; (4) A credentialing fee; (5) A dispensing fee; (6) An effective …

Prior to placing a prescription drug on a maximum allowable cost list, a pharmacy benefit manager shall ensure that the prescription drug is: (1) Listed as therapeutically and pharmaceutically equivalent in the latest edition of, or any supplement to, the Food and Drug Administra…

A pharmacy benefit manager shall: (1) Provide each pharmacy in a pharmacy network with reasonable access to each maximum allowable cost list to which the pharmacy is subject; (2) Update a maximum allowable cost list, within seven calendar days from the date of any increase, at or…

A pharmacy benefit manager may not reimburse any pharmacy located in this state an amount that is less than that which the pharmacy benefit manager reimburses a pharmacy benefit manager affiliate for dispensing the same prescription drug as that dispensed by the pharmacy. The rei…

A person may not act as a pharmacy benefit manager in this state without a license to operate as a third party administrator pursuant to chapter 58-29D . Sections 58-29D -26, 58-29D -27, and 58-29D -29 do not apply to pharmacy benefits managers. Source: SL 2004, ch 311 , § 2; SL …

A pharmacy benefit manager licensed under this chapter shall, at the request of the Division of Insurance, provide: (1) The amount charged or claimed by the pharmacy benefit manager, in a format that allows the division to identify all instances of spread pricing; and (2) Informa…

In addition to any grounds set forth in § 58-29D-31 , the director may deny a pharmacy benefit manager's application for an initial or a renewed license, and may suspend or revoke a pharmacy benefit manager's license, if the director determines that the pharmacy benefit manager, …

Each pharmacy benefit manager shall perform its duties in good faith and with fair dealing toward the third-party payor. Source: SL 2004, ch 311 , § 3; SL 2023, ch 166 , § 3.

A third-party payor may request that a pharmacy benefit manager, with which it has a pharmacy benefit management services contract, disclose to the third-party payor the amount of all rebate revenues and the nature, type, and amounts of all other revenues that the pharmacy benefi…

A pharmacy benefit manager, unless authorized pursuant to the terms of its contract with a third-party payor, may not contact any covered individual, without the express written permission of the third-party payor. Source: SL 2004, ch 311 , § 5; SL 2023, ch 166 , § 5.

Except for utilization information, a third-party payor shall maintain information disclosed in response to a request under § 58-29E-4 as confidential and proprietary information, and may not use that information for any other purpose or disclose that information to any other per…

A third-party payor that has contracted with a licensed pharmacy benefit manager may audit the pharmacy benefit manager once each calendar year. The audit authorized by this section is in addition to any other statutory or contractual audit rights. As part of the audit, a third-p…

Except as provided in chapter 58-17K , and in accordance with the audit provisions in § 58-29E-7 , a third-party payor that has contracted with a licensed pharmacy benefit manager may not publish, or directly or indirectly disclose: (1) Any information that reveals the identity o…

A pharmacy benefit manager may request that a lower - priced generic and therapeutically equivalent prescription drug be dispensed to a covered individual, as a substitute for a higher - priced prescription drug. If the substitute prescription drug's net cost is higher for the co…

A pharmacy benefit manager may neither prohibit a pharmacist or pharmacy from, nor penalize a pharmacist or pharmacy for, informing a covered individual about: (1) The cost of a prescription drug; (2) The amount of reimbursement that the pharmacy will receive for dispensing the p…

The Division of Insurance shall promulgate rules, pursuant to chapter 1-26 , to carry out the issuance of the license required by § 58-29E-2 and the enforcement provisions of this chapter. The rules may include the following: (1) Definition of terms; (2) Use of prescribed forms; …

The pharmacy audit integrity program is hereby established to provide standards for an audit of pharmacy records carried out by a pharmacy benefits manager or any entity that represents the pharmacy benefits manager. Source: SL 2013, ch 254 , § 1.

If contractually required, an auditing entity shall provide a copy of the claims included in the audit to the plan sponsor, and any recouped money shall be returned to the plan sponsor. Source: SL 2013, ch 254 , § 10.

The provisions of this chapter do not apply to any investigative audit that involves fraud, willful misrepresentation, or on any audit completed by the State of South Dakota on health care programs operated by the state. Source: SL 2013, ch 254 , § 11.

In addition to the remedies otherwise provided for in this chapter, in chapter 58-29E , or under general South Dakota law, any pharmacy subject to an audit procedure may bring a civil action to enforce the provisions of this chapter and to seek damages from the pharmacy benefits …

Term used in this chapter mean: (1) "Entity," a pharmacy benefits manager or any person or organization that represents these companies, groups, or organizations in any capacity; (2) "Plan sponsor," the employer in the case of an employee benefit plan established or maintained by…

The pharmacy benefits manager shall disclose an amendment to the pharmacy audit terms in a contract between a pharmacy and a pharmacy benefits manager to the pharmacy at least sixty days prior to the effective date of the proposed change. Source: SL 2013, ch 254 , § 3.

Unless otherwise prohibited by federal statutes or regulations, any entity conducting a pharmacy audit shall: (1) Give a pharmacy a minimum fourteen days written notice before conducting initial on-site audit; (2) Conduct an audit that involves clinical or professional judgment i…

Unless otherwise prohibited by federal statutes or regulations, for any entity conducting a pharmacy audit the following audit items apply: (1) The period covered by the audit may not exceed twenty-four months from the date that the claim was submitted to or adjudicated by the en…