Provides relative to penalties for violations of the Louisiana Insurance Code. (gov sig)

Senate Bill 323 amends four sections of the Louisiana Insurance Code to establish heightened penalties specifically for pharmacy benefits violations. The bill modifies R.S. 22:18(A) by adding a new paragraph creating a mandatory twenty-five thousand dollar fine per violation with no aggregate cap for violations pertaining to pharmacy benefits, alongside a requirement that the commissioner suspend or revoke the certificate of authority or license if the violation remains uncorrected thirty days after notice. The bill similarly amends R.S. 22:1860 by eliminating tiered penalties based on knowledge and replacing them with a flat twenty-five thousand dollar penalty per violation with no aggregate maximum, while also adding an automatic suspension or revocation mechanism if violations persist beyond thirty days. Comparable amendments to R.S. 22:1969 and 1970(A) establish the same twenty-five thousand dollar per-violation penalty structure without aggregate caps and mandatory license suspension or revocation for pharmacy benefits violations that remain uncorrected after thirty days notice.

Health insurance issuers, health maintenance organizations, pharmacy benefit managers, and other entities providing pharmacy benefits under insurance contracts face substantially more severe penalties for violations related to prescription drug payments and pharmacist services. Previously, these entities could face fines of up to one thousand dollars per violation capped at one hundred thousand dollars annually under general Insurance Code violations, or up to twenty-five thousand dollars per violation capped at two hundred fifty thousand to five hundred thousand dollars depending on the violation type and the entity's knowledge. Under the new law, pharmacy benefits violations trigger automatic twenty-five thousand dollar per-violation fines with no ceiling, and failure to correct violations within thirty days results in mandatory suspension or revocation of operating authority. This structure eliminates the commissioner's discretion in pharmacy benefits cases and removes any aggregate limitation that previously constrained cumulative penalties.

Senate Bill 323 operates within the existing administrative enforcement framework established in R.S. 22:18 and the cease and desist provisions of R.S. 22:1860, 1969, and 1970, which derive authority from the Administrative Procedure Act in R.S. 49:977.3. The bill defines pharmacy benefits violations by cross-reference to R.S. 22:1852, which establishes the regulatory framework for pharmacy benefits under insurance contracts. The amendments create a categorical exception to general penalty provisions applicable throughout the Insurance Code, meaning pharmacy benefits violations receive treatment distinct from all other code violations. The bill preserves the administrative hearing rights under Chapter 12 of Title 22 for affected parties while accelerating the timeline for administrative action through the mandatory thirty-day correction period and automatic license suspension or revocation mechanism.