Tennessee Code Title 71. Welfare § 71-5-198

(a) If necessary, the bureau of TennCare is authorized to seek a research and demonstration waiver under Section 1115 of the federal Social Security Act from the United States department of health and human services to create a TennCare prescription program, subject to funding by the general assembly and the terms and conditions imposed by the waiver.

(b) To the extent and only to the extent permitted by federal law or the terms of the waiver, the TennCare prescription program may provide a prescription benefit to individuals lacking prescription drug insurance coverage who meet criteria established by the bureau of TennCare and the general assembly in its annual appropriation bill.

(c) To the extent permitted by federal law and the TennCare waiver, the bureau of TennCare may implement, either independently or in combination with a state preferred drug list (PDL), cost saving measures for pharmaceutical services including, but not limited to, tiered co-payments, reference pricing, prior authorization, step therapy requirements, exclusion from coverage of drugs or classes of drugs, mandating the use of generic drugs, and mandating the use of therapeutic equivalent drugs.

(d) To the extent permitted by federal law or the terms of the waiver, the bureau of TennCare, through a state pharmacy benefit manager (PBM) or on its own, may negotiate manufacturer rebates for TennCare prescription drug purchases. The bureau of TennCare shall retain ultimate authority to negotiate or contract directly with a pharmaceutical manufacturer, in the interest of implementing rebates or other cost saving measures and for other purposes permitted by this section. Notwithstanding anything under Tennessee law to the contrary, the bureau's designation of a negotiating agent shall not infringe upon the state's ability to negotiate and contract directly with pharmaceutical manufacturers.

(e) To the extent permitted by federal law or the terms of the waiver, the bureau of TennCare may establish an open enrollment period based on appropriations from the general assembly.

(f) To the extent permitted by federal law or the terms of the waiver, the bureau of TennCare may contract with another department or a private entity to conduct an eligibility determination. The bureau or a contracted entity may implement an eligibility determination process to ensure participants comply with eligibility standards set by the bureau and the general assembly.

(g) As permitted by the waiver or federal law, program participants may purchase prescription drugs through pharmacies participating in the state network.

(h) To the extent permitted by federal law or the terms of the waiver, the bureau of TennCare may establish an enrollment fee to defray administrative expenses associated with the program.