But the main question is, what happens if the action which is legal by federal law, is illegal by the state law where the action takes place? In most of the contracts I’ve read that specify a juristiction, it is a particular state (for example, you look at any contract with Disney World, they specify all lawsuits have to be made in Florida). Can you specify that something legal federally be allowed in a state that it is illegal (the best example I can think of is minimum wage, can a state say the minimum wage is $10 an hour, but if you sign a contact with a company that says you accept federal law over state law only pay you $8.25 an hour?), or will the state law take prefrence? And if it does, will it void the whole contract or just that section?
In this case, it is does a pharmacy accept your particular insurance company? In the industry in question, [filling prescriptions], the insurance company has most of the power, so they set their terms, accept it or leave it [so do what they say, or you can’t fill their members rx’s… an example that caused Walgreen’s to not take Express Scripts as of Dec 31st of last year])
The penalty of not conforming to the contract is that the insurance company would deny reimbursement, i.e. not pay their portion of the the RX cost. The drug that cost the pharmacy $300 to give you, which you paid a $10 copay, the extra $290 should be paid by the insurance company, which they don’t pay if they think they can get away with it (hence this stipulation in the contracts)..