Don McGuire of Pharmacists Mutual Insurance Company was among those attending the meeting of the National Conference of Insurance Legislators (NCOIL) in Oklahoma City. The purpose was to assist NCPA and other pharmacy groups in advocating for a PBM Licensure and Regulation Model Act. NCPA and its partners have worked on this effort for the last nine months. NCPA’s regulatory affairs VP Ronna Hauser and state government affairs VP Anne Cassity advocated for the measure at the meeting. On December 8, 2018, NCOIL approved the proposed PBM Licensure and Regulation Model Act. A Model Act provides a template for legislatures to use when drafting and passing statutes in their states.
Highlights of the model act include:
- It gives the state oversight authority over the under-regulated PBM industry to the full extent permitted by existing federal law. It requires PBMs to obtain a license from the state insurance commissioner and allows the insurance commissioner to review and audit PBMs to ensure compliance with the model act’s provisions.
- It provides the insurance commissioner with the authority to adopt rules that promote, preserve, and protect public health, safety, and welfare through effective regulation of PBMs.
- It prohibits gag clauses in contracts.
- It sets out rules that an insurance commissioner may adopt, including network adequacy requirements, compensation/MAC lists, MLR abuses, and prohibited market conduct practices.
The pharmacy champions, Arkansas State Sen. Jason Rapert, New York Assemblymember Kevin Cahill, Texas State House representative Tom Oliverson, MD, and the other members of the NCOIL Health Committee worked diligently through various issues that resulted in the passage of the model bill at the meeting.