Sept. 4, 2020: State Advocacy Update


The National Association of Insurance Commissioners (NAIC) has initiated the process of drafting a state model bill on the licensure and regulation of pharmacy benefit managers (PBM). The NAIC's Pharmacy Benefit Manager Regulatory Issues Subgroup closed the initial comment period on Sept. 1 and is set to start open discussions with regulators and stakeholders in the coming weeks.

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In its initial comments, the AMA suggested the model bill focus on:

  • Improving transparency of PBM practices
  • Establishing a PBM's fiduciary duty to insurers or employers
  • Creating measurable requirements, such as pharmacy network adequacy and medical loss ratios, through regulation and strengthening insurance commissioners' enforcement authority over PBM practices

Stakeholder comments and suggested edits to the initial NAIC draft will be posted on the subgroup's website.

As the National Council of Insurance Legislators (NCOIL) moves forward with a bill to promote the expansion of short-term limited duration insurance (STLDI) plans, the AMA joined with 16 consumer and patient groups to urge NCOIL to halt adoption. The model bill that NCOIL is set to consider at its upcoming September meeting would permit short-term plans to have terms of 12 months with the ability to renew for up to 3 years. Additionally, these plans could be offered without benefits such as pharmacy coverage, maternity care, mental health care, rehabilitation services and preventive care.  The organizations on the letter expressed concern about both the lack of coverage these plans offer, as well as their ability to pull healthy individuals who would otherwise buy insurance in the marketplaces, resulting in smaller risks pools and higher premiums for those purchasing comprehensive health insurance. The letters also highlighted how particularly troubling expanding access to noncomprehensive coverage is during the COVID-19 pandemic: "As COVID-19 continues to spreads, as our nation enters the flu season, as mental health care is needed more than ever, and as patients and their physicians continue to address chronic conditions, now is simply not the time to promote and expand noncomprehensive coverage."