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LDI to audit PBM transparency filings after Southern Scripts rebate report spikes
Summary
Department of Insurance staff told the advisory council on Sept. 22 that plan-level transparency reporting will be audited and that prior reporting was aggregated; the department flagged an apparent year-over-year anomaly in Southern Scripts' rebate reporting and said a look-back audit is planned.
Department of Insurance staff and council members discussed anomalies in the PBM transparency reports and said the department will add audit functions as Act 474 takes effect.
Senator Jay L. Bass and others asked why some PBMs appear multiple times in the transparency database. LDI staff explained those multiple entries generally reflect separate plan-level filings (for example, separate fully insured and self-funded ERISA lines). The department said it will publish an Excel export of reported data and that plan-level detail will be added to the form-review process.
Senator McMath raised an apparent anomaly: two filings showed Southern Scripts' reported rebates climbing from about $8.6 million in one prior report to roughly $960 million in the most recent filing. LDI counsel said prior to Act 474 the agency aggregated reports and lacked enforcement authority tied to the filings; with the statute's new obligations the department will begin validating filings, perform look-back audits and escalate discrepancies.
"Until this act, we essentially just received those reports, aggregated them, and posted them on the website," an LDI staff member said. "There is going to be a look back." The department confirmed it will audit filings in March cycles and pursue market-conduct reviews if a pattern of inconsistent or implausible reporting emerges.
LDI said it will require PBMs to report totals at the plan level and will publish updated transparency files at LDI's website. The department asked committee members to forward specific PBM questions so staff can follow up with companies and, if necessary, bring PBM representatives to future meetings to explain reporting differences.
Ending: The department said it will circulate the full transparency dataset to council members, perform audit reviews of suspicious filings, and use discretion to escalate to enforcement if look-back audits show reporting errors or intentional misreporting.
