Committee amends HB1584 to create separate PBM license class; bill passes out of committee

The House Committee on Industry, Business and Labor voted to pass House Bill 1584 as amended, adopting a new licensing class for pharmacy benefit managers and Representative Casper’s narrower definition of PBMs.

The amendments — one establishing a distinct license category for PBMs and one providing a revised definition of “pharmacy benefit manager” that Representative Casper offered — were combined and adopted before the committee voted on the bill. Representative Casper moved to adopt both amendments; Representative Koppelman moved that the committee “do pass as amended” on House Bill 1584, with a second from Representative Shots. The motion passed on a roll-call vote.

The amended measure creates a separate licensure class for PBMs, distinct from the third-party administrator (TPA) license the entities now commonly hold. John Arnold, Deputy Insurance Commissioner, told the committee the insurance department borrowed language from West Virginia to craft the licensing provision and kept the initial and renewal fees aligned with current TPA fees “with the idea that then that would be revenue neutral.” Arnold said the draft uses a $250 initial fee and a $100 renewal fee as placeholders to avoid additional short-term fiscal questions.

Representative Casper, who circulated a definition of PBM on the floor and urged the committee to adopt it, said the definition clarifies the bill’s scope and, in his view, avoids unintended impacts on self-funded plans. “It appears to me to be full of misinformation,” Casper said in response to an outside submission he received during floor session, and he urged the committee to rely on the filed court rulings and testimony presented. Casper also argued the legislation strengthens the state’s position should litigation follow: “By having those safeguards in place, it’ll help strengthen our arguments if it does come to that.”

Committee members asked how licensing would affect oversight. Arnold said the separate license class lets regulators “know exactly what the universe of PBMs looks like instead of the universe of TPAs,” and therefore which entities are subject to the bill’s provisions. He acknowledged that if the insurance department assumes regulatory responsibility it will likely need additional staff and resources, and that fee levels and funding could be revisited with Senate counterparts.

The committee briefly discussed the bill’s fiscal elements. Arnold confirmed the insurance department removed an appropriation request so the committee could consider the licensure language without triggering immediate fiscal referrals. He said an appropriations decision could be revisited later in the process.

Representative Koppelman, who moved the final do-pass motion, told colleagues the work on PBM regulation has been ongoing for many years and that prior state legislation and court wins provide background for the current draft. Supporters on the floor argued the bill will protect insurers, pharmacists and consumers by increasing oversight and transparency.

The committee’s roll-call recorded affirmative votes from a majority of members present and the clerk completed the tally at the meeting’s close. Committee leadership said Representative Casper may carry the bill to the floor if final procedural conditions are met.

The committee paused work to continue other bills and scheduled follow-up vetting between the House and the insurance department as needed.