Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Pbm Pharmacy Reform topic
No spam. Unsubscribe anytime.
Senate committee passes pharmacy-reimbursement bill as insurers warn of higher costs
Summary
The Senate Insurance & Commerce Committee adopted an amendment and passed Senate Bill 520 to set a fixed dispensing fee and change pharmacy reimbursement benchmarks, drawing testimony from independent pharmacists who described retroactive 'clawbacks' and insurers who presented multi-million-dollar cost estimates.
The Senate Insurance & Commerce Committee passed Senate Bill 520 on a voice vote after adopting an amendment that extends appeal windows and changes reimbursement benchmarks for pharmacies.
Sponsor Senator Hammer argued the bill responds to what he called problematic pharmacy benefit manager (PBM) practices and would protect patient access to local pharmacies. "We as legislators can't help that a couple stays in a bad working relationship ... but the kids shouldn't be hurt," Hammer said in closing, urging members to treat the bill as a practical response to PBM maneuvers.
The adopted amendment, explained by John Vincent of the Arkansas Pharmacist Association, lengthened the appeals period from seven to 30 days and replaced references to a pharmacy's invoice acquisition cost with a national average acquisition cost (NADAC/NAIDAC) standard for certain below-cost claim appeals. Vincent said the change aligns Arkansas with other states and aims to level the playing field for independent pharmacies.
Britney Sanders, co-owner of Wellington Pharmacy in West Little Rock, told the committee that PBMs have been issuing retroactive recoupments that threaten small pharmacies. She gave a recent example in which a product bought for $400 was front-end reimbursed at $420 and later clawed back $380, leaving the pharmacy with a $360 loss. "It's not sustainable," Sanders said, urging the committee to preserve patient access and transparency.
Insurers and payors warned the committee the bill carries material budgetary consequences. John Ryan of Arkansas Health & Wellness said the Arkansas Works program would see roughly $5.5 million in additional annual costs tied to the fixed dispensing fee. Max Greenwood with Arkansas Blue Cross and Blue Shield estimated an impact of about $58 million in the first year for the fully insured population, saying the bill could increase premiums by roughly 3 percent and raise out-of-pocket costs for some members.
Ryan James of the Arkansas Insurance Department told the committee the current PBM law does not explicitly cover the escrow and clawback behaviors Sanders described and that the department would need further statutory authority or rulemaking to address some practices directly.
Committee members pressed insurers on whether carriers would immediately shift costs to consumers. Insurer witnesses said fully insured carriers would factor any new dispensing-fee obligations into rate-setting, which can change premiums and benefits over time; some benefit designs could raise copays for individuals. Senator Teague and others urged insurers and pharmacies to explore working with more transparent PBMs and recommended further study.
The committee adopted the amendment by voice vote and approved the bill as amended on a subsequent voice vote. Chair noted the committee may form an interim subcommittee to examine PBM practices more deeply and encouraged insurance companies to consider contracting with transparent PBMs as one private-market remedy.
Votes at a glance: the committee took voice votes to concur or pass numerous noncontroversial measures earlier in the meeting, including concurrence on several house amendments, passage of House Bill 1463, House Bill 1516 (as amended), House Bill 1818, Senate Bill 592, Senate Bill 602 (as amended), and finally Senate Bill 520 (do pass as amended).
The committee adjourned after passing SB 520 and completing the day's agenda.
