Louisiana insurance regulator orders PBM reimbursement data, says it will set industry dispensing standard by February
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Summary
The Louisiana Department of Insurance told the advisory council it will collect PBM reimbursement formulas and claim volumes to derive an industry benchmark under Act 4 74, while urging PBMs to voluntarily raise outlier reimbursements immediately. Commissioner Tim Temple said the department expects an initial standard no later than February.
Tim Temple, Louisiana’s commissioner of insurance, told the Pharmacy Benefit Manager Monitoring Advisory Council on Jan. 22 that the Department of Insurance (LDI) will issue a data request to PBMs to collect reimbursement formulas, ingredient references, markups, dispensing fees and claim volumes so the department can establish a defensible industry standard under Act 4 74 of 2025.
Temple said the department has seen a surge in complaints since 2018 and that a sharp increase in 2025 followed enactment of recent legislation. "Since 2018 we have received 843 complaints," he said, and recounted enforcement actions in 2023 that resulted in consent orders and fines against two PBMs (MedImpact, $250,000; Express Scripts, $275,000).
Why it matters: Act 4 74 expanded LDI’s tools to oversee PBMs by banning spread pricing, prohibiting retroactive denials and clarifying audit authorities. Temple said the statute does not give LDI authority to set a price floor for dispensing fees but does require reimbursement formulas to include a professional dispensing fee; LDI plans to use industry norms derived from PBM submissions to define what a "reasonable" dispensing fee means under the law.
What LDI will do next: Temple said LDI has already asked PBMs who appear to be outliers to bring reimbursements in line with industry standards. He added that the department is collecting market data "to support our reasonable standard" and that staff expects to publish guidance "no later than February." He explained that enforcement is tiered: fines for individual occurrences (starting in the low thousands) can escalate to market-conduct investigations with larger fines and, ultimately, license revocation for systemic noncompliance.
Questions and constraints: Committee members asked whether LDI could use existing federal or third‑party surveys (for example, Medicaid cost surveys) to set reimbursement standards. Temple responded that under current law LDI cannot set a floor based on provider cost surveys or Medicaid rates; instead the department must establish what the commercial industry is paying and judge compliance against industry practice.
Near-term relief and timing: Independent pharmacists in the room described cash‑flow stress and reimbursement cuts they said occurred in January. Temple said LDI has urged PBMs to make voluntary adjustments immediately and that the department will return to the council with data and a more complete analysis at a February meeting. "We expect to have that no later than February," Temple said.
Next steps: LDI will issue the data call to PBMs and return to the advisory council with an initial standard and an estimate of system cost impacts. PBMs present pledged to cooperate and provide data quickly so the regulator can evaluate compliance and consider remedies where warranted.
