House committee advances HB 1109 to force PBM, MCO reporting to CMS after alleged $2.9B discrepancy
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Summary
The House Health and Human Services Committee voted 18–0 to report HB 1109 to appropriations. Patron Delegate Tucker Hodges said standardized reporting and independent audits of PBMs and managed‑care organizations would reveal discrepancies he says amount to billions; insurers disputed the magnitude of projected savings.
Delegate Tucker Hodges presented House Bill 1109 on standardized reporting requirements for managed care organizations (MCOs) and pharmacy benefit managers (PBMs), saying the measure would require uniform methodologies, independent audits every two years and creation of a compliance unit within the Department of Medical Assistance Services (DMAS).
"In 2023, there was a $2,900,000,000 difference," Hodges said, arguing the discrepancy between what pharmacies were paid and what PBMs reported to CMS inflates capitation rates for Medicaid managed care. He said the bill includes data‑content requirements and a modest compliance‑unit cost compared with the potential savings and that he placed a budget amendment estimating part‑year savings of $1 billion and $1.8 billion the following year under stricter reporting.
Two witnesses supported the bill. Art Kellerman, identified as a former health system CEO and academic physician, called the legislation "fantastic" and urged lawmakers to back it. Cal Whitehead of the Virginia Community Pharmacy Association said greater transparency would help legislators, DMAS, pharmacists and patients.
Representing health plans, Doug Grama of the Virginia Association of Health Plans urged caution. Grama said an independent study funded last year found single‑PBM models produced less than a 1% savings estimate and that projected savings in other analyses were closer to $20 million within a roughly $2.6 billion program. "People need to respect the facts, and the facts are coming from your own studies," he told the committee.
Hodges replied that his figures rely on CMS‑reported data rather than single‑PBM modeling. "These are actual numbers that were reported to CMS," he said, repeating his claim of a $2.9 billion gap in 2023 and saying the cumulative difference reported to CMS from 2017 through 2023 was $10,900,000,000.
After brief committee discussion, a motion to report HB 1109 and refer it to Appropriations passed by voice/board vote, 18–0. The committee did not adopt amendments on the floor during that vote.
What happens next: HB 1109 is reported to the Appropriations Committee for further review and potential budget impact analysis. The bill text, fiscal estimates and any amendments will be considered there.