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AID schedules hearing after Navitus objects to data request in PBM examination
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Summary
AID officials told the Arkansas Legislative Council that Navitus Health Solutions has objected to providing self‑funded claims data in an affiliate‑pricing examination; AID has asked for a hearing (tentatively in April) to resolve whether ERISA preempts the state's data request. The matter remains under review and unresolved in the administrative process.
Daniel Holland, general counsel for the state insurance department's PBM examination, told the Arkansas Legislative Council that Navitus Health Solutions has objected to providing claims data the agency requested as part of an affiliate‑pricing review.
Holland said both parties have briefed the issue and AID (the state's administrative body) is setting the matter for a hearing. "We'll get that set for hearing within the next week or so," Holland said, and later said his office has asked for an April hearing date and is awaiting confirmation from the hearing officer.
Several legislators pressed Holland on the scope and legal basis of Navitus’s objection. Holland described the dispute as a federal preemption argument tied to the Employee Retirement Income Security Act (ERISA): "There's an argument that can be made for self‑funded plans that this is preempted by ERISA," he said. Holland added that the state disputes that position and that the examination is intended to determine compliance with Arkansas law.
Senator Justin Boyd referenced regulatory action in another state during questioning, saying West Virginia fined a PBM about $800,000; Holland said he was aware of West Virginia’s action and had spoken with regulators there.
Legislators asked whether other PBMs under audit had raised similar objections. Holland said five PBMs are being audited and that four of the five had not made Navitus’s particular preemption argument; he said he was not aware of multimillion‑dollar state contracts tied to the other firms under audit.
Holland emphasized that AID will not execute a grant or finalize enforcement steps without completing due process: "We have to give them due process…let our hearing officer make a recommendation to the commissioner," he said. If parties disagree with administrative findings after a hearing, Holland noted, they could seek judicial review.
The committee did not vote on the matter; AID staff were excused after questioning. The hearing date remains pending confirmation by the hearing officer.
