Senate Health Committee Hears Bill to Regulate Pharmacy Benefit Managers

SB 3 – Benefit Managers Regulation
Authored by Sen. Liz Brown (R-Fort Wayne)

Requires that a pharmacy benefit manager (PBM) – a company that manages prescription drug benefits on behalf of health insurers – obtain a license issued by the Department of Insurance. Sets forth requirements of the pharmacy PBM. Provides for the commissioner of the Department of Insurance to adopt rules to specify licensure, financial standards and reporting requirements that apply to a PBM. Sets forth requirements of a PBM’s reimbursement for a contracted pharmacy when using a maximum allowable cost for a drug product. Makes violations of the chapter concerning PBMs an unfair or deceptive act or practice in the business of insurance. Repeals the chapter of existing language on PBMs and moves the language concerning maximum allowable cost lists to a new chapter.

Chamber position: Neutral

The latest: The bill passed the Senate Health Committee 9-2.

Indiana Chamber action/commentary: The Chamber testified that Sen. Brown has been very reasonable and has attempted to listen to all interested parties. We said last session and during the summer study discussion that employers use PBMs to negotiate on their behalf to reduce drug costs. We also reiterated again that less regulation is better and no action should be taken that raises costs.

Senate Health Provider ‘Gag Clause’ Bill Heard in Committee; Chamber Urges Amending

SB 5 – Health Provider Contracts and Pricing
Authored by Sen Ed Charbonneau (R-Valparaiso)

Prohibits health provider contracts from including provisions that prohibit providers from disclosing the pricing for health care services. States that a violation by the issuer of a health provider contract is an unfair or deceptive act or practice in the business of insurance.

Chamber position: Support in part

The latest: The bill was heard in the Senate Provider Services Committee and held for possible amendments.

Indiana Chamber action/commentary: The way the bill is written could result in collusion among providers if they know what their competitors’ reimbursement rates are, which could raise costs. That is the concern the Chamber expressed; we indicated that the preferable language is in the House version, which is related specifically to just claims data. The Chamber provided Sen. Charbonneau with the more acceptable House language.

Health Insurance Mandate Brings Out Emotional Testimony

SB 311 – Coverage for PANDAS and PANS
Authored by Sen David Niezgodski (D-South Bend)

Requires a state employee health plan, a policy of accident and sickness insurance, and a health maintenance organization contract to provide coverage for pediatric autoimmune neuropsychiatric disorders associated with streptococcal infections (PANDAS) and pediatric acute-onset neuropsychiatric syndrome (PANS), including treatment with intravenous immunoglobulin therapy.

Chamber position: Oppose

The latest: No vote was taken in the Senate Financial Institutions and Insurance Committee; it is uncertain whether this bill will be voted on or not.

Indiana Chamber action/commentary: The committee heard very emotional testimony from two mothers of children who have PANDA. Their lives have been devastated and the families have absorbed incredible costs because of this illness.

This was a difficult bill to oppose. The Chamber testified that we are not contesting the seriousness of the illness or the impacts on these families. But the reality is, most employers will not be covering this particular illness because they are on self-insured plans. This bill only effects the fully insured plans –about 20% of the employer market. These are the small employers who struggle to keep costs down so that they may be able to provide health benefits for employees. Senator Mike Gaskill (R-Pendleton) asked if self-insured employers could cover this and the Chamber responded that they could include this in their plan design, but they would not be mandated to do so.

Resource: Mike Ripley at (317) 264-6883 or email: mripley@indianachamber.com