Credit: Allison Bell/ALM
Many states are now asking their insurance departments or other insurance regulatory agencies to oversee pharmacy benefit managers.
Related: California Senate passes PBM control bill that a big employer group hates
A team at the National Association of Insurance Commissioners is drafting guidelines that could help regulators handle the PBM oversight job.
One early conflict is over whether representatives from pharmacist groups and other non-regulators should get to help with the guideline drafting process.
The first NAIC team working on the PBM exam process guidelines drafting process let non-regulators help. The team now in charge of the drafting process, the Pharmacy Benefit Management Working Group, is excluding non-regulators from the drafting process and plans to hold some regulator-only meetings on specific exam standards, according to draft working group meeting minutes included in a working group document packet.
Joylynn Fix, a West Virginia insurance regulator who serves as the working group chair, said in March that the working group expects to complete its drafting work by the end of the year, is following NAIC rules, and will give stakeholders a chance to comment on the working group's draft, according to the draft minutes.
The working group is preparing to meet in person Monday in Minneapolis, at the NAIC's summer national meeting.
What it Means: Regulators are creating guidelines that could have hard-to-predict effects on how states implement their new PBM rules.
Benefits buyers and benefits professionals might want to make sure the guidelines reflect the needs of employers that sue PBMs to provide pharmacy benefits for plan participants.
The backdrop: U.S. federal law leaves regulation of the business of insurance to the states.
The federal Employee Retirement Income Security Act preempts state efforts to regulate large employers' benefit plans.
The conflict between the state-based insurance regulation system and ERISA means that the working group's work may have the most direct effect on small and midsize employers with fully insured pharmacy benefits. In practice, the views of the NAIC and state insurance regulators could affect how PBMs operate even when the PBMs are working with large employers and self-insured plans.
The NAIC: The NAIC is a group for insurance regulators. It helps regulators work together to develop models for state insurance regulatory efforts.
States can choose whether to use the models.
The PBM exam guidelines project: The NAIC already has a Market Regulation Handbook that helps states assess insurers and other regulated entities.
The team working on the PBM exam guidelines is drafting a PBM examination handbook chapter.
The chapter will deal with matters such as drug utilization review standards and how PBMs decide which drugs fit where on their "formularies," or lists of covered drugs.
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