HB 226 Implementation and PBM Registration Guidance

Department of Commerce, Community, and Economic Development DIVISION OF INSURANCE Anchorage Office 550 West Seventh Avenue, Suite 1560 Anchorage, Alaska 99501-3567 Main: 907.269.7900 Fax: 907.269.7910 BULLETIN B 24-12 TO: ALL LICENSEES AND ADMITTED INSURERS IN THE STATE OF ALASKA AND OTHER INTERESTED PARTIES RE: HB 226 IMPLEMENTATION AND PBM REGISTRATION GUIDANCE On September 23, 2024, the Governor signed Alaska House Bill (HB) 226 (Chapter 61, SLA 24) with the short title Pharmacies/Pharmacists/Benefits Managers into law. The law becomes effective on January 1, 2025. Regulations are being promulgated and are anticipated to come out in two packages for public comment early in 2025. The first package addresses registration requirements specific to pharmacy benefits managers (PBM). The second package is specific to PBM claims, grievances, activities and appeals under Alaska Statute (AS) 21.27.953. On January 1, 2025, the Division will register PBM under the authority of AS 21.27.901- 21.27.905. Until the regulations become effective PBM registration will follow the current thirdparty administrator (TPA) registration processes. To comply with the new law, the Division has instituted a PBM registration form found on https://www.commerce.alaska.gov/web/Portals/11/pub/08-236.pdf and attached to this bulletin. If a PBM holds a current valid TPA registration, they are required to renew their registration with the new form when their current registration is set for renewal. A PBM that is currently registered as a TPA will follow the expiration date format under 3 AAC 23.860(b) biennial license renewal. On or after January 1, 2025, a PBM who is operating in Alaska and not currently registered is required to register using the new form. Nothing prohibits a PBM from renewing their registration prior to expiration under the law statutory scheme. Until regulations are adopted and effective regarding PBM claims, grievances, activities and appeals, the Division is unable to process a grievance or appeal specific to a PBM. The Division will provide updated guidance on how to submit PBM appeals once regulations are adopted. The Division reminds providers, including pharmacists, that they can use current complaint process for situations that fall under the insurance contract coverage. All information about the current complaint process, including forms to file a complaint, can be found at https://www.commerce.alaska.gov/web/ins/Consumers/Complaints.aspx. Questions regarding registration requirements in this bulletin should be directed to Program Coordinator 2 Kayla Erickson at kayla.erickson@alaska.gov or 907-465-2545. B 24-12 HB 226 Implementation and PBM Registration Guidance December 30, 2024 Page 2 of 2 Questions regarding other aspects of HB 226 implementation can be directed to Deputy Director Heather Carpenter at heather.carpenter@alaska.gov or 907-465-2518. ________________________ Lori Wing-Heier Director of Insurance 08-236 Rev 12/20/2024 Pharmacy Benefit Manager Registration Page 1 of 5 Pharmacy Benefit Manager Registration Form Filing Requirements for Pharmacy Benefit Managers:  Registration Form  Registration Fee  All basic organizational documents of the Pharmacy Benefit Manager, including articles of incorporation, articles of association, articles of organization, partnership agreement, trade name certificate, trust agreement, shareholder agreement and other applicable documents and all endorsements to the required documents.  Bylaws, operating agreement, rules, regulations and similar documents regulating the internal affairs of the benefit manager.  The names, mailing addresses, physical addresses, official positions and professional qualifications of persons who are responsible for the conduct of affairs of the Pharmacy Benefit Manager, including the members of the board of directors, members of the limited liability company or partnership, board of trustees, executive committee or other governing board or committee, the principal officers in the case of a corporation or the partners or members in the case of a partnership or association, shareholders holding directly or indirectly 10 percent or more of the voting securities of the Pharmacy Benefit Manager and any other person who exercises control or influence over the affairs of the Pharmacy Benefit Manager.  Certified (audited) financial statements for the prior two years prepared by an independent certified public accountant that establish that the applicant is solvent, that the applicant's system of accounting, internal control and procedure is operating effectively to provide reasonable assurance that money is promptly accounted for and paid to the person entitled to the money.  If the applicant submits a consolidated statement, a consolidating worksheet for the applicant must also be included.  A statement describing the business plan including information on staffing levels and activities proposed in this state and in other jurisdictions and provide details establishing the Pharmacy Benefit Manager’s capability for providing a sufficient number of experienced and qualified personnel in the areas of claims handling, underwriting, and record keeping.  Identify the key personnel who supervise or have responsibility over personnel performing Pharmacy Benefit Manager functions.  All documents necessary to verify statements contained in or in connection with the application. “Strengthening competitive insurance markets while protecting Alaskans.” STATE OF ALASKA DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMIC DEVELOPMENT Division of Insurance InsuranceLicensing@Alaska.Gov Website: Insurance.Alaska.Gov Tel: 907.465.2515 · Fax: 907.465.3422 Juneau Physical Address: State Office Building, 9th Floor 333 Willoughby Avenue Juneau, AK 99811 Juneau Mailing Address: Division of Insurance PO Box 110805 Juneau, AK 99811 Anchorage Office: (Physical and Mailing Address) Division of Insurance Robert B. Atwood Building 550 W 7th Avenue, Suite 1560 Anchorage, AK 99501 Tel: 907.269.7900 Fax: 907.269.7910 Pharmacy Benefit Manager: means a person that contracts with a pharmacy on behalf of an insurer to process claims or pay pharmacies for prescription drugs or medical devices and supplies or provide network management for pharmacies Registration as a Pharmacy Benefit Manager is required if: • contract with an insurer to administer or manage pharmacy benefits provided by an insurer for a covered person, including claims processing services for and audits of payments for prescription drugs and medical devices and supplies; and • contract with network pharmacies. If you meet the definition of a Pharmacy Benefit Manager (PBM) and are conducting business in Alaska, registration is required under AS 21.27.901(a). Applications not completed within four months from the dated filed will be considered withdrawn and a new application and application fees will be required pursuant to AS 21.27.040(f). If you wish to withdraw your application at any time during the application process, please contact this division. All fees remitted are nonrefundable pursuant to 3 AAC 31.010. 08-236 Rev 12/20/2024 Pharmacy Benefit Manager Registration Page 2 of 5 PART 1 PHARMACY BENEFIT MANAGER INFORMATION NAME OF REGISTRANT List any assumed, fictitious, or trade names under which you are doing business, are currently doing business or intend to do business. Alaska Statute (AS) 21.27.010(d) states “a licensee may not use a fictitious or alias unless the licensee’s legal name and fictitious or alias are on the license.” LINES OF AUTHORITY L – Life H – Health V – Variable L H V *If applicable, FINRA Individual Firm Central Registration Depository (CRD) Number Business Physical Address City State Zip or Foreign Country Mailing Address P.O. Box City State Zip or Foreign Country Telephone Number Fax Number Business Web Site Address Business E-mail Address PART 2 LEGAL BUSINESS TYPE Check the legal business type and license class(es) for which you are applying. Legal Business Type C – Corporation P – Partnership S – Sole Proprietorship LLC – Limited Liability Corporation LLP – Limited Liability Partnership Legal Business Type Incorporation/Formation Date (month) (day) (year) FEIN State of Domicile Country of Domicile C P S LLC LLP PART 3 OWNERS, PARTNERS, OFFICERS, DIRECTORS, OR MEMBERS Identify all owners, with 10% interest or voting interest, partners, officers, and directors of the business entity, or members or managers of a limited liability company: Name Title SSN DOB Name Title SSN DOB Name Title SSN DOB Name Title SSN DOB Name Title SSN DOB Name Title SSN DOB Name Title SSN DOB Name Title SSN DOB Name Title SSN DOB Name Title SSN DOB Name Title SSN DOB Name Title SSN DOB Name Title SSN DOB 08-236 Rev 12/20/2024 Pharmacy Benefit Manager Registration Page 3 of 5 PART 4 BACKGROUND QUESTIONS Please read the following carefully and answer each question. All written statements submitted by the applicant must include an original signature. 1a Has the business entity or any owner, partner, officer or director of the business entity, or member or manager of a limited liability company, ever been convicted of a misdemeanor, had a judgment withheld or deferred or is the business entity or any owner, partner, officer or director of the business entity, or member or manager currently charged with, committing a misdemeanor? You may exclude the following misdemeanor convictions or pending misdemeanor charges: traffic citations, driving under the influence (DUI) or driving while intoxicated (DWI), driving without a license, reckless driving, or driving with a suspended or revoked license. You may also exclude juvenile adjudications (offenses where you were adjudicated delinquent in juvenile court.) Yes No 1b Has the business entity or any owner, partner, officer or director of the business entity, or member or manager of a limited liability company ever been convicted of a felony, had judgment withheld or deferred, or is the business entity or any owner, partner, officer or director of the business entity or member or manager of a limited liability company currently charged with committing a felony? You may exclude juvenile adjudications (offenses where you were adjudicated delinquent in a juvenile court). If you have a felony conviction involving dishonesty or breach of trust, have you applied for written consent to engage in the business of insurance in your home state as required by 18 USC 1033? If so, was consent granted? (Attach copy of 1033 consent approved by home state.) Yes No Yes No N/A Yes No N/A 1c Has the business entity or any owner, partner, officer or director of the business entity or member or manager of a limited liability company, ever been convicted of a military offense, had a judgment withheld or deferred, or is the business entity or any owner, partner, officer or director of the business entity or member or manager of a limited liability company, currently charged with committing a military offense? NOTE: For Questions 1a, 1b, and 1c "Convicted" includes, but is not limited to, having been found guilty by verdict of a judge or jury, having entered a plea of guilty or nolo contendere or no contest, or having been given probation, a suspended sentence or a fine. If you answer yes to any of these questions, you must attach to this application: a) a written statement identifying all parties involved (including percentage of ownership, if any) and explaining circumstances of each incident, b) a copy of the charging document c) a copy of the official document which demonstrates the resolution of the charges or any final judgment. Yes No 08-236 Rev 12/20/2024 Pharmacy Benefit Manager Registration Page 4 of 5 2 Has the business entity or any owner, partner, officer or director, or manager or member of a limited liability company, ever been named or involved as a party in an administrative proceeding, including a FINRA sanction or arbitration proceeding regarding any professional or occupational license, or registration? "Involved" means having a license censured, suspended, revoked, canceled, terminated; or, being assessed a fine, a cease and desist order, a prohibition order, a compliance order, placed on probation, sanctioned or surrendering a license to resolve an administrative action. "Involved" also means being named as a party to an administrative or arbitration proceeding, which is related to a professional or occupational license or registration. "Involved" also means having a license application denied or the act of withdrawing an application to avoid a denial. You may EXCLUDE terminations due solely to noncompliance with continuing education requirements or failure to pay a renewal fee. If you answer yes, you must attach to this application: a) a written statement identifying the type of license, all parties involved (including their percentage of ownership, if any) and explaining the circumstances of each incident, b) a copy of the Notice of Hearing or other document that states the charges and allegations, and c) a copy of the official document which demonstrates the resolution of the charges or any final judgment. Yes No 3 Has any demand been made or judgment rendered against the business entity or any owner, partner, officer or director of the business entity, or member or manager of a limited liability company, for overdue monies by an insurer, insured or producer, or have you ever been subject to a bankruptcy proceeding? Do not include personal bankruptcies, unless they involve funds held on behalf of others. If you answer yes, submit a statement summarizing the details of the indebtedness and arrangements for repayment. Yes No N/A 4 Has the business entity or any owner, partner, officer or director of the business entity, or member or manager of a limited liability company, ever been notified by any jurisdiction to which you are applying of any delinquent tax obligation that is not the subject of a repayment agreement? If you answer yes, identify the jurisdiction(s): Yes No 5 Is the business entity or any owner, partner, officer or director of the business entity, or member or manager of a limited liability company, a party to, or ever been found liable in any lawsuit or arbitration proceeding involving allegations of fraud, misappropriation or conversion of funds, misrepresentation or breach of fiduciary duty? If you answer yes, you must attach to this application : a) a written statement summarizing the details of each incident, b) a copy of the Petition, Complaint or other document that commenced the lawsuit arbitrations, or meditation proceedings and c) a copy of the official documents which demonstrates the resolution of the charges or any final judgment. Yes No 08-236 Rev 12/20/2024 Pharmacy Benefit Manager Registration Page 5 of 5 6 Has the business entity or any owner, partner, officer or director of the business entity, or member or manager of a limited liability company ever had an insurance agency contract or any other business relationship with an insurance company terminated for any alleged misconduct? If you answer yes, you must attach to this application : a) a written statement summarizing the details of each incident and explaining why you feel this incident should not prevent you from receiving an insurance license, and b) copies of all relevant documents. Yes No 7 In response to a “yes” answer to one or more of the Background Questions for this application, are you submitting document(s) to the NAIC/NIPR Attachments Warehouse? If you answer, yes: Will you be associating (linking) previously filed documents from the NAIC/NIPR Attachments Warehouse to this application? Yes No N/A Yes No PART 5 CERTIFICATION AND ATTESTATION I certify and attest that: 1. All of the information submitted in this application and attachments is true and complete and I am aware that submitting false information or omitting pertinent or material information in connection with this application is grounds for license or registration revocation and may subject me to civil or criminal penalties. 2. Unless provided otherwise by law or regulation of the jurisdiction, I hereby designate the Director of Insurance to be its agent for service of process regarding all insurance matters and agree that service upon the Alaska Director of Insurance is of the same legal force and validity as personal service upon the firm or myself. 3. I grant permission to the Director of Insurance for which this application is made to verify any information supplied with any federal, state or local government agency, current or former employer or insurance company. 4. I authorize the State of Alaska to give any information it may have concerning me to any federal, state or municipal agency, or any other organization and I release the State of Alaska and any person acting on their behalf from any and all liability of whatever nature by reason of furnishing such information. 5. I acknowledge that I am familiar with the Alaska insurance laws and regulations. 6. No representatives acting on behalf of this firm have been convicted of any felony involving dishonesty or breach of trust (18 USC 1033) for which written consent by an insurance official has not been granted. 7. For non-resident license applications, I certify that I am licensed and in good standing in my home state/resident state for the lines of authority requested for the non-resident state. 8. I hereby certify that upon request, I will furnish the jurisdiction(s) to which I’m/we’re applying, certified copies of any documents attached to this application or requested by the jurisdiction. Printed Name: Title: Signature: Date: SIGN