PBM Data Call Bulletin August 2023

Main Office: 1120 Paseo de Peralta, Fourth Floor, Santa Fe, NM 87501 Satellite Office: 6200 Uptown Blvd NE, Suite 400, Albuquerque, NM 87110 Main Phone: (505) 827-4601 | Toll Free: (855) 4 - ASK - OSI www.osi.state.nm.us STATE OF NEW MEXICO OFFICE OF SUPERINTENDENT OF INSURANCE SUPERINTENDENT OF INSURANCE Alice T. Kane BULLETIN 2023-024 AUGUST 4, 2023 TO: ALL PHARMACY BENEFIT MANAGERS (PBMs) LICENSED IN THE STATE OF NEW MEXICO RE: INTERPRETATION OF A BAN ON CERTAIN PBM FEES, AS DESCRIBED IN SECTION 59-61-7, NMSA (2019) OSI is issuing this Bulletin to clarify the interpretation of NMSA 1978 § 59A-61-7, and to remind all PBMs that it remains illegal to charge pharmacies any claims adjudication fees, regardless of whether these fees are itemized in a contract. The Legislature enacted this section of the Pharmacy Benefits Manager Regulation Act to ban these fees, NMSA 1978 § 59A-61-7, on March 17, 2017, effective June 16, 2017. The section banned all claims adjudication fees, including fees for the “the receipt and processing of a pharmacy claim, [for] the development or management of a claim processing or adjudication network, or [for] participation in a claim processing or claim adjudication network.” This section was later amended, effective July 1, 2019, to add a paragraph (B), stating that “[a] pharmacy benefits manager shall not charge a pharmacy a fee for a service unless the fee for service is itemized in the pharmacy benefits management contract.” The current paragraph (A) is substantially identical to the entire previously enacted section. It has come to the attention of the Office of the Superintendent that this amendment created some confusion, raising the question of whether the new paragraph (B) modified paragraph (A), and now permits claims adjudication fees when they are itemized in the contract, or whether paragraph (B) refers to all other pharmacy fees, Bulletin 2023-024 2 | P a g e Main Office: 1120 Paseo de Peralta, Fourth Floor, Santa Fe, NM 87501 Satellite Office: 6200 Uptown Blvd NE, Suite 400, Albuquerque, NM 87110 Main Phone: (505) 827-4601 | Toll Free: (855) 4 - ASK - OSI www.osi.state.nm.us banning them when they are not contractually itemized, and leaving claims adjudication fees illegal under all circumstances. The Superintendent has determined that the latter interpretation is correct, based on well-accepted rules of statutory interpretation. First, the former interpretation contradicts the plain language of the statute, which still unconditionally states that claims adjudication fees are illegal. If the legislature intended otherwise, it could have added some conditional language to paragraph (A). However, it did not do so. As a consequence, the Superintendent has determined that the 2019 Amendment, adding Paragraph (B) to Section 59A-61-7 NMSA, did not modify the ban on claims adjudication fees. Accordingly, all pharmacy benefits managers must continue to refrain from charging these fees. Claims adjudication fees include point of sale or post claim adjudication fees; price concessions on dispensing fees or drug reimbursements in lieu of a fee; and fees for becoming credentialed or recredentialed with the PBM network. If a pharmacy benefit manager charged the statutorily specified claims adjudication fees after the passage of the 2019 amendment, it shall so report to the Superintendent under oath using the attached template pursuant to Section 59A-4-3 NMSA. If a PBM has not charged claims adjudication fees, it shall attest to doing so in a signed affidavit submitted by an officer of the PBM in SERFF. PBMs shall report this data or attestation to the Superintendent by close of business on November 3, 2023. In addition, companies that have charged PBM fees shall repay these fees, and provide evidence of this repayment to the Superintendent, no later than December 4, 2023. Moreover, no later than December 4, 2023, companies shall amend their contracts to remove any claims adjudication fees, upload an updated sample contract via SERFF, and attest that the amended contract has been sent to all of its contracted pharmacies. Companies that have not charged claim adjudication fees shall so report in a letter to the Superintendent signed by an officer of the company. Failure to submit this information may result in a referral for enforcement. It is important to note that this requirement applies to all PBMs governed by the Pharmacy Benefits Manager Regulation Act, Section 59A-61-1, NMSA 1978, et seq. That is, it applies to all contracts between pharmacy benefits management services and “health plans,” as defined by Section 59A-16-21.1, NMSA 1978, regardless of whether the health plans in question are self-funded or insured. Bulletin 2023-024 3 | P a g e Main Office: 1120 Paseo de Peralta, Fourth Floor, Santa Fe, NM 87501 Satellite Office: 6200 Uptown Blvd NE, Suite 400, Albuquerque, NM 87110 Main Phone: (505) 827-4601 | Toll Free: (855) 4 - ASK - OSI www.osi.state.nm.us The template to use for reporting claims adjudication can be found at this link - https://www.osi.state.nm.us/pages/bureaus/pbm/resources/licensure-requirements-and-templates. If you have questions regarding this Bulletin, please contact Renee Blechner at renee.blechner@osi.nm.gov ISSUED this 4th day of August, 2023. ALICE T. KANE Superintendent of Insurance