PBMs have a tremendous impact on health care policy because they administer drug plan coverage for more than 200 million Americans.. PBMs have become multi-billion dollar middlemen that compete directly with community pharmacists. PBMs claim to drive down drug costs by leveraging purchasing power and negotiating with drug makers and pharmacies. However, PBMs routinely fail to pass along savings to clients. PBMs operate in relative secrecy, while consumers, providers and state/federal government have little information on whether PBMs actually reduce drug costs.
U.S. PBMs have paid more than $370 million to date in fines and settlements arising from alleged fraudulent and deceptive practices. The long list of questionable PBM business tactics includes:
Restricting Patient Choice
Mail Order False Economies
Overcharging for Generics
Labeling Brand Drugs as “Generic”
In September 2010, six APRx board members filed a landmark class-action lawsuit against CVS Caremark that alleges RICO violations and trade secret misappropriation. Caremark is the nation's second-largest PBM.
PBM Regulation in Texas
To adjudicate claims in Texas, pharmacy benefit managers must be licensed as third-party administrators under the Texas Insurance Code. Also, HMOs, preferred provider plans and the PBMs they contract with must obey legal standards for paying and auditing pharmacies. Pharmacies experiencing PBM-related problems that may involve a violation of state law may file a complaint online with the Texas Department of Insurance (TDI).
Many employers have self-funded health benefit plans that are regulated by federal law rather than state law. TDI can help determine which issues are valid and enforceable under state law, but it cannot act on complaints that exceed its jurisdiction if they pertain to qualified self-funded plans.
Have you had to wait more than 21 days for payment on an electronically submitted claim? Have you had a PBM try to audit claims that are older than the allowable 180-day look-back limit set in Texas law? Has a PBM audited only claims on specific drugs – instead of a random sample of claims – or contested the prices you are charging for ingredients in compounded medicine? Is it using administrative errors as a reason to recoup money for medically necessary prescriptions that you dispensed? If so, you may have valid grounds for fiing a complaint with TDI.