ALC-Executive Subcommittee

Welcome to the ALC executive subcommittee. Uh, appreciate you being here today. Uh, we start on our agenda and uh. Uh, we did move to the larger room to allow uh. More people to participate, uh, we did, uh, for those who don't know, uh, exact, uh, normally does not take uh testimonies unless the chairs request and we have uh made that available today. Uh, we had to sign up sheet so there's a sign up sheet if you uh intend on speaking, you can do that. Uh, also we, uh, will be allowing as we normally do. Uh, non-committee members to, uh, ask questions, uh, we will go to committee members first. So, uh, with that, uh, first up we have, uh, Review and approval of a contract of Osburg SPI for consultant services and uh center Irban you're recognized on that. Thank you, Mr. Chair. I move that we authorize the ALC co-chairs to approve the contract between BLR and Ellsberg-SPI for consulting services related to the subcommittee's motion picture industry study by emergency action. OK, proper motion and I have a second any discussion on the motion? Thing done all in favor of the motion say aye opposed motion is approved. Thank you, Senator Irvin. Next up, we have a waiver request, uh, from, uh, West Medford School District, as you see on your agenda, uh, to exceed cooperative purchasing for construction services, uh, and aggregate amount uh all I will need is a motion on that and if we have discussion we can do that. I have a motion to approve have a second any Discussion on the motion. Not seeing all in favor say aye. Pod Motion is approved. Thank you. Senator Hill of, uh, you're recognized, uh, on D for the, uh, final report of the ALC game fish, uh, in state police subcommittee on Arkansas Firearms and concealed carry law study. Thank you, Mr. Chair. The game and fish, state police, subcommittee with the Firearms study would like to ask for an extension from October the 1st to October 17th for the report. OK. Uh, we Got a motion for that uh you understand we're just moving to next month. Any discussion on a motion to have a second on that? And the second discussion on the motion to urban. You're, you're recognized. Thank you, Mr. Chair. I, I move that we do approve the request of the ALC Game and Fish State Police Subcommittee to extend the deadline for their firearms study report and allow them to present their final report recommendations, and draft legislation to the executive subcommittee at our meeting on October 17, 2024. OK, motion. I have a second in discussion. On favor. I opposed uh they just passed. Thank you. We have all next up into, uh, item E emergency rule. Uh, Department of Commerce of the Arkansas Insurance Department on emergency rule 128 for fair and reasonable pharmacy reimbursements. Uh, we have from AID, uh. If you will come up and uh. Light your mic up. Did they lock you out? That's what I do to cattle and I don't want them to get through. And members, we are passing out the corrected, uh. Version of the rules. And uh you'll be getting a copy of that and that will be explained. Thank you all for being here today and we'll let you go through your, uh, identifying yourself and, and uh then we'll get started. Thank you, Mr. Chair. Alan McLay, Arkansas Insurance Commissioner. Booth ran general counsel, Arkansas Insurance Department chief of staff, Department of Commerce. Thank you all for being here today and you are recognized. Thank you, Mr. Chair. um, before executive committee today is a proposed emergency rule from the insurance department. The rule pertains to, uh, improving pharmacy reimbursement, um, to avoid us losing pharmacies from networks that serve as health plans, um, I will go through the rule, but just to give you a general background, um, over the last year, year and a half, health plans and PBMs have been reimbursing pharmacies. Very close to their acquisition cost or what it costs to buy ingredients, um, without dispensing fees, um. Or sometimes even making payments for reimbursement below what it costs pharmacies to purchase drugs. Um, that is a very unsustainable model, um, given that pharmacies would just be filling prescriptions for nothing and or, or for losing money. So, uh, we have received a substantial number of complaints and I know many of your members have as well about lower reimbursement affecting the decisions of pharmacies to continue to maintain business or stay in business. And so one of the, um, ideas that we came up with was To, uh, develop a mechanism where health plans and PBMs, uh, might improve pharmacy reimbursement by adding an additional dispensing fee or dispensing cost, uh, to the transaction to help sustain them to make them more viable as they process claims. What this proposed rule, emergency rule does, it sets up a mechanism for review by the insurance commissioner and the actuary from the Arkansas Insurance Department. To review whether health plans and PBM's reimbursement of pharmacies is fair and reasonable. Uh, the statute already in the PBM licenser Act authorizes the insurance commissioner to review compensation practices of PBMs and health plans to ensure that pharmacies have an adequate network of services for health plans. So he's got the statutory obligation to review reimbursement compensation in the PBMLA in the in the. BBM loer Act. And what this rule does, it does set up a mechanism for review, uh, for the, it would apply to the first calendar year of 2025, health plans would submit um a formatted data requirement or dis and disclose their methodologies on how they pay pharmacies, um, in addition to providing us with additional data request we would review their compensation system for pharmacies and decide whether. or not an additional dispensing fee dispensing costs would be required to help improve sustainability of pharmacy networks, um, for the first calendar year of 2025, the health plans would have until November 30th to submit the data. The data and methodologies and the mechanisms by which the health plans pay pharmacies will be discussed in a bulletin that we would issue to explain to the health plans what they need to submit to show us they are compensating pharmacies adequately and fairly. The commissioner would then have 20 days to review the submissions to determine whether or not the reimbursement is fair and reasonable. And if not, he would, he would, um, order. Or require a dispensing cost additional amount to help survive, help some of the pharmacy survive after 2025 plan year, uh, on or before March 1 of each year or after 2025, the health plans would submit that same report each year for the next plan, succeeding plan year. um, we would develop a procedure in the Bolton discussing the format of, of the report, what the procedures are. How to make objections and other timing requirements. Our goal is trying to improve pharmacy reimbursement so we don't lose pharmacies from networks. Um, I'll be glad to answer any questions. You have questions for the agency. Senator Irvin, you're recognized. Thank you. I appreciate you. I have a couple of different questions. Number one is, do you know how many pharmacies have actually been added. Versus lost. I do not know. John Curtley is here. He can, he can give you that information from the, uh, I, the board of pharmacy would have that. Senator Irvin, I don't, I don't know. Did y'all look at What the net. Gain that loss because I, I know pharmacies have actually opened in the same time frame and I just wanted to know I'm sorry to interrupt you. I, I've asked the PBMs to submit to me the last 2 years of numbers and it shows a steady number of pharmacies, uh, the last two years. Uh, however, if you talk to the board, the board of pharmacy, they can show numbers where they're losing numbers since 2013. So it depends on what data you want to rely upon Well, I just, I mean, I just wanna know, I know we lose pharmacies because they sell because they're retiring and they're selling their pharmacies and sometimes the people that, that's just a natural course of business. I know that some pharmacies have been closed because the pharmacists went to jail because of Bad things that they were doing. But then I also know where pharmacies have actually been added and you know, Calico Rock, for example, has had a pharmacy there for many years, but a second one now has, has, is there. I think perhaps the harps also has a pharmacy there. It's Calico Rock is a very small, small town that now has, you know, more, um, pharmacies, actually than they do health clinics. Um, so I just didn't know if you had looked at. That data because I thought that would have been important. And then I just have a quick question about, um, who determines the amount of the dispensing cost. The commissioner would in consultation with the actuary. And what type of information would you use the retention of pharmacies in the network is, which is the subject you just talked about. In other words, are you losing pharmacies or not, we would track those metrics, um, how much of reimbursement in that calendar year was below national average drug acquisition or acquisition costs, um, how much are you paying your affiliates more than you're paying your non-affiliates in compensation, how below NADA, how many times are you paying? Below NAAC or acquisition costs throughout the year. To give us some information, um, to help show us and see whether or not the pharmacies are just simply being paid for the cost of what they're doing and they're not getting additional amount and it would be the data that we would request from our actuary, um, and it would be developed in a bolt and that I would draft. Um, so, so your specific process would just be to rely on an actuarial. Um, service, and then you would be the ones that determine the data that you would kind of plug in in order to determine. Um, What exactly did this and then you would dictate to that private company, what they would have to pay that you're perfect, perfect. OK. And, and that was, is how you're going to determine what is quote fair and reasonable. OK. Um, and then in, in your response under 7 in what you submitted, it says a list, a 4 and 5, a list of less costly alternatives to the proposed rule and the reasons why the alternatives do not adequately address the problem to be solve. By the proposed rule. Did y'all list those or can I find that somewhere, I don't have any other alternatives other than than this cost addition. Uh, I think a lot of, uh, suggestions have been to be more aggressive in enforcement on payments below NAD Act, which we are starting to do if you've read the newspaper. So that is an alternative I probably should have listed that we are being more aggressive in enforcement, um, but in terms of just actual strategies that are alternatives. to this we've, we've, we just really can't come up with anything other than an additional dispensing cost, which by the way, Tennessee has adopted West Virginia as well as Kentucky. OK, I'm sorry, uh thank you for the latitude, but, um, OK, and then number 5 also were proposed, um, as a result of public comment. Have you had public comment outside of our conversations outside of just the pharmacy association because there's, there's always, you know, 4 or 5 different sides to an issue and I just want to make sure that we're understanding where, because you also indicated that this would have a fiscal impact. Could you tell me where this fiscal impact would occur and are we hearing from that side? of the equation in terms of your first question, you know, this, this is an emergency rule, so we haven't had a public hearing on this, but we have filed this rule as a permanent rule separately, and it's going through its normal pathway and we'll have a public hearing in November to take, um, comments from health plans and PBMs who may have opposition to it. So in terms of your first issue, yes, we, we are, we are planning to take public comments from all the stakeholders, including the health plans and PBMs. In terms of physical impact, obviously if the commissioner orders or requires a dispensing cost to be added that will increase drug costs and so the question you might ask is, have you done surveys or studies or fiscal impacts, uh, the health plans that provide us with. Um, um, what's be the word they're speculative, um, um, answers related to or guesses as to what the premium impact would be with a $9 fee, $10 fee, with a, with a Nak plus $10 NA plus, uh, 1% AA plus 2%. So we went through all scenarios and I received from the health plans, um, their projected premium impact, um, if the, the fee is not dollars, uh, if the fee is $9 plus something else, so we've looked at those numbers and it's looking like about a 3.5 to 4% premium impact. If, if a dispensing fee of $9 is, is ordered or requested. OK, so I, I guess that's, that's where we don't really know. So the fiscal impact would be on anybody and everybody that's going to be paying for health benefits, for health insurance. So they would, they're going to feel the impact. So the, the health insurance premiums will rise as a result of this rule, however, there is, you know, in West Virginia, which adopted the same dispensing fee, um, dispensing costs requirements, um, they did not. Premium impact, uh, with a $10 dispensing fee, and a lot of that was because in West Virginia, um, the leftover cost sharing rebate revenue was used to reduce, uh, drug costs, reimbursements, and so that's exactly what I'm proposing to do here. So for health plans that have unused amounts and cost sharing from rebates. They're required by this rule to use that to reduce premium, um, the 3.5%. Projected impact is just a guess how much rebates would reduce that singer Irvin, I don't know. So I just have two quantum. How do you, how do you regulate that? Are, are you, are they, I mean, I read that, but how do you know for for certain that they're using their rebate money to do exactly what you're saying. How do you enforce that statute? They would be required to report that data to us with this filing for me to see that they're actually have leftover cost sharing. Rebate revenue and how much they have allocated for this drug reimbursement reduction. So I would have to request the data from the health plans, uh, to try to, um, research that. OK, so, but you, you, you, you can mandate that they do that. OK, OK. And then the last question for Mr. McLean, is this a line of area that you do in other areas of healthcare where you determine if a reimbursement rate is fair and reasonable. For hospital administering. Things within the house, but I mean, this is opening up another, this is opening up to me, an area of policy and do you do that with other insurance health plans, do you determine what's fair and reasonable reimbursement rate for all the different codes that are filed in a hospital setting or a clinical setting. No, we don't, we do not have a, a real precedent for doing that. Obviously, we, we review rates and, uh, a, um, the adequacy of rates that, uh, whether it's, uh, homeowners or car or, or, or we approve health insurance rates, but as far as the reimbursement aspect of it, this, this would be new, but we have confidence in the actuarial uh staff that we have. OK, I'll, I'll get back in the queue if I have other questions. Thank you. Speaker Shepherd you recognize. Thank you, Mr. Chairman. Um, I guess just to, to follow up on that question, I have a, a few questions here just to make sure that I'm understanding this correctly and thinking about this correctly. But to this to the previous question was asked to your answer about this being the only area where apparently the only area where you're determining whether something is fair and reasonable that that is mandated by state law, correct? And so, so it's, I mean, actually this was something that the General Assembly put in place and that kind of brings me to the questions that I have just again to, to make sure that I'm understanding this and, and, uh, not misinformed. Under 2392 506, which was previously enacted by the General Assembly, it states that the insurance department may, uh, accept. May review and approve compensation based on whether it's fair and reasonable. My understanding to this point is that you have not formally made any kind of approval or declination as to those. That's correct. OK. Then in 2392506 on down it also talks about that the information that's provided in that process is confidential and proprietary, and it's not subject to FOIA. So apparently it contemplates that there would be information provided, uh, for you to make those decisions. And so, you know, as, as I've looked at this, it seems to me. That you've essentially have already had the authority to make this decision. I mean, you could say right now, we don't think any of this is fair and reasonable. um, now maybe what this rule does, it seems to me it's maybe two things. One is it puts in place a more certain process to carry out the statute. Because you're putting time frames in place which otherwise are silent. Is that correct? And then secondly, I mean, coming through the rulemaking process, you're, you're also involving the legislature in that. That's correct. But essentially you have the, you have the authority right now to. Carry this out with or without this rule change. We do and I, I just feel like it's, I think we felt like it was important to have a public discussion about this and go through rulemaking to provide notice both to the industry and licensees but as well as the legislature about what we were doing. OK. Thank you. Thank you C to Gilmore, you're recognized. Sure. Thank you, Mr. Chair. Thank you for being here. So just a couple of questions. Uh, just sort of falling back on some of the line of questions already been asked, um, premium increases come to you guys for review, is that correct? OK, um, and so, and how often do you see those? Once a year. So, so every year there's there's an increase. OK. So some of the numbers that have been thrown out by some of the PBMs is, is staggering figures like $400 million well, maybe just shy of $400 million 350 dollars, $360 million. As a result of what they say this potential dispensing fee will cost. What are your thoughts on that? Again, we've surveyed the health plans who hire the PBMs who have provided, they're their clients. We have surveyed the health plans, I think 3 times this summer and, uh, on a $9 dispensing costs, uh, the projections are roughly 3 to 4% premium impact. So I don't know what the PBMs, I mean, yes, it will increase drug costs if, if he does, uh, require a dispensing fee. He may not, depending upon what data is submitted, but if he does, yes, it would increase overall drug costs, but in terms of premium impact, it looks like it's about a 3 to 4% impact. And that's from the health plans who hired the PBMs. And I think it's safe to say that, uh, a lot of these PBMs are already paying within their structure, NTA plus even, even more than this, arguably, uh, the in, in dispensing fee. Well, I think in the fully insured market, uh, as you'll hear from the pharmacist, uh, very rarely are they paid to dispensing fee, um, and most of them are paid just right at NDA, which is their acquisition cost and so, uh, if you talk to them, um, they're just filling pills and bottles for nothing, for not getting anything out of it, so, so agree on the, on the sort of independent pharmacies in the sense of a lot of them aren't even being paid AA for most things, is that correct? OK. So, uh, Going back to the speaker's, uh, points about what's in the state law. So this basically, this rule is already in state law, correct in statutory code as as the speaker indicated. So that being said, um, we've had a lot of, we've had a lot of conversations, a lot of discussion surrounding, uh, this over the past months, um, have we seen any sort of change in behavior from a lot of these PBMs, um, how many complaints have you received from, um, pharmacies as a result of, you know, being underpaid, not being paid AAA. What are we seeing there? We get about 1400, 1300 complaints a month. 1400 complaints a month on payments below NAAC. So if you add, uh, I would say 300 to 400 complaints to that, you're looking at. 1600, 1700 complaints, probably a month. So what, what, what study have, has gone into reviewing those complaints? Well, we, I mean, in terms of a formal study or I presume you look at each one of those complaints is the reaction that I have to it, which is to do an emergency rule to try and improve reimbursement or compensation, I think, you know, the commissioner and I were talking the other day, um, how many emails do we get a day? Pharmacies complaining about, uh, not being able to survive because they're not being paid anything much above their acquisition cost and I, I get 3 or 4 a day. I don't know if he gets that many, but, um, a lot of that, uh, we track and so a lot of the reason why we're doing what we're doing today is because of that feedback that we're getting uh our complaints that we're getting from pharmacies. I don't know if I answered your question or not. No, I, I think you did. I mean, what, what I, uh, so first of all, you know, I understand that every complaint may may not be factual, may not be, you know, uh, that's just the nature of the beast. But what tells me is if you're getting that many complaints, I think it stands to reason that there's a problem. Is that, is that a fair statement? All right, thank you. I may get back in the queue, Mr. Chair. Thank you, Senator Hammer, you reckon. Thank you Mr. Chair. tagging onto that, that's 1500 complaints, but how does that translate into the number of prescriptions within those complaints that because don't they have multiple scripts within those complaints, a pharmacy that sends in a complaint over 9 prescriptions we treat as non-complaints. So each prescription. is treated as a complaint or a complaint may have 9 prescriptions within it, each prescription would be a complaint because each prescription is a violation, OK? And then. You know, maybe from a little bit of a philosophical view but also from a point of argument who's really controlling fair and reasonable now. I know you have the authority given to you by the legislature to do it and I, I perceive that today is a, a meeting of courtesy because you could go ahead and do the same way based on what Speaker Shepherd said, but for the purpose of transparency, that's one reason we're doing this and you'd like our support. But I mean, right now, are the PBMs not really ones driving the bus as far as sitting fair and reasonable because. Of what their actions are doing. Is that a mischaracterization or do you think that's accurate? OK. And then as far as determination of reasonable, is that gonna be on the basis of each individual drug or would that be considered like a range of low and high, and how are you gonna come up to that so that actuary will have to look at that, but, um, it won't be on a per drug basis. I'm sorry, say it, it would not be a per drug basis, I don't think. And you feel that you gave a long list of things a while ago, uh, because, Even though you got the power now, we may empower you even more by doing this and I think one of the concerns is we're about to give, we're about to turn the keys over to the house to you in order to determine that. What, what is your reaction to, uh, the commissioner having that much power to make that determination and how are you coming back before us? Is it going to be in those things you listed a while ago? Yes, it's up to this body to give us the powers that it desires. Um, I don't know how to really answer that. Um, you've given a sufficient power, at least in this arena or this area for us to have already acted, but again, the reason why we are doing this publicly, I think is to have a public discussion on it and set rules and regulations that even licensees can participate in so that they can understand, um, the problems that we're dealing with. All right, and then the 3-4% impact that's being projected, that, that's. Isn't that kind of a, or is it kind of a moving number, uh, because while it is that, um, they're not giving some Uh, $10 or you know, filling, uh, a lost term in my head, but you know, that $10 fee, uh, Aren't there other factors that are variables into that consideration as far as what's really going to be the final number when it's all said and done. I don't know to me it's a simple issue, uh, of, of each transaction being provided the dispensing fee it's not complicated to me, I don't think. OK. And then the last thing is, um, you know, with, with regards to the difference of pharmacies and the way that they're being treated versus other, uh, professions in the medical field, um, you know, we're going like through a Medicaid rate study and you actually control what the price is whenever they come and ask you to. their premium cost, is it, do you see any difference between what we're trying to do here today and also how maybe we handle other areas of the medical empire, uh, with regards to, you know, the, the fear that you're going to be doing price setting, I, I agree with Senator Irvin, um, and the commissioner, um, in medical or in health with hospital reimbursement or medical provider, physician reimbursement, we don't really referee those rates. Um, however, we're not providing statutory authority to do so. So. And so, um, the commissioner doesn't get involved in, uh, deciding fair and reasonable hospital rates or provider rates or clinic rates, um, but here you've given the commissioner explicit authority to do so in this area. So it really depends on how the law is worded with the checks and balances of having to come back before us. Thank you. Going to committee member Speaker Shepherd. Thank you, Mr. Chair. Uh, to follow up questions that, that, um, Price should have asked earlier. One is, Presented. Correct. And then secondly, uh, and this is something that we talked about, um, But earlier today about People need to be aware of the fact that when, when a, uh, raid or an application is submitted. Pursuant to this rule by this timeline. If it is disapproved. Then essentially they have to come back and, and submit a new proposal and because of the timeline there could be, there could be periods of time where there is not an approved rate and therefore they would be precluded from being, from paying anything because if they paid and they don't have an approved rate, they would be subjecting themselves to the, uh, penalties that are prescribed. I don't know, a few sections later, maybe 509 somewhere in there. So, uh, am I correct about that, that, that there, there's. There's things that everybody needs to be aware of just in terms of timelines because once we get it, I mean. To this point, you've had flexibility under the law, but once you adopt the rule that has specifics, there could be some scenarios that play out that could, uh, create some additional challenges and I think the timelines problems that you indicate would would put pressure on the health plans to Um, uh, comply with what the commissioner wants to try to make a time occur so they can get it in before they get into that sort of pickle that you described. And, and just a final question, if there is, uh, a proposal submitted that's disapproved, could we expect that the department would be working with the applicant to, to the department might say, well, you're deficient here, we don't think this is quite enough or we don't like this methodology we'd like to see you do this. And, and so we're, you're essentially kind of giving some guidance while at the same time, it's ultimately up to them as to what they apply for what we do in rights homeowners and car and everything else. Coach your award law you recognize? Thank you, Mr. Chair. I want to follow a little deeper into the speaker's questions. When he talked about you wouldn't be setting the rate and you would be either approven or disapproving. Is there a set methodology that you'll be looking at to form that conclusion of an approval, no, sir. So how, how will you approach that to say this one's approved and this one isn't. Can you walk us through what you'll be looking for? I, I intend to set that out in the bulletin that we want to issue, um, obviously after consulting with our expect the bulletin to go out. I was thinking about. That, uh, representative Warlaw at lunch and I said, you know, I need to get this out in the next week or so, uh, so that we can discuss what sort of parameters we and data we want to analyze, but essentially it would be on a case by case individual basis. Give me some examples of what will go inside that bulletin. I would think that we would want to collect data. Um, from the from the health plans showing, um, the average. Um, are we, are we looking for how many pharmacy assistants are in the pharmacy, what the bottle costs, what the lid costs. Now I'm, I'm looking at, are, are you paying above acquisition cost and how much are you paying above we're not talking about the drug here. We're talking about the dispensing fee. So what are we going to be looking for in a fair and reasonable defensing dispensing fee in a dispensing fee it would be a reasonable amount. That would, uh, and I thought I had the definition of it here in the rule. Um, Giving due regard for the cost factors of labor supplies, and other administrative costs of the pharmacy associated with dispensing of a drug. So let's go back to my question and my examples I give. Are you going to be looking at the cost of the bottle, the lid, the pharmacy assistant. The cost of a building, light bills, those sort of things, when you look at the dispensing fee fair and reasonable. I haven't thought that, but I probably might, we might. OK, I'll be, I, I think members Depending on the rule passing, I think it's important that that bulletin come back to committee in October. Be glad to and, and I, I need to start working on it like right now, I think. OK. Thank you, Mr. Chair. Uh, Speaker Desson Evans you recognized? Thank you, Mr. Chair. Mr. Rand, um, just looking for a little clarification. We've had some of these conversations before as we've worked on this rule for, for months now, um, Every How the 1600 average per month complaints that come to your office, who handles those comp those complaints. We have a BBM division, um, Doctor Amy Seale is our PBM director, and she has, uh, two persons that help her process those complaints so 3 people are processing 1600 complaints per month. Uh, rough round estimate that that's about 9 an hour every day, every month. And those complaints come to that department. How is that by email, by fax, by phone call? I would say 85 to 90% are electronic email, OK? And when that complaint comes in, is that a complaint of a single prescription. Or is that a transaction to a, uh, maybe it's 5 prescriptions to one client or is it just the bulk of the as I explained to Senator Hammer a minute ago if we get an Excel spreadsheet of 5 prescriptions that each are alleged to be a violation, I view those as 5 complaints. So not just one complaint but 5. So it's on a per prescription basis. prescription, OK. And just for understanding, so the, the, the full body here understands uh as we have a lot of representation here in the audience today, uh, of these 1600 complaints that come in per month, what percentage would you say of those 1600 complaints are coming from our independent pharmacist back in our communities or what percentage then. Contrast is coming from big box, big chain. I'd say 99% come from independent pharmacies. 99% of 1600 complaints a month are coming from the people represented in this audience today. Thank you for that clarity. You too. Thank you. Uh, going to Centra Gilmore. Thank you, Mr. Chair. Um, so just to follow up on that. I guess my, my question to the department and, and this is not meant to poke, but it may sound like that. When did we start receiving those complaints? Since 2018. And what, what have we done? We've, we've done sporadic enforcement, uh, hold up. What, what does that mean? That means about every year to year and a half we do an audit or an examination of the PBMs to determine violations, uh, and just recently, this last summer, we started a, uh, a pretty aggressive enforcement, uh, action against 5 or 6 PBMs. And so, uh, just do. Resource limitations, um, we schedule out our enforcement through examinations and through complaints and, um, given the staff that the PBM division has, uh, it's done every year, year and a half on audits that we look at in terms of violations. So we passed a law in 2018. Sort of led the nation in that arguably. Uh, So it maybe it went into effect in 2018, but led the nation in that. And so, It took us from that point until. Win again? Well, in 2020, we did a significant enforcement examination against the five major PBMs and we find uh a number of them over several $100,000. So that was 2 years after the enactment, uh, but we do do enforcement, um, it's, uh. And when I say sporadic, it's, it's, it's every other year, year and a half, that kind of thing. In terms of examinations. So with this rule, are we going to do more than sporadic enforcement, um, because, you know, again, I, I'm, I'm sort of wanting to see a, a change in behavior with, um, some of these, these companies, um, and so that's what concerns me. Again, I think things would be different if we hadn't passed a law. I think we can make really good arguments about other sectors of health care and and reimbursements and all these other things, which I may or may not agree with, uh, I think those are good conversations. The reality is we passed a law. That says we're going to do something. Um, we need to enforce that. Um, and so, uh, I agree with this rule, and I think we, we should do it. I just concerns me that maybe we haven't been doing that the way that a lot of people in this room maybe thought we were doing. OK. Go to Woodlaw. Just a quick statement for the audience. Their sign-up sheet's been placed back in the back. There's anyone who wants to speak for or against the rule, you need to sign up now or forever hold your peace, we will be taking the form up at one o'clock. So, uh, be sure and get your name on there if you have something to say. Chairman, Senator Irvin, you recognize. Thank you, Mr. Chair. Just on the complaints, just please describe to me the process of verifying the complaint, because my kids can complain to me all day long, but sometimes I agree with them, sometimes I don't, but, um, do you mind just saying, yes, we verify. That this is a legitimate complaint based on the complaint comes in from the pharmacy, uh, usually with an attached Excel spreadsheet. Showing, for example, let's just make this up, 19 prescriptions that were paid to the pharmacy below their acquisition cost or NADA, which is a violation of the state statute. Um, this goes to our PBM division, uh, Rhonda, or to the PBM director herself, uh, who takes the complaint and she reviews it to make sure that the data is accurate. Then she sends the complaint to the PBM giving the PBM 20 working days to respond to the complaint and the PBM has to respond in writing to the complaint, admitting or denying the complaint. Uh, many times they will go ahead and Admit they made a mistake and they will make the adjustments retroactive on a rebuild or calculation to the pharmacy where they'll pay the pharmacy back what they shouldn't, what they should have paid initially, um, and, and that is a, the whole process is probably 40 days, 35 days, something like that. OK, OK, that's not, that's not too, too long. I mean, I thought it actually would have been longer, but sometimes, but it's. About that and do we, do we know how often they, they get that flagged and sent to them and then they make those adjustments. Is there a percentage of, do we, can we director might know. It'd be interesting. I would like to know that eventually like what percentage of those complaints that are verified, I'm assuming the pharmacy is sending their acquisition acquisition receipts or whatever to match up what they're getting reimbursed versus what they pay. OK, and then. Like what percentage of those that are sent to the PBMs, do they actually then verify and correct? And I, I'm assuming that's probably also gonna be part of your calculation and whatever you're going to develop here if this passes that they would, would you be able to give them the ability to do that before you, OK, because I would probably be important information in your bulletin, and then I know that the statute also says that if a PBM owns their own pharmacy that they cannot they have to pay whatever they're paying themselves. They also have to pay, correct? So if they're paying themselves, let's say a $2 dispensing fee, then Is that then going to be considered fair and reasonable for them to pay $2 dispensing fee because you kept referring 9 and $10. But if you find it to be lower or if it's $1 or whatever, I mean, is, are y'all gonna look at that and say, well, they're paying themselves this, so that's exactly what we're going to look at, if they're paying their mail order a $9 fee, uh, or, or cost and they're not providing that same cost to an independent. Brick and mortar, uh, mom and pop pharmacy, that would be a relevant issue for me in terms of my evaluation whether it's very reasonable, but you're not gonna say to them, well, you're, it's not fair and reasonable what you're paying yourself, so you have to raise that and raise this. You're not OK, OK. I just wanted to make sure. We were looking at That component of it. Thank you. Representative Fortner you recognized? Thank you Mr. Chairman, uh, and thank you for, uh, the, uh, public that has come out to participate in this and be a part of this procedure. I appreciate you all being here. I, uh. Coming from a very rural area where uh. Our pharmacies, uh, are usually smaller. I think it would be fair to say, uh. The people in my district. Wouldn't want to have anything increased but they would not want to lose their pharmacy. They would be willing to. a little more to make sure that that service was available because the local pharmacies do so much more than just give out pill. And I know that's a statement, not a question I could say, would you agree? Yes. OK. Thank you. Uh, representing Pickett and you're recognized. OK, uh, Center Hill, you're recognized. Thank you Mr. Chair, over here. I know the. Director has the authority to, uh, to increase this or do do what he wants to to make this, uh, go through. What I want the, the question answered is, how do I, since y'all have the authority to do it, go back to my district. And tell them Tell the people who have already experienced health care costs for their insurance. the roof increased several years in a row. Go have an increase this year more than likely that we're going to go up 3 to 4% on them. How do I explain that to them? I think, I think the, the point there is we don't want to have pharmacies where we're not, we don't want to have those same health plans of your constituents, not being able to go to their independent pharmacy in their hometown and have to travel long distances as we lose pharmacies and unused are used That's also understanding that, hey, when Costco's go up, they have to see this person. They have to deal with this person. If there's a problem, they know who to call. So that's what concerns me and I represent a very rural area of the state, um, I, I have, I have very few, um, healthcare resources, quite frankly, in my district that concerns me. I don't want to lose anymore. So, I, I, I wouldn't, wouldn't you agree that we we will potentially see if we don't enforce, and again, this is. About enforcing what we've already passed. If we don't enforce this law, I think we're going to see significant changes in the sector and not for the good. Thank you. Representative Aker, you are recognized. Thank you, Mr. Chair. Thank you, Booth. Um, I wanted to touch on a little bit about your upcoming bulletin. Uh, I think it's important as we've pointed out a little bit of concern on premiums, but as you and your department review these definitions of fair and reasonable. You'll also be able to see egregious overpayment. Is that correct? Right. So the idea is not simply to move the bottom up, it's also to show that if they're going to move premiums up. They're going to have to defend why they're paying thousands of% over in other markets and other pharmacies. So there is an opportunity that a fair and reasonable could drive premiums down. It could depending upon the day. Central wall you recognize. And I'm over here, sir. Uh, thank you for being here today. Uh, I'll, as so many of my fellow legislators represent a rural area. I had a meeting with 10 of my pharmacists in my district about a month ago, and they showed me figures where there's a very wide disparity and pricing of what the small pharmacies receive and what the larger players. are receiving, uh. I've got towns of 250 people. I've got towns of 1500 people, and, and we have a small pharmacy there. If we lose that pharmacy. Those folks some some folks in their 70s, 80s without a vehicle will have to go 30, 35 miles to get to Jonesboro. Um, from what I'm seeing that we're doing today in the law that we passed previously, uh, I think that this is going to help. Save our small rural pharmacies. Am, am I right? I hope so. Thank you, sir. Center hammer you recognized. Thank you, Mr. Chair Booth. It sounds like you're gonna be working this weekend and appreciate that. And, and I'm very sympathetic to the rural area, um, Shannon Hills, uh, pharmacy in, uh, what I would consider rural underserved area, but also, um, would remind everybody in my district in the last 4 or 5 years I lost to CVS and I lost probably at the time the largest pharmacy, Smith Caldwell, who got squeezed out because of cash flow issues, that's my interpretation, not their statement. But it has an effect on pharmacies regardless of whatever size. the, the enforcement issue, how limited are you in your ability. To do what we gave you the thought to do back in 2018 as far as being able to really step it up and enforce it. We gave you some additional positions, but moving forward if this goes through what's the future look like for the agency to be able to do it in a timely manner. That the director. We, we intend to use, we have an actuary that we hire that has a significant staff that actuary is on, um, approved through our budget. So that staff of that firm is used to help offset any resource issues that we've got, Senator Hammer. So I'm not worried about our current three-person staff, um, handling this, the actuarial farm will doom the bulk of the work here. That we've contracted with. OK, and then the other thing is, uh, when you go to look to establish if I'm, I could be mistaken, so I reserve the right to be called out and be wrong, but I, I think Medicaid has a $10 dispensing fee now and I think about 10 years ago there was a study, an analysis that was already done. Have you reviewed that or will you take that into consideration because you're, you're making a big promise to have it turned out as quick as you are. So I'm just wondering, what are you going to be able to use or were you looking at? Those things to substantiate and be able to defend your position. We, we certainly will look at the Medicaid model for sure. OK. All right, thank you. Represented Moore you recognized? Mm Thank you, Mr. Chair. Um, thank y'all for showing up today. Appreciate you being here. This issue is particularly, uh, poignant to me because when that first article came out about y'all levying those fines, those 3 PBMs for 1 $1.5 billion about half of those came from three pharmacies in my district in the town of Stuttgart. Um, I know the main concern is what is this going to do to to possibly raise rates, uh, for health insurance premiums. But my first question is this, the current rule or law already requires PBMs, uh, to pay fair and reasonable rates to their independent insurance or independent pharmacies, correct? That is correct. Uh, would you say that the reasoning behind this proposed rule is to keep those PBMs accountable. Yes. So would you not also agree that if the PBMs were already paying a fair and reasonable rate that that would play no influence or be no reason to pass increased premiums along to the customers. I guess so, yes. Thank you. Representative Maberry you recognized? Thank you. I might wait for a second for the for the singing to stop. I don't know if anyone can hear me. Um, so I asked my local pharmacist. He owns two pharmacies and, um, just on a random day, September 19th, I said, tell me how many prescriptions you had that you sold at a loss and his one pharmacy had 72 prescriptions that day, and the other one had 82 prescriptions. This is just a random day that he's selling prescriptions at a loss. He's giving this out and it's not just giving it out for. Free, he's paying for it. That doesn't cover the overhead, that doesn't cover anything else that's going on. So, um, to make sure I'm asking the question through all this, I'm just trying to, to put the numbers to this, a local pharmacy cannot do that every single day, 72 or 82 prescriptions given out, he's paying so that someone can have their medicine, but. I'm sure that my local pharmacist did not report all of that to you. So when you say you have X number 1600, 1200, whatever it is a month, how many do you think are out there that have not actually reported that information because that can be overwhelming too, I would say 5 to 6 times probably at least that. So we, we're aware that many pharmacies simply don't have the time. To sit there and and spend 2 hours in front of a regulatory screen filling out a complaint form when they're busy doing their, you know, their work. And so they've got to do it either after work and a lot of the times they just don't file a complaint because it just takes so long to do one. So I, I agree entirely with you. We're only seeing complaints from people who file complaints, not from the many pharmacies who deal with this issue every day that don't. Center Hill, you reckon. Oh we're here again. I've heard you talk about the PBMs and the reimbursement fees and how how they're low. And I know you have the ability to find them up to $5000 worth. Have you ever thought about just giving one of a death sentence and say get out of Arkansas. We no longer want you to do business here if you can't play by the rules. It's kind of like losing your driver's license or something like that. I think you make an example out of one that would take care of the problem. We're in that process right now. With the current enforcement cases that we have pending. So I'm, I've thought of that myself. I agree with you that there's something to deterrence from a big case that dissuades further violations, and so we're very aware of that Center Hill. OK. Get to work on it then. Thank you. Senator Hammer, you recognized? One of the, one of the concerns I would have and how you're going to address it is a pharmacy and say Desark is going to have a totally different overhead cost versus a pharmacy in Benton or Northwest Arkansas because of the different labor rates and I, and will the information that you might determine is fair and reasonable at Desark to be able to be seen by a pharmacy that's in Benton or Northwest Arkansas to see what the reimbursement is for a particular drug because I could see that causing a lot of consternation among the various pharmacies. All of a sudden it's all over the place. I'll have to think about that this weekend as I developed my bulletin. So that's a good, good observation. Um, I've considered that issue yet. But I mean, Alright, man, you got, I appreciate you very much and I appreciate everybody in the room, but you are really promising a lot between now and I, and I, I'm not a member of the committee. I think the senior to get out of here, but you're really promising a lot. So when you get this out there, are you going to make adjustments to the bulletin as you get more information and is this, this is just gonna be an ongoing learning process. We're just gonna try to, try to send a message to the PBMs and, and right to ship before the end of the year. So we don't, then we come back in Ja anywhere and do whatever we got to do in January and in all fairness, we do that with homeowners, with auto, with other areas of insurance, we use bulletins and we amend the bulletins as new data comes in and get, uh, responses back from licensees and stakeholders about maybe looking at different methodologies, maybe looking at different data. So it's an ongoing process that we use in other lines of insurance. So we use the bulletin process to do that. What are you gonna do as far as pharmacies that you may find the pharmacist is at fault. And this point was raised last week that, you know, we're talking about bad PBMs. What about, what about bad pharmacists they're just trying to to build the system report them to the board of pharmacy. I have no jurisdiction over them personally or over their licenses. I only have jurisdiction over the PBM. So they, the any that kind of malfeasance would be reported to the board of Pharmacy, but as far as adjustment or penalties assessed against them, you have no legal authority to to reverse it to where they could be. Uh, may be penalized the way we're going to penalize PBMs do not have that authority. So it be the board of pharmacy that has to hold them accountable. OK, thank you. Gang members, I have no more questions currently the list I have is uh for signed up to speak, uh, for, uh, before we do that, I will have to have a motion from a board, uh, from the exec board member. OK, excuse me, without objection, we'll do it that way that we suspend the rules to allow public testimony, as I said before, this is not the normal exact meeting and so. Hearing no objection, uh, I'm gonna call up for public, uh. Comment uh Clint. Uh, Reck and walled, I believe. If you will come up. Uh, as far as that goes, since we've got 4 chairs if Kristen Riddle. Uh, Kyle Lomax and John Vincent want to come up and it'll be. Recognized in that order. Before you speak, we'll ask that you give your name, who you're here representing and uh. You'll be able to present uh. In that order. And if you want to do that first, tell us who you are, who you with. Push your button and on the mic. All right. Can everyone hear me? Thank you. Thank you. Uh, I want to start out. My name is Clint Rechtenwald. I'm from Mountain Home, Arkansas. I have a small pharmacy in Gasville, Arkansas. I sit here today by the grace of Jesus Christ. That is the only reason I'm here. Let me start out by thanking you all for what you are doing. Thank you for the opportunity to come and speak before you. It is an honor to be able to come be part of this process. I trust that the, the wisdom that you have, the experience that you have to lead our state is such that it needs to be, and I appreciate the authority that you have over us to do what is best in the best interest of us as a state and carry us forward. Thank you for the time you take away from your families. Thank you for the time that you spend to make sure that we can be as great as we can be. Thank you for that. I appreciate it. I purchased my pharmacy after I graduated pharmacy school in August 2007, I went to undergrad at Washta Baptist and then went to UAMS in Little Rock. After that, I was approached my last year in pharmacy school to purchase a small pharmacy. I agreed to it. My wife and I worked at that pharmacy. We ended up tripling business in about 4 or 5 years. Since that time we have seen a steady decline in the amount of reimbursement that is available. I brought on, I had a junior partner that I, I added to, um, the pharmacy. He worked with me since 20 9, he graduated from Harding in 2016. He came on and wanted to learn the business, uh, gave me an opportunity to have time to spend with my family and community events, things like that, last February I had to buy him out. He moved out of state because of the reimbursement issues that we're dealing with with PBMs. What I've come to the conclusion of, we have two things that we can control. One is inventory and one is labor cost. And whenever that is all we have control over, uh, that doesn't give us much room to wiggle. I have had multiple conversations since when I discovered that one of the big PBMs decided to reimburse us at Nak plus 50 cents over cost and that NATA means that it's the average. That doesn't mean that's what I acquired it for. That means what they determined the average to be. So because of that now, I'm trying to survive, I'm trying to make things work if, if I don't have the revenue coming in, I can't support my staff. I can't support my pharmacy. I've had multiple conversations with many people who had multiple conversations with my wholesaler and the leadership of my wholesaler and said, you guys could send me Product for 0. And reimbursement at or below $1 would not cut it. I've had a conversation with an insurer for a local manufacturer in my area that they actually get paid. The insurance company gets paid $3 for every transaction that I submit through the system. My total paid is usually less than $2. The insurance company makes more than I do on that claim. As questions that have been answered before or asked before, I appreciate it and I appreciate the thought, we need to be held accountable. That's part of this, me being here today. I probably can't afford to do it. The pharmacist that I have working today, I have to pay to relief to come cover me for today, my staff, I'm probably gonna lose money to sit here and be here. It is that important for me to sit here before you and explain my heart and explain where we're at. It is dire. I work 60 hours a week plus. I'm on a call 24/7 because if one of your loved ones needs hospice medicine, they call me and I go take care of it, whether that be 2 o'clock in the morning on a Saturday afternoon, Sunday before church, or afterwards. We're, our goal is to love our patients and to take care of those because that's what we've been called to do. The players that were going up against are bigger than we can handle. I've talked with the groups that organized for us that contract for us, and they say we can't do anything, they won't listen to us. The only way that it can change is if your law in the state changes. Because of that, we have to have you. I don't want to be sitting here today asking you for help. We, we are resourceful, we can come up with solutions to problems. We've been doing it for years. I've exhausted what I've had stored up and saved up so that I could keep my employees and their families there so that I could continue to take care of the people in my community. I've, I've developed so many great relationships with folks. I've been asked to be pallbearers when folks pass away. Uh, people come in and tell us about the babies that they have. People come in and talk about all the things in their lives because we're part of their lives. We're easily accessible and we're there for them. We counsel them, all those things we don't get paid for, all those things we have to make in a, in a fair and reasonable dispensing fee over the cost of the drug. And at this point, if we get paid below cost on something, we hope to make it back up. A lot of times we can't, not now. In addition to that, I signed up. I'm taking an MBA class this year. Why? Because pharmacy may not be sustainable if something doesn't change. So not only am I working 60 hours, I'm staying up till about 1 to 20 at night and getting up and helping take my boys to school the next morning. Because if this doesn't work out, I've got to go get a job somewhere. These are not APA talking points. Pharmacists Association talking points. This is my heart. And I told everybody that I've talked to, I will not go down without a fight. Y'all will hear from me and where I'm at. And the role of government, you're supposed to help the little guy. That's where we're at. We are the little guy. This is not only significant for independent pharmacies. This is not a pay raise. I want to be long term sustainable. I don't want to get rich off of one prescription. That's unnecessary. I want to be here so I can take care of the community that I've been put into. I want to be a good steward of the resources that I've been entrusted to be. In charge of. I had a conversation with one of the representatives that work for an insurance company. I said, give or take average Arkansas pharmacist's salary is $65 an hour, and a small pharmacy working 10 hours a day you'd have to fill 250 prescriptions at $3 above cost just to pay for that one pharmacists salary. They quickly said, no, at our pharmacies, we pay them $70 an hour. I said thank you for that. I've had the opportunity to transfer some prescriptions out of town to my pharmacy from where people have visited from. And I asked him how many prescriptions do you fill a day, how many pharmacists do you have on staff? How many techs do you have on staff? These big box pharmacies are paying themselves 789 $10 above cost, or they would be in the hole just on that. I know they're making more than that because they're also making sure that their stock price stays up. I'm only interested in making sure that I can provide for my family, provide for my employees, provide for my patients and my community. And that's where we're at. This is a plea for help. This is for relevance for our profession. And as it has been mentioned before, Senator Gilmore, this is a law that is here. These are things that have been established. Arkansas led the nation in 2018. Thank you. This is another opportunity for Arkansas to lead the nation against these bad actors that they only desire is greed. The only desire is money. It is not patient care. It is not to reduce cost. It is slight of hand in my MBA class, we talked a little bit about oligary. This is an oligarchy that has collusion to it. They're vertically integrated. And they can manipulate price from the top to the bottom. We are but one small pharmacy in North Central Arkansas. This is not about whether I get business or running somebody else out of business or, or gaining or growing. I want to be exactly where I'm at and I want to be doing exactly what I'm doing. This is about the profession of pharmacy. This is about our viability as healthcare professionals, as leaders in the state and in the nation. Arkansas can take a stand with this to reinforce the law that has already been held up by the United States Supreme Court, 80. And set an example. To the rest of the nation, and they will follow. They'll follow our lead because it's true. And the truth does not matter. Question the truth. Challenge the truth. The truth will still stand. And if I've said anything false here, I apologize. I believe I'm operating off of a true perspective and a true point of view. So again, I thank you for the time that you've spent to take out of your day to come here. I thank you for the opportunity to come before you. It's an honor and a privilege. Thank you for, for the wisdom and the experience that you're applying to each situation to make sure that you steward the responsibilities that you've been given as well. And I'm glad to talk anytime. With any questions, any concerns, I've got it. What I'll leave you with is to talk about premiums going up. If the insurance companies, if the PBMs were already doing what they were supposed to do based on Arkansas law, there would be no issue. They would hand their information over to the insurance department and say, we're already providing fair and reasonable. There would be no need to increase. Premiums. There would be no need to do anything because we're already doing what we're supposed to do. The only, the only reason that it wouldn't be so is because they're hiding behind what they're doing. I'm asking y'all to turn the light on and expose the darkness that they've been shrouded in they're hiding in, and they have been for so long. Expose them to the truth and change the way it is going in our society. We have to take a stand. It is that vital and it is that important. Thank you again so much. I appreciate it. And members without objection, I'm gonna go ahead and take all four of these, uh, before we, uh, have questions. Uh Kristen Riddle, you are recognized if you'll identify yourself first. Yes, sir. Thank you. Hello, I'm Kristen Riddle. I'm a pharmacist from Greenbrier, Arkansas. I am a pharmacy owner in Clinton, Arkansas, um, I'm a 2nd generation pharmacist and I like every pharmacist in this room and those here at this table, I love my patience. And I thank you esteemed members of this committee for having us here today. We're very thankful for this opportunity. I also serve as the chairman of the board for the National Community Pharmacists Association NCPA, and in that role, I've had the opportunity to have congressional meetings in Washington DC and also at the White House with the White House Economic Council, and I will tell you that the discussions we're having here today are the same discussions that are going on right now. I am. So thankful for the leadership that we have in Arkansas and has what has been stated is true, that the nation watches Arkansas. We're at the top. In Proverbs, it says, wise and knowledgeable leaders bring stability. And I want to thank our leaders in Faulkner County. Senator Johnson, and Senator Irvin had to step out, but she's my senator. And I'm, I'm thankful for the leadership that we've had in Faulkner County. We're Senator Rapert, um, with Senator Irvin now is my senator, Senator Johnson in Farner County. Uh, we, we have strong leadership, and I'm so thankful for that. The law that, that you have passed, what we have on the books, um, has definitely made that impact on the nation. Right now, there's current language that our law has that's being proposed federally. Um, other states have taken that language and put it into their laws. And as, as you said, Senator Gilmore, we had it first. And so with all of your leadership, now it's time to have accountability. You gave Arkansas a good law and it needs to be enforced. The emergency rule gives our insurance commissioner office the ability to do so. So, for example, I was, as in pharmacy, we call it, we're on the bench. So yesterday, I was the pharmacist on the bench, and I filled multiple prescriptions below the cost that it was to get that capsule or that tablet into my pharmacy. They did not, as you've all heard this, but I'm telling you, we live this every day. It didn't cost, it didn't count with that vo cost with that lid cost, which But you guys have already been mentioning. It's very real what it cost for my staff. None of that was taken into consideration. So I'll give you an example. Yesterday, I had a patient. Her co-pay was set at 20 cents. And the PBM paid me 19 cents. Like, it was actually below what I call, what I paid for those tablets, and it sure didn't cover what everything was in that vile label, etc. Clearly this is not fair nor reasonable. This is one example of many that every one of us in the room and every pharmacist and pharmacy owner big box or independent. Deals with every single day, all day long. Some of those complaints go to our commissioner's office. Some of them do not because I can barely pay for my technician just to put that label on that vial that's not even getting the cost covered. It would be, it's a luxury to get to send in all those complaints. We already have pharmacy deserts in Arkansas. We need to enforce a law that we already have on our books for 6 years, so that we can continue to have pharmacies in our communities in Arkansas and our patients have access. Thank you so much. Thank you, Kyle Lomax, you're recognized. Thank you, Mr. Chair. Um, my name's Cal Lomax. I'm a 2nd generation pharmacist and pharmacy owner. In northeast Arkansas. I along with my wife Cass, who's also a pharmacist, owned 5 pharmacies. We own 2 in Crackhead County, one in Jonesboro, and one in Monette, which is where we grew up. To in Poinset County. Which is in the panto in Mary, and another. In Leitchville. Which is also the home of Senator Dave Wallace. Um, I like to share my experience on what it's like to be a pharmacy owner over the past several years, particularly focusing on my Leville location. If you're not familiar with Northeast Arkansas, Leachville is a small community, farming, located between Bible and Jonesboro, about 5 miles from the Missouri border. Um, Like many small towns, there's empty storefronts, but there's a few businesses that are there to serve the community. A restaurant, a hardware store, furniture store, large cotton gin. A small primary care clinic and my pharmacy. Um, my family has er operated that pharmacy for almost 15 years. Over that Over the last decade, there's been a steady increase in prescription volume. But profits have declined declined significantly, especially in 2024. For context. Since the beginning of 2024, 3% of all commercial claims have been paid below's national average drug acquisition cost. 20% have been paid between 0 and $1 above data. And 61% have been paid between 0 and $5. This does not even include the numerous Medicare Part D claims that were paid below acquisition cost. Many plans have driven reimbursement. To exactly or just above the national average drug acquisition cost. NatA only covers the cost of the medication. And does not include any of the following labels, vials, prescription management software, electronic claims submission, fees associated with receiving the electronic prescription in liability insurance. Utilities, credit card fees. and labor costs. Do this steep decline in reimbursement. We've had to take drastic measures in order to remain for that pharmacy to remain viable. Including not stocking expensive brand name medications. And turning away prescriptions that we would otherwise lose money. Um, in early August in coordination with the Arkansas State Board of Pharmacy. We cut our hours from 5 days a week to 3 days a week, just to control costs. After her feedback from our community, we realized that we could not provide the quality of care that that community deserves by operating it 3 days a week. So we have returned to normal operating hours of 5 days a week. In turn, we've had to lay off staff, rework work schedules and, um, cut labor costs by reducing salaries. And Um, We've also had to extend lines of credit to make sure that not only we can meet payroll and pay our drug bill on a twice monthly basis. Um, I believe I can speak for every pharmacist in this room and working the bench today, when I say that these are challenges that every independent pharmacy owner's had in 24. Uh, staff layoffs, reduced hours, cutting services, charging for deliveries, avoiding stocking, expensive medications, turning away below cost prescriptions, and pharmacy owners not taking a salary are all common in 2024. In 2018, my father decided to step away from business he had on for 45 years. And hand over ownership to my wife and I. During that transition, my father repeatedly mentioned he did not want to sell me a dead horse. Now, that's his words, not mine, but I'll give you a translation of what he was trying to, to say. He did not want to hand us a pharmacy business that was not, that was unsustainable. In the recent months, my father has come to apologize multiple times because he feels like he has, um, Handed me a, a business that's unsustainable. Um, So because of this, we have. Restructured our agreement. To ensure that Pharmacies can remain open and I can continue to service towns like Leitchville, Arkansas. So in an effort to be transparent. I've turned all. Financial information, including But our income statements and balance sheets and all claims data since the first of 2024 to the Arkansas Insurance Department. Um, I'll just close by saying when pharmacies close patients lose access. There's a lot, a rule, a law in place. It just needs to be enforced. I appreciate the opportunity. To speak before this committee today? And I'd be happy to answer any questions. John Vincent, you'd recognize? Thank you. Thank you, members of the committee. My name is John Vincent, CEO of the Arkansas Pharmacists Association, and I'd like to yield my time. I have nothing else to add. Thank you. Any members any questions for those uh center hickey you're recognized. Uh, yes, sir. I'm up here to your, to your left. I appreciate you, what you have said on the end, sir, because I was sitting up here struggling with this because I didn't want to sound like I was attacking you in some way, but my question to all three of you all is you have painted a, a, a very dim picture about your personal business. Could we say that's correct? Would you be willing, and I'm, I'm asking this because of what you just said, because you said you've provided, you know, certain aspects. Would you, would you three be willing to turn over your last 3 years' federal tax return to the insurance department to work in conjunction with our DFNA and just let them do an analysis on your thing because we hear this all the time and I'll be honest, just some of it gets hard for, uh, Uh, you know, you know, to believe that it's that bad. And again, I'm not asking that any of that's public or whatever. I just hear that we're gonna, you know, do this and do that. You are just the, you know, are the ones that walked up here to do that. So that's, you know, I just wouldn't mind getting some verification of what you said. Not saying I don't trust you, says it just that old adage, but trust but verify. So, if you could just ask, answer, would you be willing, and of course, that would be up with the insurance department. And again, I'd like to have DFNA in there because there are numbers people, and, uh, they know how to get in there and calculate cash flow, look at salaries. See if there's any other uh management fees and things to that have been, have been put out, so. If you wouldn't mind answering that question, and again, I appreciate you on the end serve for kind of pushing me on to do that. Thank you. I am willing to work with the legislature, you, anybody else, to make sure that We can continue to access. Patients have access to community pharmacy, so. I would be willing to. Share what I needed to. Absolutely, sir. Thank you for that question. Um, Whatever can help aid in the process to make sure that this problem is alleviated, um, of course, in confidence, uh, you know, I, I don't mind sharing anything, uh, may overshare in some cases, but yeah, I'm, I'm glad to share whatever would be beneficial to anybody involved. I agree. I mean, there's, there's no underlying fees that are happening at any of our pharmacies that we need to be out. You through center here. You it. And, and I appreciate that because, you know, that's, that's kind of where we're at with this. I sit here and listen to the insurance commissioner and, uh, you know, we're gonna, we want to dig into what the PBMs are making and I'm not here to protect them, but I also want to be fair, you know, if we're gonna, if we're gonna go down this route, which I have a Huge struggle with actually as, uh, uh, private business and doing this and I've heard all of your arguments, you know, you know, uh, As well, it's really not private because your costs are, are set by the federal government too. And you know, I chair our EBD division here and one of my biggest concerns is, is for the retirees of this state, the public, uh, school employees and our state employees. And you know, back in May is how long I've been dealing with this, actually April, and you know, back in May, I had a report or a, uh. I have a report from EBD that it told me that if we put a $7 dispensing fee that defeat a $7 dispensing fee. On the program, that that was gonna cost an additional $22 annually to our EBD program. Now, of course, that doesn't include, I heard what Mr. Rand said about the 3.5 to 4%. I don't know what that equates to across, across the state. But from my standpoint, it's always like we've got to balance those because although you may be struggling here. I want to verify everything because the next thing that happens to us is whenever the retirees, uh, Uh, premiums go up any. I don't care what it is, then they're gonna, that's gonna be the other group of folks that are going to be laying on our members saying, why did you do this? Why, why did we go down this road, you know that we can't afford this. Now, again, so we, that's our job and that's what we're elected for, you know, to have to balance that that type of stuff out. But the more Ammunition for a lack of a word we have to say, well, there was analysis done and all this was really happening. It really does help us. So again, I do appreciate your, all three of your openness to be willing to do that. Thank you. Senator Mark Johnson, you are recognized, Mr. Chairman. Uh, call on the panel, thank you for coming, especially Ms. Riddle. I, I tell people in Greenborough, uh, you may not be in my district anymore, but I'll always be your senator. Um, I, I'm a little troubled by The request that uh Senator Hickey made that we don't seem to make of anybody else and different discussions, but I appreciate the fact that you're very transparent and have nothing to hide and I, I, I definitely, uh, I'm humbled just being in the room with you and I know there's a lot of your colleagues out here that you speak for, uh, that, yeah, we can't be here all day to hear all of them, but I'm sure they could, uh, elaborate on, on stories of this. Um, I often find myself kind of. Torn between the fact that we have a rural and urban disconnect and issues in the state education is certainly being part of it and, and certainly healthcare, uh, evidence that the hospital in in Cross it where Senator Gilmore's father's administrator and not the same building but other than that the hospital I was born in, uh, no longer has obstetric services. So we've got lots of healthcare challenges, but. Uh, for once, I think we did something right. And, uh, My friend Senator Caldwell is a sponsor in 2017 of the bill that it did go to the Supreme Court and is now considered the, uh, uh, model legislation for the nation on this. I think the work is not quite done yet of doing this and uh I had a colleague this morning. Yeah, we, we laughed, but it's very serious and true that dealing with PBMs is like playing whack a mole is you think you fixed it here and it pops up another problem here. I want to thank, even though he's not at the table right now, I want, I want to thank, uh, uh, Mr. Rand and, uh, the commissioner McLean for their work on this. I think it's a perfectly uh. Appropriate emergency rule, uh, we will be in session in January and some of the things that Senator Hickeys indicate concerns about I think are perfectly appropriate to be uh administer to to for us to take a look at that uh this is an awful long ALC hearing. These are the kind of things we do during regular sessions. So I hate to keep y'all up on this, but I think it is a simple thing that we, we pass an emergency rule that's been recommended By the, the people that we the the General Assembly have have given the authority to administer uh this legislation, uh, as so I'm, I'm grateful for you being here and I guess I should just end it by saying, would you agree? Senator Gilmore, you recognized? Thank you, Mr. Chair. Um, I just want to follow up on, Uh, Senator Hickey's request. Thank you, Senator Hickey. I think that's a great idea. I think we need to get to the bottom of this. I've done some deep dives with, um, pharmacists in my region, um, and they've been very transparent and open. Um, so I, I appreciate you, uh, being willing to do that, and I appreciate, uh, the senator bringing that up because I think truly this is a, uh, problem that we need to fully understand. Um, and with that, I look forward to with the start of this rule also holding, uh, feet to the fire of, uh, insurance and, and PBMs, not to be punitive on anyone to understand that everyone has a role in this and that we have a responsibility, yes, to try to keep premiums low, yes, to try to make sure that our constituencies are taken care of and have healthcare, but also to make sure that we're doing the due diligence that we need. So I appreciate that. And wouldn't you agree that we should also make sure that we're holding accountable, uh, These vertically integrated, um, PBNs and insurance companies. Thank you. Representative painter you recognize? Thank you, Mr. Chair. Clint, thanks for coming down, uh, today and express your, your testimony and the other two as well. Do you guys have like, if, if we don't take care of this, uh, through the emergency rule, do you have, do you have a time frame that where a possibility of closing your doors, you know, when you might have to at the end of the year, beginning, do you have a time? I, I'll start with you. So when this, when this occurred, when we started seeing out of contract reimbursement, the, the consistent reimbursement that we received all last year and then in January and February. Whenever one of the insurance companies lowered that in March. A couple of the others did it in January. Um, we tried to hang on and, and so what we're doing, um, uh, Again, not to, not to overspiritualize anything. My hope is in the Lord and He will provide. And, and I will continue to do what I'm supposed to do until the time comes that I'm not supposed to do it anymore and I truly believe that. So I will continue to press on as long as I can, um, Every day it gets more difficult and if there's not relief soon, those are decisions that we'll have to make and then have to figure out what we're going to do in the meantime with that, to give you an exact date of closure, I can't do that, um, Because I'm stubborn enough, I'm gonna keep on going into work until I cannot go into work anymore. I think you get that from your mother if I remember correctly. That's exactly right. Love my mom. Thank you. Thank you and the other two, if you want to answer that. If not, no, no problem. I just, I think it's just a big deal though, at the end of the day, if we don't take care of this somehow some way. We may not see people at the end of the year. Especially in my district. Thank you. Yeah Centers, uh, hammer you recognize. Thank you, Mr. Sher. I'd like to offer, uh, I got a couple of questions, but I want to start by offering a friendly consideration, uh, you know, we're talking about a, a sample size of 3, you 3 at the table of volunteered, you know, to reveal and I, I would fully expect that they would be protected as proprietary information where it wouldn't go any further, but I'd like to offer a friendly suggestion that uh John, perhaps you received the name of other pharmacists that would be willing to submit theirs as well. So we can increase the sample size and get a bigger picture than, than just 3, especially having some diversity of pharmacists from different sized areas to show that this is not just a a rural issue. This is across the board issue, so I'm just offering that up as a friendly suggestion, uh, to any of the pharmacists who'd be willing to do that because I do think it's going to be voluntary, not mandatory. The second thing, and I'd like to ask any one of the three at the table. The when you file a complaint because there's been some discussion when you file a complaint, does that complaint have multiple prescriptions in it and treat it as one complaint or is it express that a little bit better if you would, please. Anybody who wants to grab the mic. So when I submit a complaint, I submit a spreadsheet with multiple prescriptions for multiple plans. It will have what I was paid. And it'll also have the National Acquisition Drug costs national average drug acquisition cost at the time I dispensed it, which can be verified at CMS. So those, if I submit 5 claims on that spreadsheet, that's 5 complaints. OK. And that average is, is adjusted weekly if I remember right, is that right? It is, it is updated weekly, but most NDC's National Drug codes are only updated once monthly and that's sometime between the 15th and the 25th. OK, then my question, I'd like to hear from each one of y'all, how many do you not turn in, uh, ma'am, I'm sorry, I know Greenbrier cause, yeah, grew up Damascus partly. I know where you live, but the, the number of complaints that you don't turn in because it's just not worth your time, but it's a nickel and dime you to death scenario. I'm ashamed and. And in front of all my colleagues that. We don't have a big staff. I don't turn my complaints in. I mean, every day when I'm seeing those underwater climbs, is, that's a pharmacy term, I apologize, but, um, I, I know I'm supposed to send those in and I don't. I'm sorry in in, but to that point, what that tells me is you're losing money because it's not worth the time for you to turn around and invest the effort because cause it's going to cost you more time to turn in the complaint than it is what you're going to get back. As a follow-up statement to what you just said, it is definitely worth my time. And I am not turning in those complaints. Right, and I think I understand why, sir. Yes, sir. Thank you so much for the question. I appreciate that. So up until July, I did not turn in any complaints because it did not, uh, materialize to the point that anything would be able to happen, um, because we don't have the time nor the energy to do that. Since then, I've turned in probably 50 claims, and yes, Nyak is updated typically once a month, but we have to wait for our systems to update so that we can find out what that payment is. And those are just claims that are paid below what the national average. Cost is. Those are not the claims that the insurance providers, the PBMs are paying us at one penny above Nyak, 30 cents above Nyak, 50 cents above Ntak. They're doing it to skirt the law in Arkansas, um, As it was stated earlier, Arkansas Medicaid pays a dispensing fee of $10.50. That dispensing fee was determined in 2015 and has not been inflation adjusted. Um, At that, at that rate, these, these claims are not sustainable. So whenever it came to the point where the AID was going to start enforcing those, I felt it was valid enough for me to go ahead and take the extra time out of my day after my 12 hour day working to make sure that I could do that and get those claims submitted. I have not submitted claims from the end of, um, August through now, because I haven't had time to yet, but I plan on it, um. But up until this point, you, you hope that everything can go and work out and, and that the process will work. Um, it has not, and that's why we're here, because we, we need your help. We have to have your help, gentlemen, on the end real quick, please. Uh, so, yeah, I can, I can give a little bit more information. So I'm a part of a PSAO pharmacy Services Administration organization was called Healthmart Atlas. And a few of my colleagues have been working diligently to get switch data, which is basically the raw data submitted from a pharmacy to the PBM. And in that data from the first of 2024, there were approximately between 80,000 and 100,000 claims. That were paid below NADA and that only represents approximately 130 pharmacies in Arkansas. So if you take that sample size and multiply it by the number of pharmacies in Arkansas. I would say it's probably considerably more of prescriptions that are paid below NADA. So if they just pay what they're supposed to pay. As far as that 3 for 3 or 4% cost figure. Really, if they just do what they're supposed to be doing, that number would already be there or it should be revenue neutral or not as big of a hit. Am I misinterpreting it? And, and we don't really know, but I mean, you got to factor that into the equation if you're going to look at it holistically. I agree with that, Senator Hammer, John Vinson, Arkansas Farmers Association. And for those of you who haven't, or if you have or haven't read the Federal Trade Commission report too in July that came out to your study, um, to the point of opening up books, PBM execs, PBMs are not complying with federal law or Federal Trade Commission not showing their books. PBM executives are not showing their financials or they information, and they also released information that, and we've had complaints at the insurance department too that are still being Looked at that haven't been, uh, that I don't know what the resolution is of PBMs being paid more than local pharmacies complaints that were made as far back as February on that and Federal Trade Commission report showed examples on a cancer drug, for example, where local pharmacy was paid $100 a national chain, $2700 and a PBM owned mail order pharmacy, same drug, same dose, most vulnerable patient with end of life cancer, $19,200. So if that's identified in these cases when they're looking at the books and the pricing, you should have savings when those egregious overcharges are also identified. I don't want to take too much time to say this in closing. I was a chaplain for hospice for 25 years. I never, ever, ever, ever had a big box store show up at 2 o'clock in the morning, but I had a pharmacist open up their pharmacist that was a local independent pharmacist, and they're the ones you want to count on when you need them the most. Thank you. OK, members are going to Center stone and then represented Beatty after that. I don't have so much of a question as I do a comment and the biggest word I've heard today is what Clint said when he's studying for his MBA and you talked about oligarchs this whole process is to squeeze out the small independent pharmacy. And if you think we have high pharmacy costs now, you let all these men and women get squeezed out in the true oligoy takes over, we will have a problem and this needs to be addressed and it needs to. Happen to where you have a fighting chance to make a living, take care of your communities and provide for your families. Thank you. Representative Beatty you recognized? Thank you, Mr. Chairman. My, my question for the four, individuals at the table, uh, heard a lot about the process of how these complaints are, are sent in, uh, to the insurance department. I'd like to hear from each of you on the response you received back from the insurance department after you make those, make those, um, um, Filings. I can speak for myself. I've had constant communication with PBM director, um, very responsive and, uh, I appreciate all the hard work. Well, as I've already admitted to all my colleagues that this is, uh, I do not send the complaints and as I should, but I will say from our colleagues, it is so impressive the response that we get in Arkansas from, um, that department at the insurance commissioners enough that, um, on the board of, of directors for NCPA I've made that point, brought documents to, to that board nationally for what Arkansas is doing because it's another example of where Arkansas is a leader where other states do not have the support And their insurance commissioner that Arkansas has. Thank you for the question, sir. Arkansas Insurance Department is fantastic to work with. They are very responsive. Um, they do not take long. There's not a lot of lag time. They are concerned about our state. They're concerned about our patients, they're concerned about us and the, the problems that we're facing. I believe probably the biggest hurdle that I can see is that they don't have the manpower to do what they need to do. Uh, they don't have the resources to adequately enforce what they are allowed to enforce. And because of that, there is a backlog, and I think that, um, These PBMs and insurance companies understand that. So if they can clog the process, then that's just more time that we have to go to try to figure out how to make ends meet. There's only so much water you can pour in the milk before there's no more milk left, right? So they need the ability to be able to operate in a manner that they can do what the law gives them the authority to do, um, they are doing everything they can and I'm very thankful for what they're doing. Thank you for your question, sir. And I would just follow up to say that I agree with everything that was said. You are dealing with the, the big 3 or $924 billion revenue annual. They're bigger than Turkey, for example, just under the Netherlands based on GDP. They're very large. They have $4000 an hour attorneys, they find loopholes, they don't respond, they say claims can't be found. The, the, the They don't respond to the Federal Trade Commission, they don't respond to the US House Oversight Committee and US Congress. It's very, very challenging. So they do an amazing job with limited resources they have. And, and just a quick follow up. I mean, I, I hear the frustration and I've heard it from, uh, many of the pharmacists that, that have spoken with me that it has to be a frustrating, um, business where you're dealing with these PBMs and a lot of auto deny your claims and, and say, no, we didn't pay below cost and it's publicly available information that you can pull up that shows that they did. And so, um, you know, it's, and then that's just other longer weeks before you, you, you get your payment and, and, and get that corrected. So it's a, I, I understand your frustration and and during that time, um, you, you've got an ongoing cash flow and, and the concerns of operating your business, so I appreciate, uh, the struggle that, that you have in this, in this industry. And I, I hope that we can address that and take care of some of those concerns. So thank you all for being here today. Thank all of you for being here today. The members, I have 3 more on the board currently. Uh, we have one request for one other person to come up and testify after this uh going to Central Caldwell, you recognize. Thank you, Mr. Cha, and full disclosure, I have a brother that's a pharmacist. I have no financial interest in this store other than I have to take him a check every month. Uh, in months past, uh, talking about NA, uh, uh, y'all have had to, uh, the, the, uh, PBMs insurance companies have come back and readjusted your cost and have actually uh recoup money that they had uh spent uh or uh spent on some prescription. Uh, is that still the case? Do they still do that? Have you had a problem with with uh them in the last few months where they actually come back and and say that uh they, they paid you too much, although it may not be, uh, 75 cents or 19 cents, but does that still take place? It has ended, but there's been carryover into the first half of 2024, and that's also added to the difficult in cash flow and, uh, compounded with our commercial plans in the state. I think that's why there's even a greater need to enforce, uh, for the emergency drill 128. There's uh, yeah, that, that ended at the end of 24, 23, but the, the recruitment. have filtered all the way down to mid 2024. So we're still getting money taken back from 2023. Yes, ma'am, you have. And if I may, um, because that ended, that is why this year our reimbursement has been absolutely slashed down so low. Thank, thank you very much. Thank you, Mr. Chairman. OK, Central Wallace, you recognized? Thank you, Mr. Chair. I've, I've known that gentleman, Kyle Lomax on the end for a long time. I watched him play for his 2 state championships back in the early 90s. Um, We've asked him to show his taxes, and we've got, uh, BPMs that I'm hearing it make. 924 billion annually and profit of 40. Being caught seems to me it would only be fair if you're gonna show your Underwear that they show their underwear as well. Do you agree? I do, Senator Wallace. Thank you, sir. I mean, I love Central Wallace. He has a way to put things. Senator Irvin, you recognized. Thank you. Mr. Rand had, uh, testified that some of the complaints did result in readjustments? Have y'all experienced that? I have not experienced any. Adjustments yet. I was told by the AID that my claims that I sent were not in the first round. Um, I will speak though that I have heard that if say a drug cost was $3 and the reimbursement from the PBM was $2.90. Uh, they will call the pharmacy on those claims and say you need to reprocess that claim, so they reprocessed the claim, the patient's total paid was $2.90. The claim then reprocesses for $3.05. The PBM does not send a check for 15 cents. You have to go collect that from the patient. And they did not do anything but just raise what the patient's co-pay was. So it's not like a patient's paying a $10 copay and we're getting reimbursed $20 when our cost is $30 and then the co-pay still stays 10 and they now reimburse us fair and reasonable 30, 35, 40, whatever that is. So a lot of these claims, then we would have to go back and tell the patient, you need to pay us an extra nickel. You need to pay us an extra quarter. Uh, where at the end of the day, I'm not gonna do that. I'll just take it out of my pocket and put it in the register or not even rebuild the because at that point it's a game, it's a joke. They're not taking it seriously, they're not taking our law seriously. Um, and, and their end goal still occurs where we, we do not have the money to continue to provide the service and prepare our employees and, and then we go out of business. Either way, it, it results in what they want to accomplish. OK, well, I mean, and that's kind of to the comment that was made by I think Senator Johnson, the whack a mole, you know, effect, but I mean, and that's one of the concerns that we have to look at too is just like what you said that it gets passed then to the patient. Or to the citizen, and none of those folks are here, we're left holding the bag at this point. But, um, and then I, so thank you for that. I just wanted that clarification and then, um, you know, and I know a lot that has been said is talking about federal, you know, this is a federal issue and, and, and I. You know, I was a very proud supporter of this legislation, and I just, you know, a lot of times we get looked at as being the sole source of, I wish I could fix it for you all, but I, I mean, I just want there to be a recognition. We can do all we can, but until the federal government acts, it's going to continue. And, and we can do everything we possibly can within our purview, but It is a federal issue and, and the, the folks in this legislature are doing what we can and have for many, many years, we passed this in 2017. My frustration is it took till 2020 before any fines were ever assessed. And now 2024, 4 years later, we assess fines. I'm all for assessing the fines. I'm all for enforcing that law. I don't know why it took us so long to do that, and I'm frustrated by that, to be honest with you, because, you know, Now, now we come to this and I I want to enforce the law that's on the books, and we should have been doing that in year 123456, and 7. And so that I'm a little frustrated by that. And then my last question though is to the staff, are we going to be able to hear from EBD on self-insured plans because I believe this law does so anything that they, if this rule goes into effect, it will impact self-insured plans and so. Do we have, I believe that's correct. Is that correct? It's cell phone. OK. And then, um, do we have a fiscal impact statement from EBD and do we have a fiscal impact statement from Medicaid for the expansion program because we utilize private insurance for that expansion program. So that's a question to our chairs and to staff on fiscal impact. As for what the budgetary impact would be. For the rule. That's not a question y'all can answer, but. I have not, I have not had a request on that until you just wrote it up, so I would, I would make that request, but I think it needs to be part of public record. OK, not seeing anyone else, excuse me. Representing Moore. Thank you, Mr. Chair, the last second, um, just out of curiosity, and I know we have 3 pharmacists here with a lot more in the crowd. Your customers mean a lot to you. Your patients mean a lot to you. I'm just curious as far as on average, how many prescriptions a week do you feel that you either lose money or barely break even. Do you have any of those figures? If I was sitting in front of my software, I could print it up for you real quick. Um, I know there are some days that I have, I have worked from 8 till 12 or 1 o'clock, and I feel 100 prescriptions and I'm at An average of 20 cents a prescription. There have been some mornings that I look at it and I'm at negative dollar, um, I know just from the trend looking at where we were in January compared to now we've seen a probably $11 shift in what we would make on our prescriptions where we were making $9.08 dollars a prescription, uh, slowly eroded to now and some plans were, were zero or negative dollar $2 lose money on brand names. Drugs and, and a lot of plans are paying barely over Nyak or at Nyack in, in the generic space as well, um, Just from a shooting from the hip, I, I've seen probably my monthly gross in my profit reports, down $20,000 a month. Um, you don't make that back up. Follow up, um. Have any of you had to turn customers or patients away because you cannot afford to fill a certain prescription. Yes That's all. Thank you. OK, we thank you for your testimony. Thank you for being here today. I'm gonna, we've had a request, uh, bring up John Curtley. If you will come forward. Thank you. Thank you, members. Welcome if you identify yourself and who you're with. Thank you, Mr. Chair. My name is John Clay Kurtley. I'm the director of the Arkansas State Board of Pharmacy. Representing Ken Ferguson, you are recognized question Mr. Chair. Just a quick question and Doctor Kirtley, uh, if you've been sitting in the audience through this, uh, hearing, uh, thanks Senator Ervin had a question that she asked him the Arkansas insurance department. They didn't have the information, but it had to do with pharmacy closings as well as new pharmacies, uh, probably the been open what probably in the last 2 or 3 years with your agency have that. Information could you provide it? Yes, sir. I can give a very quick overview, but I can also supply the background data as well as a couple of maps that we have made that are interactive that you could actually see like that's a map of all the pharmacy closures since 2013 and a map that shows all the pharmacies that are currently open. Um, in short, uh, the last 20 years, the board of Pharmacy, if you look at 2004, there were roughly 739 community retail pharmacies in the state. And there was, uh, 208 pharmacies He's permitted to ship from other states. We hit a high of our in-state pharmacies in January of 2016 when that number reached 800 community retail pharmacies permitted within the state of Arkansas. And right now, as of today, it looks like we're at 737. So in the last 20 years, we had grown and then shrunk back to almost the same number, but the net number that have closed during that time is 267 individual permit numbers. The out of state pharmacy permit number at this point is 678. Uh, the out of state numbers have roughly tripled or slightly more than tripled, uh, in the time that Arkansas has been flat, I would make one point that many people have different data on this based on billing numbers, uh, NCPDP numbers. MPI numbers. Our data is purely on the permitted numbers if you and I both own pharmacies and I buy a pharmacy from you, generally, that number would stay the same with the state, so it's not that it changed the number just because it changed ownership. These are purely permits that did exist during that time period that no longer do. net closure of 267, is that over a period of what, 20 years you say or that specific numbers from 2004 to, I'm sorry, from 2013 to current. 2013, uh, there were 743 pharmacies, uh, in that time, you could roughly say that 260 or so opened in 267 closed. OK. You said that information is available online. Yes, sir, I'm happy to provide it to staff so they can send it out. Could you provide that to the staff? Yes, sir. Thank you. Thank you, Mr. Chair. Senator Ervin, you're recognized. Thank you. You said, I'm sorry, repeat that last thing. 260 clothes. Sorry. So if you, if you look at the number of 743 that has reduced down to 737. You could roughly say that in that time period, 261 pharmacies had opened or obtained a permit and 267 got rid of their permit or lost their permit. OK, so about 7 in that time period total loss, total loss between 2013 and 2024. With the, the it actually got to 8016 and then dove back down. So it's a weird curve, OK, but I'm just, I, because I know we've had some clothes, some open, so I was just trying to figure out what that number was in this, you can see details like the the calico Rock store opened in roughly May, and then when it burned, it actually closed so you've had an extra one and then lost it in the open now, so, OK. All right. Thank you. OK, thank you. Without objection the proposed emergency rule is reviewed and approved and the review and approval shall be effective upon the adjournment of ALC meeting Friday, September 20th, 2024. I've got, got, uh. From Senator Gilmore, you are recognized. Thank you, Mr. Chair. I have a motion. Go ahead with your motion. I move that we require the insurance department to report to legislative council on a monthly basis beginning October 2024, including without limitation, information related to any fair and reasonable reimbursement rate or rate as rates as approved by the commissioner. The number of reports filed by the commissioner, number of approvals and denials made by the commissioner, any resubmissions following a denial by the commissioner, any violations assessed by the department and any bulletins issued by the department related to this rule. If the General Assembly is in session, the report shall be provided on a monthly basis to the joint Budget Committee. The report shall be submitted in writing at least 10 days prior to the meeting where the insurance commissioner shall verbally present the report to the committee. OK, proper motion. I have a second. Discussion center Ester. So I'm very supportive of this motion. I, I would like if. If he's OK with it to have an end date to that if it's 12 months or 24 months, I, I just find that sometimes in here, we ask for reports and 10 years later we're wondering why we asked for the report. Is, do you have any objection to making the Sunset in 24 months or or or if we think it's imperative to continue on, Senator. for discussion, uh, go ahead if you want to answer, but then I'm gonna recognized co-chair Woodlaw. I, I'm not opposed to that, but I do think this will be a continual issue that we will need reporting on. So I'm, I'm happy that that may be a proper time we revisit that, Senator, to, to have further discussion, but, um, Mr. co-chair, were you going to add something? Well, it's gonna stayed in a meeting early this morning with the department. They alluded to this first information gathering being kind of a fact finding mission, so it's gonna be really hard to do anything in FY 25 and I'm talking about the entrance year of 25, not the fiscal year. Um, So If we did put an end date on here, it would have to be something like 24 or 36 months to actually see the total impact of what this is going to do, because I think it's gonna take that long to get the data and get the impact correct from what I learned this morning. So I think I'd be hesitant to put a deadline on it, but maybe know that the legislature should end it at some point. And, and, and to, to that point, so that, that was the point I think he made better. I, I also think that we need to understand too for, from a standpoint related to EBD we need, we need to all the data we can get to look at. Um, so at what point we've arrived at enough data, I am more than willing to end this reporting because as you've already stated well, we have a lot of reports that no one even looks at. Thank you. Senator Irvin, do you recognize him? Yeah, just also discussion. I really do want to go back to my point of fiscal impact though on EBD and Medicaid, and I think. Really important for that to be reported to this committee next month. If that's I think the fiscal impact to Medicaid expansion program that utilizes private health insurance premium. And EBD, which is our self-insured state employees and teacher employees, health benefit plan that those fiscal impacts need to be brought before this executive subcommittee next month. I think that's really important. Go, go ahead, Senator Gilmore and speak to that if you will. Thank you, and I don't disagree, Senator, and I think that was, um, maybe already requested by the senator uh Hickey back there and I think, I think that was gonna be maybe provided with without objection or that request was gonna be made already if, if I'm remembering correctly, you, you may have stepped out for a, a speaking engagement. OK, we have a motion of Central Gilmore on the floor. For, for committee members open at a second. On favor I post. OK, Central Gilmore's motion passes. Senator Gilmore, our Senator Irvin, if you will restate your motion, we'll do that separate. OK, thank you. I, I, I think it was a, a request by several members, but I'll just make it an informal motion that we, um, have a fiscal impact of this brought to this executive subcommittee from EBD and from Medicaid on the, on the self-insured state employees health benefit plan and the teacher employee health benefit plan for teachers, state employees. And then the second one would be the Medicaid, um, expansion program where we utilize private insurance, um, for the administration of that of that program. So I would like for those two fiscal impact statements to be brought to this executive subcommittee next month. That's my motion. have motion, have second all in favor. I. Post, OK, that is passed. Next member of that finishes up the pharmacy you're welcome to stay or whatever. Else we thank everybody for being here today and and being part of this, uh, our last, uh, thing on the agenda today is committee discussion on the education facilities, property insurance study and we recognize my co-chair representing War Law. So I just need to, yeah, so. OK, I'm gonna come to you right after this. So members just so that everybody's aware of where we're at in the schedule because of some requests made, uh. By the executive branch and by the committee, there's some numbers that could not be, uh, brought to committee today. So therefore we didn't have our consultants here today. There will be, and I want everyone to watch their calendar. There will be a meeting that will pop up within the 1st 2 weeks of October for a follow-up meeting to see what item D actually yields, which is the request. We've already seen A, B, and C, just so everybody's clear on what D means. Uh, the other that is, is the consultant's contract is, uh, we're getting to the end of this, and we're going to have to hit the 10% increase, uh, that's pretty normal. We did this with EBD, uh, and I think we have a motion in the committee for that, but so. Just making sure everybody's up to date, uh, watch your calendars, we'll have a meeting first couple of weeks of October to actually discuss item D. OK, I've got, uh, ready for your motion, Central. Thank you, Mr. Chair. I move that we approve and amend and amended, an amendment to the consultant services agreement between BLR and Pern to increase the contract amount by 10% of the total contract amount as permitted under the terms of the contract due to the consultant being asked to provide services outside of the original scope of work. 2. Have a motion in a second in discussion on favor CI. that is passed. It's the thing. Members, thank you for your time and we will adjourn the meeting.