Insurance and Commerce- House and Senate

Sure sees a quorum and we will open our meeting Scott good to see everybody I think this is the as you will see when we approve the minutes of the last meeting is the first joint meeting we've had since last September we just have some ISPs in a rule to adopt but we will be meeting again sometime in the next several months to to look at some more substantive issues I'm going to go ahead and and turned to my co chair for any comments you may have hi I'm all good let's go thank you very much members you have of minutes before you exhibit be do I have a motion to approve the minutes of believe it is of September twenty one of twenty twenty one is that a motion senator Elliots. Motion to adopt seconds. A representative would and all those in favor of adopting minutes signify by saying aye. Minutes are adopted a first order of business items see Arkansas insurance department review of the rule pertaining to pharmacy benefit managers regulation and that will that presentation would be made by Mr booth ran if you will identify yourself for the record you will be free to present. Thank you thank you Mr chairman booth ran Arkansas insurance department the reason why this is being reviewed by this committee are there is a provision in the PM licensure act that requires the Joint insurance and commerce committee to review and approve rules that regulate PBMs and so we are amending this particular rules rule one eighteen it is our rule which which regulates all the activities of PBMs from licensing solvency to complaints in audits and just about everything dealing with PBMs as regulator this particular role in front of you we are amending this rule we fall this rule last week with the executive subcommittee on an emergency basis so it is already in effect and we're also following it is a permanent rule so we are having a public hearing on this rule July nineteenth the next month with the industry to get various public comments that is before you because is required by law to be reviewed by the Joint insurance and commerce after its fall is emergency rules let me take a little bit about what we're doing this rule last session and twenty twenty one the legislature applied the PVM licensure act of self funded plants all large part because of a ruling in the Supreme Court called Rutledge V. PCMA this United States Supreme Court ruled that PPM laws can apply to self funded employer plans the attorney general's office represented the state in that particular litigation appeal after was successful the legislature your body applied to people in licensure act not just insurance company related PPM activity but also the self funded plants what this rule does is in adopts the accessible cation to self funded plans as one of its provisions the second thing this does under legislation issued last year the legislature pass. Ste an act called the pharmacy audit bill of rights it protects pharmacies from audits by PBMs and provides a lot of proposed protections to peep pharmacies with PBMs audit the pharmacies we adopted those provisions in this particular rule the rest of the rule amendments are removing obsolete language language we no longer need typographical errors and topographical fixes as part of that the fourth thing this rule does and we think this is probably the most important thing this rule does is last year the commissioner issued a series of bulletins which which basically Dodd told the PBMs to handle their appeals and complaints and to take invoices from pharmacies including batch appeals are for complaints and all of the Commissioner also issued all ports and addressing seasoning requirements by PBMs apply CD requirements to pharmacies before the start business what this rule does it adoptions boards and standards as part of the rule so we think that the the board as it were issued this fall or winter were important protections for pharmacists and they need to be actually adopted a rule itself so those are the highlights of the amendments to this rule I'll be glad to answer any questions. Are there any questions representative wouldn't let me Recognize you. Thank you Mr chairman of stress on the of the homes. Under this rule and under this legislation are you all being proactive are you waiting for complaints to come in now I let me tell you what we've done recently last three four months we find E. S. I fifty thousand dollars we find Optum fifty thousand dollars we find we are in the process of finding another PBM about the same amount so we've never been busier in finding and penalized PBMs we have last three four months I believe you're not worked on the matter related to an audit we had we find that particular entity so we are being very aggressive so follow up if I may Mister chairman you're on the on the PBMs would you is kind of like the kind of like the will of government check in house and then and thank you they're of the They control the movement of former there is an and they control the pricing to to the companies are to the individual independent pharmacist is that correct I think the health plans is designed for Miller is for the PBMs to to to implement to enforce yes but okay then one more question do the insurance company's own into the PPL's they do I've said that now owns CVS and I forget the other when they're there they do something something on PBMs okay thank you Mr chairman thank you Mr right thank you. Representative Pilkington. Thank you chairman. so I'm curious on the self funded plan part you know when the reasons why a lot of large companies go self funded so they can reduce their health care to ensure and a lot of times they do that by creating narrow networks and basically create a tailored plan that fits their workers obviously utilizing that. PVM I think that benefits them and that they can tailor themselves speaks beneficial would that reduce businesses ability to create those tailored plans they come self funded low that because you've got a particular standards and for example the anyone provider law in in does prohibit exclusive networks and so there were they will be subject to the requirements a lot of that is just because the right which that we've got clean including Max allowable cost reimbursement so they are going to be services were regulation that's for sure I don't think it's going to be a significant enough to to interfere or person to their business. Okay it's so. And once on their networks so the clinically integrated network that some self funds are part of does that inhibit their ability to use. To use the C. I. ends to reduce costs okay okay thank you not. Thank you senator Elliots. Thank you Mr chairman I was looking at the date the time for a comment in I'm not aware of what your process is for getting the word out to folks so that they can comment on that would you just be on the rule was filed as an emergency rule but also as a permanent rules yeah I mean it's so in the in the B. OR questions here the record will be opened beginning tomorrow for public comment will in July twenty third so we are having a public hearing on July nineteenth but the public comment reports will be four days later while in four days later in July July twenty third well I I I see the dates what I'm asking is it if I have an interest in this where hi how do you make sure people know we do just in the newspaper ads and the Arkansas growers that runs it ad in the newspaper in it is provides public notice for three days runs for three days are providing public notice for people to send in their public comments there's a link a web link that people can click to send in their particular comments for for our review. Well may I suggest you think about there's a Democrat is that and a lot of people it is not you know as as wide spread as it used to be a lot of people don't have access you know because they don't have a computer and whatnot have you ever done any advertising say in local newspapers we we do not allow that I think Senator Elliot is due to the fact that statutorily legally under the APA Arkansas administrative procedures act when agencies issue rules are required to provide public notice you're supposed to do it when the largest circulated newspaper there's not any further requirements of local newspapers B. notify the answers your questions now we have not but we have just stuck with the records that because legally that's that's the paper that we have to use yeah and I and I get that part because that's one of the ongoing things I've been concerned about it doesn't prohibit you from doing more is that this is it we're meeting the floor is what we're doing that's true we'll look at that yeah and that would be really good I think if you if you did that and just what I think is a more creative ways because especially people in rural areas right and we are having issues right now with our farmers is in rural areas to start with and I hear from them a lot of the time and they have no idea that even a hearing is being held or that there is a way to comments I just think we need to do a whole lot more there so people know what's going on we we often make loss appeared that are making education is adequate well we need more than adequate and in this case the same the same thing applies I think I agree so if you will just let your distracted look at that thank you. Thank you senator Elliots Senator Hammer. Thank you Mr following up on that point may ask in the pharmacy association do they email this rule out all their members I believe John does and Deborah so I think there were everything that we do is is distributed or notified by that organization so they they do a good job of notifying pharmacies that belong to that of what we're doing okay and then just in the sequence of events the public comment period starts it's the closest July twenty second I think I read in writer and so this sold this is what the public comment tomorrow your before us today just give us a sneak preview of it because typically it come through roles after the public comment period has been close those is just far benefit she what's coming well it's because there's no there's someone at a provision in the people in licensure act that said that with the insurance department issues any emergency rule relating to PBMs it's got to be reviewed by this body by this particular committee or I just try to get my mind around it Wright the the events okay thank you. Senator Irvin you're recognized. Thank you Mr chair I think that I mean I'm just kind of following up just because I have an idea and of course this is bigger than you that we have department agency of transformation shared services and to me that's an executive branch we also have Arkansas Legislative but. But any rule under public comment could actually be listed on a government website as well that's the on you that that's really a state wide a suggestion that's something that we as legislators should probably look at because then we could you know you could have the Department of shared services I'm sure that's a shared service I would assume you know look at all the rules and then you can hear the rules and here's the public comment and be able to provide that we did something similar to that with the cares committee where we actually had a way for input and then that includes emails all the members immediately so that's just something that we probably as a legislature need to look at that maybe you can help us yeah I was gonna say that all of our proposed rules go up on our website so there is a link on the Arkansas insurance department website with a particular link to this actual proposed rule right just okay so on the rule itself and if you don't mind is there anything that you feel like in the language that you struggled with and writing the rule from the legislation in other words you know this is a process and sometimes the legislation we do our very best to get it right the first time but sometimes there can be potential loopholes sure as we are writing the rules to implement the legislation we actually learn a lot so is there anything in your opinion I guess that we would need to tighten up or clarify will if this is going to give a legal okay our and the when the Supreme Court and and this is somewhat related to responsible person Pilkington with the Supreme Court made its ruling in the role which case it was addressing what we call maximum allowable cost reimbursements and so that is basically how pharmacies. Page through a mechanism called maximum allowable cost pharmacies are guaranteed their includes inventory cost under the maximum allowable costs low the Supreme Court did not address anything else other than that particular issue and so when the legislature amended the PBM licensure act so what does the self funded plans the question is is that waffle or is it a couple of the other parts of the act besides Maxwell cost so I anticipate there to be some discussion during the rulemaking procedures for the permanent role where the PBMs mine argue that the other provisions of the P. licensure act which are not actual local cost or not we're not addressed by the court therefore they should not apply to us because risks so there may be some legal arguments that are that might be raised that that our concerns to the self funded plans related to the other provisions of the rule out outside of maximum allowable cost network adequacy and other provisions that are not ruled on by the court but I'm not heard any Senator Irvin I've not heard any opposition controversy from the PBMs on that particular issue yet okay thank you. Members are there any other questions. Seeing none of since this is just for review there's no need for us to take action we appreciate your presentation thank you thank you Mr thank you. In a five may up I'll just as a point of public record and just acknowledge that Commissioner the claim is here thank you in chief deputy Galbreath from the department is also here so thank you for attending today. Members we have of. Two I. S. P.'s by Senator Leding of he is not here to percent of we course when we adopt ISPs all that is is to be entered into the record so study can take place so I would entertain a motion well I would make a motion without objection that we adopt the size peas and and this is a point where you can make an objection if you wish is there anyone wishing to make objection. If not we will lead a batch those two ISPs by Senator Leding and they I have a motion to adopt. Motion by Senator Elliot seconds. The Senator Dismang all those in favor of adopting these residents of these ISPs signify by saying aye. Any opposed no. Okay the ISPs do pass of the next ISP representative Johnson this was referred to us by the Arkansas Legislative Council of he's indicated to me that the issues that he believes are covered in this have been taken care of but I felt like you would still be important for us to go ahead I just spoke with him yesterday and he said he would like for us to go ahead and top this This ISP of for any study that may be necessary so do I have a motion to adopt have a motion from Senator Irvin to adopt representative Johnson's ISP is your second. Your second all those in favor signify by saying aye. Any opposed say no. It noted and did the ISP is adopted. Of the last of I S. P. is by representative jim Wooten and he has asked me to allow him to make a brief presentation representative wouldn't you're recognized. Was. I didn't see who was. Thank you Mr chairman for the record jim Wooten state representative district forty five. This legislation which you have a copy of his feelings self explanatory but I just want to make a few comments you heard some of the answers from the questions I gave to Mr Ryan with the however with the with the insurance department concerning of this ISP study the requesting to look into the relationship of pharmacists as it relates to their clientele around the state particularly those that are none owned and operated in the state of Arkansas and I think you can tell from the PBM action and questions that the city's CVS for an example controls. the P. B. some PBL's wall growing in the US they are they operate and then the insurance companies have PBM and what they're doing is they're controlling the pricing based upon the formal or that they're given and then they control the pricing to the local for Mrs and then the other the one of one of the other major issues of this is what the in the state of North Dakota the label it up today ownership law similar and exactly of like the like this legislation house bill nineteen forty five the I'm asking for the study to be form known but I will only make it very clear that what what this bill does is it is it would mandate ownership for operation of former season Arkansas have participation of residents of Arkansas and they would have to be licensed by the state board of a pharmacy of the the the the. One of the important points I think is the fact that all those pharmacies that are operating today will be grandfathered in they will not be impacted by this north Dakota's law has been very successful hello this study and then passed a law but the findings echoed by their study was an NBC news reporting and and March former sees it chain drug stores say they are reaching a breaking point they're working long hours they're working twelve hours a day and and then in addition to that some of the pharmacist and I've of seen this occur or some of some of the chain pharmacist will be closed for a period of time during the day and then they'll open back up so there the customer has no indication of exactly what's going on and there's a great senator flux right now in the pharmacy operations CVS has announced that they're closing nine hundred stores and they're closing all their stores in Arkansas it's my understanding I think the field is more profitable to be involved in the PBM side of operations and it is in the direct retail. The we we also have a situation where some of the P. B. ills and to some of the insurance companies are asking some of the former sister telling them the PBMs or telling them not to permit access under Medicare to generic drugs so that just gives you an example of the competitive of the competition but they're big they're able to control the competition and as Mr ran for two I have one of my former services got involved with the of PBM that And here again is the Arkansas old of local pharmacist of the performed on the legal all and he made the point to amend that they agreed will three months six months later they came back to another all it and it was also illegal and they find him. And the the they made him play them Ferguson like six or eight thousand dollars I can't remember but anyway the the the the E. appeal this to the insurance department and sure enough they they rule that it wasn't the legal all that but I make these points to emphasize that's the reason we will this study is to look into the relationship and the ownership and the importance of it paying perhaps being locally owned the pharmacist in the state and the come ramble but I'll be happy to to attempt to answer questions but I would would would like to see this as the study before thank you representative would we do have a question from senator Hammer you will have that Senator thank you Mr I'm just attorney clarity of what your intent is would this prohibit. A chain pharmacy from being able to conduct business in Arkansas or would they have to have their corporate office. established in Arkansas well. Are you talking about a locally owned chain or you're talking about someone coming in from outside the didn't have any Arkansas ownership say some pharmacy chains in California want to buy up all the CVS stores they're gonna be vacant in Arkansas put in their own brand in Arkansas no they wouldn't be able to do this rule under this legislation okay so they if they if they already had and we're offering and were approved by the state pharmacy board and they've also more stores in the state then they they probably would be permitted to. But that's one of the reasons for the study centers to is to look in the details like that okay and that's exactly what this is is just a study yes okay thank you thank you Sir. Representive flowers. resembling I'm here I'm here yeah yeah. Of and just to piggyback off of Senator hammers questions and to get clarification. Under that same example that you gave would not a company in state or out of state that is or that would be predominantly owned majority owned pharmacist owned they would in fact be able to open a pharmacy here. Thank you so much. So score. Members any other questions. Seeing none representive wooden of. Like to make a motion for us to to make a motion for the adoption of the study okay is there a second. Second to by representative brown. All those in favor of adopting this science be by representative wouldn't signify by saying aye. Any opposed say no. And your ISP is adopted thank you. Thank you colleagues. Members we've gotten to the end of the agenda is there any other business to come before the committee. Of just by way of announcmenet just to be we don't have a specific date but will probably be looking at of trying to schedule another joint committee in September to different areas of inquiry that I have asked to the department to work with me on this looking at one it is mainly informational for the public to look at the the increased incidence of the. Claims related to uninsured and under insured motorist coverage of the the information would be to inform citizen since they're not required to Kerry that coverage that they look at the the low cost of care of that coverage and how that prep the prevalence of that is increased dramatically so we'll have a report on that and then another issue is related to construction cost there have been some at least I have received information from his constituents that insurance adjusters are using cost estimates from well before winning construction costs and construction material costs started increasing dramatically and so we're we're gonna have probably report on that as well is there any other business to come before the committee. If not I'll entertain a motion for adjournment. I hear the motion for adjournment we are adjourned.