Law requires drug benefit managers to share finances with insurers

Prescription drug benefit managers must share financial information, related contract terms, and conflicts of interest with insurers they serve. These managers handle prescription drug benefits for insurers, including pharmacy payments and drug coverage decisions. Disclosures concern services provided to that insurer. Insurers must keep reasonably identified trade secrets and protected business information confidential, except when disclosure is required or allowed by law. Starting August 1, 2028, reports under the Consolidated Appropriation Act of 2026 count as sufficient compliance with an unclearly identified subsection. Confidentiality does not excuse giving required information to the health insurance commissioner's office, which must also keep it confidential. The insurer disclosure duties begin August 1, 2027.

Prescription drug benefit managers must work carefully, deal fairly, and safeguard money received for their services. The duties cover dealings with patients, pharmacies, and others. The money rule includes amounts collected by charging more for a prescription than the manager pays the pharmacy. When dealing with an insured patient, a manager owes that patient the same duty as the insurer it serves. Money must be held in trust, meaning it must be safeguarded and used only as the insurer contract or law allows. Contracts may expressly allow service fees. These duties take effect January 1, 2027.

Prescription drug benefit managers must follow limits on prescription changes, pharmacy disclosure restrictions, and patient copayments. The contract rules cover pharmacies and agents that negotiate contracts for them. A manager may change a prescription or cause a drug substitution only with the prescriber's approval or when law or regulations expressly require or permit it. In pharmacy contracts, managers cannot prohibit or penalize sharing prices, pharmacy costs and payments, or equivalent drugs and other payment options. A patient's copayment cannot exceed the pharmacy's submitted charges for which it is paid. The pharmacy keeps the amount determined for the claim, and the manager cannot reduce or recover it. These protections take effect January 1, 2027.

Prescription drug benefit managers must offer pharmacies a process to challenge prices used to calculate payments for generic drugs available from multiple sources. The process covers contracts with pharmacies or their contracting agents. Managers must provide appeal contacts, acknowledge receipt by email, and send an electronic decision. A successful appeal adjusts the appealing pharmacy's payment limit back to the original claim date. The pharmacy must reverse and resubmit the claim to receive corrected payment. If a wider update is warranted, the manager or insurer must adjust payment limits for similarly situated pharmacies in its Rhode Island network. A denial must explain the reason and identify an equivalent drug available in adequate supply from wholesalers at or below the payment limit. The process applies January 1, 2027. Appeals must be filed within 15 days following the initial claim, with decisions within 15 days of filing. Warranted network-wide updates are due no later than one day after an appeal is found valid.

Rhode Island's health insurance commissioner must review drug benefit managers' effect on insurance costs and issue rules. Managers and insurers under investigation or enforcement must pay the costs. The review covers managers' practices and operations affecting Rhode Island health insurance costs. Cost charges apply to managers or insurers facing an investigation, examination, or enforcement action. The affected managers and insurers share enforcement costs equally. Charges include 150% of enforcement staff salaries and benefits, less salary reimbursement, along with reasonable technology, training, and outside expert expenses. The law takes effect January 1, 2027. Findings and recommendations to the General Assembly are due on or before March 31, 2027.