PA-NABIP Pulse July 2024

PA-NABIP Pulse July 2024

The Facts of the Month

Here is something to mention when discussing health trends in the month ahead.

Three-quarters of Americans think mental health issues are identified and treated worse than physical health issues in the U.S. Then, when asked to evaluate how well the nation’s healthcare system deals with mental health conditions, the assessment is bleak. Only 1% of U.S. adults grade its ability to address mental health issues as an A, 8% as a B, and 27% as a C. The remaining majority, 57%, grade it as a D (32%) or F (25%). In the same survey, 52% of Americans cite affordability as the top barrier to obtaining mental health care and 42% note the difficulty in finding a provider.

Source: Americans Perceive Gaps in Mental, Physical Healthcare, West Health-Gallup Poll, February 2-14, 2024

The Big Three

Each month GPAHU identifies three top public policy or legal developments that could impact our members and clients. Here are this month’s big three!

  1. Pennsylvania Enacts Telemedicine Legislation Supported by PA-NABIP

On July 3, 2024, Governor Shapiro signed Senate Bill 739 into law. The measure is now known as Act 42 of 2024, and it requires all health insurance issuers offering fully-insured coverage in the state and the Commonwealth’s CHIP and Medicaid programs to reimburse qualified providers for covered services appropriately provided through telemedicine. According to the measure, if a commercial health insurer provides coverage for a health care service that is performed in-person, it now must also cover that same service via telemedicine as long as the required standard of care is met. The law also establishes terms for when payment reimbursement isn’t required, such as if the equipment or service isn’t compliant, the service is inconsistent with the standard of care, or if the service is provided out of network.

The new law will go into effect on October 3, 2024. Before its enactment, Pennsylvania was one of only a handful of states that lacked a legal framework for the reimbursement of services provided through telemedicine.

  1. PBM Reform Legislation Signed by Governor Shapiro

Last week, Governor Shapiro signed H.B. 1993, Pharmacy Benefit Manager (PBM) reform legislation into law. The measure passed both houses of the legislature extremely quickly and with bipartisan approval. Act 77 of 2024 applies to PBMs working with fully-insured health plans in the state. It has a staggered effective date, but all provisions will be applicable to fully-insured health insurance policies approved and pharmacy contracts issued, renewed, or amended after November 14, 2024.

The new law addresses pharmacy rebates by specifying that PBMs must pass at least 95 percent of any manufacturer rebates through to a health benefit plan client if the health plan designates rebate negotiation to their PBM. To enforce this provision the law also includes transparency requirements for PBMs operating in the Commonwealth. Beginning in 2026, each PBM must annually report, for each of their fully-insured health plan clients the following information:

  • The aggregate amount of all manufacturer rebates the PBM received for each health insurer client and in total
  • The aggregate amount of all manufacturer administrative fees the PBM received for each health insurer client and in total
  • The aggregate retained manufacturer rebates received that were not passed to health insurer clients
  • The highest, lowest, and mean aggregate retained rebate percentage for each and all health insurer clients.

PBMs that control or are affiliated with a pharmacy also must provide a description of any difference between what the PBM reimburses or charges affiliated and nonaffiliated pharmacies. Within 60 days of receipt of these reports, the PID must publish deidentified versions of the data on its website.

The new law also includes provisions that will directly impact consumers. It attempts to control pharmacy steering and spread pricing by preventing health plans and PBMs from requiring plan participants to purchase medications from mail-order pharmacies or PBM-affiliated retail locations or from using financial incentives, such as lower cost-sharing to steer plan members to PBM-affiliated retail pharmacies. It also specifies that pharmacies may not charge insured patients more than the self-pay price for any medication, or more than the pharmacy will receive in reimbursement from the insurer or PBM, even if the individual’s pharmacy cost-sharing responsibility is more than the cost of the drug.

Health plans and PBMs may only auto-enroll a person into mail-order prescription drug services if the prescription involved is a maintenance medication, the auto-enrollment cannot occur in the first 90 days of a person’s prescription, and the individual has the option to cancel mail order services at any time. In addition, PBMs are not permitted to designate a medication as a specialty drug or require a medication to be purchased through a specialty pharmacy unless the drug meets specified criteria. To address network adequacy, PBMs need to have networks that meet or exceed federal Medicare Part D pharmacy access standards and they must provide network adequacy reports to the PID beginning in 2016.

The PID will be developing regulations to more fully implement this measure, and PA-NABIP will keep our members informed of any new developments as they occur.

  1. Agent Licensing Simplification Bill Advances to the House

S.B. 1241, a measure to make it easier for insurance agents to get a license has passed the Senate and is currently pending in the House. Senator Chris Gebhard (R-48) introduced the bill, which would remove Pennsylvania’s pre-licensing education requirements and instead only require people to take and pass the Commonwealth’s licensing examination. The bill also removes the requirement for the insurance department to approve and administer pre-examination education programs. If approved by the House and signed by Governor Shapiro, the bill will take effect 180 days after enactment.

Check This Out!

If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!

Forbes has put together a compendium of health insurance facts and statistics.

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