House Bill 23-1227: PBM Registration, MAC Requirements, and Enforcement
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State statute establishing PBM registration, oversight, enforcement, fee collection, and operational requirements for PBMs, affecting PBMs, carriers, and pharmacies contracting with PBMs in Colorado.
A registration requirement for any person operating as a PBM in Colorado starting in 2024, including application and renewal fees and rulemaking authority for the commissioner.
Explicit enforcement authority for the commissioner across multiple PBM-related statute sections, permitting penalties or other remedies for noncompliance.
Requirements for maximum allowable cost (MAC) lists and pharmacy appeal processes in PBM contracts, including update frequency, availability, and timelines for appeals and adjustments.
Authorization to collect and deposit registration fees into the Division of Insurance Cash Fund and appropriate those funds to implement the act, including a specified appropriation for FY2023-24.
MAC Contract and Appeals Requirements
inv-01: MAC contract and appeals criteria
Contractual requirements and dispute resolution for MAC pricing between PBMs and pharmacies:
ALL of the following
- A 21-day limit to file an appeal following the initial claim.
- A requirement that the appeal be investigated and resolved within 21 days after the appeal is filed.
- A telephone number where the pharmacy may contact the PBM to speak with a person responsible for processing appeals.
- A requirement that the PBM provide a reason for any appeal denial and identify the National Drug Code (NDC) of a drug that may be purchased by the pharmacy at a price at or below the PBM's benchmark price.
- A requirement that the PBM make any required pricing adjustment to a date no later than one day after the date of determination; retroactive claim adjustments are permitted.
MAC Listing Criteria and Identifiers
| NDC | National Drug Code must be identified by PBM when providing reason for MAC appeal denial and identifying alternative drugs at or below benchmark price. |
Registration, Enforcement, and Disciplinary Authority
Registration enforcement and disciplinary actions
The commissioner may deny a registration, suspend, revoke, or refuse to issue, continue, or renew a PBM registration, or issue a cease-and-desist order after providing notice and holding a hearing in accordance with sections 24-4-104 and 24-4-105 if the PBM or an officer, director, or employee has made a material misstatement or omission in a registration, obtained a registration fraudulently, committed fraud or illegal activity in administering prescription drug benefit management services, or violated any provision of Title 10.
- Applies to all PBMs doing business in Colorado, including PBMs not directly connected with a carrier.
- Hearings and final determinations are conducted in accordance with Colorado administrative procedure (sections 24-4-104, 24-4-105) and are final agency actions subject to judicial review under section 24-4-106.
General enforcement authority and remedies
The commissioner has authority to enforce multiple PBM-related statutory sections and may impose a penalty or other remedy, and to adopt rules to implement and enforce those sections when a PBM, pharmacy benefit management firm, or carrier fails to comply.
- Enforcement authority is added across provisions governing retroactive reductions, formulary changes, audits, disclosures, and real-time benefit access.
- The commissioner may adopt rules to implement and enforce these sections and may require corrective action plans for carriers when appropriate.
Key Definitions
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