State pharmacy benefits manager; DMAS to select & contract with a third-party administrator to serve
HB2610 amends Virginia’s Medicaid statute and adds a new section establishing a single state pharmacy benefits manager for the Department of Medical Assistance Services (DMAS). The bill requires DMAS, by July 1, 2026, to select and contract with one third-party administrator to manage pharmacy benefits for all Medicaid recipients, including those enrolled in managed care organizations. Managed care contracts must require use of that state pharmacy benefits manager, and the contract must include fiduciary duties, pass-through pricing, use of the Department’s formulary and reimbursement methods, transparency in drug costs and rebates, and a prohibition on spread pricing.
The bill also directs DMAS to hire an independent consultant with experience in Medicaid fraud control and in states that have implemented a single pharmacy benefits manager, to help implement the new model. The consultant may not be affiliated with a Virginia Medicaid managed care organization or a pharmacy benefits manager already contracted with one. The evaluation is expressly not allowed to delay the July 1, 2026 implementation date.
Beyond the pharmacy benefit changes, the bill retains and restates a broad range of Medicaid state-plan provisions in § 32.1-325, including coverage and eligibility rules for numerous services such as telemedicine, remote patient monitoring, contraceptives, screenings, transplants, durable medical equipment, school-based services, and other medical assistance benefits. The new language also reinforces DMAS authority over provider contracts, appeals, and reimbursement rules, while adding specific restrictions on spread pricing in managed care pharmacy contracts.
The bill’s impact on state law is significant because it centralizes pharmacy benefit administration for Virginia Medicaid and limits how pharmacy benefit managers may be paid. It is intended to increase transparency, reduce pricing spread, and align Medicaid pharmacy purchasing under a single statewide administrator, affecting DMAS, Medicaid managed care organizations, pharmacies, and pharmacy benefit managers. It also continues to shape the scope of covered Medicaid services and provider reimbursement requirements under Virginia law.
The overall sentiment appears strongly favorable, with the bill passing the House overwhelmingly and advancing through Senate committees and floor votes without recorded opposition in most stages. The only notable resistance appears at the conference stage, where the House initially rejected the Senate substitute amendment before ultimately agreeing to the conference report. That suggests the main disagreement was not over the concept of a state pharmacy benefits manager, but over the details of the substitute and amendment language, likely including implementation structure and contracting terms.
HB2610 amends § 32.1-325 of the Code of Virginia and adds new § 32.1-325.5 to create a statewide Medicaid pharmacy benefits manager program. It requires DMAS to contract with a single third-party administrator for all Medicaid pharmacy benefits by July 1, 2026, and requires managed care organizations to use that administrator. The bill also imposes contract requirements prohibiting spread pricing and requiring pass-through pricing, fiduciary duties, and transparency in rebates, fees, and drug costs. In addition, it directs DMAS to retain an independent consultant to assist with implementation. The bill leaves in place and restates extensive Medicaid state-plan provisions covering eligibility, telemedicine, screenings, maternity care, durable medical equipment, and other covered services, thereby reinforcing DMAS’s authority over Medicaid administration and provider reimbursement.
The bill’s reception was broadly positive and bipartisan. It moved through committee and floor votes with large margins, including unanimous or near-unanimous committee approvals and a 98-0 House passage, followed by a 40-0 Senate passage of a substitute with amendment. The only clear split came when the House rejected the Senate substitute amendment on a 6-92 vote before the chambers resolved differences in conference. Overall, the voting history suggests strong support for the policy goal of centralizing Medicaid pharmacy benefits, with disagreement focused on the final form of the substitute language rather than the bill’s core objective.
The main contention appears to have been over the Senate substitute and amendment package, not the idea of a single state pharmacy benefits manager itself. The House initially rejected the Senate’s version, indicating concern about the details of implementation, contracting authority, or related amendments. The bill’s pharmacy-benefit provisions also implicate managed care organizations and existing pharmacy benefit managers, who would lose flexibility to use separate PBMs and would be subject to pass-through pricing and anti-spread-pricing rules. Those entities are the most likely stakeholders to be affected by the bill’s restructuring of Medicaid pharmacy administration.