A BILL to amend and reenact § 32.1-325.5 of the Code of Virginia, relating to state pharmacy benefits manager; contractual provisions; dispensing fee increases; report.
HB631 would revise Virginia’s Medicaid pharmacy benefit administration by requiring the Department of Medical Assistance Services to contract with a single state pharmacy benefits manager (PBM) to administer pharmacy benefits for all Medicaid recipients, including those enrolled through managed care organizations. The bill sets out detailed contractual requirements for that PBM, including fiduciary duties to the Department, pass-through pricing, use of the Department’s common formulary and reimbursement methodologies, transparency in pricing and rebates, and prohibitions on spread pricing, steering to affiliated pharmacies, and mandatory mail-order use.
The bill also directs the Department to use national average drug acquisition cost-based reimbursement, or a comparable formula if NADAC is unavailable, plus a professional dispensing fee. It requires network adequacy standards, open participation for licensed pharmacies that accept the contract terms, accurate pharmacy directory information, annual reporting, and enforcement mechanisms with monetary penalties for noncompliance. In addition, the Department must calculate annual savings from the centralized PBM model and increase dispensing fees by the amount of those savings, while publishing the savings and fee updates online and reporting annually to the General Assembly.
HB631 would amend § 32.1-325.5 of the Code of Virginia and significantly restructure how Medicaid pharmacy benefits are administered in the Commonwealth. It would centralize pharmacy benefit management under a single state-contracted PBM, impose new transparency and reimbursement rules on Medicaid pharmacy claims, and require managed care organizations to use that state PBM for Medicaid pharmacy services. The bill would also create ongoing reporting obligations and a mechanism to redirect savings from PBM consolidation and pricing changes into higher dispensing fees for pharmacies.
Based on the available record, the bill appears to have been introduced as a policy reform measure with no recorded committee debate or votes in the provided materials. Its structure suggests support for pharmacy reimbursement transparency and pharmacy access, but the fact that it was left in the House Appropriations Committee indicates it did not advance in the process. With no transcript or vote history, there is no documented public sentiment beyond the bill’s formal introduction and referral.
The main points of contention likely involve the bill’s mandate for a single state PBM, which would reduce flexibility for managed care organizations and could shift administrative control from private PBM arrangements to the Department. Other likely concerns include the cost and feasibility of requiring pass-through pricing, real-time transparency, network adequacy standards, and network-wide rate adjustments after appeals. The bill’s requirement to increase dispensing fees by calculated savings may also raise questions about budget impact and whether projected savings are sufficiently certain to support higher pharmacy payments.