Legislative leaders have asked Gov. Asa Hutchinson to call a special session to pass legislation that would license and regulate pharmacy benefit managers through the Arkansas Insurance Department.
Identical letters to that effect were written Friday, Feb. 16 by Senate President Pro Tempore Jonathan Dismang, R-Searcy, and Speaker of the House Jeremy Gillam, R-Judsonia.
In an interview, Dismang said the two legislative leaders had written the identical letters after a couple of days of talks, and that the special session would occur immediately after the current fiscal session.
He said the issue with pharmacy benefit managers (PBMs) has “occupied a lot of our conversations at the Capitol.”
“With all the policy discussion that we’re having, it’s been hard to focus on the appropriations and actual budget matters of the state, and we really feel like we need to refocus the members by giving some assurance that these items would be dealt with,” he said.
Hutchinson spokesman J.R. Davis said, “The governor will review the letter and consider the request over the weekend. We’ll have more next week.”
Dismang said the majority of members would like to see PBMs licensed and regulated by the Arkansas Insurance Department to ensure they are following current state laws.
PBMs have become an issue since Jan. 1, when Arkansas Blue Cross and Blue Shield began contracting with CVS Caremark as its pharmacy benefit manager. PBMs act as middlemen between insurance companies and pharmacies and are designed to lower pharmacy payments and drug costs.
But the state’s pharmacists claim they are losing money on many transactions and that CVS Caremark, which also contracts with insurance provider Ambetter, has been illegally keeping too much of the insurers’ payments that belong to them. CVS Caremark has said it reimburses pharmacists at competitive rates and provides a cost-effective benefit for its clients.
Legislators are currently meeting in their even-numbered-year fiscal session, which is designed to focus only on budgetary matters unless two-thirds of the members request that additional subjects be considered.
The letters from Dismang and Gillam said that legislators wish to “maintain the integrity and voter intent” of the fiscal session by “focusing only on those financial issues.”
The letters also state that legislators want to clean up the state’s law regarding open containers of alcohol in motor vehicles in the special session.
Legislators passed an open container law in 2017 to comply with federal law. According to Rep. Mat Pitsch, R-Fort Smith, the legislation did not acceptably match federal requirements, though the intent was to do so. Because of that, $11.6 million, or 2.5% of all federal funds the state receives for highways, would have to be dedicated to safety and training expenditures dictated by the federal government. Lawmakers would rather have the flexibility to spend that money on other needs.
Pitch has sponsored a resolution this fiscal session that would make those provisions.
The letter requests that the final drafts of bills to be considered in the special session be ready for review by Feb. 26. It also requests that the bills be accompanied by the signatures of two-thirds of the members of each chamber to demonstrate support. Other issues could be considered.
The governor would not have to require that threshold to call the session, but Dismang said it would convey consensus. He said members could work through the issues while meeting in the fiscal session.
Dismang said some members have mentioned the PBM issue in conjunction with the state’s appropriation for the Department of Human Services. He said he’s “not sure exactly how that would have played out as we went on into the session.”
Opponents of the state’s Arkansas Works program in the past have tried unsuccessfully to end it by blocking the appropriation, and it has often passed with few or no votes to spare. Arkansas Works is the state program that uses federal dollars through the Affordable Care Act (Obamacare) to purchase private health insurance for lower-income Arkansans.
Dismang said members are still waiting on DHS to answer questions before voting on the appropriation and have a full schedule with other matters next week.
The appropriation requires a three-fourths vote, which is especially challenging this year. Three of the Senate’s 35 seats are vacant, but the 27 votes are still required. But some senators who traditionally have opposed the program have indicated a lack of interest in a long, bruising fight this year.
“At this point, the members are keeping an open mind on the appropriation, and that includes members that have traditionally voted no,” he said.
Senate Majority Leader Jim Hendren, R-Gravette, said in a text message that he didn’t have a “hard count” on the vote totals but added, “I think we’ll find common ground on (the) PBM issue, and (the) appetite for another DHS (appropriation) fight is lessening every day.”