July 16, 2025 • 15 mins
PBM licensure requirements are evolving fast—and compliance mistakes are getting costly. In this episode, we break down what every pharmacy benefit manager needs to know to stay licensed and competitive.
From rising state fees to unpredictable reporting timelines, regulators are putting more pressure on PBMs than ever before. Joe Boyle, President of ClearFile, explains the full licensure process, how to avoid common mistakes, and why proactive PBMs are gaining a strategic edge. 🔍
You’ll learn:
- The difference between registration and full licensure
- How to build trust with regulators and avoid delays
- Why staffing and reporting strategy matters
- What new trends are reshaping PBM compliance in 2025
Stay in the loop with Regulatory Joe: https://www.regulatoryjoe.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hey everybody.
(00:00):
Welcome to Regulatory Joe.
I'm Joe Boyle, president of ClearFile,and on today's episode we'll be
talking about PBM Licensure 101.
I know what you're thinking.
This may be a little bit different.
We'll still be reporting on healthplans but we'll be branching out
to net new lines of business,including PBM licensure, TPA
licensure, even non-healthcarelines of business, and don't worry.
Health plan content's not going far.
(00:21):
It'll still be our primary focus onwhat we report on, on the podcast.
So what are we talking about today?
Every pharmacy benefit manager knowswell and clear that divisions of
insurance are strengthening regulatoryoversight for the past 24 months.
Here's what you need to know.
So starting at the beginning, everyPBM needs to be registered within
a state that they operate in.
Registration is the first driverto become fully licensed within
(00:43):
any division of insurance.
Registration, simply put, is making surethat the company is domiciled and formed
and approved by the Secretary of State,also abbreviated as an SOS application.
And it may seem like a pretty simple stepor an administrative filing to actually
just get your SOS application approved.
But really, once that applicationgoes into your division of
insurance, the clock starts ticking.
(01:04):
Generally speaking, an SOS applicationhas a series of company documents,
including formatted business plans,some light financial statements,
history about the company, when andwhere it was domiciled, where your
headquartered location is, and usuallya small fee anywhere between $50, $100.
I think the most expensive one we've seenis up to $500 for the application itself.
(01:26):
From a turnaround time perspective,once you gather and collect all of your
documents and organize them and versionthem, making sure they're up to date
for regulator review, generally takesabout five to seven business days for
your SOS application to actually beapproved and certified by the state.
Now recognizing each state anddivision of insurance operates
slightly differently, we can quantifythis to an average turnaround time.
(01:48):
We generally see PBMs are planningtheir strategic roadmap to become
compliant in different ways.
Some PBMs are prioritizing their SOSregistration based on the number of
lives that they cover within thatstate, or maybe based on the cost of
how much it costs to participate withinthat state or even become registered.
And once A PBM has finalizedtheir strategy for growth and
(02:09):
compliance within the space, we canmove on to full-blown licensure.
It's very important to know that licensureis not governed on a federal level where
it's consistent across all states anddomestic territories within our country.
It's actually governed on astate and local government level.
So while those requirements may feelkind of similar across each state, you
need to be very careful because eachstate has their own set of templates,
(02:30):
state specific requirements, additionalforms, exhibits, appendices, and more.
Understanding the full licensureprocess really starts with understanding
your footprint in your state today,how many lives you cover, how much
revenue you're generating, and howmany claims that you're producing on
an annual basis within that state.
Now it becomes very complicatedbecause we have worked with PBMs and
organizations that may be domiciled ina state, and you could be registered
(02:54):
in that same domiciled state,fully licensed within that state.
But if you cover a group, let's justsay a trucking company that's filling
prescription drugs across state linesin bordering states, you also need
to make sure that your PBM is notjust registered in those neighboring
states, but also fully licensed inthose neighboring states as well.
And with the complexities offull-blown state licensure, you may
(03:16):
ask the question, well, how did weget from just registering a PBM as a
headquartered organization to full-blown,strengthened licensure requirements?
Well, if we walk it back on atimeline for the last 24 months,
we've seen that there's been muchmore eyes from state regulators
on PBM organizations as a whole.
In fact, over half the states inour country are now governing PBMs
(03:37):
by licensure requirements throughapplications, biographical affidavits,
templates, even reporting that are notjust on an annual basis, quarterly basis,
but even on a monthly basis to ensurecompliant PBM operations, compliant claim
adjudication and filling of prescriptiondrugs for members that need it the most.
While some states have had licensurerequirements for the past number
(03:59):
of years, other states, such asMassachusetts, are just rolling out
requirements, effective 1/1/2026.
In looking to how regulators areestablishing these requirements,
they're speaking with other states.
This was a huge topic at the SpringNational NAIC conference, where
multiple dedicated sessions acrossall states where regulators were
collaborating had discussed (04:16):
what's working for PBM licensure requirements?
Where is there opportunityfor improvement?
Where are regulators, in somecases, overregulating with
requirements that could be lookedat as disproportionate for PBMs.
Again, let's walk it back.
You have a handful of large PBMs thathave governed our country's operations for
(04:37):
many, many years, and you have a number ofsmall PBMs, even startup PBMs that have a
percentage of lives that may not be ableto afford to conduct business, even with
ethical strategies within that state.
So not just application fees.
We're seeing that just to submita licensure application, including
biographical affidavits, fingerprints,even financial statements, audited or
(04:58):
not audited, application fees, couldrun a PBM anywhere from $500, $1,000,
or we're seeing states like Floridaup to $10,000 or New York for $10,000
to operate for three years within thatstate before they even sold a life.
So taking on that expense as anorganization, small or large, can
carry a very different burden in actualoperating and conducting business.
(05:20):
We are seeing that smaller PBMs arestruggling to actually participate
within states up against large PBMs,simply because the disproportionate
regulations that are being put in force.
And I think it's important to understandthat licensure applications and submitting
for certification is one thing, butthat's just getting your PBM started.
So if you're operating and conductingbusiness within the state, what happens
(05:40):
quickly after certification is reporting.
And it's important to know that there'sdifferent levels of reporting, not
just what we talked about, of annual,quarterly, monthly, or even weekly,
but harnessing the difference betweenreporting tied to licensure specifically,
and reporting for different functionsof a pharmacy benefit manager.
And what we recommend is right out ofthe gate, is to understand the resourcing
(06:03):
your analysts within your company toharness the data within your warehouse.
We know each PBM houses theirdata in many different ways.
Some have their own customdatabase, some rented database,
but really understanding reporting.
Getting your SQL servers with the,the right level of code to understand
what's required for licensurereporting and then what's required
for other functions of your business.
(06:24):
Far, too often, they are crossinglines and it actually causes confusion,
impacting the quality of submission.
And it's important to know thatall regulators are different.
And so what I mean by that iseven if there's a review process
in place, a big part of licensureapplication is interpretation.
So when you're running your reports,we encourage you to also build a
relationship with your regulator.
(06:46):
That's half the battle.
Understanding who's reviewing yourapplication, making sure they know who
you are, making sure they know they cantrust their submitter and that they're
transparent within their application.
Building that trust up front withinyour state, year one, especially
if you've been operating and doingbusiness within the state and covering
lives, will be critically important.
This will help you avoid fines,avoid fees, and streamline the
(07:07):
operations of actually getting yourregistration on time, getting your
licensure application approved, andactually executing your reporting.
But you need to be prepared.
You cannot actually get licensedin a state if you don't have a plan
strategy to build your businessor just to simply get licensed.
You need to have a plan, a business planof action, and you need to be prepared
(07:27):
to actually present that to the state.
We've seen it far too often that duringthe application process, you can follow
each questionnaire down to subsectionsub letter A, B, subsection C, but
they'll still have questions about yourbusiness to actually get to know you.
Why are you operatingas a PBM in our state?
Are you looking to cover fully insuredlives or self-funded ERISA lives?
(07:49):
Why?
Be prepared to answer thesequestions and assemble your team.
We understand PBMs can run lean withsenior officers or the executive
team, with very lean operations.
So we recommend having a dedicatedresource on your legal team to be
prepared to answer legal questions.
Have a senior officer able to attestto your fiduciary responsibilities,
(08:10):
like your CFO or your CEO, to makesure that you've been sound financially
for the past x amount of years.
Generally speaking, PBMs will ask you tohave prepared anywhere from three to five
years of financial statements upfront.
Have those prepared, and if you don't,there's a likely chance that you will
be audited, and that is incrediblyexpensive, to the tune of what we've
(08:32):
seen working with even one PBM paying$12,000 to actually conduct an audit,
just to get audited financials, noteven to complete the application.
It's the cost of doing business.
Even in the state of Florida, comparablyspeaking, we've worked with a PBM that
ingested a $60,000 fee simply to haveaudited financials because they've been
(08:52):
in business for so long and they were sucha large company that that's what it took.
So contracting a CPA, youshould get one quickly.
Codify your business operations, buildyour team, assemble your team, ensure your
fiduciary responsibility, review historicdata in your company and have a plan.
It will be important in understandinghow your organization is set up.
(09:13):
And what I mean by that is far too often,we see PBMs that are what we are referring
to as child organizations within parentorganizations, PBMs who are oversaw by a
grocery store, a joint venture partner,a hospital health system or other,
even a health plan for that matter.
You have to make a decision ifit's the child organization or
(09:34):
the parent organization thatultimately is responsible, who's
operating independently from who.
How we break that down and howwe look at the responsibility and
ownership and accountability isby tax ID number or FEIN number.
So really where you're getting licensed,the organization that's conducting
the operation, really making sure thatthat FEIN number is taking fiduciary
(09:56):
accountability for the operations withinthe state or exclusively articulating in
your application that your parent companywill oversee and take responsibility
for all of your PBM operations.
So all that said, let's ask thequestion, where are states going?
With regulations, we do see statesstrengthening requirements month over
month for the foreseeable future.
(10:16):
We recommend following operationsand conversations through the
National Association of InsuranceCommissioners, NAIC, and work with
your regulators, attend the meetings.
Make the effort to showup and to shake hands.
Have the conversations,build your relationships.
Being at the forefront of watching yourregulators formate policies will allow you
the opportunity to ask questions, shareyour opinion, and share your outlook as a
(10:40):
PBM and the operations you're conductingin your state to share your voice.
And it's very important.
Every PBM has a voiceand regulators do listen.
You just have to make the timeand the effort to show up.
Very specifically speaking, we doanticipate and we do expect many
states, inconsistently across the boardwill increase reporting requirements.
So be prepared to report moreon your rebates, be prepared
(11:02):
to report more on your claims.
This is all in support of transparencyand coverage, or TIC, all governed,
even as far up as the CAA or theConsolidated Appropriations Act.
So that's not going away byany stretch of the imagination.
We would also encourage PBMs to beprepared for more financial reporting.
So I know we've already talked aboutfinancial statements, audited or not,
(11:23):
but being prepared to produce differentthings in your general ledger, different
formats of financial statements, differenttime periods of financial statements.
And lastly, PBMs really need tobe prepared for increased fines,
increased dollar amounts, andincreased penalties across the board.
PBMs should really take a step back andtake a moment to understand the cost
(11:44):
of doing business within their states.
Evaluate the number of lives and thenumber of membership that you have
in the state versus how much it willcost to complete your registration
application, your licensure application,or even the cost of building,
reporting, or a process in placeto sustain business in that state.
We're seeing more often than not insmaller PBMs case, this is driving PBMs to
actually exit or withdraw from the market.
(12:06):
So one more thing PBM should beprepared of is we've been so used
to being in the virtual world overthe past 24 months when PBMs have
been developing these requirements.
Be prepared to show up in person.
It's not uncommon for a regulator, evenfor a specific reason of getting a fine
to simply ask a PBM or a representativeof that organization to show up
in person, to have a conversation.
(12:28):
As they go through the licensureapplication, getting to know you and
learning more about your business andyour PBM is going to be important for
that regulator and that reviewer to know.
Licensure is a living obligation, andjust because you get your registration
complete with your SOS application,just because your licensure is approved
and you started your reporting, if youdon't dedicate the time, materials,
and resources to a codified process,year over year, regulators will
(12:52):
know and they will ask questions.
And regardless if you're a startup PBMoperating in one state, growing one state
at a time into 2, 3, 4, 5, or you'rea regional PBM entering four states at
a time, regardless of your structureor your org design, you really need to
sit down and think about how am I goingto assign my work by state, or how am
(13:12):
I going to assign my work by function?
It is very important to understand howyou're going to staff the work because
we're big believers in accountability,and we've seen PBMs be successful by
having an accountable owner work astate application from end-to-end.
They own that state,they own those templates.
They own those applications andmaterials all the way through the review
period, through approval and reporting.
We've also seen some PBMs be verysuccessful by having dedicated
(13:36):
resources by function for many states,not one-to-one, but one to many,
where they'll complete biographicalaffidavits for all the states within
the scope of their engagement.
And there's another dedicated resourcethat will complete all financial
statements for all the states withinthe scope and that engagement.
Both models work perfectly fine.
It's just truly based on how you'restaffing your organization, how you're
(13:57):
going to invest in the organizationaldesign of your PBM, and how you're
going to approach and look at that work.
On a go forward basis, we encourageall PBMs to be proactive and to,
quite frankly, self-regulate.
And what we mean by that is not justsimply sitting and waiting around for a
regulator or a state to find PBM activityand broach the subject themselves, but
(14:19):
really taking the accountability withintheir own organization to say, "Hey, we're
going to get ahead of any regulation.
We're going to get ahead of anyapplication and prioritize this to be
a good steward and a good fiduciarywithin the industry." Leading the
change will be very important, too.
Even getting public presence, attendingconferences with regulators, showing
up, spending the time and investingthe time with our legal partners to
(14:41):
making sure that we're on the pathfor compliant PBM activity within
all states across the country.
Shameless self-promotion (14:47):
ClearFile makes this process easy for PBMs,
really bringing all matrixed PBMrequirements, thousands of documents,
templates, applications, and instructionsinto one organized place where we
can assign accountable owners acrossany type of organization, keeping
it as closely managed or as broadlymanaged as that organization operates.
(15:11):
All the way from pre-licensurecertification, all the way to
disposition, approvals and reporting.
Thanks again for tuning in.
Don't forget to give us a like, give usa share and we'll see you all next time.
Hey everybody.
(00:00):
Welcome to Regulatory Joe.
I'm Joe Boyle, president of ClearFile,and on today's episode we'll be
talking about PBM Licensure 101.
I know what you're thinking.
This may be a little bit different.
We'll still be reporting on healthplans but we'll be branching out
to net new lines of business,including PBM licensure, TPA
licensure, even non-healthcarelines of business, and don't worry.
Health plan content's not going far.
(00:21):
It'll still be our primary focus onwhat we report on, on the podcast.
So what are we talking about today?
Every pharmacy benefit manager knowswell and clear that divisions of
insurance are strengthening regulatoryoversight for the past 24 months.
Here's what you need to know.
So starting at the beginning, everyPBM needs to be registered within
a state that they operate in.
Registration is the first driverto become fully licensed within
(00:43):
any division of insurance.
Registration, simply put, is making surethat the company is domiciled and formed
and approved by the Secretary of State,also abbreviated as an SOS application.
And it may seem like a pretty simple stepor an administrative filing to actually
just get your SOS application approved.
But really, once that applicationgoes into your division of
insurance, the clock starts ticking.
(01:04):
Generally speaking, an SOS applicationhas a series of company documents,
including formatted business plans,some light financial statements,
history about the company, when andwhere it was domiciled, where your
headquartered location is, and usuallya small fee anywhere between $50, $100.
I think the most expensive one we've seenis up to $500 for the application itself.
(01:26):
From a turnaround time perspective,once you gather and collect all of your
documents and organize them and versionthem, making sure they're up to date
for regulator review, generally takesabout five to seven business days for
your SOS application to actually beapproved and certified by the state.
Now recognizing each state anddivision of insurance operates
slightly differently, we can quantifythis to an average turnaround time.
(01:48):
We generally see PBMs are planningtheir strategic roadmap to become
compliant in different ways.
Some PBMs are prioritizing their SOSregistration based on the number of
lives that they cover within thatstate, or maybe based on the cost of
how much it costs to participate withinthat state or even become registered.
And once A PBM has finalizedtheir strategy for growth and
(02:09):
compliance within the space, we canmove on to full-blown licensure.
It's very important to know that licensureis not governed on a federal level where
it's consistent across all states anddomestic territories within our country.
It's actually governed on astate and local government level.
So while those requirements may feelkind of similar across each state, you
need to be very careful because eachstate has their own set of templates,
(02:30):
state specific requirements, additionalforms, exhibits, appendices, and more.
Understanding the full licensureprocess really starts with understanding
your footprint in your state today,how many lives you cover, how much
revenue you're generating, and howmany claims that you're producing on
an annual basis within that state.
Now it becomes very complicatedbecause we have worked with PBMs and
organizations that may be domiciled ina state, and you could be registered
(02:54):
in that same domiciled state,fully licensed within that state.
But if you cover a group, let's justsay a trucking company that's filling
prescription drugs across state linesin bordering states, you also need
to make sure that your PBM is notjust registered in those neighboring
states, but also fully licensed inthose neighboring states as well.
And with the complexities offull-blown state licensure, you may
(03:16):
ask the question, well, how did weget from just registering a PBM as a
headquartered organization to full-blown,strengthened licensure requirements?
Well, if we walk it back on atimeline for the last 24 months,
we've seen that there's been muchmore eyes from state regulators
on PBM organizations as a whole.
In fact, over half the states inour country are now governing PBMs
(03:37):
by licensure requirements throughapplications, biographical affidavits,
templates, even reporting that are notjust on an annual basis, quarterly basis,
but even on a monthly basis to ensurecompliant PBM operations, compliant claim
adjudication and filling of prescriptiondrugs for members that need it the most.
While some states have had licensurerequirements for the past number
(03:59):
of years, other states, such asMassachusetts, are just rolling out
requirements, effective 1/1/2026.
In looking to how regulators areestablishing these requirements,
they're speaking with other states.
This was a huge topic at the SpringNational NAIC conference, where
multiple dedicated sessions acrossall states where regulators were
collaborating had discussed (04:16):
what's working for PBM licensure requirements?
Where is there opportunityfor improvement?
Where are regulators, in somecases, overregulating with
requirements that could be lookedat as disproportionate for PBMs.
Again, let's walk it back.
You have a handful of large PBMs thathave governed our country's operations for
(04:37):
many, many years, and you have a number ofsmall PBMs, even startup PBMs that have a
percentage of lives that may not be ableto afford to conduct business, even with
ethical strategies within that state.
So not just application fees.
We're seeing that just to submita licensure application, including
biographical affidavits, fingerprints,even financial statements, audited or
(04:58):
not audited, application fees, couldrun a PBM anywhere from $500, $1,000,
or we're seeing states like Floridaup to $10,000 or New York for $10,000
to operate for three years within thatstate before they even sold a life.
So taking on that expense as anorganization, small or large, can
carry a very different burden in actualoperating and conducting business.
(05:20):
We are seeing that smaller PBMs arestruggling to actually participate
within states up against large PBMs,simply because the disproportionate
regulations that are being put in force.
And I think it's important to understandthat licensure applications and submitting
for certification is one thing, butthat's just getting your PBM started.
So if you're operating and conductingbusiness within the state, what happens
(05:40):
quickly after certification is reporting.
And it's important to know that there'sdifferent levels of reporting, not
just what we talked about, of annual,quarterly, monthly, or even weekly,
but harnessing the difference betweenreporting tied to licensure specifically,
and reporting for different functionsof a pharmacy benefit manager.
And what we recommend is right out ofthe gate, is to understand the resourcing
(06:03):
your analysts within your company toharness the data within your warehouse.
We know each PBM houses theirdata in many different ways.
Some have their own customdatabase, some rented database,
but really understanding reporting.
Getting your SQL servers with the,the right level of code to understand
what's required for licensurereporting and then what's required
for other functions of your business.
(06:24):
Far, too often, they are crossinglines and it actually causes confusion,
impacting the quality of submission.
And it's important to know thatall regulators are different.
And so what I mean by that iseven if there's a review process
in place, a big part of licensureapplication is interpretation.
So when you're running your reports,we encourage you to also build a
relationship with your regulator.
(06:46):
That's half the battle.
Understanding who's reviewing yourapplication, making sure they know who
you are, making sure they know they cantrust their submitter and that they're
transparent within their application.
Building that trust up front withinyour state, year one, especially
if you've been operating and doingbusiness within the state and covering
lives, will be critically important.
This will help you avoid fines,avoid fees, and streamline the
(07:07):
operations of actually getting yourregistration on time, getting your
licensure application approved, andactually executing your reporting.
But you need to be prepared.
You cannot actually get licensedin a state if you don't have a plan
strategy to build your businessor just to simply get licensed.
You need to have a plan, a business planof action, and you need to be prepared
(07:27):
to actually present that to the state.
We've seen it far too often that duringthe application process, you can follow
each questionnaire down to subsectionsub letter A, B, subsection C, but
they'll still have questions about yourbusiness to actually get to know you.
Why are you operatingas a PBM in our state?
Are you looking to cover fully insuredlives or self-funded ERISA lives?
(07:49):
Why?
Be prepared to answer thesequestions and assemble your team.
We understand PBMs can run lean withsenior officers or the executive
team, with very lean operations.
So we recommend having a dedicatedresource on your legal team to be
prepared to answer legal questions.
Have a senior officer able to attestto your fiduciary responsibilities,
(08:10):
like your CFO or your CEO, to makesure that you've been sound financially
for the past x amount of years.
Generally speaking, PBMs will ask you tohave prepared anywhere from three to five
years of financial statements upfront.
Have those prepared, and if you don't,there's a likely chance that you will
be audited, and that is incrediblyexpensive, to the tune of what we've
(08:32):
seen working with even one PBM paying$12,000 to actually conduct an audit,
just to get audited financials, noteven to complete the application.
It's the cost of doing business.
Even in the state of Florida, comparablyspeaking, we've worked with a PBM that
ingested a $60,000 fee simply to haveaudited financials because they've been
(08:52):
in business for so long and they were sucha large company that that's what it took.
So contracting a CPA, youshould get one quickly.
Codify your business operations, buildyour team, assemble your team, ensure your
fiduciary responsibility, review historicdata in your company and have a plan.
It will be important in understandinghow your organization is set up.
(09:13):
And what I mean by that is far too often,we see PBMs that are what we are referring
to as child organizations within parentorganizations, PBMs who are oversaw by a
grocery store, a joint venture partner,a hospital health system or other,
even a health plan for that matter.
You have to make a decision ifit's the child organization or
(09:34):
the parent organization thatultimately is responsible, who's
operating independently from who.
How we break that down and howwe look at the responsibility and
ownership and accountability isby tax ID number or FEIN number.
So really where you're getting licensed,the organization that's conducting
the operation, really making sure thatthat FEIN number is taking fiduciary
(09:56):
accountability for the operations withinthe state or exclusively articulating in
your application that your parent companywill oversee and take responsibility
for all of your PBM operations.
So all that said, let's ask thequestion, where are states going?
With regulations, we do see statesstrengthening requirements month over
month for the foreseeable future.
(10:16):
We recommend following operationsand conversations through the
National Association of InsuranceCommissioners, NAIC, and work with
your regulators, attend the meetings.
Make the effort to showup and to shake hands.
Have the conversations,build your relationships.
Being at the forefront of watching yourregulators formate policies will allow you
the opportunity to ask questions, shareyour opinion, and share your outlook as a
(10:40):
PBM and the operations you're conductingin your state to share your voice.
And it's very important.
Every PBM has a voiceand regulators do listen.
You just have to make the timeand the effort to show up.
Very specifically speaking, we doanticipate and we do expect many
states, inconsistently across the boardwill increase reporting requirements.
So be prepared to report moreon your rebates, be prepared
(11:02):
to report more on your claims.
This is all in support of transparencyand coverage, or TIC, all governed,
even as far up as the CAA or theConsolidated Appropriations Act.
So that's not going away byany stretch of the imagination.
We would also encourage PBMs to beprepared for more financial reporting.
So I know we've already talked aboutfinancial statements, audited or not,
(11:23):
but being prepared to produce differentthings in your general ledger, different
formats of financial statements, differenttime periods of financial statements.
And lastly, PBMs really need tobe prepared for increased fines,
increased dollar amounts, andincreased penalties across the board.
PBMs should really take a step back andtake a moment to understand the cost
(11:44):
of doing business within their states.
Evaluate the number of lives and thenumber of membership that you have
in the state versus how much it willcost to complete your registration
application, your licensure application,or even the cost of building,
reporting, or a process in placeto sustain business in that state.
We're seeing more often than not insmaller PBMs case, this is driving PBMs to
actually exit or withdraw from the market.
(12:06):
So one more thing PBM should beprepared of is we've been so used
to being in the virtual world overthe past 24 months when PBMs have
been developing these requirements.
Be prepared to show up in person.
It's not uncommon for a regulator, evenfor a specific reason of getting a fine
to simply ask a PBM or a representativeof that organization to show up
in person, to have a conversation.
(12:28):
As they go through the licensureapplication, getting to know you and
learning more about your business andyour PBM is going to be important for
that regulator and that reviewer to know.
Licensure is a living obligation, andjust because you get your registration
complete with your SOS application,just because your licensure is approved
and you started your reporting, if youdon't dedicate the time, materials,
and resources to a codified process,year over year, regulators will
(12:52):
know and they will ask questions.
And regardless if you're a startup PBMoperating in one state, growing one state
at a time into 2, 3, 4, 5, or you'rea regional PBM entering four states at
a time, regardless of your structureor your org design, you really need to
sit down and think about how am I goingto assign my work by state, or how am
(13:12):
I going to assign my work by function?
It is very important to understand howyou're going to staff the work because
we're big believers in accountability,and we've seen PBMs be successful by
having an accountable owner work astate application from end-to-end.
They own that state,they own those templates.
They own those applications andmaterials all the way through the review
period, through approval and reporting.
We've also seen some PBMs be verysuccessful by having dedicated
(13:36):
resources by function for many states,not one-to-one, but one to many,
where they'll complete biographicalaffidavits for all the states within
the scope of their engagement.
And there's another dedicated resourcethat will complete all financial
statements for all the states withinthe scope and that engagement.
Both models work perfectly fine.
It's just truly based on how you'restaffing your organization, how you're
(13:57):
going to invest in the organizationaldesign of your PBM, and how you're
going to approach and look at that work.
On a go forward basis, we encourageall PBMs to be proactive and to,
quite frankly, self-regulate.
And what we mean by that is not justsimply sitting and waiting around for a
regulator or a state to find PBM activityand broach the subject themselves, but
(14:19):
really taking the accountability withintheir own organization to say, "Hey, we're
going to get ahead of any regulation.
We're going to get ahead of anyapplication and prioritize this to be
a good steward and a good fiduciarywithin the industry." Leading the
change will be very important, too.
Even getting public presence, attendingconferences with regulators, showing
up, spending the time and investingthe time with our legal partners to
(14:41):
making sure that we're on the pathfor compliant PBM activity within
all states across the country.
Shameless self-promotion (14:47):
ClearFile makes this process easy for PBMs,
really bringing all matrixed PBMrequirements, thousands of documents,
templates, applications, and instructionsinto one organized place where we
can assign accountable owners acrossany type of organization, keeping
it as closely managed or as broadlymanaged as that organization operates.
(15:11):
All the way from pre-licensurecertification, all the way to
disposition, approvals and reporting.
Thanks again for tuning in.
Don't forget to give us a like, give usa share and we'll see you all next time.
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