Representative Lontine, bill co-sponsor, presented HB21-1237.  The bill directs the Department of Personnel and Administration (DPA) to enter into a contract with a pharmacy benefit manager (PBM) for the administration of state employee health insurance through a reverse-auction process prescribed by the bill, and then use that platform to audit claims.  State employee insurance offered through Kaiser Permanente is exempt from this requirement.  It creates avenues for other public and private health insurance plans to participate jointly with the state.

Technology platform.  By November 1, 2021, DPA must obtain a technology platform, and associated services from the platform operator, capable of conducting a reverse-auction for a PBM.  The platform must be equipped with certain automation and price comparison capabilities specified in the bill.  In addition, the platform must be able to perform automated line-by-line review of all invoiced PBM drug claims to identify any deviations from the terms of the PBM contract.  DPA may perform a market check during the term of the PBM contract to evaluate the incumbent PBM’s drug pricing for continuing competitiveness.

Fee.  The platform, operator services, claim review, and market checks will be paid for by a per-prescription fee paid by the winning PBM directly to the platform operator.

Joint participation.  Any other self-funded public sector health plan may use the processes and procedures established in the bill individually, collectively, or as a joint purchasing group with a state employee health insurance plan.  After completion of the first PBM reverse auction, self-funded private sector health plans with substantial participation by Colorado employees may also participate in a joint purchasing pool with state employees for subsequent PBM reverse auctions.  Any health plans participating in a purchasing pool retain autonomy over their drug formularies and benefit designs.

She distributed a handout to the committee (Attachment H).

Representative Rich, bill co-sponsor, continued introducing the bill.

The sponsors responded to questions from the committee.

The sponsors responded to questions from the committee.

Mr. Blum and Mr. Burdge continued to respond to committee questions.

Submitted written testimony can be found in Attachment I.

The bill sponsors made closing comments on the bill.

Committee members made closing comments on the bill.