Major PBM Reforms Advance In Congress As DOL Proposes New Fee-Disclosure Rule
- 12 hours ago
- 3 min read
Federal efforts to increase oversight of the pharmacy benefit manager (PBM) industry are gaining momentum. On Jan. 22, 2026, the House of Representatives passed the Consolidated Appropriations Act (CAA) of 2026, which includes a funding package with key healthcare provisions aimed at reforming PBM practices. As the bill moves to the Senate for consideration, the U.S. Department of Labor (DOL) followed up on Jan. 28, 2026, with a proposed rule to enhance PBM fee-disclosure requirements. These developments highlight the government's commitment to greater transparency and accountability in the PBM sector.
Understanding PBMs & The Need for Reform
PBMs serve as intermediaries that manage prescription drug benefits for most health plans. They handle tasks such as processing claims, building pharmacy networks, and negotiating rebates with drug manufacturers. However, the industry has come under scrutiny in recent years due to concerns over limited transparency practices, such as retaining portions of manufacturer rebates and spread pricing, where PBMs charge plans more than they pay pharmacies. In the absence of strict federal rules, states have stepped in with their own regulations, but these new federal initiatives aim to create a more uniform approach.
Key Highlights From The CAA Bill
The CAA bill introduces comprehensive reforms to address these issues, particularly for health plan sponsors and insurance issuers. Here are some of the main provisions:
Mandatory PBM Reporting
PBMs must deliver detailed prescription drug spending data to group health plans and issuers at least twice annually, or quarterly upon request.
They are also required to provide summary documents that plans can share with participants and beneficiaries.
Group Health Plan Notice Requirements
Annually, plans must notify participants and beneficiaries in writing that their PBM submits spending reports. This can be included in plan documents or sent separately.
Upon request, plans must supply the PBM's summary document and, for large plans, details on the difference between what the plan paid the PBM and what the PBM paid the pharmacy for a specific claim.
Penalties For Non-Compliance
PBMs or plans failing to provide required information could face civil penalties of up to $10,000 per day.
Additional fines may apply for submitting false data, though waivers are possible for good-faith compliance efforts.
Full Rebate Pass-Through
To ensure contracts are reasonable under the Employee Retirement Income Security Act (ERISA), PBMs must pass 100% of rebates, fees, and other remuneration to plans quarterly. Overpayments identified in audits must be returned, and the bill expands ERISA's "covered service provider" definition to explicitly include PBMs, requiring full disclosure of services and compensation.
The bill also includes Medicare Part D reforms, such as prohibiting PBM compensation based on drug list prices, mandating CMS to enforce "reasonable" contract terms with penalties, and authorizing tracking of pharmacy payments and network inclusions.
DOL's Proposed Rule
Building on the CAA, the DOL's proposal expands ERISA disclosure rules for PBMs serving self-insured group health plans. It requires disclosures on:
Rebates and payments from manufacturers.
Compensation when plan payments exceed pharmacy reimbursements.
Payments recouped from pharmacies.
Fiduciaries can audit these disclosures, with relief if PBMs fail to comply. Fully insured plans are excluded for now, but the DOL seeks comments on extending rules, due by March 31, 2026.
These changes could significantly impact how health plans operate and manage costs. At Siekmann Company, we specialize in helping businesses navigate complex retirement and employee benefits regulations. If you're a plan sponsor or fiduciary unsure how these reforms affect your organization, reach out to our team for personalized guidance. We're here to ensure your plans remain compliant and effective. Contact info@siekmannco.com today to discuss your needs.
