SR0329LRB102 18696 MST 27167 r
1
SENATE RESOLUTION
2 WHEREAS, The Medicaid program in Illinois has an immense
3and growing impact, both in terms of taxpayer dollars and in
4the effect it has on citizens across the State; and
5 WHEREAS, State resources for healthcare services are
6scarce, and many healthcare providers, including pharmacists,
7are discontinuing services or ceasing operation, leading to a
8profoundly detrimental impact on our communities and the
9expansion of pharmacy deserts; and
10 WHEREAS, Enrollment under the Illinois Department of
11Healthcare and Family Services' Medical Assistance Programs
12(Medicaid) exceeds three million; and
13 WHEREAS, A sizable portion of the Medicaid population is
14currently enrolled, often mandatorily, in Managed Care
15Organizations (MCOs), making outlays to MCOS, measured in
16billions of dollars, one of the largest resources used in the
17State; and
18 WHEREAS, 12,500 licensed pharmacists in Illinois provide
19medications and patient care services to assure the rational
20and safe use of all medications; and

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1 WHEREAS, Pharmacists, as front-line health care providers,
2answered the call to aid during the ongoing COVID-19 pandemic
3and have taken on additional responsibilities of care and
4practice in order to best serve the public health needs of the
5citizens of the State of Illinois; and
6 WHEREAS, A significant number of pharmacists respond to
7the charge of their community to establish a pharmacy to
8provide access to care for their patients; and
9 WHEREAS, Pharmacies generate additional taxable revenue
10for the State and yet are continuously under-reimbursed below
11their cost on medications dispensed to meet their patient's
12needs; and
13 WHEREAS, A number of states have performed audits on
14managed Medicaid programs and the utilization of tax dollars,
15and states, such as Ohio, have found over $208 million in
16collected fees to the benefit of pharmacy benefit managers in
17a one-year period, in addition to other operational and
18business practice concerns; and
19 WHEREAS, Attorneys General, Auditors General,
20Comptrollers, and Insurance Directors have investigated,
21fined, or instituted court proceedings into the business
22practices of Pharmacy Benefit Managers (PBMs) in the states of

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1Arkansas, California, Colorado, Connecticut, Delaware,
2Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas,
3Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
4Minnesota, Montana, Nebraska, Nevada, New Jersey, New Mexico,
5New York, North Carolina, Ohio, Oklahoma, Oregon,
6Pennsylvania, Texas, Utah, Vermont, Virginia, Washington, West
7Virginia, and Wyoming, and in the District of Columbia; and
8 WHEREAS, The landmark December 2020 United States Supreme
9Court decision in Rutledge v. PCMA brought PBM operational and
10business practices and especially the reimbursement
11methodologies for pharmaceuticals into further question,
12including Chief Justice Roberts calling their business
13practices 'byzantine'; and
14 WHEREAS, There has been little information disseminated to
15the General Assembly in terms of how State resources are being
16spent on MCOs and on the overall healthcare outcomes for
17individuals enrolled in these MCOs; and
18 WHEREAS, It is paramount that the General Assembly stay
19engaged in Medicaid funding and corresponding healthcare
20outcome issues and be prepared to make legislative and
21administrative recommendations; therefore, be it
22 RESOLVED, BY THE SENATE OF THE ONE HUNDRED SECOND GENERAL

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1ASSEMBLY OF THE STATE OF ILLINOIS, that the Auditor General,
2with the assistance of the Comptroller as necessary, is
3directed to conduct an audit of Medicaid MCOs, including
4contracted and previously contracted pharmacy benefit
5managers, which includes a comparison of State expenditures
6between MCOs and the Medicaid fee-for-service program; and be
7it further
8 RESOLVED, That the audit shall examine pharmacy benefits
9managers that contract with managed care organizations for the
10purpose of determining the amount of State and federal funds
11used to reimburse managed care organizations, pharmacy
12benefits managers, and pharmacies and the dollar amount of
13funds received by each respective party for fiscal year 2017,
142018, 2019, 2020, and 2021 with respect to the following
15issues:
16 (1) The amount paid to a pharmacy provider per each
17 individual claim, including ingredient cost and the amount
18 of any copayment deducted from the payment;
19 (2) The transmission fees charged by a pharmacy
20 benefit manager to a pharmacy provider;
21 (3) The amount charged by the pharmacy benefit manager
22 to the medical assistance managed care organization per
23 claim, including all administrative fees and processing
24 charges associated with the claim;
25 (4) Rebates paid by the pharmacy benefit manager to

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1 the managed care organization and any payment from a
2 pharmaceutical manufacturer to a PBM;
3 (5) The Auditor General shall be provided with access
4 to the following documents and information by either the
5 managed care organization, the pharmacy benefits manager,
6 or the pharmacy:
7 (a) Contracts between the managed care
8 organization and the pharmacy benefits manager;
9 (b) Contracts between the pharmacy benefits
10 manager and pharmacies receiving reimbursement;
11 (c) Full encounter claims data showing the
12 amount the managed care organization paid the pharmacy
13 benefits manager;
14 (d) Full encounter claims data showing the
15 amount that was paid to the pharmacies by the pharmacy
16 benefits managers;
17 (6) Information requested from the pharmacy benefits
18 manager or the pharmacy via questionnaire by the Auditor
19 General; and
20 (7) Any additional information or data required by the
21 Auditor General or Comptroller to determine the actual
22 reimbursement to the managed care organizations, pharmacy
23 benefits managers, and pharmacies; and be it further
24 RESOLVED, That the audit shall further examine
25reimbursement issues for Medicaid MCOs, including contracted

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1pharmacy benefit managers, for fiscal years 2017, 2018, 2019,
22020, and 2021 and should:
3 (1) Provide an overview of the distribution of and
4 payment for pharmaceuticals in the medical assistance
5 managed care program;
6 (2) Review the reimbursement practices of pharmacy
7 benefit managers to pharmacies, including out-of-state
8 pharmacies and pharmacies affiliated with pharmacy benefit
9 managers;
10 (3) Review the reimbursement practices of managed care
11 organizations to pharmacy benefit managers;
12 (4) Investigate and compare the reimbursement rates
13 paid by pharmacy benefit managers to independent
14 pharmacies and to chain pharmacies and to out-of-state
15 pharmacies and to pharmacies affiliated with pharmacy
16 benefit managers;
17 (5) Study the best practices and laws adopted by other
18 states to address concerns with pharmacy reimbursement
19 practices of pharmacy benefit managers; and
20 (6) Review any other data the Auditor General or
21 Comptroller deems necessary to complete the audit; and be
22 it further
23 RESOLVED, That the audit shall further examine
24reimbursement with a comparison, in aggregate on both a dollar
25level and per prescription basis, of what the Illinois

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1Department of Healthcare and Family Services paid directly
2through its Medicaid Fee-For-Service (FFS) program versus what
3was charged through the MCO's to the Illinois Department of
4Healthcare and Family Services for Medicaid managed care
5prescriptions; such a comparison shall include the cost
6comparison to the top 200 drugs covered by the Illinois
7Medicaid prescription drug benefit FFS program, including all
8dispensing and other professional fees paid to Medicaid
9pharmacy providers, including comparison to out-of-state and
10pharmacies affiliated with pharmacy benefit managers; and be
11it further
12 RESOLVED, That the Auditor General shall publish only
13aggregate data in the report; any information disclosed or
14produced by a pharmacy benefit manager or a medical assistance
15managed care organization for the purposes of this audit shall
16be confidential; and be it further
17 RESOLVED, That on or before December 1, 2021, the Auditor
18General shall provide the results of the audit to the General
19Assembly; and be it further
20 RESOLVED, That the Illinois Department of Healthcare and
21Family Services and any other State agency having information
22relevant to this audit cooperate fully and promptly with the
23Auditor General's Office in its conduct; and be it further

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1 RESOLVED, That the Auditor General commence this audit as
2soon as possible and report his findings and recommendations
3upon completion in accordance with the provisions of Section
43-14 of the Illinois State Auditing Act.