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HB 1244

Insurance, Health, Accident - As enacted, removes the aggregate penalty limits for violations of law concerning pharmacy benefits managers; provides that a pharmacy benefits manager regulated under law relative to pharmacy benefits managers is subject to the insurance laws relative to timely reimbursement of health insurance claims and its requirements for timing of payments to pharmacists; provides that a violation of the prompt pay standards is governed by the penalties set out in insurance laws relative to timely reimbursement of health insurance claims. - Amends TCA Title 56.

114th Regular Session (2025-2026) Introduced by Brock Martin

Tennessee removes penalty caps on pharmacy benefits managers for late payments and subjects them to insurer-level prompt-pay requirements, potentially increasing compliance costs and reimbursement speed.

Comp. became Pub. Ch. 446
#accident #health #insurance
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Bill Summary · HB 1244

Legislative bill overview

HB 1244 removes caps on financial penalties that can be imposed on pharmacy benefits managers (PBMs) for violations and requires PBMs to comply with the same prompt-payment standards applied to health insurers. The bill subjects PBMs to insurance law penalties for failing to reimburse pharmacists on time, effectively treating PBMs like traditional insurance entities in this regard.

Why is this important

PBMs are intermediaries that manage prescription drug benefits for insurers and employers, and they control what pharmacists are paid. Without aggregate penalty limits, regulators can impose significantly larger financial consequences for delayed payments, potentially incentivizing faster reimbursement to pharmacies. This affects pharmacy operations, drug access, and ultimately consumers' ability to fill prescriptions without disruption.

Potential points of contention

  • Industry resistance: PBMs may argue that removing penalty caps creates unpredictable compliance costs and burdens their business model, potentially leading to higher drug prices or reduced pharmacy networks
  • Enforcement discretion: Unlimited penalties could incentivize aggressive enforcement, raising concerns about whether penalties are proportionate to actual harms or become de facto revenue sources
  • Pharmacy impact uncertainty: While pharmacies benefit from faster payments, unclear whether this improves consumer outcomes if PBMs respond by reducing reimbursement rates or network participation

Compiled from official sources — confirm details with the bill’s official record.

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