FAQ: Pharmacy Benefit Managers FAQs

FAQs from Pharmacy Benefit Managers

Pharmacy benefit managers (PBM) must be licensed by the Department of Financial Services to operate in New York.

FAQs About the Annual Report

Various portions of the Annual Report Spreadsheet (“Spreadsheet”) require the submission of supplemental documents. How should we submit these supplemental documents?

For every Spreadsheet tab which includes a document request, you must provide a separate PDF file which adheres to the requested naming convention and page limit requirements.

Submit all requested documents from all tabs in a single "zipped" file and send the file through the PBM dropbox via the New York State MySend platform. To confirm that the document request is complete and included in the file submission, utilize the drop-down box directly to the right of the document to note your submission.

What if a certain document request is not applicable to the PBM?

If a document request does not apply to the PBM, you should provide a brief explanation as to why the request is not applicable.

My data does not fit within the allotted rows, and I need additional space. What should I do?

If you need additional space for any of the tabs, submit a supplemental copy of the specific tab for which you require more rows with the additional data included in that supplemental copy. The following naming convention should be utilized: “(PBM Name)_Spreadsheet Tab Number_Supplemental Copy”).

How do I determine whether 50% or more of the beneficiaries of a health plan work or reside in New York?

A beneficiary of a health plan is considered a New York beneficiary (i.e., someone who works or resides in New York) for purposes of New York Insurance Law Article 29, New York Public Health Law section 280-a, and the applicable regulations promulgated thereunder, when any of the following are true:

The health plan is issued by an insurance company that is an authorized insurer under the insurance law, a company organized pursuant to article forty-three of the insurance law, a municipal cooperative health benefit plan established pursuant to article forty-seven of the insurance law, an entity certified pursuant to article forty-four of the public health law, an institution of higher education certified pursuant to section one thousand one hundred twenty-four of the insurance law, the state insurance fund, or the New York state health insurance plan established under article eleven of the civil service law,
The beneficiary primary participant of the health plan has or had access to that health plan as a result of working in New York, or
The beneficiary resides in New York.

For purposes of calculating the total number of beneficiaries under a health plan, each primary participant of the health plan and all beneficiaries under each primary participant should be counted as beneficiaries for purposes of calculating the total number of New York and non-New York beneficiaries under the health plan.

Once you have determined which beneficiaries are considered New York beneficiaries, you can then calculate what percentage of the total beneficiaries work or reside in New York.

If data and information fits in more than one category, should I report duplicative data throughout the Spreadsheet?

When possible, avoid reporting duplicative data. If data and information fits in more than one category and therefore duplicative data is reported, clearly indicate which response(s) include(s) duplicative data, and the specific amount of any overlap, in the “Notes” section on each tab.

FAQs About the Annual Report Spreadsheet:

Revenue (Tab 1)

Question 2 on Tab 1 “Revenue” requests the rebates received by rebate aggregators. Should I include the value of rebates received by rebate aggregator(s) which is subsequently passed-through to a third-party?

Yes. Include any rebate value which is subsequently passed-through to any other part(y/ies).

What should I report for “other” revenue? (Tab 1 “Revenue”, Question 24)

Other revenue should include all additional revenue generated from the performance of pharmacy benefit management services on behalf of Covered Individuals and/or Health Plans. Identify the source(s) of other revenue in the “Notes” section.

Health Plans and Current Health Plans (Tabs 2a and 2b):

Tab 2a “Health Plans” and Tab 2b “Current Health Plans” both request health plan information. What is the difference between these two tabs?

Tab 2a requires a PBM to report a detailed list of health plans for which they performed pharmacy benefit management services during the reporting period January 1, 2025 to December 31, 2025, as well as other data points related to those health plans.

Tab 2 requires a PBM to report a list of any additional/new health plans that the PBM contracts with and/or provides pharmacy benefit management services to as of the date of the annual report submission, as well as a list of health plans (as reported on Tab 2a) that the PBM no longer contracts with and/or provides pharmacy benefit management services to. Indicate the health plans which the PBM no longer contracts with and/or provides pharmacy benefit management services to by including the following in the “Notes” section (Column J): “PBM no longer contracts with this health plan”.

Rebate Contracts and Rebates by Drug (Tabs 3a and 3b):

Tabs 3a and 3b ask for data and information related to rebate contracts. Is the definition of rebate contract exclusive to these tabs?

For these tabs only refer to the definition for “rebate contract” in Tab 12 “Glossary”.

Columns G through N on Tab 3b “Rebates by Drug” request summaries of various contract terms. Is there a word limit to these responses?

No, there is not a word limit for these responses and the PBM should provide detailed summaries related to each contract term, utilizing as much space as needed to do so.

PBM Services (Tab 4):

The PBM Services Document Request section of Tab 4 “PBM Services” asks the PBM to submit a detailed summary of any services and associated operational activities performed by the PBM and any third-party entity for each selected service category. What if the PBM or the third-party entity only performs a portion of a certain service category selected?

You should provide an explanation of each portion of the service provided by the PBM and/or the third-party entity and include an explanation of any overlap between the services provided by the PBM and/or any third-party entities, as applicable.

Complaints (Tab 5):

Tab 5 “Complaints” requests information related to pharmacies. What is the scope of the data and information that should be included for purposes of this tab?

This tab requires the PBM to report information related to pharmacies located in New York State and /or any mail-order and specialty pharmacies located outside of New York State that service Covered Individuals of Health Plans as defined in Tab 12 “Glossary”.

Audits (Tab 6):

Tab 6 “Audits” requests information related to pharmacies. What is the scope of the data and information that should be included for purposes of this tab?

Tab 6 “ Audits” asks for the total number of pharmacies audited and the total number of audits conducted. What is the difference between these questions?

The total number of pharmacies audited should reflect the total number of individual pharmacy locations at which an audit was conducted. (e.g. if a pharmacy has 5 locations and an audit was conducted at each location that should be reflected as 5 pharmacies audited).

The total number of audits conducted should reflect the total number of audits conducted across all pharmacies.

Some questions on this tab request the “pending” recoupment amount. What is the scope of data that should be reported?

Any “pending” recoupment amount should relate to audits performed during the reporting period January 1, 2025 to December 31, 2025 for which a PBM and/or third-party has not yet collected the recoupment value.

Network Criteria (Tab 7)

Tab 7 “Network Criteria” requests information related to pharmacies. What is the scope of the data and information that should be included for purposes of this tab?

Credentialing (Tab 8):

Tab 8 “Credentialing” requests information related to pharmacies. What is the scope of the data and information that should be included for purposes of this tab?

Audited Financials (Tab 9):

Tab 9 “Audited Financials” requires the submission of audited financial statements. What type of audited financials am I required to submit?

The audited financial statements shall be for the licensed PBM and not include any parent company.

Tab 11a (Contracted Pharmacy):

Tab 11a “Contracted Pharmacy” requests information related to pharmacies. What is the scope of the data and information that should be included for purposes of this tab?

This tab requests the “service provider type” ( Column C) for each contracted pharmacy. What should I do if a pharmacy has more than one “service provider type?”

If a pharmacy has more than one “service provider type” select each applicable “service provider type” from the embedded drop-down. Where applicable, you can choose more than one option from the embedded list.

The “Pharmacy Type Document Requests” section requires the submission of the PBM’s pharmacy provider manual. Can I submit a redacted copy?

No. Submission of an unredacted copy of the PBM’s pharmacy provider manual is required.

FAQs About Required PBM Disclosures to Health Plans

Under Public Health Law section 280-a and Part 452 of the Department’s regulations, PBMs licensed by the Department are required to disclose information to health plans for which they perform pharmacy benefit management services (“PBM Services”).

What information must a PBM disclose?

Upon written request by any health plan, a PBM must do the following:

Use of Funds. Demonstrate how all funds received by the PBM for PBM Services on behalf of the health plan were used as agreed to in the PBM’s contract with the health plan or, as applicable, the law.
Full, Unredacted Third-Party Contracts. Provide full unredacted terms and conditions of any contract(s) or arrangement(s) between the PBM and any party relating to the contracted PBM Services.
Conflicts of Interest. Disclose potential conflicts of interest, including where the PBM (or in some instances, an entity owned by or affiliated with the PBM):
- Engages in spread pricing,
- Retains a portion of manufacturer compensation,
- Has ownership interests/affiliations with pharmacies,
- Solicits or incentivizes covered individuals to use owned/affiliated pharmacies,
- Transfers prescriptions to owned/affiliated pharmacies,
- Audits pharmacies,
- Restricts the use of manufacturer copay cards or coupons,
- Shares data from a non-affiliated pharmacy with an owned/affiliated pharmacy, or
- Where the health plan reasonably views any other activity, policy, practice, contract, or arrangement of the PBM as directly or indirectly presenting a conflict of interest with the PBM's relationship with or obligation to the health plan.

When must a PBM disclose the information?

A PBM must produce the requested “Use of Funds” information within 60 days of the health plan’s request.

A PBM must disclose the “Full, Unredacted Third-Party Contracts” and “Conflicts of Interest” information within 30 days of the health plan’s request.

How often can a health plan request terms and conditions of Third-Party Contracts?

A health plan can request terms and conditions of any contract(s) or arrangement(s) once every 6 months.

What if a health plan requests disclosure of a Third-Party Contract that the PBM determines is not related to the PBM Services provided to the health plan?

The PBM may appeal to the Department within 30 days of receiving the health plan’s request. The PBM’s response to the health plan is not required until the Department makes a decision. The Department may direct the PBM to make the disclosure, make the disclosure with specific redactions, or determine that the PBM is not required to make the disclosure.

Is an entity that provides PBM services exclusively in the workers’ compensation or automobile insurance industry required to abide by the accounting and contract(s)/arrangement(s) terms and conditions disclosure requirements?

No. PBMs that provide PBM Services only for workers’ compensation and automobile insurance plans are exempted from the “Use of Funds” and “Third-Party Contract” disclosure requirements.

Is an entity that provides PBM services exclusively in the workers’ compensation or automobile insurance industry required to abide by the Conflicts of Interest disclosure requirement?

Yes. PBMs that provide PBM services only for workers’ compensation and automobile insurance plans are not exempt from this requirement and must disclose conflicts of interest.

FAQs About PBM Licensing

How do I submit a PBM license application?

A PBM will log in to DFS Connect using DFS ID.

Will I be able to pay the license application fee through DFS Connect?

Yes, a PBM can pay the $24,000 non-refundable license application fee electronically via ACH or by credit card directly in DFS Connect.

If a PBM is currently licensed by the Department, do I have to submit a new license application through DFS Connect?

No, a PBM that previously submitted a license application through the old system, i.e., the DFS Portal and MySend, and that is currently licensed in New York does not need to apply again through DFS Connect, however, a licensed PBM should log in to confirm they are able to access DFS Connect for future license renewals, and other required submissions to the Department.

How do I determine whether the Department has approved a license application?

A PBM will be able to see status updates in DFS Connect to track an application.

How will the Department communicate with me about a license application?

A PBM will receive notifications of new communications by email and can log in to view and respond to the communications. A PBM can view the status of an application by selecting ‘My Saved/Submitted Applications’. The status can also be seen when the application is open at the top of the page.

How do I obtain a copy of my issued PBM license?

A PBM can log in to view and download a PDF copy of the issued license by selecting ‘My Licenses’.

How do I notify the Department of any changes in the information or documents required to be disclosed on the PBM’s license application?

A PBM must notify the Department within 30 days of changes by logging in to DFS Connect to submit updates.

Will I be able to complete a new application or submit updates in multiple sessions?

Yes, the license application can be completed in multiple sessions. At any time, a PBM can exit an application and resume work by selecting ‘My Saved/Submitted Applications’.

How do I determine whether 50% or more of the beneficiaries of a health plan work or reside in New York?

A beneficiary of a health plan is considered a New York beneficiary (i.e., someone who works or resides in New York) for purposes of Insurance Law Article 29, Public Health Law section 280-a, and the applicable regulations promulgated thereunder, when any of the following are true:

The health plan is issued by an insurance company that is an authorized insurer under the insurance law, a company organized pursuant to article forty-three of the insurance law, a municipal cooperative health benefit plan established pursuant to article forty-seven of the insurance law, an entity certified pursuant to article forty-four of the public health law, an institution of higher education certified pursuant to section one thousand one hundred twenty-four of the insurance law, the state insurance fund, or the New York state health insurance plan established under article eleven of the civil service law,
The beneficiary’s primary participant of the health plan has or had access to that health plan as a result of working in New York, or
The beneficiary resides in New York.

Once you have determined which beneficiaries are considered New York beneficiaries, you can then calculate what percentage of the total beneficiaries work or reside in New York.

Is an entity that provides PBM services exclusively in the workers’ compensation industry required to obtain a license?

Yes. Workers’ compensation plans provide benefits which include payment for prescription drugs. Therefore, the broad definition of health plan in the law which includes any policy or plan that provides prescription drug coverage includes workers’ compensation plans. PBMs that provide services only for workers’ compensation plans in New York must obtain a license.

Is a PBM that provides services exclusively for self-insured plans required to obtain a license?

Yes. Self-insured plans are health plans under the statute, therefore an entity that provides PBM services to a self-insured health plan must obtain a license.

Is a PBM that provides services exclusively for Medicare Part D plans required to obtain a license?

Yes, the term “health plan” covers Medicare Part D plans.

Who can enforce the violation, penalty and damages provision of Insurance Law § 2905(b)?

The superintendent is authorized to enforce the violations, penalty, and damages provision located in § 2905(b) of the Insurance Law after notice and a hearing. This provision does not create a private cause of action.