SD| The South Dakota Division of Insurance issued Bulletin 25-03 to clarify compliance requirements for Pharmacy Benefit Managers (PBMs) when working with Discount Medical Plan Organizations (DMPOs) in processing prescription drug claims. The bulletin distinguishes between scenarios where DMPOs are used independently by patients (not subject to SDCL Ch. 58-29E) and situations where PBMs integrate DMPOs into insured benefit claims (subject to SDCL Ch. 58-29E), emphasizing PBMs’ responsibility to ensure contracted entities comply with state law, particularly regarding improper fees and reimbursement practices.
Key Points:
- When a patient independently uses a DMPO card, the transaction is governed by SDCL Ch. 58-17E and not subject to SDCL Ch. 58-29E.
- If a PBM processes an insured’s claim through a DMPO and collects fees from the pharmacy or insured exceeding what the pharmacy retains, it violates SDCL 58-29E-12 and 58-29E-16, and PBMs are accountable for preventing such violations.