LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 172 HLS 24RS 81
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: May 29, 2024 2:47 PM Author: ECHOLS
Dept./Agy.: Office of Group Benefits
Subject: Annual Report on Revenues from Contracts with OGB Analyst: Patrice Thomas
INSURANCE/GROUP-STATE EN SEE FISC NOTE SG RV Page 1 of 1
Provides relative to disclosure and remittance to the state of revenues in excess of certain contractual amounts in certain
circumstances for certain contractors with the state's Office of Group Benefits
Proposed law requires each administrator and pharmacy benefit manager that had a contract with the Office of Group
Benefits (OGB) in the preceding calendar year to file two annual revenue reports with OGB: (1) before April 1st on initial
revenues; and (2) before June 30th on final revenues. Both reports shall also be submitted to House and Senate insurance
committees. Proposed law authorizes each administrator and pharmacy benefit manager (PBM) to establish and retain an
administrative fee and prohibits these entities from retaining revenues directly attributable to the OGB contract including
rebates and other fee arrangements with third-party administrators or third-party pharmacy benefit managers. Proposed law
requires remittance to OGB all revenues (less administrative fee) within 30 days of filing the April 1st report and new
revenue disclosed within 30 days of filing the June 30th report. Proposed law provides that failure to file or accurately file
shall constitute a breach of duties, and provides for penalties twice the party's revenues received. Proposed law authorizes
an exception under the Administrative Procedure Act so OGB may promulgate emergency rules, and effective 7/01/24.
EXPENDITURES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
REVENUES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total
EXPENDITURE EXPLANATION
There is no anticipated direct material effect on governmental expenditures as a result of this measure. Under the proposed
law, the Office of Group Benefits (OGB) will be required to have clearly established administrative fees for all claims
administration and clinical management services each vendor provides. OGB will be able to establish clear administrative
fees required under this measure with existing staff and resources; therefore, there is no impact on expenditures.
REVENUE EXPLANATION
Currently, there is no anticipated direct material effect on OGB revenues as a result of this measure. In future fiscal years,
the proposed law may result in OGB receiving more revenue. The proposed law requires OGB’s contracted medical
administrator and pharmacy benefit manager (PBM) to remit back to OGB all revenues earned, less an administrative fee, in
the prior calendar (plan) year directly attributable to its OGB contacts. Revenues include rebates and other fee arrangements
with third parties outside of the contractually established administrative fee. These revenues will be identified by source from
annual reports filed by the administrator and PBM, and remitted to OGB. The extent amount of revenue from rebates and
other fee arrangements that will be identified in the annual filings and remitted back to OGB under this measure is
speculative and indeterminable.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Alan M. Boxberger
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} Legislative Fiscal Officer
or a Net Fee Decrease {S}