CORRECTED Attachment 10 - GIC Financial Requirements for the Pharmacy Benefit Manager.pdf

Massachusetts Group Insurance Commission (GIC)

CORRECTED Attachment 10 – GIC Financial Requirements for the Pharmacy Benefit Manager

GIC Financial Requirements for the Pharmacy Benefit Manager

The Group Insurance Commission (GIC) requires that the self-insured pharmacy benefit manager (PBM) pays claims from their own checking account. The PBM shall be reimbursed by the GIC within five (5) business days of receipt of the weekly detailed claims data file (described below, in item #3). A grace period of up to ten (10) days from the date of receipt of the detailed claims data file, or such longer grace period as the PBM may allow, shall be granted to the GIC for any claims payment due, subject to the terms of the Contract.

The PBM shall submit a weekly summary invoice to the GIC for claims paid by plan name. The summary invoice must include the following elements: 1. The date; 2. The billing period; 3. The invoice number that is associated with the weekly detailed claims data file; 4. Each plan name;

5. The total claims for each plan; 6. Any fees associated with claims or programs that the GIC agreed to as part of this RFR that are not included in the administration fee; 7. Any miscellaneous credits (e.g. performance guarantee payments); and 8. The amount, if any, of claims refunds received from a prior fiscal year. The invoice shall be submitted by e-mail to:

GIC-Finance-Billing@state.ma.us. For the purpose of this subsection, "weekly" means the PBM will select a day that works for its system, and will submit the required invoices to the GIC on such day. The PBM shall also submit a weekly detailed claims data file that corresponds to the weekly summary invoice totals (described in item #3). The weekly detailed claims data file must be submitted in conjunction with the weekly invoice.

The PBM shall provide the GIC with a weekly detailed claims data file supporting the PBM's weekly summary invoice. The file totals must match the total claims for each plan from the weekly summary invoice. The detailed file's format shall be "comma separate values" (CSV) and transmitted to the GIC electronically through the Commonwealth's secured delivery system (currently MoveIt) to the following e-mail addresses: Jennifer.K.Hewitt@mass.gov;

Margaret.Byrne@mass.gov; Barbara.Conneely@mass.gov and Duc.Tran@mass.gov. The naming convention for the file is - Plan name, invoice number, invoice date. Because of the "CSV" format limitation on the number of consecutive numeric digits permitted in each cell, the invoice number cannot exceed 15 numeric digits without an alpha character. The report's member data column headings as of today are enumerated in the attachment to this document titled "Member Data Column Headings." To support the summary and detailed invoices, the GIC will provide the PBM with eligibility data that includes each enrollee’s plan affiliation.

Administration fees will be invoiced on a monthly basis, using eligibility data provided by the GIC that is validated by the PBM, and received at the GIC within 5 days of month’s end. The invoice shall be submitted to: GIC-Finance-Billing@state.ma.us.

The PBM will continue to process and adjudicate all unpaid claims incurred prior to the effective date of termination at no additional cost to the GIC.

The PBM shall credit the GIC’s claims invoice for claims payment refunds received by the PBM from Providers and/or Pharmacies corresponding to claims paid by the GIC in the current or immediately prior fiscal year. For refunds corresponding to claims paid by the GIC in earlier fiscal years, the PBM shall work with the GIC’s fiscal department staff to refund the money to the state.

The PBM must submit a Service Organization Controls (SOC) report to the GIC annually, no later than three months from the report’s end date, October 1, 20XX. The report must cover the twelve-month period ending June 30, 20XX. The report must include a summary of all noted weaknesses of control objectives and control activities, which often include controls over information technology and related processes. Additionally, the PBM must submit a corrective action plan (CAP) for any noted weaknesses, including the date on which the PBM anticipates the weaknesses being corrected. Quarterly updates should be submitted until there is resolution deemed satisfactory by the GIC.

The PBM will offer the GIC its most favorable pricing throughout the term of the contract, including an annual market check with a 1% threshold. The PBM agrees to disclose at least on mailto:GIC-Finance-Billing@state.ma.us mailto:Jennifer.K.Hewitt@mass.gov mailto:Margaret.Byrne@mass.gov mailto:Barbara.Conneely@mass.gov mailto:Duc.Tran@mass.gov mailto:GIC-Finance-Billing@state.ma.us an annual basis whether it uses spread pricing across any channels. If spread pricing is used, the PBM agrees to: (1) Provide historical average spreads, (2) Commit to delivering claim-level detail showing plan paid, pharmacy paid, and any spread amounts on a defined cadence, and

(3) provide the GIC with Total Revenue Disclosure reporting that includes spread revenue disclosure across all channels.

The PBM agrees to disclose all revenue streams, at least on an annual basis, tied to drug pricing and fulfillment (including but not limited to: manufacturer rebates and price concessions, Direct and Indirect Remuneration (DIR) price concessions, manufacturer administrative fees, pharmacy price concessions, rebate arrears, retrospective adjustments), and commit in writing what will be retained versus passed through to the GIC Commercial and EGWP business, including timing and reconciliation cadence.

The PBM agrees to pass through 100% of all rebates collected by the PBM and/or the GPO, on behalf of the GIC, inclusive of manufacturer administrative fees.

The PBM agrees to fully disclose corporate ownership and all related party relationships (ownership and financial ties to retail/specialty/PBM-owned pharmacies, labs, health plans) and describe arrangements that could create conflicts of interest.

The PBM agrees to grant the GIC, Mercer/MMC, State auditors, and other auditors designated by the GIC (collectively, “Auditors”) full audit rights to all records and systems necessary to verify the PBM’s performance, pricing, payments, concessions and compliance under this RFR, including but not limited to: financial statements; billing, remittance and payment reconciliations; claims-level adjudication data and supporting documentation; subcontractor, manufacturer and Group Purchasing Organization (GPO) contracts, invoices and records necessary to validate pricing concessions and pass-throughs; and third-party vendor contracts.

13 The PBM agrees to provide 100% of any network pharmacy audit recoveries to the GIC.

The PBM agrees that all discounts, fees, and miscellaneous program costs will be backed by auditable and proactively reconciled guarantees.

The PBM agrees to provide their full and timely cooperation with the GIC and their contracted auditors. The audits will occur no less than annually and will entail at minimum a review of rebates, financial guarantees, and plan benefits.

The PBM agrees to support the GIC’s Rx Data Collection (RxDC) reporting and compliance requirements by providing timely, complete, and auditable prescription-drug data extracts and interfaces in the format and cadence required by the RxDC authority or as specified by the GIC. Support must include production, secure transmission, ongoing validation, remediation of errors, and support for audits or inquiries related to reported RxDC data.

The PBM agrees to apply all rebates, refunds, subsidies, discounts, reinsurance, and any other amounts due to the GIC as invoice credits on the next available invoice to offset ongoing expenses; the GIC expects these amounts to be remitted exclusively as invoice credits and not by check or other cash payment.

Appendix: Member Data Column Headings – Pharmacy (as of

6/30/2026)

Important Notes:

• The file must be CSV (Comma Separated Values).

• There should be 31 commas separating the 32 fields (with no extra comma on the end).

• There should be no pipe-delimited files.

• There should be no extra rows.

1. Billing Date

2. Invoice Number

3. GIC ID#

4. First Name

5. Last Name

6. Date of Service

7. Member Status

8. Plan Name

9. Agency Group

10. NDC-11

11. Drug Name

12. GPI

13. NABP/NPI

14. Pharmacy Name

15. Prior Authorization Flag

16. Channel Dispensed

17. Compound Flag

18. OTC Flag

19. Member Direct Submission Claim Indicator

20. 340B Status Code

21. Submission Clarification Code

22. COB Indicator

23. DAW Code

24. Maintenance Drug Flag

25. HDHP Preventative Drug on Date Dispensed Flag

26. Fill Quantity

27. Number of Units

28. Days Supply

29. Undiscounted AWP

30. Ingredient Cost

31. Total Member Paid

32. Total Plan Paid

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