HB5514 104TH GENERAL ASSEMBLY

LRB104 18694 KTG 32137 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5514

Introduced 2/13/2026, by Rep. Nabeela Syed

SYNOPSIS AS INTRODUCED:

305 ILCS 5/5-36a new

Amends the Medical Assistance Article of the Illinois Public Aid Code. Requires the Chief Procurement Officer for General Services, in consultation with the Department of Healthcare and Family Services, to conduct and complete, no later than one year after the effective date of the amendatory Act, any procurement necessary to select a third-party administrator to serve as the single State pharmacy benefit manager for the medical assistance program and to be used by all Medicaid managed care organizations under contract with the Department. Provides that, beginning on January 1, 2028, the selected pharmacy benefit manager shall be responsible for managing and processing all pharmacy claims under the medical assistance program, including pharmacy claims from contracted Medicaid managed care organizations. Provides that the Department is responsible for enforcing the pharmacy benefit manager contract after the procurement process. Sets forth certain activities the Director of Healthcare and Family Services must do as part of the procurement process, including: (i) establishing eligibility criteria an entity must meet in order to become the State pharmacy benefit manager; and (ii) developing a master contract that incorporates all pharmacy benefit manager contract requirements under the Illinois Insurance Code, with some exceptions. Requires a prospective State pharmacy benefit manager to disclose certain information during the procurement process, including, but not limited to: (i) any conflicts of interest; (ii) any common ownership, board membership, or other control the pharmacy benefit manager has over a Medicaid managed care organization or other specified entities; and (iii) any financial terms and arrangements between the pharmacy benefit manager and a prescription drug manufacturer or labeler. Effective immediately.

A BILL FOR

AN ACT concerning public aid.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Public Aid Code is amended by adding Section 5-36a as follows:

(305 ILCS 5/5-36a new)

Sec. 5-36a. Pharmacy benefit manager; procurement.

(a) No later than one year after the effective date of this amendatory Act of the 104th General Assembly, the Chief Procurement Officer for General Services, in consultation with the Department of Healthcare and Family Services, shall conduct and complete, in compliance with the Illinois Procurement Code, any procurement necessary to select a third-party administrator to serve as the single State pharmacy benefit manager for the medical assistance program and to be used by all Medicaid managed care organizations under contract with the Department. Beginning on January 1, 2028, the selected pharmacy benefit manager shall be responsible for managing and processing all pharmacy claims under the medical assistance program, including pharmacy claims from contracted Medicaid managed care organizations. The Department of Healthcare and Family Services is responsible for enforcing the pharmacy benefit manager contract after the procurement process.

(b) As a part of the procurement process, the Director of the Department shall do all of the following:

(1) Accept applications from entities seeking to become the State pharmacy benefit manager.

(2) Establish eligibility criteria an entity must meet in order to become the State pharmacy benefit manager.

(3) Select and contract with, in collaboration with the Chief Procurement Officer for General Services, a single State pharmacy benefit manager.

(4) Develop a master contract that incorporates all requirements under Article XXXIIB of the Illinois Insurance Code, unless incorporating a particular requirement would place the State in violation of federal law or otherwise cause the State to lose eligibility for federal payments.

(c) A prospective State pharmacy benefit manager shall disclose to the Director all of the following during the procurement process:

(1) Any activity, policy, practice, contract, or arrangement of the pharmacy benefit manager that may directly or indirectly present any conflict of interest with the pharmacy benefit manager's relationship with or obligation to the Department or a Medicaid managed care organization.

(2) All common ownership, members of a board of directors, managers, or other control of the pharmacy benefit manager (or any of the pharmacy benefit manager's affiliated companies) with any of the following:

(A) A Medicaid managed care organization and its affiliated companies.

(B) An entity that contracts on behalf of a pharmacy or any pharmacy services administration organization and its affiliated companies.

(C) A drug wholesaler or distributor and its affiliated companies.

(D) A third-party payer and its affiliated companies.

(E) A pharmacy and its affiliate companies.

(3) Any direct or indirect fees, charges, or any kind of assessments imposed by the pharmacy benefit manager on pharmacies licensed in this State in which the pharmacy benefit manager shares common ownership, management, or control; or that are owned, managed, or controlled by any of the pharmacy benefit manager's affiliated companies.

(4) Any direct or indirect fees, charges, or any kind of assessments imposed by the pharmacy benefit manager on the pharmacies licensed in this State.

(5) Any financial terms and arrangements between the pharmacy benefit manager and a prescription drug manufacturer or labeler, including formulary management, drug substitution programs, educational support claims processing, or data sales fees.

Section 99. Effective date. This Act takes effect upon becoming law.