Indiana § 27-1-23-13 - Application of chapter

§ 27-1-23-13. Application of chapter

Sec. 13. This chapter, while independent in its enactment of any other law, shall be supplemental to the Indiana Insurance Law (IC 27-1-2 through IC 27-1-20). All provisions of IC 27-1-2 through IC 27-1-20 shall be fully and completely applicable to this chapter in the same manner as if the provisions of this chapter had been an original part of IC 27-1-2 through IC 27-1-20. This chapter shall be controlling in the event there exists any conflict between this chapter and IC 27-1-2 through IC 27-1-20.

Formerly: Acts 1971, P.L.387, SEC.1. As amended by Acts 1981, P.L.244, SEC.11.

IC 27-1-23.5Chapter 23.5. Risk Management and Own Risk and Solvency Assessment

27-1-23.5-1Application of chapter 27-1-23.5-2Definitions 27-1-23.5-3"Insurance group" 27-1-23.5-4"Insurer" 27-1-23.5-5"ORSA" 27-1-23.5-6Repealed 27-1-23.5-7"ORSA summary report" 27-1-23.5-8Risk management framework 27-1-23.5-9Conducting an ORSA 27-1-23.5-10ORSA reports; requirements 27-1-23.5-11Exemptions 27-1-23.5-12ORSA summary report preparation, review 27-1-23.5-13Documents, materials, other information 27-1-23.5-14Civil penalties

IC 27-1-23.5-1Application of chapter Sec. 1. This chapter applies beginning January 1, 2015.

As added by P.L.129-2014, SEC.8.

IC 27-1-23.5-2Definitions Sec. 2. Except as otherwise provided in this chapter, the definitions in IC 27-1-23 apply throughout this chapter.

As added by P.L.129-2014, SEC.8.

IC 27-1-23.5-3"Insurance group" Sec. 3. As used in this chapter, "insurance group", for purposes of conducting an ORSA, means insurers and affiliates of an insurance holding company system (as defined in IC 27-1-23-1).

As added by P.L.129-2014, SEC.8.

IC 27-1-23.5-4"Insurer" Sec. 4. As used in this chapter, "insurer" has the same meaning as set forth in IC 27-1-2-3, except that the term:

(1) refers only to domestic insurers (as defined in IC 27-1-36-8); and

(2) does not include agencies, authorities, or instrumentalities of the United States, possessions and territories of the United States, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.

As added by P.L.129-2014, SEC.8.

IC 27-1-23.5-5"ORSA" Sec. 5. As used in this chapter, "ORSA" or "own risk and solvency assessment" means a confidential internal assessment:

(1) that is:

(A) appropriate to the nature, scale, and complexity of; and

(B) conducted by;

an insurer or insurance group; and

(2) of the:

(A) material and relevant risks associated with the insurer or insurance group's current business plan; and

(B) sufficiency of capital resources to support the risks described in clause (A).

As added by P.L.129-2014, SEC.8.

IC 27-1-23.5-6RepealedAs added by P.L.129-2014, SEC.8. Repealed by P.L.124-2018, SEC.43.

IC 27-1-23.5-7"ORSA summary report" Sec. 7. As used in this chapter, "ORSA summary report" means a confidential, high level summary of an insurer or insurance group's ORSA.

As added by P.L.129-2014, SEC.8.

IC 27-1-23.5-8Risk management framework Sec. 8. (a) An insurer shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing, and reporting concerning the insurer's material and relevant risks.

(b) If an insurance group of which an insurer is a member maintains a risk management framework described in subsection (a) that applies to the operations of the insurer, the insurer is considered to be in compliance with subsection (a).

As added by P.L.129-2014, SEC.8.

IC 27-1-23.5-9Conducting an ORSA Sec. 9. Subject to section 11 of this chapter, an:

(1) insurer; or

(2) insurance group of which an insurer is a member;

shall, at any time when significant changes occur to the risk profile of the insurer or insurance group and at least one (1) time per year, conduct an ORSA in a manner consistent with the ORSA guidance manual.

As added by P.L.129-2014, SEC.8.

IC 27-1-23.5-10ORSA reports; requirements Sec. 10. (a) Upon the request of the commissioner, and not more than one (1) time per year, an insurer shall submit to the commissioner:

(1) an ORSA summary report; or

(2) a combination of reports that together contain the information described in the ORSA Manual;

applicable to the insurer or insurance group of which the insurer is a member.

(b) Regardless of a request from the commissioner, if the commissioner is the lead state commissioner of an insurance group of which an insurer is a member (as determined by the procedures in the Financial Analysis Handbook), the insurer shall submit a report described in subsection (a) at least one (1) time per year.

(c) A report required by this section must include a signature of the insurer's or insurance group's chief risk officer, or another executive who has responsibility for the oversight of the insurer's enterprise risk management process, attesting that:

(1) to the best of the officer's or executive's belief and knowledge the insurer applies the enterprise risk management process described in the ORSA summary report; and

(2) a copy of the report has been provided to the insurer's board of directors or the appropriate committee of the insurer's board of directors.

(d) If an insurer or another member of an insurance group of which the insurer is a member submits to the commissioner the most recent report that:

(1) was provided to the:

(A) commissioner of another state; or

(B) regulatory authority of an alien jurisdiction;

(2) is substantially similar to an ORSA summary report; and

(3) contains information that is comparable to the information described in the ORSA Manual;

the insurer is considered to have satisfied the requirements of this section.

(e) If a report described in subsection (d) is completed in a language other than English, a translation of the report into the English language must be submitted with the report.

As added by P.L.129-2014, SEC.8. Amended by P.L.124-2018, SEC.44.

IC 27-1-23.5-11Exemptions Sec. 11. (a) Except as otherwise provided in this section, an insurer is exempt from the requirements of this chapter if:

(1) the insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than five hundred million dollars ($500,000,000); and

(2) the insurance group of which the insurer is a member has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than one billion dollars ($1,000,000,000).

(b) If:

(1) an insurer qualifies under subsection (a)(1) for exemption from the requirements of this chapter; and

(2) the insurance group of which the insurer is a member does not qualify for exemption under subsection (a)(2);

an ORSA summary report required by section 10 of this chapter must include every insurer that is a member of the insurance group.

(c) If:

(1) an insurance group described in subsection (b) submits more than one (1) ORSA summary report for a combination of insurers; and

(2) the combination of ORSA summary reports submitted as described in subdivision (1) includes every insurer that is a member of the insurance group;

the insurance group is considered to be in compliance with subsection (b).

(d) If:

(1) an insurer does not qualify under subsection (a)(1) for exemption from the requirements of this chapter; and

(2) the insurance group of which the insurer is a member qualifies for exemption under subsection (a)(2);

the only ORSA summary report that is required under section 10 of this chapter is the report that applies to the insurer.

(e) An insurer that does not qualify under subsection (a) for exemption from the requirements of this chapter may apply to the commissioner for a waiver from the requirements of this chapter based on unique circumstances. In deciding whether to grant an insurer's request for a waiver, the commissioner:

(1) may consider the type and volume of business written, ownership and organizational structure, and any other factor the commissioner considers relevant to the insurer or insurance group of which the insurer is a member; and

(2) shall, if the insurer is part of an insurance group with insurers domiciled in more than one (1) state, coordinate with the:

(A) lead state commissioner of the insurance group (as determined by the procedures in the Financial Analysis Handbook); and

(B) other domiciliary commissioners;

in considering whether to grant the insurer's request for a waiver.

(f) The commissioner may, regardless of an insurer's qualification under this section for exemption from the requirements of this chapter, require that an insurer maintain a risk management framework, conduct an ORSA, and file an ORSA summary report if one (1) of the following applies:

(1) If unique circumstances exist, as determined by the commissioner, including the following:

(A) The type and volume of business written by the insurer.

(B) The insurer's ownership and organizational structure.

(C) The request of a federal agency.

(D) The request of an international supervisor.

(2) If the insurer:

(A) has authorized control level RBC for a company action level event under IC 27-1-36;

(B) meets at least one (1) of the standards of an insurer considered to be in hazardous financial condition according to rules adopted by the department under IC 27-1-3-7; or

(C) exhibits other qualities of a troubled insurer, as determined by the commissioner.

(g) If an insurer ceases to qualify for an exemption under this section due to changes in premium, as reflected in:

(1) the insurer's most recent annual statement; or

(2) the most recent annual statements of the insurers that are members of the insurance group of which the insurer is a member;

the insurer must meet the requirements of this chapter not later than one (1) year after the date on which the premium change occurs.

As added by P.L.129-2014, SEC.8. Amended by P.L.124-2018, SEC.45.

IC 27-1-23.5-12ORSA summary report preparation, review Sec. 12. (a) Except as provided in subsection (b), an ORSA summary report must be prepared in a manner consistent with the ORSA guidance manual. Documentation and supporting information must be maintained and made available upon examination or request of the commissioner.

(b) The commissioner's review of an ORSA summary report, and any requests for additional information, must be made in a manner similar to the procedures used by the commissioner in the analysis and examination of multistate or global insurers and insurance groups.

As added by P.L.129-2014, SEC.8.

IC 27-1-23.5-13Documents, materials, other information Sec. 13. (a) Documents, materials, and other information related to an ORSA, including an ORSA summary report, in the possession of or control of the department that are obtained by, created by, or disclosed to the commissioner or another person under this chapter, are:

(1) considered to be proprietary and contain trade secrets;

(2) confidential and privileged;

(3) not subject to subpoena; and

(4) not subject to discovery or admissible in evidence in a private civil action.

(b) The commissioner may:

(1) use the documents, materials, and other information described in subsection (a) in relation to a regulatory or legal action brought as part of the commissioner's duties; and

(2) otherwise make the documents, materials, and other information public only with the prior written consent of the insurer or insurance group.

(c) The commissioner, and any other person:

(1) who receives documents, materials, or other information related to an ORSA while acting under the authority of the commissioner; or

(2) with whom the documents, materials, or other information are shared;

under this chapter is not permitted or required to testify in a private civil action concerning any documents, materials, or other information described in subsection (a).

(d) The commissioner may do the following:

(1) Upon request, share all documents, materials, and other information described in subsection (a) with the following if the recipient agrees in writing, and provides written verification that the recipient has the legal authority, to maintain the confidential and privileged status of the documents, materials, and other information:

(A) Other state, federal, and international financial regulatory agencies.

(B) The NAIC.

(C) Members of a supervisory college.

(D) A third party consultant designated by the commissioner.

(2) Receive documents, materials, and other information described in subsection (a) from:

(A) regulatory officials of domestic or foreign jurisdictions;

(B) members of a supervisory college; and

(C) the NAIC;

if the commissioner maintains the confidential or privileged status of the documents, materials, and other information that are received with notice or the understanding that the documents, materials, and other information are confidential or privileged under the laws of the jurisdiction that is the source of the documents, materials, and other information.

(e) The commissioner shall enter into a written agreement with the NAIC or a third party consultant governing sharing and use of information provided under this chapter, including the following:

(1) Procedures and protocols concerning the confidentiality and security of information shared:

(A) with the NAIC or a third party consultant under this chapter; and

(B) by the NAIC with regulators of other states in which insurers that are members of an insurance group are domiciled.

(2) A statement that the recipient agrees in writing, and provides written verification that the recipient has the legal authority, to maintain the confidential and privileged status of the documents, materials, and other information.

(3) A statement that, with respect to information shared with the NAIC or a third party consultant under this chapter:

(A) the commissioner maintains ownership of the information; and

(B) the use of the information is subject to the direction of the commissioner.

(4) A statement that the NAIC or a third party consultant may not store information shared under this chapter in a permanent data base after the underlying analysis is completed.

(5) A requirement that, if confidential information of an insurer that is in the possession of the NAIC or a third party consultant under this chapter is subject to a request or subpoena to the NAIC or third party consultant for production or disclosure, the NAIC or a third party consultant will provide prompt notice to the insurer.

(6) A requirement that the NAIC or a third party consultant will allow intervention by an insurer in a judicial or administrative action under which the NAIC or third party consultant may be required to disclose confidential information concerning the insurer that has been shared with the NAIC or third party consultant under this chapter.

(7) If the written agreement is with a third party consultant, a statement that the insurer's written consent is required for the sharing of the information with the third party consultant.

(f) The sharing of information by the commissioner under this chapter is not a delegation of regulatory authority. The commissioner is solely responsible for the administration, implementation, and enforcement of this chapter.

(g) Disclosure to or sharing by the commissioner of documents, materials, or other information under this chapter is not a waiver of any applicable privilege or claim of confidentiality in the documents, materials, or other information.

(h) Documents, materials, and other information in the possession or control of the NAIC or a third party consultant under this chapter are:

(1) confidential and privileged;

(2) not subject to subpoena; and

(3) not discoverable or admissible in evidence in a private civil action.

As added by P.L.129-2014, SEC.8.

IC 27-1-23.5-14Civil penalties Sec. 14. (a) An insurer that fails, without just cause (as determined by the commissioner), to timely file an ORSA summary report as required by this chapter shall, after notice and hearing under IC 4-21.5, pay a civil penalty of one hundred dollars ($100) for each day of noncompliance, not to exceed ten thousand dollars ($10,000).

(b) The commissioner may reduce a penalty imposed under subsection (a) if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.

(c) A civil penalty collected under this section shall be deposited in the department of insurance fund established by IC 27-1-3-28.

As added by P.L.129-2014, SEC.8.

IC 27-1-24Chapter 24. RepealedRepealed by P.L.257-1983, SEC.3.

IC 27-1-24.2Chapter 24.2. Pharmacy Benefits

27-1-24.2-1Applicability 27-1-24.2-1.5"Actual acquisition cost" 27-1-24.2-2"Actual overpayment" 27-1-24.2-3"Common control" 27-1-24.2-4"Cost sharing" 27-1-24.2-5"Health plan" 27-1-24.2-6"Insured" 27-1-24.2-7"Insurer" 27-1-24.2-8"National drug code number" 27-1-24.2-9"Net amount" 27-1-24.2-10"Pharmacy" 27-1-24.2-11"Pharmacy affiliate" 27-1-24.2-12"Pharmacy benefit manager" 27-1-24.2-13"Pharmacy or pharmacist services" 27-1-24.2-14Network requirements; annual report; review of a network; confidential information and data 27-1-24.2-15Required provisions in a contract between a pharmacy or pharmacist and a pharmacy benefit manager; prohibition on requesting a refund or making a recoupment of a dispensing fee if the correct medication was dispensed 27-1-24.2-16Prohibited actions 27-1-24.2-17Complaint for violation of chapter; investigation 27-1-24.2-18State employee health plan use of a pharmacy benefit manager 27-1-24.2-19Prohibited actions by a third party administrator 27-1-24.2-20Reimbursement for monetary loss incurred as a result of a violation of this chapter 27-1-24.2-21Conflict with federal law

IC 27-1-24.2-1Applicability Sec. 1. (a) This chapter applies to a policy or contract that is issued, delivered, entered into, renewed, or amended after December 31, 2025.

(b) This chapter does not apply to the following:

(1) Medicaid or a managed care organization (as defined in IC 12-7-2.1-218).

(2) Except as provided in section 18 of this chapter, a state employee health plan (as defined in IC 5-10-8-6.7).

As added by P.L.189-2025, SEC.1. Amended by P.L.145-2026, SEC.140.

IC 27-1-24.2-1.5"Actual acquisition cost" Sec. 1.5. As used in this chapter, "actual acquisition cost" means the purchase price of a drug paid by a pharmacy net of all discounts, rebates, chargebacks, and other adjustments to the price of the drug. The term does not include professional fees.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-2"Actual overpayment" Sec. 2. As used in this chapter, "actual overpayment" means the portion of any amount paid for pharmacy or pharmacist services that:

(1) is duplicative because the pharmacy or pharmacist has already been paid for the services; or

(2) was erroneously paid because the services were not rendered in accordance with the prescriber's order, in which case only the amount paid for the portion of the prescription that was filled incorrectly or in excess of the prescriber's order is deemed an actual overpayment.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-3"Common control" Sec. 3. As used in this chapter, "common control" includes:

(1) sharing common management or managers; and

(2) having common members on boards of directors.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-4"Cost sharing" Sec. 4. As used in this chapter, "cost sharing" means the cost to an insured under a health plan according to any coverage limit, copayment, coinsurance, deductible, or other out-of-pocket expense requirements imposed by the health plan.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-5"Health plan" Sec. 5. (a) As used in this chapter, "health plan" means the following:

(1) A policy of accident and sickness insurance (as defined in IC 27-8-5-1). However, the term does not include the coverages described in IC 27-8-5-2.5(a).

(2) An individual contract (as defined in IC 27-13-1-21) or a group contract (as defined in IC 27-13-1-16) that provides coverage for basic health care services (as defined in IC 27-13-1-4).

(3) Any other plan or program that provides payment, reimbursement, or indemnification to a covered individual for the cost of prescription drugs.

(b) The term does not include the following:

(1) A self-insured health plan provided by a hospital or health system to its employees and dependents of employees if the hospital or health system owns a pharmacy.

(2) A prescription drug plan established under Medicare Part D.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-6"Insured" Sec. 6. As used in this chapter, "insured" means an individual covered under a health plan.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-7"Insurer" Sec. 7. As used in this chapter, "insurer" means any of the following that offer or issue a health plan:

(1) An insurance company.

(2) A health maintenance organization.

(3) A limited health service organization.

(4) A self-insurer, including a governmental plan, church plan, or multiple employer welfare arrangement.

(5) A provider sponsored integrated health delivery network.

(6) A self-insured employer organized association.

(7) A nonprofit hospital, medical-surgical, dental, and health service corporation.

(8) Any other third party payor that is:

(A) authorized to transact health insurance business in Indiana; or

(B) not exempt by federal law from regulation under the insurance laws of Indiana.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-8"National drug code number" Sec. 8. As used in this chapter, "national drug code number" means the unique national drug code number that identifies:

(1) a specific approved drug;

(2) the manufacturer of the drug; and

(3) the package presentation of the drug.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-9"Net amount" Sec. 9. As used in this chapter, "net amount" means the amount paid to a pharmacy or pharmacist by the insurer, pharmacy benefit manager, or other administrator minus:

(1) any fees;

(2) any price concessions; and

(3) all other revenue;

passing from the pharmacy or pharmacist to the insurer, pharmacy benefit manager, or other administrator.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-10"Pharmacy" Sec. 10. As used in this chapter, "pharmacy" has the meaning set forth in IC 25-26-13-2.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-11"Pharmacy affiliate" Sec. 11. As used in this chapter, "pharmacy affiliate" means a pharmacy, including a specialty pharmacy, that directly or indirectly, through one (1) or more intermediaries:

(1) owns or controls;

(2) is owned or controlled by; or

(3) is under common ownership or common control with;

an insurer, a pharmacy benefit manager, or other administrator of pharmacy benefits.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-12"Pharmacy benefit manager" Sec. 12. As used in this chapter, "pharmacy benefit manager" has the meaning set forth in IC 27-1-24.5-12.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-13"Pharmacy or pharmacist services" Sec. 13. (a) As used in this chapter, "pharmacy or pharmacist services" means any:

(1) health care procedures or treatments within the scope of practice of a pharmacist; or

(2) services provided by a pharmacy or pharmacist.

(b) The term includes the sale and provision of the following by a pharmacy or pharmacist:

(1) Prescription drugs.

(2) Home medical equipment (as defined in IC 25-26-21-2).

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-14Network requirements; annual report; review of a network; confidential information and data Sec. 14. (a) An insurer, a pharmacy benefit manager, or any other administrator of pharmacy benefits that utilizes a network to provide pharmacy or pharmacist services under a health plan shall ensure that the network is reasonably adequate and accessible with respect to the provision of pharmacy or pharmacist services.

(b) A reasonably adequate and accessible network with respect to the provision of pharmacy or pharmacist services must, at a minimum:

(1) offer an adequate number of accessible pharmacies that are not mail order pharmacies; and

(2) provide convenient access to pharmacies that are not mail order pharmacies within a reasonable distance of not more than thirty (30) miles from each insured's residence, to the extent that pharmacy or pharmacist services are available.

(c) An insurer, a pharmacy benefit manager, and any other administrator of pharmacy benefits shall file an annual report with the commissioner in a manner and form prescribed by the commissioner. The annual report must describe the networks of the insurer, pharmacy benefit manager, or other administrator that are utilized for the provision of pharmacy or pharmacist services under a health plan.

(d) The commissioner shall review each network reported under subsection (c) to ensure that the network complies with this section.

(e) All information and data acquired by the department under this section that is generally recognized as confidential or proprietary is confidential for the purposes of IC 5-14-3-4 and may not be disclosed by the department. However, the department may publicly disclose aggregated information that is not descriptive of any readily identifiable person or entity.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-15Required provisions in a contract between a pharmacy or pharmacist and a pharmacy benefit manager; prohibition on requesting a refund or making a recoupment of a dispensing fee if the correct medication was dispensed Sec. 15. (a) A contract between a pharmacy or pharmacist and an insurer, a pharmacy benefit manager, or any other administrator of pharmacy benefits for the provision of pharmacy or pharmacist services under a health plan, either directly or through a pharmacy services administrative organization or group purchasing organization, must include provisions that do the following:

(1) Outline the terms and conditions for the provision of pharmacy or pharmacist services.

(2) Subject to subsection (b), prohibit the insurer, pharmacy benefit manager, or other administrator from retroactively denying, reducing reimbursement for, or seeking any refunds or recoupments for a claim for pharmacy or pharmacist services, in whole or in part, from the pharmacy or pharmacist after returning a paid claim response as part of the adjudication of the claim, including claims for the cost of a medication or dispensed product and claims for pharmacy or pharmacist services that are deemed ineligible for coverage, unless:

(A) the original claim was submitted fraudulently; or

(B) the pharmacy or pharmacist received an actual overpayment.

(3) Prohibit the insurer, pharmacy benefit manager, or other administrator from reimbursing the pharmacy or pharmacist for a prescription drug or other service at a net amount that is less than the greater of the following:

(A) The amount the insurer, pharmacy benefit manager, or other administrator reimburses itself or a pharmacy affiliate for the same prescription drug by national drug code number or service.

(B) The following amount, as applicable:

(i) If the prescription drug or service is administered, dispensed, or provided at a pharmacy that is a licensed premises (as defined in IC 7.1-1-3-20), the actual acquisition cost for the prescription drug or service plus a fair and reasonable dispensing fee.

(ii) If the prescription drug or service is administered, dispensed, or provided at a pharmacy not described in item (i), the national average drug acquisition cost (NADAC) for the prescription drug or service, as determined by the federal Centers for Medicare and Medicaid Services at the time the prescription drug or service is administered, dispensed, or provided plus a professional dispensing fee equal to the Medicaid fee for service dispensing fee under 405 IAC 5-24-6.

(b) An insurer, a pharmacy benefit manager, or any other administrator of pharmacy benefits may not request a refund or make a recoupment of a dispensing fee paid to the pharmacy if the correct medication was dispensed to the patient.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-16Prohibited actions Sec. 16. (a) Except as provided in section 15 of this chapter, with respect to the provision of pharmacy or pharmacist services under a health plan, an insurer, a pharmacy benefit manager, or any other administrator of pharmacy benefits may not:

(1) prohibit a pharmacy or pharmacist from, or impose a penalty on a pharmacy or pharmacist for:

(A) selling a lower cost alternative to an insured, if a lower cost alternative is available; or

(B) providing information to an insured under subsection (c);

(2) discriminate against any pharmacy or pharmacist that is:

(A) located within the geographic coverage area of the health plan; and

(B) willing to agree to, or accept, terms and conditions established for participation in the insurer's, pharmacy benefit manager's, other administrator's, or health plan's network;

(3) impose limits, including quantity limits or refill frequency limits, on an insured's access to medication from a pharmacy that are more restrictive than those existing for a pharmacy affiliate;

(4) except as provided in subsection (b), require an insured to receive pharmacy or pharmacist services from a pharmacy affiliate, including:

(A) requiring an insured to obtain a specialty drug from a pharmacy affiliate; and

(B) charging less cost sharing to insureds that use pharmacy affiliates than what is charged to insureds that use nonaffiliated pharmacies;

(5) require a pharmacy or pharmacist to enter into an additional contract with an affiliate of the insurer, pharmacy benefit manager, or other administrator of pharmacy benefits as a condition of entering into a contract with this insurer, pharmacy benefit manager, or administrator; or

(6) require a pharmacy or pharmacist to, as a condition of a contract, agree to payment rates for any affiliate of the insurer, pharmacy benefit manager, or other administrator of pharmacy benefits that is not a party to the contract.

(b) Subsection (a)(4):

(1) does not apply to a mail order pharmacy; and

(2) may not be construed to prohibit:

(A) communications to insureds regarding networks and prices if the communication is accurate and includes information about all eligible nonaffiliated pharmacies; or

(B) an insurer, a pharmacy benefit manager, or any other administrator of pharmacy benefits from providing financial incentives for utilizing the network, if the insurer, pharmacy benefit manager, or other administrator complies with this section and section 14 of this chapter.

(c) A pharmacist shall have the right to provide an insured with information regarding lower cost alternatives to assist the insured in making informed decisions.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-17Complaint for violation of chapter; investigation Sec. 17. (a) Any insured, pharmacy, or pharmacist impacted by an alleged violation of this chapter may file a complaint with the commissioner.

(b) The commissioner shall:

(1) review and investigate all complaints filed under this section; and

(2) issue, in writing, a determination to the insured, pharmacy, or pharmacist as to whether a violation occurred.

(c) An insurer, a pharmacy benefit manager, or any other administrator of pharmacy benefits shall:

(1) respond to; and

(2) comply with;

any requests made by the commissioner under this section.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-18State employee health plan use of a pharmacy benefit manager Sec. 18. (a) This section applies to a state employee health plan (as defined in IC 5-10-8-6.7). If a pharmacy benefit manager is used with regard to a state employee health plan, the state personnel department shall either:

(1) create a pharmacy benefit manager within the state personnel department; or

(2) contract with an insurer, a pharmacy benefit manager, or any other administrator of pharmacy benefits.

(b) All data collected by a contractor while administering a contract under subsection (a)(2) is the property of the state.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-19Prohibited actions by a third party administrator Sec. 19. (a) As used in this section, "plan sponsor" means an employer or organization that:

(1) has more than one hundred (100) employees or members; and

(2) offers health insurance coverage to its employees or members through a self-funded health benefit plan.

(b) A third party administrator may not:

(1) require, as a condition of a plan sponsor entering into a contract with the third party administrator, that the plan sponsor enter into a contract with a particular pharmacy benefit manager; or

(2) charge a different fee for services provided by the third party administrator to a plan sponsor based on the plan sponsor's selection of a particular pharmacy benefit manager.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-20Reimbursement for monetary loss incurred as a result of a violation of this chapter Sec. 20. In addition to any other remedies, penalties, or damages available under common law or statute, the commissioner may order reimbursement to any person who has incurred a monetary loss as a result of a violation of this chapter.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.2-21Conflict with federal law Sec. 21. This chapter applies to the extent that it is not in conflict with federal law.

As added by P.L.189-2025, SEC.1.

IC 27-1-24.5Chapter 24.5. Pharmacy Benefit Managers

27-1-24.5-0.7"Contract holder" 27-1-24.5-0.8"Cost sharing" 27-1-24.5-1"Covered individual" 27-1-24.5-2"Effective rate of reimbursement" 27-1-24.5-3"Equal access and incentives" 27-1-24.5-4"Generic drug" 27-1-24.5-4.5"Health care service" 27-1-24.5-5"Health plan" 27-1-24.5-6"Independent pharmacies" 27-1-24.5-6.5"Insurer" 27-1-24.5-7"Maximum allowable cost" 27-1-24.5-8"Maximum allowable cost list" 27-1-24.5-9"Pharmacist" 27-1-24.5-10"Pharmacist services" 27-1-24.5-11"Pharmacy" 27-1-24.5-11.5"Pharmacy benefit management services" 27-1-24.5-12"Pharmacy benefit manager" 27-1-24.5-13"Pharmacy benefit manager affiliate" 27-1-24.5-14"Pharmacy benefit manager network" 27-1-24.5-15"Pharmacy services administrative organization" 27-1-24.5-16"Rebate" 27-1-24.5-17"Third party" 27-1-24.5-18Licensure 27-1-24.5-19Equal access and incentives; prohibited acts 27-1-24.5-19.5Federal drug pricing program 27-1-24.5-20Acts of the commissioner; confidentiality 27-1-24.5-21Annual reporting requirements; trade secrets 27-1-24.5-22Required information; appeals process; auditing procedures 27-1-24.5-22.5Aggregated information from pharmacy benefit manager reports 27-1-24.5-22.6Filing complaints with department of insurance 27-1-24.5-23Drug price data 27-1-24.5-24Information necessary for appeal 27-1-24.5-25Contract holder's right to audit; disclosure of data; amounts paid; consideration 27-1-24.5-26Disclosure of contract with another party 27-1-24.5-27Contracts of pharmacy services administrative organizations 27-1-24.5-27.5Pharmacist may not be required to collect higher copayment for prescription drug 27-1-24.5-27.7Limitation on cost sharing; calculating covered individual's contribution 27-1-24.5-28Violation of chapter 27-1-24.5-29Report

IC 27-1-24.5-0.7"Contract holder" Sec. 0.7. As used in this chapter, "contract holder" means:

(1) an individual or entity that offers health insurance coverage to its employees or members through a self-funded health benefit plan, including a self-funded health benefit plan that complies with the federal Employee Retirement Income Security Act (ERISA) of 1974 (29 U.S.C. 1001 et seq.);

(2) a health plan; or

(3) Medicaid or a managed care organization (as defined in IC 12-7-2.1-218) that provides services to a Medicaid recipient;

that contracts with a pharmacy benefit manager to provide services.

As added by P.L.152-2024, SEC.11. Amended by P.L.145-2026, SEC.141.

IC 27-1-24.5-0.8"Cost sharing" Sec. 0.8. As used in this chapter, "cost sharing" means any copayment, coinsurance, deductible, or other similar charge that is:

(1) required of a covered individual for a health care service covered by a health plan, including a prescription drug; and

(2) paid:

(A) by; or

(B) on behalf of;

the covered individual.

As added by P.L.237-2025, SEC.1.

IC 27-1-24.5-1"Covered individual" Sec. 1. As used in this chapter, "covered individual" means an individual who is entitled to coverage under a health plan.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-2"Effective rate of reimbursement" Sec. 2. As used in this chapter, "effective rate of reimbursement" includes the following:

(1) Generic effective rates.

(2) Brand effective rates.

(3) Direct and indirect remuneration fees.

(4) Any other reduction or aggregate reduction of payment.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-3"Equal access and incentives" Sec. 3. As used in this chapter, "equal access and incentives" means that a pharmacy benefit manager allows any willing pharmacy provider to participate as part of any of the pharmacy benefit manager's networks as long as the pharmacy provider agrees to the terms and conditions of the relevant contract applicable to any other pharmacy provider within that network.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-4"Generic drug" Sec. 4. As used in this chapter, "generic drug" means a drug product that is identified by the drug's chemical name and that is:

(1) accepted by the federal Food and Drug Administration;

(2) available from at least three (3) sources; and

(3) therapeutically equivalent to an originating brand name drug.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-4.5"Health care service" Sec. 4.5. As used in this chapter, "health care service" means a service or good furnished for the purpose of preventing, alleviating, curing, or healing:

(1) human illness;

(2) physical disability; or

(3) injury.

As added by P.L.237-2025, SEC.2.

IC 27-1-24.5-5"Health plan" Sec. 5. As used in this chapter, "health plan" means a plan through which coverage is provided for health care services through insurance, prepayment, reimbursement, or otherwise. The term includes the following:

(1) A state employee health plan (as defined in IC 5-10-8-6.7).

(2) A policy of accident and sickness insurance (as defined in IC 27-8-5-1). However, the term does not include the coverages described in IC 27-8-5-2.5(a).

(3) An individual contract (as defined in IC 27-13-1-21) or a group contract (as defined in IC 27-13-1-16) that provides coverage for basic health care services (as defined in IC 27-13-1-4).

(4) Any other plan or program that provides payment, reimbursement, or indemnification to a covered individual for the cost of prescription drugs.

As added by P.L.68-2020, SEC.1. Amended by P.L.207-2021, SEC.52; P.L.237-2025, SEC.3.

IC 27-1-24.5-6"Independent pharmacies" Sec. 6. As used in this chapter, "independent pharmacies" means pharmacies that are not a pharmacy benefit manager affiliate.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-6.5"Insurer" Sec. 6.5. As used in this chapter, "insurer" means an insurer subject to state law and rules regulating insurance or subject to the jurisdiction of the department that contracts, or offers to contract, to:

(1) provide;

(2) deliver;

(3) arrange for;

(4) pay for; or

(5) reimburse;

any of the costs of health care services to a covered individual under a health plan.

As added by P.L.237-2025, SEC.4.

IC 27-1-24.5-7"Maximum allowable cost" Sec. 7. As used in this chapter, "maximum allowable cost" means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a generic drug. The term does not include a dispensing fee or professional fee.

As added by P.L.68-2020, SEC.1. Amended by P.L.32-2021, SEC.76.

IC 27-1-24.5-8"Maximum allowable cost list" Sec. 8. As used in this chapter, "maximum allowable cost list" means a list of drugs that is used:

(1) by a pharmacy benefit manager; and

(2) to set the maximum amount that may be reimbursed to a pharmacy or pharmacist for a drug.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-9"Pharmacist" Sec. 9. As used in this chapter, "pharmacist" means an individual licensed as a pharmacist under IC 25-26.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-10"Pharmacist services" Sec. 10. As used in this chapter, "pharmacist services" means products, goods, and services provided as part of the practice of pharmacy.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-11"Pharmacy" Sec. 11. As used in this chapter, "pharmacy" means the physical location:

(1) that is licensed under IC 25-26; and

(2) at which drugs, chemicals, medicines, prescriptions, and poisons are compounded, dispensed, or sold at retail.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-11.5"Pharmacy benefit management services" Sec. 11.5. As used in this chapter, "pharmacy benefit management services" means:

(1) negotiating the price of prescription drugs, including negotiating and contracting for direct or indirect rebates, discounts, or other price concessions;

(2) managing any aspect of a prescription drug benefit, including:

(A) the processing and payment of claims for prescription drugs;

(B) arranging alternative access to or funding for prescription drugs;

(C) the performance of drug utilization review;

(D) the processing of drug prior authorization requests;

(E) the adjudication of appeals or grievances related to the prescription drug benefit;

(F) contracting with network pharmacies;

(G) controlling the cost of covered prescription drugs;

(H) managing or providing data relating to the prescription drug benefit;

(I) the provision of services related to the prescription drug benefit; or

(J) creating or updating prescription drug formularies;

(3) the performance of any administrative, managerial, clinical, pricing, financial, reimbursement, data administration or reporting, or billing service; and

(4) any other services specified in a rule adopted by the department.

As added by P.L.237-2025, SEC.5.

IC 27-1-24.5-12"Pharmacy benefit manager" Sec. 12. (a) As used in this chapter, "pharmacy benefit manager" means:

(1) a person who, under a written agreement with an insurer, health plan, state agency, managed care organization, or other third party payor, directly or indirectly provides one (1) or more pharmacy benefit management services on behalf of the insurer, health plan, state agency, managed care organization, or other third party payor; and

(2) an agent, a contractor, an intermediary, an affiliate, a subsidiary, or a related entity of a person described in subdivision (1) who facilitates, provides, directs, or oversees the provision of the pharmacy benefit management services.

(b) The term does not include the following:

(1) A person licensed under IC 16.

(2) A health provider who is:

(A) described in IC 25-0.5-1; and

(B) licensed or registered under IC 25.

(3) A consultant who only provides advice concerning the selection or performance of a pharmacy benefit manager.

As added by P.L.68-2020, SEC.1. Amended by P.L.32-2021, SEC.77; P.L.237-2025, SEC.6.

IC 27-1-24.5-13"Pharmacy benefit manager affiliate" Sec. 13. As used in this chapter, "pharmacy benefit manager affiliate" means a pharmacy or pharmacist that directly or indirectly, through one (1) or more intermediaries:

(1) owns or controls;

(2) is owned or controlled by; or

(3) is under common ownership or control with;

a pharmacy benefit manager.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-14"Pharmacy benefit manager network" Sec. 14. As used in this chapter, "pharmacy benefit manager network" means a group of pharmacies or pharmacists that is offered:

(1) through an agreement or health plan contract; and

(2) to provide pharmacist services for health plans.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-15"Pharmacy services administrative organization" Sec. 15. As used in this chapter, "pharmacy services administrative organization" means an organization that assists independent pharmacies and pharmacy benefit managers or health plans to achieve administrative efficiencies, including contracting and payment efficiencies.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-16"Rebate" Sec. 16. (a) As used in this chapter, "rebate" means a discount or other price concession that is:

(1) based on use of a prescription drug; and

(2) paid by a manufacturer or third party to a pharmacy benefit manager, pharmacy services administrative organization, or pharmacy after a claim has been processed and paid at a pharmacy.

(b) The term includes an incentive and a disbursement.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-17"Third party" Sec. 17. As used in this chapter, "third party" means a person other than a:

(1) pharmacy benefit manager; or

(2) covered individual.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-18Licensure Sec. 18. A person shall, before establishing or operating as a pharmacy benefit manager, apply to and obtain a license from the commissioner under this chapter.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-19Equal access and incentives; prohibited acts Sec. 19. (a) A pharmacy benefit manager shall provide equal access and incentives to all pharmacies within the pharmacy benefit manager's network.

(b) A pharmacy benefit manager may not do any of the following:

(1) Condition participation in any network on accreditation, credentialing, or licensing of a pharmacy, other than a license or permit required by the Indiana board of pharmacy or other state or federal regulatory authority for the services provided by the pharmacy. However, nothing in this subdivision precludes the department from providing credentialing or accreditation standards for pharmacies.

(2) Discriminate against any pharmacy.

(3) Directly or indirectly retroactively deny a claim or aggregate of claims after the claim or aggregate of claims has been adjudicated, unless any of the following apply:

(A) The original claim was submitted fraudulently.

(B) The original claim payment was incorrect because the pharmacy or pharmacist had already been paid for the drug.

(C) The pharmacist services were not properly rendered by the pharmacy or pharmacist.

(4) Reduce, directly or indirectly, payment to a pharmacy for pharmacist services to an effective rate of reimbursement, including permitting an insurer or plan sponsor to make such a reduction.

(5) Reimburse a pharmacy that is affiliated with the pharmacy benefit manager, other than solely being included in the pharmacy benefit manager's network, at a greater reimbursement rate than other pharmacies in the same network.

(6) Impose limits, including quantity limits or refill frequency limits, on a pharmacy's access to medication that differ from those existing for a pharmacy benefit manager affiliate.

(7) Share any covered individual's information, including de-identified covered individual information, received from a pharmacy or pharmacy benefit manager affiliate, except as permitted by the federal Health Insurance Portability and Accountability Act (HIPAA) (P.L.104-191).

A violation of this subsection by a pharmacy benefit manager constitutes an unfair or deceptive act or practice in the business of insurance under IC 27-4-1-4.

As added by P.L.68-2020, SEC.1. Amended by P.L.32-2021, SEC.78; P.L.196-2021, SEC.22.

IC 27-1-24.5-19.5Federal drug pricing program Sec. 19.5. (a) This section does not apply to:

(1) a Medicaid managed care organization (as defined in 42 U.S.C. 1396b(m)); and

(2) the state Medicaid program when Medicaid provides reimbursement for covered outpatient drugs (as defined in 42 U.S.C. 1396r-8(k)) on a fee for service basis.

(b) As used in this section, "340B covered entity" means an entity authorized to participate in the federal 340B Drug Pricing Program under Section 340B(a)(4) of the federal Public Health Service Act (42 U.S.C. 256b(a)(4)) and includes any pharmacy under contract with the entity to dispense drugs on behalf of the entity.

(c) The following provisions may not be contained in a contract between a pharmacy benefit manager and a 340B covered entity:

(1) A reimbursement rate for a prescription drug that would diminish the 340B benefit to a 340B covered entity.

(2) A fee or adjustment that is not imposed on a pharmacy that is not a 340B covered entity.

(3) A fee or adjustment amount that exceeds the fee or adjustment amount imposed on a pharmacy that is not a 340B covered entity.

(4) Any provision that prevents or interferes with an individual's choice to receive a prescription drug from a 340B covered entity, including the administration of the drug.

(5) Any provision that excludes a 340B covered entity from pharmacy benefit manager networks based on the 340B covered entity's participation in the federal 340B Drug Pricing Program.

(6) Any provision that discriminates against a 340B covered entity.

A violation of this subsection by a pharmacy benefit manager constitutes an unfair or deceptive act or practice in the business of insurance under IC 27-4-1-4.

(d) For contracts between a pharmacy benefit manager and a 340B covered entity that are entered into, amended, or renewed after June 30, 2021, a provision that violates subsection (c) is considered void and unenforceable.

As added by P.L.196-2021, SEC.23. Amended by P.L.213-2025, SEC.298.

IC 27-1-24.5-20Acts of the commissioner; confidentiality Sec. 20. (a) The commissioner shall do the following:

(1) Prescribe an application for use in applying for a license to operate as a pharmacy benefit manager.

(2) Adopt rules under IC 4-22-2 to establish the following:

(A) Pharmacy benefit manager licensing requirements.

(B) Licensing fees.

(C) A license application.

(D) Financial standards for pharmacy benefit managers.

(E) Reporting requirements described in sections 21 and 29 of this chapter.

(F) The time frame for the resolution of an appeal under section 22 of this chapter.

(b) The commissioner may do the following:

(1) Charge a license application fee and renewal fees established under subsection (a)(2) in an amount not to exceed five hundred dollars ($500) to be deposited in the department of insurance fund established by IC 27-1-3-28.

(2) Examine or audit the books and records of a pharmacy benefit manager one (1) time per year to determine if the pharmacy benefit manager is in compliance with this chapter.

(3) Adopt rules under IC 4-22-2 to:

(A) implement this chapter; and

(B) specify requirements for the following:

(i) Prohibited market conduct practices.

(ii) Data reporting in connection with violations of state law.

(iii) Maximum allowable cost list compliance and enforcement requirements, including the requirements of sections 22 and 23 of this chapter.

(iv) Prohibitions and limits on pharmacy benefit manager practices that require licensure under IC 25-22.5.

(v) Pharmacy benefit manager affiliate information sharing.

(vi) Lists of health plans administered by a pharmacy benefit manager in Indiana.

(vii) Pharmacy benefit management services included under section 11.5(4) of this chapter.

(c) Financial information and proprietary information submitted by a pharmacy benefit manager to the department is confidential.

As added by P.L.68-2020, SEC.1. Amended by P.L.158-2024, SEC.8; P.L.237-2025, SEC.7.

IC 27-1-24.5-21Annual reporting requirements; trade secrets Sec. 21. (a) Beginning June 1, 2021, and annually thereafter, a pharmacy benefit manager shall submit a report containing data from the immediately preceding calendar year to the commissioner. The commissioner shall determine what must be included in the report and consider the following information to be included in the report:

(1) The aggregate amount of all rebates that the pharmacy benefit manager received from all pharmaceutical manufacturers for:

(A) all insurers; and

(B) each insurer;

with which the pharmacy benefit manager contracted during the immediately preceding calendar year.

(2) The aggregate amount of administrative fees that the pharmacy benefit manager received from all pharmaceutical manufacturers for:

(A) all insurers; and

(B) each insurer;

with which the pharmacy benefit manager contracted during the immediately preceding calendar year.

(3) The aggregate amount of retained rebates that the pharmacy benefit manager received from all pharmaceutical manufacturers and did not pass through to insurers with which the pharmacy benefit manager contracted during the immediately preceding calendar year.

(4) The highest, lowest, and mean aggregate retained rebate for:

(A) all insurers; and

(B) each insurer;

with which the pharmacy benefit manager contracted during the immediately preceding calendar year.

(b) A pharmacy benefit manager that provides information under this section may designate the information as a trade secret (as defined in IC 24-2-3-2). Information designated as a trade secret under this subsection must not be published unless required under subsection (c).

(c) Disclosure of information designated as a trade secret under subsection (b) may be ordered by a court of Indiana for good cause shown or made in a court filing.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-22Required information; appeals process; auditing procedures Sec. 22. (a) A pharmacy benefit manager shall do the following:

(1) Identify to contracted:

(A) pharmacy services administrative organizations; or

(B) pharmacies if the pharmacy benefit manager contracts directly with pharmacies;

the sources used by the pharmacy benefit manager to calculate the drug product reimbursement paid for covered drugs available under the pharmacy health plan administered by the pharmacy benefit manager.

(2) Establish an appeal process for contracted pharmacies, pharmacy services administrative organizations, or group purchasing organizations to appeal and resolve disputes concerning the maximum allowable cost pricing.

(3) Update and make available to pharmacies:

(A) at least every seven (7) days; or

(B) in a different time frame if contracted between a pharmacy benefit manager and a pharmacy;

the pharmacy benefit manager's maximum allowable cost list.

(4) Determine that a prescription drug:

(A) is not obsolete;

(B) is generally available for purchase by pharmacies in Indiana from a national or regional wholesaler licensed in Indiana; and

(C) is not:

(i) temporarily unavailable;

(ii) listed on a drug shortage list; or

(iii) unable to be lawfully substituted;

before the prescription drug is placed or continued on a maximum allowable cost list.

(b) The appeal process required by subsection (a)(2) must include the following:

(1) The right to appeal a claim not to exceed sixty (60) days following the initial filing of the claim.

(2) The investigation and resolution of a filed appeal by the pharmacy benefit manager in a time frame determined by the commissioner.

(3) If an appeal is denied, a requirement that the pharmacy benefit manager do the following:

(A) Provide the reason for the denial.

(B) Provide the appealing contracted pharmacy, pharmacy services administrative organization, or group purchasing organization with the national drug code number of the prescription drug that is available from a national or regional wholesaler operating in Indiana.

(4) If an appeal is approved, a requirement that the pharmacy benefit manager do the following:

(A) Change the maximum allowable cost of the drug for the pharmacy that filed the appeal as of the initial date of service that the appealed drug was dispensed.

(B) Adjust the maximum allowable cost of the drug for the appealing pharmacy and for all other contracted pharmacies in the same network of the pharmacy benefit manager that filled a prescription for patients covered under the same health plan beginning on the initial date of service the appealed drug was dispensed.

(C) Notify each pharmacy in the pharmacy benefit manager's network that the maximum allowable cost for the drug has been adjusted as a result of an approved appeal.

(D) Adjust the drug product reimbursement for contracted pharmacies that resubmit claims to reflect the adjusted maximum allowable cost, if applicable.

(E) Allow the appealing pharmacy and all other contracted pharmacies in the network that filled the prescriptions for patients covered under the same health plan to reverse and resubmit claims and receive payment based on the adjusted maximum allowable cost from the initial date of service the appealed drug was dispensed.

(F) Make retroactive price adjustments in the next payment cycle unless otherwise agreed to by the pharmacy.

(5) The establishment of procedures for auditing submitted claims by a contracted pharmacy in a manner established by administrative rules under IC 4-22-2 by the department. The auditing procedures:

(A) may not use extrapolation or any similar methodology;

(B) may not allow for recovery by a pharmacy benefit manager of a submitted claim due to clerical or other error where the patient has received the drug for which the claim was submitted;

(C) must allow for recovery by a contracted pharmacy for underpayments by the pharmacy benefit manager; and

(D) may only allow for the pharmacy benefit manager to recover overpayments on claims that are actually audited and discovered to include a recoverable error.

(c) The department must approve the manner in which a pharmacy benefit manager may respond to an appeal filed under this section. The department shall establish a process for a pharmacy benefit manager to obtain approval from the department under this section.

As added by P.L.68-2020, SEC.1. Amended by P.L.32-2021, SEC.79; P.L.196-2021, SEC.24.

IC 27-1-24.5-22.5Aggregated information from pharmacy benefit manager reports Sec. 22.5. Aggregated information compiled from reports submitted by pharmacy benefit managers to the insurance commissioner under section 22 of this chapter is not confidential except for information that would reveal a specific pharmacy benefit manager's proprietary information.

As added by P.L.114-2020, SEC.15.

IC 27-1-24.5-22.6Filing complaints with department of insurance Sec. 22.6. (a) If a pharmacy benefit manager denies an appeal under section 22(a)(2) of this chapter, the appealing contracted pharmacy, pharmacy services administrative organization, or group purchasing organization may file a complaint with the department not later than thirty (30) days from the date of the denial. The department may request additional information from either party as necessary to resolve a complaint.

(b) If a contracted pharmacy or pharmacy services administrative organization believes that its contract with a pharmacy benefit manager contains an unlawful contractual provision regarding reimbursement rates, the contracted pharmacy or pharmacy services administrative organization may file a complaint with the department.

(c) A pharmacy benefit manager that receives written notice of a complaint filed under this section shall promptly conduct an investigation of the matters alleged in the complaint. Not later than twenty (20) business days after the date of the complaint, the pharmacy benefit manager shall provide to the department and the complaining party a written report containing the following information:

(1) The specific actions taken by the pharmacy benefit manager with respect to:

(A) the appeal, for a complaint filed under subsection (a); or

(B) the contract, for a complaint filed under subsection (b).

(2) A good faith estimate of the time required for a resolution of the complaint.

(d) If a pharmacy believes that its contract with a pharmacy services administrative organization contains an unlawful contractual provision regarding reimbursement rates, the pharmacy may file a complaint with the department.

(e) The department shall establish a process for complaints filed under this section.

As added by P.L.196-2021, SEC.25.

IC 27-1-24.5-23Drug price data Sec. 23. (a) For every drug for which the pharmacy benefit manager establishes a maximum allowable cost to determine the drug product reimbursement, the pharmacy benefit manager shall make available to a contracted pharmacy services administrative organization to make available to the pharmacies, or to a pharmacy if the pharmacy benefit manager contracts directly with a pharmacy, in a manner established by the department by administrative rule described in subsection (b) the following:

(1) Information identifying the national drug pricing compendia or sources used to obtain the drug price data.

(2) The comprehensive list of drugs subject to maximum allowable cost and the actual maximum allowable cost for each drug.

(b) The department shall adopt rules under IC 4-22-2 concerning the manner in which a pharmacy benefit manager shall communicate the following to contracted pharmacy services administrative organizations:

(1) Drug price data should be used to establish drug reimbursements by pharmacy benefit managers as described in subsection (a)(1).

(2) The comprehensive list of drugs described in subsection (a)(2).

(c) The department may, concerning a maximum allowable cost list, consider whether a drug is:

(1) obsolete;

(2) temporarily unavailable;

(3) to be included on a drug shortage list; or

(4) unable to be lawfully substituted.

As added by P.L.68-2020, SEC.1. Amended by P.L.32-2021, SEC.80.

IC 27-1-24.5-24Information necessary for appeal Sec. 24. (a) For every drug for which a pharmacy benefit manager establishes a maximum allowable cost to determine reimbursement for the drug product, the pharmacy benefit manager shall make available to the department, upon request of the department, information that is needed to resolve an appeal.

(b) If the pharmacy benefit manager fails to promptly make available to the department the information as required in subsection (a), the department shall consider the appeal granted in favor of the appealing pharmacy.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-25Contract holder's right to audit; disclosure of data; amounts paid; consideration Sec. 25. (a) A contract holder may, one (1) time in a calendar year and not earlier than six (6) months following a previously requested audit, request an audit of compliance with the contract. If requested by the contract holder, the audit shall include full disclosure of the following data specific to the contract holder:

(1) Rebate amounts secured on prescription drugs, whether product specific or general rebates, that were provided by a pharmaceutical manufacturer. The information provided under this subdivision must identify the prescription drugs by therapeutic category.

(2) Pharmaceutical and device claims received by the pharmacy benefit manager on any of the following:

(A) The CMS-1500 form or its successor form.

(B) The HCFA-1500 form or its successor form.

(C) The HIPAA X12 837P electronic claims transaction for professional services, or its successor transaction.

(D) The HIPAA X12 837I institutional form or its successor form.

(E) The CMS-1450 form or its successor form.

(F) The UB-04 form or its successor form.

The forms or transaction may be modified as necessary to comply with the federal Health Insurance Portability and Accountability Act (HIPAA) (P.L. 104-191).

(3) Pharmaceutical and device claims payments or electronic funds transfer or remittance advice notices provided by the pharmacy benefit manager as ASC X12N 835 files or a successor format. The files may be modified as necessary to comply with the federal Health Insurance Portability and Accountability Act (HIPAA) (P.L. 104-191). In the event that paper claims are provided, the pharmacy benefit manager shall convert the paper claims to the ASC X12N 835 electronic format or a successor format.

(4) Any other revenue and fees derived by the pharmacy benefit manager from the contract, including all direct and indirect remuneration from pharmaceutical manufacturers regardless of whether the remuneration is classified as a rebate, fee, or another term.

(b) A pharmacy benefit manager may not impose the following:

(1) Fees for:

(A) requesting an audit under this section; or

(B) selecting an auditor other than an auditor designated by the pharmacy benefit manager.

(2) Conditions that would restrict a contract holder's right to conduct an audit under this section, including restrictions on the:

(A) time period of the audit;

(B) number of claims analyzed;

(C) type of analysis conducted;

(D) data elements used in the analysis; or

(E) selection of an auditor as long as the auditor:

(i) does not have a conflict of interest;

(ii) meets a threshold for liability insurance specified in the contract between the parties;

(iii) does not work on a contingent fee basis; and

(iv) does not have a history of breaching nondisclosure agreements.

(c) A pharmacy benefit manager shall disclose, upon request from a contract holder, to the contract holder the actual amounts directly or indirectly paid by the pharmacy benefit manager to the pharmacist or pharmacy for the drug and for pharmacist services related to the drug.

(d) A pharmacy benefit manager shall provide notice to a contract holder contracting with the pharmacy benefit manager of any consideration, including direct or indirect remuneration, that the pharmacy benefit manager receives from a pharmaceutical manufacturer or group purchasing organization for formulary placement or any other reason.

(e) The commissioner may establish a procedure to release information from an audit performed by the department to a contract holder that has requested an audit under this section in a manner that does not violate confidential or proprietary information laws.

(f) A contract that is entered into, issued, amended, or renewed after June 30, 2024, may not contain a provision that violates this section.

(g) A pharmacy benefit manager shall:

(1) obtain any information requested in an audit under this section from a group purchasing organization or other partner entity of the pharmacy benefit manager; and

(2) provide claims data to the contract holder not later than fifteen (15) business days after the information or claims data is requested.

(h) Information provided in an audit under this section must be provided in accordance with the federal Health Insurance Portability and Accountability Act (HIPAA) (P.L. 104-191).

As added by P.L.68-2020, SEC.1. Amended by P.L.32-2021, SEC.81; P.L.152-2024, SEC.12; P.L.216-2025, SEC.40; P.L.186-2025, SEC.294; P.L.215-2025, SEC.47.

IC 27-1-24.5-26Disclosure of contract with another party Sec. 26. A person or entity that has contracted with a pharmacy benefit manager for the performance of services described in section 12(a) of this chapter is entitled to full disclosure from the pharmacy benefit manager of the terms of a contract between the pharmacy benefit manager and any other person or entity within the same network concerning the performance of the services described in section 12(a) of this chapter, including:

(1) the purchase price for prescription drugs within the same network and set by a contract entered into by the pharmacy benefit manager; and

(2) the amount of any rebate provided in connection with the purchase of prescription drugs within the same network by a contract entered into by the pharmacy benefit manager.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-27Contracts of pharmacy services administrative organizations Sec. 27. A pharmacy services administrative organization shall, upon request, fully disclose to an independent pharmacy on whose behalf the pharmacy services administrative organization acts the terms of a contract between the pharmacy services administrative organization and any other person or entity concerning the actions taken by the pharmacy services administrative organization on behalf of the independent pharmacy.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-27.5Pharmacist may not be required to collect higher copayment for prescription drug Sec. 27.5. A pharmacy benefit manager may not require a pharmacy or pharmacist to collect a higher copayment for a prescription drug from a customer than the pharmacy benefit manager allows the pharmacy or pharmacist to retain.

As added by P.L.114-2020, SEC.16. Amended by P.L.32-2021, SEC.82.

IC 27-1-24.5-27.7Limitation on cost sharing; calculating covered individual's contribution Sec. 27.7. (a) This section applies to a health plan that is issued, delivered, amended, or renewed after December 31, 2025.

(b) A pharmacy benefit manager shall apply the annual limitation on cost sharing set forth in the federal Patient Protection and Affordable Care Act under 42 U.S.C. 18022(c)(1) to prescription drugs that:

(1) are covered under a health plan administered by the pharmacy benefit manager;

(2) are life-saving or intended to manage chronic pain; and

(3) do not have an approved generic version.

(c) Except as provided in subsection (d), when calculating a covered individual's contribution to an applicable cost sharing requirement, a pharmacy benefit manager must include any cost sharing amounts paid:

(1) by the covered individual; or

(2) on behalf of the covered individual by another person.

(d) If application of subsection (c) would result in a covered individual becoming ineligible for a health savings account under Section 223 of the Internal Revenue Code, the requirement under subsection (c) applies with respect to the deductible of a high deductible health plan after the covered individual satisfies the minimum deductible under Section 223 of the Internal Revenue Code. However, subsection (c) applies to items or services that are preventative care under Section 223(c)(2)(C) of the Internal Revenue Code regardless of whether the minimum deductible under Section 223 of the Internal Revenue Code is satisfied.

(e) A pharmacy benefit manager may not directly or indirectly:

(1) set;

(2) alter;

(3) implement; or

(4) condition;

the terms of health plan coverage, including the benefit design, based in part or entirely on information about the availability or amount of financial or product assistance available for a prescription drug.

As added by P.L.237-2025, SEC.8.

IC 27-1-24.5-28Violation of chapter Sec. 28. (a) A violation of this chapter is an unfair or deceptive act or practice in the business of insurance under IC 27-4-1-4.

(b) The department may also adopt rules under IC 4-22-2 to set forth fines for a violation under this chapter.

As added by P.L.68-2020, SEC.1.

IC 27-1-24.5-29Report Sec. 29. (a) At least every six (6) months, a pharmacy benefit manager shall provide a report to the department.

(b) A report under subsection (a) must include the:

(1) overall aggregate amount charged to a health plan for all pharmaceutical claims processed by the pharmacy benefit manager; and

(2) overall aggregate amount paid to pharmacies for claims processed by the pharmacy benefit manager.

(c) Upon request, the department shall make a report received under subsection (a) available to the members of the general assembly in an electronic format under IC 5-14-6.

As added by P.L.166-2023, SEC.1.

IC 27-1-24.6Chapter 24.6. Disclosure of Negotiated Rate

27-1-24.6-1Applicability 27-1-24.6-2"Generic drug" 27-1-24.6-3"Health plan" 27-1-24.6-4"National average drug acquisition cost" 27-1-24.6-5"Plan sponsor" 27-1-24.6-6Provision of amount of the national average drug acquisition cost to plan sponsor

IC 27-1-24.6-1Applicability Sec. 1. This chapter applies to generic drugs covered under a health plan after December 31, 2025.

As added by P.L.216-2025, SEC.41.

IC 27-1-24.6-2"Generic drug" Sec. 2. As used in this chapter, "generic drug" has the meaning set forth in IC 27-1-24.5-4.

As added by P.L.216-2025, SEC.41.

IC 27-1-24.6-3"Health plan" Sec. 3. As used in this chapter, "health plan" means the following:

(1) A state employee health plan (as described in IC 5-10-8-7).

(2) A policy of accident and sickness insurance (as defined in IC 27-8-5-1). However, the term does not include the coverages described in IC 27-8-5-2.5(a).

(3) An individual contract (as defined in IC 27-13-1-21) or a group contract (as defined in IC 27-13-1-16) that provides coverage for basic health care services (as defined in IC 27-13-1-4.

As added by P.L.216-2025, SEC.41.

IC 27-1-24.6-4"National average drug acquisition cost" Sec. 4. As used in this chapter, "national average drug acquisition cost" means the average price pharmacies pay for a prescription drug. The term does not include a dispensing fee or a professional fee.

As added by P.L.216-2025, SEC.41.

IC 27-1-24.6-5"Plan sponsor" Sec. 5. As used in this chapter, "plan sponsor" means:

(1) an employer or organization that offers health insurance coverage to its employees or members under a health plan; or

(2) for purposes of an individual policy of accident and sickness insurance or an individual contract, the policyholder.

As added by P.L.216-2025, SEC.41.

IC 27-1-24.6-6Provision of amount of the national average drug acquisition cost to plan sponsor Sec. 6. A health plan must provide the amount of the national average drug acquisition cost for a generic drug to the plan sponsor.

As added by P.L.216-2025, SEC.41.

IC 27-1-24.7Chapter 24.7. Disclosure of Rebates

27-1-24.7-1Applicability 27-1-24.7-2"Covered individual" 27-1-24.7-3"Health plan" 27-1-24.7-4"Policyholder" 27-1-24.7-5"Prescription drug" 27-1-24.7-6"Rebate" 27-1-24.7-7Contract requirement of notice to policyholder

IC 27-1-24.7-1Applicability Sec. 1. This chapter applies to an agreement between a pharmacy benefit manager and a health plan regarding prescription drugs that is entered into, renewed, or renegotiated after December 31, 2025. This chapter does not apply to a health plan, with point of sale rebates, if at least eighty-five percent (85%) of the estimated rebates are deducted from the cost of prescription drugs dispensed at a pharmacy or via mail order before a covered individual's cost sharing requirement is determined.

As added by P.L.216-2025, SEC.42.

IC 27-1-24.7-2"Covered individual" Sec. 2. As used in this chapter, "covered individual" means an individual who is entitled to coverage under a health plan.

As added by P.L.216-2025, SEC.42.

IC 27-1-24.7-3"Health plan" Sec. 3. As used in this chapter, "health plan" means the following:

(1) A state employee health plan (as described in IC 5-10-8-7).

(2) A policy of accident and sickness insurance (as defined in IC 27-8-5-1).

(3) An individual contract (as defined in IC 27-13-1-21) and a group contract (as defined in IC 27-13-1-16).

(4) Any other plan or program that provides payment, reimbursement, or indemnification to a covered individual for the cost of prescription drugs.

As added by P.L.216-2025, SEC.42.

IC 27-1-24.7-4"Policyholder" Sec. 4. As used in this chapter, "policyholder" means an individual in whose name a health plan is held.

As added by P.L.216-2025, SEC.42.

IC 27-1-24.7-5"Prescription drug" Sec. 5. As used in this chapter, "prescription drug" means a controlled substance or a legend drug (as defined in IC 16-18-2-199).

As added by P.L.216-2025, SEC.42.

IC 27-1-24.7-6"Rebate" Sec. 6. (a) As used in this chapter, "rebate" means a discount or other price concession that is:

(1) based on the use of a prescription drug; and

(2) paid by a manufacturer or a third party to a pharmacy benefit manager (as defined in IC 27-1-24.5-12), pharmacy services administrative organization (as defined in IC 27-1-24.5-15), or pharmacy (as defined in IC 27-1-24.5-11) after a claim has been processed and paid at a pharmacy.

(b) The term includes an incentive and a disbursement.

As added by P.L.216-2025, SEC.42.

IC 27-1-24.7-7Contract requirement of notice to policyholder Sec. 7. An agreement to which this chapter applies must contain a contractual provision that requires the pharmacy benefit manager to provide on an annual basis, not later than sixty (60) days after the end of each policy year, a notice to a policyholder that states the following:

(1) An explanation of what a rebate is.

(2) An explanation of how rebates accrue to a health plan from a manufacturer.

(3) The aggregate amount of rebates for all prescription drugs dispensed or administered to covered individuals on the policyholder's health plan that accrued to the health plan during the previous policy year. This information may not include any information about an individual prescription drug, including the name, manufacturer, quantity, or dosage of a prescription drug.

The notice required by this section may be provided by first class mail or electronic mail.

As added by P.L.216-2025, SEC.42.

IC 27-1-24.8Chapter 24.8. RepealedRepealed by P.L.68-2020, SEC.2.

IC 27-1-25Chapter 25. Insurance Administrators

27-1-25-1Definitions 27-1-25-2Written agreements 27-1-25-3Presumptions as to payment of premiums and claims 27-1-25-4Books and records; maintenance; inspection; transfer; ownership; notice of material change; maintenance of bond 27-1-25-5Advertising 27-1-25-5.5Insurer responsibilities 27-1-25-6Fiduciary status of administrator; fiduciary accounts 27-1-25-7Payment of claims 27-1-25-7.5Repealed 27-1-25-8Administrator compensation 27-1-25-9Delivery of written communications 27-1-25-10Notice of relationship; statement of premiums or charges 27-1-25-11Repealed 27-1-25-11.1Resident third party administrator license; application; refusal to issue license; notice of material change; bond 27-1-25-12Repealed 27-1-25-12.2Nonresident third party administrator license; commissioner refusal to issue license or delay of issuance; fees 27-1-25-12.3Resident administrator annual filings 27-1-25-12.4Denial, suspension, or revocation of administrator license 27-1-25-13Public documents; confidentiality; financial information 27-1-25-14Regulations 27-1-25-15Violations; offense; notice 27-1-25-16Presumption of control