Pharmacy Benefit Managers must maintain compliance with all applicable laws. Below, you will find valuable information about how to obtain and maintain a license to operate as a Pharmacy Benefit Manager under the Knox-Keene Act.
As defined in Health and Safety Code section 1385.001(t), a “pharmacy benefit manager” is a person, business, or other entity that, either directly or through an intermediary, affiliate, or both, acts as a price negotiator or group purchaser on behalf of a payer, or manages the prescription drug coverage provided by the payer. This includes, but is not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, or controlling the cost of covered prescription drugs.
Instructions: How to Apply for Licensure as a Pharmacy Benefit Manager (PBM)
PBMs must submit a completed DMHC 10-293 form titled, "Application Form for Pharmacy Benefit Manager Conditional License” (PBM License Application). This form will be posted once it is finalized.
For more information, please contact the DMHC's Office of Plan Licensing at 916-324-9046 or Duty.Counsel@dmhc.ca.gov.
Please be aware that while the Office of Plan Licensing may provide you with information and answer general questions, staff are prohibited from providing you with legal advice. Legal advice is the application of law to a specific set of facts. If your question requires legal advice, you may wish to seek independent legal counsel from a licensed attorney competent to represent you.
Relevant Laws
- Knox-Keene Act (KKA) – Health and Safety Code, Article 6.1. Pharmacy Benefit Management Services
- Knox-Keene Act (KKA) – Health and Safety Code, sections 1351 and 1352
- California Code of Regulations (CCR) – Title 28, rules 1300.51 to 1300.52.4
Electronic Fund Transfer
The Electronic Fund Transfer (EFT) program is a method that allows PBMs to make an Automated Clearing House (ACH) Debit transaction to pay DMHC invoices. This program allows PBMs to electronically transfer funds from their bank account to the DMHC bank account. The PBM will maintain total control to initiate a transaction by specifying the amount and date of its withdrawal.
If your PBM administrator has authorized you to make payments for your PBM, log into the Web Portal to make payments.
If you are having technical difficulties accessing the EFT application, please contact DMHC at wpso@dmhc.ca.gov for assistance.
Contacts
Mail:
Department of Managed Health Care
Office of Plan Licensing
980 9th Street, Suite 500
Sacramento, CA 95814
Email:
PBM.Licensing@dmhc.ca.gov
Contact:
Questions or concerns regarding the PBM licensing process or a related matter from PBMs prior to licensure should be directed to the Office of Plan Licensing at PBM.Licensing@dmhc.ca.gov or at 916-324-9046.
Questions or concerns regarding PBM licensing or a related matter after licensure should be directed to the PBM’s assigned Office of Plan Licensing reviewer.