Medicaid Fraud, Oklahoma Commissioner Testifies about PBMs, Nebraska Pet Insurance Licensing

State by state variations of laws, compliance protocols, industry transparency, and general regulatory culture can lend one the impression that keeping up with industry changes is a little bit like herding cats. So, what better way to wrangle some of the more localized insurance news than in a Regulatory Roundup?

On an ongoing basis, in no particular order or rank, we’re wrestling the various regulatory changes, compliance actions, and commissioner decisions into our roundup. As a disclaimer: There’s a lot going on at any given time in these here United States, so this isn’t a comprehensive picture of state-level action by any means. Think of it as, instead, a sampler platter of regulation. 

Also important to note: If we’re recapping interpretations of legal decisions, this is some armchair insurance speculation and not at all legal advice. If you need legal advice, get a lawyer. 

Medicaid redetermination inspires fraudsters to redouble nefarious efforts

States across the union continued to issue advisories through May directed at consumers and insurers alike to remind everyone that, with the end of coronavirus emergency orders, Medicaid redeterminations and disenrollments are back. 

Most statements are frank and factual: Those removed from Medicaid have special enrollment periods (SEPs) in which to enroll in health plans via MedSup providers if Medicare eligible, or in plans from state health care exchanges or employer-provided plans. But one release from the Department of Insurance and Financial Services (DIFS) in Michigan was a stark warning that scammers are using Medicaid disenrollments to double-down on fraud calls.

“As the Medicaid renewal process restarts nationwide, we are already seeing criminals in other states try to take advantage of the situation to scam innocent people,” said DIFS Director Anita Fox. “Giving out your information to the wrong person could end up costing you thousands of dollars in the long run. Be sure to stay vigilant, never give your Social Security Number or other personal information to anyone who sends you unsolicited emails, texts, or phone calls, and never agree to pay for an unsolicited service.”

While scammy fraud liars are out hocking their fake wares, it’s more important than ever for carriers and agencies to direct consumers to credible licensed insurance and financial professionals. It all begins with making compliance automatic and, well, everywhere.

Commissioner Mulready testifies about PBMs to Congress

Oklahoma Insurance Commissioner Glen Mulready testified to the U.S. House Ways and Means Committee May 17, 2023, giving representatives a window into his state’s experience in what he called anti-competitive behavior among certain insurance businesses.

The Ways and Means Committee heard testimony about factors that make health care in the U.S. unaffordable. Mulready testified about his lengthy dispute with a prominent pharmacy benefits manager (PBM) over coverage of 90-day prescriptions. 

“I appreciate the opportunity to share our story with members of Congress,” Mulready said in a DOI news release. “I am hopeful that our successful efforts to defend legal challenges, hold PBMs accountable with administrative actions, and work with our legislature to make key policy changes will be a roadmap for others.”

Mulready also announced the state now has a plan in place for the PBM in question to provide 90-day prescriptions and mail order options for 80 percent of its plans by July. Previously, Mulready was seeking to terminate the PBM’s license because of what the business said were internal tech restrictions on filling 90-day prescriptions.

Nebraska creates pet insurance license

Pet insurance. So hot right now.

Even Nebraska agrees – the state DOI has created a pet insurance license for those who wish to sell this insurance type. 

Someone who already has a property and casualty license is, per the state, already authorized to sell pet insurance. But unlicensed people who would like to sell pet insurance need not take an exam to apply for a pet insurance license (as a reminder, this will limit you to just selling pet insurance).

The Nebraska notice makes it clear that carriers are the ones chiefly responsible for ensuring their pet producers are adequately trained on the product and properly licensed to sell it. Of course, if you need to integrate licensing data into your systems to be sure the right people are getting trained, you could… ya know… get AgentSync.

Other state changes

Alabama Gov. Kay Ivey has established the Alabama Resilience Council to take a proactive approach to helping state residents act to mitigate their personal risks.

Alaska issued a bulletin clarifying specific duties that require a title producer to have a license, and duties that don’t need to be carried out by a licensed title producer.

California legislation regarding “Bail Fugitive Recovery Persons” takes effect July 1, 2023, the state DOI has reminded the industry that anyone wanting to be a bail fugitive recovery person (bounty hunter) will need a license from the DOI, complete with training, a liability policy, and continuing education expectations.

Colorado has proposed a bulletin to encourage health insurers to continue covering COVID-19 vaccines in the wake of the end of the coronavirus public health emergency order. The bulletin also strongly encourages health insurance carriers to give enrollees a comprehensive overview of their coverage for testing, diagnosis, and treatment for COVID-19. The state also announced the completion of the inaugural report on health care sharing ministries (HCSMs), which the state refers to as health care sharing associations (HCSAs). The report revealed data points such as the fact that Coloradoans make up more than 4 percent of HCSM users, despite having 1.7 percent of the overall U.S. population.

Florida has updated the state’s emergency adjuster rules, updating initial license and extension application procedures.

Georgia has changed procedures for course instructors who offer continuing education in order to allow them to register for a biennial period and teach for multiple CE providers.

Maryland has proposed a regulation allowing people with Medicare Supplement policies to switch to Supplement plans with “equal or lesser” benefits during an open enrollment period in the 30 days after their birthday each year without health or age rating. 

Massachusetts State Sen. Pavel Payano has proposed a bill to require auto insurers to reduce the weight of ZIP codes in auto insurance underwriting. Payano said the rating change aims to reduce “racial and sociaeconomic inequities in auto insurance premium pricing.”

Michigan revoked the license of a mortgage administrator when the business was unable to verify its complete list of loan applications in the state. Not only had the business filed incomplete mortgage data calls with the state, it didn’t have internal controls to sufficiently determine how many loans it had or whether they’d been processed correctly. You might be thinking “mortgage administrators aren’t in insurance, why include this tidbit?” To which we respond 1) the Michigan Department of Financial Services oversees both insurance and mortgage administrators (among other industries), and 2) we’re hoping to belabor the point that you should have 360-degree visibility into your data for internal controls and automatic compliance.

South Dakota posted its DOI newsletter online, including a recap of its state insurance regulation, from provisions updating basic requirements for companies seeking certificates of authority to new procedures for examination reports and market conduct annual statement requirements.

Tennessee became one of 13 jurisdictions requiring investment adviser representatives (IARs) to take continuing education (CE) credits, effective Jan. 1, 2024.

Vermont has a cannabis bill that’s shown initial positive reception in both branches of Legislature. Broadly speaking, it loosens some of the previous state restrictions and gives some protections to those trying to start a cannabis-based business, including making it easier for them to find banking options. The Vermont Department of Financial Regulation said it’s working with businesses and banks to discuss how to create partnerships in this budding industry, provided the bill passes.

FINRA announced it’ll move back to expecting exam-takers to test in person as the default standard for exams, but will maintain digital exams for those who request an exemption due to health or distance issues. 

While these points of interest aren’t comprehensive, our knowledge of insurance producer and variable lines broker license and compliance maintenance is. See how AgentSync can help make you look smarter today; head over to the Compliance Library and wrastle up some state-by-state regulation and more jurisdictional updates.