ALC: Nov. 21, 2025

Representative Les Eaves Alright, members, if you could go ahead and take your seats. Members, if you could go ahead and take your seats, we’ll get this started. All right, members, we are going to call this meeting of Arkansas Legislative Council to order. Good morning. Welcome to Arkansas Legislative Council. At this time, I’d like to recognize Senator Petty for the prayer to get us started. 

Senator Jim Petty All right. Let’s pray. Heavenly Father, we just, we humbly bow before you in this busy time and as we come up on the season of Thanksgiving. First of all, we thank you for your son who died for us. And we pray, Heavenly Father, as we conduct the business today, that it would do, we would do so without selfless ambition, and that everything that we do, we do for serving the people and the citizens of Arkansas. And we just ask that you would allow us to do so and to do so with calmness and wisdom that comes from heaven. We ask all of this in your son’s name. Amen. 

Representative Les Eaves All right, members, at this time I’d like to see if we can get a motion to adopt the minutes from the October 17 meeting. We have a motion. Second. All those in favor signify by saying aye. Opposed? It has passed. And at this time, we’re going to recognize Senator Hammer for a point of personal privilege. 

Recognition of John Felts

Senator Kim Hammer Thank you. I’m not sure Senator Clark’s in the room, but if he is, he’d come forward. Members, thank you for allowing this point of personal privilege for Senator Clark, myself, and also for our Senate pro tem. And we would like to present the Senate citation. Let me just read it in its entirety. It will help you understand better. 

It says, ‘Whereas John Manuel Felts, Commissioner of the Arkansas Post Prison Transfer Board, has demonstrated the highest standards of professionalism, excellence, integrity, and dependable leadership throughout his career and has served under four governors, both Democrat and Republican. Upon his retirement in January of 2026, Mr. Felts will be the longest serving parole commissioner in Arkansas history and one of the longest serving parole commissioners nationwide. 

And whereas John has created and shaped successful state parole policies and procedures, public safety measures, and reintegration programs, he was the vice chairman of the Southern Regional Association of Parole Authorities International, better known as APAI, and worked on key collaboration with criminal justice and correction leaders across the nation. He received the 2025 Ben Bear award from APAI in recognition for his local, state, and national impact in the field of parole. 

And whereas the members of the Arkansas Senate wish to join Senator Alan Clark and Senator Kim Hammer expressing appreciation to John Manuel Felts for his more than 34 years of exemplary commitment in his role he has held in the service of the state of Arkansas and wishing him well in the years ahead. This is pursuant to the motion of Senator Alan Clark, Senator Kim Hammer, also signed by Senator Bart Hester Pro Tem of the Senate.’ 

And just on a personal note, I’ve known John for many years and we have a good friendship. But the fact that he has served the length of time that he has and is retiring after a distinguished career, we felt that this was good to bring a Senate citation to recognize his years of service to the state upon his retirement. And if you would, would you please join me in acknowledging his years of service? Mr Chairman, if John would like to say something, would the Chair allow? 

John Felts Good morning. I’m just– I can’t think of a better word than flabbergasted by this. And it’s been a pleasure over the 28 years being on the Arkansas Post Prison Transfer Board to be associated with many of you and your predecessors and knowing that we have the best state in the United States, bar none. 

And our leadership, our governors can certainly testify to that effect. I think that we’ve all had great leadership, and so I want to say thank you very much. Senator, thank you very much also for this certificate, and I would just say Godspeed to you. Thank you very much. 

Representative Les Eaves Senator Hammer, thank you for that. Members, that takes us to item D. This would be the presentation of the October Revenue Report with Dr. Carlos Silva. Good morning, Dr. Silva. 

October Revenue Report

Carlos Silva Good morning. Thank you, Mr. Chairman. Carlos Silva, Bureau of Legislative Research. And I’m here to present the October 2025 monthly general revenue report. There is the first month for our second quarter of the fiscal year. We have gross revenue collections year to date, it’s a $2.65 billion, have an increase of 14.1%, $14.1 million or half a percent increase there in our gross collections. 

As we look down, we have a $2.63 billion collected last fiscal year to date in that comparison. As we look into net general revenue available for distribution for this month, we have $2.27 billion. That’s an increase of $41.4 million compared to last fiscal year to date, those first four months. And that’s a 1.9% increase compared to the October 2024. 

As we look into page number one, we saw that the difference that we still expect with individual and corporate income tax refunds. We have the decline there. And as we move to page number two, what we have are cumulative deviation from DFA net general revenue available for distribution forecast. We saw again an increase of $16.6 million for this month, which is $90.5 million above the forecast for the agency from May this year. 

As we move into page number three and page number four, and the top of page number five, we have our general revenue collections in detail there for the month of October and the cumulative. And for the other pages, we have the special revenue collections. 

As we look into what the changes from this month, we start to receive again data from the federal government. We have some updates. We have first update for jobs report yesterday, better than expected, which is always great. Consumer confidence has been going down this month once again. But as we look into the state of Arkansas, initial unemployment claims and continued claims still steady. With that, I will take any further questions. 

Representative Les Eaves Thank you, Doctor Silver. Members, any questions? Seeing no question. Senator Love, you’re recognized. 

Senator Fred Love Thank you, Mr Chair. I’m not going to ever skip asking questions. So here’s the question I have, Doctor Silva. So you said the jobs report was better than expected. I didn’t get a chance to review the jobs report. So can you give us a rundown of the jobs report? 

Carlos Silva Yeah, yeah, so the jobs we’re talking about that was September jobs report. So we had the delay in some of the reports. We have 119,000 jobs national level. That’s what we have here. That was better than expected. We had looked at ADP, though we were looking to the private data sets in the last few months because we didn’t have. The government jobs were lower, were a lot lower. 

So for the month of September, those numbers were better than expected. As we look into previous months, as we look into August, we have some adjustment there, which  brought the jobs decline there for the month of August. But for the month of September, we have the number that were better than improved. 

As we look into October and November, still unsure whether or not we’re going to have a report for October. But we’re going to be looking into November to see how that is going to continue and whether we’re going to see some increase in jobs in the national level here. 

Senator Fred Love All right, and then you said consumer confidence is down. How do you predict that’s going to impact our state budget? 

Carlos Silva So that’s a national level. So what we’re talking about is how people are doing generally. So it gives an understanding to the members on how things are moving. But if you want to, I can dig deeper a little bit into how overall Arkansas is feeling. But here  what we’re looking at is see how the nation is feeling because also it has an impact in the state of Arkansas. 

Senator Fred Love Okay, I appreciate that. Thank you. Thank you, Mr. Chair. 

Representative Les Eaves Thank you, Senator. Members, any other questions? All right, seeing none, thank you, Dr. Silva, for the presentation. Members, that takes us to item E. I recognize my co-chair, Senator Ben Gilmore. You’re recognized. 

Committee Reports

Senator Ben Gilmore Thank you, Mr. Chair. The Executive Subcommittee met yesterday and reviewed and approved an emergency rule for DHS related to the SNAP program. Subcommittee also approved revisions to the Mac security policy to account for the State Police assuming control over the security of the Mac building. A copy of the revised security policy is attached to the subcommittee report. I move adoption of this report, Mr. Chair. 

Representative Les Eaves Thank you, Senator. Members, any questions on this item? All right, we have a motion to adopt. Do we have a second? Thank you. Second. Any discussion? Seeing none, all those in favor signify by saying aye. Opposed? The ayes have it. That takes us to item F. And I’m going to recognize Representative Lane Jean. 

Representative Lane Jean Thank you, Mr. Chairman. The subcommittee of Rules Administration met yesterday, November 20th. The subcommittee filed two quarterly reports. The subcommittee received agency updates on outstanding rulemaking from the 23 and 25 regular session. And the subcommittee also accepted recommendations of group three agencies concerning extension of rules from the 2017 and 2021 session. All rules were reviewed and approved of as noted in the report. I move adoption of this report. 

Representative Les Eaves All right, thank you, Representative. Members, any questions on this item? All right, seeing none, do we have a motion? Do we have a second? Second. Any discussion? Seeing none, all those in favor signify by saying aye. Opposed? The ayes have it. That takes us to item F4. Representative Dwight Tosh, you’re recognized. 

Representative Dwight Tosh Thank you. Thank you, Mr. Chair. The Game & Fish and the State Police subcommittee met on Monday. The subcommittee heard discussion regarding rules and regulations for the upcoming duck season from the Game & Fish commission. The subcommittee also heard discussion regarding concealed and open handgun carry laws in state parks from the Attorney General’s office and the Department of Parks, Heritage and Tourism. I move for adoption of this report. 

Representative Les Eaves All right, members, you’ve heard the report. We have a motion and a second. Any discussion? Members, any questions on that item before we go further? All right. Seeing none, we have a motion and a second. Any discussion? Seeing none, all those in favor signify by saying aye. Opposed? The ayes have it. Report is reviewed. That takes us down to item number seven, Hospital, Medicaid and Developmental Disabilities. And we’re going to recognize Senator Jane English. 

Senator Jane English Thank you. The Hospital, Medicaid and Developmental Disabilities Study Committee met on Monday at the Department of Human Services in Little Rock. The subcommittee heard testimony on the following items: overview of daily operations and update on reimbursement rates under the Living Choices Assisted Living Waiver by DHS. The subcommittee met again on Thursday at the Arkansas Workforce Center in Little Rock to hear testimony regarding the daily operations and processing procedures. I move adoption of this report. 

Representative Les Eaves All right. Thank you, Senator. Members, any questions? Seeing none, we have a motion and a second. Any discussion? Seeing none, all those in favor signify by saying aye. Opposed. The item will be reviewed. That takes us down to item number 11, Peer. I recognize Senator Dismang. 

Senator Jonathan Dismang Thank you, Mr. Chairman. The Peer subcommittee met on Tuesday, November 18th. The subcommittee received reports, reviewed requests, and approved the following various temporary appropriations: American Rescue Plan Act Appropriation, Infrastructure Investment and Jobs Act appropriation, and a restricted reserve fund transfer. 

Two items in the report were held for Council, A1, an appropriation request for the Arkansas School for Mathematics, Sciences and the Arts for operations; and G16, an appropriation request for the Department of Agriculture to make a grant for the Lake Maumelle watershed. Since the meeting, questions have been answered regarding A1. And then as far as G16, the Department of Agriculture is pulling that down from consideration today. I move to adopt item A1 and adopt the rest of the report. 

Representative Les Eaves Members, you’ve heard the report. Are there any questions? Seeing no questions, we have a motion. And we have a second? We have a second. Any discussion? Seeing none, all those in favor signify by saying aye. Opposed? The ayes have it. Takes us down to item 12, Review. Senator Blake Johnson.

Senator Blake Johnson Review subcommittee met on Tuesday and reviewed methods of finance, discretionary grants, one alternative delivery construction procurement, one agency ratification, one RFQ request and services contracts. Three contracts were held pending further information from the agencies, and members have released their holds. Under construction contracts, it was Contract 10, University of Arkansas, ASMSA, and Agriculture Plus was held until full legislative meeting. 

Under out of state contracts, contract number 1 for the Public Service Commission with Daymark Energy Advisors and also Contract 2, Department of Commerce, AEDC with Boston Consulting Group, were both held until full Legislative Council. The subcommittee approved a member disclosure for Jim Petty, Senator Jim Petty from the Arkansas Development Finance Authority, and Black River Technical College request to lease two motor vehicles. 

After the subcommittee meeting, staff from the Department of Health requested a correction on the purpose statement from item C 1.2 in the discretionary grants. The purpose statement originally submitted by the agency was incorrect, and they have provided a new description, which is in your packet. Late yesterday, staff received a request from DHS to remove item D2, a request for RFQ approval, from consideration. 

I move for the adoption of this report except for item D2, the RFQ request from DHS, and include the review of previously held contracts and the replacement of the purpose statement for the health discretionary grant and pull out of state contract number 8 DHS DCFS with Evident Change for a separate consideration. 

Representative Les Eaves All right, members, you’ve heard the report. Are there any questions? I’m going to recognize Senator Petty before we take a vote. You’re recognized, Senator Petty.

Senator Jim Petty Thank you, Mr Chair. I was just going to state for the record, because I have an item on there, I would be abstaining from voting on this item. 

Representative Les Eaves Duly noted. Thank you, Senator Petty. Members, any questions on this report? Seeing none, we have a motion. We have a second? Second. Any discussion? Seeing none, all those in favor signify by saying aye. Opposed? Ayes have it. 

Senator Blake Johnson Mr. Chair, I would like to have DCFS to come to the table for a separate answer– separate questions on the contract that was pulled. 

Representative Les Eaves All right, on the way. Good morning. If you would, just introduce yourself for the record and then we’ll get on to the questions. 

Tiffany Wright Good morning, Tiffany Wright, Director for the Division of Children and Family Services. 

Sarah Cunningham And Sarah Cunningham, Office of Procurement. 

Representative Les Eaves Representative Rose, you’re recognized.

Concern about DCFS contractor Evident Change

Representative Ryan Rose Thank you, Mr. Chair. I’m over here on your right behind Representative Berry. Thank you for joining us today and taking the time to answer some questions. I want to thank you for your work. DCFS is an important component to what we do as a state, and I appreciate your work, especially in foster care and adoption. The questions I’m going to ask today are serious because I believe they’re grounded in the priority of child safety. 

This contract amendment that we’re looking at expands, to my understanding, vendor authority in some of the most serious and sensitive stages of child safety. And so I want to discuss that this morning. To confirm for the record, I submitted some questions through BLR to understand the scope of the amendment. And prior to this amendment, did Evident Change oversee hotline screening or investigative fidelity in Arkansas? 

Tiffany Wright No, they did not. 

Representative Ryan Rose And should this amendment be passed, the new responsibilities over hotline screening, investigative fidelity, calibrating the SDM hotline tool, and coaching investigators would now be under their authority. Is that correct? 

Tiffany Wright Yes, they would be walking alongside the division in regards to that. 

Representative Ryan Rose So these are serious expansions of authority, and they go right to the front end of our child protection system. And so I also want to know: Is there any other vendor that is involved statewide in SDM calibration or structured decision making, investigative fidelity, guidance, QSPR reviews, safe measure dashboards, CQI reporting, or is this now all under the umbrella of one vendor, Evident Change? 

Tiffany Wright This will all fall under one vendor, Evident Change. 

Representative Ryan Rose Does DCFS have any independent entity or anybody outside the vendor that validates whether Evident Change’s tools, scoring, or interpretations are accurate and unbiased? 

Tiffany Wright No. We would receive the reports back, review them, ask questions. So we may do some of our own validation and asking questions back, but they would be overseeing the reviews and providing us that feedback based on their reviews. 

Representative Ryan Rose So moving forward, excuse me, for hotline investigations, for risk scoring, for CQI data interpretation, we’re effectively reliant on the same vendor for both the tools and the evaluation of whether those tools are working. Essentially, they’re grading their own homework? 

Tiffany Wright No. So they’re grading how the state is implementing the work. So they brought the tools, we use the tools to help support decision making. They’re evaluating the division and how the division is utilizing the tools and implementing the tools that we have. 

Representative Ryan Rose The tools, but that we are sourcing through them. 

Tiffany Wright That’s correct. 

Representative Ryan Rose The tools that we’re paying them for, correct? 

Tiffany Wright Correct. 

Representative Ryan Rose This contract amendment is for, I don’t know, $375,000, something along those lines. Since 23, I think this contract has been somewhere around $5 million. I think there’s a second contract that Review may have looked at back in June. But we’ve been in business with them since 2018, it sounds like. 

Tiffany Wright Yes. When we started implementing and changing practice within the division. So one side of Evident Change is the tools, the other side of their business is evaluation of the tools. So it is different teams. And so when we started systems work, they came into our state with these different sources of tools and data management. 

Representative Ryan Rose So this involvement with the hotline and investigative fidelity, this is new for them. 

Tiffany Wright So they brought us– 

Representative Ryan Rose Excuse me, it’s new for them in Arkansas. 

Tiffany Wright So they brought the structured decision making tool to the hotline. Now we’re asking them to evaluate the use of that tool and how it’s been implemented and what needs to be improved and provide feedback around that. 

Representative Ryan Rose So I want to establish a baseline. Would you agree that any vendor involved in hotline screening or investigative decisions needs to align with Arkansas law or Arkansas legal definition of child abuse? 

Tiffany Wright Yes. 

Representative Ryan Rose Would you also agree that Arkansas law is clear with respect to gender transition procedures on minors under the SAFE Act and related statutes that those procedures constitute abuse? 

Tiffany Wright Yes. 

Representative Ryan Rose So thank you for that. Now I want to ask about the vendor’s documented public policy positions. Were you aware that Evident Change publicly posted articles and argued that in Texas that gender transition surgeries, hormone therapies, etc., for minors should not be treated or investigated as child abuse? 

Tiffany Wright I did not know that. 

Representative Ryan Rose Were you aware then– I’m guessing not– that those articles were later removed from Evident Change’s website? They’re only accessible through article recovery, but during the RFP for the contract that was agreed to in 2023. I can give you a copy if you’d like afterwards. At any point, has somebody, to your knowledge, from DCFS or DHS instructed, requested, informed Evident Change that it would be advisable to remove such articles from their website? 

Tiffany Wright I don’t– I can’t answer that. I don’t know. 

Representative Ryan Rose There’s a lot of questions regarding their positions on a number of issues. 

Representative Les Eaves Representative Rose, we need to try to wrap this up as quick as you can. 

Representative Ryan Rose Okay. 

Representative Les Eaves If it’s more discussion that we need to have with the group, we need to probably do that offline. But I’ll let you finish up at this point. 

Representative Ryan Rose Yeah, I thank you, Mr. Chair. So given the status publicly that the organization has posted on just this one issue, and there are others, there is a very definite contradiction between their public opinions and the law that we have established here. 

And so what I want to bring this back to is what matters most, is if a vendor believes particular harmful practice is not abuse, it’s very concerning on how that could influence their opinions and overarching themes with regards to the hotline and investigative fidelity. These are real concerns because their decisions affect real families here in Arkansas. 

And they sound like the go-to shop right now inside of DCFS for data, for consulting, for coaching, for the hotline. I have one final question, but I’d like to give you an opportunity to comment. 

Tiffany Wright I don’t, I don’t have a comment. 

Representative Ryan Rose At this time, I move that we refer this contract back to the Review subcommittee for further review. And I appreciate the latitude, Mr. Chair. 

Representative Les Eaves All right, members, any other questions on this item? We have a motion to send this back to the Review subcommittee which will meet in December. We have a motion. Is there a second? Second. We have a second. Any discussion? All those in favor, signify by saying aye.  Opposed? The ayes have it. Senator Hester. 

Senator Bart Hester Thank you. Hey, thank you for being here. I think it’s really important that we’re doing the oversight and looking into this. I didn’t want you to get away without just, like Representative Rose started, thanking you for your endless work. 

I don’t know that there’s anyone or anyone in the state that’s doing work that is so impactful, so important, so critical that matters to you and your entire team. Thank you for the work you’re doing. It’s important that we get the contracts right and that we understand what all it is, but I didn’t want you to get out of here without knowing how much we appreciate the work you’re doing. 

Tiffany Wright Thank you, Senator Hester. 

Representative Les Eaves Thank you, Senator Hester. Thank you both for coming down. All right, members, that takes us to item 13, state insurance programs. That’s going to be Representative Rick Beck. Push your button. 

Representative Rick Beck Thank you, Mr. Chair. The State Insurance Program Oversight Committee met on Wednesday. The subcommittee reviewed the Employees Benefits Division contract with Public Consulting Group LLC. The subcommittee approved the prescription formularies and medical drug recommendations. The subcommittee approved the captive insurance program’s investment policy statement. The subcommittee discussed the Legislative Audit’s report on state and public employees’ health benefits for the fiscal year ending June 20, 2024r. I move for adoption of this report. 

Representative Les Eaves All right, members you’ve heard the report. Are there any questions? All right, seeing none, we have a motion. Got a second? Second. Alright, any discussion? Seeing none, all those in favor signify by saying aye. Opposed? The ayes have it. Takes us to item 14, Personnel committee. This would be Senator Breanne Davis. Representative Warren. Representative Warren, can you give the report? All right, go ahead and push your button. You’re recognized. Oh. Hang on one minute. All right, you’re recognized.

Representative Les Warren The Personnel subcommittee met Wednesday, November 19, and reviewed the requests and reports listed as items 1 through 8. The committee was provided a report as requested at the August meeting from the Employee Benefits Division regarding the usage of the positions provided to them for the Office of Property Risk. No items were held. And I respectfully move adoption of the report at the proper time. 

Representative Les Eaves Thank you, Representative. Members, any questions? All right, seeing none, we have a motion. Can I get a second? We have a second. Any discussion? Seeing none, all in favor say aye. Opposed? The ayes have it. Members, there are no reports on interim or special committees. 

That takes us down to item H. I’m going to give you just a second to look at those communications. All right, members, there’s two items we may need to talk about. Item 3, Department of Commerce, Economic Development Commission. I need a motion to approve that request. I have a motion. Can I get a second? Have a second. Any discussion? Seeing none, all those in favor say aye. Opposed? The ayes have it. Senator Rice, did you have anything? You’re recognized. Now you’re recognized. 

Senator Terry Rice Thank you. Wanted to see if somebody from AID could come up on 3B. 

Representative Les Eaves If we could get someone from the Insurance Department. Morning gentlemen, if you would, introduce yourself for the record. And then we’ll get on with some questions. 

Jimmy Harris Jimmy Harris, AID commissioner. 

Daniel Holland Good morning, Daniel Holland, AID PVB general counsel. 

CVS and SilverScript questions

Representative Les Eaves You guys have a report on the Rule 128. I believe that’s what Senator Rice is asking about. 

Senator Terry Rice I thank the gentleman for being here. And Commissioner Harris and I spoke earlier in the week, and I sent him a copy from a constituent I thought might be helpful. I would imagine some other people are getting some. But because of the lawsuit regarding the PBMs and CVS announcing they’re pulling out of the state, had a husband and wife retiree couple that received a corporate letter that says as of the end of the year that their prescription through SilverScript, which I have a SilverScript on my Medicare, but theirs is going to be up. 

And they’re telling me that– guys, if you can wait just a second– theirs are going to be up with like $200 prescription they’re getting now for $5 or $10. I know this is up in the air with the judicial system, but can you give us as far as this body, something that we can give back to our constituents? 

Because if they’re going to be shut off, and that’s what this letter says it intends to do, if they’re going to be shut off and not have an option because of the annual sign-up, can you give us any direction that we can give our constituents? 

Jimmy Harris Yeah, we received your letter. I forwarded it on to CVS and asked for an explanation of exactly what they’re talking about. I don’t think they’re necessarily pulling out. I think that was just a change that they’re making in their network. But when I get a response on that explanation, I’ll be sure and send that to you and we can talk about it. 

Senator Terry Rice But it is possible they could go ahead and shut off, depending on the judicial ruling. 

Jimmy Harris It’s possible. Yes, sir. 

Senator Terry Rice Okay. But, again, I just trying to be preemptive in giving them options because– can you answer this? Could they sign up? Would they have an opportunity to sign up for something different if it did get cut off at the end of the year? 

Jimmy Harris Yes, sir. They would be given an opportunity. I can’t tell you exactly what that something different would be, but the plan in that situation would certainly negotiate some different options. 

Senator Terry Rice Okay. I do greatly appreciate you checking up on that. And it’s just something I think could affect across the state so I wanted the body to know. Thank you, Mr. Chair. 

Representative Les Eaves Thank you, Senator. Senator Hammer, you’re recognized. 

Rule 128 and Pharmacy questions

Senator Kim Hammer Thank you. A couple of clarifications on the handout that we’ve got. It says on the first page of the exhibit we have, the preliminary review indicates that reported NADAC percentages are generally accurate, but significant variations exist beneath those averages. Could you expand on that comment? ‘But significant variations exist beneath those averages.’

Jimmy Harris Yes, Senator. So our consultants found that there was a significant difference between reimbursement rates at national chain pharmacies versus independent pharmacies. 

Senator Kim Hammer Would you mind pulling the mic a little closer, please? Thank you. 

Jimmy Harris Yes, Senator, sorry about that. So our consultants found there was a significant difference between reimbursement rates at national chains versus independent pharmacies. So we’re trying to get our numbers in a place where we can isolate exactly how much that difference is and how that might affect an implementation of Rule 128. So the discrepancy they found was reimbursement rates between national chains and independents. 

Senator Kim Hammer Okay. And then on the next page, says that you found a PBM division– the PBM division has identified a third PBM, appears to be operating without a license and opened an investigation. How is it that a PBM could do business in Arkansas without first being licensed? And how is that addressed? Unless I’m misinterpreting the statement. 

Jimmy Harris No, sir, you’re not misinterpreting it. So the PBM would contract with plans and then they would begin adjudicating pharmacy claims. They can begin that adjudication within their internal systems without AID knowing. AID will find out about it, maybe through Rule 128 reports. 

Or we could find out about it through complaints filed by pharmacies. When we do get a complaint or Rule 128 report with a PBM we’re not familiar with, we’ll reach out to that PBM, ask them for an explanation. In these situations with the two that we found, we immediately reach out and essentially ask how long they’ve been operating here without a license, how many reimbursements they’ve adjudicated without a license. 

And these penalty amounts will be based on the amount of adjudications that they performed while unlicensed. So that’s primarily how we find out about the PBMs who are operating without a license. But as far as how they are able to do that, they can adjudicate those claims based on their contracts with health plans without the state knowing at least for a while. 

Senator Kim Hammer And who are the two PBMs you found operating without license? 

Jimmy Harris The two are Rx Advance out of Massachusetts and Med One, I think, out of Iowa.

Senator Kim Hammer Mr. Chair, a question to the chair, please. I saw on the bottom of the report, I think, and maybe they can weigh in, I saw a three week time frame that you’re going to– a comprehensive summary of these findings will be completed within the next three weeks. And you’re able to hold to that timetable given the holiday and everything? 

Jimmy Harris That’s what I’ve been told. I think that’s going to be accurate. 

Senator Kim Hammer Mr. Chair, will Chair have it on the agenda or would put it on the agenda– and maybe they’re already on the agenda– to come back and challenge them to have that report ready by the next ALC in December? 

Representative Les Eaves Yes, sir. It’ll be on the agenda. 

Senator Kim Hammer All right. Thank you. Appreciate it. 

Representative Les Eaves You bet. Senator Dismang, you’re recognized.

Senator Jonathan Dismang Thank you, Mr. Chairman. And it just relates back to the reimbursement rates because I believe those are negotiated by the PSAOs for independent pharmacies typically. And so I was just a little bit curious of where we are on the PSAO registration rulemaking process. I may have missed it. But I mean, I think that will be helpful to know who’s all engaged as we’re gathering that information. 

Jimmy Harris Yes, absolutely. So we’re working on drafting that licensing process. It’ll be very similar to the PBM licensing process. Significantly less entities to license. I think there’s seven or eight PSAOs that operate in Arkansas. But we’re working on that rule now. 

Senator Jonathan Dismang And these are the ones that negotiate those lower reimbursement rates that we’ve kind of noted?

Jimmy Harris That’s a lot of what they do. They’re not negotiating. It’s not a collective negotiation, but they do assist in that process. And that is the majority of PBM pharmacy contracts. There are some direct contracts specifically between the pharmacy and the PBM, but the vast majority are PSAO contracts. 

Senator Jonathan Dismang Alright, thank you.

Representative Les Eaves Senator Boyd, you’re recognized. See if he’s going to turn it on. There you go. 

Senator Justin Boyd Thank you, Mr Chair. So just for clarity’s sake, there was some discussion about discussion of terms in the contract. Does it really work that way or are these more like contracts of adhesion where it’s really take it or leave it? One side, the PBM, says these are the rules, and you’re either– 

Jimmy Harris  I heard you. I would say that categorizing those as adhesion contracts is generally accurate, yeah. 

Senator Justin Boyd And then just for some clarity, it sounds like there’s some thought that maybe there are rates that are stable. And in these contracts of adhesion, that the pharmacy is told, or even the chain is told, this is what your rate’s going to be. But in my experience, it’s more like the rate is variable. It can go up technically, but generally it just goes down at the will of the PBM. Is that more reflective in the overall market of what you see? 

Jimmy Harris I think so. I think that’s accurate. That’s something that we’re definitely dealing with with our affiliate limited scope examinations. We get those agreements in order to determine exactly how a prescription is reimbursed to a pharmacy. And there is a lot of, I guess you could say, wiggle room in those contracts. And there is a lot of variance in the reimbursement rates. And sometimes you can tie them to a contract and sometimes they are wildly outside of the terms of that contract. 

Senator Justin Boyd Thank you for that clarity. 

Representative Les Eaves Were there any other questions for these two? That is all we have on the agenda. [mic issue and adjournment]