MEDICAID-PBM-PROCUREMENT

Illinois General Assembly - Full Text of HB5514

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HB5514 - 104th General Assembly

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5514

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

SYNOPSIS AS INTRODUCED:

305 ILCS 5/5-36a new

Amends the Medical Assistance Article of the Illinois Public Aid
Code. Requires the Chief Procurement Officer for General Services, in
consultation with the Department of Healthcare and Family Services, to
conduct and complete, no later than one year after the effective date of
the amendatory Act, any procurement necessary to select a third-party
administrator to serve as the single State pharmacy benefit manager for
the medical assistance program and to be used by all Medicaid managed care
organizations under contract with the Department. Provides that, beginning
on January 1, 2028, the selected pharmacy benefit manager shall be
responsible for managing and processing all pharmacy claims under the
medical assistance program, including pharmacy claims from contracted
Medicaid managed care organizations. Provides that the Department is
responsible for enforcing the pharmacy benefit manager contract after the
procurement process. Sets forth certain activities the Director of
Healthcare and Family Services must do as part of the procurement process,
including: (i) establishing eligibility criteria an entity must meet in
order to become the State pharmacy benefit manager; and (ii) developing a
master contract that incorporates all pharmacy benefit manager contract
requirements under the Illinois Insurance Code, with some exceptions.
Requires a prospective State pharmacy benefit manager to disclose certain
information during the procurement process, including, but not limited to:
(i) any conflicts of interest; (ii) any common ownership, board
membership, or other control the pharmacy benefit manager has over a
Medicaid managed care organization or other specified entities; and (iii)
any financial terms and arrangements between the pharmacy benefit manager
and a prescription drug manufacturer or labeler. Effective immediately.
LRB104 18694 KTG 32137 b

A BILL FOR

HB5514
LRB104 18694 KTG 32137 b
1

AN ACT concerning public aid.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

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

6

(305 ILCS 5/5-36a new)
7

Sec. 5-36a.
Pharmacy benefit manager; procurement.
8

(a) No later than one year after the effective date of this
9
amendatory Act of the 104th General Assembly, the Chief
10
Procurement Officer for General Services, in consultation with
11
the Department of Healthcare and Family Services, shall
12
conduct and complete, in compliance with the Illinois
13
Procurement Code, any procurement necessary to select a
14
third-party administrator to serve as the single State
15
pharmacy benefit manager for the medical assistance program
16
and to be used by all Medicaid managed care organizations
17
under contract with the Department. Beginning on January 1,
18
2028, the selected pharmacy benefit manager shall be
19
responsible for managing and processing all pharmacy claims
20
under the medical assistance program, including pharmacy
21
claims from contracted Medicaid managed care organizations.
22
The Department of Healthcare and Family Services is
23
responsible for enforcing the pharmacy benefit manager

HB5514
- 2 -
LRB104 18694 KTG 32137 b
1
contract after the procurement process.
2

(b) As a part of the procurement process, the Director of
3
the Department shall do all of the following:
4

(1) Accept applications from entities seeking to
5

become the State pharmacy benefit manager.
6

(2) Establish eligibility criteria an entity must meet
7

in order to become the State pharmacy benefit manager.
8

(3) Select and contract with, in collaboration with
9

the Chief Procurement Officer for General Services, a
10

single State pharmacy benefit manager.
11

(4) Develop a master contract that incorporates all
12

requirements under Article XXXIIB of the Illinois
13

Insurance Code, unless incorporating a particular
14

requirement would place the State in violation of federal
15

law or otherwise cause the State to lose eligibility for
16

federal payments.
17

(c) A prospective State pharmacy benefit manager shall
18
disclose to the Director all of the following during the
19
procurement process:
20

(1) Any activity, policy, practice, contract, or
21

arrangement of the pharmacy benefit manager that may
22

directly or indirectly present any conflict of interest
23

with the pharmacy benefit manager's relationship with or
24

obligation to the Department or a Medicaid managed care
25

organization.
26

(2) All common ownership, members of a board of

HB5514
- 3 -
LRB104 18694 KTG 32137 b
1

directors, managers, or other control of the pharmacy
2

benefit manager (or any of the pharmacy benefit manager's
3

affiliated companies) with any of the following:
4

(A) A Medicaid managed care organization and its
5

affiliated companies.
6

(B) An entity that contracts on behalf of a
7

pharmacy or any pharmacy services administration
8

organization and its affiliated companies.
9

(C) A drug wholesaler or distributor and its
10

affiliated companies.
11

(D) A third-party payer and its affiliated
12

companies.
13

(E) A pharmacy and its affiliate companies.
14

(3) Any direct or indirect fees, charges, or any kind
15

of assessments imposed by the pharmacy benefit manager on
16

pharmacies licensed in this State in which the pharmacy
17

benefit manager shares common ownership, management, or
18

control; or that are owned, managed, or controlled by any
19

of the pharmacy benefit manager's affiliated companies.
20

(4) Any direct or indirect fees, charges, or any kind
21

of assessments imposed by the pharmacy benefit manager on
22

the pharmacies licensed in this State.
23

(5) Any financial terms and arrangements between the
24

pharmacy benefit manager and a prescription drug
25

manufacturer or labeler, including formulary management,
26

drug substitution programs, educational support claims

HB5514
- 4 -
LRB104 18694 KTG 32137 b
1

processing, or data sales fees.

2

Section 99.
Effective date.
This Act takes effect upon
3
becoming law.

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