AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- OFFICE OF HEALTH AND HUMAN SERVICES (Requires the secretary of the executive office of health and human services to monitor and mandate changes to the price-setting practices of pharmacy benefit managers to prohibit the spread pricing payment model.)

H7825

2026 -- H 7825
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LC005093
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO STATE AFFAIRS AND GOVERNMENT -- OFFICE OF HEALTH AND
HUMAN SERVICES

Introduced By:
Representatives Stewart, Giraldo, Kislak, Potter, Tanzi, Handy, and
Boylan

Date Introduced:
February 26, 2026

Referred To:
House Finance
It is enacted by the General Assembly as follows:
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SECTION 1. The intent of this legislation is to protect Rhode Islanders and the state
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Medicaid program from high prescription drug costs by requiring greater pharmacy benefit
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manager (PBM) transparency and accountability.
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SECTION 2. Section 42-7.2-5 of the General Laws in Chapter 42-7.2 entitled "Office of
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Health and Human Services" is hereby amended to read as follows:
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42-7.2-5. Duties of the secretary.
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The secretary shall be subject to the direction and supervision of the governor for the
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oversight, coordination, and cohesive direction of state-administered health and human services
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and in ensuring the laws are faithfully executed, notwithstanding any law to the contrary. In this
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capacity, the secretary of the executive office of health and human services (EOHHS) shall be
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authorized to:
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(1) Coordinate the administration and financing of healthcare benefits, human services, and
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programs including those authorized by the state’s Medicaid section 1115 demonstration waiver
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and, as applicable, the Medicaid state plan under Title XIX of the U.S. Social Security Act.
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However, nothing in this section shall be construed as transferring to the secretary the powers,
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duties, or functions conferred upon the departments by Rhode Island public and general laws for
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the administration of federal/state programs financed in whole or in part with Medicaid funds or
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the administrative responsibility for the preparation and submission of any state plans, state plan

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amendments, or authorized federal waiver applications, once approved by the secretary.
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(2) Serve as the governor’s chief advisor and liaison to federal policymakers on Medicaid
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reform issues as well as the principal point of contact in the state on any such related matters.
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(3)(i) Review and ensure the coordination of the state’s Medicaid section 1115
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demonstration waiver requests and renewals as well as any initiatives and proposals requiring
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amendments to the Medicaid state plan or formal amendment changes, as described in the special
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terms and conditions of the state’s Medicaid section 1115 demonstration waiver with the potential
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to affect the scope, amount, or duration of publicly funded healthcare services, provider payments
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or reimbursements, or access to or the availability of benefits and services as provided by Rhode
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Island general and public laws. The secretary shall consider whether any such changes are legally
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and fiscally sound and consistent with the state’s policy and budget priorities. The secretary shall
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also assess whether a proposed change is capable of obtaining the necessary approvals from federal
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officials and achieving the expected positive consumer outcomes. Department directors shall,
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within the timelines specified, provide any information and resources the secretary deems necessary
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in order to perform the reviews authorized in this section.
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(ii) Direct the development and implementation of any Medicaid policies, procedures, or
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systems that may be required to assure successful operation of the state’s health and human services
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integrated eligibility system and coordination with HealthSource RI, the state’s health insurance
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marketplace.
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(iii) Beginning in 2015, conduct on a biennial basis a comprehensive review of the
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Medicaid eligibility criteria for one or more of the populations covered under the state plan or a
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waiver to ensure consistency with federal and state laws and policies, coordinate and align systems,
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and identify areas for improving quality assurance, fair and equitable access to services, and
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opportunities for additional financial participation.
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(iv) Implement service organization and delivery reforms that facilitate service integration,
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increase value, and improve quality and health outcomes.
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(4) Beginning in 2020, prepare and submit to the governor, the chairpersons of the house
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and senate finance committees, the caseload estimating conference, and to the joint legislative
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committee for health-care oversight, by no later than September 15 of each year, a comprehensive
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overview of all Medicaid expenditures outcomes, administrative costs, and utilization rates. The
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overview shall include, but not be limited to, the following information:
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(i) Expenditures under Titles XIX and XXI of the Social Security Act, as amended;
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(ii) Expenditures, outcomes, and utilization rates by population and sub-population served
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(e.g., families with children, persons with disabilities, children in foster care, children receiving

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adoption assistance, adults ages nineteen (19) to sixty-four (64), and elders);
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(iii) Expenditures, outcomes, and utilization rates by each state department or other
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municipal or public entity receiving federal reimbursement under Titles XIX and XXI of the Social
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Security Act, as amended;
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(iv) Expenditures, outcomes, and utilization rates by type of service and/or service
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provider;
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(v) Expenditures by mandatory population receiving mandatory services and, reported
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separately, optional services, as well as optional populations receiving mandatory services and,
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reported separately, optional services for each state agency receiving Title XIX and XXI funds; and
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(vi) Information submitted to the Centers for Medicare & Medicaid Services for the
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mandatory annual state reporting of the Core Set of Children’s Health Care Quality Measures for
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Medicaid and Children’s Health Insurance Program, behavioral health measures on the Core Set of
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Adult Health Care Quality Measures for Medicaid and the Core Sets of Health Home Quality
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Measures for Medicaid to ensure compliance with the Bipartisan Budget Act of 2018, Pub. L. No.
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115-123.
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The directors of the departments, as well as local governments and school departments,
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shall assist and cooperate with the secretary in fulfilling this responsibility by providing whatever
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resources, information, and support shall be necessary.
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(5) Resolve administrative, jurisdictional, operational, program, or policy conflicts among
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departments and their executive staffs and make necessary recommendations to the governor.
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(6) Ensure continued progress toward improving the quality, the economy, the
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accountability, and the efficiency of state-administered health and human services. In this capacity,
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the secretary shall:
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(i) Direct implementation of reforms in the human resources practices of the executive
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office and the departments that streamline and upgrade services, achieve greater economies of scale
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and establish the coordinated system of the staff education, cross-training, and career development
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services necessary to recruit and retain a highly-skilled, responsive, and engaged health and human
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services workforce;
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(ii) Encourage EOHHS-wide consumer-centered approaches to service design and delivery
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that expand their capacity to respond efficiently and responsibly to the diverse and changing needs
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of the people and communities they serve;
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(iii) Develop all opportunities to maximize resources by leveraging the state’s purchasing
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power, centralizing fiscal service functions related to budget, finance, and procurement,
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centralizing communication, policy analysis and planning, and information systems and data

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management, pursuing alternative funding sources through grants, awards, and partnerships and
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securing all available federal financial participation for programs and services provided EOHHS-
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wide;
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(iv) Improve the coordination and efficiency of health and human services legal functions
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by centralizing adjudicative and legal services and overseeing their timely and judicious
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administration;
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(v) Facilitate the rebalancing of the long-term system by creating an assessment and
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coordination organization or unit for the expressed purpose of developing and implementing
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procedures EOHHS-wide that ensure that the appropriate publicly funded health services are
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provided at the right time and in the most appropriate and least restrictive setting;
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(vi) Strengthen health and human services program integrity, quality control and
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collections, and recovery activities by consolidating functions within the office in a single unit that
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ensures all affected parties pay their fair share of the cost of services and are aware of alternative
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financing;
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(vii) Assure protective services are available to vulnerable elders and adults with
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developmental and other disabilities by reorganizing existing services, establishing new services
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where gaps exist, and centralizing administrative responsibility for oversight of all related
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initiatives and programs.
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(7) Prepare and integrate comprehensive budgets for the health and human services
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departments and any other functions and duties assigned to the office. The budgets shall be
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submitted to the state budget office by the secretary, for consideration by the governor, on behalf
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of the state’s health and human services agencies in accordance with the provisions set forth in §
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35-3-4.
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(8) Utilize objective data to evaluate health and human services policy goals, resource use
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and outcome evaluation and to perform short and long-term policy planning and development.
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(9) Establish an integrated approach to interdepartmental information and data
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management that complements and furthers the goals of the unified health infrastructure project
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initiative and that will facilitate the transition to a consumer-centered integrated system of state-
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administered health and human services.
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(10) At the direction of the governor or the general assembly, conduct independent reviews
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of state-administered health and human services programs, policies, and related agency actions and
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activities and assist the department directors in identifying strategies to address any issues or areas
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of concern that may emerge thereof. The department directors shall provide any information and
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assistance deemed necessary by the secretary when undertaking such independent reviews.

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(11) Provide regular and timely reports to the governor and make recommendations with
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respect to the state’s health and human services agenda.
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(12) Employ such personnel and contract for such consulting services as may be required
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to perform the powers and duties lawfully conferred upon the secretary.
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(13) Assume responsibility for complying with the provisions of any general or public law
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or regulation related to the disclosure, confidentiality, and privacy of any information or records,
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in the possession or under the control of the executive office or the departments assigned to the
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executive office, that may be developed or acquired or transferred at the direction of the governor
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or the secretary for purposes directly connected with the secretary’s duties set forth herein.
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(14) Hold the director of each health and human services department accountable for their
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administrative, fiscal, and program actions in the conduct of the respective powers and duties of
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their agencies.
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(15) Identify opportunities for inclusion with the EOHHS’ October 1, 2023, budget
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submission, to remove fixed eligibility thresholds for programs under its purview by establishing
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sliding scale decreases in benefits commensurate with income increases up to four hundred fifty
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percent (450%) of the federal poverty level. These shall include but not be limited to, medical
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assistance, childcare assistance, and food assistance.
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(16) Ensure that insurers minimize administrative burdens on providers that may delay
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medically necessary care, including requiring that insurers do not impose a prior authorization
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requirement for any admission, item, service, treatment, or procedure ordered by an in-network
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primary care provider. Provided, the prohibition shall not be construed to prohibit prior
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authorization requirements for prescription drugs. Provided further, that as used in this subsection
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(16) of this section, the terms “insurer,” “primary care provider,” and “prior authorization” means
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the same as those terms are defined in § 27-18.9-2.
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(17) The secretary shall convene, in consultation with the governor, an advisory working
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group to assist in the review and analysis of potential impacts of any adopted federal actions related
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to Medicaid programs. The working group shall develop options for administrative action or
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general assembly consideration that may be needed to address any federal funding changes that
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impact Rhode Island’s Medicaid programs.
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(i) The advisory working group may include, but not be limited to, the secretary of health
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and human services, director of management and budget, and designees from the following: state
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agencies, businesses, healthcare, public sector unions, and advocates.
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(ii) As soon as practicable after the enactment federal budget for fiscal year 2026, but no
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later than October 31, 2025, the advisory working group shall forward a report to the governor,

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speaker of the house, and president of the senate containing the findings, recommendations and
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options for consideration to become compliant with federal changes prior to the governor’s budget
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submission pursuant to § 35-3-7.
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(18) Ensure managed care organizations (“MCOs”) and pharmacy benefit managers
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(“PBMs”) working for the Rhode Island Medicaid program are transparent, do not increase
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unnecessary costs for the Rhode Island Medicaid program and patients, and demonstrate
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improvement in patient health outcomes by requiring contracts with MCOs ensure PBMs to cease
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and prohibit activities that result in spread pricing, a payment model in which PBMs charge a health
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plan more than it reimburses the pharmacy for a prescription drug and retains the difference.
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SECTION 3. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO STATE AFFAIRS AND GOVERNMENT -- OFFICE OF HEALTH AND
HUMAN SERVICES
***
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This act would require the secretary of the executive office of health and human services
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(EOHHS) to monitor and mandate changes to the price-setting practices of pharmacy benefit
3
managers to prohibit the spread pricing payment model.
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This act would take effect upon passage.
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