TN HB 1244

Introduced February 6, 2025.

Passed House and Senate unanimously (93–0 in the House, 30–0 in the Senate).

Signed by the governor on May 9, 2025, becoming Public Chapter 446, effective same day

What the Bill Does

• Removes all aggregate penalty limits for violations by pharmacy benefit managers (PBMs). Previously, fines capped at $100k for ordinary violations and $250k for knowing violations. 

• Aligns PBMs with insurance law requirements by mandating set “prompt pay” standards:

  • Any clean paper claim must be paid within 30 days.

  • Any clean electronic claim must be paid within 21 days, or else incur 1% interest per month until settled.

• Establishes regulatory oversight by the Department of Commerce & Insurance (DCI):

  • PBMs must process over 95% of clean claims annually or face penalties.

  • Progressive penalties scale from $10k up to $200k, depending on performance thresholds (e.g., failure to process 60% of claims).

  • DCI can also issue cease-and-desist orders and perform full compliance audits.

Benefits:

• Faster payments improve pharmacy cash flow and reduce administrative burdens.

• Interest on delayed payments incentivizes PBMs to comply.

• Binding appeal outcomes make MAC appeals more meaningful.

Risks if Ignored:

• Pharmacies must still track their clean claims rate, appeal timelines, and reimbursement changes.

• PBMs may tighten claim review to avoid penalties, potentially rejecting more for minor technical issues.

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