Medical Loss Ratio (MLR) and Pharmacy Benefit Manager (PBM) Compliance
The MLR and PBM Compliance team is a specialized regulatory partner, providing expert-level support to state and federal agencies in enforcing compliance with complex healthcare and pharmacy benefit regulations. With deep subject matter expertise, technical precision, and a proven track record, the MLR and PBM Compliance team ensures that insurers and pharmacy benefit managers (PBMs) meet their obligations under federal and state law, protecting both consumers and the integrity of the insurance marketplace.
Medical Loss Ratio (MLR) Compliance Services
Federal & State Examination Expertise:
- Conducts MLR examinations in accordance with 45 CFR Part 158, NAIC MLR Examination Reporting Instructions, and state-specific rules.
- Longstanding federal contract with CCIIO to perform all federally mandated MLR examinations since 2017.
- Supports states in designing and executing MLR exams that meet federal standards for acceptance.
Technical Focus Areas:
- Risk Identification: Detects high-risk carriers and components prone to inaccurate MLR calculations or rebate underpayments.
- Market Classification: Validates group size determinations using federal and state employee counting methodologies.
- Quality Improvement Activities (QIA): Reviews QIA classifications for compliance, including overhead misallocations and intercompany cost-sharing.
- Internal Controls: Assesses MLR-specific controls to reduce the need for extensive substantive testing.
- PBM Integration: Evaluates PBM service agreements to ensure proper exclusion of spread pricing, rebates, and price concessions from incurred claims.
- Program Development & Training: Provides training and custom MLR examination programs for state examiners.
Lines of Business:
- Includes integration of MLR procedures for Medicare Advantage and Medicaid programs.
Pharmacy Benefit Manager (PBM) Compliance Services
Regulatory Leadership:
- Recognized as a premier provider of PBM compliance services, supporting regulators in developing PBM examination standards and enforcing transparency mandates.
- Offers tailored PBM audits and consulting aligned with NAIC Market Regulation Handbook standards and Title XXVII of the Public Health Service Act (PHSA).
Technical Capabilities:
- Contract & Pricing Analysis: Reviews PBM contracts, spread pricing models, and manufacturer rebate agreements.
- Revenue & Claims Auditing: Verifies manufacturer revenue calculations, prescription drug claims, and utilization management practices.
- Network & Access Compliance: Assesses pharmacy network adequacy and complaint/appeal handling.
- Governance & Risk: Evaluates PBM corporate governance, licensure, risk management, and cybersecurity practices.
- Regulatory Alignment: Ensures compliance with MHPAEA, state PBM laws, and federal transparency requirements.
Multidisciplinary Team:
- Includes Certified Pharmacy Benefit Specialists (CPBS), licensed pharmacists, IT/cybersecurity experts, and experienced market conduct and financial examiners.
- Team members bring a blend of regulatory, clinical, and technical expertise to support comprehensive PBM oversight.
The MLR and PBM Compliance team is a trusted regulatory ally, delivering high-impact examination and consulting services that ensure compliance with some of the most complex areas of insurance regulation. Their work supports accurate rebate payments, fair pharmacy benefit practices, and robust consumer protections—strengthening regulatory enforcement and advancing public trust in the healthcare system.
TESTIMONIALS
What our team says about us
Cynthia M. Fitzgerald, AIRC, ACS, AIAA, CICSR, CFE(Fraud), CIE, MCM, PHAM, ITP, CCP
Director
Working at ER has allowed me to develop my leadership skills to elevate my team in the Health Consulting Services space. Consistent and meaningful engagement with executive leadership at ER is incredibly supportive and collaborative. At ER, we foster a creative work environment where everyone feels valued and heard. ER leadership is committed to professional development and work life balance. I enjoy the opportunity to lead a strong team with vision and purpose as we support state and federal regulators with dynamic and creative solutions. One of the attributes I like most about working at ER is the opportunity to work closely with other leaders in other areas of insurance regulation. This opportunity is only possible when leaders feel trusted, supported and equipped with the tools necessary to be successful. At ER, we take care of our clients, our team and each other as we deliver on our mission.
Craig Leonard, CIE, CPCU, CCP, FLMI, ARC, AIAF, ARM, MCM
Senior Director Market Conduct
Working at ER has been an incredible experience that allows me to lean into my strongest skills as a thought leader who is always looking to raise the bar and find better ways to improve market regulation processes. ER’s commitment to quality, efficiency, and first-rate representation creates an environment where innovation thrives, and continuous improvement is the standard. Our firm’s streamlined structure ensures prompt attention to clients at all levels, enabling me to partner with them in meaningful ways and consistently exceed their expectations. In my 34 years being involved in market regulation, I have never worked with a more knowledgeable, dedicated team. With deep knowledge and dedication to the NAIC’s Market Regulation Handbook, combined with our ‘out-of-the-box’ thinking, we identify critical findings often overlooked by others. I take immense pride in the work we do and the value we provide to our clients every day.
Mark Ossi, CPA, CFE, AMCM, CFE (Fraud)
Director Financial Analysis
In my previous position as a state regulator, ER was one of our trusted contracting firms. I felt like they were a strategic partner in the Department’s insurance regulatory oversight and was happy to have them be part of our team for the seventeen years I was employed at the Georgia Department. In 2019, I joined the ER Team and have been even more impressed with ER’s professionalism, culture and commitment to assisting our client’s mission of regulatory oversight of the insurance industry with the goal of safeguarding policyholders.
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CORPORATE HEADQUARTERS
20 10th Street NW, Suite 803
Atlanta, GA 30309-6197
Office: 404.816.6188
Fax: 404.816.6197
UTAH OFFICE
10619 S. Jordan Gateway, Suite 335
South Jordan, UT 84095
Office: 801.562.5748
VIRGINIA OFFICE
145 N. Main Street
Stuart, VA 24171
Office: 276.694.3806
Fax: 404.816.6197