MLR and PBM Compliance Services

MLR Compliance Services

ER has accumulated some of the leading experts from across the country in the examination and analysis of medical loss ratio (MLR) filings. Our sole focus is providing first class MLR-related services to state and Federal regulators. Since 2017, our MLR Team continues to be contracted with The Center for Consumer Information and Insurance Oversight (CCIIO) to perform all MLR examinations conducted on behalf of the Federal government. Our MLR Team has also assisted numerous states in the performance of MLR examinations, largely assessing MLR filings in compliance with the same federally mandated rules and requirements.

Through our extensive experience in conducting MLR examinations, ER has developed the expertise and skills necessary to understand the regulation, technical guidance and other MLR reporting and rebate requirements, allowing it to provide a broad assortment of assistance to state regulators.

 MLR Services to Regulators:

  • Performance of MLR examinations in accordance with 45 CFR Part 158, including compliance with the NAIC MLR Examination Reporting Instructions or other state specific MLR rules and requirements
  • Development of specific MLR examination programs for state examiners
  • Training of examiners on the nuances of performing MLR examinations
  • Assisting in the design and execution of MLR examinations performed by states in a manner that ensures acceptance by CCIIO
  • Identification of companies exhibiting a high risk for inaccurate MLR calculations and/or underpayment of MLR rebates
  • Identification of high-risk components within a company’s MLR calculation
  • Assessment of proper market classification in accordance with the federal method of counting employees for the determination of group size, or the state counting method, if applicable
  • Assessment of quality improving activities (QIA), including identification of overhead/indirect costs improperly classified as QIA, and determination of the reasonableness of intercompany cost sharing transactions
  • Interpretation of MLR regulations, CCIIO technical guidance and MLR Filing Instructions
  • Assessment of pharmacy benefit manager (PBM) service agreements and verification of proper removal of spread pricing for prescription drug transactions, manufacturer rebates and other price concessions from incurred claims
  • Assessment of the applicability of MLR specific internal controls that could be leveraged to reduce substantive testing of MLR processes and balances
  • Integration of MLR examination procedures for Medicare Advantage or Medicaid lines of business

PBM Compliance Services

ER is the premier vendor providing pharmacy benefit manager (PBM) compliance services for regulators. Our PBM Team tailors PBM analyses and examinations to our clients’ unique needs, helping to create PBM examination standards, leading PBM examinations, and enforcing PBM transparency and fair business practices requirements. Our PBM Team actively develops and presents PBM-specific trainings to regulators on current PBM compliance issues, industry trends, and legislative and regulatory developments.

ER has completed examinations covering various aspects of PBM and pharmacy benefits over the past 12 years on behalf of state and federal regulators. ER’s PBM Team includes PBM specialists, market conduct and financial examiners, licensed pharmacists, IT/cybersecurity specialists, and diverse staff experienced in all aspects of auditing PBMs. Members of the PBM Team, including specialty sub-contractors, hold various professional designations which demonstrate the necessary skills and experience needed to assist regulators with the development of PBM examination processes and to efficiently and effectively conduct PBM examinations. This includes the Certified Pharmacy Benefit Specialist (CPBS) designation, setting our team apart as PBM compliance leaders.

Proven areas of PBM expertise include:

  • Contract review
  • Prescription drug pricing arrangements (including spread pricing)
  • Manufacturer rebate service agreements
  • Manufacturer revenue calculations
  • Reports and filings
  • Pharmacy audits
  • Complaints and appeals
  • Pharmacy network adequacy
  • Prescription drug claim transactions
  • Prescription drug utilization management services
  • Corporate governance
  • Risk management
  • Licensure and renewal documentation
  • Federal and state law mandates
  • IT/Cybersecurity
  • Market reforms requirements of Title XXVII of the Public Health Service Act (PHSA) and the Mental Health Parity and Addiction Equity Act (MHPAEA)
  • Applicable NAIC Market Regulation Handbook standards


Craig Moore, CFE, CPBS, CPA