How to Stop PBM Clawbacks Using Texas HB 1763

Resources

Effective Rate Complaint_Redacted #1_Redacted.pdf

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Texas_AG_Opinion_kp-0480 (1).pdf

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A Pharmacy Cowboy Guide to Filing a TDI Complaint and Getting Paid

Howdy, y’all. Ever had a claim paid fair and square, only to watch a PBM slither back 16–18 months later and claw back thousands through an "effective‑rate" adjustment—like a coyote stealing your supper? Texas House Bill 1763, signed into law back in 2021, was written to put an end to that kind of behavior. In this guide, I’ll show you how a West Texas pharmacy owner is using the law to file a complaint with the Texas Department of Insurance (TDI)—and how you can too.

What Is an Effective Rate?

Most pharmacies are paid at the point of sale using a Maximum Allowable Cost (MAC) or usual & customary price. But behind the scenes, PBMs contract with you based on an "effective rate"—an average reimbursement target they want to hit across all your claims.

If, over time, you were paid "too much," the PBM claws money back later to reconcile with the effective rate. These retroactive clawbacks often happen months after the fill date, with no notice, and no transparency.

That’s where HB 1763 comes in.

What Does HB 1763 Say?

Texas Insurance Code § 1369.553 states:

Sec. 1369.553. REDUCTION OF CERTAIN CLAIM PAYMENT AMOUNTS PROHIBITED.(a) A health benefit plan issuer or pharmacy benefit manager may not directly or indirectly reduce the amount of a claim payment to a pharmacist or pharmacy after adjudication of the claim through the use of an aggregated effective rate, quality assurance program, other direct or indirect remuneration fee, or otherwise, except in accordance with an audit performed under Subchapter F.(b) Nothing in this section prohibits a health benefit plan issuer or pharmacy benefit manager from increasing a claim payment amount after adjudication of the claim.

In plain English: credits after the fact are allowed. Debits are not—unless it’s part of a formal audit. Period.

What the Data Shows (Real Example)

One independent pharmacy in West Texas reviewed their 2023 PBM true-ups. Here’s what they found:

PBM	Debits
OptumRx	$60,464
Caremark	$49,203
Express Scripts	$109,283

Total Debits: $218,950 AND it took 16 to 18 months to settle the claims with the True-up process. That level of uncertainty and abuse is devastating to a pharmacy’s cash flow—and HB 1763 was passed to stop it.

A Claim-Level Example: Jardiance

"On 09/06/2023, Mrs. Mxxxxx received a prescription for Jardiance 25mg (Rx# xxxxxxx). The total reimbursement received (remitted) from Express Scripts on 09/14/2023 was $538.00, with a patient copay of $45.00, to equal a total amount of $583.00. However, approximately 16 months later, on 01/22/2025 Express Scripts reduced the amount of the claim through and aggregated effective rate by $23.04. This reduction in payment seems to clearly violate HB 1763. This example is only the tip of the iceberg. I received claim level detailed reports for all Express Scripts claims for contract year 2023 and discovered 6,092 instances of post-adjudication reductions in payment using an aggregated effective rate, totaling $109,283 in payment reductions."

How to File a Complaint with TDI

Filing is easier than you think. Here’s how to do it:

1. Go to the TDI Complaint Portal

2. Choose a specific patient example.

   • Provide a image of the patient's insurance card; or Pharmacy Management System screenshot of ID, BIN, GRP, PCN

3. Provide a brief explanation of your issue. Example: "PBM applied post-adjudication payment reductions in violation of Texas Insurance Code § 1369.553."

4. Attach proof. This can be:

   • Claim-level screenshots

   • Spreadsheets summarizing debits/credits

   • Redacted patient-specific claim examples

5. Include the total dollar amount impacted and cite the statute directly.

Need data from the PBM? Send a polite email asking for all post-adjudication adjustments (excluding Medicare D) for 2021–2024. A sample request email might look like this:

Subject: Effective Rate True-up information request - PHARMACY NAME - NCPDP# xxxx

Dear [PBM],

Can you please provide the end-of-year effective rate true-up information for XXXXXX Pharmacy (NCPDP: XXXXXXX). Specifically, I need all non-MedD claim level effective rate true-up details for contract years 2021, 2022, 2023, and 2024. Or any post-adjudication claim adjustment detail that you can provide. I can't locate the information about this in my records. My understanding is we were directly contracted during these years and some adjustments may have occurred. I'm trying to better understand the true-up process and the associated financial liabilities that occurred. Ideally the information will include any claim-level debits or credits that occurred to adjust the claims to the effective rate.

Sincerely,

Pharmacy Cowboy

What If the PBM Claims It’s an ERISA Plan?

Some PBMs may claim the law doesn’t apply because the plan is ERISA-funded. But they’re wrong.

Texas Attorney General Opinion KP-0480 (Feb 5, 2025) confirms that HB 1763 applies to all PBMs operating in Texas, even if the plan is federally regulated. And the U.S. Supreme Court’s Rutledge v. PCMA decision agrees: states have the right to regulate PBM conduct at the point of sale.

Push back respectfully and cite the AG opinion.

Why It Matters

Every retroactive debit isn’t just a line item. It’s payroll. It’s inventory. It’s time you could’ve spent caring for patients instead of fighting over pennies.

If independent pharmacists don’t enforce this law, nobody else will. That’s why it’s critical that we speak up—and file complaints.

Final Thoughts & Resources

Texas gave us the legal tools in 2021. HB 1763 is the law of the land—but enforcement starts with us.

✅ Gather your data✅ File your complaint✅ Help your peers do the same

The more we report, the harder it is for PBMs to ignore the law.

Stay in the Loop

📌 Follow @PharmacyCowboy on YouTube, Facebook, or X for more practical tips on protecting your business from PBM abuse.📌 Join us at the Texas Pharmacy Association Annual Conference this July and visit the Independent Pharmacy Academy booth to network with other pharmacy owners fighting the same battles.

Until then—keep your books clean, your claims compliant, and your dollars where they belong: in your pharmacy.