Attorney General Neronha announces new legislation to further address health care crisis

Attorney General Neronha announces new legislation to further address health care crisis

Published on Thursday, May 07, 2026

Attorney General Peter F. Neronha today announced a series of health care-related legislative proposals aimed at improving Rhode Island's health care system, including legislation intended to lower prescription drug costs, ensure the stability of Rhode Island hospitals, and prevent the increasingly predatory practices of anti-competitive, market-dominating Pharmacy Benefit Managers (PBMs). This announcement follows significant actions taken over the last year by the Office to strengthen the state's health care landscape, including legal action against PBMs, successful advocacy to significantly raise Medicaid reimbursement rates for primary care, and regulations requiring pre-merger notification for certain health care transactions, among other initiatives.

Today's health care announcement includes introducing legislation which would:

• prevent unfair and deceptive practices by PBMs;
• strengthen enforcement tools available to the Attorney General to prevent unfair or predatory PBM audits of pharmacies;
• give the Superior Court authority to place a hospital into receivership if plagued by mismanagement, financial distress or insolvency, illegal or fraudulent conduct, risk of asset loss, or threats to patient health and safety; and
• establish a state-administered prescription drug purchasing pool to allow employers that currently bargain for drugs only on their own behalf to band together with the state to purchase drugs at steeper discounts.

"We must approach reform with multi-faceted, innovative solutions," said Attorney General Neronha. "Last year, working with the General Assembly, we made significant strides by increasing primary care reimbursements and reducing burdensome and unnecessary prior authorization requirements. Yet our problems persist. Reimbursement rates are still too low, which makes recruiting and retaining primary care physicians extremely difficult. Many would rather practice in Massachusetts or Connecticut where reimbursement rates for primary care are higher, or forego dealing with health insurance altogether and move to concierge medicine. Rhode Islanders are paying far too much for essential, life-saving medications, and PBMs continue their exploitive tactics, even targeting independent pharmacies that have been faithfully serving their communities for years.

"The bills we are announcing today will address these challenges. Yet there is still more to do. In the coming months, my Office will also release proposals to structurally reorganize and reform the state's health care agencies, including the creation of a new agency which will prioritize data-driven change, and a study by the Brown School of Public Health, commissioned by my Office, on what a public health insurance option in Rhode Island designed to reduce costs and increase access might look like."

"I applaud Attorney General Neronha's health care initiatives and they will be carefully considered in this legislative session," said House Speaker K. Joseph Shekarchi. "The Attorney General has been an invaluable partner in the health care realm, especially his leadership in helping to rescue Roger Williams and Fatima hospitals."

"The Senate is grateful to Attorney General Neronha for his focus on strengthening our state's hospitals and improving our health care environment," said Senate Health and Human Services Committee Chairwoman Melissa Murray. "The initiatives being highlighted today complement the work of the Senate in our own health care package and build upon steps we have taken in prior years, with the strong support of the Attorney General, such as increasing reimbursement rates for primary care providers. I look forward to continuing to work with Attorney General Neronha to enact strong health care initiatives this session."

In-depth information about the Office's initiatives, and more, can be found on our dedicated website.

PBM DTPA Legislation (HB 8360, SB 3260)

Sponsored by Representative Mia Ackerman and Senator Robert Britto, this legislation would amend the state's Deceptive Trade Practices Act (DTPA) to expressly define a detailed set of PBM practices as unfair or deceptive acts enforceable by the Attorney General. Prohibited conduct would include spread pricing and undisclosed "effective rate pricing"; steering patients to PBM-owned or affiliated pharmacies or using financial inducements to influence pharmacy choice; requiring pharmacies to use specific wholesalers; manipulating or failing to maintain attainable maximum allowable cost (MAC) pricing; imposing restrictive early refill limits on maintenance medications (with limited Medicaid flexibility); and failing to honor prior step therapy determinations under specified conditions. The bill also expressly restricts PBM use and monetization of prescription data for competitive advantage and prohibits certain drug repackaging markups.

This legislation follows Attorney General Neronha's lawsuit against the country's largest Pharmacy Benefit Managers (CVS Caremark, Express Scripts, and Optum) and their affiliated Group Purchasing Organizations (Zinc, Ascent Health Services, Emisar Pharma Services) for their role in unfairly and deceptively increasing the costs of prescription drugs, limiting care choices for Rhode Islanders, and harming local businesses.

PBM Audit Enforcement Legislation (HB 8382, SB 3258)

Sponsored by Representative Rebecca Kislak and Senator Linda Ujifusa, this legislation would strengthen pharmacy audit protections by tightening the scope and justification for audits conducted under fraud, waste, and abuse (FWA) exceptions and enhancing oversight and enforcement.

Recent experience has shown that Pharmacy Benefit Managers (PBMs) sometimes use pharmacy audits as a tool to put pressure on independent pharmacies, to the benefit of the PBM's own affiliated pharmacies. The amendments proposed in this legislation require that any audit invoking an FWA exception be narrowly limited to the specific issues giving rise to suspicion and supported by a written justification describing the factual basis for the audit, which must be made available to the Attorney General upon request. Auditors are prohibited from relying solely on common ownership or control to justify expanded audits absent evidence of a systemic issue at a related pharmacy. Further, the bill requires advance notice to the Attorney General before initiating an exception-based audit. Finally, the amendments clarify enforcement authority by explicitly authorizing the Attorney General to bring actions for injunctive relief, impose civil penalties of up to $10,000 per violation, and promulgate implementing regulations.

State Drug Purchasing Pool Legislation (HB 8383, SB 3257)

Sponsored by Representative Tina Spears and Senator Lou DiPalma, this legislation would establish a state-administered prescription drug purchasing pool, operated by the Department of Administration (DOA), through which non-state public employers (e.g., municipalities), self-insured private employers, and health insurance carriers may elect to purchase prescription drugs under the state's purchasing authority.

This bill would allow insurance plans that currently bargain for drugs only on their own behalf to band together with the state to purchase drugs at additional discount. Under the law, DOA is authorized to set eligibility, enrollment, payment, and participation rules; and enter into multistate purchasing arrangements to maximize rebates and discounts. The legislation also permits optional stop-loss coverage offerings, enables joint purchasing arrangements among employers, and allows coordination with the state's prescription drug discount program to extend negotiated prices and rebates more broadly.

Hospital Receivership Legislation (HB 8364, SB 3244)

Sponsored by Representative Susan Donovan and Senator Melissa Murray, this legislation would expand the authority of the Superior Court, upon petition by the Attorney General or Department of Health, to appoint a receiver over a hospital, including affiliated entities supporting care delivery. It would also authorize the Court to liquidate the hospital's assets and business where there is mismanagement, financial distress or insolvency, illegal or fraudulent conduct, risk of asset loss, or threats to patient health and safety.

If passed, the Court would be granted broad equitable authority to issue orders, appoint an interim or permanent receiver, with a hearing on permanent appointment required within 21 days of commencement of the action unless extended for good cause, and take other actions to preserve assets and maintain patient safety and access during the proceeding. The receiver, subject to court supervision, may take control of operations, preserve and manage assets, conduct litigation, and sell or otherwise dispose of property, with proceeds applied to expenses and liabilities. The Court would retain exclusive jurisdiction over the hospital and its property throughout the proceedings.

For more information on these and other initiatives, please visit our website.

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