On this episode of Regulatory Joe, host Joe Boyle sat down with Bryan Connole, Director of Plan Management at Penstock, to unpack the growing complexities of the ACA prescription drug template.
With Plan Year 2026 approaching and QHP certification requirements getting stricter, CMS and state departments of insurance are placing increased focus on pharmacy template accuracy. Together, the duo breaks down the strategies, tools and internal coordination issuers need to avoid rework and stay compliant.
The Growing Importance of Pharmacy Template Accuracy in QHP Filings
The prescription drug template continues to be a focus area for regulators. One of the top compliance issues for Plan Year 2025 involved prior authorization—particularly for PrEP drugs.
Bryan notes that several objections were issued after templates had already been submitted, and in at least one case, a state came back post-submission requiring updates to comply with changing regulations.
His advice: keep a close eye on evolving federal and state requirements, even after your template is finalized.
The Must-Use Tools for ACA Pharmacy Template Validation
To avoid costly delays and objections, Bryan emphasizes the importance of consistently running these CMS validation tools:
- Adverse Tiering Tool
- Drug Count Tool
- Formulary Review Suite
It’s critical to communicate internally, especially with pharmacy teams or PBMs, to ensure clarity and alignment when these tools return results requiring justification. If you receive any outliers or flagged results, justification forms should be submitted along with the template.
Why Cross-Validation Still Trips Up Issuers
Even if your pharmacy template validates cleanly in MPMS, issues can arise when it’s cross-checked against the Plan & Benefits Template, rate data, and other components. According to Bryan, “Even if the prescription drug template is accurate… you run that cross validation and then you’re encountering an error within the PBT.”
This is why he recommends not only validating each template individually but also prioritizing cross-template validation and tracking changes closely through version control or change governance processes.
What Issuers Should Watch for in 2026 and Beyond
Looking ahead, Bryan sees continued movement toward automation and integration in MPMS. He notes that CMS “has been moving a lot of things into MPMS lately, trying to automate and make things easier.” Tools like the formulary suite and drug count tool may eventually become embedded in the system, streamlining validation but requiring issuers to stay up to date on how the process evolves.
He also points to a growing focus on PBM licensure at the state level—something that could add complexity for issuers depending on their pharmacy arrangements.
Final Thoughts on the Pharmacy Template
Getting the prescription drug template right takes more than just technical accuracy—it requires coordination across teams, constant validation, and attention to changing rules. As Bryan explains, success depends on communication, repetition, and being proactive with both your tools and your internal processes.
Tune in to the full episode for practical guidance on avoiding the most common pharmacy benefit template pitfalls.
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VIDEO TRANSCRIPT
Joe: Hey everybody. Welcome to Regulatory Joe. I’m Joe Boyle, the president of Regulatory Solutions here at Penstock, and today I’m very excited to introduce our special guest and also very own director of plan management, Bryan Connole.
Bryan, tell us a little bit about yourself.
Bryan: Thanks, Joe. Happy to be here.
I’ve been in that insurance field for about seven to eight years now, initially starting off as a territory manager and where I was working on product implementation for many states in the smaller group, ACA as well as large group space.
I was doing that for a few years and then an opportunity actually opened up in the regulatory space within my company. And I jumped on that opportunity to learn more beyond the product implementation piece and grow my career, take another step in my career.
It’s something I definitely I wasn’t sure I would enjoy, but I do. It’s something that I definitely have grown into. Definitely enjoyed learning all about the ACA regulatory filing, working with state departments of insurance, working with CMS around, you know, the rules and regulations and trying to improve the processes around the QHP certification and, and filing piece in general.
And that kind of led me here over to Penstock where we have partnered up and, you know, hoping to, again, continue to improve the process around QHP certification and regulatory filing and helping clients in states, you know, in that space who need, who need assistance.
Joe: You know, so, Brian, it’s, it’s easy for me to forget all the, the years we worked together and,
glad to have you here on the team.
You know,
It’s really interesting because with all the complexities in the ACA landscape and the strengthening of both federal and state policy, specifically for plan year 2026, we’re up against a lot for this year.
What are some of the hot topics, if not the biggest hot topic that you’re looking forward to tackling for this year?
Bryan: One of the big topics we’ve noticed is prior authorization for drugs in the formularies going forward. And so we did notice multiple objections for Plan Year 2025, where states and CMS came back and asked issuers to remove prior authorization from multiple drugs.
One being your PrEP formularies because, you know, again, that’s not in compliance with several of the rules and regulations going forward. So I think that is a key topic to keep an eye on going forward this year and actually making sure that, you know, issuers are reviewing the state guidelines around prior authorization as well as any rules and regulations being released from CMS,
from the federal government to make sure they’re in compliance with those statutes.
Joe: That’s great, Bryan. I understand, you know, working with issuers both small and large through the last plan year, prior authorization was a big issue.
I think that’s a good lesson learned, especially as it relates to working with state divisions of insurance. We’re seeing increasing strength with needs for justification forms to be attached to the templates to justify non-compliance for certain issuers.
What else are you seeing in working with your clients that you could share with us that other folks may find beneficial?
Bryan: Exactly, I do agree with you on the, on the justification forms.
One other area we are seeing is with, you know, the adverse tiering tool and so we definitely wanna make sure issuers are running that tool on their prescription drug template prior to submitting the template in their binders and to CMS. You want it to be as accurate as possible and avoid any objections that may come up.
Bryan: So once you run that tool and after anything comes back where you need an adverse tiering justification form, you want to make sure that you fill that out and submit that along with your prescription drug template when you are submitting into the binder into CMS to avoid any objections coming back from the state or the federal government.
Joe: That’s great, Bryan. And from a best practice perspective, I acknowledge and recognize and just wanna call out how labor intensive it could be for certain issuers to run these tools and functions and to produce the outputs. There’s multiple iterations.
It’s almost impossible to run the tool and get a clean result output on the first try,
would encourage issuers to also create change governance or a change control process to track the versioning of their template outputs to make sure that they’re having the most clean submission possible.
I also wanted to call out and I think in working with CMS we’ve noticed that there are other certain tools and instructions issuers can leverage, such as the REGTAP QHP webinars that are just starting now by CMS, where folks can log in and listen to certain sessions, put on by panelists about the best way to run tools, FAQs, and others.
Bryan: Exactly, Joe. So definitely wanna take advantage of those REGTAP webinars, especially when you’re creating the prescription drug template, you wanna make sure you’re attending that webinar that focuses specifically on that one template. A lot of times they’ll do the demo on there so you can see live, you know, to make sure you’re filling it out correctly. And there’s always a chance for Q&A.
In addition to the advanced, you know, tiering tool, there’s also the drug count tool in the formulary review suite. So again, those are two other options you can use.
My advice is to run as many tools as possible, make sure that it’s accurate as possible, just to avoid, you know, again, any objections, any concerns as you submit the templates in the binders going forward. Run as many tools as you can and then if needed, always submit those justification forms for any instances where you have an outlier or you have a result from that, from either any of those tools.
Joe: You know, that’s a really good point, and I almost forgot that too, because with the formulary output suite and the drug count tool, those are three codified tools that issuers should be running. It’s interesting because working with different health plans, I know based on how the org design of a department is, you could have the pharmacy team running the tools on the plans and products, or you could be having the product team running the tools on the plans on the products.
Bryan: If you don’t have any, develop strong relationships with your stakeholders internally with your pharmacy team, or even in fact the PBM behind the pharmacy or formulary benefits. Because health plans who are reliant on their PBM to give them their RX QEs to give them their retail or mail order supply for tab one or tab two on the template could create a bottleneck between creating justification forms, asking for new data and running the tools.
That’s true, Joe. Very true. Definitely. You want to communicate, ’cause again, a lot of issuers, you know, you do have separate departments who are working on separate templates, and so sometimes you have that pharmacy area that is working specifically on the, on the pharmacy benefit template.
Bryan: In my previous experience, you know, I had a pharmacy team that ran the pharmacy template and kind of handed it off to us and it was just our job to go ahead and, and submit it. And so you definitely want to have that strong communication, you know, if it’s an internal team, definitely have that communication with them to make sure that you’re in agreement, you know what is going on with, with the template, both the tabs and if there are any issues, you’re having that clear communication as to what the issue might be. And then again, some issuers also have, you know, an outside PBM they’re working with as well.
So, again, clear communication with them to make sure that you understand everything that they’re populating on that template. That PBM or that pharmacy team may be running a template, but you know, maybe you run it again yourself. So maybe you both run it.
CMS right now has MPMS, where you run the plan validation, and sometimes issuers might think, you know, I’ll run MPMS, the prescription drug template will come back accurate within there, and then they’ll kind of move forward.
Bryan: I think it’s always a good practice to, beyond just running that plan validation, take a few minutes to run those, you know, separate review tools outside of MPMS. It’s only gonna help you, it’s always gonna help you to avoid objections or any issues going forward.
So again, outside of MPMS, take the time to run those, run those outside tools. And then again, communication with your pharmacy team or outside PBM is definitely critical to making sure that you’re both on the same page and everything on that template is as accurate as possible.
Joe: Awesome. And I couldn’t have said it better myself too, because, so in order from A to Z: adverse tiering, drug count tool, formulary review suite. Those are the three that are gonna set you up for success for MPMS validation. Now, I also recall, if I’m not mistaken, that validation in MPMS is one thing, but where issuers also encountered significant issues in rework, almost missing federal deadlines, was during cross validation.
So you can validate a template in MPMS all day long, including the pharmacy template. But once that cross validation occurs, and you’re comparing the pharmacy template against the PBT, against the rate data template, against all of these other, including business rules, that’s where some unknown errors could come back that impact more than just one stakeholder, more than your pharmacy stakeholder.
So had you encountered any of that during cross validation or any best practices for issuers? Maybe doing it for the first time?
Bryan: You definitely wanna do cross validation and in the cross validation, that happens within the formulary review suite tool, but then again, when you’re running it through MPMS, you run the industry validation, and you’re always required to run the cross validation in MPMS as well, where it’s going to run, in addition to the prescription drug template, it’s going to cross validate all templates within that plan certification.
Even if the prescription drug template is accurate, you know, it may be, “oh, I’m good to go.” But then you run that cross validation and then you’re countering an error within the PBT. The PBT does not agree with, you know, the prescription drug template and there’s an area where you need to go ahead and fix.
Always, always, always wanna make sure you’re running that cross validation to make sure all those templates are agreeing.
So yeah, that’s definitely a good point, Joe.
Joe: Awesome. And that’s also gonna take care with consideration to the, formulary mapping. So for issuers also who are mapping different formulary IDs to parent IDs, have to be mindful of that. Do you have a two tier formulary? Three tier, four tier?
We’ve worked with carriers that have up to six plus tiers of prescription drugs through generic, brand-preferred or specialty across the board so it can get complex also, wouldn’t probably be a bad use of issuers’ time to work with your product strategy team to make sure your product strategists are developing their plan designs appropriately because all the decisions made up here or up at the beginning by leadership,
are gonna cascade downstream and could cause a rework or abrasion.
Bryan: Definitely yes.
No, you definitely want to work with your product strategist. And to your point too, yes, we’ve had, you know, multiple clients where they’ve had six or seven tiers, within their formulary, up to 13, 14, 15, you know, formulary IDs.
Which when you’re translating that over to the plan and benefit template, you wanna make sure you’re lining up the correct formulary ID with correct plan on the correct tab. It’s obviously very detail-oriented, but you know, those are two pieces where you wanna make sure everything’s lining up correctly with the templates and then yeah, you want to have that communication with the strategy team to make sure you know what they are proposing.
You definitely wanna make sure that you’re up to date, you’re following along with the new laws and regulations that are being passed by the states and by the federal government going forward.
Sometimes, you know, laws are passed after you have gone ahead and submitted your prescription drug template.
I had an example of that just this past year where one state came back after we had submitted, and due to a prior authorization for the PrEP formularies, we actually had to go back after we submitted.
So definitely always want to make sure that you’re keeping up to date on that. You never know when the state is gonna come back or the government may come back and ask you to go ahead and, and fix that template.
And if you can formulate a way to make sure that you are having someone on your team, regularly checking to make sure, you know, uh, check on those federal regulations, state regulations.
Joe: So This has been a great discussion, Bryan. And you know, when I pick up my proverbial crystal ball and when we look into the future calendar year 2025, plan year 2026 even, let’s skip ahead to 2027.
What do you see the future of the prescription drug template or even frankly, pharmacy regulations going?
Bryan: That’s a great question, Joe. Most issues are aware, you know, CMS has been moving a lot of things into MPMS lately, trying to automate and make things easier as far as submissions and validation.
So. You know, crystal ball looking to the future? As they continue to move more into MPMS, like this year I think they’re moving in the URT into MPMS. I could see a, a scenario where, you know, they start moving in validation tools, the formulary review suite, you know, the drug count tool, the reverse tiering tool.
You wanna make sure that you’re keeping up on that to make sure you’re in compliance as well.
We’ve noticed lately too, there’s a lot centered around, you know, PBM licensure in each states, they’re kind of tightening that up and making things a little harder on the PBMs.
Something that you want to kind of, kind of keep an eye on.
I don’t envision, you know, any major changes, any major rework coming to the prescription or drug template, but there could be some tweaks here and there.
Hopefully that kind stays the course, but those are the kind of things I’m seeing going forward to kind of keep an eye on and best practices going forward.
Joe: That’s definitely some valuable advice and I think all our listeners will definitely appreciate it. Well, that’s a wrap. Bryan, thank you for your time. Give us a like, give us a share and we’ll see you next time.
