PBM Transparency Rule Sparks Chaos: Inside the DOL Comment Storm

In this episode of The EOB Podcast, we unpacked one of the most controversial healthcare regulatory discussions happening right now: the proposed Department of Labor rule on PBM transparency.

And based on the industry response?

A lot of people are nervous.

Very nervous.

With more than 500 submitted comments from:

• PBMs
• insurance carriers
• employer groups
• pharmaceutical companies
• consultants
• hospitals
• TPAs
• advocacy organizations

…the divide became crystal clear.

Some stakeholders are demanding more transparency.

Others are fighting hard to stop it.

What the Proposed PBM Transparency Rule Would Require

At the center of this conversation is a proposed DOL rule that would require Pharmacy Benefit Managers (PBMs) to disclose all compensation tied to employer health plans before contracts are signed.

That includes:

• manufacturer rebates
• spread pricing
• administrative fees
• indirect compensation
• price protection arrangements
• affiliate relationships
• additional revenue streams

For many employers and fiduciaries, this would represent a major shift.

Because historically, plan sponsors have had very limited visibility into how PBMs actually generate revenue.

And honestly, one thing we continue hearing from employers is that they feel like they have been operating blind for years.

Why the Industry Pushback Has Been So Intense

One of the biggest themes across the submitted comment letters was resistance around operational complexity.

Many PBMs and carriers argued that:

• the disclosures would be too difficult to produce
• systems would need major rebuilding
• reporting requirements are too complicated
• employers would struggle to understand the data
• implementation timelines are unrealistic

And honestly?
We did not exactly buy that argument.

Especially when some of the organizations making those claims are among the largest healthcare corporations in the world.

Throughout the conversation, we kept coming back to the same question:

If these companies already track profitability, pricing, rebates, contracts, and compensation internally… why would reporting it suddenly be impossible?

“This Is Too Complex for Employers”

One of the more controversial arguments raised in multiple comment letters was the idea that employers may not be sophisticated enough to interpret PBM compensation disclosures properly.

Several submissions suggested:

• smaller employers lack resources
• fiduciaries could become overwhelmed
• too much transparency may create confusion
• disclosures may increase compliance risks

We pushed back heavily on that idea.

Because at the end of the day, employers are already responsible for making fiduciary decisions on behalf of their health plans.

So the real question becomes:
How can fiduciaries properly evaluate “reasonable compensation” if they are not allowed to see the compensation structure in the first place?

That logic simply does not hold up.

ERISA Fiduciary Responsibility Was a Major Theme

Throughout this episode, we repeatedly came back to ERISA fiduciary obligations.

Under ERISA, fiduciaries are expected to:

• act prudently
• monitor service providers
• evaluate reasonable compensation
• avoid prohibited transactions
• act in the best interest of plan participants

But one of the biggest issues we continue seeing is that many employers still struggle to get:

• contracts
• claims data
• compensation details
• audit access
• direct pricing information

In some situations, even obtaining basic documentation becomes difficult because vendors claim the information is “proprietary.”

That creates a serious tension between fiduciary obligations and operational reality.

Because employers are expected to oversee plans responsibly… while often lacking the visibility necessary to actually do it.

Audit Rights Became One of the Most Controversial Issues

One of the most heated parts of this discussion centered around audit rights.

The proposed rule would allow plans to verify whether disclosed compensation information is actually accurate.

And unsurprisingly, many PBMs strongly opposed broad audit provisions.

Some comment letters argued that:

• audits should be limited
• benchmarking should be restricted
• audit scope should be narrowed
• disclosure data should not be widely compared
• affiliate and subcontractor details should remain protected

Honestly, we found this to be one of the most revealing parts of the entire comment process.

Because transparency without verification is not really transparency.

If disclosures cannot be audited or validated, then employers are still largely operating on trust alone.

The “Operational Burden” Argument

Another major theme throughout the episode was the repeated claim that the rule would create an overwhelming operational burden.

Several carriers argued they would need:

• years of implementation time
• new enterprise systems
• large-scale infrastructure changes
• additional reporting frameworks

UnitedHealthcare specifically argued that employers could become overwhelmed by “multiple layers” of PBM compensation data and ongoing updates.

But throughout the conversation, we kept asking:
Is this really about operational complexity… or is it about protecting existing business models?

Because transparent PBMs already exist.

Which means this level of reporting clearly can be done.

That alone weakens a lot of the arguments against the rule.

Why Employers Feel Trapped

One thing we continue hearing from plan sponsors is frustration.

A lot of employers feel:

• stuck in opaque contracts
• unable to access critical data
• dependent on large vendors
• blocked from meaningful comparisons
• exposed to fiduciary liability without clear visibility

And even when employers want answers, they often run into:

• confidentiality restrictions
• proprietary contract language
• limited audit access
• incomplete compensation disclosures

That creates a system where employers are expected to govern responsibly without always having the tools necessary to do so.

The Debate Around Fully Insured Plans

We also spent time discussing whether these transparency requirements should apply beyond self-funded plans.

Some industry stakeholders argued that fully insured employers should not receive direct PBM disclosures because they are not technically contracting with the PBM themselves.

Others believe transparency should expand much further across the healthcare ecosystem.

That naturally opened a broader conversation around:

• carrier relationships
• underwriting access
• data ownership
• plan governance
• healthcare accountability

And honestly, even we acknowledged that some of these questions are still evolving.

But the bigger point remains:
more transparency almost always benefits fiduciary oversight.

The Conversation Expanded Beyond PBMs

While PBMs remained the primary focus, this discussion repeatedly expanded into larger healthcare transparency issues.

We talked about:

• hidden revenue streams
• rebate aggregators
• network pricing arrangements
• revenue neutrality agreements
• spread pricing
• claims repricing
• anti-competitive structures
• healthcare consolidation

At several points, we found ourselves asking whether the healthcare system has simply become too layered and too opaque for employers to navigate effectively anymore.

Because once you start following where money flows inside healthcare, the level of complexity becomes hard to ignore.

Transparency vs. The Status Quo

One of the clearest takeaways from this conversation was this:

The debate is not really about whether compensation exists.

Everyone knows compensation exists.

The real debate is about:
who gets to see it.

And once employers fully understand:

• how money flows
• where incentives exist
• how pricing structures operate
• how indirect compensation works

…the market itself may start changing.

That possibility seems to be driving much of the resistance.

Standardization Might Be the Real Long-Term Solution

Toward the end of the episode, we discussed one idea that could potentially reduce friction across the industry:
standardized disclosure formats.

Instead of every organization creating:

• different reporting methods
• different definitions
• different spreadsheets
• different formats

…standardized disclosures could help:

• employers compare vendors
• simplify fiduciary review
• streamline audits
• improve benchmarking
• reduce confusion

And importantly, standardization could make transparency far more actionable.

Because transparency only matters if employers can realistically understand and use the information.

Final Thoughts: This Debate Is Bigger Than PBMs

This episode was not just about PBMs.

It was about a much larger question:

Should employers and fiduciaries have the right to fully understand how healthcare dollars are flowing through their own plans?

Because once transparency enters the conversation, it naturally leads to:

• accountability
• benchmarking
• fiduciary oversight
• competitive pressure
• market disruption

And that is where things start getting uncomfortable for some organizations.

One thing we continue seeing across the healthcare industry is that employers are no longer willing to simply accept “trust us” as an answer.

They are asking for visibility.

And honestly, they should be.

Because this proposed rule could become one of the most significant transparency shifts the healthcare industry has seen in decades.

FAQ: PBM Transparency Rule & DOL Disclosure Requirements

What is the proposed PBM transparency rule?

The Department of Labor proposed a rule requiring PBMs to disclose compensation details tied to employer health plans, including rebates, spread pricing, fees, and indirect compensation.

Why are PBMs opposing the rule?

Many PBMs argue the reporting requirements are too complex, operationally burdensome, and difficult to implement within the proposed timeline.

What does ERISA require from employers?

ERISA requires plan fiduciaries to act prudently, monitor vendors, evaluate reasonable compensation, and act in the best interest of plan participants.

Why are audit rights important?

Audit rights allow employers to verify whether disclosed compensation and pricing information is accurate and complete.

What is spread pricing?

Spread pricing occurs when a PBM charges a health plan more for a prescription drug than it reimburses the pharmacy, keeping the difference as profit.

Could this rule impact healthcare costs?

Potentially. Increased transparency may help employers better evaluate PBM contracts, compensation arrangements, and overall plan costs.

Listen to the Full Episode

To hear the full conversation on PBM transparency, ERISA fiduciary responsibility, healthcare pricing, audit rights, and the future of healthcare regulation, visit The EOB Podcast.