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Pharmacy Benefit Manager (PBM)

A company that manages prescription drug benefits on behalf of health insurers, Medicare Part D plans, and large employers. They determine drug formularies (lists of covered drugs), negotiate prices with manufacturers, and reimburse pharmacies.

Vertical Integration

When a single company owns or controls multiple stages of the supply chain for a product or service. In healthcare, this means a company might own a health insurer, a PBM, and also hospitals or doctor's offices.

Management Services Organization (MSO)

An entity that provides non-clinical services (like billing, scheduling, IT, human resources) to medical practices. In some cases, MSOs can be used by larger corporations to control provider practices without direct ownership.

Divestment

The process of selling off assets, subsidiaries, or business units. In this bill, it refers to companies being required to sell off parts of their business to comply with new ownership rules.

Consolidation

The process where smaller companies merge with or are acquired by larger companies, leading to fewer, larger entities dominating a market.

Medical Loss Ratio (MLR)

The percentage of premium revenue that an insurance company spends on clinical services and quality improvement activities, as opposed to administrative costs. Federal law sets minimum MLRs for health insurance plans.