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Rob Sand says audit shows PBMs may be overcharging Iowa taxpayers

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Rob Sand says audit shows PBMs may be overcharging Iowa taxpayers


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State Auditor Rob Sand said pharmacy benefit managers who work with Iowa’s Medicaid program appear to be overcharging taxpayers by using prohibited pricing techniques.

But Sand said he wasn’t able to get a full picture of the financial impact to the state’s Medicaid program because the three pharmacy benefit managers that work with Iowa Medicaid did not provide certain financial records and other information his office requested.

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“We believe that Iowans deserve to know how their tax dollars are being spent and that PBMs shouldn’t be allowed to rip off taxpayers by hiding behind what they say is proprietary information,” he said at a news conference Wednesday, June 10.

At issue is the use of what is known as effective rate pricing, which Sand said allows PBMs to claw back payments previously made to pharmacies at the end of the year. That results in “spread pricing,” which the audit says occurs when the PBM receives a larger reimbursement payment from the Medicaid managed care organization it works with than the PBM pays to the pharmacy.

Sand said spread pricing is prohibited under Iowa Medicaid.

“It can inflate costs for taxpayers, reduce the quality of care and create financial hardships for pharmacies,” he said. “That’s especially true for the independent pharmacies in smaller communities.”

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Sand’s office released a report Wednesday covering transactions from 2019 to 2021. While incomplete, he said it showed the effective rate reconciliations for one of the three PBMs that works with the state totaled $100 million over that time period.

“That’s $100 million that Iowa taxpayers may have been overcharged,” Sand said. “We believe it to be even more than that because despite the fact that we made repeated requests and negotiated, the PBMs still at the end of the day withheld critical financial information.”

Sand said his office hired a firm called 3Axis Advisors that has performed similar work in other states to assist with the audit, at a cost of about $30,000.

Sand’s report recommends banning year-end reconciliations and requiring PBMs, managed care organizations and other state contractors to provide unrestricted access to information for the auditor’s office.

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The report says there should be additional regulations on PBMs to separate Medicaid payments from non-Medicaid payments and to remove pricing variability from PBM contracts.

Sand, a Democrat who is the party’s nominee for governor, earlier this year released a health care platform pledging to crack down on pharmacy benefit managers.

Last year, Iowa lawmakers passed legislation placing several new regulations on PBMs, including requiring them to pay higher reimbursement rates to pharmacies.

A federal judge partially blocked portions of the law last summer while a lawsuit is pending from a coalition of business groups. It is awaiting an appeal.

Sand praised the law as “very good” but said “I think there’s a lot more that could be done.”

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“The regulations that were contained in it would prevent some abuses,” he said. “But again, I think it’s very important to emphasize that auditors need to have access to this information to make sure that taxpayers are being protected, and they’re not being ripped off.”

Heather Nahas, a spokesperson for Gov. Kim Reynolds, said Iowa has recovered hundreds of thousands of dollars in improper fees charged to pharmacies.

“For the last several years, Gov. Reynolds and Iowa lawmakers have been leading the fight against abusive PBM practices, advancing reforms, strengthening oversight and defending those efforts against repeated challenges,” she said in a statement.

Nahas called Sand’s report “irrelevant and outdated,” saying the data he looked at does not reflect current practices at Iowa’s Department of Insurance and Financial Services or Medicaid pharmacy oversight.

Nahas said the report includes recommendations that Iowa Medicaid implemented more than three years ago.

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“The auditor may be late to the game, but he’s finally arrived at the same conclusion that Iowans, the Republican legislature, and the Reynolds administration have known for years: PBM practices demand scrutiny, transparency and reform,” she said. “The difference is we’re doing something about it.”

Sand said his efforts to gather data were delayed by resistance from the PBMs and by a Republican-passed law, Senate File 478, that blocks the auditor from going to court against other state entities to force them to turn over documents.

“It took absolutely forever to get all of this data, to go back and forth with the PBMs, to evaluate legal claims about trade secrets or about SF 478,” he said. “And so as usual with this industry everything is much murkier and slower moving than any reasonable person would expect.”

Stephen Gruber-Miller is the Capitol bureau chief for the Des Moines Register. He can be reached by email at sgrubermil@registermedia.com, by phone at 515-284-8169 or on X at @sgrubermiller.



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Iowa’s governor and her family on weeklong tour of Iowa tourist sites – Radio Iowa

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Iowa’s governor and her family on weeklong tour of Iowa tourist sites – Radio Iowa


Governor Kim Reynolds, her husband and five of their grandchildren stopped in Mason City this morning to get a look at the city’s new bike park.

“This is a great example of Destination Iowa funds,” Reynolds said, “I think they received $4.5 million, and the partnerships is how we get things like this done.”

Starting in 2023, Governor Reynolds used federal pandemic relief dollars to create the Destination Iowa program to invest in infrastructure, like airports, and boost locations to attract tourists and new Iowa residents and legislators have provided state tax dollars to continue the program. Reynolds said an Iowa Economic Development Authority survey shows the value of the program. “It really pointed out that when people come here from out of state and if they love the experience, they really are more likely to move here and become a resident,” Reynolds said.

The Reynolds family is making a week long tour around the state, visiting outdoor destinations and attractions to draw attention to the governor’s June 8 executive order that established an Iowa Office of Outdoor Recreation. “It’ll partner with tourism, it’ll really highlight all of the great amenities that we have in this state and really drive people to the state,” Reynolds said.

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This is day three of the Reynolds’ family road trip. Yesterday they hiked in the Loess Hills and stopped at the West Bend Grotto. The governor said her grandkids were excited this morning as they drove into Mason City’s new bike park. “The whole Winnebago was full of the wow factor,” Reynolds said. “They were lined up on the windows and they were like pointing stuff out and we about tripped over each trying to get out the door so they could get out there and experience it.”

The Prairie Rock Trails Bike Park features wood boardwalks, jumps, and several single-track routes for riders of varying ages and skill levels. It connects riders to more than 20 miles of trails and 600 acres of scenic parkland.

(By Bob Fisher, KGLO, Mason City)



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New York Times/Siena Polls in Alaska, Iowa, North Carolina, and Ohio – Siena Research Institute

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New York Times/Siena Polls in Alaska, Iowa, North Carolina, and Ohio – Siena Research Institute


  • Alaska: Sullivan 47% – Peltola 45%
  • Iowa: Hinson 48% – Turek 46%
  • North Carolina: Cooper 50% – Whatley 43%
  • Ohio: Husted 50% – Brown 47%

All Toplines

All Crosstabs

AK Toplines

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AK Crosstabs

IA Toplines

IA Crosstabs

NC Toplines

NC Crosstabs

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OH Toplines

OH Crosstabs

“The fight for control of the U.S. Senate is on. Republicans hold razor thin leads in Alaska, Iowa and Ohio while in North Carolina, the former governor holds an early 7-point advantage,” according to Siena Research Institute’s Executive Director, Don Levy. “Of the six states we polled, these four as well as Maine and Texas, all except for North Carolina are well within the margin of error.”

Contact Information:

Siena Research Institute Director, Dr. Don Levy is available starting at 8:30 AM ET Wednesday, July 1st, to discuss the findings.

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Levy can be reached at (518)-284-3551 or don.levy@reconmr.com to arrange for interviews in person or via phone.



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Iowa judges take ICE to task over ‘astonishing conduct’ and violations of court orders

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Iowa judges take ICE to task over ‘astonishing conduct’ and violations of court orders


CEDAR RAPIDS, Iowa (Iowa Capital Dispatch) – Two federal judges in Iowa have sharply criticized government officials for repeatedly violating the law in immigration cases, with one Iowa ICE enforcement officer held in contempt for “astonishing conduct” and willfully violating a court order.

The two cases, each handled by a different federal judge, involve Immigration and Customs Enforcement officials who have moved detainees out of Iowa jails and the court’s jurisdiction while the individuals have pending immigration cases before the court.

The judge in one of the two cases took aim at the U.S. Attorney’s Office for the Southern District of Iowa, saying “the court expects better” of assistant U.S. attorneys who, she said, should be working in the interests of justice. The judge also criticized ICE and the U.S. Department of Homeland Security for what she called their “unprecedented disregard for court orders and continued failure to follow the law.”

In the second case, the chief judge of the Southern District of Iowa referenced ICE’s “record of defying court orders,” and warned the federal government that “noncitizens are not bargaining chips to be shifted from district to district as litigation strategy.”

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ICE officer held in contempt

The first of the two Iowa cases involves Pardeep Saini, 22, of Sacramento, California, who was pulled over by Iowa State Patrol Trooper Aaron Taylor in February 2026 along Interstate 80 in Jasper County. Taylor instructed Saini to go to a weigh station where, according to court records, ICE officials were waiting.

At the weigh station, Taylor ticketed Saini for failing to stop at the weigh station prior to being pulled over and turned him over to ICE officials, who arrested him on the grounds that his student visa had been revoked. Saini was then taken to the Polk County Jail and detained.

Saini’s attorney filed a lawsuit in U.S. District Court, seeking his client’s immediate release, and on March 19, 2026, U.S. District Judge Rebecca Goodgame Ebinger ordered the U.S. Department of Justice to show cause as to why Saini was not being illegally detained. At the time, Ebinger also ordered federal officials to refrain from moving Saini out of the Southern District of Iowa while the case was pending.

Without notifying the court, ICE officials then transferred Saini from the Polk County Jail in Iowa to a detention facility in McCook, Nebraska. Court records show that ICE Supervisory Detention and Deportation Officer Quintin Erdman later testified that while there was a general understanding that individuals such as Saini would not be transferred out of a judicial district while their court case was pending, ICE officers didn’t place a hold on those detainees to prevent their removal and instead merely noted the pending case in the detainees’ file.

According to court records, Erdman testified that while ICE Deportation Officer Daniel Archer would have been aware of Saini’s pending court case, Archer nevertheless approved Saini’s transfer to Nebraska on April 1, 2026 — almost two weeks after the court issued its order blocking any such transfer.

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Erdman testified he became aware of the violation of the court’s order on April 9 or 10, 2026, and acknowledged that he did not notify the court or consult with the U.S. Attorney’s Office on the issue. Instead, he testified, he twice sought guidance from ICE’s own Office of the Principal Legal Advisor, which advised him both times to keep Saini in Nebraska.

Court records show that Assistant U.S. Attorney Andrew Kahl became aware of the violation when Saini filed court papers indicating his presence at a bond hearing held in Nebraska. On June 11, 2026, two days after learning of the violation, Kahl disclosed to the Judge Ebinger that Saini had been transferred from Iowa to Nebraska, but he did so only in a footnote in a court filing.

In reviewing the matter, Ebinger stated that Erdman had known of the violation of the court’s order for more than two months without ever disclosing it to the U.S. Attorney’s Office or to her.

“Astonishingly,” Ebinger noted, at the time of a June 23, 2026, hearing in Saini’s case, “Saini remained in Nebraska despite Erdman becoming aware of the violation of the court’s order on April 9 or 10, 2026, (and) Assistant U.S. Attorney Kahl becoming aware of the violation of the court’s order on June 9, 2026.”

Judge cites ‘unprecedented disregard for court orders’

In her court order responding to the government’s actions, Ebinger observed that “this is not the first time the federal respondents have violated a court order to keep immigration detainees in this district,” adding that they had violated court orders regarding immigration detainee transfers “in matters before every district judge in this district over the past two months … And these violations are not isolated to this district. Courts across the country are struggling with an unprecedented disregard for court orders and continued failure to follow the law.”

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Ebinger ruled that Erdman had “knowingly and willfully violated the court’s order” and, rather than take corrective action by returning Saini to Iowa, he had instead perpetuated the violation. “He made no effort, at any point, to bring his agency into compliance,” Ebinger found.

Ebinger concluded that while Erdman was given “plainly erroneous advice” by ICE’s Office of the Principal Legal Advisor, that did not “relieve Erdman of his duty to follow the law, comply with court orders, and comport with his ethical obligations to the court, his agency, and immigration detainees.”

Ebinger said an aggravating factor was Erdman’s action in another recent case involving a different ICE detainee, Abhishek Kumar, who, like Saini, was detained as part of “Operation ICE Wall” involving ICE and the Iowa State Patrol.

Court records show that in that case, Erdman admitted Kumar had been transferred out of the Southern District of Iowa in violation of a court order. The records show Erdman then told the court steps had been taken to ensure similar violations didn’t occur in the future. At the time Erdman made those claims, Ebinger noted in her recent order, he had been aware, for two weeks, of the violation in Saini’s case but said nothing about it.

At the same time Erdman was attesting to ICE’s noncompliance in the Kumar matter, he chose to remain silent as to the exact same noncompliance in this matter.

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– U.S. District Judge Rebecca Goodgame Ebinger

“At the same time Erdman was attesting to ICE’s noncompliance in the Kumar matter, he chose to remain silent as to the exact same noncompliance in this matter,” Ebinger stated in her order. “Federal officials, including ICE officials and the federal respondents in this matter, are in a position of power over numerous lives. Detainees’ rights depend on these officials complying with the law and court orders … It is untenable that federal officials refuse to meet their obligation to follow the law and court orders, especially in this context … This is astonishing conduct and exceedingly unacceptable.”

Ebinger ruled Erdman was in civil contempt and admonished him for his conduct in the case, warning him that any future violations could result in sanctions.

While Erdman told Ebinger that ICE has implemented a plan to prevent court-prohibited transfers in the future, the judge said she did not find that assertion convincing and noted that “ICE continues to struggle to follow the law and court orders.”

Ebinger ordered Erdman to conduct a review of all Southern District of Iowa cases in which ICE detainees are challenging their detention and to then file a statement with the court attesting to the fact that all of those individuals remain in the district.

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In her order, Ebinger also reminded the U.S. Attorney’s Office for the Southern District of Iowa of its “ethical obligations to the court and the Iowa Bar.” She noted Kahl’s footnoted disclosure to the court, made two days after he became aware of the violation, calling it “insufficient” in meeting those obligations.

“The court expects better, particularly from assistant U.S. attorneys,” Ebinger stated. “The court will not tolerate willful disobedience of judicial orders.”

MacKenzie Benson Tubbs, the public information officer for the U.S. Attorney’s Office for the Southern District of Iowa, did not respond Tuesday to messages from Iowa Capital Dispatch seeking comment.

Chief judge: ‘Noncitizens are not bargaining chips’

The second recent Iowa case that has resulted in a judge taking federal officials to task over their handling of an immigration case involves Osmar Jose Arraiz Montilla. He was originally detained in Cedar Rapids, within the Northern District of Iowa, before being transferred to the Southern District of Iowa while his court challenge was still pending.

In that case, the judge in the Northern District had not issued an order explicitly barring such a transfer. But the chief judge of the Southern District, Stephanie M. Rose, noted in a court order this week that such transfers aren’t typical, since they would enable the government to “transfer noncitizens from district to district in search of a more favorable locale, or to forestall adjudication of the legality of their detention.”

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Rose cited concerns about Montilla’s transfer, given the government’s “record of defying court orders.” She noted that in the previous three weeks, the government had violated two orders prohibiting the transfer of immigration detainees outside the Southern District of Iowa.

“Noncitizens are not bargaining chips to be shifted from district to district as litigation strategy dictates,” Rose stated in her order. “If (Montilla’s) transfer was necessary to make room for other detainees, that interest does not justify defeating a court’s jurisdiction over a pending petition. If it was meant to impede (Montilla’s court challenge), the matter is graver still. Either way, this pattern of behavior is troubling.”

Rose stated that ICE’s transfer of Montilla and the resulting jurisdictional uncertainty it triggered “wasted two weeks of litigation and judicial resources in both the Northern District and Southern District of Iowa.”

Rose’s order bars ICE from transferring Montilla outside the Southern District of Iowa, but with the understanding that if the parties determine that the Northern District is better suited to handle the case, they can notify her so she can clear the way for Montilla’s transfer back to the Northern District.

As part of her order, Rose also directed the federal government to state in writing “the true reason for (Montilla’s) transfer from the Northern District of Iowa to the Southern District of Iowa.”

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Copyright 2026 Iowa Capital Dispatch. All rights reserved.



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