BILL ANALYSIS S.B. 628 By: Madla (Van de Putte) 05-11-95 Committee Report (Amended) BACKGROUND Under current law, the exclusive contracting ability of managed care health plans to provide pharmaceutical care through select providers has created a barrier to pharmaceutical care in rural areas. In a rural area with a limited number of pharmaceutical care providers who may be excluded from participation in a managed care plan, a plan participant may be forced to seek services many miles from home. PURPOSE S.B. 628 prohibits managed care health plans from limiting access to certain pharmaceutical services. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 1, Article 21.52B, Insurance Code, by adding Subdivision (6), to define "managed care plan" as a health maintenance organization, a preferred provider organization, or another organization that, under a contract or other agreement entered into with a participant in the plan, provides, or arranges for the provision of health care benefits to a participant, and requires or encourages those participants to use health care providers designated by the plan. SECTION 2. Amends Section 2, Article 21.52B, Insurance Code, as follows: Sec. 2. PROHIBITED CONTRACTUAL PROVISIONS. (a) Prohibits a health insurance policy or managed care plan that is delivered, issued for delivery, or renewed or for which a contract or other agreement is executed from, among others, prohibiting a person or participant in the plan from selecting a pharmacy or pharmacist to be a provider under the policy or plan to furnish pharmaceutical services offered by the policy or plan. Makes conforming changes. (b) Makes conforming changes. (c) Redesignates existing Subsection (b). Declares that this section does not prohibit a plan from establishing reasonable application and recertification fees for a pharmacy which provides pharmaceutical services as a contract provider under the plan, provided that such fees are uniformly charged to each pharmacy under contract to the plan. Makes conforming changes. SECTION 3. Amends Section 3, Article 21.52B, Insurance Code, to make conforming changes. SECTION 4. Amends Section 4, Article 21.52B, Insurance Code, to make conforming changes. SECTION 5. Amends Subsection (g), Article 20A.14, Insurance Code, to make conforming changes. SECTION 6. Declares that the provisions of this Act apply to a group model health maintenance organization that is a state certified health maintenance organization that provides the majority of its professional services through a single group medical practice that is formally affiliated with the medical school component of a Texas state supported public college or university and that received its certification as a health maintenance organization prior to November 1, 1981. SECTION 7. Effective date: September 1, 1995. Makes application of this Act prospective beginning January 1, 1996. SECTION 8. Emergency clause. EXPLANATION OF AMENDMENTS The Committee amendment to S.B. 628 would provide that the "Any Willing Provider" provisions in S.B. 628 would only apply to rural areas. The amendment specifically provides that the requirements would only apply to those portions of an health maintenance organization service area that are in counties of a population of 40,000 or less as reflected in the most recent official census. SUMMARY OF COMMITTEE ACTION: In accordance with House rules, S.B. 628 was heard in a formal meeting on May 9, 1995 at desk #24 on the House Floor and was called to order by the Chair, Representative John Smithee. The Chair laid out S.B. 628 and after the Committee reviewed the bill, the Chair left S.B. 628 as pending business before the Committee. Pursuant to an announcement filed with the Journal Clerk and read by the Reading Clerk, in accordance with House Rules, the House Committee on Insurance met in a formal meeting on May 11, 1995 at desk #24 on the House Floor and was called to order by the Chair, Representative John Smithee. The Chair laid out S.B. 628 as pending business before the Committee. The Chair recognized Representative G. Lewis who offered an amendment to S.B. 628. The Chair recognized Representative De La Garza who moved the Committee adopt the amendment to S.B. 628. The Chair heard no objections and the amendment to S.B. 628 was adopted. The Chair recognized Representative G. Lewis who moved the Committee report S.B. 628 as amended to the full House with the recommendation that it do pass and be printed. Representative Shields seconded the motion and the motion prevailed by the following vote: AYES: (5); NAYES: (2); PNV: (0); Absent: (2).