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).