BILL ANALYSIS


                                                     C.S.S.B. 628
                                                        By: Madla
                                             Economic Development
                                                          4-29-95
                                   Committee Report (Substituted)
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

As proposed, C.S.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 grant any
additional rulemaking authority to a state officer, institution, or
agency.

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.