RS H.B. 3420 75(R) BILL ANALYSIS INSURANCE H.B. 3420 By: Luna 4-21-97 Committee Report (Amended) BACKGROUND Standard co-payments for prescriptions depend on the insurance plans and the premium an individual agrees to pay for coverage. HMO plans offer employees prescription co-payments of either $5, $10 and $15, depending on the plan. There are prescriptions, particularly penicillin, that cost less than the given co-payment amounts; however, some pharmacies charge the patient the higher price of the co-payment as issued by the HMO. PURPOSE The purpose of this bill is to mandate the price of a prescription drug be charged as the lesser of the actual price of the drug or co-payment. RULEMAKING AUTHORITY The Committee adopted Amendment No. 1 granting additional rulemaking authority to the Commissioner of Insurance in SECTION 2 of the bill (Chapter 20A, Vernon's Texas Insurance Code). SECTION BY SECTION ANALYSIS: SECTION 1. Amends Chapter 20A, Insurance Code, by adding Section 14A as follows: Sec. 14A. COPAYMENTS FOR PRESCRIPTION DRUGS. A health maintenance organization may not apply a copayment or similar charge to a prescription drug to the extent the charge exceeds the usual and customary cost for the prescription drug by the pharmacy that is filling the prescription. SECTION 2. Effective Date, September 1, 1997, and applies to policies issued or enacted on or after January 1, 1998. SECTION 3. Emergency Clause EXPLANATION OF AMENDMENTS Committee Amendment #1. Amends bill by adding new SECTION 2 as follows: Section 2. STANDARDIZED PHARMACY BENEFIT CARDS. The commissioner, with the assistance of the Texas State Board of Pharmacy, shall adopt rules by January 1, 1999, that require health maintenance organizations to use standardized pharmacy cards for insured or enrollees that meet the requirements of the United States Department of Health and Human Services, and National Council of Prescription Drug Programs.