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.