75R9435 SAW-F                           

         By Van de Putte                                       H.B. No. 3175

         Substitute the following for H.B. No. 3175:

         By Lewis of Tarrant                               C.S.H.B. No. 3175

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the provision of pharmaceutical services through

 1-3     certain health benefit plans.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Article 21.52B, Insurance Code, is reenacted and

 1-6     amended to read as follows:

 1-7           Art. 21.52B.  PHARMACEUTICAL SERVICES

 1-8           Sec. 1.  DEFINITIONS.  In this article:

 1-9                 (1)  "Health benefit plan" [insurance policy"] means an

1-10     individual, group, blanket, or franchise [insurance policy,]

1-11     insurance policy or insurance agreement, a [or] group hospital

1-12     service contract, or an evidence of coverage issued by a health

1-13     maintenance organization operating under the Texas Health

1-14     Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance

1-15     Code) that provides benefits for pharmaceutical services that are

1-16     necessary as a result of or to prevent an accident or sickness[,

1-17     but does not include evidence of coverage provided by a health

1-18     maintenance organization under the Texas Health Maintenance

1-19     Organization Act (Chapter 20A, Vernon's Texas Insurance Code)].

1-20                 (2)  "Pharmaceutical services" means services,

1-21     including dispensing prescription drugs, that are ordinarily and

1-22     customarily rendered by a pharmacy or pharmacist licensed to

1-23     practice pharmacy under the Texas Pharmacy Act (Article 4542a-1,

1-24     Vernon's Texas Civil Statutes).

 2-1                 (3)  "Pharmacist" means a person licensed to practice

 2-2     pharmacy under the Texas Pharmacy Act (Article 4542a-1, Vernon's

 2-3     Texas Civil Statutes).

 2-4                 (4)  "Pharmacy" means a facility licensed as a pharmacy

 2-5     under the Texas Pharmacy Act (Article 4542a-1, Vernon's Texas Civil

 2-6     Statutes).

 2-7                 (5)  "Drugs" and "prescription drugs" have the meanings

 2-8     assigned by Section 5, Texas Pharmacy Act (Article 4542a-1,

 2-9     Vernon's Texas Civil Statutes).

2-10                 [(6)  "Managed care plan" means a health maintenance

2-11     organization, a preferred provider organization, or another

2-12     organization that, under a contract or other agreement entered into

2-13     with a participant in the plan:]

2-14                       [(A)  provides health care benefits, or arranges

2-15     for health care benefits to be provided, to a participant in the

2-16     plan; and]

2-17                       [(B)  requires or encourages those participants

2-18     to use health care providers designated by the plan.]

2-19           Sec. 2.  PROHIBITED CONTRACTUAL PROVISIONS.  (a)  A health

2-20     benefit [insurance policy or managed care] plan that is delivered,

2-21     issued for delivery, or renewed or for which a contract or other

2-22     agreement is executed may not:

2-23                 (1)  prohibit or limit a person who is a beneficiary of

2-24     the plan [policy] from selecting a pharmacy or pharmacist of the

2-25     person's choice to be a provider under the plan [policy] to furnish

2-26     pharmaceutical services offered or provided by that plan [policy]

2-27     or interfere with that person's selection of a pharmacy or

 3-1     pharmacist;

 3-2                 (2)  deny a pharmacy or pharmacist the right to

 3-3     participate as a contract provider under the [policy or] plan if

 3-4     the pharmacy or pharmacist agrees to provide pharmaceutical

 3-5     services that meet all terms and requirements of the plan and to

 3-6     include the same administrative, financial, and professional

 3-7     conditions that apply to pharmacies and pharmacists who have been

 3-8     designated as providers under the [policy or] plan; or

 3-9                 (3)  require a beneficiary of a [policy or a

3-10     participant in a] plan to obtain or request a specific quantity or

3-11     dosage supply of pharmaceutical products.

3-12           (b)  Notwithstanding Subsection (a)(3) of this section, a

3-13     health benefit [insurance policy or managed care] plan may allow

3-14     the physician of a beneficiary [or participant] to prescribe drugs

3-15     in a quantity or dosage supply the physician determines appropriate

3-16     and that is in compliance with state and federal statutes.

3-17           (c)  This section does not prohibit:

3-18                 (1)  a provision of a [policy or] plan from limiting

3-19     the quantity or dosage supply of pharmaceutical products for which

3-20     coverage is provided or providing financial incentives to encourage

3-21     the beneficiary [or participant] and the prescribing physician to

3-22     use a program that provides pharmaceutical products in quantities

3-23     that result in cost savings to the issuer of the health benefit

3-24     [insurance program or managed care] plan and the beneficiary [or

3-25     participant] if the provision applies equally to all designated

3-26     providers of pharmaceutical services under the [policy or] plan;

3-27                 (2)  a pharmacy card program that provides a means of

 4-1     obtaining pharmaceutical services offered by the [policy or] plan

 4-2     through all designated providers of pharmaceutical services; or

 4-3                 (3)  a plan from establishing reasonable application

 4-4     and recertification fees for a pharmacy which provides

 4-5     pharmaceutical services as a contract provider under the plan,

 4-6     provided that the [such] fees are uniformly charged to each

 4-7     pharmacy under contract with [to] the plan.

 4-8           Sec. 3.  PROVISION VOID.  A provision of a health benefit

 4-9     [insurance policy or managed care] plan that is delivered, issued

4-10     for delivery, entered into, or renewed in this state that conflicts

4-11     with Section 2 of this article is void to the extent of the

4-12     conflict.

4-13           Sec. 4.  CONSTRUCTION OF ARTICLE.  This article does not

4-14     require a health benefit [insurance policy or managed care] plan to

4-15     provide pharmaceutical services.

4-16           Sec. 5.  APPLICATION OF PROHIBITION.  The provisions of

4-17     Section 2 of this article do not apply to a self-insured employee

4-18     benefit plan that is subject to the Employee Retirement Income

4-19     Security Act of 1974 (29 U.S.C. Section 1001, et seq.).

4-20           Sec. 6.  SEVERABILITY.  If any provision of this article or

4-21     its application to any person or circumstance is held invalid, the

4-22     invalidity does not affect other provisions or applications of the

4-23     article that can be given effect without the invalid provision or

4-24     application, and to this end the provisions of the article are

4-25     severable.

4-26           SECTION 2.  Section 3, Chapter 182, Acts of the 72nd

4-27     Legislature, Regular Session, 1991, is repealed.

 5-1           SECTION 3.  This Act takes effect September 1, 1997, and

 5-2     applies only to a health benefit plan that is delivered, issued for

 5-3     delivery, or renewed on or after January 1, 1998.  A health benefit

 5-4     plan that is delivered, issued for delivery, or renewed before

 5-5     January 1, 1998, is governed by the law as it existed immediately

 5-6     before the effective date of this Act, and that law is continued in

 5-7     effect for this purpose.

 5-8           SECTION 4.  The importance of this legislation and the

 5-9     crowded condition of the calendars in both houses create an

5-10     emergency and an imperative public necessity that the

5-11     constitutional rule requiring bills to be read on three several

5-12     days in each house be suspended, and this rule is hereby suspended.