HBA-DMD H.B. 105 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 105 By: Alvarado Public Health 2/9/1999 Introduced BACKGROUND AND PURPOSE Currently, three major health care programs are administered by the Texas Department of Health (TDH) and offer client reimbursement for medications. These programs are the Vendor Drug Program, Kidney Health Care Program, and the Chronically Ill and Disabled Children's Services Program. H.B. 105 combines the drug reimbursement portions of the Kidney Health Care and the Chronically Ill and Disabled Children's Services programs with the Vendor Drug Program. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Health and Human Services Commission in SECTION 2 (Section 12.0125, Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 32B, Human Resources Code, by adding Section 32.0311, as follows: Sec. 32.0311. DRUG REIMBURSEMENT UNDER CERTAIN PROGRAMS. Requires the Health and Human Services Commission (HHS) to require the recipient of medical assistance to exhaust drug benefits under the medical assistance program before reimbursing the recipient, pharmacist, or other health care provider for drugs purchased by or on behalf of the recipient under the Kidney Health Care Program or the Chronically Ill and Disabled Children's Services Program. SECTION 2. Amends Chapter 12B, Health and Safety Code, by adding Section 12.0125, as follows: Sec. 12.0125. DRUG REBATES. (a) Requires the Texas Department of Health (TDH) to develop a drug manufacturer rebate program for drugs purchased by or on behalf of a client of the Kidney Health Care Program or the Chronically Ill and Disabled Children's Services Program for which rebates are not available under the Medicaid drug manufacturer rebate program. (b) Requires the TDH to consult with drug manufacturers to develop rebate amounts for the new rebate program. Prohibits the average percentage savings from rebates in the new program to be less than those in the Medicaid drug manufacturer rebate program. (c) Authorizes the TDH, by rule, to require all drug manufacturers to participate in the rebate program as a condition of reimbursement for the manufacturers' drugs under the Kidney Health Care Program and the Chronically Ill and Disabled Children's Services Program. SECTION 3. (a) Requires the Texas Department of Health (TDH), to the extent authorized by federal law, to consolidate with the Medicaid Vendor Drug Program the drug benefits components of the Kidney Health Care Program and the Chronically Ill and Disabled Children's Services Program. (b) Requires the TDH to use the Medicaid Vendor Drug Program's claims processing and program monitoring procedures, pharmacy network, and reimbursement rates for the consolidated program, except as provided by Subsection (c). (c) Requires the TDH to develop reimbursement rates for drugs purchased by or on behalf of a client of the Kidney Health Care Program or the Chronically Ill and Disabled Children's Services Program that are not included in the Medicaid Vendor Drug Program's list of reimbursable drugs. (d) Requires the TDH to obtain drug manufacturer rebates for drugs purchased by or on behalf of a client of the Kidney Health Care Program or the Chronically Ill and Disabled Children's Services Program under the Medicaid drug manufacturer rebate program and the drug rebate program developed under Section 12.0125, Health and Safety Code, as added by this Act. (e) Requires the TDH to update its computer system to facilitate the consolidation. SECTION 4. Requires the Texas Department of Health to complete the implementation of the drug manufacturer rebate program by September 1, 1999, and requires the Texas Department of Health to complete the implementation of the consolidated program as required by Section 3 of this bill not later than March 1, 2001. SECTION 5. Emergency clause. Effective date: upon passage.