SRC-SLL, ARR H.B. 494 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 494
76R11745 CLG-DBy: Maxey (Moncrief)
Human Services
5/10/1999
Engrossed


DIGEST 

In September 1997, the Texas Department of Health implemented a drug
manufacturing rebate program and  the Chronically Ill and Disabled
Children's Program and the Kidney Health Program through the Vendor Drug
Program. Currently, the projected financial benefit to the state is not
being fulfilled because participation by a pharmaceutical manufacturer in
the rebate program is voluntary. H.B. 494 would require drug benefits to
be available under certain health care programs administered by the Texas
Department of Health.   

PURPOSE

As proposed, H.B. 494 requires drug benefits to  be available under certain
health care programs administered by the Texas Department of Health.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

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 Heath
and Human Services Commission to require a recipient of medical assistance
to exhaust drug benefits available 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 (kidney program) or the Chronically Ill and Disabled
Children's Services Program (children's program).  

SECTION 2. Amends Chapter 12B, Health and Safety Code, by adding Section
12.0125, as follows: 

Sec. 12.0125. DRUG REBATES. Requires the Texas Department of Health
(department) to develop a drug manufacture rebate program for drugs
purchased by or on behalf of a client of the kidney program or the
children's program for which rebates are not available under the Medicaid
drug manufacturer rebate program. Require the department 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
from being less than the average percentage savings from rebates in the
Medicaid drug manufacturer rebate program. Authorizes amounts received by
the department under the drug rebate program established under this section
to be appropriated only for the kidney program and children's program.  

SECTION 3. Requires the department to consolidate with the Medicaid Vendor
Drug Program (MVDP) the drug benefit components of the kidney program and
the children's program, to the extent authorized by federal law. Requires
the department to use certain functions and components of MVDP for the
consolidated program. Requires the department to reimburse rates for drugs
purchased by or on behalf of a client of the kidney program and children's
program that are not included in the MVDP's list of reimbursable drugs.
Requires the department to obtain drug manufacturer rebates for drugs
purchased by or on behalf of a client of the kidney program or the
children's 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. Requires the department to update its computer
system to facilitate the consolidation.  

SECTION 4. Requires the department to complete the implementation of the
drug manufacturer rebate program required by Section 12.0125, Health and
Safety Code, as added by this Act, not later than September 1, 1999.
Requires the department to complete the implementation of the consolidation
program required by SECTION 3 of this Act not later than March 1, 2001.  

SECTION 5. Emergency clause.
                      Effective date: upon passage.