HBA-TYH H.B. 1721 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1721
By: Edwards
Insurance
4/19/1999
Introduced



BACKGROUND AND PURPOSE 

A drug formulary is a list of prescription drugs that a health plan will
pay for.  As managed care has grown, health plans have increasingly relied
on formularies to control the rising cost of prescription medicines.
Currently, if a health plan's formulary does not have a consumer's
prescribed drug, then the consumer will not be able to obtain the drug
needed for the consumer's medical condition or mental illness.  

H.B. 1721 defines "drug formulary" and requires a provider to provide
coverage for a drug not included in the provider's drug formulary, if that
drug is in a class of drugs covered under the prescription drug benefit and
has been approved and designated as safe and effective by the United States
Food and Drug Administration (FDA) in compliance with federal law; and if a
physician treating the enrollee under the health care plan determines that
use of that drug, rather than a drug included in the formulary, is in the
best interest of the enrollee. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 20A, Insurance Code (Texas Health Maintenance
Organization Act), by adding Section 9A, as follows: 

Sec. 9A.  DRUG FORMULARY.  Defines "drug formulary."  Requires a health
maintenance organization that uses a drug formulary in providing a
prescription drug benefit to provide the benefit to an enrollee for a drug
not included in the formulary if that drug is in a class of drugs covered
under the prescription drug benefit and has been approved and designated as
safe and effective by the United States Food and Drug Administration (FDA)
in compliance with federal law; and if a physician treating the enrollee
under the health care plan determines that use of that drug, rather than a
drug included in the formulary, is in the best interest of the enrollee. 

SECTION 2.  Amends Subchapter A, Chapter 533, Government Code, by adding
Section 533.0055, as follows: 

Sec. 533.0055.  DRUG FORMULARY. Defines "drug formulary." Requires a
managed care organization that uses a drug formulary in providing a
prescription drug benefit to provide the benefit to a recipient for a drug
not included in the formulary if that drug is in a class of drugs covered
under the prescription drug benefit and has been approved and designated as
safe and effective by the FDA in compliance with federal law, and if a
physician treating the recipient under the managed care plan determines
that use of that drug, rather than a drug included in the formulary, is in
the best interest of the recipient.  

SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Makes application of Section 1 of this Act prospective for an
evidence of coverage that  is delivered, issued for delivery, or renewed on
or after January 1, 2000.   
 
SECTION 5.  Makes application of Section 2 this Act prospective for a
managed care plan provided under a contract that is entered into or renewed
on or after January 1, 2000.  
 
SECTION 6.  Provides that if, before implementing any provision of Section
2 of this Act, the Health and Human Services Commission (commission)
determines that a waiver or authorization from a federal agency is
necessary for implementation of that provision, the commission is required
to request the waiver or authorization and is authorized to delay
implementing that provision until the waiver or authorization is granted.  
 
SECTION 7. Emergency clause.