SRC-JXG H.B. 2495 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 2495
By: Farabee (Madla)
Economic Development
5/13/1999
Engrossed


DIGEST 

Currently, if a health plan changes the formulary in the middle of a
contract period, during which time a consumer is unable to change coverage,
the consumer is left with a health plan that lacks the drug needed for the
consumer's medical condition or mental illness.  A formulary is a list of
prescription drugs that a health plan will pay for.  Health plans have
increasingly relied on formularies to control the rising cost of
prescription medicines.  Consumers with specific prescription drug needs
often choose a health plan based on whether the prescription drug they
require is part of the health plan's formulary.  H.B. 2495 would require
group health plans to continue covering a medication previously on its
formulary list for the remainder of a contract period.  

PURPOSE

As proposed, H.B. 2495 requires group health plans to continue covering a
medication previously on its formulary list for the remainder of a contract
period.  

RULEMAKING AUTHORITY

Rulemaking authority is granted to the commissioner of insurance in SECTION
1 (Article 21.52J, Insurance Code) of this bill.  

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subchapter E, Chapter 21, Insurance Code, by adding
Article 21.52J, as follows:  

Article 21.52J. USE OF PRESCRIPTION DRUG FORMULARY 
BY GROUP HEALTH BENEFIT PLAN 

Sec. 1. DEFINITIONS. Defines "drug formulary," "enrollee," "group health
benefit plan," "physician," and "prescription drug."  

Sec. 2. SCOPE OF ARTICLE. Sets forth the scope of this article, specifying
the group health benefit plans (plans) that are applicable and the plans
that are not applicable.  

Sec. 3. DISCLOSURE OF DRUG FORMULARY REQUIRED.  Requires a plan that covers
prescription drugs and that uses one or more drug formularies to specify
which prescription drugs the plan will cover to provide the specified
information to each enrollee in plain language in the coverage
documentation provided to the enrollee; disclose to any individual on
request, within three businesses days, whether a specific drug is on a
particular drug formulary; and notify an enrollee or any other individual
who requests information about a drug formulary that the presence of a drug
on a drug formulary does not guarantee that an enrollee's health care
provider will prescribe that drug for a particular medical condition or
mental illness.  

Sec. 4. CHANGES TO PRESCRIPTION DRUG FORMULARY; CONTINUATION OF BENEFITS
REQUIRED.  Requires a group health benefit plan that offers prescription
drug benefits to make a prescription drug that was approved or covered fora
medical condition or  mental illness available to each enrollee at the
contracted benefit level until the enrollee's plan renewal date, regardless
of whether the prescribed drug has been removed from the health benefit
plan's drug formulary. Provides that this section does not preclude a
physician or other health professional authorized to prescribe a drug from
prescribing another drug covered by the group health benefit plan that is
medically appropriate for the enrollee.  

Sec. 5. NONFORMULARY PRESCRIPTION DRUGS; ADVERSE DETERMINATION. Provides
that if a plan, through any of its employees or agents, refuses to provide
benefits to an enrollee for a drug that is not included in a drug formulary
and that the enrollee's physician has determined is medically necessary,
the refusal constitutes an adverse determination for purposes of Section 2,
Article 21.58A.  Authorizes an enrollee to appeal the adverse determination
under Sections 6 and 6a, Article 21.58A, of this code.  

Sec. 6. RULES. Authorizes the commissioner of insurance to adopt rules to
implement this article.  

SECTION 2. Effective date: September 1, 1999.
           Makes application of this Act prospective to January 1, 2000.

SECTION 3. Emergency clause.