HBA-ATS S.B. 782 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 782 By: Nelson Insurance 4/26/1999 Engrossed BACKGROUND AND PURPOSE Currently, Texas law does not prevent certain persons or entities from selling, sharing, or using specific patient information for marketing, or solicitations based on their particular medical diagnosis or prescription drug use. Inadequate regulation permits entities that manage a company's pharmacy to share data with their employers. For example, the activities of these pharmacy benefit managers lie beyond the scope of both the Texas Department of Insurance and the Texas Board of Pharmacy. Furthermore, the state does not have the ability to monitor the financial arrangements between pharmacies, pharmaceutical companies, and pharmacy benefit managers to ensure that these relationships do not influence medical decisions that could interfere with the provider-patient relationship. S.B. 782 prohibits a person from transferring patient-identifying prescription information to another person without the written consent of that patient. However, not all transfers of patient-identifying prescription information without written consent are prohibited. For example, communications between insurers and practitioners to establish prescription drug usage by a patient as necessary to avoid adverse drug interactions or other adverse health conditions, information material regarding a prescription drug or device obtained on request from the manufacturer or a vendor of the prescription drug or device, information necessary to adjudicate or process payment claims for health care services, if the recipient makes no other use or further disclosure of the information, and information used in clinical research monitored by an institutional review board, do not constitute prohibited transactions. This bill creates a misdemeanor offense punishable by a fine not to exceed $10,000 for a person who knowingly violates the prohibition against a person transferring patient-identifying prescription information to another person without the written consent of that patient. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 1 (Section 4, Article 4590k, V.T.C.S.) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 71, V.T.C.S., by adding Article 4590k, as follows: ARTICLE 4590k. DISCLOSURE REQUIREMENTS FOR CERTAIN PATIENT HEALTH INFORMATION Sec. 1. DEFINITIONS. Defines "device," "insurer," "patient prescription information," "person," "practitioner," and "prescription drug." Sec. 2. TRANSFER WITHOUT CONSENT PROHIBITED. Prohibits a person from transferring patient-identifying prescription information to another person without the written consent of that patient. Provides that this written consent must be made on a separate consent form designed solely for the purpose of obtaining this consent. Prohibits the inclusion of the separate consent form in any other form that the patient may be required to sign to obtain the prescription. Prohibits a person subject to this article from waiving a prohibition created under this section by requesting or requiring a patient to sign a consent form authorizing the disclosure. Defines "consent form." Sec. 3. EXCEPTIONS. Sets forth exclusions from this article: _direct transmission of the order by a practitioner to a licensed pharmacist; _communications among licensed practitioners, licensed pharmacists, and other health care professionals who are currently treating the patient who received the prescription drug or device or requested by the treating person to provide a professional consultation; _communications between insurers and practitioners to establish prescription drug usage by a patient as necessary to avoid adverse drug interactions or other adverse health conditions; _information material regarding a prescription drug or device obtained on request from the manufacturer or a vendor of the prescription drug or device; _information necessary to effect a recall of a defective prescription drug or device or otherwise necessary to protect the health and welfare of a specific person or the public generally; _information the release or transfer of which is subject to other state or federal laws or rules; _information necessary to adjudicate or process payment claims for health care services, if the recipient makes no other use or further disclosure of the information; _information voluntarily disclosed by a patient to a person outside the patient-provider relationship; _information used in clinical research monitored by an institutional review board; _information that does not identify a patient by name, or that is encoded in a manner under which information identifying a specific patient by name or address is not generally obtainable, and that is used for epidemiological studies, research, statistical analysis, medical outcomes, or pharmacoeconomic research; _information transferred to a person solely to provide encoding or encryption of the information by that person; _information transferred in connection with the sale of a business or medical practice to a successor in interest; or _information transferred to an agent, employee, or contractor as necessary to conduct a disclosure of information authorized under this article or another law regulating the provision of health care or the processing of a claim related to that care by an insurer or other person regulated by the Texas Department of Insurance (department). Sets forth that this article does not prohibit: _general advertising about a specific pharmaceutical or other health care product or service; _a person from requesting and receiving information regarding a specific pharmaceutical or other health care product or service; _a person from requesting and receiving information regarding the records or claims of that person or that person's dependent; or _a practitioner from providing information regarding a specific pharmaceutical or other health care product or service to a patient of that practitioner in the course of providing patient counseling. Sec. 4. INFORMATION PROVIDED BY INSURERS; REGULATION BY DEPARTMENT OF INSURANCE. Authorizes an insurer or other person regulated by the department who provides a health benefit plan (plan) to policyholders or enrollees, to provide information to its policyholders or enrollees regarding health care programs relating to specific diseases or conditions that the insurer offers through the plan if the information is provided to all of its policyholders or enrollees. Provides that this article does not affect the authority of an insurer to notify a policyholder or enrollee about a change in the plan, including a change in benefits or the adoption of or a change in a formulary used by the insurer. Authorizes the commissioner of insurance to adopt rules as necessary to regulate the activities of insurers under this section. Sec. 5. GROUNDS FOR DISCIPLINARY ACTION. Provides that a violation of this article by a practitioner, insurer, or other person subject to this article who holds a professional license or other authority to engage in an activity affected by this article that is issued by an agency of this state, constitutes a ground for appropriate disciplinary action by that state agency. Sec. 6. PENALTY. Creates a misdemeanor offense punishable by a fine not to exceed $10,000 for a person who knowingly violates Section 2 of this article. SECTION 2.Effective date: September 1, 1999. SECTION 3.Emergency clause.