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.