SRC-PNG S.B. 1030 76(R)BILL ANALYSIS


Senate Research CenterS.B. 1030
By: Madla
Economic Development
6/21/1999
Enrolled


DIGEST 

Currently, the Texas Department of Insurance rules require insurers to give
enrollees 90 days notice of any drug formulary changes, allowing insurers
to change drug formularies within the enrollees' contract period.  This
bill permits enrollees to continue to use prescribed formulary drugs until
their insurance contract ends, even if a prescribed drug has been removed
from the formulary, and if a physician prescribes a nonformulary drug, the
enrollee could appeal, using the independent review process, to have the
prescribed drug covered. 

PURPOSE

As enrolled, C.S.S.B. 1030 regulates the use of a prescription drug
formulary by a group health benefit plan. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the insurance commissioner in SECTION 1
(Section 6, Article 21.52J, Chapter 21E, Insurance Code) of this bill. 

SECTION BY SECTION ANALYSIS

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

Art.  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 certain group health benefit plans
to which this article applies. Provides that this article does not apply to
certain health benefit plans and insurance. 

Sec.  3.  DISCLOSURE OF DRUG FORMULARY REQUIRED.  Requires a group health
benefit plan that covers prescription drugs and that uses one or more drug
formularies to specify which prescription drugs the plan will cover to
provide to each enrollee notice that the plan uses drug formularies and
certain information about the drug formulary.  

Sec.  4.  CHANGES TO PRESCRIPTION DRUG FORMULARY; CONTINUATION OF BENEFITS
REQUIRED. Requires a group health benefit plan that offers prescription
drug benefits to make an approved or covered prescription drug 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 group health benefit plan, through any of its employees or
agents, refuses  to provide benefits to an enrollee for a nonformulary drug
and that the enrollee's physician has determined is medically necessary,
the refusal shall constitute an adverse determination within the meaning of
Section 2, Article 21.58A of this code.  Authorizes an enrollee to appeal
the adverse determination under Sections 6 and 6A, Article 21.58A of this
code. 

Sec.  6.  RULES.  Authorizes the insurance commissioner 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.