76R11745 CLG-D                           
         By Maxey, Alvarado                                     H.B. No. 494
         Substitute the following for H.B. No. 494:
         By Maxey                                           C.S.H.B. No. 494
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to drug benefits available under certain health care
 1-3     programs administered by the Texas Department of Health.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter B, Chapter 32, Human Resources Code,
 1-6     is amended by adding Section 32.0311 to read as follows:
 1-7           Sec. 32.0311.  DRUG REIMBURSEMENT UNDER CERTAIN PROGRAMS.
 1-8     The department shall require a recipient of medical assistance to
 1-9     exhaust drug benefits available under the medical assistance
1-10     program before reimbursing the recipient, pharmacist, or other
1-11     health care provider for drugs purchased by or on behalf of the
1-12     recipient under the Kidney Health Care Program or the Chronically
1-13     Ill and Disabled Children's Services Program.
1-14           SECTION 2.  Subchapter B, Chapter 12, Health and Safety Code,
1-15     is amended by adding Section 12.0125 to read as follows:
1-16           Sec. 12.0125.  DRUG REBATES.  (a)  The department shall
1-17     develop a drug manufacturer rebate program for drugs purchased by
1-18     or on behalf of a client of the Kidney Health Care Program or the
1-19     Chronically Ill and Disabled Children's Services Program for which
1-20     rebates are not available under the Medicaid drug manufacturer
1-21     rebate program.
1-22           (b)  The department shall consult with drug manufacturers to
1-23     develop rebate amounts for the new rebate program.  The average
1-24     percentage savings from rebates in the new program may not be less
 2-1     than the average percentage savings from rebates in the Medicaid
 2-2     drug manufacturer rebate program.
 2-3           (c)  Amounts received by the department under the drug rebate
 2-4     program established under this section may be appropriated only for
 2-5     the Kidney Health Care Program or the Chronically Ill and Disabled
 2-6     Children's Services Program.
 2-7           SECTION 3.  (a)  To the extent authorized by federal law, the
 2-8     Texas Department of Health shall consolidate with the Medicaid
 2-9     Vendor Drug Program the drug benefits components of the Kidney
2-10     Health Care Program and the Chronically Ill and Disabled Children's
2-11     Services Program.
2-12           (b)  Except as provided by Subsection (c) of this section,
2-13     the department shall use the following functions and components of
2-14     the Medicaid Vendor Drug Program for the consolidated program:
2-15                 (1)  claims processing and program monitoring
2-16     procedures;
2-17                 (2)  prior authorization safeguards;
2-18                 (3)  dispute resolution procedures and approval
2-19     criteria;
2-20                 (4)  emergency access procedures;
2-21                 (5)  pharmacy network; and
2-22                 (6)  reimbursement rates.
2-23           (c)  The department shall develop reimbursement rates for
2-24     drugs purchased by or on behalf of a client of the Kidney Health
2-25     Care Program or the Chronically Ill and Disabled Children's
2-26     Services Program that are not included in the Medicaid Vendor Drug
2-27     Program's list of reimbursable drugs.
 3-1           (d)  The department shall obtain drug manufacturer rebates
 3-2     for drugs purchased by or on behalf of a client of the Kidney
 3-3     Health Care Program or the Chronically Ill and Disabled Children's
 3-4     Services Program under the Medicaid drug manufacturer rebate
 3-5     program and the drug rebate program developed under Section
 3-6     12.0125, Health and Safety Code, as added by this Act.
 3-7           (e)  The department shall update its computer system to
 3-8     facilitate the consolidation.
 3-9           SECTION 4.  (a)  Not later than September 1, 1999, the Texas
3-10     Department of Health shall complete the implementation of the drug
3-11     manufacturer rebate program required by Section 12.0125, Health and
3-12     Safety Code, as added by this Act.
3-13           (b)  Not later than March 1, 2001, the Texas Department of
3-14     Health shall complete the implementation of the consolidated
3-15     program required by Section 3 of this Act.
3-16           SECTION 5.  The importance of this legislation and the
3-17     crowded condition of the calendars in both houses create an
3-18     emergency and an imperative public necessity that the
3-19     constitutional rule requiring bills to be read on three several
3-20     days in each house be suspended, and this rule is hereby suspended,
3-21     and that this Act take effect and be in force from and after its
3-22     passage, and it is so enacted.