1-1     By:  Maxey, Alvarado (Senate Sponsor - Moncrief)       H.B. No. 494
 1-2           (In the Senate - Received from the House May 5, 1999;
 1-3     May 6, 1999, read first time and referred to Committee on Human
 1-4     Services; May 13, 1999, reported favorably by the following vote:
 1-5     Yeas 5, Nays 0; May 13, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to drug benefits available under certain health care
 1-9     programs administered by the Texas Department of Health.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Subchapter B, Chapter 32, Human Resources Code,
1-12     is amended by adding Section 32.0311 to read as follows:
1-13           Sec. 32.0311.  DRUG REIMBURSEMENT UNDER CERTAIN PROGRAMS.
1-14     The department shall require a recipient of medical assistance to
1-15     exhaust drug benefits available under the medical assistance
1-16     program before reimbursing the recipient, pharmacist, or other
1-17     health care provider for drugs purchased by or on behalf of the
1-18     recipient under the Kidney Health Care Program or the Chronically
1-19     Ill and Disabled Children's Services Program.
1-20           SECTION 2.  Subchapter B, Chapter 12, Health and Safety Code,
1-21     is amended by adding Section 12.0125 to read as follows:
1-22           Sec. 12.0125.  DRUG REBATES.  (a)  The department shall
1-23     develop a drug manufacturer rebate program for drugs purchased by
1-24     or on behalf of a client of the Kidney Health Care Program or the
1-25     Chronically Ill and Disabled Children's Services Program for which
1-26     rebates are not available under the Medicaid drug manufacturer
1-27     rebate program.
1-28           (b)  The department shall consult with drug manufacturers to
1-29     develop rebate amounts for the new rebate program.  The average
1-30     percentage savings from rebates in the new program may not be less
1-31     than the average percentage savings from rebates in the Medicaid
1-32     drug manufacturer rebate program.
1-33           (c)  Amounts received by the department under the drug rebate
1-34     program established under this section may be appropriated only for
1-35     the Kidney Health Care Program or the Chronically Ill and Disabled
1-36     Children's Services Program.
1-37           SECTION 3.  (a)  To the extent authorized by federal law, the
1-38     Texas Department of Health shall consolidate with the Medicaid
1-39     Vendor Drug Program the drug benefits components of the Kidney
1-40     Health Care Program and the Chronically Ill and Disabled Children's
1-41     Services Program.
1-42           (b)  Except as provided by Subsection (c) of this section,
1-43     the department shall use the following functions and components of
1-44     the Medicaid Vendor Drug Program for the consolidated program:
1-45                 (1)  claims processing and program monitoring
1-46     procedures;
1-47                 (2)  prior authorization safeguards;
1-48                 (3)  dispute resolution procedures and approval
1-49     criteria;
1-50                 (4)  emergency access procedures;
1-51                 (5)  pharmacy network; and
1-52                 (6)  reimbursement rates.
1-53           (c)  The department shall develop reimbursement rates for
1-54     drugs purchased by or on behalf of a client of the Kidney Health
1-55     Care Program or the Chronically Ill and Disabled Children's
1-56     Services Program that are not included in the Medicaid Vendor Drug
1-57     Program's list of reimbursable drugs.
1-58           (d)  The department shall obtain drug manufacturer rebates
1-59     for drugs purchased by or on behalf of a client of the Kidney
1-60     Health Care Program or the Chronically Ill and Disabled Children's
1-61     Services Program under the Medicaid drug manufacturer rebate
1-62     program and the drug rebate program developed under Section
1-63     12.0125, Health and Safety Code, as added by this Act.
1-64           (e)  The department shall update its computer system to
 2-1     facilitate the consolidation.
 2-2           SECTION 4.  (a)  Not later than September 1, 1999, the Texas
 2-3     Department of Health shall complete the implementation of the drug
 2-4     manufacturer rebate program required by Section 12.0125, Health and
 2-5     Safety Code, as added by this Act.
 2-6           (b)  Not later than March 1, 2001, the Texas Department of
 2-7     Health shall complete the implementation of the consolidated
 2-8     program required by Section 3 of this Act.
 2-9           SECTION 5.  The importance of this legislation and the
2-10     crowded condition of the calendars in both houses create an
2-11     emergency and an imperative public necessity that the
2-12     constitutional rule requiring bills to be read on three several
2-13     days in each house be suspended, and this rule is hereby suspended,
2-14     and that this Act take effect and be in force from and after its
2-15     passage, and it is so enacted.
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