By Farabee, Maxey, Edwards                            H.B. No. 2495
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the use of a prescription drug formulary by a group
 1-3     health benefit plan.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter E, Chapter 21, Insurance Code, is
 1-6     amended by adding Article 21.52J to read as follows:
 1-7           Art. 21.52J.  USE OF PRESCRIPTION DRUG FORMULARY BY GROUP
 1-8     HEALTH BENEFIT PLAN
 1-9           Sec. 1.  DEFINITIONS.  In this article:
1-10                 (1)  "Drug formulary" means a list of drugs for which a
1-11     health benefit plan provides coverage, approves payment, or
1-12     encourages or offers incentives for physicians to prescribe.
1-13                 (2)  "Enrollee" means an individual who is covered
1-14     under a group health benefit plan, including a covered dependent.
1-15                 (3)  "Group health benefit plan" means a plan described
1-16     by Section 2 of this article.
1-17                 (4)  "Physician" means a person licensed as a physician
1-18     by the Texas State Board of Medical Examiners.
1-19                 (5)  "Prescription drug" has the meaning assigned by
1-20     Section 5, Texas Pharmacy Act (Article 4542a-1, Vernon's Texas
1-21     Civil Statutes).
1-22           Sec. 2.  SCOPE OF ARTICLE.  (a)  This article applies only to
1-23     a group health benefit plan that provides benefits for medical or
1-24     surgical expenses incurred as a result of a health condition,
 2-1     accident, or sickness, including a group, blanket, or franchise
 2-2     insurance policy or insurance agreement, a group hospital service
 2-3     contract, or a group contract or similar coverage document that is
 2-4     offered by:
 2-5                 (1)  an insurance company;
 2-6                 (2)  a group hospital service corporation operating
 2-7     under Chapter 20 of this code;
 2-8                 (3)  a fraternal benefit society operating under
 2-9     Chapter 10 of this code;
2-10                 (4)  a stipulated premium insurance company operating
2-11     under Chapter 22 of this code;
2-12                 (5)  a reciprocal exchange operating under Chapter 19
2-13     of this code;
2-14                 (6)  a health maintenance organization operating under
2-15     the Texas Health Maintenance Organization Act (Chapter 20A,
2-16     Vernon's Texas Insurance Code);
2-17                 (7)  a multiple employer welfare arrangement that holds
2-18     a certificate of authority under Article 3.95-2 of this code; or
2-19                 (8)  an approved nonprofit health corporation  that
2-20     holds a certificate of authority issued by the commissioner under
2-21     Article 21.52F of this code.
2-22           (b)  This article does not apply to:
2-23                 (1)  a plan that provides coverage:
2-24                       (A)  only for a specified disease or other single
2-25     benefit;
2-26                       (B)  only for accidental death or dismemberment;
2-27                       (C)  for wages or payments in lieu of wages for a
 3-1     period during which an employee is absent from work because of
 3-2     sickness or injury;
 3-3                       (D)  as a supplement to liability insurance;
 3-4                       (E)  for credit insurance;
 3-5                       (F)  only for dental or vision care;
 3-6                       (G)  only for hospital expenses; or
 3-7                       (H)  only for indemnity for hospital confinement;
 3-8                 (2)  a small employer health benefit plan written under
 3-9     Chapter 26 of this code;
3-10                 (3)  a Medicare supplemental policy as defined by
3-11     Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss),
3-12     as amended;
3-13                 (4)  workers' compensation insurance coverage;
3-14                 (5)  medical payment insurance coverage issued as part
3-15     of a motor vehicle insurance policy; or
3-16                 (6)  a long-term care policy, including a nursing home
3-17     fixed indemnity policy, unless the commissioner determines that the
3-18     policy provides benefit coverage so comprehensive that the policy
3-19     is a health benefit plan as described by Subsection (a) of this
3-20     section.
3-21           Sec. 3.  DISCLOSURE OF DRUG FORMULARY REQUIRED.  A group
3-22     health benefit plan that covers prescription drugs and that uses
3-23     one or more drug formularies to specify which prescription drugs
3-24     the plan will cover shall:
3-25                 (1)  provide to each enrollee in plain language in the
3-26     coverage documentation provided to the enrollee:
3-27                       (A)  notice that the plan uses one or more drug
 4-1     formularies;
 4-2                       (B)  an explanation of what a drug formulary is;
 4-3                       (C)  a statement regarding the method the plan
 4-4     uses to determine which prescription drugs are included in or
 4-5     excluded from a drug formulary;
 4-6                       (D)  a statement of how often the plan reviews
 4-7     the contents of each drug formulary; and
 4-8                       (E)  notice that the enrollee may contact the
 4-9     plan to find out if a specific drug is on a particular drug
4-10     formulary;
4-11                 (2)  disclose to any individual on request, not later
4-12     than the third business day after the date of the request, whether
4-13     a specific drug is on a particular drug formulary; and
4-14                 (3)  notify an enrollee or any other individual who
4-15     requests information about a drug formulary under this section that
4-16     the presence of a drug on a drug formulary does not guarantee that
4-17     an enrollee's health care provider will prescribe that drug for a
4-18     particular medical condition or mental illness.
4-19           Sec. 4.  CHANGES TO PRESCRIPTION DRUG FORMULARY; CONTINUATION
4-20     OF BENEFITS REQUIRED.  (a)  A group health benefit plan that offers
4-21     prescription drug benefits shall make a prescription drug that was
4-22     approved or covered for a medical condition or mental illness
4-23     available to each enrollee at the contracted benefit level until
4-24     the enrollee's plan renewal date, regardless of whether the
4-25     prescribed drug has been removed from the health benefit plan's
4-26     drug formulary.
4-27           (b)  This section does not preclude a physician or other
 5-1     health professional authorized to prescribe a drug from prescribing
 5-2     another drug covered by the group health benefit plan that is
 5-3     medically appropriate for the enrollee.
 5-4           Sec. 5.  NONFORMULARY PRESCRIPTION DRUGS; ADVERSE
 5-5     DETERMINATION.  If a group health benefit plan, through any of its
 5-6     employees or agents, refuses to provide benefits to an enrollee for
 5-7     a drug that is not included in a drug formulary and that the
 5-8     enrollee's physician has determined is medically necessary, the
 5-9     refusal constitutes an adverse determination for purposes of
5-10     Section 2, Article 21.58A, of this code.  An enrollee may appeal
5-11     the adverse determination under Sections 6 and 6A, Article 21.58A,
5-12     of this code.
5-13           Sec. 6.  RULES.  The commissioner may adopt rules to
5-14     implement this article.
5-15           SECTION 2.  This Act takes effect September 1, 1999, and
5-16     applies only to a group health benefit plan that is delivered,
5-17     issued for delivery, or renewed on or after January 1, 2000.  A
5-18     group health benefit plan delivered, issued for delivery, or
5-19     renewed before January 1, 2000, is governed by the law as it
5-20     existed immediately before the effective date of this Act, and that
5-21     law is continued in effect for that purpose.
5-22           SECTION 3.  The importance of this legislation and the
5-23     crowded condition of the calendars in both houses create an
5-24     emergency and an imperative public necessity that the
5-25     constitutional rule requiring bills to be read on three several
5-26     days in each house be suspended, and this rule is hereby suspended.