1-1 By: Farabee, Maxey, Edwards (Senate Sponsor - Madla) H.B. No. 2495 1-2 (In the Senate - Received from the House May 11, 1999; 1-3 May 12, 1999, read first time and referred to Committee on Economic 1-4 Development; May 14, 1999, reported favorably by the following 1-5 vote: Yeas 5, Nays 0; May 14, 1999, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to the use of a prescription drug formulary by a group 1-9 health benefit plan. 1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-11 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is 1-12 amended by adding Article 21.52J to read as follows: 1-13 Art. 21.52J. USE OF PRESCRIPTION DRUG FORMULARY BY GROUP 1-14 HEALTH BENEFIT PLAN 1-15 Sec. 1. DEFINITIONS. In this article: 1-16 (1) "Drug formulary" means a list of drugs for which a 1-17 health benefit plan provides coverage, approves payment, or 1-18 encourages or offers incentives for physicians to prescribe. 1-19 (2) "Enrollee" means an individual who is covered 1-20 under a group health benefit plan, including a covered dependent. 1-21 (3) "Group health benefit plan" means a plan described 1-22 by Section 2 of this article. 1-23 (4) "Physician" means a person licensed as a physician 1-24 by the Texas State Board of Medical Examiners. 1-25 (5) "Prescription drug" has the meaning assigned by 1-26 Section 5, Texas Pharmacy Act (Article 4542a-1, Vernon's Texas 1-27 Civil Statutes). 1-28 Sec. 2. SCOPE OF ARTICLE. (a) This article applies only to 1-29 a group health benefit plan that provides benefits for medical or 1-30 surgical expenses incurred as a result of a health condition, 1-31 accident, or sickness, including a group, blanket, or franchise 1-32 insurance policy or insurance agreement, a group hospital service 1-33 contract, or a group contract or similar coverage document that is 1-34 offered by: 1-35 (1) an insurance company; 1-36 (2) a group hospital service corporation operating 1-37 under Chapter 20 of this code; 1-38 (3) a fraternal benefit society operating under 1-39 Chapter 10 of this code; 1-40 (4) a stipulated premium insurance company operating 1-41 under Chapter 22 of this code; 1-42 (5) a reciprocal exchange operating under Chapter 19 1-43 of this code; 1-44 (6) a health maintenance organization operating under 1-45 the Texas Health Maintenance Organization Act (Chapter 20A, 1-46 Vernon's Texas Insurance Code); 1-47 (7) a multiple employer welfare arrangement that holds 1-48 a certificate of authority under Article 3.95-2 of this code; or 1-49 (8) an approved nonprofit health corporation that 1-50 holds a certificate of authority issued by the commissioner under 1-51 Article 21.52F of this code. 1-52 (b) This article does not apply to: 1-53 (1) a plan that provides coverage: 1-54 (A) only for a specified disease or other single 1-55 benefit; 1-56 (B) only for accidental death or dismemberment; 1-57 (C) for wages or payments in lieu of wages for a 1-58 period during which an employee is absent from work because of 1-59 sickness or injury; 1-60 (D) as a supplement to liability insurance; 1-61 (E) for credit insurance; 1-62 (F) only for dental or vision care; 1-63 (G) only for hospital expenses; or 1-64 (H) only for indemnity for hospital confinement; 2-1 (2) a small employer health benefit plan written under 2-2 Chapter 26 of this code; 2-3 (3) a Medicare supplemental policy as defined by 2-4 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss), 2-5 as amended; 2-6 (4) workers' compensation insurance coverage; 2-7 (5) medical payment insurance coverage issued as part 2-8 of a motor vehicle insurance policy; or 2-9 (6) a long-term care policy, including a nursing home 2-10 fixed indemnity policy, unless the commissioner determines that the 2-11 policy provides benefit coverage so comprehensive that the policy 2-12 is a health benefit plan as described by Subsection (a) of this 2-13 section. 2-14 Sec. 3. DISCLOSURE OF DRUG FORMULARY REQUIRED. A group 2-15 health benefit plan that covers prescription drugs and that uses 2-16 one or more drug formularies to specify which prescription drugs 2-17 the plan will cover shall: 2-18 (1) provide to each enrollee in plain language in the 2-19 coverage documentation provided to the enrollee: 2-20 (A) notice that the plan uses one or more drug 2-21 formularies; 2-22 (B) an explanation of what a drug formulary is; 2-23 (C) a statement regarding the method the plan 2-24 uses to determine which prescription drugs are included in or 2-25 excluded from a drug formulary; 2-26 (D) a statement of how often the plan reviews 2-27 the contents of each drug formulary; and 2-28 (E) notice that the enrollee may contact the 2-29 plan to find out if a specific drug is on a particular drug 2-30 formulary; 2-31 (2) disclose to any individual on request, not later 2-32 than the third business day after the date of the request, whether 2-33 a specific drug is on a particular drug formulary; and 2-34 (3) notify an enrollee or any other individual who 2-35 requests information about a drug formulary under this section that 2-36 the presence of a drug on a drug formulary does not guarantee that 2-37 an enrollee's health care provider will prescribe that drug for a 2-38 particular medical condition or mental illness. 2-39 Sec. 4. CHANGES TO PRESCRIPTION DRUG FORMULARY; CONTINUATION 2-40 OF BENEFITS REQUIRED. (a) A group health benefit plan that offers 2-41 prescription drug benefits shall make a prescription drug that was 2-42 approved or covered for a medical condition or mental illness 2-43 available to each enrollee at the contracted benefit level until 2-44 the enrollee's plan renewal date, regardless of whether the 2-45 prescribed drug has been removed from the health benefit plan's 2-46 drug formulary. 2-47 (b) This section does not preclude a physician or other 2-48 health professional authorized to prescribe a drug from prescribing 2-49 another drug covered by the group health benefit plan that is 2-50 medically appropriate for the enrollee. 2-51 Sec. 5. NONFORMULARY PRESCRIPTION DRUGS; ADVERSE 2-52 DETERMINATION. If a group health benefit plan, through any of its 2-53 employees or agents, refuses to provide benefits to an enrollee for 2-54 a drug that is not included in a drug formulary and that the 2-55 enrollee's physician has determined is medically necessary, the 2-56 refusal constitutes an adverse determination for purposes of 2-57 Section 2, Article 21.58A, of this code. An enrollee may appeal 2-58 the adverse determination under Sections 6 and 6A, Article 21.58A, 2-59 of this code. 2-60 Sec. 6. RULES. The commissioner may adopt rules to 2-61 implement this article. 2-62 SECTION 2. This Act takes effect September 1, 1999, and 2-63 applies only to a group health benefit plan that is delivered, 2-64 issued for delivery, or renewed on or after January 1, 2000. A 2-65 group health benefit plan delivered, issued for delivery, or 2-66 renewed before January 1, 2000, is governed by the law as it 2-67 existed immediately before the effective date of this Act, and that 2-68 law is continued in effect for that purpose. 2-69 SECTION 3. The importance of this legislation and the 3-1 crowded condition of the calendars in both houses create an 3-2 emergency and an imperative public necessity that the 3-3 constitutional rule requiring bills to be read on three several 3-4 days in each house be suspended, and this rule is hereby suspended. 3-5 * * * * *