By Nelson                                              S.B. No. 782
         76R4031 PB-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to disclosure requirements for certain information held by
 1-3     pharmacists, pharmacies, and pharmacy benefit managers.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 5, Texas Pharmacy Act (Article 4542a-1,
 1-6     Vernon's Texas Civil Statutes), is amended to read as follows:
 1-7           Sec. 5.  DEFINITIONS.  In this Act, unless the context of its
 1-8     use clearly indicates otherwise:
 1-9                 (1)  "A.C.P.E." means the American Council on
1-10     Pharmaceutical Education.
1-11                 (2)  "Administer" means the direct application of a
1-12     prescription drug by injection, inhalation, ingestion, or any other
1-13     means to the body of a patient by:
1-14                       (A)  a practitioner, an authorized agent under
1-15     his supervision, or other person authorized by law; or
1-16                       (B)  the patient at the direction of a
1-17     practitioner.
1-18                 (3)  "Administrative Procedure Act" means Chapter 2001,
1-19     Government Code.
1-20                 (4)  "Board" means the Texas State Board of Pharmacy.
1-21                 (5)  "Class A pharmacy license" or "community pharmacy
1-22     license" means a license issued to a pharmacy dispensing drugs or
1-23     devices to the general public pursuant to a prescription drug
1-24     order.
 2-1                 (6)  "Class B pharmacy license" or "nuclear pharmacy
 2-2     license" means a license issued to a pharmacy dispensing or
 2-3     providing radioactive drugs or devices for administration to an
 2-4     ultimate user.
 2-5                 (7)  "Class C pharmacy license" or "institutional
 2-6     pharmacy license" means a license issued to a pharmacy located in a
 2-7     hospital or other in-patient facility that is licensed under
 2-8     Chapter 241 or 577, Health and Safety Code, [or Chapter 6, Texas
 2-9     Mental Health Code  (Article 5547-1 et seq., Vernon's Texas Civil
2-10     Statutes),] to a hospice in-patient facility that is licensed under
2-11     Chapter 142, Health and Safety Code, or to a pharmacy located in a
2-12     hospital maintained or operated by the state.
2-13                 (8)  "Class D pharmacy license" or "clinic pharmacy
2-14     license" means a license issued to a pharmacy dispensing a limited
2-15     type of drugs or devices pursuant to a prescription drug order.
2-16                 (9)  "Class E pharmacy license" or "nonresident
2-17     pharmacy license" means a license issued under this Act to a
2-18     pharmacy located in a state of the United States other than this
2-19     state whose primary business is to dispense a prescription drug or
2-20     device under a prescription drug order and to deliver the drug or
2-21     device to a patient, including a patient in this state, by the
2-22     United States mail, a common carrier, or a delivery service.
2-23                 (10)  "College of pharmacy" means a school, university,
2-24     or college of pharmacy that satisfies the accreditation standards
2-25     of A.C.P.E. as adopted by the board; or that has degree
2-26     requirements which meet the standards of accreditation set by the
2-27     board.
 3-1                 (11)  "Compounding" means the preparation, mixing,
 3-2     assembling, packaging, or labeling of a drug or device:
 3-3                       (A)  as the result of a practitioner's
 3-4     prescription drug order or initiative based on the
 3-5     practitioner-patient-pharmacist relationship in the course of
 3-6     professional practice;
 3-7                       (B)  in anticipation of prescription drug orders
 3-8     based on routine, regularly observed prescribing patterns; or
 3-9                       (C)  for the purpose of or as an incident to
3-10     research, teaching, or chemical analysis and not for sale or
3-11     dispensing.
3-12                 (12)  "Confidential record" means any health-related
3-13     record that contains information that identifies an individual and
3-14     that is maintained by a pharmacy or pharmacist such as a patient
3-15     medication record, prescription drug order, or medication order.
3-16                 (13)  "Controlled substance" means a drug, immediate
3-17     precursor, or other substance listed in Schedules I-V or Penalty
3-18     Groups 1-4 of Chapter 481, Health and Safety Code, or a drug,
3-19     immediate precursor, or other substance included in Schedule I, II,
3-20     III, IV, or V of the Federal Comprehensive Drug Abuse Prevention
3-21     and Control Act of 1970 (21 U.S.C. Section 801 et seq.).
3-22                 (14)  "Controlled Substances Act" means Chapter 481,
3-23     Health and Safety Code, or the Federal Comprehensive Drug Abuse
3-24     Prevention and Control Act of 1970 (21 U.S.C. Section 801 et seq.).
3-25                 (15)  "Dangerous drug" means any drug or device that is
3-26     not included in Penalty Groups 1-4 of the Controlled Substances Act
3-27     and that is unsafe for self-medication or any drug or device that
 4-1     bears or is required to bear the legend:
 4-2                       (A)  "Caution:  federal law prohibits dispensing
 4-3     without prescription"; or
 4-4                       (B)  "Caution:  federal law restricts this drug
 4-5     to use by or on the order of a licensed veterinarian."
 4-6                 (16)  "Dangerous Drug Act" means Chapter 483, Health
 4-7     and Safety Code.
 4-8                 (17)  "Deliver" or "delivery" means the actual,
 4-9     constructive, or attempted transfer of a prescription drug or
4-10     device or controlled substance from one person to another, whether
4-11     or not for a consideration.
4-12                 (18)  "Designated agent" means:
4-13                       (A)  a licensed nurse, physician assistant,
4-14     pharmacist, or other individual designated by a practitioner, and
4-15     for whom the practitioner assumes legal responsibility, who
4-16     communicates prescription drug orders to a pharmacist;
4-17                       (B)  a licensed nurse, physician assistant, or
4-18     pharmacist employed in a health care facility to whom the
4-19     practitioner communicates a prescription drug order; or
4-20                       (C)  a registered nurse or physician assistant
4-21     authorized by a practitioner to carry out a prescription drug order
4-22     for dangerous drugs under Subdivision (5) or (6), Subsection (d),
4-23     Section 3.06, Medical Practice Act (Article 4495b, Vernon's Texas
4-24     Civil Statutes).
4-25                 (19)  "Device" means an instrument, apparatus,
4-26     implement, machine, contrivance, implant, in vitro reagent, or
4-27     other similar or related article, including any component part or
 5-1     accessory, that is required under federal or state law to be
 5-2     ordered or prescribed by a practitioner.
 5-3                 (20)  "Dispense" means preparing, packaging,
 5-4     compounding, or labeling for delivery a prescription drug or device
 5-5     in the course of professional practice to an ultimate user or his
 5-6     agent by or pursuant to the lawful order of a practitioner.
 5-7                 (21)  "Distribute" means the delivery of a prescription
 5-8     drug or device other than by administering or dispensing.
 5-9                 (22)  "Drug" means:
5-10                       (A)  a substance recognized as drugs in the
5-11     current official United States Pharmacopoeia, official National
5-12     Formulary, official Homeopathic Pharmacopoeia, or other drug
5-13     compendium or any supplement to any of them;
5-14                       (B)  a substance intended for use in the
5-15     diagnosis, cure, mitigation, treatment, or prevention of disease in
5-16     man or other animals;
5-17                       (C)  a substance, other than food, intended to
5-18     affect the structure or any function of the body of man or other
5-19     animals;
5-20                       (D)  a substance intended for use as a component
5-21     of any articles specified in Paragraph (A), (B), or (C) of this
5-22     subdivision;
5-23                       (E)  a dangerous drug; or
5-24                       (F)  a controlled substance.
5-25                 (23)  "Drug regimen review" includes the following
5-26     activities:
5-27                       (A)  evaluation of prescription drug or
 6-1     medication orders and patient medication records for:
 6-2                             (i)  known allergies;
 6-3                             (ii)  rational therapy-contraindications;
 6-4                             (iii)  reasonable dose and route of
 6-5     administration; and
 6-6                             (iv)  reasonable directions for use;
 6-7                       (B)  evaluation of prescription drug or
 6-8     medication orders and patient medication records for duplication of
 6-9     therapy;
6-10                       (C)  evaluation of prescription drug or
6-11     medication orders and patient medication records for:
6-12                             (i)  drug-drug interactions;
6-13                             (ii)  drug-food interactions;
6-14                             (iii)  drug-disease interactions;
6-15                             (iv)  adverse drug reactions; and
6-16                       (D)  evaluation of prescription drug and
6-17     medication orders and patient medication records for proper
6-18     utilization, including overutilization or underutilization.
6-19                 (24)  "Internship" means a practical experience program
6-20     that is approved by the board.
6-21                 (25)  "Label" means written, printed, or graphic matter
6-22     on the immediate container of a drug or device.
6-23                 (26)  "Labeling" means the process of affixing a label
6-24     including all information required by federal and state law or
6-25     regulation to any drug or device container.  The term does not
6-26     include the labeling by a manufacturer, packer, or distributor of a
6-27     nonprescription drug or commercially packaged prescription drug or
 7-1     device, or unit dose packaging.
 7-2                 (27)  "Manufacturing" means the production,
 7-3     preparation, propagation, conversion, or processing of a drug or
 7-4     device, either directly or indirectly, by extraction from
 7-5     substances of natural origin or independently by means of chemical
 7-6     or biological synthesis and includes any packaging or repackaging
 7-7     of the substances or labeling or relabeling of the container and
 7-8     the promotion and marketing of such drugs or devices.
 7-9     Manufacturing also includes the preparation and promotion of
7-10     commercially available products from bulk compounds for resale by
7-11     pharmacies, practitioners, or other persons but does not include
7-12     compounding.
7-13                 (28)  "Medication order" means an order from a
7-14     practitioner or a practitioner's designated agent for
7-15     administration of a drug or device.
7-16                 (29)  "Nonprescription drug" means a nonnarcotic drug
7-17     or device that may be sold without a prescription and that is
7-18     labeled and packaged in compliance with applicable state or federal
7-19     law.
7-20                 (30)  "Patient counseling" means the communication by
7-21     the pharmacist of information, as specified in the rules of the
7-22     board, to the patient or caregiver, in order to improve therapy by
7-23     ensuring proper use of drugs and devices.
7-24                 (31)  "Person" means an individual, corporation,
7-25     government or governmental subdivision or agency, business trust,
7-26     estate, trust, partnership, association, or any other legal entity.
7-27                 (32)  "Pharmaceutical care" is the provision of drug
 8-1     therapy and other pharmaceutical services defined in the rules of
 8-2     the board and intended to assist in the cure or prevention of a
 8-3     disease, elimination or reduction of a patient's symptoms, or
 8-4     arresting or slowing of a disease process.
 8-5                 (33)  "Pharmacist" means a person licensed by the board
 8-6     to practice pharmacy.
 8-7                 (34)  "Pharmacist-in-charge" means the pharmacist
 8-8     designated on a pharmacy license as the pharmacist who has the
 8-9     authority or responsibility for a pharmacy's compliance with laws
8-10     and rules pertaining to the practice of pharmacy.
8-11                 (35)  "Pharmacist-intern" means an undergraduate
8-12     student enrolled in the professional sequence of a college of
8-13     pharmacy approved by the board and participating in a school-based,
8-14     board-approved internship program or a graduate of a college of
8-15     pharmacy who is participating in a board-approved internship.
8-16                 (36)  "Pharmacy" means a facility at which prescription
8-17     drug or medication orders are received, processed, or dispensed
8-18     under this Act, the Dangerous Drug Act, or the Controlled
8-19     Substances Act.  The term does not include a narcotic drug
8-20     treatment program that is regulated by Chapter 466, Health and
8-21     Safety Code.
8-22                 (37)  "Pharmacy benefit manager" has the meaning
8-23     assigned by Section 1, Article 21.07-6, Insurance Code.
8-24                 (38)  "Pharmacy technician" means an individual
8-25     employed by a pharmacy whose responsibility is to provide technical
8-26     services that do not require professional judgment regarding the
8-27     preparation and distribution of drugs and who works under the
 9-1     direct supervision of and is responsible to a pharmacist.
 9-2                 (39) [(38)]  "Practice of pharmacy" means:
 9-3                       (A)  provision of those acts or services
 9-4     necessary to provide pharmaceutical care;
 9-5                       (B)  interpretation and evaluation of
 9-6     prescription drug orders or medication orders;
 9-7                       (C)  participation in drug and device selection
 9-8     as authorized by law, drug administration, drug regimen review, or
 9-9     drug or drug-related research;
9-10                       (D)  provision of patient counseling;
9-11                       (E)  responsibility for:
9-12                             (i)  dispensing of prescription drug orders
9-13     or distribution of medication orders;
9-14                             (ii)  compounding and labeling of drugs and
9-15     devices, except labeling by a manufacturer, repackager, or
9-16     distributor of nonprescription drugs and commercially packaged
9-17     prescription drugs and devices;
9-18                             (iii)  proper and safe storage of drugs and
9-19     devices; or
9-20                             (iv)  maintenance of proper records for
9-21     drugs and devices;
9-22                       (F)  performance of a specific act of drug
9-23     therapy management for a patient delegated to a pharmacist by a
9-24     written protocol from a physician licensed in this state in
9-25     compliance with the Medical Practice Act (Article 4495b, Vernon's
9-26     Texas Civil Statutes); or
9-27                       (G)  administration of immunizations and
 10-1    vaccinations under a physician's written protocol.
 10-2                (40) [(39)]  "Practitioner" means:
 10-3                      (A)  a physician, dentist, podiatrist,
 10-4    veterinarian, or other person licensed or registered to prescribe,
 10-5    distribute, administer, or dispense a prescription drug or device
 10-6    in the course of professional practice in this state;
 10-7                      (B)  a person licensed by another state in a
 10-8    health field in which, under Texas law, licensees in this state may
 10-9    legally prescribe dangerous drugs or a person practicing in another
10-10    state and licensed by another state as a physician, dentist,
10-11    veterinarian, or podiatrist, having a current Federal Drug
10-12    Enforcement Administration registration number, and who may legally
10-13    prescribe Schedule II, III, IV, or V controlled substances in such
10-14    other state; or
10-15                      (C)  a person licensed in the Dominion of Canada
10-16    or the United Mexican States in a health field in which, under the
10-17    laws of this state, a licensee may legally prescribe dangerous
10-18    drugs.  "Practitioner" does not include a person licensed under
10-19    this Act.
10-20                (41) [(40)]  "Preceptor" means a pharmacist licensed in
10-21    this state to practice pharmacy who meets the preceptor
10-22    requirements specified by rule and who is certified by the board to
10-23    supervise and be responsible for the activities and functions of a
10-24    pharmacist-intern in the internship program.
10-25                (42) [(41)]  "Prescription drug" means:
10-26                      (A)  a substance for which federal or state law
10-27    requires a prescription before it may be legally dispensed to the
 11-1    public;
 11-2                      (B)  a drug or device that under federal law is
 11-3    required, prior to being dispensed or delivered, to be labeled with
 11-4    either of the following statements:
 11-5                            (i)  "Caution:  federal law prohibits
 11-6    dispensing without prescription"; or
 11-7                            (ii)  "Caution:  federal law restricts this
 11-8    drug to use by or on the order of a licensed veterinarian"; or
 11-9                      (C)  a drug or device that is required by any
11-10    applicable federal or state law or regulation to be dispensed on
11-11    prescription only or is restricted to use by a practitioner only.
11-12                (43) [(42)]  "Prescription drug order" means:
11-13                      (A)  an order from a practitioner or a
11-14    practitioner's designated agent to a pharmacist for a drug or
11-15    device to be dispensed; or
11-16                      (B)  an order pursuant to Subdivision (5) or (6),
11-17    Subsection (d), Section 3.06, Medical Practice Act (Article 4495b,
11-18    Vernon's Texas Civil Statutes).
11-19                (44) [(43)]  "Prospective drug use review" means a
11-20    review of the patient's drug therapy and prescription drug order or
11-21    medication order, as defined in the rules of the board, prior to
11-22    dispensing or distributing the drug.
11-23                (45) [(44)]  "Provide" means to supply one or more unit
11-24    doses of a nonprescription drug or dangerous drug to a patient.
11-25                (46) [(45)]  "Radioactive drug" means a drug that
11-26    exhibits spontaneous disintegration of unstable nuclei with the
11-27    emission of nuclear particles or photons, including any
 12-1    nonradioactive reagent kit or nuclide generator that is intended to
 12-2    be used in the preparation of any such substance.
 12-3                (47) [(46)]  "Substitution" means the dispensing of a
 12-4    drug or a brand of drug other than that which is ordered or
 12-5    prescribed.
 12-6                (48) [(47)]  "Texas trade association" means a
 12-7    nonprofit, cooperative association of business or professional
 12-8    competitors in this state whose purpose is to assist its members,
 12-9    industry, or profession and whose members have joined voluntarily.
12-10                (49) [(48)]  "Ultimate user" means a person who has
12-11    obtained and possesses a prescription drug or device for the
12-12    person's own use or for the use of a member of the person's
12-13    household or for administering to an animal owned by the person or
12-14    by a member of the person's household.
12-15                (50) [(49)]  "Unit dose packaging" means the ordered
12-16    amount of drug in a dosage form ready for administration to a
12-17    particular patient, by the prescribed route at the prescribed time,
12-18    and properly labeled with name, strength, and expiration date of
12-19    the drug.
12-20                (51) [(50)]  "Written protocol" means a physician's
12-21    order, standing medical order, standing delegation order, or other
12-22    order or protocol as defined by rule of the Texas State Board of
12-23    Medical Examiners under the Medical Practice Act (Article 4495b,
12-24    Vernon's Texas Civil Statutes).
12-25          SECTION 2.  The Texas Pharmacy Act (Article 4542a-1, Vernon's
12-26    Texas Civil Statutes) is amended by adding Sections 42-44 to read
12-27    as follows:
 13-1          Sec. 42.  DISCLOSURE OF FINANCIAL INCENTIVES REQUIRED.  Each
 13-2    pharmacist, pharmacy, and pharmacy benefit manager shall disclose
 13-3    to the board in the manner provided by rule by the board any
 13-4    financial incentive or other compensation paid or offered to the
 13-5    pharmacist, pharmacy, and pharmacy benefit manager by a
 13-6    pharmaceutical company.
 13-7          Sec. 43.  LIMITATIONS ON ACCESS TO CERTAIN PATIENT HEALTH
 13-8    INFORMATION.  (a)  In this section, "patient health information"
 13-9    means any confidential record and any other information compiled
13-10    during the course of patient treatment that could reasonably be
13-11    used to determine the identity of a specific patient,  including:
13-12                (1)  a medical record;
13-13                (2)  genetic test information;
13-14                (3)  clinical research records;
13-15                (4)  mental health therapy notes; and
13-16                (5)  prescription records.
13-17          (b)  Each pharmacy and pharmacist shall ensure that patient
13-18    health information is maintained in a secure environment and that
13-19    access to that information is restricted to persons with legitimate
13-20    reasons for that access.  The board by rule shall adopt guidelines
13-21    regarding access to patient health information regarding
13-22    pharmaceutical records by persons regulated under this Act and by
13-23    pharmacy benefit managers.
13-24          (c)  This section does not supersede or otherwise affect
13-25    Section 40C of this Act or any requirement regarding
13-26    confidentiality of personal information regarding a patient that is
13-27    established under another law of this state or a federal law.
 14-1          Sec. 44.  PROHIBITED ACTS; EXCEPTIONS.  (a)  A person subject
 14-2    to regulation under this Act may not sell, share, or use, for
 14-3    marketing purposes, a list of patients that contains information
 14-4    through which the identity of individual patients is disclosed.
 14-5          (b)  Subsection (a)  of this section specifically prohibits a
 14-6    person subject to regulation under this Act from selling, sharing,
 14-7    or using a list of patients who have certain diagnoses or use
 14-8    certain types of drugs in order to solicit an individual patient to
 14-9    use another type or brand of drugs.
14-10          (c)  A person subject to regulation under this Act may not
14-11    waive a  prohibition created under this section by requesting or
14-12    requiring a patient to sign a consent form authorizing the
14-13    disclosure.
14-14          (d)  This section does not prohibit a release of information
14-15    authorized under Section 40C of this Act.
14-16          (e)  This section does not prohibit:
14-17                (1)  general advertising about a specific
14-18    pharmaceutical product or service;
14-19                (2)  a person from requesting and receiving information
14-20    regarding a specific pharmaceutical product or service;
14-21                (3)  a person from requesting and receiving
14-22    information regarding the person's own records or claims, or those
14-23    regarding the person's dependent; or
14-24                (4)  a pharmacist from providing information regarding
14-25    a specific pharmaceutical product or service to an individual
14-26    patient of that pharmacist in the course of providing patient
14-27    counseling.
 15-1          (f)  In addition to any other penalty provided by law, a
 15-2    person regulated under this Act who violates this section commits
 15-3    an act that constitutes a ground for appropriate disciplinary
 15-4    action by the board under this Act.
 15-5          SECTION 3.  Section 1, Article 21.07-6, Insurance Code, is
 15-6    amended by amending Subdivision (1) and by adding Subdivision (9)
 15-7    to read as follows:
 15-8                (1)  "Administrator" means a person who collects
 15-9    premiums or contributions from or who adjusts or settles claims in
15-10    connection with life, health, and accident benefits, including
15-11    pharmacy benefits, or annuities for residents of this state but
15-12    does not include:
15-13                      (A)  an employer on behalf of its employees or
15-14    the employees of one or more subsidiaries or affiliated
15-15    corporations of the employer;
15-16                      (B)  a union on behalf of its members;
15-17                      (C)  an insurance company or a group hospital
15-18    service corporation subject to Chapter 20 of this code with respect
15-19    to a policy lawfully issued and delivered by it in and under the
15-20    law of a state in which the insurer was authorized to do an
15-21    insurance business;
15-22                      (D)  a health maintenance organization that is
15-23    authorized to operate in this state under the Texas Health
15-24    Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
15-25    Code), with respect to any activity that is specifically regulated
15-26    under that Act;
15-27                      (E)  an agent licensed under Article 21.07 or
 16-1    Chapter 213, Acts of the 54th Legislature, Regular Session, 1955
 16-2    (Article 21.07-1, Vernon's Texas Insurance Code), who is acting
 16-3    under appointment on behalf of an insurance company authorized to
 16-4    do business in this state and within the customary scope and duties
 16-5    of the insurance agent's authority as an agent and who receives
 16-6    commissions as an agent;
 16-7                      (F)  a creditor who is acting on behalf of its
 16-8    debtors with respect to insurance that covers a debt between the
 16-9    creditor and its debtor so long as only the functions of a group
16-10    policyholder or creditor are performed;
16-11                      (G)  a trust established in conformity with 29
16-12    U.S.C. Section 186 and the trustees and employees who are acting
16-13    under the trust;
16-14                      (H)  a trust that is exempt from taxation under
16-15    Section 501(a) of the Internal Revenue Code of 1986 and the
16-16    trustees and employees acting under the trust, or a custodian and
16-17    the custodian's agents and employees who are acting pursuant to a
16-18    custodian account that complies with Section 401(f), Internal
16-19    Revenue Code of 1986;
16-20                      (I)  a bank, credit union, savings and loan
16-21    association, or other financial institution that is subject to
16-22    supervision or examination under federal or state law by federal or
16-23    state regulatory authorities so long as that institution is
16-24    performing only those functions for which it holds a license under
16-25    federal or state law;
16-26                      (J)  a company that advances and collects a
16-27    premium or charge from its credit card holders on their
 17-1    authorization, if the company does not adjust or settle claims and
 17-2    acts only in the company's debtor-creditor relationship with its
 17-3    credit card holders;
 17-4                      (K)  a person who adjusts or settles claims in
 17-5    the normal course of his practice or employment as a licensed
 17-6    attorney and who does not collect any premium or charge in
 17-7    connection with life, health, or accident benefits, including
 17-8    pharmacy benefits, or annuities;
 17-9                      (L)  an adjuster licensed by the commissioner, if
17-10    the adjuster is engaged in the performance of his powers and duties
17-11    as an adjuster within the scope of his license;
17-12                      (M)  a person who provides technical, advisory,
17-13    utilization review, precertification, or consulting services to an
17-14    insurer, plan, or plan sponsor and who does not make any management
17-15    or discretionary decisions on behalf of an insurer, plan, or plan
17-16    sponsor;
17-17                      (N)  an attorney in fact for a Lloyd's operating
17-18    under Chapter 18 of this code or a reciprocal or interinsurance
17-19    exchange operating under Chapter 19 of this code if acting in the
17-20    capacity of attorney in fact under the applicable chapter;
17-21                      (O)  a municipality that is self-insured or a
17-22    joint fund, risk management pool, or a self-insurance pool composed
17-23    of political subdivisions of this state that participate in a fund
17-24    or pool through interlocal agreements and any nonprofit
17-25    administrative agency or governing body or any nonprofit entity
17-26    that acts solely on behalf of a fund, pool, agency, or body or any
17-27    other funds, pools, agencies, or bodies that are established
 18-1    pursuant to or for the purpose of implementing an interlocal
 18-2    governmental agreement;
 18-3                      (P)  a self-insured political subdivision;
 18-4                      (Q)  a plan under which insurance benefits are
 18-5    provided exclusively by a carrier licensed to do business in this
 18-6    state and the administrator of the plan is either:
 18-7                            (i)  a full-time employee of the plan's
 18-8    organizing or sponsoring association, trust, or other entity; or
 18-9                            (ii)  the trustee or trustees of the
18-10    organizing or sponsoring trust; or
18-11                      (R)  a parent of a wholly owned direct or
18-12    indirect subsidiary insurer licensed to do business in this state
18-13    or a wholly owned direct or indirect subsidiary insurer that is a
18-14    part of the parent's holding company system that, only on behalf of
18-15    itself or its affiliated insurers:
18-16                            (i)  collects premiums or contributions, if
18-17    the parent or subsidiary insurer prepares only billing statements,
18-18    places those statements in the United States mail, and causes all
18-19    collected premiums to be deposited directly in a depository account
18-20    of the particular affiliated insurer, and the services rendered by
18-21    the parent or subsidiary are performed under an agreement regulated
18-22    and approved under Article 21.49-1 of this code or a similar
18-23    statute of the domiciliary state if the parent or subsidiary is a
18-24    foreign insurer doing business in this state; or
18-25                            (ii)  furnishes proof-of-loss forms,
18-26    reviews claims, determines the amount of the liability for those
18-27    claims, and negotiates settlements, but pays claims only from the
 19-1    funds of the particular subsidiary by checks or drafts of that
 19-2    subsidiary and the services rendered by the parent or subsidiary
 19-3    are performed under an agreement regulated and approved under
 19-4    Article 21.49-1 of this code or a similar statute of the
 19-5    domiciliary state if the parent or subsidiary is a foreign insurer
 19-6    doing business in this state.
 19-7                (9)  "Pharmacy benefit manager" means a person who
 19-8    administers benefits provided under a health benefit plan that
 19-9    relate to pharmaceutical services provided by a pharmacist or a
19-10    pharmacy, including:
19-11                      (A)  performing a utilization review regarding
19-12    prescription practices and dispensing of controlled substances;
19-13                      (B)  determining the extent of prescription
19-14    coverage under a health benefit plan; and
19-15                      (C)  determining which drugs are included in a
19-16    formulary used by a health benefit plan.
19-17          SECTION 4.  Article 21.07-6, Insurance Code, is amended by
19-18    adding Section 25 to read as follows:
19-19          Sec. 25.  APPLICATION TO PHARMACY BENEFIT MANAGERS;
19-20    DISCLOSURE OF CERTAIN PATIENT INFORMATION PROHIBITED.  (a)  A
19-21    person may not operate as a pharmacy benefit manager in this state
19-22    unless the person holds a certificate of authority issued under
19-23    this article to act as an administrator.
19-24          (b)  An administrator who operates as a pharmacy benefit
19-25    manager may not disclose to an employer contracting with the
19-26    administrator under an employer plan information in the possession
19-27    of the administrator or to which the administrator has access that
 20-1    was compiled during the course of treatment of a patient who is an
 20-2    employee or dependent of an employee and that could reasonably be
 20-3    used to determine the identity of the patient, including:
 20-4                (1)  a medical record;
 20-5                (2)  genetic test information;
 20-6                (3)  clinical research records;
 20-7                (4)  mental health therapy notes; and
 20-8                (5)  prescription records.
 20-9          SECTION 5.  This Act takes effect September 1, 1999.
20-10          SECTION 6.  The importance of this legislation and the
20-11    crowded condition of the calendars in both houses create an
20-12    emergency and an imperative public necessity that the
20-13    constitutional rule requiring bills to be read on three several
20-14    days in each house be suspended, and this rule is hereby suspended.