By: Madla S.B. No. 1030 A BILL TO BE ENTITLED AN ACT 1-1 relating to the use of a prescription drug formulary by a group 1-2 health benefit plan. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is 1-5 amended by adding Article 21.52J to read as follows: 1-6 Art. 21.52J. USE OF PRESCRIPTION DRUG FORMULARY BY GROUP 1-7 HEALTH BENEFIT PLAN 1-8 Sec. 1. DEFINITIONS. In this article: 1-9 (1) "Drug formulary" means a list of drugs for which a 1-10 health benefit plan provides coverage, approves payment, or 1-11 encourages or offers incentives for physicians to prescribe. 1-12 (2) "Enrollee" means an individual who is covered 1-13 under a group health benefit plan, including a covered dependent. 1-14 (3) "Group health benefit plan" means a plan described 1-15 by Section 2 of this article. 1-16 (4) "Physician" means a person licensed as a physician 1-17 by the Texas State Board of Medical Examiners. 1-18 (5) "Prescription drug" has the meaning assigned by 1-19 Section 5, Texas Pharmacy Act (Article 4542a-1, Vernon's Texas 1-20 Civil Statutes). 1-21 Sec. 2. SCOPE OF ARTICLE. (a) This article applies only to 1-22 a group health benefit plan that provides benefits for medical or 1-23 surgical expenses incurred as a result of a health condition, 1-24 accident, or sickness, including a group, blanket, or franchise 2-1 insurance policy or insurance agreement, a group hospital service 2-2 contract, or a group contract or similar coverage document that is 2-3 offered by: 2-4 (1) an insurance company; 2-5 (2) a group hospital service corporation operating 2-6 under Chapter 20 of this code; 2-7 (3) a fraternal benefit society operating under 2-8 Chapter 10 of this code; 2-9 (4) a stipulated premium insurance company operating 2-10 under Chapter 22 of this code; 2-11 (5) a reciprocal exchange operating under Chapter 19 2-12 of this code; 2-13 (6) a health maintenance organization operating under 2-14 the Texas Health Maintenance Organization Act (Chapter 20A, 2-15 Vernon's Texas Insurance Code); 2-16 (7) a multiple employer welfare arrangement that holds 2-17 a certificate of authority under Article 3.95-2 of this code; or 2-18 (8) an approved nonprofit health corporation that 2-19 holds a certificate of authority issued by the commissioner under 2-20 Article 21.52F of this code. 2-21 (b) This article does not apply to: 2-22 (1) a plan that provides coverage: 2-23 (A) only for a specified disease or other single 2-24 benefit; 2-25 (B) only for accidental death or dismemberment; 2-26 (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: 4-1 (A) notice that the plan uses one or more drug 4-2 formularies; 4-3 (B) an explanation of what a drug formulary is; 4-4 (C) a statement regarding the method the plan 4-5 uses to determine which prescription drugs are included in or 4-6 excluded from a drug formulary; 4-7 (D) a statement of how often the plan reviews 4-8 the contents of each drug formulary; and 4-9 (E) notice that the enrollee may contact the 4-10 plan to find out if a specific drug is on a particular drug 4-11 formulary; 4-12 (2) disclose to any individual on request, not later 4-13 than the third business day after the date of the request, whether 4-14 a specific drug is on a particular drug formulary; and 4-15 (3) notify an enrollee or any other individual who 4-16 requests information about a drug formulary under this section that 4-17 the presence of a drug on a drug formulary does not guarantee that 4-18 an enrollee's health care provider will prescribe that drug for a 4-19 particular medical condition or mental illness. 4-20 Sec. 4. CHANGES TO PRESCRIPTION DRUG FORMULARY; CONTINUATION 4-21 OF BENEFITS REQUIRED. (a) A group health benefit plan that offers 4-22 prescription drug benefits shall make a prescription drug that was 4-23 approved or covered for a medical condition or mental illness 4-24 available to each enrollee at the contracted benefit level until 4-25 the enrollee's plan renewal date, regardless of whether the 4-26 prescribed drug has been removed from the health benefit plan's 5-1 drug formulary. 5-2 (b) This section does not preclude a physician or other 5-3 health professional authorized to prescribe a drug from prescribing 5-4 another drug covered by the group health benefit plan that is 5-5 medically appropriate for the enrollee. 5-6 Sec. 5. NONFORMULARY PRESCRIPTION DRUGS; ADVERSE 5-7 DETERMINATION. If a group health benefit plan, through any of its 5-8 employees or agents, refuses to provide benefits to an enrollee for 5-9 a drug that is not included in a drug formulary and that the 5-10 enrollee's physician has determined is medically necessary, the 5-11 refusal constitutes an adverse determination for purposes of 5-12 Section 2, Article 21.58A of this code. An enrollee may appeal the 5-13 adverse determination under Sections 6 and 6A, Article 21.58A of 5-14 this code. 5-15 Sec. 6. RULES. The commissioner may adopt rules to 5-16 implement this article. 5-17 SECTION 2. This Act takes effect September 1, 1999, and 5-18 applies only to a group health benefit plan that is delivered, 5-19 issued for delivery, or renewed on or after January 1, 2000. A 5-20 group health benefit plan delivered, issued for delivery, or 5-21 renewed before January 1, 2000, is governed by the law as it 5-22 existed immediately before the effective date of this Act, and that 5-23 law is continued in effect for that purpose. 5-24 SECTION 3. The importance of this legislation and the 5-25 crowded condition of the calendars in both houses create an 5-26 emergency and an imperative public necessity that the 6-1 constitutional rule requiring bills to be read on three several 6-2 days in each house be suspended, and this rule is hereby suspended.