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.