By: Madla S.B. No. 1030
99S0663/1
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the prescription drug benefits available to enrollees
1-2 of certain health benefit plans.
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 21.53L to read as follows:
1-6 Art. 21.53L. PRESCRIPTION DRUG BENEFITS
1-7 Sec. 1. DEFINITIONS. In this article:
1-8 (1) "Drug formulary" means a list of drugs for which a
1-9 health benefit plan provides coverage, approves payment, or
1-10 encourages or offers incentives for physicians to prescribe.
1-11 (2) "Enrollee" means an individual who is covered
1-12 under a health benefit plan, including covered dependents.
1-13 (3) "Health benefit plan" means a plan described by
1-14 Section 2 of this article.
1-15 (4) "Physician" means a person licensed as a physician
1-16 by the Texas State Board of Medical Examiners.
1-17 (5) "Prescription drug" has the meaning assigned by
1-18 Section 5(41), Texas Pharmacy Act (Article 4542a-1, Vernon's Texas
1-19 Civil Statutes).
1-20 Sec. 2. SCOPE OF ARTICLE. (a) This article applies to a
1-21 health benefit plan that:
1-22 (1) provides benefits for medical or surgical expenses
1-23 incurred as a result of a health condition, accident, or sickness,
1-24 including an individual, group, blanket, or franchise insurance
2-1 policy or insurance agreement, a group hospital service contract,
2-2 or an individual or group evidence of coverage that is offered by:
2-3 (A) an insurance company;
2-4 (B) a group hospital service corporation
2-5 operating under Chapter 20 of this code;
2-6 (C) a fraternal benefit society operating under
2-7 Chapter 10 of this code;
2-8 (D) a stipulated premium insurance company
2-9 operating under Chapter 22 of this code;
2-10 (E) a health maintenance organization operating
2-11 under the Texas Health Maintenance Organization Act (Chapter 20A,
2-12 Vernon's Texas Insurance Code);
2-13 (F) a health benefits plan operating under the
2-14 Texas Employees Uniform Group Insurance Benefits Act (Article
2-15 3.50-2, Vernon's Texas Insurance Code);
2-16 (G) a multiple employer welfare arrangement as
2-17 defined by Section 3, Employee Retirement Income Security Act of
2-18 1974 (29 U.S.C. Section 1002); or
2-19 (H) another analogous benefit arrangement; or
2-20 (2) is offered by an approved nonprofit health
2-21 corporation that is certified under Section 5.01(a), Medical
2-22 Practice Act (Article 4495b, Vernon's Texas Civil Statutes), and
2-23 that holds a certificate of authority issued by the commissioner
2-24 under Article 21.52F of this code; or
2-25 (3) is offered by any other entity not licensed under
2-26 this code or another insurance law of this state that contracts
3-1 directly for health care services on a risk-sharing basis,
3-2 including an entity that contracts for health care services on a
3-3 capitation basis.
3-4 (b) Notwithstanding Section 172.014, Local Government Code,
3-5 or any other law, this article applies to health and accident
3-6 coverage provided by a risk pool created under Chapter 172, Local
3-7 Government Code.
3-8 (c) This article does not apply to:
3-9 (1) a plan that provides coverage as a supplement to
3-10 liability insurance;
3-11 (2) medicare supplement insurance as defined under
3-12 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
3-13 (3) workers' compensation insurance coverage;
3-14 (4) medical payment insurance issued as part of a
3-15 motor vehicle insurance policy; or
3-16 (5) a plan written under Chapter 26 of this code.
3-17 Sec. 3. CONTINUED ACCESS TO FORMULARY DRUGS. (a) A health
3-18 benefit plan that offers prescription drug benefits shall make an
3-19 approved or covered prescription drug available to each enrollee at
3-20 the contracted benefit level until the enrollee's contract with the
3-21 health benefit plan expires, regardless of whether the prescribed
3-22 drug has been removed from the health benefit plan's drug
3-23 formulary.
3-24 (b) Nothing in this section shall preclude a physician from
3-25 prescribing another drug covered by the health benefit plan that is
3-26 medically appropriate for the enrollee.
4-1 Sec. 4. NOTICE. (a) A health benefit plan that provides
4-2 prescription drug benefits shall disclose to enrollees in the
4-3 evidence of coverage and by separate written notice that the health
4-4 benefit plan does or does not use a drug formulary. If the health
4-5 benefit plan uses a drug formulary, the notice shall include an
4-6 explanation of what a drug formulary is, how the health benefit
4-7 plan determines which prescription drugs are included on or
4-8 excluded from the formulary, and how often the plan reviews the
4-9 composition of the formulary.
4-10 (b) A health benefit plan that provides prescription drug
4-11 benefits and maintains one or more drug formularies shall provide
4-12 to enrollees and prospective enrollees, upon request, a copy of the
4-13 most current list of prescription drugs on the formulary, by major
4-14 therapeutic category, with an indication of whether any drugs on
4-15 the list are preferred over other listed drugs. If the request is
4-16 from an enrollee, the health benefit plan shall also provide any
4-17 prior drug formularies that were in effect at any time during the
4-18 term of the enrollee's contract with the health benefit plan.
4-19 (c) If the health benefit plan maintains more than one
4-20 formulary, the plan shall send a copy of each drug formulary to the
4-21 requester.
4-22 Sec. 5. NONFORMULARY PRESCRIPTION DRUGS. If a health
4-23 benefit plan, through any of its employees or agents, refuses to
4-24 provide a nonformulary drug which an enrollee's physician has
4-25 determined is medically necessary, such denial shall constitute an
4-26 "adverse determination" within the meaning of Section 2(3), Article
5-1 21.58A of this code. An enrollee may appeal the adverse
5-2 determination under Sections 6 and 6A, Article 21.58A of this code.
5-3 SECTION 2. This Act takes effect September 1, 1999, and
5-4 applies to a health benefit plan, as described by Section 2,
5-5 Article 21.53L, Insurance Code, as added by this Act, that is
5-6 delivered, issued for delivery, or renewed on or after January 1,
5-7 2000. A health benefit plan that is delivered, issued for
5-8 delivery, or renewed before January 1, 2000, is governed by the law
5-9 as it existed immediately before the effective date of this Act,
5-10 and that law is continued in effect for that purpose.
5-11 SECTION 3. The importance of this legislation and the
5-12 crowded condition of the calendars in both houses create an
5-13 emergency and an imperative public necessity that the
5-14 constitutional rule requiring bills to be read on three several
5-15 days in each house be suspended, and this rule is hereby suspended.