AN ACT
1-1 relating to the administration of pharmacy benefits under certain
1-2 health benefit plans.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1, Article 21.07-6, Insurance Code, is
1-5 amended by amending Subdivision (1) and adding Subdivision (9) to
1-6 read as follows:
1-7 (1) "Administrator" means a person who collects
1-8 premiums or contributions from or who adjusts or settles claims in
1-9 connection with life, health, and accident benefits, including
1-10 pharmacy benefits, or annuities for residents of this state but
1-11 does not include:
1-12 (A) an employer on behalf of its employees or
1-13 the employees of one or more subsidiaries or affiliated
1-14 corporations of the employer;
1-15 (B) a union on behalf of its members;
1-16 (C) an insurance company or a group hospital
1-17 service corporation subject to Chapter 20 of this code with respect
1-18 to a policy lawfully issued and delivered by it in and under the
1-19 law of a state in which the insurer was authorized to do an
1-20 insurance business;
1-21 (D) a health maintenance organization that is
1-22 authorized to operate in this state under the Texas Health
1-23 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
1-24 Code), with respect to any activity that is specifically regulated
2-1 under that Act;
2-2 (E) an agent licensed under Article 21.07 or
2-3 Chapter 213, Acts of the 54th Legislature, Regular Session, 1955
2-4 (Article 21.07-1, Vernon's Texas Insurance Code), who is acting
2-5 under appointment on behalf of an insurance company authorized to
2-6 do business in this state and within the customary scope and duties
2-7 of the insurance agent's authority as an agent and who receives
2-8 commissions as an agent;
2-9 (F) a creditor who is acting on behalf of its
2-10 debtors with respect to insurance that covers a debt between the
2-11 creditor and its debtor so long as only the functions of a group
2-12 policyholder or creditor are performed;
2-13 (G) a trust established in conformity with 29
2-14 U.S.C. Section 186 and the trustees and employees who are acting
2-15 under the trust;
2-16 (H) a trust that is exempt from taxation under
2-17 Section 501(a) of the Internal Revenue Code of 1986 and the
2-18 trustees and employees acting under the trust, or a custodian and
2-19 the custodian's agents and employees who are acting pursuant to a
2-20 custodian account that complies with Section 401(f), Internal
2-21 Revenue Code of 1986;
2-22 (I) a bank, credit union, savings and loan
2-23 association, or other financial institution that is subject to
2-24 supervision or examination under federal or state law by federal or
2-25 state regulatory authorities so long as that institution is
2-26 performing only those functions for which it holds a license under
3-1 federal or state law;
3-2 (J) a company that advances and collects a
3-3 premium or charge from its credit card holders on their
3-4 authorization, if the company does not adjust or settle claims and
3-5 acts only in the company's debtor-creditor relationship with its
3-6 credit card holders;
3-7 (K) a person who adjusts or settles claims in
3-8 the normal course of his practice or employment as a licensed
3-9 attorney and who does not collect any premium or charge in
3-10 connection with life, health, or accident benefits, including
3-11 pharmacy benefits, or annuities;
3-12 (L) an adjuster licensed by the commissioner, if
3-13 the adjuster is engaged in the performance of his powers and duties
3-14 as an adjuster within the scope of his license;
3-15 (M) a person who provides technical, advisory,
3-16 utilization review, precertification, or consulting services to an
3-17 insurer, plan, or plan sponsor and who does not make any management
3-18 or discretionary decisions on behalf of an insurer, plan, or plan
3-19 sponsor;
3-20 (N) an attorney in fact for a Lloyd's operating
3-21 under Chapter 18 of this code or a reciprocal or interinsurance
3-22 exchange operating under Chapter 19 of this code if acting in the
3-23 capacity of attorney in fact under the applicable chapter;
3-24 (O) a municipality that is self-insured or a
3-25 joint fund, risk management pool, or a self-insurance pool composed
3-26 of political subdivisions of this state that participate in a fund
4-1 or pool through interlocal agreements and any nonprofit
4-2 administrative agency or governing body or any nonprofit entity
4-3 that acts solely on behalf of a fund, pool, agency, or body or any
4-4 other funds, pools, agencies, or bodies that are established
4-5 pursuant to or for the purpose of implementing an interlocal
4-6 governmental agreement;
4-7 (P) a self-insured political subdivision;
4-8 (Q) a plan under which insurance benefits are
4-9 provided exclusively by a carrier licensed to do business in this
4-10 state and the administrator of the plan is either:
4-11 (i) a full-time employee of the plan's
4-12 organizing or sponsoring association, trust, or other entity; or
4-13 (ii) the trustee or trustees of the
4-14 organizing or sponsoring trust; or
4-15 (R) a parent of a wholly owned direct or
4-16 indirect subsidiary insurer licensed to do business in this state
4-17 or a wholly owned direct or indirect subsidiary insurer that is a
4-18 part of the parent's holding company system that, only on behalf of
4-19 itself or its affiliated insurers:
4-20 (i) collects premiums or contributions, if
4-21 the parent or subsidiary insurer prepares only billing statements,
4-22 places those statements in the United States mail, and causes all
4-23 collected premiums to be deposited directly in a depository account
4-24 of the particular affiliated insurer, and the services rendered by
4-25 the parent or subsidiary are performed under an agreement regulated
4-26 and approved under Article 21.49-1 of this code or a similar
5-1 statute of the domiciliary state if the parent or subsidiary is a
5-2 foreign insurer doing business in this state; or
5-3 (ii) furnishes proof-of-loss forms,
5-4 reviews claims, determines the amount of the liability for those
5-5 claims, and negotiates settlements, but pays claims only from the
5-6 funds of the particular subsidiary by checks or drafts of that
5-7 subsidiary and the services rendered by the parent or subsidiary
5-8 are performed under an agreement regulated and approved under
5-9 Article 21.49-1 of this code or a similar statute of the
5-10 domiciliary state if the parent or subsidiary is a foreign insurer
5-11 doing business in this state.
5-12 (9) "Pharmacy benefit manager" means a person, other
5-13 than a pharmacy or pharmacist, who acts as an administrator in
5-14 connection with pharmacy benefits.
5-15 SECTION 2. Article 21.07-6, Insurance Code, is amended by
5-16 adding Section 19A to read as follows:
5-17 Sec. 19A. IDENTIFICATION CARDS FOR CERTAIN PLANS.
5-18 (a) Except as provided by rules adopted by the commissioner, an
5-19 administrator for a plan that provides pharmacy benefits shall
5-20 issue an identification card to each individual covered by the
5-21 plan.
5-22 (b) The commissioner by rule shall adopt standard
5-23 information to be included on the identification card. At minimum,
5-24 the standard form identification card must include:
5-25 (1) the name or logo of the entity that is
5-26 administering the pharmacy benefits;
6-1 (2) the International Identification Number that is
6-2 assigned by the American National Standards Institute for the
6-3 entity that is administering the pharmacy benefits;
6-4 (3) the group number applicable for the individual;
6-5 (4) the effective date of the coverage evidenced by
6-6 the card;
6-7 (5) a telephone number to be used to contact an
6-8 appropriate person to obtain information relating to the pharmacy
6-9 benefits provided under the coverage; and
6-10 (6) copayment information for generic and brand-name
6-11 prescription drugs.
6-12 (c) An administrator for a plan that provides pharmacy
6-13 benefits shall issue to an individual an identification card not
6-14 later than the 30th day after the date the administrator receives
6-15 notice that the individual is eligible for the benefits.
6-16 SECTION 3. Article 21.07-6, Insurance Code, is amended by
6-17 adding Section 19B to read as follows:
6-18 Sec. 19B. DISCLOSURE OF CERTAIN PATIENT INFORMATION
6-19 PROHIBITED. (a) A pharmacy benefit manager may not sell a list of
6-20 patients that contains information through which the identity of
6-21 individual patients is disclosed.
6-22 (b) All data that identifies a patient maintained by the
6-23 pharmacy benefit manager shall be maintained in a confidential
6-24 manner that prevents disclosure to third parties, unless the
6-25 disclosure is otherwise authorized by law or by the patient.
6-26 (c) This section does not prohibit:
7-1 (1) general advertising about a specific
7-2 pharmaceutical product or service;
7-3 (2) a person from requesting and receiving information
7-4 regarding a specific pharmaceutical product or service; or
7-5 (3) a person from requesting and receiving information
7-6 regarding the person's own records or claims, or information
7-7 regarding the person's dependent's records or claims.
7-8 SECTION 4. Subchapter E, Chapter 21, Insurance Code, is
7-9 amended by adding Article 21.53L to read as follows:
7-10 Art. 21.53L. PHARMACY BENEFIT CARDS
7-11 Sec. 1. DEFINITION. In this article, "health benefit plan"
7-12 means a health benefit plan described by Section 2 of this article.
7-13 Sec. 2. SCOPE OF ARTICLE. (a) This article applies only to
7-14 a health benefit plan that provides benefits for medical or
7-15 surgical expenses incurred as a result of a health condition,
7-16 accident, or sickness, including an individual, group, blanket, or
7-17 franchise insurance policy or insurance agreement, a group hospital
7-18 service contract, or an individual or group evidence of coverage or
7-19 similar coverage document that is offered by:
7-20 (1) an insurance company;
7-21 (2) a group hospital service corporation operating
7-22 under Chapter 20 of this code;
7-23 (3) a fraternal benefit society operating under
7-24 Chapter 10 of this code;
7-25 (4) a stipulated premium insurance company operating
7-26 under Chapter 22 of this code;
8-1 (5) a reciprocal exchange operating under Chapter 19
8-2 of this code;
8-3 (6) a health maintenance organization operating under
8-4 the Texas Health Maintenance Organization Act (Chapter 20A,
8-5 Vernon's Texas Insurance Code);
8-6 (7) a multiple employer welfare arrangement that holds
8-7 a certificate of authority under Article 3.95-2 of this code; or
8-8 (8) an approved nonprofit health corporation that
8-9 holds a certificate of authority issued by the commissioner under
8-10 Article 21.52F of this code.
8-11 (b) This article does not apply to:
8-12 (1) a plan that provides coverage:
8-13 (A) only for a specified disease or other
8-14 limited benefit;
8-15 (B) only for accidental death or dismemberment;
8-16 (C) for wages or payments in lieu of wages for a
8-17 period during which an employee is absent from work because of
8-18 sickness or injury;
8-19 (D) as a supplement to liability insurance;
8-20 (E) for credit insurance;
8-21 (F) only for dental or vision care;
8-22 (G) only for hospital expenses; or
8-23 (H) only for indemnity for hospital confinement;
8-24 (2) a small employer health benefit plan written under
8-25 Chapter 26 of this code;
8-26 (3) a Medicare supplemental policy as defined by
9-1 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
9-2 (4) workers' compensation insurance coverage;
9-3 (5) medical payment insurance coverage issued as part
9-4 of a motor vehicle insurance policy; or
9-5 (6) a long-term care policy, including a nursing home
9-6 fixed indemnity policy, unless the commissioner determines that the
9-7 policy provides benefit coverage so comprehensive that the policy
9-8 is a health benefit plan as described by Subsection (a) of this
9-9 section.
9-10 Sec. 3. IDENTIFICATION CARD; PHARMACY BENEFITS. (a) A
9-11 health benefit plan that provides pharmacy benefits for enrollees
9-12 in the plan shall include on the identification card of each
9-13 enrollee:
9-14 (1) the name or logo of the entity that is
9-15 administering the pharmacy benefits, if different from the health
9-16 benefit plan;
9-17 (2) the group number applicable to the individual;
9-18 (3) the effective date of the coverage evidenced by
9-19 the card;
9-20 (4) a telephone number to be used to contact an
9-21 appropriate person to obtain information relating to the pharmacy
9-22 benefits provided under the coverage; and
9-23 (5) copayment information for generic and brand-name
9-24 prescription drugs.
9-25 (b) This section does not require a health benefit plan that
9-26 administers its own pharmacy benefits to issue an identification
10-1 card separate from any identification card issued to an enrollee to
10-2 evidence coverage under the health benefit plan, if the
10-3 identification card contains the elements required by Subsection
10-4 (a) of this section.
10-5 Sec. 4. RULES. The commissioner shall adopt rules as
10-6 necessary to implement this article.
10-7 SECTION 5. This Act takes effect September 1, 1999.
10-8 SECTION 6. (a) This Act applies only to a person acting as
10-9 an administrator, as that term is defined by Subdivision (1),
10-10 Section 1, Article 21.07-6, Insurance Code, as amended by this Act,
10-11 with respect to pharmacy benefits on or after January 1, 2000. A
10-12 person acting as an administrator with respect to pharmacy
10-13 benefits before January 1, 2000, is governed by the law as it
10-14 existed immediately before the effective date of this Act, and that
10-15 law is continued in effect for that purpose.
10-16 (b) An administrator, as that term is defined by Subdivision
10-17 (1), Section 1, Article 21.07-6, Insurance Code, as amended by this
10-18 Act, is not required to issue a new identification card to an
10-19 individual, as required by Section 19A, Article 21.07-6, Insurance
10-20 Code, as added by this Act, if the identification card held by the
10-21 individual on the effective date of this Act contains the elements
10-22 described by Subdivisions (2) through (5), Subsection (b), Section
10-23 19A, Article 21.07-6, Insurance Code, as added by this Act. A new
10-24 card complying with Section 19A, Article 21.07-6, Insurance Code,
10-25 as added by this Act, must be issued at the time the individual's
10-26 coverage is modified.
11-1 (c) A health benefit plan, as that term is defined by
11-2 Section 1, Article 21.53L, Insurance Code, as added by this Act, is
11-3 not required to issue a new identification card to an enrollee, as
11-4 required by Section 3, Article 21.53L, Insurance Code, as added by
11-5 this Act, if the identification card held by the enrollee on the
11-6 effective date of this Act contains the elements described by
11-7 Subdivisions (2), (3), and (4), Subsection (a), Section 3, Article
11-8 21.53L, Insurance Code, as added by this Act. A new card complying
11-9 with Article 21.53L, Insurance Code, as added by this Act, must be
11-10 issued at the time the enrollee's coverage is modified.
11-11 SECTION 7. The importance of this legislation and the
11-12 crowded condition of the calendars in both houses create an
11-13 emergency and an imperative public necessity that the
11-14 constitutional rule requiring bills to be read on three several
11-15 days in each house be suspended, and this rule is hereby suspended.
S.B. No. 1237
________________________________ ________________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1237 passed the Senate on
April 15, 1999, by the following vote: Yeas 30, Nays 0;
May 17, 1999, Senate refused to concur in House amendments and
requested appointment of Conference Committee; May 19, 1999, House
granted request of the Senate; May 30, 1999, Senate adopted
Conference Committee Report by a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1237 passed the House, with
amendments, on May 12, 1999, by a non-record vote; May 19, 1999,
House granted request of the Senate for appointment of Conference
Committee; May 29, 1999, House adopted Conference Committee Report
by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
________________________________
Date
________________________________
Governor