HBA-DMH H.B. 1967 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1967 By: Najera Public Health 3/7/2001 Introduced BACKGROUND AND PURPOSE Under current law, an individual that is at least 65 years of age or suffers from a serious health care condition or disability is allowed three prescriptions under the medicaid program. In many cases this is not a sufficient number of medication for proper treatment of a serious illness. Those over 65 are significantly more likely to be regular users of prescription drugs and to have numerous prescriptions in their medicine cabinets. At the same time, they are less likely to have prescription drug coverage and more likely to have a problem paying for prescription drugs. A lack of funds for prescriptions may lead to individuals neglecting their health. Several states have recognized this problem and implemented prescription drug programs to assist the elderly and the seriously ill. House Bill 1967 creates a prescription drug plan for Texas residents. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Health and Human Services Commission in SECTION 1 (Sections 65.051, 65.052, 65.053, 65.058, 65.101, 65.102, and 65.151, Health and Safety Code); to the Texas Department of Health in SECTION 1 (Section 65.051, Health and Safety Code); to the Texas Department of Human Services SECTION 1 (Section 65.051, Health and Safety Code); and to the Texas Department of Insurance SECTION 1 (Section 65.054, Health and Safety Code) of this bill. ANALYSIS House Bill 1967 amends the Health and Safety Code to create a state prescription drug plan (plan) to provide prescription drug benefits to state residents who are at least 65 years of age or have a serious health care condition (Sec. 65.001). The bill requires the Health and Human Services Commission (HHSC) to develop and implement a plan program, not later than September 1, 2002, to obtain coverage for prescription drug benefits program for eligible individuals and sets forth duties of HHSC (Sec. 65.051 and SECTION 3). The bill sets forth provisions relating to plan eligibility and requires HHSC by rule to establish eligibility standards for Texas residents who have a specified condition, disability, or disease (Sec. 65.101). The bill requires HHSC, in consultation with the commissioner of insurance to establish by rule the benefits provided under the plan. The bill requires benefits provided under the plan to be coordinated with other benefits for which an enrollee is eligible so that the plan benefits supplement, but do not duplicate the other benefits. The bill authorizes the plan to use a prescription drug formulary (Sec. 65.151). The bill sets forth the duties of the Texas Department of Health (TDH), the Texas Department of Human Services (DHS), and the Texas Department of Insurance (TDI) in developing or implementing the plan under the direction of or at the request of HHSC (Secs. 65.052, 65.053, and 65.054). In administering the program, the bill authorizes HHSC to contract with a third party administrator to provide enrollment and related plan services that would otherwise be performed by TDH or DHS. The bill sets forth provisions for contracting with a third party administrator and for the procurement process associated with such contracts (Sec. 61.151). The bill sets forth requirements for selecting a plan provider and requires HHSC, or TDH at the direction of and in consultation with HHSC, to select the plan providers under the program through a competitive procurement process (Sec. 65.155). The bill requires HHSC to conduct a review of each entity that enters into a contract to implement the plan or that is selected to be a provider to ensure that the entity is available, prepared, and able to fulfill specified obligations (Sec. 65.051). The bill requires HHSC to appoint regional advisory committees to provide specified recommendations and sets forth requirements for the composition of such committees (Sec. 65.057). The bill requires HHSC to provide plan coverage at reduced premium rates to individuals who satisfy specified eligibility requirements. The bill provides that HHSC shall require a plan enrollee to pay a copayment or similar charge for prescription drugs provided under the plan and the plan premium. The bill requires reduced premium rates adopted to ensure that individuals with higher levels of income are required to pay progressively higher percentages of the cost of the plan. The bill requires HHSC to establish by rule eligibility standards for individuals to receive coverage under the plan for a reduced premium. In adopting such rules, the bill requires HHSC to consult with the regional advisory committees. Considering availability of appropriated funds, the bill provides that the reduced premium eligibility standards must consider the family income of the individual and be developed to provide the broadest possible availability of reduced premium coverage under the program. The bill prohibits the consideration of a homestead in which the individual resides, and one motor vehicle owned by the family. The bill requires HHSC to specify the manner in which the premium is paid, and authorizes HHSC to require that the premium be paid to DHS, TDH, or a plan provider. The bill authorizes the commissioner of health and human services (commissioner) to establish classes of enrollees and charge different amounts to enrollees in different classes for specified purposes. Not later than August 31 of each even-numbered year, the bill requires the commissioner to obtain an actuarial review of the costs of providing plan benefits to enrollees and requires modifications based on the actuarial review (Sec. 65.153). The bill sets forth provisions relating to waiting periods for the plan and preexisting conditions (Sec. 65.154). The bill requires HHSC to conduct a community outreach and education campaign (campaign) to provide information relating to the availability of plan coverage. The campaign must include a toll-free number through which individuals may obtain information about the program. The bill requires HHSC to contract with community-based and interfaith entities to implement the campaign, and to promote and encourage voluntary efforts to implement the campaign. The bill requires HHSC to direct that TDH or DHS coordinate the campaign (Sec. 65.056). The bill requires the commissioner and the office of the state auditor to review the operation of the program at the conclusion of each fiscal biennium, including evaluating the enrollment levels for individuals receiving coverage under the plan at reduced premium rates. The bill requires the state auditor to assign a team of three persons from the auditor's office to participate in such a review (Sec. 65.004). The bill requires HHSC, in consultation with the office of the attorney general, to adopt and implement rules for the prevention and detection of fraud in the program. The rules must authorize the exclusion of any individual who commits fraud from the plan after notice to the individual and an opportunity for hearing (Sec. 65.058). The bill sets forth provisions relating to the confidentiality of information application forms and procedures and eligibility screening and enrollment (Secs. 65.059, 65.103, and 65.104). The bill provides that provisions relating to the plan do not establish an entitlement to assistance in obtaining prescription drug benefits (Sec. 65.003). EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.