HBA-MSH C.S.H.B. 1982 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1982 By: Farabee Insurance 4/20/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Current law requires a group health benefit plan that offers prescription drug benefits to make a prescription drug that was approved or covered for a medical condition or mental illness available to each enrollee at the contracted benefit level until the enrollee's plan renewal date, regardless of whether the prescribed drug has been removed from the health benefit plan's drug formulary. This requirement has necessitated the development of multiple formularies by the health plans and has created administrative problems. C.S.H.B. 1982 requires a health plan to make available a prescription drug that was previously prescribed for an enrollee and was available at the beginning of the plan year. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 3 (Section 6, Article 21.52J, Insurance Code) of this bill. ANALYSIS C.S.H.B. 1982 amends the Insurance Code to require a group health benefit plan (benefit plan) that offers prescription drug benefits to make a prescription drug that at the beginning of the plan year was included in the plan's formulary available to an enrollee at the contracted benefit level for that drug until the enrollee's plan renewal date, regardless of whether the prescribed drug has been removed from the health benefit plan's drug formulary, if the drug was at any time previously prescribed to the enrollee under the plan or the enrollee can demonstrate that the drug was at any time previously prescribed to the enrollee. The bill provides that this does not require a benefit plan to continue to provide prescription drug benefits for a prescription drug if the United States Food and Drug Administration (FDA) prohibits the sale or use of the drug or the use of the drug as prescribed to an enrollee, or the FDA or the drug's manufacturer identifies a side effect, adverse reaction, or other health risk associated with the drug that was unknown at the time the drug was prescribed to the enrollee. The bill authorizes the commissioner of insurance to adopt rules governing documents or other evidence that must be accepted as an initial showing that a drug was at any time previously prescribed to an enrollee. The bill requires a benefit plan that covers prescription drugs and that uses one or more formularies to specify which prescription drugs the plan will cover to provide to each enrollee a statement of the enrollee's right to complain in a circumstance in which benefits for a drug are denied because the drug is not included in the plan's drug formulary. The bill authorizes an enrollee who is denied benefits to file a complaint in accordance with the complaint procedures of the benefit plan. EFFECTIVE DATE September 1, 2001. The Act applies only to a group health benefit plan that is delivered, issued for delivery, or renewed on or after January 1, 2002. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 1982 differs from the original by authorizing an enrollee who is denied benefits for a prescription drug to file a complaint. The substitute requires a benefit plan that offers prescription drug benefits to make available a prescription drug that at the beginning of the plan year was included in the plan's formulary and was previously prescribed to the enrollee rather than a drug that was prescribed for an enrollee during the plan year. C.S.H.B. 1982 sets forth the conditions under which a benefit plan must make the prescription drug available. The substitute removes the provision that a benefit plan is not required to continue to provide benefits for a drug if the United States Food and Drug Administration (FDA) or the drug's manufacturer identifies a side effect, adverse reaction, or other health risk associated with the drug that is substantially more severe as determined under rules adopted by the commissioner of insurance than was believed at the time the drug was prescribed to the enrollee.