SRC-JEC C.S.S.B. 556 77(R)BILL ANALYSIS Senate Research CenterC.S.S.B. 556 77R5279 KKA-DBy: Duncan Health & Human Services 3/27/2001 Committee Report (Substituted) DIGEST AND PURPOSE Currently, more than a third of Texas' Medicare recipients (primarily elderly people) are not covered under any prescription drug plan. Some are, but the coverage is inadequate. Those without prescription drug coverage pay retail prices for prescriptions, which can be financially burdensome. C.S.S.B. 556 establishes a senior drug assistance program, authorizing pharmacies to allow Medicare recipients to purchase pharmaceutical drugs at a lower Medicaid price, and to receive a rebate from the pharmaceutical company. Pharmacies that opt to participate in the state's Medicaid program are encouraged to sell Medicare recipients' drugs at the Medicaid price. The Health and Human Services Commission is required to monitor the effectiveness of the program and to evaluate its effect on the availability of prescription drugs to Medicare recipients. RULEMAKING AUTHORITY Rulemaking authority is expressly granted to the Health and Human Services Commission or an agency operating part of the medical assistance program, as appropriate, in SECTION 1 (Section 34.0462, Human Resources Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 32B, Human Resources Code, to add Section 32.0462, as follows: Sec. 34.0462. SENIOR DRUG ASSISTANCE PROGRAM. (a) Defines "participant." (b) Requires the Health and Human Services Commission or an agency operating part of the medical assistance program, as appropriate (department), by rule to develop and implement a voluntary pricing program under which a provider in the vendor drug program may agree to provide to a Medicare recipient eligible under Subsection (c) prescription drugs available to a recipient of medical assistance under the vendor drug program at the lesser of two prices. (c) Makes a Medicare recipient eligible to receive a prescription drug available to a recipient of medical assistance under the vendor drug program at a reduced price in accordance with the senior drug assistance program only if the recipient does not have insurance coverage or other health benefit plan coverage that provides pharmaceutical benefits for that drug. (d) Authorizes the department to provide a participant with a rebate from the department for each prescription drug provided to an eligible Medicare recipient at a reduced price under the senior drug assistance program. Requires the department to determine the amount of the rebate based on the amount of funds available to the department for that purpose. (e) Requires the department to negotiate rebate agreements and other terms with pharmaceutical companies whose products are covered under the vendor drug program to provide the rebates prescribed by Subsection (d). (f) Authorizes the department to return excess rebate revenue to participating pharmaceutical companies based on an equitable method of distribution determined by the department if the savings or other sources of funding obtained through negotiations with pharmaceutical companies under Subsection (e) exceed the cost of implementing, administrating, and operating the senior drug assistance program. (g) Requires the department in implementing the senior drug assistance program to require an eligible Medicare recipient, as a condition of receiving a reduced price, to present certain documents and provide a prescription, and to ensure that information concerning prices that may be charged under the senior drug assistance program is readily available to participants. (h) Requires the department to take all possible action, including any administrative action available to the department in connection with the operation of any department program, to encourage providers in the vendor drug program to participate in the senior drug assistance program, and to encourage pharmaceutical companies to negotiate rebate agreements under Subsection (e) to enable the department to successfully implement the senior drug assistance program. (i) Requires the department to monitor provider participation in the senior drug assistance program, evaluate its effect on the availability of prescription drugs to eligible Medicare recipients, and develop recommendations for improving the availability of prescription drugs to eligible Medicare recipients. (j) Requires the department to submit a report to the legislature not later than January 1 of each year containing the information obtained and developed by the department under Subsection (i). (k) Authorizes pharmacies to participate in the senior drug assistance program before the department successfully negotiates rebate agreements under Subsection (e) with pharmaceutical companies that sell prescription drugs. Requires the department to favorably note any participation by pharmacies under this subsection to the legislature during the next legislative session. SECTION 2. Requires a state agency affected by a provision of this Act, if before implementing the provision it determines that a waiver or authorization from a federal agency is necessary for implementation of that provision, to request the waiver or authorization. Authorizes the agency to delay implementing that provision until the waiver or authorization is granted. Requires the agency to submit an implementation plan to the legislature during the next regular legislative session or to the Legislative Budget Board during the interim on receipt of the waiver or authorization and before its implementation. SECTION 3. Effective date: September 1, 2001. SUMMARY OF COMMITTEE CHANGES Differs from the original as follows: _Amends the caption. _Amends the heading of Section 32.0462, Human Resources Code, as added by this Act. _Adds text in Section 32.0462, Subsections (a)- (i) and (k), to: _grant rulemaking authority to the department; _authorize, rather than require, a pharmacy to participate in the program to provide prescription drugs to certain eligible Medicare recipients; _create the senior drug assistance program as a separate entity from the vendor drug program; _offer a rebate program to allow a pharmacy to receive a rebate from the pharmaceutical company for each drug provided at a reduced price; _change the eligibility requirements for recipients of the discounted pharmaceutical prices; and _change requirements encouraging pharmacies to participate in the program. _Adds the requirement that a state agency submit an implementation plan to the legislature or the Legislative Budget Board.