By Gray, Flores, Kitchen, Naishtat, et al.            H.B. No. 1094
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the creation of a state prescription drug program for
 1-3     certain Medicare beneficiaries.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Chapter 531, Government Code, is amended by adding
 1-6     Subchapter I to read as follows:
 1-7               SUBCHAPTER I.  STATE PRESCRIPTION DRUG PROGRAM
 1-8           Sec. 531.301.  DEVELOPMENT AND IMPLEMENTATION OF STATE
 1-9     PROGRAM; FUNDING. (a)  The commission shall develop and implement a
1-10     state prescription drug program that operates in the same manner as
1-11     the vendor drug program operates in providing prescription drug
1-12     benefits to recipients of medical assistance under Chapter 32,
1-13     Human Resources Code.
1-14           (b)  A person is eligible for prescription drug benefits
1-15     under the state program if the person is:
1-16                 (1)  a qualified Medicare beneficiary, as defined by 42
1-17     U.S.C. Section 1396d(p)(1), as amended;
1-18                 (2)  a specified low-income Medicare beneficiary who is
1-19     eligible for medical assistance for Medicare cost-sharing payments
1-20     under 42 U.S.C. Section 1396a(a)(10)(E)(iii), as amended;
1-21                 (3)  a qualified disabled and working individual, as
1-22     defined by 42 U.S.C. Section 1396d(s), as amended;
1-23                 (4)  a qualifying individual who is eligible for that
1-24     assistance under 42 U.S.C. Section 1396a(a)(10)(E)(iv)(I), as
 2-1     amended; or
 2-2                 (5)  a qualifying individual who is eligible for that
 2-3     assistance under 42 U.S.C. Section 1396a(a)(10)(E)(iv)(II), as
 2-4     amended.
 2-5           (c)  Prescription drugs under the state program may be funded
 2-6     only with state money, unless funds are available under federal law
 2-7     to fund all or part of the program.
 2-8           Sec. 531.302.  RULES. (a)  The commission shall adopt all
 2-9     rules necessary for implementation of the state prescription drug
2-10     program.
2-11           (b)  In adopting rules for the state prescription drug
2-12     program, the commission may:
2-13                 (1)  require a person who is eligible for prescription
2-14     drug benefits to pay a cost-sharing payment;
2-15                 (2)  authorize the use of a prescription drug formulary
2-16     to specify which prescription drugs the state program will cover;
2-17                 (3)  require prior authorization for prescription drug
2-18     benefits under the state program; and
2-19                 (4)  establish a drug utilization review program to
2-20     ensure the appropriate use of prescription drugs under the state
2-21     program.
2-22           Sec. 531.303.  GENERIC EQUIVALENT AUTHORIZED. In adopting
2-23     rules under the state program, the commission may require that,
2-24     unless the practitioner's signature on a prescription clearly
2-25     indicates that the prescription must be dispensed as written, the
2-26     pharmacist may select a generic equivalent of the prescribed drug.
2-27           Sec. 531.304.  PROGRAM FUNDING PRIORITIES. If money available
 3-1     for the state prescription drug program is insufficient to provide
 3-2     prescription drug benefits to all persons who are eligible under
 3-3     Section 531.301(b), the commission shall limit the number of
 3-4     enrollees based on available funding and shall provide the
 3-5     prescription drug benefits to eligible persons in the following
 3-6     order of priority:
 3-7                 (1)  persons eligible under Section 531.301(b)(1);
 3-8                 (2)  persons eligible under Section 531.301(b)(2); and
 3-9                 (3)  persons eligible under Sections 531.301(b)(3),
3-10     (4), and (5).
3-11           SECTION 2. Not later than January 1, 2002, the Health and
3-12     Human Services Commission shall develop and implement the state
3-13     prescription drug program under Subchapter I, Chapter 531,
3-14     Government Code, as added by this Act.
3-15           SECTION 3. This Act takes effect September 1, 2001.