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)  to the extent possible, require clinically
2-18     appropriate prior authorization for prescription drug benefits in
2-19     the same manner as prior authorization is required under the vendor
2-20     drug program; and
2-21                 (4)  establish a drug utilization review program to
2-22     ensure the appropriate use of prescription drugs under the state
2-23     program.
2-24           (c)  In adopting rules for the state prescription drug
2-25     program, the commission shall consult with an advisory panel
2-26     composed of an equal number of physicians, pharmacists, and
2-27     pharmacologists appointed by the commissioner.
 3-1           Sec. 531.303.  GENERIC EQUIVALENT AUTHORIZED. In adopting
 3-2     rules under the state program, the commission may require that,
 3-3     unless the practitioner's signature on a prescription clearly
 3-4     indicates that the prescription must be dispensed as written, the
 3-5     pharmacist may select a generic equivalent of the prescribed drug.
 3-6           Sec. 531.304.  PROGRAM FUNDING PRIORITIES. If money available
 3-7     for the state prescription drug program is insufficient to provide
 3-8     prescription drug benefits to all persons who are eligible under
 3-9     Section 531.301(b), the commission shall limit the number of
3-10     enrollees based on available funding and shall provide the
3-11     prescription drug benefits to eligible persons in the following
3-12     order of priority:
3-13                 (1)  persons eligible under Section 531.301(b)(1);
3-14                 (2)  persons eligible under Section 531.301(b)(2); and
3-15                 (3)  persons eligible under Sections 531.301(b)(3),
3-16     (4), and (5).
3-17           SECTION 2. Not later than January 1, 2002, the Health and
3-18     Human Services Commission shall develop and implement the state
3-19     prescription drug program under Subchapter I, Chapter 531,
3-20     Government Code, as added by this Act.
3-21           SECTION 3. This Act takes effect September 1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 1094 was passed by the House on April
         26, 2001, by the following vote:  Yeas 145, Nays 0, 1 present, not
         voting; that the House refused to concur in Senate amendments to
         H.B. No. 1094 on May 18, 2001, and requested the appointment of a
         conference committee to consider the differences between the two
         houses; and that the House adopted the conference committee report
         on H.B. No. 1094 on May 27, 2001, by a non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 1094 was passed by the Senate, with
         amendments, on May 16, 2001, by a viva-voce vote; at the request of
         the House, the Senate appointed a conference committee to consider
         the differences between the two houses; and that the Senate adopted
         the conference committee report on H.B. No. 1094 on May 27, 2001,
         by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  __________________________
                              Date
                    __________________________
                            Governor