By Najera H.B. No. 1967 77R6281 DLF-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to a state prescription drug plan for certain older 1-3 individuals and individuals who have serious health care 1-4 conditions. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Subtitle C, Title 2, Health and Safety Code, is 1-7 amended by adding Chapter 65 to read as follows: 1-8 CHAPTER 65. PRESCRIPTION DRUG PLAN 1-9 SUBCHAPTER A. GENERAL PROVISIONS 1-10 Sec. 65.001. OBJECTIVE OF STATE PRESCRIPTION DRUG PLAN. The 1-11 state prescription drug plan provides prescription drug benefits to 1-12 individuals who reside in this state and who are at least 65 years 1-13 of age or have a serious health care condition. 1-14 Sec. 65.002. DEFINITIONS. In this chapter: 1-15 (1) "Commission" means the Health and Human Services 1-16 Commission. 1-17 (2) "Commissioner" means the commissioner of health 1-18 and human services. 1-19 (3) "Prescription drug plan provider" means an 1-20 insurance company, health maintenance organization, or other entity 1-21 that provides prescription drug benefits coverage under the 1-22 prescription drug plan program. 1-23 (4) "Regional advisory committee" means a committee 1-24 appointed under Section 65.057. 2-1 Sec. 65.003. NOT AN ENTITLEMENT. This chapter does not 2-2 establish an entitlement to assistance in obtaining prescription 2-3 drug benefits. 2-4 Sec. 65.004. BIENNIAL REVIEW OF PROGRAM. (a) At the 2-5 conclusion of each fiscal biennium, the commissioner and the office 2-6 of the state auditor shall review the operation of the prescription 2-7 drug plan program established under this chapter. In reviewing the 2-8 program, the commissioner and the office of the state auditor shall 2-9 evaluate the enrollment levels for individuals receiving coverage 2-10 under the prescription drug plan at reduced premium rates. 2-11 (b) The state auditor shall assign a team of three persons 2-12 from the auditor's office to participate in the review required by 2-13 this section. 2-14 (Sections 65.005-65.050 reserved for expansion 2-15 SUBCHAPTER B. ADMINISTRATION OF PRESCRIPTION DRUG PLAN PROGRAM 2-16 Sec. 65.051. DUTIES OF COMMISSION. (a) The commission 2-17 shall develop and implement a prescription drug plan program to 2-18 obtain coverage for prescription drug benefits for eligible 2-19 individuals. 2-20 (b) The commission is the agency responsible for making 2-21 policy for the prescription drug plan program, including policy 2-22 related to eligibility for coverage under the plan and to 2-23 prescription drug benefits provided under the plan. The commission 2-24 may not delegate this duty to another agency or entity. 2-25 (c) The commission shall oversee the implementation of the 2-26 prescription drug plan program and coordinate the activities of 2-27 each agency necessary to the implementation of the program, 3-1 including the Texas Department of Health, Texas Department of Human 3-2 Services, and Texas Department of Insurance. 3-3 (d) The commission shall adopt rules as necessary to 3-4 implement this chapter. The commission shall require the 3-5 appropriate health and human services agency, including the Texas 3-6 Department of Health and the Texas Department of Human Services, to 3-7 adopt, with the approval of the commission, the rules that are 3-8 necessary to implement the prescription drug plan program. With 3-9 the consent of another agency, including the Texas Department of 3-10 Insurance, the commission may delegate to that agency the authority 3-11 to adopt, with the approval of the commission, any rules that are 3-12 necessary to implement the program. 3-13 (e) The commission shall conduct a review of each entity 3-14 that enters into a contract under Section 65.055 or Section 65.155, 3-15 to ensure that the entity is available, prepared, and able to 3-16 fulfill the entity's obligations under the contract in compliance 3-17 with the contract, this chapter, and rules adopted under this 3-18 chapter. 3-19 Sec. 65.052. DUTIES OF TEXAS DEPARTMENT OF HEALTH. (a) The 3-20 commission may direct the Texas Department of Health to: 3-21 (1) implement contracts with prescription drug plan 3-22 providers under Section 65.155; 3-23 (2) monitor the prescription drug plan providers, 3-24 through reporting requirements and other means, to ensure 3-25 performance under the contracts and quality delivery of services; 3-26 (3) monitor the quality of services delivered to 3-27 enrollees; and 4-1 (4) provide payment under the contracts to the 4-2 prescription drug plan providers. 4-3 (b) The commission, or the Texas Department of Health under 4-4 the direction of and in consultation with the commission, shall 4-5 adopt rules as necessary to implement this section. 4-6 Sec. 65.053. DUTIES OF TEXAS DEPARTMENT OF HUMAN SERVICES. 4-7 (a) Under the direction of the commission, the Texas Department of 4-8 Human Services shall: 4-9 (1) accept applications for coverage under the 4-10 prescription drug plan and implement the prescription drug plan 4-11 program eligibility screening and enrollment procedures; 4-12 (2) resolve grievances relating to eligibility 4-13 determinations; and 4-14 (3) coordinate the prescription drug plan program with 4-15 the Medicaid program, as necessary. 4-16 (b) If the commission contracts with a third party 4-17 administrator under Section 65.055, the commission may direct the 4-18 Texas Department of Human Services to: 4-19 (1) implement the contract; 4-20 (2) monitor the third party administrator, through 4-21 reporting requirements and other means, to ensure performance under 4-22 the contract and quality delivery of services; and 4-23 (3) provide payment under the contract to the third 4-24 party administrator. 4-25 (c) The commission, or the Texas Department of Human 4-26 Services under the direction of and in consultation with the 4-27 commission, shall adopt rules as necessary to implement this 5-1 section. 5-2 Sec. 65.054. DUTIES OF TEXAS DEPARTMENT OF INSURANCE. (a) 5-3 At the request of the commission, the Texas Department of Insurance 5-4 shall provide any necessary assistance with the development of the 5-5 prescription drug plan. The department shall monitor the quality 5-6 of the services provided by prescription drug plan providers and 5-7 shall coordinate with the Texas Department of Human Services to 5-8 resolve grievances relating to the prescription drug plan 5-9 providers. 5-10 (b) The commission and the Texas Department of Insurance may 5-11 adopt a memorandum of understanding that addresses the 5-12 responsibilities of each agency in developing the plan. 5-13 (c) The Texas Department of Insurance, in consultation with 5-14 the commission, shall adopt rules as necessary to implement this 5-15 section. 5-16 Sec. 65.055. CONTRACTS FOR IMPLEMENTATION OF PRESCRIPTION 5-17 DRUG PLAN. (a) It is the intent of the legislature that the 5-18 commission maximize the use of private resources in administering 5-19 the prescription drug plan program created under this chapter. In 5-20 administering the program, the commission may contract with a third 5-21 party administrator to provide enrollment and related services 5-22 under the state prescription drug plan. 5-23 (b) A third party administrator may perform tasks under the 5-24 contract that would otherwise be performed by the Texas Department 5-25 of Health or Texas Department of Human Services under this chapter. 5-26 (c) The commission shall: 5-27 (1) retain all policymaking authority over the state 6-1 prescription drug plan; 6-2 (2) procure all contracts with a third party 6-3 administrator through a competitive procurement process in 6-4 compliance with applicable state laws; and 6-5 (3) ensure that all contracts with prescription drug 6-6 plan providers under Section 65.155 are procured through a 6-7 competitive procurement process in compliance with applicable law. 6-8 (d) The commission shall ensure that each contract with a 6-9 third party administrator or prescription drug plan provider 6-10 requires compliance with Section 65.059. 6-11 Sec. 65.056. COMMUNITY OUTREACH CAMPAIGN; TOLL-FREE HOTLINE. 6-12 (a) The commission shall conduct a community outreach and 6-13 education campaign to provide information relating to the 6-14 availability of prescription drug plan coverage under this chapter. 6-15 (b) The community outreach campaign must include a toll-free 6-16 telephone number through which individuals may obtain information 6-17 about the prescription drug plan program. 6-18 (c) The commission shall contract with community-based and 6-19 interfaith organizations or coalitions of those organizations to 6-20 implement the community outreach campaign and shall promote and 6-21 encourage voluntary efforts to implement the community outreach 6-22 campaign. 6-23 (d) The commission shall direct that the Texas Department of 6-24 Health or the Texas Department of Human Services coordinate the 6-25 community outreach campaign. 6-26 Sec. 65.057. REGIONAL ADVISORY COMMITTEES. The commission 6-27 shall appoint regional advisory committees to provide 7-1 recommendations concerning the implementation and operation of the 7-2 prescription drug plan program. The regional advisory committees 7-3 must be composed of knowledgeable representatives of the Texas 7-4 Department of Human Services, the Texas Department of Health, and 7-5 local community health providers. 7-6 Sec. 65.058. FRAUD PREVENTION. (a) The commission, in 7-7 consultation with the office of the attorney general, shall adopt 7-8 and implement rules for the prevention and detection of fraud in 7-9 the prescription drug plan program. 7-10 (b) The rules must authorize the exclusion of any individual 7-11 who commits fraud from the prescription drug plan after notice to 7-12 the individual and an opportunity for hearing. 7-13 Sec. 65.059. CONFIDENTIALITY OF INFORMATION. Information 7-14 relating to an applicant for or participant in the prescription 7-15 drug plan program is confidential and may not be disclosed to any 7-16 person except as necessary for the administration of the 7-17 prescription drug plan. The information is not subject to 7-18 disclosure under Chapter 552, Government Code. 7-19 (Sections 65.060-65.100 reserved for expansion 7-20 SUBCHAPTER C. ELIGIBILITY FOR COVERAGE UNDER PRESCRIPTION DRUG PLAN 7-21 Sec. 65.101. ELIGIBILITY. (a) An individual is eligible for 7-22 coverage under the prescription drug plan if the individual is a 7-23 legal resident of this state and: 7-24 (1) is not less than 65 years of age; 7-25 (2) has a chronic health care condition that is likely 7-26 to last at least one year and result in limitations of function and 7-27 activities; 8-1 (3) has a disease or condition for which the 8-2 likelihood of death is probable unless the course of the disease or 8-3 condition is interrupted; or 8-4 (4) has a mental or physical disability. 8-5 (b) The commission by rule shall establish eligibility 8-6 standards for individuals described by Subsection (a)(2), (3), or 8-7 (4). 8-8 Sec. 65.102. ELIGIBILITY FOR REDUCED PREMIUMS. (a) The 8-9 commission by rule shall establish eligibility standards for 8-10 individuals to receive coverage under the prescription drug plan 8-11 for a reduced premium in accordance with Section 65.153. In 8-12 adopting rules under this section, the commission shall consult 8-13 with the regional advisory committees. 8-14 (b) The standards must consider the family income of the 8-15 individual, but may not consider the value of: 8-16 (1) a homestead in which the individual resides; and 8-17 (2) one motor vehicle owned by the family. 8-18 (c) The standards must be developed to provide the broadest 8-19 possible availability of reduced premium coverage under the 8-20 prescription drug plan program, considering available appropriated 8-21 funds. 8-22 Sec. 65.103. APPLICATION FORM AND PROCEDURES. (a) The 8-23 commission, with the assistance of the regional advisory 8-24 committees, shall adopt an application form and application 8-25 procedures for requesting prescription drug plan coverage under 8-26 this chapter. 8-27 (b) To the extent possible, the application form shall be 9-1 made available in languages other than English. 9-2 (c) The commission shall permit application to be made by 9-3 mail, by telephone, and through the Internet. 9-4 Sec. 65.104. ELIGIBILITY SCREENING AND ENROLLMENT. (a) The 9-5 commission, with the assistance of the regional advisory 9-6 committees, shall develop eligibility screening and enrollment 9-7 procedures for the prescription drug plan program. 9-8 (b) A determination of whether an individual is eligible for 9-9 reduced premium coverage under the prescription drug plan and the 9-10 enrollment of an eligible individual with a prescription drug plan 9-11 provider must be completed, and information on the individual's 9-12 available choice of prescription drug plan providers must be 9-13 provided, in a timely manner, as determined by the commission. The 9-14 commission must require that the determination be made and the 9-15 information be provided not later than the 30th day after the date 9-16 the individual submits a complete application. 9-17 (c) The commission may establish enrollment periods for the 9-18 prescription drug plan program, except that an individual described 9-19 by Section 65.101(a)(2), (3), or (4) is eligible for enrollment in 9-20 the plan without regard to any enrollment period requirement. 9-21 (Sections 65.105-65.150 reserved for expansion 9-22 SUBCHAPTER D. PRESCRIPTION DRUG PLAN 9-23 Sec. 65.151. PRESCRIPTION DRUG PLAN COVERAGE. (a) The 9-24 commission, in consultation with the commissioner of insurance, by 9-25 rule shall establish the benefits provided under the prescription 9-26 drug plan. 9-27 (b) Benefits provided under the prescription drug plan shall 10-1 be coordinated with other benefits for which an enrollee is 10-2 eligible, including benefits provided under Medicare and the 10-3 Medicaid program, so that the prescription drug plan benefits 10-4 supplement, but do not duplicate, the other benefits. 10-5 (c) The prescription drug plan may use a prescription drug 10-6 formulary. 10-7 Sec. 65.152. APPLICATION OF INSURANCE LAW. The prescription 10-8 drug plan is not subject to: 10-9 (1) a law that requires: 10-10 (A) coverage or the offer of coverage of a 10-11 health care service or benefit; 10-12 (B) coverage or the offer of coverage for the 10-13 provision of services by a particular pharmacy or pharmacist; or 10-14 (C) the use of a particular policy or contract 10-15 form or of particular language in a policy or contract form; or 10-16 (2) Article 21.52J, Insurance Code. 10-17 Sec. 65.153. PREMIUM; REDUCED PREMIUM. (a) Subject to 10-18 Subsection (b), the commission shall require an enrollee in the 10-19 prescription drug plan to pay: 10-20 (1) a copayment or similar charge for prescription 10-21 drugs provided under the plan; and 10-22 (2) the plan premium. 10-23 (b) The commission shall provide prescription drug plan 10-24 coverage at reduced premium rates to individuals who satisfy the 10-25 eligibility requirements established under Section 65.102. Reduced 10-26 premium rates adopted under this section shall ensure that 10-27 individuals with higher levels of income are required to pay 11-1 progressively higher percentages of the cost of the plan. 11-2 (c) The commission shall specify the manner in which the 11-3 premium is paid. The commission may require that the premium be 11-4 paid to the Texas Department of Health, the Texas Department of 11-5 Human Services, or the prescription drug plan provider. 11-6 (d) For purposes of establishing the amounts of copayments 11-7 or similar charges and plan premiums, the commissioner may 11-8 establish classes of enrollees and may charge different amounts to 11-9 enrollees in different classes. Not later than August 31 of each 11-10 even-numbered year, the commissioner shall obtain an actuarial 11-11 review of the costs of providing benefits under the plan to 11-12 enrollees. If the commissioner determines that the actuarial 11-13 review demonstrates that any group of individuals described by 11-14 Section 65.101(a)(1), (2), (3), or (4) is unfairly subsidizing the 11-15 cost of plan benefits for another group of individuals, the 11-16 commissioner shall establish separate classes of enrollees. 11-17 Sec. 65.154. WAITING PERIODS; PREEXISTING CONDITION 11-18 PROVISIONS; CROWD OUT. (a) Except as provided by Subsection (d), 11-19 the prescription drug plan may include a waiting period of not more 11-20 than 180 days. 11-21 (b) Except as provided by Subsection (d), the prescription 11-22 drug plan may include a preexisting condition provision that 11-23 limits, but does not exclude, benefits for prescription drugs for a 11-24 disease or condition for not more than 60 days after the effective 11-25 date of coverage under the plan. The preexisting condition 11-26 provision may not otherwise be more restrictive than the 11-27 preexisting condition provision authorized for a small employer 12-1 health benefit plan under Article 26.49, Insurance Code. 12-2 (c) The prescription drug plan may include copayments and 12-3 other provisions intended to discourage employers and other persons 12-4 from electing to discontinue providing or offering, under employee 12-5 or other group health benefit plans, prescription drug benefits for 12-6 individuals who are at least 65 years of age. 12-7 (d) A waiting period established under Subsection (a) or a 12-8 preexisting condition provision established under Subsection (b) 12-9 may not apply to an individual who is eligible to enroll in the 12-10 prescription drug plan under Section 65.101(a)(2), (3), or (4). 12-11 Sec. 65.155. PRESCRIPTION DRUG PLAN PROVIDERS. (a) The 12-12 commission, or the Texas Department of Health at the direction of 12-13 and in consultation with the commission, shall select the 12-14 prescription drug plan providers under the program through a 12-15 competitive procurement process. A prescription drug plan provider 12-16 must hold a certificate of authority issued by the Texas Department 12-17 of Insurance that authorizes the prescription drug plan provider to 12-18 provide the type of prescription drug plan offered and must 12-19 satisfy, except as provided by this chapter, any applicable 12-20 requirement of the Insurance Code or another insurance law of this 12-21 state. 12-22 (b) In selecting a prescription drug plan provider for a 12-23 metropolitan area, the commission shall consult with the 12-24 appropriate regional advisory committee. The commission shall 12-25 provide for a choice of at least two prescription drug plan 12-26 providers in each metropolitan area. The commissioner may 12-27 authorize an exception to the requirement imposed by this 13-1 subsection if there is only one acceptable applicant to become a 13-2 prescription drug plan provider in the metropolitan area. 13-3 SECTION 2. The heading of Subtitle C, Title 2, Health and 13-4 Safety Code, is amended to read as follows: 13-5 SUBTITLE C. INDIGENT HEALTH CARE AND PUBLIC HEALTH CARE PLANS 13-6 SECTION 3. Not later than September 1, 2002, the Health and 13-7 Human Services Commission shall develop and implement the 13-8 prescription drug plan program required by Chapter 65, Health and 13-9 Safety Code, as added by this Act. 13-10 SECTION 4. This Act takes effect immediately if it receives 13-11 a vote of two-thirds of all the members elected to each house, as 13-12 provided by Section 39, Article III, Texas Constitution. If this 13-13 Act does not receive the vote necessary for immediate effect, this 13-14 Act takes effect September 1, 2001.