H.B. 1744 78(R)    BILL ANALYSIS


H.B. 1744
By: Delisi
State Health Care Expenditures, Select
Committee Report (Unamended)



BACKGROUND AND PURPOSE 

There are several factors to consider when determining why health care
costs continue to increase nationwide.  Some states have taken a proactive
approach to rising costs by employing the services of a pharmacy benefit
manager.  In Texas, the Employee Retirement System and the Teacher's
Retirement System both contract with pharmacy benefit managers to help
contain costs.  Those two systems also use prior authorization to control
prescription drug costs-arguably the most significant cost-driver in
health care. 

H.B. 1744 expands the use prior authorization for drugs not on their
preferred drug lists, particularly for gastrointestinal agents,
cholesterol lowering agents, anti-inflammatory agents, antihistamines, and
antidepressants. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

SECTION 1.  Amends Subchapter E, Chapter 1551, Insurance Code, as
effective June 1, 2003, by adding Section 1551.218 as follows: 

Sec. 1551.218.  PRIOR AUTHORIZATION FOR CERTAIN DRUGS.  Subsection (a)
defines drug formulary as a list of drugs preferred for us and eligible
for coverage under a health benefit plan. 

Subsection (b) sets out the categories of prescribed drugs requiring prior
authorization for coverage. The list includes: 

  A gastrointestinal drug
  A cholesterol-lowering drug
  An anti-inflammatory drug
  An antihistamine drug
  An antidepressant drug

Subsection (c) requires the Employees Retirement System board of trustees
to submit a report regarding cost savings to achieved with this program to
the comptroller and the Legislative Budget Board.  Reports must cover the
previous six-month period. 

SECTION 2.  Amends Subchapter D, Chapter 1575, Insurance Code, as
effective June 1, 2003, by adding Section 1575.161 as follows: 

Sec. 1575.161.  PRIOR AUTHORIZATION FOR CERTAIN DRUGS.  Subsection (a)
defines drug formulary as a list of drugs preferred for us and eligible
for coverage under a health benefit plan. 

Subsection (b) sets out the categories of prescribed drugs requiring prior
authorization for coverage. The list includes: 

   A gastrointestinal drug
  A cholesterol-lowering drug
  An anti-inflammatory drug
  An antihistamine drug
  An antidepressant drug

Subsection (c) requires the Teacher's Retirement System board of trustees
to submit a report regarding cost savings to achieved with this program to
the comptroller and the Legislative Budget Board.  Reports must cover the
previous six-month period. 

SECTION 3.  Amends Subchapter E, Chapter 3, Insurance Code, by adding
Article 3.50-7A as follows: 

Art. 3.50-7A.  PRIOR AUTHORIZATION FOR CERTAIN DRUGS PROVIDED UNDER TEXAS
SCHOOL EMPLOYEES UNIFORM GROUP COVERAGE.  Subsection (a) defines drug
formulary as a list of drugs preferred for us and eligible for coverage
under a health benefit plan. 

Subsection (b) sets out the categories of prescribed drugs requiring prior
authorization for coverage. The list includes: 

  A gastrointestinal drug
  A cholesterol-lowering drug
  An anti-inflammatory drug
  An antihistamine drug
  An antidepressant drug

Subsection (c) requires the Teacher's Retirement System to submit a report
regarding cost savings to achieved with this program to the comptroller
and the Legislative Budget Board.  Reports must cover the previous
six-month period. 

SECTION 4.  States that reports required by Section 1551.218(c) and
1575.161(c), Insurance Code, and Subsection (c), Article 3.50-7A,
Insurance Code, are due September 1, 2005. 

EFFECTIVE DATE
    
This act takes effect September 1, 2003.