S.B. 1173 78(R)    BILL ANALYSIS


S.B. 1173
By: Janek
State Health Care Expenditures, Select
Committee Report (Unamended)



BACKGROUND AND PURPOSE 

One of the cost drivers in health insurance is the frequency of
prescriptions and the increased cost 
of prescription medication. As proposed, S.B. 1173 amends the Insurance
Code to address 
prescription drug benefits under the group health benefit program for
certain governmental 
employees.


RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, 
institution, or agency.

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. (a) Defines
 "drug formulary."

  (b) Requires a health benefit plan provided under this chapter that uses
a drug 
  formulary in providing a prescription drug benefit to require prior
authorization 
  for coverage of the following categories of prescribed drugs if the
specific drug 
  prescribed is not included in the formulary:

   (1) a gastrointestinal drug;
   (2) a cholesterol-lowering drug;
   (3) an anti-inflammatory drug;
   (4) an antihistamine drug; and
   (5) an antidepressant drug.

  (c) Requires the board of trustees of the Employees Retirement System of
Texas 
  every six months to submit to the comptroller and to the Legislative
Budget Board 
  a report regarding any cost savings achieved in the program through
  implementation of the prior authorization requirement of this section.
Requires a 
  report to 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. (a) Defines
 "drug formulary."

  (b) Requires a health benefit plan provided under this chapter that uses
a drug 
  formulary in providing a prescription drug benefit to require prior
authorization 
  for coverage of the following categories of prescribed drugs if the
specific drug 
  prescribed is not included in the formulary:

    (1) a gastrointestinal drug;
   (2) a cholesterol-lowering drug;
   (3) an anti-inflammatory drug;
   (4) an antihistamine; and
   (5) an antidepressant drug.

  (c) Requires the board of trustees every six months to submit to the
comptroller 
  and to the Legislative Budget Board a report regarding any cost savings
achieved 
  in the program through implementation of the prior authorization
requirement of 
  this section. Requires a report to 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
 PROGRAM. (a) Defines "drug formulary."

  (b) Requires a health coverage plan provided under the uniform group
coverage 
  program established under Article 3.50-7 of this code that uses a drug
formulary 
  in providing a prescription drug benefit to require prior authorization
for coverage 
  of the following categories of prescribed drugs if the specific drug
prescribed is 
  not included in the formulary:

   (1) a gastrointestinal drug;
   (2) a cholesterol-lowering drug;
   (3) an anti-inflammatory drug;
   (4) an antihistamine drug; and
   (5) an antidepressant drug.

  (c) Requires the Teacher Retirement System of Texas every six months to
submit 
  to the comptroller and to the Legislative Budget Board a report
regarding any cost 
  savings achieved in the uniform group coverage program through
implementation 
  of the prior authorization requirement of this article. Requires a
report to cover 
  the previous six-month period.

SECTION 4. Provides that the initial reports required by Sections
1551.218(c) and 1575.161(c), 
Insurance Code, and Subsection (c), Article 3.50-7A, Insurance Code, as
added by this Act, are 
due September 1, 2005.

SECTION 5. Effective date: Provides that this Act takes effect September
1, 2003, and applies 
to health benefit plans provided under Chapters 1551 and 1575, Insurance
Code, as effective 
June 1, 2003, and health coverage plans subject to Article 3.50-7A,
Insurance Code, as added by 
this Act, beginning with the 2004-2005 plan year.


EFFECTIVE DATE

This Act takes effect September 1, 2003, and applies to health benefit
plans provided under Chapters 1551 and 1575, Insurance Code, as effective
June 1, 2003, and health coverage plans subject to Article 3.50-7A,
Insurance Code, as added by this Act, beginning with the 2004-2005 plan
year.