SRC-EPT S.B. 1173 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1173
78R3971 CLG-DBy: Janek
State Affairs
4/1/2003
As Filed


DIGEST 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. 

SECTION BY SECTION 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.