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78R7877 KCR-D
By: Gutierrez H.B. No. 3302
A BILL TO BE ENTITLED
AN ACT
relating to pharmacy benefit managers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2, Article 21.07-6, Insurance Code, is
amended to read as follows:
Sec. 2. RULES; FORMS. The commissioner [board] may adopt
[establish and promulgate] rules, regulations, forms, minimum
standards, or limitations that are fair and reasonable and are
necessary [as may be appropriate] for the augmentation and
implementation of this article.
SECTION 2. Section 4, Article 21.07-6, Insurance Code, is
amended to read as follows:
Sec. 4. APPLICATION PROCEDURE. (a) An application for a
certificate of authority to operate as an administrator must be in a
form prescribed by the commissioner and must include the following:
(1) copies of all basic organizational documents of
the administrator, including the articles of incorporation,
bylaws, articles of association, trade name certificate, and other
similar documents and copies of all amendments to those documents;
(2) a description of the administrator and its
services, facilities, and personnel;
(3) a power of attorney executed by the administrator,
if not domiciled in this state, appointing the commissioner, the
commissioner's successors in office, or the commissioner's duly
appointed designee as the attorney of the administrator in this
state, on whom process may be served in any legal action or
proceeding based on a cause of action arising in this state against
the administrator;
(4) an audited financial statement of the applicant
covering the preceding three calendar years or for any lesser
period that the applicant and any predecessors of the applicant
have been in existence, but if an audited financial statement is not
available, the applicant shall attach an unaudited financial
statement as of a date not earlier than the 120th day before the
date the application is filed, accompanied by an affidavit or
certification of the applicant that:
(A) the unaudited financial statement is true and
correct, as of its date; and
(B) no material change in financial condition has
occurred from the date of the financial statement to the execution
date of the affidavit or certification; and
(5) any other information the commissioner may
reasonably require.
(b) A person filing an application under Subsection (a) of
this section who intends to operate as a pharmacy benefit manager
must include, in addition to the information required by Subsection
(a) of this section, information concerning:
(1) the amount and sources of money available for
operating expenses; and
(2) any proposed arrangements for the reimbursement or
compensation of incorporators or other principals.
SECTION 3. Article 21.07-6, Insurance Code, is amended by
adding Section 8A to read as follows:
Sec. 8A. ANNUAL REVIEW OF PHARMACY BENEFIT MANAGER. (a)
The commissioner shall annually review information filed by a
pharmacy benefit manager under Section 9 of this article.
(b) An annual review conducted under Subsection (a) of this
section must include a review of all financial documents filed by a
pharmacy benefit manager, including a determination of the pharmacy
benefit manager's ability to meet all existing contractual
financial obligations.
SECTION 4. Section 9, Article 21.07-6, Insurance Code, is
amended by adding Subsection (c) to read as follows:
(c) An annual report filed under this section by a pharmacy
benefit manager must include:
(1) a blank copy of any contract used by the pharmacy
benefit manager;
(2) a statement describing the financial condition of
the pharmacy benefit manager, including:
(A) the total number of insureds subject to
management by the pharmacy benefit manager;
(B) the total number of insureds whose management
by the pharmacy benefit manager was terminated;
(C) the number of insureds receiving services
from the pharmacy benefit manager at the end of the calendar year;
(D) the total number of all claims processed; and
(E) the total dollar value of all claims
processed;
(3) a description of all services provided by the
pharmacy benefit manager, including:
(A) claims processing services;
(B) pharmacy services;
(C) insurance services;
(D) prescription drug or device services; and
(E) administrative services;
(4) a description of all incentive programs or other
financial arrangements negotiated, directly or indirectly, with
pharmaceutical companies that resulted in the receipt of income or
other consideration from a pharmaceutical company by the pharmacy
benefit manager, including:
(A) the amount of income or other consideration
received by the pharmacy benefit manager; and
(B) the identity of any prescription drug or
device associated with the incentive program; and
(5) a description of the pharmacy benefit manager's
ownership interest or affiliation of any kind with any:
(A) insurance company responsible for providing
benefits, directly or through reinsurance, to any plan for which
the pharmacy plan benefit manager provides services; and
(B) parent company, subsidiary, or other
business entity engaging in business related to the provision of
pharmacy services or other prescription drug or device services.
SECTION 5. Article 21.07-6, Insurance Code, is amended by
adding Sections 25, 26, 27, 28, and 29 to read as follows:
Sec. 25. STANDARD CONTRACTS FOR PHARMACY BENEFIT MANAGERS;
CONTRACT REQUIREMENTS. (a) The commissioner, in consultation with
the contract advisory panel established under Section 26 of this
article, shall adopt rules that establish standard contract forms
for use by pharmacy benefit managers for use in entering into
contracts with pharmacies and insurers.
(b) A pharmacy benefit manager who enters into a contract
with a pharmacy or an insurer must use a contract form adopted by
the commissioner under Subsection (a) of this section.
(c) The terms of a contract form adopted under Subsection
(a) of this section and entered into by a pharmacy benefit manager
and a pharmacy or an insurer may not be subsequently modified unless
the modification is agreed to by the pharmacy benefit manager and
the pharmacy or insurer.
(d) A contract entered into by a pharmacy benefit manager
under this article must:
(1) be written in plain English;
(2) establish the average wholesale price of a
prescription drug or device as an index for claim payments; and
(3) provide that a pharmacy is not responsible for the
actions or omissions of an insurer or pharmacy benefit manager.
(e) A contract entered into by a pharmacy benefit manager
may not:
(1) limit the range of services a pharmacist may
provide to a range that is narrower than the scope of the
pharmacist's license to practice pharmacy;
(2) exclude an otherwise qualified pharmacy or
pharmacist from participation in the contract solely because the
pharmacy or pharmacist declines to participate in another plan
managed by the pharmacy benefit manager;
(3) require a pharmacy or pharmacist to participate in
one plan managed by the pharmacy benefit manager to participate in
another plan managed by the pharmacy benefit manager; or
(4) require a pharmacist to alter an insured's
prescription without the consent of the prescribing health care
provider and the insured.
Sec. 26. CONTRACT ADVISORY PANEL; MEMBERSHIP. (a) The
contract advisory panel is established as an advisory panel to the
commissioner to advise and make recommendations to the commissioner
regarding the adoption of standard contract forms under Section 25
of this article.
(b) The advisory panel is composed of nine members appointed
jointly by the commissioner:
(1) two attorneys who primarily represent insurers,
health maintenance organizations, or health benefit plans;
(2) two pharmacists licensed by this state;
(3) two pharmacy benefit managers; and
(4) three individuals who represent consumers.
(c) A consumer representative on the advisory panel may not:
(1) receive any compensation from or be employed
directly or indirectly by a pharmacist, pharmacy benefit manager,
health care provider, insurer, health maintenance organization, or
other health benefit plan issuer;
(2) be a pharmacist or pharmacy benefit manager; or
(3) be a person required to register as a lobbyist
under Chapter 305, Government Code, because of the person's
activities for compensation on behalf of a profession related to
the operation of the advisory panel.
(d) Members of the advisory panel serve without
compensation and at the will of the commissioner.
Sec. 27. DUTIES OF PHARMACY BENEFIT MANAGER. A person
licensed under this article and doing business as a pharmacy
benefit manager shall:
(1) deal fairly in all contracts with pharmacies;
(2) act as a fiduciary for a pharmacy with which a
pharmacy benefit manager has a contract if the pharmacy benefit
manager receives payment for services rendered by the pharmacy or a
pharmacist employed by the pharmacy; and
(3) give a pharmacy or pharmacist employed by the
pharmacy at least 30 days written notice of the termination of a
contract, except in cases of professional misconduct.
Sec. 28. PROHIBITED ACTIONS OF PHARMACY BENEFIT MANAGER.
(a) A person licensed under this article and doing business as a
pharmacy benefit manager may not penalize a pharmacy or terminate a
contract with a pharmacy solely because the pharmacy or a
pharmacist employed by the pharmacy:
(1) files a complaint against the pharmacy benefit
manager;
(2) disagrees with the pharmacy benefit manager's
decision to deny or limit benefits to an insured;
(3) assists an insured with seeking reconsideration of
the pharmacy benefit manager's decision to deny or limit benefits
to the insured; or
(4) discusses alternative prescription drugs or
devices with an insured.
(b) A person licensed under this article and doing business
as a pharmacy benefit manager may not:
(1) intervene in the delivery or transmission of
prescriptions from the prescribing health care provider to the
pharmacy or pharmacist for purposes of influencing the prescribing
health care provider's choice of therapy;
(2) influence an insured's choice of pharmacy or
pharmacist; or
(3) change the drug or device prescribed by a health
care provider without the written consent of the prescribing health
care provider.
(c) Unless a person licensed under this article and doing
business as a pharmacy benefit manager holds a license to practice
pharmacy issued by the Texas State Board of Pharmacy, the person may
not:
(1) provide pharmaceutical care or patient
counseling;
(2) interpret or evaluate a prescription drug order;
(3) participate in prescription drug or device
selection, administration, or regimen review;
(4) dispense or distribute drug orders or products; or
(5) perform a specific act of drug therapy for an
insured.
(d) A person licensed under this article and doing business
as a pharmacy benefit manager may not use any extrapolation
accounting method when auditing a pharmacy.
Sec. 29. PHARMACY BENEFIT MANAGER DISPUTE RESOLUTION. (a)
The commissioner shall establish an arbitration method for
resolving disputes arising from contracts entered into by pharmacy
benefit managers.
(b) The arbitration method established under Subsection (a)
of this section must include pharmacy benefit managers or their
representatives, insurers, and pharmacists.
SECTION 6. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.
SECTION 7. Not later than June 1, 2004, the commissioner of
insurance shall adopt the rules and forms required by Section 25,
Article 21.07-6, Insurance Code, as added by this Act.
SECTION 8. A pharmacy benefit manager shall use a standard
form contract adopted under Section 25, Article 21.07-6, Insurance
Code, as added by this Act, for any contract between a pharmacy
benefit manager and a pharmacy entered into or renewed on or after
January 1, 2005.