79R2807 PB-F
By: Isett H.B. No. 1336
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of pharmacy benefit managers; providing
administrative and criminal penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle D, Title 13, Insurance Code, is amended
by adding Chapter 4154 to read as follows:
CHAPTER 4154. PHARMACY BENEFIT MANAGERS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 4154.001. DEFINITIONS. In this chapter:
(1) "Board" means the Texas State Board of Pharmacy.
(2) "Claims processing service" means an
administrative service performed in connection with the processing
and adjudication of a claim relating to pharmaceutical services,
including making payments to pharmacists and pharmacies.
(3) "Common controlling interest" means that a
controlling interest in two persons is held by the same person.
(4) "Controlling interest" means that a person
directly or indirectly owns, controls, holds with the power to
vote, or holds proxies representing 50 percent or more of the voting
interests of another person.
(5) "Labor union" has the meaning assigned by Section
101.051, Labor Code.
(6) "Maintenance drug" means a drug:
(A) prescribed by a health care practitioner who
is licensed to prescribe drugs; and
(B) used to treat a medical condition for a
period greater than 30 days.
(7) "Multi-source drug" means a drug that is stocked
and available from at least three suppliers.
(8) "Other prescription drug or device service" means
a service, other than a claims processing service, that is provided
directly or indirectly by a pharmacy benefit manager, whether in
connection with or separate from claims processing services,
including:
(A) negotiating a rebate, discount, other
financial incentive, or other arrangement with a drug company;
(B) disbursing or distributing a rebate;
(C) managing or participating in an incentive
program or arrangement for the services of a pharmacist;
(D) negotiating or entering into a contractual
arrangement with a pharmacist, a pharmacy, or both;
(E) developing drug formularies; and
(F) advertising or promoting claims processing
services or other prescription drug or device services.
(9) "Person" means an individual, corporation,
organization, trust, partnership, or other legal entity.
(10) "Pharmacist" has the meaning assigned by Section
551.003(28), Occupations Code.
(11) "Pharmacist's service" means a service that is
provided by a pharmacist, including drug therapy or another patient
care service, as defined by board rules, that is intended to achieve
outcomes related to:
(A) curing or preventing a disease;
(B) eliminating or reducing a patient's
symptoms; or
(C) arresting or slowing a disease process.
(12) "Pharmacy" has the meaning assigned by Section
551.003(31), Occupations Code.
(13) "Pharmacy benefit manager" means a person and any
wholly or partially owned or controlled subsidiary of the person,
that provides to third parties claims processing services, other
prescription drug or device services, or both services. The term
does not include:
(A) a health care facility licensed in this
state;
(B) a health care practitioner licensed in this
state;
(C) a pharmacy licensed in this state;
(D) an insurer authorized to engage in the
business of insurance in this state;
(E) a health maintenance organization that holds
a certificate of authority under Chapter 843;
(F) a labor union; or
(G) a consultant who only provides advice as to
the selection or performance of a pharmacy benefit manager.
(14) "Single source drug" means a drug other than a
multi-source drug.
(15) "Third party" means any person who is not a
pharmacy benefit manager. The term does not include:
(A) a person that holds a controlling interest in
a pharmacy benefit manager;
(B) a person that shares a common controlling
interest with a pharmacy benefit manager; or
(C) a policyholder, insured, member, or enrollee
of an insurer authorized to engage in the business of insurance in
this state or a health maintenance organization that holds a
certificate of authority under Chapter 843, to the extent that
claims processing services, other prescription drug or device
services, or both services, are provided to the policyholder,
insured, member, or enrollee by a person:
(i) in which the insurance company or
health maintenance organization holds a controlling interest; or
(ii) that shares common controlling
interest with the insurer or health maintenance organization.
(16) "Usual and customary price" means the price that
a pharmacist or pharmacy would charge a patient paying cash for the
same services provided on the same date to another patient, other
than a patient whose reimbursement rates are set by contract.
Sec. 4154.002. RULES. The commissioner shall adopt rules
and standards as necessary to implement this chapter.
Sec. 4154.003. APPLICABILITY OF OTHER PROVISIONS OF CODE.
A pharmacy benefit manager is subject to Section 823.457,
Subchapter H of Chapter 101, Chapter 541, Subchapter A of Chapter
542, and Chapter 804.
Sec. 4154.004. PHARMACY BENEFIT MANAGER NOT INSURANCE
AGENT. (a) A pharmacy benefit manager licensed in any state who
accepts an agent's commission for coverage for a risk located in
this state and disburses that commission to an agent in this state
is not considered an agent for purposes of this title.
(b) The exemption provided by this section does not
authorize a pharmacy benefit manager to perform any other act for
which a license as an agent is required by law.
[Sections 4154.005-4154.050 reserved for expansion]
SUBCHAPTER B. CERTIFICATE OF AUTHORITY; LICENSE
Sec. 4154.051. CERTIFICATE OF AUTHORITY REQUIRED; BOARD
LICENSE REQUIRED. (a) A person may not act as or represent that the
person is a pharmacy benefit manager in this state unless the person
is covered by and is engaging in business under a certificate of
authority issued by the commissioner under this chapter.
(b) In addition to the certificate of authority issued by
the commissioner, a person may not act as or represent that the
person is a pharmacy benefit manager in this state unless the person
holds a pharmacy benefit manager license issued by the board under
Chapter 570, Occupations Code.
(c) A person that holds a certificate of authority under
this chapter is not also required to hold a certificate of authority
as an administrator under Chapter 4151 to act as a pharmacy benefit
manager in this state.
Sec. 4154.052. APPLICATION REQUIREMENTS. (a) An applicant
for a certificate of authority under this chapter shall submit an
application to the department in the manner prescribed by the
commissioner.
(b) An application under this chapter must:
(1) include the information required in an application
made under Section 4151.052 and other information as required by
the commissioner; and
(2) be accompanied by a $300 application fee.
Sec. 4154.053. FIDELITY BOND REQUIRED. (a) If the
commissioner approves an application under Section 4154.052 for a
certificate of authority, before the commissioner issues the
certificate of authority, the applicant must:
(1) obtain and maintain a fidelity bond that complies
with this section; and
(2) submit to the commissioner proof that the
applicant has obtained the fidelity bond.
(b) The fidelity bond must protect against an act of fraud
or dishonesty by the applicant in exercising the applicant's powers
and duties as a pharmacy benefit manager.
(c) The fidelity bond must be equal to at least 10 percent of
the amount of money handled by the pharmacy benefit manager during
the preceding year or, if no money was handled during the preceding
year, 10 percent of the amount of money reasonably estimated to be
handled by the pharmacy benefit manager during the calendar year in
which the license is issued.
(d) For purposes of this section, the amount of money
handled by a person in the person's capacity as pharmacy benefit
manager is the greater of the total amount of premiums and
contributions received by the pharmacy benefit manager or the total
amount of benefits paid by the pharmacy benefit manager in all
jurisdictions in which the person acts as a pharmacy benefit
manager.
(e) Unless the pharmacy benefit manager and an insurer,
health maintenance organization, or benefit plan sponsor agree
otherwise in writing, a pharmacy benefit manager is required to
obtain and maintain only one fidelity bond for all of the pharmacy
benefit manager's activities as a pharmacy benefit manager in this
state.
Sec. 4154.054. ISSUANCE OF CERTIFICATE; DURATION OF
CERTIFICATE; RENEWAL. (a) The commissioner shall issue a
certificate of authority to an applicant that complies with this
chapter.
(b) A pharmacy benefit manager is required to hold only one
certificate of authority issued under this chapter.
(c) A certificate of authority issued under this chapter is
valid for two years from the date of issuance, and may be renewed on
submission of a renewal application to the department accompanied
by a $300 renewal fee.
[Sections 4154.055-4154.100 reserved for expansion]
SUBCHAPTER C. DEPARTMENT REGULATION OF PHARMACY BENEFIT MANAGERS
Sec. 4154.101. EXAMINATION OF PHARMACY BENEFIT MANAGER.
(a) The commissioner may examine a pharmacy benefit manager with
regard to the manager's business in this state.
(b) An examination under this section must include a review
of:
(1) each existing written agreement between the
pharmacy benefit manager and an insurer, health maintenance
organization, or benefit plan sponsor; and
(2) the pharmacy benefit manager's financial
statements.
(c) The commissioner may also require an on-site evaluation
of the pharmacy benefit manager's personnel and facilities and any
books and records of the pharmacy benefit manager relating to the
transaction of business by and the financial condition of the
pharmacy benefit manager. Before an examiner enters the property
of the pharmacy benefit manager, the examiner must notify the
pharmacy benefit manager of the date and estimated time of the
examination in the manner prescribed by commissioner rule. The
examiner shall comply with any operational rules of the pharmacy
benefit manager while on the pharmacy benefit manager's property.
(d) The pharmacy benefit manager shall pay a fee to the
department not to exceed $500 to cover the costs of an examination
under this section.
Sec. 4154.102. ANNUAL STATEMENT. (a) Not later than March
1 of each year, each pharmacy benefit manager shall file with the
department an annual statement for the preceding calendar year.
(b) The annual statement must be made on a form and in the
manner prescribed by the commissioner, accompanied by a $1,000
filing fee, and must include the number and value of claims for
pharmacists' services that are processed by the pharmacy benefit
manager for the preceding calendar year for all patients who are
residents of this state.
Sec. 4154.103. EXTENSION OF FILING PERIOD. The
commissioner may extend, for a period not to exceed 60 days, the
time prescribed for the filing of an annual statement or other
report or exhibit by a pharmacy benefit manager for good cause.
Sec. 4154.104. ASSESSMENT. (a) In addition to the fees
required under this chapter, the commissioner shall annually assess
each pharmacy benefit manager holding a certificate of authority
under this chapter for the department's expenses in administering
this chapter.
(b) The commissioner shall proportionately assess each
pharmacy benefit manager under Subsection (a) for its share of the
total expenses incurred by the department in administering this
chapter in proportion to the business done by all pharmacy benefit
managers in this state, as determined by the commissioner by rule.
Sec. 4154.105. CHANGE IN OWNERSHIP. A pharmacy benefit
manager must notify the department in writing of any material
change in the ownership of the pharmacy benefit manager not later
than the fifth day after the effective date of the change of
ownership.
Sec. 4154.106. ARBITRATION. (a) The commissioner by rule
shall establish a procedure that uses arbitration for resolving
disputes arising under contracts entered into by pharmacy benefit
managers.
(b) The arbitration procedure adopted under Subsection (a)
must include participation by:
(1) pharmacy benefit managers or their
representatives;
(2) insurers, health maintenance organizations, or
benefit plan sponsors; and
(3) pharmacists.
[Sections 4154.107-4154.150 reserved for expansion]
SUBCHAPTER D. CONTRACT ISSUES
Sec. 4154.151. STANDARD CONTRACT FORMS REQUIRED. (a) The
commissioner, in consultation with the contract advisory panel
established under Section 4154.152, shall adopt rules that
establish standard contract forms for use by pharmacy benefit
managers in entering into contracts with pharmacies and pharmacists
and insurers, health maintenance organizations, and benefit plan
sponsors.
(b) Except as provided by Section 4154.153, a pharmacy
benefit manager that enters into a contract with a pharmacy or
pharmacist or insurer, health maintenance organization, or benefit
plan sponsor must use a contract form adopted by the commissioner
under this section.
(c) The terms of a contract form adopted under this section
and entered into by a pharmacy benefit manager and a pharmacy or
pharmacist or insurer, health maintenance organization, or benefit
plan sponsor may not be subsequently modified unless the
modification is agreed to by the pharmacy benefit manager and the
pharmacy or the pharmacist or the insurer, health maintenance
organization, or benefit plan sponsor.
Sec. 4154.152. PHARMACY BENEFIT MANAGER CONTRACT ADVISORY
PANEL. (a) The pharmacy benefit manager contract advisory panel is
established as an advisory body to the commissioner. The advisory
panel shall advise and make recommendations to the commissioner
regarding the adoption of standard contract forms under Section
4154.151.
(b) The advisory panel is composed of nine members appointed
jointly by the commissioner and the board as follows:
(1) two members must be attorneys who primarily
represent insurers, health maintenance organizations, or benefit
plan sponsors;
(2) two members must be pharmacists;
(3) two members must be pharmacy benefit managers who
hold certificates of authority under this chapter; and
(4) three members must be public members.
(c) A public member of 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
benefit plan sponsor;
(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.
(e) Section 2110.008, Government Code, does not apply to the
advisory panel.
Sec. 4154.153. COMMISSIONER APPROVAL OF CONTRACT FORMS.
(a) Not later than the 30th day before the date on which a pharmacy
benefit manager proposes to use a form in this state, other than a
form adopted under Section 4154.151, for a contract entered into
with a pharmacy or pharmacist to provide services in this state, the
pharmacy benefit manager must file the form with the department.
(b) Each contract form is subject to approval by the
commissioner. If the commissioner fails to approve a form before
the 31st day after the date on which the form is received by the
department, the form is deemed disapproved.
(c) The commissioner by rule shall develop formal criteria
for the approval and disapproval of pharmacy benefit manager
contract forms under this section.
Sec. 4154.154. CONTRACT TERMS. (a) Each contract entered
into by a pharmacy benefit manager under this chapter must:
(1) establish specific times within which the pharmacy
benefit manager is required to pay a pharmacy, a pharmacist, or both
for services rendered;
(2) include a provision stating that a pharmacy is not
liable for the acts or omissions of the pharmacy benefit manager;
and
(3) establish the average wholesale price of a
prescription drug or device that is used as an index for claim
payments.
(b) A pharmacy benefit manager contract may not:
(1) establish basic recordkeeping requirements for a
pharmacy or pharmacist that are more stringent than the
recordkeeping requirements required by state or federal laws or
rules;
(2) require a pharmacy or pharmacist to change a
maintenance drug prescribed for a patient unless the prescribing
physician orders the change; or
(3) limit the services a pharmacist may provide to a
range narrower than the scope of the pharmacist's license to
practice pharmacy.
[Sections 4154.155-4154.200 reserved for expansion]
SUBCHAPTER E. POWERS AND DUTIES OF PHARMACY BENEFIT MANAGERS
Sec. 4154.201. IDENTIFICATION CARDS. (a) Except as
provided by commissioner rules, a pharmacy benefit manager shall
issue an identification card to each individual covered by a plan
that provides pharmacy benefits. The pharmacy benefit manager
shall issue the identification card not later than the 30th day
after the date the pharmacy benefit manager receives notice that
the individual is eligible for the benefits.
(b) The commissioner by rule shall adopt standard
information to be included on the identification card. The
standard form identification card must include:
(1) the name or logo of the entity administering the
pharmacy benefits;
(2) the international identification number assigned
by the American National Standards Institute for the entity
administering the pharmacy benefits;
(3) the group number applicable to the covered
individual;
(4) the effective date of the coverage evidenced by
the card;
(5) a telephone number to be used to contact an
appropriate person to obtain information relating to the pharmacy
benefits provided under the coverage; and
(6) copayment information for generic and brand-name
prescription drugs covered by the plan.
Sec. 4154.202. DISCLOSURE OF CERTAIN PATIENT INFORMATION
PROHIBITED. (a) A pharmacy benefit manager may not sell a list of
patients that contains information through which the identity of an
individual patient is disclosed.
(b) A pharmacy benefit manager shall maintain all data that
identifies a patient in a confidential manner that prevents
disclosure to a third party unless the disclosure is otherwise
authorized by law or by the patient.
(c) This section does not prohibit:
(1) general advertising about a specific
pharmaceutical product or service; or
(2) the request and receipt by a person of information
regarding:
(A) a specific pharmaceutical product or
service;
(B) the person's own records or claims; or
(C) the person's dependent's records or claims.
Sec. 4154.203. MEDICATION REIMBURSEMENT COSTS; INDEX. (a)
Each pharmacy benefit manager shall use a current nationally
recognized benchmark as the basis for reimbursements for
medications and products dispensed by pharmacies and pharmacists
with whom the pharmacy benefit manager contracts.
(b) For brand-name single source drugs and brand-name
multi-source drugs, the pharmacy benefit manager shall use as an
index the average wholesale price, as listed in:
(1) First DataBank;
(2) Facts & Comparisons; or
(3) a comparable source recognized by the
commissioner, as provided by Subsection (d).
(c) For generic multi-source drugs, maximum allowable costs
shall be established by referencing the baseline price, as listed
in:
(1) First DataBank;
(2) Facts & Comparisons; or
(3) a comparable source recognized by the
commissioner, as provided by Subsection (d).
(d) If a publication specified in Subsection (b) or (c)
ceases to be a nationally recognized benchmark for reimbursement
for medication and products dispensed by pharmacies and
pharmacists, the commissioner may adopt any other current
nationally recognized benchmark that is established and published
by a person with whom pharmacy benefit managers do not have a
financial or business interest or connection.
(e) To be eligible to be reimbursed through a maximum
allowable cost price methodology, a product must:
(1) be equivalent and generically interchangeable as
provided by state laws related to pharmaceutical products; and
(2) have a United States Food and Drug Administration
Orange Book rating of "A" through "B".
(f) If a generic multi-source drug product does not have a
baseline price, the drug shall be treated as a brand-name single
source drug for the purpose of valuing reimbursement.
[Sections 4154.204-4154.250 reserved for expansion]
SUBCHAPTER F. PROHIBITED ACTIONS BY PHARMACY BENEFIT MANAGERS
Sec. 4154.251. CERTAIN RETROACTIVE CLAIM ADJUSTMENTS
PROHIBITED. (a) A pharmacy benefit manager may not retroactively
deny a claim paid by the pharmacy benefits manager for a
pharmacist's services or adjust the claim after adjudication of the
claim unless:
(1) the original claim was submitted fraudulently;
(2) the payment of the original claim was in error
because the pharmacy or pharmacist had already been paid for the
pharmacist's services; or
(3) the services in question were not rendered by the
pharmacy or pharmacist.
(b) A pharmacy benefit manager may not retroactively
reverse an acknowledgment of eligibility.
Sec. 4154.252. DECEPTIVE ADVERTISEMENTS OR OFFERS
PROHIBITED. A pharmacy benefit manager, or a representative of a
pharmacy benefit manager, may not cause or knowingly permit the use
of an advertisement, promotion, solicitation, proposal, or offer
that is untrue, deceptive, or misleading.
Sec. 4154.253. PROHIBITED ACTIONS AGAINST PHARMACY OR
PHARMACIST. 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 with the department against the
pharmacy benefit manager;
(2) disagrees with the pharmacy benefit manager's
decision to deny or limit benefits to an insured, member, or
enrollee;
(3) assists an insured, member, or enrollee in seeking
reconsideration of the pharmacy benefit manager's decision to deny
or limit benefits to the insured, member, or enrollee; or
(4) discusses alternative prescription drugs or
devices with an insured, member, or enrollee.
[Sections 4154.254-4154.300 reserved for expansion]
SUBCHAPTER G. ENFORCEMENT; SANCTIONS
Sec. 4154.301. ENFORCEMENT; RULES. The commissioner shall
adopt rules as necessary to enforce this chapter. In adopting rules
under this section, the commissioner shall consult and cooperate
with the board as necessary to coordinate enforcement of the
certificate of authority requirements adopted under this chapter
with the license requirements adopted under Chapter 570,
Occupations Code.
Sec. 4154.302. COMPLAINTS; INVESTIGATION. (a) The
commissioner by rule shall adopt procedures for investigation of
complaints concerning the failure of a pharmacy benefit manager to
comply with this chapter.
(b) The commissioner shall refer a complaint received under
this chapter to the board if the complaint involves:
(1) a pharmacy or a pharmacist or other health care
practitioner regulated under Subtitle J, Title 3, Occupations Code;
or
(2) an issue regarding patient health or safety.
Sec. 4154.303. DISCIPLINARY ACTIONS. If the commissioner
has reason to believe that a violation of this chapter has occurred,
the commissioner may:
(1) issue an emergency cease and desist order under
Chapter 83 against the pharmacy benefit manager; or
(2) impose any other necessary or appropriate sanction
under Chapter 82, including suspension or revocation of the
pharmacy benefit manager's certificate of authority.
Sec. 4154.304. ADMINISTRATIVE PENALTY. A person that acts
as a pharmacy benefit manager without a certificate of authority
issued under this chapter is subject to administrative penalties
under Chapter 84. An administrative penalty imposed under this
section may not be less than $5,000 or greater than $10,000 for each
violation.
Sec. 4154.305. CRIMINAL PENALTY. (a) A pharmacy benefit
manager commits an offense if the pharmacy benefit manager
knowingly violates this chapter or a commissioner rule adopted
under this chapter.
(b) An offense under this section is a misdemeanor
punishable by a fine of not less than $500 or more than $5,000.
SECTION 2. Subtitle J, Title 3, Occupations Code, is
amended by adding Chapter 570 to read as follows:
CHAPTER 570. REGULATION OF PHARMACY BENEFIT MANAGERS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 570.001. DEFINITIONS. In this chapter:
(1) "Commissioner" means the commissioner of
insurance.
(2) "Department" means the Texas Department of
Insurance.
(3) "Pharmacy benefit manager" has the meaning
assigned by Section 4154.001, Insurance Code.
[Sections 570.002-570.050 reserved for expansion]
SUBCHAPTER B. LICENSE REQUIREMENTS
Sec. 570.051. LICENSE REQUIRED; DEPARTMENT CERTIFICATE OF
AUTHORITY REQUIRED. (a) A person may not act as or represent that
the person is a pharmacy benefit manager in this state unless the
person holds a pharmacy benefit manager license issued by the board
under this chapter.
(b) In addition to the license issued by the board under
this chapter, a person may not act as or represent that the person
is a pharmacy benefit manager in this state unless the person is
covered by and is engaging in business under a certificate of
authority issued by the commissioner under Chapter 4154, Insurance
Code.
Sec. 570.052. LICENSE REQUIREMENTS. (a) The board by rule
shall adopt the requirements for an original or renewal license
issued under this chapter.
(b) In adopting rules under this section, the board shall
consider the requirements adopted by the commissioner under Chapter
4154, Insurance Code.
Sec. 570.053. LICENSE APPLICATION. Each applicant for a
license under this chapter shall submit a license application in
the manner prescribed by the board, accompanied by a nonrefundable
$500 application fee.
Sec. 570.054. INVESTIGATIONS. As the board considers
necessary for the protection of the residents of this state, the
board may conduct investigations regarding the quality of the
services provided by:
(1) a pharmacy benefit manager; or
(2) a pharmacy or pharmacist with whom the pharmacy
benefit manager contracts.
[Sections 570.055-570.100 reserved for expansion]
SUBCHAPTER C. PROHIBITED ACTS
Sec. 570.101. GENERAL PROHIBITED ACTS. A person licensed
under this chapter and doing business as a pharmacy benefit manager
may not:
(1) intervene in the delivery or transmission of
prescriptions from a prescribing health care practitioner to a
pharmacy or pharmacist for purposes of influencing the prescribing
health care practitioner's choice of therapy;
(2) attempt to influence an insured's, member's, or
enrollee's choice of pharmacy or pharmacist; or
(3) change a drug or device prescribed by a health care
practitioner without the written consent of the prescribing health
care practitioner.
Sec. 570.102. LICENSE TO PRACTICE PHARMACY REQUIRED.
Unless a person licensed under this chapter and doing business as a
pharmacy benefit manager also holds a license to practice pharmacy
issued by the board under Chapter 558, 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, member, or enrollee.
[Sections 570.103-570.150 reserved for expansion]
SUBCHAPTER D. ENFORCEMENT
Sec. 570.151. ENFORCEMENT; RULES. The board shall adopt
rules as necessary to enforce this chapter. In adopting rules under
this section, the board shall consult and cooperate with the
commissioner as necessary to coordinate enforcement of the license
requirements adopted under this chapter with the certificate of
authority requirements adopted under Chapter 4154, Insurance Code.
Sec. 570.152. COMPLAINTS; INVESTIGATION. (a) The board by
rule shall adopt procedures under Chapter 555 for investigation of
complaints concerning the failure of a pharmacy benefit manager to
comply with this chapter.
(b) The board shall refer a complaint received under this
chapter to the commissioner if the complaint involves an issue
regarding the business operations or finances of the pharmacy
benefit manager.
Sec. 570.153. DISCIPLINARY ACTIONS. If the board has
reason to believe that a violation of this chapter has occurred, the
board may, after notice and hearing:
(1) issue a cease and desist order against the
pharmacy benefit manager; or
(2) take any other necessary or appropriate action
under this subtitle, including suspension or revocation of the
pharmacy benefit manager's license.
SECTION 3. Section 4151.001(1), Insurance Code, as
effective April 1, 2005, is amended to read as follows:
(1) "Administrator" means a person who, in connection
with annuities or life, health, and accident benefits, other than
[including] pharmacy benefits, collects premiums or contributions
from or adjusts or settles claims for residents of this state. The
term does not include:
(A) a person described by Section 4151.002; or
(B) a pharmacy benefit manager regulated under
Chapter 4154.
SECTION 4. Subchapter D, Chapter 4151, Insurance Code, as
effective April 1, 2005, is repealed.
SECTION 5. (a) This section applies only to a person who:
(1) on the effective date of this Act, holds a
certificate of authority issued under Chapter 4151, Insurance Code,
as effective April 1, 2005; and
(2) immediately before the effective date of this Act
is operating as a pharmacy benefit manager under that chapter.
(b) Notwithstanding any other provision of this Act, a
person to whom this section applies is entitled to an initial
certificate of authority under Chapter 4154, Insurance Code, as
added by this Act, if the person applies to the commissioner of
insurance in writing not later than March 1, 2006. The person is
not required to comply with the application requirements adopted
under Subchapter B, Chapter 4154, Insurance Code, as added by this
Act, if the commissioner of insurance determines that the person is
in compliance with the application and fidelity bond requirements
imposed under Subchapter B, Chapter 4151, Insurance Code, as
effective April 1, 2005.
(c) The commissioner of insurance shall adopt rules as
necessary to implement this section.
(d) This section expires July 1, 2006.
SECTION 6. A person is not required to hold a certificate of
authority under Chapter 4154, Insurance Code, as added by this Act,
or a license under Chapter 570, Occupations Code, as added by this
Act, to operate as a pharmacy benefit manager in this state until
January 1, 2006.
SECTION 7. (a) The commissioner of insurance shall adopt
rules as necessary to implement Chapter 4154, Insurance Code, as
added by this Act, not later than December 31, 2005.
(b) The Texas State Board of Pharmacy shall adopt rules as
necessary to implement Chapter 570, Occupations Code, as added by
this Act, not later than December 31, 2005.
SECTION 8. (a) Except as provided by Subsection (b) of this
section, this Act takes effect September 1, 2005.
(b) Sections 4154.051, 4154.304, and 4154.305, Insurance
Code, and Section 570.051, Occupations Code, take effect January 1,
2006.