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79R8069 KCR-D
By: Hupp H.B. No. 2674
A BILL TO BE ENTITLED
AN ACT
relating to prescription drug insurance benefits provided through
or by the Employees Retirement System of Texas or the Teacher
Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle H, Title 8, Insurance Code, is amended
by adding Chapter 1565 to read as follows:
CHAPTER 1565. DRUG FORMULARY FOR USE BY CERTAIN
STATE AGENCIES
Sec. 1565.001. DEFINITIONS. In this chapter:
(1) "Commission" means the Health and Human Services
Commission.
(2) "Drug formulary" means a list of drugs preferred
for use and eligible for coverage under a health benefit plan.
(3) "Executive commissioner" means the executive
commissioner of the commission.
Sec. 1565.002. DRUG FORMULARIES. (a) The commission shall
adopt drug formularies for prescription drugs purchased in
connection with health benefit plan coverage provided under Chapter
1551, 1575, or 1579.
(b) In making a decision regarding the placement of a drug
on a drug formulary, the commission shall consider:
(1) the recommendations of the Pharmaceutical and
Therapeutics Committee established under Section 1565.004;
(2) the clinical efficacy of the drug;
(3) the safety of the drug; and
(4) the cost-effectiveness of the drug.
(c) The commission shall:
(1) distribute the formularies by posting the
formularies on the commission's Internet website; and
(2) mail copies of the formularies to:
(A) the executive directors of the Employees
Retirement System of Texas and the Teacher Retirement System of
Texas; and
(B) any health care provider on the request of
that provider.
Sec. 1565.003. PRIOR AUTHORIZATION FOR CERTAIN
PRESCRIPTION DRUGS REQUIRED. (a) The commission shall require
prior authorization for reimbursement for any drug that is not
included in the applicable drug formulary adopted under Section
1565.002. The commission shall require that the prior
authorization be obtained by the prescribing physician or
prescribing practitioner.
(b) Until the commission has completed a study evaluating
the impact of a requirement for prior authorization on recipients
of a drug, the commission may not require prior authorization for a
drug that is used to treat patients with an illness that:
(1) is life-threatening;
(2) is chronic; and
(3) requires complex medical management strategies.
(c) Not later than the 30th day before the date on which a
prior authorization requirement is effective, the commission shall
post on the commission's Internet website for covered persons and
health care providers:
(1) a notification of the effective date of the
requirement; and
(2) a detailed description of the procedures to be
used to obtain prior authorization.
(d) The commission may not require prior authorization for
reimbursement for a prescription drug that is prescribed to a
covered person before the effective date of the prior authorization
requirement for the drug before the earlier of:
(1) the date the covered person has exhausted all of
the prescription, including any authorized refills; or
(2) the expiration of a period prescribed by the
commission.
(e) The commission shall ensure that the prior
authorization requirements are implemented in a manner that
minimizes the cost to the state and the administrative burden on
health care providers.
Sec. 1565.004. PHARMACEUTICAL AND THERAPEUTICS COMMITTEE.
(a) The Pharmaceutical and Therapeutics Committee is established
to develop recommendations for drug formularies adopted by the
commission under Section 1565.002.
(b) The committee consists of the following members
appointed by the lieutenant governor:
(1) five physicians licensed under Subtitle B, Title
3, Occupations Code, two of whom must be doctors of osteopathic
medicine;
(2) five pharmacists licensed under Subtitle J, Title
3, Occupations Code, one of whom must be a clinical pharmacist and
one of whom must have expertise in pharmaco-economics;
(3) one representative of the Employees Retirement
System of Texas; and
(4) one representative of the Teacher Retirement
System of Texas.
(c) In making appointments to the committee, the lieutenant
governor shall ensure that the committee includes physicians and
pharmacists who:
(1) represent different specialties;
(2) have experience in developing or practicing under
drug formularies; and
(3) do not have contractual relationships, ownership
interests, or other conflicts of interest with a pharmacy benefit
manager under contract with or employed by the Employees Retirement
System of Texas or the Teacher Retirement System of Texas.
(d) A member of the committee is appointed for a two-year
term and may serve more than one term.
(e) The lieutenant governor shall appoint a physician to be
the presiding officer of the committee. The presiding officer
serves at the pleasure of the lieutenant governor.
(f) The committee shall meet at least quarterly and at other
times at the call of the presiding officer or a majority of the
committee members.
(f-1) Notwithstanding Subsection (f), the committee shall
meet at least monthly during the six-month period following
establishment of the committee to enable the committee to develop
recommendations for the initial drug formularies. This subsection
expires September 1, 2007.
(g) A member of the committee may not receive compensation
for serving on the committee but is entitled to reimbursement for
reasonable and necessary travel expenses incurred by the member
while conducting the business of the committee, as provided by the
General Appropriations Act.
(h) In developing the committee's recommendations for the
drug formularies, the committee shall consider the clinical
efficacy, safety, and cost-effectiveness of a drug to be placed on a
formulary.
(i) The executive commissioner shall adopt rules governing
the operation of the committee, including rules governing the
procedures used by the committee to provide notice of a meeting.
The committee shall comply with the rules adopted under this
subsection.
(j) To the extent feasible, the committee shall review all
drug classes included in the drug formularies adopted under Section
1565.002 at least once every 12 months and may recommend inclusions
to and exclusions from the formularies to ensure that the
formularies provide for cost-effective, medically appropriate drug
therapies for covered persons.
(k) The commission shall provide administrative support and
resources as necessary for the committee to perform the committee's
duties.
(l) Chapter 2110, Government Code, does not apply to the
committee.
Sec. 1565.005. RULES. The executive commissioner shall
adopt rules as necessary to implement this chapter.
SECTION 2. Section 1551.218, Insurance Code, is amended to
read as follows:
Sec. 1551.218. USE OF DRUG FORMULARIES; PRIOR AUTHORIZATION
REQUIRED FOR CERTAIN DRUGS. The board of trustees by rule shall
require a [(a) In this section, "drug formulary" means a list of
drugs preferred for use and eligible for coverage under a health
benefit plan.
[(b) A] health benefit plan provided under this chapter to:
(1) use only the [that uses a] drug formularies
adopted by the Health and Human Services Commission under Chapter
1565 [formulary] in providing a prescription drug benefit; and
(2) follow the [must require] prior authorization
requirements adopted by the Health and Human Services Commission as
part of those formularies [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) Every six months the board of trustees shall submit to
the comptroller and Legislative Budget Board a report regarding any
cost savings achieved in the group benefits program through
implementation of the prior authorization requirement of this
section. A report must cover the previous six-month period].
SECTION 3. Subchapter E, Chapter 1551, Insurance Code, is
amended by adding Section 1551.2195 to read as follows:
Sec. 1551.2195. RESTRICTIONS ON MAIL ORDER PRESCRIPTION
PLANS. (a) In this section, "pharmacy benefit manager" has the
meaning assigned by Section 4151.151.
(b) A pharmacy benefit manager who administers pharmacy
benefits under a coverage plan under this chapter may not refer a
participant in the group benefits program to a mail order
prescription plan that is owned by or affiliated with the pharmacy
benefit manager or from which the pharmacy benefit manager receives
incentives, bonuses, or other compensation.
(c) A pharmacy benefit manager who violates Subsection (b)
is subject to sanctions as provided by Chapter 82.
SECTION 4. Subchapter D, Chapter 1575, Insurance Code, is
amended by adding Section 1575.169 to read as follows:
Sec. 1575.169. RESTRICTIONS ON MAIL ORDER PRESCRIPTION
PLANS. (a) In this section, "pharmacy benefit manager" has the
meaning assigned by Section 4151.151.
(b) A pharmacy benefit manager who administers pharmacy
benefits under a health benefit plan under this chapter may not
refer a participant in the group program to a mail order
prescription plan that is owned by or affiliated with the pharmacy
benefit manager or from which the pharmacy benefit manager receives
incentives, bonuses, or other compensation.
(c) A pharmacy benefit manager who violates Subsection (b)
is subject to sanctions as provided by Chapter 82.
SECTION 5. Section 1575.170, Insurance Code, is amended to
read as follows:
Sec. 1575.170. USE OF DRUG FORMULARIES; PRIOR AUTHORIZATION
REQUIRED FOR CERTAIN DRUGS. The trustee by rule shall require a
[(a) In this section, "drug formulary" means a list of drugs
preferred for use and eligible for coverage under a health benefit
plan.
[(b) A] health benefit plan provided under this chapter to:
(1) use only the [that uses a] drug formularies
adopted by the Health and Human Services Commission under Chapter
1565 [formulary] in providing a prescription drug benefit; and
(2) follow the [must require] prior authorization
requirements adopted by the Health and Human Services Commission as
part of those formularies [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) Every six months the board of trustees shall submit to
the comptroller and Legislative Budget Board a report regarding any
cost savings achieved in the group program through implementation
of the prior authorization requirement of this section. A report
must cover the previous six-month period].
SECTION 6. Subchapter C, Chapter 1579, Insurance Code, is
amended by adding Sections 1579.106 and 1579.107 to read as
follows:
Sec. 1579.106. USE OF DRUG FORMULARIES; PRIOR AUTHORIZATION
REQUIRED FOR CERTAIN DRUGS. The trustee by rule shall require a
health coverage plan provided under this chapter to:
(1) use only the drug formularies adopted by the
Health and Human Services Commission under Chapter 1565 in
providing a prescription drug benefit; and
(2) follow the prior authorization requirements
adopted by the Health and Human Services Commission as part of those
formularies.
Sec. 1579.107. RESTRICTIONS ON MAIL ORDER PRESCRIPTION
PLANS. (a) In this section, "pharmacy benefit manager" has the
meaning assigned by Section 4151.151.
(b) A pharmacy benefit manager who administers pharmacy
benefits under a coverage plan under this chapter may not refer a
participant in the program to a mail order prescription plan that is
owned by or affiliated with the pharmacy benefit manager or from
which the pharmacy benefit manager receives incentives, bonuses, or
other compensation.
(c) A pharmacy benefit manager who violates Subsection (b)
is subject to sanctions as provided by Chapter 82.
SECTION 7. (a) The Health and Human Services Commission
shall adopt the drug formularies required under Chapter 1565,
Insurance Code, as added by this Act, not later than June 1, 2006.
(b) The lieutenant governor shall appoint the members of the
Pharmaceutical and Therapeutics Committee established under
Chapter 1565, Insurance Code, as added by this Act, not later than
the 61st day after the effective date of this Act.
(c) Sections 1551.2195, 1575.169, and 1579.107, Insurance
Code, as added by this Act, apply to health benefit plans or health
coverage plans provided under Chapters 1551, 1575, and 1579,
Insurance Code, beginning with the 2005-2006 plan year.
(d) Sections 1551.218 and 1575.170, Insurance Code, as
amended by this Act, and Section 1579.106, Insurance Code, as added
by this Act, apply to health benefit plans or health coverage plans
provided under Chapters 1551, 1575, and 1579, Insurance Code,
beginning with the 2006-2007 plan year.
SECTION 8. 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, 2005.