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AN ACT
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relating to the regulation of pharmacy benefit managers and mail |
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order pharmacies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 2158, Government Code, is amended by |
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adding Subchapter H to read as follows: |
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SUBCHAPTER H. PURCHASE OF PHARMACY BENEFIT MANAGER SERVICES |
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Sec. 2158.401. DEFINITION; APPLICABILITY. (a) In this |
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subchapter, "state agency" means a board, commission, department, |
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office, or other agency in the executive, legislative, or judicial |
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branch of state government that is created by the constitution or a |
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statute of this state, including an institution of higher education |
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as defined by Section 61.003, Education Code. |
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(b) This subchapter applies in relation to a state agency |
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contract or proposed contract for pharmacy benefit manager services |
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without regard to whether the contract or proposed contract is |
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otherwise subject to this subtitle. |
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Sec. 2158.402. REQUIRED DISCLOSURE. (a) A state agency on |
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request of another state agency shall disclose information relating |
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to the amounts charged by a pharmacy benefit manager for pharmacy |
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benefit manager services provided under a prescription drug program |
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and other requested pricing information related to a contract for |
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pharmacy benefit manager services. A state agency shall provide |
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information requested under this section not later than the 30th |
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day after the date the information is requested. |
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(b) Subsection (a) does not require a state agency to |
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disclose information the agency is specifically prohibited from |
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disclosing under a contract with a pharmacy benefit manager |
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executed before September 1, 2009. |
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(c) A contract entered, amended, or extended on or after |
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September 1, 2009, may not contain a provision that prohibits a |
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state agency from disclosing under this subchapter information on |
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the amounts charged by a pharmacy benefit manager for pharmacy |
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benefit manager services provided under a prescription drug program |
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or from disclosing under this subchapter other pricing information |
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related to the contract. |
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Sec. 2158.403. CONFIDENTIALITY. The information received |
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by a state agency under this subchapter may not be disclosed to a |
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person outside of the state agency or its agents. |
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SECTION 2. Subchapter B, Chapter 1369, Insurance Code, is |
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amended by adding Section 1369.0551 to read as follows: |
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Sec. 1369.0551. STUDY. (a) The department shall conduct a |
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study to evaluate the ways in which pharmacy benefit managers use |
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prescription drug information to manage therapeutic drug |
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interchange programs and other drug substitution recommendations |
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made by pharmacy benefit managers or other similar entities. The |
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study must include information regarding pharmacy benefit |
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managers: |
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(1) intervening in the delivery or transmission of a |
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prescription from a prescribing health care practitioner to a |
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pharmacist for purposes of influencing the prescribing health care |
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practitioner's choice of therapy; |
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(2) recommending that a prescribing health care |
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practitioner change from the originally prescribed medication to |
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another medication, including generic substitutions and |
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therapeutic interchanges; |
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(3) changing a drug or device prescribed by a health |
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care practitioner without the consent of the prescribing health |
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care practitioner; |
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(4) changing a patient cost-sharing obligation for the |
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cost of a prescription drug or device, including placing a drug or |
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device on a higher formulary tier than the initial contracted |
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benefit level; and |
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(5) removing a drug or device from a group health |
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benefit plan formulary without providing proper enrollee notice. |
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(b) Not later than August 1, 2010, the department shall |
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submit to the governor, the lieutenant governor, the speaker of the |
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house of representatives, and the appropriate standing committees |
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of the legislature a report regarding the results of the study |
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required by Subsection (a), together with any recommendations for |
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legislation. |
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(c) This section expires September 1, 2010. |
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SECTION 3. Subchapter B, Chapter 1551, Insurance Code, is |
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amended by adding Section 1551.067 to read as follows: |
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Sec. 1551.067. PHARMACY BENEFIT MANAGER CONTRACTS. (a) In |
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awarding a contract to provide pharmacy benefit manager services |
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under this chapter, the board of trustees is not required to select |
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the lowest bid but must select a contract that meets the criteria |
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established by this section. |
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(b) The contract must state that: |
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(1) the board of trustees is entitled to audit the |
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pharmacy benefit manager to verify costs and discounts associated |
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with drug claims, pharmacy benefit manager compliance with contract |
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requirements, and services provided by subcontractors; |
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(2) the audit must be conducted by an independent |
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auditor in accordance with established auditing standards; and |
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(3) to conduct the audit, the board of trustees and the |
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independent auditor are entitled access to information related to |
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the services and the costs associated with the services performed |
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under the contract, including access to the pharmacy benefit |
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manager's facilities, records, contracts, medical records, and |
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agreements with subcontractors. |
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(c) The contract must define the information that the |
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pharmacy benefit manager is required to provide to the board of |
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trustees concerning the audit of the retail, independent, and mail |
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order pharmacies performing services under the contract and |
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describe how the results of these audits must be reported to the |
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board of trustees, including how often the results must be |
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reported. The contract must state whether the pharmacy benefit |
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manager is required to return recovered overpayments to the board |
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of trustees. |
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(d) The contract must state that any audit of a mail order |
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pharmacy owned by the pharmacy benefit manager must be conducted by |
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an independent auditor selected by the board of trustees in |
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accordance with established auditing standards. |
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SECTION 4. Section 1551.224, Insurance Code, is amended to |
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read as follows: |
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Sec. 1551.224. MAIL ORDER REQUIREMENT FOR PRESCRIPTION DRUG |
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COVERAGE PROHIBITED. (a) The board of trustees or a health |
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benefit plan under this chapter that provides benefits for |
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prescription drugs may not require a participant in the group |
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benefits program to purchase a prescription drug through a mail |
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order program. |
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(b) Except as provided by Subsection (c), the [The] board of |
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trustees or a health benefit plan shall require that a participant |
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who chooses to obtain a prescription drug through a retail pharmacy |
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or other method other than by mail order pay a deductible, |
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copayment, coinsurance, or other cost-sharing obligation to cover |
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the additional cost of obtaining a prescription drug through that |
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method rather than by mail order. |
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(c) The board of trustees or a health benefit plan may not |
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require a participant who obtains a multiple-month supply of a |
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prescription drug from a retail pharmacy under Section 1560.003 to |
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pay a deductible, copayment, coinsurance, or other cost-sharing |
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obligation that differs from the amount the participant pays for a |
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multiple-month supply of that drug through a mail order program. |
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SECTION 5. Subtitle H, Title 8, Insurance Code, is amended |
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by adding Chapter 1560 to read as follows: |
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CHAPTER 1560. DELIVERY OF PRESCRIPTION DRUGS BY MAIL |
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Sec. 1560.001. DEFINITIONS. In this chapter: |
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(1) "Community retail pharmacy" means a pharmacy that |
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is licensed as a Class A pharmacy under Chapter 560, Occupations |
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Code. |
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(2) "Mail order pharmacy" means a pharmacy that is |
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licensed under Chapter 560, Occupations Code, and that primarily |
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delivers prescription drugs to an enrollee through the United |
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States Postal Service or a commercial delivery service. |
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Sec. 1560.002. APPLICABILITY OF CHAPTER. This chapter |
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applies only to a health benefit plan that provides benefits for |
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medical or surgical expenses incurred as a result of a health |
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condition, accident, or sickness, including an individual, group, |
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blanket, or franchise insurance policy or insurance agreement, a |
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group hospital service contract, or an individual or group evidence |
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of coverage or similar coverage document that is offered or |
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administered by: |
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(1) the Teacher Retirement System of Texas under |
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Chapter 1575 or 1579; or |
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(2) the Employees Retirement System of Texas under |
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Chapter 1551. |
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Sec. 1560.003. MULTIPLE-MONTH SUPPLY OF PRESCRIPTION DRUG. |
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(a) In this section, "multiple-month supply" means a supply for 60 |
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or more days. |
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(b) Notwithstanding any other law, an issuer of a health |
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benefit plan that provides pharmacy benefits to enrollees must |
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allow an enrollee to obtain from a community retail pharmacy a |
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multiple-month supply of any prescription drug under the same terms |
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and conditions applicable when the prescription drug is obtained |
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from a mail order pharmacy, if the community retail pharmacy agrees |
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to accept reimbursement on exactly the same terms and conditions |
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that apply to a mail order pharmacy. |
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(c) This section does not require: |
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(1) the issuer of a health benefit plan to contract |
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with: |
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(A) a retail pharmacy that does not agree to |
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accept reimbursement on exactly the same terms and conditions that |
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apply to a mail order pharmacy; or |
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(B) more than one mail order pharmacy; or |
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(2) a community retail pharmacy to: |
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(A) provide a multiple-month supply of a |
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prescription drug under the same terms and conditions applicable |
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when the prescription drug is obtained from a mail order pharmacy; |
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or |
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(B) agree to accept reimbursement on exactly the |
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same terms and conditions that apply to a mail order pharmacy. |
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Sec. 1560.004. PRESCRIPTION DRUG REIMBURSEMENT RATES. |
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(a) An issuer of a health benefit plan that provides pharmacy |
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benefits to enrollees shall reimburse pharmacies participating in |
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the health plan using prescription drug reimbursement rates, for |
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both brand name and generic prescription drugs, that are based on a |
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current and nationally recognized benchmark index that includes |
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average wholesale price and maximum allowable cost. |
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(b) Regardless of whether a pharmacy is a mail order |
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pharmacy or a community retail pharmacy, an issuer of a health |
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benefit plan shall use the same benchmark index, including the same |
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average wholesale price, maximum allowable cost, and national |
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prescription drug codes, to reimburse all pharmacies participating |
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in the health benefit plan. |
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SECTION 6. Subchapter C, Chapter 1575, Insurance Code, is |
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amended by adding Section 1575.110 to read as follows: |
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Sec. 1575.110. PHARMACY BENEFIT MANAGER CONTRACTS. (a) In |
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awarding a contract to provide pharmacy benefit manager services |
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under this chapter, the trustee is not required to select the lowest |
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bid but must select a contract that meets the criteria established |
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by this section. |
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(b) The contract must state that: |
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(1) the trustee is entitled to audit the pharmacy |
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benefit manager to verify costs and discounts associated with drug |
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claims, pharmacy benefit manager compliance with contract |
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requirements, and services provided by subcontractors; |
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(2) the audit must be conducted by an independent |
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auditor in accordance with established auditing standards; and |
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(3) to conduct the audit, the trustee and the |
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independent auditor are entitled access to information related to |
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the services and the costs associated with the services performed |
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under the contract, including access to the pharmacy benefit |
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manager's facilities, records, contracts, medical records, and |
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agreements with subcontractors. |
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(c) The contract must define the information that the |
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pharmacy benefit manager is required to provide to the trustee |
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concerning the audit of the retail, independent, and mail order |
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pharmacies performing services under the contract and describe how |
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the results of these audits must be reported to the trustee, |
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including how often the results must be reported. The contract must |
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state whether the pharmacy benefit manager is required to return |
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recovered overpayments to the trustee. |
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(d) The contract must state that any audit of a mail order |
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pharmacy owned by the pharmacy benefit manager must be conducted by |
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an independent auditor selected by the trustee in accordance with |
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established auditing standards. |
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SECTION 7. Subchapter B, Chapter 1579, Insurance Code, is |
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amended by adding Section 1579.057 to read as follows: |
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Sec. 1579.057. PHARMACY BENEFIT MANAGER CONTRACTS. (a) In |
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awarding a contract to provide pharmacy benefit manager services |
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under this chapter, the trustee is not required to select the lowest |
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bid but must select a contract that meets the criteria established |
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by this section. |
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(b) The contract must state that: |
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(1) the trustee is entitled to audit the pharmacy |
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benefit manager to verify costs and discounts associated with drug |
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claims, pharmacy benefit manager compliance with contract |
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requirements, and services provided by subcontractors; |
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(2) the audit must be conducted by an independent |
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auditor in accordance with established auditing standards; and |
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(3) to conduct the audit, the trustee and the |
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independent auditor are entitled access to information related to |
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the services and the costs associated with the services performed |
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under the contract, including access to the pharmacy benefit |
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manager's facilities, records, contracts, medical records, and |
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agreements with subcontractors. |
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(c) The contract must define the information that the |
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pharmacy benefit manager is required to provide to the trustee |
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concerning the audit of the retail, independent, and mail order |
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pharmacies performing services under the contract and describe how |
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the results of these audits must be reported to the trustee, |
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including how often the results must be reported. The contract must |
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state whether the pharmacy benefit manager is required to return |
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recovered overpayments to the trustee. |
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(d) The contract must state that any audit of a mail order |
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pharmacy owned by the pharmacy benefit manager must be conducted by |
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an independent auditor selected by the trustee in accordance with |
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established auditing standards. |
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SECTION 8. Subchapter B, Chapter 1601, Insurance Code, is |
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amended by adding Section 1601.064 to read as follows: |
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Sec. 1601.064. PHARMACY BENEFIT MANAGER CONTRACTS. (a) In |
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awarding a contract to provide pharmacy benefit manager services |
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under this chapter, a system is not required to select the lowest |
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bid but must select a contract that meets the criteria established |
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by this section. |
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(b) The contract must state that: |
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(1) the system is entitled to audit the pharmacy |
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benefit manager to verify costs and discounts associated with drug |
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claims, pharmacy benefit manager compliance with contract |
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requirements, and services provided by subcontractors; |
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(2) the audit must be conducted by an independent |
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auditor in accordance with established auditing standards; and |
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(3) to conduct the audit, the system and the |
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independent auditor are entitled access to information related to |
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the services and the costs associated with the services performed |
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under the contract, including access to the pharmacy benefit |
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manager's facilities, records, contracts, medical records, and |
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agreements with subcontractors. |
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(c) The contract must define the information that the |
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pharmacy benefit manager is required to provide to the system |
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concerning the audit of the retail, independent, and mail order |
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pharmacies performing services under the contract and describe how |
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the results of these audits must be reported to the system, |
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including how often the results must be reported. The contract must |
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state whether the pharmacy benefit manager is required to return |
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recovered overpayments to the system. |
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(d) The contract must state that any audit of a mail order |
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pharmacy owned by the pharmacy benefit manager must be conducted by |
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an independent auditor selected by the system in accordance with |
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established auditing standards. |
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SECTION 9. Sections 1551.067, 1575.110, 1579.057, and |
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1601.064, Insurance Code, as added by this Act, apply only to a |
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contract with a pharmacy benefit manager executed or renewed on or |
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after the effective date of this Act. |
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SECTION 10. Chapter 1560, Insurance Code, as added by this |
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Act, and Section 1551.224, Insurance Code, as amended by this Act |
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apply only to a health benefit plan that is delivered, issued for |
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delivery, or renewed on or after January 1, 2010. A health benefit |
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plan that is delivered, issued for delivery, or renewed before |
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January 1, 2010, is covered by the law in effect at the time the |
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health benefit plan was delivered, issued for delivery, or renewed, |
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and that law is continued in effect for that purpose. |
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SECTION 11. This Act takes effect September 1, 2009. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 704 passed the Senate on |
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April 22, 2009, by the following vote: Yeas 30, Nays 0; and that |
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the Senate concurred in House amendments on May 30, 2009, by the |
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following vote: Yeas 30, Nays 1. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 704 passed the House, with |
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amendments, on May 20, 2009, by the following vote: Yeas 134, |
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Nays 0, three present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |