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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of pharmacy benefit managers; imposing |
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penalties; imposing and authorizing fees. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle D, Title 13, Insurance Code, is amended |
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by adding Chapter 4154 to read as follows: |
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CHAPTER 4154. PHARMACY BENEFIT MANAGERS |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 4154.001. DEFINITIONS. In this chapter: |
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(1) "Covered entity" means an entity that issues or |
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provides coverage described by Section 4154.002. |
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(2) "Covered individual" means a member, participant, |
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enrollee, contract holder, policyholder, or beneficiary of a |
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covered entity who is provided health coverage by the covered |
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entity. The term includes a dependent or other individual who |
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receives health coverage through a policy, contract, or plan for a |
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covered individual. |
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(3) "Extrapolation" means a mathematical process or |
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technique to estimate audit results or findings for a larger batch |
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or group of claims not audited. |
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(4) "Pharmacy benefit management" means |
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administration or management of prescription drug benefits |
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provided by a covered entity, including: |
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(A) retail pharmacy network management; |
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(B) pharmacy discount card management; |
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(C) claims payment to a retail pharmacy for |
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prescription medications dispensed to covered individuals; |
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(D) clinical formulary development and |
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management services, including utilization management and quality |
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assurance programs; |
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(E) rebate contracting and administration; |
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(F) auditing contracted pharmacies; |
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(G) establishing pharmacy reimbursement pricing |
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and methodologies; and |
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(H) determining single and multiple source |
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medications. |
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(5) "Pharmacy benefit manager" means an entity that: |
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(A) contracts with a retail pharmacy on behalf of |
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a covered entity for the pharmacy to provide pharmacy services to |
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the covered entity; and |
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(B) provides pharmacy benefit management |
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services. |
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(6) "Retail pharmacy" means a pharmacy licensed under |
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Chapter 560, Occupations Code, that dispenses medications to the |
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public, including an independent pharmacy, a chain pharmacy, a |
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supermarket pharmacy, or a mass merchandiser pharmacy. The term |
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does not include a pharmacy that dispenses prescription medications |
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primarily through the mail, a nursing home pharmacy, a long-term |
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care facility pharmacy, a hospital pharmacy, a clinic pharmacy, a |
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charitable or nonprofit pharmacy, a government pharmacy, or a |
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pharmacy benefit manager that is serving in its capacity as a |
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pharmacy benefit manager. |
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Sec. 4154.002. APPLICABILITY OF CHAPTER; EXCEPTION. (a) |
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This chapter applies only to a pharmacy benefit manager that |
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provides pharmacy benefit management with respect to prescription |
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drug benefits provided by an entity that issues or provides a health |
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benefit plan that provides benefits for medical or surgical |
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expenses incurred as a result of a health condition, accident, or |
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sickness, including an individual, group, blanket, or franchise |
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insurance policy or insurance agreement, a group hospital service |
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contract, or an individual or group evidence of coverage or similar |
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coverage document that is offered by: |
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(1) an insurance company; |
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(2) a group hospital service corporation operating |
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under Chapter 842; |
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(3) a fraternal benefit society operating under |
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Chapter 885; |
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(4) a stipulated premium company operating under |
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Chapter 884; |
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(5) an exchange operating under Chapter 942; |
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(6) a health maintenance organization operating under |
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Chapter 843; |
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(7) a multiple employer welfare arrangement that holds |
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a certificate of authority under Chapter 846; or |
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(8) an approved nonprofit health corporation that |
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holds a certificate of authority under Chapter 844. |
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(b) This chapter applies to a pharmacy benefit manager that |
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provides pharmacy benefit management with respect to prescription |
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drug benefits provided by the provider or issuer of group health |
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coverage made available by a school district in accordance with |
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Section 22.004, Education Code. |
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(c) Notwithstanding Section 172.014, Local Government Code, |
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or any other law, this chapter applies to a pharmacy benefit manager |
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that provides pharmacy benefit management with respect to |
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prescription drug benefits provided by a risk pool created under |
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Chapter 172, Local Government Code, that provides health and |
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accident coverage. |
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(d) Notwithstanding any provision in Chapter 1551, 1575, |
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1579, or 1601 or any other law, this chapter applies to a pharmacy |
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benefit manager that provides pharmacy benefit management with |
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respect to prescription drug benefits provided by the provider or |
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issuer of: |
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(1) a basic coverage plan under Chapter 1551; |
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(2) a basic plan under Chapter 1575; |
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(3) a primary care coverage plan under Chapter 1579; |
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and |
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(4) basic coverage under Chapter 1601. |
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(e) Notwithstanding Section 1501.251 or any other law, this |
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chapter applies to a pharmacy benefit manager that provides |
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pharmacy benefit management with respect to prescription drug |
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benefits provided by the issuer of coverage under a small employer |
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health benefit plan subject to Chapter 1501. |
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(f) To the extent allowed by federal law, this chapter |
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applies to a pharmacy benefit manager that provides pharmacy |
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benefit management with respect to prescription drug benefits |
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provided by the state Medicaid program or a managed care |
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organization that contracts with the Health and Human Services |
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Commission to provide health care services to Medicaid recipients |
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through a managed care plan. |
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(g) This chapter does not apply to a pharmacy benefit |
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manager that provides pharmacy benefit management with respect to |
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prescription drug benefits provided by: |
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(1) a plan that provides coverage: |
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(A) for wages or payments in lieu of wages for a |
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period during which an employee is absent from work because of |
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sickness or injury; |
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(B) as a supplement to a liability insurance |
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policy; |
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(C) for credit insurance; |
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(D) only for dental or vision care; |
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(E) only for hospital expenses; or |
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(F) only for indemnity for hospital confinement; |
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(2) a Medicare supplemental policy as defined by |
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Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss); |
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(3) a workers' compensation insurance policy; |
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(4) medical payment insurance coverage provided under |
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a motor vehicle insurance policy; or |
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(5) a long-term care policy, including a nursing home |
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fixed indemnity policy, unless the commissioner determines that the |
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policy provides benefit coverage so comprehensive that the policy |
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is a health benefit plan as described by Subsections (a)-(f). |
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Sec. 4154.003. AGENT FOR SERVICE OF PROCESS. (a) As a |
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condition of being authorized to act as a pharmacy benefit manager |
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under this chapter, an applicant must appoint and maintain as agent |
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for service of process a person in this state on whom judicial or |
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administrative process may be served. |
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(b) If an applicant does not appoint or maintain a person in |
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this state as agent for service of process or the agent cannot with |
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reasonable diligence be found, the commissioner may accept service |
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of process and notify the applicant. |
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Sec. 4154.004. RULES. The commissioner may adopt rules and |
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standards as necessary to implement this chapter. |
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[Sections 4154.005-4154.050 reserved for expansion] |
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SUBCHAPTER B. CERTIFICATE OF AUTHORITY |
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Sec. 4154.051. CERTIFICATE OF AUTHORITY REQUIRED. Except |
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as provided by Section 4154.251(b), an entity may not act as or hold |
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itself out as a pharmacy benefit manager in this state unless the |
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entity is covered by and is engaging in business under a certificate |
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of authority issued under this chapter. |
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Sec. 4154.052. APPLICATION. The application for a |
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certificate of authority under this subchapter must be: |
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(1) in the form prescribed by the commissioner; and |
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(2) verified by an officer or authorized |
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representative of the applicant. |
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Sec. 4154.053. CONTENTS OF APPLICATION. (a) An application |
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for a certificate of authority under this subchapter must include: |
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(1) a copy of the applicant's organizational |
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documents, including the articles of incorporation, articles of |
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association, partnership agreement, trust agreement, bylaws, or |
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other applicable documents; |
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(2) all amendments to the applicant's organizational |
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documents; and |
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(3) a financial statement for each of the two years |
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preceding the date of the application that includes: |
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(A) projected financial statements during the |
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initial period of operation under the certificate of authority; |
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(B) a balance sheet reflecting the condition of |
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the applicant on the date operations are expected to start; |
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(C) a statement of revenue and expenses with |
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expected member months; and |
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(D) a cash flow statement that states any capital |
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expenditures, purchase and sale of investments, and deposits with |
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the state. |
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(b) An application for a certificate of authority must |
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include a list of the names, addresses, and official positions of |
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the persons responsible for the conduct of the applicant's affairs, |
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including: |
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(1) each member of the board of directors, board of |
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trustees, executive committee, or other governing body or |
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committee; |
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(2) the principal officer, if the applicant is a |
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corporation; |
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(3) each partner or member, if the applicant is a |
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partnership or association; and |
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(4) other information required by the commissioner. |
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(c) An application for a certificate of authority must |
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include a detailed description of pharmacy benefit management and |
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other services, if any, the applicant will provide. |
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Sec. 4154.054. FEES; EXPENSES. (a) An applicant for the |
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issuance or renewal of a certificate of authority under this |
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subchapter must pay a fee in an amount set by the commissioner on |
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the date the applicant files the application for issuance or |
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renewal. |
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(b) The commissioner may annually assess a fee against all |
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pharmacy benefit managers in this state in an amount necessary to |
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cover the costs incurred in administering this chapter. |
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Sec. 4154.055. DURATION OF CERTIFICATE OF AUTHORITY. A |
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certificate of authority under this chapter is effective until the |
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earlier of: |
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(1) one year from the date the application for the |
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certificate is approved or the certificate is renewed, as |
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applicable; or |
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(2) the date the certificate is suspended, canceled, |
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or revoked. |
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Sec. 4154.056. STREAMLINED PROCEDURES. The commissioner |
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may adopt and implement procedures for streamlining certification |
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under this chapter. |
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[Sections 4154.057-4154.100 reserved for expansion] |
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SUBCHAPTER C. GENERAL REQUIREMENTS AND PROHIBITIONS |
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Sec. 4154.101. AMENDMENT OF CONTRACT TERM. A pharmacy |
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benefit manager may not change a term of a contract with a retail |
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pharmacy, including automatically enrolling or disenrolling the |
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pharmacy from a pharmacy benefit network, without prior written |
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agreement of the retail pharmacy. |
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Sec. 4154.102. CERTAIN TRANSACTION FEES PROHIBITED. A |
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pharmacy benefit manager may not charge a transaction fee for a |
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claim submitted electronically to the pharmacy benefit manager by a |
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retail pharmacy. |
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Sec. 4154.103. PHARMACY NETWORK REQUIREMENTS AND |
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PROHIBITIONS. (a) A pharmacy benefit manager may not require that |
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a retail pharmacy be a member of a network managed by the pharmacy |
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benefit manager as a condition for the retail pharmacy to |
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participate in another network managed by the pharmacy benefit |
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manager. |
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(b) A pharmacy benefit manager may not exclude a retail |
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pharmacy from participation in a network if the pharmacy: |
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(1) accepts the terms, conditions, and reimbursement |
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rates of the pharmacy benefit manager; |
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(2) meets all applicable federal and state licensure |
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and permit requirements; and |
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(3) has not been excluded from participation as a |
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provider in any federal or state program. |
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(c) A pharmacy benefit manager shall establish a pharmacy |
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network that includes sufficient retail pharmacies to ensure that: |
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(1) in urban areas, not less than 90 percent of health |
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plan beneficiaries, on average, live not more than two miles from a |
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network retail pharmacy; |
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(2) in suburban areas, not less than 90 percent of |
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health plan beneficiaries, on average, live not more than five |
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miles from a network retail pharmacy; and |
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(3) in rural areas, not less than 70 percent of health |
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plan beneficiaries, on average, live not more than 15 miles from a |
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network retail pharmacy. |
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Sec. 4154.104. RELATIONSHIP WITH COVERED INDIVIDUALS. A |
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pharmacy benefit manager may not: |
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(1) require that a covered individual use a retail |
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pharmacy, mail order pharmacy, specialty pharmacy, or other entity |
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providing pharmacy services: |
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(A) in which the pharmacy benefit manager has an |
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ownership interest; or |
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(B) that has an ownership interest in the |
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pharmacy benefit manager; or |
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(2) provide an incentive to a covered individual to |
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encourage the individual to use a retail pharmacy, mail order |
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pharmacy, specialty pharmacy, or other entity providing pharmacy |
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services: |
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(A) in which the pharmacy benefit manager has an |
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ownership interest; or |
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(B) that has an ownership interest in the |
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pharmacy benefit manager. |
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Sec. 4154.105. SALE, RENTAL, OR LEASING OF CLAIMS DATA. (a) |
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Not later than the 30th day before the date a pharmacy benefit |
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manager intends to sell, rent, or lease a covered entity's claims |
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data, the pharmacy benefit manager shall disclose in writing to the |
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covered entity that the pharmacy benefit manager intends to sell, |
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rent, or lease the claims data. The written disclosure must |
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identify the potential purchaser and the expected use of the data. |
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(b) A pharmacy benefit manager may not sell, rent, or lease |
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claims data without the written approval of the covered entity. |
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(c) A pharmacy benefit manager must allow each covered |
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individual to refuse the sale, rent, or lease of that individual's |
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claims data. |
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Sec. 4154.106. TRANSMISSION OF CLAIMS DATA AND CERTAIN |
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OTHER INFORMATION PROHIBITED. A pharmacy benefit manager may not |
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transmit an individual's personally identifiable utilization or |
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claims data to a pharmacy owned by the pharmacy benefit manager |
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unless before each transmission the individual consents in writing |
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to the transmission. |
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[Sections 4154.107-4154.150 reserved for expansion] |
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SUBCHAPTER D. COST PRICING AND REIMBURSEMENT |
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Sec. 4154.151. DEFINITIONS. (a) In this subchapter: |
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(1) "Maximum allowable cost price" means a maximum |
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reimbursement amount for a group of therapeutically and |
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pharmaceutically equivalent multiple source medications that are |
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listed in the most recent edition or supplement of the United States |
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Food and Drug Administration's "Approved Drug Products with |
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Therapeutic Equivalence Evaluations," and for which not fewer than |
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three equivalent medication products are nationally available. |
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(2) "Multiple source medication" means a medication |
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that, with respect to another medication, two or more other |
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products exist that are: |
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(A) rated as therapeutically equivalent in the |
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most recent edition or supplement of the United States Food and Drug |
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Administration's "Approved Drug Products with Therapeutic |
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Equivalence Evaluations"; |
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(B) determined by the United States Food and Drug |
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Administration to be pharmaceutically equivalent or bioequivalent; |
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and |
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(C) separately marketed or sold in the United |
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States during a calendar quarter. |
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(3) "Nationally available" means: |
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(A) available for purchase in sufficient supply |
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by or for a retail pharmacy from national pharmaceutical |
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wholesalers; and |
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(B) actively marketed by the manufacturer or |
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labeler, regardless of the product's listing in the national |
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pricing compendia. |
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(b) For the purposes of Subsection (a)(3)(A), a product is |
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not available for purchase in sufficient supply during a period in |
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which the supply of the product is interrupted on a short-term basis |
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or the product is available only inconsistently or intermittently. |
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Sec. 4154.152. ESTABLISHMENT OF MAXIMUM ALLOWABLE COST |
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PRICE. (a) A pharmacy benefit manager may only establish a maximum |
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allowable cost price for a medication that is: |
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(1) a multiple source medication prescribed after |
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expiration of a generic exclusivity period described by 21 U.S.C. |
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Section 355; or |
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(2) a medication with not fewer than three A-rated |
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therapeutically equivalent multiple source medications, as listed |
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in the most recent edition or supplement of the United States Food |
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and Drug Administration's "Approved Drug Products with Therapeutic |
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Equivalence Evaluations," with a significant cost difference among |
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the medications. |
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(b) A pharmacy benefit manager shall establish the maximum |
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allowable cost price under Subsection (a) based on comparable drug |
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prices obtained from multiple nationally recognized comprehensive |
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data sources, including wholesalers, drug file vendors, and |
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pharmaceutical manufacturers of medications that are nationally |
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available and available for purchase locally by pharmacies in this |
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state. |
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(c) A pharmacy benefit manager shall modify a maximum |
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allowable cost price established under Subsection (a) not less than |
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twice each month to reflect updated information, if any, from data |
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sources described by Subsection (b). |
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Sec. 4154.153. REQUIRED DISCLOSURE AND NOTICE PROVISIONS. |
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(a) A pharmacy benefit manager shall disclose in a contract with a |
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retail pharmacy the data sources from which the pharmacy benefit |
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manager obtains pricing data used in establishing a maximum |
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allowable cost price under Section 4154.152. |
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(b) The contract must require the pharmacy benefit manager |
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to notify a retail pharmacy not less than once a week of a pharmacy |
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benefit manager's substitution, addition, or deletion of a data |
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source from which the pharmacy benefit manager obtains pricing data |
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used in establishing a maximum allowable cost price under Section |
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4154.152. |
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Sec. 4154.154. NOTICE OF PRICE MODIFICATION. A pharmacy |
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benefit manager shall notify a retail pharmacy of a modification of |
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a maximum allowable cost price on the date of the modification. |
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Sec. 4154.155. PRICING CONTEST PROCESS. (a) A contract |
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between a pharmacy benefit manager and a retail pharmacy must |
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establish a process by which a retail pharmacy may contest a maximum |
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allowable cost price established under Section 4154.152. |
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(b) If a retail pharmacy successfully contests a maximum |
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allowable cost price under Subsection (a), any amount due to the |
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pharmacy must be based on the retroactive application of the |
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maximum allowable cost price resulting from the contest. |
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Sec. 4154.156. GENERIC REIMBURSEMENT RATE. (a) The |
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average reimbursement rate for generic medications: |
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(1) may not be calculated solely based on the amount |
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allowed by the covered entity for generic medications; and |
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(2) must be calculated based on all generic |
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medications dispensed, including medications not subject to a |
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maximum allowable cost price under Section 4154.152. |
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(b) A pharmacy benefit manager shall pay to a retail |
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pharmacy an average reimbursement rate for a generic medication |
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calculated based on the actual amount, excluding any dispensing |
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fee, charged for the medication by the pharmacy. |
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(c) A pharmacy benefit manager must disclose in its contract |
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with a retail pharmacy: |
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(1) the average reimbursement rate described by this |
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section; and |
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(2) details of the calculations described by this |
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section. |
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Sec. 4154.157. FINALITY OF ADJUDICATION. (a) A pharmacy |
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benefit manager may not modify, reject, or reverse a positive |
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adjudication of a claim for a prescription that complies with rules |
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adopted by the Texas State Board of Pharmacy based on a subsequent |
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determination that the claim is ineligible for payment under the |
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applicable coverage terms. |
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(b) A pharmacy benefit manager may not modify, reject, or |
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reverse a positive adjudication of a claim for a prescription that |
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complies with rules adopted by the Texas State Board of Pharmacy |
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unless: |
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(1) the claim is fraudulent or duplicated a paid |
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claim; |
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(2) the transaction on which the claim is based is not |
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completed within a reasonable period; or |
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(3) the positive adjudication is based on an |
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unintentional clerical or recordkeeping error, such as a |
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typographical error, scrivener's error, or computer error found |
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during an on-site audit. |
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[Sections 4154.158-4154.200 reserved for expansion] |
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SUBCHAPTER E. ON-SITE AUDIT |
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Sec. 4154.201. NOTICE. A pharmacy benefit manager shall |
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notify a retail pharmacy and the pharmacy's corporate office, if |
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any, in writing of an on-site audit of the retail pharmacy not later |
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than the 30th day before the date the audit is scheduled to begin. |
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Sec. 4154.202. SCHEDULING. (a) Unless the retail pharmacy |
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consents in writing, a pharmacy benefit manager may not conduct an |
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on-site audit: |
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(1) during the first five calendar days of a month; or |
|
(2) on the day of, or the day before or after, a |
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federal holiday. |
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(b) Unless the retail pharmacy consents in writing, a |
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pharmacy benefit manager may not conduct an on-site audit of the |
|
retail pharmacy more than once annually. |
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Sec. 4154.203. AUDIT PERIOD. A pharmacy benefit manager |
|
conducting an on-site audit of a retail pharmacy may not audit a |
|
prescription claim initially submitted to the pharmacy benefit |
|
manager more than two years before the date the audit begins. |
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Sec. 4154.204. UNIFORM STANDARDS. (a) The commissioner |
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shall establish uniform standards for a pharmacy benefit manager's |
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on-site audit of similarly situated retail pharmacies. |
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(b) An on-site audit must be conducted: |
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(1) in accordance with: |
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(A) generally accepted accounting principles, |
|
standards, and procedures; and |
|
(B) generally accepted auditing principles, |
|
standards, and procedures; and |
|
(2) using the uniform standards established under |
|
Subsection (a). |
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(c) Similarly situated retail pharmacies must be audited in |
|
a uniform manner under uniform terms and with uniform documentation |
|
requirements. |
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Sec. 4154.205. EXTRAPOLATION PROHIBITED. During an on-site |
|
audit, a pharmacy benefit manager may not use extrapolation to |
|
calculate a recovery amount or penalty. A finding of overpayment or |
|
underpayment must be based on the actual overpayment or |
|
underpayment and may not be based on a projection based on the |
|
number of: |
|
(1) covered individuals with a similar diagnosis; or |
|
(2) orders or refill orders for a similar medication. |
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Sec. 4154.206. AUDITOR EXPERTISE. (a) If an on-site audit |
|
involves the exercise of the clinical or professional judgment of a |
|
pharmacist, the audit must be conducted: |
|
(1) by a pharmacist; or |
|
(2) in consultation with a pharmacist. |
|
(b) An on-site audit that does not involve the exercise of |
|
the clinical or professional judgment of a pharmacist may be |
|
conducted by a field agent who possesses pharmacy practice |
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expertise. |
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Sec. 4154.207. ERRORS. (a) An unintentional clerical or |
|
recordkeeping error, such as a typographical error, scrivener's |
|
error, or computer error, found during an on-site audit is not prima |
|
facie evidence of fraud and may not be the basis of a criminal |
|
penalty without proof of intent to commit fraud. |
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(b) A pharmacy benefit manager may recover from a retail |
|
pharmacy a payment made by the pharmacy benefit manager based on an |
|
error described by Subsection (a) only if the error resulted in |
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financial loss to a covered individual or covered entity. |
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Sec. 4154.208. METHODOLOGY. (a) Except as provided by |
|
Subsection (b), validation of the dosage and days' supply of a |
|
medication must be based on the manufacturer's guidelines and |
|
definitions. |
|
(b) Validation of the dosage and days' supply of a topical |
|
or titrated medication must be based on: |
|
(1) the clinical or professional judgment of the |
|
pharmacist conducting the audit or being consulted in connection |
|
with the audit; and |
|
(2) information obtained from the patient or |
|
prescriber by the pharmacist conducting the audit or being |
|
consulted in connection with the audit. |
|
(c) During an on-site audit, a pharmacy benefit manager |
|
shall calculate reimbursement for compounded medications based on |
|
the retail pharmacy's usual and customary price for compounded |
|
medications, unless provided otherwise in the contract between the |
|
pharmacy benefit manager and the retail pharmacy. |
|
Sec. 4154.209. VERIFICATION STANDARDS. (a) A pharmacy |
|
benefit manager may not require a retail pharmacy to maintain |
|
documentation that the pharmacy is not required by law to maintain |
|
in order to validate a prescription medication claim. |
|
(b) During an on-site audit, a pharmacy benefit manager may |
|
not require a retail pharmacy to verify a prescription medication |
|
claim with any documentation that the pharmacy is not required by |
|
law to maintain. |
|
(c) Notwithstanding Subsection (b), a written record of a |
|
hospital, physician, or other authorized practitioner of the |
|
healing arts, regardless of the means of communication, may be used |
|
to validate a record of a legend or narcotic drug, a medication, or |
|
medicinal supplies. |
|
Sec. 4154.210. ELECTRONIC RECORDS. (a) During an on-site |
|
audit, a pharmacy benefit manager shall accept as equivalent to |
|
paper documentation an electronic record, including an electronic |
|
beneficiary signature log, an electronic tracking of a |
|
prescription, an electronic prescriber prescription transmission, |
|
an electronic image of the prescription, an electronically scanned |
|
store or patient record maintained at or accessible by the retail |
|
pharmacy, and any other reasonably clear and accurate electronic |
|
documentation. |
|
(b) Point-of-sale electronic register data is a form of |
|
proof of delivery to the covered individual. |
|
Sec. 4154.211. AUDIT OF PAPER DOCUMENTATION. A pharmacy |
|
benefit manager may, in connection with the audit of a particular |
|
claim, review a retail pharmacy's paper signature log, if any, |
|
dated only until the earlier of the 14th day after the date the |
|
pharmacy dispensed the medication or the date the transaction was |
|
completed. |
|
Sec. 4154.212. PAYMENT OF AUDITOR. A pharmacy benefit |
|
manager may not pay an auditor for conducting an on-site audit based |
|
on a percentage of the amount the pharmacy benefit manager is |
|
entitled to recover based on the on-site audit. |
|
Sec. 4154.213. PRELIMINARY AUDIT REPORT. Unless the retail |
|
pharmacy subject to an on-site audit agrees in writing otherwise, a |
|
pharmacy benefit manager shall deliver a preliminary audit report |
|
to the retail pharmacy and the pharmacy's corporate office, if any, |
|
not later than the 30th day after the date the audit is completed. |
|
Sec. 4154.214. APPEAL PROCESS. (a) A pharmacy benefit |
|
manager shall establish a process under which a retail pharmacy may |
|
submit to the pharmacy benefit manager an appeal, wholly or partly, |
|
of a preliminary audit report. |
|
(b) The appeal process described by Subsection (a) must be |
|
disclosed in the contract between the pharmacy benefit manager and |
|
a retail pharmacy. |
|
(c) An appeal described by Subsection (a) must be commenced |
|
not earlier than the 30th day after the date the pharmacy receives |
|
the preliminary report and not later than the 60th day after that |
|
date. |
|
(d) The commissioner by rule may establish reasonable |
|
criteria for the process described by Subsection (a). |
|
Sec. 4154.215. FINAL AUDIT REPORT. (a) If the retail |
|
pharmacy does not appeal the preliminary audit report under the |
|
process described by Section 4154.214, a pharmacy benefit manager |
|
shall deliver the final audit report to the retail pharmacy and the |
|
pharmacy's corporate office, if any, not later than the 61st day |
|
after the date the pharmacy received the preliminary audit report. |
|
(b) If the retail pharmacy appeals the preliminary audit |
|
report under the process described by Section 4154.214, a pharmacy |
|
benefit manager shall deliver the final audit report to the retail |
|
pharmacy and the pharmacy's corporate office, if any, not later |
|
than the 45th day after the date the appeal process concludes. |
|
Sec. 4154.216. SETTLEMENT OF ACCOUNTS AFTER AUDIT. (a) A |
|
pharmacy benefit manager may recover from a retail pharmacy an |
|
amount based on the final audit report delivered under Section |
|
4154.215. |
|
(b) A pharmacy benefit manager may recover an amount due, if |
|
any, based on the final report delivered under Section 4154.215 by |
|
submitting to the retail pharmacy an invoice for payment. |
|
(c) A pharmacy benefit manager may not deduct a recovery |
|
amount from an amount otherwise owed to a retail pharmacy unless the |
|
retail pharmacy: |
|
(1) agrees in writing that the pharmacy benefit |
|
manager may deduct the recovery amount from an amount otherwise |
|
owed to the retail pharmacy; or |
|
(2) fails to timely pay the invoice before the later of |
|
the due date imposed by the invoice or the due date imposed by the |
|
retail pharmacy's contract with the pharmacy benefit manager. |
|
[Sections 4154.217-4154.250 reserved for expansion] |
|
SUBCHAPTER F. DISCIPLINARY ACTIONS; PENALTIES |
|
Sec. 4154.251. GROUNDS FOR DENIAL, REVOCATION, SUSPENSION, |
|
OR RESTRICTION OF CERTIFICATE OF AUTHORITY. (a) The department may |
|
deny an application for a certificate of authority under this |
|
chapter or revoke, suspend, or restrict a certificate of authority |
|
issued under this chapter: |
|
(1) if the department determines that the applicant or |
|
certificate holder violated state or federal laws or regulations; |
|
or |
|
(2) on other grounds as determined by the commissioner |
|
by rule. |
|
(b) If an application for a renewal of a certificate of |
|
authority under this chapter is denied or a certificate of |
|
authority under this chapter is revoked, suspended, or restricted, |
|
the commissioner may, as necessary to protect the interests of |
|
covered entities, covered individuals, and retail pharmacies, |
|
allow the applicant or certificate holder to operate under terms |
|
established by the commissioner for a limited time not to exceed 60 |
|
days after the date the application is denied or the certificate is |
|
revoked, suspended, or restricted. |
|
Sec. 4154.252. HEARING. If the department proposes to deny |
|
an application for a certificate of authority or to suspend, |
|
revoke, or restrict a certificate of authority, the applicant or |
|
holder is entitled to notice and a hearing conducted by the State |
|
Office of Administrative Hearings as provided by Chapter 40. |
|
Sec. 4154.253. APPLICATION OF CERTAIN OTHER LAW. An action |
|
taken under Section 4154.251 is subject to Chapter 82. |
|
Sec. 4154.254. ENFORCEMENT. The commissioner shall take |
|
all reasonable actions to ensure compliance with this chapter, |
|
including issuing orders and assessing penalties. |
|
Sec. 4154.255. BOARD OF PHARMACY REQUESTS. The |
|
commissioner shall provide to the Texas State Board of Pharmacy, on |
|
the board's request, a copy of any document related to an action |
|
taken under Section 4154.251, including: |
|
(1) a document submitted by a pharmacy benefit manager |
|
to the commissioner; |
|
(2) correspondence between the pharmacy benefit |
|
manager and the commissioner; and |
|
(3) a written notice, finding, or determination, or |
|
other document sent by the commissioner to the pharmacy benefit |
|
manager. |
|
SECTION 2. Section 82.002(a), Insurance Code, is amended to |
|
read as follows: |
|
(a) This chapter applies to each company regulated by the |
|
commissioner, including: |
|
(1) a domestic or foreign, stock or mutual, life, |
|
health, or accident insurance company; |
|
(2) a domestic or foreign, stock or mutual, fire or |
|
casualty insurance company; |
|
(3) a Mexican casualty company; |
|
(4) a domestic or foreign Lloyd's plan insurer; |
|
(5) a domestic or foreign reciprocal or interinsurance |
|
exchange; |
|
(6) a domestic or foreign fraternal benefit society; |
|
(7) a domestic or foreign title insurance company; |
|
(8) an attorney's title insurance company; |
|
(9) a stipulated premium insurance company; |
|
(10) a nonprofit legal service corporation; |
|
(11) a health maintenance organization; |
|
(12) a statewide mutual assessment company; |
|
(13) a local mutual aid association; |
|
(14) a local mutual burial association; |
|
(15) an association exempt under Section 887.102; |
|
(16) a nonprofit hospital, medical, or dental service |
|
corporation, including a company subject to Chapter 842; |
|
(17) a county mutual insurance company; [and] |
|
(18) a farm mutual insurance company; and |
|
(19) a pharmacy benefit manager. |
|
SECTION 3. Section 4003.010, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 4003.010. CHAPTER NOT APPLICABLE TO THIRD-PARTY |
|
ADMINISTRATORS. This chapter does not apply to a certificate of |
|
authority issued under Chapter 4151 or 4154. |
|
SECTION 4. The change in law made by this Act applies only |
|
to a contract between a pharmacy benefit manager and a retail |
|
pharmacy entered into or renewed on or after January 1, 2014. A |
|
contract entered into or renewed before January 1, 2014, is |
|
governed by the law as it existed immediately before the effective |
|
date of this Act, and that law is continued in effect for that |
|
purpose. |
|
SECTION 5. Notwithstanding Chapter 4154, Insurance Code, as |
|
added by this Act, an entity acting as, or holding itself out as, a |
|
pharmacy benefit manager for purposes of that chapter is not |
|
required to hold a certificate of authority under that chapter |
|
before January 1, 2014. |
|
SECTION 6. This Act takes effect September 1, 2013. |