85R7017 PMO-F

By: Kolkhorst S.B. No. 1564

A BILL TO BE ENTITLED

AN ACT

relating to pharmacy benefit networks and pharmacy benefit managers.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 1458.001, Insurance Code, is amended by amending Subdivisions (2), (7), and (8) and adding Subdivision (3-a) to read as follows:

(2) "Contracting entity" means a person who:

(A) enters into a direct contract with a provider for the delivery of health care services or drugs to covered individuals; and

(B) in the ordinary course of business establishes a provider network or networks for access by another party.

(3-a) "Drug" has the meaning assigned by Section 551.003, Occupations Code.

(7)(A) "Provider" means:

(i) an advanced practice nurse;

(ii) an optometrist;

(iii) a therapeutic optometrist;

(iv) a physician;

(v) a physician assistant;

(vi) a professional association composed solely of physicians, optometrists, or therapeutic optometrists;

(vii) a single legal entity authorized to practice medicine owned by two or more physicians;

(viii) a nonprofit health corporation certified by the Texas Medical Board under Chapter 162, Occupations Code;

(ix) a partnership composed solely of physicians, optometrists, or therapeutic optometrists;

(x) a physician-hospital organization that acts exclusively as an administrator for a provider to facilitate the provider's participation in health care contracts; [or]

(xi) an institution that is licensed under Chapter 241, Health and Safety Code; or

(xii) a pharmacist or pharmacy.

(B) "Provider" does not include a physician-hospital organization that leases or rents the physician-hospital organization's network to another party.

(8) "Provider network contract" means a contract between a contracting entity and a provider for the delivery of, and payment for, health care services or drugs to a covered individual.

SECTION 2. Section 1458.002(a), Insurance Code, is amended to read as follows:

(a) In this chapter, "health benefit plan" means:

(1) a hospital and medical expense incurred policy;

(2) a nonprofit health care service plan contract;

(3) a health maintenance organization subscriber contract; or

(4) any other health care plan or arrangement that pays for or furnishes medical or health care services or drugs.

SECTION 3. Sections 1458.101(c), (d), and (e), Insurance Code, are amended to read as follows:

(c) A contracting entity may not provide a person access to health care services, drugs, or contractual discounts under a provider network contract unless the provider network contract specifically states that the contracting entity may contract with a person to provide access to the contracting entity's rights and responsibilities under the provider network contract.

(d) The provider network contract must require that on the request of the provider, the contracting entity will provide information necessary to determine whether a particular person has been authorized to access the provider's health care services, drugs, and contractual discounts.

(e) To be enforceable against a provider, a provider network contract, including the lines of business described by Subsections (a) and (f), must also specify or reference a separate fee schedule for each such line of business. The separate fee schedule may describe specific services or procedures or drugs that the provider will deliver along with a corresponding payment, may describe a methodology for calculating payment based on a published fee schedule, or may describe payment in any other reasonable manner that specifies a definite payment for services or drugs. The fee information may be provided by any reasonable method, including electronically.

SECTION 4. Section 1458.102(a), Insurance Code, is amended to read as follows:

(a) A contracting entity may not provide a person access to health care services, drugs, or contractual discounts under a provider network contract unless the provider network contract specifically states that the person must comply with all applicable terms, limitations, and conditions of the provider network contract.

SECTION 5. Section 4151.001, Insurance Code, is amended by adding Subdivisions (3-a) and (5-a) to read as follows:

(3-a) "Pharmacy benefit management" means the administration or management of prescription drug benefits, including:

(A) retail pharmacy network management;

(B) pharmacy discount card management;

(C) claims payment to a retail pharmacy for prescription medications dispensed to plan participants;

(D) clinical formulary development and management services, including utilization management and quality assurance programs;

(E) rebate contracting and administration;

(F) auditing contracted pharmacies;

(G) establishing pharmacy reimbursement pricing and methodologies; and

(H) determining single and multiple source medications.

(5-a) "Retail pharmacy" means a pharmacy licensed under Chapter 560, Occupations Code, that dispenses medications to the public, including an independent pharmacy, a chain pharmacy, a supermarket pharmacy, or a mass merchandiser pharmacy. The term does not include a pharmacy that dispenses prescription medications primarily through the mail, a nursing home pharmacy, a long-term care facility pharmacy, a hospital pharmacy, a clinic pharmacy, a charitable or nonprofit pharmacy, a government pharmacy, or a pharmacy benefit manager that is serving in its capacity as a pharmacy benefit manager.

SECTION 6. Section 4151.151, Insurance Code, is amended to read as follows:

Sec. 4151.151. DEFINITION. In this subchapter, "pharmacy benefit manager" means a person, other than a pharmacy or pharmacist, who acts as an administrator that provides pharmacy benefit management in connection with pharmacy benefits.

SECTION 7. Chapter 1458, Insurance Code, as amended by this Act, applies only to a provider network contract entered into or renewed on or after January 1, 2018. A provider network contract entered into or renewed before January 1, 2018, 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 8. This Act takes effect September 1, 2017.