By: Schwertner S.B. No. 1922
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to prescription drug benefits in the Medicaid managed care
  program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  (a)  Section 533.005(a), Government Code, is
  amended to read as follows:
         (a)  A contract between a managed care organization and the
  commission for the organization to provide health care services to
  recipients must contain:
               (1)  procedures to ensure accountability to the state
  for the provision of health care services, including procedures for
  financial reporting, quality assurance, utilization review, and
  assurance of contract and subcontract compliance;
               (2)  capitation rates that ensure the cost-effective
  provision of quality health care;
               (3)  a requirement that the managed care organization
  provide ready access to a person who assists recipients in
  resolving issues relating to enrollment, plan administration,
  education and training, access to services, and grievance
  procedures;
               (4)  a requirement that the managed care organization
  provide ready access to a person who assists providers in resolving
  issues relating to payment, plan administration, education and
  training, and grievance procedures;
               (5)  a requirement that the managed care organization
  provide information and referral about the availability of
  educational, social, and other community services that could
  benefit a recipient;
               (6)  procedures for recipient outreach and education;
               (7)  a requirement that the managed care organization
  make payment to a physician or provider for health care services
  rendered to a recipient under a managed care plan on any claim for
  payment that is received with documentation reasonably necessary
  for the managed care organization to process the claim:
                     (A)  not later than:
                           (i)  the 10th day after the date the claim is
  received if the claim relates to services provided by a nursing
  facility, intermediate care facility, or group home;
                           (ii)  the 30th day after the date the claim
  is received if the claim relates to the provision of long-term
  services and supports not subject to Subparagraph (i); and
                           (iii)  the 45th day after the date the claim
  is received if the claim is not subject to Subparagraph (i) or (ii);
  or
                     (B)  within a period, not to exceed 60 days,
  specified by a written agreement between the physician or provider
  and the managed care organization;
               (7-a)  a requirement that the managed care organization
  demonstrate to the commission that the organization pays claims
  described by Subdivision (7)(A)(ii) on average not later than the
  21st day after the date the claim is received by the organization;
               (8)  a requirement that the commission, on the date of a
  recipient's enrollment in a managed care plan issued by the managed
  care organization, inform the organization of the recipient's
  Medicaid certification date;
               (9)  a requirement that the managed care organization
  comply with Section 533.006 as a condition of contract retention
  and renewal;
               (10)  a requirement that the managed care organization
  provide the information required by Section 533.012 and otherwise
  comply and cooperate with the commission's office of inspector
  general and the office of the attorney general;
               (11)  a requirement that the managed care
  organization's usages of out-of-network providers or groups of
  out-of-network providers may not exceed limits for those usages
  relating to total inpatient admissions, total outpatient services,
  and emergency room admissions determined by the commission;
               (12)  if the commission finds that a managed care
  organization has violated Subdivision (11), a requirement that the
  managed care organization reimburse an out-of-network provider for
  health care services at a rate that is equal to the allowable rate
  for those services, as determined under Sections 32.028 and
  32.0281, Human Resources Code;
               (13)  a requirement that, notwithstanding any other
  law, including Sections 843.312 and 1301.052, Insurance Code, the
  organization:
                     (A)  use advanced practice registered nurses and
  physician assistants in addition to physicians as primary care
  providers to increase the availability of primary care providers in
  the organization's provider network; and
                     (B)  treat advanced practice registered nurses
  and physician assistants in the same manner as primary care
  physicians with regard to:
                           (i)  selection and assignment as primary
  care providers;
                           (ii)  inclusion as primary care providers in
  the organization's provider network; and
                           (iii)  inclusion as primary care providers
  in any provider network directory maintained by the organization;
               (14)  a requirement that the managed care organization
  reimburse a federally qualified health center or rural health
  clinic for health care services provided to a recipient outside of
  regular business hours, including on a weekend day or holiday, at a
  rate that is equal to the allowable rate for those services as
  determined under Section 32.028, Human Resources Code, if the
  recipient does not have a referral from the recipient's primary
  care physician;
               (15)  a requirement that the managed care organization
  develop, implement, and maintain a system for tracking and
  resolving all provider appeals related to claims payment, including
  a process that will require:
                     (A)  a tracking mechanism to document the status
  and final disposition of each provider's claims payment appeal;
                     (B)  the contracting with physicians who are not
  network providers and who are of the same or related specialty as
  the appealing physician to resolve claims disputes related to
  denial on the basis of medical necessity that remain unresolved
  subsequent to a provider appeal;
                     (C)  the determination of the physician resolving
  the dispute to be binding on the managed care organization and
  provider; and
                     (D)  the managed care organization to allow a
  provider with a claim that has not been paid before the time
  prescribed by Subdivision (7)(A)(ii) to initiate an appeal of that
  claim;
               (16)  a requirement that a medical director who is
  authorized to make medical necessity determinations is available to
  the region where the managed care organization provides health care
  services;
               (17)  a requirement that the managed care organization
  ensure that a medical director and patient care coordinators and
  provider and recipient support services personnel are located in
  the South Texas service region, if the managed care organization
  provides a managed care plan in that region;
               (18)  a requirement that the managed care organization
  provide special programs and materials for recipients with limited
  English proficiency or low literacy skills;
               (19)  a requirement that the managed care organization
  develop and establish a process for responding to provider appeals
  in the region where the organization provides health care services;
               (20)  a requirement that the managed care organization:
                     (A)  develop and submit to the commission, before
  the organization begins to provide health care services to
  recipients, a comprehensive plan that describes how the
  organization's provider network complies with the provider access
  standards established under Section 533.0061, as added by Chapter
  1272 (S.B. 760), Acts of the 84th Legislature, Regular Session,
  2015;
                     (B)  as a condition of contract retention and
  renewal:
                           (i)  continue to comply with the provider
  access standards established under Section 533.0061, as added by
  Chapter 1272 (S.B. 760), Acts of the 84th Legislature, Regular
  Session, 2015; and
                           (ii)  make substantial efforts, as
  determined by the commission, to mitigate or remedy any
  noncompliance with the provider access standards established under
  Section 533.0061, as added by Chapter 1272 (S.B. 760), Acts of the
  84th Legislature, Regular Session, 2015;
                     (C)  pay liquidated damages for each failure, as
  determined by the commission, to comply with the provider access
  standards established under Section 533.0061, as added by Chapter
  1272 (S.B. 760), Acts of the 84th Legislature, Regular Session,
  2015, in amounts that are reasonably related to the noncompliance;
  and
                     (D)  regularly, as determined by the commission,
  submit to the commission and make available to the public a report
  containing data on the sufficiency of the organization's provider
  network with regard to providing the care and services described
  under Section 533.0061(a), as added by Chapter 1272 (S.B. 760),
  Acts of the 84th Legislature, Regular Session, 2015, and specific
  data with respect to access to primary care, specialty care,
  long-term services and supports, nursing services, and therapy
  services on the average length of time between:
                           (i)  the date a provider requests prior
  authorization for the care or service and the date the organization
  approves or denies the request; and
                           (ii)  the date the organization approves a
  request for prior authorization for the care or service and the date
  the care or service is initiated;
               (21)  a requirement that the managed care organization
  demonstrate to the commission, before the organization begins to
  provide health care services to recipients, that, subject to the
  provider access standards established under Section 533.0061, as
  added by Chapter 1272 (S.B. 760), Acts of the 84th Legislature,
  Regular Session, 2015:
                     (A)  the organization's provider network has the
  capacity to serve the number of recipients expected to enroll in a
  managed care plan offered by the organization;
                     (B)  the organization's provider network
  includes:
                           (i)  a sufficient number of primary care
  providers;
                           (ii)  a sufficient variety of provider
  types;
                           (iii)  a sufficient number of providers of
  long-term services and supports and specialty pediatric care
  providers of home and community-based services; and
                           (iv)  providers located throughout the
  region where the organization will provide health care services;
  and
                     (C)  health care services will be accessible to
  recipients through the organization's provider network to a
  comparable extent that health care services would be available to
  recipients under a fee-for-service or primary care case management
  model of Medicaid managed care;
               (22)  a requirement that the managed care organization
  develop a monitoring program for measuring the quality of the
  health care services provided by the organization's provider
  network that:
                     (A)  incorporates the National Committee for
  Quality Assurance's Healthcare Effectiveness Data and Information
  Set (HEDIS) measures;
                     (B)  focuses on measuring outcomes; and
                     (C)  includes the collection and analysis of
  clinical data relating to prenatal care, preventive care, mental
  health care, and the treatment of acute and chronic health
  conditions and substance abuse;
               (23)  subject to Subsection (a-1), a requirement that
  the managed care organization develop, implement, and maintain an
  outpatient pharmacy benefit plan  for its enrolled recipients:
                     (A)  that exclusively employs the vendor drug
  program formulary and preserves the state's ability to reduce
  waste, fraud, and abuse under Medicaid;
                     (B)  that adheres to the applicable preferred drug
  list adopted by the commission under Section 531.072;
                     (C)  that includes the prior authorization
  procedures and requirements prescribed by or implemented under
  Sections 531.073(b), (c), and (g) for the vendor drug program;
                     (D)  for purposes of which the managed care
  organization:
                           (i)  may [not] negotiate with and [or]
  collect rebates from labelers and manufacturers, as those terms are
  defined by Section 531.070, that are associated with pharmacy
  products on the managed care organization's [vendor drug program]
  formulary; and
                           (ii)  may not receive drug rebate or pricing
  information that is confidential under Section 531.071;
                     (E)  that complies with the prohibition under
  Section 531.089;
                     (F)  under which the managed care organization may
  not prohibit, limit, or interfere with a recipient's selection of a
  pharmacy or pharmacist of the recipient's choice for the provision
  of pharmaceutical services under the plan through the imposition of
  different copayments;
                     (G)  that allows the managed care organization or
  any subcontracted pharmacy benefit manager to contract with a
  pharmacist or pharmacy providers separately for specialty pharmacy
  services, except that:
                           (i)  the managed care organization and
  pharmacy benefit manager are prohibited from allowing exclusive
  contracts with a specialty pharmacy owned wholly or partly by the
  pharmacy benefit manager responsible for the administration of the
  pharmacy benefit program; and
                           (ii)  the managed care organization and
  pharmacy benefit manager must adopt policies and procedures for
  reclassifying prescription drugs from retail to specialty drugs,
  and those policies and procedures must be consistent with rules
  adopted by the executive commissioner and include notice to network
  pharmacy providers from the managed care organization;
                     (H)  under which the managed care organization may
  not prevent a pharmacy or pharmacist from participating as a
  provider if the pharmacy or pharmacist agrees to comply with the
  financial terms and conditions of the contract as well as other
  reasonable administrative and professional terms and conditions of
  the contract;
                     (I)  under which the managed care organization may
  include mail-order pharmacies in its networks, but may not require
  enrolled recipients to use those pharmacies, and may not charge an
  enrolled recipient who opts to use this service a fee, including
  postage and handling fees;
                     (J)  under which the managed care organization or
  pharmacy benefit manager, as applicable, must pay claims in
  accordance with Section 843.339, Insurance Code; and
                     (K)  under which the managed care organization or
  pharmacy benefit manager, as applicable:
                           (i)  to place a drug on a maximum allowable
  cost list, must ensure that:
                                 (a)  the drug is listed as "A" or "B"
  rated in the most recent version of the United States Food and Drug
  Administration's Approved Drug Products with Therapeutic
  Equivalence Evaluations, also known as the Orange Book, has an "NR"
  or "NA" rating or a similar rating by a nationally recognized
  reference; and
                                 (b)  the drug is generally available
  for purchase by pharmacies in the state from national or regional
  wholesalers and is not obsolete;
                           (ii)  must provide to a network pharmacy
  provider, at the time a contract is entered into or renewed with the
  network pharmacy provider, the sources used to determine the
  maximum allowable cost pricing for the maximum allowable cost list
  specific to that provider;
                           (iii)  must review and update maximum
  allowable cost price information at least once every seven days to
  reflect any modification of maximum allowable cost pricing;
                           (iv)  must, in formulating the maximum
  allowable cost price for a drug, use only the price of the drug and
  drugs listed as therapeutically equivalent in the most recent
  version of the United States Food and Drug Administration's
  Approved Drug Products with Therapeutic Equivalence Evaluations,
  also known as the Orange Book;
                           (v)  must establish a process for
  eliminating products from the maximum allowable cost list or
  modifying maximum allowable cost prices in a timely manner to
  remain consistent with pricing changes and product availability in
  the marketplace;
                           (vi)  must:
                                 (a)  provide a procedure under which a
  network pharmacy provider may challenge a listed maximum allowable
  cost price for a drug;
                                 (b)  respond to a challenge not later
  than the 15th day after the date the challenge is made;
                                 (c)  if the challenge is successful,
  make an adjustment in the drug price effective on the date the
  challenge is resolved, and make the adjustment applicable to all
  similarly situated network pharmacy providers, as determined by the
  managed care organization or pharmacy benefit manager, as
  appropriate;
                                 (d)  if the challenge is denied,
  provide the reason for the denial; and
                                 (e)  report to the commission every 90
  days the total number of challenges that were made and denied in the
  preceding 90-day period for each maximum allowable cost list drug
  for which a challenge was denied during the period;
                           (vii)  must notify the commission not later
  than the 21st day after implementing a practice of using a maximum
  allowable cost list for drugs dispensed at retail but not by mail;
  and
                           (viii)  must provide a process for each of
  its network pharmacy providers to readily access the maximum
  allowable cost list specific to that provider;
               (24)  a requirement that the managed care organization
  and any entity with which the managed care organization contracts
  for the performance of services under a managed care plan disclose,
  at no cost, to the commission and, on request, the office of the
  attorney general all discounts, incentives, rebates, fees, free
  goods, bundling arrangements, and other agreements affecting the
  net cost of goods or services provided under the plan;
               (25)  a requirement that the managed care organization
  not implement significant, nonnegotiated, across-the-board
  provider reimbursement rate reductions unless:
                     (A)  subject to Subsection (a-3), the
  organization has the prior approval of the commission to make the
  reduction; or
                     (B)  the rate reductions are based on changes to
  the Medicaid fee schedule or cost containment initiatives
  implemented by the commission; and
               (26)  a requirement that the managed care organization
  make initial and subsequent primary care provider assignments and
  changes.
         (b)  This section takes effect September 1, 2018.
         SECTION 2.  Chapter 533, Government Code, is amended by
  adding Subchapter B to read as follows:
  SUBCHAPTER B. PRESCRIPTION DRUG BENEFITS
         Sec. 533.051.  DEFINITIONS. In this subchapter:
               (1)  "Labeler" and "manufacturer" have the meanings
  assigned by Section 531.070.
               (2)  "Recipient" means a Medicaid recipient.
               (3)  "Step therapy protocol" means a protocol that
  requires a recipient to use a prescription drug or sequence of
  prescription drugs other than the drug that the recipient's
  physician recommends for the recipient's treatment before a managed
  care organization provides coverage for the recommended drug.
         Sec. 533.052.  APPLICABILITY OF SUBCHAPTER. (a)  This
  subchapter applies to an outpatient pharmacy benefit plan
  implemented by a managed care organization that contracts with the
  commission to provide health care benefits to recipients.
         (b)  To the extent of a conflict between the requirements for
  an outpatient pharmacy benefit plan for a managed care
  organization's enrolled recipients specified by Sections
  533.005(a)(23)(A), (B), and (C) and the requirements for that plan
  specified by this subchapter, the requirements specified by
  Sections 533.005(a)(23)(A), (B), and (C) prevail.  This subsection
  expires August 31, 2018.
         Sec. 533.053.  STEP THERAPY PROTOCOL EXCEPTION REQUESTS.  
  (a)  A managed care organization shall establish a process in a
  user-friendly format through which an exception request under this
  section may be submitted by a prescribing provider.  The process
  must be readily accessible to:
               (1)   a recipient who enrolls in a managed care plan
  offered by the managed care organization or transfers to a managed
  care plan offered by the managed care organization from a managed
  care plan offered by another managed care organization; and
               (2)  the provider.
         (b)  A prescribing provider on behalf of a recipient may
  submit in written or electronic form or by telephone to the
  recipient's managed care organization an exception request for a
  step therapy protocol required by the recipient's managed care
  organization.
         (c)  A managed care organization shall review and, if
  clinically appropriate, grant an exception request under
  Subsection (b) if the request includes a statement by the
  prescribing provider stating that:
               (1)  the drug required under the step therapy protocol:
                     (A)  is contraindicated;
                     (B)  will likely cause an adverse reaction in or
  physical or mental harm to the recipient; or
                     (C)  is expected to be ineffective based on the
  known clinical characteristics of the recipient and the known
  characteristics of the prescription drug regimen;
               (2)  the recipient previously discontinued taking the
  drug required under the step therapy protocol:
                     (A)  while enrolled in a managed care plan offered
  by the recipient's current managed care organization or while
  enrolled in a managed care plan offered by another managed care
  organization; and
                     (B)  because the drug was not effective or had a
  diminished effect or because of an adverse event;
               (3)  the drug required under the step therapy protocol
  is not in the best interest of the recipient, based on clinical
  appropriateness, because the recipient's use of the drug is
  expected to:
                     (A)  cause a significant barrier to the
  recipient's adherence to or compliance with the recipient's plan of
  care;
                     (B)  worsen a comorbid condition of the recipient;
  or
                     (C)  decrease the recipient's ability to achieve
  or maintain reasonable functional ability in performing daily
  activities; or
               (4)  the drug that is subject to the step therapy
  protocol was prescribed for the recipient's condition while
  enrolled in a managed care plan offered by the recipient's current
  managed care organization or while enrolled in a managed care plan
  offered by a previous managed care organization and the recipient
  is stable on the drug.
         (d)  Except as provided by Subsection (e), if a managed care
  organization does not deny an exception request under Subsection
  (b) before 72 hours after the managed care organization receives
  the request, the request is considered granted.
         (e)  If a statement described by Subsection (c) also states
  that the prescribing provider reasonably believes that denial of
  the exception request makes the death of or serious harm to the
  recipient probable, the request is considered granted if the
  managed care organization does not deny the request before 24 hours
  after the managed care organization receives the request.
         (f)  A managed care organization may not require a
  prescribing provider to submit a subsequent exception request under
  Subsection (b) for a drug for treatment of a recipient's condition
  for which the managed care organization has already granted an
  exception to a step therapy protocol for the recipient unless the
  managed care organization's medical director determines that the
  drug for treatment under the previously granted exception request
  will likely cause physical or mental harm to the recipient.
         Sec. 533.054.  CONTINUITY OF CARE.  (a)  A managed care
  organization shall provide coverage to a recipient who enrolls in a
  managed care plan offered by the managed care organization or
  transfers to a managed care plan offered by the managed care
  organization from a managed care plan offered by another managed
  care organization for a prescription drug prescribed for the
  recipient before the enrollment or transfer for a 90-day period
  following the date of the enrollment or transfer, regardless of
  whether the prescription drug is on the managed care organization's
  preferred drug list.
         (b)  To promote continuity of care for recipients who
  transfer to a managed care plan offered by a managed care
  organization from a managed care plan offered by another managed
  care organization, the executive commissioner by rule or the
  commission in its contracts with managed care organizations shall:
               (1)  require a managed care organization that offers
  the managed care plan from which a recipient transfers enrollment
  to provide to the managed care organization that offers the managed
  care plan to which the recipient transfers enrollment the
  prescription drug information necessary to promote the recipient's
  continuity of care to the extent allowed by law; and
               (2)  establish an electronic process that facilitates
  the transfer of the information described by Subdivision (1)
  between managed care organizations.
         Sec. 533.055.  ACCESS TO INFORMATION REGARDING PRESCRIPTION
  DRUG REBATES, PRICING, AND NEGOTIATIONS.  (a)  The commission may
  require the submission of and review information obtained or
  maintained by a managed care organization regarding prescription
  drug rebate negotiations or a supplemental Medicaid or other rebate
  agreement, including the rebate amount, rebate percentage, and
  manufacturer or labeler pricing.
         (b)  Subject to Subsections (c), (d), and (e), information
  described by Subsection (a) that a managed care organization
  submits to the commission as required by the commission is
  confidential and not subject to disclosure under Chapter 552.
         (c)  Subsection (b) does not:
               (1)  authorize the commission to withhold from
  individual members, agencies, or committees of the legislature for
  use for legislative purposes information described by Subsection
  (a) that a managed care organization submits to the commission; or
               (2)  affect the applicability of Section 552.008.
         (d)  The commission may not release information that is
  confidential under 42 U.S.C. Section 1396r-8(b)(3)(D) unless the
  legislative request for information is accompanied by a written
  affidavit from the requestor providing a detailed description of
  the legislative purpose for the request and describing how the
  request is within the exception to confidentiality described by 42
  U.S.C. Section 1396r-8(b)(3)(D)(iv).
         (e)  The commission may not disclose information described
  by Subsection (a) until each legislative recipient of the
  information signs a nondisclosure agreement acknowledging that the
  information is subject to, and the recipient agrees to comply with,
  the confidentiality provisions in 42 U.S.C. Section
  1396r-8(b)(3)(D) and Section 531.071. The nondisclosure agreement
  must also contain an acknowledgement of applicable civil and
  criminal penalties for improper disclosure.
         Sec. 533.056.  PREFERRED DRUG LIST; SEARCHABLE DATABASE OF
  PREFERRED DRUGS AND RESTRICTIONS.  (a)  A managed care organization
  shall provide for the distribution of current copies of the managed
  care organization's preferred drug list by posting the list on the
  managed care organization's Internet website.
         (b)  A managed care organization shall maintain on the
  managed care organization's Internet website a searchable database
  to allow a provider to search the managed care organization's
  preferred drug list and easily determine whether a prescription
  drug or drug class is subject to any prior authorization
  requirements, clinical edits, or other clinical restrictions.  A
  managed care organization shall make reasonable efforts to ensure
  that the database contains current information.
         Sec. 533.057.  PRIOR AUTHORIZATION AND STEP THERAPY
  PROTOCOLS FOR CERTAIN PRESCRIPTION DRUGS. (a)  Except as provided
  by Subsection (b), a managed care organization may not require
  prior authorization or a step therapy protocol for prescription
  drugs that, as determined by the executive commissioner by rule or
  by the commission in a contract with a managed care organization,
  are used to treat patients with illnesses that:
               (1)  are life-threatening;
               (2)  are chronic; and
               (3)  require complex medical management strategies.
         (b)  Subsection (a) applies only to a drug that is prescribed
  for a use approved by the United States Food and Drug
  Administration.  A managed care organization may require prior
  authorization for a drug prescribed for a use that is not approved
  by the United States Food and Drug Administration, provided that
  the prior authorization requirement is not solely based on the drug
  manufacturer's package insert.
         (c)  Once every 10 years, the commission shall conduct a
  study to evaluate and determine the classes of prescription drugs
  for which prior authorizations or step therapy protocols are
  prohibited under Subsection (a).
         (d)  A managed care organization shall ensure that a drug
  prescribed before the managed care organization implements a prior
  authorization requirement or step therapy protocol for that drug is
  not subject to the prior authorization requirement or step therapy
  protocol until the expiration of a period of at least 90 days
  beginning on the date the prior authorization requirement or step
  therapy protocol is implemented, as specified by the managed care
  organization.
         (e)  Notwithstanding Subsection (a), a managed care
  organization may require prior authorization for a prescription
  drug for patient safety purposes, including a drug that is
  clinically contraindicated.
         Sec. 533.058.  PRIOR AUTHORIZATION PROCEDURES. Each managed
  care organization shall establish a procedure for prior
  authorizations, including step therapy protocols, to ensure
  compliance with 42 U.S.C. Section 1396r-8(d)(5). The procedure
  must ensure that:
               (1)  a prior authorization requirement for a drug is
  not imposed before the drug has been submitted for review to the
  managed care organization's drug utilization review board or
  pharmacy and therapeutics committee;
               (2)  a response to a request for prior authorization
  will be provided by telephone or other telecommunications device
  not later than 24 hours after the request is made; and
               (3)  a 72-hour supply of a covered prescribed drug will
  be provided in an emergency or if a response is not provided within
  the period required by Subdivision (2).
         Sec. 533.059.  REDUCING ADMINISTRATIVE BURDENS ASSOCIATED
  WITH NATIONAL DRUG CODES. (a)  A managed care organization shall
  ensure that a prescribing provider is not required to provide the
  national drug code number on a prescription for a generic
  equivalent of a prescribed drug, except as required by federal law.
         (b)  As soon as practicable after receiving notice from the
  Centers for Medicare and Medicaid Services that a national drug
  code number for a rebate-eligible prescription drug has been
  changed or newly added to a list of rebate-eligible prescription
  drugs maintained by the Centers for Medicare and Medicaid Services
  or a prescription drug has been removed from that list, the
  commission and each managed care organization shall provide notice
  of the change, addition, or removal to providers by updating the
  commission's or managed care organization's electronic database of
  national drug code numbers for rebate-eligible prescription drugs,
  as applicable.
         Sec. 533.060.  ANNUAL REPORT. Each managed care
  organization shall annually report to the commission:
               (1)  the total number of prescriptions dispensed to
  recipients enrolled in a managed care plan offered by the managed
  care organization;
               (2)  the percentage of prescription drugs described by
  Subdivision (1) for which prior authorization was required;
               (3)  the percentage of prescription drugs described by
  Subdivision (1) for which a step therapy protocol was required; and
               (4)  the number of exceptions and appeals sought and
  granted for prior authorizations, step therapy protocols, and other
  formulary requests.
         SECTION 3.  Not later than September 1, 2018, the Health and
  Human Services Commission shall conduct the initial study required
  by Section 533.057(c), Government Code, as added by this Act.  The
  commission or a managed care organization may not change a prior
  authorization requirement or step therapy protocol for a
  prescription drug to which that section applies until the
  commission has completed the study.
         SECTION 4.  If before implementing any provision of this Act
  a state agency determines that a waiver or authorization from a
  federal agency is necessary for implementation of that provision,
  the agency affected by the provision shall request the waiver or
  authorization and may delay implementing that provision until the
  waiver or authorization is granted.
         SECTION 5.  Except as otherwise provided by this Act, this
  Act takes effect September 1, 2017.