86R10486 KFF-D
 
  By: Raymond H.B. No. 3401
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to delivery of outpatient prescription drug benefits under
  certain public benefit programs, including Medicaid and the child
  health plan program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. DELIVERY OF OUTPATIENT PRESCRIPTION DRUG BENEFITS USING
  FEE-FOR-SERVICE DELIVERY MODEL UNDER CERTAIN PUBLIC BENEFIT
  PROGRAMS
         SECTION 1.01.  Subchapter B, Chapter 531, Government Code,
  is amended by adding Section 531.068 to read as follows:
         Sec. 531.068.  DELIVERY OF OUTPATIENT PRESCRIPTION DRUG
  BENEFITS UNDER CERTAIN PROGRAMS. (a)  In this section, "recipient"
  means a person receiving benefits under a program described by
  Subsection (b).
         (b)  Notwithstanding any other law, beginning January 1,
  2020, the commission shall provide outpatient prescription drug
  benefits through the vendor drug program using a transparent
  fee-for-service delivery model to persons, including persons
  enrolled in a managed care program, receiving benefits under:
               (1)  Medicaid;
               (2)  the child health plan program;
               (3)  the kidney health care program; and
               (4)  any other benefits program administered by the
  commission that provides an outpatient prescription drug benefit.
         (c)  In providing outpatient prescription drug benefits
  under this section, the commission shall:
               (1)  eliminate any obligation to pay fees included in
  the capitation rate or other amounts paid to managed care
  organizations that are associated with the provision of outpatient
  prescription drug benefits, including:
                     (A)  the guaranteed risk margin; and
                     (B)  the health insurance providers fee imposed
  under Section 9010 of the federal Patient Protection and Affordable
  Care Act (Pub. L. No. 111-148), as amended by the Health Care and
  Education Reconciliation Act of 2010 (Pub. L. No. 111-152), and the
  associated effects of that fee on federal income taxes;
               (2)  pay claims in accordance with the deadlines
  imposed by Section 843.339, Insurance Code;
               (3)  if the commission contracts with a prescription
  drug benefits administrator for purposes of this section, pay the
  administrator only for reimbursement of any prescribed drug and a
  contracted administrative fee; and
               (4)  in accordance with the findings of the study
  conducted by the commission in response to Section 60 following the
  Article II appropriations to the commission in Chapter 605
  (S.B. 1), Acts of the 85th Legislature, Regular Session, 2017 (the
  General Appropriations Act):
                     (A)  consistently apply clinical prior
  authorization requirements statewide and use prior authorizations
  to control unnecessary utilization;
                     (B)  ensure the preferred drug list is not
  disadvantaged;
                     (C)  maintain drug utilization review; and
                     (D)  coordinate data exchange under existing data
  warehouse and enterprise data resources.
         (d)  In providing outpatient prescription drug benefits
  under this section, the commission may not:
               (1)  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 by imposing different
  copayments associated with a pharmacy or pharmacist; and
               (2)  prevent a pharmacy or pharmacist from
  participating as a provider if the pharmacy or pharmacist agrees to
  comply with the financial terms of the program and any contract
  required under the program.
         (e)  In providing outpatient prescription drug benefits
  under this section, the commission may include mail-order
  pharmacies in the commission's network of pharmacy providers,
  except the commission may not:
               (1)  require recipients to use a mail-order pharmacy;
  or
               (2)  charge a recipient who elects to use a mail-order
  pharmacy a fee for using the mail order service, including a postage
  or handling fee.
         (f)  Notwithstanding any other law, a managed care
  organization providing health care services under a benefit program
  described by Subsection (b) may not develop, implement, or
  maintain an outpatient pharmacy benefit plan for recipients
  beginning on the 180th day after the date the commission begins
  providing outpatient prescription drug benefits under this
  section.
         SECTION 1.02.  As soon as practicable after the effective
  date of this article, but not later than December 31, 2019, the
  Health and Human Services Commission shall amend each contract with
  a managed care organization entered into before the effective date
  of this article to prohibit the organization from providing
  outpatient prescription drug benefits to recipients under a public
  benefits program subject to Section 531.068, Government Code, as
  added by this Act, beginning on the 180th day after the date the
  commission begins providing outpatient prescription drug benefits
  in the manner required by that section.
  ARTICLE 2. CESSATION OF DELIVERY OF OUTPATIENT PRESCRIPTION DRUG
  BENEFITS BY MANAGED CARE ORGANIZATIONS
         SECTION 2.01.  Section 533.012(a), Government Code, is
  amended to read as follows:
         (a)  Each managed care organization contracting with the
  commission under this chapter shall submit the following, at no
  cost, to the commission and, on request, the office of the attorney
  general:
               (1)  a description of any financial or other business
  relationship between the organization and any subcontractor
  providing health care services under the contract;
               (2)  a copy of each type of contract between the
  organization and a subcontractor relating to the delivery of or
  payment for health care services;
               (3)  a description of the fraud control program used by
  any subcontractor that delivers health care services; and
               (4)  a description and breakdown of all funds paid to or
  by the managed care organization, including a health maintenance
  organization, primary care case management provider, [pharmacy
  benefit manager,] and exclusive provider organization, necessary
  for the commission to determine the actual cost of administering
  the managed care plan.
         SECTION 2.02.  Section 32.046(a), Human Resources Code, is
  amended to read as follows:
         (a)  The executive commissioner shall adopt rules governing
  sanctions and penalties that apply to a provider [who participates]
  in the vendor drug program [or is enrolled as a network pharmacy
  provider of a managed care organization contracting with the
  commission under Chapter 533, Government Code, or its subcontractor
  and] who submits an improper claim for reimbursement under the
  program.
         SECTION 2.03.  The following provisions are repealed:
               (1)  Sections 531.0697, 533.003(b), and 533.056,
  Government Code; and
               (2)  Section 32.073(c), Human Resources Code.
         SECTION 2.04.  The changes in law made by this article apply
  beginning on the 180th day after the date the Health and Human
  Services Commission begins providing outpatient prescription drug
  benefits in the manner required by Section 531.068, Government
  Code, as added by this Act. Until the changes in law made by this
  article apply, the law as it existed on the day immediately before
  the effective date of this article governs and the former law is
  continued in effect for that purpose.
  ARTICLE 3. INSURANCE PREMIUM AND REVENUE TAX
         SECTION 3.01.  Section 222.001, Insurance Code, is amended
  by amending Subsection (a) and adding Subsection (a-1) to read as
  follows:
         (a)  This chapter applies to any of the following entities
  that receives gross premiums or revenues subject to taxation under
  Section 222.002:
               (1)  an [any] insurer, including a group hospital
  service corporation;
               (2)  a[, any] health maintenance organization;
               (3)  a[, and any] managed care organization; and
               (4)  a prescription drug benefit administrator that
  enters into a contract with the Health and Human Services
  Commission under Section 531.068, Government Code, to administer
  prescription drug benefits.
         (a-1)  Entities described by Subsection (a) include [that
  receives gross premiums or revenues subject to taxation under
  Section 222.002, including] companies operating under Chapter 841,
  842, 843, 861, 881, 882, 883, 884, 941, 942, 982, or 984, Insurance
  Code, Chapter 533, Government Code, or Title XIX of the federal
  Social Security Act.
         SECTION 3.02.  Section 222.002, Insurance Code, is amended
  by amending Subsections (a) and (c) and adding Subsection (b-1) to
  read as follows:
         (a)  An annual tax is imposed on:
               (1)  each insurer that receives gross premiums subject
  to taxation under this section; [and]
               (2)  each health maintenance organization that
  receives gross revenues from the sale of health maintenance
  certificates or contracts; and
               (3)  the prescription drug benefit administrator that
  receives gross revenues from the administration of prescription
  drug benefits under Section 531.068, Government Code.
         (b-1)  Except as otherwise provided by this section, a
  prescription drug benefit administrator's taxable gross revenues
  are equal to the total gross amount of administrative fees and other
  consideration received by the prescription drug benefit
  administrator in a calendar year from the contract entered into
  under Section 531.068, Government Code.
         (c)  The following are not included in determining an
  insurer's taxable gross premiums or a health maintenance
  organization's or prescription drug benefit administrator's
  taxable gross revenues:
               (1)  returned premiums or revenues;
               (2)  dividends applied to purchase paid-up additions to
  insurance or to shorten the endowment or premium payment period;
               (3)  premiums received from an insurer for reinsurance;
               (4)  premiums or revenues received from the treasury of
  the United States for insurance or benefits contracted for by the
  federal government  in accordance with or in furtherance of Title
  XVIII of the Social Security Act (42 U.S.C. Section 1395c et seq.)
  and its subsequent amendments;
               (5)  premiums or revenues paid on group health,
  accident, and life policies or contracts in which the group covered
  by the policy or contract consists of a single nonprofit trust
  established to provide coverage primarily for employees of:
                     (A)  a municipality, county, or hospital district
  in this state; or
                     (B)  a county or municipal hospital, without
  regard to whether the employees are employees of the county or
  municipality or of an entity operating the hospital on behalf of the
  county or municipality; or
               (6)  premiums or revenues excluded by another law of
  this state.
         SECTION 3.03.  Section 222.003, Insurance Code, is amended
  by adding Subsection (d) to read as follows:
         (d)  The rate of the tax imposed by this chapter on a
  prescription drug benefit administrator is:
               (1)  0.875 percent of the first $450,000 of taxable
  gross revenues received during a calendar year; and
               (2)  1.75 percent of the remaining taxable gross
  revenues received during that calendar year.
         SECTION 3.04.  Section 222.004(b), Insurance Code, is
  amended to read as follows:
         (b)  An insurer, [or] health maintenance organization, or
  prescription drug benefit administrator that had a net tax
  liability for the previous calendar year of more than $1,000 shall
  make semiannual prepayments of tax on March 1 and August 1. The tax
  paid on each date must be equal to 50 percent of the total amount of
  tax the insurer, [or] health maintenance organization, or
  prescription drug benefit administrator paid under this chapter for
  the previous calendar year. If the insurer, [or] health
  maintenance organization, or prescription drug benefit
  administrator did not pay a tax under this chapter during the
  previous calendar year, the tax paid on each date must be equal to
  the tax that would be owed on the aggregate of the taxable gross
  premiums or taxable gross revenues for the two previous calendar
  quarters.
         SECTION 3.05.  Sections 222.005(a) and (c), Insurance Code,
  are amended to read as follows:
         (a)  An insurer, [or] health maintenance organization, or
  prescription drug benefit administrator liable for the tax imposed
  by this chapter must file annually with the comptroller a tax report
  on a form prescribed by the comptroller.
         (c)  The comptroller may require the insurer, [or] health
  maintenance organization, or prescription drug benefit
  administrator to file any additional relevant information that is
  reasonably necessary to verify the amount of tax due.
         SECTION 3.06.  Section 222.007(a), Insurance Code, is
  amended to read as follows:
         (a)  Except as otherwise provided by this subsection, an
  insurer, [or] health maintenance organization, or prescription
  drug benefit administrator is entitled to a credit on the amount of
  tax due under this chapter for all examination and evaluation fees
  paid to this state during the calendar year for which the tax is
  due.  An insurer is not entitled to a credit on the amount of tax
  due under this chapter for fees paid for valuing life insurance
  policies.  The limitations provided by Sections 803.007(1) and
  (2)(B) for a domestic insurance company apply to a foreign
  insurance company.
         SECTION 3.07.  Section 222.008, Insurance Code, is amended
  to read as follows:
         Sec. 222.008.  FAILURE TO PAY TAXES. An insurer, [or] health
  maintenance organization, or prescription drug benefit
  administrator that fails to pay all taxes imposed by this chapter is
  subject to Section 203.002.
  ARTICLE 4. FEDERAL AUTHORIZATION AND EFFECTIVE DATE
         SECTION 4.01.  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 4.02.  (a)  Except as provided by Subsection (b) of
  this section, this Act takes effect September 1, 2019.
         (b)  Article 3 of this Act takes effect January 1, 2020.