89R14852 RDS-D

By: Rose H.B. No. 4422

A BILL TO BE ENTITLED

AN ACT

relating to discriminatory practices by a health benefit plan issuer, pharmacy benefit manager, and third-party payor with respect to certain entities participating in a federal drug discount program.

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

SECTION 1. Chapter 1369, Insurance Code, is amended by adding Subchapter O to read as follows:

SUBCHAPTER O. PROHIBITION ON DISCRIMINATION WITH RESPECT TO

FEDERAL 340B DRUG DISCOUNT PROGRAM

Sec. 1369.701. DEFINITIONS. In this subchapter:

(1) "Covered entity" has the meaning assigned by 42 U.S.C. Section 256b(a)(4).

(2) "Non-covered entity" means an entity that is not a covered entity.

(3) "Pharmacy benefit manager" has the meaning assigned by Section 4151.151.

(4) "Third-party payor" means any person, other than a pharmacy benefit manager, health benefit plan issuer, patient, or individual paying for a patient's drugs on the patient's behalf, that makes payment for drugs dispensed by a pharmacist or pharmacy or administered by a health care professional.

Sec. 1369.702. APPLICABILITY OF SUBCHAPTER. (a) This subchapter applies only to a health benefit plan that provides benefits for medical or surgical expenses incurred as a result of a health condition, accident, or sickness, including an individual, group, blanket, or franchise insurance policy or insurance agreement, a group hospital service contract, or an individual or group evidence of coverage or similar coverage document that is issued by:

(1) an insurance company;

(2) a group hospital service corporation operating under Chapter 842;

(3) a health maintenance organization operating under Chapter 843;

(4) an approved nonprofit health corporation that holds a certificate of authority under Chapter 844;

(5) a multiple employer welfare arrangement that holds a certificate of authority under Chapter 846;

(6) a stipulated premium company operating under Chapter 884;

(7) a fraternal benefit society operating under Chapter 885;

(8) a Lloyd's plan operating under Chapter 941; or

(9) an exchange operating under Chapter 942.

(b) Notwithstanding any other law, this subchapter applies to:

(1) a small employer health benefit plan subject to Chapter 1501, including coverage provided through a health group cooperative under Subchapter B of that chapter;

(2) a standard health benefit plan issued under Chapter 1507;

(3) a basic coverage plan under Chapter 1551;

(4) a basic plan under Chapter 1575;

(5) a primary care coverage plan under Chapter 1579;

(6) a plan providing basic coverage under Chapter 1601;

(7) nonprofit agricultural organization health benefits offered by a nonprofit agricultural organization under Chapter 1682;

(8) alternative health benefit coverage offered by a subsidiary of the Texas Mutual Insurance Company under Subchapter M, Chapter 2054;

(9) health benefits provided by or through a church benefits board under Subchapter I, Chapter 22, Business Organizations Code;

(10) group health coverage made available by a school district in accordance with Section 22.004, Education Code;

(11) the state Medicaid program, including the Medicaid managed care program operated under Chapter 540, Government Code;

(12) the child health plan program under Chapter 62, Health and Safety Code;

(13) a regional or local health care program operated under Section 75.104, Health and Safety Code;

(14) a self-funded health benefit plan sponsored by a professional employer organization under Chapter 91, Labor Code;

(15) county employee group health benefits provided under Chapter 157, Local Government Code; and

(16) health and accident coverage provided by a risk pool created under Chapter 172, Local Government Code.

Sec. 1369.703. PROHIBITION ON DISCRIMINATORY ACTIONS. A health benefit plan issuer, pharmacy benefit manager, or third-party payor may not:

(1) reimburse a covered entity or a pharmacist or pharmacy that is under contract with the entity for a prescription drug at a rate lower than the rate paid to a non-covered entity for the same drug;

(2) impose a term on a covered entity that differs from the terms applied to non-covered entities on the basis that the entity is a covered entity, including:

(A) a fee, chargeback, or other adjustment that is not placed on non-covered entities; or

(B) a restriction or requirement regarding participation in a health benefit plan issuer, pharmacy benefit manager, or third-party payor network, including a requirement that a covered entity enter into a contract with a specific pharmacy or pharmacist; or

(3) create a restriction applicable to or impose an additional charge on a patient who chooses to receive a prescription drug from a covered entity.

SECTION 2. Subchapter O, Chapter 1369, Insurance Code, as added by this Act, applies only to a health benefit plan delivered, issued for delivery, or renewed on or after January 1, 2026.

SECTION 3. It is the intent of the legislature that every provision, section, subsection, sentence, clause, phrase, or word in this Act, and every application of the provisions in this Act to every person, group of persons, or circumstances, is severable from each other. If any application of any provision in this Act to any person, group of persons, or circumstances is found by a court to be invalid for any reason, the remaining applications of that provision to all other persons and circumstances shall be severed and may not be affected.

SECTION 4. This Act takes effect September 1, 2025.