By: Smithee, et al. (Senate Sponsor - Deuell) H.B. No. 1405
(In the Senate - Received from the House April 7, 2011;
April 20, 2011, read first time and referred to Committee on State
Affairs; May 5, 2011, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 0; May 5, 2011, sent
to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 1405 By: Van de Putte
A BILL TO BE ENTITLED
AN ACT
relating to provision by a health benefit plan of prescription drug
coverage specified by formulary and to modifications of that
coverage.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1369.051(2), Insurance Code, is amended
to read as follows:
(2) "Enrollee" means an individual who is covered
under a [group] health benefit plan, including a covered dependent.
SECTION 2. Section 1369.052, Insurance Code, is amended to
read as follows:
Sec. 1369.052. APPLICABILITY OF SUBCHAPTER. This
subchapter applies only to a [group] 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, [a] group, blanket, or franchise insurance policy or
insurance agreement, a group hospital service contract, or a small
or large employer group contract or similar coverage document that
is offered by:
(1) an insurance company;
(2) a group hospital service corporation operating
under Chapter 842;
(3) a fraternal benefit society operating under
Chapter 885;
(4) a stipulated premium company operating under
Chapter 884;
(5) a reciprocal exchange operating under Chapter 942;
(6) a health maintenance organization operating under
Chapter 843;
(7) a multiple employer welfare arrangement that holds
a certificate of authority under Chapter 846; or
(8) an approved nonprofit health corporation that
holds a certificate of authority under Chapter 844.
SECTION 3. Section 1369.053, Insurance Code, is amended to
read as follows:
Sec. 1369.053. EXCEPTION. This subchapter does not apply
to:
(1) a health benefit plan that provides coverage:
(A) only for a specified disease or for another
single benefit;
(B) only for accidental death or dismemberment;
(C) for wages or payments in lieu of wages for a
period during which an employee is absent from work because of
sickness or injury;
(D) as a supplement to a liability insurance
policy;
(E) for credit insurance;
(F) only for dental or vision care;
(G) only for hospital expenses; or
(H) only for indemnity for hospital confinement;
(2) [a small employer health benefit plan written
under Chapter 1501;
[(3)] a Medicare supplemental policy as defined by
Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss),
as amended;
(3) [(4)] a workers' compensation insurance policy;
(4) [(5)] medical payment insurance coverage provided
under a motor vehicle insurance policy; [or]
(5) [(6)] a long-term care insurance policy, including
a nursing home fixed indemnity policy, unless the commissioner
determines that the policy provides benefit coverage so
comprehensive that the policy is a health benefit plan as described
by Section 1369.052;
(6) the child health plan program under Chapter 62,
Health and Safety Code, or the health benefits plan for children
under Chapter 63, Health and Safety Code; or
(7) a Medicaid managed care program operated under
Chapter 533, Government Code, or a Medicaid program operated under
Chapter 32, Human Resources Code.
SECTION 4. Section 1369.054, Insurance Code, is amended to
read as follows:
Sec. 1369.054. NOTICE AND DISCLOSURE OF CERTAIN INFORMATION
REQUIRED. An issuer of a [group] health benefit plan that covers
prescription drugs and uses one or more drug formularies to specify
the prescription drugs covered under the plan shall:
(1) provide in plain language in the coverage
documentation provided to each enrollee:
(A) notice that the plan uses one or more drug
formularies;
(B) an explanation of what a drug formulary is;
(C) a statement regarding the method the issuer
uses to determine the prescription drugs to be included in or
excluded from a drug formulary;
(D) a statement of how often the issuer reviews
the contents of each drug formulary; and
(E) notice that an enrollee may contact the
issuer to determine whether a specific drug is included in a
particular drug formulary;
(2) disclose to an individual on request, not later
than the third business day after the date of the request, whether a
specific drug is included in a particular drug formulary; and
(3) notify an enrollee and any other individual who
requests information under this section that the inclusion of a
drug in a drug formulary does not guarantee that an enrollee's
health care provider will prescribe that drug for a particular
medical condition or mental illness.
SECTION 5. Subchapter B, Chapter 1369, Insurance Code, is
amended by adding Section 1369.0541 to read as follows:
Sec. 1369.0541. MODIFICATION OF DRUG COVERAGE UNDER PLAN.
(a) A health benefit plan issuer may modify drug coverage provided
under a health benefit plan if:
(1) the modification occurs at the time of coverage
renewal;
(2) the modification is effective uniformly among all
group health benefit plan sponsors covered by identical or
substantially identical health benefit plans or all individuals
covered by identical or substantially identical individual health
benefit plans, as applicable; and
(3) not later than the 60th day before the date the
modification is effective, the issuer provides written notice of
the modification to the commissioner, each affected group health
benefit plan sponsor, each affected enrollee in an affected group
health benefit plan, and each affected individual health benefit
plan holder.
(b) Modifications affecting drug coverage that require
notice under Subsection (a) include:
(1) removing a drug from a formulary;
(2) adding a requirement that an enrollee receive
prior authorization for a drug;
(3) imposing or altering a quantity limit for a drug;
(4) imposing a step-therapy restriction for a drug;
and
(5) moving a drug to a higher cost-sharing tier unless
a generic drug alternative to the drug is available.
(c) A health benefit plan issuer may elect to offer an
enrollee in the plan the option of receiving notifications required
by this section by e-mail.
SECTION 6. Section 1369.055, Insurance Code, is amended to
read as follows:
Sec. 1369.055. CONTINUATION OF COVERAGE REQUIRED; OTHER
DRUGS NOT PRECLUDED. (a) An issuer of a [group] health benefit plan
that covers prescription drugs shall offer to each enrollee at the
contracted benefit level and until the enrollee's plan renewal date
any prescription drug that was approved or covered under the plan
for a medical condition or mental illness, regardless of whether
the drug has been removed from the health benefit plan's drug
formulary before the plan renewal date.
(b) This section does not prohibit a physician or other
health professional who is authorized to prescribe a drug from
prescribing a drug that is an alternative to a drug for which
continuation of coverage is required under Subsection (a) if the
alternative drug is:
(1) covered under the [group] health benefit plan; and
(2) medically appropriate for the enrollee.
SECTION 7. Section 1369.056(a), Insurance Code, is amended
to read as follows:
(a) The refusal of a [group] health benefit plan issuer to
provide benefits to an enrollee for a prescription drug is an
adverse determination for purposes of Section 4201.002 if:
(1) the drug is not included in a drug formulary used
by the [group] health benefit plan; and
(2) the enrollee's physician has determined that the
drug is medically necessary.
SECTION 8. Section 1501.108(d), Insurance Code, is amended
to read as follows:
(d) Notwithstanding Subsection (a), a small or large
employer health benefit plan issuer may modify a small or large
employer health benefit plan in accordance with Section 1369.0541
or if:
(1) the modification occurs at the time of coverage
renewal;
(2) the modification is effective uniformly among all
small or large employers covered by that health benefit plan; and
(3) the issuer notifies the commissioner and each
affected covered small or large employer of the modification not
later than the 60th day before the date the modification is
effective.
SECTION 9. The change in law made by this Act applies only
to a health benefit plan delivered, issued for delivery, or renewed
on or after January 1, 2012. A health benefit plan delivered,
issued for delivery, or renewed before January 1, 2012, is governed
by the law in effect immediately before the effective date of this
Act, and that law is continued in effect for that purpose.
SECTION 10. This Act takes effect September 1, 2011.
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