Texas 2015 - 84th Regular

Texas House Bill HB2618 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	84R9165 PMO-F
2	2	By: Muñoz, Jr. H.B. No. 2618
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the regulation of third-party administrators,
8	8	including pharmacy benefit managers; expanding the requirement of a
9	9	certificate of authority to engage in an occupation; adding
10	10	provisions subject to a criminal penalty.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 4151.001, Insurance Code, is amended by
13	13	amending Subdivisions (1), (2), and (4) and adding Subdivisions
14	14	(3-a) and (5-a) to read as follows:
15	15	(1) "Administrator" means a person who, in connection
16	16	with annuities or life benefits, health benefits, accident
17	17	benefits, pharmacy benefits, or workers' compensation benefits,
18	18	collects premiums or contributions from or adjusts or settles
19	19	claims for residents of this state. Except as provided by Section
20	20	4151.0023, the [The] term includes a delegated entity under Chapter
21	21	1272 and a workers' compensation health care network authorized
22	22	under Chapter 1305 that administers a workers' compensation claim
23	23	for an insurer, including an insurer that establishes or contracts
24	24	with the network to provide health care services. Except as
25	25	provided by Section 4151.0023, the [The] term does not include a
26	26	person described by Section 4151.002.
27	27	(2) "Insurer" means a person who engages in the
28	28	business of life, health, accident, or workers' compensation
29	29	insurance under the law of this state. For purposes of this chapter
30	30	only, the term also includes:
31	31	(A) an "insurance carrier," as defined by Section
32	32	401.011(27), Labor Code, other than a governmental entity or a
33	33	workers' compensation self-insurance group subject to regulation
34	34	under Chapter 407A, Labor Code; and
35	35	(B) an entity for whom a pharmacy benefit manager
36	36	acts as described by Section 4151.0023.
37	37	(3-a) "Pharmacy benefit management" means
38	38	administration or management of prescription drug benefits
39	39	provided by an insurer, including:
40	40	(A) retail pharmacy network management;
41	41	(B) pharmacy discount card management;
42	42	(C) claims payment to a retail pharmacy for
43	43	prescription medications dispensed to plan participants;
44	44	(D) clinical formulary development and
45	45	management services, including utilization management and quality
46	46	assurance programs;
47	47	(E) rebate contracting and administration;
48	48	(F) auditing contracted pharmacies;
49	49	(G) establishing pharmacy reimbursement pricing
50	50	and methodologies; and
51	51	(H) determining single- and multiple-source
52	52	medications.
53	53	(4) "Plan" means a plan, fund, or program established,
54	54	adopted, or maintained by a plan sponsor or insurer to the extent
55	55	that the plan, fund, or program is established, adopted, or
56	56	maintained to provide indemnification, [or] expense reimbursement,
57	57	or payment for any type of life, health, or accident benefit.
58	58	(5-a) "Retail pharmacy" means a pharmacy licensed
59	59	under Chapter 560, Occupations Code, that dispenses medications to
60	60	the public, including an independent pharmacy, a chain pharmacy, a
61	61	supermarket pharmacy, or a mass merchandiser pharmacy. The term
62	62	does not include a pharmacy that dispenses prescription medications
63	63	primarily through the mail, a nursing home pharmacy, a long-term
64	64	care facility pharmacy, a hospital pharmacy, a clinic pharmacy, a
65	65	charitable or nonprofit pharmacy, a government pharmacy, or a
66	66	pharmacy benefit manager that is serving in its capacity as a
67	67	pharmacy benefit manager.
68	68	SECTION 2. Section 4151.002, Insurance Code, is amended to
69	69	read as follows:
70	70	Sec. 4151.002. EXEMPTIONS. Except as provided by Section
71	71	4151.0023, a [A] person is not an administrator if the person is:
72	72	(1) an employer, other than a certified workers'
73	73	compensation self-insurer, administering an employee benefit plan
74	74	or the plan of an affiliated employer under common management and
75	75	control;
76	76	(2) a union administering a benefit plan on behalf of
77	77	its members;
78	78	(3) an insurer or a group hospital service corporation
79	79	subject to Chapter 842 acting with respect to a policy lawfully
80	80	issued and delivered by the insurer or corporation in and under the
81	81	law of a state in which the insurer or corporation was authorized to
82	82	engage in the business of insurance;
83	83	(4) a health maintenance organization that is
84	84	authorized to operate in this state under Chapter 843 with respect
85	85	to any activity that is specifically regulated under that chapter,
86	86	Chapter 1271, 1272, or 1367, Subchapter A, Chapter 1452, or
87	87	Subchapter B, Chapter 1507;
88	88	(5) an agent licensed under Subchapter B, Chapter
89	89	4051, Subchapter B, Chapter 4053, or Subchapter B, Chapter 4054,
90	90	who receives commissions as an agent and is acting:
91	91	(A) under appointment on behalf of an insurer
92	92	authorized to engage in the business of insurance in this state; and
93	93	(B) in the customary scope and duties of the
94	94	person's authority as an agent;
95	95	(6) a creditor acting on behalf of its debtor with
96	96	respect to insurance that covers a debt between the creditor and its
97	97	debtor, if the creditor performs only the functions of a group
98	98	policyholder or a creditor;
99	99	(7) a trust established in conformity with 29 U.S.C.
100	100	Section 186 or a trustee or employee who is acting under the trust;
101	101	(8) a trust that is exempt from taxation under Section
102	102	501(a), Internal Revenue Code of 1986, or a trustee or employee
103	103	acting under the trust;
104	104	(9) a custodian or a custodian's agent or employee who
105	105	is acting under a custodian account that complies with Section
106	106	401(f), Internal Revenue Code of 1986;
107	107	(10) a bank, credit union, savings and loan
108	108	association, or other financial institution that is subject to
109	109	supervision or examination under federal or state law by a federal
110	110	or state regulatory authority, if the institution is performing
111	111	only those functions for which the institution holds a license
112	112	under federal or state law;
113	113	(11) a company that advances and collects a premium or
114	114	charge from its credit card holders on their authorization, if the
115	115	company does not adjust or settle claims and acts only in the
116	116	company's debtor-creditor relationship with its credit card
117	117	holders;
118	118	(12) a person who adjusts or settles claims in the
119	119	normal course of the person's practice or employment as a licensed
120	120	attorney and who does not collect any premium or charge in
121	121	connection with annuities or with life, health, accident, pharmacy,
122	122	or workers' compensation benefits;
123	123	(13) an adjuster licensed under Subtitle C by the
124	124	department who is engaged in the performance of the individual's
125	125	powers and duties as an adjuster in the scope of the individual's
126	126	license;
127	127	(14) a person who provides technical, advisory,
128	128	utilization review, precertification, or consulting services to an
129	129	insurer, plan, or plan sponsor but does not make any management or
130	130	discretionary decisions on behalf of the insurer, plan, or plan
131	131	sponsor;
132	132	(15) an attorney in fact for a Lloyd's plan operating
133	133	under Chapter 941 or for a reciprocal or interinsurance exchange
134	134	operating under Chapter 942 who is acting in the capacity of
135	135	attorney in fact under the applicable chapter;
136	136	(16) a joint fund, risk management pool, or
137	137	self-insurance pool composed of political subdivisions of this
138	138	state that participate in a fund or pool through interlocal
139	139	agreements, any nonprofit administrative agency or governing body
140	140	or other nonprofit entity that acts solely on behalf of a fund,
141	141	pool, agency, or body, or any other fund, pool, agency, or body
142	142	established under or for the purpose of implementing an interlocal
143	143	governmental agreement;
144	144	(17) a self-insured political subdivision;
145	145	(18) a plan under which insurance benefits are
146	146	provided exclusively by an insurer authorized to engage in the
147	147	business of insurance in this state and the administrator of which
148	148	is:
149	149	(A) a full-time employee of the plan's organizing
150	150	or sponsoring association, trust, or other entity; or
151	151	(B) a trustee of the organizing or sponsoring
152	152	trust;
153	153	(19) a parent of a wholly owned direct or indirect
154	154	subsidiary insurer authorized to engage in the business of
155	155	insurance in this state or a wholly owned direct or indirect
156	156	subsidiary insurer that is a part of the parent's holding company
157	157	system that, under an agreement regulated and approved under
158	158	Chapter 823 or a similar statute of the domiciliary state if the
159	159	parent or subsidiary insurer is a foreign insurer engaged in
160	160	business in this state, on behalf of only itself or an affiliated
161	161	insurer:
162	162	(A) collects premiums or contributions, if the
163	163	parent or subsidiary insurer:
164	164	(i) prepares only billing statements and
165	165	places those statements in the United States mail; and
166	166	(ii) causes all collected premiums to be
167	167	deposited directly in a depository account of the particular
168	168	affiliated insurer; or
169	169	(B) furnishes proof-of-loss forms, reviews
170	170	claims, determines the amount of the liability for those claims,
171	171	and negotiates settlements, if the parent or subsidiary insurer
172	172	pays claims only from the funds of the particular subsidiary by
173	173	checks or drafts of that subsidiary; or
174	174	(20) an affiliate, as described by Section [Chapter]
175	175	823.003, of a self-insurer certified under Chapter 407, Labor Code,
176	176	and who:
177	177	(A) is performing the acts of an administrator on
178	178	behalf of that certified self-insurer; and
179	179	(B) directly or indirectly through one or more
180	180	intermediaries, controls, is controlled by, or is under common
181	181	control with that certified self-insurer, as the term "control" is
182	182	described by Section 823.005.
183	183	SECTION 3. Subchapter A, Chapter 4151, Insurance Code, is
184	184	amended by adding Section 4151.0023 to read as follows:
185	185	Sec. 4151.0023. CHAPTER APPLICABILITY TO PHARMACY BENEFIT
186	186	MANAGERS; EXCEPTIONS. (a) Notwithstanding any other law, this
187	187	chapter applies to a person, other than a pharmacist or pharmacy,
188	188	who collects premium or contributions from or adjusts or settles
189	189	claims for residents of this state with respect to pharmacy
190	190	benefits provided by an entity that issues or provides a plan that
191	191	provides benefits for medical or surgical expenses incurred as a
192	192	result of a health condition, accident, or sickness, including an
193	193	individual, group, blanket, or franchise insurance policy or
194	194	insurance agreement, a group hospital service contract, or an
195	195	individual or group evidence of coverage or similar coverage
196	196	document that is offered by:
197	197	(1) an insurance company;
198	198	(2) a group hospital service corporation operating
199	199	under Chapter 842;
200	200	(3) a fraternal benefit society operating under
201	201	Chapter 885;
202	202	(4) a stipulated premium company operating under
203	203	Chapter 884;
204	204	(5) an exchange operating under Chapter 942;
205	205	(6) a health maintenance organization operating under
206	206	Chapter 843;
207	207	(7) a multiple employer welfare arrangement that holds
208	208	a certificate of authority under Chapter 846; or
209	209	(8) an approved nonprofit health corporation that
210	210	holds a certificate of authority under Chapter 844.
211	211	(b) This chapter applies to a pharmacy benefit manager that
212	212	provides pharmacy benefit management with respect to pharmacy
213	213	benefits provided by the provider or issuer of a plan of group
214	214	health coverage made available by a school district in accordance
215	215	with Section 22.004, Education Code.
216	216	(c) Notwithstanding Section 172.014, Local Government Code,
217	217	or any other law, this chapter applies to a pharmacy benefit manager
218	218	that provides pharmacy benefit management with respect to pharmacy
219	219	benefits provided by a risk pool created under Chapter 172, Local
220	220	Government Code, that provides health and accident coverage.
221	221	(d) Notwithstanding any provision in Chapter 1551, 1575,
222	222	1579, or 1601 or any other law, this chapter applies to a pharmacy
223	223	benefit manager that provides pharmacy benefit management with
224	224	respect to pharmacy benefits provided by the provider or issuer of:
225	225	(1) a basic coverage plan under Chapter 1551;
226	226	(2) a basic plan under Chapter 1575;
227	227	(3) a primary care coverage plan under Chapter 1579;
228	228	and
229	229	(4) a plan that provides basic coverage under Chapter
230	230	1601.
231	231	(e) Notwithstanding Section 1501.251 or any other law, this
232	232	chapter applies to a pharmacy benefit manager that provides
233	233	pharmacy benefit management with respect to pharmacy benefits
234	234	provided by the issuer of coverage under a small employer health
235	235	benefit plan subject to Chapter 1501.
236	236	(f) To the extent allowed by federal law, this chapter
237	237	applies to a pharmacy benefit manager that provides pharmacy
238	238	benefit management with respect to pharmacy benefits provided by
239	239	the state Medicaid program, except that this chapter does not apply
240	240	to a managed care organization subject to Section 533.005,
241	241	Government Code.
242	242	(g) This chapter does not apply to a pharmacy benefit
243	243	manager with respect to pharmacy benefits provided by:
244	244	(1) a plan that provides coverage:
245	245	(A) for wages or payments in lieu of wages for a
246	246	period during which an employee is absent from work because of
247	247	sickness or injury;
248	248	(B) as a supplement to a liability insurance
249	249	policy;
250	250	(C) for credit insurance;
251	251	(D) only for dental or vision care;
252	252	(E) only for hospital expenses; or
253	253	(F) only for indemnity for hospital confinement;
254	254	(2) a Medicare supplemental policy as defined by
255	255	Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
256	256	(3) a workers' compensation insurance policy or any
257	257	other plan or arrangement that provides workers' compensation
258	258	benefits;
259	259	(4) medical payment insurance coverage provided under
260	260	a motor vehicle insurance policy; or
261	261	(5) a long-term care policy, including a nursing home
262	262	fixed indemnity policy, unless the commissioner determines that the
263	263	policy provides benefit coverage so comprehensive that the policy
264	264	is a health benefit plan as described by Subsections (a)-(f).
265	265	(h) Notwithstanding any other law, a person described by
266	266	Subsections (a)-(g) is an administrator subject to this chapter and
267	267	must obtain a certificate of authority under Subchapter B.
268	268	SECTION 4. The heading to Subchapter D, Chapter 4151,
269	269	Insurance Code, is amended to read as follows:
270	270	SUBCHAPTER D. PHARMACY BENEFITS [BENEFIT PLANS]
271	271	SECTION 5. Subchapter D, Chapter 4151, Insurance Code, is
272	272	amended by amending Section 4151.151 and adding Sections 4151.154,
273	273	4151.155, 4151.156, 4151.157, 4151.158, and 4151.159 to read as
274	274	follows:
275	275	Sec. 4151.151. DEFINITION. In this subchapter, "pharmacy
276	276	benefit manager" means a person, other than a pharmacy or
277	277	pharmacist, who acts as an administrator who provides pharmacy
278	278	benefit management in connection with pharmacy benefits.
279	279	Sec. 4151.154. AMENDMENT OF CONTRACT TERM. A pharmacy
280	280	benefit manager may not change a term of a contract with a retail
281	281	pharmacy, including automatically enrolling or disenrolling the
282	282	pharmacy from a pharmacy benefit network, without prior written
283	283	agreement of the retail pharmacy.
284	284	Sec. 4151.155. CERTAIN TRANSACTION FEES PROHIBITED. A
285	285	pharmacy benefit manager may not charge a transaction fee for a
286	286	claim submitted electronically to the pharmacy benefit manager by a
287	287	retail pharmacy.
288	288	Sec. 4151.156. PHARMACY NETWORK REQUIREMENTS AND
289	289	PROHIBITIONS. (a) A pharmacy benefit manager may not require that
290	290	a retail pharmacy be a member of a network managed by the pharmacy
291	291	benefit manager as a condition for the retail pharmacy to
292	292	participate in another network managed by the pharmacy benefit
293	293	manager.
294	294	(b) A pharmacy benefit manager may not exclude a retail
295	295	pharmacy from participation in a network if the pharmacy:
296	296	(1) accepts the terms, conditions, and reimbursement
297	297	rates of the pharmacy benefit manager;
298	298	(2) meets all applicable federal and state licensure
299	299	and permit requirements; and
300	300	(3) has not been excluded from participation as a
301	301	provider in any federal or state program.
302	302	(c) A pharmacy benefit manager shall establish a pharmacy
303	303	network that includes sufficient retail pharmacies to ensure that:
304	304	(1) in urban areas, not less than 90 percent of plan
305	305	participants, on average, live not more than two miles from a
306	306	network retail pharmacy;
307	307	(2) in suburban areas, not less than 90 percent of plan
308	308	participants, on average, live not more than five miles from a
309	309	network retail pharmacy; and
310	310	(3) in rural areas, not less than 70 percent of plan
311	311	participants, on average, live not more than 15 miles from a network
312	312	retail pharmacy.
313	313	Sec. 4151.157. RELATIONSHIP WITH PLAN PARTICIPANTS. A
314	314	pharmacy benefit manager may not:
315	315	(1) require that a plan participant use a retail
316	316	pharmacy, mail order pharmacy, specialty pharmacy, or other entity
317	317	providing pharmacy services:
318	318	(A) in which the pharmacy benefit manager has an
319	319	ownership interest; or
320	320	(B) that has an ownership interest in the
321	321	pharmacy benefit manager; or
322	322	(2) provide an incentive to a plan participant to
323	323	encourage the plan participant to use a retail pharmacy, mail order
324	324	pharmacy, specialty pharmacy, or other entity providing pharmacy
325	325	services:
326	326	(A) in which the pharmacy benefit manager has an
327	327	ownership interest; or
328	328	(B) that has an ownership interest in the
329	329	pharmacy benefit manager.
330	330	Sec. 4151.158. SALE, RENTAL, OR LEASING OF CLAIMS DATA. (a)
331	331	Not later than the 30th day before the date a pharmacy benefit
332	332	manager intends to sell, rent, or lease an insurer's claims data,
333	333	the pharmacy benefit manager shall disclose in writing to the
334	334	insurer that the pharmacy benefit manager intends to sell, rent, or
335	335	lease the claims data. The written disclosure must identify the
336	336	potential purchaser and the expected use of the data.
337	337	(b) A pharmacy benefit manager may not sell, rent, or lease
338	338	claims data without the written approval of the insurer.
339	339	(c) A pharmacy benefit manager must allow each plan
340	340	participant to refuse the sale, rent, or lease of that plan
341	341	participant's claims data.
342	342	Sec. 4151.159. TRANSMISSION OF CLAIMS DATA AND CERTAIN
343	343	OTHER INFORMATION PROHIBITED. A pharmacy benefit manager may not
344	344	transmit a plan participant's personally identifiable utilization
345	345	or claims data to a pharmacy owned by the pharmacy benefit manager
346	346	unless before each transmission the plan participant consents in
347	347	writing to the transmission.
348	348	SECTION 6. The change in law made by this Act applies only
349	349	to a contract between a pharmacy benefit manager and a retail
350	350	pharmacy entered into or renewed on or after January 1, 2016. A
351	351	contract entered into or renewed before January 1, 2016, is
352	352	governed by the law as it existed immediately before the effective
353	353	date of this Act, and that law is continued in effect for that
354	354	purpose.
355	355	SECTION 7. Unless required to register as an administrator
356	356	under Chapter 4151, Insurance Code, before the effective date of
357	357	this Act, an entity acting as, or holding itself out as, a pharmacy
358	358	benefit manager for purposes of that chapter as amended by this Act
359	359	is not required to hold a certificate of authority under that
360	360	chapter before January 1, 2016.
361	361	SECTION 8. This Act takes effect September 1, 2015.