TX
Texas Senate Bill SB1612

Texas 2015 - 84th Regular

Texas Senate Bill SB1612 Compare Versions

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11 84R10167 EES-F
22 By: Kolkhorst S.B. No. 1612
33
44
55 A BILL TO BE ENTITLED
66 AN ACT
77 relating to the reimbursement of prescription drugs under the
88 Medicaid managed care and child health plan programs.
99 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1010 SECTION 1. Section 533.005(a), Government Code, is amended
1111 to read as follows:
1212 (a) A contract between a managed care organization and the
1313 commission for the organization to provide health care services to
1414 recipients must contain:
1515 (1) procedures to ensure accountability to the state
1616 for the provision of health care services, including procedures for
1717 financial reporting, quality assurance, utilization review, and
1818 assurance of contract and subcontract compliance;
1919 (2) capitation rates that ensure the cost-effective
2020 provision of quality health care;
2121 (3) a requirement that the managed care organization
2222 provide ready access to a person who assists recipients in
2323 resolving issues relating to enrollment, plan administration,
2424 education and training, access to services, and grievance
2525 procedures;
2626 (4) a requirement that the managed care organization
2727 provide ready access to a person who assists providers in resolving
2828 issues relating to payment, plan administration, education and
2929 training, and grievance procedures;
3030 (5) a requirement that the managed care organization
3131 provide information and referral about the availability of
3232 educational, social, and other community services that could
3333 benefit a recipient;
3434 (6) procedures for recipient outreach and education;
3535 (7) a requirement that the managed care organization
3636 make payment to a physician or provider for health care services
3737 rendered to a recipient under a managed care plan on any claim for
3838 payment that is received with documentation reasonably necessary
3939 for the managed care organization to process the claim:
4040 (A) not later than:
4141 (i) the 10th day after the date the claim is
4242 received if the claim relates to services provided by a nursing
4343 facility, intermediate care facility, or group home;
4444 (ii) the 30th day after the date the claim
4545 is received if the claim relates to the provision of long-term
4646 services and supports not subject to Subparagraph (i); and
4747 (iii) the 45th day after the date the claim
4848 is received if the claim is not subject to Subparagraph (i) or (ii);
4949 or
5050 (B) within a period, not to exceed 60 days,
5151 specified by a written agreement between the physician or provider
5252 and the managed care organization;
5353 (7-a) a requirement that the managed care organization
5454 demonstrate to the commission that the organization pays claims
5555 described by Subdivision (7)(A)(ii) on average not later than the
5656 21st day after the date the claim is received by the organization;
5757 (8) a requirement that the commission, on the date of a
5858 recipient's enrollment in a managed care plan issued by the managed
5959 care organization, inform the organization of the recipient's
6060 Medicaid certification date;
6161 (9) a requirement that the managed care organization
6262 comply with Section 533.006 as a condition of contract retention
6363 and renewal;
6464 (10) a requirement that the managed care organization
6565 provide the information required by Section 533.012 and otherwise
6666 comply and cooperate with the commission's office of inspector
6767 general and the office of the attorney general;
6868 (11) a requirement that the managed care
6969 organization's usages of out-of-network providers or groups of
7070 out-of-network providers may not exceed limits for those usages
7171 relating to total inpatient admissions, total outpatient services,
7272 and emergency room admissions determined by the commission;
7373 (12) if the commission finds that a managed care
7474 organization has violated Subdivision (11), a requirement that the
7575 managed care organization reimburse an out-of-network provider for
7676 health care services at a rate that is equal to the allowable rate
7777 for those services, as determined under Sections 32.028 and
7878 32.0281, Human Resources Code;
7979 (13) a requirement that, notwithstanding any other
8080 law, including Sections 843.312 and 1301.052, Insurance Code, the
8181 organization:
8282 (A) use advanced practice registered nurses and
8383 physician assistants in addition to physicians as primary care
8484 providers to increase the availability of primary care providers in
8585 the organization's provider network; and
8686 (B) treat advanced practice registered nurses
8787 and physician assistants in the same manner as primary care
8888 physicians with regard to:
8989 (i) selection and assignment as primary
9090 care providers;
9191 (ii) inclusion as primary care providers in
9292 the organization's provider network; and
9393 (iii) inclusion as primary care providers
9494 in any provider network directory maintained by the organization;
9595 (14) a requirement that the managed care organization
9696 reimburse a federally qualified health center or rural health
9797 clinic for health care services provided to a recipient outside of
9898 regular business hours, including on a weekend day or holiday, at a
9999 rate that is equal to the allowable rate for those services as
100100 determined under Section 32.028, Human Resources Code, if the
101101 recipient does not have a referral from the recipient's primary
102102 care physician;
103103 (15) a requirement that the managed care organization
104104 develop, implement, and maintain a system for tracking and
105105 resolving all provider appeals related to claims payment, including
106106 a process that will require:
107107 (A) a tracking mechanism to document the status
108108 and final disposition of each provider's claims payment appeal;
109109 (B) the contracting with physicians who are not
110110 network providers and who are of the same or related specialty as
111111 the appealing physician to resolve claims disputes related to
112112 denial on the basis of medical necessity that remain unresolved
113113 subsequent to a provider appeal;
114114 (C) the determination of the physician resolving
115115 the dispute to be binding on the managed care organization and
116116 provider; and
117117 (D) the managed care organization to allow a
118118 provider with a claim that has not been paid before the time
119119 prescribed by Subdivision (7)(A)(ii) to initiate an appeal of that
120120 claim;
121121 (16) a requirement that a medical director who is
122122 authorized to make medical necessity determinations is available to
123123 the region where the managed care organization provides health care
124124 services;
125125 (17) a requirement that the managed care organization
126126 ensure that a medical director and patient care coordinators and
127127 provider and recipient support services personnel are located in
128128 the South Texas service region, if the managed care organization
129129 provides a managed care plan in that region;
130130 (18) a requirement that the managed care organization
131131 provide special programs and materials for recipients with limited
132132 English proficiency or low literacy skills;
133133 (19) a requirement that the managed care organization
134134 develop and establish a process for responding to provider appeals
135135 in the region where the organization provides health care services;
136136 (20) a requirement that the managed care organization:
137137 (A) develop and submit to the commission, before
138138 the organization begins to provide health care services to
139139 recipients, a comprehensive plan that describes how the
140140 organization's provider network will provide recipients sufficient
141141 access to:
142142 (i) preventive care;
143143 (ii) primary care;
144144 (iii) specialty care;
145145 (iv) after-hours urgent care;
146146 (v) chronic care;
147147 (vi) long-term services and supports;
148148 (vii) nursing services; and
149149 (viii) therapy services, including
150150 services provided in a clinical setting or in a home or
151151 community-based setting; and
152152 (B) regularly, as determined by the commission,
153153 submit to the commission and make available to the public a report
154154 containing data on the sufficiency of the organization's provider
155155 network with regard to providing the care and services described
156156 under Paragraph (A) and specific data with respect to Paragraphs
157157 (A)(iii), (vi), (vii), and (viii) on the average length of time
158158 between:
159159 (i) the date a provider makes a referral for
160160 the care or service and the date the organization approves or denies
161161 the referral; and
162162 (ii) the date the organization approves a
163163 referral for the care or service and the date the care or service is
164164 initiated;
165165 (21) a requirement that the managed care organization
166166 demonstrate to the commission, before the organization begins to
167167 provide health care services to recipients, that:
168168 (A) the organization's provider network has the
169169 capacity to serve the number of recipients expected to enroll in a
170170 managed care plan offered by the organization;
171171 (B) the organization's provider network
172172 includes:
173173 (i) a sufficient number of primary care
174174 providers;
175175 (ii) a sufficient variety of provider
176176 types;
177177 (iii) a sufficient number of providers of
178178 long-term services and supports and specialty pediatric care
179179 providers of home and community-based services; and
180180 (iv) providers located throughout the
181181 region where the organization will provide health care services;
182182 and
183183 (C) health care services will be accessible to
184184 recipients through the organization's provider network to a
185185 comparable extent that health care services would be available to
186186 recipients under a fee-for-service or primary care case management
187187 model of Medicaid managed care;
188188 (22) a requirement that the managed care organization
189189 develop a monitoring program for measuring the quality of the
190190 health care services provided by the organization's provider
191191 network that:
192192 (A) incorporates the National Committee for
193193 Quality Assurance's Healthcare Effectiveness Data and Information
194194 Set (HEDIS) measures;
195195 (B) focuses on measuring outcomes; and
196196 (C) includes the collection and analysis of
197197 clinical data relating to prenatal care, preventive care, mental
198198 health care, and the treatment of acute and chronic health
199199 conditions and substance abuse;
200200 (23) subject to Subsection (a-1), a requirement that
201201 the managed care organization develop, implement, and maintain an
202202 outpatient pharmacy benefit plan for its enrolled recipients:
203203 (A) that exclusively employs the vendor drug
204204 program formulary and preserves the state's ability to reduce
205205 waste, fraud, and abuse under the Medicaid program;
206206 (B) that adheres to the applicable preferred drug
207207 list adopted by the commission under Section 531.072;
208208 (C) that includes the prior authorization
209209 procedures and requirements prescribed by or implemented under
210210 Sections 531.073(b), (c), and (g) for the vendor drug program;
211211 (D) for purposes of which the managed care
212212 organization:
213213 (i) may not negotiate or collect rebates
214214 associated with pharmacy products on the vendor drug program
215215 formulary; and
216216 (ii) may not receive drug rebate or pricing
217217 information that is confidential under Section 531.071;
218218 (E) that complies with the prohibition under
219219 Section 531.089;
220220 (F) under which the managed care organization may
221221 not prohibit, limit, or interfere with a recipient's selection of a
222222 pharmacy or pharmacist of the recipient's choice for the provision
223223 of pharmaceutical services under the plan through the imposition of
224224 different copayments;
225225 (G) that allows the managed care organization or
226226 any subcontracted pharmacy benefit manager to contract with a
227227 pharmacist or pharmacy providers separately for specialty pharmacy
228228 services, except that:
229229 (i) the managed care organization and
230230 pharmacy benefit manager are prohibited from allowing exclusive
231231 contracts with a specialty pharmacy owned wholly or partly by the
232232 pharmacy benefit manager responsible for the administration of the
233233 pharmacy benefit program; and
234234 (ii) the managed care organization and
235235 pharmacy benefit manager must adopt policies and procedures for
236236 reclassifying prescription drugs from retail to specialty drugs,
237237 and those policies and procedures must be consistent with rules
238238 adopted by the executive commissioner and include notice to network
239239 pharmacy providers from the managed care organization;
240240 (H) under which the managed care organization may
241241 not prevent a pharmacy or pharmacist from participating as a
242242 provider if the pharmacy or pharmacist agrees to comply with the
243243 financial terms and conditions of the contract as well as other
244244 reasonable administrative and professional terms and conditions of
245245 the contract;
246246 (I) under which the managed care organization may
247247 include mail-order pharmacies in its networks, but may not require
248248 enrolled recipients to use those pharmacies, and may not charge an
249249 enrolled recipient who opts to use this service a fee, including
250250 postage and handling fees;
251251 (J) under which the managed care organization or
252252 pharmacy benefit manager, as applicable, must pay claims in
253253 accordance with Section 843.339, Insurance Code; and
254254 (K) under which the managed care organization or
255255 pharmacy benefit manager, as applicable, must comply with Section
256256 533.00512 as a condition of contract retention and renewal[:
257257 [(i) to place a drug on a maximum allowable
258258 cost list, must ensure that:
259259 [(a) the drug is listed as "A" or "B"
260260 rated in the most recent version of the United States Food and Drug
261261 Administration's Approved Drug Products with Therapeutic
262262 Equivalence Evaluations, also known as the Orange Book, has an "NR"
263263 or "NA" rating or a similar rating by a nationally recognized
264264 reference; and
265265 [(b) the drug is generally available
266266 for purchase by pharmacies in the state from national or regional
267267 wholesalers and is not obsolete;
268268 [(ii) must provide to a network pharmacy
269269 provider, at the time a contract is entered into or renewed with the
270270 network pharmacy provider, the sources used to determine the
271271 maximum allowable cost pricing for the maximum allowable cost list
272272 specific to that provider;
273273 [(iii) must review and update maximum
274274 allowable cost price information at least once every seven days to
275275 reflect any modification of maximum allowable cost pricing;
276276 [(iv) must, in formulating the maximum
277277 allowable cost price for a drug, use only the price of the drug and
278278 drugs listed as therapeutically equivalent in the most recent
279279 version of the United States Food and Drug Administration's
280280 Approved Drug Products with Therapeutic Equivalence Evaluations,
281281 also known as the Orange Book;
282282 [(v) must establish a process for
283283 eliminating products from the maximum allowable cost list or
284284 modifying maximum allowable cost prices in a timely manner to
285285 remain consistent with pricing changes and product availability in
286286 the marketplace;
287287 [(vi) must:
288288 [(a) provide a procedure under which a
289289 network pharmacy provider may challenge a listed maximum allowable
290290 cost price for a drug;
291291 [(b) respond to a challenge not later
292292 than the 15th day after the date the challenge is made;
293293 [(c) if the challenge is successful,
294294 make an adjustment in the drug price effective on the date the
295295 challenge is resolved, and make the adjustment applicable to all
296296 similarly situated network pharmacy providers, as determined by the
297297 managed care organization or pharmacy benefit manager, as
298298 appropriate;
299299 [(d) if the challenge is denied,
300300 provide the reason for the denial; and
301301 [(e) report to the commission every 90
302302 days the total number of challenges that were made and denied in the
303303 preceding 90-day period for each maximum allowable cost list drug
304304 for which a challenge was denied during the period;
305305 [(vii) must notify the commission not later
306306 than the 21st day after implementing a practice of using a maximum
307307 allowable cost list for drugs dispensed at retail but not by mail;
308308 and
309309 [(viii) must provide a process for each of
310310 its network pharmacy providers to readily access the maximum
311311 allowable cost list specific to that provider];
312312 (24) a requirement that the managed care organization
313313 and any entity with which the managed care organization contracts
314314 for the performance of services under a managed care plan disclose,
315315 at no cost, to the commission and, on request, the office of the
316316 attorney general all discounts, incentives, rebates, fees, free
317317 goods, bundling arrangements, and other agreements affecting the
318318 net cost of goods or services provided under the plan; and
319319 (25) a requirement that the managed care organization
320320 not implement significant, nonnegotiated, across-the-board
321321 provider reimbursement rate reductions unless:
322322 (A) subject to Subsection (a-3), the
323323 organization has the prior approval of the commission to make the
324324 reduction; or
325325 (B) the rate reductions are based on changes to
326326 the Medicaid fee schedule or cost containment initiatives
327327 implemented by the commission.
328328 SECTION 2. Subchapter A, Chapter 533, Government Code, is
329329 amended by adding Section 533.00512 to read as follows:
330330 Sec. 533.00512. REIMBURSEMENT METHODOLOGY FOR PRESCRIPTION
331331 DRUGS. (a) A managed care organization that contracts with the
332332 commission under this chapter or a pharmacy benefit manager
333333 administering a pharmacy benefit program on behalf of the managed
334334 care organization shall reimburse a pharmacy or pharmacist that
335335 dispenses a prescribed prescription drug to a recipient for:
336336 (1) subject to Subsection (b), the drug ingredient
337337 cost using the National Average Drug Acquisition Cost published by
338338 the Centers for Medicare and Medicaid Services; and
339339 (2) except as provided by Subsection (e), the cost of
340340 dispensing the drug by paying the pharmacy or pharmacist, as
341341 applicable, a dispensing fee equal to the greater of $7.93 plus an
342342 amount equal to 1.96 percent of the amount paid under Subdivision
343343 (1) or Subsection (b), as applicable.
344344 (b) If a National Average Drug Acquisition Cost is not
345345 available to determine the ingredient cost of a prescription drug
346346 for the purpose of Subsection (a)(1), the managed care organization
347347 or pharmacy benefit manager shall reimburse the pharmacy or
348348 pharmacist for the drug ingredient cost using:
349349 (1) the wholesale acquisition cost, less an amount
350350 equal to two percent of that cost; or
351351 (2) an amount equal to the amount paid for the drug
352352 under the traditional fee-for-service arrangement.
353353 (c) A managed care organization that contracts with the
354354 commission under this chapter or a pharmacy benefit manager
355355 administering a pharmacy benefit program on behalf of the managed
356356 care organization shall review and update cost information at least
357357 once every seven days to reflect any modification of the National
358358 Average Drug Acquisition Cost or wholesale acquisition cost for a
359359 prescription drug.
360360 (d) Not later than December 1, 2016, the commission shall
361361 complete a study of the average cost of dispensing prescription
362362 drugs for pharmacies and pharmacists participating in the Medicaid
363363 managed care and child health plan programs. The commission may
364364 contract with a third party to conduct the study required by this
365365 subsection. This subsection expires September 1, 2017.
366366 (e) If the executive commissioner finds, as a result of the
367367 study conducted under Subsection (d), that the average cost of
368368 dispensing prescription drugs under the Medicaid managed care and
369369 child health plan programs is greater than $10.12, the executive
370370 commissioner by rule may establish a dispensing fee greater than
371371 the fee required by Subsection (a)(2).
372372 SECTION 3. Subchapter D, Chapter 62, Health and Safety
373373 Code, is amended by adding Section 62.160 to read as follows:
374374 Sec. 62.160. REIMBURSEMENT METHODOLOGY FOR PRESCRIPTION
375375 DRUGS. A managed care organization providing pharmacy benefits
376376 under the child health plan program or a pharmacy benefit manager
377377 administering a pharmacy benefit program on behalf of the managed
378378 care organization shall comply with Section 533.00512, Government
379379 Code.
380380 SECTION 4. Section 533.005(a-2), Government Code, is
381381 repealed.
382382 SECTION 5. If before implementing any provision of this Act
383383 a state agency determines that a waiver or authorization from a
384384 federal agency is necessary for implementation of that provision,
385385 the agency affected by the provision shall request the waiver or
386386 authorization and may delay implementing that provision until the
387387 waiver or authorization is granted.
388388 SECTION 6. This Act takes effect September 1, 2015.