Texas 2017 - 85th Regular

Texas House Bill HB1206 Compare Versions

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

Old	New	Differences
1	1	85R520 KFF-D
2	2	By: Shaheen H.B. No. 1206
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to allowing Medicaid managed care organizations to adopt
8	8	their own drug formularies.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 531.072(a), Government Code, is amended
11	11	to read as follows:
12	12	(a) In a manner that complies with applicable state and
13	13	federal law, the commission shall adopt preferred drug lists for
14	14	the Medicaid vendor drug program and for prescription drugs
15	15	purchased through the child health plan program. Except as
16	16	provided by Section 531.0721, the [The] commission may adopt
17	17	preferred drug lists for community mental health centers, state
18	18	mental health hospitals, and any other state program administered
19	19	by the commission or a state health and human services agency.
20	20	SECTION 2. Subchapter B, Chapter 531, Government Code, is
21	21	amended by adding Section 531.0721 to read as follows:
22	22	Sec. 531.0721. ADOPTION OF PRESCRIPTION DRUG FORMULARY BY
23	23	MEDICAID MANAGED CARE ORGANIZATION. A managed care organization
24	24	providing an outpatient pharmacy benefit plan for its Medicaid
25	25	enrolled recipients may adopt its own drug formulary and is not
26	26	required to employ the vendor drug program formulary or to
27	27	otherwise adhere to a preferred drug list adopted by the commission
28	28	under Section 531.072.
29	29	SECTION 3. Section 531.073, Government Code, is amended by
30	30	amending Subsection (a) and adding Subsection (j) to read as
31	31	follows:
32	32	(a) The executive commissioner, in the rules and standards
33	33	governing the Medicaid vendor drug program and the child health
34	34	plan program, shall require prior authorization for the
35	35	reimbursement of a drug that is not included in the appropriate
36	36	preferred drug list adopted under Section 531.072, except as
37	37	provided by Subsection (j) and for any drug exempted from prior
38	38	authorization requirements by federal law. Except as provided by
39	39	Subsection (j), the [The] executive commissioner may require prior
40	40	authorization for the reimbursement of a drug provided through any
41	41	other state program administered by the commission or a state
42	42	health and human services agency, including a community mental
43	43	health center and a state mental health hospital if the commission
44	44	adopts preferred drug lists under Section 531.072 that apply to
45	45	those facilities and the drug is not included in the appropriate
46	46	list. The executive commissioner shall require that the prior
47	47	authorization be obtained by the prescribing physician or
48	48	prescribing practitioner.
49	49	(j) This section does not apply to a managed care
50	50	organization that elects to adopt its own drug formulary under
51	51	Section 531.0721.
52	52	SECTION 4. Sections 533.005(a) and (a-2), Government Code,
53	53	are amended to read as follows:
54	54	(a) A contract between a managed care organization and the
55	55	commission for the organization to provide health care services to
56	56	recipients must contain:
57	57	(1) procedures to ensure accountability to the state
58	58	for the provision of health care services, including procedures for
59	59	financial reporting, quality assurance, utilization review, and
60	60	assurance of contract and subcontract compliance;
61	61	(2) capitation rates that ensure the cost-effective
62	62	provision of quality health care;
63	63	(3) a requirement that the managed care organization
64	64	provide ready access to a person who assists recipients in
65	65	resolving issues relating to enrollment, plan administration,
66	66	education and training, access to services, and grievance
67	67	procedures;
68	68	(4) a requirement that the managed care organization
69	69	provide ready access to a person who assists providers in resolving
70	70	issues relating to payment, plan administration, education and
71	71	training, and grievance procedures;
72	72	(5) a requirement that the managed care organization
73	73	provide information and referral about the availability of
74	74	educational, social, and other community services that could
75	75	benefit a recipient;
76	76	(6) procedures for recipient outreach and education;
77	77	(7) a requirement that the managed care organization
78	78	make payment to a physician or provider for health care services
79	79	rendered to a recipient under a managed care plan on any claim for
80	80	payment that is received with documentation reasonably necessary
81	81	for the managed care organization to process the claim:
82	82	(A) not later than:
83	83	(i) the 10th day after the date the claim is
84	84	received if the claim relates to services provided by a nursing
85	85	facility, intermediate care facility, or group home;
86	86	(ii) the 30th day after the date the claim
87	87	is received if the claim relates to the provision of long-term
88	88	services and supports not subject to Subparagraph (i); and
89	89	(iii) the 45th day after the date the claim
90	90	is received if the claim is not subject to Subparagraph (i) or (ii);
91	91	or
92	92	(B) within a period, not to exceed 60 days,
93	93	specified by a written agreement between the physician or provider
94	94	and the managed care organization;
95	95	(7-a) a requirement that the managed care organization
96	96	demonstrate to the commission that the organization pays claims
97	97	described by Subdivision (7)(A)(ii) on average not later than the
98	98	21st day after the date the claim is received by the organization;
99	99	(8) a requirement that the commission, on the date of a
100	100	recipient's enrollment in a managed care plan issued by the managed
101	101	care organization, inform the organization of the recipient's
102	102	Medicaid certification date;
103	103	(9) a requirement that the managed care organization
104	104	comply with Section 533.006 as a condition of contract retention
105	105	and renewal;
106	106	(10) a requirement that the managed care organization
107	107	provide the information required by Section 533.012 and otherwise
108	108	comply and cooperate with the commission's office of inspector
109	109	general and the office of the attorney general;
110	110	(11) a requirement that the managed care
111	111	organization's usages of out-of-network providers or groups of
112	112	out-of-network providers may not exceed limits for those usages
113	113	relating to total inpatient admissions, total outpatient services,
114	114	and emergency room admissions determined by the commission;
115	115	(12) if the commission finds that a managed care
116	116	organization has violated Subdivision (11), a requirement that the
117	117	managed care organization reimburse an out-of-network provider for
118	118	health care services at a rate that is equal to the allowable rate
119	119	for those services, as determined under Sections 32.028 and
120	120	32.0281, Human Resources Code;
121	121	(13) a requirement that, notwithstanding any other
122	122	law, including Sections 843.312 and 1301.052, Insurance Code, the
123	123	organization:
124	124	(A) use advanced practice registered nurses and
125	125	physician assistants in addition to physicians as primary care
126	126	providers to increase the availability of primary care providers in
127	127	the organization's provider network; and
128	128	(B) treat advanced practice registered nurses
129	129	and physician assistants in the same manner as primary care
130	130	physicians with regard to:
131	131	(i) selection and assignment as primary
132	132	care providers;
133	133	(ii) inclusion as primary care providers in
134	134	the organization's provider network; and
135	135	(iii) inclusion as primary care providers
136	136	in any provider network directory maintained by the organization;
137	137	(14) a requirement that the managed care organization
138	138	reimburse a federally qualified health center or rural health
139	139	clinic for health care services provided to a recipient outside of
140	140	regular business hours, including on a weekend day or holiday, at a
141	141	rate that is equal to the allowable rate for those services as
142	142	determined under Section 32.028, Human Resources Code, if the
143	143	recipient does not have a referral from the recipient's primary
144	144	care physician;
145	145	(15) a requirement that the managed care organization
146	146	develop, implement, and maintain a system for tracking and
147	147	resolving all provider appeals related to claims payment, including
148	148	a process that will require:
149	149	(A) a tracking mechanism to document the status
150	150	and final disposition of each provider's claims payment appeal;
151	151	(B) the contracting with physicians who are not
152	152	network providers and who are of the same or related specialty as
153	153	the appealing physician to resolve claims disputes related to
154	154	denial on the basis of medical necessity that remain unresolved
155	155	subsequent to a provider appeal;
156	156	(C) the determination of the physician resolving
157	157	the dispute to be binding on the managed care organization and
158	158	provider; and
159	159	(D) the managed care organization to allow a
160	160	provider with a claim that has not been paid before the time
161	161	prescribed by Subdivision (7)(A)(ii) to initiate an appeal of that
162	162	claim;
163	163	(16) a requirement that a medical director who is
164	164	authorized to make medical necessity determinations is available to
165	165	the region where the managed care organization provides health care
166	166	services;
167	167	(17) a requirement that the managed care organization
168	168	ensure that a medical director and patient care coordinators and
169	169	provider and recipient support services personnel are located in
170	170	the South Texas service region, if the managed care organization
171	171	provides a managed care plan in that region;
172	172	(18) a requirement that the managed care organization
173	173	provide special programs and materials for recipients with limited
174	174	English proficiency or low literacy skills;
175	175	(19) a requirement that the managed care organization
176	176	develop and establish a process for responding to provider appeals
177	177	in the region where the organization provides health care services;
178	178	(20) a requirement that the managed care organization:
179	179	(A) develop and submit to the commission, before
180	180	the organization begins to provide health care services to
181	181	recipients, a comprehensive plan that describes how the
182	182	organization's provider network complies with the provider access
183	183	standards established under Section 533.0061, as added by Chapter
184	184	1272 (S.B. 760), Acts of the 84th Legislature, Regular Session,
185	185	2015;
186	186	(B) as a condition of contract retention and
187	187	renewal:
188	188	(i) continue to comply with the provider
189	189	access standards established under Section 533.0061, as added by
190	190	Chapter 1272 (S.B. 760), Acts of the 84th Legislature, Regular
191	191	Session, 2015; and
192	192	(ii) make substantial efforts, as
193	193	determined by the commission, to mitigate or remedy any
194	194	noncompliance with the provider access standards established under
195	195	Section 533.0061, as added by Chapter 1272 (S.B. 760), Acts of the
196	196	84th Legislature, Regular Session, 2015;
197	197	(C) pay liquidated damages for each failure, as
198	198	determined by the commission, to comply with the provider access
199	199	standards established under Section 533.0061, as added by Chapter
200	200	1272 (S.B. 760), Acts of the 84th Legislature, Regular Session,
201	201	2015, in amounts that are reasonably related to the noncompliance;
202	202	and
203	203	(D) regularly, as determined by the commission,
204	204	submit to the commission and make available to the public a report
205	205	containing data on the sufficiency of the organization's provider
206	206	network with regard to providing the care and services described
207	207	under Section 533.0061(a), as added by Chapter 1272 (S.B. 760),
208	208	Acts of the 84th Legislature, Regular Session, 2015, and specific
209	209	data with respect to access to primary care, specialty care,
210	210	long-term services and supports, nursing services, and therapy
211	211	services on the average length of time between:
212	212	(i) the date a provider requests prior
213	213	authorization for the care or service and the date the organization
214	214	approves or denies the request; and
215	215	(ii) the date the organization approves a
216	216	request for prior authorization for the care or service and the date
217	217	the care or service is initiated;
218	218	(21) a requirement that the managed care organization
219	219	demonstrate to the commission, before the organization begins to
220	220	provide health care services to recipients, that, subject to the
221	221	provider access standards established under Section 533.0061, as
222	222	added by Chapter 1272 (S.B. 760), Acts of the 84th Legislature,
223	223	Regular Session, 2015:
224	224	(A) the organization's provider network has the
225	225	capacity to serve the number of recipients expected to enroll in a
226	226	managed care plan offered by the organization;
227	227	(B) the organization's provider network
228	228	includes:
229	229	(i) a sufficient number of primary care
230	230	providers;
231	231	(ii) a sufficient variety of provider
232	232	types;
233	233	(iii) a sufficient number of providers of
234	234	long-term services and supports and specialty pediatric care
235	235	providers of home and community-based services; and
236	236	(iv) providers located throughout the
237	237	region where the organization will provide health care services;
238	238	and
239	239	(C) health care services will be accessible to
240	240	recipients through the organization's provider network to a
241	241	comparable extent that health care services would be available to
242	242	recipients under a fee-for-service or primary care case management
243	243	model of Medicaid managed care;
244	244	(22) a requirement that the managed care organization
245	245	develop a monitoring program for measuring the quality of the
246	246	health care services provided by the organization's provider
247	247	network that:
248	248	(A) incorporates the National Committee for
249	249	Quality Assurance's Healthcare Effectiveness Data and Information
250	250	Set (HEDIS) measures;
251	251	(B) focuses on measuring outcomes; and
252	252	(C) includes the collection and analysis of
253	253	clinical data relating to prenatal care, preventive care, mental
254	254	health care, and the treatment of acute and chronic health
255	255	conditions and substance abuse;
256	256	(23) [subject to Subsection (a-1),] a requirement that
257	257	the managed care organization develop, implement, and maintain an
258	258	outpatient pharmacy benefit plan and prescription drug formulary
259	259	for its enrolled recipients:
260	260	(A) [that exclusively employs the vendor drug
261	261	program formulary and preserves the state's ability to reduce
262	262	waste, fraud, and abuse under Medicaid;
263	263	[(B) that adheres to the applicable preferred
264	264	drug list adopted by the commission under Section 531.072;
265	265	[(C) that includes the prior authorization
266	266	procedures and requirements prescribed by or implemented under
267	267	Sections 531.073(b), (c), and (g) for the vendor drug program;
268	268	[(D)] for purposes of which the managed care
269	269	organization[:
270	270	[(i) may not negotiate or collect rebates
271	271	associated with pharmacy products on the vendor drug program
272	272	formulary; and
273	273	[(ii)] may not receive drug rebate or
274	274	pricing information that is confidential under Section 531.071;
275	275	(B) [(E)] that complies with the prohibition
276	276	under Section 531.089;
277	277	(C) [(F)] under which the managed care
278	278	organization may not prohibit, limit, or interfere with a
279	279	recipient's selection of a pharmacy or pharmacist of the
280	280	recipient's choice for the provision of pharmaceutical services
281	281	under the plan through the imposition of different copayments;
282	282	(D) [(G)] that allows the managed care
283	283	organization or any subcontracted pharmacy benefit manager to
284	284	contract with a pharmacist or pharmacy providers separately for
285	285	specialty pharmacy services, except that:
286	286	(i) the managed care organization and
287	287	pharmacy benefit manager are prohibited from allowing exclusive
288	288	contracts with a specialty pharmacy owned wholly or partly by the
289	289	pharmacy benefit manager responsible for the administration of the
290	290	pharmacy benefit program; and
291	291	(ii) the managed care organization and
292	292	pharmacy benefit manager must adopt policies and procedures for
293	293	reclassifying prescription drugs from retail to specialty drugs,
294	294	and those policies and procedures must be consistent with rules
295	295	adopted by the executive commissioner and include notice to network
296	296	pharmacy providers from the managed care organization;
297	297	(E) [(H)] under which the managed care
298	298	organization may not prevent a pharmacy or pharmacist from
299	299	participating as a provider if the pharmacy or pharmacist agrees to
300	300	comply with the financial terms and conditions of the contract as
301	301	well as other reasonable administrative and professional terms and
302	302	conditions of the contract;
303	303	(F) [(I)] under which the managed care
304	304	organization may include mail-order pharmacies in its networks, but
305	305	may not require enrolled recipients to use those pharmacies, and
306	306	may not charge an enrolled recipient who opts to use this service a
307	307	fee, including postage and handling fees;
308	308	(G) [(J)] under which the managed care
309	309	organization or pharmacy benefit manager, as applicable, must pay
310	310	claims in accordance with Section 843.339, Insurance Code; and
311	311	(H) [(K)] under which the managed care
312	312	organization or pharmacy benefit manager, as applicable:
313	313	(i) to place a drug on a maximum allowable
314	314	cost list, must ensure that:
315	315	(a) the drug is listed as "A" or "B"
316	316	rated in the most recent version of the United States Food and Drug
317	317	Administration's Approved Drug Products with Therapeutic
318	318	Equivalence Evaluations, also known as the Orange Book, has an "NR"
319	319	or "NA" rating or a similar rating by a nationally recognized
320	320	reference; and
321	321	(b) the drug is generally available
322	322	for purchase by pharmacies in the state from national or regional
323	323	wholesalers and is not obsolete;
324	324	(ii) must provide to a network pharmacy
325	325	provider, at the time a contract is entered into or renewed with the
326	326	network pharmacy provider, the sources used to determine the
327	327	maximum allowable cost pricing for the maximum allowable cost list
328	328	specific to that provider;
329	329	(iii) must review and update maximum
330	330	allowable cost price information at least once every seven days to
331	331	reflect any modification of maximum allowable cost pricing;
332	332	(iv) must, in formulating the maximum
333	333	allowable cost price for a drug, use only the price of the drug and
334	334	drugs listed as therapeutically equivalent in the most recent
335	335	version of the United States Food and Drug Administration's
336	336	Approved Drug Products with Therapeutic Equivalence Evaluations,
337	337	also known as the Orange Book;
338	338	(v) must establish a process for
339	339	eliminating products from the maximum allowable cost list or
340	340	modifying maximum allowable cost prices in a timely manner to
341	341	remain consistent with pricing changes and product availability in
342	342	the marketplace;
343	343	(vi) must:
344	344	(a) provide a procedure under which a
345	345	network pharmacy provider may challenge a listed maximum allowable
346	346	cost price for a drug;
347	347	(b) respond to a challenge not later
348	348	than the 15th day after the date the challenge is made;
349	349	(c) if the challenge is successful,
350	350	make an adjustment in the drug price effective on the date the
351	351	challenge is resolved, and make the adjustment applicable to all
352	352	similarly situated network pharmacy providers, as determined by the
353	353	managed care organization or pharmacy benefit manager, as
354	354	appropriate;
355	355	(d) if the challenge is denied,
356	356	provide the reason for the denial; and
357	357	(e) report to the commission every 90
358	358	days the total number of challenges that were made and denied in the
359	359	preceding 90-day period for each maximum allowable cost list drug
360	360	for which a challenge was denied during the period;
361	361	(vii) must notify the commission not later
362	362	than the 21st day after implementing a practice of using a maximum
363	363	allowable cost list for drugs dispensed at retail but not by mail;
364	364	and
365	365	(viii) must provide a process for each of
366	366	its network pharmacy providers to readily access the maximum
367	367	allowable cost list specific to that provider;
368	368	(24) a requirement that the managed care organization
369	369	and any entity with which the managed care organization contracts
370	370	for the performance of services under a managed care plan disclose,
371	371	at no cost, to the commission and, on request, the office of the
372	372	attorney general all discounts, incentives, rebates, fees, free
373	373	goods, bundling arrangements, and other agreements affecting the
374	374	net cost of goods or services provided under the plan;
375	375	(25) a requirement that the managed care organization
376	376	not implement significant, nonnegotiated, across-the-board
377	377	provider reimbursement rate reductions unless:
378	378	(A) subject to Subsection (a-3), the
379	379	organization has the prior approval of the commission to make the
380	380	reduction; or
381	381	(B) the rate reductions are based on changes to
382	382	the Medicaid fee schedule or cost containment initiatives
383	383	implemented by the commission; and
384	384	(26) a requirement that the managed care organization
385	385	make initial and subsequent primary care provider assignments and
386	386	changes.
387	387	(a-2) Except as provided by Subsection (a)(23)(H)(viii)
388	388	[(a)(23)(K)(viii)], a maximum allowable cost list specific to a
389	389	provider and maintained by a managed care organization or pharmacy
390	390	benefit manager is confidential.
391	391	SECTION 5. Section 533.005(a-1), Government Code, is
392	392	repealed.
393	393	SECTION 6. As soon as practicable after the effective date
394	394	of this Act, the executive commissioner of the Health and Human
395	395	Services Commission shall adopt necessary rules to implement the
396	396	changes in law made by this Act.
397	397	SECTION 7. If before implementing any provision of this Act
398	398	a state agency determines that a waiver or authorization from a
399	399	federal agency is necessary for implementation of that provision,
400	400	the agency affected by the provision shall request the waiver or
401	401	authorization and may delay implementing that provision until the
402	402	waiver or authorization is granted.
403	403	SECTION 8. This Act takes effect September 1, 2017.