86R10486 KFF-D
By: Raymond H.B. No. 3401
A BILL TO BE ENTITLED
AN ACT
relating to delivery of outpatient prescription drug benefits under
certain public benefit programs, including Medicaid and the child
health plan program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. DELIVERY OF OUTPATIENT PRESCRIPTION DRUG BENEFITS USING
FEE-FOR-SERVICE DELIVERY MODEL UNDER CERTAIN PUBLIC BENEFIT
PROGRAMS
SECTION 1.01. Subchapter B, Chapter 531, Government Code,
is amended by adding Section 531.068 to read as follows:
Sec. 531.068. DELIVERY OF OUTPATIENT PRESCRIPTION DRUG
BENEFITS UNDER CERTAIN PROGRAMS. (a) In this section, "recipient"
means a person receiving benefits under a program described by
Subsection (b).
(b) Notwithstanding any other law, beginning January 1,
2020, the commission shall provide outpatient prescription drug
benefits through the vendor drug program using a transparent
fee-for-service delivery model to persons, including persons
enrolled in a managed care program, receiving benefits under:
(1) Medicaid;
(2) the child health plan program;
(3) the kidney health care program; and
(4) any other benefits program administered by the
commission that provides an outpatient prescription drug benefit.
(c) In providing outpatient prescription drug benefits
under this section, the commission shall:
(1) eliminate any obligation to pay fees included in
the capitation rate or other amounts paid to managed care
organizations that are associated with the provision of outpatient
prescription drug benefits, including:
(A) the guaranteed risk margin; and
(B) the health insurance providers fee imposed
under Section 9010 of the federal Patient Protection and Affordable
Care Act (Pub. L. No. 111-148), as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. No. 111-152), and the
associated effects of that fee on federal income taxes;
(2) pay claims in accordance with the deadlines
imposed by Section 843.339, Insurance Code;
(3) if the commission contracts with a prescription
drug benefits administrator for purposes of this section, pay the
administrator only for reimbursement of any prescribed drug and a
contracted administrative fee; and
(4) in accordance with the findings of the study
conducted by the commission in response to Section 60 following the
Article II appropriations to the commission in Chapter 605
(S.B. 1), Acts of the 85th Legislature, Regular Session, 2017 (the
General Appropriations Act):
(A) consistently apply clinical prior
authorization requirements statewide and use prior authorizations
to control unnecessary utilization;
(B) ensure the preferred drug list is not
disadvantaged;
(C) maintain drug utilization review; and
(D) coordinate data exchange under existing data
warehouse and enterprise data resources.
(d) In providing outpatient prescription drug benefits
under this section, the commission may not:
(1) prohibit, limit, or interfere with a recipient's
selection of a pharmacy or pharmacist of the recipient's choice for
the provision of pharmaceutical services by imposing different
copayments associated with a pharmacy or pharmacist; and
(2) prevent a pharmacy or pharmacist from
participating as a provider if the pharmacy or pharmacist agrees to
comply with the financial terms of the program and any contract
required under the program.
(e) In providing outpatient prescription drug benefits
under this section, the commission may include mail-order
pharmacies in the commission's network of pharmacy providers,
except the commission may not:
(1) require recipients to use a mail-order pharmacy;
or
(2) charge a recipient who elects to use a mail-order
pharmacy a fee for using the mail order service, including a postage
or handling fee.
(f) Notwithstanding any other law, a managed care
organization providing health care services under a benefit program
described by Subsection (b) may not develop, implement, or
maintain an outpatient pharmacy benefit plan for recipients
beginning on the 180th day after the date the commission begins
providing outpatient prescription drug benefits under this
section.
SECTION 1.02. As soon as practicable after the effective
date of this article, but not later than December 31, 2019, the
Health and Human Services Commission shall amend each contract with
a managed care organization entered into before the effective date
of this article to prohibit the organization from providing
outpatient prescription drug benefits to recipients under a public
benefits program subject to Section 531.068, Government Code, as
added by this Act, beginning on the 180th day after the date the
commission begins providing outpatient prescription drug benefits
in the manner required by that section.
ARTICLE 2. CESSATION OF DELIVERY OF OUTPATIENT PRESCRIPTION DRUG
BENEFITS BY MANAGED CARE ORGANIZATIONS
SECTION 2.01. Section 533.012(a), Government Code, is
amended to read as follows:
(a) Each managed care organization contracting with the
commission under this chapter shall submit the following, at no
cost, to the commission and, on request, the office of the attorney
general:
(1) a description of any financial or other business
relationship between the organization and any subcontractor
providing health care services under the contract;
(2) a copy of each type of contract between the
organization and a subcontractor relating to the delivery of or
payment for health care services;
(3) a description of the fraud control program used by
any subcontractor that delivers health care services; and
(4) a description and breakdown of all funds paid to or
by the managed care organization, including a health maintenance
organization, primary care case management provider, [pharmacy
benefit manager,] and exclusive provider organization, necessary
for the commission to determine the actual cost of administering
the managed care plan.
SECTION 2.02. Section 32.046(a), Human Resources Code, is
amended to read as follows:
(a) The executive commissioner shall adopt rules governing
sanctions and penalties that apply to a provider [who participates]
in the vendor drug program [or is enrolled as a network pharmacy
provider of a managed care organization contracting with the
commission under Chapter 533, Government Code, or its subcontractor
and] who submits an improper claim for reimbursement under the
program.
SECTION 2.03. The following provisions are repealed:
(1) Sections 531.0697, 533.003(b), and 533.056,
Government Code; and
(2) Section 32.073(c), Human Resources Code.
SECTION 2.04. The changes in law made by this article apply
beginning on the 180th day after the date the Health and Human
Services Commission begins providing outpatient prescription drug
benefits in the manner required by Section 531.068, Government
Code, as added by this Act. Until the changes in law made by this
article apply, the law as it existed on the day immediately before
the effective date of this article governs and the former law is
continued in effect for that purpose.
ARTICLE 3. INSURANCE PREMIUM AND REVENUE TAX
SECTION 3.01. Section 222.001, Insurance Code, is amended
by amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) This chapter applies to any of the following entities
that receives gross premiums or revenues subject to taxation under
Section 222.002:
(1) an [any] insurer, including a group hospital
service corporation;
(2) a[, any] health maintenance organization;
(3) a[, and any] managed care organization; and
(4) a prescription drug benefit administrator that
enters into a contract with the Health and Human Services
Commission under Section 531.068, Government Code, to administer
prescription drug benefits.
(a-1) Entities described by Subsection (a) include [that
receives gross premiums or revenues subject to taxation under
Section 222.002, including] companies operating under Chapter 841,
842, 843, 861, 881, 882, 883, 884, 941, 942, 982, or 984, Insurance
Code, Chapter 533, Government Code, or Title XIX of the federal
Social Security Act.
SECTION 3.02. Section 222.002, Insurance Code, is amended
by amending Subsections (a) and (c) and adding Subsection (b-1) to
read as follows:
(a) An annual tax is imposed on:
(1) each insurer that receives gross premiums subject
to taxation under this section; [and]
(2) each health maintenance organization that
receives gross revenues from the sale of health maintenance
certificates or contracts; and
(3) the prescription drug benefit administrator that
receives gross revenues from the administration of prescription
drug benefits under Section 531.068, Government Code.
(b-1) Except as otherwise provided by this section, a
prescription drug benefit administrator's taxable gross revenues
are equal to the total gross amount of administrative fees and other
consideration received by the prescription drug benefit
administrator in a calendar year from the contract entered into
under Section 531.068, Government Code.
(c) The following are not included in determining an
insurer's taxable gross premiums or a health maintenance
organization's or prescription drug benefit administrator's
taxable gross revenues:
(1) returned premiums or revenues;
(2) dividends applied to purchase paid-up additions to
insurance or to shorten the endowment or premium payment period;
(3) premiums received from an insurer for reinsurance;
(4) premiums or revenues received from the treasury of
the United States for insurance or benefits contracted for by the
federal government in accordance with or in furtherance of Title
XVIII of the Social Security Act (42 U.S.C. Section 1395c et seq.)
and its subsequent amendments;
(5) premiums or revenues paid on group health,
accident, and life policies or contracts in which the group covered
by the policy or contract consists of a single nonprofit trust
established to provide coverage primarily for employees of:
(A) a municipality, county, or hospital district
in this state; or
(B) a county or municipal hospital, without
regard to whether the employees are employees of the county or
municipality or of an entity operating the hospital on behalf of the
county or municipality; or
(6) premiums or revenues excluded by another law of
this state.
SECTION 3.03. Section 222.003, Insurance Code, is amended
by adding Subsection (d) to read as follows:
(d) The rate of the tax imposed by this chapter on a
prescription drug benefit administrator is:
(1) 0.875 percent of the first $450,000 of taxable
gross revenues received during a calendar year; and
(2) 1.75 percent of the remaining taxable gross
revenues received during that calendar year.
SECTION 3.04. Section 222.004(b), Insurance Code, is
amended to read as follows:
(b) An insurer, [or] health maintenance organization, or
prescription drug benefit administrator that had a net tax
liability for the previous calendar year of more than $1,000 shall
make semiannual prepayments of tax on March 1 and August 1. The tax
paid on each date must be equal to 50 percent of the total amount of
tax the insurer, [or] health maintenance organization, or
prescription drug benefit administrator paid under this chapter for
the previous calendar year. If the insurer, [or] health
maintenance organization, or prescription drug benefit
administrator did not pay a tax under this chapter during the
previous calendar year, the tax paid on each date must be equal to
the tax that would be owed on the aggregate of the taxable gross
premiums or taxable gross revenues for the two previous calendar
quarters.
SECTION 3.05. Sections 222.005(a) and (c), Insurance Code,
are amended to read as follows:
(a) An insurer, [or] health maintenance organization, or
prescription drug benefit administrator liable for the tax imposed
by this chapter must file annually with the comptroller a tax report
on a form prescribed by the comptroller.
(c) The comptroller may require the insurer, [or] health
maintenance organization, or prescription drug benefit
administrator to file any additional relevant information that is
reasonably necessary to verify the amount of tax due.
SECTION 3.06. Section 222.007(a), Insurance Code, is
amended to read as follows:
(a) Except as otherwise provided by this subsection, an
insurer, [or] health maintenance organization, or prescription
drug benefit administrator is entitled to a credit on the amount of
tax due under this chapter for all examination and evaluation fees
paid to this state during the calendar year for which the tax is
due. An insurer is not entitled to a credit on the amount of tax
due under this chapter for fees paid for valuing life insurance
policies. The limitations provided by Sections 803.007(1) and
(2)(B) for a domestic insurance company apply to a foreign
insurance company.
SECTION 3.07. Section 222.008, Insurance Code, is amended
to read as follows:
Sec. 222.008. FAILURE TO PAY TAXES. An insurer, [or] health
maintenance organization, or prescription drug benefit
administrator that fails to pay all taxes imposed by this chapter is
subject to Section 203.002.
ARTICLE 4. FEDERAL AUTHORIZATION AND EFFECTIVE DATE
SECTION 4.01. If before implementing any provision of this
Act a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 4.02. (a) Except as provided by Subsection (b) of
this section, this Act takes effect September 1, 2019.
(b) Article 3 of this Act takes effect January 1, 2020.