Texas 2019 - 86th Regular

Texas House Bill HB437 Compare Versions

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

Old	New	Differences
1	1	86R717 KFF-D
2	2	By: Shaheen H.B. No. 437
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:
27	27	(1) employ the vendor drug program formulary; or
28	28	(2) otherwise adhere to a preferred drug list the
29	29	commission adopts under Section 531.072.
30	30	SECTION 3. Section 531.073, Government Code, is amended by
31	31	amending Subsection (a) and adding Subsection (j) to read as
32	32	follows:
33	33	(a) The executive commissioner, in the rules and standards
34	34	governing the Medicaid vendor drug program and the child health
35	35	plan program, shall require prior authorization for the
36	36	reimbursement of a drug that is not included in the appropriate
37	37	preferred drug list adopted under Section 531.072, except as
38	38	provided by Subsection (j) and for any drug exempted from prior
39	39	authorization requirements by federal law. Except as provided by
40	40	Subsection (j), the [The] executive commissioner may require prior
41	41	authorization for the reimbursement of a drug provided through any
42	42	other state program administered by the commission or a state
43	43	health and human services agency, including a community mental
44	44	health center and a state mental health hospital if the commission
45	45	adopts preferred drug lists under Section 531.072 that apply to
46	46	those facilities and the drug is not included in the appropriate
47	47	list. The executive commissioner shall require that the prior
48	48	authorization be obtained by the prescribing physician or
49	49	prescribing practitioner.
50	50	(j) This section does not apply to a managed care
51	51	organization that elects to adopt its own drug formulary under
52	52	Section 531.0721.
53	53	SECTION 4. Sections 533.005(a) and (a-2), Government Code,
54	54	are amended to read as follows:
55	55	(a) A contract between a managed care organization and the
56	56	commission for the organization to provide health care services to
57	57	recipients must contain:
58	58	(1) procedures to ensure accountability to the state
59	59	for the provision of health care services, including procedures for
60	60	financial reporting, quality assurance, utilization review, and
61	61	assurance of contract and subcontract compliance;
62	62	(2) capitation rates that ensure the cost-effective
63	63	provision of quality health care;
64	64	(3) a requirement that the managed care organization
65	65	provide ready access to a person who assists recipients in
66	66	resolving issues relating to enrollment, plan administration,
67	67	education and training, access to services, and grievance
68	68	procedures;
69	69	(4) a requirement that the managed care organization
70	70	provide ready access to a person who assists providers in resolving
71	71	issues relating to payment, plan administration, education and
72	72	training, and grievance procedures;
73	73	(5) a requirement that the managed care organization
74	74	provide information and referral about the availability of
75	75	educational, social, and other community services that could
76	76	benefit a recipient;
77	77	(6) procedures for recipient outreach and education;
78	78	(7) a requirement that the managed care organization
79	79	make payment to a physician or provider for health care services
80	80	rendered to a recipient under a managed care plan on any claim for
81	81	payment that is received with documentation reasonably necessary
82	82	for the managed care organization to process the claim:
83	83	(A) not later than:
84	84	(i) the 10th day after the date the claim is
85	85	received if the claim relates to services provided by a nursing
86	86	facility, intermediate care facility, or group home;
87	87	(ii) the 30th day after the date the claim
88	88	is received if the claim relates to the provision of long-term
89	89	services and supports not subject to Subparagraph (i); and
90	90	(iii) the 45th day after the date the claim
91	91	is received if the claim is not subject to Subparagraph (i) or (ii);
92	92	or
93	93	(B) within a period, not to exceed 60 days,
94	94	specified by a written agreement between the physician or provider
95	95	and the managed care organization;
96	96	(7-a) a requirement that the managed care organization
97	97	demonstrate to the commission that the organization pays claims
98	98	described by Subdivision (7)(A)(ii) on average not later than the
99	99	21st day after the date the claim is received by the organization;
100	100	(8) a requirement that the commission, on the date of a
101	101	recipient's enrollment in a managed care plan issued by the managed
102	102	care organization, inform the organization of the recipient's
103	103	Medicaid certification date;
104	104	(9) a requirement that the managed care organization
105	105	comply with Section 533.006 as a condition of contract retention
106	106	and renewal;
107	107	(10) a requirement that the managed care organization
108	108	provide the information required by Section 533.012 and otherwise
109	109	comply and cooperate with the commission's office of inspector
110	110	general and the office of the attorney general;
111	111	(11) a requirement that the managed care
112	112	organization's usages of out-of-network providers or groups of
113	113	out-of-network providers may not exceed limits for those usages
114	114	relating to total inpatient admissions, total outpatient services,
115	115	and emergency room admissions determined by the commission;
116	116	(12) if the commission finds that a managed care
117	117	organization has violated Subdivision (11), a requirement that the
118	118	managed care organization reimburse an out-of-network provider for
119	119	health care services at a rate that is equal to the allowable rate
120	120	for those services, as determined under Sections 32.028 and
121	121	32.0281, Human Resources Code;
122	122	(13) a requirement that, notwithstanding any other
123	123	law, including Sections 843.312 and 1301.052, Insurance Code, the
124	124	organization:
125	125	(A) use advanced practice registered nurses and
126	126	physician assistants in addition to physicians as primary care
127	127	providers to increase the availability of primary care providers in
128	128	the organization's provider network; and
129	129	(B) treat advanced practice registered nurses
130	130	and physician assistants in the same manner as primary care
131	131	physicians with regard to:
132	132	(i) selection and assignment as primary
133	133	care providers;
134	134	(ii) inclusion as primary care providers in
135	135	the organization's provider network; and
136	136	(iii) inclusion as primary care providers
137	137	in any provider network directory maintained by the organization;
138	138	(14) a requirement that the managed care organization
139	139	reimburse a federally qualified health center or rural health
140	140	clinic for health care services provided to a recipient outside of
141	141	regular business hours, including on a weekend day or holiday, at a
142	142	rate that is equal to the allowable rate for those services as
143	143	determined under Section 32.028, Human Resources Code, if the
144	144	recipient does not have a referral from the recipient's primary
145	145	care physician;
146	146	(15) a requirement that the managed care organization
147	147	develop, implement, and maintain a system for tracking and
148	148	resolving all provider appeals related to claims payment, including
149	149	a process that will require:
150	150	(A) a tracking mechanism to document the status
151	151	and final disposition of each provider's claims payment appeal;
152	152	(B) the contracting with physicians who are not
153	153	network providers and who are of the same or related specialty as
154	154	the appealing physician to resolve claims disputes related to
155	155	denial on the basis of medical necessity that remain unresolved
156	156	subsequent to a provider appeal;
157	157	(C) the determination of the physician resolving
158	158	the dispute to be binding on the managed care organization and
159	159	provider; and
160	160	(D) the managed care organization to allow a
161	161	provider with a claim that has not been paid before the time
162	162	prescribed by Subdivision (7)(A)(ii) to initiate an appeal of that
163	163	claim;
164	164	(16) a requirement that a medical director who is
165	165	authorized to make medical necessity determinations is available to
166	166	the region where the managed care organization provides health care
167	167	services;
168	168	(17) a requirement that the managed care organization
169	169	ensure that a medical director and patient care coordinators and
170	170	provider and recipient support services personnel are located in
171	171	the South Texas service region, if the managed care organization
172	172	provides a managed care plan in that region;
173	173	(18) a requirement that the managed care organization
174	174	provide special programs and materials for recipients with limited
175	175	English proficiency or low literacy skills;
176	176	(19) a requirement that the managed care organization
177	177	develop and establish a process for responding to provider appeals
178	178	in the region where the organization provides health care services;
179	179	(20) a requirement that the managed care organization:
180	180	(A) develop and submit to the commission, before
181	181	the organization begins to provide health care services to
182	182	recipients, a comprehensive plan that describes how the
183	183	organization's provider network complies with the provider access
184	184	standards established under Section 533.0061;
185	185	(B) as a condition of contract retention and
186	186	renewal:
187	187	(i) continue to comply with the provider
188	188	access standards established under Section 533.0061; and
189	189	(ii) make substantial efforts, as
190	190	determined by the commission, to mitigate or remedy any
191	191	noncompliance with the provider access standards established under
192	192	Section 533.0061;
193	193	(C) pay liquidated damages for each failure, as
194	194	determined by the commission, to comply with the provider access
195	195	standards established under Section 533.0061 in amounts that are
196	196	reasonably related to the noncompliance; and
197	197	(D) regularly, as determined by the commission,
198	198	submit to the commission and make available to the public a report
199	199	containing data on the sufficiency of the organization's provider
200	200	network with regard to providing the care and services described
201	201	under Section 533.0061(a) and specific data with respect to access
202	202	to primary care, specialty care, long-term services and supports,
203	203	nursing services, and therapy services on the average length of
204	204	time between:
205	205	(i) the date a provider requests prior
206	206	authorization for the care or service and the date the organization
207	207	approves or denies the request; and
208	208	(ii) the date the organization approves a
209	209	request for prior authorization for the care or service and the date
210	210	the care or service is initiated;
211	211	(21) a requirement that the managed care organization
212	212	demonstrate to the commission, before the organization begins to
213	213	provide health care services to recipients, that, subject to the
214	214	provider access standards established under Section 533.0061:
215	215	(A) the organization's provider network has the
216	216	capacity to serve the number of recipients expected to enroll in a
217	217	managed care plan offered by the organization;
218	218	(B) the organization's provider network
219	219	includes:
220	220	(i) a sufficient number of primary care
221	221	providers;
222	222	(ii) a sufficient variety of provider
223	223	types;
224	224	(iii) a sufficient number of providers of
225	225	long-term services and supports and specialty pediatric care
226	226	providers of home and community-based services; and
227	227	(iv) providers located throughout the
228	228	region where the organization will provide health care services;
229	229	and
230	230	(C) health care services will be accessible to
231	231	recipients through the organization's provider network to a
232	232	comparable extent that health care services would be available to
233	233	recipients under a fee-for-service or primary care case management
234	234	model of Medicaid managed care;
235	235	(22) a requirement that the managed care organization
236	236	develop a monitoring program for measuring the quality of the
237	237	health care services provided by the organization's provider
238	238	network that:
239	239	(A) incorporates the National Committee for
240	240	Quality Assurance's Healthcare Effectiveness Data and Information
241	241	Set (HEDIS) measures;
242	242	(B) focuses on measuring outcomes; and
243	243	(C) includes the collection and analysis of
244	244	clinical data relating to prenatal care, preventive care, mental
245	245	health care, and the treatment of acute and chronic health
246	246	conditions and substance abuse;
247	247	(23) [subject to Subsection (a-1),] a requirement that
248	248	the managed care organization develop, implement, and maintain an
249	249	outpatient pharmacy benefit plan and prescription drug formulary
250	250	for its enrolled recipients:
251	251	(A) [that exclusively employs the vendor drug
252	252	program formulary and preserves the state's ability to reduce
253	253	waste, fraud, and abuse under Medicaid;
254	254	[(B) that adheres to the applicable preferred
255	255	drug list adopted by the commission under Section 531.072;
256	256	[(C) that includes the prior authorization
257	257	procedures and requirements prescribed by or implemented under
258	258	Sections 531.073(b), (c), and (g) for the vendor drug program;
259	259	[(D)] for purposes of which the managed care
260	260	organization[:
261	261	[(i) may not negotiate or collect rebates
262	262	associated with pharmacy products on the vendor drug program
263	263	formulary; and
264	264	[(ii)] may not receive drug rebate or
265	265	pricing information that is confidential under Section 531.071;
266	266	(B) [(E)] that comply [complies] with the
267	267	prohibition under Section 531.089;
268	268	(C) [(F)] under which the managed care
269	269	organization may not prohibit, limit, or interfere with a
270	270	recipient's selection of a pharmacy or pharmacist of the
271	271	recipient's choice for the provision of pharmaceutical services
272	272	under the plan through the imposition of different copayments;
273	273	(D) [(G)] that allow [allows] the managed care
274	274	organization or any subcontracted pharmacy benefit manager to
275	275	contract with a pharmacist or pharmacy providers separately for
276	276	specialty pharmacy services, except that:
277	277	(i) the managed care organization and
278	278	pharmacy benefit manager are prohibited from allowing exclusive
279	279	contracts with a specialty pharmacy owned wholly or partly by the
280	280	pharmacy benefit manager responsible for the administration of the
281	281	pharmacy benefit program; and
282	282	(ii) the managed care organization and
283	283	pharmacy benefit manager must adopt policies and procedures for
284	284	reclassifying prescription drugs from retail to specialty drugs,
285	285	and those policies and procedures must be consistent with rules
286	286	adopted by the executive commissioner and include notice to network
287	287	pharmacy providers from the managed care organization;
288	288	(E) [(H)] under which the managed care
289	289	organization may not prevent a pharmacy or pharmacist from
290	290	participating as a provider if the pharmacy or pharmacist agrees to
291	291	comply with the financial terms and conditions of the contract as
292	292	well as other reasonable administrative and professional terms and
293	293	conditions of the contract;
294	294	(F) [(I)] under which the managed care
295	295	organization may include mail-order pharmacies in its networks, but
296	296	may not require enrolled recipients to use those pharmacies, and
297	297	may not charge an enrolled recipient who opts to use this service a
298	298	fee, including postage and handling fees;
299	299	(G) [(J)] under which the managed care
300	300	organization or pharmacy benefit manager, as applicable, must pay
301	301	claims in accordance with Section 843.339, Insurance Code; and
302	302	(H) [(K)] under which the managed care
303	303	organization or pharmacy benefit manager, as applicable:
304	304	(i) to place a drug on a maximum allowable
305	305	cost list, must ensure that:
306	306	(a) the drug is listed as "A" or "B"
307	307	rated in the most recent version of the United States Food and Drug
308	308	Administration's Approved Drug Products with Therapeutic
309	309	Equivalence Evaluations, also known as the Orange Book, has an "NR"
310	310	or "NA" rating or a similar rating by a nationally recognized
311	311	reference; and
312	312	(b) the drug is generally available
313	313	for purchase by pharmacies in the state from national or regional
314	314	wholesalers and is not obsolete;
315	315	(ii) must provide to a network pharmacy
316	316	provider, at the time a contract is entered into or renewed with the
317	317	network pharmacy provider, the sources used to determine the
318	318	maximum allowable cost pricing for the maximum allowable cost list
319	319	specific to that provider;
320	320	(iii) must review and update maximum
321	321	allowable cost price information at least once every seven days to
322	322	reflect any modification of maximum allowable cost pricing;
323	323	(iv) must, in formulating the maximum
324	324	allowable cost price for a drug, use only the price of the drug and
325	325	drugs listed as therapeutically equivalent in the most recent
326	326	version of the United States Food and Drug Administration's
327	327	Approved Drug Products with Therapeutic Equivalence Evaluations,
328	328	also known as the Orange Book;
329	329	(v) must establish a process for
330	330	eliminating products from the maximum allowable cost list or
331	331	modifying maximum allowable cost prices in a timely manner to
332	332	remain consistent with pricing changes and product availability in
333	333	the marketplace;
334	334	(vi) must:
335	335	(a) provide a procedure under which a
336	336	network pharmacy provider may challenge a listed maximum allowable
337	337	cost price for a drug;
338	338	(b) respond to a challenge not later
339	339	than the 15th day after the date the challenge is made;
340	340	(c) if the challenge is successful,
341	341	make an adjustment in the drug price effective on the date the
342	342	challenge is resolved[,] and make the adjustment applicable to all
343	343	similarly situated network pharmacy providers, as determined by the
344	344	managed care organization or pharmacy benefit manager, as
345	345	appropriate;
346	346	(d) if the challenge is denied,
347	347	provide the reason for the denial; and
348	348	(e) report to the commission every 90
349	349	days the total number of challenges that were made and denied in the
350	350	preceding 90-day period for each maximum allowable cost list drug
351	351	for which a challenge was denied during the period;
352	352	(vii) must notify the commission not later
353	353	than the 21st day after implementing a practice of using a maximum
354	354	allowable cost list for drugs dispensed at retail but not by mail;
355	355	and
356	356	(viii) must provide a process for each of
357	357	its network pharmacy providers to readily access the maximum
358	358	allowable cost list specific to that provider;
359	359	(24) a requirement that the managed care organization
360	360	and any entity with which the managed care organization contracts
361	361	for the performance of services under a managed care plan disclose,
362	362	at no cost, to the commission and, on request, the office of the
363	363	attorney general all discounts, incentives, rebates, fees, free
364	364	goods, bundling arrangements, and other agreements affecting the
365	365	net cost of goods or services provided under the plan;
366	366	(25) a requirement that the managed care organization
367	367	not implement significant, nonnegotiated, across-the-board
368	368	provider reimbursement rate reductions unless:
369	369	(A) subject to Subsection (a-3), the
370	370	organization has the prior approval of the commission to make the
371	371	reductions [reduction]; or
372	372	(B) the rate reductions are based on changes to
373	373	the Medicaid fee schedule or cost containment initiatives
374	374	implemented by the commission; and
375	375	(26) a requirement that the managed care organization
376	376	make initial and subsequent primary care provider assignments and
377	377	changes.
378	378	(a-2) Except as provided by Subsection (a)(23)(H)(viii)
379	379	[(a)(23)(K)(viii)], a maximum allowable cost list specific to a
380	380	provider and maintained by a managed care organization or pharmacy
381	381	benefit manager is confidential.
382	382	SECTION 5. Section 533.005(a-1), Government Code, is
383	383	repealed.
384	384	SECTION 6. As soon as practicable after the effective date
385	385	of this Act, the executive commissioner of the Health and Human
386	386	Services Commission shall adopt necessary rules to implement the
387	387	changes in law made by this Act.
388	388	SECTION 7. If before implementing any provision of this Act
389	389	a state agency determines that a waiver or authorization from a
390	390	federal agency is necessary for implementation of that provision,
391	391	the agency affected by the provision shall request the waiver or
392	392	authorization and may delay implementing that provision until the
393	393	waiver or authorization is granted.
394	394	SECTION 8. This Act takes effect September 1, 2019.