Texas 2019 - 86th Regular

Texas Senate Bill SB2267 Compare Versions

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

Old	New	Differences
1	1	86R16634 KLA-D
2	2	By: Kolkhorst S.B. No. 2267
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the provision of pharmacy benefits through Medicaid
8	8	managed care.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Sections 533.005(a) and (a-2), Government Code,
11	11	are amended to read as follows:
12	12	(a) A contract between a managed care organization and the
13	13	commission for the organization to provide health care services to
14	14	recipients must contain:
15	15	(1) procedures to ensure accountability to the state
16	16	for the provision of health care services, including procedures for
17	17	financial reporting, quality assurance, utilization review, and
18	18	assurance of contract and subcontract compliance;
19	19	(2) capitation rates that ensure the cost-effective
20	20	provision of quality health care;
21	21	(3) a requirement that the managed care organization
22	22	provide ready access to a person who assists recipients in
23	23	resolving issues relating to enrollment, plan administration,
24	24	education and training, access to services, and grievance
25	25	procedures;
26	26	(4) a requirement that the managed care organization
27	27	provide ready access to a person who assists providers in resolving
28	28	issues relating to payment, plan administration, education and
29	29	training, and grievance procedures;
30	30	(5) a requirement that the managed care organization
31	31	provide information and referral about the availability of
32	32	educational, social, and other community services that could
33	33	benefit a recipient;
34	34	(6) procedures for recipient outreach and education;
35	35	(7) a requirement that the managed care organization
36	36	make payment to a physician or provider for health care services
37	37	rendered to a recipient under a managed care plan on any claim for
38	38	payment that is received with documentation reasonably necessary
39	39	for the managed care organization to process the claim:
40	40	(A) not later than:
41	41	(i) the 10th day after the date the claim is
42	42	received if the claim relates to services provided by a nursing
43	43	facility, intermediate care facility, or group home;
44	44	(ii) the 30th day after the date the claim
45	45	is received if the claim relates to the provision of long-term
46	46	services and supports not subject to Subparagraph (i); and
47	47	(iii) the 45th day after the date the claim
48	48	is received if the claim is not subject to Subparagraph (i) or (ii);
49	49	or
50	50	(B) within a period, not to exceed 60 days,
51	51	specified by a written agreement between the physician or provider
52	52	and the managed care organization;
53	53	(7-a) a requirement that the managed care organization
54	54	demonstrate to the commission that the organization pays claims
55	55	described by Subdivision (7)(A)(ii) on average not later than the
56	56	21st day after the date the claim is received by the organization;
57	57	(8) a requirement that the commission, on the date of a
58	58	recipient's enrollment in a managed care plan issued by the managed
59	59	care organization, inform the organization of the recipient's
60	60	Medicaid certification date;
61	61	(9) a requirement that the managed care organization
62	62	comply with Section 533.006 as a condition of contract retention
63	63	and renewal;
64	64	(10) a requirement that the managed care organization
65	65	provide the information required by Section 533.012 and otherwise
66	66	comply and cooperate with the commission's office of inspector
67	67	general and the office of the attorney general;
68	68	(11) a requirement that the managed care
69	69	organization's usages of out-of-network providers or groups of
70	70	out-of-network providers may not exceed limits for those usages
71	71	relating to total inpatient admissions, total outpatient services,
72	72	and emergency room admissions determined by the commission;
73	73	(12) if the commission finds that a managed care
74	74	organization has violated Subdivision (11), a requirement that the
75	75	managed care organization reimburse an out-of-network provider for
76	76	health care services at a rate that is equal to the allowable rate
77	77	for those services, as determined under Sections 32.028 and
78	78	32.0281, Human Resources Code;
79	79	(13) a requirement that, notwithstanding any other
80	80	law, including Sections 843.312 and 1301.052, Insurance Code, the
81	81	organization:
82	82	(A) use advanced practice registered nurses and
83	83	physician assistants in addition to physicians as primary care
84	84	providers to increase the availability of primary care providers in
85	85	the organization's provider network; and
86	86	(B) treat advanced practice registered nurses
87	87	and physician assistants in the same manner as primary care
88	88	physicians with regard to:
89	89	(i) selection and assignment as primary
90	90	care providers;
91	91	(ii) inclusion as primary care providers in
92	92	the organization's provider network; and
93	93	(iii) inclusion as primary care providers
94	94	in any provider network directory maintained by the organization;
95	95	(14) a requirement that the managed care organization
96	96	reimburse a federally qualified health center or rural health
97	97	clinic for health care services provided to a recipient outside of
98	98	regular business hours, including on a weekend day or holiday, at a
99	99	rate that is equal to the allowable rate for those services as
100	100	determined under Section 32.028, Human Resources Code, if the
101	101	recipient does not have a referral from the recipient's primary
102	102	care physician;
103	103	(15) a requirement that the managed care organization
104	104	develop, implement, and maintain a system for tracking and
105	105	resolving all provider appeals related to claims payment, including
106	106	a process that will require:
107	107	(A) a tracking mechanism to document the status
108	108	and final disposition of each provider's claims payment appeal;
109	109	(B) the contracting with physicians who are not
110	110	network providers and who are of the same or related specialty as
111	111	the appealing physician to resolve claims disputes related to
112	112	denial on the basis of medical necessity that remain unresolved
113	113	subsequent to a provider appeal;
114	114	(C) the determination of the physician resolving
115	115	the dispute to be binding on the managed care organization and
116	116	provider; and
117	117	(D) the managed care organization to allow a
118	118	provider with a claim that has not been paid before the time
119	119	prescribed by Subdivision (7)(A)(ii) to initiate an appeal of that
120	120	claim;
121	121	(16) a requirement that a medical director who is
122	122	authorized to make medical necessity determinations is available to
123	123	the region where the managed care organization provides health care
124	124	services;
125	125	(17) a requirement that the managed care organization
126	126	ensure that a medical director and patient care coordinators and
127	127	provider and recipient support services personnel are located in
128	128	the South Texas service region, if the managed care organization
129	129	provides a managed care plan in that region;
130	130	(18) a requirement that the managed care organization
131	131	provide special programs and materials for recipients with limited
132	132	English proficiency or low literacy skills;
133	133	(19) a requirement that the managed care organization
134	134	develop and establish a process for responding to provider appeals
135	135	in the region where the organization provides health care services;
136	136	(20) a requirement that the managed care organization:
137	137	(A) develop and submit to the commission, before
138	138	the organization begins to provide health care services to
139	139	recipients, a comprehensive plan that describes how the
140	140	organization's provider network complies with the provider access
141	141	standards established under Section 533.0061;
142	142	(B) as a condition of contract retention and
143	143	renewal:
144	144	(i) continue to comply with the provider
145	145	access standards established under Section 533.0061; and
146	146	(ii) make substantial efforts, as
147	147	determined by the commission, to mitigate or remedy any
148	148	noncompliance with the provider access standards established under
149	149	Section 533.0061;
150	150	(C) pay liquidated damages for each failure, as
151	151	determined by the commission, to comply with the provider access
152	152	standards established under Section 533.0061 in amounts that are
153	153	reasonably related to the noncompliance; and
154	154	(D) regularly, as determined by the commission,
155	155	submit to the commission and make available to the public a report
156	156	containing data on the sufficiency of the organization's provider
157	157	network with regard to providing the care and services described
158	158	under Section 533.0061(a) and specific data with respect to access
159	159	to primary care, specialty care, long-term services and supports,
160	160	nursing services, and therapy services on the average length of
161	161	time between:
162	162	(i) the date a provider requests prior
163	163	authorization for the care or service and the date the organization
164	164	approves or denies the request; and
165	165	(ii) the date the organization approves a
166	166	request for prior authorization for the care or service and the date
167	167	the care or service is initiated;
168	168	(21) a requirement that the managed care organization
169	169	demonstrate to the commission, before the organization begins to
170	170	provide health care services to recipients, that, subject to the
171	171	provider access standards established under Section 533.0061:
172	172	(A) the organization's provider network has the
173	173	capacity to serve the number of recipients expected to enroll in a
174	174	managed care plan offered by the organization;
175	175	(B) the organization's provider network
176	176	includes:
177	177	(i) a sufficient number of primary care
178	178	providers;
179	179	(ii) a sufficient variety of provider
180	180	types;
181	181	(iii) a sufficient number of providers of
182	182	long-term services and supports and specialty pediatric care
183	183	providers of home and community-based services; and
184	184	(iv) providers located throughout the
185	185	region where the organization will provide health care services;
186	186	and
187	187	(C) health care services will be accessible to
188	188	recipients through the organization's provider network to a
189	189	comparable extent that health care services would be available to
190	190	recipients under a fee-for-service or primary care case management
191	191	model of Medicaid managed care;
192	192	(22) a requirement that the managed care organization
193	193	develop a monitoring program for measuring the quality of the
194	194	health care services provided by the organization's provider
195	195	network that:
196	196	(A) incorporates the National Committee for
197	197	Quality Assurance's Healthcare Effectiveness Data and Information
198	198	Set (HEDIS) measures;
199	199	(B) focuses on measuring outcomes; and
200	200	(C) includes the collection and analysis of
201	201	clinical data relating to prenatal care, preventive care, mental
202	202	health care, and the treatment of acute and chronic health
203	203	conditions and substance abuse;
204	204	(23) subject to Subsection (a-1) and Section
205	205	533.00513, a requirement that the managed care organization
206	206	develop, implement, and maintain an outpatient pharmacy benefit
207	207	plan for its enrolled recipients:
208	208	(A) that exclusively employs the vendor drug
209	209	program formulary and preserves the state's ability to reduce
210	210	waste, fraud, and abuse under Medicaid;
211	211	(B) that adheres to the applicable preferred drug
212	212	list adopted by the commission under Section 531.072;
213	213	(C) that includes the prior authorization
214	214	procedures and requirements prescribed by or implemented under
215	215	Sections 531.073(b), (c), and (g) for the vendor drug program;
216	216	(D) for purposes of which the managed care
217	217	organization:
218	218	(i) may not negotiate or collect rebates
219	219	associated with pharmacy products on the vendor drug program
220	220	formulary; and
221	221	(ii) may not receive drug rebate or pricing
222	222	information that is confidential under Section 531.071;
223	223	(E) that complies with the prohibition under
224	224	Section 531.089;
225	225	(F) under which the managed care organization may
226	226	not prohibit, limit, or interfere with a recipient's selection of a
227	227	pharmacy or pharmacist of the recipient's choice for the provision
228	228	of pharmaceutical services under the plan through the imposition of
229	229	different copayments;
230	230	(G) that allows the managed care organization [or
231	231	any subcontracted pharmacy benefit manager] to contract with a
232	232	pharmacist or pharmacy providers separately for specialty pharmacy
233	233	services, except that[:
234	234	[(i) the managed care organization and
235	235	pharmacy benefit manager are prohibited from allowing exclusive
236	236	contracts with a specialty pharmacy owned wholly or partly by the
237	237	pharmacy benefit manager responsible for the administration of the
238	238	pharmacy benefit program; and
239	239	[(ii)] the managed care organization [and
240	240	pharmacy benefit manager] must adopt policies and procedures for
241	241	reclassifying prescription drugs from retail to specialty drugs,
242	242	and those policies and procedures must be consistent with rules
243	243	adopted by the executive commissioner and include notice to network
244	244	pharmacy providers from the managed care organization;
245	245	(H) under which the managed care organization may
246	246	not prevent a pharmacy or pharmacist from participating as a
247	247	provider if the pharmacy or pharmacist agrees to comply with the
248	248	financial terms and conditions of the contract as well as other
249	249	reasonable administrative and professional terms and conditions of
250	250	the contract;
251	251	(I) under which the managed care organization may
252	252	include mail-order pharmacies in its networks, but may not require
253	253	enrolled recipients to use those pharmacies, and may not charge an
254	254	enrolled recipient who opts to use this service a fee, including
255	255	postage and handling fees;
256	256	(J) under which the managed care organization [or
257	257	pharmacy benefit manager, as applicable,] must pay claims in
258	258	accordance with Section 843.339, Insurance Code; and
259	259	(K) under which the managed care organization [or
260	260	pharmacy benefit manager, as applicable]:
261	261	(i) to place a drug on a maximum allowable
262	262	cost list, must ensure that:
263	263	(a) the drug is listed as "A" or "B"
264	264	rated in the most recent version of the United States Food and Drug
265	265	Administration's Approved Drug Products with Therapeutic
266	266	Equivalence Evaluations, also known as the Orange Book, has an "NR"
267	267	or "NA" rating or a similar rating by a nationally recognized
268	268	reference; and
269	269	(b) the drug is generally available
270	270	for purchase by pharmacies in the state from national or regional
271	271	wholesalers and is not obsolete;
272	272	(ii) must provide to a network pharmacy
273	273	provider, at the time a contract is entered into or renewed with the
274	274	network pharmacy provider, the sources used to determine the
275	275	maximum allowable cost pricing for the maximum allowable cost list
276	276	specific to that provider;
277	277	(iii) must review and update maximum
278	278	allowable cost price information at least once every seven days to
279	279	reflect any modification of maximum allowable cost pricing;
280	280	(iv) must, in formulating the maximum
281	281	allowable cost price for a drug, use only the price of the drug and
282	282	drugs listed as therapeutically equivalent in the most recent
283	283	version of the United States Food and Drug Administration's
284	284	Approved Drug Products with Therapeutic Equivalence Evaluations,
285	285	also known as the Orange Book;
286	286	(v) must establish a process for
287	287	eliminating products from the maximum allowable cost list or
288	288	modifying maximum allowable cost prices in a timely manner to
289	289	remain consistent with pricing changes and product availability in
290	290	the marketplace;
291	291	(vi) must:
292	292	(a) provide a procedure under which a
293	293	network pharmacy provider may challenge a listed maximum allowable
294	294	cost price for a drug;
295	295	(b) respond to a challenge not later
296	296	than the 15th day after the date the challenge is made;
297	297	(c) if the challenge is successful,
298	298	make an adjustment in the drug price effective on the date the
299	299	challenge is resolved[,] and make the adjustment applicable to all
300	300	similarly situated network pharmacy providers, as determined by the
301	301	managed care organization [or pharmacy benefit manager, as
302	302	appropriate];
303	303	(d) if the challenge is denied,
304	304	provide the reason for the denial; and
305	305	(e) report to the commission every 90
306	306	days the total number of challenges that were made and denied in the
307	307	preceding 90-day period for each maximum allowable cost list drug
308	308	for which a challenge was denied during the period;
309	309	(vii) must notify the commission not later
310	310	than the 21st day after implementing a practice of using a maximum
311	311	allowable cost list for drugs dispensed at retail but not by mail;
312	312	and
313	313	(viii) must provide a process for each of
314	314	its network pharmacy providers to readily access the maximum
315	315	allowable cost list specific to that provider;
316	316	(24) a requirement that the managed care organization
317	317	and any entity with which the managed care organization contracts
318	318	for the performance of services under a managed care plan disclose,
319	319	at no cost, to the commission and, on request, the office of the
320	320	attorney general all discounts, incentives, rebates, fees, free
321	321	goods, bundling arrangements, and other agreements affecting the
322	322	net cost of goods or services provided under the plan;
323	323	(25) a requirement that the managed care organization
324	324	not implement significant, nonnegotiated, across-the-board
325	325	provider reimbursement rate reductions unless:
326	326	(A) subject to Subsection (a-3), the
327	327	organization has the prior approval of the commission to make the
328	328	reductions [reduction]; or
329	329	(B) the rate reductions are based on changes to
330	330	the Medicaid fee schedule or cost containment initiatives
331	331	implemented by the commission; and
332	332	(26) a requirement that the managed care organization
333	333	make initial and subsequent primary care provider assignments and
334	334	changes.
335	335	(a-2) Except as provided by Subsection (a)(23)(K)(viii), a
336	336	maximum allowable cost list specific to a provider and maintained
337	337	by a managed care organization [or pharmacy benefit manager] is
338	338	confidential.
339	339	SECTION 2. Subchapter A, Chapter 533, Government Code, is
340	340	amended by adding Section 533.00513 to read as follows:
341	341	Sec. 533.00513. PROHIBITED SUBCONTRACTS. A managed care
342	342	organization that contracts with the commission under this chapter
343	343	to provide health care services to recipients may not contract with
344	344	a pharmacy benefit manager for purposes of maintaining an
345	345	outpatient pharmacy benefit plan for the organization's enrolled
346	346	recipients as required by Section 533.005(a)(23).
347	347	SECTION 3. Section 533.012(a), Government Code, is amended
348	348	to read as follows:
349	349	(a) Each managed care organization contracting with the
350	350	commission under this chapter shall submit the following, at no
351	351	cost, to the commission and, on request, the office of the attorney
352	352	general:
353	353	(1) a description of any financial or other business
354	354	relationship between the organization and any subcontractor
355	355	providing health care services under the contract;
356	356	(2) a copy of each type of contract between the
357	357	organization and a subcontractor relating to the delivery of or
358	358	payment for health care services;
359	359	(3) a description of the fraud control program used by
360	360	any subcontractor that delivers health care services; and
361	361	(4) a description and breakdown of all funds paid to or
362	362	by the managed care organization, including a health maintenance
363	363	organization, primary care case management provider, [pharmacy
364	364	benefit manager,] and exclusive provider organization, necessary
365	365	for the commission to determine the actual cost of administering
366	366	the managed care plan.
367	367	SECTION 4. Section 32.046(a), Human Resources Code, is
368	368	amended to read as follows:
369	369	(a) The executive commissioner shall adopt rules governing
370	370	sanctions and penalties that apply to a provider who participates
371	371	in the vendor drug program or is enrolled as a network pharmacy
372	372	provider of a managed care organization contracting with the
373	373	commission under Chapter 533, Government Code, [or its
374	374	subcontractor] and who submits an improper claim for reimbursement
375	375	under the program.
376	376	SECTION 5. Sections 533.003(b) and 533.056, Government
377	377	Code, are repealed.
378	378	SECTION 6. (a) The Health and Human Services Commission
379	379	shall, in a contract between the commission and a managed care
380	380	organization under Chapter 533, Government Code, that is entered
381	381	into or renewed on or after the effective date of this Act, require
382	382	that the managed care organization comply with Section 533.005,
383	383	Government Code, as amended by this Act, and Section 533.00513,
384	384	Government Code, as added by this Act.
385	385	(b) The Health and Human Services Commission shall seek to
386	386	amend contracts entered into with managed care organizations under
387	387	Chapter 533, Government Code, before the effective date of this Act
388	388	to require those managed care organizations to comply with Section
389	389	533.005, Government Code, as amended by this Act, and Section
390	390	533.00513, Government Code, as added by this Act. To the extent of
391	391	a conflict between those sections and a provision of a contract with
392	392	a managed care organization entered into before the effective date
393	393	of this Act, the contract provision prevails.
394	394	SECTION 7. If before implementing any provision of this Act
395	395	a state agency determines that a waiver or authorization from a
396	396	federal agency is necessary for implementation of that provision,
397	397	the agency affected by the provision shall request the waiver or
398	398	authorization and may delay implementing that provision until the
399	399	waiver or authorization is granted.
400	400	SECTION 8. This Act takes effect September 1, 2019.