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Texas Senate Bill SB1113

Texas 2023 - 88th Regular

Texas Senate Bill SB1113 Compare Versions

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11 88R1140 MM-F
22 By: Hughes S.B. No. 1113
33
44
55 A BILL TO BE ENTITLED
66 AN ACT
77 relating to prescription drug formularies applicable to the
88 Medicaid managed care program.
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:
2020 (A) include acuity and risk adjustment
2121 methodologies that consider the costs of providing acute care
2222 services and long-term services and supports, including private
2323 duty nursing services, provided under the plan; and
2424 (B) ensure the cost-effective provision of
2525 quality health care;
2626 (3) a requirement that the managed care organization
2727 provide ready access to a person who assists recipients in
2828 resolving issues relating to enrollment, plan administration,
2929 education and training, access to services, and grievance
3030 procedures;
3131 (4) a requirement that the managed care organization
3232 provide ready access to a person who assists providers in resolving
3333 issues relating to payment, plan administration, education and
3434 training, and grievance procedures;
3535 (5) a requirement that the managed care organization
3636 provide information and referral about the availability of
3737 educational, social, and other community services that could
3838 benefit a recipient;
3939 (6) procedures for recipient outreach and education;
4040 (7) a requirement that the managed care organization
4141 make payment to a physician or provider for health care services
4242 rendered to a recipient under a managed care plan on any claim for
4343 payment that is received with documentation reasonably necessary
4444 for the managed care organization to process the claim:
4545 (A) not later than:
4646 (i) the 10th day after the date the claim is
4747 received if the claim relates to services provided by a nursing
4848 facility, intermediate care facility, or group home;
4949 (ii) the 30th day after the date the claim
5050 is received if the claim relates to the provision of long-term
5151 services and supports not subject to Subparagraph (i); and
5252 (iii) the 45th day after the date the claim
5353 is received if the claim is not subject to Subparagraph (i) or (ii);
5454 or
5555 (B) within a period, not to exceed 60 days,
5656 specified by a written agreement between the physician or provider
5757 and the managed care organization;
5858 (7-a) a requirement that the managed care organization
5959 demonstrate to the commission that the organization pays claims
6060 described by Subdivision (7)(A)(ii) on average not later than the
6161 21st day after the date the claim is received by the organization;
6262 (8) a requirement that the commission, on the date of a
6363 recipient's enrollment in a managed care plan issued by the managed
6464 care organization, inform the organization of the recipient's
6565 Medicaid certification date;
6666 (9) a requirement that the managed care organization
6767 comply with Section 533.006 as a condition of contract retention
6868 and renewal;
6969 (10) a requirement that the managed care organization
7070 provide the information required by Section 533.012 and otherwise
7171 comply and cooperate with the commission's office of inspector
7272 general and the office of the attorney general;
7373 (11) a requirement that the managed care
7474 organization's usages of out-of-network providers or groups of
7575 out-of-network providers may not exceed limits for those usages
7676 relating to total inpatient admissions, total outpatient services,
7777 and emergency room admissions determined by the commission;
7878 (12) if the commission finds that a managed care
7979 organization has violated Subdivision (11), a requirement that the
8080 managed care organization reimburse an out-of-network provider for
8181 health care services at a rate that is equal to the allowable rate
8282 for those services, as determined under Sections 32.028 and
8383 32.0281, Human Resources Code;
8484 (13) a requirement that, notwithstanding any other
8585 law, including Sections 843.312 and 1301.052, Insurance Code, the
8686 organization:
8787 (A) use advanced practice registered nurses and
8888 physician assistants in addition to physicians as primary care
8989 providers to increase the availability of primary care providers in
9090 the organization's provider network; and
9191 (B) treat advanced practice registered nurses
9292 and physician assistants in the same manner as primary care
9393 physicians with regard to:
9494 (i) selection and assignment as primary
9595 care providers;
9696 (ii) inclusion as primary care providers in
9797 the organization's provider network; and
9898 (iii) inclusion as primary care providers
9999 in any provider network directory maintained by the organization;
100100 (14) a requirement that the managed care organization
101101 reimburse a federally qualified health center or rural health
102102 clinic for health care services provided to a recipient outside of
103103 regular business hours, including on a weekend day or holiday, at a
104104 rate that is equal to the allowable rate for those services as
105105 determined under Section 32.028, Human Resources Code, if the
106106 recipient does not have a referral from the recipient's primary
107107 care physician;
108108 (15) a requirement that the managed care organization
109109 develop, implement, and maintain a system for tracking and
110110 resolving all provider appeals related to claims payment, including
111111 a process that will require:
112112 (A) a tracking mechanism to document the status
113113 and final disposition of each provider's claims payment appeal;
114114 (B) the contracting with physicians who are not
115115 network providers and who are of the same or related specialty as
116116 the appealing physician to resolve claims disputes related to
117117 denial on the basis of medical necessity that remain unresolved
118118 subsequent to a provider appeal;
119119 (C) the determination of the physician resolving
120120 the dispute to be binding on the managed care organization and
121121 provider; and
122122 (D) the managed care organization to allow a
123123 provider with a claim that has not been paid before the time
124124 prescribed by Subdivision (7)(A)(ii) to initiate an appeal of that
125125 claim;
126126 (16) a requirement that a medical director who is
127127 authorized to make medical necessity determinations is available to
128128 the region where the managed care organization provides health care
129129 services;
130130 (17) a requirement that the managed care organization
131131 ensure that a medical director and patient care coordinators and
132132 provider and recipient support services personnel are located in
133133 the South Texas service region, if the managed care organization
134134 provides a managed care plan in that region;
135135 (18) a requirement that the managed care organization
136136 provide special programs and materials for recipients with limited
137137 English proficiency or low literacy skills;
138138 (19) a requirement that the managed care organization
139139 develop and establish a process for responding to provider appeals
140140 in the region where the organization provides health care services;
141141 (20) a requirement that the managed care organization:
142142 (A) develop and submit to the commission, before
143143 the organization begins to provide health care services to
144144 recipients, a comprehensive plan that describes how the
145145 organization's provider network complies with the provider access
146146 standards established under Section 533.0061;
147147 (B) as a condition of contract retention and
148148 renewal:
149149 (i) continue to comply with the provider
150150 access standards established under Section 533.0061; and
151151 (ii) make substantial efforts, as
152152 determined by the commission, to mitigate or remedy any
153153 noncompliance with the provider access standards established under
154154 Section 533.0061;
155155 (C) pay liquidated damages for each failure, as
156156 determined by the commission, to comply with the provider access
157157 standards established under Section 533.0061 in amounts that are
158158 reasonably related to the noncompliance; and
159159 (D) regularly, as determined by the commission,
160160 submit to the commission and make available to the public a report
161161 containing data on the sufficiency of the organization's provider
162162 network with regard to providing the care and services described
163163 under Section 533.0061(a) and specific data with respect to access
164164 to primary care, specialty care, long-term services and supports,
165165 nursing services, and therapy services on the average length of
166166 time between:
167167 (i) the date a provider requests prior
168168 authorization for the care or service and the date the organization
169169 approves or denies the request; and
170170 (ii) the date the organization approves a
171171 request for prior authorization for the care or service and the date
172172 the care or service is initiated;
173173 (21) a requirement that the managed care organization
174174 demonstrate to the commission, before the organization begins to
175175 provide health care services to recipients, that, subject to the
176176 provider access standards established under Section 533.0061:
177177 (A) the organization's provider network has the
178178 capacity to serve the number of recipients expected to enroll in a
179179 managed care plan offered by the organization;
180180 (B) the organization's provider network
181181 includes:
182182 (i) a sufficient number of primary care
183183 providers;
184184 (ii) a sufficient variety of provider
185185 types;
186186 (iii) a sufficient number of providers of
187187 long-term services and supports and specialty pediatric care
188188 providers of home and community-based services; and
189189 (iv) providers located throughout the
190190 region where the organization will provide health care services;
191191 and
192192 (C) health care services will be accessible to
193193 recipients through the organization's provider network to a
194194 comparable extent that health care services would be available to
195195 recipients under a fee-for-service or primary care case management
196196 model of Medicaid managed care;
197197 (22) a requirement that the managed care organization
198198 develop a monitoring program for measuring the quality of the
199199 health care services provided by the organization's provider
200200 network that:
201201 (A) incorporates the National Committee for
202202 Quality Assurance's Healthcare Effectiveness Data and Information
203203 Set (HEDIS) measures or, as applicable, the national core
204204 indicators adult consumer survey and the national core indicators
205205 child family survey for individuals with an intellectual or
206206 developmental disability;
207207 (B) focuses on measuring outcomes; and
208208 (C) includes the collection and analysis of
209209 clinical data relating to prenatal care, preventive care, mental
210210 health care, and the treatment of acute and chronic health
211211 conditions and substance abuse;
212212 (23) [subject to Subsection (a-1),] a requirement that
213213 the managed care organization develop, implement, and maintain an
214214 outpatient pharmacy benefit plan for its enrolled recipients:
215215 (A) that, except as provided by Paragraph
216216 (L)(ii), exclusively employs the vendor drug program formulary and
217217 preserves the state's ability to reduce waste, fraud, and abuse
218218 under Medicaid;
219219 (B) that adheres to the applicable preferred drug
220220 list adopted by the commission under Section 531.072;
221221 (C) that, except as provided by Paragraph (L)(i),
222222 includes the prior authorization procedures and requirements
223223 prescribed by or implemented under Sections 531.073(b), (c), and
224224 (g) for the vendor drug program;
225225 (C-1) that does not require a clinical,
226226 nonpreferred, or other prior authorization for any antiretroviral
227227 drug, as defined by Section 531.073, or a step therapy or other
228228 protocol, that could restrict or delay the dispensing of the drug
229229 except to minimize fraud, waste, or abuse;
230230 (C-2) that does not require prior authorization
231231 for a nonpreferred antipsychotic drug prescribed to an adult
232232 recipient if the requirements of Section 531.073(a-3) are met;
233233 (D) for purposes of which the managed care
234234 organization:
235235 (i) may not negotiate or collect rebates
236236 associated with pharmacy products on the vendor drug program
237237 formulary; and
238238 (ii) may not receive drug rebate or pricing
239239 information that is confidential under Section 531.071;
240240 (E) that complies with the prohibition under
241241 Section 531.089;
242242 (F) under which the managed care organization may
243243 not prohibit, limit, or interfere with a recipient's selection of a
244244 pharmacy or pharmacist of the recipient's choice for the provision
245245 of pharmaceutical services under the plan through the imposition of
246246 different copayments;
247247 (G) that allows the managed care organization or
248248 any subcontracted pharmacy benefit manager to contract with a
249249 pharmacist or pharmacy providers separately for specialty pharmacy
250250 services, except that:
251251 (i) the managed care organization and
252252 pharmacy benefit manager are prohibited from allowing exclusive
253253 contracts with a specialty pharmacy owned wholly or partly by the
254254 pharmacy benefit manager responsible for the administration of the
255255 pharmacy benefit program; and
256256 (ii) the managed care organization and
257257 pharmacy benefit manager must adopt policies and procedures for
258258 reclassifying prescription drugs from retail to specialty drugs,
259259 and those policies and procedures must be consistent with rules
260260 adopted by the executive commissioner and include notice to network
261261 pharmacy providers from the managed care organization;
262262 (H) under which the managed care organization may
263263 not prevent a pharmacy or pharmacist from participating as a
264264 provider if the pharmacy or pharmacist agrees to comply with the
265265 financial terms and conditions of the contract as well as other
266266 reasonable administrative and professional terms and conditions of
267267 the contract;
268268 (I) under which the managed care organization may
269269 include mail-order pharmacies in its networks, but may not require
270270 enrolled recipients to use those pharmacies, and may not charge an
271271 enrolled recipient who opts to use this service a fee, including
272272 postage and handling fees;
273273 (J) under which the managed care organization or
274274 pharmacy benefit manager, as applicable, must pay claims in
275275 accordance with Section 843.339, Insurance Code;
276276 (K) under which the managed care organization or
277277 pharmacy benefit manager, as applicable:
278278 (i) to place a drug on a maximum allowable
279279 cost list, must ensure that:
280280 (a) the drug is listed as "A" or "B"
281281 rated in the most recent version of the United States Food and Drug
282282 Administration's Approved Drug Products with Therapeutic
283283 Equivalence Evaluations, also known as the Orange Book, has an "NR"
284284 or "NA" rating or a similar rating by a nationally recognized
285285 reference; and
286286 (b) the drug is generally available
287287 for purchase by pharmacies in the state from national or regional
288288 wholesalers and is not obsolete;
289289 (ii) must provide to a network pharmacy
290290 provider, at the time a contract is entered into or renewed with the
291291 network pharmacy provider, the sources used to determine the
292292 maximum allowable cost pricing for the maximum allowable cost list
293293 specific to that provider;
294294 (iii) must review and update maximum
295295 allowable cost price information at least once every seven days to
296296 reflect any modification of maximum allowable cost pricing;
297297 (iv) must, in formulating the maximum
298298 allowable cost price for a drug, use only the price of the drug and
299299 drugs listed as therapeutically equivalent in the most recent
300300 version of the United States Food and Drug Administration's
301301 Approved Drug Products with Therapeutic Equivalence Evaluations,
302302 also known as the Orange Book;
303303 (v) must establish a process for
304304 eliminating products from the maximum allowable cost list or
305305 modifying maximum allowable cost prices in a timely manner to
306306 remain consistent with pricing changes and product availability in
307307 the marketplace;
308308 (vi) must:
309309 (a) provide a procedure under which a
310310 network pharmacy provider may challenge a listed maximum allowable
311311 cost price for a drug;
312312 (b) respond to a challenge not later
313313 than the 15th day after the date the challenge is made;
314314 (c) if the challenge is successful,
315315 make an adjustment in the drug price effective on the date the
316316 challenge is resolved and make the adjustment applicable to all
317317 similarly situated network pharmacy providers, as determined by the
318318 managed care organization or pharmacy benefit manager, as
319319 appropriate;
320320 (d) if the challenge is denied,
321321 provide the reason for the denial; and
322322 (e) report to the commission every 90
323323 days the total number of challenges that were made and denied in the
324324 preceding 90-day period for each maximum allowable cost list drug
325325 for which a challenge was denied during the period;
326326 (vii) must notify the commission not later
327327 than the 21st day after implementing a practice of using a maximum
328328 allowable cost list for drugs dispensed at retail but not by mail;
329329 and
330330 (viii) must provide a process for each of
331331 its network pharmacy providers to readily access the maximum
332332 allowable cost list specific to that provider; and
333333 (L) under which the managed care organization or
334334 pharmacy benefit manager, as applicable:
335335 (i) may not require a prior authorization,
336336 other than a clinical prior authorization or a prior authorization
337337 imposed by the commission to minimize the opportunity for waste,
338338 fraud, or abuse, for or impose any other barriers to a drug that is
339339 prescribed to a child enrolled in the STAR Kids managed care program
340340 for a particular disease or treatment and that is on the vendor drug
341341 program formulary or require additional prior authorization for a
342342 drug included in the preferred drug list adopted under Section
343343 531.072;
344344 (ii) must provide for continued access to a
345345 drug prescribed to a child enrolled in the STAR Kids managed care
346346 program, regardless of whether the drug is on the vendor drug
347347 program formulary or, if applicable on or after August 31, 2023, the
348348 managed care organization's formulary;
349349 (iii) may not use a protocol that requires a
350350 child enrolled in the STAR Kids managed care program to use a
351351 prescription drug or sequence of prescription drugs other than the
352352 drug that the child's physician recommends for the child's
353353 treatment before the managed care organization provides coverage
354354 for the recommended drug; and
355355 (iv) must pay liquidated damages to the
356356 commission for each failure, as determined by the commission, to
357357 comply with this paragraph in an amount that is a reasonable
358358 forecast of the damages caused by the noncompliance;
359359 (24) a requirement that the managed care organization
360360 and any entity with which the managed care organization contracts
361361 for the performance of services under a managed care plan disclose,
362362 at no cost, to the commission and, on request, the office of the
363363 attorney general all discounts, incentives, rebates, fees, free
364364 goods, bundling arrangements, and other agreements affecting the
365365 net cost of goods or services provided under the plan;
366366 (25) a requirement that the managed care organization
367367 not implement significant, nonnegotiated, across-the-board
368368 provider reimbursement rate reductions unless:
369369 (A) subject to Subsection (a-3), the
370370 organization has the prior approval of the commission to make the
371371 reductions; or
372372 (B) the rate reductions are based on changes to
373373 the Medicaid fee schedule or cost containment initiatives
374374 implemented by the commission; and
375375 (26) a requirement that the managed care organization
376376 make initial and subsequent primary care provider assignments and
377377 changes.
378378 SECTION 2. Section 533.005(a-1), Government Code, is
379379 repealed.
380380 SECTION 3. If before implementing any provision of this Act
381381 a state agency determines that a waiver or authorization from a
382382 federal agency is necessary for implementation of that provision,
383383 the agency affected by the provision shall request the waiver or
384384 authorization and may delay implementing that provision until the
385385 waiver or authorization is granted.
386386 SECTION 4. This Act takes effect September 1, 2023.