BILL ANALYSIS C.S.H.B. 2402 By: Rose Human Services Committee Report (Substituted) BACKGROUND AND PURPOSE Under current law, Texas Medicaid sets drug reimbursement rates based on the usual and customary price which, according to the Texas Administrative Code, is the price the provider most frequently charges the general public for the same drug. However, the bill author has informed the committee that there is ambiguity regarding the reporting of usual and customary pricing, as there are certain membership-based pharmacy discount programs that provide medications at a reduced price as an exclusive benefit to enrolled members. Further, if Medicaid includes these membership prices in usual and customary calculations, reimbursement rates could be artificially lowered, discouraging pharmacy participation and limiting cost-saving options for consumers. C.S.H.B. 2402 seeks to prevent the distortion of Medicaid reimbursement rates by excluding monthly fee-based membership discount programs from usual and customary calculations. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 2402 amends the Human Resources Code to establish that the fee, charge, or rate for the payment of Medicaid benefits, other than for a professional service, excludes any fee, charge, or rate offered as part of a monthly fee-based membership discount program. If before implementing any provision of the bill 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 must request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted. EFFECTIVE DATE September 1, 2025. COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 2402 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. Whereas the introduced required the Health and Human Services Commission to exclude any fee, charge, or rate offered as part of a fee-based membership discount program in determining the usual and customary fee, charge, or rate that prevails in the community for Medicaid payment purposes, the substitute establishes instead that the fee, charge, or rate for those purposes excludes any fee, charge, or rate offered as part of a monthly fee-based membership discount program.
BILL ANALYSIS
# BILL ANALYSIS
C.S.H.B. 2402
By: Rose
Human Services
Committee Report (Substituted)
C.S.H.B. 2402
By: Rose
Human Services
Committee Report (Substituted)
BACKGROUND AND PURPOSE Under current law, Texas Medicaid sets drug reimbursement rates based on the usual and customary price which, according to the Texas Administrative Code, is the price the provider most frequently charges the general public for the same drug. However, the bill author has informed the committee that there is ambiguity regarding the reporting of usual and customary pricing, as there are certain membership-based pharmacy discount programs that provide medications at a reduced price as an exclusive benefit to enrolled members. Further, if Medicaid includes these membership prices in usual and customary calculations, reimbursement rates could be artificially lowered, discouraging pharmacy participation and limiting cost-saving options for consumers. C.S.H.B. 2402 seeks to prevent the distortion of Medicaid reimbursement rates by excluding monthly fee-based membership discount programs from usual and customary calculations.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS C.S.H.B. 2402 amends the Human Resources Code to establish that the fee, charge, or rate for the payment of Medicaid benefits, other than for a professional service, excludes any fee, charge, or rate offered as part of a monthly fee-based membership discount program. If before implementing any provision of the bill 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 must request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.
EFFECTIVE DATE September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 2402 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. Whereas the introduced required the Health and Human Services Commission to exclude any fee, charge, or rate offered as part of a fee-based membership discount program in determining the usual and customary fee, charge, or rate that prevails in the community for Medicaid payment purposes, the substitute establishes instead that the fee, charge, or rate for those purposes excludes any fee, charge, or rate offered as part of a monthly fee-based membership discount program.
BACKGROUND AND PURPOSE
Under current law, Texas Medicaid sets drug reimbursement rates based on the usual and customary price which, according to the Texas Administrative Code, is the price the provider most frequently charges the general public for the same drug. However, the bill author has informed the committee that there is ambiguity regarding the reporting of usual and customary pricing, as there are certain membership-based pharmacy discount programs that provide medications at a reduced price as an exclusive benefit to enrolled members. Further, if Medicaid includes these membership prices in usual and customary calculations, reimbursement rates could be artificially lowered, discouraging pharmacy participation and limiting cost-saving options for consumers. C.S.H.B. 2402 seeks to prevent the distortion of Medicaid reimbursement rates by excluding monthly fee-based membership discount programs from usual and customary calculations.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
C.S.H.B. 2402 amends the Human Resources Code to establish that the fee, charge, or rate for the payment of Medicaid benefits, other than for a professional service, excludes any fee, charge, or rate offered as part of a monthly fee-based membership discount program. If before implementing any provision of the bill 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 must request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.
EFFECTIVE DATE
September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 2402 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
Whereas the introduced required the Health and Human Services Commission to exclude any fee, charge, or rate offered as part of a fee-based membership discount program in determining the usual and customary fee, charge, or rate that prevails in the community for Medicaid payment purposes, the substitute establishes instead that the fee, charge, or rate for those purposes excludes any fee, charge, or rate offered as part of a monthly fee-based membership discount program.