Bill Text: TX HB3401 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to delivery of outpatient prescription drug benefits under certain public benefit programs, including Medicaid and the child health plan program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2019-04-03 - Withdrawn from schedule [HB3401 Detail]
Download: Texas-2019-HB3401-Introduced.html
86R10486 KFF-D | ||
By: Raymond | H.B. No. 3401 |
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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, [ |
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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 [ |
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in the vendor drug program [ |
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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 [ |
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service corporation; | ||
(2) a[ |
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(3) a[ |
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(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 [ |
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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; [ |
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(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, [ |
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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, [ |
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prescription drug benefit administrator paid under this chapter for | ||
the previous calendar year. If the insurer, [ |
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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, [ |
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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, [ |
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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, [ |
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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, [ |
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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. |