Bill Text: TX HB1137 | 2013-2014 | 83rd Legislature | Introduced

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Bill Title: Relating to the use of maximum allowable cost lists under a Medicaid managed care pharmacy benefit plan.

Spectrum: Moderate Partisan Bill (Republican 6-1)

Status: (Introduced - Dead) 2013-04-17 - Left pending in committee [HB1137 Detail]

Download: Texas-2013-HB1137-Introduced.html

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83R2219 ADM-F
By: J. Davis of Harris H.B. No. 1137

A BILL TO BE ENTITLED
AN ACT
relating to the use of maximum allowable cost lists under a Medicaid
managed care pharmacy benefit plan.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 531.021, Government Code, is amended by
adding Subsection (h) to read as follows:
(h) The executive commissioner shall:
(1) adopt rules and establish procedures under which a
pharmacy participating in the network of a managed care
organization contracting with the commission under Chapter 533 may
appeal and have the commission review a denial by the managed care
organization or a subcontracted pharmacy benefit manager, as
applicable, of a challenge by the pharmacy of the managed care
organization's or pharmacy benefit manager's maximum allowable cost
price for a drug; and
(2) require the managed care organization or pharmacy
benefit manager, as applicable, to make any required adjustment in
the maximum allowable cost price for the drug:
(A) retroactive to the date the challenge was
made; and
(B) applicable to all pharmacies participating
in the network.
SECTION 2. Section 533.005(a), Government Code, is amended
to read as follows:
(a) A contract between a managed care organization and the
commission for the organization to provide health care services to
recipients must contain:
(1) procedures to ensure accountability to the state
for the provision of health care services, including procedures for
financial reporting, quality assurance, utilization review, and
assurance of contract and subcontract compliance;
(2) capitation rates that ensure the cost-effective
provision of quality health care;
(3) a requirement that the managed care organization
provide ready access to a person who assists recipients in
resolving issues relating to enrollment, plan administration,
education and training, access to services, and grievance
procedures;
(4) a requirement that the managed care organization
provide ready access to a person who assists providers in resolving
issues relating to payment, plan administration, education and
training, and grievance procedures;
(5) a requirement that the managed care organization
provide information and referral about the availability of
educational, social, and other community services that could
benefit a recipient;
(6) procedures for recipient outreach and education;
(7) a requirement that the managed care organization
make payment to a physician or provider for health care services
rendered to a recipient under a managed care plan not later than the
45th day after the date a claim for payment is received with
documentation reasonably necessary for the managed care
organization to process the claim, or within a period, not to exceed
60 days, specified by a written agreement between the physician or
provider and the managed care organization;
(8) a requirement that the commission, on the date of a
recipient's enrollment in a managed care plan issued by the managed
care organization, inform the organization of the recipient's
Medicaid certification date;
(9) a requirement that the managed care organization
comply with Section 533.006 as a condition of contract retention
and renewal;
(10) a requirement that the managed care organization
provide the information required by Section 533.012 and otherwise
comply and cooperate with the commission's office of inspector
general and the office of the attorney general;
(11) a requirement that the managed care
organization's usages of out-of-network providers or groups of
out-of-network providers may not exceed limits for those usages
relating to total inpatient admissions, total outpatient services,
and emergency room admissions determined by the commission;
(12) if the commission finds that a managed care
organization has violated Subdivision (11), a requirement that the
managed care organization reimburse an out-of-network provider for
health care services at a rate that is equal to the allowable rate
for those services, as determined under Sections 32.028 and
32.0281, Human Resources Code;
(13) a requirement that the organization use advanced
practice nurses in addition to physicians as primary care providers
to increase the availability of primary care providers in the
organization's provider network;
(14) a requirement that the managed care organization
reimburse a federally qualified health center or rural health
clinic for health care services provided to a recipient outside of
regular business hours, including on a weekend day or holiday, at a
rate that is equal to the allowable rate for those services as
determined under Section 32.028, Human Resources Code, if the
recipient does not have a referral from the recipient's primary
care physician;
(15) a requirement that the managed care organization
develop, implement, and maintain a system for tracking and
resolving all provider appeals related to claims payment, including
a process that will require:
(A) a tracking mechanism to document the status
and final disposition of each provider's claims payment appeal;
(B) the contracting with physicians who are not
network providers and who are of the same or related specialty as
the appealing physician to resolve claims disputes related to
denial on the basis of medical necessity that remain unresolved
subsequent to a provider appeal; and
(C) the determination of the physician resolving
the dispute to be binding on the managed care organization and
provider;
(16) a requirement that a medical director who is
authorized to make medical necessity determinations is available to
the region where the managed care organization provides health care
services;
(17) a requirement that the managed care organization
ensure that a medical director and patient care coordinators and
provider and recipient support services personnel are located in
the South Texas service region, if the managed care organization
provides a managed care plan in that region;
(18) a requirement that the managed care organization
provide special programs and materials for recipients with limited
English proficiency or low literacy skills;
(19) a requirement that the managed care organization
develop and establish a process for responding to provider appeals
in the region where the organization provides health care services;
(20) a requirement that the managed care organization
develop and submit to the commission, before the organization
begins to provide health care services to recipients, a
comprehensive plan that describes how the organization's provider
network will provide recipients sufficient access to:
(A) preventive care;
(B) primary care;
(C) specialty care;
(D) after-hours urgent care; and
(E) chronic care;
(21) a requirement that the managed care organization
demonstrate to the commission, before the organization begins to
provide health care services to recipients, that:
(A) the organization's provider network has the
capacity to serve the number of recipients expected to enroll in a
managed care plan offered by the organization;
(B) the organization's provider network
includes:
(i) a sufficient number of primary care
providers;
(ii) a sufficient variety of provider
types; and
(iii) providers located throughout the
region where the organization will provide health care services;
and
(C) health care services will be accessible to
recipients through the organization's provider network to a
comparable extent that health care services would be available to
recipients under a fee-for-service or primary care case management
model of Medicaid managed care;
(22) a requirement that the managed care organization
develop a monitoring program for measuring the quality of the
health care services provided by the organization's provider
network that:
(A) incorporates the National Committee for
Quality Assurance's Healthcare Effectiveness Data and Information
Set (HEDIS) measures;
(B) focuses on measuring outcomes; and
(C) includes the collection and analysis of
clinical data relating to prenatal care, preventive care, mental
health care, and the treatment of acute and chronic health
conditions and substance abuse;
(23) subject to Subsection (a-1), a requirement that
the managed care organization develop, implement, and maintain an
outpatient pharmacy benefit plan for its enrolled recipients:
(A) that exclusively employs the vendor drug
program formulary and preserves the state's ability to reduce
waste, fraud, and abuse under the Medicaid program;
(B) that adheres to the applicable preferred drug
list adopted by the commission under Section 531.072;
(C) that includes the prior authorization
procedures and requirements prescribed by or implemented under
Sections 531.073(b), (c), and (g) for the vendor drug program;
(D) for purposes of which the managed care
organization:
(i) may not negotiate or collect rebates
associated with pharmacy products on the vendor drug program
formulary; and
(ii) may not receive drug rebate or pricing
information that is confidential under Section 531.071;
(E) that complies with the prohibition under
Section 531.089;
(F) under which the managed care organization may
not 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 under the plan through the imposition of
different copayments;
(G) that allows the managed care organization or
any subcontracted pharmacy benefit manager to contract with a
pharmacist or pharmacy providers separately for specialty pharmacy
services, except that:
(i) the managed care organization and
pharmacy benefit manager are prohibited from allowing exclusive
contracts with a specialty pharmacy owned wholly or partly by the
pharmacy benefit manager responsible for the administration of the
pharmacy benefit program; and
(ii) the managed care organization and
pharmacy benefit manager must adopt policies and procedures for
reclassifying prescription drugs from retail to specialty drugs,
and those policies and procedures must be consistent with rules
adopted by the executive commissioner and include notice to network
pharmacy providers from the managed care organization;
(H) under which the managed care organization may
not prevent a pharmacy or pharmacist from participating as a
provider if the pharmacy or pharmacist agrees to comply with the
financial terms and conditions of the contract as well as other
reasonable administrative and professional terms and conditions of
the contract;
(I) under which the managed care organization may
include mail-order pharmacies in its networks, but may not require
enrolled recipients to use those pharmacies, and may not charge an
enrolled recipient who opts to use this service a fee, including
postage and handling fees; [and]
(J) under which the managed care organization or
pharmacy benefit manager, as applicable, must pay claims in
accordance with Section 843.339, Insurance Code; and
(K) under which the managed care organization or
pharmacy benefit manager, as applicable:
(i) to place a drug on a maximum allowable
cost list, must ensure that:
(a) the drug has at least three
nationally available, therapeutically equivalent, multiple source
drugs with a significant cost difference;
(b) the drug is listed as
therapeutically and pharmaceutically equivalent or "A" rated in the
most recent version of the United States Food and Drug
Administration's Approved Drug Products with Therapeutic
Equivalence Evaluations, also known as the Orange Book; and
(c) the drug is available for purchase
without limitation by all pharmacies in the state from national or
regional wholesalers and is not obsolete or temporarily
unavailable;
(ii) must disclose to its network pharmacy
providers and to the commission the basis of the maximum allowable
cost price for each drug on the list and the methodology and sources
used to determine that price;
(iii) must update maximum allowable cost
price information at least every seven days and establish a
reasonable process to allow for the prompt notification of network
pharmacy providers and the commission of pricing updates;
(iv) must establish a reasonable process
for eliminating products from the maximum allowable cost list or
modifying maximum allowable cost prices in a timely manner to
remain consistent with pricing changes in the marketplace;
(v) must:
(a) provide a reasonable procedure
under which a network pharmacy provider may challenge a listed
maximum allowable cost price for a drug;
(b) respond to a challenge not later
than the 15th day after the date the challenge is made;
(c) make an adjustment in the drug
price retroactive to the date the challenge was made and make the
adjustment applicable to all network pharmacy providers, if the
challenge is successful;
(d) if the challenge is denied,
provide the reason for the denial and notify the network pharmacy
provider of where the drug may be purchased at a price at or below
the maximum allowable cost price for the relevant time period;
(e) allow a network pharmacy provider
to appeal a denied challenge by having the denial reviewed by the
commission according to rules adopted and procedures established by
the executive commissioner; and
(f) report to the commission every 90
days, and to each network pharmacy provider upon request, the total
number of challenges that were denied in the preceding 90-day
period for each maximum allowable cost list drug for which a
challenge was denied during the period;
(vi) must notify the commission not later
than the 21st day after implementing a practice of using a maximum
allowable cost list for drugs dispensed at retail but not by mail;
and
(vii) must disclose to the commission
whether the maximum allowable cost list used with respect to
billing the commission is the same as the list used when reimbursing
network pharmacy providers and, if not, disclose to the commission
any variance between amounts paid to network pharmacy providers and
amounts charged to the commission; and
(24) a requirement that the managed care organization
and any entity with which the managed care organization contracts
for the performance of services under a managed care plan disclose,
at no cost, to the commission and, on request, the office of the
attorney general all discounts, incentives, rebates, fees, free
goods, bundling arrangements, and other agreements affecting the
net cost of goods or services provided under the plan.
SECTION 3. (a) The Health and Human Services Commission
shall, in a contract between the commission and a managed care
organization under Chapter 533, Government Code, that is entered
into or renewed on or after the effective date of this Act, require
that the managed care organization comply with Section 533.005(a),
Government Code, as amended by this Act.
(b) The Health and Human Services Commission shall seek to
amend contracts entered into with managed care organizations under
Chapter 533, Government Code, before the effective date of this Act
to require those managed care organizations to comply with Section
533.005(a), Government Code, as amended by this Act. To the extent
of a conflict between that subsection and a provision of a contract
with a managed care organization entered into before the effective
date of this Act, the contract provision prevails.
SECTION 4. 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 5. This Act takes effect September 1, 2013.