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.