Bill Text: TX HB3685 | 2019-2020 | 86th Legislature | Introduced


Bill Title: Relating to pharmacy benefits provided through the Medicaid managed care program.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2019-03-19 - Referred to Public Health [HB3685 Detail]

Download: Texas-2019-HB3685-Introduced.html
  86R9144 LED-D
 
  By: Oliverson H.B. No. 3685
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to pharmacy benefits provided through the Medicaid managed
  care program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  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 on any claim for
  payment that is received with documentation reasonably necessary
  for the managed care organization to process the claim:
                     (A)  not later than:
                           (i)  the 10th day after the date the claim is
  received if the claim relates to services provided by a nursing
  facility, intermediate care facility, or group home;
                           (ii)  the 30th day after the date the claim
  is received if the claim relates to the provision of long-term
  services and supports not subject to Subparagraph (i); and
                           (iii)  the 45th day after the date the claim
  is received if the claim is not subject to Subparagraph (i) or (ii);
  or
                     (B)  within a period, not to exceed 60 days,
  specified by a written agreement between the physician or provider
  and the managed care organization;
               (7-a)  a requirement that the managed care organization
  demonstrate to the commission that the organization pays claims
  described by Subdivision (7)(A)(ii) on average not later than the
  21st day after the date the claim is received by the 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, notwithstanding any other
  law, including Sections 843.312 and 1301.052, Insurance Code, the
  organization:
                     (A)  use advanced practice registered nurses and
  physician assistants in addition to physicians as primary care
  providers to increase the availability of primary care providers in
  the organization's provider network; and
                     (B)  treat advanced practice registered nurses
  and physician assistants in the same manner as primary care
  physicians with regard to:
                           (i)  selection and assignment as primary
  care providers;
                           (ii)  inclusion as primary care providers in
  the organization's provider network; and
                           (iii)  inclusion as primary care providers
  in any provider network directory maintained by the organization;
               (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;
                     (C)  the determination of the physician resolving
  the dispute to be binding on the managed care organization and
  provider; and
                     (D)  the managed care organization to allow a
  provider with a claim that has not been paid before the time
  prescribed by Subdivision (7)(A)(ii) to initiate an appeal of that
  claim;
               (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:
                     (A)  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 complies with the provider access
  standards established under Section 533.0061;
                     (B)  as a condition of contract retention and
  renewal:
                           (i)  continue to comply with the provider
  access standards established under Section 533.0061; and
                           (ii)  make substantial efforts, as
  determined by the commission, to mitigate or remedy any
  noncompliance with the provider access standards established under
  Section 533.0061;
                     (C)  pay liquidated damages for each failure, as
  determined by the commission, to comply with the provider access
  standards established under Section 533.0061 in amounts that are
  reasonably related to the noncompliance; and
                     (D)  regularly, as determined by the commission,
  submit to the commission and make available to the public a report
  containing data on the sufficiency of the organization's provider
  network with regard to providing the care and services described
  under Section 533.0061(a) and specific data with respect to access
  to primary care, specialty care, long-term services and supports,
  nursing services, and therapy services on the average length of
  time between:
                           (i)  the date a provider requests prior
  authorization for the care or service and the date the organization
  approves or denies the request; and
                           (ii)  the date the organization approves a
  request for prior authorization for the care or service and the date
  the care or service is initiated;
               (21)  a requirement that the managed care organization
  demonstrate to the commission, before the organization begins to
  provide health care services to recipients, that, subject to the
  provider access standards established under Section 533.0061:
                     (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;
                           (iii)  a sufficient number of providers of
  long-term services and supports and specialty pediatric care
  providers of home and community-based services; and
                           (iv)  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, except as provided by Paragraph
  (L)(ii), exclusively employs the vendor drug program formulary and
  preserves the state's ability to reduce waste, fraud, and abuse
  under Medicaid;
                     (B)  that adheres to the applicable preferred drug
  list adopted by the commission under Section 531.072;
                     (C)  that, except as provided by Paragraph (L)(i),
  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;
                     (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 is listed as "A" or "B"
  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, has an "NR"
  or "NA" rating or a similar rating by a nationally recognized
  reference; and
                                 (b)  the drug is generally available
  for purchase by pharmacies in the state from national or regional
  wholesalers and is not obsolete;
                           (ii)  must provide to a network pharmacy
  provider, at the time a contract is entered into or renewed with the
  network pharmacy provider, the sources used to determine the
  maximum allowable cost pricing for the maximum allowable cost list
  specific to that provider;
                           (iii)  must review and update maximum
  allowable cost price information at least once every seven days to
  reflect any modification of maximum allowable cost pricing;
                           (iv)  must, in formulating the maximum
  allowable cost price for a drug, use only the price of the drug and
  drugs listed as therapeutically equivalent 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;
                           (v)  must establish a 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 and product availability in
  the marketplace;
                           (vi)  must:
                                 (a)  provide a 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)  if the challenge is successful,
  make an adjustment in the drug price effective on the date the
  challenge is resolved[,] and make the adjustment applicable to all
  similarly situated network pharmacy providers, as determined by the
  managed care organization or pharmacy benefit manager, as
  appropriate;
                                 (d)  if the challenge is denied,
  provide the reason for the denial; and
                                 (e)  report to the commission every 90
  days the total number of challenges that were made and denied in the
  preceding 90-day period for each maximum allowable cost list drug
  for which a challenge was denied during the period;
                           (vii)  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
                           (viii)  must provide a process for each of
  its network pharmacy providers to readily access the maximum
  allowable cost list specific to that provider; and
                     (L)  under which the managed care organization or
  pharmacy benefit manager, as applicable:
                           (i)  may not require a prior authorization,
  other than a clinical prior authorization, for or impose any other
  barriers to a drug that is prescribed to a medically fragile child
  for a particular disease or treatment and that is on the vendor drug
  program formulary, regardless of whether the drug is included in
  the preferred drug list adopted under Section 531.072;
                           (ii)  must provide for continued access to a
  drug prescribed to a child enrolled in the STAR Kids managed care
  program, regardless of whether the drug is on the vendor drug
  program formulary or, if applicable on or after August 31, 2023, the
  managed care organization's formulary;
                           (iii)  may not use a protocol that requires a
  child enrolled in the STAR Kids managed care program to use a
  prescription drug or sequence of prescription drugs other than the
  drug that the child's physician recommends for the child's
  treatment before the managed care organization provides coverage
  for the recommended drug; and
                           (iv)  must pay liquidated damages to the
  commission for each failure, as determined by the commission, to
  comply with this paragraph in an amount that is a reasonable
  forecast of the damages caused by the noncompliance;
               (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;
               (25)  a requirement that the managed care organization
  not implement significant, nonnegotiated, across-the-board
  provider reimbursement rate reductions unless:
                     (A)  subject to Subsection (a-3), the
  organization has the prior approval of the commission to make the
  reductions [reduction]; or
                     (B)  the rate reductions are based on changes to
  the Medicaid fee schedule or cost containment initiatives
  implemented by the commission; and
               (26)  a requirement that the managed care organization
  make initial and subsequent primary care provider assignments and
  changes.
         SECTION 2.  Section 533.005, Government Code, as amended by
  this Act, applies to a contract entered into or renewed on or after
  the effective date of this Act. A contract entered into or renewed
  before that date is governed by the law in effect on the date the
  contract was entered into or renewed, and that law is continued in
  effect for that purpose.
         SECTION 3.  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.  This Act takes effect September 1, 2019.
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