Bill Text: TX SB2267 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to the provision of pharmacy benefits through Medicaid managed care.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-03-21 - Referred to Finance [SB2267 Detail]
Download: Texas-2019-SB2267-Introduced.html
86R16634 KLA-D | ||
By: Kolkhorst | S.B. No. 2267 |
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relating to the provision of pharmacy benefits through Medicaid | ||
managed care. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Sections 533.005(a) and (a-2), Government Code, | ||
are 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) and Section | ||
533.00513, 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 Medicaid; | ||
(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 [ |
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pharmacist or pharmacy providers separately for specialty pharmacy | ||
services, except that[ |
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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 [ |
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accordance with Section 843.339, Insurance Code; and | ||
(K) under which the managed care organization [ |
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(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[ |
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similarly situated network pharmacy providers, as determined by the | ||
managed care organization [ |
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(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; | ||
(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 [ |
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(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. | ||
(a-2) Except as provided by Subsection (a)(23)(K)(viii), a | ||
maximum allowable cost list specific to a provider and maintained | ||
by a managed care organization [ |
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confidential. | ||
SECTION 2. Subchapter A, Chapter 533, Government Code, is | ||
amended by adding Section 533.00513 to read as follows: | ||
Sec. 533.00513. PROHIBITED SUBCONTRACTS. A managed care | ||
organization that contracts with the commission under this chapter | ||
to provide health care services to recipients may not contract with | ||
a pharmacy benefit manager for purposes of maintaining an | ||
outpatient pharmacy benefit plan for the organization's enrolled | ||
recipients as required by Section 533.005(a)(23). | ||
SECTION 3. 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 4. 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 who participates | ||
in the vendor drug program or is enrolled as a network pharmacy | ||
provider of a managed care organization contracting with the | ||
commission under Chapter 533, Government Code, [ |
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under the program. | ||
SECTION 5. Sections 533.003(b) and 533.056, Government | ||
Code, are repealed. | ||
SECTION 6. (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, | ||
Government Code, as amended by this Act, and Section 533.00513, | ||
Government Code, as added 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, Government Code, as amended by this Act, and Section | ||
533.00513, Government Code, as added by this Act. To the extent of | ||
a conflict between those sections 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 7. 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 8. This Act takes effect September 1, 2019. |