HBA-MSH S.B. 804 77(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 804
By: Madla
Insurance
4/22/2001
Engrossed



BACKGROUND AND PURPOSE 

Current law requires a group health benefit plan that offers prescription
drug benefits to make a prescription drug that was approved or covered for
a medical condition or mental illness available to each enrollee at the
contracted benefit level until the enrollee's plan renewal date, regardless
of whether the prescribed drug has been removed from the health benefit
plan's drug formulary. This requirement has necessitated the development of
multiple formularies by the health plans and has created administrative
problems. Senate Bill 804 requires a health plan to make available a
prescription drug that was previously prescribed for an enrollee and was
available at the beginning of the plan year.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of insurance in
SECTION 2 (Section 4, Article 21.52J, Insurance Code) and SECTION 3
(Section 6, Article 21.52J, Insurance Code) of this bill. 

ANALYSIS

Senate Bill 804 amends the Insurance Code to require a group health benefit
plan (benefit plan) that offers prescription drug benefits to make a
prescription drug that at the beginning of the plan year was included in
the plan's formulary available to an enrollee at the contracted benefit
level for that drug until the enrollee's plan renewal date, regardless of
whether the prescribed drug has been removed from the health benefit plan's
drug formulary if the drug was at any time previously prescribed to the
enrollee. The bill provides that this does not require a benefit plan to
continue to provide prescription drug benefits for a prescription drug if
the United States Food and Drug Administration (FDA) prohibits the sale or
use of the drug or the use of the drug as prescribed to an enrollee or the
FDA or the drug's manufacturer identifies a side effect, adverse reaction,
or other health risk associated with the drug that was unknown at the time
the drug was prescribed to the enrollee or is substantially more severe as
determined under rules adopted by the commissioner of insurance
(commissioner) than was believed at the time the drug was prescribed to the
enrollee. 

The bill authorizes the commissioner to adopt rules governing documents or
other evidence that must be accepted as an initial showing that a drug was
at any time previously prescribed to an enrollee.  

The bill requires a benefit plan that covers prescription drugs and that
uses one or more formularies to specify which prescription drugs the plan
will cover to provide to each enrollee a statement of the enrollee's right
to complain in a circumstance in which benefits for a drug are denied
because the drug is not included in the plan's drug formulary. The bill
authorizes an enrollee who is denied benefits to file a complaint in
accordance with the complaint procedures of the benefit plan. 

EFFECTIVE DATE

September 1, 2001. The Act applies only to a group health benefit plan that
is delivered, issued for delivery, or renewed on or after January 1, 2002.