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.