HBA-DMD H.B. 105 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 105
By: Alvarado
Public Health
2/9/1999
Introduced



BACKGROUND AND PURPOSE

Currently, three major health care programs are administered by the Texas
Department of Health (TDH) and offer client reimbursement for medications.
These programs are the Vendor Drug Program, Kidney Health Care Program, and
the Chronically Ill and Disabled Children's Services Program.  H.B. 105
combines the drug reimbursement portions of the Kidney Health Care and the
Chronically Ill and Disabled Children's Services programs with the Vendor
Drug Program.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Health and Human Services
Commission in SECTION 2 (Section 12.0125, Health and Safety Code) of this
bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 32B, Human Resources Code, by adding Section
32.0311, as        follows: 

Sec. 32.0311.  DRUG REIMBURSEMENT UNDER CERTAIN PROGRAMS.  Requires the
Health and Human Services Commission (HHS) to require the recipient of
medical assistance to exhaust drug benefits under the medical assistance
program before reimbursing the recipient, pharmacist, or other health care
provider for drugs purchased by or on behalf of the recipient under the
Kidney Health Care Program or the Chronically Ill and Disabled Children's
Services Program. 

SECTION 2.  Amends Chapter 12B, Health and Safety Code, by adding Section
12.0125, as         follows: 

Sec. 12.0125.  DRUG REBATES.  (a) Requires the Texas Department of Health
(TDH) to develop a drug manufacturer rebate program for drugs purchased by
or on behalf of a client of the Kidney Health Care Program or the
Chronically Ill and Disabled Children's Services Program for which rebates
are not available under the Medicaid drug manufacturer rebate program.   

(b) Requires the TDH to consult with drug manufacturers to develop rebate
amounts for the new rebate program.  Prohibits the average percentage
savings from rebates in the new program to be less than those in the
Medicaid drug manufacturer rebate program.   

(c) Authorizes the TDH, by rule, to require all drug manufacturers to
participate in the rebate program as a condition of reimbursement for the
manufacturers' drugs under the Kidney Health Care Program and the
Chronically Ill and Disabled Children's Services Program. 

SECTION 3. (a) Requires the Texas Department of Health (TDH), to the extent
authorized by federal law, to consolidate with the Medicaid Vendor Drug
Program the drug benefits components of the Kidney Health Care Program and
the Chronically Ill and Disabled Children's Services Program. 
 
(b) Requires the TDH to use the Medicaid Vendor Drug Program's claims
processing and program monitoring procedures, pharmacy network, and
reimbursement rates for the consolidated program, except as provided by
Subsection (c). 

(c) Requires the TDH to develop reimbursement rates for drugs purchased by
or on behalf of a client of the Kidney Health Care Program or the
Chronically Ill and Disabled Children's Services Program that are not
included in the Medicaid Vendor Drug Program's list of reimbursable drugs. 

(d) Requires the TDH to obtain drug manufacturer rebates for drugs
purchased by or on behalf of a client of the Kidney Health Care Program or
the Chronically Ill and Disabled Children's Services Program under the
Medicaid drug manufacturer rebate program and the drug rebate program
developed under Section 12.0125, Health and Safety Code, as added by this
Act. 

(e) Requires the TDH to update its computer system to facilitate the
consolidation. 

SECTION 4.  Requires the Texas Department of Health to complete the
implementation of the drug manufacturer rebate program by September 1,
1999, and  requires the Texas Department of Health to complete the
implementation of the consolidated program as required by Section 3 of this
bill not later than March 1, 2001. 


SECTION 5.  Emergency clause.
            Effective date:  upon passage.