HBA-TYH C.S.H.B. 2061 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2061 By: Averitt Insurance 4/5/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, Texas is one of the few large states not providing medical access to "off-label" uses of certain drugs. An "off-label" use involves using a federal Food and Drug Administration (FDA) approved drug that is already deemed safe and effective for one medical condition to treat another medical condition. Although such "off-label" uses are often supported by scientific research and detailed in peer-reviewed studies, health plans and health maintenance organization (HMOs) have denied coverage for their use by claiming the use to be "experimental or insignificant." Twenty-six states have enacted legislation to cover at least some medically accepted off-label uses of FDA-approved drugs. For example, 12 states guarantee off-label drugs for persons who have cancer or AIDS so long as the uses are supported by standard drug compendia, peer-reviewed research, or government review panels. Additionally, eight states have enacted laws guaranteeing all persons coverage, not just persons with special health care needs, for all off-label uses of the FDA-approved drugs prescribed by their physician. C.S.H.B. 2061 allows certain prescription drugs to be available for health benefit plan enrollees that suffer from chronic, disabling, or life-threatening illnesses, as long as the drug has been approved by the FDA, is supported by clinical research that appears in peer-reviewed literature for the medical condition, or is supported or accepted in a prescription drug reference compendium approved by the commissioner of insurance. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter E, Chapter 21, Insurance Code, by adding Article 21.53M, as follows: Art. 21.53M. COVERAGE FOR OFF-LABEL DRUG USE Sec. 1. DEFINITIONS. Defines "contraindication," "drug," "health benefit plan," "indication," and "peer-reviewed medical literature." Sec. 2. SCOPE OF ARTICLE. Provides that this article applies to a health benefit plan that provides benefits for medical or surgical expenses incurred as a result of a health condition, accident, or sickness, including an individual, group, blanket, or franchise insurance policy or insurance agreement, a group hospital service contract, or an individual or group evidence of coverage that is offered by the enumerated entities, including a reciprocal exchange, a multiple employer welfare arrangement, or an approved nonprofit arrangement. Provides that this article does not apply to the enumerated plans including a plan that provides coverage only for indemnity for hospital confinement. Sec. 3. MINIMUM STANDARDS OF COVERAGE. (a) Provides that a health benefit plan that provides coverage for drugs must provide coverage for any drug prescribed to treat an enrollee for a covered chronic, disabling, or life-threatening illness if the drug has been approved by the Food and Drug Administration (FDA) for at least one indication and is recognized for treatment of the indication for which the drug is prescribed in a prescription drug reference compendium approved by the commissioner for the purpose of this article, or substantially accepted peer-reviewed medical literature. (b) Requires coverage of a drug to include coverage of medically necessary services associated with the administration of the drug. (c) Prohibits a drug use to be denied coverage based on a "medical necessity" requirement except for reasons that are unrelated to the legal status of the drug use. (d) Provides that this section does not require coverage for experimental drugs not otherwise approved for any indication by the FDA, or any disease or condition that is excluded from coverage under the plan. (e) Provides that a health benefit plan is not required to cover a drug the FDA has determined to be contraindicated for treatment of the current indication. SECTION 2.Effective date: September 1, 1999. Makes application of this Act prospective, as of January 1, 2000. SECTION 3.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original bill by redesignating the proposed Article 21.53H to Article 21.53M and changing the proposed heading from "COVERAGE FOR OFF-LABEL USES OF FDAAPPROVED DRUGS" to "COVERAGE FOR OFF-LABEL DRUG USE." The substitute further modifies the original as follows: Sec. 1. Deletes proposed definition of "standard reference compendia" and "FDA." Adds the definition of "drug." Modifies original bill to make nonsubstantive format changes. Sec. 2. Deletes the condition proposed in the original that this article applies only to health benefit plans "that provides coverage for drugs." Includes in the applicability of this article, a reciprocal exchange, a multiple employer welfare arrangement, and an approved welfare arrangement. Deletes proposed applicable conditions for a multiple employer welfare arrangement and an approved nonprofit health corporation. Provides that this article does not apply to a plan that provides coverage only for hospital confinement. Modifies original bill to make nonsubstantive format changes and conforming changes. Sec. 3. Provides that a health benefit plan must, rather than requires a health benefit plan to, provide coverage for any drug prescribed to treat an enrollee for the specific covered diseases under the enumerated conditions, including if the drug is recognized for treatment of the indication for which the drug is prescribed in a prescription drug reference compendium "approved by the commissioner for the purposes of this article." Provides that this section does not require coverage for any disease or condition that is excluded from coverage under the plan. Modifies original bill to make nonsubstantive format changes and conforming changes.