HBA-JRA H.B. 494 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 494
By: Maxey
Public Health
6/7/1999
Enrolled



BACKGROUND AND PURPOSE 

In September, 1997, the Texas Department of Health implemented a drug
manufacturing rebate program for the Chronically Ill and Disabled
Children's Services Program and the Kidney Health Program through the
Medicaid Vendor Drug Program.  Prior to the 76th Legislative Session, the
projected financial benefit to the state was not being fulfilled because
participation by a pharmaceutical manufacturer in the rebate program was
voluntary.  H.B. 494 requires manufacturers to participate in the rebate
program as a condition of covering the cost of the product and ensures that
rebate funds are returned to the Chronically Ill and Disabled Children's
Services Program and the Kidney Health Program. 

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 B, Chapter 32, 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 to require a recipient of medical
assistance purchasing drugs under the Kidney Health Care Program or the
Chronically Ill and Disabled Children's Services Program to exhaust drug
benefits available under the medical assistance program before reimbursing
the recipient, pharmacist, or other health care provider. 

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

Sec. 12.0125.  DRUG REBATES.  Requires the Texas Department of Health (TDH)
to develop a voluntary 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.
Requires TDH to consult with drug manufacturers to develop rebate amounts
for the new voluntary rebate program.  Prohibits the average percentage
savings from rebates from being less than the average percentage savings
from rebates in the Medicaid drug manufacturer rebate program.  Authorizes
amounts received under the drug rebate program established under this
section to be appropriated only for the Kidney Health Care Program and the
Chronically Ill and Disabled Children's Services Program. 

SECTION 3.  (a)  Requires TDH to consolidate the drug benefits components
of the Kidney Health Care Program and the Chronically Ill and Disabled
Children's Services Program with the Medicaid Vendor Drug Program, to the
extent authorized by federal law.   

(b)  Requires TDH to use the claims processing and program monitoring
procedures, prior authorization safeguards, dispute resolution procedures
and approval criteria, emergency access procedures, pharmacy network, and
reimbursement rates of the Medicaid Vendor  Drug Program for the
consolidated program, except as provided by Subsection (c) of this section. 

(c)  Requires TDH to develop reimbursement rates for drugs purchased by or
on behalf of a client of the Kidney Health Care Program and 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 TDH to obtain drug manufacturer rebates for drug purchases 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 voluntary drug rebate program as
added by this Act. 

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

SECTION 4.  Requires TDH to complete the implementation of the voluntary
drug manufacturer rebate program required by this Act before September 1,
1999,  and to complete the implementation of the consolidated program
required by SECTION 3 of this Act no later than March 1, 2001. 

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