HBA-MPM C.S.H.B. 1094 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1094 By: Gray Public Health 4/17/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE According to Families USA, the average cost per prescription for seniors rose 48 percent in the past eight years. A report released in 1999 revealed that the prices of the 50 prescription drugs most commonly used by senior citizens rose faster than the rate of inflation rate for each of the previous five years. Seniors are most affected by these rising prices, as those over age 65 are significantly more likely to be regular users of prescription drugs. Seniors are also less likely to be reimbursed for prescription drug purchases, as Medicare does not provide prescription drug coverage. One way for states to help seniors pay for prescription drugs is to create a pharmaceutical assistance program. According to the National Conference of State Legislatures, 26 states had authorized some type of pharmaceutical assistance program as of February 2001, 24 of which are currently in operation. C.S.H.B. 1094 establishes a state pharmaceutical assistance program similar to the Medicaid vendor drug program to provide prescription drug benefits to certain low-income Medicare recipients. 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 1 (Section 531.302, Government Code) of this bill. ANALYSIS C.S.H.B. 1094 amends the Government Code to require the Health and Human Services Commission (HHSC), no later than January 1, 2002, to develop and implement a state prescription drug program (program) that operates in the same manner as the Medicaid vendor drug program. The bill provides that a person is eligible for program benefits if the person is a qualified Medicare beneficiary (QMB), a specified low-income Medicare beneficiary (SLMB) who is eligible for Medicare cost-sharing payments, a qualified disabled and working individual (working disabled), and qualified individuals (QI-1 and QI-2). The bill specifies that the program may be funded only with state money unless funds are available under federal law to fund all or part of the program. The bill requires HHSC to adopt all rules necessary to implement the program, and in doing so, HHSC is authorized to: _require a person eligible for prescription drug benefits to pay a cost-sharing payment; _authorize the use of a prescription drug formulary to specify which prescription drugs the program will cover; _require prior authorization for prescription drug benefits under the program; and _establish a drug utilization review program to ensure the appropriate use of prescription drugs under the program. The bill authorizes HHSC in adopting rules to require that a pharmacist may select a generic equivalent of a prescribed drug unless the practitioner's signature on a prescription clearly indicates that the prescription must be dispensed as written. If money available for the state program is insufficient to provide prescription drug benefits to all eligible persons, HHSC is required to provide the benefits to eligible persons in the following order of priority: _QMBs; _SLMBs; and _the working disabled, QI-1 and QI-2s. EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 1094 differs from the original by expanding the list of individuals eligible for the state prescription drug program (program) to include qualified disabled and working individuals and qualified individuals. The substitute specifies the order of priority in which eligible program participants are required to receive prescription drug benefits if money for the program is insufficient to cover all eligible persons. The substitute specifies that the program may be funded with federal money, if funds are available under federal law to fund all or part of the program. The substitute removes provisions that the rules must be designed to result in a program that is substantively identical to the Medicaid vendor drug program. The substitute removes provisions in the original prohibiting the Health and Human Services Commission (HHSC) from requiring an eligible program participant to pay a premium, deductible, coinsurance, or other cost-sharing payment, and specifies that in adopting rules, HHSC may require an eligible participant to pay a cost-sharing premium, as well as adopt other rules regarding the use of a prescription drug formulary, prior authorization, and utilization of prescription drugs under the state program.