Office of House Bill AnalysisH.B. 1967
By: Najera
Public Health


Under current law, an individual that is at least 65 years of age or
suffers from a serious health care condition or disability is allowed three
prescriptions under the medicaid program.  In many cases this is not a
sufficient number of medication for proper treatment of a serious illness.
Those over 65 are significantly more likely to be regular users of
prescription drugs and to have numerous prescriptions in their medicine
cabinets.  At the same time, they are less likely to have prescription drug
coverage and more likely to have a problem paying for prescription drugs.
A lack of funds for prescriptions may lead to individuals neglecting their
health. Several states have recognized this problem and implemented
prescription drug programs to assist the elderly and the seriously ill.
House Bill 1967 creates a prescription drug plan for Texas residents. 


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 (Sections 65.051, 65.052, 65.053, 65.058, 65.101,
65.102, and 65.151, Health and Safety Code); to the Texas Department of
Health in SECTION 1 (Section 65.051, Health and Safety Code); to the Texas
Department of Human Services SECTION 1 (Section 65.051, Health and Safety
Code); and to the Texas Department of Insurance SECTION 1 (Section 65.054,
Health and Safety Code) of this bill. 


House Bill 1967 amends the Health and Safety Code to create a state
prescription drug plan (plan) to provide prescription drug benefits to
state residents who are at least 65 years of age or have a serious health
care condition (Sec. 65.001).  

The bill requires the Health and Human Services Commission (HHSC) to
develop and implement a plan program, not later than September 1, 2002, to
obtain coverage for prescription drug benefits program for eligible
individuals and sets forth duties of HHSC (Sec. 65.051 and SECTION 3). The
bill sets forth provisions relating to plan eligibility and requires HHSC
by rule to establish eligibility standards for Texas residents who have a
specified condition, disability, or disease (Sec. 65.101).   
The bill requires HHSC, in consultation with the commissioner of insurance
to establish by rule the benefits provided under the plan.  The bill
requires benefits provided under the plan to be coordinated with other
benefits for which an enrollee is eligible so that the plan benefits
supplement, but do not duplicate the other benefits.  The bill authorizes
the plan to use a prescription drug formulary (Sec. 65.151). 

The bill sets forth the duties of the Texas Department of Health (TDH), the
Texas Department of Human Services (DHS), and the Texas Department of
Insurance (TDI) in developing or implementing the plan under the direction
of or at the request of HHSC (Secs. 65.052, 65.053, and 65.054).  

In administering the program, the bill authorizes HHSC to contract with a
third party administrator to provide enrollment and related plan services
that would otherwise be performed by TDH or DHS.  The bill sets forth
provisions for contracting with a third party administrator and for the
procurement process associated with such contracts (Sec. 61.151).  The bill
sets forth requirements for selecting a plan provider  and requires HHSC,
or TDH at the direction of and in consultation with HHSC, to select the
plan providers under the program through a competitive procurement process
(Sec. 65.155).  The bill requires HHSC to conduct a review of each entity
that enters into a contract to implement the plan or that is selected to be
a provider to ensure that the entity is available, prepared, and able to
fulfill specified obligations (Sec. 65.051). 

The bill requires HHSC to appoint regional advisory committees to provide
specified recommendations and sets forth requirements for the composition
of such committees (Sec. 65.057).   

The bill requires HHSC to provide plan coverage at reduced premium rates to
individuals who satisfy specified eligibility requirements.  The bill
provides that HHSC shall require a plan enrollee to pay a copayment or
similar charge for prescription drugs provided under the plan and the plan
premium.  The bill requires reduced premium rates adopted to ensure that
individuals with higher levels of income are required to pay progressively
higher percentages of the cost of the plan.  The bill requires HHSC to
establish by rule eligibility standards for individuals to receive coverage
under the plan for a reduced premium.  In adopting such rules, the bill
requires HHSC to consult with the regional advisory committees.
Considering availability of appropriated funds, the bill provides that the
reduced premium eligibility standards must consider the family income of
the individual and be developed to provide the broadest possible
availability of reduced premium coverage under the program.  The bill
prohibits the consideration of a homestead in which the individual resides,
and one motor vehicle owned by the family.  The bill requires HHSC to
specify the manner in which the premium is paid, and authorizes HHSC to
require that the premium be paid to DHS, TDH, or a plan provider.  The bill
authorizes the commissioner of health and human services (commissioner) to
establish classes of enrollees and charge different amounts to enrollees in
different classes for specified purposes.  Not later than August 31 of each
even-numbered year, the bill requires the commissioner to obtain an
actuarial review of the costs of providing plan benefits to enrollees and
requires modifications based on the actuarial review (Sec. 65.153).  The
bill sets forth provisions relating to waiting periods for the plan and
preexisting conditions (Sec. 65.154). 

The bill requires HHSC to conduct a community outreach and education
campaign (campaign) to provide information relating to the availability of
plan coverage.  The campaign must include a toll-free number through which
individuals may obtain information about the program.  The bill requires
HHSC to contract with community-based and interfaith entities to implement
the campaign, and to promote and encourage voluntary efforts to implement
the campaign.  The bill requires HHSC to direct that TDH or DHS coordinate
the campaign (Sec. 65.056). 

The bill requires the commissioner and the office of the state auditor to
review the operation of the program at the conclusion of each fiscal
biennium, including evaluating the enrollment levels for individuals
receiving coverage under the plan at reduced premium rates.  The bill
requires the state auditor to assign a team of three persons from the
auditor's office to participate in such a review (Sec. 65.004). 

The bill requires HHSC, in consultation with the office of the attorney
general, to adopt and implement rules for the prevention and detection of
fraud in the program.  The rules must authorize the exclusion of any
individual who commits fraud from the plan after notice to the individual
and an opportunity for hearing (Sec. 65.058).  The bill sets forth
provisions relating to the confidentiality of information application forms
and procedures and eligibility screening and enrollment (Secs. 65.059,
65.103, and 65.104).  The bill provides that provisions relating to the
plan do not establish an entitlement to assistance in obtaining
prescription drug benefits (Sec. 65.003). 


On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.