CHAPTER 1369. BENEFITS RELATED TO PRESCRIPTION DRUGS AND DEVICES AND RELATED SERVICES
INSURANCE CODE
TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES
SUBTITLE E. BENEFITS PAYABLE UNDER HEALTH COVERAGES
CHAPTER 1369. BENEFITS RELATED TO PRESCRIPTION DRUGS AND DEVICES
AND RELATED SERVICES
SUBCHAPTER A. COVERAGE OF PRESCRIPTION DRUGS IN GENERAL
Sec. 1369.001. DEFINITIONS. In this subchapter:
(1) "Contraindication" means the potential for, or the
occurrence of:
(A) an undesirable change in the therapeutic effect of a
prescribed drug because of the presence of a disease condition in
the patient for whom the drug is prescribed; or
(B) a clinically significant adverse effect of a prescribed drug
on a disease condition of the patient for whom the drug is
prescribed.
(2) "Drug" has the meaning assigned by Section 551.003,
Occupations Code.
(3) "Indication" means a symptom, cause, or occurrence in a
disease that points out the cause, diagnosis, course of
treatment, or prognosis of the disease.
(4) "Peer-reviewed medical literature" means scientific studies
published in a peer-reviewed national professional journal.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.002. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only 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 or similar coverage document that is offered
by:
(1) an insurance company;
(2) a group hospital service corporation operating under Chapter
842;
(3) a fraternal benefit society operating under Chapter 885;
(4) a stipulated premium company operating under Chapter 884;
(5) a reciprocal exchange operating under Chapter 942;
(6) a health maintenance organization operating under Chapter
843;
(7) a multiple employer welfare arrangement that holds a
certificate of authority under Chapter 846; or
(8) an approved nonprofit health corporation that holds a
certificate of authority under Chapter 844.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.003. EXCEPTION. This subchapter does not apply to:
(1) a health benefit plan that provides coverage:
(A) only for a specified disease or for another limited benefit;
(B) only for accidental death or dismemberment;
(C) for wages or payments in lieu of wages for a period during
which an employee is absent from work because of sickness or
injury;
(D) as a supplement to a liability insurance policy;
(E) for credit insurance;
(F) only for dental or vision care;
(G) only for hospital expenses; or
(H) only for indemnity for hospital confinement;
(2) a small employer health benefit plan written under Chapter
1501;
(3) a Medicare supplemental policy as defined by Section
1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss), as
amended;
(4) a workers' compensation insurance policy;
(5) medical payment insurance coverage provided under a motor
vehicle insurance policy; or
(6) a long-term care insurance policy, including a nursing home
fixed indemnity policy, unless the commissioner determines that
the policy provides benefit coverage so comprehensive that the
policy is a health benefit plan as described by Section 1369.002.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.004. COVERAGE REQUIRED. (a) A health benefit plan
that covers drugs must cover any drug prescribed to treat an
enrollee for a chronic, disabling, or life-threatening illness
covered under the plan if the drug:
(1) has been approved by the United States Food and Drug
Administration for at least one indication; and
(2) is recognized by the following for treatment of the
indication for which the drug is prescribed:
(A) a prescription drug reference compendium approved by the
commissioner for purposes of this section; or
(B) substantially accepted peer-reviewed medical literature.
(b) Coverage of a drug required under Subsection (a) must
include coverage of medically necessary services associated with
the administration of the drug.
(c) A health benefit plan issuer may not, based on a "medical
necessity" requirement, deny coverage of a drug required under
Subsection (a) unless the reason for the denial is unrelated to
the legal status of the drug use.
(d) This section does not require a health benefit plan to
cover:
(1) experimental drugs that are not otherwise approved for an
indication by the United States Food and Drug Administration;
(2) any disease or condition that is excluded from coverage
under the plan; or
(3) a drug that the United States Food and Drug Administration
has determined to be contraindicated for treatment of the current
indication.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.005. RULES. The commissioner may adopt rules to
implement this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
SUBCHAPTER B. COVERAGE OF PRESCRIPTION DRUGS SPECIFIED BY DRUG
FORMULARY
Sec. 1369.051. DEFINITIONS. In this subchapter:
(1) "Drug formulary" means a list of drugs:
(A) for which a health benefit plan provides coverage;
(B) for which a health benefit plan issuer approves payment; or
(C) that a health benefit plan issuer encourages or offers
incentives for physicians to prescribe.
(2) "Enrollee" means an individual who is covered under a group
health benefit plan, including a covered dependent.
(3) "Physician" means a person licensed as a physician by the
Texas State Board of Medical Examiners.
(4) "Prescription drug" has the meaning assigned by Section
551.003, Occupations Code.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.052. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a group health benefit plan that provides
benefits for medical or surgical expenses incurred as a result of
a health condition, accident, or sickness, including a group,
blanket, or franchise insurance policy or insurance agreement, a
group hospital service contract, or a group contract or similar
coverage document that is offered by:
(1) an insurance company;
(2) a group hospital service corporation operating under Chapter
842;
(3) a fraternal benefit society operating under Chapter 885;
(4) a stipulated premium company operating under Chapter 884;
(5) a reciprocal exchange operating under Chapter 942;
(6) a health maintenance organization operating under Chapter
843;
(7) a multiple employer welfare arrangement that holds a
certificate of authority under Chapter 846; or
(8) an approved nonprofit health corporation that holds a
certificate of authority under Chapter 844.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.053. EXCEPTION. This subchapter does not apply to:
(1) a health benefit plan that provides coverage:
(A) only for a specified disease or for another single benefit;
(B) only for accidental death or dismemberment;
(C) for wages or payments in lieu of wages for a period during
which an employee is absent from work because of sickness or
injury;
(D) as a supplement to a liability insurance policy;
(E) for credit insurance;
(F) only for dental or vision care;
(G) only for hospital expenses; or
(H) only for indemnity for hospital confinement;
(2) a small employer health benefit plan written under Chapter
1501;
(3) a Medicare supplemental policy as defined by Section
1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss), as
amended;
(4) a workers' compensation insurance policy;
(5) medical payment insurance coverage provided under a motor
vehicle insurance policy; or
(6) a long-term care insurance policy, including a nursing home
fixed indemnity policy, unless the commissioner determines that
the policy provides benefit coverage so comprehensive that the
policy is a health benefit plan as described by Section 1369.052.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.054. NOTICE AND DISCLOSURE OF CERTAIN INFORMATION
REQUIRED. An issuer of a group health benefit plan that covers
prescription drugs and uses one or more drug formularies to
specify the prescription drugs covered under the plan shall:
(1) provide in plain language in the coverage documentation
provided to each enrollee:
(A) notice that the plan uses one or more drug formularies;
(B) an explanation of what a drug formulary is;
(C) a statement regarding the method the issuer uses to
determine the prescription drugs to be included in or excluded
from a drug formulary;
(D) a statement of how often the issuer reviews the contents of
each drug formulary; and
(E) notice that an enrollee may contact the issuer to determine
whether a specific drug is included in a particular drug
formulary;
(2) disclose to an individual on request, not later than the
third business day after the date of the request, whether a
specific drug is included in a particular drug formulary; and
(3) notify an enrollee and any other individual who requests
information under this section that the inclusion of a drug in a
drug formulary does not guarantee that an enrollee's health care
provider will prescribe that drug for a particular medical
condition or mental illness.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.055. CONTINUATION OF COVERAGE REQUIRED; OTHER DRUGS
NOT PRECLUDED. (a) An issuer of a group health benefit plan
that covers prescription drugs shall offer to each enrollee at
the contracted benefit level and until the enrollee's plan
renewal date any prescription drug that was approved or covered
under the plan for a medical condition or mental illness,
regardless of whether the drug has been removed from the health
benefit plan's drug formulary before the plan renewal date.
(b) This section does not prohibit a physician or other health
professional who is authorized to prescribe a drug from
prescribing a drug that is an alternative to a drug for which
continuation of coverage is required under Subsection (a) if the
alternative drug is:
(1) covered under the group health benefit plan; and
(2) medically appropriate for the enrollee.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
For expiration of this section, see Subsection (c).
Sec. 1369.0551. STUDY. (a) The department shall conduct a
study to evaluate the ways in which pharmacy benefit managers use
prescription drug information to manage therapeutic drug
interchange programs and other drug substitution recommendations
made by pharmacy benefit managers or other similar entities. The
study must include information regarding pharmacy benefit
managers:
(1) intervening in the delivery or transmission of a
prescription from a prescribing health care practitioner to a
pharmacist for purposes of influencing the prescribing health
care practitioner's choice of therapy;
(2) recommending that a prescribing health care practitioner
change from the originally prescribed medication to another
medication, including generic substitutions and therapeutic
interchanges;
(3) changing a drug or device prescribed by a health care
practitioner without the consent of the prescribing health care
practitioner;
(4) changing a patient cost-sharing obligation for the cost of a
prescription drug or device, including placing a drug or device
on a higher formulary tier than the initial contracted benefit
level; and
(5) removing a drug or device from a group health benefit plan
formulary without providing proper enrollee notice.
(b) Not later than August 1, 2010, the department shall submit
to the governor, the lieutenant governor, the speaker of the
house of representatives, and the appropriate standing committees
of the legislature a report regarding the results of the study
required by Subsection (a), together with any recommendations for
legislation.
(c) This section expires September 1, 2010.
Added by Acts 2009, 81st Leg., R.S., Ch.
1033, Sec. 1, eff. September 1, 2009.
Added by Acts 2009, 81st Leg., R.S., Ch.
1207, Sec. 2, eff. September 1, 2009.
Sec. 1369.056. ADVERSE DETERMINATION. (a) The refusal of a
group health benefit plan issuer to provide benefits to an
enrollee for a prescription drug is an adverse determination for
purposes of Section 4201.002 if:
(1) the drug is not included in a drug formulary used by the
group health benefit plan; and
(2) the enrollee's physician has determined that the drug is
medically necessary.
(b) The enrollee may appeal the adverse determination under
Subchapters H and I, Chapter 4201.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2G.012, eff. April 1, 2009.
Sec. 1369.057. RULES. The commissioner may adopt rules to
implement this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
SUBCHAPTER C. COVERAGE OF PRESCRIPTION CONTRACEPTIVE DRUGS AND
DEVICES AND RELATED SERVICES
Sec. 1369.101. DEFINITIONS. In this subchapter:
(1) "Enrollee" means a person who is entitled to benefits under
a health benefit plan.
(2) "Outpatient contraceptive service" means a consultation,
examination, procedure, or medical service that is provided on an
outpatient basis and that is related to the use of a drug or
device intended to prevent pregnancy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.102. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a health benefit plan, including a small employer
health benefit plan written under Chapter 1501, 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 or similar coverage
document that is offered by:
(1) an insurance company;
(2) a group hospital service corporation operating under Chapter
842;
(3) a fraternal benefit society operating under Chapter 885;
(4) a stipulated premium company operating under Chapter 884;
(5) a reciprocal exchange operating under Chapter 942;
(6) a health maintenance organization operating under Chapter
843;
(7) a multiple employer welfare arrangement that holds a
certificate of authority under Chapter 846; or
(8) an approved nonprofit health corporation that holds a
certificate of authority under Chapter 844.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.103. EXCEPTION. This subchapter does not apply to:
(1) a health benefit plan that provides coverage only:
(A) for a specified disease or for another limited benefit other
than for cancer;
(B) for accidental death or dismemberment;
(C) for wages or payments in lieu of wages for a period during
which an employee is absent from work because of sickness or
injury;
(D) as a supplement to a liability insurance policy;
(E) for credit insurance;
(F) for dental or vision care; or
(G) for indemnity for hospital confinement;
(2) a Medicare supplemental policy as defined by Section
1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss), as
amended;
(3) a workers' compensation insurance policy;
(4) medical payment insurance coverage provided under a motor
vehicle insurance policy; or
(5) a long-term care insurance policy, including a nursing home
fixed indemnity policy, unless the commissioner determines that
the policy provides benefit coverage so comprehensive that the
policy is a health benefit plan as described by Section 1369.102.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.104. EXCLUSION OR LIMITATION PROHIBITED. (a) A
health benefit plan that provides benefits for prescription drugs
or devices may not exclude or limit benefits to enrollees for:
(1) a prescription contraceptive drug or device approved by the
United States Food and Drug Administration; or
(2) an outpatient contraceptive service.
(b) This section does not prohibit a limitation that applies to
all prescription drugs or devices or all services for which
benefits are provided under a health benefit plan.
(c) This section does not require a health benefit plan to cover
abortifacients or any other drug or device that terminates a
pregnancy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.105. CERTAIN COST-SHARING PROVISIONS PROHIBITED. (a)
A health benefit plan may not impose a deductible, copayment,
coinsurance, or other cost-sharing provision applicable to
benefits for prescription contraceptive drugs or devices unless
the amount of the required cost-sharing is the same as or less
than the amount of the required cost-sharing applicable to
benefits for other prescription drugs or devices under the plan.
(b) A health benefit plan may not impose a deductible,
copayment, coinsurance, or other cost-sharing provision
applicable to benefits for outpatient contraceptive services
unless the amount of the required cost-sharing is the same as or
less than the amount of the required cost-sharing applicable to
benefits for other outpatient services under the plan.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.106. CERTAIN WAITING PERIODS PROHIBITED. (a) A
health benefit plan may not impose a waiting period applicable to
benefits for prescription contraceptive drugs or devices unless
the waiting period is the same as or shorter than any waiting
period applicable to benefits for other prescription drugs or
devices under the plan.
(b) A health benefit plan may not impose a waiting period
applicable to benefits for outpatient contraceptive services
unless the waiting period is the same as or shorter than any
waiting period applicable to benefits for other outpatient
services under the plan.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.107. PROHIBITED CONDUCT. A health benefit plan issuer
may not:
(1) solely because of the applicant's or enrollee's use or
potential use of a prescription contraceptive drug or device or
an outpatient contraceptive service, deny:
(A) the eligibility of an applicant to enroll in the plan;
(B) the continued eligibility of an enrollee for coverage under
the plan; or
(C) the eligibility of an enrollee to renew coverage under the
plan;
(2) provide a monetary incentive to an applicant for enrollment
or an enrollee to induce the applicant or enrollee to accept
coverage that does not satisfy the requirements of this
subchapter; or
(3) reduce or limit a payment to a health care professional, or
otherwise penalize the professional, because the professional
prescribes a contraceptive drug or device or provides an
outpatient contraceptive service.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.108. EXEMPTION FOR ENTITIES ASSOCIATED WITH RELIGIOUS
ORGANIZATION. (a) This subchapter does not require a health
benefit plan that is issued by an entity associated with a
religious organization or any physician or health care provider
providing medical or health care services under the plan to
offer, recommend, offer advice concerning, pay for, provide,
assist in, perform, arrange, or participate in providing or
performing a medical or health care service that violates the
religious convictions of the organization, unless the
prescription contraceptive coverage is necessary to preserve the
life or health of the enrollee.
(b) An issuer of a health benefit plan that excludes or limits
coverage for medical or health care services under this section
shall state the exclusion or limitation in:
(1) the plan's coverage document;
(2) the plan's statement of benefits;
(3) plan brochures; and
(4) other informational materials for the plan.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.109. ENFORCEMENT. A health benefit plan issuer that
violates this subchapter is subject to the enforcement provisions
of Subtitle B, Title 2.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
SUBCHAPTER D. PHARMACY BENEFIT CARDS
Sec. 1369.151. APPLICABILITY OF SUBCHAPTER. (a) This
subchapter applies only 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 or similar coverage
document that is offered by:
(1) an insurance company;
(2) a group hospital service corporation operating under Chapter
842;
(3) a fraternal benefit society operating under Chapter 885;
(4) a stipulated premium company operating under Chapter 884;
(5) a reciprocal exchange operating under Chapter 942;
(6) a health maintenance organization operating under Chapter
843;
(7) a multiple employer welfare arrangement that holds a
certificate of authority under Chapter 846; or
(8) an approved nonprofit health corporation that holds a
certificate of authority under Chapter 844.
(b) Notwithstanding any other law, this subchapter applies to
coverage under:
(1) the basic coverage plan under Chapter 1551;
(2) the basic plan under Chapter 1575;
(3) the primary care coverage plan under Chapter 1579;
(4) the basic coverage plan under Chapter 1601;
(5) the child health plan program under Chapter 62, Health and
Safety Code; and
(6) the medical assistance program under Chapter 32, Human
Resources Code.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1117, Sec. 1, eff. September 1, 2009.
Sec. 1369.152. EXCEPTION. This subchapter does not apply to:
(1) a health benefit plan that provides coverage:
(A) only for a specified disease or for another limited benefit;
(B) only for accidental death or dismemberment;
(C) for wages or payments in lieu of wages for a period during
which an employee is absent from work because of sickness or
injury;
(D) as a supplement to a liability insurance policy;
(E) for credit insurance;
(F) only for dental or vision care;
(G) only for hospital expenses; or
(H) only for indemnity for hospital confinement;
(2) a small employer health benefit plan written under Chapter
1501;
(3) a Medicare supplemental policy as defined by Section
1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
(4) a workers' compensation insurance policy;
(5) medical payment insurance coverage provided under a motor
vehicle insurance policy; or
(6) a long-term care insurance policy, including a nursing home
fixed indemnity policy, unless the commissioner determines that
the policy provides benefit coverage so comprehensive that the
policy is a health benefit plan as described by Section 1369.151.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1369.153. INFORMATION REQUIRED ON IDENTIFICATION CARD. (a)
An issuer of a health benefit plan that provides pharmacy
benefits to enrollees shall include on the front of the
identification card of each enrollee:
(1) the name of the entity administering the pharmacy benefits
if the entity is different from the health benefit plan issuer;
(2) the group number applicable to the enrollee;
(3) the identification number of the enrollee, which may not be
the enrollee's social security number;
(4) the bank identification number necessary for electronic
billing;
(5) the effective date of the coverage evidenced by the card;
and
(6) copayment information for generic and brand-name
prescription drugs.
(b) In addition to the information required under Subsection
(a), the issuer of a health benefit plan shall include on the
identification card of each enrollee:
(1) the logo of the entity administering the pharmacy benefits
if the entity is different from the health benefit plan issuer;
and
(2) a telephone number for contacting an appropriate person to
obtain information relating to the pharmacy benefits provided
under the plan.
(c) In addition to complying with Subsections (a) and (b), an
issuer of a health benefit plan may provide the information
required under Subsections (a) and (b) in electronically readable
form on the back of the identification card.
(d) This section does not require a health benefit plan issuer
that administers its own pharmacy benefits to issue an
identification card separate from any identification card issued
to an enrollee to evidence coverage under the plan if the
identification card issued to evidence coverage contains the
information required by Subsections (a) and (b).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1117, Sec. 2, eff. September 1, 2009.
Sec. 1369.154. RULES. (a) The commissioner shall adopt rules
as necessary to implement this subchapter.
(b) Rules adopted by the commissioner must be consistent with
national standards established by the Workgroup for Electronic
Data Interchange or by other similar organizations recognized by
the commissioner.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1117, Sec. 3, eff. September 1, 2009.