By: Raymond H.B. No. 3732       A BILL TO BE ENTITLED   AN ACT   relating to prescription drug benefits under the Medicaid program.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 531.073(a), Government Code, is amended   to read as follows:          (a)  The executive commissioner, in the rules and standards   governing the Medicaid vendor drug program and the child health   plan program, shall require prior authorization for the   reimbursement of a drug that is not included in the appropriate   preferred drug list adopted under Section 531.072, except as   provided by Section 531.0731 and for any drug exempted from prior   authorization requirements by federal law. Except as provided by   Section 531.0731, the [The] executive commissioner may require   prior authorization for the reimbursement of a drug provided   through any other state program administered by the commission or a   state health and human services agency, including a community   mental health center and a state mental health hospital if the   commission adopts preferred drug lists under Section 531.072 that   apply to those facilities and the drug is not included in the   appropriate list. The executive commissioner shall require that the   prior authorization be obtained by the prescribing physician or   prescribing practitioner.          SECTION 2.  Subchapter B, Chapter 531, Government Code, is   amended by adding Section 531.0731 to read as follows:          Sec. 531.0731.  CONTINUITY OF CARE IN RELATION TO   PRESCRIPTION DRUGS.  The commission shall ensure that a   prescription drug prescribed to a person who is newly enrolled in   the child health plan program, Medicaid, or another state program   administered by the commission or a health and human services   agency, or who is newly enrolled in a Medicaid managed care health   plan, is not subject to a prior authorization requirement for up to   one year after the date of the person's enrollment, if:                (1)  the patient had previously been prescribed the   drug to treat a medical condition; and                (2)  the person's physician prescribes the drug to   treat the person's medical condition based on the physician's   determination that the prescription is the most appropriate course   of treatment for the medical condition.          SECTION 3.  Section 531.0736, Government Code, is amended by   amending Subsection (b) to read as follows:          (b)  In addition to performing any other duties required by   federal law, the board shall:                (1)  develop and submit to the commission   recommendations for preferred drug lists adopted by the commission   under Section 531.072;                (2)  suggest to the commission restrictions or clinical   edits on prescription drugs in accordance with Section 531.0738;                (3)  review existing restrictions or clinical edits on   prescription drugs for appropriateness in accordance with Section   531.0738;                (4)  recommend to the commission educational   interventions for Medicaid providers;                (5) [(4)]  review drug utilization across Medicaid;   and                (6) [(5)]  perform other duties that may be specified   by law and otherwise make recommendations to the commission.          SECTION 4.  Subchapter B, Chapter 531, is amended by adding   Sections 531.0738, 531.07381, 531.07382, and 531.07383 to read as   follows:          Sec. 531.0738.  DRUG UTILIZATION REVIEW BOARD: SUGGESTION   AND REVIEW OF RESTRICTIONS AND CLINICAL EDITS.  (a)  In performing   the requirements under Sections 531.0736(b)(2) and (3), the board   shall evaluate the appropriateness of and make a recommendation   regarding a restriction or clinical edit or protocol on a   prescription drug. The committee's evaluation and recommendation   must:                (1)  be based on only a determination of the safety and   efficacy of the restriction or clinical edit or protocol;                (2)  ensure the restriction or clinical edit is written   for the needs of all applicable populations, including pediatric   and obstetric populations; and                (3)  include an explanation of the basis for the   committee's recommendation that is written in such a way that would   allow a person without medical training to understand.          (b)  To perform the requirements under Section   531.0736(b)(3), the board shall establish a periodic review   schedule for existing restrictions or clinical edits or protocols.   The schedule must require review of a restriction or clinical edit   on a prescription drug no less frequently than once every two years.   A restriction or clinical edit on a prescription drug has no effect   and may not be enforced beginning on the date of the second   anniversary of the most recent review of the restriction or edit by   the board unless the restriction or clinical edit has been   evaluated and renewed by the board.          (c)  In determining the safety and efficacy of a restriction   or clinical edit, the board:                (1)  may consider public comment or clinical   information including scientific evidence, standards of practice,   peer-reviewed medical literature, randomized clinical trials,   pharmacoeconomic studies, and outcomes research data; and                (2)  may not rely solely on manufacturer package   inserts.          Sec. 531.07381.  SUSPENSION OF RESTRICTION OR CLINICAL EDIT   ON PRESCRIPTION DRUG.  The executive commissioner by rule shall   adopt a process by which the commission amends or suspends a   restriction or clinical edit on a prescription drug. The process   must:                (1)  allow providers or Medicaid managed care   organization medical or pharmacy directors to submit to the   commission evidence that the restriction or clinical edit:                      (A)  jeopardizes patient safety or care by   imposing undue administrative burdens to patients or providers; or                      (B)  is clinically inaccurate or otherwise   inappropriate;                (2)  require the commission's Medicaid medical director   to:                      (A)  review submitted clinical information to   determine whether the restriction or clinical edit should be   amended or suspended in the interest of patient safety or care; and                      (B)  submit a recommendation based on the medical   director's determination regarding the restriction or clinical   edit to the executive commissioner; and                (3)  no later than 10 business days after the date the   executive commissioner receives the medical director's   recommendation), require the executive commissioner to amend or   suspend the restriction or clinical edit in accordance with the   medical director's determination, as applicable.          Sec. 531.07382.  STEP THERAPY PROTOCOLS.  (a)  In this   section and in Section 531.07383:                (1)  "Clinical practice guideline" means a statement   systematically developed by physicians and other health care   providers to assist a patient or health care provider in making a   decision about appropriate health care for a specific clinical   circumstance or condition.                (2)  "Clinical review criteria" means the written   screening procedures, decision abstracts, clinical protocols, and   practice guidelines used by a health benefit plan issuer,   utilization review organization, or independent review   organization to determine the medical necessity and   appropriateness of a health care service or prescription drug.                (3)  "Step therapy protocol" means a protocol that   requires an enrollee to use a prescription drug or sequence of   prescription drugs other than the drug that the enrollee's   physician recommends for the enrollee's treatment before the health   benefit plan provides coverage for the recommended drug.          (b)  The commission may require a step therapy protocol   before providing coverage for a prescription drug only if the   commission establishes, implements, and administers the step   therapy protocol in accordance with clinical review criteria   readily available to the health care industry.  The clinical review   criteria must be based on:                (1)  generally accepted clinical practice guidelines   that are:                      (A)  developed and endorsed by a   multidisciplinary panel of experts described by Subsection (b); and                      (B)  based on high quality studies, research, and   medical practice that are:                            (i)  created by an explicit and transparent   process that:                                  (a)  minimizes bias and conflicts of   interest;                                  (b)  explains the relationship between   treatment options and outcomes;                                  (c)  rates the quality of the evidence   supporting the recommendations; and                                  (d)  considers relevant patient   subgroups and preferences; and                            (ii)  updated at appropriate intervals after   a review of new evidence, research, and treatments; or                (2)  if clinical practice guidelines described by   Subdivision (1) are not reasonably available, peer-reviewed   publications developed by independent experts, which must include   physicians, with expertise applicable to the relevant health   condition.          (c)  A multidisciplinary panel of experts consisting of   physicians and other health care providers that develops and   endorses clinical practice guidelines under Subsection (a)(1) must   manage conflicts of interest by:                (1)  requiring each member of the panel's writing or   review group to:                      (A)  disclose any potential conflict of interest,   including a conflict of interest involving an insurer, managed care   organization, or pharmaceutical manufacturer; and                      (B)  recuse himself or herself in any situation in   which the member has a conflict of interest;                (2)  using a methodologist to work with writing groups   to provide objectivity in data analysis and the ranking of evidence   by preparing evidence tables and facilitating consensus; and                (3)  offering an opportunity for public review and   comment.          (d)  This section may not be construed to prohibit:                (1)  the commission from requiring a patient to try an   AB-rated generic equivalent drug before providing coverage for the   equivalent branded prescription drug, unless the drug:                      (A)  has been demonstrated to be ineffective on   the patient;                      (B)  has caused an adverse reaction in or physical   or mental harm to the patient; or                      (C)  is likely to cause an adverse reaction in or   physical or mental harm to the patient; or                (2)  a prescribing provider from prescribing a   prescription drug that is determined to be medically appropriate.          Sec. 531.07383.  OVERRIDE OF RESTRICTIONS ON MEDICATION   SEQUENCE IN STEP THERAPY PROTOCOL.  (a)  The commission shall   establish a clear and convenient process for a prescribing health   professional to request electronically, in writing, or by phone an   override of a step therapy protocol.          (b)  The commission shall grant a request for an override of   a step therapy protocol to a prescribing health professional   within, subject to Subsections (c) and (d), a reasonable time after   the health professional completes the process for the request of   the override, if:                (1)  the prescribing health professional can   demonstrate that the patient has previously failed the preferred   treatment required under the step therapy protocol, or that the   preferred treatment or another drug in the same pharmacologic class   or with the same mechanism of action as the preferred treatment, has   been ineffective or had a diminished effect for the treatment of a   recipient's medical condition after two attempts of following the   protocol; or                (2)  based on sound clinical evidence or medical and   scientific evidence, the prescribing health professional can   demonstrate that the preferred treatment required under the step   therapy protocol:                      (A)  is expected or likely to be ineffective based   on the known relevant physical or mental characteristics of the   recipient and known characteristics of the drug regimen; or                      (B)  will cause or will likely cause an adverse   reaction in or physical or mental harm to the recipient.          (c)  Except as provided by Subsection (e), if the commission   does not deny an exception request described by Subsection (a)   before 48 hours after the commission receives the request, the   request is considered granted.          (d)  If an exception request described by Subsection (c) also   states that the prescribing provider reasonably believes that   denial of the request makes the death of or serious harm to the   patient probable, the request is considered granted if commission   does not deny the request before 24 hours after the organization   receives the request.          (e)  The process established under this section must allow a   prescribing health professional to appeal a denial of a request for   an override of a step therapy protocol to the commission's medical   director.          SECTION 5.  Section 531.0741, Government Code, is amended to   read as follows:          Sec. 531.0741.  PUBLICATION OF INFORMATION REGARDING   COMMISSION AND DRUG UTILIZATION REVIEW BOARD DECISIONS [ON   PREFERRED DRUG LIST PLACEMENT].  (a)  The commission shall publish   on the commission's Internet website any decisions on preferred   drug list placement, including:                (1)  a list of drugs reviewed and the commission's   decision for or against placement on a preferred drug list of each   drug reviewed;                (2)  for each recommendation, whether a supplemental   rebate agreement or a program benefit agreement was reached under   Section 531.070; and                (3)  the rationale for any departure from a   recommendation of the Drug Utilization Review Board under Section   531.0736.          (b)  The commission shall publish on the commission's   Internet website in a section of the website dedicated to   prescription drug information:                (1)  information on restrictions or clinical edits for   a prescription drug, including a preferred drug, including the   evaluation and recommendation required under Section 531.0738 that   relates to the restriction or clinical edit; and                (2)  the periodic review schedule established under   Section 531.0738(b).          (c)  The commission must publish the information required   under this section in a manner that would allow a provider to search   a preferred drug list to easily determine whether a prescription   drug or drug class is subject to any restrictions or clinical edits.          SECTION 6.  Subchapter B, Chapter 531, Government Code is   amended by adding Section 531.0761 to read as follows:          Sec. 531.0761.  PRESCRIPTION OF GENERIC EQUIVALENTS.  (a)   Notwithstanding any other section of law and in a manner that   complies with applicable federal law, the commission shall ensure   that a preferred drug list adopted by the commission for the   Medicaid vendor drug program and for prescription drugs purchased   through the child health plan program establishes a generic   equivalent of a prescribed drug as a preferred drug.          (b)  If a physician or other health care practitioner acting   within the practitioner's scope of delegated authority writes a   prescription for a generic equivalent of a prescribed drug, the   commission may not require the physician or practitioner to specify   the national drug code on the prescription.          Sec. 531.0762.  UPDATING NATIONAL DRUG CODES.  (a)  No later   than the 15th business day after the day the commission receives   notice from the Centers for Medicaid and Medicare Services that a   National Drug Code has been eliminated or changed, the commission   shall update its electronic database and notify Medicaid managed   care organizations.          SECTION 7.  Subchapter A, Chapter 533, Government Code, is   amended by adding Section 533.022 to read as follows:          Sec. 533.022.  PHARMACY BENEFIT PLAN REQUIREMENTS.  (a)  The   commission shall require that the pharmacy benefit plan of a   managed care organization that contracts with the commission to   provide health care services to recipients must:                (1)  adopt the restrictions or clinical edits as   recommended by the Drug Utilization Review Board under Section   531.0738 and impose no other restrictions or clinical edits than   those recommended by the board;                (2)  adopt the process adopted under Section 531.07381   for amending or suspending a restriction or clinical edit on a   prescription drug;                (3)  adhere to the step therapy guidelines and override   procedures under Sections 531.07382 and 531.07383, including a   procedure for an appeal under Section 531.07383(e) to the managed   care organization's medical director.          SECTION 8.  Section 533.005(a-1), Government Code, is   amended to read as follows:          (a-1)  The requirements imposed by Subsections (a)(23)(A),   (B), and (C) do not apply, and may not be enforced, on and after   August 31, 2030 [2018].          SECTION 9.  If before implementing any provision of this Act   a state agency determines that a waiver or authorization from a   federal agency is necessary for implementation of that provision,   the agency affected by the provision shall request the waiver or   authorization and may delay implementing that provision until the   waiver or authorization is granted.          SECTION 10.  (a) The Drug Utilization Review Board shall   establish a schedule for reviewing restrictions and clinical edits   on prescription drugs provided as benefits under the Medicaid   program as required by Section 531.0738, Government Code, as added   by this Act, no later than March 1, 2018.          (b)  The Drug Utilization Review Board shall complete a   review of all restrictions and clinical edits on prescription drugs   that are provided as benefits under the Medicaid program that are in   effect on the effective date of this Act, as required by Section   531.0738, Government Code, as added by this Act, no later than   September 1, 2018.          (c)  The Health and Human Services Commission may not allow a   restriction or clinical edit on a prescription drug provided as a   benefit under the Medicaid program to be enforced or to have any   effect before the Drug Utilization Review Board reviews the   restriction or clinical edit in accordance with Subsection (b) of   this SECTION, unless the Health and Human Services Commission   requires the enforcement or imposition of the restriction or   clinical edit by administrative rule or by contract with a managed   care organization that contracts with the commission to provide   health care benefits to enrollees in the Medicaid program.          SECTION 11.  This Act takes effect immediately if it   receives a vote of two-thirds of all the members elected to each     house, as provided by Section 39, Article III, Texas Constitution.   If this Act does not receive the vote necessary for immediate   effect, this Act takes effect September 1, 2017.