28 TAC §§21.3001, 21.3010, 21.3011, 21.3020 - 21.3023
The Texas Department of Insurance proposes new §§21.3001,
21.3010 - 21.3011, and 21.3020 - 21.3023, concerning pharmacy benefits. These
new sections are necessary to implement the provisions of Article 21.52J and
21.53M, as added by Acts 1999, 76th Legislature, in Senate Bill (SB) 1030
and House Bill (HB) 2061, respectively. The proposed sections of this rule
are necessary to allow certain prescription drugs to be available for off-label
use for health benefit plan enrollees that suffer from chronic, disabling,
or life-threatening illnesses; to permit group health benefit plan enrollees
to continue to use prescribed formulary drugs until their group health benefit
plan's renewal date, even if a prescribed drug has been removed from the formulary;
and to permit a group health benefit plan enrollee to appeal, using the independent
review process, if a physician prescribes a medically necessary nonformulary
drug, and the group health benefit plan refuses to provide coverage for such
drug.
Proposed §21.3001 sets forth the scope and purpose of this subchapter,
and contains a severability clause. Proposed §21.3010 contains definitions
relating to coverage of off-label drugs. Proposed §21.3011 requires health
benefit plans to provide coverage for a drug prescribed for an off-label use
to treat a covered chronic, disabling, or life-threatening illness or condition
if the drug meets certain requirements. The proposed section also requires
coverage for any services, and in some instances, supplies, that are medically
necessary to administer such a drug. The section also sets forth when a health
benefit plan may deny coverage for such drugs.
Proposed §21.3020 contains definitions relating to use of a prescription
drug formulary by a group health benefit plan. Proposed §21.3021 requires
group health benefit plans using one or more drug formularies to provide the
disclosures required by Insurance Code Article 21.52J. This proposed section
also sets forth the time limit by which an issuer of a group health benefit
plan must respond to a written or oral request from any individual as to whether
a specific prescription drug is on a formulary of the group health benefit
plan. Proposed §21.3022 addresses continued coverage of a drug after
it has been removed from a group health benefit plan's drug formulary, or
if the plan uses a multi-tier formulary, when the drug has been removed from
one formulary tier and placed on another formulary tier. The proposed section
also addresses group health benefit plans that implement a multi-tier formulary
after an enrollee becomes covered for prescription drug benefits. §21.3023
permits an enrollee of a group health benefit plan to use the appeal process
provided by Insurance Code Article 21.58A, when the issuer of a group health
benefit plan refuses to provide coverage for a prescription drug not included
in a drug formulary.
The department will consider the adoption of amendments to §§21.3001,
21.3010 - 21.3011, and 21.3020 - 21.3023 in a public hearing under Docket
Number 2454, scheduled for 10:00 a.m. on September 7, 2000, in Room 100 of
the William P. Hobby, Jr. State Office Building, 333 Guadalupe Street, Austin,
Texas. In addition, under Docket No. 2453, scheduled for the same date and
time, the department will consider the proposal of amendments to §§21.3002
- 21.3005, which was published in the July 14, 2000, issue of the
Texas Register
(25 TexReg 6649).
Kim Stokes, Senior Associate Commissioner, Life, Health and Licensing,
has determined that for each year of the first five years the proposed sections
will be in effect, there will be no fiscal impact to state and local governments
as a result of the enforcement or administration of the rule. There will be
no measurable effect on local employment or the local economy as a result
of the proposal.
Ms. Stokes has also determined that for each year of the first five years
the sections are in effect, the public benefits anticipated as a result of
the proposed sections will be increased access to certain prescription drugs
and drug uses by enrollees with chronic, disabling, or life-threatening illnesses
or conditions; increased consumer protection to individuals needing certain
information about prescription drug coverage by their group health benefit
plans, including the use of drug formularies by those plans; and continued
access to certain prescription drugs for enrollees of group health benefit
plans until the group health benefit plan renewal date. The probable economic
cost to persons required to comply with the sections for each year of the
first five years the sections are in effect, are the result of the legislative
enactment of Insurance Code Articles 21.52J and 21.53M, and are not the result
of the adoption, enforcement, or administration of the proposed new sections.
As such, there will also be no adverse economic effect on small or micro businesses.
Additionally, because the requirements of this rule are mandated by the underlying
state statutes, and considering the statutes' purposes, it is neither legal
nor feasible to waive or modify the requirements of these sections for small
and micro businesses, as doing so would result in a disparate effect on enrollees
and other persons affected by these proposed sections.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on September 5, 2000, to Lynda H. Nesenholtz, General
Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance,
P. O. Box 149104, Austin, Texas 78714-9104. An additional copy of the comment
must be simultaneously submitted to Diane Moellenberg, Chief Director, Regulatory
Development, Mail Code 107-2A, Texas Department of Insurance, P.O. Box 149104,
Austin, Texas 78714-9104.
The amendments are proposed under the Insurance Code Articles
21.52J and 21.53M and §36.001. Insurance Code Articles 21.52J and 21.53M
provide that the commissioner may adopt rules to implement these articles.
Section 36.001 provides that the Commissioner of Insurance may adopt rules
for the conduct and execution of the powers and duties of the department only
as authorized by statute.
The following articles are affected by this proposal: Insurance Code Articles
21.52J and 21.53M.
§21.3001.Scope and Severability.
(a)
Scope. This subchapter implements the provisions of Insurance
Code Articles 21.07-6, Sec. 19A; 21.52J; 21.53L; and 21.53M as follows:
(1)
Sections 21.3002 - 21.3005 of this subchapter implement
the provisions of Insurance Code Articles 21.07-6, Sec. 19A, and 21.53L, and
relate to pharmacy identification cards.
(2)
Sections 21.3010 - 21.3011 of this subchapter implement
the provisions of Insurance Code Article 21.53M, and relate to coverage of
off-label drugs.
(3)
Sections 21.3020 - 21.3023 of this subchapter implement
the provisions of Insurance Code Article 21.52J, and relate to the use of
a drug formulary by a group health benefit plan.
(b)
Severability. If a court of competent jurisdiction holds
that any provision of this subchapter is inconsistent with any statutes of
this state, is unconstitutional, or for any other reason is invalid, the remaining
provisions shall remain in full effect. If a court of competent jurisdiction
holds that the application of any provision of this subchapter to particular
persons, or in particular circumstances, is inconsistent with any statutes
of this state, is unconstitutional, or for any other reason is invalid, the
provision shall remain in full effect as to other persons or circumstances.
§21.3010.Definitions; Coverage of Off-Label Drugs.
The following words and terms, when used in §§21.3010 - 21.3011
of this subchapter (relating to off-label drugs) shall have the following
meanings, unless the context clearly indicates otherwise:
(1)
Chronic illness -- A disease, syndrome, or condition of
expected long duration, showing little change or slow progression.
(2)
Contraindication -- As defined in Insurance Code Article
21.53M.
(3)
Disabling illness -- A disease, syndrome, or condition
determined by an enrollee's health care practitioner to have caused or have
the potential to cause:
(A)
a physical or mental impairment that substantially limits,
or may limit, one or more of the activities of daily living of the enrollee
including, but not limited to, eating, bathing, dressing, grooming, routine
hair and skin care, meal preparation, exercising, toileting, and transfer
and ambulation;
(B)
an impairment substantially limiting an enrollee's cognitive
acuity;
(C)
an impairment substantially limiting an enrollee's ability
to work, home-make, or engage in leisure or educational activities; or
(D)
a condition regarded as an impairment by an enrollee's
licensed health care practitioner.
(4)
Drug -- As defined in the Texas Pharmacy Act, Occupations
Code §551.003.
(5)
Enrollee -- A person covered by a health benefit plan.
(6)
Health benefit plan -- As described in Insurance Code Article
21.53M. This term includes health benefit plans providing coverage for pharmacy
benefits only.
(7)
Health care practitioner -- An advanced practice nurse,
doctor of medicine, doctor of dentistry, physician assistant, doctor of osteopathy,
doctor of podiatry, or other licensed person with prescriptive authority.
(8)
Impairment -- Any loss or abnormality of psychological,
physiological, or anatomical structure or function.
(9)
Indication --As defined in Insurance Code Article 21.53M.
(10)
Life-threatening illness -- A disease or condition for
which the likelihood of death is probable unless the course of the disease
or condition is interrupted.
(11)
Off-label drug use -- The use of a drug that is approved
by the Food and Drug Administration for the treatment of one medical condition,
but is used to treat another medical condition, or at different dosage forms,
dosage regimens, populations, or other parameters not mentioned in the approved
labeling.
(12)
Peer-reviewed medical literature -- A published scientific
study in a journal or other publication in which original manuscripts are
published only after they have been critically reviewed by unbiased independent
experts in the same field, for scientific accuracy, validity, and reliability,
and have been determined by the International Committee of Medical Journal
Editors to have met the Uniform Requirements for Manuscripts submitted to
biomedical journals. Peer-reviewed medical literature does not include publications
or supplements to publications that are sponsored to a significant extent
by a pharmaceutical manufacturing company or health carrier.
(13)
Standard drug reference compendia --
(A)
The American Hospital Formulary Service-Drug Information;
(B)
The American Medical Association Drug Evaluation; or
(C)
The United States Pharmacopoeia-Drug Information.
§21.3011.Minimum Standards of Coverage for Off-Label Drug Use.
(a)
Health benefit plans that provide coverage for drugs shall
provide coverage for any drug prescribed to treat an enrollee for a covered
chronic, disabling, or life-threatening illness if the drug:
(1)
has been approved by the Food and Drug Administration for
at least one indication; and
(2)
is recognized for treatment of the indication for which
the drug is prescribed in:
(A)
a standard drug reference compendium; or
(B)
substantially accepted peer-reviewed medical literature.
(b)
Coverage of a drug required under subsection (a) of this
section:
(1)
shall include services medically necessary to administer
the drug, including any supply medically necessary to administer the drug,
if the supply is a covered benefit under the health benefit plan;
(2)
may be denied based on a finding that the use of the drug
is not medically necessary to treat the enrollee's disease, syndrome, or condition,
so long as the finding is not based on the fact that the drug is being prescribed
for an off-label use;
(3)
may not be denied solely on the basis that the drug does
not appear on the formulary. If a health benefit plan refuses to provide an
off-label drug that is not included in a drug formulary, and the enrollee's
physician or provider has determined is medically necessary for an off-label
use, the refusal constitutes an adverse determination for purposes of Insurance
Code Article 21.58A, §2. An enrollee may appeal the adverse determination
under §§6 and 6A of Article 21.58A.
(4)
may be denied for a drug prescribed to treat any disease
or condition that is excluded from coverage under the health benefit plan;
or
(5)
may be denied for a drug that the Food and Drug Administration
has determined to be a contraindication for treatment of the current disease
or condition.
§21.3020.Definitions; Prescription Drug Formulary.
The following words and terms, when used in §§21.3020-21.3023
of this subchapter (relating to prescription drug formulary benefits), shall
have the following meanings, unless the context clearly indicates otherwise:
(1)
Adverse determination -- A determination upon utilization
review that the health care services furnished or proposed to be furnished
to an enrollee are not medically necessary or not appropriate.
(2)
Contracted benefit level -- The copayment amount or coinsurance
percentage established at the beginning of the current plan year and set forth
in the coverage documentation.
(3)
Coverage documentation -- A policy, certificate of coverage,
evidence of coverage, enrollee handbook, or a plan document distributed by
an issuer, or its delegated entity, to an enrollee or to the master contract
holder, for distribution to enrollees.
(4)
Delegated entity -- An entity, which by itself or through
one or more entities, including but not limited to third-party administrators
and pharmacy benefit managers, as those terms are defined in Insurance Code
Article 21.07-6, which provides reimbursement for covered services or undertakes
to arrange for or provide benefits or services to an enrollee under a group
health benefit plan, and which performs on behalf of the issuer of a group
health benefit plan, any function regulated by §§21.3020 - 21.3023
of this subchapter.
(5)
Drug formulary - A list of drugs for which a health benefit
plan provides coverage, approves payment, or encourages or offers incentives
for physicians or other health care providers to prescribe.
(6)
Enrollee -- As defined in Insurance Code Article 21.52J.
(7)
Group health benefit plan -- As described in Insurance
Code Article 21.52J. This term includes group health benefit plans providing
coverage for pharmacy benefits only.
(8)
Issuer -- Those entities identified in Insurance Code Article
21.52J, Sec. 2(a)(1)-(8).
(9)
Multi-tier formulary -- A drug formulary with benefit levels
in addition to generic and brand name prescription drug benefit levels.
(10)
Plain language -- As prescribed in §3.602 of this
title (relating to Plain Language Requirements).
(11)
Plan year -- A 365-day period that begins on the date
the group health benefit plan's coverage commences, or a period of one full
calendar year as defined in the group health benefit plan's coverage documentation.
(12)
Prescription drug -- As defined in Insurance Code Article
21.52J.
(13)
Renewal date -- For each group health benefit plan, the
earlier of the date specified in the coverage documentation for renewal or
the policy anniversary date. In determining the renewal date for association
or multiple employer trust group health benefit plans, issuers may use the
date specified for renewal or the policy anniversary date of either the master
contract, plan document, or certificate of coverage of each group in the association
or trust. Issuers shall use the same method of determining renewal dates for
all group health benefit plans.
§21.3021.Required Disclosure of Drug Formulary.
(a)
An issuer of a group health benefit plan that covers prescription
drugs and that uses one or more drug formularies, or its delegated entity,
shall provide, in plain language, the disclosures required by Insurance Code
Article 21.52J, §3.
(b)
The plain language notice provided to the enrollee shall
include the address and telephone number where the enrollee may contact the
issuer of the group health benefit plan, or its delegated entity, to determine
if a specific prescription drug is on the drug formulary.
(c)
An issuer of a group health benefit plan, or its delegated
entity, shall disclose to any individual upon written or oral request, not
later than the third business day after the request is initially received,
whether a specific prescription drug is on the drug formulary of the group
health benefit plan.
§21.3022.Continuation of Benefits.
(a)
A group health benefit plan that offers prescription drug
benefits shall make a prescription drug that was approved or covered for a
medical condition or mental illness available to each enrollee at the contracted
benefit level until the group health benefit plan renewal date, regardless
of whether the prescribed drug has been removed from the group health benefit
plan's drug formulary.
(b)
Continuation of benefits for those group health benefit
plans that utilize a multi-tier formulary, regardless of whether the prescription
drug has been moved to another formulary tier, shall be the same as that specified
in subsection (a) of this section.
(c)
An issuer of a group health benefit plan, or its delegated
entity, that provides coverage for prescription drugs, and did not utilize
a multi-tier formulary at the time an enrollee became covered for prescription
drug benefits, but which later adopts a multi-tier formulary, shall continue
to make a prescription drug that was approved or covered for a medical condition
or a mental illness, available to each enrollee at the same contracted benefit
level before the multi-tier formulary was adopted, until the group health
benefit plan's renewal date.
§21.3023.Nonformulary Prescription Drugs; Adverse Determination.
If the issuer of a group health benefit plan, its delegated entity,
or their employees or agents, refuses to provide coverage for a prescription
drug that is not included in a drug formulary, and the enrollee's physician
or other health care provider with prescriptive authority has determined the
prescription drug is medically necessary, the refusal to provide coverage
for the prescription drug constitutes an adverse determination for the purpose
of Insurance Code Article 21.58A, §2. An enrollee may appeal the adverse
determination under Insurance Code Article 21.58A, §§6 and 6A, and
the issuer of the group health benefit plan, and its employees or agents,
shall review and resolve the appeal in accordance with those sections.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State, on July 24, 2000.
TRD-200005076
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: September 3, 2000
For further information, please call: (512) 463-6327