The committee met to take up and consider the following bills.
HB 185 – Zedler, Relating to benefits for a refill of a prescription drug by a health benefit plan issuer.
- If you want to get a subscription and you are a little early, you can be denied the refill and you are going to have to come back.
- The bill says they cannot stop a refill simply because the prescription is ordered early.
Public Testimony
Jamie Dudensing CEO of TAHP
- Working on protection of narcotics and painkillers.
Bill left pending.
HB 255 – Guerra, Relating to certain fees charged for the adjudication of pharmacy benefit claims.
- Has to do with transaction fees
- PBM has continued to go forward with these fees
- The prohibited charges should cease and they have not
- Have worked with TDI to fix this problem
- PBM have been in violation of the insurance code
- Guerra says that these loopholes in pharmaceutical claims should end
Public Testimony
Rene Garza, CEO, Stonegate Pharmacy
- Support the bill
- 250 million to 1.8 billion in profits
- These small transaction fees add up to hundreds of thousands of charges
- They charged Stonegate 22 transaction fees
- Garza says these charges on claims have been seen in his office especially in the last 4 years
- PBM’s are getting so big they are able to dictate the market
- PBM’s are virtually unregulated so they’re growing exponentially
- Garza ask for a level playing field
- Rep. Bonnen asks how they file claims; and do they choose to do it that way
- They file claims electronically; cost-prohibitive not to do it electronically
Kenneth Cattles, TIPA
- Support the bill
- Based on reimbursement problems with PBM, these little fees add up
Danny Vela, Independent Pharmacy Owner
- Support the bill
- These fees were outlawed in 2003 but the department of insurance hasn’t enforced this law
- TDI says that PBM is finding loopholes in the law but coding them or hiding them
- The transaction fees could range from 20 cents to $20
- It’s hard to believe pharmacists have to pay these transaction fees on top of subscription fees
- Should not be charged for using a claims network
- For a given year, Vela says about 12% of his revenue goes to these transaction fees
Allen Horne, VP, CVS Health
- Against the bill (Specifically parts 3 and 4)
- He was ok with the intent of the bill but has problems with parts of it
- Wanted enforcement provisions for TDI
- Wants to protect against the naming of the fee
- All of his CVS pharmacies pay a transaction fee
- Stopped charging these transaction fees as of April 1st ; these fees to a health care client will no longer be charged
- CVS contracts and Caremark contracts are different even though
Miguel Rodriguez, Attorney
- On behalf of Texas pharmacy business council
- For the bill
- All pharmacy business owners purchase their own software bearing their own cost
- Hospitals, Doctor’s and Dentist are not subject to the transaction fees while pharmacy business owners are
- Rodriguez represents independent pharmacy’s
- The only way to get information about a specific transaction fee is through legal action or 1-800 numbers – not reasonable practices
- SB418 (2003) should make these charges illegal
- Believes that allowing for protection against naming of a fee will not fix anything
Debra Diaz-Lara Director of Managed Care at TDI
- Rep Guerra asks what her opinion is about 3 and 4
- The fees weren’t transaction fees but they were called transaction fees – 3 and 4 should clean this up
Bill Left Pending.
HB778, Bell, Relating to access to pharmacists, pharmacies, and pharmaceutical care under certain health care benefits.
- Relates to pharmacists and pharmacies
- Last session this bill had no fiscal note
- Exclude ERS’s and TRS’s
Bill Hammond, CEO Texas Association of Business
- Opposed
- This would drive up the cost, reduce the ability to provide health insurance for its employees
- It would make it more difficult to provide this benefit for its employees
- Increases the cost for small businesses owners
- Every business that is not a pharmacy would be harmed by this bill
- Absent of the bill Health insurance is not going to go up
- If the bill is adopted health insurance would go up
- Cost have been rising and managed care has definitely dampened the rate of increase of health insurance
- Believed manage care has weakened recently
Rene Garza, CEO, Stonegate Pharmacy
- For the bill
- Don’t lose sight of the people that are going to the independent pharmacy
- This bill would allow him to get involved with the contracts and wouldn’t allow PBM’s to deny him access
- There are AWP laws
Tammy Grey, Owner Buda Drug Store
- For the bill
- Filling prescriptions and handling consumers is getting harder due to PBM’s
- This bill would create competition consumers rather than big businesses
- Pharmacies using the same PBM are being charged different amounts for the same transactions – no transparency
- Wants independent pharmacies to be allowed in the networks with hospitals, doctors and dentist
- Right now it is a closed network:
JD Fain Independent Pharmacy in Giddings Texas
- For the bill
- His biggest problems are the collective practices of PBM’s
- Together the 2 largest PBM’s control 70% the prescriptive drug market
- Very little competition in this market and not a lot of contact with the PBM
- HB778 would allow fain to compete in this market
Bill Moore, Pharmacist
- For the bill
- It is a patient’s right to choose their pharmacy
- Has issues when he tries to fill someone’s drug prescription but there not contracted
- Says it’s not financially smart to him but it is to his patients and that’s all he cares about
- Rep Meyer asked why networks are closed
Miguel Rodriguez, Attorney
- For the bill
- Says independent pharmacies are in big cities as well as small towns
- Problem with getting into these networks is a problem statewide
- Medicare Part D permits closed networks
- He says the statute already exist (Article 2152B of the insurance Code)
Allen Horne, VP, CVS Health
- Opposed to the bill
- Says we’re not talking about Medicare or Medicaid
- A reason for not allowing an individual in a network may be bc a Walgreens is across the street from a private pharmacist
- They have 2,000 different types of contracts
- They contract with 96% of the pharmacies in the US
- Munoz asked if without the legislation if premiums and insurance costs would decrease because there would be more ability to contract with selected providers
- Can’t necessarily guarantee that
- Munoz noted testimony given by the witness to the committee did state that
- There are many other issues that go into premium costs aside from just contracted entities
- Seeing a move nationwide to more narrow restrictive networks as an option to potentially reduce costs; not just to payor but to enrollees as well
- Munoz asked if the witness has seen cost going down or up lately
- Health care cost has gone considerably higher
- Workman asked if the witness is suggesting that a plan sponsor asks plan sponsors for certain pharmacies to be left out
- That certainly can happen; there is a national network that clients can choose from and they can customize that
- Bonnen has a suspicion that clients lean heavily on the guidance of the PBM to make these decisions; are pharmacies making more money than they have in the past
- Have not seen a wholesale drop off in independents
- Hard to say for private businesses
- Bonnen believes independents are making less than they have been
- Workman asked how many states have any willing provider provisions
- Not sure
- Sheets asked how many plan sponsors use the national network with no changes
- Not sure; may be able to get that information if it is proprietary
Duane Galligher, Texas Independent Pharmacies Association
- In support of the bill
- There is no negotiation, there is no transparency and there is no protection for independent pharmacies without this bill
- Frullo asked how people could be kept out that are not good pharmacists
- The bill says if credentialing standards are met they can be contracted with; not otherwise
- Frullo asked if there is a way where independent pharmacists can be included and large pharmacies can still battle it out to bring prices down
- Not sure how it could even be said that they are competing on price
- Frullo asked if there have been situations where independent pharmacies are treated differently in large cities versus small towns
- Believe it is a blanket situation
- Don’t believe plan sponsors are actively choosing what pharmacies they want to deal with
Jamie Dudensing, TAHP
- Against the bill
- Have offered up increasing network adequacy standards to bring more pharmacies in-network; also offered same reasonable opportunity to be in-network and provide reasons for not letting one in-network
- Allowing more providers in-network has the ability to bring prices down
Danny Vela, Rio Grande Valley Independent Pharmacy Association
- In support of the bill
- Over 100 independent pharmacies have closed in Hidalgo County in just the last three years
- This bill is what the people of the state of Texas need
- Was a school board member and when health plan decisions were made the board determined they should not be the ones making decisions about what pharmacies their members could use
- Bonnen asked the witness could compete with big box pharmacies if given the opportunity
- Not sure; does not run very large pharmacies
- The only way small pharmacies can compete when prices must be lowered is to fill more prescriptions; cannot afford to be excluded from plans
Debra Diaz-Lara, Texas Department of Insurance
- Munoz asked if there is currently a law on the books on this subject
- 2152(b) in the Insurance Code has not been enforced since 1997 after a court decision; legal staff believes the law is not enforceable because of legal decisions that have been made
- Paul asked what the cases were
- Not sure about the legal details; the statutes have been preempted by ERISA
Bell Closed
- It is not the intent of this bill to create a system where plans are forced to accept the financial structures of these pharmacies
- Competition reduces cost and increases access
Bill left pending