TPA Leads the Way: Pharmacy Secures Major Wins on PBM Reform and Prohibitions on Patient Steering and Self-Dealing
JUMP TO: Session in Brief | Notable Bills Passed Affecting Pharmacy | Pharmacy Losses | Pharmacy Defensive Victories | Other Passed Bills of Interest | 2021 Bill Tracker
The 2021 Texas legislative session was one of the most successful for pharmacy in recent memory. Despite the many challenges facing the state related to the COVID-19 pandemic, with TPA leading the way pharmacy advocates were able to secure monumental
wins on priority issues affecting pharmacy, particularly on the pharmacy benefit manager (PBM) front. While there were some disappointments, pharmacy made considerable progress on practice issues and laid the groundwork for future successes.
After the last legislative session in 2019, it was clear that pharmacy needed to unify in order to improve its chances of success at the capitol. Three of the state’s four largest independent pharmacy groups came together under the TPA umbrella through
the creation of our Independent Pharmacy Academy. That merger made TPA the undisputed voice for pharmacy at the capitol, and increased the resources TPA had to operate with this session.
Going into this session, TPA focused on PBM reform and expanded services. Fortunately, PBM reform passed with overwhelming support in the legislature. While bills to expand services did not cross the finish line, we advanced both immunization expansion
and “test and treat” bills further in the legislative process than ever before.
Thank you to all the TPA members who engaged in the process, especially those who took time away from work and family to travel to Austin to visit with legislators about issues affecting pharmacy. Additionally, we thank our legislative allies who fought
for community pharmacy and championed our issues this session.
The 87th Legislature was certainly one to remember, with access and protocols in place related to COVID-19 changing the way the capitol operated
in significant ways. The legislative session seemed destined to focus on issues related to the pandemic and the state budget, and then February’s Winter Storm Uri and the related electricity grid failure added yet another major issue to the mix.
Legislators filed 6,927 bills, of which only 1,081 ultimately passed (591 House bills and 490 Senate bills). The number of bills passed declined 24 percent versus the previous session, and reflected both the challenges of passing bills this session, as
well as some end-of-session friction between House and Senate leadership. Just 1,053 bills became law, or 15% of introduced legislation.
The governor has already called a special session to begin July 8 and will be announcing the issues to be addressed. The legislature will be back again in the fall for a second special session to address legislative redistricting. Due to pandemic-related
delays in receiving census data, the legislature will have to return to redraw state House, state Senate, and Congressional district lines to reflect current population. The governor has also indicated that he intends for the legislature during special
session to handle the appropriation of approximately $16 billion in federal funds related to the pandemic that were not allocated by the legislature during the regular session.
Pharmacy scored some key wins this session with its advocacy for legislation protecting patients and pharmacies from PBM abuses. TPA supported and worked on several other bills affecting pharmacy as well.
Comprehensive PBM Reform: PHARMACY WIN!
House Bill 1763 (Rep. Oliverson/Sen. Hughes)
HB 1763 amends the Texas insurance code to protect patients who receive prescription drug benefits through a commercial health plan subject to Texas
Department of Insurance (TDI) oversight. The bill contains three of TPA’s four PBM priorities—no clawbacks, the ability to mail prescriptions, and no accreditation/certification requirements beyond state/federal law—in almost the exact same form that
we established as our goal heading into the session. TPA worked closely with legislators to pass a strong bill that protects pharmacists and their patients. As originally filed, HB 1763 included concessions to the PBMs that were inserted at the last
minute during the 2019 legislative session. These provisions would have seriously watered down the bill and actually had the potential to hurt pharmacy. TPA would not let up and worked diligently to pass a meaningful bill. At the request of TPA, Rep.
Eddie Lucio III offered important amendments on the House floor to strengthen the bill and eliminate loopholes for the PBMs. When HB 1763 was stalled in the legislature, TPA encouraged Sen. Lois Kolkhorst to introduce a similar PBM reform bill that
unanimously passed the Senate Health and Human Services Committee and the full Senate that breathed life into this bill, prompting its passage. Specifically, this bill:
- Prohibits PBM clawbacks that reduce the amount paid to a pharmacy for a prescription weeks or months after a prescription is filled;
- Ensures patient choice by allowing local pharmacies to mail and deliver prescriptions if requested by the patient;
- Prevents self-dealing by prohibiting PBMs from steering patients to PBM-owned specialty pharmacies by requiring accreditations or certifications above those required by state and federal law;
- Prohibits PBMs from paying affiliated retail or mail-order pharmacies more than they pay other pharmacies in a network;
- Clarifies that pharmacists must have access to PBM contracts handled through a PSAO; and
- Provides legal protections for pharmacies against retaliatory actions by PBMs for lodging appeals or complaints against PBMs.
What does this mean for pharmacists?
This legislation represents the most significant curtailment of PBM practices ever passed by the Texas Legislature, and its passage is the result of the tireless work of TPA members and our legislative allies. For health plans/PBMs regulated by TDI, the
bill will prohibit DIR-like fees from taking hold in the Texas commercial insurance market as they have done in Medicare Part D. It also allows pharmacies to mail or deliver prescriptions to their patients without arbitrary PBM restrictions, something
that patients are increasingly seeking as the COVID-19 pandemic has changed customer behavior. Finally, it prohibits PBMs from requiring third party accreditations or certifications as a requirement to dispense specialty medications, the fastest growing
segment of the prescription drug market.
Effective Date: September 1, 2021, for contracts renewed or entered into after that date.
PBM Anti-Steering Protections: PHARMACY WIN!
House Bill 1919 (Rep. Harris/Sen. Schwertner)
HB 1919 amends the Insurance Code to place restrictions on PBMs’ ability to steer patients to pharmacies that they themselves own. The language in
the legislation was originally part of a larger PBM bill filed by Rep. Eddie Lucio, III and Sen. Lois Kolkhorst. This legislation contains the fourth TPA PBM reform priority of anti-steerage as identified prior to the legislative session. The legislation:
- Prohibits PBMs from steering patients to their affiliated pharmacies through online or patient-specific messaging;
- Prohibits PBMs from requiring or inducing patients with reduced cost-sharing to use the affiliated pharmacy;
- Prohibits PBMs from using patient-specific prescription information for commercial purposes;
- Requires patient consent to transfer a prescription; and
- Provides reasonable safeguards to ensure patients’ best interests are protected, and that decisions based on profits do not overrule the choices of patients and their healthcare providers.
What does this mean for pharmacists?
Health plans/PBMs subject to TDI regulation, which includes fully insured plans such as small business group insurance and individual market plans, will no longer be allowed to use marketing and plan design to steer patients to pharmacies that they own.
Effective Date: September 1, 2021, for contracts renewed or entered into after that date.
Medication Therapy Management in Medicaid: PHARMACY WIN!
House Bill 2658 (Rep. Frank/Sen. Kolkhorst)
HB 2658 is an omnibus Medicaid bill that makes a number of changes to different aspects of the program. Sen. Kolkhorst added language to the bill
that directs the Texas Health and Human Services Commission (HHSC) to collaborate with Medicaid managed care organizations to implement medication therapy management (MTM) services to lower costs and improve quality outcomes for recipients by reducing
adverse drug events.
What does this mean for pharmacists?
The language surrounding the implementation of an MTM program is very broad, so it is far from certain exactly what such a program will look like. TPA intends to work closely with HHSC as it explores possible options for implementing this legislation,
but we believe it is a positive step toward reimbursing pharmacists for services provided to patients.
Effective Date: September 1, 2021, though it may take additional time for HHSC to develop and implement an MTM program in collaboration with managed care organizations.
Prescription Drug Savings Program for the Uninsured
House Bill 18 (Rep. Oliverson/Sen. Kolkhorst)
HB 18 establishes the Texas Cares Program to provide reduced-cost prescription drugs to uninsured Texans. The legislation directs HHSC to utilize
federal funds to establish a trust fund, and to contract with a PBM or other vendor to negotiate rebates for drugs to be covered under the program. The rebate amount would then be credited at the point of sale at the pharmacy, with the patient responsible
for any remaining cost-share amounts. The program is modeled after a similar program in Utah that provides discounted insulin to uninsured residents of the state. TPA supported the legislation’s intent, but had concerns about the lack of specificity
regarding how pharmacy reimbursements would be calculated under the program. We were pleased that changes made to the legislation as it moved through the process increased HHSC responsibility and oversight over the program as TPA requested. TPA is
committed to working with HHSC and the authors of the legislation in order to successfully implement the program and ensure any prescription savings come from drug manufacturer rebates and not because of low reimbursement to pharmacies.
What does this mean for pharmacists?
Once the program is fully established, this will provide a mechanism for pharmacists to offer reduced cost medications to patients without insurance. The program will primarily benefit uninsured patients taking brand name medications, such as insulin
or EpiPens, where the price of the drug is exponentially inflated by PBM rebate demands.
Effective Date: September 1, 2021, but in light of significant rule development to implement the program, it could take longer.
Insulin Cost-Sharing Limits
Senate Bill 827 (Sen. Kolkhorst/Rep. Lucio, III)
SB 827 prohibits health benefit plans and PBMs subject to TDI oversight from imposing a cost-share requirement on a patient for insulin that exceeds
$25 per prescription for a 30-day supply, regardless of the amount or type of insulin needed to fill the enrollee’s prescription. The legislation also requires PBM formularies to include at least one insulin from each therapeutic class.
What does this mean for pharmacists?
Many patients will see out-of-pocket costs reduced for insulin prescriptions, which should make it easier for pharmacists to care for diabetic patients who have faced difficult decisions on how to pay for insulin.
Effective Date: January 1, 2022, for contracts renewed or entered into after that date.
Emergency Refills on Insulin and Insulin-Related Supplies
House Bill 1935 (Rep. Bucy/Sen. Miles)
HB 1935 authorizes pharmacies to provide an emergency 30-day refill of insulin or insulin-related supplies or equipment. The legislation also requires
that health benefit plans and PBMs must reimburse pharmacies for providing such refills. TPA worked closely with the bill authors to oppose changes suggested by the PBMs that would have been difficult for pharmacies to operationalize and presented
potential audit issues. We are very pleased with the final language included in the bill and believe this will be a great tool to assist diabetic patients in emergency situations.
What does this mean for pharmacists?
Pharmacists who are unable to contact a physician to authorize a prescription renewal will now be able to offer a 30-day emergency refill for insulin and insulin-related supplies, as opposed to a 72 hour supply with current law.
Effective Date: January 1, 2022 for health benefit plans issued or renewed after that date.
Opioid Settlement Fund
Senate Bill 1827 (Sen. Huffman/Rep. Holland)
SB 1827 establishes an Opioid Abatement Account and trust fund to utilize funds received as part of multiple opioid settlement agreements entered
into by the Texas Attorney General and other political subdivisions. Among other items, the legislation specifically authorizes funds from the account to be used for tools used to give healthcare providers information needed to prevent harm caused
by the improper use of those medications.
What does this mean for pharmacists?
The legislature did not appropriate requested funds to the Texas State Board of Pharmacy to continue the Prescription Monitoring Program (PMP) integration with NarxCare through the normal appropriation process, as agency budget rules would have required
license fees to be increased to match the funding level. TPA supports using opioid settlement funds to continue to fund PMP integration and NarxCare without raising license fees or pharmacies bearing the cost of this integration.
Effective Date: June 16, 2021, though it is unknown when settlement funds will be distributed into the newly created accounts.
Pandemic Liability Protection
Senate Bill 6 (Sen. Hancock/Rep. Leach)
SB 6 provides liability protections for businesses and healthcare providers for claims arising from or related to a pandemic. Specifically, the legislation
protects healthcare providers from liability for providing care, treatment, or failure to provide care except in cases of reckless conduct or intention, wilful, or wanton misconduct. TPA followed the legislation closely and ensured that pharmacists
were included in the definition of healthcare provider in the legislation. This bill also provides businesses protection from liability for causing exposure to a pandemic disease except in extreme circumstances. This provision applies to pharmacy
owners and employees and goes beyond the healthcare provider provisions.
What does this mean for pharmacists?
Individuals looking to sue healthcare providers for the care they received in response to COVID-19 or businesses under a claim of contracting the disease will face increased requirements in order to make a successful claim. This bill will protect pharmacists
and pharmacy owners who acted in good faith during the pandemic from frivolous lawsuits.
Effective Date: June 14, 2021.
Prior Authorization and Utilization Review Reforms
House Bill 3459 (Rep. Bonnen/Sen. Buckingham)
HB 3459 makes changes to procedures surrounding prior authorizations and utilization review for physicians and other healthcare providers for those
health plans subject to TDI jurisdiction. It will exempt a physician or provider from prior authorization requirements for a particular healthcare service, including a medication, if the physician or provider submitted at least five prior authorization
requests for that service in the previous year and at least 80 percent of those requests were approved by that health benefit plan. Additionally, the bill specifies that when a physician is subjected to a utilization review, the utilization review
agent would have to be a physician licensed to practice in Texas in the same or similar specialty as the physician subject to a utilization review.
What does this mean for pharmacists?
Prior authorizations requirements for medications prescribed by certain physicians who satisfy the requirements of the legislation could be eliminated, which could result in saving pharmacists’ time when having to deal with physician practices on PBM
prior authorization requirements and helping patients receive their medications in a more timely manner.
Effective Date: September 1, 2021 for utilization review provisions; January 1, 2022 for prior authorization provisions.
2022–23 State Budget
Senate Bill 1 (Sen. Nelson/Rep. Bonnen)
SB 1 is the 2022–23 state budget and has a price tag of $248.6 billion, a slight reduction over the current budget largely attributable to one-time
federal funding received as part of the pandemic response in the current budget. The two-year budget includes $84 billion for health and human services programs, which is virtually unchanged from current budget. Senate Bill 1 orders roughly $350 million
in cuts to Medicaid. The Texas Health and Human Services Commission will be responsible for identifying cost-cutting measures that do not impact the provision of services to benefit recipients. The federal funding of $16 billion that will be allocated
during the fall special session could be used to fund some of these cuts.
What does this mean for pharmacists?
Pharmacy will have to remain diligent and stave off any cuts to pharmacy. By the same token, there is opportunity to make the case to pay pharmacists for cost-effective services they can provide.
Effective Date: September 1, 2021.
The strength of the physicians in Texas derailed pharmacy’s top legislative priorities dealing with practice advancement this session.
“Test and Treat” Authorization for Pharmacists
House Bill 2049 (Rep. Howard)
HB 2049 would have allowed pharmacists to furnish medications under a physician protocol following a positive CLIA-waived test for influenza or strep
throat. While we are disappointed that the legislation failed to pass, it did receive a favorable 9–1 vote out of the House Public Health Committee, which means it moved further in the process than in any previous session.
Expanded Immunization Authority for Pharmacists
House Bill 678/Senate Bill 2136 (Rep. Cortez/Sen. Blanco)
HB 678 and SB 2136 would have allowed pharmacists
to order and administer immunizations to children 3 years of age and older. Under emergency declaration made using the federal Public Readiness and Emergency Preparedness (PREP) Act, pharmacists have been authorized to provide immunizations to children
ages 3 and older since March 2020. HB 678 also would have allowed pharmacy technicians to administer immunizations to those 3 years of age and older.
TPA and other pharmacy advocates worked to make this federal authority permanent by modifying current state law that allows pharmacists to provide flu vaccines only down to age 7 and other immunizations only to age 14. Passage of similar legislation has been a longtime
priority for TPA, and we have been unable to even have a committee vote on previous proposals due to opposition from physician groups. This session, it passed out of the House Public Health Committee and then passed the full House by a 139-7 vote.
Unfortunately, the bill did not get a hearing in the Senate.
PBM “White Bagging” Prohibition
House Bill 1586 (Rep. Lucio/Sen. Schwertner)
HB 1586 would have addressed the issue of “white-bagging,” whereby a pharmacy ships a medication to a provider who then administers the medication
to a patient. PBMs are increasingly requiring that patients receive certain medications from a PBM-owned specialty pharmacy instead of from a physician practice, on-site infusion pharmacy, or hospital pharmacy. This practice is particularly concerning
in the oncology setting, where physicians often modify the dosage of medication when the patient arrives for treatment.
TPA worked closely with advocates supporting the bill on the language, and it appeared likely to pass as an amendment to another PBM bill. Unfortunately, the amendment was removed over concerns that it was not germane to the larger bill, and the stand-alone
legislation, HB 1586, passed the House but did not receive a hearing in the Senate.
Non-medical Switching
House Bill 1646 (Rep. Lambert)
HB 1646 would have prohibited a health plan or PBM from modifying an enrollee’s benefit level for a prescription drug that was previously covered
by the plan if the prescribing provision determines that the drug is the most appropriate course of treatment. It also added increased disclosure requirements for prescription drug benefit changes. The legislation passed the House but did not receive
a hearing in the Senate.
Medicaid Usual and Customary Determination
House Bill 2346/Senate Bill 299 (Rep. Klick/Sen. Hinojosa)
HB 2346 and SB 299 would have clarified that
the state Medicaid program shall exclude from its usual and customary (U&C) price calculation any prices used under a third party prescription drug discount card program or membership discount price. Last year, HHSC announced that it intended
to include third-party discount card programs in its usual and customary calculations, something that it had not previously done. Because pharmacies regularly have no ability to opt-out of discount card programs, we do not believe it is appropriate
to consider these discount prices as part of the calculation. Unfortunately, neither bill received a vote in committee in either chamber. SB 800 was amended to add language for HHSC to conduct a study prior to using such discount pricing in the determination
of U&C; however, it was stripped from the final bill during conference committee.
Repeal of ERISA Exemption for Pharmacy Audits
House Bill 2787/Senate Bill 844 (Rep. Middleton/Sen. Schwertner)
HB 2787 annd SB 844 would have repealed exemption
language for ERISA plans to existing laws governing pharmacy audits by PBMs. It is unlikely that repealing the provision would have had the affirmative effect of making the provisions applicable to ERISA plans immediately, as TDI does not currently
construe the law to apply to ERISA plans, but it would have been appropriate to delete the reference in light of last year’s U.S. Supreme Court ruling in Rutledge v. PCMA regarding state authority to enact laws affecting ERISA plans.
TPA worked behind the scenes to defeat bills that would have hurt the practice of pharmacy, often despite well-organized opposition.
Physician Dispensing
HB 456 (Rep. Shaheen), HB 1778 (Rep. Oliverson),
and SB 1503 (Sen. Buckingham) would have allowed physicians to dispense medications in certain circumstances. TPA has a longstanding position
of opposing any expansion of physician dispensing, and we are pleased to report that none of these three bills received a committee hearing this session.
Telepharmacy Expansion
Unlike during the last two sessions, no legislation was ultimately filed during this session that would have expanded telepharmacy in the state. TPA worked behind the scenes to oppose contemplated legislation that would have allowed telepharmacy, where
a pharmacy technician can fill and dispense medications without a pharmacist being physically present, in mental health facilities across the state. This would have been a dramatic expansion of the locations where a telepharmacy can operate, and could
have potentially disrupted community pharmacies’ ability to serve patients receiving mental health treatment. We appreciate that the legislature listened to pharmacy’s concerns and ultimately decided not to push this initiative.
The following bills passed this session that may be of interest to pharmacists and pharmacy owners.
Telehealth Expansion
House Bill 4 (Rep. Price/Sen. Buckingham)
HB 4 makes permanent many of the allowances for expanded telemedicine payment in Medicaid and CHIP as a result of the COVID-19 pandemic, if the state
determines those services are clinically sound and cost-effective. Covered services include preventive, case management, behavioral health, therapy and nutritional counseling, and nursing services.
Effective Date: June 15, 2021.
Medicaid Antipsychotic Prior Authorization
House Bill 2822 (Rep. Hull/Sen. Buckingham)
HB 2822 prohibits Medicaid (both fee-for-service and managed care) from requiring a prior-authorization for antipsychotic medication that is covered on the Medicaid Vendor Drug Program Formulary for an adult if certain requirements have been met.
Effective Date: September 1, 2021.
Medicaid Coverage Expansion for Women
House Bill 133 (Rep. Rose/Sen. Kolkhorst)
HB 133 extends Medicaid coverage for eligible women who give birth to six months postpartum, instead of the current 60 days. Also moves the Healthy
Texas Women’s program from fee-for-service to managed care.
Effective Date: September 1, 2021.
Disease Prevention During a Disaster
Senate Bill 239 (Sen. Powell/Rep. Collier)
SB 239 requires DSHS to develop and implement a disease prevention information system for dissemination of immunization information during a declared
state of disaster or local state of disaster.
Effective Date: September 1, 2021.
Alternative Therapies for Treating PTSD
House Bill 1802 (Rep. Dominguez/Sen. Campbell)
HB 1802 requires DSHS and the Texas Medical Board to research the medical benefits and efficacy of psilocybin, MDMA, and ketamine when treating various
mental health disorders and other ailments. The study will be conducted in partnership with Baylor College of Medicine and will focus on veterans suffering from post-traumatic stress disorder (PTSD). Some of the other disorders include chronic
pain, anxiety, depression, bipolar disorders, and migraines.
Effective Date: June 18, 2021.
Texas Mutual Health Coverage Plan
House Bill 3752 (Rep. Frank/Sen. Hancock)
HB 3752 allows a subsidiary of the Texas Mutual Insurance Company to provide a health insurance product to Texans. The goal is to increase access
to affordable health insurance for individuals, especially those in rural communities, and employees of small businesses.
Effective Date: September 1, 2021.
Texas Farm Bureau Health Plan
House Bill 3924 (Rep. Oliverson/Sen. Springer)
HB 3924 allows Farm Bureau plans to offer health benefits in Texas to increase access to affordable health care for individuals, especially those
in rural communities. Since the plans authorized under the bill would be self-funded and offered exclusively to Farm Bureau members, they do not meet the threshold of being considered insurance.
Effective Date: September 1, 2021.
E-Cigarettes
Senate Bill 248 (Sen. Johnson/Rep. Thierry)
SB 248 requires e-cigarette retailers to obtain permits and sets up a framework to regulate those retailers the same way as other tobacco product
dealers are regulated. The bill is aimed at curbing vaping in general and youth e-cigarette use.
Effective Date: September 1, 2021.
Medical Use of Low-THC Cannabis
House Bill 1535 (Rep. Klick/Sen. Schwertner)
HB 1535 expands the Texas Compassionate Use Program to people with cancer and post-traumatic stress disorder. The legislation also caps the amount
of THC at 1%, a nominal increase from the 0.5% allowed under current law.
Effective Date: September 1, 2021.
Broadband in Rural Texas
House Bill 5 (Rep. Ashby/Sen. Nichols)
HB 5 creates a new state broadband office tasked with creating a statewide broadband plan to close the digital divide in Texas. Also requires the
state broadband office to establish coverage maps and a grant program that will support the expansion of broadband networks across the state.
Effective Date: June 15, 2021.
Unemployment Compensation Tax
House Bill 7 (Rep. Button/Sen. Nelson)
HB 7 amends the computation of the replenishment ratio used to determine an employer's unemployment compensation contribution tax rate.
Effective Date: May 13, 2021.
Sexual Harassment
House Bill 21 (Rep. Neave/Sen. Zaffirini)
HB 21 increases the statute of limitations for workplace sexual harassment to 300 days after the alleged harassment.
Effective Date: September 1, 2021.
Track the progress of pharmacy priority bills from the 87th Texas Legislature (2021) with TPA's Bill Tracker.
Your Participation Is Powerful!
The continued advancement of pharmacy depends greatly on the political clout of our profession and of TPA. It takes a well-funded political action committee (PAC) to support the campaigns of pharmacy-friendly candidates and to help build the credibility of your profession as an effective and influential group.
Pledge to invest in the future of your profession and help elect individuals who support pharmacy.
PharmPAC is the political action committee of the Texas Pharmacy Association, 3200 Steck Ave. #370, Austin, TX 78757. Call (512) 836-8350 for information. According to Texas Government Code 305.027, this material may be considered “legislative advertising.” Authorization for its publication is made by Debbie Garza, Chief Executive Officer, Texas Pharmacy Association.
