HBA-DMH C.S.H.B. 895 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 895 By: Coleman Public Health 5/15/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Until recently, individuals diagnosed with schizophrenia or bipolar disorder were prescribed medications that caused severe side effects. Because of these side effects, individuals often discontinued medications, relapsed, and ended up in high-cost institutional care. In the mid 1990s pharmaceutical manufacturers developed a new generation of medications to treat schizophrenia called atypical antipsychotics, which were found to be highly effective with significantly fewer side effects. The new generation of drugs can cost about $4,000 per person per year or more. If an individual cannot afford treatment, they often debilitate physically, to the point that the individual would qualify for disability-related Medicaid, which costs the state about $15,000 per person per year. Therefore, investing in the new generation medications and support services is cost-effective. The Texas Department of Mental Health and Mental Retardation, as one of its performance goals, is conducting a study on the number of persons receiving psychotropic medication for programmatic or emergency use. C.S.H.B. 895 authorizes a demonstration project to offer such medications and requires the Health and Human Services Commission to report on the cost-effectiveness of the use of the new generation of drugs. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 895 amends the Human Resources Code to require the Health and Human Services Commission (HHSC) to establish a demonstration project to provide to eligible persons through the medical assistance program psychotropic medications and related laboratory and physician services necessary to conform to a prescribed medical regime for those medications. The bill sets forth eligibility requirements. The bill requires HHSC to provide each participant with a 12 month period of continuous eligibility for participation in the project and provides that project participation does not entitle a participant to other services provided under the medical assistance program. The bill requires HHSC to establish an enrollment limit for the project. The bill authorizes HHSC to require a demonstration project participant to make cost-sharing payments for services provided through the project. The bill requires HHSC to use existing resources to fund the demonstration project to the maximum extent possible. The bill requires HHSC to submit a biennial report to the legislature regarding the demonstration project's progress and operation no later than December 1 of each even numbered year. The bill requires HHSC to evaluate, no later than December 1, 2006, the cost-effectiveness of the demonstration project, including whether the preventive drug treatments and related services provided under the project offset future longterm care costs for project participants. If the results of the evaluation indicate that the project is costeffective, the bill requires HHSC to incorporate a request for funding for the continuation of the program in its budget request for the next state fiscal biennium. The bill provides that the demonstration project expires September 1, 2009. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 895 differs from the original bill by removing the provision that demonstration project (project) participants are not subject to the monthly three-prescription limit under the medical assistance program. The substitute adds that project participation does not entitle a participant to other services provided under the medical assistance program. The substitute modifies the eligibility requirements for the project and includes provisions relating to continuous project eligibility and an enrollment limit. The substitute authorizes cost sharing payments by participants for services provided through the project. The substitute removes the provision that the demonstration project be established for a five-year period and provides that the project expires in 2009, rather than 2007. The substitute modifies requirements for requesting a federal waiver or authorization and modifies the effective date of the Act.