HBA-NRS S.B. 556 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 556 By: Duncan Public Health 5/7/2001 Engrossed BACKGROUND AND PURPOSE Currently, more than a third of Texas' Medicare recipients are not covered under any prescription drug plan. Those without prescription drug coverage pay retail prices for prescriptions, which can be financially burdensome. Senate Bill 556 establishes a senior drug assistance program, that authorizes pharmacies to allow Medicare recipients to purchase pharmaceutical drugs at the lower Medicaid price and to receive a rebate from the Health and Human Services Commission for each drug provider participating in the program. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Health and Human Services Commission in SECTION 1 (Section 32.0462, Human Resources Code) of this bill. ANALYSIS Senate Bill 556 amends the Human Resources Code to establish a senior drug assistance program (program). The bill requires the Health and Human Services Commission (HHSC) to develop and implement a voluntary pricing program under which a provider in the vendor drug program (participant) may agree to provide at a reduced price to an eligible Medicare recipient prescription drugs available through the Medicaid vendor drug program. The bill sets forth provisions for determining the price for the drug and provides that a Medicare recipient is eligible to receive a prescription drug available to a recipient of medical assistance under the vendor drug program at a reduced price in accordance with the program only if the recipient does not have insurance coverage or some other health benefit plan coverage that provides pharmaceutical benefits for that drug. The bill authorizes HHSC to provide a participant with a rebate from HHSC for each prescription drug provided to an eligible Medicare recipient at a reduced price under the program. In implementing the program, HHSC shall require an eligible Medicare recipient, as a condition of receiving the reduced price, to present the recipient's Medicare card and any other documentation required by HHSC to confirm the recipient's eligibility and to provide the appropriate prescription. HHSC is required to ensure that information concerning prices that may be charged under the program is readily available to participants. The bill requires HHSC to negotiate rebate agreements and other terms with pharmaceutical companies whose products are covered under the vendor drug program to provide the rebates to participants. The bill authorizes pharmacies to participate in the program before HHSC successfully negotiates rebate agreements with pharmaceutical companies that sell prescription drugs. The bill authorizes HHSC to return excess rebate revenue to participating pharmaceutical companies based on an equitable method of distribution determined by HHSC. The bill requires HHSC to monitor provider participation in the program, evaluate the effect of the program on the availability of prescription drugs to eligible Medicare recipients, and develop recommendations for improving the availability of prescription drugs to eligible Medicare recipients. Not later than January 1 of each year, the bill requires HHSC to submit a report to the legislature containing the information obtained and developed by HHSC. EFFECTIVE DATE September 1, 2001.