Our landmark PBM reform bill -- HB 1763by House Insurance Chairman Tom Oliverson, R-Houston (right), has been signed by Gov. Greg Abbott and will take effect September 1. The bill is the most impactful and far-reaching PBM legislation ever enacted in Texas and is the result of two sessions of hard work and commitment by TPBC and its legislative allies.
HB 1763 passed the Legislature on a combined 177-0 vote. That unprecedented level of support was delivered by the strength and commitment of Dr. Oliverson and Sen. Bryan Hughes, author of the Senate companion bill (SB 528). It was shored up by our lobby team's unrelenting effort to win broad support of the bills in both chambers. HB 1763 had 17 House authors and co-authors and SB 528 had 25 sponsors.
"This is an incredible day for Texas independent pharmacy," said Michael Wright, VP of Government Affairs for American Pharmacies (APRx). "It's one of the strongest PBM bills ever passed in this country and it's the result of two sessions of hard work. Chairman Hughes worked very hard to get this same legislation to the goal line in 2019 and through no fault of his, we couldn't get it across. But the foundation we built last session was critical in passing it this time around."
Wright commended Oliverson and Hughes for their strong leadership on the legislation and also thanked American Pharmacies members Steve Hoffart of Magnolia and John Hickman of Farmersville for their strong testimony on the bill and for their significant work in encouraging their own legislators to back it.
"We couldn't ask for stronger bill sponsors," Wright said. "And we owe a lot to Mr. Hoffart and Mr. Hickman for their constant support."
American Pharmacies President Laird Leavoy said the passage and enactment of HB 1763 is validation of APRx's deep commitment to advocacy for independent pharmacy owners and of its decision to establish Texas Pharmacy Business Council -- the nation's first freestanding independent pharmacy advocacy organization founded by any pharmacy purchasing group.
"Fighting for our members in the Capitol and the courtroom is in our DNA, "Leavoy said. "No one is better suited to represent independent pharmacists at the Legislature than an organization that is founded, owned and run solely by independent pharmacy owners. That's our focus and our commitment every single day."
HB 1763 targets multiple bad practices by PBMs.The new law creates Subchapter L in Chapter 1369 of the Insurance Code with the following provisions applying to health plans in Texas:
PBMs may not assess retroactive fees or payment reductions except for a legitimate audit outcome.
A PBM may not reimburse a PBM-affiliated pharmacy at a higher rate than it reimburses a non-affiliated pharmacy for providing the same product or service.
PBMs must provide an easily accessible fee schedule that specifies each service or procedure a pharmacy may deliver and the corresponding payment amount, and the methodology for calculating those payments.
A health plan or PBM may not prohibit a pharmacist or pharmacy from receiving a copy of any contract provisions applicable to the pharmacy/pharmacist that the PSAO executes with a health plan or PBM.
As permitted by law, PBMs must allow pharmacies to deliver or mail drugs to patients and to charge a fee for that service, if the pharmacy informs a patient before delivery that the fee will be charged and that it may not be reimbursable by the patient’s health plan or PBM.
A health plan or PBM may not require a pharmacy to meet accreditation or certification standards exceeding federal/state standards. A PBM or health plan may not prohibit a pharmacy from dispensing any drug it is allowed to dispense under state/federal law unless its manufacturer requires specific certifications or credentials the pharmacy does not have.
A PBM cannot retaliate against a pharmacy for exercising any rights or remedy allowed under this law.