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Texas Insurance Code - Not Codified - Article 21.52B. Pharmaceutical Services

Legal Research Home > Texas Lawyer > Insurance Code - Not Codified > Texas Insurance Code - Not Codified - Article 21.52B. Pharmaceutical Services

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Art. 21.52B. PHARMACEUTICAL SERVICES.                                          

Definitions
	Sec. 1. In this article:                                                       
	(1)  "Health insurance policy" means an individual, group, 
blanket, or franchise insurance policy, insurance policy or 
agreement, or group hospital service contract that provides 
benefits for pharmaceutical services that are necessary as a result 
of or to prevent an accident or sickness, but does not include 
evidence of coverage provided by a health maintenance organization 
under the Texas Health Maintenance Organization Act (Chapter 20A, 
Vernon's Texas Insurance Code).
	(2)  "Pharmaceutical services" means services, including 
dispensing prescription drugs, that are ordinarily and customarily 
rendered by a pharmacy or pharmacist licensed to practice pharmacy 
under the Texas Pharmacy Act (Article 4542a-1, Vernon's Texas Civil 
Statutes).
	(3)  "Pharmacist" means a person licensed to practice 
pharmacy under the Texas Pharmacy Act (Article 4542a-1, Vernon's 
Texas Civil Statutes).
	(4)  "Pharmacy" means a facility licensed as a pharmacy under 
the Texas Pharmacy Act (Article 4542a-1, Vernon's Texas Civil 
Statutes).
	(5)  "Drugs" and "prescription drugs" have the meanings 
assigned by Section 5, Texas Pharmacy Act (Article 4542a-1, 
Vernon's Texas Civil Statutes).
	(6)  "Managed care plan" means a health maintenance 
organization, a preferred provider organization, or another 
organization that, under a contract or other agreement entered into 
with a participant in the plan:
	(A)  provides health care benefits, or arranges for health 
care benefits to be provided, to a participant in the plan;  and
	(B)  requires or encourages those participants to use health 
care providers designated by the plan.

Prohibited contractual provisions
	Sec. 2. (a) A health insurance policy or managed care plan 
that is delivered, issued for delivery, or renewed or for which a 
contract or other agreement is executed may not:
	(1)  prohibit or limit a person who is a beneficiary of the 
policy from selecting a pharmacy or pharmacist of the person's 
choice to be a provider under the policy to furnish pharmaceutical 
services offered or provided by that policy or interfere with that 
person's selection of a pharmacy or pharmacist;
	(2)  deny a pharmacy or pharmacist the right to participate 
as a contract provider under the policy or plan if the pharmacy or 
pharmacist agrees to provide pharmaceutical services that meet all 
terms and requirements and to include the same administrative, 
financial, and professional conditions that apply to pharmacies and 
pharmacists who have been designated as providers under the policy 
or plan;  or
	(3)  require a beneficiary of a policy or a participant in a 
plan to obtain or request a specific quantity or dosage supply of 
pharmaceutical products.
	(b)  Notwithstanding Subsection (a)(3) of this section, a 
health insurance policy or managed care plan may allow the 
physician of a beneficiary or participant to prescribe drugs in a 
quantity or dosage supply the physician determines appropriate and 
that is in compliance with state and federal statutes.
	(c)  This section does not prohibit:                                           
	(1)  a provision of a policy or plan from limiting the 
quantity or dosage supply of pharmaceutical products for which 
coverage is provided or providing financial incentives to encourage 
the beneficiary or participant and the prescribing physician to use 
a program that provides pharmaceutical products in quantities that 
result in cost savings to the insurance program or managed care plan 
and the beneficiary or participant if the provision applies equally 
to all designated providers of pharmaceutical services under the 
policy or plan;
	(2)  a pharmacy card program that provides a means of 
obtaining pharmaceutical services offered by the policy or plan 
through all designated providers of pharmaceutical services;  or
	(3)  a plan from establishing reasonable application and 
recertification fees for a pharmacy which provides pharmaceutical 
services as a contract provider under the plan, provided that such 
fees are uniformly charged to each pharmacy under contract to the 
plan.

Provision void
	Sec. 3. A provision of a health insurance policy or managed 
care plan that is delivered, issued for delivery, entered into, or 
renewed in this state that conflicts with Section 2 of this article 
is void to the extent of the conflict.

Construction of article
	Sec. 4. This article does not require a health insurance 
policy or managed care plan to provide pharmaceutical services.

Application of prohibition
	Sec. 5. The provisions of Section 2 of this article do not 
apply to a self-insured employee benefit plan that is subject to the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 
1001, et seq.).
	Sec. 6. Repealed by Acts 1993, 73rd Leg., ch. 685, Sec. 19.06, 
eff. Aug. 30, 1993.

Added by Acts 1991, 72nd Leg., ch. 182, Sec. 1, eff. Sept. 1, 1991.  
Sec. 2(b) amended by Acts 1993, 73rd Leg., ch. 685, Sec. 19.07, eff. 
Sept. 1, 1993;  Sec. 5 amended by Acts 1993, 73rd Leg., ch. 685, Sec. 
19.08, eff. Sept. 1, 1993;  Sec. 6 repealed by Acts 1993, 73rd Leg., 
ch. 685, Sec. 19.06, eff. Aug. 30, 1993;  Sec. 1(6) added by Acts 
1995, 74th Leg., ch. 852, Sec. 1, eff. Sept. 1, 1995;  Sec. 2 amended 
by Acts 1995, 74th Leg., ch. 852, Sec. 2, eff. Sept. 1, 1995;  Sec. 3 
amended by Acts 1995, 74th Leg., ch. 852, Sec. 3, eff. Sept. 1, 
1995;  Sec. 4 amended by Acts 1995, 74th Leg., ch. 852, Sec. 4, eff. 
Sept. 1, 1995.
Article:  Previous  21.49-18  21.49-20  21.49A. FAIR PLAN (FAIR ACCESS TO INSURANCE REQUIREMENTS) ACT. Article repealed effective April 1, 2007 Authority; Purpose Sec. 1. (a) If the commissioner determines, after a public hearing, that in all or any part of the state residential property insurance is not reasonably available in the voluntary market to a substantial number of insurable risks or that at least 25 percent of the applicants to the residential property market assistance program who are qualified under the plan of operation have not been placed with an insurer in the previous six-month period, the commissioner may establish a FAIR (Fair Access to Insurance Requirements) Plan to deliver residential property insurance to citizens of this state in underserved areas, which shall be determined and designated by the commissioner by rule. (a-1) Expired. (b) Except as provided by this subsection, each insurer, as defined herein, as a condition of its authority to transact residential property insurance in this state, shall participate in the FAIR Plan Association in accordance with this Act. The Texas Windstorm Insurance Association established by Article 21.49 of this code may not participate in the FAIR Plan Association for any purpose. (c) The FAIR Plan may not provide windstorm and hail insurance coverage for a risk eligible for that coverage under Article 21.49 of this code. Definitions Sec. 2. (1) "FAIR Plan Association" or "association" means a nonprofit association established pursuant to this Act to develop and administer a program to provide residential property insurance in designated underserved areas in this state. (2) "Insurer" means any licensed insurer writing property and casualty insurance in this state, including: (A) a Lloyd's plan company; and (B) a reciprocal or interinsurance exchange. (3) "Residential property insurance" means the coverage against loss to real or tangible personal property at a fixed location provided in a homeowners policy, residential fire and allied lines policy, or farm and ranch owners policy. (4) "Inspection bureau" means the organization or organizations designated by the FAIR Plan Association with the approval of the commissioner to make inspections to determine the condition of the properties for which residential property insurance is sought and to perform such other duties as may be authorized by the FAIR Plan Association or the commissioner. The manner and scope of the inspection and evaluation report for residential property shall be prescribed by the association pursuant to the plan of operation. (5) "Net direct premiums" means gross direct written premiums less return premiums upon canceled contracts (irrespective of reinsurance assumed or ceded) written on residential property pursuant to this Act. (6) "Underserved area(s)" means area(s) designated as underserved by the commissioner by rule. In determining which areas will be designated as underserved, the commissioner shall consider the factors specified in Section 1, Article 5.35-3, of this code. Governing Committee; Plan of Operation Sec. 3. (a) The FAIR Plan shall be administered by the governing committee of the association pursuant to a plan of operation. Subject to the approval of the commissioner, the governing committee shall develop the plan of operation and propose amendments thereto. The plan of operation and any amendments thereto shall be adopted by the commissioner by rule. The governing committee may on its own initiative or at the request of the commissioner amend the plan of operation. (b) The governing committee shall be composed of 11 members appointed by the commissioner as follows: (1) five members who represent the interests of insurers; (2) four public members who reside in this state; and (3) two members who are licensed general property and casualty agents. (c) The commissioner or the commissioner's designated representative from within the Texas Department of Insurance shall serve as an ex officio member. (d) To be eligible to serve on the governing committee as a representative of insurers, a person must be a full-time employee of an authorized insurer that is a member of the association. A member of the governing committee may be removed by the commissioner without cause and replaced in accordance with Subsection (b) of this section. (e) The plan of operation shall provide: (1) for establishment of a FAIR Plan Association for the issuing of residential property insurance pursuant to this Act and the distribution of the losses and the expenses in the writing of such insurance in this state; (2) that all insurers licensed to write property insurance and writing residential property insurance shall participate in the assessments of the association, in the proportion that the net direct premiums, of each participating insurer, written in this state during the preceding calendar year, bear to the aggregate net direct premium written in this state by all participating insurers; such information shall be determined in accordance with the residential property statistical plan adopted by the commissioner; (3) that a participating insurer is entitled to receive credit for similar insurance voluntarily written in a designated underserved area and its participation in the assessments of the association shall be reduced in accordance with the provisions of the plan of operation; (4) for the immediate binding of eligible risks; for the use of premium installment payment plans, adequate marketing, and service facilities; and for the establishment of reasonable service standards; (5) procedures for efficient, economical, fair, and nondiscriminatory administration of the FAIR Plan Association; (6) procedures for determining the net level of participation required for each insurer in the FAIR Plan Association; (7) for the use of deductibles and other underwriting devices and for assessment of all members in amounts sufficient to operate the association; and establish maximum limits of liability to be placed through the program; and commissions to be paid to the licensed agents submitting applications; (8) that the association issue policies in its own name; (9) reasonable underwriting standards for determining insurability of the risk; (10) procedures for the assumption and ceding of reinsurance by the association; and (11) any other procedures or operational matters deemed necessary by the governing committee or the commissioner. (f) Notwithstanding Chapter 551, Government Code, or any other law, members of the governing committee may meet by telephone conference call, video conference, or other similar telecommunication method. The governing committee may use telephone conference call, video conference, or other similar telecommunication method for purposes of establishing a quorum or voting or for any other meeting purpose in accordance with this subsection and Subsection (g) of this section. This subsection applies without regard to the subject matter discussed or considered by the members of the governing committee at the meeting. (g) A meeting held by telephone conference call, video conference, or other similar telecommunication method: (1) is subject to the notice requirements applicable to other meetings of the governing committee; (2) may not be held unless notice of the meeting specifies the location of the meeting at which at least one member of the governing committee is physically present; (3) must be audible to the public at the location specified in the notice under Subdivision (2) of this subsection; and (4) must provide two-way audio communication between all members of the governing committee attending the meeting during the entire meeting, and if the two-way audio communication link with members attending the meeting is disrupted so that a quorum of the governing committee is no longer participating in the meeting, the meeting may not continue until the two-way audio communication link is reestablished. FAIR Plan Association Sec. 4. Pursuant to procedures and requirements set forth in the plan of operation, the FAIR Plan Association (association) shall develop and administer a program for participation by all insurers licensed to write property insurance in this state and writing residential property insurance in this state. The association shall make residential property insurance available to applicants in underserved areas whose property is insurable in accordance with reasonable underwriting standards but who, after diligent efforts, are unable to procure such insurance through the voluntary market, as evidenced by two declinations from insurers licensed to write and actually writing residential property insurance in the state. Powers of the Association; Centralized Operations Authorized Sec. 5. (a) The association is authorized, for FAIR Plan purposes only, to issue policies of insurance and endorsements thereto in its own name or a trade name duly adopted for that purpose, and to act on behalf of all participating insurers in connection with said policies and otherwise in any manner necessary to accomplish the purposes of this Act, including but not limited to issuance of policies, collection of premiums, issuance of cancellations, and payment of commissions, losses, judgments, and expenses. (b) The participating insurers shall be liable to the association as provided in this Act and the plan of operation for the expenses and liabilities so incurred by the association, and the association shall make assessments against the participating insurers as required to meet such expenses and liabilities. In connection with any policy issued by the association: (1) service of any notice, proof of loss, legal process, or other communication with respect to the policy shall be made upon the association; and (2) any action by the insured constituting a claim under the policy shall be brought only against the association, and the association shall be the proper party for all purposes in any action brought under or in connection with any such policy. The foregoing requirements shall be set forth in any policy issued by the association and the form and content of any such policy shall be subject to the approval of the commissioner. (c) The association is authorized to assume and cede reinsurance in conformity with the plan of operation. (d) Each insurer must participate in the assessments of the association in the proportion that its net direct premiums written bear to the aggregate net direct premiums written by all insurers. Coverage for Windstorm and Hail Insurance; Coverage for Certain Property Located Over Water Sec. 5A. (a) A policy issued by the association may include coverage against loss or damage by windstorm or hail for: (1) a building or other structure that is built wholly or partially over water; and (2) the corporeal movable property contained in a building or structure described by Subdivision (1) of this subsection. (b) The association may impose appropriate limits of coverage and deductibles for coverage described by Subsection (a) of this section. (c) The governing committee of the association shall submit any proposed changes to the plan of operation necessary to implement Subsections (a) and (b) of this section to the commissioner for the approval of the commissioner in the manner provided by Section 3(a) of this article. (d) The commissioner shall adopt rules as necessary to implement this section, including any rules necessary to implement changes in the plan of operation proposed under Subsections (a) and (b) of this section. Property Inspection; FAIR Plan Procedure Sec. 6. (a) Any person having an insurable interest in real or tangible personal property at a fixed location in an underserved area who, after diligent effort has been unable to obtain residential property insurance, as evidenced by two current declinations from insurers licensed to write property insurance and actually writing residential property insurance in the state, is entitled upon application to the association to an inspection and evaluation of the property by representatives of the inspection bureau. (b) Applications may be made on behalf of the applicant by a licensed general lines property and casualty agent and shall be submitted on forms prescribed by the association. (c) Promptly after the request for inspection is received, an inspection must be made and an inspection report filed with the association and made available to the applicant upon request. (d) If the inspection bureau finds that the residential property meets the reasonable underwriting standards established in the plan of operation, the applicant shall be so informed in writing and a policy or binder shall be issued by the association. If the residential property does not meet the criteria, the applicant shall be informed, in writing, of the reasons for the failure of the residential property to meet the criteria. (e) If, at any time, the applicant makes improvements in the residential property or its condition which the applicant believes are sufficient to make the residential property meet the criteria, a representative of the inspection bureau shall reinspect the residential property upon request. In any case, the applicant for residential property insurance shall be eligible for one reinspection any time within 60 days after the initial FAIR Plan inspection. If upon reinspection the residential property meets the reasonable underwriting standards established in the plan of operation, the applicant shall be so informed in writing and a policy or binder shall be issued by the association. Approval of Rates Sec. 7. The association shall file with the commissioner for approval the proposed rates and supplemental rate information to be used in connection with the issuance of policies or endorsements. Rates shall be set in an amount sufficient to carry all claims to maturity and to meet the expenses incurred in the writing and servicing of the business. Within 60 days of the filing of the proposed rates, the commissioner shall enter an order either approving or disapproving, in whole or in part, the proposed rates. The commissioner may, upon notice to the association, extend the period for entering an order under this section an additional 30 days. No such policies or endorsements shall be issued until such time as the commissioner approves the rates to be applied to the policy or endorsement. An order disapproving a rate shall state the grounds for the disapproval and the findings in support thereof. Appeals; Judicial Review Sec. 8. (a) Any applicant or affected insurer has the right of appeal to the association. A decision of the association may be appealed to the commissioner within 30 days after such decision. (b) All orders or decisions of the commissioner made pursuant to this Act are subject to judicial review in accordance with Subchapter D, Chapter 36, of this code. Immunity from Liability Sec. 9. There is no liability on the part of, and no cause of action against insurers, the inspection bureau, the association, the governing committee, their agents or employees, or the commissioner or the commissioner's authorized representatives, with respect to any inspections required to be undertaken by this Act or for any acts or omissions in connection therewith, or for any statements made in any report and communication concerning the insurability of the property, or in the findings required by the provisions of this Act, or at the hearings conducted in connection with such inspections. Insolvency Sec. 10. In the event any participating insurer fails, by reason of insolvency, to pay any assessment, the association shall cause the reimbursement ratios to be immediately recalculated, excluding therefrom the amount of the insolvent insurer's assessment determined by the commissioner to be uncollectible, so that such uncollectible amount is, in effect, assumed and redistributed among the remaining participating insurers. Assessments and Premium Surcharges Sec. 11. Should a deficit occur in the association, the association, at the direction of the commissioner, shall either request the issuance of public securities as authorized by Article 21.49A-1 of this code or assess participating insurers in accordance with this section. As reimbursement for assessments paid under this section or service fees paid under Article 21.49A-1 of this code, each insurer may charge a premium surcharge on every property insurance policy issued by it insuring property in this state, the effective date of which policy is within the three-year period commencing 90 days after the date of assessment by the association under this section or commencing 90 days after payment of a service fee under Article 21.49A-1 of this code. The amount of the surcharge shall be calculated on the basis of a uniform percentage of the premium on such policies equal to one-third of the ratio of the amount of an insurer's assessment or service fee payment to the amount of its direct earned premiums as reported in its financial statement to the department for the calendar year immediately preceding the year in which the assessment is made, such that over the period of three years the aggregate of all such surcharges by an insurer shall be at least equal to the amount of the assessment or service fee payment of such insurer. The amount of any assessment paid and surcharged under this section may be carried by the member insurer as an admitted asset of the insurer for all purposes, including exhibition in annual statements under Section 862.001 of this code, until collected. The commissioner shall adopt rules and procedures as necessary to implement this section. Sanctions Sec. 12. If the association, inspection bureau, or participating insurer is found to be in violation of or in failure to comply with this Act, each entity shall be subject to the sanctions authorized in Chapter 82 of this code and administrative penalties authorized under Chapter 84 of this code. The commissioner may also utilize any other disciplinary procedures authorized by this code, including the cease and desist procedures authorized by Chapter 83 of this code. Annual Report Sec. 13. The association shall compile a calendar year annual operating report and submit such annual report to the commissioner on or before March 31 of the following calendar year. This annual report shall be a matter of public record. Powers of the Commissioner Sec. 14. (a) In addition to any powers conferred upon the commissioner by this or any other law, the commissioner is charged with the authority to supervise the association and the inspection bureau. In addition, the commissioner has the power: (1) to examine the operation of the association and the inspection bureau through free access to all the books, records, files, papers, and documents relating to their operation and may summon, qualify, and examine as witnesses all persons having knowledge of such operations, including the governing committee, officers, or employees thereof; (2) to do all things necessary to enable the State of Texas and the association to fully participate in any federal program of reinsurance which may be enacted for purposes similar to the purposes of this Act; (3) to require such reports from the association concerning risks insured by the association pursuant to this Act as may be deemed necessary; and (4) to adopt policy forms, endorsements, rates, and rating and rule manuals for use by the association. Retention of Profits Sec. 15. The association shall retain any profits of the association to be used for the purposes of the association. The profits of the association shall be used to mitigate losses, including the purchase of reinsurance and the offset of future assessments, and may not be distributed to insurers. Assets of Association Sec. 16. On dissolution of the association, all assets of the association shall be deposited in the general revenue fund. Added by Acts 1995, 74th Leg., ch. 415, Sec. 6, eff. Aug  21.49A-1  21.49B  21.49C  21.50  21.52B  21.53X  21.54  21.58A  21.58B  21.58C  21.61  21.70  Next

Last modified: August 11, 2007


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