EMPLOYEE BENEFIT PLAN (herein referred to as the Plan ) RESTATED

Transcription

1 Master Benefit Plan Document for the HealthSelect SM of Texas Prescription Drug Program EMPLOYEE BENEFIT PLAN (herein referred to as the Plan ) RESTATED MASTER BENEFIT PLAN DOCUMENT describing the PRESCRIPTION DRUG PROGRAM for the Managed Care Plan (In-Area Benefits) and Comprehensive Medical Care Plan (Out-of-Area Benefits) for the EMPLOYEES RETIREMENT SYSTEM OF TEXAS (hereinafter referred to as ERS ) Effective Date: September 1, 2014 Implementing Amendments effective September 1, 2009, June 1, 2010, September 1, 2010, September 1, 2011, September 1, 2012, and September 1, 2013

2 Table of Contents Page No. Article I Definitions Allowable Amount... 4 Appeal Authorized Representative.. 4 Average Wholesale Price (AWP)... 4 Copay... 4 Cosmetic Drug... 4 Covered Drug... 4 DESI Drugs... 5 Experimental/Investigational... 5 FDA... 5 Generic Substituted Drug... 5 Identification Card... 5 Legend Drugs... 5 Master Benefits Plan Document... 5 Maximum Allowable Cost (MAC)... 5 Medically Necessary or Medical Necessity... 5 Network... 6 Non-Preferred Brand Name Drug... 6 Nonparticipating (Non-Network) Pharmacy... 6 Off Label Use... 6 Over the Counter (OTC) Drugs... 6 Participating (Network) Pharmacy... 6 Pharmacy... 6 Pharmacy and Therapeutics (P&T) Committee... 6 Pharmacy Benefits Manager (PBM)... 6 Physician or Other Provider... 6 Preferred Drug List... 7 Pre Service Appeal. 7 Post Service Appeal Prescription Order... 7 Preventive Medications... 7 Prior Authorization... 7 Quantity Limitation... 7 Tier... 7 Trustee... 7 Urgent Care 7 Usual and Customary... 7 Article II Terms and Provisions... 8 Article III Benefits Provided Benefits... 9 Limitations on Quantities Dispensed Prior Authorization Compound Medications Copay Retail Benefits

3 Table of Contents Extended Days Supply Network and Mail Service Benefits Plan Year Deductible Identification Card Unauthorized, Fraudulent, Improper or Abusive Use of Prescription Identification Cards Article IV Limitations and Exclusions Article V Claims Denials and Appeals 17 3

4 Article I- Definitions As used herein: A. Allowable Amount means the lesser of: (1) Usual and Customary; (2) Maximum Allowable Cost plus a contractually determined dispensing fee; or (3) the Average Wholesale Price less a contractually determined discount amount plus dispensing fee. B. Appeal means you, or your Authorized Representative has the right to ask for review of an adverse benefit determination (denial) that is subject to the Master Benefit Plan Document for the HealthSelect SM of Texas Prescription Drug program. C. Authorized Representative is a person who shall have the authority to represent the Participant in all matters concerning the Participant s claim or appeal of a claim determination. See Authorized Representative section of Article V for additional information. D. Average Wholesale Price (AWP) means a nationally-tracked pricing index provided to the PBM by Medispan, or such other nationally available reporting service of pharmaceutical prices as recommended by PBM and approved by ERS. AWP is the list price charged by wholesalers in the United States for the drug products they sell to a Pharmacy. E. Copay means the amount paid by the Participant for each Prescription Order dispensed or refilled at a Participating (Network) Pharmacy. If a Participant receives a preferred or Non-Preferred brand name drug when a Generic Substituted Drug is available, the amount paid by the Participant will include the generic copay plus the difference in cost between the generic drug and the preferred or Non-Preferred brand name drug dispensed. F. Cosmetic Drug means a drug that is used primarily to enhance appearance, including, but not limited to, correction of skin wrinkles, skin aging and hair loss, even if the drug may have other non-cosmetic uses. G. Covered Drug means any Legend Drug or injectable insulin, including disposable syringes and needles needed for self-administration: 1. That is Medically Necessary and is ordered by a Physician or Other Provider naming a Participant as the recipient; 2. For which a written or verbal Prescription Order is prepared by a Physician or Other Provider; 3. For which a separate charge is customarily made; 4. That is used for the purpose for which U.S. Food and Drug Administration (FDA) approval has been given, or used consistent with the applicable program criteria approved by the PBM s Pharmacy and Therapeutics (P&T) Committee; and 5. That is dispensed by a Pharmacy and is received by the Participant while covered under this Prescription Drug Program, except when received in a Physician s or Other Provider s office, or during confinement while a patient in a Hospital or other acute care institution or Facility. 4

5 Article I- Definitions H. DESI Drugs (Drug Efficacy Study Implementation) means drugs or medicines that have been determined by the U.S. government to be less than effective. I. Experimental/Investigational for purposes of the Master Benefit Plan Document describing the Employees Retirement System of Texas Prescription Drug Program means drugs or medicines that cannot be purchased, or that are not approved by the FDA for public use for any purpose, or that have been approved by the FDA for public use for some purposes but have not been proven to be safe, effective, and appropriate for the diagnosis or treatment of the injury or illness for which it is prescribed by either the FDA or used consistent with the applicable program criteria approved by the PBM s P&T Committee. J. Extended Days' Supply Network means a Network of retail pharmacies that will fill a 31- to 90- day supply of medicine with the same Copay as a mail order prescription. Pharmacies in the Extended Days Supply Network will not charge you a maintenance fee for a 31- to 90-day supply. K. FDA means the United States Food and Drug Administration, the federal agency responsible for drug oversight, (i.e. approval and dispensing protocols). L. Generic Substituted Drug means a drug manufactured and distributed after the patent of the innovator brand name drug has expired. The generic drug must have the same active ingredient, strength and dosage form as its brand name counterpart. M. Identification Card means the Prescription ID card issued to the Employee or Retiree indicating pertinent information applicable to a participant s prescription drug coverage. N. Legend Drugs means drugs, biologicals, or compounded prescriptions that are required by law to have a label stating Caution Federal Law Prohibits Dispensing Without a Prescription, and that are approved by the FDA for a particular use or purpose. O. Master Benefit Plan Documents mean the Managed Care (In-Area Benefits) Plan and the Comprehensive Medical Care (Out-of-Area) Plan describing the HealthSelect SM of Texas Plan (HealthSelect). P. Maximum Allowable Cost (MAC) means a list of drugs subject to Maximum Allowable Cost payment schedules developed by the PBM. The payment schedules specify the maximum unit ingredient cost payable by the Plan for drugs on the MAC list. The MAC list and payment schedules are updated frequently. Q. Medically Necessary or Medical Necessity means those Covered Drugs that are: 1. Essential to, consistent with, and provided for the diagnosis or the direct care and treatment of the condition, sickness, disease, injury, or bodily malfunction; 2. Provided in accordance with and are consistent with generally accepted standards of medical practice in the United States; 3. Not primarily for the convenience, personal preference, or appearance of the Participant or his Physician or Other Provider; 5

6 Article I- Definitions 4. The most economical Covered Drugs that are appropriate for the safe and effective treatment of the Participant, and 5. Not Experimental/Investigational in nature at the time the drugs are provided. The PBM for the Plan shall determine whether or not a Covered Drug is Medically Necessary under the Plan and shall consider the views of the state and national medical communities and the views and practices of Medicare, Medicaid, or other government-financed programs and peer reviewed literature. Although a Physician or Other Provider may have prescribed Covered Drugs, such drugs may not be Medically Necessary within this definition. R. Network means a group of independent Pharmacies or chain of Pharmacies having a particular agreement for providing prescription drug services in a Network serving this Plan. S. Non-Preferred Brand Name Drug means designated prescription brand name drugs available at a higher copay than most Preferred brand name drugs. All new drugs will be designated as Non- Preferred until reviewed by the Pharmacy and Therapeutics Committee. T. Nonparticipating (Non-Network) Pharmacy means a Pharmacy which has not entered into an agreement with the PBM to provide prescription drug benefits to Participants covered under this Prescription Drug Program. U. Off Label Use means the use of FDA approved drugs for unapproved indications. V. Over the Counter (OTC) Drugs means drugs that may be purchased without a prescription. A drug that may be otherwise purchased without a prescription but is prescribed at a strength requiring a prescription is not considered to be OTC. W. Participating (Network) Pharmacy means an independent Pharmacy or chain of Pharmacies that have contracted with the PBM to provide Pharmacy services to Participants covered under this Prescription Drug Program. X. Pharmacy means a state and federally licensed establishment where the practice of pharmacy occurs that is physically separate and apart from any Physician s or Other Provider s office and where Legend Drugs and devices are dispensed under Prescription Orders to the general public by a pharmacist licensed to dispense such drugs and devices under the laws of the state in which he practices. Y. Pharmacy and Therapeutics (P&T) Committee means a committee of independent members consisting of physicians and clinical pharmacists. The Committee s purpose is to develop the formulary, prescribing guidelines, coverage criteria (e.g., Prior Authorization) and drug utilization review interventions. The P&T Committee meets periodically to review information on safety and efficacy of each drug considered for inclusion or exclusion from the Preferred and Non-Preferred Brand Name Drug lists. Z. Pharmacy Benefits Manager (PBM) for the purposes of the Prescription Drug Program means Caremark Rx, L.L.C. (Caremark), administrator of the participating retail pharmacy program and mail service pharmacy program. AA. Physician or Other Provider means a person who is licensed and authorized to prescribe Legend Drugs to humans under state and federal law. 6

7 Article I- Definitions BB. Preferred Drug List means a list of prescription drugs, biologicals and devices approved by the P&T Committee for inclusion in the pharmacy benefit program. The Preferred Drug List is subject to change. CC. Pre Service Appeal means that you have sought and been denied Prior Authorization for a prescription drug and you request additional review of this denial. DD. Post Service Appeal means you have received and paid for prescription drugs, and you are requesting additional review following a denial of your claim by Caremark. EE. Prescription Order means a written or verbal order from a Physician or Other Provider to a pharmacist for a drug or device to be dispensed. Orders written by Physicians or Other Providers located outside the United States to be dispensed in the United States are not covered under this Prescription Drug Program. FF. Preventive Medications means those medications that are deemed to be preventive in nature by the FDA. Some of these medications are available Over-The-Counter; when presented with a Prescription Order they may be available to the participant at a zero cost share. GG. Prior Authorization means a process applied to certain drugs or classes of drugs to define the conditions under which these drugs will be covered by the pharmacy benefit program. The drugs and conditions for coverage are recommended by the P&T Committee and are subject to periodic review and modification. If a prescription drug is not prior authorized or exceeds the Quantity Limitation, the Participant will be responsible for the entire cost of the prescription drug once the limits have been exceeded. The Participant s prescribing Physician or Other Provider may request reconsideration from the PBM; however, Plan grievance and appeal rights are not available to the Participant. HH. Quantity Limitation means a process applied to selected classes of drugs to limit the amount of medication dispensed to an amount set forth in nationally recognized guidelines. Quantity Limitations are recommended by the P&T Committee and are subject to periodic review and modification. If a prescription drug exceeds the Quantity Limitation, the Participant will be responsible for the entire cost of the prescription drugs exceeding the Quantity Limitation. The Participant s prescribing Physician or Other Provider may request reconsideration from the PBM; however, Plan grievance and appeal rights are not available to the Participant. II. JJ. Subrogation means the Plan has paid monies to you or on your behalf for prescription claims related to a Sickness or Injury for which a third party is or may be considered responsible. Tier means a copay level for Covered Drugs. KK. Trustee means a member of the Board of Trustees of the Employees Retirement System of Texas. LL. Urgent Care means a request, defined by the Physician, that needs to be handled in an expedited manner according to the Urgent Care guidelines. MM. Usual and Customary means the price a cash patient would have paid the day the prescription was dispensed, inclusive of all applicable discounts. 7

8 Article II- Terms and Provisions All definitions, terms, and provisions recited in the Master Benefit Plan Document- Employees Retirement System of Texas HealthSelect SM of Texas Managed Care (In-Area Benefits) Plan and the Master Benefit Plan Document- Employees Retirement System of Texas HealthSelect SM of Texas Comprehensive Medical Care (Out-of-Area) Plan, except those contained in Sections 3 through 7, and 11, are hereby adopted and shall be construed to apply in like manner and with equal force to this Prescription Drug Program; provided, that if any such provisions are in conflict with provisions herein contained, the provisions of this Prescription Drug Program shall govern in any interpretations of rights or obligations accruing under the Plan. 8

9 Article III - Benefits Provided A. Benefits In-network or out-of-network paper claims will be paid up to 365 days from the original date of fill. 1. Participating (Network) Pharmacies a. When any Participant, while covered under this Prescription Drug Program, shall obtain Covered Drugs at a Participating (Network) Pharmacy, upon: (1) presentation of a current valid Prescription ID Card; (2) payment to the Pharmacy of the appropriate Copay amount for the drugs received; and (3) providing a valid Prescription Order and the necessary recipient information and signatures required by the Pharmacy, the Plan will reimburse the Participating (Network) Pharmacy an amount equal to the contractually agreed to Allowable Amount remaining for the Covered Drugs dispensed. b. If Covered Drugs are obtained from a Participating (Network) Pharmacy by a Participant while covered under this Prescription Drug Program prior to the Employee s receipt of a Prescription ID Card, the Plan will reimburse the Employee for the contract amount paid, less the appropriate Copay amount. c. If Covered Drugs are obtained from a Participating (Network) Pharmacy by a Participant while covered under this Prescription Drug Program after the Employee s receipt of a Prescription ID Card, and the Participant does not comply with the requirements of Section A, Subsection 1, Paragraph a, above, at the time the Covered Drug is dispensed, the Plan will reimburse the Employee in an amount equal to the billed Pharmacy charge, less the appropriate Copay amount, up to the amount the Plan would have paid the Participating (Network) Pharmacy under the contractual arrangement with the Pharmacy. The PBM will provide documentation of its determination of the benefit amount upon request of the Participant. 2. Nonparticipating (Non-Network) Pharmacies When any Participant, while covered under this Prescription Drug Program, shall obtain Covered Drugs at a Nonparticipating (Non-Network) Pharmacy, the Plan will pay benefits equal to 60% of the remaining balance as calculated using the lesser of (a) or (b) below: a) The Usual and Customary price of the drug minus the Plan Year deductible (if not met) and less the appropriate Copay amount; or, b) The ERS discounted price of the drug plus any applicable dispensing fee minus the Plan Year deductible (if not met) and less the appropriate Copay amount. Please note that if a brand name medication that has an available generic equivalent is dispensed, in addition to paying the generic Copay, the Participant shall be responsible for the difference in cost between the generic and preferred or Non-Preferred Brand Name Drug. Written Proof of Loss must be furnished to the PBM at its designated office (Caremark Claims Department, P.O. Box 52136, Phoenix, AZ ), or to its duly authorized 9

10 Article III - Benefits Provided agent. Failure to furnish such proof within the time required shall not invalidate or reduce any claim if it was not reasonably possible to furnish such proof within such time due to absence of legal capacity of the Employee or Retiree. The PBM will provide documentation of its determination of the benefit amount upon request of the Employee or Retiree. B. Limitations on Quantities Dispensed 1. Covered Drugs dispensed shall be limited to the copay and supply limitations stated in Article III (Benefits Provided) Sections E (Copay Retail Benefits) and F (Mail Service Benefits) and Subsections 3 and 4. Replacement of lost, stolen or damaged medication is generally not provided under this Plan. The Quantity Limitation includes drugs necessary for the treatment of phenylketonuria or other heritable diseases when the drugs are dispensed under a Prescription Order. When approved by the Physician issuing the Prescription Order, Generic Substituted Drugs will be substituted for brand name drugs. 2. Benefits for injectable insulin shall be limited in accordance with Section B.1. above, when the insulin is dispensed under a Prescription Order. 3. The quantity of disposable syringes and needles covered for self-administered injections shall be limited to amounts appropriate to the dosage amounts of Covered Drugs actually prescribed and dispensed, but cannot exceed the quantity required in accordance with Section B.1. above. When disposable syringes and needles are purchased with insulin, only one copay for insulin, syringes and needles applies (30-day supply or 90-day supply as applicable). When disposable syringes and needles are purchased without insulin, a separate copay for the syringes and needles applies (30-day supply or 90-day supply as applicable). 4. Payment for benefits covered under this Prescription Drug Program may be denied when drugs are dispensed or delivered in a manner intended to circumvent, or having the effect of circumventing, the Quantity Limitations described above, such as obtaining multiple refills for the same Prescription Order prior to the original supply being consumed. C. Prior Authorization Certain prescription drugs are covered under the Plan only if they are prescribed for treatment of a covered benefit and approved by the FDA for that treatment. These drugs require Prior Authorization that must be obtained from the PBM by the prescribing provider or the pharmacist. The list of prescription drugs and the coverage criteria requiring Prior Authorization are subject to periodic review and modification by the PBM. If Prior Authorization is not approved, the participant will be responsible for the entire cost of the prescription drug. Appeals are available through the PBM for most drugs under Prior Authorization; however, appeals are not available through ERS. 10

11 Article III - Benefits Provided D. Compound Medications 1. Claims for compound medications may be submitted in two ways: a. The participating retail pharmacy may submit the claim electronically to the PBM. The participant will pay a copay at the time of service. The PBM will reimburse the pharmacy. b. If the participant utilizes a non-network pharmacy or utilizes a Network pharmacy that will not file the electronic claim, the participant must file a direct claim to the PBM. The participant will be responsible for any cost differences between the pharmacy charge and the plan reimbursement. 2. In order for a direct claim to be processed, the participant must send the PBM an itemized list of ingredients with a receipt and fully completed claim form. The claim and/or receipt must include: a. The amount charged by the pharmacy; b. The cost per individual ingredient; c. Each individual ingredient name; d. The total volume or quantity of the compound and per compounded ingredient (such as the number of capsules or the number of milligrams); and e. The valid National Drug Code (NDC) for each ingredient. E. Copay Retail Benefits The benefits of this Prescription Drug Program shall be available for Covered Drugs up to a 30- day supply dispensed by a Participating (Network) Pharmacy after the Plan Year prescription drug deductible has been met and with application of one of the following Copay amounts: 1. Tier 1 Drugs (Primarily Generic Drugs): a. A Copay amount of $10.00 shall apply to each covered Tier 1 Drug dispensed. b. A Copay amount of $10.00 shall apply to each covered maintenance Tier 1 Drug dispensed. 2. Tier 2 Drugs (Mostly Preferred Brand Name Drugs): a. A Copay amount of $35.00 shall apply to each covered Tier 2 Drug dispensed. b. A Copay amount of $45.00 shall apply to each covered maintenance Tier 2 Drug dispensed. 3. Tier 3 Drugs (Non-Preferred Brand Name Drugs and Other Preferred Brand Name Drugs): a. A Copay amount of $60.00 shall apply to each covered Tier 3 Drug dispensed. b. A Copay amount of $75.00 shall apply to each covered maintenance Tier 3 Drug dispensed. Certain female contraceptives may be covered without any participant cost share dependent upon generic availability. Under the Affordable Care Act, certain contraceptive methods for women with reproductive capacity are paid at 100% (i.e., at no cost to the participant). In some cases, you 11

12 Article III - Benefits Provided will be responsible for payment (for example, if you choose a Preferred Brand Name Drug or Non-Preferred Brand Name Drug when a generic is available.) 12

13 Article III - Benefits Provided F. Extended Days Supply Network and Mail Service Benefits The benefits of this Prescription Drug Program shall be available for Covered Drugs up to a 90- day supply dispensed in accordance with the terms and conditions that apply to the PBM s mail service pharmacy or a participating Extended Days Supply Network pharmacy, described below after the Plan Year prescription drug deductible has been met and with application of one of the following Copay amounts: 1. Tier 1 Drugs (Primarily Generic Drugs): a. A Copay amount of $10.00 shall apply to each 30-days supply of covered Tier 1 Drug dispensed. b. A Copay amount of $20.00 shall apply to each days supply of covered Tier 1 Drug dispensed. c. A Copay amount of $30.00 shall apply to each days supply of covered Tier 1 Drug dispensed. 2. Tier 2 Drugs (Mostly Preferred Brand Name Drugs): a. A Copay amount of $35.00 shall apply to each 30-days supply of covered Tier 2 Drug dispensed. b. A Copay amount of $70.00 shall apply to each days supply of covered Tier 2 Drug dispensed. c. A Copay amount of $ shall apply to each days supply of covered Tier 2 Drug dispensed. 3. Tier 3 Drugs (Non-Preferred Brand Name Drugs and Other Preferred Brand Name Drugs): a. A Copay amount of $60.00 shall apply to each 30-days supply of covered Tier 3 Drug dispensed. b. A Copay amount of $ shall apply to each days supply of covered Tier 3 Drug dispensed. c. A Copay amount of $ shall apply to each days supply of covered Tier 3 Drug dispensed. Certain female contraceptives may be covered without any participant cost share dependent upon generic availability. Under the Affordable Care Act, certain contraceptive methods for women with reproductive capacity are paid at 100% (i.e., at no cost to the participant). In some cases, you will be responsible for payment (for example, if you choose a Preferred Brand Name Drug or Non-Preferred Brand Name Drug when a generic is available.) The Copay amounts for non-maintenance drugs at a Participating Pharmacy described above will be shown on the Prescription ID Card. The Participant is obligated to pay the appropriate Copay amount to the Pharmacy before benefits under this Prescription Drug Program will apply. PBM shall allow a community retail pharmacy or a Participating (Network) Pharmacy to dispense a multiple-month supply for thirty-one (31) or more days of any prescription drug covered under the Plan in accordance with the same terms and conditions applicable when such prescription drug is dispensed from PBM s mail service pharmacy; however, the pharmacy must be or become a Participating (Network) Pharmacy and must agree to accept reimbursement on exactly the same terms and conditions that apply to PBM s mail service 13

14 Article III - Benefits Provided pharmacy. PBM agrees to provide such interested pharmacies the terms and conditions provided such pharmacies execute a confidentiality agreement with PBM prior to the release of such pricing terms. G. Plan Year Deductible Each Participant must satisfy a $50 deductible per Plan Year (September 1 through August 31). The prescription drug copays apply after the deductible has been satisfied for drugs dispensed through a participating retail pharmacy or mail service. For drugs dispensed through a non- Participating Pharmacy, the deductible and copays are applied as required by the reimbursement formula. H. Identification Card l. Prescription ID Cards for each covered Employee or Retiree will be mailed to the Employee or Retiree. Where coverage applied for is other than for an individual Employee or Retiree, two cards will be provided. 2. The Prescription ID Card is required to be presented to Participating (Network) Pharmacies in order for a Participant to receive full program benefits. The card will contain information needed by the Participating (Network) Pharmacy to identify the Participant, the group, and the coverage. 3. PBM shall produce and provide Prescription ID cards for Participants use with Participating (Network) Pharmacies which shall comply with Identification Card requirements pursuant to applicable Texas statutes and regulations. These Prescription ID cards shall include at least the following on the front of the card: (1) The name of the PBM if different from the health benefit plan issuer; (2) The participant s group number; (3) The identification number of the participant that must not be his/her social security number; (4) The bank identification number necessary for electronic billing; (5) The effective date of the coverage evidenced by the card; and (6) Copay information for generic and brand-name prescription drugs. The Prescription Identification Card shall also include at least the following additional information (on either the front or the back of the card): (1) The logo of the PBM if different from the health benefit plan issuer; and (2) A telephone number for contacting a PBM representative to obtain information relating to the Pharmacy benefits provided under the plan. I. Unauthorized, Fraudulent, Improper, or Abusive Use of Prescription Identification Cards 1. The unauthorized, fraudulent, improper, or abusive use of Prescription ID Cards issued to an Employee or Retiree and his covered family members shall include, but not be limited to: a. Use of the Prescription ID Card prior to the Employee s or Retiree s effective date; 14

15 Article III - Benefits Provided b. Use of the Prescription ID Card after the Employee s or Retiree s coverage terminates under the Plan; c. Obtaining prescription drugs or other benefits for persons not covered under this Prescription Drug Program; d. Obtaining prescription drugs or other benefits that are not covered under this Prescription Drug Program; e. Obtaining Covered Drugs for resale or for use by any person other than the person for whom the Prescription Order is written, even though the person is otherwise covered under this Prescription Drug Program; f. Obtaining Covered Drugs without a Prescription Order or through the use of a forged or altered Prescription Order; g. Obtaining quantities of prescription drugs in excess of Medically Necessary standards of use or in circumvention of the Quantity Limitations of this Prescription Drug Program; h. Obtaining prescription drugs using Prescription Orders for the same drugs from multiple Physicians or Other Providers; and i. Obtaining prescription drugs from multiple Pharmacies through use of the same Prescription Order. 2. The unauthorized, fraudulent, improper, or abusive use of a Prescription ID Cards by any Participant can result in but is not limited to, the following sanctions being applied to all. Participants covered under the Employee s or Retiree s coverage: a. Denial of benefits; b. Limitation on the use of the Prescription ID Card to one designated Participating (Network) Pharmacy of the Participant s choice; c. Recoupment from the Participant of any benefit payments made; d. Preapproval of drug purchases for all Participants covered under the Employee s or Retiree s coverage; e. Notice to proper authorities of potential violations of law or professional ethics; and f. Removal from the Texas Employees Group Benefits Program. 15

16 Article IV Limitations and Exclusions The benefits of this Prescription Drug Program are not available for: A. Drugs which do not by law require a Prescription Order from a Physician or Other Provider (except injectable insulin). Drugs prescribed at a strength requiring a Prescription Order are not excluded, even if available without a prescription at a lesser strength. Drugs accompanied by a Prescription Order for a preventive medication are not excluded. B. Drugs, insulin, or covered devices for which no valid Prescription Order is obtained, either in writing or given verbally to a pharmacist by a Physician or Other Provider. C. Devices or Durable Medical Equipment of any type (even though such devices may require a Prescription Order), such as, but not limited to, contraceptive devices, therapeutic devices, artificial appliances, or similar devices (except disposable hypodermic needles and syringes for self-administered injections). D. Administration or injection of any drugs. E. Vitamins (except those vitamins which by law require a Prescription Order and for which there is no non-prescription alternative). F. Drugs dispensed in a Physician s or Other Provider s office or during confinement while a patient in a Hospital, or other acute care institution or Facility, including take-home drugs; and drugs dispensed by a nursing home or custodial or chronic care institution or Facility. Drugs dispensed in a Physician s or Other Provider s office, during confinement while a patient in a Hospital or Substance Abuse Facility, or while a patient in a Facility may be covered under the HealthSelect SM of Texas Plan. G. Covered Drugs, devices, or other Pharmacy services or supplies provided or available in connection with an occupational sickness or an injury sustained in the scope of and in the course of employment whether or not benefits are, or could upon proper claim be, provided under the Workers Compensation law. Covered Drugs, devices, or other Pharmacy services or supplies for which benefits are, or could upon proper claim be, provided under any present or future laws enacted by the Legislature of any state, or by the Congress of the United States, or the laws, regulations or established procedures of any county or municipality, or any prescription drug which may be properly obtained without charge under local, state, or federal programs, unless such exclusion is expressly prohibited by law; provided, however, that the exclusions of this Section G shall not be applicable to any coverage held by the Participant for prescription drug expenses which is written as a part of or in conjunction with any automobile casualty insurance policy. H. Any services provided or items furnished for which the Pharmacy normally does not charge. I. Drugs for which the Pharmacy s Usual and Customary charge to the general public is less than or equal to the amount of Copay provided under this Prescription Drug Program. J. Contraceptive devices and contraceptive materials other than oral contraceptives and those preventive contraceptive items that may be purchased OTC with a prescription pursuant to the Patient Protection and Affordable Care Act. 16

17 Article IV Limitations and Exclusions K. Any prescription antiseptic or fluoride mouthwashes, mouth rinses, or topical oral solutions or preparations. L. Drugs required by law to be labeled: Caution - Limited by Federal Law to Investigational Use, or Experimental drugs, even though a charge is made for the drugs. M. Covered Drugs dispensed in quantities in excess of the amounts stipulated in Article III of this Prescription Drug Program, or refills of any prescriptions in excess of the number of refills specified by the Physician or Other Provider or by law, or dispensed in quantities in excess of the amounts stipulated in Article III of this Prescription Drug Program, or any drugs or medicines dispensed more than one year following the Prescription Order date. N. Fluids, solutions, nutrients, or medications (including all additives and chemotherapy) used or intended to be used by intravenous or gastrointestinal (internal) infusion or by intravenous injection in the home setting. These fluids, solutions, nutrients, or medications may be covered under the HealthSelect SM of Texas Plan. O. Drugs used primarily for cosmetic purposes such as, but not limited to: Retin-A, Renova, Solage, Rogaine. P. Drugs prescribed and dispensed for the treatment of obesity, with an FDA indication for weight loss or for use in any program of weight reduction, weight loss, or dietary control, even if the Participant has medical conditions which might be helped by a reduction of obesity or weight and even though prescribed by a Physician. Q. Any Over the Counter smoking cessation product, including, but not limited to nicotine gum and nicotine patches. R. Drugs obtained by unauthorized, fraudulent, abusive, or improper use of the Prescription ID Card. S. Drugs used or drugs intended to be used illegally or unethically. T. Legend Drugs which are being used for purposes other than those approved by the FDA or consistent with the applicable program criteria approved by the PBM s Pharmacy and Therapeutics (P&T) Committee U. Drugs used or intended to be used in the treatment of a condition, sickness, disease, injury, or bodily malfunction which is not covered under the Master Benefit Plan Document for the HealthSelect SM of Texas Prescription Drug program or for which benefits have been exhausted. V. Coordination of benefit claims by other group plans, except when required for other governmental programs in which case ERS will coordinate benefits. W. Homeopathic products and herbal remedies. 17

18 Article V- Claim Denials and Appeals What this section includes: How Network and Non-Network claims work; and What you may do if your claim is denied, in whole or in part. Note: You may designate an Authorized Representative who has the authority to represent you in all matters concerning your claim or appeal of a claim determination. If you have an Authorized Representative, any references to you or Participant in this Section will refer to the Authorized Representative. See Authorized Representative below for details. A. Network Benefits In general, if you receive a Covered Prescription from a Network Pharmacy, Caremark will pay the Pharmacy directly. If a Network Pharmacy bills you for any Covered Prescription other than your Copay, please contact the Pharmacy or call Caremark at (888) toll free for assistance. Keep in mind, you are responsible for paying any Copay owed to a Network Pharmacy at the time of service. You are also responsible for the full cost of Prescriptions that are not covered by your plan. B. Non-Network Benefits If you receive a bill for a Covered Prescription from a Non-Network Pharmacy, you must send the bill to Caremark for processing. To make sure the claim is processed promptly and accurately, a completed claim form must be attached and mailed to Caremark at the address on the back of your prescription benefits card. C. If Your Provider Does Not File Your Claim You can obtain a claim form by visiting calling Caremark at (888) toll free or contacting your Benefits Coordinator. If you do not have a claim form, simply attach a brief letter of explanation to the bill, and verify that the bill contains the information listed below. If any of these items are missing from the bill, you can include them in your letter: your name and address; the Participant s name, age and relationship to the Subscriber; the ID number as shown on your prescription benefits card; the name, address and tax identification number of the Pharmacy of the service(s); the date of service; and an itemized bill from the Pharmacy. Failure to provide all the information listed above may delay any reimbursement that may be due you. Intentionally false statements of material fact may result in adverse action against you, including, but not limited to, termination of your health coverage and expulsion from the GBP. The above information should be filed with Caremark at the address on your prescription benefits card. After Caremark has processed your claim, you will receive payment for Benefits that the Plan allows. It is your responsibility to pay the Non-Network Pharmacy the charges you incurred, including any difference between what you were billed and what the Plan paid. You may review your prescription history by visiting or by calling Caremark tollfree at (888) to place a request for a Track Your Rx Spend Report. 18

19 Article V- Claim Denials and Appeals. Important - Timely Filing of Non-Network Claims All claim forms for Non-Network services must be submitted within 365 days after the date of service. Otherwise, the Plan will not pay any Benefits for that Eligible Expense, or Benefits will be reduced, as determined by Caremark. This 365 day requirement does not apply if you are legally incapacitated. If your claim relates to an Inpatient Stay, the date of service is the date your Inpatient Stay ends. D. Claim Denials and Appeals If Your Claim is Denied If a claim for Benefits is denied in part or in whole, you may call Caremark at (888) toll free before requesting a formal appeal. If Caremark cannot resolve the issue to your satisfaction over the phone, you have the right to file a formal appeal as described below. How to Appeal a Denied Claim If you wish to appeal a denied Pre-Service Request for Benefits, a Non-Covered Benefit, or Post-Service Claim, or appeal a rescission of coverage you or your Authorized Representative must submit your appeal as described below in writing within 180 days of receiving the adverse Benefit determination. This communication should include: the Participant s name and ID number as shown on the prescription benefits card; the Provider's name; the date of service; the reason you disagree with the denial or coverage decision; and any documentation or other written information to support your appeal. You or your Authorized Representative may send a written appeal to: Caremark Appeals Department MC 109, P.O. Box Phoenix, AZ Or fax your request to: You do not need to submit appeals of Urgent Care Requests for Benefits in writing. For Urgent Care Requests for Benefits that have been denied, your Provider should call Caremark at 1-(866) toll free to request an appeal. 19

20 Article V- Claim Denials and Appeals c. Types of Claims The timing of the claims appeal process is based on the type of claim you are appealing. If you wish to appeal a claim, it helps to understand whether it is an: Urgent Care Request for Benefits; Pre-Service Request for Benefits; Post-Service Claim; or rescission of coverage. 1. First Internal Appeal Caremark will conduct a full and fair review of your appeal. The appeal may be reviewed by: an appropriate individual(s) who did not make the initial benefit determination; and a health care professional with appropriate expertise who was not consulted during the initial Benefit determination process. Once the review is complete, if Caremark upholds the denial, you and your Provider will receive a written explanation of the reasons and facts relating to the denial and a description of additional appeal procedures, if applicable. If Caremark overturns the denial, you and your Provider will receive notification of its decision and Benefits will be paid, as appropriate. Notes: A denial of Benefits for prescription coverage does not mean that you cannot receive the prescriptions. A denial of the Benefits simply means that the prescriptions are not covered under the Plan and no payments will be made to you or any Providers by the Plan if you receive the denied prescriptions, unless you win a subsequent appeal. If your Urgent Request for Benefits was denied, you may request an expedited External Review at the same time that you request an expedited internal appeal to Caremark. Immediately upon receipt of your request for an Expedited External Review, Caremark will determine whether the request meets the reviewability requirements for an External Review. Immediately upon completing this review, Caremark will notify you that: (i) the request is complete and may proceed; (ii) the request is not complete, and additional information is needed (along with a list of the information needed to complete the request); or (iii) the request is complete, but not eligible for review. 2. Second Internal Appeal to Caremark (of an Urgent Care Request for Benefits or a Pre- Service Request for Benefits) If you are not satisfied with the first internal appeal decision regarding an Urgent Care Request for Benefits involving medical judgment or a Pre-Service Request for Benefits involving medical judgment, you have the right to request a second internal appeal from Caremark. You must file a written request for the second internal appeal within 180 days from your receipt of the first internal appeal determination notification. If the denial is upheld at the second internal appeal level, Caremark will notify you of the reasons for its decision and that your internal appeal options are exhausted. If the appeal involves issues of medical judgment, you may request an external review of the denial within four months of receiving Caremark s 20

21 Article V- Claim Denials and Appeals notice. If Caremark overturns its decision at the second internal appeal level, Caremark will notify you of its decision and Benefits will be paid, as appropriate. Note: Upon written request and free of charge, Participants may examine documents relevant to their claims and/or appeals and submit opinions and comments. Caremark will review all claims in accordance with the rules established by the U.S. Department of Labor. 3. Second Internal Appeal to ERS (of a Post-Service Claim or a Rescission of Coverage) If you are not satisfied with the first internal appeal decision regarding a Post-Service Claim or a rescission of coverage, you have the right to request a second internal appeal from ERS. You must file a written request for the second internal appeal within 90 days from your receipt of the first level appeal determination notification. If ERS upholds the denial at the second internal appeal level, ERS will notify you of the reasons for its decision and that your internal appeal options are exhausted. If your appeal involves issues of medical judgment or a rescission of coverage, you may request an external review. If ERS overturns the denial, Caremark will notify you and Benefits will be paid, as appropriate. ERS does not review denials of Pre-Service Requests for Benefits or Urgent Care Requests for Benefits. Caremark and ERS will complete reviews within legally applicable time periods. Tables 1 through 3 below describe the time frames which you and Caremark are required to follow. 21

22 Article V- Claim Denials and Appeals TABLE 1 Urgent Care Request for Benefits 1 Action to Be Taken Timing 2 If your Request for Benefits is complete, Caremark must notify you and your Provider of the benefit determination within: 72 hours If your Request for Benefits is incomplete, Caremark must notify you that it is incomplete within: You must then provide the completed Request for Benefits to Caremark within: Caremark must notify you and your Provider of the benefit determination within: If Caremark denies your Request for Benefits, you must appeal an adverse Benefit determination no later than: Caremark must notify you of the internal appeal decision within: 24 hours 48 hours after receiving notice of additional information required 48 hours after receipt of the additional information 180 days after receiving the adverse Benefit determination 72 hours after receiving the appeal 1 You do not need to submit Urgent Care appeals in writing. You should call Caremark as soon as possible to appeal an Urgent Care Request for Benefits. 2 From when the request is made unless otherwise noted below. TABLE 2 Pre-Service Request for Benefits Action to Be Taken Timing 1 If your Request for Benefits is filed improperly with Caremark, Caremark must notify you within: 5 days If your Request for Benefits is incomplete, Caremark must notify you that it is incomplete within: You must then provide completed Request for Benefits information to Caremark within: Caremark must notify you of the Benefit determination: if your Request for Benefits is complete, within: after receiving the completed Request for Benefits (if your Request for Benefits was incomplete as filed), within: You must appeal an adverse Benefit determination no later than: 15 days 45 days 15 days 15 days 180 days after receiving the adverse Benefit 22

23 Article V- Claim Denials and Appeals TABLE 2 Pre-Service Request for Benefits Action to Be Taken Timing 1 determination Caremark must notify you of the first internal appeal decision within: You must appeal the denial of your first internal appeal (by filing a second internal appeal) no later than: Caremark must notify you of the second internal appeal decision within: 15 days after receiving the first internal appeal 180 days after receiving the first internal appeal decision 15 days after receiving the second internal appeal 1 From when the request is made unless otherwise noted below. TABLE 3 Post-Service Claims Action to Be Taken Timing 1 If your claim is incomplete, Caremark must notify you within: You must then provide completed claim information to Caremark within: 30 days 45 days Caremark must notify you of the Benefit determination: if the claim was complete as filed, within: after receiving the completed claim (if the claim was incomplete as filed), within: You must appeal an adverse Benefit determination no later than: Caremark must notify you of the first internal appeal decision no later than: You must appeal the denial of your first internal appeal by filing a second internal appeal with ERS) no later than: Caremark or ERS must notify you of the second internal appeal decision within: 30 days 30 days 180 days after receiving the adverse Benefit determination 30 days after receiving the first internal appeal 90 days after receiving the first internal appeal decision 30 days after receiving the second internal appeal 1 From when the request is made unless otherwise noted below. 23

24 Article V- Claim Denials and Appeals 4. External Review Program If, after exhausting your internal appeals, you are not satisfied with the determination made by Caremark or ERS, or if Caremark or ERS fails to respond to your appeal in accordance with applicable regulations regarding timing, you may be entitled to request an immediate external review of the determination made by Caremark or ERS. The process is available at no charge to you. If one of the above conditions is met, you may request an external review of an adverse Benefit determination based upon any of the following: clinical reasons (the determination involves a question of medical judgment); rescission of coverage (coverage that was terminated retroactively); or as otherwise required by applicable law. Note: You may also have the right to pursue external review in the event that Caremark or ERS have failed to comply with the internal claims and appeals process, except for those failures that are based on de minimis violations that do not cause, and are not likely to cause, prejudice or harm to you. You or your Authorized Representative may request a standard external review by sending a written request to the address set out in the determination letter. You or your Authorized Representative may request an expedited external review, in urgent situations as detailed below, by calling Caremark at (866) toll free or by sending a written request to the address set out in the determination letter. A request must be made within four months after the date you receive Caremark s or ERS determination. An external review request should include all of the following: a specific request for an external review; the Participant s name, address, and insurance ID number; your Authorized Representative's name and address, when applicable; the service that was denied, the date of service, the Provider s name; and any new, relevant information that was not provided during the internal appeal. An external review will be performed by an Independent Review Organization (IRO). Caremark has entered into agreements with three or more IROs that have agreed to perform such reviews. There are two types of external reviews available: a standard external review; and an expedited external review. 5. Standard External Review A standard external review is comprised of all of the following: a preliminary review by Caremark of the request; a referral of the request by Caremark to the IRO; the review by the IRO; and a decision by the IRO. 24