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Texas Department of Insurance
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Commissioner’s Bulletin # B-0008-19

August 28, 2019

To:   Health plans, pharmacy benefit managers, and utilization review agents

Re:   Utilization review and adverse determination requirements - AMENDED

The Texas Department of Insurance reminds health plans, pharmacy benefit managers, and utilization review agents (URAs) that only appropriate physicians, doctors, or health care providers may issue adverse determinations. Under Texas law and rules, a pharmacist cannot deny a physician’s order for a drug or treatment over questions of medical necessity or appropriateness.

Title 28, Section 19.1705(d) of the Texas Administrative Code requires that “adverse determinations must be referred to and may only be determined by an appropriate physician, doctor, or other health care provider … to determine medical necessity or appropriateness, or the experimental or investigational nature, of health care services.”

In addition, the treating physician must be given the opportunity for a peer-to-peer discussion about the treatment plan before the URA issues an adverse determination. Title 28, Section 19.1710 of the Texas Administrative Code requires that the discussion “include, at a minimum, the clinical basis for the URA's decision and a description of documentation or evidence, if any, that can be submitted by the provider of record that, on appeal, might lead to a different utilization review decision.”

Beginning September 1, 2019, Senate Bill 1742 from the 86th Texas Legislature requires that all utilization reviews for services ordered by a physician must be reviewed by a licensed physician. Specialty physicians have the option of requesting that a denial or a denial of an appeal be reviewed by a physician of the same or similar specialty.    

TDI will continue to review compliance with utilization review rules as part of regular audits and exams. Any health plan out of compliance faces potential disciplinary action, including administrative penalties.

For more information, contact:

Last updated: 8/30/2019