1. (a) A health care managed care organization (health care MCO) must adopt and exclusively use the Health and Human Services Commission's (HHSC's) Medicaid formulary and preferred drug list.
2. (b) A health care MCO is not authorized to negotiate rebates for covered outpatient drugs with drug manufacturers, or to receive confidential drug pricing regarding covered outpatient drugs from drug manufacturers.
3. (c) A health care MCO cannot pay claims submitted by a pharmacy provider who is under sanction or exclusion from the Medicaid or CHIP Programs.
4. (d) Except as provided in subpart (e), a health care MCO must enter into a network provider agreement with any pharmacy provider that meets the health care MCO's credentialing requirements, and agrees to the health care MCO's financial terms and other reasonable administrative and professional terms.

5. (e) A health care MCO can enter into selective pharmacy provider agreements for specialty drugs, as defined in §354.1853 of this title (relating to Specialty Drugs), subject to the following limitations:

   1. (1) A health care MCO is prohibited from entering into an exclusive contract for specialty drugs with a pharmacy owned in full or part by a pharmacy benefits manager contracted with the health care MCO.
   2. (2) The selective contracting agreement cannot require the pharmacy provider to contract exclusively with the health care MCO.
   3. (3) A health care MCO cannot require a member to obtain a specialty drug from a mail-order pharmacy.
6. (f) A health care MCO must allow pharmacy providers to fill prescriptions for covered outpatient drugs ordered by any licensed prescriber regardless of the prescriber's network participation.
7. (g) A health care MCO must pay claims in accordance with Texas Insurance Code §843.339, relating to prescription drug claims payment requirements.

8. (h) An MCO must comply with the rules in Chapter 354, Subchapter F (relating to Pharmacy Services) and Subchapter W (relating to Pharmacy Limitations) of this title with the exception of:

   1. (1) Section 354.1865 (relating to Number-of-prescriptions Limit);
   2. (2) Section 354.1867 (relating to Refills);
   3. (3) Section 354.1873 (relating to Freedom of Choice);
   4. (4) Division 6 (relating to Pharmacy Claims); and
   5. (5) Section 354.3047 (relating to Quantity Limitations).

Source Note:The provisions of this §353.905 adopted to be effective March 1, 2012, 37 TexReg 1292.