|(a) Definitions. The following words or phrases have
the meaning indicated for purposes of this section:
(1) Board member--A person who is appointed to the
(2) Conflict of interest-- A situation that arises
wherein a board member or any family member or relative has a financial
relationship with an entity, ownership or financial interest with
an entity, or any other interest where the member is in a position
to derive a personal benefit from action or decisions made in their
professional capacity, with an entity.
(3) DUR Board--Drug Utilization Review Board.
(4) Entity--Includes an individual, a corporation,
organization, business trust, estate, trust, partnership, association,
and any other legal entity that may have business come before the
DUR Board or before the Medicaid Vendor Drug Program. The term includes:
(A) a pharmaceutical manufacturer or labeler with a
product on the Texas Drug Code Index and any other entity the Texas
Health and Human Services Commission (HHSC) has engaged to assist
in developing the preferred drug list or in administering of the DUR
(B) an "affiliate" or "associate," as defined in Texas
Business Organizations Code §1.002, of an entity.
(5) Family member or relative--An individual who is
related within the third degree by consanguinity or within the second
degree by affinity, as defined by the Government Code, Chapter 573,
Subchapter B (concerning Relationships by Consanguinity or by Affinity).
(6) Financial relationship--A written or oral agreement
between a board member and an entity that results in the payment of
federally reportable income to the board member (i.e., income reported
on IRS Form 1099 or Form W-2).
(7) Other interest--Involvement in the affairs of an
entity that impairs or may be perceived as impairing a board member's
independence of judgment regarding the board member's performance
of duties for the DUR Board.
(8) Ownership or financial interest--An equity interest
in where a board member exercises control over the selection of investments
and any other financial interest whose value cannot be readily determined
through reference to public records.
(1) A board member must avoid conflicts of interest
with the member's DUR Board duties.
(2) To avoid a conflict of interest, a board member
(A) disclose any conflict of interest as defined by
subsection (a)(2) of this section; and
(B) comply with any action the DUR Board or HHSC may
require under subsection (d) of this section to mitigate the effect
of any relationship disclosed.
(1) A board member of or person under consideration
for appointment to the DUR Board must report any new or existing financial
relationship, ownership or financial interest, or other interest that
the board member or their family member or relative, holds or acquires
during the board member's tenure on the DUR Board or that was held
or acquired during the two-year period that immediately precedes the
board member's tenure.
(2) A board member must report any relationships or
interests described in paragraph (1) of this subsection within established
timeframes to HHSC.
(d) Mitigation. If HHSC determines that a potential
conflict of interest exists, the following actions are taken.
(1) HHSC determines whether the potential conflict
will impair the board member's exercise of independent judgment.
(2) HHSC informs the board member and the DUR Board
chair of its recommended action.
(3) In response to a recommendation from HHSC, the
DUR Board may require:
(A) recusal of the board member; or
(B) any other action HHSC determines necessary to avoid
or mitigate a potential conflict of interest.