BILL ANALYSIS



C.S.H.B. 867
By: Maxey
3-29-95
Committee Report (Substituted)


BACKGROUND

     The Texas Department of Human Services (DHS) operates the
state's long-term care programs and provides medeical assistance
(Medicaid) to needy Texans receiving long-term care.  DHS
reimburses Medicaid-certified nursing facilities for goods and
services provided.  

     As Medicaid-covered services expanded over the last few years,
under mandates by the federal government, DHS attempted to design
automated procedures to cope with the increasing caseloads.  In
order to meet federal requirements, Medicaid-certified facilites
must deal with cumbersome paperwork demands as well as errors and
slow payments incumbent with the current system.  The federal
Health Care Financing Administration (HCFA), which oversees all
Medicaid programs, has encouraged states to upgrade their
reimbursement systems and has made grants available to facilitate
this process.


PURPOSE

     H.B. 867 directs DHS to acquire and develop an automated
system for reimbursing Medicaid-certified nursing facilty
providers.  The bill also requires the system chosen to allow
reimbursements to other Medicaid providers.  Such a system would
utilize a data set developed by HCFA and provides for two-way
electronic data transmission between DHS and the providers. Systems
installed in other states have resulted in less paperwork, fewer
errors, and faster reimbursement, and have decreased the number of
staff required to correct provider errors.


RULEMAKING AUTHORITY

It is the committee's opinion that new rulemaking authority is
granted by H.B. 867 to the Department of Human Services under
SECTION 1, in Sec. 242.205.


SECTION BY SECTION ANALYSIS

SECTION 1.   Amends Chapter 242, Health and Safety Code, by adding
new Subchapter H to read as follows:

     SUBCHAPTER H.   AUTOMATED MEDICAID PATIENT CARE AND
REIMBURSEMENT SYSTEM.

Sec. 242.201.  AUTOMATED SYSTEM FOR MEDICAID PATIENT CARE AND
REIMBURSEMENT.  (a)  Directs DHS to acquire and develop a new
automated system to reimburse nursing homes providing Medicaid
services.

(b)  Requires DHS to select an automated system that will be able
to expand as the Medicaid program expands, and accomodate
components administered by other state agencies.

(c)  Requires DHS and the Health and Human Services Commission
(HHSC) to collaborate in seeking federal funds to defray the cost
of the new system.

(d)  Requires DHS to assist nursing facilities to make their own
systems compatible with the DHS system.

Sec. 242.202.  DATA USED BY SYSTEM.  Requires that the automated
system must use a form designed by HCFA for nursing home use.

Sec. 242.203.  ELECTRONIC CLAIMS FOR REIMBURSEMENT.  (a)  Requires
that the system link DHS electonically with nursing facilities, and
when operational, facilities would make claims electonically.

(b)  Requires DHS to charge a fee to nursing facilities that do not
make claims electronically, and set the fee in an amount necessary
to cover costs of manually processing claims.

Sec. 242.204.  DATE OF REIMBURSEMENT.  Requires DHS to pay claims
filed electronically within 30 days from the date the claim is
filed.

Sec. 242.205.  RULES.  Requires DHS to adopt rules and make policy
changes to improve the efficiency of the reimbursement process and
maximize the system's capabilities.

SECTION 2.  (a)  Instructs DHS to implement the nursing home
reimbursement component of the new automated system no later than
January 1, 1997.  Requires HHSC to evaluate and determine deadlines
for bringing other Medicaid components on line, and work with other
health and human service agencies to allocate costs.

(b)  Directs DHS to prioritize the development and implementation
of the automated reimbursement system over any other equipment and
automation upgrades.

(c)  Requires DHS to reduce staff and purchases as savings and
efficiency from implementation of the automated system are
realized.

SECTION 3.  Emergency clause, effective in 90 days.


COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute adds patient care information as a component of the
new automated system and requires DHS to assist facilities in
making their own systems compatible with DHS' system.  Also, the
implementation date was extended to allow for HCFA to develop its
software for this program.


SUMMARY OF COMMITTEE ACTION

On March 20, 1995, while the Human Services Committee was convened
in public hearing, the Chairman laid out H.B. 867.  The following
witnesses provided testimony for H.B. 867:  John Holtermann, Texas
Silver-Haired Legislature; Phill Parmer, Texas Silver-Haired
Legislature; Melody Chatelle, Living Centers of American, Texas
Health Care Ass'n; David Latimer, Texas Ass'n of Homes & Services
for the Aging.  No one testified against or on H.B. 867 and the
bill was left pending.

In a public hearing on March 29, 1995, the committee took up H.B.
867 which had been pending.  Rep. Maxey offered a committee
substitute for H.B. 867.  Burton F. Raiford, Commissioner of Human
Services, provided testimony neutral on H.B. 867.  No one else
testified for or against H.B. 867.  Rep. Maxey moved adoption of
the substitute and hearing no objection, the committee substitute
was adopted.  Rep. Maxey moved to report H.B. 867 favorably as
substituted and the motion prevailed by a record vote of 6 Ayes, 0
Nays, 0 PNV, and 3 Absent.