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.