BILL ANALYSIS



H.B. 1202
By: Hilderbran
2-20-95
Committee Report (Unamended)


BACKGROUND

In House Bill 7 (H.B. 7) (72nd Leg. 1st C.S.), the Health and Human
Service Commission (HHSC) was designated the single state agency
for the Medicaid program.  Under this authority and with federal
approval, HHSC has contracted with agencies under its umbrella to
operate various components of the Medicaid program.  On September
1, 1994, HHSC transferred the residential care program for mentally
retarded persons (ICF-MR) from the Department of Human Services
(DHS) to the Department of Mental Health and Mental Retardation
(MHMR). 

Private providers of residential care sued the state, asserting
that HHSC lacked the power to transfer this program to MHMR.  Last
month, State District Judge Scott McCown agreed and ruled that HHSC
now has insufficient authority in statute to transfer the
residential care (ICR-MR) program, concluding that MHMR thus has no
authority to set reimbursement rates for this program.

PURPOSE

H.B. 1202 would clarify HHSC's authority to delegate to health and
human services agencies  the authority to operate any Medicaid
program.  Moreover, the bill would specifically validate the
transfer of the residential care program (ICF-MR) to MHMR.

This legislation must be enacted quickly to allow the MHMR board to
adopt 1995 rates for the residential care (ICF-MR) program at its
March meeting, in order to comply with the State Medicaid Plan.

RULEMAKING AUTHORITY

It is the committee's opinion that H.B. 1202 delegates no
additional rulemaking authority to a state officer, department,
agency or institution.

SECTION BY SECTION ANALYSIS

SECTION 1:

(a)  Clarifies that HHSC has the authority to delegate to any
health and human services agency the authority to operate any
Medicaid program.

(b)  Specifically lists the programs HHSC transferred to MHMR,
including the residential care (ICF-MR) program for persons with
mental retardation.

(c)  Validates the transfers of powers and duties, including the
power to set rates.

SECTION 2: Amends Sec. 32.003, Human Resources Code, to add
definitions of "board", "department" and "commissioner" which are
applicable to the remainder of Chapter 32, clarifying that HHSC
and/or the Medicaid operating agencies have authority as
appropriate for the various Medicaid program responsibilities.

SECTION 3:  Amends Sec. 32.024(o) with technical corrections for
relocated statute.

SECTION 4:  Amends Sec. 32.029(c) deleting DHS as the agency
overseeing vendor payments in the state Medicaid program.

SECTION 5: Conforming amendment to Sec. 32.030(a), deleting DHS
accounts as those used as operating accounts in the Medicaid
program.

SECTION 6: Conforming amendment to Sec. 32.031(e), deleting DHS as
the agency transferring funds under the disproportionate share
program.

SECTION 7: Conforming amendment to Sec. 32.041(a), deleting DHS as
the agency overseeing the state's managed care demonstration.

SECTION 8: Conforming amendment relating to funds consolidation in
Secs. 403.094 and 403.095, Government Code, stating that any
account or fund mentioned in the bill, but repealed, is not hereby
reinstated.

SECTION 9: Emergency clause; effective immediately upon passage.

SUMMARY OF COMMITTEE ACTION

Pursuant to a notice posted on February 15, 1995, the House Human
Services Committee convened in a public hearing on February 20,
1995; a quorum was present.  Chairman Hilderbran laid out H.B.
1202.  The following witness testified for the bill:  Pamela M.
Brown, Texas Legal Services Center, Houston Welfare Rights
Organization, Austin.  The following witness testified on the bill: 
DeAnn Friedholm, Health & Human Services Commission.  No one
testified against H.B. 1202.  Rep. Maxey moved to report H.B. 1202
favorably without amendment to the full house with the
recommendation that it do pass; Rep. Naishtat seconded the motion. 
The motion prevailed by a record vote of 9 ayes, 0 nays, 0 absent
and 0 present not voting.