BILL ANALYSIS
C.S.S.B. 10
By: Zaffirini
Health and Human Services
03-17-95
Committee Report (Substituted)
BACKGROUND
The Texas Medicaid program has grown from a total budget of $7.5
billion in the 1990-91 biennium to an appropriation of $18.7
billion for the current 1994-95 biennium, including $6.8 billion in
general revenue and $11.9 billion in federal funds. This growth is
due to federal mandates regarding eligibility expansions, mandatory
services, and provider reimbursement rules. Although caseload
growth in the program slowed recently, the demand for new state
funds for Medicaid in the 1996-97 biennium will be approximately
$2.2 billion.
Lt. Gov. Bob Bullock charged the Senate Committee on Health and
Human Services with the challenging task of developing
recommendations for wholesale reform. In response the committee
began an intensive investigation that included a public hearing on
May 31-June 1, 1994; on-site visits to Medicaid managed care pilot
projects in Texas, to a rural health clinic, and to a
rehabilitation center; and a second hearing on November 29-30,
1994. The committee heard public testimony with the House
Committees on Public Health and on Human Services and then adopted
the recommendations that are the basis of this legislation.
PURPOSE
As proposed, C.S.S.B. 10 requires the Health and Human Services
Commission to develop a health care delivery system in an effort to
restructure the delivery of Medicaid health care services. Sets
forth regulations for the creation of intergovernmental initiatives
to administer the system in a geographical area.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is granted
to the Health and Human Services Commission in SECTION 1 (Sections
16A(b) and (j), Article 4413(503), V.T.C.S.) and to appropriate
state operating agencies in SECTION 1 (Sections 16A(b) and Section
16B(l), Article 4413(503), V.T.C.S.) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Article 4413(502), V.T.C.S., by adding Section
16A, as follows:
Sec. 16A. HEALTH CARE DELIVERY SYSTEM. (a) Requires the
Health and Human Services Commission (commission), in
conjunction with each operating agency (agency), to develop a
health care delivery system (system) that restructures the
delivery of health care services provided under the state
Medicaid program. Requires the commission to develop the
system only if the commission obtains a waiver or other
authorization from all necessary federal agencies to implement
the system. Sets forth requirements for the commission to
meet in developing the system.
(b) Requires the commission and each appropriate agency to
jointly implement a system, adopt rules, and monitor
compliance with and enforce this section and related rules,
federal waivers and orders and decisions of the commission
or agency.
(c) Defines "resources."
(d) Requires certain medical institutions or governmental
entities, in accordance with matching funds agreements
(agreements), to make resources available to the commission
for use in implementing the system, if the system developed
includes a method to finance the state Medicaid program by
obtaining federal matching funds for local and state
resources spent on indigent health care and if the
commission has obtained federal authorization to implement
the system.
(e) Sets forth entities authorized to make resources
available to the commission if the clients of and health
care services provided by the entity are included in the
system.
(f) Sets forth the method for computing the amount of
resources an entity makes available to the commission in a
fiscal year.
(g) Authorizes the governing body of an entity to elect to
make available to the commission an amount greater than the
computed amounts. Authorizes the additional resources or
funds to include an amount that reflects the costs
associated with the growth in the Medicaid program as
estimated in a required federal waiver application.
Requires additional amounts to be contained in the final
agreement.
(h) Requires the commission to prepare for an entity that
makes resources available to the commission a proposed
memorandum stating the amount of resources and other funds
the entity will make available to the commission. Provides
that the memorandum serves as the basis of a final "matching
funds agreement" between the governing body of the entity,
the commissioners court (court), and the commission.
Requires the court to agree to the amount of resources made
available by a hospital district if the entity is a district
whose tax rate is set by the court in which the district is
located (certain hospital district). Requires the agreement
to be executed before the commission implements provisions
affecting that entity.
(i) Sets forth requirements for the agreement.
(j) Requires the commission, by rule, to determine the
manner in which an entity described by Subsection (d) is
required to make resources available to the commission.
Requires each entity that participates in an
intergovernmental initiative (initiative) formed under
Section 16B to make its resources available to the
initiative.
(k) Provides that this section prevails over another
provision of state law regarding Medicaid to the extent of
conflict.
(l) Provides that this section expires September 1, 2001.
Sec. 16B. INTERGOVERNMENTAL INITIATIVES. (a) Authorizes one
or more entities that make resources available, if a system
includes a method to finance the state Medicaid program by
obtaining federal matching funds, to form an initiative to
administer the system in an area, subject to the standards of
and oversight by the commission and the appropriate agency.
(b) Authorizes an initiative to serve more than one county.
Prohibits a county from being served by more than one
initiative. Authorizes the commission with the consent of
each entity that forms the initiative to modify the area the
initiative serves for certain purposes.
(c) Requires an initiative to be formed as a nonprofit
corporation or a nonstock, nonprofit entity approved by the
commission.
(d) Provides that an initiative formed is a governmental
unit for purposes of Chapter 101, Civil Practice and
Remedies Code.
(e) Requires an initiative to be governed as provided by
this subsection. Provides that each initiative has an
executive committee composed of representatives of each
entity that formed the initiative. Provides that the
governing board (board) is composed of the executive
committee and other persons the committee appoints. Sets
forth a list of persons authorized to be appointed to the
board. Requires the entities to share governance of the
executive committee if more than one entity forms an
initiative in proportion to the amount of resources they
make available for matching under the matching funds
agreement. Requires the representation on the board and the
manner in which votes are apportioned among members of the
board who are not members of the executive committee to be
on the relative level of Medicaid and charity care services
provided by those members over the previous two years.
Requires the executive committee to have at least 51 percent
of the voting rights on the board. Requires the votes to be
apportioned as described under Subdivision (3). Requires
the executive committee to manage the public funds of the
initiative. Requires the initiative board to address system
issues for the initiative. Requires the court, if an
initiative includes a certain hospital district, to agree to
the structure of governance of the initiative.
(f) Sets forth requirements for an initiative formed under
this section.
(g) Authorizes an initiative to contract with any entity to
perform any of the initiative's powers or duties.
Authorizes the entities that form the initiative to
contract, collaborate, or enter into a joint venture with
the other entities to carry out the functions of the
initiative.
(h) Requires the entities listed that intend to form an
initiative to submit within a certain time period a letter
of intent (letter) to the commission. Requires the letter
to include any information required by the commission.
Provides that the letter is informational, not binding.
(i) Requires the entities that have submitted a letter to
submit to the appropriate agency a proposed health care
delivery plan (plan) that contains the information required
by the agency. Provides that the plan is not binding but
only serves as the basis for a final agreement. Requires
the agency, by rule, to set a date based on phasing in the
system statewide by which the entities must submit the plan.
(j) Requires the commission or a designee to approve the
plan, the board structure, and the service area of an
initiative before the initiative can administer the system
in accordance with the plan.
(k) Requires the appropriate agency to implement the system
in accordance with an approved waiver in an area for which
the commission does not receive a letter and that is not
covered by a plan agreement that has become final and
binding.
(l) Requires the appropriate agency, by rule, to develop a
model plan to establish the minimum requirements for a plan
agreement developed and implemented by an initiative.
Requires the agency to ensure that an initiative meets
certain criteria.
(m) Requires the plan agreement to be completed before the
appropriate agency implements an approved waiver within the
area covered by the initiative. Authorizes both the
initiative and the agency, if a waiver is terminated or
modified, to terminate or renegotiate the plan agreement.
(n) Requires the initiative to file the plan agreement with
the court if the initiative includes a certain hospital
district. Provides that the plan agreement is considered
approved within 30 days after its filing unless the court
adopts a resolution rejecting the plan agreement.
Authorizes the court to adopt a resolution to delegate the
authority to reject the plan agreement to the board of
directors of the hospital district.
(o) Provides that this section prevails over another
provision of state law regarding Medicaid to the extent of
conflict.
(p) Provides that this section expires September 1, 2001.
SECTION 2. Amends Section 1, Article 4413(502), V.T.C.S., by adding
Subdivision (3), to define "operating agency."
SECTION 3. Amends Chapter 285, Health and Safety Code, by adding
Subchapter H, as follows:
SUBCHAPTER H. CONTRACTS, COLLABORATIONS, AND JOINT VENTURES
Sec. 285.091. HOSPITAL DISTRICT CONTRACTS, COLLABORATIONS,
AND JOINT VENTURES. Authorizes a hospital district created
under general or special law to contract, collaborate, or
enter into a joint venture with any entity to form or carry
out the functions of or provide services to an initiative.
SECTION 4. Prohibits the commission or an appropriate agency from
implementing Sections 16A and 16B, Article 4413(502), V.T.C.S.,
unless the commission has obtained a waiver or authorization from
necessary federal agencies to implement those provisions. Requires
the commission to submit to the federal government the waivers or
authorizations by July 31, 1995.
SECTION 5. (a) Requires the Texas Department of Health (department)
to continue to establish additional Medicaid pilot programs to
decrease the cost to the state of providing Medicaid services while
improving access for recipients. Requires the department to begin
the process of establishing additional programs by the date on
which the commission submits the waiver application to the federal
government.
(b) Authorizes the department to contract with entities for
the department to perform its functions under this section.
SECTION 6. Emergency clause.
Effective date: upon passage.