BILL ANALYSIS



S.B. 509
By: Zaffirini (Hilderbran)
February 27, 1995
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, and thus TDMHMR has no authority
to set reimbursement rates for providers in this program.


PURPOSE

S.B. 509 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 to MHMR.

RULEMAKING AUTHORITY

It is the committee's opinion that S.B. 509 does not grant any
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", "commissioner", and "department" 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 Section 32.024(o) with technical corrections for
relocated statute and deleting specific reference to the Department
of Human Services.

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

SECTION 5: Conforming amendments to Sections 32.030(a) and (c),
deleting DHS accounts as those used as operating accounts in the
Medicaid program.

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

SECTION 7: Conforming amendment to Section 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 previously repealed, is
not hereby reinstated.

     SECTION 9:     Emergency clause; effective immediately upon passage.


     SUMMARY OF COMMITTEE ACTION

Pursuant to a notice posted on Feb. 22, 1995, the House Human
Services Committee convened in a public hearing on February 27,
1995, and was called to order by the Chairman; a quorum was
present.  Chairman Hilderbran laid out S.B. 509 and explained that
it was the Senate companion for H.B. 1202 which was considered and
reported favorably last week.  No testimony was taken on the bill. 
Rep. Maxey moved to report S.B. 509 favorably without amendment;
Rep. Davila seconded the motion.  The motion prevailed by the
following record vote:  AYES: 8; NOES: 0; PRESENT NOT VOTING: 0;
ABSENT: 1.