BILL ANALYSIS C.S.S.B. 600 By: Zaffirini, Moncrief (Berlanga, et al.) 04-27-95 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 $11.7 billion in federal funds. This growth is due to federal mandates regarding eligibility expansions, required services, and provider reimbursement rules. 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 May 31-June 1, 1994, and on-site visits to Medicaid managed care pilot projects in Texas, to a rural health clinic, and to a rehabilitation center. On November 29-30, 1994, the House Committees on Public Health and on Human Services joined the Senate committee in a second public hearing in which public testimony was taken. The Senate Committee on Health and Human Services then adopted the recommendations that are the basis of this legislation. PURPOSE S.B. 600, as substituted, would require the Texas Department of Health, the Department of Mental Health and Mental Retardation, and the Texas Department of Insurance to set forth requirements for performance, operation, and financial standards for managed care organizations that serve Medicaid clients. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 12B, Health and Safety Code, by adding Section 12.017, as follows: Sec. 12.017. MANAGED CARE ORGANIZATIONS: MEDICAID PROGRAM. (a) Requires the Texas Department of Health (department) to develop for managed care organizations that serve Medicaid clients performance, operation, quality of care, marketing, financial standards, and standards relating to children's access to quality health care services (standards), with an exception. (b) In establishing standards, requires the department to ensure the following: that each Medicaid client can receive quality health care services in the client's local community; that plans serving children have adequate capacity to provide pediatric care; and that plans provide appropriate referrals for specialty care. SECTION 2. Amends Chapter 533B, Health and Safety Code, by adding Section 533.045, as follows: Sec. 533.045. MANAGED CARE ORGANIZATIONS: MEDICAID PROGRAM. Requires the Texas Department of Mental Health and Mental Retardation to develop standards for the provision by managed care organizations of mental health and mental retardation services to Medicaid clients. SECTION 3. Amends Chapter 1, Insurance Code, by adding Article 1.61, as follows: Art. 1.61. MEDICAID MANAGED CARE ORGANIZATION: FISCAL SOLVENCY AND COMPLAINT SYSTEM GUIDELINES. Requires the Texas Department of Insurance, in conjunction with the department, to establish fiscal solvency standards and complaint system guidelines for managed care organizations that serve Medicaid patients. Requires that complaint system information be made available to clients in an appropriate communication format. SECTION 4. Effective date: September 1, 1995. SECTION 5. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute provides greater detail regarding standards and guidelines to be developed, including: Monitoring performance relating to status and outcome of care for Medicaid clients. Adequate capacity for pediatric care. Appropriate referrals for specialty care. Making information on a managed care organization s complaint process available to clients in an appropriate communication format. SUMMARY OF COMMITTEE ACTION S.B. 600 was considered by the Public Health Committee in a formal meeting on April 27, 1995. The committee considered a complete substitute for the bill. The substitute was adopted without objection. The bill was reported favorably as substituted, with the recommendation that it do pass and be printed, by a record vote of 9 Ayes, 0 Nays, 0 PNV, and 0 Absent.