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.