BILL ANALYSIS S.B. 603 By: Madla Health and Human Services 03-16-95 Committee Report (Unamended) 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 public hearings on May 31-June 1, 1994 and November 29-30, 1994; on-site visits to Medicaid managed care pilot projects in Texas, to a facility for persons with mental retardation, to special homes for children, to a rural health clinic and to a rehabilitation center. 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, S.B. 603 requires the Health and Human Services Commission to adopt rules implementing a managed care Medicaid program. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is granted to the Health and Human Services Commission under SECTION 1 (Sec. 16(b), Article 4413(502), V.T.C.S.) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 16, Article 4413(502), V.T.C.S., as follows: Sec. 16. ADMINISTRATION OF MEDICAID PROGRAM. (a) Provides that the Health and Human Service Commission (commission) is the state agency designated to administer federal Medicaid assistance funds. (b) Requires the commission, in adopting rules implementing a managed care Medicaid program, to ensure that in developing the provider network extra consideration is given to a health care provider who has traditionally provided care to Medicaid and charity care patients; and to require that a managed care organization include in its provider network, for not less than three years, each primary care physician who previously provided care to Medicaid and charity care patients at a prescribed level, and who agrees to accept the organization's standard provider reimbursement rate. SECTION 2. Emergency clause. Effective date: upon passage.