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.