BILL ANALYSIS


                                                     C.S.S.B. 604
                                                       By: Nelson
                                        Health and Human Services
                                                          3-16-95
                                   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 $11.9 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 a public hearing on
May 31-June 1,1994; 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; and a second hearing on
November 29-30, 1994.  The committee head 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, C.S.S.B. 604 creates a pilot program for the
establishment of medical savings accounts to assist Medicaid
recipients.

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. MEDICAID MEDICAL SAVINGS ACCOUNT PILOT PROGRAM.  (a) 
Requires the Health and Human Services Commission (commission) to
develop a pilot program (program) that uses Medicaid funds to
establish medical savings accounts for recipients of acute care
services under the state Medicaid program, not later than December
1, 1995.

     (b)  Sets forth the goals of the program.
     
     (c)  Authorizes the commission to examine each available
     medical savings account model to determine if the model can be
     used in this state.
     
     (d)  Sets forth provisions the commission may provide in
     developing the pilot program.
     
     (e)  Establishes the determinations regarding the program
     which the commission is required to make.
     
     (f)  Requires the commission to implement the program not
     later than January 1, 1997.  Authorizes the commission to
     choose not to implement the program under certain conditions. 
     Sets forth the required contents and a list of persons who are
     to receive a report explaining why the program will not be
     implemented.
     
SECTION 2. REPORT.  Requires the commission to submit to the
governor and the 76th Legislature a report concerning the
effectiveness of the pilot program, not later than January 15,
1999.

SECTION 3. WAIVERS. Requires the commission to request a waiver or
authorization and to delay implementing those provisions until the
waiver or authorization is granted, if the commission determines
that a waiver or authorization from a federal agency is necessary
for implementation.

SECTION 4. EXPIRATION DATE.  Provides that this Act expires
September 1, 1999.

SECTION 5. Emergency clause.
           Effective date: upon passage.