By:  Zaffirini, et al.                                  S.B. No. 10
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to development of a health care delivery system under the
    1-2  state Medicaid program that results in cost savings to the state.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Article 4413(502), Revised Statutes, is amended
    1-5  by adding Sections 16A and 16B to read as follows:
    1-6        Sec. 16A.  HEALTH CARE DELIVERY SYSTEM.  (a)  The commission,
    1-7  in conjunction with each operating agency, shall develop a health
    1-8  care delivery system that restructures the delivery of health care
    1-9  services provided under the state Medicaid program.  The commission
   1-10  shall develop the health care delivery system only if the
   1-11  commission obtains a waiver or other authorization from all
   1-12  necessary federal agencies to implement the system.  In developing
   1-13  the health care delivery system, the commission shall:
   1-14              (1)  to the extent possible, design the system in a
   1-15  manner that will improve the health of Texans by emphasizing
   1-16  prevention, promoting continuity of care, and providing a medical
   1-17  home for Medicaid recipients;
   1-18              (2)  to the extent possible, design the system in a
   1-19  manner that will ensure that each recipient can receive high
   1-20  quality, comprehensive health care services in the recipient's
   1-21  local community;
   1-22              (3)  design the system in a manner that will enable the
   1-23  state and the local governments that make resources available to
   1-24  the commission under this section to control the costs associated
    2-1  with the state Medicaid program and, to the extent possible, will
    2-2  result in cost savings to the state and those local governments;
    2-3              (4)  to the extent possible:
    2-4                    (A)  maximize the financing of the state Medicaid
    2-5  program by obtaining federal matching funds for local and state
    2-6  resources spent on indigent health care; and
    2-7                    (B)  expand Medicaid eligibility to include
    2-8  persons who were eligible to receive indigent health care services
    2-9  through the use of those local and state resources before expansion
   2-10  of the program;
   2-11              (5)  to the extent possible, provide an option for the
   2-12  entities that make local and state resources available for federal
   2-13  match under this section to administer the health care delivery
   2-14  system within their regions, subject to the standards of and
   2-15  oversight by the commission and the appropriate operating agency;
   2-16              (6)  to the extent possible, expand Medicaid
   2-17  eligibility to include children who are not eligible under indigent
   2-18  health care program requirements by using existing sources of
   2-19  funding including state funds, earned federal funds, family
   2-20  contributions, and other funds that may be available to the state;
   2-21              (7)  design the system to:
   2-22                    (A)  include methods for ensuring accountability
   2-23  to the state for the provision of health care services under the
   2-24  state Medicaid program, including methods for financial reporting,
   2-25  quality assurance, and utilization review;
   2-26                    (B)  provide a single point of accountability for
   2-27  collection of uniform data in order to assess, compile, and analyze
    3-1  outcome quality and cost efficiency;
    3-2                    (C)  conduct comparative analysis of compiled
    3-3  data to assess the relative value of alternative delivery systems
    3-4  and report to the governor, lieutenant governor, and speaker of the
    3-5  house of representatives; and
    3-6                    (D)  oversee the methodology for setting
    3-7  capitation and provider payment rates to ensure the cost-effective
    3-8  provision of quality care;
    3-9              (8)  ensure that both private and public health care
   3-10  providers and health care plans will have an opportunity to
   3-11  participate in the system;
   3-12              (9)  design the system in a manner that enables the
   3-13  state:
   3-14                    (A)  to use different types of health care
   3-15  delivery systems in different health care service regions,
   3-16  including systems such as a primary care case management system,
   3-17  partially capitated system, or fully capitated system or a
   3-18  combination of one or more of those systems;
   3-19                    (B)  to use different types of health care
   3-20  delivery systems to meet the needs of different populations,
   3-21  including the establishment of pilot programs to deliver health
   3-22  care services to children with special health care needs; and
   3-23                    (C)  to recognize the unique role of rural
   3-24  hospitals, physicians, and other rural health care providers in
   3-25  providing access to health care services for rural Texans;
   3-26              (10)  establish geographic health care service regions
   3-27  after consulting with local governmental entities that contribute
    4-1  resources under this section and emphasize regional coordination in
    4-2  the provision of indigent health care;
    4-3              (11)  simplify eligibility criteria and streamline
    4-4  eligibility determination processes;
    4-5              (12)  to the extent possible, design a system that
    4-6  encourages the training of and access to primary care physicians;
    4-7  and
    4-8              (13)  develop and prepare, in conjunction with the
    4-9  following entities, the waiver or other documents necessary to
   4-10  obtain federal authorization for the health care delivery system
   4-11  developed under this section:
   4-12                    (A)  governmental entities that provide health
   4-13  care services and assistance to indigent persons in this state;
   4-14                    (B)  consumer representatives;
   4-15                    (C)  health plan providers; and
   4-16                    (D)  health care providers.
   4-17        (b)  In accordance with this article and other applicable
   4-18  state and federal statutes, the commission and each appropriate
   4-19  operating agency shall jointly:
   4-20              (1)  implement a health care delivery system developed
   4-21  under this section;
   4-22              (2)  adopt rules as necessary to carry out the purposes
   4-23  of this section; and
   4-24              (3)  monitor compliance with and take any action the
   4-25  commission and operating agency consider appropriate to enforce
   4-26  this section and related rules, federal waivers, and orders and
   4-27  decisions of the commission or operating agency.
    5-1        (c)  In this section, "resources" means:
    5-2              (1)  for an entity listed in Subsection (d)(1), (d)(2),
    5-3  (d)(3), (d)(7), (d)(8), or (e) of this section, tax or other public
    5-4  revenues spent on indigent health care; and
    5-5              (2)  for an entity listed in Subsection (d)(4), (d)(5),
    5-6  or (d)(6) of this section, charity care as defined by the General
    5-7  Appropriations Act provided by that entity to indigent persons.
    5-8        (d)  If a health care delivery system developed under this
    5-9  section includes a method to finance the state Medicaid program by
   5-10  obtaining federal matching funds for local and state resources
   5-11  spent on indigent health care and if the commission has obtained
   5-12  federal authorization to implement the system, the following
   5-13  entities, in accordance with final, binding matching funds
   5-14  agreements executed by those entities under Subsections (h) and (i)
   5-15  of this section, shall make resources available to the commission
   5-16  for use in implementing the health care delivery system:
   5-17              (1)  a hospital district created and established under
   5-18  the authority of Sections 4 through 11, Article IX, Texas
   5-19  Constitution;
   5-20              (2)  a hospital authority created and established under
   5-21  Chapter 262 or 264, Health and Safety Code;
   5-22              (3)  a hospital owned and operated by a municipality,
   5-23  county, or hospital authority created under Chapter 262 or 264,
   5-24  Health and Safety Code;
   5-25              (4)  a medical school operated by the state;
   5-26              (5)  a medical school that receives state funds under
   5-27  Section 61.093, Education Code;
    6-1              (6)  a teaching hospital operated by The University of
    6-2  Texas System;
    6-3              (7)  a county that provides health care services and
    6-4  assistance to indigent residents of the county under Subchapter B,
    6-5  Chapter 61, Health and Safety Code, if the commissioners court of
    6-6  the county adopts a resolution requesting that the county
    6-7  participate in the health care delivery system; and
    6-8              (8)  a governmental entity that provides funds to a
    6-9  public hospital for the provision of health care services to
   6-10  indigent persons under Section 61.062, Health and Safety Code.
   6-11        (e)  In addition to the entities listed in Subsection (d) of
   6-12  this section, an entity described by this subsection may make
   6-13  resources available to the commission as provided by this section
   6-14  if the clients of the entity and health care services provided by
   6-15  the entity are included in the health care delivery system:
   6-16              (1)  a local mental health and mental retardation
   6-17  authority as authorized by Section 531.002(8) or Section
   6-18  531.002(9), Health and Safety Code, located in a county which
   6-19  integrates mental health services into the health care delivery
   6-20  system under a pilot program or pursuant to the Health and Human
   6-21  Services Commission plan for statewide expansion;
   6-22              (2)  a city or county health department; and
   6-23              (3)  any other governmental entity that provides health
   6-24  care services to indigent persons.
   6-25        (f)  The amount of resources an entity makes available to the
   6-26  commission in a fiscal year under Subsection (d) or (e) of this
   6-27  section is computed by:
    7-1              (1)  adding the total amount of resources the entity
    7-2  spent on indigent health care during the entity's fiscal year
    7-3  ending in 1994; and
    7-4              (2)  subtracting from the amount computed under
    7-5  Subdivision (1) of this subsection the following adjustments:
    7-6                    (A)  the amount of resources the entity spent
    7-7  during the entity's fiscal year ending in 1994 on health care
    7-8  services provided by the entity or on the entity's behalf to
    7-9  indigent persons who would not have been eligible to receive
   7-10  services under the eligibility criteria developed under Subsection
   7-11  (a)(4)(B) of this section;
   7-12                    (B)  to the extent and while the current Medicaid
   7-13  disproportionate share program is continued in this state, the
   7-14  estimate of the amount of resources the entity will transfer in
   7-15  each fiscal year to the Texas Department of Health under the
   7-16  Medicaid disproportionate share program; and
   7-17                    (C)  any other necessary or equitable adjustment.
   7-18        (g)  The commission and the governing body of an entity that
   7-19  makes resources available to the commission under this section may
   7-20  agree that the entity may make available to the commission
   7-21  resources or other funds in addition to those amounts computed
   7-22  under Subsection (f) of this section.  The additional resources or
   7-23  funds may include an amount that reflects the costs associated with
   7-24  the growth in the Medicaid program as estimated in a federal waiver
   7-25  application that is required to be submitted to implement the
   7-26  health care delivery system.  Additional amounts of resources or
   7-27  funds made available by an entity under this subsection must be
    8-1  contained in the final, binding matching funds agreement executed
    8-2  by the entity under Subsections (h) and (i) of this section.
    8-3        (h)  The commission shall prepare for an entity that makes
    8-4  resources available to the commission under this section a proposed
    8-5  memorandum of understanding that states the amount of resources and
    8-6  other funds the entity will make available to the commission each
    8-7  year under Subsections (f) and (g) of this section.  The memorandum
    8-8  of understanding serves as the basis for the negotiation of a
    8-9  final, binding agreement called a "matching funds agreement"
   8-10  between the governing body of the entity, the commissioners court,
   8-11  if applicable, and the commission.   If the entity is a hospital
   8-12  district whose tax rate is set by the commissioners court of a
   8-13  county in which the hospital district is located, the commissioners
   8-14  court must also agree to the amount of resources made available by
   8-15  the hospital district under Subsections (f) and (g) of this
   8-16  section.  The matching funds agreement must be executed before the
   8-17  commission implements provisions affecting that entity by
   8-18  submitting either a waiver application or a renewal waiver
   8-19  application that a federal agency may require to implement the
   8-20  health care delivery system.
   8-21        (i)  A matching funds agreement executed under Subsection (h)
   8-22  of this section must include:
   8-23              (1)  a statement of the amount of resources or other
   8-24  funds the entity agrees to make available to the commission under
   8-25  Subsections (f) and (g) of this section;
   8-26              (2)  an estimate of the cost of providing services to
   8-27  eligible individuals;
    9-1              (3)  an estimate of the number of eligible individuals
    9-2  served;
    9-3              (4)  a description of the scope of services to be
    9-4  provided to eligible individuals;
    9-5              (5)  a provision stating that the commission shall
    9-6  design the system to ensure that the amount of resources spent by
    9-7  each participating entity listed in Subsection (d)(1), (d)(2),
    9-8  (d)(3), (d)(7), (d)(8), or (e) of this section to provide Medicaid
    9-9  health care services to persons who are eligible for Medicaid as a
   9-10  result of the expanded eligibility criteria developed under
   9-11  Subsection (a)(4)(B) of this section is at least equal to the
   9-12  amount of resources made available to the commission by the entity;
   9-13              (6)  a provision stating that if the federal Health
   9-14  Care Financing Administration and the commission modify the waiver
   9-15  application submitted by the commission with respect to financing,
   9-16  eligibility criteria, or scope of services, the commission or an
   9-17  entity that executes a  final matching funds agreement is entitled
   9-18  to modify the terms of the agreement; and
   9-19              (7)  other information the commission requires.
   9-20        (j)  The commission by rule shall determine the manner in
   9-21  which an entity described by Subsections (d) and (e) of this
   9-22  section shall make resources available to the commission under this
   9-23  section.  If an intergovernmental initiative is formed under
   9-24  Section 16B of this article, each entity listed under Subsections
   9-25  (d) and (e) of this section that participates in the
   9-26  intergovernmental initiative shall make its resources available to
   9-27  the commission by making its resources available to the
   10-1  intergovernmental initiative.
   10-2        (k)  To the extent of conflict between this section and
   10-3  another provision of state law relating to the state Medicaid
   10-4  program, this section prevails.
   10-5        (l)  This section expires September 1, 2001.
   10-6        Sec. 16B.  INTERGOVERNMENTAL INITIATIVES.  (a)  If a health
   10-7  care delivery system developed under Section 16A of this article
   10-8  includes a method to finance the state Medicaid program by
   10-9  obtaining federal matching funds for local and state resources
  10-10  spent on indigent health care, one or more of the entities listed
  10-11  in Sections 16A(d) and (e) of this article that make resources
  10-12  available for matching under a matching funds agreement may form an
  10-13  intergovernmental initiative to administer the health care delivery
  10-14  system in a geographical area, subject to the standards of and
  10-15  oversight by the commission and the appropriate operating agency.
  10-16        (b)  An intergovernmental initiative formed under this
  10-17  section may serve more than one county.  A county may not be served
  10-18  by more than one intergovernmental initiative.  The commission with
  10-19  the consent of each entity that forms the intergovernmental
  10-20  initiative may modify the geographical area the intergovernmental
  10-21  initiative serves to:
  10-22              (1)  promote client access to services and continuity
  10-23  of care; and
  10-24              (2)  move toward full regionalization of the health
  10-25  care delivery system.
  10-26        (c)  An intergovernmental initiative must be formed as:
  10-27              (1)  a nonprofit corporation under the Texas Non-Profit
   11-1  Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
   11-2  Statutes); or
   11-3              (2)  any other nonstock, nonprofit entity that is
   11-4  approved by the commission.
   11-5        (d)  An intergovernmental initiative formed under this
   11-6  section is a governmental unit for purposes of Chapter 101, Civil
   11-7  Practice and Remedies Code.
   11-8        (e)(1)  An intergovernmental initiative formed under this
   11-9  section shall be governed as provided by this subsection.
  11-10              (2)  Each intergovernmental initiative has an executive
  11-11  committee composed of representatives of each of the entities that
  11-12  formed the intergovernmental initiative.  The executive committee
  11-13  shall appoint a governing board of the intergovernmental initiative
  11-14  that shall include but not be limited to:
  11-15                    (A)  executive committee members;
  11-16                    (B)  a representative of clients of the
  11-17  intergovernmental initiative;
  11-18                    (C)  a representative of a children's hospital,
  11-19  where applicable;
  11-20                    (D)  a physician or other health care provider;
  11-21                    (E)  a representative of a nonprofit and
  11-22  for-profit hospital; and
  11-23                    (F)  a representative of a licensed managed care
  11-24  organization, where applicable.
  11-25              (3)  If more than one entity forms an intergovernmental
  11-26  initiative, the entities shall share governance of the executive
  11-27  committee of the intergovernmental initiative in proportion to the
   12-1  amount of resources they make available for matching under the
   12-2  matching funds agreement.
   12-3              (4)  Representation on the governing board and the
   12-4  manner in which votes are apportioned among members of the
   12-5  governing board who are not members of the executive committee must
   12-6  be based primarily on the relative level of Medicaid and charity
   12-7  care services, as defined by Section 311.031, Health and Safety
   12-8  Code, provided by those nonexecutive committee members of the
   12-9  governing board over the previous two years.  The executive
  12-10  committee must have at least 51 percent of the voting rights on the
  12-11  governing board.  The votes of the executive committee must be
  12-12  apportioned in the manner described by Subdivision (3) of this
  12-13  subsection.
  12-14              (5)  The executive committee of an intergovernmental
  12-15  initiative has exclusive authority to manage the public funds of
  12-16  the intergovernmental initiative, including the authority to spend
  12-17  those funds.  The governing board of an intergovernmental
  12-18  initiative shall address health care delivery system issues for the
  12-19  intergovernmental initiative, including the preparation and
  12-20  negotiation of the proposed health care delivery plan for the
  12-21  intergovernmental initiative under Subsection (i) of this section.
  12-22              (6)  If an intergovernmental initiative formed under
  12-23  this section includes a hospital district whose tax rate is set by
  12-24  the commissioners court of a county in the hospital district, the
  12-25  commissioners court of that county must also agree to the structure
  12-26  of governance of the intergovernmental initiative.  The
  12-27  commissioners court shall take action required under this
   13-1  subdivision no later than the date on which the health care
   13-2  delivery plan agreement is approved by the commissioners court
   13-3  pursuant to Subsection (n) of this section.
   13-4        (f)  An intergovernmental initiative formed under this
   13-5  section shall:
   13-6              (1)  administer the health care delivery system
   13-7  developed under Section 16A of this article in the geographical
   13-8  area described by the plan agreement of the intergovernmental
   13-9  initiative under this section subject to standards and oversight
  13-10  contained in:
  13-11                    (A)  applicable state and federal statutes and
  13-12  rules;
  13-13                    (B)  federal waivers or other authorizations
  13-14  required to implement the health care delivery system; and
  13-15                    (C)  the plan agreement executed under this
  13-16  section by the entities forming the intergovernmental initiative;
  13-17              (2)  perform the functions in administering the health
  13-18  care delivery system that are prescribed by the plan agreement
  13-19  executed by the entities forming the intergovernmental initiative
  13-20  and the appropriate operating agency;
  13-21              (3)  make supplemental payments as necessary to satisfy
  13-22  the requirement in Section 16A(h) of this article and Subsection
  13-23  (l)(8) of this section that the entities receive payments at least
  13-24  equal to the resources the entities made available to the
  13-25  commission; and
  13-26              (4)  to the extent possible, manage care to lower the
  13-27  cost of providing Medicaid services, through the use of health care
   14-1  delivery systems such as a primary care case management system,
   14-2  partially capitated system, or fully capitated system or a
   14-3  combination of one or more of those systems.
   14-4        (g)  An intergovernmental initiative formed under this
   14-5  section may contract with any public or private entity to perform
   14-6  any of the intergovernmental initiative's powers or duties.  The
   14-7  entities that form the intergovernmental initiative may contract,
   14-8  collaborate, or enter into a joint venture with other entities as
   14-9  necessary or appropriate to form or carry out the functions of or
  14-10  provide services to the intergovernmental initiative.
  14-11        (h)  Not later than the 60th day after the date on which the
  14-12  commission submits to the federal government an application for a
  14-13  waiver or other authorization required to implement the health care
  14-14  delivery system developed under Section 16A of this article, the
  14-15  entities listed in Sections 16A(d) and (e) of this article that
  14-16  intend to form an intergovernmental initiative shall submit to the
  14-17  commission a letter of intent to form the intergovernmental
  14-18  initiative.  The letter of intent must include any information
  14-19  required by the commission, including at a minimum the names and
  14-20  addresses of the entities that intend to participate in the
  14-21  intergovernmental initiative and the geographical area to be served
  14-22  by the intergovernmental initiative.  The letter of intent is not
  14-23  binding on the entities or the commission and only serves to inform
  14-24  the commission of the areas of the state that intend to be part of
  14-25  an intergovernmental initiative.
  14-26        (i)  Within the time specified by the appropriate operating
  14-27  agency after approval of any waiver or federal authorization
   15-1  required to implement the health care delivery system developed
   15-2  under Section 16A of this article, the entities that have submitted
   15-3  a letter of intent to form an intergovernmental initiative under
   15-4  this section shall submit to the appropriate operating agency a
   15-5  proposed health care delivery plan that contains the information
   15-6  required by the operating agency.  The proposed health care
   15-7  delivery plan is not binding on the entities or the operating
   15-8  agency but only serves as the basis for negotiation of a final,
   15-9  binding plan agreement between the entities and the operating
  15-10  agency.  The operating agency by rule shall set a reasonable date
  15-11  by which the entities must submit and negotiate the proposed health
  15-12  care delivery plan.  The date must be based on the schedule
  15-13  developed for phasing in the health care delivery system statewide.
  15-14        (j)  The commission or the commission's designated
  15-15  representative must approve the plan agreement, the structure of
  15-16  the governing board, and the service area of an intergovernmental
  15-17  initiative before the intergovernmental initiative can administer
  15-18  the health care delivery system in accordance with the plan
  15-19  agreement.
  15-20        (k)  The appropriate operating agency shall implement the
  15-21  health care delivery system in accordance with an approved waiver
  15-22  in a geographical area for which the commission does not receive a
  15-23  letter of intent and that is not covered by a plan agreement that
  15-24  has become final and binding by the date specified by the operating
  15-25  agency under Subsection (i) of this section.
  15-26        (l)  The appropriate operating agency by rule shall develop a
  15-27  model plan agreement to establish the minimum requirements for a
   16-1  health care delivery plan under a plan agreement developed and
   16-2  implemented by an intergovernmental initiative under this section.
   16-3  In adopting rules under this section, the operating agency shall
   16-4  ensure that an intergovernmental initiative:
   16-5              (1)  seeks public input regarding the development and
   16-6  provisions of the health care delivery plan of the
   16-7  intergovernmental initiative;
   16-8              (2)  to the extent payments to the intergovernmental
   16-9  initiative are made on a capitated basis, receives payments that
  16-10  reflect the geographic, risk-adjusted cost of providing care to
  16-11  persons eligible for Medicaid;
  16-12              (3)  develops a sufficient provider network to ensure
  16-13  adequate access to quality health care services consistent with the
  16-14  applicable waiver and any standards prescribed by the federal
  16-15  Health Care Financing Administration, commission, or operating
  16-16  agency, including standards relating to travel time and distance
  16-17  that are designed to ensure access by patients to providers in
  16-18  their own communities;
  16-19              (4)  develops and administers policies regarding
  16-20  financial management, quality assurance, utilization review, and
  16-21  patient access by the intergovernmental initiative, and the plans
  16-22  or providers with which the intergovernmental initiative contracts,
  16-23  in accordance with standards consistent with the applicable waiver
  16-24  and any standards prescribed by the federal Health Care Financing
  16-25  Administration, commission, or operating agency;
  16-26              (5)  includes in the plan agreement of the
  16-27  intergovernmental initiative provisions relating to participation
   17-1  of public and private health care plans and providers in the health
   17-2  care delivery system in accordance with standards established by
   17-3  the operating agency, including provisions relating to:
   17-4                    (A)  a methodology within a region for selection
   17-5  of participating health care plans and providers, which methodology
   17-6  shall provide added weight for additional services of value to the
   17-7  state such as trauma, Level I emergency services, neonatal
   17-8  intensive care, medical education, or other specialty services; and
   17-9                    (B)  a methodology within a region for
  17-10  establishing capitation rates and provider payment rates, which
  17-11  rates may be supplemented in exchange for the provision of
  17-12  specified additional services;
  17-13              (6)  maintains adequate stop-loss coverage of the
  17-14  intergovernmental initiative or any health care plans under
  17-15  contract with the intergovernmental initiative, including
  17-16  provisions to ensure that adequate stop-loss coverage is available;
  17-17              (7)  in accordance with any waiver application approval
  17-18  or other federal authorization to implement the health care
  17-19  delivery system, includes in the plan agreement adequate
  17-20  provisions, as appropriate to the area served by the
  17-21  intergovernmental initiative, for phasing in implementation of the
  17-22  health care delivery system, which may include provisions that
  17-23  include methods, such as reserve funds, for phasing
  17-24  disproportionate share funds into the Medicaid program;
  17-25              (8)  includes in the plan agreement adequate provisions
  17-26  to ensure that the amount of resources spent by each participating
  17-27  entity listed in Section 16A(d)(1), (d)(2), (d)(3), (d)(7), (d)(8),
   18-1  or (e) of this article for Medicaid health care services provided
   18-2  to persons who are eligible for Medicaid as a result of the
   18-3  expanded eligibility criteria developed under Section 16A(a)(4)(B)
   18-4  of this article is at least equal to the amount of resources made
   18-5  available to the commission by the entity;
   18-6              (9)  provides notice to health care providers of the
   18-7  procedures used by the intergovernmental initiative or any health
   18-8  care plans under contract with the intergovernmental initiative to
   18-9  solicit bids for the delivery of services by health care providers;
  18-10              (10)  includes in the plan agreement grievance and
  18-11  appeal procedures for persons who are denied services or have a
  18-12  complaint regarding the quality of services under the health care
  18-13  delivery plan; and
  18-14              (11)  includes in the plan agreement appeal procedures
  18-15  for health care providers who are denied participation in the
  18-16  health care delivery plan.
  18-17        (m)  The plan agreement for an intergovernmental initiative
  18-18  must be completed before the appropriate operating agency
  18-19  implements an approved waiver within the area covered by the
  18-20  intergovernmental initiative.  If an approved waiver is terminated,
  18-21  both the intergovernmental initiative and the operating agency may
  18-22  terminate the plan agreement.  If the waiver is modified in a way
  18-23  that affects the provision of services in the area covered by the
  18-24  plan agreement, the intergovernmental initiative or the appropriate
  18-25  operating agency may renegotiate the plan agreement.
  18-26        (n)  If an intergovernmental initiative formed under this
  18-27  section includes a hospital district whose tax rate is set by the
   19-1  commissioners court of a county in the hospital district, the
   19-2  intergovernmental initiative shall file the plan agreement with the
   19-3  commissioners court.  The plan agreement is considered approved by
   19-4  the commissioners court on the 30th day after the date on which the
   19-5  intergovernmental initiative files the agreement unless the
   19-6  commissioners court adopts a resolution rejecting the plan
   19-7  agreement.  The commissioners court may adopt a resolution to
   19-8  delegate the authority to reject the plan agreement to the board of
   19-9  directors of the hospital district.
  19-10        (o)  To the extent of conflict between this section and
  19-11  another provision of state law relating to the state Medicaid
  19-12  program, this section prevails.
  19-13        (p)  This section expires September 1, 2001.
  19-14        SECTION 2.  Section 1, Article 4413(502), Revised Statutes,
  19-15  is amended by adding Subdivision (3) to read as follows:
  19-16              (3)  "Operating agency" means a health and human
  19-17  services agency that administers a part of the state Medicaid
  19-18  program.
  19-19        SECTION 3.  Chapter 285, Health and Safety Code, is amended
  19-20  by adding Subchapter H to read as follows:
  19-21     SUBCHAPTER H.  CONTRACTS, COLLABORATIONS, AND JOINT VENTURES
  19-22        Sec. 285.091.  HOSPITAL DISTRICT CONTRACTS, COLLABORATIONS,
  19-23  AND JOINT VENTURES.  A hospital district created under general or
  19-24  special law may contract, collaborate, or enter into a joint
  19-25  venture with any public or private entity as necessary to form or
  19-26  carry out the functions of or provide services to an
  19-27  intergovernmental initiative under Section 16B, Article 4413(502),
   20-1  Revised Statutes.
   20-2        SECTION 4.  The Health and Human Services Commission or a
   20-3  health and human services agency that administers a part of the
   20-4  state Medicaid program may not implement Sections 16A and 16B,
   20-5  Article 4413(502), Revised Statutes, as added by this Act, unless
   20-6  the commission has obtained a waiver or other authorization from
   20-7  all necessary federal agencies to implement those provisions.  Not
   20-8  later than July 31, 1995, the commission shall submit to the
   20-9  federal government the waiver or other authorizations required to
  20-10  develop or implement the health care delivery system.
  20-11        SECTION 5.  (a)  If a federal waiver or other authorization
  20-12  is not obtained from all necessary federal agencies to implement
  20-13  the health care delivery system developed under Section 16A,
  20-14  Article 4413(502), Revised Statutes, as added by this Act, the
  20-15  Texas Department of Health shall continue to establish additional
  20-16  Medicaid managed care pilot programs statewide to decrease the cost
  20-17  to the state of providing Medicaid services while improving access
  20-18  to health care services for Medicaid recipients.  The Texas
  20-19  Department of Health shall begin the process of establishing
  20-20  additional Medicaid managed care pilot programs not later than the
  20-21  date on which the Health and Human Services Commission submits the
  20-22  waiver application to the federal government.
  20-23        (b)  The Texas Department of Health may contract with public
  20-24  or private entities as necessary for the department to perform its
  20-25  functions under this section.
  20-26        SECTION 6.  The importance of this legislation and the
  20-27  crowded condition of the calendars in both houses create an
   21-1  emergency and an imperative public necessity that the
   21-2  constitutional rule requiring bills to be read on three several
   21-3  days in each house be suspended, and this rule is hereby suspended,
   21-4  and that this Act take effect and be in force from and after its
   21-5  passage, and it is so enacted.