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.