74R11928 E
By Zaffirini, et al. S.B. No. 10
Substitute the following for S.B. No. 10:
By Berlanga, et al. C.S.S.B. No. 10
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to development of a health care delivery system under the
1-3 state Medicaid program that results in cost savings to the state.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 4413(502), Revised Statutes, is amended
1-6 by adding Sections 16A-16F to read as follows:
1-7 Sec. 16A. HEALTH CARE DELIVERY SYSTEM. (a) The commission
1-8 shall develop a health care delivery system that restructures the
1-9 delivery of health care services provided under the state Medicaid
1-10 program. The commission shall develop the health care delivery
1-11 system only if the commission obtains a waiver or other
1-12 authorization from all necessary federal agencies to implement the
1-13 system. In developing the health care delivery system, the
1-14 commission shall:
1-15 (1) to the extent possible, design the system in a
1-16 manner that will:
1-17 (A) improve the health of Texans by:
1-18 (i) emphasizing prevention;
1-19 (ii) promoting continuity of care; and
1-20 (iii) providing a medical home for
1-21 Medicaid recipients; and
1-22 (B) ensure that each recipient can receive high
1-23 quality, comprehensive health care services in the recipient's
1-24 local community;
2-1 (2) design the system in a manner that will enable the
2-2 state and the local governmental entities that make resources and
2-3 other funds available for matching to the commission under this
2-4 section to control the costs associated with the state Medicaid
2-5 program and, to the extent possible, will result in cost savings to
2-6 the state and those local governmental entities through health care
2-7 service delivery based on managed care;
2-8 (3) maximize the financing of the state Medicaid
2-9 program by obtaining federal matching funds for all resources and
2-10 other funds available for matching and expand Medicaid eligibility
2-11 to include persons who were eligible to receive indigent health
2-12 care services through the use of those resources or other funds
2-13 available for matching before expansion of eligibility, provided
2-14 that the commission shall give priority to expanding eligibility to
2-15 include children and their families;
2-16 (4) to the extent possible, develop a plan to expand
2-17 Medicaid eligibility to include children and other persons, other
2-18 than those persons described by Subdivision (3) of this subsection,
2-19 that is funded by using:
2-20 (A) appropriations that have previously been
2-21 made to other agencies or other programs to provide related health
2-22 care services to those children and other persons;
2-23 (B) earned federal funds;
2-24 (C) contributions by those children or other
2-25 persons or their families; or
2-26 (D) resources or other funds available for
2-27 matching;
3-1 (5) design the system to ensure that if the system
3-2 includes a method to finance the state Medicaid program by
3-3 obtaining federal matching funds for resources and other funds
3-4 available for matching, each entity listed in Subsection (d)(1),
3-5 (2), (3), (7), (8), or (9) or Subsection (e) of this section that
3-6 makes those resources and other funds available receives funds to
3-7 provide health care services to persons who are eligible for
3-8 Medicaid under the expanded eligibility criteria developed under
3-9 Subdivision (3) or (4) of this subsection in an amount that is at
3-10 least equal to the amount of resources or other funds available for
3-11 matching provided by that entity under this section;
3-12 (6) to the extent possible, provide for the entities
3-13 that make resources and other funds available for matching under
3-14 this section an option to operate the health care delivery system
3-15 within their regions including appropriate portions of the
3-16 eligibility determination process, subject to the standards of and
3-17 oversight by the commission;
3-18 (7) design the system to:
3-19 (A) include methods for ensuring accountability
3-20 to the state for the provision of health care services under the
3-21 state Medicaid program, including methods for financial reporting,
3-22 quality assurance, and utilization review;
3-23 (B) provide a single point of accountability for
3-24 collection of uniform data to assess, compile, and analyze outcome
3-25 quality and cost efficiency;
3-26 (C) conduct comparative analyses of compiled
3-27 data to assess the relative value of alternative health care
4-1 delivery systems and report to the governor, lieutenant governor,
4-2 and speaker of the house of representatives;
4-3 (D) oversee the methodology for setting
4-4 capitation and provider payment rates to ensure the cost-effective
4-5 provision of quality health care;
4-6 (E) ensure that both private and public health
4-7 care providers and managed care organizations, including a hospital
4-8 that has been designated as a disproportionate share hospital under
4-9 the state Medicaid program, will have an opportunity to participate
4-10 in the system;
4-11 (F) ensure, in adopting rules implementing the
4-12 system, that in developing the provider network for the system, the
4-13 commission, each intergovernmental initiative, and each managed
4-14 care organization, as applicable, give extra consideration to a
4-15 health care provider who has traditionally provided care to
4-16 Medicaid and charity care patients; and
4-17 (G) require that the commission, each
4-18 intergovernmental initiative, and each managed care organization,
4-19 as applicable, include in its provider network, for not less than
4-20 three years, each health care provider who:
4-21 (i) previously provided care to Medicaid
4-22 and charity care patients at at significant level as prescribed by
4-23 the commission;
4-24 (ii) agrees to accept the standard
4-25 provider reimbursement rate of the commission, the
4-26 intergovernmental initiative, or the managed care organization, as
4-27 applicable;
5-1 (iii) meets the credentialing requirements
5-2 under the system of the commission, the intergovernmental
5-3 initiative, or the managed care organization, as applicable,
5-4 provided that lack of board certification or accreditation by the
5-5 Joint Commission on Accreditation of Healthcare Organizations may
5-6 not be the sole grounds for exclusion from the provider network;
5-7 and
5-8 (iv) agrees to comply and does comply with
5-9 all of the terms and conditions of the standard provider agreement
5-10 of the commission, intergovernmental initiative, or managed care
5-11 organization, as applicable;
5-12 (8) design the system in a manner that, to the extent
5-13 possible, enables the state to manage care to lower the cost of
5-14 providing Medicaid services through the use of health care delivery
5-15 systems such as a primary care case management system, partially
5-16 capitated system, or fully capitated system or a combination of one
5-17 or more of those systems and use, where possible, multiple,
5-18 competing managed care organizations within those systems;
5-19 (9) design the system in a manner that enables the
5-20 state to:
5-21 (A) use different types of health care delivery
5-22 systems to meet the needs of different populations, including the
5-23 establishment of pilot programs to deliver health care services to
5-24 children with special health care needs;
5-25 (B) recognize the unique role of rural
5-26 hospitals, physicians, home and community support services
5-27 agencies, and other rural health care providers in providing access
6-1 to health care services for rural Texans; and
6-2 (C) maximize the cost-effectiveness of
6-3 prescription drugs in primary and preventive care by covering all
6-4 prescriptions that are medically indicated for a person by a
6-5 licensed physician;
6-6 (10) establish geographic health care service regions
6-7 after consulting with local governmental entities that provide
6-8 resources or other funds available for matching under this section
6-9 and emphasize regional coordination in the provision of indigent
6-10 health care;
6-11 (11) simplify eligibility criteria and streamline
6-12 eligibility determination processes;
6-13 (12) to the extent possible, provide a one-stop
6-14 approach for client information and referral for managed care
6-15 services;
6-16 (13) to the extent possible, design the system in a
6-17 manner that encourages the training of and access to primary care
6-18 physicians;
6-19 (14) develop and prepare, after consulting with the
6-20 following entities, the waiver or other documents necessary to
6-21 obtain federal authorization for the system:
6-22 (A) governmental entities that provide health
6-23 care services and assistance to indigent persons in this state;
6-24 (B) consumer representatives;
6-25 (C) managed care organizations; and
6-26 (D) health care providers;
6-27 (15) design the system to ensure that if the system
7-1 includes a method to finance the state Medicaid program by
7-2 obtaining federal matching funds for resources and other funds
7-3 available for matching, an amount not to exceed $20 million a year
7-4 must be dedicated under the system as prescribed in the waiver for
7-5 special payments to rural hospitals that:
7-6 (A) are sole community providers and provide a
7-7 significant amount of care to Medicaid and charity care patients as
7-8 prescribed by the commission; and
7-9 (B) are located in a county in which the county
7-10 or another entity located in the county and described by Subsection
7-11 (d) or (e) of this section:
7-12 (i) has executed a matching funds
7-13 agreement with the commission under this section; and
7-14 (ii) participates in an intergovernmental
7-15 initiative under Section 16B of this article with a county that is
7-16 contiguous to the county in which the rural hospital is located or
7-17 with another entity described by Subsection (d) or (e) of this
7-18 section that is located in the contiguous county if the contiguous
7-19 county or the entity located in the contiguous county is one of the
7-20 entities that forms an intergovernmental initiative under Section
7-21 16B of this article; and
7-22 (16) if necessary to ensure that all resources or
7-23 other funds available for matching are maximized in accordance with
7-24 Subdivision (3) of this subsection, design the system to ensure
7-25 that an amount determined by the commission is dedicated under the
7-26 system as prescribed in the waiver for special payments to
7-27 hospitals that provide 14,000 of low-income patient days.
8-1 (b) In determining what constitutes a significant level of
8-2 care provided to Medicaid and charity care patients for purposes of
8-3 Subsection (a)(7)(G)(i) of this section, some of the factors the
8-4 commission must consider are:
8-5 (1) minimized disruption to existing physician-patient
8-6 relationships;
8-7 (2) access by a patient to quality health care
8-8 services in the patient's local community;
8-9 (3) the dollar amount of Medicaid care delivered by a
8-10 particular non-hospital provider in proportion to the dollar amount
8-11 of Medicaid care delivered by other similar non-hospital providers
8-12 in the same field of practice; and
8-13 (4) the level of Medicaid and charity care delivered
8-14 by a particular hospital, as measured under the Medicaid
8-15 disproportionate share program, in proportion to that delivered by
8-16 other hospitals.
8-17 (c) If the state is authorized by the federal government to
8-18 expand the eligibility requirements for participation in the state
8-19 Medicaid program under the health care delivery system developed
8-20 under this section and Sections 16B-16E of this article, the
8-21 commission shall adopt procedures to ensure that appropriations
8-22 from the general revenue fund, including accounts consolidated in
8-23 the general revenue fund, may not be used to provide health care
8-24 services under the system to persons described by Subsection (a)(3)
8-25 or (4) of this section. These procedures do not apply to:
8-26 (1) federal funds appropriated from the general
8-27 revenue fund;
9-1 (2) amounts local governmental entities make available
9-2 for matching under this section;
9-3 (3) appropriations from the general revenue fund to an
9-4 entity described by Subsection (d)(4), (5), or (6) of this section
9-5 to provide indigent health care services;
9-6 (4) appropriations from the general revenue fund used
9-7 for matching under the Medicaid disproportionate share program; or
9-8 (5) appropriations from the general revenue fund to
9-9 provide health care services to children.
9-10 (d) If the health care delivery system developed under this
9-11 section includes a method to finance the state Medicaid program by
9-12 obtaining federal matching funds for resources and other funds
9-13 available for matching and if the commission has obtained federal
9-14 authorization to implement the system, the following entities, in
9-15 accordance with final, binding matching funds agreements executed
9-16 by those entities under Subsections (i) and (j) of this section,
9-17 shall make resources available for matching to the commission for
9-18 use in implementing the system:
9-19 (1) a hospital district created and established under
9-20 the authority of Sections 4 through 11, Article IX, Texas
9-21 Constitution;
9-22 (2) a hospital authority created and established under
9-23 Chapter 262 or 264, Health and Safety Code, that to some extent
9-24 uses resources for the provision of health care services to
9-25 indigent persons;
9-26 (3) a hospital owned and operated by a municipality,
9-27 county, or hospital authority created under Chapter 262 or 264,
10-1 Health and Safety Code;
10-2 (4) a medical school operated by the state;
10-3 (5) a medical school that receives state funds under
10-4 Section 61.093, Education Code, or a chiropractic school that
10-5 receives state funds under the General Appropriations Act;
10-6 (6) a teaching hospital operated by The University of
10-7 Texas System;
10-8 (7) a county that provides health care services and
10-9 assistance to indigent residents of the county under Subchapter B,
10-10 Chapter 61, Health and Safety Code, if the commissioners court of
10-11 the county adopts a resolution requesting that the county
10-12 participate in the health care delivery system by executing a
10-13 matching funds agreement under Subsections (i) and (j) of this
10-14 section;
10-15 (8) a governmental entity that provides funds to a
10-16 public hospital for the provision of health care services to
10-17 indigent persons under Section 61.062, Health and Safety Code; and
10-18 (9) a county with a population of more than 400,000
10-19 that provides funds to a public hospital and that is not included
10-20 in the boundaries of a hospital district.
10-21 (e) In addition to the entities listed in Subsection (d) of
10-22 this section, the following entities may make resources available
10-23 for matching to the commission for use in implementing the health
10-24 care delivery system if the commission designs the system in a
10-25 manner that expands Medicaid eligibility to include some or all of
10-26 the clients of the entity who did not meet the eligibility
10-27 requirements in effect immediately before the Medicaid eligibility
11-1 requirements were expanded and to cover some or all of the health
11-2 care services provided by the entity to those clients:
11-3 (1) a local mental health authority or a local mental
11-4 retardation authority as defined by Section 531.002, Health and
11-5 Safety Code;
11-6 (2) a municipal or county health department; or
11-7 (3) any other governmental entity that provides health
11-8 care services to indigent persons.
11-9 (f) The amount of resources an entity makes available to the
11-10 commission in a fiscal year under Subsection (d) or (e) of this
11-11 section is computed by:
11-12 (1) adding the total amount of resources the entity
11-13 spent on or provided for indigent health care during the entity's
11-14 fiscal year ending in 1994; and
11-15 (2) subtracting from the amount computed under
11-16 Subdivision (1) of this subsection the following adjustments:
11-17 (A) the amount of resources the entity spent on
11-18 or provided for health care services during the entity's fiscal
11-19 year ending in 1994 that were provided by the entity or on the
11-20 entity's behalf to indigent persons who would not have been
11-21 eligible to receive services under the eligibility criteria
11-22 developed under Subsection (a)(3) of this section;
11-23 (B) to the extent and while the commission
11-24 determines whether to continue the current Medicaid
11-25 disproportionate share program and before all the disproportionate
11-26 share funds become part of the health care delivery system
11-27 developed under the waiver, the estimate of the amount of
12-1 resources, if any, the entity will transfer in each fiscal year to
12-2 the Texas Department of Health under the Medicaid disproportionate
12-3 share program; and
12-4 (C) any other necessary or equitable adjustment
12-5 as determined by the commission.
12-6 (g) The commission and the governing body of an entity that
12-7 makes resources available for matching to the commission under this
12-8 section may agree that the entity may make available for matching
12-9 resources or other funds in addition to those amounts computed
12-10 under Subsection (f) of this section. The additional resources or
12-11 funds may include an amount that reflects the costs associated with
12-12 the growth in the state Medicaid program as estimated in a federal
12-13 waiver application or other federal authorization that is required
12-14 to be submitted to implement the health care delivery system.
12-15 Additional amounts of resources or other funds made available for
12-16 matching by an entity under this subsection must be contained in
12-17 the final, binding matching funds agreement executed by the entity
12-18 under Subsections (i) and (j) of this section.
12-19 (h) The commission by rule shall determine the manner in
12-20 which an entity described by Subsection (d) or (e) of this section
12-21 shall make resources available for matching to the commission under
12-22 this section. If an intergovernmental initiative is formed under
12-23 Section 16B of this article, each entity listed under Subsection
12-24 (d) or (e) of this section that participates in the
12-25 intergovernmental initiative shall make its resources available for
12-26 matching to the commission by making its resources available to the
12-27 intergovernmental initiative, subject to federal approval.
13-1 (i) The commission shall prepare for an entity that makes
13-2 resources or other funds available for matching to the commission
13-3 under this section a proposed memorandum of understanding that
13-4 states the amount of resources and other funds available for
13-5 matching the entity will make available to the commission each year
13-6 under Subsections (f) and (g) of this section. The memorandum of
13-7 understanding serves as the basis for the negotiation of a final,
13-8 binding agreement called a "matching funds agreement" between the
13-9 governing body of the entity, the commissioners court, if
13-10 applicable, and the commission. The expiration date of the
13-11 matching funds agreement must be the same date as the expiration
13-12 date of a waiver authorizing the implementation of the health care
13-13 delivery system developed under this section and Sections 16B-16E
13-14 of this article. If the entity is a hospital district the tax rate
13-15 for which is set by the commissioners court of a county in which
13-16 the hospital district is located, the commissioners court must also
13-17 agree to the amount of resources or other funds available for
13-18 matching made available by the hospital district under Subsections
13-19 (f) and (g) of this section.
13-20 (j) A matching funds agreement for each entity must include
13-21 for each year the agreement is in effect:
13-22 (1) a statement of the amount of resources or other
13-23 funds available for matching the entity agrees to make available to
13-24 the commission under Subsections (f) and (g) of this section to
13-25 provide health care services to eligible individuals described by
13-26 the commission in the waiver application that a federal agency may
13-27 require to implement the health care delivery system;
14-1 (2) an estimate of the cost of providing services to
14-2 eligible individuals described by Subdivision (1) of this
14-3 subsection by category and by income level;
14-4 (3) an estimate of the number of eligible individuals
14-5 described by Subdivision (1) of this subsection who are being
14-6 served, by category and by income level;
14-7 (4) a description of the scope of services to be
14-8 provided to eligible individuals described by Subdivision (1) of
14-9 this subsection;
14-10 (5) a provision stating the requirement prescribed by
14-11 Subsection (a)(5) of this section;
14-12 (6) a provision stating that if the federal Health
14-13 Care Financing Administration and the commission modify the waiver
14-14 application submitted by the commission to implement the health
14-15 care delivery system with respect to financing, eligibility
14-16 criteria, or scope of services, the commission or an entity that
14-17 executes a matching funds agreement may request renegotiation or
14-18 modification of the terms of the agreement and the other party
14-19 shall make a good faith effort to renegotiate or modify the terms
14-20 of the agreement;
14-21 (7) a provision stating that if substantial changes in
14-22 the financing, eligibility criteria, or scope of services provided
14-23 to eligible individuals described by Subdivision (1) of this
14-24 subsection are mandated by federal or state law, the commission and
14-25 an entity that executes a matching funds agreement may mutually
14-26 agree to modify the agreement; and
14-27 (8) other information the commission may require.
15-1 (k) If a party to the matching funds agreement is an entity
15-2 located in a metropolitan statistical area as defined by the United
15-3 States Office of Management and Budget on the effective date of
15-4 this section, the matching funds agreement must be executed by the
15-5 entity and commission before the commission submits a waiver
15-6 application that a federal agency may require to implement the
15-7 health care delivery system unless the commission determines to
15-8 extend the agreement due date for an entity because of
15-9 extraordinary circumstances. The matching funds agreement entered
15-10 into by the commission and an entity located outside a metropolitan
15-11 statistical area may be executed after the waiver application is
15-12 approved. The commission by rule shall determine the time by which
15-13 the matching funds agreement of an entity located outside a
15-14 metropolitan statistical area on the effective date of this section
15-15 must be executed by that entity and the commission.
15-16 (l) The liability of a county described by Subsection (d)(7)
15-17 of this section for health care services and assistance under
15-18 Subchapter B, Chapter 61, Health and Safety Code, is not affected
15-19 by this section.
15-20 (m) The commission by rule shall develop a methodology for
15-21 the distribution of special payments that may be made to a rural
15-22 hospital under Subsection (a)(15) of this section.
15-23 (n) This section expires September 1, 2001.
15-24 Sec. 16B. INTERGOVERNMENTAL INITIATIVES. (a) If a health
15-25 care delivery system developed under this section and Section 16A
15-26 and Sections 16C-16E of this article includes a method to finance
15-27 the state Medicaid program by obtaining federal matching funds for
16-1 local and state resources spent on or provided for indigent health
16-2 care, one or more of the entities listed in Section 16A(d) or (e)
16-3 of this article that make resources or other funds available for
16-4 matching under a matching funds agreement may form an
16-5 intergovernmental initiative to operate the health care delivery
16-6 system in a geographical area in accordance with this section.
16-7 (b) An intergovernmental initiative formed under this
16-8 section may serve more than one county. A county may not be served
16-9 by more than one intergovernmental initiative. The commission with
16-10 the consent of each entity that forms the intergovernmental
16-11 initiative may modify the geographical area the intergovernmental
16-12 initiative serves to:
16-13 (1) promote client access to health care services and
16-14 continuity of care; and
16-15 (2) move toward full regionalization of the health
16-16 care delivery system.
16-17 (c) An intergovernmental initiative must be formed as:
16-18 (1) a nonprofit corporation under the Texas Non-Profit
16-19 Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
16-20 Statutes); or
16-21 (2) any other nonstock, nonprofit entity that is
16-22 approved by the commission.
16-23 (d) An intergovernmental initiative formed under this
16-24 section is a governmental unit for purposes of Chapter 101, Civil
16-25 Practice and Remedies Code.
16-26 (e)(1) An intergovernmental initiative formed under this
16-27 section shall be governed as provided by this subsection.
17-1 (2) Each intergovernmental initiative has an executive
17-2 committee composed of representatives of each of the entities that
17-3 formed the intergovernmental initiative. The governing board of an
17-4 intergovernmental initiative is composed of the executive committee
17-5 and other persons or entities appointed by the executive committee
17-6 as prescribed by this subsection. The executive committee of an
17-7 intergovernmental initiative shall appoint to the governing board
17-8 of the intergovernmental initiative at least one person or entity
17-9 that represents each of the following groups located in the
17-10 geographical area the intergovernmental initiative serves:
17-11 (A) a representative of clients of the
17-12 intergovernmental initiative;
17-13 (B) a representative of a children's hospital;
17-14 (C) a physician or other individual health care
17-15 provider;
17-16 (D) a representative of a nonprofit hospital;
17-17 (E) a representative of a for-profit hospital;
17-18 (F) a representative of a managed care
17-19 organization that is licensed by the Texas Department of Insurance;
17-20 (G) a representative of each hospital, whether
17-21 public or private, that provided at least 14,000 low-income days of
17-22 care, as determined by the Texas Department of Health for purposes
17-23 of calculating eligibility for the Medicaid disproportionate share
17-24 program during the state fiscal year ending August 31, 1995, or at
17-25 least 14,000 low-income days of care in the state fiscal year
17-26 preceding the date of appointment as determined by the commission,
17-27 whichever is applicable; and
18-1 (H) a representative of a rural hospital that
18-2 received payments under the Medicaid disproportionate share program
18-3 during the hospital's fiscal year preceding the date of
18-4 appointment.
18-5 (3) It is a ground for removal from the governing
18-6 board if the group a member represents does not maintain during
18-7 service on the governing board the qualifications required for
18-8 inclusion on the board under Subdivision (2) of this subsection.
18-9 (4) A person appointed to the governing board by the
18-10 executive committee under Subdivision (2) of this subsection may be
18-11 appointed as a representative of more than one group listed in that
18-12 subdivision. If a group listed in that subdivision is not located
18-13 in the geographical area served by the intergovernmental
18-14 initiative, the executive committee is not required to appoint a
18-15 representative of that group to the governing board.
18-16 (5) If more than one entity forms an intergovernmental
18-17 initiative, the entities shall share governance of the executive
18-18 committee of the intergovernmental initiative in proportion to the
18-19 amount of resources and other funds they make available for
18-20 matching under the matching funds agreement.
18-21 (6) Representation on the governing board and the
18-22 manner in which votes are apportioned among members of the
18-23 governing board who are not members of the executive committee must
18-24 be based primarily on the relative level of Medicaid and charity
18-25 care services, as defined by Section 311.031, Health and Safety
18-26 Code, provided by those non-executive committee members of the
18-27 governing board over the previous two years. The executive
19-1 committee must have at least 51 percent of the voting rights on the
19-2 governing board. The votes of the executive committee must be
19-3 apportioned in the manner described by Subdivision (5) of this
19-4 subsection.
19-5 (7) The executive committee of an intergovernmental
19-6 initiative has exclusive authority to manage the public funds of
19-7 the intergovernmental initiative, including the authority to
19-8 determine how those funds will be used in accordance with this
19-9 section and other applicable law. The governing board of an
19-10 intergovernmental initiative shall address health care delivery
19-11 system issues for the intergovernmental initiative, including the
19-12 preparation and negotiation of the proposed health care delivery
19-13 plan for the intergovernmental initiative under Subsection (i) of
19-14 this section.
19-15 (8) If an intergovernmental initiative formed under
19-16 this section includes a hospital district the tax rate for which is
19-17 set by the commissioners court of a county in the hospital
19-18 district, the commissioners court of that county must also agree to
19-19 the structure of governance of the intergovernmental initiative
19-20 within the requirements of Subsection (e). The commissioners court
19-21 shall take action required under this subdivision not later than
19-22 the date on which the health care delivery plan agreement for the
19-23 intergovernmental initiative is deemed approved or is rejected by
19-24 the commissioners court under Subsection (o) of this section.
19-25 (f) An intergovernmental initiative formed under this
19-26 section shall:
19-27 (1) operate the health care delivery system developed
20-1 under this section and Section 16A and Sections 16C-16E of this
20-2 article in the geographical area described by the health care
20-3 delivery plan agreement of the intergovernmental initiative subject
20-4 to the standards of and oversight by the commission and standards
20-5 and oversight contained in:
20-6 (A) applicable state and federal statutes and
20-7 rules;
20-8 (B) federal waivers or other federal
20-9 authorizations required to implement the health care delivery
20-10 system; and
20-11 (C) the health care delivery plan agreement
20-12 executed under this section by the entities forming the
20-13 intergovernmental initiative;
20-14 (2) perform the functions in operating the health care
20-15 delivery system that are prescribed by the health care delivery
20-16 plan agreement executed by the entities forming the
20-17 intergovernmental initiative and the commission;
20-18 (3) if applicable, make supplemental payments as
20-19 necessary to entities that make resources and other funds available
20-20 for matching to the intergovernmental initiative under Section 16A
20-21 of this article to satisfy the purpose of Section 16A(a)(5) of this
20-22 article and Subsection (m)(9) of this section;
20-23 (4) to the extent possible, manage care to lower the
20-24 cost of providing Medicaid services through the use of health care
20-25 delivery systems such as a primary care case management system,
20-26 partially capitated system, or fully capitated system or a
20-27 combination of one or more of those systems and use, where
21-1 possible, multiple, competing managed care organizations within
21-2 those systems;
21-3 (5) comply with Chapter 551, Government Code; and
21-4 (6) use any savings that accrue to the
21-5 intergovernmental initiative or the entities that form the
21-6 intergovernmental initiative through operation of the health care
21-7 delivery plan agreement solely for the purpose of delivering and
21-8 providing health care to indigent persons.
21-9 (g) An intergovernmental initiative formed under this
21-10 section may contract with any public or private entity to perform
21-11 any of the intergovernmental initiative's powers or duties. The
21-12 entities that form the intergovernmental initiative may contract,
21-13 collaborate, or enter into a joint venture with other entities as
21-14 necessary or appropriate to form or carry out the functions of or
21-15 provide services to the intergovernmental initiative. Any
21-16 contract, collaborative arrangement, or joint venture entered into
21-17 under this subsection by an entity that forms an intergovernmental
21-18 initiative is subject to the standards of and oversight by the
21-19 commission as authorized under this section and Section 16A and
21-20 Sections 16C-16E of this article.
21-21 (h) Not later than the 60th day after the date the
21-22 commission submits to the federal government an application for a
21-23 waiver or other authorization required to implement the health care
21-24 delivery system developed under this section and Section 16A and
21-25 Sections 16C-16E of this article, the entities listed in Section
21-26 16A(d) or (e) of this article that intend to form an
21-27 intergovernmental initiative shall submit to the commission a
22-1 letter of intent to form the intergovernmental initiative. The
22-2 letter of intent must include any information required by the
22-3 commission, including at a minimum the names and addresses of the
22-4 entities that intend to form the intergovernmental initiative and
22-5 the geographical area to be served by the intergovernmental
22-6 initiative. The letter of intent is not binding on the entities or
22-7 the commission and only serves to inform the commission of the
22-8 areas of the state that intend to be part of an intergovernmental
22-9 initiative.
22-10 (i) Within the time specified by the commission after the
22-11 date the federal government approves a waiver or gives federal
22-12 authorization required to implement the health care delivery system
22-13 developed under this section and Section 16A and Sections 16C-16E
22-14 of this article, the entities that have submitted a letter of
22-15 intent to form an intergovernmental initiative under this section
22-16 shall jointly submit to the commission a proposed health care
22-17 delivery plan that contains the information required by the
22-18 commission. The proposed health care delivery plan is not binding
22-19 on the entities or the commission but only serves as the basis for
22-20 negotiation of a final, binding agreement called a "health care
22-21 delivery plan agreement" between the entities and the commission.
22-22 The commission by rule shall set a reasonable date by which the
22-23 entities must submit and negotiate the proposed health care
22-24 delivery plan. The date must be based on the schedule in the
22-25 waiver developed by the commission for phasing in the health care
22-26 delivery system statewide. A negotiated health care delivery plan
22-27 agreement takes effect as provided by the terms of the agreement,
23-1 unless it is rejected by a commissioners court as provided by
23-2 Subsection (o) of this section.
23-3 (j) Before an intergovernmental initiative can operate the
23-4 health care delivery system developed under this section and
23-5 Section 16A and Sections 16C-16E of this article in accordance with
23-6 the health care delivery plan agreement, the commission must
23-7 approve the plan agreement, the structure of governance within the
23-8 requirements of Subsection (e) of this section, and the geographic
23-9 service area of the intergovernmental initiative but may do so only
23-10 after notice and public hearing held in the geographic service
23-11 area. The commission's approval of the plan agreement does not
23-12 include the authority to determine the managed care organization
23-13 with which the intergovernmental initiative may contract under the
23-14 plan agreement. Some of the criteria on which the commission must
23-15 base its decision to approve a health care delivery plan agreement
23-16 include:
23-17 (1) the cost-effectiveness of the health care delivery
23-18 plan;
23-19 (2) the opportunity for public and private managed
23-20 care organizations and providers to participate in the health care
23-21 delivery plan;
23-22 (3) access to quality health care services;
23-23 (4) any savings to the state; and
23-24 (5) whether the plan agreement contains the minimum
23-25 requirements prescribed by Subsection (m) of this section.
23-26 (k) The commission shall implement the health care delivery
23-27 system developed under this section and Section 16A and Sections
24-1 16C-16E of this article in a geographical area for which the
24-2 commission did not receive a letter of intent to form an
24-3 intergovernmental initiative or that is not covered by a health
24-4 care delivery plan agreement that has become final and binding by
24-5 the date specified by the commission under Subsection (i) of this
24-6 section. The commission, in performing its functions under this
24-7 subsection, is exempt from the Texas Health Maintenance
24-8 Organization Act (Chapter 20A, Vernon's Texas Insurance Code) and
24-9 Articles 21.07-6 and 21.58A, Insurance Code.
24-10 (l) The commission shall adopt rules regarding the health
24-11 care delivery plan agreement and requiring an intergovernmental
24-12 initiative to seek public input in the development and provisions
24-13 of the health care delivery plan agreement of the intergovernmental
24-14 initiative. In addition, the commission shall develop a model plan
24-15 agreement that includes the minimum requirements established by
24-16 rule for a health care delivery plan agreement.
24-17 (m) The minimum requirements of a health care delivery plan
24-18 agreement must include provisions relating to:
24-19 (1) compliance with uniform criteria that are set in
24-20 the waiver described by Subsection (i) of this section for
24-21 establishing eligibility for persons receiving services under the
24-22 plan;
24-23 (2) compliance with a uniform description and
24-24 provision of services that is set in the waiver for persons covered
24-25 by the health care delivery plan;
24-26 (3) the assurance that, to the extent possible,
24-27 payments made to the intergovernmental initiative on a capitated
25-1 basis consider the geographic, risk-adjusted cost of providing care
25-2 to persons eligible for Medicaid;
25-3 (4) the development of a sufficient provider network
25-4 to ensure adequate access to quality health care services
25-5 consistent with the waiver and any standards prescribed by the
25-6 federal Health Care Financing Administration or the commission,
25-7 including standards relating to travel time and distance that are
25-8 designed to ensure access by patients to health care providers in
25-9 the patient's local community;
25-10 (5) the development and operation by each
25-11 intergovernmental initiative, managed care organization, and
25-12 provider that participates in the health care delivery system of
25-13 policies regarding financial management, quality assurance,
25-14 utilization review, and patient access in accordance with standards
25-15 consistent with the waiver and any standards prescribed by the
25-16 federal Health Care Financing Administration or the commission;
25-17 (6) the opportunity for participation of public and
25-18 private managed care organizations and providers in the health care
25-19 delivery system in accordance with standards established by the
25-20 commission, including provisions relating to:
25-21 (A) a methodology within the geographic service
25-22 area of an intergovernmental initiative for selection of
25-23 participating managed care organizations and providers, which must
25-24 provide added weight for additional services of value to the state
25-25 such as trauma, Level I emergency services, neonatal intensive
25-26 care, medical education, or other specialty services;
25-27 (B) a methodology within the geographic service
26-1 area of an intergovernmental initiative for establishing capitation
26-2 rates and provider payment rates, which rates may be supplemented
26-3 in exchange for the provision of specified additional services; and
26-4 (C) a methodology within the geographic service
26-5 area of an intergovernmental initiative to ensure recipients have
26-6 the choice of multiple managed care organizations where possible
26-7 and providers;
26-8 (7) maintenance of adequate stop-loss coverage of the
26-9 intergovernmental initiative or any managed care organization under
26-10 contract with the intergovernmental initiative, including
26-11 provisions to ensure that adequate stop-loss coverage is available;
26-12 (8) phasing in operation of the health care delivery
26-13 system, as appropriate to the area served by the intergovernmental
26-14 initiative, in accordance with any waiver application approval or
26-15 other federal authorization to implement the health care delivery
26-16 system, which may include provisions that include methods, such as
26-17 reserve funds, for phasing disproportionate share funds into
26-18 financing the system under the waiver;
26-19 (9) ensuring that the amount of funds each
26-20 participating entity listed in Section 16A(d)(1), (2), (3), (7),
26-21 (8), or (9) or Section 16A(e) of this article receives to provide
26-22 Medicaid health care services to persons who are eligible for
26-23 Medicaid as a result of the expanded eligibility criteria developed
26-24 under Section 16A(a)(3) or (4) of this article is at least equal to
26-25 the amount of resources and other funds made available for matching
26-26 to the commission by the entity;
26-27 (10) notice to health care providers of the procedures
27-1 used by the intergovernmental initiative or any managed care
27-2 organization under contract with the intergovernmental initiative
27-3 to solicit bids for the delivery of services by health care
27-4 providers;
27-5 (11) grievance and appeal procedures for persons who
27-6 are denied services or have a complaint regarding the quality of
27-7 services under the health care delivery plan; and
27-8 (12) grievance and appeal procedures for health care
27-9 providers who are denied participation in the health care delivery
27-10 plan or who want to appeal the:
27-11 (A) calculation of payment rates under the plan;
27-12 (B) denial or reduction of supplemental payment
27-13 amounts; or
27-14 (C) denial or reduction of payment for services
27-15 provided or to be provided under the plan.
27-16 (n) The health care delivery plan agreement for an
27-17 intergovernmental initiative must be completed before the
27-18 commission implements an approved waiver in the area covered by the
27-19 intergovernmental initiative. If an approved waiver is terminated,
27-20 the intergovernmental initiative or commission is entitled to
27-21 terminate the health care delivery plan agreement. If the waiver
27-22 is modified in a manner that affects the provision of services in
27-23 the area covered by the health care delivery plan agreement, the
27-24 intergovernmental initiative or the commission may request
27-25 renegotiation and modification of the plan agreement and the other
27-26 party shall make a good faith effort to renegotiate and modify the
27-27 agreement.
28-1 (o) If an intergovernmental initiative formed under this
28-2 section includes a hospital district the tax rate for which is set
28-3 by the commissioners court of a county in which the hospital
28-4 district is located, the intergovernmental initiative shall file
28-5 the negotiated health care delivery plan agreement with the
28-6 commissioners court. The negotiated agreement is deemed approved
28-7 by the commissioners court on the 30th day after the date on which
28-8 the intergovernmental initiative files the negotiated agreement
28-9 unless before the end of that 30-day period the commissioners court
28-10 adopts a resolution rejecting the negotiated agreement. The
28-11 commissioners court may adopt a resolution to delegate the
28-12 authority to reject the negotiated health care delivery plan
28-13 agreement to the board of directors of the hospital district.
28-14 (p) An intergovernmental initiative that operates a health
28-15 care delivery system in accordance with an approved health care
28-16 delivery plan agreement is exempt from the Texas Health Maintenance
28-17 Organization Act (Chapter 20A, Vernon's Texas Insurance Code) and
28-18 Articles 21.07-6 and 21.58A, Insurance Code, to the extent the
28-19 intergovernmental initiative:
28-20 (1) contracts to purchase services to operate the
28-21 health care delivery system through a managed care organization
28-22 that:
28-23 (A) is a health maintenance organization that
28-24 holds a certificate of authority to operate under the Texas Health
28-25 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
28-26 Code); or
28-27 (B)(i) demonstrates to the satisfaction of the
29-1 Texas Department of Insurance that the managed care organization
29-2 has obtained insurance or other protection through an insurance
29-3 company licensed under the Insurance Code to guaranty the cost of
29-4 health care benefits or services to be provided by that managed
29-5 care organization and to provide coverage in the event of failure
29-6 of the managed care organization to meet its obligation under the
29-7 contract; and
29-8 (ii) satisfies federal law and regulations
29-9 relating to minimum solvency requirements applicable to entities or
29-10 persons contracting under the state Medicaid program; or
29-11 (2) receives capitated payments from the commission
29-12 under this section or Section 16A or Sections 16C-16E of this
29-13 article.
29-14 (q) A managed care organization that contracts with the
29-15 commission or with an intergovernmental initiative to provide or
29-16 arrange to provide health care benefits or services to Medicaid
29-17 eligible individuals must:
29-18 (1) be a health maintenance organization that holds a
29-19 certificate of authority to operate under the Texas Health
29-20 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
29-21 Code); or
29-22 (2)(A) demonstrate to the satisfaction of the Texas
29-23 Department of Insurance that the managed care organization has
29-24 obtained insurance or other protection through an insurance company
29-25 licensed under the Insurance Code to guaranty the cost of health
29-26 care benefits or services to be provided by the managed care
29-27 organization and to provide coverage in the event of failure of the
30-1 managed care organization to meet its obligation under the
30-2 contract; and
30-3 (B) satisfy federal law and regulations relating
30-4 to minimum solvency requirements applicable to entities or persons
30-5 contracting under the state Medicaid program.
30-6 (r) Subsection (q) of this section does not affect the
30-7 requirement that any person or entity subject to Article
30-8 20A.26(f)(2), Texas Health Maintenance Organization Act (Article
30-9 20A.26, Vernon's Texas Insurance Code), obtain a certificate of
30-10 authority from the commissioner of insurance. A state agency or
30-11 intergovernmental initiative may not contract with an entity or
30-12 person subject to Article 20A.26(f)(2), Texas Health Maintenance
30-13 Organization Act (Article 20A.26, Vernon's Texas Insurance Code),
30-14 unless that entity or person holds a certificate of authority from
30-15 the commissioner of insurance.
30-16 (s) The commission may allow rates for services for Medicaid
30-17 eligible individuals to be established for categories of Medicaid
30-18 eligible individuals based on health status and other risk factors,
30-19 including age and sex.
30-20 (t) This section expires September 1, 2001.
30-21 Sec. 16C. IMPLEMENTATION OF HEALTH CARE DELIVERY SYSTEM;
30-22 ENFORCEMENT. (a) In accordance with this article and other
30-23 applicable state and federal statutes, the commission shall:
30-24 (1) implement a health care delivery system developed
30-25 under this section and Sections 16A, 16B, 16D, and 16E of this
30-26 article; and
30-27 (2) monitor compliance with and take any action as
31-1 necessary or appropriate, including the use of administrative
31-2 penalties, to enforce this section and Sections 16A, 16B, 16D, and
31-3 16E of this article and related rules, federal waivers, or orders
31-4 and decisions of the commission.
31-5 (b) The commission and the Texas Department of Insurance, to
31-6 the extent not prohibited by federal law, shall share confidential
31-7 information, including financial data, that relates to or affects
31-8 an entity that may contract with the commission or an
31-9 intergovernmental initiative to carry out the purposes of this
31-10 section and Sections 16A, 16B, 16D, and 16E of this article.
31-11 (c) This section expires September 1, 2001.
31-12 Sec. 16D. RULES FOR HEALTH CARE DELIVERY SYSTEM. (a) The
31-13 commission shall adopt rules as necessary or appropriate to carry
31-14 out its functions under Sections 16A, 16B, 16C, and 16E of this
31-15 article.
31-16 (b) The commission may delegate to a health and human
31-17 services agency that operates a part of the state Medicaid program
31-18 the authority to adopt rules under this section and may require
31-19 that agency to adopt those rules.
31-20 (c) This section expires September 1, 2001.
31-21 Sec. 16E. DELEGATION OF AUTHORITY. (a) The commission may
31-22 delegate to a health and human services agency that operates a part
31-23 of the state Medicaid program the authority to exercise all or part
31-24 of its functions, powers, and duties under Sections 16A, 16B, and
31-25 16C of this article.
31-26 (b) This section expires September 1, 2001.
31-27 Sec. 16F. CONFLICT WITH OTHER LAW. (a) To the extent of
32-1 conflict between Sections 16A-16E of this article and any other
32-2 provision of state law relating to the state Medicaid program other
32-3 than those sections, Sections 16A-16E of this article prevail.
32-4 (b) This section expires September 1, 2001.
32-5 SECTION 2. Section 1, Article 4413(502), is amended to read
32-6 as follows:
32-7 Sec. 1. DEFINITIONS. In this article:
32-8 (1) "Commission" means the Health and Human Services
32-9 Commission.
32-10 (2) "Commissioner" means the commissioner of health
32-11 and human services.
32-12 (3) "Managed care organization" means any entity or
32-13 person that is authorized or otherwise permitted by law to arrange
32-14 for or provide a managed care plan.
32-15 (4) "Managed care plan" means any plan under which an
32-16 entity or person undertakes to provide, arrange for, pay for, or
32-17 reimburse any part of the cost of any health care services
32-18 provided, however, that a part of the plan must consist of
32-19 arranging for or providing health care services as distinguished
32-20 from indemnification against the cost of those services, on a
32-21 pre-paid basis through insurance or otherwise. The term does not
32-22 include a plan that indemnifies a person for the cost of health
32-23 care services through insurance.
32-24 (5) "Resources" means:
32-25 (A) for an entity listed in Section 16A(d)(1),
32-26 (2), (3), (7), (8), or (9) or Section 16A(e) of this article, tax
32-27 or other public revenues spent on indigent health care; and
33-1 (B) for an entity listed in Section 16A(d)(4),
33-2 (5), or (6) of this article, the value of unsponsored charity care
33-3 as described by the General Appropriations Act provided by or on
33-4 behalf of that entity to indigent persons and general revenue or
33-5 other funds used for matching under the Medicaid disproportionate
33-6 share program.
33-7 (6) "Resources or other funds available for matching"
33-8 means resources and other funds made available by an entity listed
33-9 in Section 16A(d) or (e) of this article that the federal
33-10 government has determined are acceptable for matching under a
33-11 waiver submitted to develop and implement the health care delivery
33-12 system developed under Sections 16A-16E of this article.
33-13 SECTION 3. Chapter 285, Health and Safety Code, is amended
33-14 by adding Subchapter H to read as follows:
33-15 SUBCHAPTER H. CONTRACTS, COLLABORATIONS, AND JOINT VENTURES
33-16 Sec. 285.091. HOSPITAL DISTRICT CONTRACTS, COLLABORATIONS,
33-17 AND JOINT VENTURES. A hospital district created under general or
33-18 special law may contract, collaborate, or enter into a joint
33-19 venture with any public or private entity as necessary to form or
33-20 carry out the functions of or provide services to an
33-21 intergovernmental initiative under Section 16B, Article 4413(502),
33-22 Revised Statutes.
33-23 SECTION 4. (a) The Health and Human Services Commission or
33-24 a health and human services agency that operates a part of the
33-25 state Medicaid program may not implement Sections 16A-16E, Article
33-26 4413(502), Revised Statutes, as added by this Act, unless the
33-27 commission has obtained a waiver or other authorization from all
34-1 necessary federal agencies to implement those provisions.
34-2 (b) Except as provided by Subsection (c) of this section,
34-3 the Health and Human Services Commission, not later than August 31,
34-4 1995, shall submit to the federal government the waiver or other
34-5 authorizations required to develop or implement the health care
34-6 delivery system developed by the commission under Sections 16A-16E,
34-7 Article 4413(502), Revised Statutes, as added by this Act, unless
34-8 both the governor and the Legislative Budget Board determine that
34-9 the expenditure of funds under the health care delivery system as
34-10 designed will not enable the state to control the costs associated
34-11 with the state Medicaid program.
34-12 (c) If the Health and Human Services Commission finds that
34-13 it is not practical or feasible to submit the waiver described by
34-14 Subsection (a) of this section by August 31, 1995, the commission
34-15 shall certify its findings to the governor not later than August
34-16 15, 1995. On receipt of the commission's certification, the
34-17 governor by executive order may postpone the date the waiver is
34-18 required to be submitted under this Act and establish an alternate
34-19 submission date that may not be later than September 30, 1995.
34-20 SECTION 5. (a) The Health and Human Services Commission
34-21 shall begin the process of establishing additional Medicaid managed
34-22 care pilot programs not later than the date on which the commission
34-23 submits the waiver application to the federal government.
34-24 (b) If a federal waiver or other authorization is not
34-25 obtained from all necessary federal agencies to implement the
34-26 health care delivery system developed under Sections 16A-16E,
34-27 Article 4413(502), Revised Statutes, as added by this Act, the
35-1 Health and Human Services Commission shall continue to establish
35-2 additional Medicaid managed care pilot programs statewide to
35-3 decrease the cost to the state of providing Medicaid services while
35-4 improving access to health care services for Medicaid recipients.
35-5 (c) The Health and Human Services Commission may contract
35-6 with public or private entities as necessary for the commission to
35-7 perform its functions under this section.
35-8 SECTION 6. The importance of this legislation and the
35-9 crowded condition of the calendars in both houses create an
35-10 emergency and an imperative public necessity that the
35-11 constitutional rule requiring bills to be read on three several
35-12 days in each house be suspended, and this rule is hereby suspended,
35-13 and that this Act take effect and be in force from and after its
35-14 passage, and it is so enacted.