Amend CSHB 2913 by striking SECTIONS 3 and 4 of the bill and substituting the following: SECTION 3. (a) Subtitle I, Title 4, Government Code, is amended by adding Chapter 533 to read as follows: CHAPTER 533. IMPLEMENTATION OF MEDICAID MANAGED CARE PROGRAM SUBCHAPTER A. GENERAL PROVISIONS Sec. 533.001. DEFINITIONS. In this chapter: (1) "Commission" means the Health and Human Services Commission or an agency operating part of the state Medicaid managed care program, as appropriate. (2) "Commissioner" means the commissioner of health and human services. (3) "Health and human services agencies" has the meaning assigned by Section 531.001. (4) "Managed care organization" means a person who is authorized or otherwise permitted by law to arrange for or provide a managed care plan. (5) "Managed care plan" means a plan under which a person undertakes to provide, arrange for, pay for, or reimburse any part of the cost of any health care services. A part of the plan must consist of arranging for or providing health care services as distinguished from indemnification against the cost of those services on a prepaid basis through insurance or otherwise. The term includes a primary care case management provider network. The term does not include a plan that indemnifies a person for the cost of health care services through insurance. (6) "Recipient" means a recipient of medical assistance under Chapter 32, Human Resources Code. Sec. 533.002. PURPOSE. The commission shall implement the Medicaid managed care program as part of the health care delivery system developed under Chapter 532 by contracting with managed care organizations in a manner that, to the extent possible: (1) improves the health of Texans by: (A) emphasizing prevention; (B) promoting continuity of care; and (C) providing a medical home for recipients; (2) ensures that each recipient receives high quality, comprehensive health care services in the recipient's local community; (3) encourages the training of and access to primary care physicians and providers; (4) maximizes cooperation with existing public health entities, including local departments of health; (5) provides incentives to managed care organizations, other than managed care organizations created by political subdivisions with constitutional or statutory obligations to provide health care to indigent patients, to improve the quality of health care services for recipients by providing value-added services, including services listed in Section 533.008(2)(D); and (6) reduces administrative and other nonfinancial barriers for recipients in obtaining health care services. Sec. 533.003. CONSIDERATIONS IN AWARDING CONTRACTS. In awarding contracts to mangaged care organizations, the commission shall: (1) give extra consideration to organizations that agree to assure continuity of care for at least three months beyond the period of Medicaid eligibility for recipients; and (2) consider the need to use different managed care plans to meet the needs of different populations. Sec. 533.004. MANDATORY CONTRACTS. (a) In implementing Medicaid managed care in a health care service region, the commission shall contract with at least one managed care organization in that region that: (1) is created by a political subdivision with a constitutional or statutory obligation to provide health care to indigent patients; (2) is licensed to provide health care in that region; and (3) demonstrates its ability to meet the contractual obligations delineated in the commission's request for applications to enter into a contract with commission to provide health care to recipients in that region. (b) A contract with a managed care organization described in Subsection (a) must contain the same requirements and capitation rate as contracts with other managed care organizations to provide health care services to recipients in that region. (c) The commmission may not contract with a managed care organization created by a political subdivision under Subsection (a)(1)(A) unless the political subdivision has entered into an agreement with the state to provide funds for the expansion of Medicaid for children as described by SB 10, Acts of the 74th Legislature, Regular Session, 1995. Sec. 533.005. REQUIRED CONTRACT PROVISIONS. A contract between a managed care organization and the commission for the organization to provide health care services to recipients must contain: (1) procedures to ensure accountability to the state for the provision of health care services, including procedures for financial reporting, quality assurance, utilization review, and assurance of contract and subcontract compliance; (2) capitation and provider payment rates that ensure the cost-effective provision of high quality health care; (3) a requirement that the managed care organization provide ready access to a person who assists recipients in resolving issues relating to enrollment, plan administration, education and training, access to services, and grievance procedures; (4) a requirement that the managed care organization provide ready access to a person who assists providers in resolving issues relating to payment, plan administration, education and training, and grievance procedures; (5) a requirement that the managed care organization provide information and referral about the availability of educational, social, and other community services that could benefit a recipient; (6) procedures for recipient outreach and education; and (7) a requirement that the managed care organization make payment to a physician or provider for health care services rendered to a recipient under a managed care plan not later than the 45th day after the date a claim for payment is received with documentation reasonably necessary for the managed care organization to process the claim, or within a period, not to exceed 60 days, specified by a written agreement between the physician or provider and the managed care organization. Sec. 533.006. PROVIDER NETWORKS. (a) The commission shall require that each managed care organization that contracts with the commission to provide health care services to recipients in a region: (1) seek participation in the organization's provider network from: (A) each health care provider in the region who has traditionally provided care to Medicaid and charity care recipients; and (B) each hospital in the region that has been designated as a disproportionate share hospital under the state Medicaid program; and (2) include in its provider network for not less than three years: (A) each health care provider in the region who: (i) previously provided care to Medicaid and charity care recipients at a significant level as prescribed by the commission; (ii) agrees to accept the prevailing provider contract rate of the managed care organization; and (iii) has the credentials required by the managed care organization, provided that lack of board certification or accreditation by the Joint Commission on Accreditation of Healthcare Organizations may not be the sole ground for exclusion from the provider network; (B) each accredited primary care residency program in the region; and (C) each disproportionate share hospital designated by the commission as a state-wide significant traditional provider. (b) A contract between a managed care organization and the commission for the organization to provide health care services to recipients in a health care service region that includes a rural area must require that the organization include in its provider network rural hospitals, physicians, home and community support services agencies, and other rural health care providers who: (1) are sole community providers; (2) provide care to Medicaid and charity care recipients at a significant level as prescribed by the commission; (3) agree to accept the prevailing provider contract rate of the managed care organization; and (4) have the credentials required by the managed care organization, provided that lack of board certification or accreditation by the Joint Commission on Accreditation of Healthcare Organizations may not be the sole ground for exclusion from the provider network. Sec. 533.007. CONTRACT COMPLIANCE. (a) The commission shall review each managed care organization that contracts with the commission to provide health care services to recipients through a managed care plan issued by the organization to determine whether the organization is prepared to meet its contractual obligations. (b) Each managed care organization that contracts with the commission to provide health care services to recipients in a health care service region shall submit an implementation plan not later than the 90th day before the date on which the commission plans to begin to provide health care services to recipients in that region through managed care. The implementation plan must include: (1) specific staffing patterns by function for all operations, including enrollment, information systems, member services, quality improvement, claims management, case management, and provider and recipient training; and (2) specific time frames for demonstrating preparedness for implementation before the date on which the commission plans to begin to provide health care services to recipients in that region through managed care. (c) The commission shall respond to an implementation plan not later than the fifth day after the date a managed care organization submits the plan if the plan does not adequately meet preparedness guidelines. (d) Each managed care organization that contracts with the commission to provide health care services to recipients in a region shall submit status reports on the implementation plan not later than the 60th day and the 30th day before the date on which the commission plans to begin to provide health care services to recipients in that region through managed care and every 30th day after that date until the 180th day after that date. (e) The commission shall conduct a compliance and readiness review of each managed care organization that contracts with the commission not later than the 15th day before the date on which the commission plans to begin the enrollment process in a region and again not later than the 15th day before the date on which the commission plans to begin to provide health care services to recipients in that region through managed care. The review must include an on-site inspection and tests of service authorization and claims payment systems, complaint processing systems, and any other process or system required by the contract. (f) The commission may delay enrollment of recipients in a managed care plan issued by a managed care organization if the review reveals that the managed care organization is not prepared to meet its contractual obligations. The commission shall notify a managed care organization of a decision to delay enrollment in a plan issued by that organization. Sec. 533.008. MARKETING GUIDELINES. The commission shall establish marketing guidelines for managed care organizations that contract with the commission to provide health care services to recipients, including guidelines that prohibit: (1) door-to-door marketing to recipients by managed care organizations or agents of those organizations; (2) the use of marketing materials with inaccurate or misleading information; (3) misrepresentations to recipients or providers; (4) offering recipients material or financial incentives to choose a managed care plan other than nominal gifts or free health screenings approved by the commission that the managed care organization offers to all recipients regardless of whether the recipients enroll in the managed care plan; (5) marketing at public assistance offices; and (6) the use of marketing agents who are paid solely by the commission. Sec. 533.009. SPECIAL DISEASE MANAGEMENT. (a) The commission shall, to the extent possible, ensure that managed care organizations under contract with the commission to provide health care services to recipients develop special disease management programs to address chronic health conditions, including asthma and diabetes. (b) The commission may study, in conjunction with an academic center, the benefits and costs of applying disease management principles in the delivery of Medicaid managed care. Sec. 533.010. SPECIAL PROTOCOLS. In conjunction with an academic center, the commission may study the treatment of indigent populations to develop special protocols for managed care organizations to use in providing health care services to recipients. Sections 533.011-533.020 reserved for expansion SUBCHAPTER B. REGIONAL ADVISORY COMMITTEES Sec. 533.021. APPOINTMENT. Not later than the 180th day before the date the commission plans to begin to provide health care services to recipients in a health care service region through managed care, the commission, in consultation with health and human services agencies, shall appoint a Medicaid managed care advisory committee for that region. Sec. 533.022. COMPOSITION. A committee consists of representatives from entities and communities in the region as considered necessary by the commission to ensure representation of interested persons, including representatives of: (1) hospitals; (2) managed care organizations; (3) primary care providers; (4) state agencies; (5) consumer advocates; (6) recipients; and (7) rural providers. Sec. 533.023. PRESIDING OFFICER; SUBCOMMITTEES. The commissioner or the commissioner's designated representative serves as the presiding officer of a committee. The presiding officer may appoint subcommittees as necessary. Sec. 533.024. MEETINGS. (a) A committee shall meet at least quarterly for the first year after appointment of the committee and at least annually after that time. (b) A committee is subject to Chapter 551, Government Code. Sec. 533.025. POWERS AND DUTIES. A committee shall: (1) comment on the implementation of Medicaid managed care in the region; (2) provide recommendations to the commission on the improvement of Medicaid managed care in the region not later than the 30th day after the date of each committee meeting; and (3) seek input from the public, including public comment at each committee meeting. Sec. 533.026. INFORMATION FROM COMMISSION. On request, the commission shall provide to a committee information relating to recipient enrollment and disenrollment, recipient and provider complaints, administrative procedures, program expenditures, and education and training procedures. Sec. 533.027. COMPENSATION; REIMBURSEMENT. (a) A member of a committee other than a representative of a health and human services agency is not entitled to receive compensation or reimbursement for travel expenses. (b) A member of a committee who is an agency representative is entitled to reimbursement for expenses incurred in the performance of committee duties by the appointing agency in accordance with the travel provisions for state employees in the General Appropriations Act. Sec. 533.028. OTHER LAW. Except as provided by this chapter, a committee is subject to Article 6252-33, Revised Statutes. (b) Not later than September 1, 1997, the Health and Human Services Commission shall direct the Texas Department of Health and the Texas Department of Human Services to submit to the governor and the Legislative Budget Board a plan to realize cost savings for the state by simplifying eligibility criteria and streamlining eligibility determination processes for recipients of financial assistance under Chapter 31, Human Resources Code, recipients of medical assistance under Chapter 32, Human Resources Code, and recipients of other public assistance. (c) Not later than December 1, 1998, the Health and Human Services Commission shall submit a report to the governor, the lieutenant governor, and the speaker of the house of representatives on the impact of Medicaid managed care on the public health sector. (d) Not later than the first anniversary of the date on which Medicaid recipients in a health care service region begin to receive health care services through Medicaid managed care, the Health and Human Services Commission, in cooperation with the Medicaid managed care advisory committee for that region created under Subchapter B, Chapter 533, Government Code, as added by this Act, shall submit a report to the governor, lieutenant governor, and speaker of the house of representatives on the implementation of Medicaid managed care in that region. If Medicaid recipients in a region began to receive health care services through managed care before September 1, 1996, the commission is required to submit a report on the implementation of Medicaid managed care in that region as soon as possible after the effective date of this Act. The commission may consolidate a report with any other report relating to the same subject that the commission is required to submit under other law. (e) Section 533.007, Government Code, as added by this Act, applies only to a contract with a managed care organization that the Health and Human Services Commission or an agency operating part of the Medicaid managed care program enters into or renews on or after the effective date of this Act. A contract with a managed care organization that the Health and Human Services Commission or an agency operating part of the Medicaid managed care program enters into or renews before the effective date of this Act is governed by the law as it existed immediately before that date, and that law is continued in effect for that purpose. (f) Section 533.004, Government Code, as added by this Act, does not affect the expansion of medical assistance for children described in HCR 189, 75th Legislature, Regular Session, 1997. (g) If Medicaid recipients in a health care service region began to receive health care services through managed care before the effective date of this Act, the Health and Human Services Commission or an agency operating part of the Medicaid managed care program shall appoint a Medicaid managed care advisory committee for that region in accordance with Subchapter B, Chapter 533, Government Code, as added by this Act, as soon as possible after the effective date of this Act. (h) This section takes effect immediately. SECTION 4. This Act takes effect September 1, 1997, except that Section 3 and this section take effect immediately. SECTION 5. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended, and that this Act take effect and be in force according to its terms, and it is so enacted.