JKC C.S.H.B. 1085 75(R)BILL ANALYSIS


HUMAN SERVICES
C.S.H.B. 1085
By: Maxey
3-10-97
Committee Report (Substituted)



BACKGROUND 

The Department of Human Services was required by the 74th Legislature to
develop an automated system by which nursing facilities would provide
information on Medicaid reimbursements and patient care to the department.
H.B. 1085 directs DHS to use the quarterly information that is currently
reported by the nursing homes in order to set reimbursement rates.
Reimbursement rates are currently adjusted every six months.  Moving the
department to a quarterly rate adjustment schedule will result in a
reimbursement rate that more accurately reflects the level of care being
provided by the facility.  In addition, the department is directed to send
reimbursements to the nursing homes electronically.  Nursing homes that
wish to continue receiving reimbursement payments by paper check may
continue to do so; however, the cost pf processing that check will be
deducted from their reimbursement. 

This legislation will not result in any changes in the type of information
reported by the nursing homes or in the way in which that information is
transmitted to DHS.  No additional nursing home staff time will be
required in order to implement this legislation.  In addition, more
up-todate information will enable the Department of Human Services to be
more responsive to the needs of nursing facility residents and handle
problem areas more efficiently. 

PURPOSE

This legislation directs the Department of Human Services to adjust
reimbursement rates on a quarterly basis.  In addition, DHS is directed to
reimburse nursing homes electronically.  Nursing homes that wish to
continue receiving their reimbursements by paper check will have the cost
of processing the checks deducted for their reimbursements. 

RULEMAKING AUTHORITY

This legislation provides rulemaking authority in Section 1 (Section
242.226 of the Health and Safety Code) to DHS to adopt rules and make
policy changes as necessary to improve the effeciency of the reimbursement
process. 

SECTION BY SECTION ANALYSIS
Sec. 1.Subchapter H, Chapter 242, Health and Safety Code, as added by
Chapter 189, Acts of the 74th Legislature, Regular Session, 1995, is
amended as follows: 

Sec. 242.201 is replaced by Sec. 242.221. 

 (a)Directs the department to acquire and develop an automated system for
reimbursing nursing facilities under the state Medicaid program. 

 (b)The automated system that is chosen must allow for the addition of
other components of the state Medicaid program, including components
administered by other state agencies. 

 (c)Directs the department and the Health and Human Services Commission to
work together to apply for all federal funds to help pay for the automated
system. 

  (d)Directs the department to assist nursing facilities to make their
systems compatible with the automated system chosen by the department. 

 (e)Directs the department to charge a fee to nursing homes that do not
wish to receive reimbursement payments electronically.  The facility will
be charged the cost of producing and processing the paper check. 


Sec. 242.202 is replaced by Sec. 242.222.  Requires the automated system
to use a form designed by the United States Health Care Financing
Administration for nursing facility use. 


Sec. 242.223. Requires nursing facilities to submit the designated form to
the department at least quarterly in response to changes in resident
conditions. 

Sec. 242.224. Requires the department to be electronically connected with
nursing facilities making claims for reimbursement.  When the system is
operational, the nursing facility must make claims electronically. 

Subsection (b) is deleted.

Sec. 242.204 is replaced by Sec. 242.225.   The department must pay
reimbursement claims made electronically within thirty days of the date of
the claim. 

Sec. 242.205 is replaced by Sec. 242.226.  Directs the department to adopt
rules and make the necessary policy changes to improve the efficiency of
the reimbursement process. 

Sec. 2. This legislation takes effect September 1, 1997.

Sec. 3. Emergency clause.


COMPARISON OF ORIGINAL TO SUBSTITUTE

1)Section 242.223. The nursing homes are currently required to submit MDS
updates to DHS on a quarterly basis.  Language was added that allows the
department to begin using this quarterly information to reimburse nursing
homes on a quarterly basis rather than at the current six month period. 

2)Section 1. (e) was added that directs DHS to charge a fee to nursing
homes that wish to continue receiving their reimbursements by paper check.