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.