Senate Research Center   H.B. 1511
By: Berlanga (Zaffirini)
Health & Human Services


Currently, Texas enhances the Medicaid reimbursement rates it pays to
teaching hospitals by permitting the inclusion of the allowable graduate
medical education (GME) costs in its reimbursement rates.  The purpose of
these payments is to compensate for the higher costs associated with the
clinical training of medical residents.  As Texas increasingly emphasizes
primary and outpatient care, both inpatient admissions and Medicaid
payments for hospital services are decreasing.  As the state's managed
care growth continues, the portion of cost for GME will increasingly be
directed toward these managed care entities.  Managed care organizations
are not obligated to forward the GME component of their capitated rate to
teaching institutions.  Nationally, state governments, in collaboration
with their academic medical centers and various health service
organizations, are devising innovative methods of financing their GME
programs.  H.B. 1511 directs the Texas Department of Health to distribute
funds for GME through a formula consistent with the GME needs of Texas and
in consultation with the Texas Higher Education Coordinating Board
(board).  This legislation also requires the board to allocate funding and
administer a program for GME.      


As proposed, H.B. 1511 provides for the administration and allocation of
Medicaid and other funds to pay for graduate medical education. 


This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 


SECTION 1. Amends Chapter 32B, Human Resources Code, by adding Section
32.0315, as follows: 

Sec. 32.0315.  FUNDS FOR GRADUATE MEDICAL EDUCATION.  Requires the Texas
Department of Health (department) to establish procedures and formulas for
the allocation of federal medical assistance funds that are directed to be
used to support graduate medical education in connection with the medical
assistance program.  Sets forth the terms by which the department is
required to allocate the funds in the manner the department determines to
most effectively and equitably achieve the purposes for which those
federal funds are received, consistent with, and taking into account
certain factors.  Requires the department to consult with the Texas Higher
Education Coordinating Board (board) before adopting or revising a
formula.  Requires the board, at the department's request, to provide the
department with any information the board possesses.  Sets forth the
formula which the department is required to use in reimbursing each
teaching hospital.  Sets forth the method by which the department is
required to make payments.  Defines "primary care."  Establishes the
amounts each teaching hospital that received federal medical assistance
funds for training residents in the state fiscal year ending August 31,
1995, is required to receive.   

 SECTION 2. Amends Chapter 61C, Education Code, by adding Section 61.0594,
as follows: 

forth the terms by which the board is required to administer a program to
support graduate medical education programs.  Authorizes the board to make
grants or formula distributions from money available to the program to
certain programs and activities.  Sets forth the terms by which an
institution or other entity is eligible to receive a grant or
distribution, and by which the program is funded.  Establishes the
conditions by which the comptroller of public accounts is required to
issue warrants to institutions or entities which receive grants, and by
which an amount granted may be used to cover certain expenses. Requires
the board to appoint an advisory committee to advise the board regarding
the development and administration of the program, and sets forth other
provisions regarding the composition, terms, meetings, and compensation of
members of the committee.  Requires the advisory committee to perform
certain functions. 

SECTION 3. Effective date:  September 1, 1997.
  Makes application of this Act prospective.

SECTION 4. Emergency clause.