BG C.S.H.B. 2932 75(R)BILL ANALYSIS PUBLIC HEALTH C.S.H.B. 2932 By: Coleman 4-24-97 Committee Report (Substituted) BACKGROUND For over 25 years, hospitals have been authorized and encouraged to file liens on services provided to Medicaid recipients when certain liable third party sources of payment are available, such as an automobile liability insurance policy. Each year, Texas hospitals refund more than $6 million to the Medicaid program once they receive payment from the settlement of a liability claim. In 1995, the rights of hospitals to pursue their hospital liens on services provided to Medicaid recipients began to be challenged. These challenges are grounded in a creative re-interpretation of the existing law and an ambiguous provision which exists in the Medicaid provider agreements. This legislation is consistent with Comptroller Sharp's TPR recommendation to increase thirdparty subrogation collection efforts for medical payments and the state's policy that Medicaid be the "payor of last resort." PURPOSE CSHB 2932 allows a hospital provider to recover funds from a third party in the amount of hospital charges for services provided to a recipient. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 32.033, Human Resources Code, by adding Subsection (i) to allow a hospital provider to recover from a third party any funds the department has a right of recovery under Subsection (a)(3) regarding the assumption by a third party of another's legal right to collect a debt or damages (subrogation). Allows a hospital provider to file a lien under Chapter 55, Property Code, regarding Hospital Liens, and to recover the full amount of hospital charges for services provided to a recipient. Requires a hospital provider, upon recovery from a third party, to reimburse DHS for any amount previously paid to the hospital provider by DHS. Establishes that the combined amounts received by the hospital provider from DHS and the third party may not exceed the amount charged by the hospital for the first 100 days of the injured recipient's hospitalization. SECTION 2. Establishes the effective date of this Act to be September 1, 1997. SECTION 3. Emergency Clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The original bill made reference to a Sec. 55.004, Property Code, which is obsolete under federal law. The substitute removes this and specifies the amount to be not more than the first hundred day charges.