LSL C.S.H.B. 3258 75(R) BILL ANALYSIS PUBLIC HEALTH C.S.H.B. 3258 By: Coleman 4-25-97 Committee Report (Substituted) BACKGROUND Senate Bill 10 from the 74th Legislative session directed the Health and Human Services Commission (commission) to implement Medicaid managed care in Texas. In the course of implementation, through 1915(b) pilot projects, some unintended consequences and unforseen circumstances have developed. To date, these pilot projects have been implemented in five counties. This bill is intended to address the issues that have arisen from those sites and from concerns in regions that will be implementing managed care in the future. PURPOSE CSHB 3258 gives the commission and the Texas Department of Health (department) additional direction in the implementation of Medicaid managed care. CSHB 3258 also creates a regional advisory council to assist the commission in addressing the specialized needs of each region. RULEMAKING AUTHORITY It is the committee's opinion that this bill expressly grants additional rulemaking authority to the Health and Human Services Commission in SECTION 1 (Sec. 533.004(g), Subtitle I, Title 4, Government Code). SECTION BY SECTION ANALYSIS SECTION 1. Amends Subtitle I, Title 4, Government Code, by adding Chapter 533, as follows: SUBCHAPTER A. GENERAL PROVISIONS Sec. 533.001. DEFINITIONS. Defines commission, commissioner, health and human services agencies, managed care organization, and managed care plan. Sec. 533.002. PURPOSE. Requires the commission to 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 specified in this section. Sec. 533.003. CONTRACTS WITH MANAGED CARE ORGANIZATIONS. Subsection (a) requires the commission to give extra consideration to organizations that agree to assure continuity of care for Medicaid recipients, as specified, and to consider the need to use different managed care plans to meet the needs of different populations. Subsection (b) specifies the contents that a contract between a managed care organization and the commission must contain. Subsection (c) stipulates that a contract between a managed care organization and the commission for the provision of services in a region that includes a rural area must require the inclusion of rural hospitals, physicians, home and community support service agencies, and other rural health care providers in its provider network, as specified. Sec. 533.004. CONTRACT COMPLIANCE. Subsection (a) requires the commission to review each managed care organization that contracts to provide service to Medicaid recipients to determine whether the organization is prepared to meet its contractual obligations. Subsection (b) requires each managed care organization that contracts with the commission to submit an implementation plan to the commission no later than the 90th day before enrollment of the Medicaid recipients. Subsection (c) requires the commission to provide a written response to an implementation plan no later than the 10th day after the plan is submitted by the managed care organization, if the plan reveals that the organization may fail to meet its contractual obligations. Subsection (d) requires the commission to conduct further review no later than the 60th day before the date on which Medicaid recipients may begin enrolling in the organization's managed care plan. Subsection (e) requires the review to include an on-site inspection and tests of any process or system required by the contract, as specified. Subsection (f) allows the commission to delay enrollment of Medicaid recipients in a managed care plan if the review reveals that the managed care organization is not prepared to meet its contractual obligations. Requires the commission to notify a managed care organization of a decision to delay enrollment in a plan issued by that organization. Subsection (g) requires the commission to identify and review the administrative costs of each contracting managed care organization. Allows the commission, by rule, to limit these administrative costs. Sec. 533.005. RECIPIENT ENROLLMENT. Requires the commission to ensure that Medicaid recipients choose appropriate managed care plans and primary health care providers by ensuring or considering the conditions specified in this section. Sec. 533.006. SPECIAL DISEASE MANAGEMENT. Subsection (a) requires the commission to ensure, to the extent possible, that managed care organizations under contract with the commission develop special disease management programs to address chronic health conditions, including asthma and diabetes. Subsection (b) allows the commission to study, in conjunction with an academic health center, the benefits and costs of applying disease management principles in the delivery of Medicaid managed care. SUBCHAPTER B. REGIONAL ADVISORY COMMITTEES Sec. 533.021. APPOINTMENT. Requires the commission, in consultation with health and human service agencies, to appoint a Medicaid managed care advisory committee for a region, not later than the 180th day before the commission plans to implement Medicaid managed care in that region. Sec. 533.022. COMPOSITION. Specifies the representation of a committee. Sec. 533.023. PRESIDING OFFICER; SUBCOMMITTEES. Provides that the commissioner or designated representative serves as the presiding officer of a committee, and allows that person to appoint subcommittees as necessary. Sec. 533.024. MEETINGS. Requires a committee to meet at least quarterly for the first year, and at least annually after that. Sec. 533.025. POWERS AND DUTIES. Requires a committee to review and comment and provide recommendations, as specified. Sec. 533.026. COMPENSATION; REIMBURSEMENT. Stipulates that a member of a committee, other than a health and human service agency representative, is not entitled to receive compensation or reimbursement for travel expenses. Provides that a health and human service agency representative is entitled to reimbursement in accordance with the travel provisions for state employees in the General Appropriations Act. Sec. 533.027. OTHER LAW. Provides that a committee is subject to Article 6252-33, Revised Statutes, except as provided by this chapter. SECTION 2. Requires the commission to direct the department and the Texas Department of Human Services to submit a plan to the governor and the Labor Budget Board to realize cost savings to the state by simplifying and streamlining eligibility criteria and determination processes for public assistance recipients, as specified, by September 1, 1997. SECTION 3. Requires the commission to submit a report to the governor, the lieutenant governor, and the speaker of the house on the impact of Medicaid managed care on the public health sector by December 1, 1998. SECTION 4. Subsection (a) requires the commission, in cooperation with the advisory committee created by this Act, to submit a report to the governor, lt. governor, and speaker of the house on the implementation of Medicaid managed care in a region, not later than the first anniversary of the date on which Medicaid recipients begin enrolling in that region. Subsection (b) requires the commission to submit a report as soon as possible on the implementation of Medicaid managed care in a region if Medicaid recipients in that region began enrolling in Medicaid managed care plans before September 1, 1996. SECTION 5. Stipulates that this Act takes effect immediately, except Sec. 533.004 takes effect September 1, 1997, and applies only to a contract with a managed care organization that the commission enters into or renews on or after that date. Provides that a contract entered into or renewed before September 1, 1997, is governed by existing law, which is continued in effect for that purpose. Provides the definition of commission for the purposes of this section. SECTION 6. Emergency clause. Effective upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE The major revision of this bill is the removal of both the original bill's proposed amendment to the existing Article 4413(502), Vernon's Texas Civil Statutes and the proposed legislative oversight committee that would have been created by HB 3258's Chapter 533. The substitute bill, instead, expands and details a newly created Chapter 533, entitled "Implementation of Medicaid Managed Care Program." SECTIONS 2, 3, and 4 of the substitute are added to establish dates and time frames for submitting the Act's required reports. The section concerning the Act's effective date has been revised to specify that contracts entered into or renewed before the stated effective date are governed by prior law and to define the term "commission" as specified.