CLC C.S.S.B. 534 75(R)    BILL ANALYSIS

HUMAN SERVICES
S.B. 534
By: Harris (Maxey)
5-6-97
5-6-97

BACKGROUND

Currently, when a state agency pays for certain medical services, the
state has a right to recover its costs from any payments a patient may
receive in the settlement of a related lawsuit.  Texas could avoid some of
these medical expenditures by identifying potential third-party liability
sources when the suit is initially filed.  This bill improves collection
efforts by directing the Health and Human Services Commission to enter
into subrogation contracts as appropriate. 

PURPOSE

As proposed, C.S.S.B. 534 improves collection efforts by directing the
Health and Human Services Commission to enter into subrogation contracts
as appropriate. 

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 531B, Government Code, by adding Section
531.0391, as follows: 

Sec. 531.0391. SUBROGATION AND THIRD-PARTY REIMBURSEMENT COLLECTION
CONTRACT. (a) Requires the Health and Human SErvices Commission
(commission) to enter into contracts to recover money under a subrogation
or third-party reimbursement right held by the commission.  Sets forth the
requirements of the contracts. 

(b) Requires the commission to develop a process for identifying certain
claims. Requires a health and human services agency to cooperate with a
contractor on a claim of the agency referred to the contractor for
collection. 

(c) Provides that the commission is not required to enter into a contract
under Subsection (a) if the commission cannot identify a contractor who is
willing to contract with the commission on reasonable terms.  Requires the
commission to develop and implement alternative policies to ensure the
collection of money under a subrogation or third-party reimbursement
right, if the commission cannot identify a contractor who is willing to
contract on reasonable terms. 

(d) Authorizes the commission to allow a state agency other than a health
and human services to be a party to contracts required in Subsection (a).
Requires the commission to modify the contract as necessary to reflect the
services to be provided by the contractor to the additional state agency. 

Sec. 531.0392. SUBROGATION AND THIRD-PARTY REIMBURSEMENT; HOSPITAL
PROVIDERS. Allows 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. Requires the commission to enter into an initial contract or
implement the alternative policies as required by Section 531.0391,
Government Code, by February 1, 1998. 

SECTION 3. Requires the commission to prepare a report for certain
persons.  Sets forth the contents of the report. 

SECTION 4. EMERGENCY CLAUSE.


COMPARISON OF ORIGINAL TO SUBSTITUTE

Section 531.0392 was added to clarify and reaffirm hospitals'
long-standing right to enforce their lien rights when Medicaid has paid.
Hospitals would be allowed to collect the full cost for treatment provided
to a Medicaid client from any award stemming from a private cause of
action. The hospital would then have to reimburse the state for any
Medicaid payments made previously.