BG S.B. 1164 75(R)BILL ANALYSIS 



PUBLIC HEALTH
S.B. 1164
By Zaffirini (Berlanga)
5-8-97
Committee Report (Amended)


BACKGROUND 

Texas began to implement managed care pilot programs in the state Medicaid
program in 1993 under 1915(b) waivers from the federal government to
control costs while ensuring quality care. One of the problems encountered
during the implementation of Medicaid managed care was the inability of
some managed care organizations to handle the number of Medicaid patients
as well as the unique nature of Medicaid claims. This resulted in
providers not receiving reimbursement for services rendered, slow claims
processing and difficulties in obtaining preauthorization.  

PURPOSE

S.B. 1164 requires the Texas Department of Health (TDH) to review each
managed care organization that has contracted with TDH to determine
whether the organization is prepared to meet certain contractual
obligations.   

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 Chapter 32B, Human Resources Code, by adding Section
32.043, as follows:  

Sec. 32.043.  MANAGED CARE CONTRACT COMPLIANCE. 

Subsection (a) requires the Texas Department of Health (TDH) to review
each managed care organization that has contracted with TDH to provide
medical assistance as specified to determine whether the organization is
prepared to meet its contractual obligations.  

Subsection (b) requires TDH to require each managed care organization, as
specified to submit an implementation plan by the 90th day before the date
that TDH expects to initiate medical assistance as specified. Establishes
that the plan must include specific staffing patterns by function for all
operations; and specific time frames for demonstrating preparedness.
Requires TDH to respond within five working days if the plan does not meet
preparedness guidelines.  Requires TDH to require each contracted managed
care organization to submit status reports on the plan by the 60th day and
the 30th day before the date on which TDH plans to begin to provide
medical assistance through a managed care plan in a service area and every
30th day afterwards until the 180th day of operations. 

Subsection (c) requires TDH to conduct a compliance and readiness review
of each managed care organization that contracts with the state by the
15th day before the date on which TDH plans to begin the enrollment
process in a service area and again no later than the 15th day before the
date on which TDH plans to begin providing medical assistance through a
managed care plan in a service area.  Requires the review to include
on-site inspection and tests of service authorization and claims payment
systems, compliant processing systems, and any other process or system
required by contract.  

Subsection (d) allows TDH to delay enrollment of medical assistance
recipients in a managed care plan if the review reveals that the managed
care organization is not prepared to meet its contractual obligations.   

SECTION 2. Makes application of this Act prospective.

SECTION 3. Emergency clause.  Establishes that this Act takes effect upon
passage.  

EXPLANATION OF AMENDMENTS

Committee Amendment 1.  Revises the time by which TDH is required to
respond to a plan that does not meet implementation preparedness to within
10 working days rather than 5. 

Committee Amendment 2.  Adds a new section regarding the required
evaluation and report of STAR+PLUS Medicaid managed care long-term care
pilot project by the Health and Human Services Commission.