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.