SRC-JFA S.B. 1164 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1164
By: Zaffirini
Health & Human Services
4-7-97
As Filed


DIGEST 

Currently, 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.  This bill would require the Texas Department of Health
to perform, at least 60 days before the date of implementation in a
service area, a readiness review of each managed care organization that
contracts with the state to provide Medicaid services.   

PURPOSE

As proposed, 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

Rulemaking authority is granted to the Health and Human Services
Commission in SECTION 1 (Section 32.043(d), Human Resources Code) of this
bill.   

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.  Requires the Texas
Department of Health (TDH) to review each managed care organization that
has contracted with TDH to provide medical assistance to medical
assistance recipients through a managed care plan issued by the
organization to determine whether the organization is prepared to meet its
contractual obligations.  Requires TDH to conduct the review by the 60th
day before the date on which medical assistance recipients may begin
enrolling in the organization's managed care plan.  Requires the review to
include an on-site inspection and tests of service authorization and
claims payment systems, complaint processing systems, and any other
process or system required by the contract.  Authorizes 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.  Requires TDH to identify and review the
administrative costs of each managed care organization that  contracts
with TDH.  Authorizes TDH, by rule, to limit these administrative costs.   

SECTION 2. Effective date: September 1, 1997.
  Makes application of this Act prospective.

SECTION 3. Emergency clause.