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


Senate Research CenterC.S.S.B. 1164
By: Zaffirini
Health & Human Services
4-17-97
Committee Report (Substituted)


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 review each managed care organization that has contracted with TDH to
determine whether the organization is prepared to meet certain contractual
obligations.   

PURPOSE

As proposed, C.S.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

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

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.  (a)  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.  

(b)  Requires TDH to require each managed care organization that has
contracted with TDH to submit an implementation plan no later than the
90th day before the date on which TDH plans to begin to provide medical
assistance through a managed care plan in a service area.  Requires the
implementation plan to include specific staffing patterns by function for
all operations; and specific time frames for demonstrating preparedness
for implementation before the date on which TDH plans to begin to provide
medical assistance through a managed care plan in a service area.
Requires TDH to respond within five working days if the implementation
plan does not adequately meet preparedness guidelines.  Requires TDH to
require each managed care organization that has contracted with TDH to
submit status reports on the implementation plan no later than 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 after TDH begins to provide medical assistance through
a managed care plan in a service area until the 180th day of operations. 

(c)  Requires TDH to conduct a compliance and readiness review of each
managed care organization that contracts with the state no later than 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 to provide medical assistance through a
managed care plan in a service area.  Requires the review to include an
on-site inspection and tests of service authorization and claims payment
systems, compliant processing systems, and any other process or system
required by contract.  

(d)  Requires 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.
  Effective date:  upon passage. 

SUMMARY OF COMMITTEE CHANGES

SECTION 1. 

Amends Section 32.043, Human Resources Code, by revising proposed
Subsections (b) and (c).  Omits proposed Subsection (e), which authorized
TDH, by rule, to limit certain administrative costs.   

SECTION 2.  

Omits the effective date of September 1, 1997.  Revises session making
this Act prospective.  

SECTION 3. 

Adds an effective date of upon passage of the Act.