BG S.B. 1574 75(R)BILL ANALYSIS PUBLIC HEALTH S.B. 1574 By: Madla (Van de Putte) 5-8-97 Committee Report (Unamended) BACKGROUND The health care delivery system under the state Medicaid program was restructured by S.B. 10, which passed during the 74th Legislature. That law contained a provision requiring each managed care organization involved in the system to include in its provider network each historical Medicaid health care provider who agrees to the terms of the contract for not less than three years. The 1115 waiver from the federal government to implement the Texas statewide managed care Medicaid program under S.B. 10 has not been approved. The state has been implementing managed care pilot programs in various regions under 1915(b) waivers. Clarification is needed to establish that the three-year requirement for contracting with historical Medicaid health care providers begins after the date of implementation of managed care in each service area, not after the date of implementation of S.B. 10. PURPOSE S.B. 1574 clarifies that the three-year requirement for contracting with historical Medicaid health care providers by each managed care organization involved in the state Medicaid program begins after the date of implementation of managed care in each service area. 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 ARTICLE 1. SECTION 1.01 Amends Section 16A(a), Article 4413(502), Vernon's Texas Civil Statutes, as added by Chapter 444, Acts of the 74th Legislature, 1995, to add to the requirement in Subsection (a)(7)(H) that the Health and Human Services Commission (commission), in developing the health care delivery system, among other items, design the system to require that the commission, each intergovernmental initiative, and each managed care organization, as applicable, include in its provider network, for not less than three years after the date of implementation of managed care in a service area for the current Medicaid population, each health care provider in that area who, among other conditions, provided care to Medicaid and charity care patients as specified, during the 12 months preceding the date of implementation. ARTICLE 2. SECTION 2.01. Amends Section 532.102(a), Government Code, as added by the Act of the 75th Legislature, Regular Session, 1997, relating to nonsubstantive additions to and corrections in enacted codes, to require the commission, in developing the health care delivery system under this chapter, to the extent possible, to design the system in a manner that improves the health of the people in this state as specified and ensures that each recipient can receive services as specified in their local community. Requires the commission to design the system in a manner that enable state and local government entities, as specified, to control Medicaid program costs and that, to the extent possible, results in cost savings through health care service delivery based on managed care. Requires the commission to maximize the financing of the state Medicaid program by obtaining federal matching funds as specified and expand Medicaid eligibility to include persons who were eligible for indigent care services as specified, to the extent that is cost effective to the state and local governments. Requires the commission, to the extent possible, to develop a plan to expand Medicaid eligibility to include children and other persons as specified. Requires the commission to design the system to ensure that each entity, as specified, receives specified funds to provide health care to persons who are Medicaid eligible under the expanded criteria, if a method to finance the Medicaid program by obtaining federal matching funds for resources and other funds, as specified, is included. Requires the commission to the extent possible , to provide for each entity as specified, an option to operate the delivery system in its region, as specified. Requires the commission to design the system to include accountability methods and uniform data, to conduct comparative analyses and assess the relative value of alternative health care delivery systems and to make reports as specified. Requires the commissioner to oversee procedures for setting capitation and provider payment rates as specified. Requires the commission to ensure that private and public providers and managed care organizations, including Medicaid designated disproportionate share hospitals, have an opportunity to participate in the system and to ensure, in adopting implementation rules, that the commission, each intergovernmental initiative and each applicable managed care organization, give extra consideration to a provider who traditionally gave care to Medicaid and charity patients in developing the provider network for the system. Requires the commission to give extra consideration to providers who agree to ensure continuity of care as specified. Requires that included in the provider network, for not less than three years after managed care implementation as specified be certain specified health care providers in that area. Requires that the commission design the system in a manner that to the extent possible enable the state to manage care to lower the cost of providing Medicaid services as specified, and enable the state use different types of delivery systems to meet different population needs as specified, recognize the uniqueness of rural services as specified and review data from existing or pilot programs as specified. Requires the commission to establish geographic health care regions after consulting with local government entities as specified. Requires the commission to simplify eligibility criteria and streamline determination processes. Requires the commission to the extent possible, to provide a one-step approach for client information and referral to managed care services. Requires the commission to the extent possible to design the system in a manner that encourages the training of and access to primary care physicians. Requires the commission to develop and prepare, after consulting with the entities as specified, the waiver or other document to obtain federal authorization for the system. Requires the commission to design the system to ensure that an amount not to exceed $20 million a year must be dedicated for special payments to rural hospital as specified, if the system includes an obtaining of federal matching funds financing method as specified. Requires the commission, if necessary, to ensure that all resources or other funds available are maximized as specified and an amount determined by the commission is dedicated for special payments as specified to hospitals as specified under the procedures used for Medicaid disproportionate share determinations. Requires the commission to design a cost-neutral system to provide for a sliding scale copayment system as specified. Requires the commission, to the extent possible and subject to fund availability, to design a cost-neutral system to allow development of a buy-in program with sliding scale premiums as specified. Requires the commission to design the system in a manner that, to the extent possible, maintains administrative costs at a level not to exceed five percent of the cost of the state Medicaid program. Requires the commission to develop and implement a pilot program, as specified, for child and adult dental care, in consultation with a professional organization as specified. ARTICLE 3. SECTION 3.01. Effective date: September 1, 1997. SECTION 3.02. Provides that Article 1 takes effect only if the Act of the 75th Legislature, Regular Session, 1997, relating to nonsubstantive additions to and corrections in enacted codes, does not take effect. SECTION 3.03. Provides that Article 2 takes effect only if the Act of the 75th Legislature, Regular Session, 1997, relating to nonsubstantive additions to and corrections in enacted codes, takes effect. SECTION 3.04. Emergency clause.