1-1 AN ACT
1-2 relating to the authority of the Health and Human Services
1-3 Commission to administer and operate the Medicaid managed care
1-4 program.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 531.021, Government Code, is amended to
1-7 read as follows:
1-8 Sec. 531.021. ADMINISTRATION OF MEDICAID PROGRAM. (a) The
1-9 commission is the state agency designated to administer federal
1-10 medical assistance funds.
1-11 (b) The commission is responsible for adopting reasonable
1-12 rules and standards governing the determination of fees, charges,
1-13 and rates for medical assistance payments under Chapter 32, Human
1-14 Resources Code. In adopting these rules and standards, the
1-15 commission shall consult with the agencies that operate the
1-16 Medicaid program.
1-17 SECTION 2. (a) Subtitle I, Title 4, Government Code, is
1-18 amended by adding Chapter 533 to read as follows:
1-19 CHAPTER 533. IMPLEMENTATION OF MEDICAID
1-20 MANAGED CARE PROGRAM
1-21 SUBCHAPTER A. GENERAL PROVISIONS
1-22 Sec. 533.001. DEFINITIONS. In this chapter:
1-23 (1) "Commission" means the Health and Human Services
1-24 Commission or an agency operating part of the state Medicaid
2-1 managed care program, as appropriate.
2-2 (2) "Commissioner" means the commissioner of health
2-3 and human services.
2-4 (3) "Health and human services agencies" has the
2-5 meaning assigned by Section 531.001.
2-6 (4) "Managed care organization" means a person who is
2-7 authorized or otherwise permitted by law to arrange for or provide
2-8 a managed care plan.
2-9 (5) "Managed care plan" means a plan under which a
2-10 person undertakes to provide, arrange for, pay for, or reimburse
2-11 any part of the cost of any health care services. A part of the
2-12 plan must consist of arranging for or providing health care
2-13 services as distinguished from indemnification against the cost of
2-14 those services on a prepaid basis through insurance or otherwise.
2-15 The term includes a primary care case management provider network.
2-16 The term does not include a plan that indemnifies a person for the
2-17 cost of health care services through insurance.
2-18 (6) "Recipient" means a recipient of medical
2-19 assistance under Chapter 32, Human Resources Code.
2-20 (7) "Health care service region" or "region" means a
2-21 Medicaid managed care service area as delineated by the commission.
2-22 Sec. 533.002. PURPOSE. The commission shall implement the
2-23 Medicaid managed care program as part of the health care delivery
2-24 system developed under Chapter 532 by contracting with managed care
2-25 organizations in a manner that, to the extent possible:
2-26 (1) improves the health of Texans by:
2-27 (A) emphasizing prevention;
3-1 (B) promoting continuity of care; and
3-2 (C) providing a medical home for recipients;
3-3 (2) ensures that each recipient receives high quality,
3-4 comprehensive health care services in the recipient's local
3-5 community;
3-6 (3) encourages the training of and access to primary
3-7 care physicians and providers;
3-8 (4) maximizes cooperation with existing public health
3-9 entities, including local departments of health;
3-10 (5) provides incentives to managed care organizations
3-11 to improve the quality of health care services for recipients by
3-12 providing value-added services; and
3-13 (6) reduces administrative and other nonfinancial
3-14 barriers for recipients in obtaining health care services.
3-15 Sec. 533.003. CONSIDERATIONS IN AWARDING CONTRACTS. In
3-16 awarding contracts to managed care organizations, the commission
3-17 shall:
3-18 (1) give preference to organizations that have
3-19 significant participation in the organization's provider network
3-20 from each health care provider in the region who has traditionally
3-21 provided care to Medicaid and charity care patients;
3-22 (2) give extra consideration to organizations that
3-23 agree to assure continuity of care for at least three months beyond
3-24 the period of Medicaid eligibility for recipients; and
3-25 (3) consider the need to use different managed care
3-26 plans to meet the needs of different populations.
3-27 Sec. 533.004. MANDATORY CONTRACTS. (a) In providing health
4-1 care services through Medicaid managed care to recipients in a
4-2 health care service region, the commission shall contract with at
4-3 least one managed care organization in that region that is licensed
4-4 under the Texas Health Maintenance Organization Act (Chapter 20A,
4-5 Vernon's Texas Insurance Code) to provide health care in that
4-6 region and that is:
4-7 (1) wholly owned and operated by a hospital district
4-8 in that region;
4-9 (2) created by a nonprofit corporation that:
4-10 (A) has a contract, agreement, or other
4-11 arrangement with a hospital district in that region or with a
4-12 municipality in that region that owns a hospital licensed under
4-13 Chapter 241, Health and Safety Code, and has an obligation to
4-14 provide health care to indigent patients; and
4-15 (B) under the contract, agreement, or other
4-16 arrangement, assumes the obligation to provide health care to
4-17 indigent patients and leases, manages, or operates a hospital
4-18 facility owned by the hospital district or municipality; or
4-19 (3) created by a nonprofit corporation that has a
4-20 contract, agreement, or other arrangement with a hospital district
4-21 in that region under which the nonprofit corporation acts as an
4-22 agent of the district and assumes the district's obligation to
4-23 arrange for services under the Medicaid expansion for children as
4-24 authorized by Chapter 444, Acts of the 74th Legislature, Regular
4-25 Session, 1995.
4-26 (b) A managed care organization described by Subsection (a)
4-27 is subject to all terms and conditions to which other managed care
5-1 organizations are subject, including all contractual, regulatory,
5-2 and statutory provisions relating to participation in the Medicaid
5-3 managed care program.
5-4 (c) The commission shall make the awarding and renewal of a
5-5 mandatory contract under this section to a managed care
5-6 organization affiliated with a hospital district or municipality
5-7 contingent on the district or municipality entering into a
5-8 matching funds agreement to expand Medicaid for children as
5-9 authorized by Chapter 444, Acts of the 74th Legislature, Regular
5-10 Session, 1995. The commission shall make compliance with the
5-11 matching funds agreement a condition of the continuation of the
5-12 contract with the managed care organization to provide health care
5-13 services to recipients.
5-14 (d) Subsection (c) does not apply if:
5-15 (1) the commission does not expand Medicaid for
5-16 children as authorized by Chapter 444, Acts of the 74th
5-17 Legislature, Regular Session, 1995; or
5-18 (2) a waiver from a federal agency necessary for the
5-19 expansion is not granted.
5-20 Sec. 533.005. REQUIRED CONTRACT PROVISIONS. A contract
5-21 between a managed care organization and the commission for the
5-22 organization to provide health care services to recipients must
5-23 contain:
5-24 (1) procedures to ensure accountability to the state
5-25 for the provision of health care services, including procedures for
5-26 financial reporting, quality assurance, utilization review, and
5-27 assurance of contract and subcontract compliance;
6-1 (2) capitation and provider payment rates that ensure
6-2 the cost-effective provision of quality health care;
6-3 (3) a requirement that the managed care organization
6-4 provide ready access to a person who assists recipients in
6-5 resolving issues relating to enrollment, plan administration,
6-6 education and training, access to services, and grievance
6-7 procedures;
6-8 (4) a requirement that the managed care organization
6-9 provide ready access to a person who assists providers in resolving
6-10 issues relating to payment, plan administration, education and
6-11 training, and grievance procedures;
6-12 (5) a requirement that the managed care organization
6-13 provide information and referral about the availability of
6-14 educational, social, and other community services that could
6-15 benefit a recipient;
6-16 (6) procedures for recipient outreach and education;
6-17 (7) a requirement that the managed care organization
6-18 make payment to a physician or provider for health care services
6-19 rendered to a recipient under a managed care plan not later than
6-20 the 45th day after the date a claim for payment is received with
6-21 documentation reasonably necessary for the managed care
6-22 organization to process the claim, or within a period, not to
6-23 exceed 60 days, specified by a written agreement between the
6-24 physician or provider and the managed care organization;
6-25 (8) a requirement that the commission, on the date of
6-26 a recipient's enrollment in a managed care plan issued by the
6-27 managed care organization, inform the organization of the
7-1 recipient's Medicaid recertification date; and
7-2 (9) a requirement that the managed care organization
7-3 comply with Section 533.006 as a condition of contract retention
7-4 and renewal.
7-5 Sec. 533.006. PROVIDER NETWORKS. (a) The commission shall
7-6 require that each managed care organization that contracts with the
7-7 commission to provide health care services to recipients in a
7-8 region:
7-9 (1) seek participation in the organization's provider
7-10 network from:
7-11 (A) each health care provider in the region who
7-12 has traditionally provided care to Medicaid recipients; and
7-13 (B) each hospital in the region that has been
7-14 designated as a disproportionate share hospital under the state
7-15 Medicaid program; and
7-16 (2) include in its provider network for not less than
7-17 three years:
7-18 (A) each health care provider in the region who:
7-19 (i) previously provided care to Medicaid
7-20 and charity care recipients at a significant level as prescribed by
7-21 the commission;
7-22 (ii) agrees to accept the prevailing
7-23 provider contract rate of the managed care organization; and
7-24 (iii) has the credentials required by the
7-25 managed care organization, provided that lack of board
7-26 certification or accreditation by the Joint Commission on
7-27 Accreditation of Healthcare Organizations may not be the sole
8-1 ground for exclusion from the provider network;
8-2 (B) each accredited primary care residency
8-3 program in the region; and
8-4 (C) each disproportionate share hospital
8-5 designated by the commission as a statewide significant traditional
8-6 provider.
8-7 (b) A contract between a managed care organization and the
8-8 commission for the organization to provide health care services to
8-9 recipients in a health care service region that includes a rural
8-10 area must require that the organization include in its provider
8-11 network rural hospitals, physicians, home and community support
8-12 services agencies, and other rural health care providers who:
8-13 (1) are sole community providers;
8-14 (2) provide care to Medicaid and charity care
8-15 recipients at a significant level as prescribed by the commission;
8-16 (3) agree to accept the prevailing provider contract
8-17 rate of the managed care organization; and
8-18 (4) have the credentials required by the managed care
8-19 organization, provided that lack of board certification or
8-20 accreditation by the Joint Commission on Accreditation of
8-21 Healthcare Organizations may not be the sole ground for exclusion
8-22 from the provider network.
8-23 Sec. 533.007. CONTRACT COMPLIANCE. (a) The commission
8-24 shall review each managed care organization that contracts with the
8-25 commission to provide health care services to recipients through a
8-26 managed care plan issued by the organization to determine whether
8-27 the organization is prepared to meet its contractual obligations.
9-1 (b) Each managed care organization that contracts with the
9-2 commission to provide health care services to recipients in a
9-3 health care service region shall submit an implementation plan not
9-4 later than the 90th day before the date on which the commission
9-5 plans to begin to provide health care services to recipients in
9-6 that region through managed care. The implementation plan must
9-7 include:
9-8 (1) specific staffing patterns by function for all
9-9 operations, including enrollment, information systems, member
9-10 services, quality improvement, claims management, case management,
9-11 and provider and recipient training; and
9-12 (2) specific time frames for demonstrating
9-13 preparedness for implementation before the date on which the
9-14 commission plans to begin to provide health care services to
9-15 recipients in that region through managed care.
9-16 (c) The commission shall respond to an implementation plan
9-17 not later than the 10th day after the date a managed care
9-18 organization submits the plan if the plan does not adequately meet
9-19 preparedness guidelines.
9-20 (d) Each managed care organization that contracts with the
9-21 commission to provide health care services to recipients in a
9-22 region shall submit status reports on the implementation plan not
9-23 later than the 60th day and the 30th day before the date on which
9-24 the commission plans to begin to provide health care services to
9-25 recipients in that region through managed care and every 30th day
9-26 after that date until the 180th day after that date.
9-27 (e) The commission shall conduct a compliance and readiness
10-1 review of each managed care organization that contracts with the
10-2 commission not later than the 15th day before the date on which the
10-3 commission plans to begin the enrollment process in a region and
10-4 again not later than the 15th day before the date on which the
10-5 commission plans to begin to provide health care services to
10-6 recipients in that region through managed care. The review must
10-7 include an on-site inspection and tests of service authorization
10-8 and claims payment systems, complaint processing systems, and any
10-9 other process or system required by the contract.
10-10 (f) The commission may delay enrollment of recipients in a
10-11 managed care plan issued by a managed care organization if the
10-12 review reveals that the managed care organization is not prepared
10-13 to meet its contractual obligations. The commission shall notify a
10-14 managed care organization of a decision to delay enrollment in a
10-15 plan issued by that organization.
10-16 Sec. 533.0075. RECIPIENT ENROLLMENT. The commission shall:
10-17 (1) encourage recipients to choose appropriate managed
10-18 care plans and primary health care providers by:
10-19 (A) providing initial information to recipients
10-20 and providers in a region about the need for recipients to choose
10-21 plans and providers not later than the 90th day before the date on
10-22 which the commission plans to begin to provide health care services
10-23 to recipients in that region through managed care;
10-24 (B) providing follow-up information before
10-25 assignment of plans and providers and after assignment, if
10-26 necessary, to recipients who delay in choosing plans and providers;
10-27 and
11-1 (C) allowing plans and providers to provide
11-2 information to recipients or engage in marketing activities under
11-3 marketing guidelines established by the commission under Section
11-4 533.008 after the commission approves the information or
11-5 activities;
11-6 (2) consider the following factors in assigning
11-7 managed care plans and primary health care providers to recipients
11-8 who fail to choose plans and providers:
11-9 (A) the importance of maintaining existing
11-10 provider-patient and physician-patient relationships, including
11-11 relationships with specialists, public health clinics, and
11-12 community health centers;
11-13 (B) to the extent possible, the need to assign
11-14 family members to the same providers and plans; and
11-15 (C) geographic convenience of plans and
11-16 providers for recipients; and
11-17 (3) retain responsibility for enrollment and
11-18 disenrollment of recipients in managed care plans, except that the
11-19 commission may delegate the responsibility to an independent
11-20 contractor who receives no form of payment from, and has no
11-21 financial ties to, any managed care organization.
11-22 Sec. 533.008. MARKETING GUIDELINES. (a) The commission
11-23 shall establish marketing guidelines for managed care organizations
11-24 that contract with the commission to provide health care services
11-25 to recipients, including guidelines that prohibit:
11-26 (1) door-to-door marketing to recipients by managed
11-27 care organizations or agents of those organizations;
12-1 (2) the use of marketing materials with inaccurate or
12-2 misleading information;
12-3 (3) misrepresentations to recipients or providers;
12-4 (4) offering recipients material or financial
12-5 incentives to choose a managed care plan other than nominal gifts
12-6 or free health screenings approved by the commission that the
12-7 managed care organization offers to all recipients regardless of
12-8 whether the recipients enroll in the managed care plan;
12-9 (5) the use of marketing agents who are paid solely by
12-10 commission; and
12-11 (6) face-to-face marketing at public assistance
12-12 offices by managed care organizations or agents of those
12-13 organizations.
12-14 (b) This section does not prohibit:
12-15 (1) the distribution of approved marketing materials
12-16 at public assistance offices; or
12-17 (2) the provision of information directly to
12-18 recipients under marketing guidelines established by the
12-19 commission.
12-20 Sec. 533.009. SPECIAL DISEASE MANAGEMENT. (a) The
12-21 commission shall, to the extent possible, ensure that managed care
12-22 organizations under contract with the commission to provide health
12-23 care services to recipients develop special disease management
12-24 programs to address chronic health conditions, including asthma and
12-25 diabetes, and use outcome measures to assess the programs.
12-26 (b) The commission may study, in conjunction with an
12-27 academic center, the benefits and costs of applying disease
13-1 management principles in the delivery of Medicaid managed care.
13-2 Sec. 533.010. SPECIAL PROTOCOLS. In conjunction with an
13-3 academic center, the commission may study the treatment of indigent
13-4 populations to develop special protocols for managed care
13-5 organizations to use in providing health care services to
13-6 recipients.
13-7 Sec. 533.011. PUBLIC NOTICE. Not later than the 30th day
13-8 before the commission plans to issue a request for applications to
13-9 enter into a contract with the commission to provide health care
13-10 services to recipients in a region, the commission shall publish
13-11 notice of and make available for public review the request for
13-12 applications and all related nonproprietary documents, including
13-13 the proposed contract.
13-14 (Sections 533.012-533.020 reserved for expansion
13-15 SUBCHAPTER B. REGIONAL ADVISORY COMMITTEES
13-16 Sec. 533.021. APPOINTMENT. Not later than the 180th day
13-17 before the date the commission plans to begin to provide health
13-18 care services to recipients in a health care service region through
13-19 managed care, the commission, in consultation with health and human
13-20 services agencies, shall appoint a Medicaid managed care advisory
13-21 committee for that region.
13-22 Sec. 533.022. COMPOSITION. A committee consists of
13-23 representatives from entities and communities in the region as
13-24 considered necessary by the commission to ensure representation of
13-25 interested persons, including representatives of:
13-26 (1) hospitals;
13-27 (2) managed care organizations;
14-1 (3) primary care providers;
14-2 (4) state agencies;
14-3 (5) consumer advocates;
14-4 (6) recipients;
14-5 (7) rural providers;
14-6 (8) long-term care providers;
14-7 (9) specialty care providers, including pediatric
14-8 providers; and
14-9 (10) political subdivisions with a constitutional or
14-10 statutory obligation to provide health care to indigent patients.
14-11 Sec. 533.023. PRESIDING OFFICER; SUBCOMMITTEES. The
14-12 commissioner or the commissioner's designated representative serves
14-13 as the presiding officer of a committee. The presiding officer may
14-14 appoint subcommittees as necessary.
14-15 Sec. 533.024. MEETINGS. (a) A committee shall meet at
14-16 least quarterly for the first year after appointment of the
14-17 committee and at least annually after that time.
14-18 (b) A committee is subject to Chapter 551, Government Code.
14-19 Sec. 533.025. POWERS AND DUTIES. A committee shall:
14-20 (1) comment on the implementation of Medicaid managed
14-21 care in the region;
14-22 (2) provide recommendations to the commission on the
14-23 improvement of Medicaid managed care in the region not later than
14-24 the 30th day after the date of each committee meeting; and
14-25 (3) seek input from the public, including public
14-26 comment at each committee meeting.
14-27 Sec. 533.026. INFORMATION FROM COMMISSION. On request, the
15-1 commission shall provide to a committee information relating to
15-2 recipient enrollment and disenrollment, recipient and provider
15-3 complaints, administrative procedures, program expenditures, and
15-4 education and training procedures.
15-5 Sec. 533.027. COMPENSATION; REIMBURSEMENT. (a) A member of
15-6 a committee other than a representative of a health and human
15-7 services agency is not entitled to receive compensation or
15-8 reimbursement for travel expenses.
15-9 (b) A member of a committee who is an agency representative
15-10 is entitled to reimbursement for expenses incurred in the
15-11 performance of committee duties by the appointing agency in
15-12 accordance with the travel provisions for state employees in the
15-13 General Appropriations Act.
15-14 Sec. 533.028. OTHER LAW. Except as provided by this
15-15 chapter, a committee is subject to Article 6252-33, Revised
15-16 Statutes.
15-17 Sec. 533.029. FUNDING. The commission shall fund activities
15-18 under this section with money otherwise appropriated for that
15-19 purpose.
15-20 (b) Not later than December 1, 1998, the Health and Human
15-21 Services Commission shall submit a report to the governor, the
15-22 lieutenant governor, and the speaker of the house of
15-23 representatives on the impact of Medicaid managed care on the
15-24 public health sector.
15-25 (c) Not later than the first anniversary of the date on
15-26 which Medicaid recipients in a health care service region begin to
15-27 receive health care services through Medicaid managed care, the
16-1 Health and Human Services Commission, in cooperation with the
16-2 Medicaid managed care advisory committee for that region created
16-3 under Subchapter B, Chapter 533, Government Code, as added by this
16-4 Act, shall submit a report to the governor, lieutenant governor,
16-5 and speaker of the house of representatives on the implementation
16-6 of Medicaid managed care in that region. If Medicaid recipients in
16-7 a region began to receive health care services through managed care
16-8 before September 1, 1996, the commission is required to submit a
16-9 report on the implementation of Medicaid managed care in that
16-10 region as soon as possible after the effective date of this Act.
16-11 The commission may consolidate a report with any other report
16-12 relating to the same subject that the commission is required to
16-13 submit under other law.
16-14 (d) Section 533.007, Government Code, as added by this Act,
16-15 applies only to a contract with a managed care organization that
16-16 the Health and Human Services Commission or an agency operating
16-17 part of the Medicaid managed care program enters into or renews on
16-18 or after the effective date of this Act. A contract with a managed
16-19 care organization that the Health and Human Services Commission or
16-20 an agency operating part of the Medicaid managed care program
16-21 enters into or renews before the effective date of this Act is
16-22 governed by the law as it existed immediately before that date, and
16-23 that law is continued in effect for that purpose.
16-24 (e) Section 533.004, Government Code, as added by this Act,
16-25 does not affect the expansion of medical assistance for children
16-26 described in H.C.R. No. 189, 75th Legislature, Regular Session,
16-27 1997.
17-1 (f) If Medicaid recipients in a health care service region
17-2 began to receive health care services through managed care before
17-3 the effective date of this Act, the Health and Human Services
17-4 Commission or an agency operating part of the Medicaid managed care
17-5 program shall appoint a Medicaid managed care advisory committee
17-6 for that region in accordance with Subchapter B, Chapter 533,
17-7 Government Code, as added by this Act, as soon as possible after
17-8 the effective date of this Act.
17-9 (g) If, on the effective date of this Act, the commission
17-10 has contracted with a managed care organization to provide health
17-11 care services through Medicaid managed care to recipients in a
17-12 region, the commission shall award at least one mandatory contract
17-13 under Section 533.004, Government Code, as added by this Act, on
17-14 the renewal date of that contract.
17-15 (h) This section takes effect immediately.
17-16 SECTION 3. This Act takes effect September 1, 1997, except
17-17 that Section 2 of this Act takes effect immediately.
17-18 SECTION 4. The importance of this legislation and the
17-19 crowded condition of the calendars in both houses create an
17-20 emergency and an imperative public necessity that the
17-21 constitutional rule requiring bills to be read on three several
17-22 days in each house be suspended, and this rule is hereby suspended,
17-23 and that this Act take effect and be in force according to its
17-24 terms, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2913 was passed by the House on May
14, 1997, by the following vote: Yeas 129, Nays 12, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 2913 on May 30, 1997, by the following vote: Yeas 134, Nays 0,
1 present, not voting.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2913 was passed by the Senate, with
amendments, on May 28, 1997, by the following vote: Yeas 29, Nays
0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor