75R12895 SAW-F By Coleman H.B. No. 3258 Substitute the following for H.B. No. 3258: By Berlanga C.S.H.B. No. 3258 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the implementation of the Medicaid managed care 1-3 program. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subtitle I, Title 4, Government Code, is amended 1-6 by adding Chapter 533 to read as follows: 1-7 CHAPTER 533. IMPLEMENTATION OF MEDICAID 1-8 MANAGED CARE PROGRAM 1-9 SUBCHAPTER A. GENERAL PROVISIONS 1-10 Sec. 533.001. DEFINITIONS. In this chapter: 1-11 (1) "Commission" means the Health and Human Services 1-12 Commission or an agency operating part of the state Medicaid 1-13 managed care program, as appropriate. 1-14 (2) "Commissioner" means the commissioner of health 1-15 and human services. 1-16 (3) "Health and human services agencies" has the 1-17 meaning assigned by Section 531.001. 1-18 (4) "Managed care organization" means a person who is 1-19 authorized or otherwise permitted by law to arrange for or provide 1-20 a managed care plan. 1-21 (5) "Managed care plan" means a plan under which a 1-22 person undertakes to provide, arrange for, pay for, or reimburse 1-23 any part of the cost of any health care services. A part of the 1-24 plan must consist of arranging for or providing health care 2-1 services as distinguished from indemnification against the cost of 2-2 those services on a prepaid basis through insurance or otherwise. 2-3 The term does not include a plan that indemnifies a person for the 2-4 cost of health care services through insurance. 2-5 Sec. 533.002. PURPOSE. The commission shall implement the 2-6 Medicaid managed care program as part of the health care delivery 2-7 system developed under Chapter 532 by contracting with managed care 2-8 organizations in a manner that, to the extent possible: 2-9 (1) improves the health of Texans by: 2-10 (A) emphasizing prevention; 2-11 (B) promoting continuity of care; and 2-12 (C) providing a medical home for Medicaid 2-13 recipients; 2-14 (2) ensures that each Medicaid recipient receives high 2-15 quality, comprehensive health care services in the recipient's 2-16 local community; 2-17 (3) encourages the training of and access to primary 2-18 care physicians; 2-19 (4) maximizes cooperation with existing public health 2-20 entities, including local departments of health; and 2-21 (5) provides incentives to managed care organizations 2-22 to improve the quality of health care services provided to 2-23 Medicaid recipients. 2-24 Sec. 533.003. CONTRACTS WITH MANAGED CARE ORGANIZATIONS. 2-25 (a) In awarding contracts to managed care organizations, the 2-26 commission shall: 2-27 (1) give extra consideration to organizations that 3-1 agree to assure continuity of care for Medicaid recipients for at 3-2 least three months beyond the period of the recipients' Medicaid 3-3 eligibility; and 3-4 (2) consider the need to use different managed care 3-5 plans to meet the needs of different populations. 3-6 (b) A contract between a managed care organization and the 3-7 commission for the organization to provide health care services to 3-8 Medicaid recipients must contain: 3-9 (1) procedures to ensure accountability to the state 3-10 for the provision of health care services, including procedures for 3-11 financial reporting, quality assurance, utilization review, and 3-12 assurance of contract and subcontract compliance; 3-13 (2) capitation and provider payment rates that ensure 3-14 the cost-effective provision of high quality health care; 3-15 (3) a requirement that the managed care organization 3-16 seek participation in the organization's provider network from: 3-17 (A) each health care provider who has 3-18 traditionally provided care to Medicaid and charity care 3-19 recipients; and 3-20 (B) each hospital that has been designated as a 3-21 disproportionate share hospital under the state Medicaid program; 3-22 (4) a requirement that the managed care organization 3-23 include in its provider network, for not less than three years, 3-24 each health care provider who: 3-25 (A) previously provided care to Medicaid and 3-26 charity care recipients at a significant level as prescribed by the 3-27 commission; 4-1 (B) agrees to accept the prevailing provider 4-2 contract rate of the managed care organization; and 4-3 (C) has the credentials required by the managed 4-4 care organization, provided that lack of board certification or 4-5 accreditation by the Joint Commission on Accreditation of 4-6 Healthcare Organizations may not be the sole ground for exclusion 4-7 from the provider network; 4-8 (5) a requirement that the managed care organization 4-9 use, to the extent possible, a one-stop approach for client 4-10 information and referral, including access to a recipient advocate 4-11 to assist Medicaid recipients with enrollment, plan administration, 4-12 and payment; and 4-13 (6) a requirement that the managed care organization 4-14 pay providers for health care services not later than the 30th day 4-15 after the services are provided to a Medicaid recipient. 4-16 (c) A contract between a managed care organization and the 4-17 commission for the organization to provide health care services to 4-18 Medicaid recipients in a health care service region that includes a 4-19 rural area must require that the organization include in its 4-20 provider network rural hospitals, physicians, home and community 4-21 support services agencies, and other rural health care providers 4-22 who: 4-23 (1) are sole community providers; 4-24 (2) provide a significant amount of care to Medicaid 4-25 and charity care recipients as prescribed by the commission; and 4-26 (3) agree to accept the prevailing provider contract 4-27 rate of the managed care organization. 5-1 Sec. 533.004. CONTRACT COMPLIANCE. (a) The commission 5-2 shall review each managed care organization that contracts with the 5-3 commission to provide health care services to Medicaid recipients 5-4 through a managed care plan issued by the organization to determine 5-5 whether the organization is prepared to meet its contractual 5-6 obligations. 5-7 (b) Each managed care organization that contracts with the 5-8 commission shall submit an implementation plan to the commission 5-9 not later than the 90th day before the date on which Medicaid 5-10 recipients may begin enrolling in the organization's managed care 5-11 plan. 5-12 (c) The commission shall provide a written response to an 5-13 implementation plan not later than the 10th day after a managed 5-14 care organization submits the plan if the plan reveals that the 5-15 organization may fail to meet its contractual obligations. 5-16 (d) The commission shall conduct further review not later 5-17 than the 60th day before the date on which Medicaid recipients may 5-18 begin enrolling in the organization's managed care plan. 5-19 (e) The review shall include an on-site inspection and tests 5-20 of service authorization and claims payment systems, complaint 5-21 processing systems, and any other process or system required by the 5-22 contract. 5-23 (f) The commission may delay enrollment of Medicaid 5-24 recipients in a managed care plan if the review reveals that the 5-25 managed care organization is not prepared to meet its contractual 5-26 obligations. The commission shall notify a managed care 5-27 organization of a decision to delay enrollment in a plan issued by 6-1 that organization. 6-2 (g) The commission shall identify and review the 6-3 administrative costs of each managed care organization that 6-4 contracts with the commission. The commission by rule may limit 6-5 these administrative costs. 6-6 Sec. 533.005. RECIPIENT ENROLLMENT. The commission shall: 6-7 (1) ensure that Medicaid recipients choose appropriate 6-8 managed care plans and primary health care providers by: 6-9 (A) providing initial information to recipients 6-10 and providers about the need for recipients to choose plans and 6-11 providers; 6-12 (B) providing follow-up information before 6-13 assignment of plans and providers and after assignment, if 6-14 necessary, to recipients who delay in choosing plans and providers; 6-15 and 6-16 (C) allowing plans and providers to provide 6-17 information directly to recipients under marketing guidelines 6-18 established by the commission; 6-19 (2) consider the following in assigning managed care 6-20 plans and primary health care providers to recipients who fail to 6-21 choose plans and providers: 6-22 (A) the importance of maintaining existing 6-23 physician-patient relationships; 6-24 (B) geographic convenience of plans and 6-25 providers for recipients; 6-26 (C) the types of value-added services offered by 6-27 plans and providers, including: 7-1 (i) child-care services; 7-2 (ii) continuity of care for at least three 7-3 months beyond the period of patients' eligibility for Medicaid; 7-4 (iii) coordination of services with other 7-5 providers who have traditionally provided health care services to 7-6 Medicaid recipients, including public health clinics; 7-7 (iv) essential public health services; and 7-8 (v) transportation; and 7-9 (D) to the extent possible, the quality of 7-10 services offered by plans or providers determined through outcome 7-11 measures of overall recipient health. 7-12 Sec. 533.006. SPECIAL DISEASE MANAGEMENT. (a) The 7-13 commission shall, to the extent possible, ensure that managed care 7-14 organizations under contract with the commission to provide health 7-15 care services to Medicaid recipients develop special disease 7-16 management programs to address chronic health conditions, including 7-17 asthma and diabetes. 7-18 (b) The commission may study, in conjunction with an 7-19 academic center, the benefits and costs of applying disease 7-20 management principles in the delivery of Medicaid managed care. 7-21 (Sections 533.007-533.020 reserved for expansion 7-22 SUBCHAPTER B. REGIONAL ADVISORY COMMITTEES 7-23 Sec. 533.021. APPOINTMENT. Not later than the 180th day 7-24 before the date the commission plans to implement Medicaid managed 7-25 care in a health care service region established under Section 7-26 16A(a)(10), Article 4413(502), Revised Statutes, the commission, in 7-27 consultation with health and human services agencies, shall appoint 8-1 a Medicaid managed care advisory committee for that region. 8-2 Sec. 533.022. COMPOSITION. A committee consists of: 8-3 (1) a representative from each of the following 8-4 entities located in the region: 8-5 (A) a hospital district; 8-6 (B) a nonprofit hospital; 8-7 (C) a for-profit hospital; 8-8 (D) a managed care organization; and 8-9 (E) a children's hospital, if available; 8-10 (2) a regional representative from each of the 8-11 following agencies: 8-12 (A) the Texas Department of Health; 8-13 (B) the Texas Department of Human Services; and 8-14 (C) the Texas Department of Mental Health and 8-15 Mental Retardation; 8-16 (3) three representatives of the Medicaid recipient 8-17 community in the region, at least one of whom must be a 8-18 representative of the community of mental health care recipients; 8-19 (4) a physician in the region; 8-20 (5) a rural health care provider or a provider from a 8-21 medically underserved area in the region, as appropriate; and 8-22 (6) representatives of other entities or communities 8-23 in the region as considered necessary by the commission to ensure 8-24 appropriate representation of interested parties and representation 8-25 of rural areas by at least two committee members. 8-26 Sec. 533.023. PRESIDING OFFICER; SUBCOMMITTEES. The 8-27 commissioner or the commissioner's designated representative serves 9-1 as the presiding officer of a committee. The presiding officer may 9-2 appoint subcommittees as necessary. 9-3 Sec. 533.024. MEETINGS. A committee shall meet at least 9-4 quarterly for the first year after appointment of the committee and 9-5 at least annually after that time. 9-6 Sec. 533.025. POWERS AND DUTIES. A committee shall: 9-7 (1) review and comment on readiness review of managed 9-8 care organizations that have contracted with the commission to 9-9 provide services to Medicaid recipients in the region; 9-10 (2) review and comment on the implementation of 9-11 Medicaid managed care in the region; and 9-12 (3) provide recommendations to the commission on the 9-13 improvement of Medicaid managed care in the region. 9-14 Sec. 533.026. COMPENSATION; REIMBURSEMENT. (a) A member of 9-15 a committee other than a representative of a health and human 9-16 services agency is not entitled to receive compensation or 9-17 reimbursement for travel expenses. 9-18 (b) A member of a committee who is an agency representative 9-19 is entitled to reimbursement for expenses incurred in the 9-20 performance of committee duties by the appointing agency in 9-21 accordance with the travel provisions for state employees in the 9-22 General Appropriations Act. 9-23 Sec. 533.027. OTHER LAW. Except as provided by this 9-24 chapter, a committee is subject to Article 6252-33, Revised 9-25 Statutes. 9-26 SECTION 2. Not later than September 1, 1997, the Health and 9-27 Human Services Commission shall direct the Texas Department of 10-1 Health and the Texas Department of Human Services to submit to the 10-2 governor and the Legislative Budget Board a plan to realize cost 10-3 savings for the state by simplifying eligibility criteria and 10-4 streamlining eligibility determination processes for recipients of 10-5 financial assistance under Chapter 31, Human Resources Code, 10-6 recipients of medical assistance under Chapter 32, Human Resources 10-7 Code, and recipients of other public assistance. 10-8 SECTION 3. Not later than December 1, 1998, the Health and 10-9 Human Services Commission shall submit a report to the governor, 10-10 the lieutenant governor, and the speaker of the house of 10-11 representatives on the impact of Medicaid managed care on the 10-12 public health sector. 10-13 SECTION 4. (a) Not later than the first anniversary of the 10-14 date on which Medicaid recipients in a health care service region 10-15 begin enrolling in Medicaid managed care plans, the Health and 10-16 Human Services Commission, in cooperation with the Medicaid managed 10-17 care advisory committee for that region created under Chapter 533, 10-18 Government Code, as added by this Act, shall submit a report to the 10-19 governor, lieutenant governor, and speaker of the house of 10-20 representatives on the implementation of Medicaid managed care in 10-21 that region. 10-22 (b) As soon as possible after the effective date of this 10-23 Act, the commission is required to submit a report on the 10-24 implementation of Medicaid managed care in a region if Medicaid 10-25 recipients in that region began enrolling in Medicaid managed care 10-26 plans before September 1, 1996. 10-27 SECTION 5. (a) Except as provided by Subsection (b) of this 11-1 section, this Act takes effect immediately. 11-2 (b) Section 533.004, Government Code, as added by this Act, 11-3 takes effect September 1, 1997, and applies only to a contract with 11-4 a managed care organization that the commission enters into or 11-5 renews on or after that date. A contract with a managed care 11-6 organization that the commission enters into or renews before 11-7 September 1, 1997, is governed by the law as it existed immediately 11-8 before that date, and that law is continued in effect for that 11-9 purpose. 11-10 (c) For purposes of this section, "commission" means the 11-11 Health and Human Services Commission or an agency operating part of 11-12 the state Medicaid managed care program, as appropriate. 11-13 SECTION 6. The importance of this legislation and the 11-14 crowded condition of the calendars in both houses create an 11-15 emergency and an imperative public necessity that the 11-16 constitutional rule requiring bills to be read on three several 11-17 days in each house be suspended, and this rule is hereby suspended, 11-18 and that this Act take effect and be in force according to its 11-19 terms, and it is so enacted.