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.