1-1           By:  Harris                                      S.B. No. 534

 1-2           (In the Senate - Filed February 11, 1997; February 17, 1997,

 1-3     read first time and referred to Committee on Jurisprudence;

 1-4     February 25, 1997, reported favorably by the following vote:  Yeas

 1-5     4, Nays 0; February 25, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to the collection of claims for recovery of money under

 1-9     subrogation and third-party reimbursement rights arising from

1-10     medical payments by health and human services agencies.

1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-12           SECTION 1.  Subchapter B, Chapter 531, Government Code, is

1-13     amended by adding Section 531.0391 to read as follows:

1-14           Sec. 531.0391.  SUBROGATION AND THIRD-PARTY REIMBURSEMENT

1-15     COLLECTION CONTRACT.  (a)  The commission shall enter into a

1-16     contract under which the contractor is authorized on behalf of the

1-17     commission or a health and human services agency to recover money

1-18     under a subrogation or third-party reimbursement right held by the

1-19     commission or a health and human services agency arising from

1-20     payment of medical expenses.  The contract must provide that:

1-21                 (1)  the commission or agency, as appropriate, shall

1-22     compensate the contractor based on a percentage of the amount of

1-23     money recovered by the contractor for the commission or agency; and

1-24                 (2)  with the approval of the attorney required by

1-25     other law to represent the commission or agency in court, the

1-26     contractor may represent the commission or agency in a court

1-27     proceeding to recover money under a subrogation or third-party

1-28     reimbursement right if the representation is cost-effective and

1-29     specifically authorized by the commission.

1-30           (b)  The commission shall develop a process for identifying

1-31     claims for the recovery of money under a subrogation or third-party

1-32     reimbursement right described by this section and referring the

1-33     claims to the contractor.  A health and human services agency shall

1-34     cooperate with the contractor on a claim of the agency referred to

1-35     the contractor for collection.

1-36           (c)  The commission is not required to enter into a contract

1-37     under Subsection (a) if the commission cannot identify a contractor

1-38     who is willing to contract with the commission on reasonable terms.

1-39     If the commission cannot identify such a contractor, the commission

1-40     shall develop and implement alternative policies to ensure the

1-41     collection of money under a subrogation or third-party

1-42     reimbursement right.

1-43           (d)  The commission may allow a state agency other than a

1-44     health and human services agency to be a party to the contract

1-45     required under Subsection (a).  In that case, the commission shall

1-46     modify the contract as necessary to reflect the services to be

1-47     provided by the contractor to the additional state agency.

1-48           SECTION 2.  Not later than February 1, 1998, the Health and

1-49     Human Services Commission shall enter into an initial contract or

1-50     implement the alternative policies as required by Section 531.0391,

1-51     Government Code, as added by this Act.

1-52           SECTION 3.  Not later than September 1, 1998, the Health and

1-53     Human Services Commission shall prepare and deliver to the

1-54     governor, lieutenant governor, speaker of the house of

1-55     representatives, and clerks of the standing committees of the

1-56     senate and house of representatives with primary jurisdiction over

1-57     human services a report concerning:

1-58                 (1)  the commission's progress in improving collection

1-59     of money under subrogation and third-party reimbursement rights

1-60     relating to medical expenses paid by the commission and health and

1-61     human services agencies;

1-62                 (2)  the adequacy of existing lien and subrogation

1-63     statutes;

1-64                 (3)  any feature of a contract or a claims processing

 2-1     procedure of the commission or a health and human services agency

 2-2     that limits the ability of the commission or agency to collect

 2-3     money under a subrogation or third-party reimbursement right

 2-4     described by Subdivision (1) of this section; and

 2-5                 (4)  any other matter affecting the ability of the

 2-6     commission or a health and human services agency to collect money

 2-7     under a subrogation or third-party reimbursement right described by

 2-8     Subdivision (1) of this section.

 2-9           SECTION 4.  The importance of this legislation and the

2-10     crowded condition of the calendars in both houses create an

2-11     emergency and an imperative public necessity that the

2-12     constitutional rule requiring bills to be read on three several

2-13     days in each house be suspended, and this rule is hereby suspended,

2-14     and that this Act take effect and be in force from and after its

2-15     passage, and it is so enacted.

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