1-1     By:  Zaffirini, Moncrief                              S.B. No. 1164

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

 1-3     first time and referred to Committee on Health and Human Services;

 1-4     April 21, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 11, Nays 0; April 21, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1164               By:  Zaffirini

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to Medicaid managed care contract compliance.

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

1-12           SECTION 1.  Subchapter B, Chapter 32, Human Resources Code,

1-13     is amended by adding Section 32.043 to read as follows:

1-14           Sec. 32.043.  MANAGED CARE CONTRACT COMPLIANCE.  (a)  The

1-15     department shall review each managed care organization that has

1-16     contracted with the department to provide medical assistance to

1-17     medical assistance recipients through a managed care plan issued by

1-18     the organization to determine whether the organization is prepared

1-19     to meet its contractual obligations.

1-20           (b)(1)  The department shall require each managed care

1-21     organization that has contracted with the department to submit an

1-22     implementation plan not later than the 90th day before the date on

1-23     which the department plans to begin to provide medical assistance

1-24     through a managed care plan in a service area.  The implementation

1-25     plan must include:

1-26                       (A)  specific staffing patterns by function for

1-27     all operations, including enrollment, information systems, member

1-28     services, quality improvement, claims management, case management,

1-29     and provider and enrollee training; and

1-30                       (B)  specific time frames for demonstrating

1-31     preparedness for implementation before the date on which the

1-32     department plans to begin to provide medical assistance through a

1-33     managed care plan in a service area.

1-34                 (2)  The department shall respond within five working

1-35     days if the implementation plan does not adequately meet

1-36     preparedness guidelines.

1-37                 (3)  The department shall require each managed care

1-38     organization that has contracted with the department to submit

1-39     status reports on the implementation plan not later than the 60th

1-40     day and the 30th day before the date on which the department plans

1-41     to begin to provide medical assistance through a managed care plan

1-42     in a service area and every 30th day after the department begins to

1-43     provide medical assistance through a managed care plan in a service

1-44     area until the 180th day of operations.

1-45           (c)  The department shall conduct a compliance and readiness

1-46     review of each managed care organization that contracts with the

1-47     state not later than the 15th day before the date on which the

1-48     department plans to begin the enrollment process in a service area

1-49     and again not later than the 15th day before the date on which the

1-50     department plans to begin to provide medical assistance through a

1-51     managed care plan in a service area.  The review shall include an

1-52     on-site inspection and tests of service authorization and claims

1-53     payment systems, complaint processing systems, and any other

1-54     process or system required by the contract.

1-55           (d)  The department may delay enrollment of medical

1-56     assistance recipients in a managed care plan if the review reveals

1-57     that the managed care organization is not prepared to meet its

1-58     contractual obligations.

1-59           SECTION 2.  This Act applies only to a contract with a

1-60     managed care organization that the Health and Human Services

1-61     Commission or an agency authorized by the commission enters into or

1-62     renews on or after the effective date of this Act.  A contract with

1-63     a managed care organization that the Health and Human Services

1-64     Commission or an agency authorized by the commission enters into or

 2-1     renews before the effective date of this Act is governed by the law

 2-2     as it existed immediately before that date, and that law is

 2-3     continued in effect for that purpose.

 2-4           SECTION 3.  The importance of this legislation and the

 2-5     crowded condition of the calendars in both houses create an

 2-6     emergency and an imperative public necessity that the

 2-7     constitutional rule requiring bills to be read on three several

 2-8     days in each house be suspended, and this rule is hereby suspended,

 2-9     and that this Act take effect and be in force from and after its

2-10     passage, and it is so enacted.

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