1-1 By: Madla S.B. No. 1574
1-2 (In the Senate - Filed March 14, 1997; March 20, 1997, read
1-3 first time and referred to Committee on Health and Human Services;
1-4 April 14, 1997, reported favorably, as amended, by the following
1-5 vote: Yeas 11, Nays 0; April 14, 1997, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Madla
1-7 Amend S.B. No. 1574 in SECTION 1.01, Paragraph (H), Subdivision
1-8 (7), Subsection (a), (filed version, page 2, line 51), insert "for
1-9 the current Medicaid population" between "area" and ","
1-10 A BILL TO BE ENTITLED
1-11 AN ACT
1-12 relating to the health care provider network of the state Medicaid
1-13 program health care delivery system.
1-14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-15 ARTICLE 1
1-16 SECTION 1.01. Subsection (a), Section 16A, Article
1-17 4413(502), Vernon's Texas Civil Statutes, as added by Chapter 444,
1-18 Acts of the 74th Legislature, 1995, is amended to read as follows:
1-19 (a) The commission shall develop a health care delivery
1-20 system that restructures the delivery of health care services
1-21 provided under the state Medicaid program. The commission shall
1-22 develop the health care delivery system only if the commission
1-23 obtains a waiver or other authorization from all necessary federal
1-24 agencies to implement the system. In developing the health care
1-25 delivery system, the commission shall:
1-26 (1) to the extent possible, design the system in a
1-27 manner that will:
1-28 (A) improve the health of Texans by:
1-29 (i) emphasizing prevention;
1-30 (ii) promoting continuity of care; and
1-31 (iii) providing a medical home for
1-32 Medicaid recipients; and
1-33 (B) ensure that each recipient can receive high
1-34 quality, comprehensive health care services in the recipient's
1-35 local community;
1-36 (2) design the system in a manner that will enable the
1-37 state and the local governmental entities that make resources and
1-38 other funds available for matching to the commission under this
1-39 section to control the costs associated with the state Medicaid
1-40 program and, to the extent possible, will result in cost savings to
1-41 the state and those local governmental entities through health care
1-42 service delivery based on managed care;
1-43 (3) to the extent it is cost-effective to the state
1-44 and local governments, maximize the financing of the state Medicaid
1-45 program by obtaining federal matching funds for all resources and
1-46 other funds available for matching and expand Medicaid eligibility
1-47 to include persons who were eligible to receive indigent health
1-48 care services through the use of those resources or other funds
1-49 available for matching before expansion of eligibility, provided
1-50 that the commission shall give priority to expanding eligibility to
1-51 include children and their families;
1-52 (4) to the extent possible, develop a plan to expand
1-53 Medicaid eligibility to include children and other persons, other
1-54 than those persons described by Subdivision (3) of this subsection,
1-55 that is funded by using:
1-56 (A) appropriations that have previously been
1-57 made to other agencies or other programs to provide related health
1-58 care services to those children and other persons;
1-59 (B) earned federal funds;
1-60 (C) contributions by those children or other
1-61 persons or their families; or
1-62 (D) resources or other funds available for
1-63 matching;
1-64 (5) design the system to ensure that if the system
2-1 includes a method to finance the state Medicaid program by
2-2 obtaining federal matching funds for resources and other funds
2-3 available for matching, each entity listed in Subsection (d)(1),
2-4 (2), (3), (7), (8), or (9) or Subsection (e) of this section that
2-5 makes those resources and other funds available receives funds to
2-6 provide health care services to persons who are eligible for
2-7 Medicaid under the expanded eligibility criteria developed under
2-8 Subdivision (3) or (4) of this subsection in an amount that is at
2-9 least equal to the amount of resources or other funds available for
2-10 matching provided by that entity under this section;
2-11 (6) to the extent possible, provide for the entities
2-12 that make resources and other funds available for matching under
2-13 this section an option to operate the health care delivery system
2-14 within their regions including appropriate portions of the
2-15 eligibility determination process, subject to the standards of and
2-16 oversight by the commission;
2-17 (7) design the system to:
2-18 (A) include methods for ensuring accountability
2-19 to the state for the provision of health care services under the
2-20 state Medicaid program, including methods for financial reporting,
2-21 quality assurance, and utilization review;
2-22 (B) provide a single point of accountability for
2-23 collection of uniform data to assess, compile, and analyze outcome
2-24 quality and cost efficiency;
2-25 (C) conduct comparative analyses of compiled
2-26 data to assess the relative value of alternative health care
2-27 delivery systems and report to the governor, lieutenant governor,
2-28 and speaker of the house of representatives;
2-29 (D) oversee the methodology for setting
2-30 capitation and provider payment rates to ensure the cost-effective
2-31 provision of quality health care;
2-32 (E) ensure that both private and public health
2-33 care providers and managed care organizations, including a hospital
2-34 that has been designated as a disproportionate share hospital under
2-35 the state Medicaid program, will have an opportunity to participate
2-36 in the system;
2-37 (F) ensure, in adopting rules implementing the
2-38 system, that in developing the provider network for the system, the
2-39 commission, each intergovernmental initiative, and each managed
2-40 care organization, as applicable, give extra consideration to a
2-41 health care provider who has traditionally provided care to
2-42 Medicaid and charity care patients;
2-43 (G) give extra consideration to providers who
2-44 agree to assure continuity of care for Medicaid clients for 12
2-45 months beyond the period of eligibility; and
2-46 (H) require that the commission, each
2-47 intergovernmental initiative, and each managed care organization,
2-48 as applicable, include in its provider network, for not less than
2-49 three years after the date of implementation of managed care in a
2-50 service area, each health care provider in that area who:
2-51 (i) [previously] provided care to Medicaid
2-52 and charity care patients at a significant level, as prescribed by
2-53 the commission, during the 12 months preceding the date of
2-54 implementation;
2-55 (ii) agrees to accept the standard
2-56 provider reimbursement rate of the commission, the
2-57 intergovernmental initiative, or the managed care organization, as
2-58 applicable;
2-59 (iii) meets the credentialing requirements
2-60 under the system of the commission, the intergovernmental
2-61 initiative, or the managed care organization, as applicable,
2-62 provided that lack of board certification or accreditation by the
2-63 Joint Commission on Accreditation of Healthcare Organizations may
2-64 not be the sole grounds for exclusion from the provider network;
2-65 and
2-66 (iv) agrees to comply and does comply with
2-67 all of the terms and conditions of the standard provider agreement
2-68 of the commission, intergovernmental initiative, or managed care
2-69 organization, as applicable;
3-1 (8) design the system in a manner that, to the extent
3-2 possible, enables the state to manage care to lower the cost of
3-3 providing Medicaid services through the use of health care delivery
3-4 systems such as a primary care case management system, partially
3-5 capitated system, or fully capitated system or a combination of one
3-6 or more of those systems and use, where possible, multiple,
3-7 competing managed care organizations within those systems;
3-8 (9) design the system in a manner that enables the
3-9 state to:
3-10 (A) use different types of health care delivery
3-11 systems to meet the needs of different populations, including the
3-12 establishment of pilot programs to deliver health care services to
3-13 children with special health care needs;
3-14 (B) recognize the unique role of rural
3-15 hospitals, physicians, home and community support services
3-16 agencies, and other rural health care providers in providing access
3-17 to health care services for rural Texans; and
3-18 (C) review data from existing or new pilot
3-19 programs that cover all prescription drugs that are medically
3-20 indicated for a person by a licensed health care provider in
3-21 primary and preventive care and implement any changes in the state
3-22 Medicaid program that as a result of the review are determined to
3-23 be cost-effective and cost-neutral;
3-24 (10) establish geographic health care service regions
3-25 after consulting with local governmental entities that provide
3-26 resources or other funds available for matching under this section
3-27 and emphasize regional coordination in the provision of indigent
3-28 health care;
3-29 (11) simplify eligibility criteria and streamline
3-30 eligibility determination processes;
3-31 (12) to the extent possible, provide a one-stop
3-32 approach for client information and referral for managed care
3-33 services;
3-34 (13) to the extent possible, design the system in a
3-35 manner that encourages the training of and access to primary care
3-36 physicians;
3-37 (14) develop and prepare, after consulting with the
3-38 following entities, the waiver or other documents necessary to
3-39 obtain federal authorization for the system:
3-40 (A) governmental entities that provide health
3-41 care services and assistance to indigent persons in this state;
3-42 (B) consumer representatives;
3-43 (C) managed care organizations; and
3-44 (D) health care providers;
3-45 (15) design the system to ensure that if the system
3-46 includes a method to finance the state Medicaid program by
3-47 obtaining federal matching funds for resources and other funds
3-48 available for matching, an amount not to exceed $20 million a year
3-49 must be dedicated under the system as prescribed in the waiver for
3-50 special payments to rural hospitals that:
3-51 (A) are sole community providers and provide a
3-52 significant amount of care to Medicaid and charity care patients as
3-53 prescribed by the commission; and
3-54 (B) are located in a county in which the county
3-55 or another entity located in the county and described by Subsection
3-56 (d) or (e) of this section:
3-57 (i) has executed a matching funds
3-58 agreement with the commission under this section; and
3-59 (ii) participates in an intergovernmental
3-60 initiative under Section 16B of this article with a county that is
3-61 contiguous to the county in which the rural hospital is located or
3-62 with another entity described by Subsection (d) or (e) of this
3-63 section that is located in the contiguous county if the contiguous
3-64 county or the entity located in the contiguous county is one of the
3-65 entities that forms an intergovernmental initiative under Section
3-66 16B of this article;
3-67 (16) if necessary to ensure that all resources or
3-68 other funds available for matching are maximized in accordance with
3-69 Subdivision (3) of this subsection, design the system to ensure
4-1 that an amount determined by the commission is dedicated under the
4-2 system as prescribed in the waiver for special payments to
4-3 hospitals that provide at least 14,000 low-income patient days as
4-4 determined by the commission under the methodology used for
4-5 calculating eligibility for the Medicaid disproportionate share
4-6 program;
4-7 (17) design a cost-neutral system to provide for a
4-8 sliding scale copayment system for individuals who are above 100
4-9 percent of the federal poverty level;
4-10 (18) to the extent possible and subject to the
4-11 availability of funds, design a cost-neutral system to allow the
4-12 development of a buy-in program with sliding scale premiums for
4-13 Medicaid recipients who are leaving the program and have incomes
4-14 between 150 percent and 250 percent of the federal poverty level;
4-15 (19) design the system in a manner that, to the extent
4-16 possible, will maintain administrative costs at a level not to
4-17 exceed five percent of the cost of the state Medicaid program; and
4-18 (20) develop and implement, in consultation with any
4-19 professional association representing 51 percent or more of the
4-20 licensed dentists in the state, a pilot program for child and adult
4-21 dental care and design the pilot program in a manner that enables:
4-22 (A) the program to be prevention-based;
4-23 (B) the choice of dentists to be at the
4-24 discretion of the eligible recipient, who will choose from a list
4-25 of qualified and participating providers or dental managed care
4-26 organizations; and
4-27 (C) the exploration of the use of local funds
4-28 currently spent on dental health care as a method for financing the
4-29 state share of the pilot program.
4-30 ARTICLE 2
4-31 SECTION 2.01. Subsection (a), Section 532.102, Government
4-32 Code, as added by the Act of the 75th Legislature, Regular Session,
4-33 1997, relating to nonsubstantive additions to and corrections in
4-34 enacted codes, is amended to read as follows:
4-35 (a) In developing the health care delivery system under this
4-36 chapter, the commission shall:
4-37 (1) to the extent possible, design the system in a
4-38 manner that:
4-39 (A) improves the health of the people of this
4-40 state by:
4-41 (i) emphasizing prevention;
4-42 (ii) promoting continuity of care; and
4-43 (iii) providing a medical home for
4-44 Medicaid recipients; and
4-45 (B) ensures that each recipient can receive
4-46 high-quality, comprehensive health care services in the recipient's
4-47 local community;
4-48 (2) design the system in a manner that enables this
4-49 state and the local governmental entities that make resources and
4-50 other funds available for matching to the commission under this
4-51 subchapter to control the costs associated with the state Medicaid
4-52 program and that, to the extent possible, results in cost savings
4-53 to this state and those local governmental entities through health
4-54 care service delivery based on managed care;
4-55 (3) to the extent that it is cost-effective to this
4-56 state and local governments:
4-57 (A) maximize the financing of the state Medicaid
4-58 program by obtaining federal matching funds for all resources and
4-59 other funds available for matching; and
4-60 (B) expand Medicaid eligibility to include
4-61 persons who were eligible to receive indigent health care services
4-62 through the use of those resources or other funds available for
4-63 matching before expansion of eligibility, with priority to
4-64 expanding eligibility to children and their families;
4-65 (4) to the extent possible, develop a plan to expand
4-66 Medicaid eligibility to include children and other persons, other
4-67 than those persons described by Subdivision (3), that is funded by
4-68 using:
4-69 (A) appropriations that have previously been
5-1 made to other agencies or other programs to provide related health
5-2 care services to those children and other persons;
5-3 (B) earned federal funds;
5-4 (C) contributions by those children or other
5-5 persons or their families; or
5-6 (D) resources or other funds available for
5-7 matching;
5-8 (5) design the system to ensure that if the system
5-9 includes a method to finance the state Medicaid program by
5-10 obtaining federal matching funds for resources and other funds
5-11 available for matching, each entity listed in Section
5-12 532.104(a)(1), (2), (3), (7), (8), or (9) or Section 532.104(b)
5-13 that makes those resources and other funds available receives funds
5-14 to provide health care services to persons who are eligible for
5-15 Medicaid under the expanded eligibility criteria developed under
5-16 Subdivision (3) or (4) in an amount that is at least equal to the
5-17 amount of resources or other funds available for matching provided
5-18 by that entity under this chapter;
5-19 (6) to the extent possible, provide for each entity
5-20 that makes resources and other funds available for matching under
5-21 this subchapter an option to operate the health care delivery
5-22 system in its region, including appropriate portions of the
5-23 eligibility determination process, subject to the standards of and
5-24 oversight by the commission;
5-25 (7) design the system to:
5-26 (A) include methods for ensuring accountability
5-27 to this state for the provision of health care services under the
5-28 state Medicaid program, including methods for financial reporting,
5-29 quality assurance, and utilization review;
5-30 (B) provide a single point of accountability for
5-31 collection of uniform data to assess, compile, and analyze outcome
5-32 quality and cost efficiency;
5-33 (C) conduct comparative analyses of compiled
5-34 data to assess the relative value of alternative health care
5-35 delivery systems and report to the governor, lieutenant governor,
5-36 and speaker of the house of representatives;
5-37 (D) oversee the procedures for setting
5-38 capitation and provider payment rates to ensure the cost-effective
5-39 provision of quality health care;
5-40 (E) ensure that both private and public health
5-41 care providers and managed care organizations, including a hospital
5-42 that has been designated as a disproportionate share hospital under
5-43 the state Medicaid program, have an opportunity to participate in
5-44 the system;
5-45 (F) ensure, in adopting rules implementing the
5-46 system, that in developing the provider network for the system, the
5-47 commission, each intergovernmental initiative, and each managed
5-48 care organization, as applicable, give extra consideration to a
5-49 health care provider who has traditionally provided care to
5-50 Medicaid and charity care patients;
5-51 (G) give extra consideration to providers who
5-52 agree to ensure continuity of care for Medicaid clients for 12
5-53 months beyond the period of eligibility; and
5-54 (H) require that the commission, each
5-55 intergovernmental initiative, and each managed care organization,
5-56 as applicable, include in its provider network, for not less than
5-57 three years after the date of implementation of managed care in a
5-58 service area, each health care provider in that area who:
5-59 (i) provided care to Medicaid and charity
5-60 care patients at a significant level, as prescribed by the
5-61 commission, during the 12 months preceding the date of
5-62 implementation;
5-63 (ii) agrees to accept the standard
5-64 provider reimbursement rate of the commission, the
5-65 intergovernmental initiative, or the managed care organization, as
5-66 applicable;
5-67 (iii) meets the credentialing requirements
5-68 under the system of the commission, the intergovernmental
5-69 initiative, or the managed care organization, as applicable,
6-1 provided that lack of board certification or accreditation by the
6-2 Joint Commission on Accreditation of Healthcare Organizations may
6-3 not be the sole grounds for exclusion from the provider network;
6-4 and
6-5 (iv) agrees to comply and does comply with
6-6 all of the terms of the standard provider agreement of the
6-7 commission, intergovernmental initiative, or managed care
6-8 organization, as applicable;
6-9 (8) design the system in a manner that, to the extent
6-10 possible, enables the state to manage care to lower the cost of
6-11 providing Medicaid services through the use of health care delivery
6-12 systems such as a primary care case management system, partially
6-13 capitated system, or fully capitated system or a combination of one
6-14 or more of those systems and use, if possible, multiple, competing
6-15 managed care organizations in those systems;
6-16 (9) design the system in a manner that enables the
6-17 state to:
6-18 (A) use different types of health care delivery
6-19 systems to meet the needs of different populations, including the
6-20 establishment of pilot programs to deliver health care services to
6-21 children with special health care needs;
6-22 (B) recognize the unique role of rural
6-23 hospitals, physicians, home and community support services
6-24 agencies, and other rural health care providers in providing access
6-25 to health care services for persons who live in rural areas of this
6-26 state; and
6-27 (C) review data from existing or new pilot
6-28 programs that cover all prescription drugs that are medically
6-29 indicated for a person by a licensed health care provider in
6-30 primary and preventive care and implement any changes in the state
6-31 Medicaid program that as a result of the review are determined to
6-32 be cost-effective and cost-neutral;
6-33 (10) establish geographic health care service regions
6-34 after consulting with local governmental entities that provide
6-35 resources or other funds available for matching under this section
6-36 and emphasize regional coordination in the provision of indigent
6-37 health care;
6-38 (11) simplify eligibility criteria and streamline
6-39 eligibility determination processes;
6-40 (12) to the extent possible, provide a one-stop
6-41 approach for client information and referral for managed care
6-42 services;
6-43 (13) to the extent possible, design the system in a
6-44 manner that encourages the training of and access to primary care
6-45 physicians;
6-46 (14) develop and prepare, after consulting with the
6-47 following entities, the waiver or other documents necessary to
6-48 obtain federal authorization for the system:
6-49 (A) governmental entities that provide health
6-50 care services and assistance to indigent persons in this state;
6-51 (B) consumer representatives;
6-52 (C) managed care organizations; and
6-53 (D) health care providers;
6-54 (15) design the system to ensure that if the system
6-55 includes a method to finance the state Medicaid program by
6-56 obtaining federal matching funds for resources and other funds
6-57 available for matching, an amount not to exceed $20 million a year
6-58 must be dedicated under the system as prescribed in the waiver for
6-59 special payments to rural hospitals that:
6-60 (A) are sole community providers and provide a
6-61 significant amount of care to Medicaid and charity care patients as
6-62 prescribed by the commission; and
6-63 (B) are located in a county in which the county,
6-64 or another entity located in the county and described by Section
6-65 532.104:
6-66 (i) has executed a matching funds
6-67 agreement with the commission under this subchapter; and
6-68 (ii) participates in an intergovernmental
6-69 initiative under Subchapter C with a county that is contiguous to
7-1 the county in which the rural hospital is located or with another
7-2 entity described by Section 532.104 that is located in the
7-3 contiguous county if the contiguous county or the entity located in
7-4 the contiguous county is one of the entities that forms an
7-5 intergovernmental initiative under Subchapter C;
7-6 (16) if necessary to ensure that all resources or
7-7 other funds available for matching are maximized in accordance with
7-8 Subdivision (3), design the system to ensure that an amount
7-9 determined by the commission is dedicated under the system as
7-10 prescribed in the waiver for special payments to hospitals that
7-11 provide at least 14,000 low-income patient days as determined by
7-12 the commission under the procedures used for determining
7-13 eligibility for the Medicaid disproportionate share program;
7-14 (17) design a cost-neutral system to provide for a
7-15 sliding scale copayment system for individuals who are above 100
7-16 percent of the federal poverty level;
7-17 (18) to the extent possible and subject to the
7-18 availability of funds, design a cost-neutral system to allow the
7-19 development of a buy-in program with sliding scale premiums for
7-20 Medicaid recipients who are leaving the program and have incomes
7-21 between 150 percent and 250 percent of the federal poverty level;
7-22 (19) design the system in a manner that, to the extent
7-23 possible, maintains administrative costs at a level not to exceed
7-24 five percent of the cost of the state Medicaid program; and
7-25 (20) develop and implement, in consultation with a
7-26 professional association representing 51 percent or more of the
7-27 licensed dentists in this state, a pilot program for child and
7-28 adult dental care that:
7-29 (A) is prevention-based;
7-30 (B) allows the choice of dentists to be at the
7-31 discretion of the eligible recipient, who chooses from a list of
7-32 qualified and participating providers or dental managed care
7-33 organizations; and
7-34 (C) explores the use of local funds spent on
7-35 dental health care in the period before June 13, 1995, as a method
7-36 for financing the state share of the pilot program.
7-37 ARTICLE 3
7-38 SECTION 3.01. This Act takes effect September 1, 1997.
7-39 SECTION 3.02. Article 1 takes effect only if the Act of the
7-40 75th Legislature, Regular Session, 1997, relating to nonsubstantive
7-41 additions to and corrections in enacted codes, does not take
7-42 effect.
7-43 SECTION 3.03. Article 2 takes effect only if the Act of the
7-44 75th Legislature, Regular Session, 1997, relating to nonsubstantive
7-45 additions to and corrections in enacted codes, takes effect.
7-46 SECTION 3.04. The importance of this legislation and the
7-47 crowded condition of the calendars in both houses create an
7-48 emergency and an imperative public necessity that the
7-49 constitutional rule requiring bills to be read on three several
7-50 days in each house be suspended, and this rule is hereby suspended.
7-51 * * * * *