Amend CSHB 2641 by adding the following appropriately
numbered article and renumbering the subsequent articles
accordingly:
ARTICLE ____. MEDICAID
SECTION __.01. Subchapter B, Chapter 12, Health and Safety
Code, is amended by adding Section 12.0123 to read as follows:
Sec. 12.0123. EXTERNAL AUDITS OF CERTAIN MEDICAID
CONTRACTORS. (a) In this section, "Medicaid contractor" means an
entity that:
(1) is not a health and human services agency as
defined by Section 531.001, Government Code; and
(2) under contract with or otherwise on behalf of the
department, performs one or more administrative services in
relation to the department's operation of a part of the state
Medicaid program, such as claims processing, utilization review,
client enrollment, provider enrollment, quality monitoring, or
payment of claims.
(b) The department shall contract with an independent
auditor to perform annual independent external financial and
performance audits of any Medicaid contractor used by the
department in the department's operation of a part of the state
Medicaid program.
(c) The department shall ensure that audit procedures
related to financial audits and performance audits are used
consistently in audits under this section.
(d) An audit required by this section must be completed
before the end of the fiscal year immediately following the fiscal
year for which the audit is performed.
SECTION __.02. Section 533.003, Government Code, is amended
to read as follows:
Sec. 533.003. CONSIDERATIONS IN AWARDING CONTRACTS. In
awarding contracts to managed care organizations, the commission
shall:
(1) give preference to organizations that have
significant participation in the organization's provider network
from each health care provider in the region who has traditionally
provided care to Medicaid and charity care patients;
(2) give extra consideration to organizations that
agree to assure continuity of care for at least three months beyond
the period of Medicaid eligibility for recipients; <and>
(3) consider the need to use different managed care
plans to meet the needs of different populations; and
(4) consider the ability of organizations to process
Medicaid claims electronically.
SECTION __.03. Section 533.004, Government Code, is amended
by amending Subsection (a) and adding Subsection (e) to read as
follows:
(a) In providing health care services through Medicaid
managed care to recipients in a health care service region, the
commission shall contract with a <at least one> managed care
organization in that region that is licensed under the Texas Health
Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
Code) to provide health care in that region and that is:
(1) wholly owned and operated by a hospital district
in that region;
(2) created by a nonprofit corporation that:
(A) has a contract, agreement, or other
arrangement with a hospital district in that region or with a
municipality in that region that owns a hospital licensed under
Chapter 241, Health and Safety Code, and has an obligation to
provide health care to indigent patients; and
(B) under the contract, agreement, or other
arrangement, assumes the obligation to provide health care to
indigent patients and leases, manages, or operates a hospital
facility owned by the hospital district or municipality; or
(3) created by a nonprofit corporation that has a
contract, agreement, or other arrangement with a hospital district
in that region under which the nonprofit corporation acts as an
agent of the district and assumes the district's obligation to
arrange for services under the Medicaid expansion for children as
authorized by Chapter 444, Acts of the 74th Legislature, Regular
Session, 1995.
(e) In providing health care services through Medicaid
managed care to recipients in a health care service region, with
the exception of the Harris service area for the STAR Medicaid
managed care program, as defined by the commission as of September
1, 1999, the commission shall also contract with a managed care
organization in that region that holds a certificate of authority
as a health maintenance organization under Section 5, Texas Health
Maintenance Organization Act (Article 20A.05, Vernon's Texas
Insurance Code), and that:
(1) is certified under Section 5.01(a), Medical
Practice Act (Article 4495b, Vernon's Texas Civil Statutes);
(2) is created by The University of Texas Medical
Branch at Galveston; and
(3) has obtained a certificate of authority as a
health maintenance organization to serve one or more counties in
that region from the Texas Department of Insurance before September
2, 1999.
SECTION __.04. Section 533.005, Government Code, is amended
to read as follows:
Sec. 533.005. REQUIRED CONTRACT PROVISIONS. A contract
between a managed care organization and the commission for the
organization to provide health care services to recipients must
contain:
(1) procedures to ensure accountability to the state
for the provision of health care services, including procedures for
financial reporting, quality assurance, utilization review, and
assurance of contract and subcontract compliance;
(2) capitation and provider payment rates that ensure
the cost-effective provision of quality health care;
(3) a requirement that the managed care organization
provide ready access to a person who assists recipients in
resolving issues relating to enrollment, plan administration,
education and training, access to services, and grievance
procedures;
(4) a requirement that the managed care organization
provide ready access to a person who assists providers in resolving
issues relating to payment, plan administration, education and
training, and grievance procedures;
(5) a requirement that the managed care organization
provide information and referral about the availability of
educational, social, and other community services that could
benefit a recipient;
(6) procedures for recipient outreach and education;
(7) a requirement that the managed care organization
make payment to a physician or provider for health care services
rendered to a recipient under a managed care plan not later than
the 45th day after the date a claim for payment is received with
documentation reasonably necessary for the managed care
organization to process the claim, or within a period, not to
exceed 60 days, specified by a written agreement between the
physician or provider and the managed care organization;
(8) a requirement that the commission, on the date of
a recipient's enrollment in a managed care plan issued by the
managed care organization, inform the organization of the
recipient's Medicaid certification <recertification> date; and
(9) a requirement that the managed care organization
comply with Section 533.006 as a condition of contract retention
and renewal.
SECTION __.05. Section 533.006(a), Government Code, is
amended to read as follows:
(a) The commission shall require that each managed care
organization that contracts with the commission to provide health
care services to recipients in a region:
(1) seek participation in the organization's provider
network from:
(A) each health care provider in the region who
has traditionally provided care to Medicaid recipients; <and>
(B) each hospital in the region that has been
designated as a disproportionate share hospital under the state
Medicaid program; and
(C) each specialized pediatric laboratory in the
region, including those laboratories located in children's
hospitals; and
(2) include in its provider network for not less than
three years:
(A) each health care provider in the region who:
(i) previously provided care to Medicaid
and charity care recipients at a significant level as prescribed by
the commission;
(ii) agrees to accept the prevailing
provider contract rate of the managed care organization; and
(iii) has the credentials required by the
managed care organization, provided that lack of board
certification or accreditation by the Joint Commission on
Accreditation of Healthcare Organizations may not be the sole
ground for exclusion from the provider network;
(B) each accredited primary care residency
program in the region; and
(C) each disproportionate share hospital
designated by the commission as a statewide significant traditional
provider.
SECTION __.06. Section 533.007(e), Government Code, is
amended to read as follows:
(e) The commission shall conduct a compliance and readiness
review of each managed care organization that contracts with the
commission not later than the 15th day before the date on which the
commission plans to begin the enrollment process in a region and
again not later than the 15th day before the date on which the
commission plans to begin to provide health care services to
recipients in that region through managed care. The review must
include an on-site inspection and tests of service authorization
and claims payment systems, including the ability of the managed
care organization to process claims electronically, complaint
processing systems, and any other process or system required by the
contract.
SECTION __.07. Section 533.0075, Government Code, is amended
to read as follows:
Sec. 533.0075. RECIPIENT ENROLLMENT. The commission shall:
(1) encourage recipients to choose appropriate managed
care plans and primary health care providers by:
(A) providing initial information to recipients
and providers in a region about the need for recipients to choose
plans and providers not later than the 90th day before the date on
which the commission plans to begin to provide health care services
to recipients in that region through managed care;
(B) providing follow-up information before
assignment of plans and providers and after assignment, if
necessary, to recipients who delay in choosing plans and providers;
and
(C) allowing plans and providers to provide
information to recipients or engage in marketing activities under
marketing guidelines established by the commission under Section
533.008 after the commission approves the information or
activities;
(2) consider the following factors in assigning
managed care plans and primary health care providers to recipients
who fail to choose plans and providers:
(A) the importance of maintaining existing
provider-patient and physician-patient relationships, including
relationships with specialists, public health clinics, and
community health centers;
(B) to the extent possible, the need to assign
family members to the same providers and plans; and
(C) geographic convenience of plans and
providers for recipients; <and>
(3) retain responsibility for enrollment and
disenrollment of recipients in managed care plans, except that the
commission may delegate the responsibility to an independent
contractor who receives no form of payment from, and has no
financial ties to, any managed care organization;
(4) develop and implement an expedited process for
determining eligibility for and enrolling pregnant women and
newborn infants in managed care plans;
(5) ensure immediate access to prenatal services and
newborn care for pregnant women and newborn infants enrolled in
managed care plans, including ensuring that a pregnant woman may
obtain an appointment with an obstetrical care provider for an
initial maternity evaluation not later than the 30th day after the
date the woman applies for Medicaid; and
(6) temporarily assign Medicaid-eligible newborn
infants to the traditional fee-for-service component of the state
Medicaid program for a period not to exceed the earlier of:
(A) 60 days; or
(B) the date on which the Texas Department of
Human Services has completed the newborn's Medicaid eligibility
determination, including assignment of the newborn's Medicaid
eligibility number.
SECTION __.08. Subchapter A, Chapter 533, Government Code, is
amended by adding Sections 533.012-533.015 to read as follows:
Sec. 533.012. MORATORIUM ON IMPLEMENTATION OF CERTAIN PILOT
PROGRAMS; REVIEW; REPORT. (a) Notwithstanding any other law, the
commission may not implement Medicaid managed care pilot programs,
Medicaid behavioral health pilot programs, or Medicaid Star + Plus
pilot programs in a region for which the commission has not:
(1) received a bid from a managed care organization to
provide health care services to recipients in the region through a
managed care plan; or
(2) entered into a contract with a managed care
organization to provide health care services to recipients in the
region through a managed care plan.
(b) The commission shall:
(1) review any outstanding administrative and
financial issues with respect to Medicaid managed care pilot
programs, Medicaid behavioral health pilot programs, and Medicaid
Star + Plus pilot programs implemented in health care service
regions;
(2) review the impact of the Medicaid managed care
delivery system, including managed care organizations, prepaid
health plans, and primary care case management, on:
(A) physical access and program-related access
to appropriate services by recipients, including recipients who
have special health care needs;
(B) quality of health care delivery and patient
outcomes;
(C) utilization patterns of recipients;
(D) statewide Medicaid costs;
(E) coordination of care and care coordination
in Medicaid Star + Plus pilot programs;
(F) the level of administrative complexity for
providers, recipients, and managed care organizations;
(G) public hospitals, medical schools, and other
traditional providers of indigent health care; and
(H) competition in the marketplace and network
retention; and
(3) evaluate the feasibility of developing a separate
reimbursement methodology for public hospitals under a Medicaid
managed care delivery system.
(c) In performing its duties and functions under Subsection
(b), the commission shall seek input from the state Medicaid
managed care advisory committee created under Subchapter C. The
commission may coordinate the review required under Subsection (b)
with any other study or review the commission is required to
complete.
(d) Notwithstanding Subsection (a), the commission may
implement Medicaid managed care pilot programs, Medicaid behavioral
health pilot programs, and Medicaid Star + Plus pilot programs in a
region described by that subsection if the commission finds that:
(1) outstanding administrative and financial issues
with respect to the implementation of those programs in health care
service regions have been resolved; and
(2) implementation of those programs in a region
described by Subsection (a) would benefit both recipients and
providers.
(e) Not later than November 1, 2000, the commission shall
submit a report to the governor and the legislature that:
(1) states whether the outstanding administrative and
financial issues with respect to the pilot programs described by
Subsection (b)(1) have been sufficiently resolved;
(2) summarizes the findings of the review conducted
under Subsection (b);
(3) recommends which elements of the Medicaid managed
care delivery system should be applied to the traditional
fee-for-service component of the state Medicaid program to achieve
the goals specified in Section 533.002(1); and
(4) recommends whether Medicaid managed care pilot
programs, Medicaid behavioral health pilot programs, or Medicaid
Star + Plus pilot programs should be implemented in health care
service regions described by Subsection (a).
(f) To the extent practicable, this section may not be
construed to affect the duty of the commission to plan the
continued expansion of Medicaid managed care pilot programs,
Medicaid behavioral health pilot programs, and Medicaid Star + Plus
pilot programs in health care service regions described by
Subsection (a) after July 1, 2001.
(g) This section expires July 1, 2001.
Sec. 533.013. PREMIUM PAYMENT RATE DETERMINATION; REVIEW AND
COMMENT. (a) In determining premium payment rates paid to a
managed care organization under a managed care plan, the commission
shall consider:
(1) the regional variation in costs of health care
services;
(2) the range and type of health care services to be
covered by premium payment rates;
(3) the number of managed care plans in a region;
(4) the current and projected number of recipients in
each region, including the current and projected number for each
category of recipient;
(5) the ability of the managed care plan to meet costs
of operation under the proposed premium payment rates;
(6) the applicable requirements of the federal
Balanced Budget Act of 1997 and implementing regulations that
require adequacy of premium payments to managed care organizations
participating in the state Medicaid program;
(7) the adequacy of the management fee paid for
assisting enrollees of Supplemental Security Income (SSI) (42
U.S.C. Section 1381 et seq.) who are voluntarily enrolled in the
managed care plan;
(8) the impact of reducing premium payment rates for
the category of recipients who are pregnant; and
(9) the ability of the managed care plan to pay under
the proposed premium payment rates inpatient and outpatient
hospital provider payment rates that are comparable to the
inpatient and outpatient hospital provider payment rates paid by
the commission under a primary care case management model or a
partially capitated model.
(b) In determining the maximum premium payment rates paid to
a managed care organization that is licensed under the Texas Health
Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
Code), the commission shall consider and adjust for the regional
variation in costs of services under the traditional
fee-for-service component of the state Medicaid program,
utilization patterns, and other factors that influence the
potential for cost savings. For a service area with a service area
factor of .93 or less, or another appropriate service area factor,
as determined by the commission, the commission may not discount
premium payment rates in an amount that is more than the amount
necessary to meet federal budget neutrality requirements for
projected fee-for-service costs unless:
(1) a historical review of managed care financial
results among managed care organizations in the service area served
by the organization demonstrates that additional savings are
warranted;
(2) a review of Medicaid fee-for-service delivery in
the service area served by the organization has historically shown
a significant overutilization by recipients of certain services
covered by the premium payment rates in comparison to utilization
patterns throughout the rest of the state; or
(3) a review of Medicaid fee-for-service delivery in
the service area served by the organization has historically shown
an above-market cost for services for which there is substantial
evidence that Medicaid managed care delivery will reduce the cost
of those services.
(c) The premium payment rates paid to a managed care
organization that is licensed under the Texas Health Maintenance
Organization Act (Chapter 20A, Vernon's Texas Insurance Code) shall
be established by a competitive bid process but may not exceed the
maximum premium payment rates established by the commission under
Subsection (b).
(d) Subsection (b) applies only to a managed care
organization with respect to Medicaid managed care pilot programs,
Medicaid behavioral health pilot programs, and Medicaid Star + Plus
pilot programs implemented in a health care service region after
June 1, 1999.
Sec. 533.014. PROFIT SHARING. (a) The commission shall
adopt rules regarding the sharing of profits earned by a managed
care organization through a managed care plan providing health care
services under a contract with the commission under this chapter.
(b) Any amount received by the state under this section
shall be deposited in the general revenue fund for the purpose of
funding the state Medicaid program.
Sec. 533.015. COORDINATION OF EXTERNAL OVERSIGHT ACTIVITIES.
To the extent possible, the commission shall coordinate all
external oversight activities to minimize duplication of oversight
of managed care plans under the state Medicaid program and
disruption of operations under those plans.
SECTION __.09. Chapter 533, Government Code, is amended by
adding Subchapter C to read as follows:
SUBCHAPTER C. STATEWIDE ADVISORY COMMITTEE
Sec. 533.041. APPOINTMENT AND COMPOSITION. (a) The
commission shall appoint a state Medicaid managed care advisory
committee. The advisory committee consists of representatives of:
(1) hospitals;
(2) managed care organizations;
(3) primary care providers;
(4) state agencies;
(5) consumer advocates representing low-income
recipients;
(6) consumer advocates representing recipients with a
disability;
(7) parents of children who are recipients;
(8) rural providers;
(9) advocates for children with special health care
needs;
(10) pediatric health care providers, including
specialty providers;
(11) long-term care providers, including nursing home
providers;
(12) obstetrical care providers;
(13) community-based organizations serving low-income
children and their families; and
(14) community-based organizations engaged in
perinatal services and outreach.
(b) The advisory committee must include a member of each
regional Medicaid managed care advisory committee appointed by the
commission under Subchapter B.
Sec. 533.042. MEETINGS. The advisory committee shall meet at
least quarterly and is subject to Chapter 551.
Sec. 533.043. POWERS AND DUTIES. The advisory committee
shall:
(1) provide recommendations to the commission on the
statewide implementation and operation of Medicaid managed care;
(2) assist the commission with issues relevant to
Medicaid managed care to improve the policies established for and
programs operating under Medicaid managed care, including the
early and periodic screening, diagnosis, and treatment program,
provider and patient education issues, and patient eligibility
issues; and
(3) disseminate or make available to each regional
advisory committee appointed under Subchapter B information on best
practices with respect to Medicaid managed care that is obtained
from a regional advisory committee.
Sec. 533.044. OTHER LAW. Except as provided by this
subchapter, the advisory committee is subject to Chapter 2110.
SECTION __.10. Section 2.07(c), Chapter 1153, Acts of the
75th Legislature, Regular Session, 1997, is amended to read as
follows:
(c) As soon as possible after development of the new
provider contract, the commission and each agency operating part of
the state Medicaid program by rule shall require each provider who
enrolled in the program before completion of the new contract to
reenroll in the program under the new contract or modify the
provider's existing contract in accordance with commission or
agency procedures as necessary to comply with the requirements of
the new contract. The commission shall study the feasibility of
authorizing providers to reenroll in the program online or through
other electronic means. On completion of the study, if the
commission determines that an online or other electronic method for
reenrollment of providers is feasible, the commission shall develop
and implement the electronic method of reenrollment for providers
not later than September 1, 2000. A provider must reenroll in the
state Medicaid program or make the necessary contract modifications
not later than March 31, 2000 <September 1, 1999>, to retain
eligibility to participate in the program, unless the commission
implements under this subsection an electronic method of
reenrollment for providers, in which event a provider must reenroll
or make the contractual modifications not later than September 1,
2000. The commission by rule may extend a reenrollment deadline
prescribed by this subsection if a significant number of providers,
as determined by the commission, have not met the reenrollment
requirements by the applicable deadline.
SECTION __.11. (a) Not later than January 1, 2000, the
Health and Human Services Commission shall implement the expedited
process for determining eligibility for and enrollment of certain
recipients in Medicaid managed care plans required by Section
533.0075(4), Government Code, as added by this Act.
(b) The Health and Human Services Commission shall report
quarterly to the standing committees of the senate and house of
representatives with primary jurisdiction over Medicaid managed
care regarding the status of the expedited process described by
Subsection (a) of this section. The commission shall submit
quarterly reports under this subsection until the commission
determines the process is fully implemented and functioning
successfully.
SECTION __.12. This article takes effect only if a specific
appropriation for the implementation of this article is provided in
HB 1 (General Appropriations Act), Acts of the 76th Legislature,
Regular Session, 1999. If no specific appropriation is provided in
HB 1 (General Appropriations Act), this article has no effect.