HBA-MPM H.B. 1894 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1894
By: Maxey
Public Health
3/15/1999
Introduced



BACKGROUND AND PURPOSE 

Legislators of the 74th and 75th Regular Sessions took steps to change the
structure of the health care industry to ensure that third-party recovery
efforts remained effective by passing bills which covered most health
insurance plans.  The expansion of managed care, the use of claims
administrators, increased use of subcontractors, and numerous corporate
health care mergers have affected Medicaid third-party identification and
recovery.  State law governing Medicaid data matches does not specify any
penalty for noncompliance.  Although current law requires insurers to
provide Medicaid information, few carriers submit all of the information
requested.  While this data is enough to conduct data matches to identify
and verify policies that cover Medicaid-eligible recipients, it is not
sufficient to conduct post-payment, third-party recovery activities.
Potential claims against several entities refusing to participate are
estimated to total several million dollars in federal and state funds. 

H.B. 1894 mandates requirements for health insurers' participation in
Medicaid data matches by requiring them to include more comprehensive
information regarding insured persons and their dependents in information
that is required to be maintained in their filing system.  This bill also
imposes an administrative penalty on those who are not in compliance with a
request for information, and requires the Health and Human Services
Commission to enter into an agreement to reimburse an insurer for necessary
and reasonable costs incurred in providing requested information. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 32.042, Human Resources Code, as follows:

Sec. 32.042.  INFORMATION REQUIRED FROM HEALTH INSURERS.  (a)  Includes the
address, including claim submission address, and group policy number of
each subscriber or policyholder covered by an insurer among the information
that is required to be maintained in a file system by an insurer.  Requires
the name, address, including claim submission address, and date of birth of
each dependent of each subscriber or policyholder covered by the insurer to
be additionally maintained in a file system by the insurer. 

(b)  Deletes the provision that a third-party administrator is subject to
this subsection, regarding identification of state medical assistance
recipients with third-party health coverage or other insurance provided by
this subsection,  to the extent the information described in it is made
available to the administrator from the plan. 

(c)  Prohibits an insurer from being required to provide information in
response to a request under this section more than once every six months,
rather than once during a calendar year. 

(d)  Makes no changes.
 
(e)  Requires the Health and Human Services Commission (department) to
enter into an agreement to reimburse an insurer for necessary and
reasonable costs incurred in providing information requested under this
section.  Deletes the requirement that the procedures agreed to under this
subsection must include financial arrangements to reimburse an insurer for
necessary costs incurred in providing the requested information. 

(f)  Makes no changes.

(g)  Makes no changes.

(h)  Makes this section applicable to a plan administrator in the same
manner and to the same extent as an insurer. 

(i)  Redesignated from Subsection (h).  Defines "plan administrator" as a
third-party administrator, prescription drug payer or administrator,
pharmacy benefit manager, or dental payer or administrator. Makes
nonsubstantive changes. 

SECTION 2.  Amends Subchapter B, Chapter 32, Human Resources Code, by
adding Section 32.0421, as follows: 

Sec. 32.0421.  ADMINISTRATIVE PENALTY FOR FAILURE TO PROVIDE INFORMATION
(a)  Authorizes the department to impose an administrative penalty on a
person who is not in compliance with a request for information made under
Section 32.042(b), the amount of which may not exceed $10,000 for each day
of noncompliance that occurs after the 180th day after the date of the
request.  Requires the amount to be based on certain factors.  Provides
that enforcement of the penalty may be stayed during the time the order is
under judicial review if the person pays the penalty to the clerk of the
court or files a supersedeas bond with the court in the amount of the
penalty.  Authorizes a person who is unable to pay the penalty or file the
bond to stay the enforcement by filing an affidavit as required by the
Texas Rules of Civil Procedure for a party who is unable to file security
for costs, subject to the right of the department to contest the affidavit
as provided by those rules. Authorizes the attorney general to sue to
collect the penalty, and provides that a proceeding to impose the penalty
is considered a contested case under Chapter 2001 (Administrative
Procedure), Government Code. 

SECTION 3.  Requires the department to submit a report to the legislature
relating to third-party Medicaid recoveries made by the department under
Section 32.042, Human Resources Code, as amended by this Act, no later than
September 1, 2000.  Provides that the report must include cost avoidance
and cost savings from liable third parties and recommendations to increase
the amount of recoveries made by the department. 

SECTION 4.  Effective date: September 1, 1999.

SECTION 5.  Emergency clause.