By Maxey                                              H.B. No. 1894
         76R3486 CLG-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to Medicaid third-party recoveries; providing a penalty.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 32.042, Human Resources Code, is amended
 1-5     to read as follows:
 1-6           Sec. 32.042.  INFORMATION REQUIRED FROM HEALTH INSURERS.
 1-7     (a)  An insurer shall maintain a file system that contains:
 1-8                 (1)  the name, address, including claim submission
 1-9     address, group policy number, employer's mailing address, social
1-10     security number, and date of birth of each subscriber or
1-11     policyholder covered by the insurer; and
1-12                 (2)  the name, address, including claim submission
1-13     address, and date of birth of each dependent of each subscriber or
1-14     policyholder covered by the insurer.
1-15           (b)  The state's Medicaid third-party recovery division shall
1-16     identify state medical assistance recipients who have third-party
1-17     health coverage or insurance as provided by this subsection.  The
1-18     department shall provide to an insurer Medicaid data tapes that
1-19     identify medical assistance recipients and request that the insurer
1-20     identify each subscriber or policyholder of the insurer whose name
1-21     also appears on the Medicaid data tape.  An insurer shall comply
1-22     with a request under this subsection not later than the 60th day
1-23     after the date the request was made.  An insurer is only required
1-24     under this subsection to provide the department with the
 2-1     information maintained under Subsection (a)  by the insurer or made
 2-2     available to the insurer from the plan.  [A third-party
 2-3     administrator is subject to this subsection to the extent the
 2-4     information described in this subsection is made available to the
 2-5     third-party administrator from the plan.]
 2-6           (c)  An insurer may not be required to provide information in
 2-7     response to a request under this section more than once every six
 2-8     months [during a calendar year].
 2-9           (d)  An insurer shall provide the information required under
2-10     this section only if the department certifies that the identified
2-11     individuals are applicants for or recipients of services under
2-12     Medicaid or are legally responsible for an applicant for or
2-13     recipient of Medicaid services.
2-14           (e)  The department shall enter into an agreement to
2-15     reimburse an insurer for necessary and reasonable costs incurred in
2-16     providing information requested under this section.  The department
2-17     may enter into an agreement with insurers that provides procedures
2-18     for requesting and providing information under this section.  An
2-19     agreement under this subsection may not be inconsistent with any
2-20     law relating to the confidentiality or privacy of personal
2-21     information or medical records.  The procedures agreed to under
2-22     this subsection must [include financial arrangements to reimburse
2-23     an insurer for necessary costs incurred in providing the requested
2-24     information and must] state the time and manner the procedures take
2-25     effect.
2-26           (f)  Information required to be furnished to the department
2-27     under this section is limited to information necessary to determine
 3-1     whether health benefits have been or should have been claimed and
 3-2     paid under a health insurance policy or plan for medical care or
 3-3     services received by an individual for whom Medicaid coverage would
 3-4     otherwise be available.
 3-5           (g)  Information regarding an individual certified to an
 3-6     insurer as an applicant for or recipient of medical assistance may
 3-7     only be used to identify the records or information requested and
 3-8     may not violate the confidentiality of the applicant or recipient.
 3-9     The department shall establish guidelines not later than the date
3-10     on which the procedures agreed to under Subsection (e) take effect.
3-11           (h)  This section applies to a plan administrator in the same
3-12     manner and to the same extent as an insurer.
3-13           (i)  In this section:
3-14                 (1)  "Insurer"[, "insurer"] means a group health
3-15     services corporation, a health maintenance organization, a
3-16     self-funded or  self-insured welfare or benefit plan or program to
3-17     the extent the regulation of the plan or program is not preempted
3-18     by federal law, and any other entity that provides health coverage
3-19     in this state through an employer, union, trade association, or
3-20     other organization or other source.
3-21                 (2)  "Plan administrator" means a third-party
3-22     administrator, prescription drug payer or administrator, pharmacy
3-23     benefit manager, or dental payer or administrator.
3-24           SECTION 2.  Subchapter B, Chapter 32, Human Resources Code,
3-25     is amended by adding Section 32.0421 to read as follows:
3-26           Sec. 32.0421.  ADMINISTRATIVE PENALTY FOR FAILURE TO PROVIDE
3-27     INFORMATION.  (a)  The department may impose an administrative
 4-1     penalty on a person who does not comply with a request for
 4-2     information made under Section 32.042(b).
 4-3           (b)  The amount of the penalty may not exceed $10,000 for
 4-4     each day of noncompliance that occurs after the 180th day after the
 4-5     date of the request.  The amount shall be based on:
 4-6                 (1)  the seriousness of the violation, including the
 4-7     nature, circumstances, extent, and gravity of the violation;
 4-8                 (2)  the economic harm caused by the violation;
 4-9                 (3)  the history of previous violations;
4-10                 (4)  the amount necessary to deter a future violation;
4-11                 (5)  efforts to correct the violation; and
4-12                 (6)  any other matter that justice may require.
4-13           (c)  The enforcement of the penalty may be stayed during the
4-14     time the order is under judicial review if the person pays the
4-15     penalty to the clerk of the court or files a supersedeas bond with
4-16     the court in the amount of the penalty.  A  person who cannot
4-17     afford to pay the penalty or file the bond may stay the enforcement
4-18     by filing an affidavit in the manner required by the Texas Rules of
4-19     Civil Procedure for a party who cannot afford to file security for
4-20     costs, subject to the right of the department to contest the
4-21     affidavit as provided by those rules.
4-22           (d)  The attorney general may sue to collect the penalty.
4-23           (e)  A proceeding to impose the penalty is considered to be a
4-24     contested case under Chapter 2001, Government Code.
4-25           SECTION 3.  Not later than September 1, 2000, the Texas
4-26     Department of Health shall submit a report to the legislature
4-27     relating to third-party Medicaid recoveries made by the department
 5-1     under Section 32.042, Human Resources Code, as amended by this Act.
 5-2     The report must include:
 5-3                 (1)  cost avoidance and cost savings from liable third
 5-4     parties; and
 5-5                 (2)  recommendations to increase the amount of
 5-6     third-party Medicaid recoveries made by the department.
 5-7           SECTION 4.  This Act takes effect September 1, 1999.
 5-8           SECTION 5.  The importance of this legislation and the
 5-9     crowded condition of the calendars in both houses create an
5-10     emergency and an imperative public necessity that the
5-11     constitutional rule requiring bills to be read on three several
5-12     days in each house be suspended, and this rule is hereby suspended.