By Coleman                                            H.B. No. 2896
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the administration and operation of the Medicaid
 1-3     program.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 533.002, Government Code, is amended to
 1-6     read as follows:
 1-7           Sec. 533.002.  Purpose.  The commission shall implement the
 1-8     Medicaid managed care program as part of the health care delivery
 1-9     system developed under Chapter 532 by contracting with managed care
1-10     organizations in a manner that, to the extent possible:
1-11                 (1)  improves the health of Texans by:
1-12                       (A)  emphasizing prevention;
1-13                       (B)  promoting continuity of care; [and]
1-14                       (C)  providing a medical home for recipients; and
1-15                       (D)  developing strategies to encourage more
1-16     personal responsibility in health care maintenance and decisions;
1-17                 (2)  ensures that each recipient receives high quality,
1-18     comprehensive health care services in the recipient's local
1-19     community;
1-20                 (3)  encourages the training of and access to primary
1-21     care physicians and providers;
 2-1                 (4)  maximizes cooperation with existing public health
 2-2     entities, including local departments of health;
 2-3                 (5)  provides incentives to managed care organizations
 2-4     to improve the quality of health care services for recipients by
 2-5     providing value-added services; and
 2-6                 (6)  reduces administrative and other nonfinancial
 2-7     barriers for recipients in obtaining health care services.
 2-8           SECTION 2.  Section 533.003, Government Code, is amended to
 2-9     read as follows:
2-10           Sec. 533.003.  Considerations in Awarding Contracts.  In
2-11     awarding contracts to managed care organizations, the commission
2-12     shall:
2-13                 (1)  give preference to organizations that have
2-14     significant participation in the organization's provider network
2-15     from each health care provider in the region who has traditionally
2-16     provided care to Medicaid and charity care patients;
2-17                 (2)  give extra consideration to organizations that
2-18     agree to assure continuity of care for at least three months beyond
2-19     the period of Medicaid eligibility for recipients; [and]
2-20                 (3)  consider the need to use different managed care
2-21     plans to meet the needs of different populations[.]; and
2-22                 (4)  give extra consideration to organizations that
2-23     demonstrate provider-friendly policies such as flexible
2-24     authorization periods and policies, electronic billing, and
2-25     electronic payment.
 3-1           SECTION 3.  Section 533.005, Government Code, is amended to
 3-2     read as follows:
 3-3           Sec. 533.005.  Required Contract Provisions.  A contract
 3-4     between a managed care organization and the commission for the
 3-5     organization to provide health care services to recipients must
 3-6     contain:
 3-7                 (1)  procedures to ensure accountability to the state
 3-8     for the provision of health care services, including procedures for
 3-9     financial reporting, quality assurance, utilization review, and
3-10     assurance of contract and subcontract compliance;
3-11                 (2)  capitation and provider payment rates that ensure
3-12     the cost-effective provision of quality health care;
3-13                 (3)  a requirement that the managed care organization
3-14     provide ready access to a person who assists recipients in
3-15     resolving issues relating to enrollment, plan administration,
3-16     education and training, access to services, and grievance
3-17     procedures;
3-18                 (4)  a requirement that the managed care organization
3-19     provide ready access to a person who assists providers in resolving
3-20     issues relating to payment, plan administration, education and
3-21     training, and grievance procedures;
3-22                 (5)  a requirement that the managed care organization
3-23     provide information and referral about the availability of
3-24     educational, social, and other community services that could
3-25     benefit a recipient;
 4-1                 (6)  procedures for recipient outreach and education;
 4-2                 (7)  a requirement that the managed care organization
 4-3     make payment to a physician or provider for health care services
 4-4     rendered to a recipient under a managed care plan not later than
 4-5     the 45th day after the date a claim for payment is received with
 4-6     documentation reasonably necessary for the managed care
 4-7     organization to process the claim, or within a period, not to
 4-8     exceed 60 days, specified by a written agreement between the
 4-9     physician or provider and the managed care organization;
4-10                 (8)  a requirement that the commission, on the date of
4-11     a recipient's enrollment in a managed care plan issued by the
4-12     managed care organization, inform the organization of the
4-13     recipient's Medicaid recertification date; [and]
4-14                 (9)  a requirement that the managed care organization
4-15     comply with Section 533.006 as a condition of contract retention
4-16     and renewal[.];
4-17                 (10)  a prohibition that the managed care plan not
4-18     delegate any function or functions to a physician network that
4-19     includes exclusivity clauses in its contracts with physicians or
4-20     other providers; and
4-21                 (11)  a requirement that the managed care organization
4-22     provide patient education and referral through a 24-hour hotline
4-23     that:
4-24                       (A)  does not act as a gatekeeper to services;
4-25                       (B)  is answered by a bilingual nurse who has no
 5-1     less than five years experience in critical or emergency room care;
 5-2     and
 5-3                       (C)  has a licensed physician available at all
 5-4     times for advice.
 5-5           SECTION 4.  Subchapter A, Chapter 533, Government Code, is
 5-6     amended by adding Section 533.0055 to read as follows:
 5-7           Sec. 533.0055.  EXTERNAL REVIEW OF CONTRACTS.  (a)  The
 5-8     commission shall contract with an external entity to review
 5-9     proposed contracts between the commission and managed care plans in
5-10     each region and comment on:
5-11                 (1)  proposed premium rates;
5-12                 (2)  sanctions for failure to meet performance goals;
5-13     and
5-14                 (3)  any other areas as directed by the commission.
5-15           (b)  The commission shall enter into a contract with an
5-16     external entity not later than 120 days prior to the reenrollment
5-17     date for a region.  The external entity shall report to the
5-18     commission not later than 60 days prior to the reenrollment date
5-19     for a region.
5-20           SECTION 5.  Section 533.007, Government Code, is amended by
5-21     adding Subsection (g) to read as follows:
5-22           (g)  The commission shall evaluate and report on the
5-23     performance of all managed care plans and any other contractors to
5-24     the state who participate in support of the Medicaid managed care
5-25     program and shall hold all managed care plans and any other
 6-1     contractors to the state who participate in support of the Medicaid
 6-2     managed care program to equal standards of accountability.
 6-3           SECTION 6.  Section 533.0075, Government Code, is amended to
 6-4     read as follows:
 6-5           Sec. 533.0075.  Recipient Enrollment.  The commission shall:
 6-6                 (1)  encourage recipients to choose appropriate managed
 6-7     care plans and primary health care providers by:
 6-8                       (A)  providing initial information to recipients
 6-9     and providers in a region about the need for recipients to choose
6-10     plans and providers not later than the 90th day before the date on
6-11     which the commission plans to begin to provide health care services
6-12     to recipients in that region through managed care;
6-13                       (B)  providing follow-up information before
6-14     assignment of plans and providers and after assignment, if
6-15     necessary, to recipients who delay in choosing plans and providers;
6-16     and
6-17                       (C)  allowing plans and providers to provide
6-18     information to recipients or engage in marketing activities under
6-19     marketing guidelines established by the commission under Section
6-20     533.008 after the commission approves the information or
6-21     activities;
6-22                 (2)  consider the following factors in assigning
6-23     managed care plans and primary health care providers to recipients
6-24     who fail to choose plans and providers:
6-25                       (A)  the importance of maintaining existing
 7-1     provider-patient and physician-patient relationships, including
 7-2     relationships with specialists, public health clinics, and
 7-3     community health centers;
 7-4                       (B)  to the extent possible, the need to assign
 7-5     family members to the same providers and plans; and
 7-6                       (C)  geographic convenience of plans and
 7-7     providers for recipients; [and]
 7-8                 (3)  retain responsibility for enrollment and
 7-9     disenrollment of recipients in managed care plans, except that the
7-10     commission may delegate the responsibility to an independent
7-11     contractor who receives no form of payment from, and has no
7-12     financial ties to, any managed care organization[.]; and
7-13                 (4)  develop and implement an expedited process for
7-14     determining eligibility and enrolling pregnant women into Medicaid
7-15     and ensure immediate access to prenatal services.
7-16           SECTION 7.  Subchapter A, Chapter 533, Government Code, is
7-17     amended by adding Sections 533.012-533.016 to read as follows:
7-18           Sec. 533.012.  MORATORIUM ON IMPLEMENTATION; REVIEW; REPORT.
7-19     (a)  The commission shall not implement Medicaid managed care or
7-20     Medicaid long-term care pilot programs in any additional regions
7-21     after implementation of Medicaid managed care or Medicaid long-term
7-22     care pilot programs in currently bid and contracted regions until:
7-23                 (1)  the commission reviews:
7-24                       (A)  the outstanding administrative and financial
7-25     issues in the Medicaid managed care program; and
 8-1                       (B)  the Medicaid long-term care pilot programs
 8-2     with respect to patient outcomes, coordination of care, access to
 8-3     care, and types of providers included in the pilot programs;
 8-4                 (2)  the commission submits a report to the governor
 8-5     and the 77th Legislature that:
 8-6                       (A)  demonstrates that outstanding administrative
 8-7     and financial issues with Medicaid managed care and Medicaid
 8-8     long-term care pilot programs are sufficiently resolved; and
 8-9                       (B)  recommends whether Medicaid managed care and
8-10     Medicaid long-term care pilot programs should be implemented in
8-11     additional regions.
8-12           (b)  The commission shall submit the report required in
8-13     Subsection (a) by January 1, 2001.
8-14           Sec. 533.013.  PREMIUM RATE DETERMINATION; REVIEW AND
8-15     COMMENT.  (a)  In determining premium rates paid to managed care
8-16     plans, the commission shall consider:
8-17                 (1)  regional cost variation of health care services;
8-18                 (2)  the range and type of health care services to be
8-19     included in the premium rate;
8-20                 (3)  the number of managed care plans in a region;
8-21                 (4)  the current and projected caseload mix in a
8-22     region; and
8-23                 (5)  the ability of managed care plans to meet their
8-24     costs of operation under the proposed rates.
8-25           (b)  The Texas Department of Insurance shall concurrently
 9-1     review and comment on the premium rates developed by the commission
 9-2     with special focus on the requirements of Subsection (a)(4) above.
 9-3           Sec. 533.014.  PROFIT SHARING.  (a)  The commission shall
 9-4     develop rules regarding the sharing of annual profit earned by
 9-5     managed care plans under the Medicaid program.  The rules shall
 9-6     provide that:
 9-7                 (1)  the managed care plan shall retain the first three
 9-8     percent of annual profit generated by the plan;
 9-9                 (2)  the managed care plan shall share evenly with the
9-10     state any annual profit generated above three percent and below ten
9-11     percent; and
9-12                 (3)  the managed care plan shall return to the state
9-13     all annual profit generated above ten percent.
9-14           (b)  All annual profit shared with the state or returned to
9-15     the state under this Section shall be deposited in the state's
9-16     general revenue fund.
9-17           Sec. 533.015.  UNIFORM DOCUMENT REVIEW.  The commission shall
9-18     develop and administer a single uniform procedure for review and
9-19     approval or disapproval each document that the state requires a
9-20     managed care organization to submit for state approval, and require
9-21     that each agency involved in administering Medicaid managed care
9-22     for acute or long-term care use this system.
9-23           Sec. 533.016.  COORDINATION OF MEDICAID LONG-TERM CARE
9-24     PILOTS.  If the commission delegates all or part of its functions,
9-25     powers, and duties under Section 532.002, Subchapter B, or
 10-1    Subchapter C related to long-term care, including but not limited
 10-2    to the operation of pilot projects, it shall designate a single
 10-3    lead agency to ameliorate the impact of multiple agencies
 10-4    responsible for the functions related to long-term care, and shall
 10-5    ensure that long-term care is administered as efficiently and
 10-6    effectively as if it were administered by a single state agency.
 10-7          SECTION 8.  Acts 1997, 75th Legislature, Chapter 1153,
 10-8    Section 2.07, is repealed.
 10-9          SECTION 9.  The importance of this legislation and the
10-10    crowded condition of the calendars in both houses create an
10-11    emergency and an imperative public necessity that the
10-12    constitutional rule requiring bills to be read on three several
10-13    days in each house be suspended, and this rule is hereby suspended,
10-14    and that this Act take effect and be in force from and after its
10-15    passage, and it is so enacted.