1-1     By:  Nelson                                           S.B. No. 1248
 1-2           (In the Senate - Filed March 11, 1999; March 11, 1999, read
 1-3     first time and referred to Committee on Human Services;
 1-4     April 6, 1999, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 4, Nays 0; April 6, 1999,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1248                  By:  Carona
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to Medicaid third-party recoveries; providing a penalty.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1.  Section 32.042, Human Resources Code, is amended
1-13     to read as follows:
1-14           Sec. 32.042.  INFORMATION REQUIRED FROM HEALTH INSURERS.
1-15     (a)  An insurer shall maintain a file system that contains:
1-16                 (1)  the name, address, including claim submission
1-17     address, group policy number, employer's mailing address, social
1-18     security number, and date of birth of each subscriber or
1-19     policyholder covered by the insurer; and
1-20                 (2)  the name, address, including claim submission
1-21     address, and date of birth of each dependent of each subscriber or
1-22     policyholder covered by the insurer.
1-23           (b)  The state's Medicaid third-party recovery division shall
1-24     identify state medical assistance recipients who have third-party
1-25     health coverage or insurance as provided by this subsection.  The
1-26     department shall provide to an insurer Medicaid data tapes that
1-27     identify medical assistance recipients and request that the insurer
1-28     identify each subscriber or policyholder of the insurer whose name
1-29     also appears on the Medicaid data tape.  An insurer shall comply
1-30     with a request under this subsection not later than the 60th day
1-31     after the date the request was made.  An insurer is only required
1-32     under this subsection to provide the department with the
1-33     information maintained under Subsection (a) by the insurer or made
1-34     available to the insurer from the plan.  A plan [third-party]
1-35     administrator is subject to this subsection to the extent the
1-36     information described in this subsection is made available to the
1-37     plan [third-party] administrator from the plan.
1-38           (c)  An insurer may not be required to provide information in
1-39     response to a request under this section more than once every six
1-40     months [during a calendar year].
1-41           (d)  An insurer shall provide the information required under
1-42     this section only if the department certifies that the identified
1-43     individuals are applicants for or recipients of services under
1-44     Medicaid or are legally responsible for an applicant for or
1-45     recipient of Medicaid services.
1-46           (e)  The department shall enter into an agreement to
1-47     reimburse an insurer for necessary and reasonable costs incurred in
1-48     providing information requested under this section.  The department
1-49     may enter into an agreement with insurers that provides procedures
1-50     for requesting and providing information under this section.  An
1-51     agreement under this subsection may not be inconsistent with any
1-52     law relating to the confidentiality or privacy of personal
1-53     information or medical records.  The procedures agreed to under
1-54     this subsection must [include financial arrangements to reimburse
1-55     an insurer for necessary costs incurred in providing the requested
1-56     information and must] state the time and manner the procedures take
1-57     effect.
1-58           (f)  Information required to be furnished to the department
1-59     under this section is limited to information necessary to determine
1-60     whether health benefits have been or should have been claimed and
1-61     paid under a health insurance policy or plan for medical care or
1-62     services received by an individual for whom Medicaid coverage would
1-63     otherwise be available.
1-64           (g)  Information regarding an individual certified to an
 2-1     insurer as an applicant for or recipient of medical assistance may
 2-2     only be used to identify the records or information requested and
 2-3     may not violate the confidentiality of the applicant or recipient.
 2-4     The department shall establish guidelines not later than the date
 2-5     on which the procedures agreed to under Subsection (e) take effect.
 2-6           (h)  This section applies to a plan administrator in the same
 2-7     manner and to the same extent as an insurer if the plan
 2-8     administrator has the information necessary to comply with the
 2-9     applicable requirement.
2-10           (i)  In this section:
2-11                 (1)  "Insurer"[, "insurer"] means a group health
2-12     services corporation, a health maintenance organization, a
2-13     self-funded or self-insured welfare or benefit plan or program to
2-14     the extent the regulation of the plan or program is not preempted
2-15     by federal law, and any other entity that provides health coverage
2-16     in this state through an employer, union, trade association, or
2-17     other organization or other source.
2-18                 (2)  "Plan administrator" means a third-party
2-19     administrator, prescription drug payer or administrator, pharmacy
2-20     benefit manager, or dental payer or administrator.
2-21           SECTION 2.  Subchapter B, Chapter 32, Human Resources Code,
2-22     is amended by adding Section 32.0421 to read as follows:
2-23           Sec. 32.0421.  ADMINISTRATIVE PENALTY FOR FAILURE TO PROVIDE
2-24     INFORMATION.  (a)  The department may impose an administrative
2-25     penalty on a person who does not comply with a request for
2-26     information made under Section 32.042(b).
2-27           (b)  The amount of the penalty may not exceed $10,000 for
2-28     each day of noncompliance that occurs after the 180th day after the
2-29     date of the request.  The amount shall be based on:
2-30                 (1)  the seriousness of the violation, including the
2-31     nature, circumstances, extent, and gravity of the violation;
2-32                 (2)  the economic harm caused by the violation;
2-33                 (3)  the history of previous violations;
2-34                 (4)  the amount necessary to deter a future violation;
2-35                 (5)  efforts to correct the violation; and
2-36                 (6)  any other matter that justice may require.
2-37           (c)  The enforcement of the penalty may be stayed during the
2-38     time the order is under judicial review if the person pays the
2-39     penalty to the clerk of the court or files a supersedeas bond with
2-40     the court in the amount of the penalty.  A person who cannot afford
2-41     to pay the penalty or file the bond may stay the enforcement by
2-42     filing an affidavit in the manner required by the Texas Rules of
2-43     Civil Procedure for a party who cannot afford to file security for
2-44     costs, subject to the right of the department to contest the
2-45     affidavit as provided by those rules.
2-46           (d)  The attorney general may sue to collect the penalty.
2-47           (e)  A proceeding to impose the penalty is considered to be a
2-48     contested case under Chapter 2001, Government Code.
2-49           SECTION 3.  Not later than September 1, 2000, the Texas
2-50     Department of Health shall submit a report to the legislature
2-51     relating to third-party Medicaid recoveries made by the department
2-52     under Section 32.042, Human Resources Code, as amended by this Act.
2-53     The report must include:
2-54                 (1)  cost avoidance and cost savings from liable third
2-55     parties; and
2-56                 (2)  recommendations to increase the amount of
2-57     third-party Medicaid recoveries made by the department.
2-58           SECTION 4.  This Act takes effect September 1, 1999.
2-59           SECTION 5.  The importance of this legislation and the
2-60     crowded condition of the calendars in both houses create an
2-61     emergency and an imperative public necessity that the
2-62     constitutional rule requiring bills to be read on three several
2-63     days in each house be suspended, and this rule is hereby suspended.
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