76R16016 CLG-F                          
         By Moncrief                                           S.B. No. 1331
         Substitute the following for S.B. No. 1331:
         By Maxey                                          C.S.S.B. No. 1331
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to an assessment of the effectiveness of Medicaid managed
 1-3     care contracts.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter B, Chapter 12, Health and Safety Code,
 1-6     is amended by adding Section 12.0123 to read as follows:
 1-7           Sec. 12.0123.  EXTERNAL AUDITS OF CERTAIN MEDICAID
 1-8     CONTRACTORS.  (a)  In this section, "Medicaid contractor" means an
 1-9     entity that:
1-10                 (1)  is not a health and human services agency as
1-11     defined by Section 531.001, Government Code; and
1-12                 (2)  under contract with or otherwise on behalf of the
1-13     department, performs one or more administrative services in
1-14     relation to the department's operation of a part of the state
1-15     Medicaid program, such as claims processing, utilization review,
1-16     client enrollment, provider enrollment, quality monitoring, or
1-17     payment of claims.
1-18           (b)  The department shall contract with an independent
1-19     auditor to perform annual independent external financial and
1-20     performance audits of any Medicaid contractor used by the
1-21     department in the department's operation of a part of the state
1-22     Medicaid program.
1-23           (c)  The department shall ensure that audit procedures
 2-1     related to financial audits and performance audits are used
 2-2     consistently in audits under this section.
 2-3           (d)  An audit required by this section must be completed
 2-4     before the end of the fiscal year immediately following the fiscal
 2-5     year for which the audit is performed.
 2-6           SECTION 2.  Subchapter A, Chapter 533, Government Code, is
 2-7     amended by adding Section 533.012 to read as follows:
 2-8           Sec. 533.012.  MORATORIUM ON IMPLEMENTATION OF CERTAIN PILOT
 2-9     PROGRAMS; REVIEW; REPORT.  (a)   Notwithstanding any other law, the
2-10     commission may not implement Medicaid managed care pilot programs,
2-11     Medicaid behavioral health pilot programs, or Medicaid Star + Plus
2-12     pilot programs in a region for which the commission has not:
2-13                 (1)  received a bid from a managed care organization to
2-14     provide health care services to recipients in the region through a
2-15     managed care plan; or
2-16                 (2)  entered into a contract with a managed care
2-17     organization to provide health care services to recipients in the
2-18     region through a managed care plan.
2-19           (b)  The commission shall:
2-20                 (1)  review any outstanding administrative and
2-21     financial issues with respect to Medicaid managed care pilot
2-22     programs, Medicaid behavioral health pilot programs, and Medicaid
2-23     Star + Plus pilot programs implemented in health care service
2-24     regions; and
2-25                 (2)  review the impact of the Medicaid managed care
2-26     delivery system, including managed care organizations, prepaid
2-27     health plans, and primary care case management, on:
 3-1                       (A)  physical access and program-related access
 3-2     to appropriate services by recipients, including recipients who
 3-3     have special health care needs;
 3-4                       (B)  quality of health care delivery and patient
 3-5     outcomes;
 3-6                       (C)  utilization patterns of recipients;
 3-7                       (D)  statewide Medicaid costs;
 3-8                       (E)  coordination of care and care coordination
 3-9     in Medicaid Star + Plus pilot programs;
3-10                       (F)  the level of administrative complexity for
3-11     providers, recipients, and managed care organizations;
3-12                       (G)  public hospitals, medical schools, and other
3-13     traditional providers of indigent health care; and
3-14                       (H)  competition in the marketplace and network
3-15     retention.
3-16           (c)  In performing its duties and functions under Subsection
3-17     (b), the commission shall consult with Medicaid providers, medical
3-18     professional organizations, managed care organizations, consumers,
3-19     state agencies, and political subdivisions with a constitutional or
3-20     statutory obligation to provide health care for indigent persons.
3-21     The commission may coordinate the review required under Subsection
3-22     (b) with any other study or review the commission is required to
3-23     complete.
3-24           (d)  Notwithstanding Subsection (a), the commission may
3-25     implement Medicaid managed care pilot programs, Medicaid behavioral
3-26     health pilot programs, and Medicaid Star + Plus pilot programs in a
3-27     region described by that subsection if the commission finds that:
 4-1                 (1)  outstanding administrative and financial issues
 4-2     with respect to the implementation of those programs in health care
 4-3     service regions have been resolved; and
 4-4                 (2)  implementation of those programs in a region
 4-5     described by Subsection (a)  would benefit both recipients and
 4-6     providers.
 4-7           (e)  Not later than November 1, 2000, the commission shall
 4-8     submit a report to the governor and the legislature that:
 4-9                 (1)  states whether the outstanding administrative and
4-10     financial issues with respect to the pilot programs described by
4-11     Subsection (b)(1) have been sufficiently resolved;
4-12                 (2)  summarizes the findings of the review conducted
4-13     under Subsection (b);
4-14                 (3)  recommends which elements of the Medicaid managed
4-15     care delivery system should be applied to the traditional
4-16     fee-for-service component of the state Medicaid program to achieve
4-17     the goals specified in Section 533.002(1); and
4-18                 (4)  recommends whether Medicaid managed care pilot
4-19     programs, Medicaid behavioral health pilot programs, or Medicaid
4-20     Star + Plus pilot programs should be implemented in health care
4-21     service regions described by Subsection (a).
4-22           (f)  To the extent practicable, this section may not be
4-23     construed to affect the duty of the commission to plan the
4-24     continued expansion of Medicaid managed care pilot programs,
4-25     Medicaid behavioral health pilot programs, and Medicaid Star + Plus
4-26     pilot programs in health care service regions described by
4-27     Subsection (a) after July 1, 2001.
 5-1           (g)  This section expires July 1, 2001.
 5-2           SECTION 3.  If before implementing any provision of this Act
 5-3     a state agency determines that a waiver or other authorization from
 5-4     a federal agency is necessary for implementation, the Health and
 5-5     Human Services Commission shall request the waiver or authorization
 5-6     and may delay implementing that provision until the waiver or
 5-7     authorization is granted.
 5-8           SECTION 4.  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,
5-13     and that this Act take effect and be in force from and after its
5-14     passage, and it is so enacted.