By:  Zaffirini                                        S.B. No. 1588
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to fraud control procedures for the Medicaid managed care
 1-2     program.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Subchapter A, Chapter 533, Government Code, is
 1-5     amended by adding Section 533.012 to read as follows:
 1-6           Sec. 533.012.  INFORMATION FOR FRAUD CONTROL.  (a)  Each
 1-7     managed care organization contracting with the commission under
 1-8     this chapter shall submit to the commission:
 1-9                 (1)  a description of any financial or other business
1-10     relationship between the organization and any subcontractor
1-11     providing health care services under the contract;
1-12                 (2)  a copy of any contract between the organization
1-13     and a subcontractor relating to the delivery of or payment for
1-14     health care services; and
1-15                 (3)  a description of the fraud control program used by
1-16     any subcontractor that delivers health care services.
1-17           (b)  The information submitted under this section must be
1-18     submitted in the form required by the commission and be updated as
1-19     required by the commission.
1-20           (c)  The commission's office of investigations and
1-21     enforcement shall review the information submitted under this
1-22     section as appropriate in the investigation of fraud in the
1-23     Medicaid managed care program.  The comptroller may review the
1-24     information in connection with the health care fraud study
 2-1     conducted by the comptroller.
 2-2           SECTION 2.  Section 533.005, Government Code, is amended to
 2-3     read as follows:
 2-4           Sec. 533.005.  REQUIRED CONTRACT PROVISIONS.  A contract
 2-5     between a managed care organization and the commission for the
 2-6     organization to provide health care services to recipients must
 2-7     contain:
 2-8                 (1)  procedures to ensure accountability to the state
 2-9     for the provision of health care services, including procedures for
2-10     financial reporting, quality assurance, utilization review, and
2-11     assurance of contract and subcontract compliance;
2-12                 (2)  capitation and provider payment rates that ensure
2-13     the cost-effective provision of quality health care;
2-14                 (3)  a requirement that the managed care organization
2-15     provide ready access to a person who assists recipients in
2-16     resolving issues relating to enrollment, plan administration,
2-17     education and training, access to services, and grievance
2-18     procedures;
2-19                 (4)  a requirement that the managed care organization
2-20     provide ready access to a person who assists providers in resolving
2-21     issues relating to payment, plan administration, education and
2-22     training, and grievance procedures;
2-23                 (5)  a requirement that the managed care organization
2-24     provide information and referral about the availability of
2-25     educational, social, and other community services that could
2-26     benefit a recipient;
 3-1                 (6)  procedures for recipient outreach and education;
 3-2                 (7)  a requirement that the managed care organization
 3-3     make payment to a physician or provider for health care services
 3-4     rendered to a recipient under a managed care plan not later than
 3-5     the 45th day after the date a claim for payment is received with
 3-6     documentation reasonably necessary for the managed care
 3-7     organization to process the claim, or within a period, not to
 3-8     exceed 60 days, specified by a written agreement between the
 3-9     physician or provider and the managed care organization;
3-10                 (8)  a requirement that the commission, on the date of
3-11     a recipient's enrollment in a managed care plan issued by the
3-12     managed care organization, inform the organization of the
3-13     recipient's Medicaid recertification date; [and]
3-14                 (9)  a requirement that the managed care organization
3-15     comply with Section 533.006 as a condition of contract retention
3-16     and renewal; and
3-17                 (10)  a requirement that the managed care organization
3-18     provide the information required by Section 533.012 and otherwise
3-19     comply and cooperate with the commission's office of investigations
3-20     and enforcement.
3-21           SECTION 3.  This Act takes effect September 1, 1999.
3-22           SECTION 4.  The change in law made by this Act applies only
3-23     to a contract with a managed care organization entered into or
3-24     renewed on or after the effective date of this Act.  A contract
3-25     entered into before the effective date of this Act is governed by
3-26     the law as it existed immediately before the effective date of this
 4-1     Act, and that law is continued in effect for that purpose.
 4-2           SECTION 5.  The importance of this legislation and the
 4-3     crowded condition of the calendars in both houses create an
 4-4     emergency and an imperative public necessity that the
 4-5     constitutional rule requiring bills to be read on three several
 4-6     days in each house be suspended, and this rule is hereby suspended.