HBA-MPM H.B. 1001 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1001
By: Naishtat
Human Services
7/9/2001
Enrolled



BACKGROUND AND PURPOSE 

The House Human Services Committee reports that both industry
representatives and nursing home resident advocacy groups point to the
methodology for calculating Medicaid reimbursement rates as an underlying
cause for much of the nursing home industry's problems.  The current
methodology may not accurately reflect all justifiably reimbursable costs
of doing business.  In addition, the current Texas Index for Level of
Effort (TILE) reimbursement system does not always reflect the true
resource needs of residents.  For example, facilities generally receive the
lowest rate of reimbursement for patients with Alzheimer's or related
dementia, even though caring for these patients demands more staff time.
Furthermore, the reimbursement methodology needs to provide incentives for
increased direct care spending.  House Bill 1001 requires the Health and
Human Services Commission and the Department of Human Services to review
the base reimbursement methodology for nursing home care.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 1001 requires the Health and Human Services Commission (HHSC) in
conjunction with the Texas Department of Human Services (DHS), subject to
the availability of funds, to evaluate the methodology and rates used for
determining Medicaid reimbursement rates for nursing facilities.  The bill
requires HHSC and DHS to:  

_consider including legitimate costs of doing business that are currently
not in the reimbursement rate; 

_explore methods to adjust the reimbursement rate to account for sudden
increases in liability insurance rates and other business costs; 

_evaluate the effectiveness of the Medicaid nursing facility (facility)
reimbursement rate methodology in providing incentives for increased direct
staffing; 

_examine the possibility of adding incentives to improve the care, diet,
and quality of life for facility residents  

_examine the possibility of developing a system of adjusted Medicaid
reimbursement for facilities with a high-level of performance based on
quality indicators established in this bill; 

_examine and consider adopting a means of mitigating recoupment from
nursing homes that fail to meet the direct care spending requirements but
provide a higher quality of care, based on indicators determined
appropriate by HHSC; 

 _examine any inadequacies of the current flat-rate system in accounting
for regional and facilityspecific differences in the cost of providing care
and explore alternatives to the flat-rate system; and 

_examine all the current methodology components, including inflation
factors and occupancy adjustments. 

H.B. 1001 requires HHSC and DHS, subject to the availability of funds, to
evaluate the Texas Index for Level of Effort classification system to
determine whether the system accurately accounts for the care needs of
patients with dementia, including those with Alzheimer's disease, and in
doing so to seek the input of relevant professionals and other individuals
or groups with expertise in caring for people with these conditions.  The
bill requires HHSC to report the results of the evaluations to the
governor, lieutenant governor, and the speaker of the house of
representatives no later than September 1, 2002. 

EFFECTIVE DATE

Vetoed.