HBA-DMH H.B. 2467 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2467 By: Chavez Public Health 3/13/2001 Introduced BACKGROUND AND PURPOSE Residents in the Texas-Mexico border region suffer from inadequate medical services compared with most Texans, in part because Medicaid funds are not equitably distributed. Physician to patient ratios are lowest in areas along the border region and in rural areas and inner cities, areas known as strategic investment areas. In February 2000, the Health and Human Services Commission (HHSC) convened the Border Rate Work Group (work group) to study and recommend solutions regarding Medicaid and the state child health plan (CHIP) reimbursement rates along the Texas-Mexico border. The work group concluded that a lack of access to health care services along the border has reduced the utilization rates of health care services in the region, that the border region receives disproportionately low Medicaid reimbursement as a result of low utilization rates, and that Medicaid and CHIP capitation rates do not reflect the current health care environment since the rates are based on past fee for service reimbursement rates. The report also found that lower revenue provides a disincentive for health care providers to locate and remain in the border region. The work group recommended increasing Medicaid and CHIP reimbursement rates in strategic investment areas to recruit more doctors and increase access to care. House Bill 2467 establishes three pilot programs to eliminate the disparity between counties with above average unemployment and below average per capita income and the rest of the state, and provides physicians with a 10 percent bonus for providing health care services in these regions. 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 2467 amends the Government Code to require the commissioner of health and human services (commissioner) to appoint an advisory committee (committee) to develop a strategic plan for eliminating the disparities between strategic investment areas and other areas of the state in certain Medicaid and child health plan (CHIP) rates and expenditures. The bill sets forth provisions for the appointment, administration, and operation of the committee. The bill requires the committee to perform the research necessary to analyze and compare the rates and expenditures, not later than the date specified by the commissioner or September 1, 2002, and produce a report based on the results of that analysis and comparison. The bill requires the committee to make recommendations for addressing the problems created by disparities documented in the report. The bill requires the Health and Human Services Commission (HHSC) to conduct three pilot programs to equalize Medicaid rates and expenditures and provide physician incentives. The bill provides that each pilot program must be located in a county in a strategic investment area and meet specified criteria. The bill requires HHSC to ensure that the disparities in rates and expenditures for CHIP are eliminated as soon as practicable so that the CHIP rates and expenditures in the strategic investment areas equal the statewide average rates and expenditures, and provide that such changes must be initiated not later than September 1, 2002. The bill requires HHSC to ensure in the pilot program areas that the disparities in Medicaid rates and expenditures are eliminated as soon as practicable so that the Medicaid rates and expenditures in the pilot program areas equal those statewide, and provides that such changes must be initiated not later than September 1, 2002. The bill requires HHSC to ensure that a physician providing a service to a Medicaid recipient in the pilot program area receives a bonus in the amount of 10 percent of the reimbursement customarily provided to a physician providing that service in another region of the state. The bill requires HHSC to exclude data from strategic investment areas in determining the statewide average capitation rates under Medicaid managed care and CHIP and the statewide average total professional services expenditures per Medicaid recipient or per child enrolled in CHIP. The bill authorizes HHSC to vary the amount of any rate increases for professional services according to the type of service provided. The bill requires HHSC to develop mechanisms to pass any rate increase directly to providers. The bill requires HHSC to contract with a public university to: _measure changes occurring from September 1, 2001, to August 31, 2004, in the number of health care providers participating in Medicaid or CHIP in strategic investment areas and resulting effects on consumer access to health care and consumer utilization; _determine any effects of the changes in rates and expenditures; _make a recommendation regarding whether the pilot program should be expanded to other areas of the state; and _submit a report to the legislature, not later than December 1, 2004. These provisions expire September 1, 2011. EFFECTIVE DATE September 1, 2001.