HBA-MPM C.S.S.B. 1156 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 1156 By: Zaffirini Public Health 5/17/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, the state of Texas and the nation are experiencing an increase in cost per Medicaid recipient due to the general rise in health care utilization, the recent rise in caseloads, the increasing utilization and prices of prescription drugs, and a comparative decrease in federal funding. Innovative approaches are needed to both cut costs and expand services. C.S.S.B. 1156 establishes demonstration projects and feasibility studies, extends Medicaid services to certain populations, authorizes the transfer of administration of certain Medicaid programs from the Texas Department of Health to the Health and Human Services Commission, and adds budget reporting requirements. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Board of Nurse Examiners in SECTION 4 (Section 32.0271, Human Resources Code), the Texas Department of Health in SECTION 6 (Section 32.0422, Human Resources Code), the Health and Human Services Commission in SECTION 1 (Section 32.024, Human Resources Code), SECTION 2 (Section 32.0248, Human Resources Code), SECTION 8 (Section 32.057, Human Resources Code), SECTION 9 (Section 531.02106, Government Code), SECTION 15 (Section 531.056, Government Code), and SECTION 22 (Section 533.0091, Government Code), to the commissioner of insurance in SECTION 18 (Section 533.0023, Government Code), to the commissioner of health and human services in SECTION 22 (Section 533.0202, Government Code), and to the Texas Department of Mental Health and Mental Retardation in SECTION 22 (Section 533.0208, Government Code) of this bill. Rulemaking authority previously delegated to the Texas Department of Health is transferred to the Health and Human Services Commission in SECTION 25 of this bill. ANALYSIS C.S.S.B. 1156 amends the Human Resources Code to prohibit the Health and Human Services Commission (HHSC) in its rules and standards governing the Medicaid vendor drug program from limiting benefits for the number of medications prescribed to a recipient of prescription drug benefits under Medicaid. HHSC is required to provide for cost-sharing by recipients of prescription drug benefits under Medicaid in a manner that ensures that recipients with higher levels of income are required to pay progressively higher percentages of the costs of prescription drugs. In implementing the cost-sharing provisions, HHSC is prohibited from requiring a participating pharmacy to collect copayments or other cost-sharing payments from recipients for remittance to HHSC, but is required to allow the pharmacy to retain the payments as a component of the reimbursement provided to the pharmacy. HHSC is required to provide Medicaid to a person in need of treatment for breast or cervical cancer who is eligible for the assistance under the federal Breast and Cervical Cancer Prevention and Treatment Act of 2000 for a continuous period during which the person requires the treatment. HHSC is required to simplify the enrollment process for a provider of such services and to adopt rules to provide for certification of presumptive eligibility. To the extent allowed by federal law, HHSC is prohibited from requiring a personal interview in determining a person's eligibility (Sec. 32.024). The bill requires HHSC to provide Medicaid in accordance with federal law to an eligible qualified alien. HHSC is required to provide pregnancy-related Medicaid services in accordance with federal law to a pregnant, lawfully present alien regardless of the date the person entered the United States (Sec. 32.0247). C.S.S.B. 1156 requires HHSC to provide Medicaid in accordance with HHSC rules to an independent foster care adolescent who is not otherwise eligible for medical assistance and who HHSC determines is not covered by a health benefits plan offering adequate benefits and to amend the state Medicaid plan accordingly. The bill prohibits HHSC from considering an independent foster care adolescent's income, assets, or resources in determining eligibility (Sec. 32.0248). The bill authorizes HHSC to the extent allowed by federal law to contract with certain health entities to designate one or more employees of the entity to process Medicaid application forms and conduct client interviews for eligibility determination. The bill sets forth standards and requirements for the contract and the entity with which HHSC contracts (Sec. 32.0252). The bill authorizes HHSC or its designee to implement demonstration projects designed to reduce Medicaid claims processing costs (Sec. 32.029). C.S.S.B. 1156 requires HHSC to ensure that a Medicaid recipient is authorized to select a nurse first assistant (RNFA) to perform any health care service or procedure covered under Medicaid if the selected RNFA is authorized to perform the service or procedure and the physician requests that the service or procedure be performed by the RNFA. The bill authorizes the Board of Nurse Examiners to adopt rules governing RNFAs for purposes of this provision (Sec. 32.0271). C.S.S.B. 1156 amends the Human Resources and Insurance codes to require the Texas Department of Health (TDH) to identify individuals who are otherwise entitled to Medicaid for enrollment in a group health benefit plan (group plan). If TDH determines that it is cost-effective, TDH shall require the individual to apply to enroll in the group plan as a condition for Medicaid eligibility and to provide for payment of specified costs or cost-sharing obligations imposed on the individual. The bill provides for payment of premiums for family members who are not eligible for Medicaid if enrollment for the eligible individual is not possible without enrolling ineligible individuals and TDH determines it to be cost effective. The bill sets forth the enrollment process and requires TDH to adopt rules necessary to implement enrollment of Medicaid recipients in a group plan (Sec. 32.0422, Human Resources Code, and Art. 21.52K, Insurance Code). C.S.S.B. 1156 amends the Human Resources Code to require HHSC to establish demonstration projects to provide through Medicaid psychotropic medications and related laboratory and physician services, certain HIV/AIDS treatments and services, and preventive health and planning services for women. The bill also requires HHSC to establish a demonstration project to provide Medicaid to adults whose income is at or below 200 percent of the federal poverty level. The bill sets forth eligibility, implementation, reporting requirements, and expiration dates for each of the projects (Secs. 32.053-32.056). C.S.S.B. 1156 requires HHSC to develop and implement a program of all-inclusive care for the elderly (PACE). The bill requires HHSC to provide Medicaid to a participant in PACE in the manner and to the extent authorized by federal law. The bill requires HHSC to adopt rules as necessary to implement PACE and in doing so to use the Bienvivir Senior Health Services of El Paso initiative as a model and to ensure that a person is not required to hold a certificate of authority as a health maintenance organization (HMO) to provide services under PACE. The bill establishes financial solvency requirements for persons with which HHSC contracts. The bill provides for the promotion of PACE. The bill establishes a timetable for implementation of PACE and sets forth reporting requirements (Sec. 32.057). C.S.S.B. 1156 amends the Government Code to require HHSC to develop and implement strategies to improve management of the cost, quality, and use of services provided under the Medicaid program to achieve administrative efficiency and cost savings. HHSC is required to consult with local communities, providers, consumers, and other affected parties regarding the strategies (Sec. 531.02103). HHSC is authorized to transfer the administration of the Medicaid program from a health and human services agency to HHSC if the transfer is approved by the Medicaid legislative oversight committee established by this bill. HHSC is required to notify the Legislative Budget Board and the governor's office of budget and planning no later than the 30th day before the effective date of the transfer (Secs. 531.02101 and 531.02102 and SECTION 9) The bill provides for the transfer from TDH to HHSC of the administration of Medicaid acute care services or the Medicaid vendor drug program on January 1, 2002 or an earlier date specified by HHSC (SECTION 25). C.S.S.B. 1156 requires HHSC to ensure that Medicaid eligibility policies, processes, and time frames are designed to minimize the time that an applicant or recipient is required to wait before receiving services or being recertified (Sec. 531.02104). The bill requires HHSC to take all necessary actions to simplify specified aspects of the Texas Health Steps program (THSteps). The bill requires HHSC in consultation with providers to develop mechanisms to promote accurate, reliable, and timely reporting of examinations to appropriate entities and to promote incorporation of THSteps services into a child's medical home, and to require the evaluation of THSteps (Sec. 531.02105). C.S.S.B. 1156 requires HHSC before requiring Medicaid recipients to make copayments or comply with other cost-sharing requirements to establish by rule monthly limits on total copayments and other costsharing requirements. HHSC is also required by rule to exempt preventive care services from any copayment or other cost-sharing requirements (Sec. 531.02106). The bill requires HHSC to conduct a community outreach campaign similar to the one for CHIP to provide information relating to the availability of Medicaid coverage for children and adults and to promote enrollment. The bill requires HHSC to inform potential recipients of the toll-free telephone assistance number through which families may obtain information about health benefits coverage for children. HHSC is required to contract with community-based organizations and other organizations for assistance in implementing the outreach campaign (Sec. 531.02131). The bill requires HHSC to submit the consolidated health and human services budget to additional specified state officials and include in the consolidated budget recommendation a consolidated Medicaid appropriations request for the subsequent fiscal biennium and to prepare a comprehensive Medicaid operating budget at the beginning of each fiscal year. The bill sets forth provisions for the development of the request and budget. The bill also requires HHSC to monitor all Medicaid expenditures and submit quarterly expenditure reports (Secs. 531.026, 531.0261 and 531.0272). C.S.S.B. 1156 requires HHSC no later than December 1 of each even-numbered year to prepare a Medicaid reimbursement rates report. The bill sets forth content and distribution requirements for the report (Sec. 531.055). The bill requires HHSC to conduct a study regarding the feasibility of contracting with one or more existing networks of health care providers located in Texas and other states to establish a migrant care network to provide health care services to eligible children of migrant or seasonal agricultural workers. The bill requires HHSC to develop and implement a pilot program if HHSC determines that the establishment of a migrant care network is feasible and by rule establish eligibility criteria for participation in the program. The bill sets forth reporting requirements. The study expires September 1, 2003 (Sec. 531.056). C.S.S.B. 1156 requires HHSC, in cooperation with the Texas Interagency Council for the Homeless (council), no later than November 1, 2001 to develop a pilot case management program for no more than 75 homeless people with chronic illnesses who are recipients of Medicaid. The bill requires the council to administer the program in cooperation with relevant state agencies under the direction of HHSC and sets forth criteria for that administration. The council is required to select through a competitive bidding process a nonprofit entity to implement the program. HHSC is required to report to the council information regarding programs currently available to homeless people through health and human services agencies. The bill sets forth reporting requirements for the council. The program expires September 1, 2005 (Sec. 531.057). C.S.S.B. 1156 authorizes HHSC to develop a health care delivery system that restructures the delivery of health care services provided under Medicaid (Sec. 533.002). The bill requires HHSC to the extent that it is cost-effective to maximize federal matching funds and expand Medicaid eligibility (Sec. 533.0021). The bill requires the commissioner of insurance to adopt rules as necessary to carry out the functions of the Texas Department of Insurance under the Medicaid managed care program (Sec. 533.0023). The bill prohibits HHSC from awarding a contract to or renewing a contract with a managed care organization (organization) that after July 1, 2001 has a policy that the usual and customary reimbursement rate for a health care provider who is outside of the organization's provider network is equal to the lowest contracted rate the organization has negotiated with a provider who is in the network and in the same health care service region (Sec. 533.003). C.S.S.B. 1156 requires HHSC to evaluate the number of organizations with which HHSC contracts and limit the number of contracts in a manner that promotes the successful implementation of the delivery of health care services through the state Medicaid managed care program (Sec. 533.0035). The bill provides that a contract must contain a requirement that the organization or managed care plan reimburse health care providers for medical screening and stabilization of an emergency medical or psychiatric condition. A contract must also contain a process by which HHSC is required to provide in writing to the organization the fiscal impact on the state and the organizations of proposed Medicaid managed care program, benefit, or contract changes, and to negotiate in good faith regarding appropriate operational and financial changes to the contract before implementing those changes (Sec. 533.005). C.S.S.B. 1156 requires HHSC before renewing a contract with an organization to consider the organization's contract and statutory compliance, administrative processes, financial performance, participation in CHIP, and the level of satisfaction of recipients and health care providers with the organization (Sec. 533.0051). The bill authorizes HHSC to prohibit a Medicaid recipient from disenrolling in a managed care plan and enrolling in another plan during the 12-month period after the recipient originally enrolls, except that the recipient may do so at any time before the 91st day after original enrollment. HHSC is required to allow a recipient to disenroll at any time for cause in accordance with federal law (Sec. 533.0076). C.S.S.B. 1156 requires HHSC to collaborate with organizations that contract with HHSC to develop a uniform screening tool to identify adult recipients with disabilities or chronic health conditions and to assist the recipients in accessing health care services. HHSC, in cooperation with TDH, is required by rule to adopt criteria by which to classify a child with certain health conditions as a child with special health care needs. The bill requires HHSC, in cooperation with TDH, to: _monitor and assess health care services provided under Medicaid and the Medicaid managed care program to children with special health care needs; _adopt specific quality of care standards applicable to health care services provided under the Medicaid managed care program to children with special health care needs; and _undertake initiatives to develop, test, and implement optimum methods for delivery of appropriate, comprehensive, and cost-effective health care services under the Medicaid managed care program to children with special health care needs (Sec. 533.0091). The bill prohibits HHSC from using encounter data in determining premium payment rates and other amounts paid to managed care organizations under a managed care plan unless the data is certified as set forth in the bill (Sec. 533.0131). The bill requires HHSC to require a health and human services agency (agency) implementing the Medicaid managed care program to provide to each other agency implementing the program information reported to that agency by an organization or health care provider providing services to recipients. The bill requires HHSC, each agency, and the Texas Department of Insurance (TDI) to share certain confidential information, except as provided by federal law. The information remains confidential and not subject to disclosure (Sec. 533.016). C.S.S.B. 1156 requires HHSC to: _streamline on-site inspection procedures of organizations; _streamline reporting requirements for organizations; _require organizations to streamline administrative processes required of health care providers; and _designate one entity to which organizations may report encounter data (Sec. 533.017). The bill requires HHSC, TDI, and, if appropriate, health and human services agencies to enter into a memorandum of understanding no later than March 1, 2002 that outlines methods to maximize interagency coordination and eliminate and prevent duplicative monitoring, regulation, and enforcement policies and processes. The bill sets forth the content of the memorandum of understanding (Sec. 533.018 and SECTION 22). The bill prohibits HHSC and TDI and contractors of HHSC or TDI from scheduling, initiating, preparing for, or conducting certain reviews, audits, or examinations of organizations contracting with HHSC until each entity enters into the memorandum of understanding and provides the memorandum to the organizations. HHSC and TDI are authorized to take any action authorized by law to protect the safety of a recipient or with respect to a managed care organization determined to be in hazardous financial condition (Sec. 533.017). The bill also requires HHSC and TDI to develop no later than March 1, 2002 an operational and financial audit instrument to be used for such reviews. The bill authorizes HHSC and TDI to contract on a competitive bid basis with a consultant not affiliated with either agency to develop the instrument (Sec. 533.019 and SECTION 22). C.S.S.B. 1156 requires HHSC, in consultation with physicians, hospitals, and organizations, to develop a process by which the organizations eliminate preauthorization processes for routine services and a process by which to notify health care providers of services that do not require preauthorization (Sec. 533.020). The bill requires HHSC to the extent allowed by federal law to require an organization that provides services through a primary care case management network to conduct a utilization review of those services (Sec. 533.0201). The bill sets forth requirements for notifications of determination (Sec. 533.0202). C.S.S.B. 1156 requires HHSC in cooperation with TDI and any other appropriate entity to collect complaint data regarding organizations. The bill sets forth reporting requirements of complaint data (Sec. 533.0203). HHSC is required to collaborate with organizations and health care providers under the organization's provider networks to develop incentives and mechanisms to encourage providers to report complete and accurate encounter data to managed care organizations in a timely manner (Sec. 533.0204). The bill requires the person acting as the state Medicaid director to appoint no later than January 1, 2002 a person as the certifier of encounter data and sets forth the individual's qualifications and duties. HHSC is required to make available to the certifier all appropriate data and records (Secs. 533.0205 and 533.0206, and SECTION 22). The bill specifies that before implementing a Medicaid managed care plan that uses capitation as a method of payment in a county with a population of less than 100,000, HHSC must determine that implementation is economically efficient. HHSC is authorized to continue such a plan in a county if the plan was in progress on January 1, 2001 (Sec. 533.0207). C.S.S.B. 1156 authorizes HHSC and the Texas Department of Mental Health and Mental Retardation (MHMR) to establish a program that uses direct contracting with local mental health and mental retardation authorities to allow the authorities to manage all federal, state, and local matching funds for community mental health services. The bill sets forth the duties of an authority. MHMR is required to adopt rules to implement the program (Sec. 533.0208). The bill expands the composition of the state Medicaid managed care advisory committee to include representatives of medically underserved communities and community mental health and mental retardation centers (Sec. 533.041). C.S.S.B. 1156 requires the commissioner of health and human services to conduct a study regarding the feasibility of expanding Medicaid to provide assistance to disabled children under 18 in accordance with federal law. The bill sets forth requirements for the study and related reports and recommendations (SECTION 24). EFFECTIVE DATE September 1, 2001. SECTION 6 takes effect August 31, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.B. 1156 differs from the original by prohibiting the Health and Human Services Commission (HHSC) from limiting benefits for the number of medications prescribed to a Medicaid recipient of prescription drug benefits and from requiring a pharmacy participating in the Medicaid vendor drug program to collect payments (Sec. 32.024, Human Resources Code). The substitute adds provisions related to treatment for breast or cervical cancer, Medicaid for qualified aliens and independent foster care adolescents, contracting for Medicaid eligibility services, and nurse first assistants (Secs. 32.0247, 32.0248, 32.0252 and 32.0271). The substitute adds provisions related to demonstration projects for reducing claims processing costs, HIV/AIDS, individuals with incomes at or below 200 percent of the federal poverty level, preventive health and family planning services for women, and homeless persons (Secs. 32.029, 32.054, 32.055, and 32.056, Human Resources Code, and Sec. 531.057, Government Code). The substitute adds provisions related to the enrollment of individuals who are eligible for Medicaid in a group health benefit plan (Sec. 32.0422, Human Resources Code, and Art. 21.52K, Insurance Code). The substitute adds provisions related to a program of all-inclusive care for the elderly and a migrant care network (Sec. 32.057, Human Resources Code, and Sec. 531.056, Government Code). The substitute requires HHSC when developing and implementing strategies to improve management of the cost, quality, and use of services provided under the Medicaid program to consult with affected parties (Sec. 531.02103). The substitute requires HHSC to ensure that Medicaid policies, processes, and time frames are designed to minimize the time that an applicant or recipient is required to wait before receiving services (Sec. 531.02104). The substitute requires HHSC to simplify specified aspects of the Texas Health Steps program and to establish monthly limits on the total amount of copayments and other cost-sharing requirements (Secs. 531.02105 and 531.02106). The substitute requires HHSC to conduct a Medicaid community outreach program (Sec. 531.02131). The substitute expands the content of the Medicaid reimbursement rates report (Sec. 531.055). The substitute authorizes HHSC to develop a health care delivery system that restructures the delivery of health care services provided under the state Medicaid program (Sec. 533.002). The substitute requires the commissioner of insurance to adopt rules to carry out TDI's functions under the Medicaid managed care program (Sec. 533.0023). The substitute adds provisions related to contracts with managed care organizations (Secs. 533.003, 533.0035, 533.005, and 533.0051, Government Code). The substitute authorizes HHSC to prohibit a Medicaid recipient from disenrolling in a managed care plan and enrolling in another during a 12-month period under certain circumstances (Sec. 533.0076). The substitute adds provisions related to uniform screening tools, children with special healthcare needs, encounter data, confidential information, reviews of managed care organizations, preauthorization processes, utilization reviews, complaint data, and encounter data under the Medicaid manage care program (Secs. 533.0091, 533.0131, 533.016, 533.020, and 533.0201-533.0206, Government Code). The substitute modifies the requirements for HHSC to reduce and coordinate reporting requirements and inspection procedures for managed care organizations (Sec. 533.017). The substitute specifies that before implementing a Medicaid managed care plan that uses capitation as a method of payment in a county with a population with less than 100,000, HHSC must determine that implementation is economically efficient (Sec. 533.0207). The substitute authorizes HHSC and the Texas Department of Mental Health and Mental Retardation (MHMR) to establish a program that uses direct contracting with local mental health and mental retardation authorities (Sec. 533.0208). The substitute expands the composition of the state Medicaid managed care advisory committee (Sec. 533.041). The substitute requires the commissioner of health and human services to conduct a study regarding the feasibility of expanding Medicaid to provide assistance to disabled children (SECTION 24). The substitute removes provisions in the original requiring HHSC to establish a provider reimbursement methodology that recognizes and rewards high volume providers. The substitute modifies what the strategies for improving budget certainty and cost savings in Medicaid may include (Sec. 531.02103, Government Code). The substitute authorizes HHSC to contract for eligibility services for the psychotropic medications demonstration project (Sec. 32.053, Human Resources Code). The substitute provides for the transfer of the administration of Medicaid acute care services or the Medicaid vendor drug program rather than the entire Medicaid program from TDH to HHSC (SECTION 25).