By Naishtat                                           H.B. No. 1001
         77R1614 MCK-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the review of the reimbursement methodology for and
 1-3     resource needs of nursing facilities.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  REVIEW OF REIMBURSEMENT RATES. (a)  The Health
 1-6     and Human Services Commission, in conjunction with the Texas
 1-7     Department of Human Services, shall evaluate the methodology used
 1-8     for determining Medicaid reimbursement rates for nursing
 1-9     facilities.  The commission and department shall:
1-10                 (1)  consider including legitimate costs of doing
1-11     business that are not currently included in the reimbursement rate;
1-12     and
1-13                 (2)  explore methods to adjust the reimbursement rate
1-14     to account for sudden increases in liability insurance rates and
1-15     other costs of doing business.
1-16           (b)  The Health and Human Services Commission, in conjunction
1-17     with the Texas Department of Human Services, shall:
1-18                 (1)  evaluate the effectiveness of the Medicaid nursing
1-19     facility reimbursement rate methodology to provide incentives for
1-20     increased direct staffing; and
1-21                 (2)  examine the possibility of adding incentives to
1-22     Medicaid reimbursement rates for increased spending to improve the
1-23     diet of residents and other increased spending to improve the
1-24     quality of care and quality of life for residents.
 2-1           SECTION 2.  REVIEW OF TILE CLASSIFICATION SYSTEM. The Health
 2-2     and Human Services Commission, in conjunction with the Texas
 2-3     Department of Human Services, shall evaluate the Texas Index for
 2-4     Level of Effort classification system used to quantify the
 2-5     intensity of the care needs of individuals in nursing facilities
 2-6     and to assign daily reimbursement rates for that care to determine
 2-7     whether the system accurately accounts for the care needs of
 2-8     patients with dementia, including patients with Alzheimer's
 2-9     disease.
2-10           SECTION 3.  REPORT TO LEGISLATURE. The Health and Human
2-11     Services Commission shall report the results of the evaluations
2-12     conducted under this Act to the governor, the lieutenant governor,
2-13     and the speaker of the house of representatives not later than
2-14     December 1, 2002.
2-15           SECTION 4.  EFFECTIVE DATE. This Act takes effect September
2-16     1, 2001.