1-1     By:  Naishtat, Wohlgemuth, et al.                     H.B. No. 1001
 1-2          (Senate Sponsor - Zaffirini)
 1-3           (In the Senate - Received from the House April 26, 2001;
 1-4     April 27, 2001, read first time and referred to Committee on Health
 1-5     and Human Services; May 8, 2001, reported adversely, with favorable
 1-6     Committee Substitute by the following vote:  Yeas 8, Nays 0;
 1-7     May 8, 2001, sent to printer.)
 1-8     COMMITTEE SUBSTITUTE FOR H.B. No. 1001                By:  Moncrief
 1-9                            A BILL TO BE ENTITLED
1-10                                   AN ACT
1-11     relating to the review of the reimbursement methodology for and
1-12     resource needs of nursing facilities.
1-13           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14           SECTION 1.  REVIEW OF REIMBURSEMENT RATES. (a)  Subject to
1-15     the availability of funds, the Health and Human Services
1-16     Commission, in conjunction with the Texas Department of Human
1-17     Services, shall evaluate the methodology used for determining
1-18     Medicaid reimbursement rates for nursing facilities.  The
1-19     commission and department shall:
1-20                 (1)  consider including legitimate costs of doing
1-21     business that are not currently included in the reimbursement rate;
1-22     and
1-23                 (2)  explore methods to adjust the reimbursement rate
1-24     to account for sudden increases in liability insurance rates and
1-25     other costs of doing business.
1-26           (b)  The Health and Human Services Commission, in conjunction
1-27     with the Texas Department of Human Services, shall:
1-28                 (1)  evaluate the effectiveness of the Medicaid nursing
1-29     facility reimbursement rate methodology to provide incentives for
1-30     increased direct staffing;
1-31                 (2)  examine the possibility of adding incentives to
1-32     Medicaid reimbursement rates for increased spending to improve the
1-33     diet of residents and other increased spending to improve the
1-34     quality of care and quality of life for residents;
1-35                 (3)  examine the possibility of developing a system of
1-36     adjusted Medicaid reimbursement for nursing facilities that rewards
1-37     a higher level of performance based on quality indicators;
1-38                 (4)  examine and consider adopting a means of
1-39     mitigating recoupment from nursing homes that fail to meet the
1-40     direct care spending requirements but provide a higher quality of
1-41     care, based on indicators determined appropriate by the Health and
1-42     Human Services Commission;
1-43                 (5)  examine any inadequacies of the current flat-rate
1-44     system in accounting for regional and facility-specific differences
1-45     in the cost of providing care and explore alternatives to the
1-46     flat-rate system that better account for those differences; and
1-47                 (6)  examine all the current methodology components,
1-48     including inflation factors and occupancy adjustments.
1-49           (c)  In measuring the level of performance under Subsection
1-50     (b)(3) of this section, the criteria that should be examined should
1-51     include:
1-52                 (1)  a quality of care index that could include the
1-53     factors listed under Section 242.403(a), Health and Safety Code;
1-54                 (2)  a customer satisfaction index;
1-55                 (3)  a resolved complaint index; and
1-56                 (4)  any other criteria the commission considers
1-57     appropriate for examination.
1-58           SECTION 2.  REVIEW OF TILE CLASSIFICATION SYSTEM. (a)
1-59     Subject to the availability of funds, the Health and Human Services
1-60     Commission, in conjunction with the Texas Department of Human
1-61     Services, shall evaluate the Texas Index for Level of Effort
1-62     classification system used to quantify the intensity of the care
1-63     needs of individuals in nursing facilities and to assign daily
1-64     reimbursement rates for that care to determine whether the system
 2-1     accurately accounts for the care needs of patients with dementia,
 2-2     including patients with Alzheimer's disease.
 2-3           (b)  In conducting the evaluation of the Texas Index for
 2-4     Level of Effort classification system, the Health and Human
 2-5     Services Commission shall seek the input of relevant professionals
 2-6     and other individuals or organizations with expertise in caring for
 2-7     people with dementia, including Alzheimer's disease.
 2-8           SECTION 3.  REPORT TO LEGISLATURE. The Health and Human
 2-9     Services Commission shall report the results of the evaluations
2-10     conducted under this Act to the governor, the lieutenant governor,
2-11     and the speaker of the house of representatives not later than
2-12     September 1, 2002.
2-13           SECTION 4.  EFFECTIVE DATE. This Act takes effect September
2-14     1, 2001.
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