By:  Zaffirini, et al.                                S.B. No. 1156
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the state Medicaid program.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 32.024, Human Resources Code, is amended
 1-5     by adding Subsection (x) to read as follows:
 1-6           (x)  In its rules and standards governing the vendor drug
 1-7     program, the department shall provide for cost-sharing by
 1-8     recipients of prescription drug benefits under the medical
 1-9     assistance program in a manner that ensures that recipients with
1-10     higher levels of income are required to pay progressively higher
1-11     percentages of the costs of prescription drugs.
1-12           SECTION 2.  Section 32.028, Human Resources Code, is amended
1-13     by adding Subsection (g) to read as follows:
1-14           (g)  The department in its adoption of reasonable rules and
1-15     standards governing the allocation of any funds appropriated for
1-16     rate increases for physician services and outpatient hospital
1-17     services shall establish a provider reimbursement methodology that
1-18     recognizes and rewards high volume providers, with an emphasis on
1-19     providers located in areas of this state where medical assistance
1-20     payments are particularly vital to the health care delivery system.
1-21           SECTION 3.  Subchapter B, Chapter 32, Human Resources Code,
1-22     is amended by adding Section 32.053 to read as follows:
1-23           Sec. 32.053.  DEMONSTRATION PROJECT FOR CERTAIN MEDICATIONS
1-24     AND RELATED SERVICES.  (a)  The department shall establish a
1-25     demonstration project to provide to a person through the medical
 2-1     assistance program psychotropic medications and related laboratory
 2-2     and medical services necessary to conform to a prescribed medical
 2-3     regime for those medications.
 2-4           (b)  A person is eligible to participate in the demonstration
 2-5     project if the person:
 2-6                 (1)  has been diagnosed as having a mental impairment,
 2-7     including schizophrenia or bipolar disorder, that is expected to
 2-8     cause the person to become a disabled individual, as defined by
 2-9     Section 1614(a) of the federal Social Security Act (42 U.S.C.
2-10     Section 1382c(a)), as amended;
2-11                 (2)  is at least 19 years of age, but not more than 64
2-12     years of age;
2-13                 (3)  has a net family income that is at or below 200
2-14     percent of the federal poverty level;
2-15                 (4)  is not covered by a health benefits plan offering
2-16     adequate coverage, as determined by the department; and
2-17                 (5)  is not otherwise eligible for medical assistance
2-18     at the time the person's eligibility for participation in the
2-19     demonstration project is determined.
2-20           (c)  Notwithstanding any other provision of this section, the
2-21     department shall provide each participant in the demonstration
2-22     project with a 12-month period of continuous eligibility for
2-23     participation in the project.
2-24           (d)  Participation in the demonstration project does not
2-25     entitle a participant to other services provided under the medical
2-26     assistance program.
 3-1           (e)  The department shall establish an appropriate enrollment
 3-2     limit for the demonstration project and may not allow participation
 3-3     in the project to exceed that limit.  Once the limit is reached,
 3-4     the department shall establish a waiting list for enrollment in the
 3-5     demonstration project.
 3-6           (f)  To the extent permitted by federal law, the department
 3-7     may require a participant in the demonstration project to make
 3-8     cost-sharing payments for services provided through the project.
 3-9           (g)  To the maximum extent possible, the department shall use
3-10     existing resources to fund the demonstration project.
3-11           (h)  Not later than December 1 of each even-numbered year,
3-12     the department shall submit a biennial report to the legislature
3-13     regarding the department's progress in establishing and operating
3-14     the demonstration project.
3-15           (i)  Not later than December 1, 2006, the department shall
3-16     evaluate the cost-effectiveness of the demonstration project,
3-17     including whether the preventive drug treatments and related
3-18     services provided under the project offset future long-term care
3-19     costs for project participants.  If the results of the evaluation
3-20     indicate that the project is cost-effective, the department shall
3-21     incorporate a request for funding for the continuation of the
3-22     program in the department's budget request for the next state
3-23     fiscal biennium.
3-24           (j)  This section expires September 1, 2009.
3-25           SECTION 4.  Subchapter B, Chapter 531, Government Code, is
3-26     amended by adding Sections 531.02101, 531.02102, and 531.02103 to
 4-1     read as follows:
 4-2           Sec. 531.02101.  TRANSFER AUTHORITY RELATING TO
 4-3     ADMINISTRATION OF MEDICAID PROGRAM.  (a)  To the extent that
 4-4     reorganization is necessary to achieve the goals of increased
 4-5     administrative efficiency, increased accountability, or cost
 4-6     savings in the Medicaid program or to otherwise improve the health
 4-7     of residents of this state, the commission, subject to Subsection
 4-8     (b), may transfer any power, duty, function, program, activity,
 4-9     obligation, right, contract, record, employee, property, or
4-10     appropriation or other money relating to administration of the
4-11     Medicaid program from a health and human services agency to the
4-12     commission.
4-13           (b)  A transfer authorized by Subsection (a) may not take
4-14     effect unless approved by the Medicaid legislative oversight
4-15     committee created under Section 531.02102.
4-16           (c)  The commission must notify the Legislative Budget Board
4-17     and the governor's office of budget and planning not later than the
4-18     30th day before the effective date of a transfer authorized by
4-19     Subsection (a).
4-20           Sec. 531.02102.  MEDICAID LEGISLATIVE OVERSIGHT COMMITTEE.
4-21     (a)  The Medicaid legislative oversight committee is composed of:
4-22                 (1)  three members of the senate appointed by the
4-23     lieutenant governor; and
4-24                 (2)  three members of the house of representatives
4-25     appointed by the speaker of the house of representatives.
4-26           (b)  A member of the Medicaid legislative oversight committee
 5-1     serves at the pleasure of the appointing official.
 5-2           (c)  The lieutenant governor and speaker of the house of
 5-3     representatives shall appoint the presiding officer of the Medicaid
 5-4     legislative oversight committee on an alternating basis.  The
 5-5     presiding officer shall serve a two-year term expiring February 1
 5-6     of each odd-numbered year.
 5-7           (d)  The Medicaid legislative oversight committee shall:
 5-8                 (1)  meet not more than quarterly at the call of the
 5-9     presiding officer; and
5-10                 (2)  review and approve or reject any transfer proposed
5-11     by the commission of a power, duty, function, program, activity,
5-12     obligation, right, contract, record, employee, property, or
5-13     appropriation or other money relating to administration of the
5-14     Medicaid program from a health and human services agency to the
5-15     commission.
5-16           (e)  The Medicaid legislative oversight committee may use
5-17     staff of standing committees in the senate and house of
5-18     representatives with appropriate jurisdiction, the Department of
5-19     Information Resources, the state auditor, the Texas Legislative
5-20     Council, and the Legislative Budget Board in carrying out its
5-21     responsibilities.
5-22           Sec. 531.02103.  MEDICAID PROGRAM:  STRATEGIES FOR IMPROVING
5-23     BUDGET CERTAINTY AND COST SAVINGS.  To achieve administrative
5-24     efficiency and cost savings in the Medicaid program, the commission
5-25     shall develop and implement strategies to improve management of the
5-26     cost, quality, and use of services provided under the program.  The
 6-1     strategies developed and implemented under this section may
 6-2     include:
 6-3                 (1)  imposition of copayments for services provided
 6-4     under the program; and
 6-5                 (2)  use of procurement initiatives such as selective
 6-6     contracting as a mechanism for obtaining provider services under
 6-7     the program.
 6-8           SECTION 5.  Subsection (d), Section 531.0214, Government
 6-9     Code, is amended to read as follows:
6-10           (d)  The commission shall develop the database system in a
6-11     manner that will enable a complete analysis of the use of
6-12     prescription medications[, including information relating to:]
6-13                 [(1)  Medicaid clients for whom more than three
6-14     medications have been prescribed; and]
6-15                 [(2)  the medical effect denial of Medicaid coverage
6-16     for more than three medications has had on Medicaid clients].
6-17           SECTION 6.  Subsection (a), Section 531.026, Government Code,
6-18     is amended to read as follows:
6-19           (a)  The commission shall prepare and submit to the
6-20     lieutenant governor, the speaker of the house of representatives,
6-21     the comptroller, the Legislative Budget Board, [and] the governor's
6-22     office of budget and planning, each member of the appropriations
6-23     committees of the senate and house of representatives, and each
6-24     member of the standing committees of the senate and house of
6-25     representatives with responsibility for oversight of health and
6-26     human services issues [governor] a consolidated health and human
 7-1     services budget recommendation not later than October 15 of each
 7-2     even-numbered year.
 7-3           SECTION 7.  Subchapter B, Chapter 531, Government Code, is
 7-4     amended by adding Section 531.0261 to read as follows:
 7-5           Sec. 531.0261.  CONSOLIDATED MEDICAID APPROPRIATIONS REQUEST.
 7-6     (a)  The commission shall include in the consolidated budget
 7-7     recommendation required by Section 531.026 a consolidated Medicaid
 7-8     appropriations request for the subsequent fiscal biennium.
 7-9           (b)  The commission shall:
7-10                 (1)  develop the consolidated Medicaid appropriations
7-11     request with input from the Legislative Budget Board and the
7-12     governor's office of budget and planning to ensure that relevant
7-13     information for acute and long-term care Medicaid programs relating
7-14     to caseloads, costs, measures, rates, waivers, and eligibility is
7-15     reflected; and
7-16                 (2)  to assist in the legislative appropriations
7-17     process, revise the consolidated Medicaid appropriations request
7-18     each time that revised caseload and cost estimates relating to the
7-19     Medicaid program are prepared.
7-20           SECTION 8.  Subchapter B, Chapter 531, Government Code, is
7-21     amended by adding Section 531.0272 to read as follows:
7-22           Sec. 531.0272.  COMPREHENSIVE MEDICAID OPERATING BUDGET;
7-23     QUARTERLY EXPENDITURE REPORTS.  (a)  The commission shall prepare a
7-24     comprehensive Medicaid operating budget at the beginning of each
7-25     fiscal year, with input as appropriate from each health and human
7-26     services agency that receives legislative appropriations relating
 8-1     to the Medicaid program.
 8-2           (b)  The commission shall monitor all Medicaid expenditures
 8-3     by the commission and health and human services agencies and submit
 8-4     quarterly Medicaid expenditure reports to the lieutenant governor,
 8-5     the speaker of the house of representatives, the comptroller, the
 8-6     Legislative Budget Board, the governor's office of budget and
 8-7     planning, each member of the appropriations committees of the
 8-8     senate and house of representatives, and each member of the
 8-9     standing committees of the senate and house of representatives with
8-10     responsibility for oversight of health and human services issues.
8-11           (c)  The commission shall prepare the comprehensive Medicaid
8-12     operating budget and quarterly Medicaid expenditure reports with
8-13     input from the Legislative Budget Board and the governor's office
8-14     of budget and planning to ensure that the information described by
8-15     Section 531.0261(b)(1) is reflected.
8-16           SECTION 9.  Subchapter B, Chapter 531, Government Code, is
8-17     amended by adding Section 531.055 to read as follows:
8-18           Sec. 531.055.  MEDICAID REIMBURSEMENT RATES REPORT.  Not
8-19     later than December 1 of each even-numbered year, the commission
8-20     shall prepare and deliver to the governor, lieutenant governor,
8-21     speaker of the house of representatives, and each member of the
8-22     legislature a report that:
8-23                 (1)  identifies the Medicaid reimbursement rates for
8-24     each county in this state; and
8-25                 (2)  compares the state's Medicaid reimbursement rates
8-26     to the Medicaid reimbursement rates of the top 15 industrial states
 9-1     as ranked by the United States Department of Commerce Bureau of
 9-2     Economic Analysis based on gross state product.
 9-3           SECTION 10.  Subchapter A, Chapter 533, Government Code, is
 9-4     amended by adding Sections 533.0055 and 533.016 to read as follows:
 9-5           Sec. 533.0055.  EVALUATION OF REPORTING REQUIREMENTS AND
 9-6     INSPECTION PROCEDURES.  (a)  The commission shall:
 9-7                 (1)  evaluate on-site inspection procedures of managed
 9-8     care organizations contracting with the commission under this
 9-9     chapter and evaluate methods to streamline those procedures to
9-10     assist the commission in determining necessary and effective
9-11     quality control measures and required data;
9-12                 (2)  evaluate methods to streamline reporting
9-13     requirements for managed care organizations contracting with the
9-14     commission under this chapter, including:
9-15                       (A)  combining information required to be
9-16     reported into a quarterly management report;
9-17                       (B)  eliminating unnecessary or duplicative
9-18     reporting requirements; and
9-19                       (C)  requiring managed care organizations to use
9-20     uniform forms developed by the commission for referrals for
9-21     services and credentialing of health care providers providing
9-22     health care services to recipients; and
9-23                 (3)  require managed care organizations contracting
9-24     with the commission under this chapter to evaluate reporting
9-25     requirements for health care providers to identify methods of
9-26     reducing the administrative burden placed on the providers,
 10-1    including:
 10-2                      (A)  reducing the complexity of forms health care
 10-3    providers are required to complete; and
 10-4                      (B)  eliminating unnecessary or duplicative
 10-5    reporting requirements.
 10-6          (b)  The commission shall submit a report to the legislature
 10-7    regarding the evaluation of and methods for streamlining on-site
 10-8    inspection procedures and reporting requirements for managed care
 10-9    organizations and health care providers providing health care
10-10    services to recipients.  The report must include recommendations on
10-11    which methods should be implemented and a schedule for
10-12    implementation.
10-13          (c)  This section expires September 1, 2002.
10-14          Sec. 533.016.  INTERAGENCY SHARING OF INFORMATION.  The
10-15    commission shall require a health and human services agency
10-16    implementing the Medicaid managed care program to provide to each
10-17    other health and human services agency implementing the Medicaid
10-18    managed care program information reported to that agency by a
10-19    managed care organization or health care provider providing
10-20    services to recipients.
10-21          SECTION 11.  On January 1, 2002, or on an earlier date
10-22    specified by the Health and Human Services Commission:
10-23                (1)  all powers, duties, functions, programs,
10-24    activities, obligations, rights, contracts, records, employees,
10-25    property, and appropriations and other money of the Texas
10-26    Department of Health that are determined by the commissioner of
 11-1    health and human services to be essential to the administration of
 11-2    the Medicaid program are transferred to the Health and Human
 11-3    Services Commission;
 11-4                (2)  a rule or form adopted by the Texas Department of
 11-5    Health that relates to a transferred component of the Medicaid
 11-6    program is a rule or form of the Health and Human Services
 11-7    Commission and remains in effect until altered by the commission;
 11-8                (3)  a reference in law or an administrative rule to
 11-9    the Texas Department of Health that relates to a transferred
11-10    component of the Medicaid program means the Health and Human
11-11    Services Commission;
11-12                (4)  a license, permit, or certification in effect that
11-13    was issued by the Texas Department of Health that relates to a
11-14    transferred component of the Medicaid program is continued in
11-15    effect as a license, permit, or certification of the Health and
11-16    Human Services Commission; and
11-17                (5)  a complaint, investigation, or other proceeding
11-18    pending before the Texas Department of Health that relates to a
11-19    transferred component of the Medicaid program is transferred
11-20    without change in status to the Health and Human Services
11-21    Commission.
11-22          SECTION 12.  The state agency responsible for implementing
11-23    the demonstration project required by Section 32.053, Human
11-24    Resources Code, as added by this Act, shall request and actively
11-25    pursue any necessary waivers or authorizations from the Health Care
11-26    Financing Administration or other appropriate entities to enable
 12-1    the agency to implement the demonstration project not later than
 12-2    September 1, 2002.  The agency may delay implementing the
 12-3    demonstration project until the necessary waivers or authorizations
 12-4    are granted.
 12-5          SECTION 13.  The Health and Human Services Commission shall
 12-6    submit the report required by Subsection (b), Section 533.0055,
 12-7    Government Code, as added by this Act, not later than November 1,
 12-8    2002.
 12-9          SECTION 14.  As soon as possible after the effective date of
12-10    this Act, the lieutenant governor and speaker of the house of
12-11    representatives shall appoint the members of the Medicaid
12-12    legislative oversight committee created by Section 531.02102,
12-13    Government Code, as added by this Act.  The lieutenant governor
12-14    shall appoint the initial presiding officer of the committee.
12-15          SECTION 15.  (a)  Subject to Subsection (b) of this section,
12-16    if before implementing any provision of this Act a state agency
12-17    determines that a waiver or authorization from a federal agency is
12-18    necessary for implementation of that provision, the agency affected
12-19    by the provision shall request the waiver or authorization and may
12-20    delay implementing that provision until the waiver or authorization
12-21    is granted.
12-22          (b)  Implementation of Section 32.053, Human Resources Code,
12-23    as added by this Act, is governed by Section 12 of this Act.
12-24          SECTION 16.  (a)  Except as provided by Subsection (b) of
12-25    this section, this Act takes effect September 1, 2001, and applies
12-26    to a person receiving medical assistance on or after that date
 13-1    regardless of the date on which the person began receiving that
 13-2    medical assistance.
 13-3          (b)  Sections 3, 10, and 12 of this Act take effect
 13-4    immediately if this Act receives a vote of two-thirds of all the
 13-5    members elected to each house, as provided by Section 39, Article
 13-6    III, Texas Constitution.  If this Act does not receive the vote
 13-7    necessary for immediate effect, Sections 3, 10, and 12 of this Act
 13-8    take effect September 1, 2001.