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 Subsections (x) and (y) to read as follows:
 1-6           (x)  In its rules and standards governing the vendor drug
 1-7     program, and in accordance with Section 531.02106, Government Code,
 1-8     the department shall provide for cost-sharing by recipients of
 1-9     prescription drug benefits under the medical assistance program in
1-10     a manner that ensures that recipients with higher levels of income
1-11     are required to pay progressively higher percentages of the costs
1-12     of prescription drugs.  In implementing cost-sharing provisions
1-13     required by this subsection, the department may not require a
1-14     pharmacy participating in the vendor drug program to collect
1-15     copayments or other cost-sharing payments from recipients for
1-16     remittance to the department, but shall allow the pharmacy to
1-17     retain the payments as a component of the reimbursement provided to
1-18     the pharmacy under the program.
1-19           (y)  The department shall provide hyperbaric oxygen therapy
1-20     to the extent permitted by federal law.
1-21           SECTION 2.  Subchapter B, Chapter 32, Human Resources Code,
1-22     is amended by adding Section 32.0247 to read as follows:
1-23           Sec. 32.0247.  ELIGIBILITY OF CERTAIN ALIENS.  (a)  The
1-24     department shall provide medical assistance in accordance with 8
1-25     U.S.C. Section 1612(b), as amended, to a person who:
 2-1                 (1)  is a qualified alien, as defined by 8 U.S.C.
 2-2     Sections 1641(b) and (c), as amended;
 2-3                 (2)  meets the eligibility requirements of the medical
 2-4     assistance program;
 2-5                 (3)  entered the United States on or after August 22,
 2-6     1996; and
 2-7                 (4)  has resided in the United States for a period of
 2-8     five years after the date the person entered as a qualified alien.
 2-9           (b)  If authorized by federal law, the department shall
2-10     provide pregnancy-related medical assistance to the maximum extent
2-11     permitted by the federal law to a person who is pregnant and is a
2-12     lawfully present alien as defined by 8 C.F.R. Section 103.12, as
2-13     amended, including a battered alien under 8 U.S.C. Section 1641(c),
2-14     as amended, regardless of the date on which the person entered the
2-15     United States.  The department shall comply with any prerequisite
2-16     imposed under the federal law for providing medical assistance
2-17     under this subsection.
2-18           SECTION 3.  Subchapter B, Chapter 32, Human Resources Code,
2-19     is amended by adding Section 32.0252 to read as follows:
2-20           Sec. 32.0252.  CONTRACT TO PROVIDE ELIGIBILITY DETERMINATION
2-21     SERVICES.  (a)  To the extent allowed by federal law, and except as
2-22     otherwise provided by this section, the department may contract for
2-23     the provision of medical assistance eligibility services with:
2-24                 (1)  a hospital district created under the authority of
2-25     Sections 4-11, Article IX, Texas Constitution;
2-26                 (2)  a hospital authority created under the authority
 3-1     of Chapter 262 or 264, Health and Safety Code, that uses resources
 3-2     to provide health care services to indigent persons to some extent;
 3-3                 (3)  a hospital owned and operated by a municipality or
 3-4     county or by a hospital authority created under Chapter 262 or 264,
 3-5     Health and Safety Code;
 3-6                 (4)  a medical school operated by this state;
 3-7                 (5)  a medical school that receives state money under
 3-8     Section 61.093, Education Code, or a chiropractic school that
 3-9     receives state money under the General Appropriations Act;
3-10                 (6)  a teaching hospital operated by The University of
3-11     Texas System;
3-12                 (7)  a county that is required to provide health care
3-13     assistance to eligible county residents under Subchapter B, Chapter
3-14     61, Health and Safety Code;
3-15                 (8)  a governmental entity that is required to provide
3-16     money to a public hospital under Section 61.062, Health and Safety
3-17     Code;
3-18                 (9)  a county with a population of more than 400,000
3-19     that provides money to a public hospital and that is not included
3-20     in the boundaries of a hospital district;
3-21                 (10)  a hospital owned by a municipality and leased to
3-22     and operated by a nonprofit hospital for a public purpose;
3-23                 (11)  a hospital that receives Medicaid
3-24     disproportionate share payments;
3-25                 (12)  a community mental health and mental retardation
3-26     center;
 4-1                 (13)  a local mental health or mental retardation
 4-2     authority;
 4-3                 (14)  a local health department or public health
 4-4     district;
 4-5                 (15)  a school-based health center;
 4-6                 (16)  a community health center; and
 4-7                 (17)  a federally qualified health center.
 4-8           (b)  The department may contract with an entity described by
 4-9     Subsection (a) for the entity to designate one or more employees of
4-10     the entity to process medical assistance application forms and
4-11     conduct client interviews for eligibility determinations.
4-12           (c)  Except as provided by Subsection (d), the contract must
4-13     require each designated employee to submit completed application
4-14     forms to the appropriate agency as determined by the department to
4-15     finally determine eligibility and to enroll eligible persons in the
4-16     program.  A designated employee may not make a final determination
4-17     of eligibility or enroll an eligible person in the program.
4-18           (d)  Notwithstanding Subsection (c), the commissioner may
4-19     apply for federal authorization to allow a designated employee of
4-20     an entity described by Subsection (a) to make a final determination
4-21     of eligibility or enroll an eligible person in the program.
4-22           (e)  The department may:
4-23                 (1)  monitor the eligibility and application processing
4-24     program used by an entity with which the department contracts; and
4-25                 (2)  provide on-site supervision of the program for
4-26     quality control.
 5-1           (f)  The Health and Human Services Commission shall ensure
 5-2     that there are adequate protections to avoid a conflict of interest
 5-3     with an entity described by Subsection (a) that has a contract for
 5-4     eligibility services and also has a contract, either directly or
 5-5     through an affiliated entity, as a managed care organization for
 5-6     the Medicaid program or for the child health plan program under
 5-7     Chapter 62, Health and Safety Code.  The commission shall ensure
 5-8     that there are adequate protections for recipients to freely choose
 5-9     a health plan without being inappropriately induced to join an
5-10     entity's health plan.
5-11           SECTION 4.  Subchapter B, Chapter 32, Human Resources Code,
5-12     is amended by adding Section 32.0271 to read as follows:
5-13           Sec. 32.0271.  SELECTION OF NURSE FIRST ASSISTANT.  (a)  In
5-14     this section, "nurse first assistant" means a registered nurse who:
5-15                 (1)  is certified in perioperative nursing by an
5-16     organization recognized by the Board of Nurse Examiners; and
5-17                 (2)  has completed a nurse first assistant educational
5-18     program approved by an organization recognized by the Board of
5-19     Nurse Examiners.
5-20           (b)  The department shall ensure that a recipient of medical
5-21     assistance may select a nurse first assistant to perform any health
5-22     care service or procedure covered under the medical assistance
5-23     program if:
5-24                 (1)  the selected nurse first assistant is authorized
5-25     by law to perform the service or procedure; and
5-26                 (2)  the physician requests that the service or
 6-1     procedure be performed by the nurse first assistant.
 6-2           (c)  A managed care organization or a managed care plan, as
 6-3     those terms are defined by Section 533.001, Government Code, may
 6-4     not by contract or any other method require a physician to use the
 6-5     services of a nurse first assistant in providing care to a
 6-6     recipient of medical assistance.
 6-7           (d)  The Board of Nurse Examiners may adopt rules governing
 6-8     nurse first assistants for purposes of this section.
 6-9           SECTION 5.  Section 32.028, Human Resources Code, is amended
6-10     by adding Subsection (g) to read as follows:
6-11           (g)  The department in its adoption of reasonable rules and
6-12     standards governing the allocation of any funds appropriated for
6-13     rate increases for physician services and outpatient hospital
6-14     services shall establish a provider reimbursement methodology that
6-15     recognizes and rewards high volume providers, with an emphasis on
6-16     providers located in areas of this state where medical assistance
6-17     payments are particularly vital to the health care delivery system.
6-18           SECTION 6.  Section 32.029, Human Resources Code, is amended
6-19     by adding Subsection (f) to read as follows:
6-20           (f)  The department or its designee may implement
6-21     demonstration projects designed to reduce medical assistance claims
6-22     processing costs.
6-23           SECTION 7.  (a)  Subchapter B, Chapter 32, Human Resources
6-24     Code, is amended by adding Section 32.0422 to read as follows:
6-25           Sec. 32.0422.  HEALTH INSURANCE PREMIUM PAYMENT REIMBURSEMENT
6-26     PROGRAM FOR MEDICAL ASSISTANCE RECIPIENTS.  (a)  In this section:
 7-1                 (1)  "Department" means the Texas Department of Health.
 7-2                 (2)  "Group health benefit plan" has the meaning
 7-3     assigned by Article 21.52K, Insurance Code.
 7-4                 (3)  "Spouse" means a husband, who is a male, or a
 7-5     wife, who is a female.  A member of a civil union or similar
 7-6     relationship entered into in another state between persons of the
 7-7     same sex is not a spouse.
 7-8           (b)  The department shall identify individuals, otherwise
 7-9     entitled to medical assistance, who are eligible to enroll in a
7-10     group health benefit plan.  The department must include individuals
7-11     eligible for or receiving health care services under a Medicaid
7-12     managed care delivery system.
7-13           (c)  The department may require an individual requesting
7-14     medical assistance to provide information as necessary relating to
7-15     the availability of a group health benefit plan to the individual
7-16     through an employer of the individual or an employer of the
7-17     individual's spouse or parent.  The department may not leave
7-18     pending, consider incomplete, or otherwise delay an individual's
7-19     application for medical assistance or request for recertification
7-20     as a result of the requirement authorized by this subsection.
7-21           (d)  For an individual identified under Subsection (b), the
7-22     department shall determine whether it is cost-effective to enroll
7-23     the individual in the group health benefit plan under this section.
7-24           (e)  If the department determines that it is cost-effective
7-25     to enroll the individual in the group health benefit plan, the
7-26     department shall:
 8-1                 (1)  require the individual to apply to enroll in the
 8-2     group health benefit plan as a condition for eligibility under the
 8-3     medical assistance program; and
 8-4                 (2)  provide written notice to the issuer of the group
 8-5     health benefit plan in accordance with Article 21.52K, Insurance
 8-6     Code.
 8-7           (f)  The department shall provide for payment of:
 8-8                 (1)  the employee's share of required premiums for
 8-9     coverage of an individual enrolled in the group health benefit
8-10     plan; and
8-11                 (2)  any deductible, copayment, coinsurance, or other
8-12     cost-sharing obligation imposed on the enrolled individual for an
8-13     item or service otherwise covered under the medical assistance
8-14     program.
8-15           (g)  A payment made by the department under Subsection (f) is
8-16     considered to be a payment for medical assistance.
8-17           (h)  A payment of a premium for an individual who is a member
8-18     of the family of an individual enrolled in a group health benefit
8-19     plan under this section and who is not eligible for medical
8-20     assistance is considered to be a payment for medical assistance for
8-21     an eligible individual if:
8-22                 (1)  enrollment of the family members who are eligible
8-23     for medical assistance is not possible under the plan without also
8-24     enrolling members who are not eligible; and
8-25                 (2)  the department determines it to be cost-effective.
8-26           (i)  A payment of any deductible, copayment, coinsurance, or
 9-1     other cost-sharing obligation of a family member who is enrolled in
 9-2     a group health benefit plan in accordance with Subsection (h) and
 9-3     who is not eligible for medical assistance:
 9-4                 (1)  may not be paid under this chapter; and
 9-5                 (2)  is not considered to be a payment for medical
 9-6     assistance for an eligible individual.
 9-7           (j)  The department shall treat coverage under the group
 9-8     health benefit plan as a third party liability to the program.
 9-9     Enrollment of an individual in a group health benefit plan under
9-10     this section does not affect the individual's eligibility for
9-11     medical assistance benefits, except that the state is entitled to
9-12     payment under Sections 32.033 and 32.038.
9-13           (k)  The department may not require or permit an individual
9-14     who is enrolled in a group health benefit plan under this section
9-15     to participate in the Medicaid managed care program under Chapter
9-16     533, Government Code, or a Medicaid managed care demonstration
9-17     project under Section 32.041.
9-18           (l)  The Texas Department of Human Services shall provide
9-19     information and otherwise cooperate with the department as
9-20     necessary to ensure the enrollment of eligible individuals in the
9-21     group health benefit plan under this section.
9-22           (m)  The department shall adopt rules as necessary to
9-23     implement this section.  In developing rules and related
9-24     procedures, the department shall consult with providers and other
9-25     interested persons to minimize the administrative complexity of the
9-26     program.
 10-1          (b)  Subchapter E, Chapter 21, Insurance Code, is amended by
 10-2    adding Article 21.52K to read as follows:
 10-3          Art. 21.52K.  ENROLLMENT OF MEDICAL ASSISTANCE RECIPIENTS
 10-4          Sec. 1.  DEFINITION OF GROUP HEALTH BENEFIT PLAN.  (a)  In
 10-5    this article, "group health benefit plan" means a plan that
 10-6    provides benefits for medical or surgical expenses incurred as a
 10-7    result of a health condition, accident, or sickness, including a
 10-8    group, blanket, or franchise insurance policy or insurance
 10-9    agreement, a group hospital service contract, or a group evidence
10-10    of coverage or similar group coverage document that is offered by:
10-11                (1)  an insurance company;
10-12                (2)  a group hospital service corporation operating
10-13    under Chapter 20 of this code;
10-14                (3)  a fraternal benefit society operating under
10-15    Chapter 10 of this code;
10-16                (4)  a stipulated premium insurance company operating
10-17    under Chapter 22 of this code;
10-18                (5)  a reciprocal exchange operating under Chapter 19
10-19    of this code;
10-20                (6)  a health maintenance organization operating under
10-21    the Texas Health Maintenance Organization Act (Chapter 20A,
10-22    Vernon's Texas Insurance Code);
10-23                (7)  a multiple employer welfare arrangement that holds
10-24    a certificate of authority under Article 3.95-2 of this code; or
10-25                (8)  an approved nonprofit health corporation that
10-26    holds a certificate of authority under Article 21.52F of this code.
 11-1          (b)  The term "group health benefit plan" includes:
 11-2                (1)  a small employer health benefit plan written under
 11-3    Chapter 26 of this code; and
 11-4                (2)  a plan provided under the Texas Employees Uniform
 11-5    Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
 11-6    Insurance Code), the Texas State College and University Employees
 11-7    Uniform Insurance Benefits Act (Article 3.50-3, Vernon's Texas
 11-8    Insurance Code), the Texas Public School Employees Group Insurance
 11-9    Act (Article 3.50-4, Insurance Code), or a successor of any of
11-10    those plans.
11-11          Sec. 2.  ENROLLMENT REQUIRED.  (a)  The issuer of a group
11-12    health benefit plan, on receipt of written notice from the Texas
11-13    Department of Health or a designee of the Texas Department of
11-14    Health that states that an individual who is otherwise eligible for
11-15    enrollment in the plan is a recipient of medical assistance under
11-16    the state Medicaid program and is a participant in the health
11-17    insurance premium payment reimbursement program for medical
11-18    assistance recipients under Section 32.0422, Human Resources Code,
11-19    shall permit the individual to enroll in the plan without regard to
11-20    any enrollment period restriction.
11-21          (b)  If an individual described by Subsection (a) of this
11-22    section is not eligible to enroll in the plan unless a family
11-23    member of the individual is also enrolled in the plan, the issuer,
11-24    on receipt of the written notice under Subsection (a) of this
11-25    section, shall enroll both the individual and the family member in
11-26    the plan.
 12-1          (c)  Unless enrollment occurs during an established
 12-2    enrollment period, enrollment under this article takes effect on
 12-3    the first day of the calendar month that begins at least 30 days
 12-4    after the date written notice is received by the issuer under
 12-5    Subsection (a) of this section.
 12-6          (d)  Notwithstanding any other requirement of the group
 12-7    health benefit plan, the issuer of the plan shall permit an
 12-8    individual who is enrolled in a group health benefit plan under
 12-9    Subsection (a) of this section, and any family member of the
12-10    individual enrolled under Subsection (b) of this section, to
12-11    terminate enrollment in the plan not later than the 60th day after
12-12    the date on which the individual provides satisfactory proof to the
12-13    issuer that the individual is no longer:
12-14                (1)  a recipient of medical assistance under the state
12-15    Medicaid program; or
12-16                (2)  a participant in the health insurance premium
12-17    payment reimbursement program for medical assistance recipients
12-18    under Section 32.0422, Human Resources Code.
12-19          (c)  Section 301.104, Labor Code, is amended to read as
12-20    follows:
12-21          Sec. 301.104.  ELIGIBILITY.  A person is eligible for the
12-22    refund for wages paid or incurred by the person, during each
12-23    calendar year for which the refund is claimed, only if:
12-24                (1)  the wages paid or incurred by the person are for
12-25    services of an employee who is:
12-26                      (A)  a resident of this state; and
 13-1                      (B)  a recipient of:
 13-2                            (i)  financial assistance and services in
 13-3    accordance with Chapter 31, Human Resources Code; or
 13-4                            (ii)  medical assistance in accordance with
 13-5    Chapter 32, Human Resources Code;
 13-6                (2)  the person satisfies the certification
 13-7    requirements under Section 301.105; and
 13-8                (3)  the person provides and pays for the benefit of
 13-9    the employee a part of the cost of coverage under:
13-10                      (A)  a health plan provided by a health
13-11    maintenance organization established under the Texas Health
13-12    Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
13-13    Code);
13-14                      (B)  a health benefit plan approved by the
13-15    commissioner of insurance; [or]
13-16                      (C)  a self-funded or self-insured employee
13-17    welfare benefit plan that provides health benefits and is
13-18    established in accordance with the Employee Retirement Income
13-19    Security Act of 1974 (29 U.S.C. 1001 et seq.); or
13-20                      (D)  a medical savings account authorized under
13-21    the Health Insurance Portability and Accountability Act of 1996 (26
13-22    U.S.C. Section 220).
13-23          (d)  Section 301.105, Labor Code, is amended to read as
13-24    follows:
13-25          Sec. 301.105.  CERTIFICATION.  A person is not eligible for
13-26    the refund for wages paid or incurred by the person unless the
 14-1    person has received a written certification from the commission
 14-2    that the employee is a recipient of financial assistance and
 14-3    services or medical assistance on or before the day the employee
 14-4    begins employment with the person.
 14-5          (e)  The changes in law made by this section take effect
 14-6    August 31, 2001, and apply only to a group health benefit plan that
 14-7    is delivered, issued for delivery, or renewed on or after that
 14-8    date.  A group health benefit plan that is delivered, issued for
 14-9    delivery, or renewed before August 31, 2001, is governed by the law
14-10    as it existed immediately before that date, and that law is
14-11    continued in effect for that purpose.
14-12          (f)  A person may claim a refund under Section 301.104, Labor
14-13    Code, as amended by this Act, only for wages paid or incurred on or
14-14    after the effective date of this Act.
14-15          SECTION 8.  Subchapter B, Chapter 32, Human Resources Code,
14-16    is amended by adding Section 32.0471 to read as follows:
14-17          Sec. 32.0471.  FAMILY PLANNING COUNSELING SERVICES; PROVIDER
14-18    QUALIFICATIONS.  Notwithstanding Section 503.056, Occupations Code,
14-19    the department shall require that anyone who provides counseling
14-20    services related to family planning services provided under this
14-21    chapter must be:
14-22                (1)  a licensed health care provider or a licensed
14-23    counseling professional; or
14-24                (2)  under the supervision of a licensed health care
14-25    professional or a licensed counseling professional.
14-26          SECTION 9.  (a)  Subchapter B, Chapter 32, Human Resources
 15-1    Code, is amended by adding Sections 32.053 through 32.056 to read
 15-2    as follows:
 15-3          Sec. 32.053.  DEMONSTRATION PROJECT FOR CERTAIN MEDICATIONS
 15-4    AND RELATED SERVICES.  (a)  The department shall establish a
 15-5    demonstration project to provide to a person through the medical
 15-6    assistance program psychotropic medications and related laboratory
 15-7    and medical services necessary to conform to a prescribed medical
 15-8    regime for those medications.
 15-9          (b)  A person is eligible to participate in the demonstration
15-10    project if the person:
15-11                (1)  has been diagnosed as having a mental impairment,
15-12    including schizophrenia or bipolar disorder, that is expected to
15-13    cause the person to become a disabled individual, as defined by
15-14    Section 1614(a) of the federal Social Security Act (42 U.S.C.
15-15    Section 1382c), as amended;
15-16                (2)  is at least 19 years of age, but not more than 64
15-17    years of age;
15-18                (3)  has a net family income that is at or below 200
15-19    percent of the federal poverty level;
15-20                (4)  is not covered by a health benefits plan offering
15-21    adequate coverage, as determined by the department; and
15-22                (5)  is not otherwise eligible for medical assistance
15-23    at the time the person's eligibility for participation in the
15-24    demonstration project is determined.
15-25          (c)  To the extent allowed by federal law, and except as
15-26    otherwise provided by this section, the department may contract for
 16-1    the provision of eligibility services for the demonstration project
 16-2    with a local mental health authority.
 16-3          (d)  Notwithstanding any other provision of this section, the
 16-4    department shall provide each participant in the demonstration
 16-5    project with a 12-month period of continuous eligibility for
 16-6    participation in the project.
 16-7          (e)  Participation in the demonstration project does not
 16-8    entitle a participant to other services provided under the medical
 16-9    assistance program.
16-10          (f)  The department shall establish an appropriate enrollment
16-11    limit for the demonstration project and may not allow participation
16-12    in the project to exceed that limit.  Once the limit is reached,
16-13    the department shall establish a waiting list for enrollment in the
16-14    demonstration project.
16-15          (g)  To the extent permitted by federal law, the department
16-16    may require a participant in the demonstration project to make
16-17    cost-sharing payments for services provided through the project.
16-18          (h)  To the maximum extent possible, the department shall use
16-19    existing resources to fund the demonstration project.
16-20          (i)  Not later than December 1 of each even-numbered year,
16-21    the department shall submit a biennial report to the legislature
16-22    regarding the department's progress in establishing and operating
16-23    the demonstration project.
16-24          (j)  Not later than December 1, 2006, the department shall
16-25    evaluate the cost-effectiveness of the demonstration project,
16-26    including whether the preventive drug treatments and related
 17-1    services provided under the project offset future long-term care
 17-2    costs for project participants.  If the results of the evaluation
 17-3    indicate that the project is cost-effective, the department shall
 17-4    incorporate a request for funding for the continuation of the
 17-5    program in the department's budget request for the next state
 17-6    fiscal biennium.
 17-7          (k)  This section expires September 1, 2012.
 17-8          Sec. 32.054.  DEMONSTRATION PROJECT FOR PERSONS WITH HIV
 17-9    INFECTION OR AIDS.  (a)  In this section, "AIDS" and "HIV" have the
17-10    meanings assigned by Section 81.101, Health and Safety Code.
17-11          (b)  The department shall establish a demonstration project
17-12    to provide a person with HIV infection or AIDS with the following
17-13    services and medications through the medical assistance program:
17-14                (1)  services provided by a physician, physician
17-15    assistant, advanced practice nurse, or other health care provider
17-16    specified by the department;
17-17                (2)  medications not included in the formulary for the
17-18    HIV medication program operated by the department, but determined
17-19    to be necessary for treatment of a condition related to HIV
17-20    infection or AIDS;
17-21                (3)  vaccinations for hepatitis B and pneumonia;
17-22                (4)  pap smears, colposcopy, and other diagnostic
17-23    procedures necessary to monitor gynecologic complications resulting
17-24    from HIV infection or AIDS in women;
17-25                (5)  hospitalization;
17-26                (6)  laboratory and other diagnostic services,
 18-1    including periodic testing for CD4+ T-cell counts, viral load
 18-2    determination, and phenotype or genotype testing if clinically
 18-3    indicated; and
 18-4                (7)  other laboratory and radiological testing
 18-5    necessary to monitor potential toxicity of therapy.
 18-6          (c)  The department shall establish the demonstration project
 18-7    in at least two counties with a high prevalence of HIV infection
 18-8    and AIDS.  The department shall ensure that the demonstration
 18-9    project is financed using funds made available by the counties in
18-10    which the department establishes the demonstration project.  The
18-11    manner in which a county makes funds available may include an
18-12    option for the county to be able to certify the amount of funds
18-13    considered available instead of sending the funds to the state.
18-14          (d)  A person is eligible to participate in the demonstration
18-15    project if the person:
18-16                (1)  has been diagnosed with HIV infection or AIDS by a
18-17    physician;
18-18                (2)  is under 65 years of age;
18-19                (3)  has a net family income that is at or below 200
18-20    percent of the federal poverty level;
18-21                (4)  is a resident of a county included in the project
18-22    or, subject to guidelines established by the department, is
18-23    receiving medical care for HIV infection or AIDS through a facility
18-24    located in a county included in the project;
18-25                (5)  is not covered by a health benefits plan offering
18-26    adequate coverage, as determined by the department; and
 19-1                (6)  is not otherwise eligible for medical assistance
 19-2    at the time the person's eligibility for participation in the
 19-3    demonstration project is determined.
 19-4          (e)  Participation in the demonstration project does not
 19-5    entitle a participant to other services provided under the medical
 19-6    assistance program.
 19-7          (f)  The department shall establish an appropriate enrollment
 19-8    limit for the demonstration project and may not allow participation
 19-9    in the project to exceed that limit.  Once the limit is reached,
19-10    the department:
19-11                (1)  shall establish a waiting list for enrollment in
19-12    the demonstration project; and
19-13                (2)  may allow eligible persons on the waiting list to
19-14    enroll solely in the HIV medication program operated by the
19-15    department.
19-16          (g)  The department shall ensure that a participant in the
19-17    demonstration project is also enrolled in the HIV medication
19-18    program operated by the department.
19-19          (h)  Notwithstanding any other provision of this section, the
19-20    department shall provide each participant in the project with a
19-21    six-month period of continuous eligibility for participation in the
19-22    project.
19-23          (i)  Not later than December 1 of each even-numbered year,
19-24    the department shall submit a biennial report to the legislature
19-25    regarding the department's progress in establishing and operating
19-26    the demonstration project.
 20-1          (j)  Not later than December 1, 2006, the department shall
 20-2    evaluate the cost-effectiveness of the demonstration project,
 20-3    including whether the services and medications provided offset
 20-4    future higher costs for project participants.  If the results of
 20-5    the evaluation indicate that the project is cost-effective, the
 20-6    department shall incorporate a request for funding for the
 20-7    expansion of the project into additional counties or throughout the
 20-8    state, as appropriate, in the department's budget request for the
 20-9    next state fiscal biennium.
20-10          (k)  This section expires September 1, 2012.
20-11          Sec. 32.055.  DEMONSTRATION PROJECTS FOR PROVISION OF MEDICAL
20-12    ASSISTANCE TO CERTAIN LOW-INCOME INDIVIDUALS.  (a)  The Health and
20-13    Human Services Commission shall establish demonstration projects to
20-14    provide medical assistance under this chapter to adult individuals
20-15    who are not otherwise eligible for medical assistance and whose
20-16    incomes are at or below 200 percent of the federal poverty level.
20-17          (b)  The Health and Human Services Commission shall select
20-18    one or more municipalities or counties in which to implement the
20-19    demonstration projects.
20-20          (c)  The Health and Human Services Commission, in conjunction
20-21    with local governmental entities that make funds available to the
20-22    commission in accordance with this section, shall design the
20-23    components of the demonstration project and shall ensure that:
20-24                (1)  each demonstration project is financed using funds
20-25    made available by certain local governmental entities, through a
20-26    certification process, to the commission for matching purposes to
 21-1    maximize federal funds for the medical assistance program; and
 21-2                (2)  a participant in a demonstration project is not
 21-3    subject to a limitation imposed on prescription drug benefits under
 21-4    the medical assistance program.
 21-5          (d)  The Health and Human Services Commission shall appoint
 21-6    regional advisory committees to assist the commission in
 21-7    establishing and implementing demonstration projects under this
 21-8    section.  An advisory committee must include health care providers,
 21-9    employers, and local government officials.
21-10          Sec. 32.056.  DEMONSTRATION PROJECT FOR WOMEN'S HEALTH CARE
21-11    SERVICES.  (a)  The department shall establish a five-year
21-12    demonstration project through the medical assistance program to
21-13    expand access to preventive health and family planning services for
21-14    women.  A woman eligible under Subsection (b) to participate in the
21-15    demonstration project may receive preventive health and family
21-16    planning services, including:
21-17                (1)  medical history;
21-18                (2)  physical examinations;
21-19                (3)  counseling and education on contraceptive methods
21-20    that includes:
21-21                      (A)  promoting abstinence as the preferred choice
21-22    of behavior related to all sexual activity for unmarried persons;
21-23                      (B)  emphasizing abstinence from sexual activity,
21-24    if used consistently and correctly, is the only method that is 100
21-25    percent effective in preventing pregnancy, sexually transmitted
21-26    diseases, infection with human immunodeficiency virus or acquired
 22-1    immune deficiency syndrome, and the emotional trauma associated
 22-2    with adolescent sexual activity; and
 22-3                      (C)  informing single and divorced adults that
 22-4    abstinence from sexual activity before marriage is the most
 22-5    effective way to prevent pregnancy, sexually transmitted diseases,
 22-6    and infection with human immunodeficiency virus or acquired immune
 22-7    deficiency syndrome;
 22-8                (4)  provision of contraceptives;
 22-9                (5)  health screenings, including screening for:
22-10                      (A)  diabetes;
22-11                      (B)  cervical cancer;
22-12                      (C)  breast cancer;
22-13                      (D)  sexually transmitted diseases;
22-14                      (E)  hypertension;
22-15                      (F)  cholesterol; and
22-16                      (G)  tuberculosis;
22-17                (6)  risk assessment; and
22-18                (7)  referral of medical problems to appropriate
22-19    providers.
22-20          (b)  A woman is eligible to participate in the demonstration
22-21    project if the woman:
22-22                (1)  is 18 years of age or older;
22-23                (2)  has a net family income that is at or below 185
22-24    percent of the federal poverty level; and
22-25                (3)  is not otherwise eligible for the medical
22-26    assistance program.
 23-1          (c)  The department shall develop procedures for determining
 23-2    and certifying presumptive eligibility for a woman eligible under
 23-3    Subsection (b).  The department shall integrate these procedures
 23-4    with current procedures to minimize duplication of effort by
 23-5    providers, the department, and other state agencies.
 23-6          (d)  The department shall provide for 12 months of continuous
 23-7    eligibility for a woman eligible under Subsection (b).
 23-8          (e)  The department shall compile a list of potential funding
 23-9    sources a client can use to help pay for treatment for health
23-10    problems:
23-11                (1)  identified using services provided to the client
23-12    under the demonstration project; and
23-13                (2)  for which the client is not eligible to receive
23-14    treatment under the medical assistance program.
23-15          (f)  Not later than December 1 of each even-numbered year,
23-16    the department shall submit a report to the legislature that
23-17    includes a statement of the department's progress in establishing
23-18    and operating the demonstration project.
23-19          (g)  The department shall ensure that money under the
23-20    demonstration project established by this section may not be used
23-21    for an abortion, as that term is defined by Section 245.002, Health
23-22    and Safety Code.
23-23          (h)  To the extent required by federal budget neutrality
23-24    requirements, the department may establish an appropriate
23-25    enrollment limit for the demonstration project.
23-26          (i)  This section expires September 1, 2007.
 24-1          (b)  The state agency responsible for implementing the
 24-2    demonstration projects required by Sections 32.053 through 32.056,
 24-3    Human Resources Code, as added by this Act, shall request and
 24-4    actively pursue any necessary waivers or authorizations from the
 24-5    Health Care Financing Administration or other appropriate entities
 24-6    to enable the agency to implement the demonstration project not
 24-7    later than September 1, 2002.  The agency may delay implementing
 24-8    the demonstration project until the necessary waivers or
 24-9    authorizations are granted.
24-10          SECTION 10.  (a)  Subchapter B, Chapter 32, Human Resources
24-11    Code, is amended by adding Section 32.057 to read as follows:
24-12          Sec. 32.057.  PROGRAM OF ALL-INCLUSIVE CARE FOR THE ELDERLY
24-13    (PACE).  (a)  The department, as a part of the medical assistance
24-14    program, shall develop and implement a program of all-inclusive
24-15    care for the elderly (PACE) in accordance with Section 4802 of the
24-16    Balanced Budget Act of 1997 (Pub. L. No. 105-33), as amended.  The
24-17    department shall provide medical assistance to a participant in the
24-18    PACE program in the manner and to the extent authorized by federal
24-19    law.
24-20          (b)  The department shall adopt rules as necessary to
24-21    implement this section.  In adopting rules, the department shall:
24-22                (1)  use the Bienvivir Senior Health Services of El
24-23    Paso initiative as a model for the program; and
24-24                (2)  ensure that a person is not required to hold a
24-25    certificate of authority as a health maintenance organization under
24-26    the Texas Health Maintenance Organization Act (Chapter 20A,
 25-1    Vernon's Texas Insurance Code) to provide services under the PACE
 25-2    program.
 25-3          (c)  The department may not contract with a person to provide
 25-4    services under the PACE program unless the person:
 25-5                (1)  purchases reinsurance in an amount determined by
 25-6    the department that is sufficient to ensure the person's continued
 25-7    solvency; or
 25-8                (2)  has the financial resources sufficient to cover
 25-9    expenses in the event of the person's insolvency.
25-10          (d)  To demonstrate sufficiency of financial resources for
25-11    purposes of Subsection (c)(2), a person may use cash reserves, a
25-12    letter of credit, a guarantee of a company affiliated with the
25-13    person, or a combination of those arrangements.  The amount of a
25-14    person's financial arrangement must be at least equal to the sum
25-15    of:
25-16                (1)  the total capitation revenue for one month; and
25-17                (2)  the average monthly payment of operating expenses.
25-18          (e)  The department shall consult with the Texas Department
25-19    of Insurance in determining a person's sufficiency of financial
25-20    resources for continued solvency or to cover expenses in the event
25-21    of the person's insolvency as required by Subsection (c).
25-22          (f)  The department, with direction from the Health and Human
25-23    Services Commission, shall develop and implement a coordinated plan
25-24    to promote PACE program sites operating under this section.  The
25-25    department shall adopt policies and procedures to ensure that
25-26    caseworkers and any other appropriate state agency staff discuss
 26-1    the benefits of participating in the PACE program with long-term
 26-2    care clients.
 26-3          (b)  The state agency administering the program of
 26-4    all-inclusive care for the elderly (PACE) implemented under Section
 26-5    32.057, Human Resources Code, as added by this Act, shall use its
 26-6    best efforts to develop and support multiple PACE program sites.
 26-7          (c)  If before June 1, 2004, the state does not receive
 26-8    federal approval for the operation of all PACE program sites for
 26-9    which the state has applied solely because the federal limit on the
26-10    number of new PACE program sites allowed nationwide per year has
26-11    been attained, the Health and Human Services Commission and Texas
26-12    Department of Human Services, not later than September 1, 2004,
26-13    shall examine federal laws and regulations regarding PACE programs
26-14    and identify changes to law that would result in an increased
26-15    number of PACE programs in this state.
26-16          (d)  Not later than December 1, 2004, the commissioner of
26-17    health and human services shall submit to the legislature a written
26-18    report concerning the results of the examination conducted under
26-19    Subsection (c) of this section.  The report must include any
26-20    recommendations for memorializing the Congress of the United States
26-21    to request changes to federal laws or regulations.
26-22          (e)  As soon as practicable after the effective date of this
26-23    Act, the Health and Human Services Commission shall submit an
26-24    amendment to the state's Medicaid plan authorizing the state to
26-25    implement the program of all-inclusive care for the elderly (PACE)
26-26    established under Section 32.057, Human Resources Code, as added by
 27-1    this Act.  The commission is not required to submit an additional
 27-2    amendment to the state's Medicaid plan each time the state agency
 27-3    administering the PACE program selects and enters into a proposed
 27-4    agreement with a provider to deliver services under the program.
 27-5          SECTION 11.  (a)  Subchapter B, Chapter 531, Government Code,
 27-6    is amended by adding Sections 531.02101 through 531.02107 to read
 27-7    as follows:
 27-8          Sec. 531.02101.  TRANSFER AUTHORITY RELATING TO
 27-9    ADMINISTRATION OF MEDICAID PROGRAM.  (a)  To the extent that
27-10    reorganization is necessary to achieve the goals of increased
27-11    administrative efficiency, increased accountability, or cost
27-12    savings in the Medicaid program or to otherwise improve the health
27-13    of residents of this state, the commission, subject to Subsection
27-14    (b), may transfer any power, duty, function, program, activity,
27-15    obligation, right, contract, record, employee, property, or
27-16    appropriation or other money relating to administration of the
27-17    Medicaid program from a health and human services agency to the
27-18    commission.
27-19          (b)  A transfer authorized by Subsection (a) may not take
27-20    effect unless approved by the Medicaid legislative oversight
27-21    committee created under Section 531.02102.
27-22          (c)  The commission must notify the Legislative Budget Board
27-23    and the governor's office of budget and planning not later than the
27-24    30th day before the effective date of a transfer authorized by
27-25    Subsection (a).
27-26          Sec. 531.02102.  MEDICAID LEGISLATIVE OVERSIGHT COMMITTEE.
 28-1    (a)  The Medicaid legislative oversight committee is composed of:
 28-2                (1)  five members of the senate appointed by the
 28-3    lieutenant governor; and
 28-4                (2)  five members of the house of representatives
 28-5    appointed by the speaker of the house of representatives.
 28-6          (b)  A member of the Medicaid legislative oversight committee
 28-7    serves at the pleasure of the appointing official.
 28-8          (c)  The lieutenant governor and speaker of the house of
 28-9    representatives shall appoint the presiding officer of the Medicaid
28-10    legislative oversight committee on an alternating basis.  The
28-11    presiding officer shall serve a two-year term expiring February 1
28-12    of each odd-numbered year.
28-13          (d)  The Medicaid legislative oversight committee shall:
28-14                (1)  meet not more than quarterly at the call of the
28-15    presiding officer; and
28-16                (2)  review and approve or reject any transfer proposed
28-17    by the commission of a power, duty, function, program, activity,
28-18    obligation, right, contract, record, employee, property, or
28-19    appropriation or other money relating to administration of the
28-20    Medicaid program from a health and human services agency to the
28-21    commission.
28-22          (e)  The Medicaid legislative oversight committee may use
28-23    staff of standing committees in the senate and house of
28-24    representatives with appropriate jurisdiction, the Department of
28-25    Information Resources, the state auditor, the Texas Legislative
28-26    Council, and the Legislative Budget Board in carrying out its
 29-1    responsibilities.
 29-2          Sec. 531.02103.  MEDICAID PROGRAM:  STRATEGIES FOR IMPROVING
 29-3    BUDGET CERTAINTY AND COST SAVINGS.  (a)  To achieve administrative
 29-4    efficiency and cost savings in the Medicaid program, the commission
 29-5    shall develop and implement strategies to improve management of the
 29-6    cost, quality, and use of services provided under the program.  The
 29-7    strategies developed and implemented under this section may
 29-8    include:
 29-9                (1)  expansion of an enhanced primary care case
29-10    management model to areas of the state and to populations currently
29-11    subject to fee-for-service arrangements;
29-12                (2)  use of medical case management for complex medical
29-13    cases;
29-14                (3)  mandatory enrollment of some or all Medicaid
29-15    recipients who receive Supplemental Security Income (SSI) (42
29-16    U.S.C. Section 1381 et seq.) into a STAR + Plus pilot program in an
29-17    area of the state served by a STAR pilot program as of January 1,
29-18    2001, or into an alternate managed care model developed by the
29-19    commission;
29-20                (4)  use of telemedicine for children and other persons
29-21    with special health care needs;
29-22                (5)  use of copayments and other mechanisms to
29-23    encourage responsible use of health care services under the
29-24    program, provided that implementation occurs in accordance with
29-25    Section 531.02106;
29-26                (6)  use of procurement initiatives such as selective
 30-1    contracting as a mechanism for obtaining provider services under
 30-2    the program, provided that the initiatives may not apply to a Class
 30-3    A community independent pharmacy or a Class A community chain
 30-4    pharmacy with 10 or fewer pharmacies;
 30-5                (7)  expansion of the program of all-inclusive care for
 30-6    the elderly (PACE), as authorized by Section 4802 of the Balanced
 30-7    Budget Act of 1997 (Pub. L. No. 105-33), as amended, to additional
 30-8    sites;
 30-9                (8)  use of disease management and drug therapy
30-10    management for Medicaid recipients with chronic diseases, including
30-11    congestive heart failure, chronic obstructive pulmonary disease,
30-12    asthma, and diabetes;
30-13                (9)  use of cost controls in the provision of
30-14    pharmaceutical services as necessary to ensure appropriate pricing,
30-15    cost-effective use of pharmaceutical products, and the state's
30-16    greatest entitlement to rebates from pharmaceutical manufacturers;
30-17                (10)  use of competitive pricing for medical equipment
30-18    and supplies, including vision care equipment and supplies;
30-19                (11)  expansion of the health insurance premium payment
30-20    reimbursement system (HIPPS);
30-21                (12)  reduction of hospital outlier payments; and
30-22                (13)  any other strategy designed to improve the
30-23    quality and cost-effectiveness of the Medicaid program.
30-24          (b)  The commission shall consult with local communities,
30-25    providers, consumers, and other affected parties in the development
30-26    and implementation of strategies under Subsection (a).  The
 31-1    commission shall use existing state or local advisory committees
 31-2    for this purpose.
 31-3          (c)  The commission shall hold public hearings at least
 31-4    quarterly regarding the development and implementation of
 31-5    strategies under Subsection (a) and the development of agency
 31-6    procedures and necessary state plan amendments or waivers.  If the
 31-7    commission proposes to adopt a rule necessary to implement a
 31-8    strategy under Subsection (a), the commission shall adopt the rule
 31-9    in accordance with Chapter 2001 and hold any public hearing
31-10    required by that chapter.
31-11          Sec. 531.02104.  MEDICAID ELIGIBILITY AND ENROLLMENT.  The
31-12    commission shall ensure that:
31-13                (1)  the Medicaid eligibility policies, processes, and
31-14    time frames of the Texas Department of Human Services, including
31-15    policies, processes, and time frames relating to an applicant or
31-16    recipient whose eligibility status is on hold, are designed to
31-17    minimize the time that an applicant or recipient is required to
31-18    wait before the applicant or recipient begins receiving services or
31-19    is recertified;
31-20                (2)  each state agency operating a part of the Medicaid
31-21    program conforms the Medicaid eligibility policies and related
31-22    processes and time frames, including any cutoff dates, of the
31-23    agency and any agency contractor to the Medicaid eligibility
31-24    policies, processes, and time frames of the Texas Department of
31-25    Human Services; and
31-26                (3)  the Medicaid eligibility policies, processes, and
 32-1    time frames of each agency operating a part of the Medicaid program
 32-2    and any agency contractor are designed to minimize the time that an
 32-3    applicant or recipient is required to wait before receiving
 32-4    services.
 32-5          Sec. 531.02105.  TEXAS HEALTH STEPS PROGRAM.  The commission
 32-6    shall:
 32-7                (1)  take all actions necessary to simplify:
 32-8                      (A)  provider enrollment in the Texas Health
 32-9    Steps program;
32-10                      (B)  reporting requirements relating to the Texas
32-11    Health Steps program; and
32-12                      (C)  billing and coding procedures so that Texas
32-13    Health Steps program processes are more consistent with commercial
32-14    standards;
32-15                (2)  in consultation with providers of Texas Health
32-16    Steps program services, develop mechanisms to promote accurate,
32-17    reliable, and timely reporting of examinations of children
32-18    conducted under the program to managed care organizations and other
32-19    appropriate entities;
32-20                (3)  in consultation with providers of Texas Health
32-21    Steps program services, develop a mechanism to promote
32-22    incorporation of Texas Health Steps program services into a child's
32-23    medical home; and
32-24                (4)  require the external quality monitoring
32-25    organization to evaluate the Texas Health Steps program using
32-26    information available from all relevant sources and prepare
 33-1    periodic reports regarding the program for submission by the
 33-2    commission to the legislature.
 33-3          Sec. 531.02106.  LIMITS ON MEDICAID COST-SHARING.  Before
 33-4    requiring Medicaid recipients to make copayments or comply with
 33-5    other cost-sharing requirements, the commission by rule shall
 33-6    establish monthly limits on total copayments and other cost-sharing
 33-7    requirements.
 33-8          Sec. 531.02107.  AUTHORIZATION FOR EXPANDED MEDICAID
 33-9    COST-SHARING.  Notwithstanding any other law, the commissioner may
33-10    request federal authorization to require all Medicaid recipients to
33-11    make copayments or comply with other cost-sharing requirements for
33-12    all services provided under the program in accordance with that
33-13    authorization.
33-14          (b)  As soon as possible after the effective date of this
33-15    Act, the lieutenant governor and the speaker of the house of
33-16    representatives shall appoint the members of the Medicaid
33-17    legislative oversight committee created by Section 531.02102,
33-18    Government Code, as added by this Act.  The speaker of the house of
33-19    representatives shall appoint the initial presiding officer of the
33-20    committee.
33-21          SECTION 12.  Subchapter B, Chapter 531, Government Code, is
33-22    amended by adding Section 531.02131 to read as follows:
33-23          Sec. 531.02131.  COMMUNITY OUTREACH CAMPAIGN.  (a)  The
33-24    commission shall conduct a community outreach campaign to provide
33-25    information relating to the availability of Medicaid coverage for
33-26    children and adults and to promote enrollment of eligible children
 34-1    and adults in Medicaid.
 34-2          (b)  The commission may combine the community outreach
 34-3    campaign under this section with any other state outreach campaign
 34-4    or educational activity relating to health care and available
 34-5    health care coverage.
 34-6          SECTION 13.  Subsection (d), Section 531.0214, Government
 34-7    Code, is amended to read as follows:
 34-8          (d)  The commission shall develop the database system in a
 34-9    manner that will enable a complete analysis of the use of
34-10    prescription medications[, including information relating to:]
34-11                [(1)  Medicaid clients for whom more than three
34-12    medications have been prescribed; and]
34-13                [(2)  the medical effect denial of Medicaid coverage
34-14    for more than three medications has had on Medicaid clients].
34-15          SECTION 14.  Subsection (a), Section 531.026, Government
34-16    Code, is amended to read as follows:
34-17          (a)  The commission shall prepare and submit to the
34-18    lieutenant governor, the speaker of the house of representatives,
34-19    the comptroller, the Legislative Budget Board, [and] the governor's
34-20    office of budget and planning, each member of the appropriations
34-21    committees of the senate and house of representatives, and each
34-22    member of the standing committees of the senate and house of
34-23    representatives with responsibility for oversight of health and
34-24    human services issues [governor] a consolidated health and human
34-25    services budget recommendation not later than October 15 of each
34-26    even-numbered year.
 35-1          SECTION 15.  Subchapter B, Chapter 531, Government Code, is
 35-2    amended by adding Section 531.0261 to read as follows:
 35-3          Sec. 531.0261.  CONSOLIDATED MEDICAID APPROPRIATIONS REQUEST.
 35-4    (a)  The commission shall include in the consolidated budget
 35-5    recommendation required by Section 531.026 a consolidated Medicaid
 35-6    appropriations request for the subsequent fiscal biennium.
 35-7          (b)  The commission shall:
 35-8                (1)  develop the consolidated Medicaid appropriations
 35-9    request with input from the Legislative Budget Board and the
35-10    governor's office of budget and planning to ensure that relevant
35-11    information for acute and long-term care Medicaid programs relating
35-12    to caseloads, costs, measures, rates, waivers, and eligibility is
35-13    reflected; and
35-14                (2)  provide assistance with the legislative
35-15    appropriations process by revising the consolidated Medicaid
35-16    appropriations request each time that revised caseload and cost
35-17    estimates relating to the Medicaid program are prepared.
35-18          SECTION 16.  Subchapter B, Chapter 531, Government Code, is
35-19    amended by adding Section 531.0272 to read as follows:
35-20          Sec. 531.0272.  COMPREHENSIVE MEDICAID OPERATING BUDGET;
35-21    QUARTERLY EXPENDITURE REPORTS.  (a)  The commission shall prepare a
35-22    comprehensive Medicaid operating budget at the beginning of each
35-23    fiscal year, with input as appropriate from each health and human
35-24    services agency that receives legislative appropriations relating
35-25    to the Medicaid program.
35-26          (b)  The commission shall monitor all Medicaid expenditures
 36-1    by the commission and health and human services agencies and submit
 36-2    quarterly Medicaid expenditure reports to the lieutenant governor,
 36-3    the speaker of the house of representatives, the comptroller, the
 36-4    Legislative Budget Board, the governor's office of budget and
 36-5    planning, each member of the appropriations committees of the
 36-6    senate and house of representatives, and each member of the
 36-7    standing committees of the senate and house of representatives with
 36-8    responsibility for oversight of health and human services issues.
 36-9          (c)  The commission shall prepare the comprehensive Medicaid
36-10    operating budget and quarterly Medicaid expenditure reports with
36-11    input from the Legislative Budget Board and the governor's office
36-12    of budget and planning to ensure that the information described by
36-13    Section 531.0261(b)(1) is reflected.
36-14          SECTION 17.  Subchapter B, Chapter 531, Government Code, is
36-15    amended by adding Section 531.055 to read as follows:
36-16          Sec. 531.055.  MEDICAID REIMBURSEMENT RATES REPORT.  Not
36-17    later than December 1 of each even-numbered year, the commission
36-18    shall prepare and deliver to the governor, lieutenant governor,
36-19    speaker of the house of representatives, and each member of the
36-20    legislature a report that:
36-21                (1)  identifies the Medicaid reimbursement rates for
36-22    each county in this state; and
36-23                (2)  compares the state's Medicaid reimbursement rates
36-24    to the Medicaid reimbursement rates of the top 15 industrial states
36-25    as ranked by the United States Department of Commerce Bureau of
36-26    Economic Analysis based on gross state product.
 37-1          SECTION 18.  (a)  The purpose of this section is to pilot a
 37-2    coordinated approach to addressing the needs of homeless people
 37-3    with chronic illnesses who are recipients of medical assistance
 37-4    under Chapter 32, Human Resources Code, so that homeless people may
 37-5    learn to manage their illnesses and become productive members of
 37-6    society.  Current state, federal, and local agencies fund separate
 37-7    programs that address only one aspect of the needs of homeless
 37-8    people, such as housing, job training, and medical care.  Homeless
 37-9    people with chronic illnesses will benefit from a coordinated
37-10    approach that comprehensively addresses the needs of homeless
37-11    people.
37-12          (b)  Subchapter B, Chapter 531, Government Code, is amended
37-13    by adding Section 531.057 to read as follows:
37-14          Sec. 531.057.  PILOT CASE MANAGEMENT PROGRAM.  (a)  The
37-15    commission, in cooperation with the Texas Interagency Council for
37-16    the Homeless, shall develop a pilot case management program for
37-17    homeless people who have chronic illnesses, including diabetes and
37-18    HIV infection or AIDS, and who are recipients of medical assistance
37-19    under Chapter 32, Human Resources Code.  The council in cooperation
37-20    with relevant state agencies shall administer the pilot program
37-21    under the direction of the commission.
37-22          (b)  Using existing resources of the agencies composing the
37-23    Texas Interagency Council for the Homeless, the staff of the
37-24    council shall:
37-25                (1)  select a county with a population of more than 2.8
37-26    million in which to implement the program;
 38-1                (2)  identify existing services provided through
 38-2    programs of the agencies composing the council to homeless people
 38-3    with chronic illnesses who are recipients of medical assistance;
 38-4                (3)  identify existing federal, state, county, and
 38-5    local sources from which money may be available to fund the pilot
 38-6    program; and
 38-7                (4)  create a pilot case management program for not
 38-8    more than 75 homeless people with chronic illnesses who are
 38-9    recipients of medical assistance using existing financial and
38-10    agency resources.
38-11          (c)  The Texas Interagency Council for the Homeless shall
38-12    select, through competitive bidding, a nonprofit entity to
38-13    implement the pilot case management program for the homeless.  The
38-14    pilot program established under this section must:
38-15                (1)  provide case management services and existing
38-16    health-related education services to participants of the program;
38-17    and
38-18                (2)  coordinate housing, medical, job training, and
38-19    other necessary services for the participants of the program.
38-20          (d)  The commission shall identify programs available through
38-21    health and human services agencies through which homeless people
38-22    described by Subsection (a) may receive housing, medical, job
38-23    placement, or other services.  The commission shall report to the
38-24    Texas Interagency Council for the Homeless information regarding
38-25    the identified programs, including the programs' sources of funding
38-26    and eligibility requirements.
 39-1          (e)  Not later than December 15 of each even-numbered year,
 39-2    the Texas Interagency Council for the Homeless shall submit a
 39-3    report to the governor, the lieutenant governor, and the speaker of
 39-4    the house of representatives regarding the effectiveness of the
 39-5    pilot program established under this section.
 39-6          (f)  This section expires September 1, 2005.
 39-7          (c)  The Health and Human Services Commission shall develop
 39-8    and the Texas Interagency Council for the Homeless shall implement
 39-9    the pilot program established under this section not later than
39-10    November 1, 2001.
39-11          SECTION 19.  The heading to Chapter 533, Government Code, is
39-12    amended to read as follows:
39-13               CHAPTER 533.  DEVELOPMENT AND IMPLEMENTATION
39-14                     OF MEDICAID MANAGED CARE PROGRAM
39-15          SECTION 20.  Subchapter A, Chapter 533, Government Code, is
39-16    amended by amending Sections 533.001 and 533.002 and adding
39-17    Sections 533.0021, 533.0022, 533.0023, and 533.0024 to read as
39-18    follows:
39-19          Sec. 533.001.  Definitions.  In this chapter:
39-20                (1)  "Commission" means the Health and Human Services
39-21    Commission or an agency operating part of the state Medicaid
39-22    managed care program, as appropriate.
39-23                (2)  "Commissioner" means the commissioner of health
39-24    and human services.
39-25                (3)  "Health and human services agencies" has the
39-26    meaning assigned by Section 531.001.
 40-1                (4)  "Managed care organization" means a person who is
 40-2    authorized or otherwise permitted by law to arrange for or provide
 40-3    a managed care plan.  The term includes a health care system
 40-4    established under Chapter 20C, Insurance Code.
 40-5                (5)  "Managed care plan" means a plan under which a
 40-6    person undertakes to provide, arrange for, pay for, or reimburse
 40-7    any part of the cost of any health care services.  A part of the
 40-8    plan must consist of arranging for or providing health care
 40-9    services as distinguished from indemnification against the cost of
40-10    those services on a prepaid basis through insurance or otherwise.
40-11    The term includes a primary care case management provider network
40-12    and a health care system established under Chapter 20C, Insurance
40-13    Code.  The term does not include a plan that indemnifies a person
40-14    for the cost of health care services through insurance.
40-15                (6)  "Recipient" means a recipient of medical
40-16    assistance under Chapter 32, Human Resources Code.
40-17                (7)  "Health care service region" or "region" means a
40-18    Medicaid managed care service area as delineated by the commission.
40-19          Sec. 533.002.  MEDICAID HEALTH CARE DELIVERY SYSTEM.  The
40-20    commission may develop a health care delivery system that
40-21    restructures the delivery of health care services provided under
40-22    the state Medicaid program.
40-23          Sec. 533.0021.  DESIGN AND DEVELOPMENT OF HEALTH CARE
40-24    DELIVERY SYSTEM.  In developing the health care delivery system
40-25    under this chapter, the commission shall:
40-26                (1)  design the system in a manner that:
 41-1                      (A)  improves the health of the people of this
 41-2    state by:
 41-3                            (i)  emphasizing prevention;
 41-4                            (ii)  promoting continuity of care; and
 41-5                            (iii)  providing a medical home for
 41-6    recipients;
 41-7                      (B)  ensures that each recipient receives
 41-8    high-quality, comprehensive health care services in the recipient's
 41-9    local community; and
41-10                      (C)  ensures that the community is given an
41-11    opportunity to provide input and participate in the implementation
41-12    of the system in the health care service region by holding public
41-13    hearings in the community at which the commission takes public
41-14    comment from all persons interested in the implementation of the
41-15    system;
41-16                (2)  to the extent that it is cost-effective to this
41-17    state and local governments:
41-18                      (A)  maximize the financing of the state Medicaid
41-19    program by obtaining federal matching funds for all resources or
41-20    other money available for matching;
41-21                      (B)  expand Medicaid eligibility to include
41-22    persons who were eligible to receive indigent health care services
41-23    through the use of those resources or other money available for
41-24    matching before expansion of eligibility; and
41-25                      (C)  develop a sliding scale copayment schedule
41-26    for recipients based on income and other factors determined by the
 42-1    commissioner; and
 42-2                (3)  develop and prepare the waiver or other documents
 42-3    necessary to obtain federal authorization for the system.
 42-4          Sec. 533.0022.  PURPOSE.  The commission shall implement the
 42-5    Medicaid managed care program as part of the health care delivery
 42-6    system developed under this chapter [Chapter 532] by contracting
 42-7    with managed care organizations in a manner that, to the extent
 42-8    possible:
 42-9                (1)  accomplishes the goals described by Section
42-10    533.0021 [improves the health of Texans by:]
42-11                      [(A)  emphasizing prevention;]
42-12                      [(B)  promoting continuity of care; and]
42-13                      [(C)  providing a medical home for recipients;]
42-14                [(2)  ensures that each recipient receives high
42-15    quality, comprehensive health care services in the recipient's
42-16    local community];
42-17                (2) [(3)]  encourages the training of and access to
42-18    primary care physicians and providers;
42-19                (3) [(4)]  maximizes cooperation with existing public
42-20    health entities, including local departments of health and
42-21    community mental health and mental retardation centers established
42-22    under Chapter 534, Health and Safety Code;
42-23                (4) [(5)]  provides incentives to managed care
42-24    organizations to improve the quality of health care services for
42-25    recipients by providing value-added services; [and]
42-26                (5) [(6)]  reduces administrative and other
 43-1    nonfinancial barriers for recipients in obtaining health care
 43-2    services; and
 43-3                (6)  controls the costs associated with the state
 43-4    Medicaid program.
 43-5          Sec. 533.0023.  RULES FOR HEALTH CARE DELIVERY SYSTEM.
 43-6    (a)  The commissioner of insurance shall adopt rules as necessary
 43-7    or appropriate to carry out the functions of the Texas Department
 43-8    of Insurance under this chapter.
 43-9          (b)  The commissioner of health and human services shall
43-10    adopt rules and obtain public input in accordance with Chapter 2001
43-11    before making substantive changes to policies or programs under the
43-12    Medicaid managed care program.
43-13          Sec. 533.0024.  RESOLUTION OF IMPLEMENTATION ISSUES.  The
43-14    commission shall conduct a meeting at least quarterly with managed
43-15    care organizations that contract with the commission under this
43-16    chapter and health care providers to identify and resolve
43-17    implementation issues with respect to the Medicaid managed care
43-18    program.
43-19          SECTION 21.  Subchapter A, Chapter 533, Government Code, is
43-20    amended by adding Section 533.0035 to read as follows:
43-21          Sec. 533.0035.  LIMITATION ON NUMBER OF CONTRACTS AWARDED.
43-22    The commission shall:
43-23                (1)  evaluate the number of managed care organizations
43-24    with which the commission contracts to provide health care services
43-25    in each health care service region, focusing particularly on the
43-26    market share of those managed care organizations; and
 44-1                (2)  limit the number of contracts awarded to managed
 44-2    care organizations under this chapter in a manner that promotes the
 44-3    successful implementation of the delivery of health care services
 44-4    through the state Medicaid managed care program.
 44-5          SECTION 22.  (a)  Section 533.005, Government Code, is
 44-6    amended to read as follows:
 44-7          Sec. 533.005.  REQUIRED CONTRACT PROVISIONS.  A contract
 44-8    between a managed care organization and the commission for the
 44-9    organization to provide health care services to recipients must
44-10    contain:
44-11                (1)  procedures to ensure accountability to the state
44-12    for the provision of health care services, including procedures for
44-13    financial reporting, quality assurance, utilization review, and
44-14    assurance of contract and subcontract compliance;
44-15                (2)  capitation and provider payment rates that ensure
44-16    the cost-effective provision of quality health care;
44-17                (3)  a requirement that the managed care organization
44-18    provide ready access to a person who assists recipients in
44-19    resolving issues relating to enrollment, plan administration,
44-20    education and training, access to services, and grievance
44-21    procedures;
44-22                (4)  a requirement that the managed care organization
44-23    provide ready access to a person who assists providers in resolving
44-24    issues relating to payment, plan administration, education and
44-25    training, and grievance procedures;
44-26                (5)  a requirement that the managed care organization
 45-1    provide information and referral about the availability of
 45-2    educational, social, and other community services that could
 45-3    benefit a recipient;
 45-4                (6)  procedures for recipient outreach and education;
 45-5                (7)  a requirement that the managed care organization
 45-6    make payment to a physician or provider for health care services
 45-7    rendered to a recipient under a managed care plan not later than
 45-8    the 45th day after the date a claim for payment is received with
 45-9    documentation reasonably necessary for the managed care
45-10    organization to process the claim, or within a period, not to
45-11    exceed 60 days, specified by a written agreement between the
45-12    physician or provider and the managed care organization;
45-13                (8)  a requirement that the commission, on the date of
45-14    a recipient's enrollment in a managed care plan issued by the
45-15    managed care organization, inform the organization of the
45-16    recipient's Medicaid certification date;
45-17                (9)  a requirement that the managed care organization
45-18    comply with Section 533.006 as a condition of contract retention
45-19    and renewal; [and]
45-20                (10)  a requirement that the managed care organization
45-21    provide the information required by Section 533.012 and otherwise
45-22    comply and cooperate with the commission's office of investigations
45-23    and enforcement;
45-24                (11)  a process by which the commission is required to:
45-25                      (A)  provide in writing to the managed care
45-26    organization the projected fiscal impact on the state and managed
 46-1    care organizations that contract with the commission under this
 46-2    chapter of proposed Medicaid managed care program, benefit, or
 46-3    contract changes; and
 46-4                      (B)  negotiate in good faith regarding
 46-5    appropriate operational and financial changes to the contract with
 46-6    the managed care organization before implementing those changes;
 46-7                (12)  a requirement that the managed care organization
 46-8    providing services to recipients under a Medicaid STAR + Plus pilot
 46-9    program:
46-10                      (A)  have an appropriate number of clinically
46-11    trained case managers within the Medicaid STAR + Plus pilot program
46-12    service delivery area to manage medically complex patients; and
46-13                      (B)  implement disease management programs that
46-14    address the medical conditions of the Medicaid STAR + Plus pilot
46-15    program population, including persons with HIV infection, AIDS, or
46-16    sickle cell anemia;
46-17                (13)  a requirement that the renewal date of the
46-18    contract coincide with the beginning of the state fiscal year; and
46-19                (14)  a requirement that the managed care organization
46-20    reimburse health care providers for an appropriate emergency
46-21    medical screening that is within the capability of the hospital's
46-22    emergency department, including ancillary services routinely
46-23    available to the emergency department, and that is provided to
46-24    determine whether:
46-25                      (A)  an emergency medical or psychiatric
46-26    condition exists; and
 47-1                      (B)  additional medical examination and treatment
 47-2    is required to stabilize the emergency medical or psychiatric
 47-3    condition.
 47-4          (b)  The changes in law made by Section 533.005, Government
 47-5    Code, as amended by this Act, apply to a contract between the
 47-6    Health and Human Services Commission and a managed care
 47-7    organization under Chapter 533, Government Code, that is entered
 47-8    into or renewed on or after the effective date of this Act.  A
 47-9    contract that is entered into or renewed before the effective date
47-10    of this Act is governed by the law in effect on the date the
47-11    contract was entered into or renewed, and the former law is
47-12    continued in effect for that purpose.
47-13          SECTION 23.  (a)  Subchapter A, Chapter 533, Government Code,
47-14    is amended by adding Sections 533.0051, 533.0076, 533.0091,
47-15    533.0131, and 533.016 through 533.0207 to read as follows:
47-16          Sec. 533.0051.  CONTRACT RENEWAL.  Before renewing a contract
47-17    with a managed care organization under this chapter, the commission
47-18    shall consider:
47-19                (1)  the managed care organization's:
47-20                      (A)  overall contract compliance;
47-21                      (B)  implementation of simplified administrative
47-22    processes for health care providers and recipients;
47-23                      (C)  compliance with statutory requirements to
47-24    promptly reimburse health care providers for covered services
47-25    provided under the Medicaid managed care program;
47-26                      (D)  compliance with the requirements under
 48-1    Article 3.70-3C, Insurance Code, as added by Chapter 1260, Acts of
 48-2    the 75th Legislature, Regular Session, 1997, and Section 14, Texas
 48-3    Health Maintenance Organization Act (Article 20A.14, Vernon's Texas
 48-4    Insurance Code), to identify advanced practice nurses and physician
 48-5    assistants as providers in the managed care organization's provider
 48-6    network;
 48-7                      (E)  financial performance; and
 48-8                      (F)  participation in the state child health plan
 48-9    under Chapter 62, Health and Safety Code; and
48-10                (2)  the level of satisfaction of recipients and health
48-11    care providers with the managed care organization.
48-12          Sec. 533.0076.  LIMITATIONS ON RECIPIENT DISENROLLMENT.
48-13    (a)  Except as provided by Subsections (b) and (c), and to the
48-14    extent permitted by federal law, the commission may prohibit a
48-15    recipient from disenrolling in a managed care plan under this
48-16    chapter and enrolling in another managed care plan during the
48-17    12-month period after the date the recipient initially enrolls in a
48-18    plan.
48-19          (b)  At any time before the 91st day after the date of a
48-20    recipient's initial enrollment in a managed care plan under this
48-21    chapter, the recipient may disenroll in that plan for any reason
48-22    and enroll in another managed care plan under this chapter.
48-23          (c)  The commission shall allow a recipient who is enrolled
48-24    in a managed care plan under this chapter to disenroll in that plan
48-25    at any time for cause in accordance with federal law.
48-26          Sec. 533.0091.  UNIFORM STANDARDS FOR IDENTIFYING RECIPIENTS
 49-1    WITH DISABILITIES OR CHRONIC CONDITIONS.  (a)  The commission shall
 49-2    collaborate with managed care organizations that contract with the
 49-3    commission under this chapter to develop a uniform screening tool
 49-4    to be used by the managed care organizations to identify adult
 49-5    recipients with disabilities or chronic health conditions and
 49-6    assist those recipients in accessing health care services.
 49-7          (b)  The commission, in cooperation with the Texas Department
 49-8    of Health, by rule shall adopt criteria by which to classify a
 49-9    child with certain health conditions as a child with special health
49-10    care needs.  In adopting the criteria, the commission must include
49-11    children who have:
49-12                (1)  severe disabilities;
49-13                (2)  severe mental or emotional disorders;
49-14                (3)  medically complex or fragile health conditions; or
49-15                (4)  rare or chronic health conditions that are likely
49-16    to last at least one year and result in limitations on the child's
49-17    functioning and activities when compared to other children of the
49-18    same age who do not have those conditions.
49-19          (c)  The commission, in cooperation with the Texas Department
49-20    of Health, shall:
49-21                (1)  monitor and assess health care services provided
49-22    under the state Medicaid managed care program and the medical
49-23    assistance program under Chapter 32, Human Resources Code, to
49-24    children with special health care needs as determined by the
49-25    criteria adopted under Subsection (b);
49-26                (2)  adopt specific quality of care standards
 50-1    applicable to health care services provided under the state
 50-2    Medicaid managed care program to children described by Subdivision
 50-3    (1); and
 50-4                (3)  undertake initiatives to develop, test, and
 50-5    implement optimum methods for the delivery of appropriate,
 50-6    comprehensive, and cost-effective health care services under the
 50-7    state Medicaid managed care program to children described by
 50-8    Subdivision (1), including initiatives to:
 50-9                      (A)  coordinate health care services with
50-10    educational programs and other social and community services; and
50-11                      (B)  promote family involvement and support.
50-12          Sec. 533.0131.  USE OF ENCOUNTER DATA IN DETERMINING PREMIUM
50-13    PAYMENT RATES.  (a)  In determining premium payment rates and other
50-14    amounts paid to managed care organizations under a managed care
50-15    plan, the commission may not base or derive the rates or amounts on
50-16    or from encounter data, or incorporate in the determination an
50-17    analysis of encounter data, unless a certifier of encounter data
50-18    certifies that:
50-19                (1)  the encounter data for the most recent state
50-20    fiscal year is complete, accurate, and reliable; and
50-21                (2)  there is no statistically significant variability
50-22    in the encounter data attributable to incompleteness, inaccuracy,
50-23    or another deficiency as compared to equivalent data for similar
50-24    populations and when evaluated against professionally accepted
50-25    standards.
50-26          (b)  For purposes of determining whether data is equivalent
 51-1    data for similar populations under Subsection (a)(2), a certifier
 51-2    of encounter data shall, at a minimum, consider:
 51-3                (1)  the regional variation in utilization patterns of
 51-4    recipients and costs of health care services;
 51-5                (2)  the range and type of health care services to be
 51-6    covered by premium payment rates;
 51-7                (3)  the number of managed care plans in the region;
 51-8    and
 51-9                (4)  the current number of recipients in each region,
51-10    including the number for each category of recipient.
51-11          Sec. 533.016.  INTERAGENCY SHARING OF INFORMATION.  (a)  The
51-12    commission shall require a health and human services agency
51-13    implementing the Medicaid managed care program to provide to each
51-14    other health and human services agency implementing the program
51-15    information reported to the agency by a managed care organization
51-16    or health care provider providing services to recipients.
51-17          (b)  Except as prohibited by federal law, the commission,
51-18    each health and human services agency implementing the Medicaid
51-19    managed care program, and the Texas Department of Insurance shall
51-20    share confidential information, including financial data, that
51-21    relates to or affects a person who proposes to contract with or has
51-22    contracted with a state agency or a contractor of a state agency
51-23    for the purposes of this chapter.
51-24          (c)  Information shared between agencies under Subsection (b)
51-25    remains confidential and is not subject to disclosure under Chapter
51-26    552.
 52-1          Sec. 533.017.  REDUCTION AND COORDINATION OF REPORTING
 52-2    REQUIREMENTS AND INSPECTION PROCEDURES.  (a)  The commission shall:
 52-3                (1)  streamline on-site inspection procedures of
 52-4    managed care organizations contracting with the commission under
 52-5    this chapter;
 52-6                (2)  streamline reporting requirements for managed care
 52-7    organizations contracting with the commission under this chapter,
 52-8    including:
 52-9                      (A)  combining information required to be
52-10    reported into a quarterly management report;
52-11                      (B)  eliminating unnecessary or duplicative
52-12    reporting requirements; and
52-13                      (C)  to the extent feasible, allowing managed
52-14    care organizations contracting with the commission under this
52-15    chapter to submit reports electronically;
52-16                (3)  require managed care organizations contracting
52-17    with the commission under this chapter to streamline administrative
52-18    processes required of health care providers, including:
52-19                      (A)  simplifying and standardizing, to the extent
52-20    reasonably feasible, the forms providers are required to complete,
52-21    including forms for preauthorization for covered services;
52-22                      (B)  eliminating unnecessary or duplicative
52-23    reporting requirements; and
52-24                      (C)  encouraging the adoption of collaboratively
52-25    developed uniform forms; and
52-26                (4)  designate one entity to which managed care
 53-1    organizations contracting with the commission under this chapter
 53-2    may report encounter data.
 53-3          (b)  Except as provided by Subsection (d), the commission and
 53-4    the Texas Department of Insurance and contractors of the commission
 53-5    or department may not schedule, initiate, prepare for, or conduct a
 53-6    documentary, electronic, or on-site review, a readiness,
 53-7    compliance, or performance review, or any other review, audit, or
 53-8    examination of a managed care organization contracting with the
 53-9    commission under this chapter until:
53-10                (1)  the commission, the department, and, if
53-11    appropriate, each health and human services agency implementing a
53-12    part of the Medicaid managed care program enter into a memorandum
53-13    of understanding under Section 533.018; and
53-14                (2)  the agencies described by Subdivision (1) provide
53-15    that memorandum to the managed care organization.
53-16          (c)  Notwithstanding Subsection (b), the commission or the
53-17    Texas Department of Insurance may take any action:
53-18                (1)  otherwise authorized by law to protect the safety
53-19    of a recipient; or
53-20                (2)  with respect to a managed care organization
53-21    determined to be in a hazardous financial condition.
53-22          (d)  The commission and the Texas Department of Insurance may
53-23    review monthly, quarterly, or annual reports required to be filed
53-24    by managed care organizations contracting with the commission under
53-25    this chapter.
53-26          Sec. 533.018.  MEMORANDUM OF UNDERSTANDING REGARDING
 54-1    COORDINATION OF REPORTING REQUIREMENTS AND INSPECTION PROCEDURES.
 54-2    (a)   The commission, the Texas Department of Insurance, and, if
 54-3    appropriate, each health and human services agency implementing a
 54-4    part of the Medicaid managed care program shall enter into a
 54-5    memorandum of understanding that outlines methods to:
 54-6                (1)  maximize interagency coordination in conducting
 54-7    reviews of managed care organizations contracting with the
 54-8    commission under this chapter; and
 54-9                (2)  eliminate and prevent duplicative monitoring,
54-10    reporting, reviewing of forms, regulation, and enforcement policies
54-11    and processes with respect to those managed care organizations.
54-12          (b)  The memorandum of understanding under this section must:
54-13                (1)  maximize the use of electronic filing of
54-14    information by managed care organizations contracting with the
54-15    commission under this chapter;
54-16                (2)  specify the process by which the commission and
54-17    the Texas Department of Insurance will jointly schedule a single
54-18    on-site visit that satisfies the requirements of all state agencies
54-19    regarding regularly scheduled, comprehensive compliance monitoring
54-20    of and enforcement efforts with respect to managed care
54-21    organizations contracting with the commission under this chapter;
54-22                (3)  require that interagency orientation and training
54-23    are scheduled and conducted to ensure that agency staff members are
54-24    familiar with the obligation to eliminate and prevent duplicative
54-25    monitoring and enforcement activities; and
54-26                (4)  ensure coordination to eliminate and prevent
 55-1    duplication regarding policy development and implementation,
 55-2    procurement, cost estimates, electronic systems issues, and
 55-3    monitoring and enforcement activities with respect to managed care
 55-4    organizations that serve recipients as well as enrollees in the
 55-5    state child health plan under Chapter 62, Health and Safety Code.
 55-6          Sec. 533.019.  INTEGRATED OPERATIONAL AND FINANCIAL AUDIT
 55-7    INSTRUMENT.  (a)  The commission and the Texas Department of
 55-8    Insurance shall develop and use an integrated operational and
 55-9    financial audit instrument for regularly scheduled, comprehensive,
55-10    on-site readiness, performance, or compliance reviews, or other
55-11    reviews, audits, or examinations of managed care organizations that
55-12    contract with the commission under this chapter.
55-13          (b)  In developing the integrated operational and financial
55-14    audit instrument, the commission and the Texas Department of
55-15    Insurance must include:
55-16                (1)  a method to assess compliance with each applicable
55-17    federal and state law and each applicable accreditation and
55-18    contractual requirement, including financial, actuarial,
55-19    operational, and quality of care requirements, the agencies are
55-20    authorized to enforce at least on a periodic basis;
55-21                (2)  a method to assess compliance of documents,
55-22    records, and electronic files the commission or the Texas
55-23    Department of Insurance requires managed care organizations that
55-24    contract with the commission under this chapter to submit for
55-25    review, either before or as an alternative to an on-site review,
55-26    audit, or examination; and
 56-1                (3)  a method to assess compliance through on-site
 56-2    reviews, audits, and examinations, including document review,
 56-3    electronic systems testing or review, and observation and
 56-4    interviews of managed care organization employees.
 56-5          (c)  The commission and the Texas Department of Insurance may
 56-6    contract on a competitive bid basis with a consultant not
 56-7    affiliated with the commission or department to develop the
 56-8    integrated operational and financial audit instrument required by
 56-9    this section.
56-10          Sec. 533.020.  PREAUTHORIZATION FOR CERTAIN SERVICES NOT
56-11    REQUIRED.  The commission, in consultation with physicians,
56-12    hospitals, and managed care organizations contracting with the
56-13    commission under this chapter, shall develop:
56-14                (1)  a process by which the managed care organizations
56-15    eliminate preauthorization processes for covered services that are
56-16    considered to be routine services; and
56-17                (2)  a process by which to notify health care providers
56-18    of covered services under the Medicaid managed care program for
56-19    which preauthorization is not required.
56-20          Sec. 533.0201.  UTILIZATION REVIEW UNDER PRIMARY CARE CASE
56-21    MANAGEMENT NETWORK.  To the extent allowed by federal law, the
56-22    commission shall require a managed care organization that contracts
56-23    with the commission under this chapter and that provides health
56-24    care services to recipients through a primary care case management
56-25    network to conduct utilization review of those services in
56-26    accordance with Article 21.58A, Insurance Code.
 57-1          Sec. 533.0202.  NOTICE OF DETERMINATIONS MADE BY UTILIZATION
 57-2    REVIEW AGENTS.  (a)  In this section, "utilization review agent"
 57-3    has the meaning assigned by Section 2, Article 21.58A, Insurance
 57-4    Code.
 57-5          (b)  A utilization review agent shall notify a recipient or a
 57-6    person acting on behalf of the recipient and the recipient's health
 57-7    care provider of a utilization review determination in accordance
 57-8    with this section and Section 5(a), Article 21.58A, Insurance Code,
 57-9    with respect to services provided under the state Medicaid managed
57-10    care program.
57-11          (c)  If the utilization review agent makes an adverse
57-12    determination, the notice required by this section must include:
57-13                (1)  the principal reasons for the adverse
57-14    determination;
57-15                (2)  the clinical basis for the adverse determination;
57-16                (3)  a description or the source of the screening
57-17    criteria used as guidelines in making the determination; and
57-18                (4)  a description of the procedure for the complaint
57-19    and appeal process, including a description provided to the
57-20    recipient of:
57-21                      (A)  the recipient's right to a Medicaid fair
57-22    hearing at any time; and
57-23                      (B)  the procedures for appealing an adverse
57-24    determination at a Medicaid fair hearing.
57-25          (d)  The utilization review agent must provide notice of an
57-26    adverse determination:
 58-1                (1)  to the recipient and the recipient's health care
 58-2    provider of record by telephone or electronic transmission not
 58-3    later than the next business day after the date the determination
 58-4    is made if the recipient is hospitalized when the determination is
 58-5    made, to be followed not later than the third business day after
 58-6    the date the determination is made by a written notice of the
 58-7    determination;
 58-8                (2)  to the recipient and the recipient's health care
 58-9    provider of record by written notice not later than the third
58-10    business day after the date the determination is made if the
58-11    recipient is not hospitalized when the determination is made; or
58-12                (3)  to the recipient's treating physician or health
58-13    care provider within the time appropriate to the circumstances that
58-14    relate to the delivery of the services and the condition of the
58-15    patient, but not later than one hour after the recipient's treating
58-16    physician or provider requests poststabilization care following
58-17    emergency treatment.
58-18          (e)  The commissioner shall adopt rules to implement this
58-19    section.
58-20          Sec. 533.0203.  COMPLAINT INFORMATION.  (a)  The commission,
58-21    in cooperation with the Texas Department of Insurance and any other
58-22    appropriate entity, shall collect complaint data, including
58-23    complaint resolution rates, regarding managed care organizations
58-24    contracting with the commission under this chapter.  In entering
58-25    into or renewing a contract with a managed care organization under
58-26    this chapter, the commission may include provisions in the contract
 59-1    to accomplish the purposes of this section.
 59-2          (b)  The commission shall report on a quarterly basis the
 59-3    complaint data collected under Subsection (a) to the state Medicaid
 59-4    managed care advisory committee under Subchapter C.
 59-5          (c)  Not later than December 1 of each even-numbered year,
 59-6    the commission shall report to the legislature the complaint data
 59-7    collected under Subsection (a).  The report may be consolidated
 59-8    with any other report relating to the same subject matter the
 59-9    commission is required to submit under other law.
59-10          Sec. 533.0204.  PROVIDER REPORTING OF ENCOUNTER DATA.  The
59-11    commission shall collaborate with managed care organizations that
59-12    contract with the commission and health care providers under the
59-13    organizations' provider networks to develop incentives and
59-14    mechanisms to encourage providers to report complete and accurate
59-15    encounter data to managed care organizations in a timely manner.
59-16          Sec. 533.0205.  QUALIFICATIONS OF CERTIFIER OF ENCOUNTER
59-17    DATA.  (a)  The person acting as the state Medicaid director shall
59-18    appoint a person as the certifier of encounter data.
59-19          (b)  The certifier of encounter data must have:
59-20                (1)  demonstrated expertise in estimating premium
59-21    payment rates paid to a managed care organization under a managed
59-22    care plan; and
59-23                (2)  access to actuarial expertise, including expertise
59-24    in estimating premium payment rates paid to a managed care
59-25    organization under a managed care plan.
59-26          (c)  A person may not be appointed under this section as the
 60-1    certifier of encounter data if the person participated with the
 60-2    commission in developing premium payment rates for managed care
 60-3    organizations under managed care plans in this state during the
 60-4    three-year period before the date the certifier is appointed.
 60-5          Sec. 533.0206.  CERTIFICATION OF ENCOUNTER DATA.  (a)  The
 60-6    certifier of encounter data shall certify the completeness,
 60-7    accuracy, and reliability of encounter data for each state fiscal
 60-8    year.
 60-9          (b)  The commission shall make available to the certifier all
60-10    records and data the certifier considers appropriate for evaluating
60-11    whether to certify the encounter data.  The commission shall
60-12    provide to the certifier selected resources and assistance in
60-13    obtaining, compiling, and interpreting the records and data.
60-14          Sec. 533.0207.  IMPLEMENTATION OF CERTAIN MANAGED CARE PLANS
60-15    IN CERTAIN COUNTIES.  (a)  Notwithstanding any other law, before
60-16    implementing a Medicaid managed care plan that uses capitation as a
60-17    method of payment in a county with a population of less than
60-18    100,000, the commission must determine that implementation is
60-19    economically efficient.
60-20          (b)  Notwithstanding Subsection (a), the commission may
60-21    continue implementation of a Medicaid managed care plan described
60-22    by Subsection (a) in a county with a population of less than
60-23    100,000 if implementation of the plan in the county was in progress
60-24    on January 1, 2001.
60-25          (b)  Not later than March 1, 2002, the Health and Human
60-26    Services Commission and each appropriate health and human services
 61-1    agency implementing part of the Medicaid managed care program under
 61-2    Chapter 533, Government Code, shall complete the requirements for
 61-3    reducing and coordinating reporting requirements and inspection
 61-4    procedures as required by Section 533.017, Government Code, as
 61-5    added by this Act.
 61-6          (c)  Not later than March 1, 2002, the Health and Human
 61-7    Services Commission, the Texas Department of Insurance, and each
 61-8    appropriate health and human services agency implementing a part of
 61-9    the Medicaid managed care program under Chapter 533, Government
61-10    Code, shall enter into the memorandum of understanding required by
61-11    Section 533.018, Government Code, as added by this Act.
61-12          (d)  Not later than March 1, 2002, the Health and Human
61-13    Services Commission and the Texas Department of Insurance shall
61-14    develop the integrated operational and financial audit instrument
61-15    required by Section 533.019, Government Code, as added by this Act.
61-16          (e)  The changes in law made by Section 533.0202, Government
61-17    Code, as added by this Act, apply to a contract between the Health
61-18    and Human Services Commission and a managed care organization under
61-19    Chapter 533, Government Code, that is entered into or renewed on or
61-20    after the effective date of this Act.  A contract that is entered
61-21    into or renewed before the effective date of this Act is governed
61-22    by the law in effect on the date the contract was entered into or
61-23    renewed, and the former law is continued in effect for that
61-24    purpose.
61-25          (f)  Not later than January 1, 2002, the person acting as the
61-26    state Medicaid director shall appoint the certifier of Medicaid
 62-1    managed care encounter data required by Section 533.0205,
 62-2    Government Code, as added by this Act.
 62-3          SECTION 24.  Subsection (a), Section 533.041, Government
 62-4    Code, is amended to read as follows:
 62-5          (a)  The commission shall appoint a state Medicaid managed
 62-6    care advisory committee.  The advisory committee consists of
 62-7    representatives of:
 62-8                (1)  hospitals;
 62-9                (2)  managed care organizations;
62-10                (3)  primary care providers;
62-11                (4)  state agencies;
62-12                (5)  consumer advocates representing low-income
62-13    recipients;
62-14                (6)  consumer advocates representing recipients with a
62-15    disability;
62-16                (7)  parents of children who are recipients;
62-17                (8)  rural providers;
62-18                (9)  advocates for children with special health care
62-19    needs;
62-20                (10)  pediatric health care providers, including
62-21    specialty providers;
62-22                (11)  long-term care providers, including nursing home
62-23    providers;
62-24                (12)  obstetrical care providers;
62-25                (13)  community-based organizations serving low-income
62-26    children and their families; [and]
 63-1                (14)  community-based organizations engaged in
 63-2    perinatal services and outreach;
 63-3                (15)  medically underserved communities; and
 63-4                (16)  community mental health and mental retardation
 63-5    centers established under Subchapter A, Chapter 534, Health and
 63-6    Safety Code.
 63-7          SECTION 25.  Notwithstanding S.B. No. 1, Acts of the 77th
 63-8    Legislature, Regular Session, 2001 (the General Appropriations
 63-9    Act), the annual salary of the executive director of the
63-10    Interagency Council on Early Childhood Intervention during the
63-11    state fiscal biennium beginning September 1, 2001, is $72,000.
63-12          SECTION 26.  (a)  The commissioner of health and human
63-13    services shall conduct a study regarding the feasibility of
63-14    expanding the medical assistance program under Chapter 32, Human
63-15    Resources Code, to provide medical assistance to disabled children
63-16    18 years of age or younger in accordance with 42 U.S.C. Section
63-17    1396a(e)(3), as amended.
63-18          (b)  In conducting the study, the commissioner of health and
63-19    human services shall evaluate:
63-20                (1)  the number of children who would be eligible for
63-21    medical assistance under the expanded program and who would be
63-22    likely to enroll;
63-23                (2)  the effect of other health insurance coverage
63-24    provided for children who would be eligible under the expanded
63-25    medical assistance program on the cost of expanding the program;
63-26                (3)  utilization patterns of similar populations of
 64-1    disabled children under similar programs in this state and other
 64-2    states;
 64-3                (4)  the cost to the state of inappropriate
 64-4    institutionalization of disabled children resulting from
 64-5    unavailability of health insurance coverage for those children; and
 64-6                (5)  options for setting an income eligibility cap for
 64-7    the expanded medical assistance program.
 64-8          (c)  Not later than December 1, 2002, the commissioner of
 64-9    health and human services shall submit a report to the legislature
64-10    regarding the results of the study conducted under this section.
64-11    The report must include a recommendation regarding expanding the
64-12    medical assistance program to provide that assistance to disabled
64-13    children in accordance with 42 U.S.C. Section 1396a(e)(3), as
64-14    amended.
64-15          SECTION 27.  The commissioner of health and human services
64-16    shall examine the reimbursement methodology for air ambulance
64-17    services purchased under the medical assistance program and may
64-18    implement any changes necessary to maintain a viable air ambulance
64-19    system through the state.
64-20          SECTION 28.  On January 1, 2002, or on an earlier date
64-21    specified by the Health and Human Services Commission:
64-22                (1)  all powers, duties, functions, activities,
64-23    obligations, rights, contracts, records, employees, property, and
64-24    appropriations and other money of the Texas Department of Health
64-25    that are determined by the commissioner of health and human
64-26    services to be essential to the administration of Medicaid acute
 65-1    care services or the Medicaid vendor drug program are transferred
 65-2    to the Health and Human Services Commission;
 65-3                (2)  a rule or form adopted by the Texas Department of
 65-4    Health that relates to a transferred component of the Medicaid
 65-5    program is a rule or form of the Health and Human Services
 65-6    Commission and remains in effect until altered by the commission;
 65-7                (3)  a reference in law or an administrative rule to
 65-8    the Texas Department of Health that relates to a transferred
 65-9    component of the Medicaid program means the Health and Human
65-10    Services Commission;
65-11                (4)  a license, permit, or certification in effect that
65-12    was issued by the Texas Department of Health that relates to a
65-13    transferred component of the Medicaid program is continued in
65-14    effect as a license, permit, or certification of the Health and
65-15    Human Services Commission; and
65-16                (5)  a complaint, investigation, or other proceeding
65-17    pending before the Texas Department of Health that relates to a
65-18    transferred component of the Medicaid program is transferred
65-19    without change in status to the Health and Human Services
65-20    Commission.
65-21          SECTION 29.  (a)  Subject to Subsection (b) of this section,
65-22    if before implementing any provision of this Act a state agency
65-23    determines that a waiver or authorization from a federal agency is
65-24    necessary for implementation of that provision, the agency affected
65-25    by the provision shall request the waiver or authorization and may
65-26    delay implementing that provision until the waiver or authorization
 66-1    is granted.
 66-2          (b)  Implementation of Sections 32.053 through 32.056, Human
 66-3    Resources Code, as added by this Act, is governed by Section 9 of
 66-4    this Act.  Implementation of Section 32.057, Human Resources Code,
 66-5    as added by this Act, is governed by Section 10 of this Act.
 66-6          SECTION 30.  Except as otherwise provided by this Act, this
 66-7    Act takes effect September 1, 2001, and applies to a person
 66-8    receiving medical assistance on or after that date regardless of
 66-9    the date on which the person began receiving that medical
66-10    assistance.
                                                               S.B. No. 1156
            _______________________________     _______________________________
                President of the Senate              Speaker of the House
                  I hereby certify that S.B. No. 1156 passed the Senate on
            April 24, 2001, by the following vote:  Yeas 29, Nays 0, one
            present not voting; May 23, 2001, Senate refused to concur in House
            amendments and requested appointment of Conference Committee;
            May 24, 2001, House granted request of the Senate; May 27, 2001,
            Senate adopted Conference Committee Report by a viva-voce vote.
                                                _______________________________
                                                    Secretary of the Senate
                  I hereby certify that S.B. No. 1156 passed the House, with
            amendments, on May 22, 2001, by a non-record vote; May 24, 2001,
            House granted request of the Senate for appointment of Conference
            Committee; May 27, 2001, House adopted Conference Committee Report
            by a non-record vote.
                                                _______________________________
                                                    Chief Clerk of the House
            Approved:
            _______________________________
                         Date
            _______________________________
                       Governor