77R16085 KKA/KLA-F                          
         By Zaffirini, et al.                                  S.B. No. 1156
         Substitute the following for S.B. No. 1156:
         By Coleman                                        C.S.S.B. No. 1156
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the state Medicaid program.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 32.024, Human Resources Code, is amended
 1-5     by adding Subsections (x) and (y) to read as follows:
 1-6           (x)  In its rules and standards governing the vendor drug
 1-7     program, the department may not limit benefits for the number of
 1-8     medications prescribed to a recipient of prescription drug benefits
 1-9     under the medical assistance program.  In accordance with Section
1-10     531.02106, Government Code, the department also shall provide for
1-11     cost-sharing by recipients of prescription drug benefits under the
1-12     medical assistance program in a manner that ensures that recipients
1-13     with higher levels of income are required to pay progressively
1-14     higher percentages of the costs of prescription drugs.  In
1-15     implementing cost-sharing provisions required by this subsection,
1-16     the department may not require a pharmacy participating in the
1-17     vendor drug program to collect copayments or other cost-sharing
1-18     payments from recipients for remittance to the department, but
1-19     shall allow the pharmacy to retain the payments as a component of
1-20     the reimbursement provided to the pharmacy under the program.
1-21           (y)  The department shall provide medical assistance to a
1-22     person in need of treatment for breast or cervical cancer who is
1-23     eligible for that assistance under the Breast and Cervical Cancer
1-24     Prevention and Treatment Act of 2000 (Pub. L. No. 106-354) for a
 2-1     continuous period during which the person requires that treatment.
 2-2     The department shall simplify the provider enrollment process for a
 2-3     provider of that medical assistance and shall adopt rules to
 2-4     provide for certification of presumptive eligibility of a person
 2-5     for that assistance.  In determining a person's eligibility for
 2-6     medical assistance under this subsection, the department, to the
 2-7     extent allowed by federal law, may not require a personal
 2-8     interview.
 2-9           SECTION 2. (a)  Subchapter B, Chapter 32, Human Resources
2-10     Code, is amended by adding Sections 32.0247 and 32.0248 to read as
2-11     follows:
2-12           Sec. 32.0247.  ELIGIBILITY OF CERTAIN ALIENS. (a)  The
2-13     department shall provide medical assistance in accordance with 8
2-14     U.S.C. Section 1612(b), as amended, to a person who:
2-15                 (1)  is a qualified alien, as defined by 8 U.S.C.
2-16     Sections 1641(b) and (c), as amended;
2-17                 (2)  meets the eligibility requirements of the medical
2-18     assistance program;
2-19                 (3)  entered the United States on or after August 22,
2-20     1996; and
2-21                 (4)  has resided in the United States for a period of
2-22     five years after the date the person entered as a qualified alien.
2-23           (b)  If authorized by federal law, the department shall
2-24     provide pregnancy-related medical assistance to the maximum extent
2-25     permitted by the federal law to a person who is pregnant and is a
2-26     lawfully present alien as defined by 8 C.F.R. Section 103.12, as
2-27     amended, including a battered alien under 8 U.S.C. Section 1641(c),
 3-1     as amended, regardless of the date on which the person entered the
 3-2     United States.  The department shall comply with any prerequisite
 3-3     imposed under the federal law for providing medical assistance
 3-4     under this subsection.
 3-5           Sec. 32.0248.  MEDICAL ASSISTANCE FOR CERTAIN PERSONS MAKING
 3-6     TRANSITION FROM FOSTER CARE TO INDEPENDENT LIVING. (a)  In this
 3-7     section, "independent foster care adolescent" has the meaning
 3-8     assigned by 42 U.S.C. Section 1396d(w)(1).
 3-9           (b)  The department shall provide medical assistance, in
3-10     accordance with department rules, to an independent foster care
3-11     adolescent who:
3-12                 (1)  is not otherwise eligible for medical assistance;
3-13     and
3-14                 (2)  is not covered by a health benefits plan offering
3-15     adequate benefits, as determined by the Health and Human Services
3-16     Commission.
3-17           (c)  The department may not consider a person's income,
3-18     assets, or resources in determining whether the person is eligible
3-19     for medical assistance under this section.
3-20           (b)  As soon as possible after the effective date of this
3-21     Act, the Health and Human Services Commission shall submit an
3-22     amendment to the state's Medicaid plan to include the provision of
3-23     medical assistance to independent foster care adolescents as
3-24     required by Section 32.0248, Human Resources Code, as added by this
3-25     Act.
3-26           SECTION 3. Subchapter B, Chapter 32, Human Resources Code, is
3-27     amended by adding Section 32.0252 to read as follows:
 4-1           Sec. 32.0252.  CONTRACT TO PROVIDE ELIGIBILITY DETERMINATION
 4-2     SERVICES. (a)  To the extent allowed by federal law, and except as
 4-3     otherwise provided by this section, the department may contract for
 4-4     the provision of medical assistance eligibility services with:
 4-5                 (1)  a hospital district created under the authority of
 4-6     Sections 4-11, Article IX, Texas Constitution;
 4-7                 (2)  a hospital authority created under the authority
 4-8     of Chapter 262 or 264, Health and Safety Code, that uses resources
 4-9     to provide health care services to indigent persons to some extent;
4-10                 (3)  a hospital owned and operated by a municipality or
4-11     county or by a hospital authority created under Chapter 262 or 264,
4-12     Health and Safety Code;
4-13                 (4)  a medical school operated by this state;
4-14                 (5)  a medical school that receives state money under
4-15     Section 61.093, Education Code, or a chiropractic school that
4-16     receives state money under the General Appropriations Act;
4-17                 (6)  a teaching hospital operated by The University of
4-18     Texas System;
4-19                 (7)  a county that is required to provide health care
4-20     assistance to eligible county residents under Subchapter B, Chapter
4-21     61, Health and Safety Code;
4-22                 (8)  a governmental entity that is required to provide
4-23     money to a public hospital under Section 61.062, Health and Safety
4-24     Code;
4-25                 (9)  a county with a population of more than 400,000
4-26     that provides money to a public hospital and that is not included
4-27     in the boundaries of a hospital district;
 5-1                 (10)  a hospital owned by a municipality and leased to
 5-2     and operated by a nonprofit hospital for a public purpose;
 5-3                 (11)  a hospital that receives Medicaid
 5-4     disproportionate share payments;
 5-5                 (12)  a community mental health and mental retardation
 5-6     center;
 5-7                 (13)  a local mental health or mental retardation
 5-8     authority;
 5-9                 (14)  a local health department or public health
5-10     district;
5-11                 (15)  a school-based health center;
5-12                 (16)  a community health center; and
5-13                 (17)  a federally qualified health center.
5-14           (b)  The department may contract with an entity described by
5-15     Subsection (a)  for the entity to designate one or more employees
5-16     of the entity to  process medical assistance application forms and
5-17     conduct client interviews for eligibility determinations.
5-18           (c)  The contract must require each designated employee to
5-19     submit completed application forms to the appropriate agency as
5-20     determined by the department to finally determine eligibility and
5-21     to enroll eligible persons in the program. A designated employee
5-22     may not make a final determination of eligibility or enroll an
5-23     eligible person in the program.
5-24           (d)  The department may:
5-25                 (1)  monitor the eligibility and application processing
5-26     program used by an entity with which the department contracts; and
5-27                 (2)  provide on-site supervision of the program for
 6-1     quality control.
 6-2           (e)  The Health and Human Services Commission shall ensure
 6-3     that there are adequate protections to avoid a conflict of interest
 6-4     with an entity described by Subsection (a) that has a contract for
 6-5     eligibility services and also has a contract, either directly or
 6-6     through an affiliated entity, as a managed care organization for
 6-7     the Medicaid program or for the child health plan program under
 6-8     Chapter 62, Health and Safety Code.  The commission shall ensure
 6-9     that there are adequate protections for recipients to freely choose
6-10     a health plan without being inappropriately induced to join an
6-11     entity's health plan.
6-12           SECTION 4. Subchapter B, Chapter 32, Human Resources Code, is
6-13     amended by adding Section 32.0271 to read as follows:
6-14           Sec. 32.0271.  SELECTION OF NURSE FIRST ASSISTANT. (a)  In
6-15     this section, "nurse first assistant" means a registered nurse who:
6-16                 (1)  is certified in perioperative nursing by an
6-17     organization recognized by the Board of Nurse Examiners; and
6-18                 (2)  has completed a nurse first assistant educational
6-19     program approved by an organization recognized by the Board of
6-20     Nurse Examiners.
6-21           (b)  The department shall ensure that a recipient of medical
6-22     assistance may select a nurse first assistant to perform any health
6-23     care service or procedure covered under the medical assistance
6-24     program if:
6-25                 (1)  the selected nurse first assistant is authorized
6-26     by law to perform the service or procedure; and
6-27                 (2)  the physician requests that the service or
 7-1     procedure be performed by the nurse first assistant.
 7-2           (c)  The Board of Nurse Examiners may adopt rules governing
 7-3     nurse first assistants for purposes of this section.
 7-4           SECTION 5. Section 32.029, Human Resources Code, is amended
 7-5     by adding Subsection (f) to read as follows:
 7-6           (f)  The department or its designee may implement
 7-7     demonstration projects designed to reduce medical assistance claims
 7-8     processing costs.
 7-9           SECTION 6.  (a)  Subchapter B, Chapter 32, Human Resources
7-10     Code, is amended by adding Section 32.0422 to read as follows:
7-11           Sec. 32.0422.  HEALTH INSURANCE PREMIUM PAYMENT REIMBURSEMENT
7-12     PROGRAM FOR MEDICAL ASSISTANCE RECIPIENTS. (a)  In this section:
7-13                 (1)  "Department" means the Texas Department of Health.
7-14                 (2)  "Group health benefit plan" has the meaning
7-15     assigned by Article 21.52K, Insurance Code.
7-16           (b)  The department shall identify individuals, otherwise
7-17     entitled to medical assistance, who are eligible to enroll in a
7-18     group health benefit plan.  The department must include individuals
7-19     eligible for or receiving health care services under a Medicaid
7-20     managed care delivery system.
7-21           (c)  The department may require an individual requesting
7-22     medical assistance to provide information as necessary relating to
7-23     the availability of a group health benefit plan to the individual
7-24     through an employer of the individual or an employer of the
7-25     individual's spouse or parent.  The department may not leave
7-26     pending, consider incomplete, or otherwise delay an individual's
7-27     application for medical assistance or request for recertification
 8-1     as a result of the requirement authorized by this subsection.
 8-2           (d)  For an individual identified under Subsection (b), the
 8-3     department shall determine whether it is cost-effective to enroll
 8-4     the individual in the group health benefit plan under this section.
 8-5           (e)  If the department determines that it is cost-effective
 8-6     to enroll the individual in the group health benefit plan, the
 8-7     department shall:
 8-8                 (1)  require the individual to apply to enroll in the
 8-9     group health benefit plan as a condition for eligibility under the
8-10     medical assistance program; and
8-11                 (2)  provide written notice to the issuer of the group
8-12     health benefit plan in accordance with Article 21.52K, Insurance
8-13     Code.
8-14           (f)  The department shall provide for payment of:
8-15                 (1)  the employee's share of required premiums for
8-16     coverage of an individual enrolled in the group health benefit
8-17     plan; and
8-18                 (2)  any deductible, copayment, coinsurance, or other
8-19     cost-sharing obligation imposed on the enrolled individual for an
8-20     item or service otherwise covered under the medical assistance
8-21     program.
8-22           (g)  A payment made by the department under Subsection (f) is
8-23     considered to be a payment for medical assistance.
8-24           (h)  A payment of a premium for an individual who is a member
8-25     of the family of an individual enrolled in a group health benefit
8-26     plan under this section and who is not eligible for medical
8-27     assistance is considered to be a payment for medical assistance for
 9-1     an eligible individual if:
 9-2                 (1)  enrollment of the family members who are eligible
 9-3     for medical assistance is not possible under the plan without also
 9-4     enrolling members who are not eligible; and
 9-5                 (2)  the department determines it to be cost-effective.
 9-6           (i)  A payment of any deductible, copayment, coinsurance, or
 9-7     other cost-sharing obligation of a family member who is enrolled in
 9-8     a group health benefit plan in accordance with Subsection (h) and
 9-9     who is not eligible for medical assistance:
9-10                 (1)  may not be paid under this chapter; and
9-11                 (2)  is not considered to be a payment for medical
9-12     assistance for an eligible individual.
9-13           (j)  The department shall treat coverage under the group
9-14     health benefit plan as a third party liability to the program.
9-15     Enrollment of an individual in a group health benefit plan under
9-16     this section does not affect the individual's eligibility for
9-17     medical assistance benefits, except that the state is entitled to
9-18     payment under Sections 32.033 and 32.038.
9-19           (k)  The department may not require or permit an individual
9-20     who is enrolled in a group health benefit plan under this section
9-21     to participate in the Medicaid managed care program under Chapter
9-22     533, Government Code, or a Medicaid managed care demonstration
9-23     project under Section 32.041.
9-24           (l)  The Texas Department of Human Services shall provide
9-25     information and otherwise cooperate with the department as
9-26     necessary to ensure the enrollment of eligible individuals in the
9-27     group health benefit plan under this section.
 10-1          (m)  The department shall adopt rules as necessary to
 10-2    implement this section.  In developing rules and related
 10-3    procedures, the department shall consult with providers and other
 10-4    interested persons to minimize the administrative complexity of the
 10-5    program.
 10-6          (b)  Subchapter E, Chapter 21, Insurance Code, is amended by
 10-7    adding Article 21.52K to read as follows:
 10-8          Art. 21.52K.  ENROLLMENT OF MEDICAL ASSISTANCE RECIPIENTS
 10-9          Sec. 1.  DEFINITION OF GROUP HEALTH BENEFIT PLAN. (a)  In
10-10    this article, "group health benefit plan" means a plan that
10-11    provides benefits for medical or surgical expenses incurred as a
10-12    result of a health condition, accident, or sickness, including a
10-13    group, blanket, or franchise insurance policy or insurance
10-14    agreement, a group hospital service contract, or a group evidence
10-15    of coverage or similar group coverage document that is offered by:
10-16                (1)  an insurance company;
10-17                (2)  a group hospital service corporation operating
10-18    under Chapter 20 of this code;
10-19                (3)  a fraternal benefit society operating under
10-20    Chapter 10 of this code;
10-21                (4)  a stipulated premium insurance company operating
10-22    under Chapter 22 of this code;
10-23                (5)  a reciprocal exchange operating under Chapter 19
10-24    of this code;
10-25                (6)  a health maintenance organization operating under
10-26    the Texas Health Maintenance Organization Act (Chapter 20A,
10-27    Vernon's Texas Insurance Code);
 11-1                (7)  a multiple employer welfare arrangement that holds
 11-2    a certificate of authority under Article 3.95-2 of this code; or
 11-3                (8)  an approved nonprofit health corporation that
 11-4    holds a certificate of authority under Article 21.52F of this code.
 11-5          (b)  The term "group health benefit plan" includes:
 11-6                (1)  a small employer health benefit plan written under
 11-7    Chapter 26 of this code; and
 11-8                (2)  a plan provided under the Texas Employees Uniform
 11-9    Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
11-10    Insurance Code), the Texas State College and University Employees
11-11    Uniform Insurance Benefits Act (Article 3.50-3, Vernon's Texas
11-12    Insurance Code), the Texas Public School Employees Group Insurance
11-13    Act (Article 3.50-4, Vernon's Texas Insurance Code), or a successor
11-14    of any of those plans.
11-15          Sec. 2.  ENROLLMENT REQUIRED. (a)  The issuer of a group
11-16    health benefit plan, on receipt of written notice from the Texas
11-17    Department of Health or a designee of the Texas Department of
11-18    Health that states that an individual who is otherwise eligible for
11-19    enrollment in the plan is a recipient of medical assistance under
11-20    the state Medicaid program and is a participant in the health
11-21    insurance premium payment reimbursement program for medical
11-22    assistance recipients under Section 32.0422, Human Resources Code,
11-23    shall permit the individual to enroll in the plan without regard to
11-24    any enrollment period restriction.
11-25          (b)  If an individual described by Subsection (a) of this
11-26    section is not eligible to enroll in the plan unless a family
11-27    member of the individual is also enrolled in the plan, the issuer,
 12-1    on receipt of the written notice under Subsection (a) of this
 12-2    section, shall enroll both the individual and the family member in
 12-3    the plan.
 12-4          (c)  Unless enrollment occurs during an established
 12-5    enrollment period, enrollment under this article takes effect on
 12-6    the first day of the calendar month that begins at least 30 days
 12-7    after the date written notice is received by the issuer under
 12-8    Subsection (a) of this section.
 12-9          (d)  Notwithstanding any other requirement of the group
12-10    health benefit plan, the issuer of the plan shall permit an
12-11    individual who is enrolled in a group health benefit plan under
12-12    Subsection (a) of this section, and any family member of the
12-13    individual enrolled under Subsection (b) of this section, to
12-14    terminate enrollment in the plan not later than the 60th day after
12-15    the date on which the individual provides satisfactory proof to the
12-16    issuer that the individual is no longer:
12-17                (1)  a recipient of medical assistance under the state
12-18    Medicaid program; or
12-19                (2)  a participant in the health insurance premium
12-20    payment reimbursement program for medical assistance recipients
12-21    under Section 32.0422, Human Resources Code.
12-22          (c)  The changes in law made by this section take effect
12-23    August 31, 2001, and apply only to a group health benefit plan that
12-24    is delivered, issued for delivery, or renewed on or after that
12-25    date.  A group health benefit plan that is delivered, issued for
12-26    delivery, or renewed before August 31, 2001,  is governed by the
12-27    law as it existed immediately before that date, and that law is
 13-1    continued in effect for that purpose.
 13-2          SECTION 7.  (a)  Subchapter B, Chapter 32, Human Resources
 13-3    Code, is amended by adding Sections 32.053-32.056 to read as
 13-4    follows:
 13-5          Sec. 32.053.  DEMONSTRATION PROJECT FOR CERTAIN MEDICATIONS
 13-6    AND RELATED SERVICES. (a)  The department shall establish a
 13-7    demonstration project to provide to a person through the medical
 13-8    assistance program psychotropic medications and related laboratory
 13-9    and medical services necessary to conform to a prescribed medical
13-10    regime for those medications.
13-11          (b)  A person is eligible to participate in the demonstration
13-12    project if the person:
13-13                (1)  has been diagnosed as having a mental impairment,
13-14    including schizophrenia or bipolar disorder, that is expected to
13-15    cause the person to become a disabled individual, as defined by
13-16    Section 1614(a) of the federal Social Security Act (42 U.S.C.
13-17    Section 1382c), as amended;
13-18                (2)  is at least 19 years of age, but not more than 64
13-19    years of age;
13-20                (3)  has a net family income that is at or below 200
13-21    percent of the federal poverty level;
13-22                (4)  is not covered by a health benefits plan offering
13-23    adequate coverage, as determined by the department; and
13-24                (5)  is not otherwise eligible for medical assistance
13-25    at the time the person's eligibility for participation in the
13-26    demonstration project is determined.
13-27          (c)  To the extent allowed by federal law, and except as
 14-1    otherwise provided by this section, the department may contract for
 14-2    the provision of eligibility services for the demonstration project
 14-3    with a local mental health authority.
 14-4          (d)  Notwithstanding any other provision of this section, the
 14-5    department shall provide each participant in the demonstration
 14-6    project with a 12-month period of continuous eligibility for
 14-7    participation in the project.
 14-8          (e)  Participation in the demonstration project does not
 14-9    entitle a participant to other services provided under the medical
14-10    assistance program.
14-11          (f)  The department shall establish an appropriate enrollment
14-12    limit for the demonstration project and may not allow participation
14-13    in the project to exceed that limit.  Once the limit is reached,
14-14    the department shall establish a waiting list for enrollment in the
14-15    demonstration project.
14-16          (g)  To the extent permitted by federal law, the department
14-17    may require a participant in the demonstration project to make
14-18    cost-sharing payments for services provided through the project.
14-19          (h)  To the maximum extent possible, the department shall use
14-20    existing resources to fund the demonstration project.
14-21          (i)  Not later than December 1 of each even-numbered year,
14-22    the department shall submit a biennial report to the legislature
14-23    regarding the department's progress in establishing and operating
14-24    the demonstration project.
14-25          (j)  Not later than December 1, 2006, the department shall
14-26    evaluate the cost-effectiveness of the demonstration project,
14-27    including whether the preventive drug treatments and related
 15-1    services provided under the project offset future long-term care
 15-2    costs for project participants.  If the results of the evaluation
 15-3    indicate that the project is cost-effective, the department shall
 15-4    incorporate a request for funding for the continuation of the
 15-5    program in the department's budget request for the next state
 15-6    fiscal biennium.
 15-7          (k)  This section expires September 1, 2012.
 15-8          Sec. 32.054.  DEMONSTRATION PROJECT FOR PERSONS WITH HIV
 15-9    INFECTION OR AIDS. (a)  In this section, "AIDS" and "HIV" have the
15-10    meanings assigned by Section 81.101, Health and Safety Code.
15-11          (b)  The department shall establish a demonstration project
15-12    to provide a person with HIV infection or AIDS with the following
15-13    services and medications through the medical assistance program:
15-14                (1)  services provided by a physician, physician
15-15    assistant, advanced practice nurse, or other health care provider
15-16    specified by the department;
15-17                (2)  medications not included in the formulary for the
15-18    HIV medication program operated by the department, but determined
15-19    to be necessary for treatment of a condition related to HIV
15-20    infection or AIDS;
15-21                (3)  vaccinations for hepatitis B and pneumonia;
15-22                (4)  pap smears, colposcopy, and other diagnostic
15-23    procedures necessary to monitor gynecologic complications resulting
15-24    from HIV infection or AIDS in women;
15-25                (5)  hospitalization;
15-26                (6)  laboratory and other diagnostic services,
15-27    including periodic testing for CD4+ T-cell counts, viral load
 16-1    determination, and phenotype or genotype testing if clinically
 16-2    indicated; and
 16-3                (7)  other laboratory and radiological testing
 16-4    necessary to monitor potential toxicity of therapy.
 16-5          (c)  The department shall establish the demonstration project
 16-6    in at least two counties with a high prevalence of HIV infection
 16-7    and AIDS.  The department shall ensure that the demonstration
 16-8    project is financed using funds made available by the counties in
 16-9    which the department establishes the demonstration project.  The
16-10    manner in which a county makes funds available may include an
16-11    option for the county to be able to certify the amount of funds
16-12    considered available instead of sending the funds to the state.
16-13          (d)  A person is eligible to participate in the demonstration
16-14    project if the person:
16-15                (1)  has been diagnosed with HIV infection or AIDS by a
16-16    physician;
16-17                (2)  is under 65 years of age;
16-18                (3)  has a net family income that is at or below 200
16-19    percent of the federal poverty level;
16-20                (4)  is a resident of a county included in the project
16-21    or, subject to guidelines established by the department, is
16-22    receiving medical care for HIV infection or AIDS through a facility
16-23    located in a county included in the project;
16-24                (5)  is not covered by a health benefits plan offering
16-25    adequate coverage, as determined by the department; and
16-26                (6)  is not otherwise eligible for medical assistance
16-27    at the time the person's eligibility for participation in the
 17-1    demonstration project is determined.
 17-2          (e)  Participation in the demonstration project does not
 17-3    entitle a participant to other services provided under the medical
 17-4    assistance program.
 17-5          (f)  The department shall establish an appropriate enrollment
 17-6    limit for the demonstration project and may not allow participation
 17-7    in the project to exceed that limit.  Once the limit is reached,
 17-8    the department:
 17-9                (1)  shall establish a waiting list for enrollment in
17-10    the demonstration project; and
17-11                (2)  may allow eligible persons on the waiting list to
17-12    enroll solely in the HIV medication program operated by the
17-13    department.
17-14          (g)  The department shall ensure that a participant in the
17-15    demonstration project is also enrolled in the HIV medication
17-16    program operated by the department.
17-17          (h)  Notwithstanding any other provision of this section, the
17-18    department shall provide each participant in the project with a
17-19    six-month period of continuous eligibility for participation in the
17-20    project.
17-21          (i)  Not later than December 1 of each even-numbered year,
17-22    the department shall submit a biennial report to the legislature
17-23    regarding the department's progress in establishing and operating
17-24    the demonstration project.
17-25          (j)  Not later than December 1, 2006, the department shall
17-26    evaluate the cost-effectiveness of the demonstration project,
17-27    including whether the services and medications provided offset
 18-1    future higher costs for project participants.  If the results of
 18-2    the evaluation indicate that the project is cost-effective, the
 18-3    department shall incorporate a request for funding for the
 18-4    expansion of the project into additional counties or throughout the
 18-5    state, as appropriate, in the department's budget request for the
 18-6    next state fiscal biennium.
 18-7          (k)  This section expires September 1, 2012.
 18-8          Sec. 32.055.  DEMONSTRATION PROJECTS FOR PROVISION OF MEDICAL
 18-9    ASSISTANCE TO CERTAIN LOW-INCOME INDIVIDUALS. (a)  The Health and
18-10    Human Services Commission shall establish demonstration projects to
18-11    provide medical assistance under this chapter to adult individuals
18-12    who are not otherwise eligible for medical assistance and whose
18-13    incomes are at or below 200 percent of the federal poverty level.
18-14          (b)  The Health and Human Services Commission shall select
18-15    one or more municipalities or counties in which to implement the
18-16    demonstration projects.
18-17          (c)  The Health and Human Services Commission, in conjunction
18-18    with local governmental entities that make funds available to the
18-19    commission in accordance with this section, shall design the
18-20    components of the demonstration project and shall ensure that:
18-21                (1)  each demonstration project is financed using funds
18-22    made available by certain local governmental entities, through a
18-23    certification process, to the commission for matching purposes to
18-24    maximize federal funds for the medical assistance program; and
18-25                (2)  a participant in a demonstration project is not
18-26    subject to a limitation imposed on prescription drug benefits under
18-27    the medical assistance program.
 19-1          (d)  The Health and Human Services Commission shall appoint
 19-2    regional advisory committees to assist the commission in
 19-3    establishing and implementing demonstration projects under this
 19-4    section.  An advisory committee must include health care providers,
 19-5    employers, and local government officials.
 19-6          Sec. 32.056.  DEMONSTRATION PROJECT FOR WOMEN'S HEALTH CARE
 19-7    SERVICES. (a)  The department shall establish a five-year
 19-8    demonstration project through the medical assistance program to
 19-9    expand access to preventive health and family planning services for
19-10    women.  A woman eligible under Subsection (b) to participate in the
19-11    demonstration project may receive preventive health and family
19-12    planning services, including:
19-13                (1)  medical history;
19-14                (2)  physical examinations;
19-15                (3)  counseling and education on contraceptive methods;
19-16                (4)  provision of contraceptives;
19-17                (5)  health screenings, including screening for:
19-18                      (A)  diabetes;
19-19                      (B)  cervical cancer;
19-20                      (C)  breast cancer;
19-21                      (D)  sexually transmitted diseases;
19-22                      (E)  hypertension;
19-23                      (F)  cholesterol; and
19-24                      (G)  tuberculosis;
19-25                (6)  risk assessment; and
19-26                (7)  referral of medical problems to appropriate
19-27    providers.
 20-1          (b)  A woman is eligible to participate in the demonstration
 20-2    project if the woman:
 20-3                (1)  is of childbearing age, as determined by the
 20-4    department;
 20-5                (2)  has a net family income that is at or below 185
 20-6    percent of the federal poverty level; and
 20-7                (3)  is not otherwise eligible for the medical
 20-8    assistance program.
 20-9          (c)  The department shall develop procedures for determining
20-10    and certifying presumptive eligibility for a woman eligible under
20-11    Subsection (b).  The department shall integrate these procedures
20-12    with current procedures to minimize duplication of effort by
20-13    providers, the department, and other state agencies.
20-14          (d)  The department shall provide for 12 months of continuous
20-15    eligibility for a woman eligible under Subsection (b).
20-16          (e)  The department shall compile a list of potential funding
20-17    sources a client can use to help pay for treatment for health
20-18    problems:
20-19                (1)  identified using services provided to the client
20-20    under the demonstration project; and
20-21                (2)  for which the client is not eligible to receive
20-22    treatment under the medical assistance program.
20-23          (f)  Not later than December 1 of each even-numbered year,
20-24    the department shall submit a report to the legislature that
20-25    includes a statement of the department's progress in establishing
20-26    and operating the demonstration project.
20-27          (g)  The department shall ensure that money under the
 21-1    demonstration project established by this section may not be used
 21-2    for an abortion, as that term is defined by Section 245.002, Health
 21-3    and Safety Code.
 21-4          (h)  To the extent required by federal budget neutrality
 21-5    requirements, the department may establish an appropriate
 21-6    enrollment limit for the demonstration project.
 21-7          (i)  This section expires September 1, 2007.
 21-8          (b)  The state agency responsible for implementing the
 21-9    demonstration projects required by Sections 32.053-32.056, Human
21-10    Resources Code, as added by this Act, shall request and actively
21-11    pursue any necessary waivers or authorizations from the Health Care
21-12    Financing Administration or other appropriate entities to enable
21-13    the agency to implement the demonstration project not later than
21-14    September 1, 2002.  The agency may delay implementing the
21-15    demonstration project until the necessary waivers or authorizations
21-16    are granted.
21-17          SECTION 8. (a)  Subchapter B, Chapter 32, Human Resources
21-18    Code, is amended by adding Section 32.057 to read as follows:
21-19          Sec. 32.057.  PROGRAM OF ALL-INCLUSIVE CARE FOR THE ELDERLY
21-20    (PACE). (a)  The department, as a part of the medical assistance
21-21    program, shall develop and implement a program of all-inclusive
21-22    care for the elderly (PACE) in accordance with Section 4802 of the
21-23    Balanced Budget Act of 1997 (Pub. L. No. 105-33), as amended.  The
21-24    department shall provide medical assistance to a participant in the
21-25    PACE program in the manner and to the extent authorized by federal
21-26    law.
21-27          (b)  The department shall adopt rules as necessary to
 22-1    implement this section.  In adopting rules, the department shall:
 22-2                (1)  use the Bienvivir Senior Health Services of El
 22-3    Paso initiative as a model for the program; and
 22-4                (2)  ensure that a person is not required to hold a
 22-5    certificate of authority as a health maintenance organization under
 22-6    the Texas Health Maintenance Organization Act (Chapter 20A,
 22-7    Vernon's Texas Insurance Code) to provide services under the PACE
 22-8    program.
 22-9          (c)  The department may not contract with a person to provide
22-10    services under the PACE program unless the person:
22-11                (1)  purchases reinsurance in an amount determined by
22-12    the department that is sufficient to ensure the person's continued
22-13    solvency; or
22-14                (2)  has the financial resources sufficient to cover
22-15    expenses in the event of the person's insolvency.
22-16          (d)  To demonstrate sufficiency of financial resources for
22-17    purposes of Subsection (c)(2), a person may use cash reserves, a
22-18    letter of credit, a guarantee of a company affiliated with the
22-19    person, or a combination of those arrangements.  The amount of a
22-20    person's financial arrangement must be at least equal to the sum
22-21    of:
22-22                (1)  the total capitation revenue for one month; and
22-23                (2)  the average monthly payment of operating expenses.
22-24          (e)  The department shall consult with the Texas Department
22-25    of Insurance in determining a person's sufficiency of financial
22-26    resources for continued solvency or to cover expenses in the event
22-27    of the person's insolvency as required by Subsection (c).
 23-1          (f)  The department, with direction from the Health and Human
 23-2    Services Commission, shall develop and implement a coordinated plan
 23-3    to promote PACE program sites operating under this section.  The
 23-4    department shall adopt policies and procedures to ensure that
 23-5    caseworkers and any other appropriate state agency staff discuss
 23-6    the benefits of participating in the PACE program with long-term
 23-7    care clients.
 23-8          (b)  The state agency administering the program of
 23-9    all-inclusive care for the elderly (PACE) implemented under Section
23-10    32.057, Human Resources Code, as added by this Act, shall use its
23-11    best efforts to develop and support multiple PACE program sites.
23-12          (c)  If before June 1, 2004, the state does not receive
23-13    federal approval for the operation of all PACE program sites for
23-14    which the state has applied solely because the federal limit on the
23-15    number of new PACE program sites allowed nationwide per year has
23-16    been attained, the Health and Human Services Commission and Texas
23-17    Department of Human Services, not later than September 1, 2004,
23-18    shall examine federal laws and regulations regarding PACE programs
23-19    and identify changes to law that would result in an increased
23-20    number of PACE programs in this state.
23-21          (d)  Not later than December 1, 2004, the commissioner of
23-22    health and human services shall submit to the legislature a written
23-23    report concerning the results of the examination conducted under
23-24    Subsection (c) of this section.  The report must include any
23-25    recommendations for memorializing the Congress of the United States
23-26    to request changes to federal laws or regulations.
23-27          (e)  As soon as practicable after the effective date of this
 24-1    Act, the Health and Human Services Commission shall submit an
 24-2    amendment to the state's Medicaid plan authorizing the state to
 24-3    implement the program of all-inclusive care for the elderly (PACE)
 24-4    established under Section 32.057, Human Resources Code, as added by
 24-5    this Act.  The commission is not required to submit an additional
 24-6    amendment to the state's Medicaid plan each time the state agency
 24-7    administering the PACE program selects and enters into a proposed
 24-8    agreement with a provider to deliver services under the program.
 24-9          SECTION 9.  (a)  Subchapter B, Chapter 531, Government Code,
24-10    is amended by adding Sections 531.02101-531.02106 to read as
24-11    follows:
24-12          Sec. 531.02101.  TRANSFER AUTHORITY RELATING TO
24-13    ADMINISTRATION OF MEDICAID PROGRAM.  (a)  To the extent that
24-14    reorganization is necessary to achieve the goals of increased
24-15    administrative efficiency, increased accountability, or cost
24-16    savings in the Medicaid program or to otherwise improve the health
24-17    of residents of this state, the commission, subject to Subsection
24-18    (b), may transfer any power, duty, function, program, activity,
24-19    obligation, right, contract, record, employee, property, or
24-20    appropriation or other money relating to administration of the
24-21    Medicaid program from a health and human services agency to the
24-22    commission.
24-23          (b)  A transfer authorized by Subsection (a) may not take
24-24    effect unless approved by the Medicaid legislative oversight
24-25    committee created under Section 531.02102.
24-26          (c)  The commission must notify the Legislative Budget Board
24-27    and the governor's office of budget and planning not later than the
 25-1    30th day before the effective date of a transfer authorized by
 25-2    Subsection (a).
 25-3          Sec. 531.02102.  MEDICAID LEGISLATIVE OVERSIGHT COMMITTEE.
 25-4    (a)  The Medicaid legislative oversight committee is composed of:
 25-5                (1)  three members of the senate appointed by the
 25-6    lieutenant governor; and
 25-7                (2)  three members of the house of representatives
 25-8    appointed by the speaker of the house of representatives.
 25-9          (b)  A member of the Medicaid legislative oversight committee
25-10    serves at the pleasure of the appointing official.
25-11          (c)  The lieutenant governor and speaker of the house of
25-12    representatives shall appoint the presiding officer of the Medicaid
25-13    legislative oversight committee on an alternating basis.  The
25-14    presiding officer shall serve a two-year term expiring February 1
25-15    of each odd-numbered year.
25-16          (d)  The Medicaid legislative oversight committee shall:
25-17                (1)  meet not more than quarterly at the call of the
25-18    presiding officer; and
25-19                (2)  review and approve or reject any transfer proposed
25-20    by the commission of a power, duty, function, program, activity,
25-21    obligation, right, contract, record, employee, property, or
25-22    appropriation or other money relating to administration of the
25-23    Medicaid program from a health and human services agency to the
25-24    commission.
25-25          (e)  The Medicaid legislative oversight committee may use
25-26    staff of standing committees in the senate and house of
25-27    representatives with appropriate jurisdiction, the Department of
 26-1    Information Resources, the state auditor, the Texas Legislative
 26-2    Council, and the Legislative Budget Board in carrying out its
 26-3    responsibilities.
 26-4          Sec. 531.02103.  MEDICAID PROGRAM:  STRATEGIES FOR IMPROVING
 26-5    BUDGET CERTAINTY AND COST SAVINGS. (a)  To achieve administrative
 26-6    efficiency and cost savings in the Medicaid program, the commission
 26-7    shall develop and implement strategies to improve management of the
 26-8    cost, quality, and use of services provided under the program.  The
 26-9    strategies developed and implemented under this section may
26-10    include:
26-11                (1)  expansion of an enhanced primary care case
26-12    management model in areas of the state currently subject to
26-13    fee-for-service arrangements;
26-14                (2)  use of medical case management for complex medical
26-15    cases;
26-16                (3)  mandatory enrollment of some or all Medicaid
26-17    recipients who receive Supplemental Security Income (SSI) (42
26-18    U.S.C. Section 1381 et seq.) into a STAR + Plus pilot program in an
26-19    area of the state served by a STAR + Plus pilot program as of
26-20    January 1, 2001, or into an alternate managed care model developed
26-21    by the commission;
26-22                (4)  use of telemedicine for children and other persons
26-23    with special health care needs;
26-24                (5)  use of copayments and other mechanisms to
26-25    encourage responsible use of health care services under the
26-26    program, provided that implementation occurs in accordance with
26-27    Section 531.02106;
 27-1                (6)  use of procurement initiatives such as selective
 27-2    contracting as a mechanism for obtaining provider services under
 27-3    the program, provided that the initiatives may not apply to
 27-4    pharmacies participating in the vendor drug program;
 27-5                (7)  expansion of the program of all-inclusive care for
 27-6    the elderly (PACE), as authorized by Section 4802 of the Balanced
 27-7    Budget Act of 1997 (Pub. L. No. 105-33), as amended, to additional
 27-8    sites;
 27-9                (8)  use of disease management and drug therapy
27-10    management for Medicaid recipients with chronic diseases, including
27-11    congestive heart failure, chronic obstructive pulmonary disease,
27-12    asthma, and diabetes;
27-13                (9)  use of cost controls in the provision of
27-14    pharmaceutical services as necessary to ensure appropriate pricing,
27-15    cost-effective use of pharmaceutical products, and the state's
27-16    greatest entitlement to rebates from pharmaceutical manufacturers;
27-17                (10)  use of competitive pricing for medical equipment
27-18    and supplies, including vision care equipment and supplies;
27-19                (11)  expansion of the health insurance premium payment
27-20    reimbursement system (HIPPS); and
27-21                (12)  reduction of hospital outlier payments by not
27-22    more than five percent for cases that exceed the established rate
27-23    of reimbursement.
27-24          (b)  The commission shall consult with local communities,
27-25    providers, consumers, and other affected parties in the development
27-26    and implementation of strategies under Subsection (a) and shall
27-27    solicit input on the need for and effect of those strategies.  The
 28-1    commission may use existing state or local advisory committees for
 28-2    this purpose or may hold public hearings in the development of
 28-3    agency rules and procedures and necessary state plan amendments or
 28-4    waivers.
 28-5          Sec. 531.02104.  MEDICAID ELIGIBILITY AND ENROLLMENT. The
 28-6    commission shall ensure that:
 28-7                (1)  the Medicaid eligibility policies, processes, and
 28-8    time frames of the Texas Department of Human Services, including
 28-9    policies, processes, and time frames relating to an applicant or
28-10    recipient whose eligibility status is on hold, are designed to
28-11    minimize the time that an applicant or recipient is required to
28-12    wait before the applicant or recipient begins receiving services or
28-13    is recertified;
28-14                (2)  each state agency operating a part of the Medicaid
28-15    program conforms the Medicaid eligibility policies and related
28-16    processes and time frames, including any cutoff dates, of the
28-17    agency and any agency contractor to the Medicaid eligibility
28-18    policies, processes, and time frames of the Texas Department of
28-19    Human Services; and
28-20                (3)  the Medicaid eligibility policies, processes, and
28-21    time frames of each agency operating a part of the Medicaid program
28-22    and any agency contractor are designed to minimize the time that an
28-23    applicant or recipient is required to wait before receiving
28-24    services.
28-25          Sec. 531.02105.  TEXAS HEALTH STEPS PROGRAM. The commission
28-26    shall:
28-27                (1)  take all actions necessary to simplify:
 29-1                      (A)  provider enrollment in the Texas Health
 29-2    Steps program;
 29-3                      (B)  reporting requirements relating to the Texas
 29-4    Health Steps program; and
 29-5                      (C)  billing and coding procedures so that Texas
 29-6    Health Steps program processes are more consistent with commercial
 29-7    standards;
 29-8                (2)  in consultation with providers of Texas Health
 29-9    Steps program services, develop mechanisms to promote accurate,
29-10    reliable, and timely reporting of examinations of children
29-11    conducted under the program to managed care organizations and other
29-12    appropriate entities;
29-13                (3)  in consultation with providers of Texas Health
29-14    Steps program services, develop a mechanism to promote
29-15    incorporation of Texas Health Steps program services into a child's
29-16    medical home; and
29-17                (4)  require the external quality monitoring
29-18    organization to evaluate the Texas Health Steps program using
29-19    information available from all relevant sources and prepare
29-20    periodic reports regarding the program for submission by the
29-21    commission to the legislature.
29-22          Sec. 531.02106.  GUIDELINES FOR MEDICAID COST-SHARING. Before
29-23    requiring Medicaid recipients to make copayments or comply with
29-24    other cost-sharing requirements, the commission by rule shall:
29-25                (1)  establish monthly limits on total copayments and
29-26    other cost-sharing requirements so that:
29-27                      (A)  a recipient with an income at or below the
 30-1    federal poverty level is not required to pay more than the lesser
 30-2    of $10 or five percent of the recipient's monthly household gross
 30-3    income, and the total amount required to be paid by all members of
 30-4    a household consisting only of recipients with incomes at or below
 30-5    the federal poverty level does not exceed five percent of the
 30-6    recipients' monthly household gross income; and
 30-7                      (B)  a recipient with an income above the federal
 30-8    poverty level is not required to pay more than five percent of the
 30-9    recipient's monthly household gross income, and the total amount
30-10    required to be paid by all members of a household that includes a
30-11    recipient with an income above the federal poverty level does not
30-12    exceed five percent of the members' monthly household gross income;
30-13    and
30-14                (2)  exempt preventive care services from any copayment
30-15    or other cost-sharing requirements.
30-16          (b)  As soon as possible after the effective date of this
30-17    Act, the lieutenant governor and the speaker of the house of
30-18    representatives shall appoint the members of the Medicaid
30-19    legislative oversight committee created by Section 531.02102,
30-20    Government Code, as added by this Act.  The speaker of the house of
30-21    representatives shall appoint the initial presiding officer of the
30-22    committee.
30-23          SECTION 10.  Subchapter B, Chapter 531, Government Code, is
30-24    amended by adding Section 531.02131 to read as follows:
30-25          Sec. 531.02131.  COMMUNITY OUTREACH CAMPAIGN.  (a)  The
30-26    commission shall conduct a community outreach campaign to provide
30-27    information relating to the availability of Medicaid coverage for
 31-1    children and adults and to promote enrollment of eligible children
 31-2    and adults in Medicaid.
 31-3          (b)  As a part of the community outreach campaign, the
 31-4    commission shall inform potential Medicaid recipients of the
 31-5    toll-free telephone assistance number required by Section 531.0213.
 31-6          (c)  The commission shall contract with community-based
 31-7    organizations and other organizations, as appropriate, for
 31-8    assistance in implementing the community outreach campaign.
 31-9          (d)  In designing the community outreach campaign, the
31-10    commission shall include components similar to components of the
31-11    community outreach campaign required under Section 62.056, Health
31-12    and Safety Code.
31-13          (e)  To the extent feasible and appropriate, the commission
31-14    may combine the community outreach campaign required by this
31-15    section with any other state outreach campaign or educational
31-16    activity relating to health care and available health care
31-17    coverage.
31-18          SECTION 11.  Subsection (d), Section 531.0214, Government
31-19    Code, is amended to read as follows:
31-20          (d)  The commission shall develop the database system in a
31-21    manner that will enable a complete analysis of the use of
31-22    prescription medications[, including information relating to:]
31-23                [(1)  Medicaid clients for whom more than three
31-24    medications have been prescribed; and]
31-25                [(2)  the medical effect denial of Medicaid coverage
31-26    for more than three medications has had on Medicaid clients].
31-27          SECTION 12.  Subsection (a), Section 531.026, Government
 32-1    Code, is amended to read as follows:
 32-2          (a)  The commission shall prepare and submit to the
 32-3    lieutenant governor, the speaker of the house of representatives,
 32-4    the comptroller, the Legislative Budget Board, [and] the governor's
 32-5    office of budget and planning, each member of the appropriations
 32-6    committees of the senate and house of representatives, and each
 32-7    member of the standing committees of the senate and house of
 32-8    representatives with responsibility for oversight of health and
 32-9    human services issues [governor] a consolidated health and human
32-10    services budget recommendation not later than October 15 of each
32-11    even-numbered year.
32-12          SECTION 13.  Subchapter B, Chapter 531, Government Code, is
32-13    amended by adding Section 531.0261 to read as follows:
32-14          Sec. 531.0261.  CONSOLIDATED MEDICAID APPROPRIATIONS REQUEST.
32-15    (a)  The commission shall include in the consolidated budget
32-16    recommendation required by Section 531.026 a consolidated Medicaid
32-17    appropriations request for the subsequent fiscal biennium.
32-18          (b)  The commission shall:
32-19                (1)  develop the consolidated Medicaid appropriations
32-20    request with input from the Legislative Budget Board and the
32-21    governor's office of budget and planning to ensure that relevant
32-22    information for acute and long-term care Medicaid programs relating
32-23    to caseloads, costs, measures, rates, waivers, and eligibility is
32-24    reflected; and
32-25                (2)  provide assistance with the legislative
32-26    appropriations process by revising the consolidated Medicaid
32-27    appropriations request each time that revised caseload and cost
 33-1    estimates relating to the Medicaid program are prepared.
 33-2          SECTION 14.  Subchapter B, Chapter 531, Government Code, is
 33-3    amended by adding Section 531.0272 to read as follows:
 33-4          Sec. 531.0272.  COMPREHENSIVE MEDICAID OPERATING BUDGET;
 33-5    QUARTERLY EXPENDITURE REPORTS.  (a)  The commission shall prepare a
 33-6    comprehensive Medicaid operating budget at the beginning of each
 33-7    fiscal year, with input as appropriate from each health and human
 33-8    services agency that receives legislative appropriations relating
 33-9    to the Medicaid program.
33-10          (b)  The commission shall monitor all Medicaid expenditures
33-11    by the commission and health and human services agencies and submit
33-12    quarterly Medicaid expenditure reports to the lieutenant governor,
33-13    the speaker of the house of representatives, the comptroller, the
33-14    Legislative Budget Board, the governor's office of budget and
33-15    planning, each member of the appropriations committees of the
33-16    senate and house of representatives, and each member of the
33-17    standing committees of the senate and house of representatives with
33-18    responsibility for oversight of health and human services issues.
33-19          (c)  The commission shall prepare the comprehensive Medicaid
33-20    operating budget and quarterly Medicaid expenditure reports with
33-21    input from the Legislative Budget Board and the governor's office
33-22    of budget and planning to ensure that the information described by
33-23    Section 531.0261(b)(1) is reflected.
33-24          SECTION 15.  Subchapter B, Chapter 531, Government Code, is
33-25    amended by adding Sections 531.055 and 531.056 to read as follows:
33-26          Sec. 531.055.  MEDICAID REIMBURSEMENT RATES REPORT. Not later
33-27    than December 1 of each even-numbered year, the commission shall
 34-1    prepare and deliver to the governor, the lieutenant governor, the
 34-2    speaker of the house of representatives, and each member of the
 34-3    legislature a report that:
 34-4                (1)  identifies the Medicaid provider reimbursement
 34-5    rates established by rule for each county in this state and the
 34-6    rates paid to providers by managed care organizations contracting
 34-7    with the commission under Chapter 533 in each affected area of the
 34-8    state;
 34-9                (2)  compares the rates identified under Subdivision
34-10    (1) to:
34-11                      (A)  the rates paid by other health care payors,
34-12    including Medicare, in the same county or affected area of the
34-13    state for comparable services provided to comparable populations;
34-14    and
34-15                      (B)  the appropriate Medicaid rates of the top 15
34-16    industrial states as ranked by the United States Department of
34-17    Commerce Bureau of Economic Analysis based on gross state product;
34-18                (3)  includes information necessary to permit an
34-19    accurate comparison of reimbursement provided to pharmacies
34-20    participating in the vendor drug program, including information
34-21    relating to dispensing fees, brand name drug product cost
34-22    definitions, generic drug product cost definitions, any other
34-23    reimbursements or deductions, and total reimbursements for the top
34-24    25 brand name drug prescriptions and for the top 25 generic drug
34-25    prescriptions; and
34-26                (4)  includes information resulting from cost reports
34-27    obtained from a statistically valid sample of pharmacies
 35-1    participating in the vendor drug program that specify the costs of
 35-2    the pharmacies in preparing and dispensing prescriptions and
 35-3    providing other pharmacy services, including drug therapy
 35-4    management.
 35-5          Sec. 531.056.  MIGRANT CARE NETWORK STUDY; PILOT PROGRAM. (a)
 35-6    In this section, "migrant or seasonal agricultural worker" means an
 35-7    individual who:
 35-8                (1)  is working or available for work seasonally or
 35-9    temporarily in primarily an agricultural or agriculture-related
35-10    industry; and
35-11                (2)  moves one or more times from one place to another
35-12    to perform seasonal or temporary employment or to be available for
35-13    seasonal or temporary employment.
35-14          (b)  The commission shall conduct a study regarding the
35-15    feasibility of contracting with one or more existing networks of
35-16    health care providers located in this state and in other states to
35-17    establish a migrant care network to provide health care services to
35-18    children of migrant or seasonal agricultural workers who are
35-19    residents of this state and intend to return to this state at the
35-20    conclusion of temporary or seasonal employment in another state and
35-21    who are:
35-22                (1)  recipients of medical assistance under Chapter 32,
35-23    Human Resources Code; or
35-24                (2)  enrollees in the child health plan program under
35-25    Chapter 62, Health and Safety Code, or the health benefits plan
35-26    program under Chapter 63, Health and Safety Code.
35-27          (c)  In conducting the study under this section, the
 36-1    commission shall:
 36-2                (1)  consider migrant work patterns to determine in
 36-3    which states the migrant care network is most needed to adequately
 36-4    provide the medical assistance, child health plan coverage, or
 36-5    health benefits plan coverage;
 36-6                (2)  examine the necessity and fiscal effect of
 36-7    entering into interstate agreements to establish the migrant care
 36-8    network; and
 36-9                (3)  determine whether ensuring the provision of health
36-10    care services under the medical assistance program, the child
36-11    health plan program, and the health benefits plan program for
36-12    children of migrant or seasonal agricultural workers during the
36-13    time in which a child is outside of this state is necessary to
36-14    maintain continuity of care for the child.
36-15          (d)  If, based on the results of the study under this
36-16    section, the commission determines that the establishment of a
36-17    migrant care network is feasible, the commission shall develop and
36-18    implement a pilot program for that purpose.  The commission by rule
36-19    shall establish eligibility criteria for participation in the pilot
36-20    program.
36-21          (e)  The commission shall report its findings and
36-22    recommendations regarding the establishment of a migrant care
36-23    network to the governor, the lieutenant governor, and the standing
36-24    committees of the senate and house of representatives having
36-25    primary jurisdiction over the commission.  The commission shall
36-26    make the report:
36-27                (1)  on completion of the study required by this
 37-1    section if the commission determines that the establishment of the
 37-2    migrant care network is not feasible; or
 37-3                (2)  on implementation of the pilot program required by
 37-4    this section if the commission determines that the establishment of
 37-5    the migrant care network is feasible.
 37-6          (f)  This section expires September 1, 2003.
 37-7          SECTION 16.  (a)  The purpose of this section is to pilot a
 37-8    coordinated approach to addressing the needs of homeless people
 37-9    with chronic illnesses who are recipients of medical assistance
37-10    under Chapter 32, Human Resources Code, so that homeless people may
37-11    learn to manage their illnesses and become productive members of
37-12    society.  Current state, federal, and local agencies fund separate
37-13    programs that address only one aspect of the needs of homeless
37-14    people, such as housing, job training, and medical care.  Homeless
37-15    people with chronic illnesses will benefit from a coordinated
37-16    approach that comprehensively addresses the needs of homeless
37-17    people.
37-18          (b)  Subchapter B, Chapter 531, Government Code, is amended
37-19    by adding Section 531.057 to read as follows:
37-20          Sec. 531.057.  PILOT CASE MANAGEMENT PROGRAM. (a)  The
37-21    commission, in cooperation with the Texas Interagency Council for
37-22    the Homeless, shall develop a pilot case management program for
37-23    homeless people who have chronic illnesses, including diabetes and
37-24    HIV infection or AIDS, and who are recipients of medical assistance
37-25    under Chapter 32, Human Resources Code.  The council in cooperation
37-26    with relevant state agencies shall administer the pilot program
37-27    under the direction of the commission.
 38-1          (b)  Using existing resources of the agencies composing the
 38-2    council, the staff of the council shall:
 38-3                (1)  select a county with a population of more than 2.8
 38-4    million in which to implement the program;
 38-5                (2)  identify existing services provided through
 38-6    programs of the agencies composing the council to homeless people
 38-7    with chronic illnesses who are recipients of medical assistance;
 38-8                (3)  identify existing federal, state, county, and
 38-9    local sources from which money may be available to fund the pilot
38-10    program; and
38-11                (4)  create a pilot case management program for not
38-12    more than 75 homeless people with chronic illnesses who are
38-13    recipients of medical assistance using existing financial and
38-14    agency resources.
38-15          (c)  The council shall select, through competitive bidding, a
38-16    nonprofit entity to implement the pilot case management program for
38-17    the homeless.  The pilot program established under this section
38-18    must:
38-19                (1)  provide case management services and existing
38-20    health-related education services to participants of the program;
38-21    and
38-22                (2)  coordinate housing, medical, job training, and
38-23    other necessary services for the participants of the program.
38-24          (d)  The commission shall identify programs available through
38-25    health and human services agencies through which homeless people
38-26    described by Subsection (a) may receive housing, medical, job
38-27    placement, or other services.  The commission shall report to the
 39-1    council information regarding the identified programs, including
 39-2    the programs' sources of funding and eligibility requirements.
 39-3          (e)  Not later than December 15 of each even-numbered year,
 39-4    the council shall submit a report to the governor, the lieutenant
 39-5    governor, and the speaker of the house of representatives regarding
 39-6    the effectiveness of the pilot program established under this
 39-7    section.
 39-8          (f)  This section expires September 1, 2005.
 39-9          (c)  The Health and Human Services Commission shall develop
39-10    and the Texas Interagency Council for the Homeless shall implement
39-11    the pilot program established under this section not later than
39-12    November 1, 2001.
39-13          SECTION 17.  The heading to Chapter 533, Government Code, is
39-14    amended to read as follows:
39-15               CHAPTER 533.  DEVELOPMENT AND IMPLEMENTATION
39-16                     OF MEDICAID MANAGED CARE PROGRAM
39-17          SECTION 18.  Subchapter A, Chapter 533, Government Code, is
39-18    amended by amending Sections 533.001 and 533.002 and adding
39-19    Sections 533.0021, 533.0022, and 533.0023 to read as follows:
39-20          Sec. 533.001.  Definitions. In this chapter:
39-21                (1)  "Commission" means the Health and Human Services
39-22    Commission or an agency operating part of the state Medicaid
39-23    managed care program, as appropriate.
39-24                (2)  "Commissioner" means the commissioner of health
39-25    and human services.
39-26                (3)  "Health and human services agencies" has the
39-27    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:
40-27                      (A)  improves the health of the people of this
 41-1    state by:
 41-2                            (i)  emphasizing prevention;
 41-3                            (ii)  promoting continuity of care; and
 41-4                            (iii)  providing a medical home for
 41-5    recipients;
 41-6                      (B)  ensures that each recipient receives
 41-7    high-quality, comprehensive health care services in the recipient's
 41-8    local community; and
 41-9                      (C)  ensures that the community supports the
41-10    implementation of the system in the health care service region, to
41-11    be ascertained through a public hearing in the community at which
41-12    the commission takes public comment from health care consumers and
41-13    physicians and other health care providers;
41-14                (2)  to the extent that it is cost-effective to this
41-15    state and local governments:
41-16                      (A)  maximize the financing of the state Medicaid
41-17    program by obtaining federal matching funds for all resources or
41-18    other money available for matching; and
41-19                      (B)  expand Medicaid eligibility to include
41-20    persons who were eligible to receive indigent health care services
41-21    through the use of those resources or other money available for
41-22    matching before expansion of eligibility; and
41-23                (3)  develop and prepare the waiver or other documents
41-24    necessary to obtain federal authorization for the system.
41-25          Sec. 533.0022.  PURPOSE.  The commission shall implement the
41-26    Medicaid managed care program as part of the health care delivery
41-27    system developed under this chapter [Chapter 532] by contracting
 42-1    with managed care organizations in a manner that, to the extent
 42-2    possible:
 42-3                (1)  accomplishes the goals described by Section
 42-4    533.0021 [improves the health of Texans by:]
 42-5                      [(A)  emphasizing prevention;]
 42-6                      [(B)  promoting continuity of care; and]
 42-7                      [(C)  providing a medical home for recipients;]
 42-8                [(2)  ensures that each recipient receives high
 42-9    quality, comprehensive health care services in the recipient's
42-10    local community];
42-11                (2) [(3)]  encourages the training of and access to
42-12    primary care physicians and providers;
42-13                (3) [(4)]  maximizes cooperation with existing public
42-14    health entities, including local departments of health and
42-15    community mental health and mental retardation centers established
42-16    under Chapter 534, Health and Safety Code;
42-17                (4) [(5)]  provides incentives to managed care
42-18    organizations to improve the quality of health care services for
42-19    recipients by providing value-added services; [and]
42-20                (5) [(6)]  reduces administrative and other
42-21    nonfinancial barriers for recipients in obtaining health care
42-22    services; and
42-23                (6)  controls the costs associated with the state
42-24    Medicaid program.
42-25          Sec. 533.0023.  RULES FOR HEALTH CARE DELIVERY SYSTEM. The
42-26    commissioner of insurance shall adopt rules as necessary or
42-27    appropriate to carry out the functions of the Texas Department of
 43-1    Insurance under this chapter.
 43-2          SECTION 19.  Section 533.003, Government Code, is amended to
 43-3    read as follows:
 43-4          Sec.  533.003.  CONSIDERATIONS IN AWARDING CONTRACTS. (a)  In
 43-5    awarding contracts to managed care organizations, the commission
 43-6    shall:
 43-7                (1)  give preference to organizations that have
 43-8    significant participation in the organization's provider network
 43-9    from each health care provider in the region who has traditionally
43-10    provided care to Medicaid and charity care patients;
43-11                (2)  give extra consideration to organizations that
43-12    agree to assure continuity of care for at least three months beyond
43-13    the period of Medicaid eligibility for recipients;
43-14                (3)  consider the need to use different managed care
43-15    plans to meet the needs of different populations; and
43-16                (4)  consider the ability of organizations to process
43-17    Medicaid claims electronically.
43-18          (b)  The commission may not award a contract to or renew a
43-19    contract with a managed care organization that, after July 1, 2001,
43-20    has a policy that the usual and customary reimbursement rate for a
43-21    health care provider who is outside the organization's provider
43-22    network is equal to the lowest contracted rate the organization has
43-23    negotiated with a provider who is in the network in the same health
43-24    care service region.
43-25          SECTION 20.  Subchapter A, Chapter 533, Government Code, is
43-26    amended by adding Section 533.0035 to read as follows:
43-27          Sec. 533.0035.  LIMITATION ON NUMBER OF CONTRACTS AWARDED.
 44-1    The commission shall:
 44-2                (1)  evaluate the number of managed care organizations
 44-3    with which the commission contracts to provide health care services
 44-4    in each health care service region, focusing particularly on the
 44-5    market share of those managed care organizations; and
 44-6                (2)  limit the number of contracts awarded to managed
 44-7    care organizations under this chapter in a manner that promotes the
 44-8    successful implementation of the delivery of health care services
 44-9    through the state Medicaid managed care program.
44-10          SECTION 21.  (a)  Section 533.005, Government Code, is
44-11    amended to read as follows:
44-12          Sec. 533.005.  REQUIRED CONTRACT PROVISIONS. A contract
44-13    between a managed care organization and the commission for the
44-14    organization to provide health care services to recipients must
44-15    contain:
44-16                (1)  procedures to ensure accountability to the state
44-17    for the provision of health care services, including procedures for
44-18    financial reporting, quality assurance, utilization review, and
44-19    assurance of contract and subcontract compliance;
44-20                (2)  capitation and provider payment rates that ensure
44-21    the cost-effective provision of quality health care;
44-22                (3)  a requirement that the managed care organization
44-23    provide ready access to a person who assists recipients in
44-24    resolving issues relating to enrollment, plan administration,
44-25    education and training, access to services, and grievance
44-26    procedures;
44-27                (4)  a requirement that the managed care organization
 45-1    provide ready access to a person who assists providers in resolving
 45-2    issues relating to payment, plan administration, education and
 45-3    training, and grievance procedures;
 45-4                (5)  a requirement that the managed care organization
 45-5    provide information and referral about the availability of
 45-6    educational, social, and other community services that could
 45-7    benefit a recipient;
 45-8                (6)  procedures for recipient outreach and education;
 45-9                (7)  a requirement that the managed care organization
45-10    make payment to a physician or provider for health care services
45-11    rendered to a recipient under a managed care plan not later than
45-12    the 45th day after the date a claim for payment is received with
45-13    documentation reasonably necessary for the managed care
45-14    organization to process the claim, or within a period, not to
45-15    exceed 60 days, specified by a written agreement between the
45-16    physician or provider and the managed care organization;
45-17                (8)  a requirement that the commission, on the date of
45-18    a recipient's enrollment in a managed care plan issued by the
45-19    managed care organization, inform the organization of the
45-20    recipient's Medicaid certification date;
45-21                (9)  a requirement that the managed care organization
45-22    comply with Section 533.006 as a condition of contract retention
45-23    and renewal; [and]
45-24                (10)  a requirement that the managed care organization
45-25    provide the information required by Section 533.012 and otherwise
45-26    comply and cooperate with the commission's office of investigations
45-27    and enforcement;
 46-1                (11)  a requirement that the managed care organization
 46-2    or managed care plan reimburse health care providers for medical
 46-3    screening and stabilization of an emergency medical or psychiatric
 46-4    condition and not use a triage method of reimbursement; and
 46-5                (12)  a process by which the commission is required to:
 46-6                      (A)  provide in writing to the managed care
 46-7    organization the projected fiscal impact on the state and managed
 46-8    care organizations that contract with the commission under this
 46-9    chapter of proposed Medicaid managed care program, benefit, or
46-10    contract changes; and
46-11                      (B)  negotiate in good faith regarding
46-12    appropriate operational and financial changes to the contract with
46-13    the managed care organization before implementing those changes.
46-14          (b)  The changes in law made by Section 533.005, Government
46-15    Code, as amended by this Act, apply to a contract between the
46-16    Health and Human Services Commission and a managed care
46-17    organization under Chapter 533, Government Code, that is entered
46-18    into or renewed on or after the effective date of this Act.  A
46-19    contract that is entered into or renewed before the effective date
46-20    of this Act is governed by the law in effect on the date the
46-21    contract was entered into or renewed, and the former law is
46-22    continued in effect for that purpose.
46-23          SECTION 22.  (a)  Subchapter A, Chapter 533, Government Code,
46-24    is amended by adding Sections 533.0051, 533.0076, 533.0091,
46-25    533.0131, and 533.016-533.0208 to read as follows:
46-26          Sec. 533.0051.  CONTRACT RENEWAL. Before renewing a contract
46-27    with a managed care organization under this chapter, the commission
 47-1    shall consider:
 47-2                (1)  the managed care organization's:
 47-3                      (A)  overall contract compliance;
 47-4                      (B)  implementation of simplified administrative
 47-5    processes for health care providers and recipients;
 47-6                      (C)  compliance with statutory requirements to
 47-7    promptly reimburse health care providers for covered services
 47-8    provided under the Medicaid managed care program;
 47-9                      (D)  compliance with the requirements under
47-10    Article 3.70-3C, Insurance Code, as added by Chapter 1260, Acts of
47-11    the 75th Legislature, Regular Session, 1997, and Section 14, Texas
47-12    Health Maintenance Organization Act (Article 20A.14, Vernon's Texas
47-13    Insurance Code), to identify advanced practice nurses and physician
47-14    assistants as providers in the managed care organization's provider
47-15    network;
47-16                      (E)  financial performance; and
47-17                      (F)  participation in the state child health plan
47-18    under Chapter 62, Health and Safety Code; and
47-19                (2)  the level of satisfaction of recipients and health
47-20    care providers with the managed care organization.
47-21          Sec. 533.0076.  LIMITATIONS ON RECIPIENT DISENROLLMENT.  (a)
47-22    Except as provided by Subsections (b) and (c), and to the extent
47-23    permitted by federal law, the commission may prohibit a recipient
47-24    from disenrolling in a managed care plan under this chapter and
47-25    enrolling in another managed care plan during the 12-month period
47-26    after the date the recipient initially enrolls in a plan.
47-27          (b)  At any time before the 91st day after the date of a
 48-1    recipient's initial enrollment in a managed care plan under this
 48-2    chapter, the recipient may disenroll in that plan for any reason
 48-3    and enroll in another managed care plan under this chapter.
 48-4          (c)  The commission shall allow a recipient who is enrolled
 48-5    in a managed care plan under this chapter to disenroll in that plan
 48-6    at any time for cause in accordance with federal law.
 48-7          Sec. 533.0091.  UNIFORM STANDARDS FOR IDENTIFYING RECIPIENTS
 48-8    WITH DISABILITIES OR CHRONIC CONDITIONS. (a)  The commission shall
 48-9    collaborate with managed care organizations that contract with the
48-10    commission under this chapter to develop a uniform screening tool
48-11    to be used by the managed care organizations to identify adult
48-12    recipients with disabilities or chronic health conditions and
48-13    assist those recipients in accessing health care services.
48-14          (b)  The commission, in cooperation with the Texas Department
48-15    of Health, by rule shall adopt criteria by which to classify a
48-16    child with certain health conditions as a child with special health
48-17    care needs.  In adopting the criteria, the commission must include
48-18    children who have:
48-19                (1)  severe disabilities;
48-20                (2)  severe mental or emotional disorders;
48-21                (3)  medically complex or fragile health conditions; or
48-22                (4)  rare or chronic health conditions that are likely
48-23    to last at least one year and result in limitations on the child's
48-24    functioning and activities when compared to other children of the
48-25    same age who do not have those conditions.
48-26          (c)  The commission, in cooperation with the Texas Department
48-27    of Health, shall:
 49-1                (1)  monitor and assess health care services provided
 49-2    under the state Medicaid managed care program and the medical
 49-3    assistance program under Chapter 32, Human Resources Code, to
 49-4    children with special health care needs as determined by the
 49-5    criteria adopted under Subsection (b);
 49-6                (2)  adopt specific quality of care standards
 49-7    applicable to health care services provided under the state
 49-8    Medicaid managed care program to children described by Subdivision
 49-9    (1); and
49-10                (3)  undertake initiatives to develop, test, and
49-11    implement optimum methods for the delivery of appropriate,
49-12    comprehensive, and cost-effective health care services under the
49-13    state Medicaid managed care program to children described by
49-14    Subdivision (1), including initiatives to:
49-15                      (A)  coordinate health care services with
49-16    educational programs and other social and community services; and
49-17                      (B)  promote family involvement and support.
49-18          Sec. 533.0131.  USE OF ENCOUNTER DATA IN DETERMINING PREMIUM
49-19    PAYMENT RATES. (a)  In determining premium payment rates and other
49-20    amounts paid to managed care organizations under a managed care
49-21    plan, the commission may not base or derive the rates or amounts on
49-22    or from encounter data, or incorporate in the determination an
49-23    analysis of encounter data, unless a certifier of encounter data
49-24    certifies that:
49-25                (1)  the encounter data for the most recent state
49-26    fiscal year is complete, accurate, and reliable; and
49-27                (2)  there is no statistically significant variability
 50-1    in the encounter data attributable to incompleteness, inaccuracy,
 50-2    or another deficiency as compared to equivalent data for similar
 50-3    populations and when evaluated against professionally accepted
 50-4    standards.
 50-5          (b)  For purposes of determining whether data is equivalent
 50-6    data for similar populations under Subsection (a)(2), a certifier
 50-7    of encounter data shall, at a minimum, consider:
 50-8                (1)  the regional variation in utilization patterns of
 50-9    recipients and costs of health care services;
50-10                (2)  the range and type of health care services to be
50-11    covered by premium payment rates;
50-12                (3)  the number of managed care plans in the region;
50-13    and
50-14                (4)  the current number of recipients in each region,
50-15    including the number for each category of recipient.
50-16          Sec. 533.016.  INTERAGENCY SHARING OF INFORMATION. (a)  The
50-17    commission shall require a health and human services agency
50-18    implementing the Medicaid managed care program to provide to each
50-19    other health and human services agency implementing the program
50-20    information reported to the agency by a managed care organization
50-21    or health care provider providing services to recipients.
50-22          (b)  Except as prohibited by federal law, the commission,
50-23    each health and human services agency implementing the Medicaid
50-24    managed care program, and the Texas Department of Insurance shall
50-25    share confidential information, including financial data, that
50-26    relates to or affects a person who proposes to contract with or has
50-27    contracted with a state agency or a contractor of a state agency
 51-1    for the purposes of this chapter.
 51-2          (c)  Information shared between agencies under Subsection (b)
 51-3    remains confidential and is not subject to disclosure under Chapter
 51-4    552.
 51-5          Sec. 533.017.  REDUCTION AND COORDINATION OF REPORTING
 51-6    REQUIREMENTS AND INSPECTION PROCEDURES. (a)  The commission shall:
 51-7                (1)  streamline on-site inspection procedures of
 51-8    managed care organizations contracting with the commission under
 51-9    this chapter;
51-10                (2)  streamline reporting requirements for managed care
51-11    organizations contracting with the commission under this chapter,
51-12    including:
51-13                      (A)  combining information required to be
51-14    reported into a quarterly management report;
51-15                      (B)  eliminating unnecessary or duplicative
51-16    reporting requirements; and
51-17                      (C)  to the extent feasible, allowing managed
51-18    care organizations contracting with the commission under this
51-19    chapter to submit reports electronically;
51-20                (3)  require managed care organizations contracting
51-21    with the commission under this chapter to streamline administrative
51-22    processes required of health care providers, including:
51-23                      (A)  simplifying and standardizing, to the extent
51-24    reasonably feasible, the forms providers are required to complete,
51-25    including forms for preauthorization for covered services;
51-26                      (B)  eliminating unnecessary or duplicative
51-27    reporting requirements; and
 52-1                      (C)  encouraging the adoption of collaboratively
 52-2    developed uniform forms; and
 52-3                (4)  designate one entity to which managed care
 52-4    organizations contracting with the commission under this chapter
 52-5    may report encounter data.
 52-6          (b)  Except as provided by Subsection (d), the commission and
 52-7    the Texas Department of Insurance and contractors of the commission
 52-8    or department may not schedule, initiate, prepare for, or conduct a
 52-9    documentary, electronic, or on-site review, a readiness,
52-10    compliance, or performance review, or any other review, audit, or
52-11    examination of a managed care organization contracting with the
52-12    commission under this chapter until:
52-13                (1)  the commission, the department, and, if
52-14    appropriate, each health and human services agency implementing a
52-15    part of the Medicaid managed care program enter into a memorandum
52-16    of understanding under Section 533.018; and
52-17                (2)  the agencies described by Subdivision (1) provide
52-18    that memorandum to the managed care organization.
52-19          (c)  Notwithstanding Subsection (b), the commission or the
52-20    Texas Department of Insurance may take any action:
52-21                (1)  otherwise authorized by law to protect the safety
52-22    of a recipient; or
52-23                (2)  with respect to a managed care organization
52-24    determined to be in a hazardous financial condition.
52-25          (d)  The commission and the Texas Department of Insurance may
52-26    review monthly, quarterly, or annual reports required to be filed
52-27    by managed care organizations contracting with the commission under
 53-1    this chapter.
 53-2          Sec. 533.018.  MEMORANDUM OF UNDERSTANDING REGARDING
 53-3    COORDINATION OF REPORTING REQUIREMENTS AND INSPECTION PROCEDURES.
 53-4    (a)   The commission, the Texas Department of Insurance, and, if
 53-5    appropriate, each health and human services agency implementing a
 53-6    part of the Medicaid managed care program shall enter into a
 53-7    memorandum of understanding that outlines methods to:
 53-8                (1)  maximize interagency coordination in conducting
 53-9    reviews of managed care organizations contracting with the
53-10    commission under this chapter; and
53-11                (2)  eliminate and prevent duplicative monitoring,
53-12    regulation, and enforcement policies and processes with respect to
53-13    those managed care organizations.
53-14          (b)  The memorandum of understanding under this section must:
53-15                (1)  ensure that managed care organizations contracting
53-16    with the commission under this chapter are not required to file the
53-17    same or similar information with more than one state agency;
53-18                (2)  maximize the use of electronic filing of
53-19    information by managed care organizations contracting with the
53-20    commission under this chapter;
53-21                (3)  specifically identify all information, documents,
53-22    and reports that managed care organizations contracting with the
53-23    commission under this chapter are required to file with state
53-24    agencies, either electronically or otherwise, and describe the
53-25    information, documents, or reports and the authority for the filing
53-26    requirement;
53-27                (4)  ensure that regularly scheduled, comprehensive
 54-1    compliance monitoring of and enforcement efforts with respect to
 54-2    managed care organizations contracting with the commission under
 54-3    this chapter:
 54-4                      (A)  are highly coordinated between the agencies
 54-5    entering into the memorandum of understanding and consolidate
 54-6    similar monitoring and enforcement functions of each agency in a
 54-7    unified, streamlined process; and
 54-8                      (B)  do not require duplication of efforts of
 54-9    agency employees or contractors or the managed care organizations;
54-10                (5)  include as an attachment the operational and
54-11    financial audit instrument to be developed under Section 533.019;
54-12                (6)  specify in detail the process by which the
54-13    commission and the Texas Department of Insurance will amend the
54-14    operational and financial audit instrument developed under Section
54-15    533.019;
54-16                (7)  specify in detail the process by which the
54-17    commission and the Texas Department of Insurance will jointly
54-18    schedule a single on-site visit that satisfies the requirements of
54-19    all state agencies regarding regularly scheduled, comprehensive
54-20    compliance monitoring of and enforcement efforts with respect to
54-21    managed care organizations contracting with the commission under
54-22    this chapter;
54-23                (8)  specify in detail the process by which the
54-24    commission and the Texas Department of Insurance will coordinate
54-25    with respect to:
54-26                      (A)  focus studies, market conduct
54-27    investigations, data calls, and any type of ad hoc requests for
 55-1    information from or performance reviews of a managed care
 55-2    organization that contracts with the commission under this chapter;
 55-3                      (B)  investigations of complaints regarding a
 55-4    managed care organization that contracts with the commission under
 55-5    this chapter, both before and during the investigation; and
 55-6                      (C)  the development and implementation of
 55-7    corrective action plans for and enforcement actions against a
 55-8    managed care organization that contracts with the commission under
 55-9    this chapter;
55-10                (9)  specify the manner in which the commission and the
55-11    Texas Department of Insurance will:
55-12                      (A)  ensure the regular exchange of information
55-13    between the commission, the department, and each health and human
55-14    services agency that operates a part of the Medicaid managed care
55-15    program, including information regarding:
55-16                            (i)  the names of and contact information
55-17    for agency staff members having monitoring and enforcement
55-18    responsibilities with respect  to managed care organizations that
55-19    contract with the commission under this chapter; and
55-20                            (ii)  each agency staff member responsible
55-21    for collecting and distributing information to be exchanged and the
55-22    frequency with which that information will be exchanged;
55-23                      (B)  schedule and conduct regular, periodic
55-24    interagency briefings by electronic notice or otherwise to assist
55-25    agency staff members in:
55-26                            (i)  remaining informed regarding current
55-27    monitoring and enforcement activities; and
 56-1                            (ii)  coordinating monitoring and
 56-2    enforcement activities, including coordinating persons who will
 56-3    participate in the activities, and the frequency with which the
 56-4    activities will be conducted;
 56-5                      (C)  schedule and conduct interagency orientation
 56-6    and training to ensure that agency staff members are familiar with:
 56-7                            (i)  the obligation to eliminate and
 56-8    prevent duplicative monitoring and enforcement activities;
 56-9                            (ii)  the general regulatory
56-10    responsibilities of each agency; and
56-11                            (iii)  resources for maintaining
56-12    coordination between the agencies;
56-13                      (D)  ensure that the agencies eliminate and
56-14    prevent duplication of efforts by agency employees and contractors
56-15    and managed care organizations that contract with the commission
56-16    under this chapter with respect to the activities of contractors
56-17    who communicate or interact with the managed care organizations;
56-18    and
56-19                      (E)  ensure coordination to eliminate and prevent
56-20    duplication regarding policy development and implementation,
56-21    procurement, cost estimates, electronic systems issues, and
56-22    monitoring and enforcement activities with respect to managed care
56-23    organizations that serve recipients as well as enrollees in the
56-24    state child health plan under Chapter 62, Health and Safety Code;
56-25    and
56-26                (10)  describe the process by which the commission and
56-27    the Texas Department of Insurance will collaborate to:
 57-1                      (A)  identify statutory barriers to eliminating
 57-2    or preventing duplicative public and private monitoring and
 57-3    enforcement activities with respect to managed care organizations
 57-4    that contract with the commission under this chapter; and
 57-5                      (B)  develop recommendations for legislation
 57-6    regarding removing the barriers described by Paragraph (A).
 57-7          Sec. 533.019.  OPERATIONAL AND FINANCIAL AUDIT INSTRUMENT.
 57-8    (a)  The commission and the Texas Department of Insurance shall
 57-9    develop and use an operational and financial audit instrument for
57-10    regularly scheduled, comprehensive, on-site readiness, performance,
57-11    or compliance reviews, or other reviews, audits, or examinations of
57-12    managed care organizations that contract with the commission under
57-13    this chapter.
57-14          (b)  In developing the operational and financial audit
57-15    instrument, the commission and the Texas Department of Insurance
57-16    must include:
57-17                (1)  a method to assess compliance with each applicable
57-18    federal and state law and each applicable accreditation and
57-19    contractual requirement, including financial, actuarial,
57-20    operational, and quality of care requirements, the agencies are
57-21    authorized to enforce at least on a periodic basis;
57-22                (2)  a method to assess compliance of documents,
57-23    records, and electronic files the commission or the Texas
57-24    Department of Insurance requires managed care organizations that
57-25    contract with the commission under this chapter to submit for
57-26    review, either before or as an alternative to an on-site review,
57-27    audit, or examination; and
 58-1                (3)  a method to assess compliance through on-site
 58-2    reviews, audits, and examinations, including document review,
 58-3    electronic systems testing or review, and observation and
 58-4    interviews of managed care organization employees.
 58-5          (c)  The commission and the Texas Department of Insurance may
 58-6    contract on a competitive bid basis with a consultant not
 58-7    affiliated with the commission or department to develop the
 58-8    operational and financial audit instrument required by this
 58-9    section.
58-10          Sec. 533.020.  PREAUTHORIZATION FOR CERTAIN SERVICES NOT
58-11    REQUIRED. The commission, in consultation with physicians,
58-12    hospitals, and managed care organizations contracting with the
58-13    commission under this chapter, shall develop:
58-14                (1)  a process by which the managed care organizations
58-15    eliminate preauthorization processes for covered services that are
58-16    considered to be routine services; and
58-17                (2)  a process by which to notify health care providers
58-18    of covered services under the Medicaid managed care program for
58-19    which preauthorization is not required.
58-20          Sec. 533.0201.  UTILIZATION REVIEW UNDER PRIMARY CARE CASE
58-21    MANAGEMENT NETWORK. To the extent allowed by federal law, the
58-22    commission shall require a managed care organization that contracts
58-23    with the commission under this chapter and that provides health
58-24    care services to recipients through a primary care case management
58-25    network to conduct utilization review of those services in
58-26    accordance with Article 21.58A, Insurance Code.
58-27          Sec. 533.0202.  NOTICE OF DETERMINATIONS MADE BY UTILIZATION
 59-1    REVIEW AGENTS. (a)  In this section, "utilization review agent" has
 59-2    the meaning assigned by Section 2, Article 21.58A, Insurance Code.
 59-3          (b)  A utilization review agent shall notify a recipient or a
 59-4    person acting on behalf of the recipient and the recipient's health
 59-5    care provider of a utilization review determination in accordance
 59-6    with this section and Section 5(a), Article 21.58A, Insurance Code,
 59-7    with respect to services provided under the state Medicaid managed
 59-8    care program.
 59-9          (c)  If the utilization review agent makes an adverse
59-10    determination, the notice required by this section must include:
59-11                (1)  the principal reasons for the adverse
59-12    determination;
59-13                (2)  the clinical basis for the adverse determination;
59-14                (3)  a description or the source of the screening
59-15    criteria used as guidelines in making the determination; and
59-16                (4)  a description of the procedure for the complaint
59-17    and appeal process, including a description provided to the
59-18    recipient of:
59-19                      (A)  the recipient's right to a Medicaid fair
59-20    hearing at any time; and
59-21                      (B)  the procedures for appealing an adverse
59-22    determination at a Medicaid fair hearing.
59-23          (d)  The utilization review agent must provide notice of an
59-24    adverse determination:
59-25                (1)  to the recipient and the recipient's health care
59-26    provider of record by telephone or electronic transmission not
59-27    later than the next business day after the date the determination
 60-1    is made if the recipient is hospitalized when the determination is
 60-2    made, to be followed not later than the third business day after
 60-3    the date the determination is made by a written notice of the
 60-4    determination;
 60-5                (2)  to the recipient and the recipient's health care
 60-6    provider of record by written notice not later than the third
 60-7    business day after the date the determination is made if the
 60-8    recipient is not hospitalized when the determination is made; or
 60-9                (3)  to the recipient's treating physician or health
60-10    care provider within the time appropriate to the circumstances that
60-11    relate to the delivery of the services and the condition of the
60-12    patient, but not later than one hour after the recipient's treating
60-13    physician or provider requests poststabilization care following
60-14    emergency treatment.
60-15          (e)  The commissioner shall adopt rules to implement this
60-16    section.
60-17          Sec. 533.0203.  COMPLAINT INFORMATION. (a)  The commission,
60-18    in cooperation with the Texas Department of Insurance and any other
60-19    appropriate entity, shall collect complaint data, including
60-20    complaint resolution rates, regarding managed care organizations
60-21    contracting with the commission under this chapter. In entering
60-22    into or renewing a contract with a managed care organization under
60-23    this chapter, the commission may include provisions in the contract
60-24    to accomplish the purposes of this section.
60-25          (b)  The commission shall report on a quarterly basis the
60-26    complaint data collected under Subsection (a) to the state Medicaid
60-27    managed care advisory committee under Subchapter C.
 61-1          (c)  Not later than December 1 of each even-numbered year,
 61-2    the commission shall report to the legislature the complaint data
 61-3    collected under Subsection (a).  The report may be consolidated
 61-4    with any other report relating to the same subject matter the
 61-5    commission is required to submit under other law.
 61-6          Sec. 533.0204.  PROVIDER REPORTING OF ENCOUNTER DATA. The
 61-7    commission shall collaborate with managed care organizations that
 61-8    contract with the commission and health care providers under the
 61-9    organizations' provider networks to develop incentives and
61-10    mechanisms to encourage providers to report complete and accurate
61-11    encounter data to managed care organizations in a timely manner.
61-12          Sec. 533.0205.  QUALIFICATIONS OF CERTIFIER OF ENCOUNTER
61-13    DATA. (a)  The person acting as the state Medicaid director shall
61-14    appoint a person as the certifier of encounter data.
61-15          (b)  The certifier of encounter data must have:
61-16                (1)  demonstrated expertise in estimating premium
61-17    payment rates paid to a managed care organization under a managed
61-18    care plan; and
61-19                (2)  access to actuarial expertise, including expertise
61-20    in estimating premium payment rates paid to a managed care
61-21    organization under a managed care plan.
61-22          (c)  A person may not be appointed under this section as the
61-23    certifier of encounter data if the person participated with the
61-24    commission in developing premium payment rates for managed care
61-25    organizations under managed care plans in this state during the
61-26    three-year period before the date the certifier is appointed.
61-27          Sec. 533.0206.  CERTIFICATION OF ENCOUNTER DATA. (a)  The
 62-1    certifier of encounter data shall certify the completeness,
 62-2    accuracy, and reliability of encounter data for each state fiscal
 62-3    year.
 62-4          (b)  The commission shall make available to the certifier all
 62-5    records and data the certifier considers appropriate for evaluating
 62-6    whether to certify the encounter data.  The commission shall
 62-7    provide to the certifier selected resources and assistance in
 62-8    obtaining, compiling, and interpreting the records and data.
 62-9          Sec. 533.0207.  IMPLEMENTATION OF CERTAIN MANAGED CARE PLANS
62-10    IN CERTAIN COUNTIES.  (a)  Notwithstanding any other law, before
62-11    implementing a Medicaid managed care plan that uses capitation as a
62-12    method of payment in a county with a population of less than
62-13    100,000, the commission must determine that implementation is
62-14    economically efficient.
62-15          (b)  Notwithstanding Subsection (a), the commission may
62-16    continue implementation of a Medicaid managed care plan described
62-17    by Subsection (a)  in a county with a population of less than
62-18    100,000 if implementation of the plan in the county was in progress
62-19    on January 1, 2001.
62-20          Sec. 533.0208.  INTEGRATED MENTAL HEALTH FUNDING TO LOCAL
62-21    MHMR AUTHORITIES. (a)  The commission and the Texas Department of
62-22    Mental Health and Mental Retardation may establish a program that
62-23    uses direct contracting with units of local government that the
62-24    department designates as local mental health and mental retardation
62-25    authorities to allow the authorities to manage all federal, state,
62-26    and local matching funds for community mental health services to
62-27    provide more customer choice, an improved array of services at the
 63-1    provider level, improved quality of services, and more
 63-2    cost-effective services.
 63-3          (b)  A local mental health and mental retardation authority
 63-4    shall:
 63-5                (1)  establish an effective process for planning,
 63-6    policy development, and monitoring of the local program that
 63-7    includes consumers and family members; and
 63-8                (2)  maintain an effective local process for planning,
 63-9    policy development, resource management, service contracting, and
63-10    coordination with other local agencies, including local jails.
63-11          (c)  The Texas Department of Mental Health and Mental
63-12    Retardation shall adopt rules to implement the program.
63-13          (b)  Not later than March 1, 2002, the Health and Human
63-14    Services Commission, the Texas Department of Insurance, and each
63-15    appropriate health and human services agency implementing a part of
63-16    the Medicaid managed care program under Chapter 533, Government
63-17    Code, shall enter into the memorandum of understanding required by
63-18    Section 533.018, Government Code, as added by this Act.
63-19          (c)  Not later than March 1, 2002, the Health and Human
63-20    Services Commission and the Texas Department of Insurance shall
63-21    develop the operational and financial audit instrument required by
63-22    Section 533.019, Government Code, as added by this Act.
63-23          (d)  The changes in law made by Section 533.0202, Government
63-24    Code, as added by this Act, apply to a contract between the Health
63-25    and Human Services Commission and a managed care organization under
63-26    Chapter 533, Government Code, that is entered into or renewed on or
63-27    after the effective date of this Act.  A contract that is entered
 64-1    into or renewed before the effective date of this Act is governed
 64-2    by the law in effect on the date the contract was entered into or
 64-3    renewed, and the former law is continued in effect for that
 64-4    purpose.
 64-5          (e)  Not later than January 1, 2002, the person acting as the
 64-6    state Medicaid director shall appoint the certifier of Medicaid
 64-7    managed care encounter data required by Section 533.0205,
 64-8    Government Code, as added by this Act.
 64-9          (f)  The agencies responsible for implementing Section
64-10    533.0208, Government Code, as added by this Act, shall request and
64-11    actively pursue any necessary waivers or authorizations from the
64-12    Health Care Financing Administration or other appropriate entities
64-13    to enable the agencies to implement that section not later than
64-14    September 1, 2002.  The agencies may delay implementing Section
64-15    533.0208, Government Code, as added by this Act, until the
64-16    necessary waivers or authorizations are granted.
64-17          SECTION 23.  Subsection (a), Section 533.041, Government
64-18    Code, is amended to read as follows:
64-19          (a)  The commission shall appoint a state Medicaid managed
64-20    care advisory committee.  The advisory committee consists of
64-21    representatives of:
64-22                (1)  hospitals;
64-23                (2)  managed care organizations;
64-24                (3)  primary care providers;
64-25                (4)  state agencies;
64-26                (5)  consumer advocates representing low-income
64-27    recipients;
 65-1                (6)  consumer advocates representing recipients with a
 65-2    disability;
 65-3                (7)  parents of children who are recipients;
 65-4                (8)  rural providers;
 65-5                (9)  advocates for children with special health care
 65-6    needs;
 65-7                (10)  pediatric health care providers, including
 65-8    specialty providers;
 65-9                (11)  long-term care providers, including nursing home
65-10    providers;
65-11                (12)  obstetrical care providers;
65-12                (13)  community-based organizations serving low-income
65-13    children and their families; [and]
65-14                (14)  community-based organizations engaged in
65-15    perinatal services and outreach;
65-16                (15)  medically underserved communities; and
65-17                (16)  community mental health and mental retardation
65-18    centers established under Subchapter A, Chapter 534, Health and
65-19    Safety Code.
65-20          SECTION 24.  (a)  The commissioner of health and human
65-21    services shall conduct a study regarding the feasibility of
65-22    expanding the medical assistance program under Chapter 32, Human
65-23    Resources Code, to provide medical assistance to disabled children
65-24    18 years of age or younger in accordance with 42 U.S.C. Section
65-25    1396a(e)(3), as amended.
65-26          (b)  In conducting the study, the commissioner shall
65-27    evaluate:
 66-1                (1)  the number of children who would be eligible for
 66-2    medical assistance under the expanded program and who would be
 66-3    likely to enroll;
 66-4                (2)  the effect of other health insurance coverage
 66-5    provided for children who would be eligible under the expanded
 66-6    medical assistance program on the cost of expanding the program;
 66-7                (3)  utilization patterns of similar populations of
 66-8    disabled children under similar programs in this state and other
 66-9    states;
66-10                (4)  the cost to the state of inappropriate
66-11    institutionalization of disabled children resulting from
66-12    unavailability of health insurance coverage for those children; and
66-13                (5)  options for setting an income eligibility cap for
66-14    the expanded medical assistance program.
66-15          (c)  Not later than December 1, 2002, the commissioner shall
66-16    submit a report to the legislature regarding the results of the
66-17    study conducted under this section.  The report must include a
66-18    recommendation regarding expanding the medical assistance program
66-19    to provide that assistance to disabled children in accordance with
66-20    42 U.S.C. Section 1396a(e)(3), as amended.
66-21          SECTION 25.  On January 1, 2002, or on an earlier date
66-22    specified by the Health and Human Services Commission:
66-23                (1)  all powers, duties, functions, activities,
66-24    obligations, rights, contracts, records, employees, property, and
66-25    appropriations and other money of the Texas Department of Health
66-26    that are determined by the commissioner of health and human
66-27    services to be essential to the administration of Medicaid acute
 67-1    care services or the Medicaid vendor drug program are transferred
 67-2    to the Health and Human Services Commission;
 67-3                (2)  a rule or form adopted by the Texas Department of
 67-4    Health that relates to a transferred component of the Medicaid
 67-5    program is a rule or form of the Health and Human Services
 67-6    Commission and remains in effect until altered by the commission;
 67-7                (3)  a reference in law or an administrative rule to
 67-8    the Texas Department of Health that relates to a transferred
 67-9    component of the Medicaid program means the Health and Human
67-10    Services Commission;
67-11                (4)  a license, permit, or certification in effect that
67-12    was issued by the Texas Department of Health that relates to a
67-13    transferred component of the Medicaid program is continued in
67-14    effect as a license, permit, or certification of the Health and
67-15    Human Services Commission; and
67-16                (5)  a complaint, investigation, or other proceeding
67-17    pending before the Texas Department of Health that relates to a
67-18    transferred component of the Medicaid program is transferred
67-19    without change in status to the Health and Human Services
67-20    Commission.
67-21          SECTION 26.  (a)  Subject to Subsection (b) of this section,
67-22    if before implementing any provision of this Act a state agency
67-23    determines that a waiver or authorization from a federal agency is
67-24    necessary for implementation of that provision, the agency affected
67-25    by the provision shall request the waiver or authorization and may
67-26    delay implementing that provision until the waiver or authorization
67-27    is granted.
 68-1          (b)  Implementation of Sections 32.053-32.056, Human
 68-2    Resources Code, as added by this Act, is governed by Section 7 of
 68-3    this Act.  Implementation of Section 32.057, Human Resources Code,
 68-4    as added by this Act, is governed by Section 8 of this Act.
 68-5    Implementation of Section 533.0208, Government Code, as added by
 68-6    this Act, is governed by Section 22 of this Act.
 68-7          SECTION 27.  Except as otherwise provided by this Act, this
 68-8    Act takes effect September 1, 2001, and applies to a person
 68-9    receiving medical assistance on or after that date regardless of
68-10    the date on which the person began receiving that medical
68-11    assistance.