1-1     By:  Zaffirini, et al.                                S.B. No. 1156
 1-2           (In the Senate - Filed March 6, 2001; March 7, 2001, read
 1-3     first time and referred to Committee on Finance; April 17, 2001,
 1-4     reported adversely, with favorable Committee Substitute by the
 1-5     following vote:  Yeas 12, Nays 0; April 17, 2001, sent to printer.)
 1-6     COMMITTEE SUBSTITUTE FOR S.B. No. 1156               By:  Zaffirini
 1-7                            A BILL TO BE ENTITLED
 1-8                                   AN ACT
 1-9     relating to the state Medicaid program.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Section 32.024, Human Resources Code, is amended
1-12     by adding Subsection (x) to read as follows:
1-13           (x)  In its rules and standards governing the vendor drug
1-14     program, the department shall provide for cost-sharing by
1-15     recipients of prescription drug benefits under the medical
1-16     assistance program in a manner that ensures that recipients with
1-17     higher levels of income are required to pay progressively higher
1-18     percentages of the costs of prescription drugs.
1-19           SECTION 2.  Subchapter B, Chapter 32, Human Resources Code,
1-20     is amended by adding Section 32.053 to read as follows:
1-21           Sec. 32.053.  DEMONSTRATION PROJECT FOR CERTAIN MEDICATIONS
1-22     AND RELATED SERVICES.  (a)  The department shall establish a
1-23     demonstration project to provide to a person through the medical
1-24     assistance program psychotropic medications and related laboratory
1-25     and medical services necessary to conform to a prescribed medical
1-26     regime for those medications.
1-27           (b)  A person is eligible to participate in the demonstration
1-28     project if the person:
1-29                 (1)  has been diagnosed as having a mental impairment,
1-30     including schizophrenia or bipolar disorder, that is expected to
1-31     cause the person to become a disabled individual, as defined by
1-32     Section 1614(a) of the federal Social Security Act (42 U.S.C.
1-33     Section 1382c(a)), as amended;
1-34                 (2)  is at least 19 years of age, but not more than 64
1-35     years of age;
1-36                 (3)  has a net family income that is at or below 200
1-37     percent of the federal poverty level;
1-38                 (4)  is not covered by a health benefits plan offering
1-39     adequate coverage, as determined by the department; and
1-40                 (5)  is not otherwise eligible for medical assistance
1-41     at the time the person's eligibility for participation in the
1-42     demonstration project is determined.
1-43           (c)  Notwithstanding any other provision of this section, the
1-44     department shall provide each participant in the demonstration
1-45     project with a 12-month period of continuous eligibility for
1-46     participation in the project.
1-47           (d)  Participation in the demonstration project does not
1-48     entitle a participant to other services provided under the medical
1-49     assistance program.
1-50           (e)  The department shall establish an appropriate enrollment
1-51     limit for the demonstration project and may not allow participation
1-52     in the project to exceed that limit.  Once the limit is reached,
1-53     the department shall establish a waiting list for enrollment in the
1-54     demonstration project.
1-55           (f)  To the extent permitted by federal law, the department
1-56     may require a participant in the demonstration project to make
1-57     cost-sharing payments for services provided through the project.
1-58           (g)  To the maximum extent possible, the department shall use
1-59     existing resources to fund the demonstration project.
1-60           (h)  Not later than December 1 of each even-numbered year,
1-61     the department shall submit a biennial report to the legislature
1-62     regarding the department's progress in establishing and operating
1-63     the demonstration project.
1-64           (i)  Not later than December 1, 2006, the department shall
 2-1     evaluate the cost-effectiveness of the demonstration project,
 2-2     including whether the preventive drug treatments and related
 2-3     services provided under the project offset future long-term care
 2-4     costs for project participants.  If the results of the evaluation
 2-5     indicate that the project is cost-effective, the department shall
 2-6     incorporate a request for funding for the continuation of the
 2-7     program in the department's budget request for the next state
 2-8     fiscal biennium.
 2-9           (j)  This section expires September 1, 2009.
2-10           SECTION 3.  Subchapter B, Chapter 531, Government Code, is
2-11     amended by adding Sections 531.02101 and 531.02102 to read as
2-12     follows:
2-13           Sec. 531.02101.  TRANSFER AUTHORITY RELATING TO
2-14     ADMINISTRATION OF MEDICAID PROGRAM.  (a)  To the extent that
2-15     reorganization is necessary to achieve the goals of increased
2-16     administrative efficiency, increased accountability, or cost
2-17     savings in the Medicaid program or to otherwise improve the health
2-18     of residents of this state, the commission, subject to Subsection
2-19     (b), may transfer any power, duty, function, program, activity,
2-20     obligation, right, contract, record, employee, property, or
2-21     appropriation or other money relating to administration of the
2-22     Medicaid program from a health and human services agency to the
2-23     commission.
2-24           (b)  A transfer authorized by Subsection (a) may not take
2-25     effect unless approved by the Medicaid legislative oversight
2-26     committee created under Section 531.02102.
2-27           (c)  The commission must notify the Legislative Budget Board
2-28     and the governor's office of budget and planning not later than the
2-29     30th day before the effective date of a transfer authorized by
2-30     Subsection (a).
2-31           Sec. 531.02102.  MEDICAID LEGISLATIVE OVERSIGHT COMMITTEE.
2-32     (a)  The Medicaid legislative oversight committee is composed of:
2-33                 (1)  three members of the senate appointed by the
2-34     lieutenant governor; and
2-35                 (2)  three members of the house of representatives
2-36     appointed by the speaker of the house of representatives.
2-37           (b)  A member of the Medicaid legislative oversight committee
2-38     serves at the pleasure of the appointing official.
2-39           (c)  The lieutenant governor and speaker of the house of
2-40     representatives shall appoint the presiding officer of the Medicaid
2-41     legislative oversight committee on an alternating basis.  The
2-42     presiding officer shall serve a two-year term expiring February 1
2-43     of each odd-numbered year.
2-44           (d)  The Medicaid legislative oversight committee shall:
2-45                 (1)  meet not more than quarterly at the call of the
2-46     presiding officer; and
2-47                 (2)  review and approve or reject any transfer proposed
2-48     by the commission of a power, duty, function, program, activity,
2-49     obligation, right, contract, record, employee, property, or
2-50     appropriation or other money relating to administration of the
2-51     Medicaid program from a health and human services agency to the
2-52     commission.
2-53           (e)  The Medicaid legislative oversight committee may use
2-54     staff of standing committees in the senate and house of
2-55     representatives with appropriate jurisdiction, the Department of
2-56     Information Resources, the state auditor, the Texas Legislative
2-57     Council, and the Legislative Budget Board in carrying out its
2-58     responsibilities.
2-59           SECTION 4.  Subsection (d), Section 531.0214, Government
2-60     Code, is amended to read as follows:
2-61           (d)  The commission shall develop the database system in a
2-62     manner that will enable a complete analysis of the use of
2-63     prescription medications[, including information relating to:]
2-64                 [(1)  Medicaid clients for whom more than three
2-65     medications have been prescribed; and]
2-66                 [(2)  the medical effect denial of Medicaid coverage
2-67     for more than three medications has had on Medicaid clients].
2-68           SECTION 5.  Subsection (a), Section 531.026, Government Code,
2-69     is amended to read as follows:
 3-1           (a)  The commission shall prepare and submit to the
 3-2     lieutenant governor, the speaker of the house of representatives,
 3-3     the comptroller, the Legislative Budget Board, [and] the governor's
 3-4     office of budget and planning, each member of the appropriations
 3-5     committees of the senate and house of representatives, and each
 3-6     member of the standing committees of the senate and house of
 3-7     representatives with responsibility for oversight of health and
 3-8     human services issues [governor] a consolidated health and human
 3-9     services budget recommendation not later than October 15 of each
3-10     even-numbered year.
3-11           SECTION 6.  Subchapter B, Chapter 531, Government Code, is
3-12     amended by adding Section 531.0261 to read as follows:
3-13           Sec. 531.0261.  CONSOLIDATED MEDICAID APPROPRIATIONS REQUEST.
3-14     (a)  The commission shall include in the consolidated budget
3-15     recommendation required by Section 531.026 a consolidated Medicaid
3-16     appropriations request for the subsequent fiscal biennium.
3-17           (b)  The commission shall:
3-18                 (1)  develop the consolidated Medicaid appropriations
3-19     request with input from the Legislative Budget Board and the
3-20     governor's office of budget and planning to ensure that relevant
3-21     information for acute and long-term care Medicaid programs relating
3-22     to caseloads, costs, measures, rates, waivers, and eligibility is
3-23     reflected; and
3-24                 (2)  to assist in the legislative appropriations
3-25     process, revise the consolidated Medicaid appropriations request
3-26     each time that revised caseload and cost estimates relating to the
3-27     Medicaid program are prepared.
3-28           SECTION 7.  Subchapter B, Chapter 531, Government Code, is
3-29     amended by adding Section 531.0272 to read as follows:
3-30           Sec. 531.0272.  COMPREHENSIVE MEDICAID OPERATING BUDGET;
3-31     QUARTERLY EXPENDITURE REPORTS.  (a)  The commission shall prepare a
3-32     comprehensive Medicaid operating budget at the beginning of each
3-33     fiscal year, with input as appropriate from each health and human
3-34     services agency that receives legislative appropriations relating
3-35     to the Medicaid program.
3-36           (b)  The commission shall monitor all Medicaid expenditures
3-37     by the commission and health and human services agencies and submit
3-38     quarterly Medicaid expenditure reports to the lieutenant governor,
3-39     the speaker of the house of representatives, the comptroller, the
3-40     Legislative Budget Board, the governor's office of budget and
3-41     planning, each member of the appropriations committees of the
3-42     senate and house of representatives, and each member of the
3-43     standing committees of the senate and house of representatives with
3-44     responsibility for oversight of health and human services issues.
3-45           (c)  The commission shall prepare the comprehensive Medicaid
3-46     operating budget and quarterly Medicaid expenditure reports with
3-47     input from the Legislative Budget Board and the governor's office
3-48     of budget and planning to ensure that the information described by
3-49     Section 531.0261(b)(1) is reflected.
3-50           SECTION 8.  Subchapter A, Chapter 533, Government Code, is
3-51     amended by adding Sections 533.0055 and 533.016 to read as follows:
3-52           Sec. 533.0055.  EVALUATION OF REPORTING REQUIREMENTS AND
3-53     INSPECTION PROCEDURES.  (a)  The commission shall:
3-54                 (1)  evaluate on-site inspection procedures of managed
3-55     care organizations contracting with the commission under this
3-56     chapter and evaluate methods to streamline those procedures to
3-57     assist the commission in determining necessary and effective
3-58     quality control measures and required data;
3-59                 (2)  evaluate methods to streamline reporting
3-60     requirements for managed care organizations contracting with the
3-61     commission under this chapter, including:
3-62                       (A)  combining information required to be
3-63     reported into a quarterly management report;
3-64                       (B)  eliminating unnecessary or duplicative
3-65     reporting requirements; and
3-66                       (C)  requiring managed care organizations to use
3-67     uniform forms developed by the commission for referrals for
3-68     services and credentialing of health care providers providing
3-69     health care services to recipients; and
 4-1                 (3)  require managed care organizations contracting
 4-2     with the commission under this chapter to evaluate reporting
 4-3     requirements for health care providers to identify methods of
 4-4     reducing the administrative burden placed on the providers,
 4-5     including:
 4-6                       (A)  reducing the complexity of forms health care
 4-7     providers are required to complete; and
 4-8                       (B)  eliminating unnecessary or duplicative
 4-9     reporting requirements.
4-10           (b)  The commission shall submit a report to the legislature
4-11     regarding the evaluation of and methods for streamlining on-site
4-12     inspection procedures and reporting requirements for managed care
4-13     organizations and health care providers providing health care
4-14     services to recipients.  The report must include recommendations on
4-15     which methods should be implemented and a schedule for
4-16     implementation.
4-17           (c)  This section expires September 1, 2002.
4-18           Sec. 533.016.  INTERAGENCY SHARING OF INFORMATION.  The
4-19     commission shall require a health and human services agency
4-20     implementing the Medicaid managed care program to provide to each
4-21     other health and human services agency implementing the Medicaid
4-22     managed care program information reported to that agency by a
4-23     managed care organization or health care provider providing
4-24     services to recipients.
4-25           SECTION 9.  On January 1, 2002, or on an earlier date
4-26     specified by the Health and Human Services Commission:
4-27                 (1)  all powers, duties, functions, programs,
4-28     activities, obligations, rights, contracts, records, employees,
4-29     property, and appropriations and other money of the Texas
4-30     Department of Health that are determined by the commissioner of
4-31     health and human services to be essential to the administration of
4-32     the Medicaid program are transferred to the Health and Human
4-33     Services Commission;
4-34                 (2)  a rule or form adopted by the Texas Department of
4-35     Health that relates to a transferred component of the Medicaid
4-36     program is a rule or form of the Health and Human Services
4-37     Commission and remains in effect until altered by the commission;
4-38                 (3)  a reference in law or an administrative rule to
4-39     the Texas Department of Health that relates to a transferred
4-40     component of the Medicaid program means the Health and Human
4-41     Services Commission;
4-42                 (4)  a license, permit, or certification in effect that
4-43     was issued by the Texas Department of Health that relates to a
4-44     transferred component of the Medicaid program is continued in
4-45     effect as a license, permit, or certification of the Health and
4-46     Human Services Commission; and
4-47                 (5)  a complaint, investigation, or other proceeding
4-48     pending before the Texas Department of Health that relates to a
4-49     transferred component of the Medicaid program is transferred
4-50     without change in status to the Health and Human Services
4-51     Commission.
4-52           SECTION 10.  The state agency responsible for implementing
4-53     the demonstration project required by Section 32.053, Human
4-54     Resources Code, as added by this Act, shall request and actively
4-55     pursue any necessary waivers or authorizations from the Health Care
4-56     Financing Administration or other appropriate entities to enable
4-57     the agency to implement the demonstration project not later than
4-58     September 1, 2002.  The agency may delay implementing the
4-59     demonstration project until the necessary waivers or authorizations
4-60     are granted.
4-61           SECTION 11.  The Health and Human Services Commission shall
4-62     submit the report required by Subsection (b), Section 533.0055,
4-63     Government Code, as added by this Act, not later than November 1,
4-64     2002.
4-65           SECTION 12.  As soon as possible after the effective date of
4-66     this Act, the lieutenant governor and speaker of the house of
4-67     representatives shall appoint the members of the Medicaid
4-68     legislative oversight committee created by Section 531.02102,
4-69     Government Code, as added by this Act.  The lieutenant governor
 5-1     shall appoint the initial presiding officer of the committee.
 5-2           SECTION 13.  (a)  Subject to Subsection (b) of this section,
 5-3     if before implementing any provision of this Act a state agency
 5-4     determines that a waiver or authorization from a federal agency is
 5-5     necessary for implementation of that provision, the agency affected
 5-6     by the provision shall request the waiver or authorization and may
 5-7     delay implementing that provision until the waiver or authorization
 5-8     is granted.
 5-9           (b)  Implementation of Section 32.053, Human Resources Code,
5-10     as added by this Act, is governed by Section 10 of this Act.
5-11           SECTION 14.  (a)  Except as provided by Subsection (b) of
5-12     this section, this Act takes effect September 1, 2001, and applies
5-13     to a person receiving medical assistance on or after that date
5-14     regardless of the date on which the person began receiving that
5-15     medical assistance.
5-16           (b)  Sections 2, 8, and 10 of this Act take effect
5-17     immediately if this Act receives a vote of two-thirds of all the
5-18     members elected to each house, as provided by Section 39, Article
5-19     III, Texas Constitution.  If this Act does not receive the vote
5-20     necessary for immediate effect, Sections 2, 8, and 10 of this Act
5-21     take effect September 1, 2001.
5-22                                  * * * * *