SRC-LBB S.B. 1185 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1185
78R7271 CLG-FBy: Lindsay
State Affairs
4/1/2003
As Filed


DIGEST AND PURPOSE 

Currently, the Health and Human Services Commission (HHSC) oversees
contracts with several managed care plans as part of the Medicaid STAR
contract.  HHSC is charged with developing performance, operation, quality
of care, marketing, financial standards and standards relating to
children's access to quality health care services for all health plans
participating in the Medicaid managed care (MMC) program.  Because the MMC
is under a contract to provide services specifically related to HHSC,
there might be a potential conflict of interest.  As proposed, S.B. 1185
centralizes the oversight of the MMC plans in the Texas Department of
Insurance (TDI). This bill also directs TDI to monitor and assess the
performance of MMC plans to ensure that plans fully reimburse
out-of-network physicians and providers for offering care to a plans'
Medicaid clients. 

RULEMAKING AUTHORITY  

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Article 1.61, Insurance Code, as follows:

Art. 1.61.  New heading:  MEDICAID MANAGED CARE ORGANIZATIONS.  (a)
Defines "managed care organization" and "managed care plan." 

(b)  Requires the Texas Department of Insurance (TDI), in consultation
with the Health and Human Services Commission (HHSC), as necessary or
appropriate, to establish performance, operation, quality of care, and
financial standards, standards relating to access to good quality health
care services,  and complaint system guidelines that are specific to
managed care organizations that serve Medicaid clients.  Requires TDI, in
establishing standards under this article, to: 

(1)  include measures to monitor and assess the performance of managed
care organizations relating to the health status and outcome of care for
Medicaid clients; and 

   (2)  ensure that:

(A)  to the extent possible, each Medicaid client can receive good quality
health care services in the client's local community under a managed care
plan provided through a managed care organization delivery network; 

(B)  managed care plans are provided through managed care organization
delivery networks with adequate capacity to provide good quality health
care services to Medicaid clients; 

(C)  managed care plans provide timely access and appropriate referrals
for specialty care; and 
 
(D)  managed care plans fully reimburse all reasonable charges of
out-of-network physicians and providers for health care services provided
to the plans' Medicaid clients. 

  (c)  Changes "guidelines" to "complaint system guidelines."

SECTION 2.  Amends Section 533.005, Government Code, as follows:

 (2)  Adds the phrase "for network physicians and providers" in relation
to capitation and 
  provider payment rates.

(10)  Amends this subdivision to provide a requirement that the managed
care organization  comply and cooperate with HHSC and TDI in connection
with all audits, investigations, and enforcement action. 

(11)  Adds this subdivision to require that the managed care organization
fully reimburse all reasonable charges of an out-of-network physician or
provider that provides health care services to a recipient. 

SECTION 3.  Repealer:  Sections 12.017 (Managed Care Organizations:
Medicaid Program) and 533.047 ( Managed Care Organizations:  Medicaid
Program), Health and Safety Code. 

SECTION 4.  Makes application of this Act prospective.

SECTION 5.  Effective date:  September 1, 2003.