By: Coleman H.B. No. 2705
A BILL TO BE ENTITLED
AN ACT
relating to the state Medicaid program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 32.024, Human Resources Code, is amended
by adding Subsection (x) to read as follows:
(x) In its rules and standards governing the vendor drug
program, and in accordance with Section 531.02106, Government Code,
the department shall provide for cost-sharing by recipients of
prescription drug benefits under the medical assistance program in
a manner that ensures that recipients with higher levels of income
are required to pay progressively higher percentages of the costs
of prescription drugs. In implementing cost-sharing provisions
required by this subsection, the department may not require a
pharmacy participating in the vendor drug program to collect
copayments or other cost-sharing payments from recipients for
remittance to the department, but shall allow the pharmacy to
retain the payments as a component of the reimbursement provided to
the pharmacy under the program.
SECTION 2. Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Section 32.0247 to read as follows:
Sec. 32.0247. ELIGIBILITY OF CERTAIN ALIENS. (a) The
department shall provide medical assistance in accordance with 8
U.S.C. Section 1612(b), as amended, to a person who:
(1) is a qualified alien, as defined by 8 U.S.C.
Sections 1641(b) and (c), as amended;
(2) meets the eligibility requirements of the medical
assistance program;
(3) entered the United States on or after August 22,
1996; and
(4) has resided in the United States for a period of
five years after the date the person entered as a qualified alien.
(b) If authorized by federal law, the department shall
provide pregnancy-related medical assistance to the maximum extent
permitted by the federal law to a person who is pregnant and is a
lawfully present alien as defined by 8 C.F.R. Section 103.12, as
amended, including a battered alien under 8 U.S.C. Section 1641(c),
as amended, regardless of the date on which the person entered the
United States. The department shall comply with any prerequisite
imposed under the federal law for providing medical assistance
under this subsection.
SECTION 3. Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Section 32.0252 to read as follows:
Sec. 32.0252. CONTRACT TO PROVIDE ELIGIBILITY
DETERMINATION SERVICES. (a) To the extent allowed by federal law,
and except as otherwise provided by this section, the department
may contract for the provision of medical assistance eligibility
services with:
(1) a hospital district created under the authority of
Sections 4-11, Article IX, Texas Constitution;
(2) a hospital authority created under the authority
of Chapter 262 or 264, Health and Safety Code, that uses resources
to provide health care services to indigent persons to some extent;
(3) a hospital owned and operated by a municipality or
county or by a hospital authority created under Chapter 262 or 264,
Health and Safety Code;
(4) a medical school operated by this state;
(5) a medical school that receives state money under
Section 61.093, Education Code, or a chiropractic school that
receives state money under the General Appropriations Act;
(6) a teaching hospital operated by The University of
Texas System;
(7) a county that is required to provide health care
assistance to eligible county residents under Subchapter B, Chapter
61, Health and Safety Code;
(8) a governmental entity that is required to provide
money to a public hospital under Section 61.062, Health and Safety
Code;
(9) a county with a population of more than 400,000
that provides money to a public hospital and that is not included in
the boundaries of a hospital district;
(10) a hospital owned by a municipality and leased to
and operated by a nonprofit hospital for a public purpose;
(11) a hospital that receives Medicaid
disproportionate share payments;
(12) a community mental health and mental retardation
center;
(13) a local mental health or mental retardation
authority;
(14) a local health department or public health
district;
(15) a school-based health center;
(16) a community health center; and
(17) a federally qualified health center.
(b) The department may contract with an entity described by
Subsection (a) for the entity to designate one or more employees of
the entity to process medical assistance application forms and
conduct client interviews for eligibility determinations.
(c) Except as provided by Subsection (d), the contract must
require each designated employee to submit completed application
forms to the appropriate agency as determined by the department to
finally determine eligibility and to enroll eligible persons in the
program. A designated employee may not make a final determination
of eligibility or enroll an eligible person in the program.
(d) Notwithstanding Subsection (c), the commissioner may
apply for federal authorization to allow a designated employee of
an entity described by Subsection (a) to make a final determination
of eligibility or enroll an eligible person in the program.
(e) The department may:
(1) monitor the eligibility and application
processing program used by an entity with which the department
contracts; and
(2) provide on-site supervision of the program for
quality control.
(f) The Health and Human Services Commission shall ensure
that there are adequate protections to avoid a conflict of interest
with an entity described by Subsection (a) that has a contract for
eligibility services and also has a contract, either directly or
through an affiliated entity, as a managed care organization for
the Medicaid program or for the child health plan program under
Chapter 62, Health and Safety Code. The commission shall ensure
that there are adequate protections for recipients to freely choose
a health plan without being inappropriately induced to join an
entity's health plan.
SECTION 4. Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Sections 32.057, 32.061 and 32.062 to read as
follows:
Sec. 32.057. DEMONSTRATION PROJECT FOR PERSONS WITH HIV
INFECTION OR AIDS. (a) In this section, "AIDS" and "HIV" have the
meanings assigned by Section 81.101, Health and Safety Code.
(b) The department shall establish a demonstration project
to provide a person with HIV infection or AIDS with the following
services and medications through the medical assistance program:
(1) services provided by a physician, physician
assistant, advanced practice nurse, or other health care provider
specified by the department;
(2) medications not included in the formulary for the
HIV medication program operated by the department, but determined
to be necessary for treatment of a condition related to HIV
infection or AIDS;
(3) vaccinations for hepatitis B and pneumonia;
(4) pap smears, colposcopy, and other diagnostic
procedures necessary to monitor gynecologic complications
resulting from HIV infection or AIDS in women;
(5) hospitalization;
(6) laboratory and other diagnostic services,
including periodic testing for CD4+ T-cell counts, viral load
determination, and phenotype or genotype testing if clinically
indicated; and
(7) other laboratory and radiological testing
necessary to monitor potential toxicity of therapy.
(c) The department shall establish the demonstration
project in at least two counties with a high prevalence of HIV
infection and AIDS. The department shall ensure that the
demonstration project is financed using funds made available by the
counties in which the department establishes the demonstration
project. The manner in which a county makes funds available may
include an option for the county to be able to certify the amount of
funds considered available instead of sending the funds to the
state.
(d) A person is eligible to participate in the demonstration
project if the person:
(1) has been diagnosed with HIV infection or AIDS by a
physician;
(2) is under 65 years of age;
(3) has a net family income that is at or below 200
percent of the federal poverty level;
(4) is a resident of a county included in the project
or, subject to guidelines established by the department, is
receiving medical care for HIV infection or AIDS through a facility
located in a county included in the project;
(5) is not covered by a health benefits plan offering
adequate coverage, as determined by the department; and
(6) is not otherwise eligible for medical assistance
at the time the person's eligibility for participation in the
demonstration project is determined.
(e) Participation in the demonstration project does not
entitle a participant to other services provided under the medical
assistance program.
(f) The department shall establish an appropriate
enrollment limit for the demonstration project and may not allow
participation in the project to exceed that limit. Once the limit
is reached, the department:
(1) shall establish a waiting list for enrollment in
the demonstration project; and
(2) may allow eligible persons on the waiting list to
enroll solely in the HIV medication program operated by the
department.
(g) The department shall ensure that a participant in the
demonstration project is also enrolled in the HIV medication
program operated by the department.
(h) Notwithstanding any other provision of this section,
the department shall provide each participant in the project with a
six-month period of continuous eligibility for participation in the
project.
(i) Not later than December 1 of each even-numbered year,
the department shall submit a biennial report to the legislature
regarding the department's progress in establishing and operating
the demonstration project.
(j) Not later than December 1, 2008, the department shall
evaluate the cost-effectiveness of the demonstration project,
including whether the services and medications provided offset
future higher costs for project participants. If the results of the
evaluation indicate that the project is cost-effective, the
department shall incorporate a request for funding for the
expansion of the project into additional counties or throughout the
state, as appropriate, in the department's budget request for the
next state fiscal biennium.
(k) This section expires September 1, 2014.
Sec. 32.061. DEMONSTRATION PROJECT FOR CERTAIN MEDICATIONS
AND RELATED SERVICES. (a) The department shall establish a
demonstration project to provide to a person through the medical
assistance program psychotropic medications and related laboratory
and medical services necessary to conform to a prescribed medical
regime for those medications.
(b) A person is eligible to participate in the demonstration
project if the person:
(1) has been diagnosed as having a mental impairment,
including schizophrenia or bipolar disorder, that is expected to
cause the person to become a disabled individual, as defined by
Section 1614(a) of the federal Social Security Act (42 U.S.C.
Section 1382c), as amended;
(2) is at least 19 years of age, but not more than 64
years of age;
(3) has a net family income that is at or below 200
percent of the federal poverty level;
(4) is not covered by a health benefits plan offering
adequate coverage, as determined by the department; and
(5) is not otherwise eligible for medical assistance
at the time the person's eligibility for participation in the
demonstration project is determined.
(c) To the extent allowed by federal law, and except as
otherwise provided by this section, the department may contract for
the provision of eligibility services for the demonstration project
with a local mental health authority.
(d) Notwithstanding any other provision of this section,
the department shall provide each participant in the demonstration
project with a 12-month period of continuous eligibility for
participation in the project.
(e) Participation in the demonstration project does not
entitle a participant to other services provided under the medical
assistance program.
(f) The department shall establish an appropriate
enrollment limit for the demonstration project and may not allow
participation in the project to exceed that limit. Once the limit
is reached, the department shall establish a waiting list for
enrollment in the demonstration project.
(g) To the extent permitted by federal law, the department
may require a participant in the demonstration project to make
cost-sharing payments for services provided through the project.
(h) To the maximum extent possible, the department shall use
existing resources to fund the demonstration project.
(i) Not later than December 1 of each even-numbered year,
the department shall submit a biennial report to the legislature
regarding the department's progress in establishing and operating
the demonstration project.
(j) Not later than December 1, 2008, the department shall
evaluate the cost-effectiveness of the demonstration project,
including whether the preventive drug treatments and related
services provided under the project offset future long-term care
costs for project participants. If the results of the evaluation
indicate that the project is cost-effective, the department shall
incorporate a request for funding for the continuation of the
program in the department's budget request for the next state
fiscal biennium.
(k) This section expires September 1, 2014.
Sec. 32.062. DEMONSTRATION PROJECT FOR WOMEN'S HEALTH CARE
SERVICES. (a) The department shall establish a five-year
demonstration project through the medical assistance program to
expand access to preventive health and family planning services for
women. A woman eligible under Subsection (b) to participate in the
demonstration project may receive preventive health and family
planning services, including:
(1) medical history;
(2) physical examinations;
(3) counseling and education on contraceptive methods
that includes:
(4) provision of contraceptives;
(5) health screenings, including screening for:
(A) diabetes;
(B) cervical cancer;
(C) breast cancer;
(D) sexually transmitted diseases;
(E) hypertension;
(F) cholesterol; and
(G) tuberculosis;
(6) risk assessment; and
(7) referral of medical problems to appropriate
providers.
(b) A woman is eligible to participate in the demonstration
project if the woman:
(1) is 18 years of age or older;
(2) has a net family income that is at or below 185
percent of the federal poverty level; and
(3) is not otherwise eligible for the medical
assistance program.
(c) The department shall develop procedures for determining
and certifying presumptive eligibility for a woman eligible under
Subsection (b). The department shall integrate these procedures
with current procedures to minimize duplication of effort by
providers, the department, and other state agencies.
(d) The department shall provide for 12 months of continuous
eligibility for a woman eligible under Subsection (b).
(e) The department shall compile a list of potential funding
sources a client can use to help pay for treatment for health
problems:
(1) identified using services provided to the client
under the demonstration project; and
(2) for which the client is not eligible to receive
treatment under the medical assistance program.
(f) Not later than December 1 of each even-numbered year,
the department shall submit a report to the legislature that
includes a statement of the department's progress in establishing
and operating the demonstration project.
(g) To the extent required by federal budget neutrality
requirements, the department may establish an appropriate
enrollment limit for the demonstration project.
(h) This section expires September 1, 2009.
(b) The state agency responsible for implementing the
demonstration projects required by Sections 32.057, 32.061, and
32.062, Human Resources Code, as added by this Act, shall request
and actively pursue any necessary waivers or authorizations from
the Centers for Medicare and Medicaid Services or other appropriate
entities to enable the agency to implement the demonstration
project not later than September 1, 2004. The agency may delay
implementing the demonstration project until the necessary waivers
or authorizations are granted.
SECTION 5. (a) Subchapter B, Chapter 531, Government Code,
is amended by adding Sections 531.02101 through 531.02107 to read
as follows:
Sec. 531.02101. TRANSFER AUTHORITY RELATING TO
ADMINISTRATION OF MEDICAID PROGRAM. (a) To the extent that
reorganization is necessary to achieve the goals of increased
administrative efficiency, increased accountability, or cost
savings in the Medicaid program or to otherwise improve the health
of residents of this state, the commission, subject to Subsection
(b), may transfer any power, duty, function, program, activity,
obligation, right, contract, record, employee, property, or
appropriation or other money relating to administration of the
Medicaid program from a health and human services agency to the
commission.
(b) A transfer authorized by Subsection (a) may not take
effect unless approved by the Medicaid legislative oversight
committee created under Section 531.02102.
(c) The commission must notify the Legislative Budget Board
and the governor's office of budget and planning not later than the
30th day before the effective date of a transfer authorized by
Subsection (a).
Sec. 531.02102. MEDICAID LEGISLATIVE OVERSIGHT COMMITTEE.
(a) The Medicaid legislative oversight committee is composed of:
(1) five members of the senate appointed by the
lieutenant governor; and
(2) five members of the house of representatives
appointed by the speaker of the house of representatives.
(b) A member of the Medicaid legislative oversight
committee serves at the pleasure of the appointing official.
(c) The lieutenant governor and speaker of the house of
representatives shall appoint the presiding officer of the Medicaid
legislative oversight committee on an alternating basis. The
presiding officer shall serve a two-year term expiring February 1
of each odd-numbered year.
(d) The Medicaid legislative oversight committee shall:
(1) meet not more than quarterly at the call of the
presiding officer; and
(2) review and approve or reject any transfer proposed
by the commission of a power, duty, function, program, activity,
obligation, right, contract, record, employee, property, or
appropriation or other money relating to administration of the
Medicaid program from a health and human services agency to the
commission.
(e) The Medicaid legislative oversight committee may use
staff of standing committees in the senate and house of
representatives with appropriate jurisdiction, the Department of
Information Resources, the state auditor, the Texas Legislative
Council, and the Legislative Budget Board in carrying out its
responsibilities.
Sec. 531.02103. MEDICAID PROGRAM: STRATEGIES FOR IMPROVING
BUDGET CERTAINTY AND COST SAVINGS. (a) To achieve administrative
efficiency and cost savings in the Medicaid program, the commission
shall develop and implement strategies to improve management of the
cost, quality, and use of services provided under the program. The
strategies developed and implemented under this section may
include:
(1) expansion of an enhanced primary care case
management model to areas of the state and to populations currently
subject to fee-for-service arrangements;
(2) use of medical case management for complex medical
cases;
(3) mandatory enrollment of some or all Medicaid
recipients who receive Supplemental Security Income (SSI) (42
U.S.C. Section 1381 et seq.) into a STAR + Plus pilot program in an
area of the state served by a STAR pilot program as of January 1,
2001, or into an alternate managed care model developed by the
commission;
(4) use of telemedicine for children and other persons
with special health care needs;
(5) use of copayments and other mechanisms to
encourage responsible use of health care services under the
program, provided that implementation occurs in accordance with
Section 531.02106;
(6) use of procurement initiatives such as selective
contracting as a mechanism for obtaining provider services under
the program, provided that the initiatives may not apply to a Class
A community independent pharmacy or a Class A community chain
pharmacy with 10 or fewer pharmacies;
(7) expansion of the program of all-inclusive care for
the elderly (PACE), as authorized by Section 4802 of the Balanced
Budget Act of 1997 (Pub. L. No. 105-33), as amended, to additional
sites;
(8) use of disease management and drug therapy
management for Medicaid recipients with chronic diseases,
including congestive heart failure, chronic obstructive pulmonary
disease, asthma, and diabetes;
(9) use of cost controls in the provision of
pharmaceutical services as necessary to ensure appropriate
pricing, cost-effective use of pharmaceutical products, and the
state's greatest entitlement to rebates from pharmaceutical
manufacturers;
(10) use of competitive pricing for medical equipment
and supplies, including vision care equipment and supplies;
(11) expansion of the health insurance premium payment
reimbursement system (HIPPS);
(12) reduction of hospital outlier payments; and
(13) any other strategy designed to improve the
quality and cost-effectiveness of the Medicaid program.
(b) The commission shall consult with local communities,
providers, consumers, and other affected parties in the development
and implementation of strategies under Subsection (a). The
commission shall use existing state or local advisory committees
for this purpose.
(c) The commission shall hold public hearings at least
quarterly regarding the development and implementation of
strategies under Subsection (a) and the development of agency
procedures and necessary state plan amendments or waivers. If the
commission proposes to adopt a rule necessary to implement a
strategy under Subsection (a), the commission shall adopt the rule
in accordance with Chapter 2001 and hold any public hearing
required by that chapter.
Sec. 531.02105. TEXAS HEALTH STEPS PROGRAM. The commission
shall:
(1) take all actions necessary to simplify:
(A) provider enrollment in the Texas Health Steps
program;
(B) reporting requirements relating to the Texas
Health Steps program; and
(C) billing and coding procedures so that Texas
Health Steps program processes are more consistent with commercial
standards;
(2) in consultation with providers of Texas Health
Steps program services, develop mechanisms to promote accurate,
reliable, and timely reporting of examinations of children
conducted under the program to managed care organizations and other
appropriate entities;
(3) in consultation with providers of Texas Health
Steps program services, develop a mechanism to promote
incorporation of Texas Health Steps program services into a child's
medical home; and
(4) require the external quality monitoring
organization to evaluate the Texas Health Steps program using
information available from all relevant sources and prepare
periodic reports regarding the program for submission by the
commission to the legislature.
Sec. 531.02106. LIMITS ON MEDICAID COST-SHARING. Before
requiring Medicaid recipients to make copayments or comply with
other cost-sharing requirements, the commission by rule shall
establish monthly limits on total copayments and other cost-sharing
requirements.
Sec. 531.02107. AUTHORIZATION FOR EXPANDED MEDICAID
COST-SHARING. (a) Notwithstanding any other law, the commissioner
may request federal authorization to require all Medicaid
recipients to make copayments or comply with other cost-sharing
requirements for all services provided under the program in
accordance with that authorization.
(b) As soon as possible after the effective date of this
Act, the lieutenant governor and the speaker of the house of
representatives shall appoint the members of the Medicaid
legislative oversight committee created by Section 531.02102,
Government Code, as added by this Act. The speaker of the house of
representatives shall appoint the initial presiding officer of the
committee.
SECTION 6. Subchapter B, Chapter 531, Government Code, is
amended by adding Section 531.02131 to read as follows:
Sec. 531.02131. COMMUNITY OUTREACH CAMPAIGN. (a) The
commission shall conduct a community outreach campaign to provide
information relating to the availability of Medicaid coverage for
children and adults and to promote enrollment of eligible children
and adults in Medicaid.
(b) The commission may combine the community outreach
campaign under this section with any other state outreach campaign
or educational activity relating to health care and available
health care coverage.
SECTION 7. Subchapter B, Chapter 531, Government Code, is
amended by adding Section 531.02192 to read as follows:
Sec. 531.02192. HEALTH BENEFITS COVERAGE FOR CERTAIN
LOW-INCOME PARENTS. (a) The commission shall develop and
implement a demonstration project with a statewide program in which
health benefits coverage is provided to an individual who:
(1) is the parent of a child receiving medical
assistance under the state Medicaid program or of a child enrolled
in the state child health plan program under Chapter 62, Health and
Safety Code;
(2) has a family income that is at or below 200 percent
of the federal poverty level; and
(3) is not covered by health insurance or another type
of health benefit plan other than a health benefit plan other than a
health benefit plan that is administered by or on behalf of a local
governmental entity.
(b) The commission shall ensure that the program is designed
and administered in a manner that qualifies for federal funding and
is financed using state money and money made available by local
governmental entities to the commission for federal matching
purposes. Local money described by this subsection includes tax or
other revenue spent to provide indigent health care services to
eligible individuals before they were eligible to receive health
benefits coverage under this section and any other resources made
available to the commission under this section for federal matching
purposes.
(c) In establishing the demonstration project with a
statewide phase-in, the commission shall:
(1) develop a health benefit plan to provide coverage
for health care services to eligible individuals that:
(A) requires plan coverage to be purchased using
a combination of local, federal, and state contributions;
(B) provides a benefits package that is similar
to the state child health plan program benefits; and
(C) to the extent possible eliminates coverage
for duplicative or extraordinary services; and
(2) not later than the 180th day before the date on
which the commission plans to begin to provide health coverage to
recipients through the program, appoint an advisory committee to
provide recommendations on the implementation and operation of the
program, including the development of the health benefit plan.
(d) The advisory committee described by Subsection (c)(2)
must be composed of representatives of:
(1) local governmental entities that make funds
available to the commission in accordance with this section;
(2) insurance companies and health maintenance
organizations eligible to offer health benefits coverage under the
health benefit plan; and
(3) health consumer advocates.
(e) In developing the health benefit plan under Subsection
(c)(1), the commission must include provisions intended to
discourage:
(1) employers and other persons from electing to
discontinue offering coverage for individuals under employee or
other group health benefit plans; and
(2) individuals with access to adequate health benefit
plan coverage, other than coverage under the health benefit plan
developed under Subsection (c)(1), from electing not to obtain or
to discontinue that coverage.
(f) At the request of the commission, the Texas Department
of Insurance shall provide any necessary assistance with the
development of the health benefit plan under Subsection (c)(1).
(g) The commission shall:
(1) adopt an application form and application
procedures for requesting health benefit plan coverage under this
section;
(2) develop eligibility determination and enrollment
procedures for the program; and
(3) select the health benefit plan providers under the
program through a competitive procurement process.
(h) The commission shall adopt rules as necessary to
implement this section.
SECTION 8. The heading to Chapter 533, Government Code, is
amended to read as follows:
CHAPTER 533. DEVELOPMENT AND IMPLEMENTATION
OF MEDICAID MANAGED CARE PROGRAM
SECTION 9. Subchapter A, Chapter 533, Government Code, is
amended by amending Sections 533.001 and 533.002 and adding
Sections 533.0021, 533.0022, 533.0023, and 533.0024 to read as
follows:
Sec. 533.001. Definitions. In this chapter:
(1) "Commission" means the Health and Human Services
Commission or an agency operating part of the state Medicaid
managed care program, as appropriate.
(2) "Commissioner" means the commissioner of health
and human services.
(3) "Health and human services agencies" has the
meaning assigned by Section 531.001.
(4) "Managed care organization" means a person who is
authorized or otherwise permitted by law to arrange for or provide a
managed care plan. The term includes a health care system
established under Chapter 20C, Insurance Code.
(5) "Managed care plan" means a plan under which a
person undertakes to provide, arrange for, pay for, or reimburse
any part of the cost of any health care services. A part of the plan
must consist of arranging for or providing health care services as
distinguished from indemnification against the cost of those
services on a prepaid basis through insurance or otherwise. The
term includes a primary care case management provider network and a
health care system established under Chapter 20C, Insurance Code.
The term does not include a plan that indemnifies a person for the
cost of health care services through insurance.
(6) "Recipient" means a recipient of medical
assistance under Chapter 32, Human Resources Code.
(7) "Health care service region" or "region" means a
Medicaid managed care service area as delineated by the commission.
Sec. 533.002. MEDICAID HEALTH CARE DELIVERY SYSTEM. The
commission may develop a health care delivery system that
restructures the delivery of health care services provided under
the state Medicaid program.
Sec. 533.0021. DESIGN AND DEVELOPMENT OF HEALTH CARE
DELIVERY SYSTEM. In developing the health care delivery system
under this chapter, the commission shall:
(1) design the system in a manner that:
(A) improves the health of the people of this
state by:
(i) emphasizing prevention;
(ii) promoting continuity of care; and
(iii) providing a medical home for
recipients;
(B) ensures that each recipient receives
high-quality, comprehensive health care services in the
recipient's local community; and
(C) ensures that the community is given an
opportunity to provide input and participate in the implementation
of the system in the health care service region by holding public
hearings in the community at which the commission takes public
comment from all persons interested in the implementation of the
system;
(2) to the extent that is cost-effective to this state
and local governments:
(A) maximize the financing of the state Medicaid
program by obtaining federal matching funds for all resources or
other money available for matching;
(B) expand Medicaid eligibility to include
persons who were eligible to receive indigent health care services
through the use of those resources or other money available for
matching before expansion of eligibility; and
(C) develop a sliding scale copayment schedule
for recipients based on income and other factors determined by the
commissioner; and
(3) develop and prepare the waiver or other documents
necessary to obtain federal authorization for the system.
Sec. 533.0022. PURPOSE. The commission shall implement the
Medicaid managed care program as part of the health care delivery
system developed under this chapter [Chapter 532] by contracting
with managed care organizations in a manner that, to the extent
possible:
(1) accomplishes the goals described by Section
533.0021 [improves the health of Texans by:
[(A) emphasizing prevention;
[(B) promoting continuity of care; and
[(C) providing a medical home for recipients;
[(2) ensures that each recipient receives high
quality, comprehensive health care services in the recipient's
local community];
(2) [(3)] encourages the training of and access to
primary care physicians and providers;
(3) [(4)] maximizes cooperation with existing public
health entities, including local departments of health and
community mental health and mental retardation centers established
under Chapter 534, Health and Safety Code;
(4) [(5)] provides incentives to managed care
organizations to improve the quality of health care services for
recipients by providing value-added services; [and]
(5) [(6)] reduces administrative and other
nonfinancial barriers for recipients in obtaining health care
services; and
(6) controls the costs associated with the state
Medicaid program.
Sec. 533.0023. RULES FOR HEALTH CARE DELIVERY SYSTEM. (a)
The commissioner of insurance shall adopt rules as necessary or
appropriate to carry out the functions of the Texas Department of
Insurance under this chapter.
(b) The commissioner of health and human services shall
adopt rules and obtain public input in accordance with Chapter 2001
before making substantive changes to policies or programs under the
Medicaid managed care program.
Sec. 533.0024. RESOLUTION OF IMPLEMENTATION ISSUES. The
commission shall conduct a meeting at least quarterly with managed
care organizations that contract with the commission under this
chapter and health care providers to identify and resolve
implementation issues with respect to the Medicaid managed care
program.
SECTION 10. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.0035 to read as follows:
Sec. 533.0035. LIMITATION ON NUMBER OF CONTRACTS AWARDED.
The commission shall:
(1) evaluate the number of managed care organizations
with which the commission contracts to provide health care services
in each health care service region, focusing particularly on the
market share of those managed care organizations; and
(2) limit the number of contracts awarded to managed
care organizations under this chapter in a manner that promotes the
successful implementation of the delivery of health care services
through the state Medicaid managed care program.
SECTION 11. (a) Section 533.005, Government Code, is
amended to read as follows:
Sec. 533.005. REQUIRED CONTRACT PROVISIONS. A contract
between a managed care organization and the commission for the
organization to provide health care services to recipients must
contain:
(1) procedures to ensure accountability to the state
for the provision of health care services, including procedures for
financial reporting, quality assurance, utilization review, and
assurance of contract and subcontract compliance;
(2) capitation and provider payment rates that ensure
the cost-effective provision of quality health care;
(3) a requirement that the managed care organization
provide ready access to a person who assists recipients in
resolving issues relating to enrollment, plan administration,
education and training, access to services, and grievance
procedures;
(4) a requirement that the managed care organization
provide ready access to a person who assists providers in resolving
issues relating to payment, plan administration, education and
training, and grievance procedures;
(5) a requirement that the managed care organization
provide information and referral about the availability of
educational, social, and other community services that could
benefit a recipient;
(6) procedures for recipient outreach and education;
(7) a requirement that the managed care organization
make payment to a physician or provider for health care services
rendered to a recipient under a managed care plan not later than the
45th day after the date a claim for payment is received with
documentation reasonably necessary for the managed care
organization to process the claim, or within a period, not to exceed
60 days, specified by a written agreement between the physician or
provider and the managed care organization;
(8) a requirement that the commission, on the date of a
recipient's enrollment in a managed care plan issued by the managed
care organization, inform the organization of the recipient's
Medicaid certification date;
(9) a requirement that the managed care organization
comply with Section 533.006 as a condition of contract retention
and renewal; [and]
(10) a requirement that the managed care organization
provide the information required by Section 533.012 and otherwise
comply and cooperate with the commission's office of investigations
and enforcement;
(11) a process by which the commission is required to:
(A) provide in writing to the managed care
organization the projected fiscal impact on the state and managed
care organizations that contract with the commission under this
chapter of proposed Medicaid managed care program, benefit, or
contract changes; and
(B) negotiate in good faith regarding
appropriate operational and financial changes to the contract with
the managed care organization before implementing those changes;
(12) a requirement that the managed care organization
providing services to recipients under a Medicaid STAR + Plus pilot
program:
(A) have an appropriate number of clinically
trained case managers within the Medicaid STAR + Plus pilot program
service delivery area to manage medically complex patients; and
(B) implement disease management programs that
address the medical conditions of Medicaid the STAR + Plus pilot
program population, including persons with HIV infection, AIDS, or
sickle cell anemia;
(13) a requirement that the renewal date of the
contract coincide with the beginning of the state fiscal year; and
(14) a requirement that the managed care organization
reimburse health care providers for an appropriate emergency
medical screening that is within the capability of the hospital's
emergency department, including ancillary services routinely
available to the emergency department, and that is provided to
determine whether:
(A) an emergency medical or psychiatric
condition exists; and
(B) additional medical examination and treatment
is required to stabilize the emergency medical or psychiatric
condition.
(b) The changes in law made by Section 533.005, Government
Code, as amended by this Act, apply to a contract between the Health
and Human Services Commission and a managed care organization under
Chapter 533, Government Code, that is entered into or renewed on or
after the effective date of this Act. A contract that is entered
into or renewed before the effective date of this Act is governed by
the law in effect on the date the contract was entered into or
renewed, and the former law is continued in effect for that purpose.
SECTION 12. (a) Subchapter A, Chapter 533, Government Code,
is amended by adding Sections 533.0051, 533.0076, 533.0091,
533.0131, and 533.016 through 533.0207 to read as follows:
Sec. 533.0051. CONTRACT RENEWAL. Before renewing a
contract with a managed care organization under this chapter, the
commission shall consider:
(1) the managed care organization's:
(A) overall contract compliance;
(B) implementation of simplified administrative
processes for health care providers and recipients;
(C) compliance with statutory requirements to
promptly reimburse health care providers for covered services
provided under the Medicaid managed care program;
(D) compliance with the requirements under
Article 3.70-3C, Insurance Code, as added by Chapter 1260, Acts of
the 75th Legislature, Regular Session, 1997, and Section 14, Texas
Health Maintenance Organization Act (Article 20A.14, Vernon's
Texas Insurance Code), to identify advanced practice nurses and
physician assistants as providers in the managed care
organization's provider network;
(E) financial performance; and
(F) participation in the state child health plan
under Chapter 62, Health and Safety Code; and
(2) the level of satisfaction of recipients and health
care providers with the managed care organization.
Sec. 533.0076. LIMITATIONS ON RECIPIENT DISENROLLMENT. (a)
Except as provided by Subsections (b) and (c), and to the extent
permitted by federal law, the commission may prohibit a recipient
from disenrolling in a managed care plan under this chapter and
enrolling in another managed care plan during the 12-month period
after the date the recipient initially enrolls in a plan.
(b) At any time before the 91st day after the date of a
recipient's initial enrollment in a managed care plan under this
chapter, the recipient may disenroll in that plan for any reason and
enroll in anther managed care plan under this chapter.
(c) The commission shall allow a recipient who is enrolled
in a managed care plan under this chapter to disenroll in that plan
at any time for cause in accordance with federal law.
Sec. 533.0091. UNIFORM STANDARDS FOR IDENTIFYING
RECIPIENTS WITH DISABILITIES OR CHRONIC CONDITIONS. (a) The
commission shall collaborate with managed care organizations that
contract with the commission under this chapter to develop a
uniform screening tool to be used by the managed care organizations
to identify adult recipients with disabilities or chronic health
conditions and assist those recipients in accessing health care
services.
(b) The commission, in cooperation with the Texas
Department of Health, by rule shall adopt criteria by which to
classify a child with certain health conditions as a child with
special health care needs. In adopting the criteria, the
commission must include children who have:
(1) severe disabilities;
(2) severe mental or emotional disorders;
(3) medically complex or fragile health conditions; or
(4) rare or chronic health conditions that are likely
to last at least one year and result in limitations on the child's
functioning and activities when compared to other children of the
same age who do not have those conditions.
(c) The commission, in cooperation with the Texas
Department of Health, shall:
(1) monitor and assess health care services provided
under the state Medicaid managed care program and the medical
assistance program under Chapter 32, Human Resources Code, to
children with special health care needs as determined by the
criteria adopted under Subsection (b);
(2) adopt specific quality of care standards
applicable to health care services provided under the state
Medicaid managed care program to children described by Subdivision
(1); and
(3) undertake initiatives to develop, test, and
implement optimum methods for the delivery of appropriate,
comprehensive, and cost-effective health care services under the
state Medicaid managed care program to children described by
Subdivision (1), including initiatives to:
(A) coordinate health care services with
educational programs and other social and community services; and
(B) promote family involvement and support.
Sec. 533.016. INTERAGENCY SHARING OF INFORMATION. (a) The
commission shall require a health and human services agency
implementing the Medicaid managed care program to provide to each
other health and human services agency implementing the program
information reported to the agency by a managed care organization
or health care provider providing services to recipients.
(b) Except as prohibited by federal law, the commission,
each health and human services agency implementing the Medicaid
managed care program, and the Texas Department of Insurance shall
share confidential information, including financial data, that
relates to or affects a person who proposes to contract with or has
contracted with a state agency or a contractor of a state agency for
the purposes of this chapter.
(c) Information shared between agencies under Subsection
(b) remains confidential and is not subject to disclosure under
Chapter 552.
Sec. 533.017. REDUCTION AND COORDINATING OF REPORTING
REQUIREMENTS AND INSPECTION PROCEDURES. (a) The commission shall:
(1) streamline on-site inspection procedures of
managed care organizations contracting with the commission under
this chapter;
(2) streamline reporting requirements for managed
care organizations contracting with the commission under this
chapter, including:
(A) combining information required to be
reported into a quarterly management report;
(B) eliminating unnecessary or duplicative
reporting requirements; and
(C) to the extent feasible, allowing managed care
organizations contracting with the commission under this chapter to
submit reports electronically;
(3) require managed care organizations contracting
with the commission under this chapter to streamline administrative
processes required of health care providers, including:
(A) simplifying and standardizing, to the extent
reasonably feasible, the forms providers are required to complete,
including forms for preauthorization for covered services;
(B) eliminating unnecessary or duplicative
reporting requirements; and
(C) encouraging the adoption of collaboratively
developed uniform forms; and
(4) designate one entity to which managed care
organizations contracting with the commission under this chapter
may report encounter data.
(b) Except as provided by Subsection (d), the commission and
the Texas Department of Insurance and contractors of the commission
or department may not schedule, initiate, prepare for, or conduct a
documentary, electronic, or on-site review, a readiness,
compliance, or performance review, or any other review, audit, or
examination of a managed care organization contracting with the
commission under this chapter until:
(1) the commission, the department, and, if
appropriate, each health and human services agency implementing a
part of the Medicaid managed care program enter into a memorandum of
understanding under Section 533.018; and
(2) the agencies described by Subdivision (1) provide
that memorandum to the managed care organization.
(c) Notwithstanding Subsection (b), the commission or the
Texas Department of Insurance may take any action:
(1) otherwise authorized by law to protect the safety
of a recipient; or
(2) with respect to a managed care organization
determined to be in a hazardous financial condition.
(d) The commission and the Texas Department of Insurance may
review monthly, quarterly, or annual reports required to be filed
by managed care organizations contracting with the commission
under this chapter.
Sec. 533.018. MEMORANDUM OF UNDERSTANDING REGARDING
COORDINATION OF REPORTING REQUIREMENTS AND INSPECTION PROCEDURES.
(a) The commission, the Texas Department of Insurance, and, if
appropriate, each health and human services agency implementing a
part of the Medicaid managed care program shall enter into a
memorandum of understanding that outlines methods to:
(1) maximize interagency coordination in conducting
reviews of managed care organizations contracting with the
commission under this chapter; and
(2) eliminate and prevent duplicative monitoring,
reporting, reviewing of forms, regulation, and enforcement
policies and processes with respect to those managed care
organizations.
(b) The memorandum of understanding under this section
must:
(1) maximize the use of electronic filing of
information by managed care organizations contracting with the
commission under this chapter;
(2) specify the process by which the commission and
the Texas Department of Insurance will jointly schedule a single
on-site visit that satisfies the requirements of all state agencies
regarding regularly scheduled, comprehensive compliance monitoring
of and enforcement efforts with respect to managed care
organizations contracting with the commission under this chapter;
(3) require that interagency orientation and training
are scheduled and conducted to ensure that agency staff members are
familiar with the obligation to eliminate and prevent duplicative
monitoring and enforcement activities; and
(4) ensure coordination to eliminate and prevent
duplication regarding policy development and implementation,
procurement, cost estimates, electronic systems issues, and
monitoring and enforcement activities with respect to managed care
organizations that serve recipients as well as enrollees in the
state child health plan under Chapter 62, Health and Safety Code.
Sec. 533.019. INTEGRATED OPERATIONAL AND FINANCIAL AUDIT
INSTRUMENT. (a) The commission and the Texas Department of
Insurance shall develop and use an integrated operational and
financial audit instrument for regularly scheduled, comprehensive,
on-site readiness, performance, or compliance reviews, or other
reviews, audits, or examinations of managed care organizations that
contract with the commission under this chapter.
(b) In developing the integrated operational and financial
audit instrument, the commission and the Texas Department of
Insurance must include:
(1) a method to assess compliance with each applicable
federal and state law and each applicable accreditation and
contractual requirement, including financial, actuarial,
operational, and quality of care requirements, the agencies are
authorized to enforce at least on a periodic basis;
(2) a method to assess compliance of documents,
records, and electronic files the commission or the Texas
Department of Insurance requires managed care organizations that
contract with the commission under this chapter to submit for
review, either before or as an alternative to an on-site review,
audit, or examination; and
(3) a method to assess compliance through on-site
reviews, audits, and examinations, including document review,
electronic systems testing or review, and observation and
interviews of managed care organization employees.
(c) The commission and the Texas Department of Insurance may
contract on a competitive bid basis with a consultant not
affiliated with the commission or department to develop the
integrated operational and financial audit instrument required by
this section.
Sec. 533.020. PREAUTHORIZATION FOR CERTAIN SERVICES NOT
REQUIRED. The commission, in consultation with physicians,
hospitals, and managed care organizations contracting with the
commission under this chapter, shall develop:
(1) a process by which the managed care organizations
eliminate preauthorization processes for covered services that are
considered to be routine services; and
(2) a process by which to notify health care providers
of covered services under the Medicaid managed care program for
which preauthorization is not required.
Sec. 533.0201. UTILIZATION REVIEW UNDER PRIMARY CARE CASE
MANAGEMENT NETWORK. To the extent allowed by federal law, the
commission shall require a managed care organization that contracts
with the commission under this chapter and that provides health
care services to recipients through a primary care case management
network to conduct utilization review of those services in
accordance with Article 21.58A, Insurance Code.
Sec. 533.0202. NOTICE OF DETERMINATIONS MADE BY UTILIZATION
REVIEW AGENTS. (a) In this section, "utilization review agent" has
the meaning assigned by Section 2, Article 21.58A, Insurance Code.
(b) A utilization review agent shall notify a recipient or a
person acting on behalf of the recipient and the recipient's health
care provider of a utilization review determination in accordance
with this section and Section 5(a), Article 21.58A, Insurance Code,
with respect to services provided under the state Medicaid managed
care program.
(c) If the utilization review agent makes an adverse
determination, the notice required by this section must include:
(1) the principal reasons for the adverse
determination;
(2) the clinical basis for the adverse determination;
(3) a description or the source of the screening
criteria used as guidelines in making the determination; and
(4) a description of the procedure for the complaint
and appeal process, including a description provided to the
recipient of:
(A) the recipient's right to a Medicaid fair
hearing at any time; and
(B) the procedures for appealing an adverse
determination at a Medicaid fair hearing.
(d) The utilization review agent must provide notice of an
adverse determination:
(1) to the recipient and the recipient's health care
provider of record by telephone or electronic transmission not
later than the next business day after the date the determination is
made if the recipient is hospitalized when the determination is
made, to be followed not later than the third business day after the
date the determination is made by a written notice of the
determination;
(2) to the recipient and the recipient's health care
provider of record by written notice not later than the third
business day after the date the determination is made if the
recipient is not hospitalized when the determination is made; or
(3) to the recipient's treating physician or health
care provider within the time appropriate to the circumstances that
relate to the delivery of the services and the condition of the
patient, but not later than one hour after the recipient's treating
physician or provider requests poststabilization care following
emergency treatment.
(e) The commissioner shall adopt rules to implement this
section.
Sec. 533.0203. COMPLAINT INFORMATION. (a) The commission,
in cooperation with the Texas Department of Insurance and any other
appropriate entity, shall collect complaint data, including
complaint resolution rates, regarding managed care organizations
contracting with the commission under this chapter. In entering
into or renewing a contract with a managed care organization under
this chapter, the commission may include provisions in the contract
to accomplish the purposes of this section.
(b) The commission shall report on a quarterly basis the
complaint data collected under Subsection (a) to the state Medicaid
managed care advisory committee under Subchapter C.
(c) Not later than December 1 of each even-numbered year,
the commission shall report to the legislature the complaint data
collected under Subsection (a). The report may be consolidated
with any other report relating to the same subject matter the
commission is required to submit under other law.
Sec. 533.0204. PROVIDER REPORTING OF ENCOUNTER DATA. The
commission shall collaborate with managed care organizations that
contract with the commission and health care providers under the
organizations' provider networks to develop incentives and
mechanisms to encourage providers to report complete and accurate
encounter data to managed care organizations in a timely manner.
Sec. 533.0205. QUALIFICATIONS OF CERTIFIER OF ENCOUNTER
DATA. (a) The person acting as the state Medicaid director shall
appoint a person as the certifier of encounter data.
(b) The certifier of encounter data must have:
(1) demonstrated expertise in estimating premium
payment rates paid to a managed care organization under a managed
care plan; and
(2) access to actuarial expertise, including
expertise in estimating premium payment rates paid to a managed
care organization under a managed care plan.
(c) A person may not be appointed under this section as the
certifier of encounter data if the person participated with the
commission in developing premium payment rates for managed care
organizations under managed care plans in this state during the
three-year period before the date the certifier is appointed.
Sec. 533.0206. CERTIFICATION OF ENCOUNTER DATA. (a) The
certifier of encounter data shall certify the completeness,
accuracy, and reliability of encounter data for each state fiscal
year.
(b) The commission shall make available to the certifier all
records and data the certifier considers appropriate for evaluating
whether to certify the encounter data. The commission shall
provide to the certifier selected resources and assistance in
obtaining, compiling, and interpreting the records and data.
Sec. 533.0207. IMPLEMENTATION OF CERTAIN MANAGED CARE PLANS
IN CERTAIN COUNTIES. (a) Notwithstanding any other law, before
implementing a Medicaid managed care plan that uses capitation as a
method of payment in a county with a population of less than
100,000, the commission must determine that implementation is
economically efficient.
(b) Notwithstanding Subsection (a), the commission may
continue implementation of a Medicaid managed care plan described
by Subsection (a) in a county with a population of less than 100,000
if implementation of the plan in the county was in progress on
January 1, 2001.
(c) Not later than March 1, 2004, the Health and Human
Services Commission and each appropriate health and human services
agency implementing part of the Medicaid managed care program under
Chapter 533, Government Code, shall complete the requirements for
reducing and coordinating reporting requirements and inspection
procedures as required by Section 533.017, Government Code, as
added by this Act.
(d) Not later than March 1, 2004, the Health and Human
Services Commission, the Texas Department of Insurance, and each
appropriate health and human services agency implementing a part of
the Medicaid managed care program under Chapter 533, Government
Code, shall enter into the memorandum of understanding required by
Section 533.018, Government Code, as added by this Act.
(e) Not later than March 1, 2004, the Health and Human
Services Commission and the Texas Department of Insurance shall
develop the integrated operational and financial audit instrument
required by Section 533.019, Government Code, as added by this Act.
(f) The changes in law made by Section 533.0202, Government
Code, as added by this Act, apply to a contract between the Health
and Human Services Commission and a managed care organization under
Chapter 533, Government Code, that is entered into or renewed on or
after the effective date of this Act. A contract that is entered
into or renewed before the effective date of this Act is governed by
the law in effect on the date the contract was entered into or
renewed, and the former law is continued in effect for that purpose.
(g) Not later than January 1, 2004, the person acting as the
state Medicaid director shall appoint the certifier of Medicaid
managed care encounter data required by Section 533.0205,
Government Code, as added by this Act.
SECTION 13. Subsection (a), Section 533.041, Government
Code, is amended to read as follows:
(a) The commission shall appoint a state Medicaid managed
care advisory committee. The advisory committee consists of
representatives of:
(1) hospitals;
(2) managed care organizations;
(3) primary care providers;
(4) state agencies;
(5) consumer advocates representing low-income
recipients;
(6) consumer advocates representing recipients with a
disability;
(7) parents of children who are recipients;
(8) rural providers;
(9) advocates for children with special health care
needs;
(10) pediatric health care providers, including
specialty providers;
(11) long-term care providers, including nursing home
providers;
(12) obstetrical care providers;
(13) community-based organizations serving low-income
children and their families; [and]
(14) community-based organizations engaged in
perinatal services and outreach;
(15) medically underserved communities; and
(16) community mental health and mental retardation
centers established under Subchapter A, Chapter 534, Health and
Safety Code.
SECTION 14. (a) Subject to Subsection (b) of this section,
if before implementing any provision of this Act a state agency
determines that a waiver or authorization from a federal agency is
necessary for implementation of that provision, the agency affected
by the provision shall request the waiver or authorization and may
delay implementing that provision until the waiver or authorization
is granted.
(b) Implementation of Sections 32.057, 32.061, and 32.062,
Human Resources Code, as added by this Act, is governed by Section 4
of this Act. Implementation of Section 533.02192, Government Code,
as added by this Act, is governed by Section 7 of this Act.
SECTION 15. Not later than September 1, 2003, the Health and
Human Services Commission shall request and actively pursue any
necessary waivers from a federal agency or any other appropriate
entity to enable the commission to implement the program
established under Section 531.02192, Government Code, as added by
this Act. The commission may delay implementing the program
described by that section until the necessary waivers or
authorizations are granted.
SECTION 16. The Health and Human Services Commission is not
required to implement Section 531.0219, Government Code, as added
by this Act, unless a specific appropriation for the implementation
is provided in the General Appropriations Act, Acts of the 78th
Legislature, Regular Session, 2003.
SECTION 17. Except as otherwise provided by this Act, this
Act takes effect September 1, 2003, and applies to a person
receiving medical assistance on or after that date regardless of
the date on which the person began receiving that medical
assistance.