78R8684 CLG-D
By: Nelson S.B. No. 1330
A BILL TO BE ENTITLED
AN ACT
relating to state policy relating to financing of certain health
and human services programs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 531.001, Government Code, is amended by
adding Subdivision (1-a) to read as follows:
(1-a) "Child health plan program" means the child health
plan program established under Chapter 62, Health and Safety Code.
SECTION 2. Subchapter B, Chapter 531, Government Code, is
amended by adding Section 531.0392 to read as follows:
Sec. 531.0392. RECOVERY OF CERTAIN THIRD-PARTY
REIMBURSEMENTS UNDER MEDICAID. (a) In this section, "dually
eligible individual" means an individual who is eligible to receive
health care benefits under both the Medicaid and Medicare programs.
(b) The commission shall obtain Medicaid reimbursement from
each fiscal intermediary who makes a payment to a service provider
on behalf of the Medicare program, including a reimbursement for a
payment made to a home health services provider or nursing facility
for services rendered to a dually eligible individual.
SECTION 3. Subchapter B, Chapter 531, Government Code, is
amended by adding Sections 531.063-531.070 to read as follows:
Sec. 531.063. PHARMACY BENEFIT MANAGER. (a) In this
section, "pharmacy benefit manager" has the meaning assigned by
Section 1, Article 21.07-6, Insurance Code.
(b) The commission shall contract with a pharmacy benefit
manager to administer the pharmacy benefits of the Medicaid vendor
drug program and the child health plan program.
Sec. 531.064. SUPPLEMENTAL REBATES. (a) In this section:
(1) "Labeler" means a person that:
(A) has a labeler code from the United States
Food and Drug Administration under 21 C.F.R. Section 207.20; and
(B) receives prescription drugs from a
manufacturer or wholesaler and repackages those drugs for later
retail sale.
(2) "Manufacturer" means a manufacturer of
prescription drugs as defined by 42 U.S.C. Section 1396r-8(k)(5),
as amended, including a subsidiary or affiliate of a manufacturer.
(3) "Wholesaler" means a person licensed under
Subchapter I, Chapter 431, Health and Safety Code.
(b) The commission shall negotiate with manufacturers and
labelers to obtain supplemental rebates for prescription drugs sold
in this state.
(c) A manufacturer or labeler that sells prescription drugs
in this state may voluntarily negotiate with the commission and
enter into an agreement to provide supplemental rebates for
prescription drugs provided under:
(1) the Medicaid vendor drug program in excess of the
Medicaid rebates required by 42 U.S.C. Section 1396r-8, as amended;
and
(2) the child health plan program under Chapter 62,
Health and Safety Code.
(d) In negotiating terms for a supplemental rebate amount,
the commission shall consider:
(1) rebates calculated under the Medicaid rebate
program in accordance with 42 U.S.C. Section 1396r-8, as amended;
and
(2) any other available information on prescription
drug prices or rebates.
Sec. 531.065. CONFIDENTIALITY OF REBATES, PRICING, AND
NEGOTIATIONS. Information obtained or maintained by the Health and
Human Services Commission regarding supplemental medical
assistance rebate negotiations or a supplemental medical
assistance rebate agreement, including trade secrets, rebate
amount, rebate percentage, and manufacturer or labeler pricing, is
confidential and not subject to disclosure under Chapter 552,
Government Code.
Sec. 531.066. PREFERRED DRUG LISTS FOR MEDICAID AND CHILD
HEALTH PLAN PROGRAMS. (a) The commission shall adopt preferred
drug lists for the Medicaid vendor drug program and for
prescription drugs purchased through the child health plan program.
In making a decision regarding the placement of a drug on each of
the preferred drug lists, the commission shall consider:
(1) the recommendations of the Pharmaceutical and
Therapeutics Committee established under Section 531.068;
(2) the clinical efficacy of the drug; and
(3) the price of competing drugs after deducting any
federal and state rebate amounts.
(b) The commission shall provide for distribution of
current copies of the preferred drug lists to all appropriate
providers of medical assistance in this state.
(c) In this subsection, "labeler" and "manufacturer" have
the meanings assigned by Section 531.064. The commission shall
ensure that:
(1) a manufacturer or labeler that reaches an
agreement with the commission on supplemental rebates under Section
531.064 has an opportunity to provide written evidence supporting
inclusion of a drug on the preferred drug lists; and
(2) any drug that has been approved or has had any of
its particular uses approved by the United States Food and Drug
Administration under a priority review classification will be
reviewed by the Pharmaceutical and Therapeutics Committee at the
next regularly scheduled meeting of the committee. On receiving
notice from a manufacturer or labeler of the availability of a new
product, the commission, to the extent possible, shall schedule a
review for the product at the next regularly scheduled meeting of
the committee.
(d) A recipient of drug benefits under the Medicaid vendor
drug program may use the Medicaid fair hearing process to appeal a
preferred drug list decision made by the commission.
Sec. 531.067. PRIOR AUTHORIZATION FOR CERTAIN PRESCRIPTION
DRUGS. The commission, in its rules and standards governing the
Medicaid vendor drug program, and the child health plan program,
shall require prior authorization for the reimbursement of a drug
that is not included in the appropriate preferred drug lists
adopted under Section 531.066, except for any drug exempted from
prior authorization requirements by federal law. The commission
shall establish procedures for the prior authorization requirement
under the Medicaid vendor drug program to ensure that the
requirements of 42 U.S.C. Section 1396r-8(d)(5) are met.
Sec. 531.068. PHARMACEUTICAL AND THERAPEUTICS COMMITTEE.
(a) The Pharmaceutical and Therapeutics Committee is established
for the purposes of developing recommendations for a preferred drug
list for the Medicaid vendor drug program and a preferred drug list
for the child health plan program.
(b) The committee consists of the following members
appointed by the governor:
(1) five physicians licensed under Subtitle B, Title
3, Occupations Code;
(2) five pharmacists licensed under Subtitle J, Title
3, Occupations Code; and
(3) one public member.
(c) In making appointments to the committee under
Subsection (b), the governor shall ensure that the committee
includes physicians or pharmacists participating in the medical
assistance program or child health plan program who:
(1) provide services to all segments of the program's
diverse population; and
(2) have experience in either developing or practicing
under a preferred drug list.
(d) A member of the committee is appointed for a two-year
term and may serve more than one term.
(e) The committee shall elect a presiding officer and an
assistant presiding officer from its membership, and each officer
shall serve a one-year term.
(f) The committee shall meet at least quarterly at the call
of the presiding officer.
(g) A member of the committee may not receive compensation
for serving on the committee but is entitled to reimbursement for
reasonable and necessary travel expenses incurred by the member
while conducting the business of the committee, as provided by the
General Appropriations Act.
(h) In developing its recommendations for the preferred
drug lists, the committee shall consider the clinical efficacy,
safety, and cost-effectiveness of a product.
(i) The commission shall adopt rules governing the
operation of the committee, including rules governing the
procedures used by the committee for providing notice of a meeting.
The committee shall comply with the rules adopted under this
subsection.
(j) To the extent feasible, the committee shall review all
drug classes included in the preferred drug lists adopted under
Section 531.066 at least once every 12 months and may recommend
inclusions to and exclusions from the list to ensure that the list
provides for cost-effective medically appropriate drug therapies
for Medicaid recipients and children receiving health benefits
coverage under the child health plan program.
(k) The commission shall provide administrative support and
resources as necessary for the committee to perform its duties
under this section and Section 531.067.
(l) Chapter 2110 does not apply to the committee.
Sec. 531.069. CONTRACTS FOR DISEASE MANAGEMENT
PROGRAMS. (a) The commission shall request contract proposals
from providers of disease management programs, including managed
care organizations that contract with the commission to provide
health care services under Chapter 533, to provide program services
to Medicaid recipients who have a disease or other chronic health
condition, such as heart disease, diabetes, respiratory illness,
end-stage renal disease, HIV infection, or AIDS, that the
commission determines is a disease or condition that needs disease
management and for whom provision of services through a disease
management model instead of a Medicaid managed care plan is more
effective and economical.
(b) The commission may contract with a private entity to:
(1) write the requests for proposals;
(2) determine how savings will be measured;
(3) identify populations that need disease
management; and
(4) develop appropriate contracts.
(c) The commission, by rule, shall prescribe the minimum
requirements a provider of a disease management program must meet
to be eligible to receive a contract under this section.
(d) The commission may not award a contract for a disease
management program under this section unless the contract includes
a written guarantee of state savings on expenditures for the group
of Medicaid recipients covered by the program.
Sec. 531.070. CONTRACTS FOR TRANSPORTATION BROKERAGE
SERVICES. (a) The commission shall contract with a single
statewide transportation broker or with an appropriate number of
regional transportation brokers for administrative assistance in
providing transportation services under the medical transportation
program.
(b) The commission may contract under this section with any
person who meets the criteria established by the commission,
including a nonprofit organization, public entity, or private
contractor.
(c) A contract between the commission and a broker must:
(1) require the broker to act as a gatekeeper to
control costs and the use of transportation services, as well as to
ensure consistent quality of and access to those services;
(2) require the broker to implement procedures
designed to:
(A) prevent fraud and abuse in the medical
transportation program; and
(B) promote use of the most efficient and least
costly modes of transportation; and
(3) include an overall cap on the amount that may be
paid by the commission under the contract.
(d) The broker or brokers selected by the commission may
contract with transportation providers as necessary to provide
transportation services to persons eligible for those services.
SECTION 4. Section 62.101(b), Health and Safety Code, is
amended to read as follows:
(b) The commission shall establish income eligibility
levels consistent with Title XXI, Social Security Act (42 U.S.C.
Section 1397aa et seq.), as amended, and any other applicable law or
regulations, and subject to the availability of appropriated money,
so that a child who is younger than 19 years of age and whose net
family income is at or below 150 [200] percent of the federal
poverty level is eligible for health benefits coverage under the
program.
SECTION 5. Section 62.151(b), Health and Safety Code, is
amended to read as follows:
(b) In developing the covered benefits, the commission
shall consider the health care needs of healthy children and
children with special health care needs. [At the time the child
health plan program is first implemented, the child health plan
must provide a benefits package that is actuarially equivalent, as
determined in accordance with 42 U.S.C. Section 1397cc, to the
basic plan for active state employees offered through health
maintenance organizations under the Texas Employees Uniform Group
Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
Code), as determined by the commission. The child health plan must
provide at least the covered benefits described by the recommended
benefits package described for a state-designed child health plan
by the Texas House of Representatives Committee on Public Health
"CHIP" Interim Report to the Seventy-Sixth Texas Legislature dated
December, 1998, and the Senate Interim Committee on Children's
Health Insurance Report to the Seventy-Sixth Texas Legislature
dated December 1, 1998.]
SECTION 6. Subchapter K, Chapter 242, Health and Safety
Code, is amended by adding Section 242.406 to read as follows:
Sec. 242.406. GRANT PROGRAM FOR NURSING FACILITIES
PROVIDING QUALITY ENVIRONMENTS. (a) The department shall
establish a competitive grant program to pay part of the costs of a
project proposed by a nursing facility that is designed to improve
the quality of life for residents of the facility by providing:
(1) homelike environments for residents, including
providing opportunities for residents to engage in meaningful
activities such as gardening or other outdoor activities;
(2) direct care staff members who tailor care to the
individual needs of a resident and allow the resident and the
resident's family members to participate in the decision-making
process regarding that care;
(3) opportunities for residents to interact with
companion animals, children, family members, and other visitors
from the community; or
(4) other innovative programs designed to improve the
quality of residents' care.
(b) A project proposed by a nursing facility under
Subsection (a) must be designed to serve as a model of best
practices for the nursing facility industry.
(c) The department shall monitor the expenditure of grant
money to ensure that the money is being used for the intended
purpose.
(d) The department by rule shall establish guidelines for
the grant program, including guidelines that specify:
(1) the procedures for submitting a grant proposal;
(2) the criteria the department will follow in
evaluating the proposals; and
(3) the reports that a grant recipient must file to
allow the department and the industry to evaluate the feasibility
and success of the project.
(e) The department shall fund the grant program using
available resources attributable to the savings realized from
implementing Section 32.050(d), Human Resources Code.
(f) The department shall award each grant under a contract.
A contract may further detail:
(1) reports that the grant recipient must file; and
(2) monitoring of the project that the grant recipient
must allow.
(g) The department shall post a summary of best practices
under the grant program on its Internet site to serve as a model of
best practices for the industry. The department shall report to the
legislature regarding those best practices.
SECTION 7. Section 31.012(c), Human Resources Code, is
amended to read as follows:
(c) A person who is the caretaker of a physically or
mentally disabled child who requires the caretaker's presence is
not required to participate in a program under this section.
Effective January 1, 2000, a single person who is the caretaker of a
child is not required to participate in a program under this section
until the caretaker's youngest child at the time the caretaker
first became eligible for assistance reaches the age of three.
Effective September 1, 2000, a single person who is the caretaker of
a child is exempt until the caretaker's youngest child at the time
the caretaker first became eligible for assistance reaches the age
of two. Effective September 1, 2001, a single person who is the
caretaker of a child is exempt until the caretaker's youngest child
at the time the caretaker first became eligible for assistance
reaches the age of one. [Notwithstanding Sections 31.0035(b) and
32.0255(b), the department shall provide to a person who is exempt
under this subsection and who voluntarily participates in a program
under Subsection (a)(2) six months of transitional benefits in
addition to the applicable limit prescribed by Section 31.0065.]
SECTION 8. Section 32.021, Human Resources Code, is amended
by adding Subsections (q), (r), and (s) to read as follows:
(q) The department shall include in its contracts for the
delivery of medical assistance by nursing facilities clearly
defined minimum standards that relate directly to the quality of
care for residents of those facilities. The department shall
include in each contract:
(1) specific performance measures by which the
department may evaluate the extent to which the nursing facility is
meeting the standards; and
(2) provisions that allow the department to terminate
the contract if the nursing facility is not meeting the standards.
(r) The department may not award a contract for the delivery
of medical assistance to a nursing facility that does not meet the
minimum standards that would be included in the contract as
required by Subsection (q). The department shall terminate a
contract for the delivery of medical assistance by a nursing
facility that does not meet or maintain the minimum standards
included in the contract in a manner consistent with the terms of
the contract.
(s) Not later than November 15 of each even-numbered year,
the department shall submit a report to the legislature regarding
nursing facilities that contract with the department to provide
medical assistance under this chapter and other facilities with
which the department was prohibited to contract as provided by
Subsection (r). The department may include the report required
under this section with the report made by the long-term care
legislative oversight committee as required by Section 242.654,
Health and Safety Code. The report must include:
(1) the minimum standards and performance measures
included in the department's contracts with those facilities;
(2) the performance of the facilities with regard to
the minimum standards;
(3) the number of facilities with which the department
has terminated a contract or to which the department will not award
a contract because the facilities do not meet the minimum
standards; and
(4) the overall impact of the minimum standards on the
quality of care provided by the facilities, consumers' access to
facilities, and cost of care.
SECTION 9. Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Section 32.0212 to read as follows:
Sec. 32.0212. DELIVERY OF MEDICAL ASSISTANCE.
Notwithstanding any other law, the department shall provide medical
assistance only through the Medicaid managed care system
implemented under Chapter 533, Government Code.
SECTION 10. Section 32.0321(a), Human Resources Code, is
amended to read as follows:
(a) The department by rule may require each provider of
medical assistance in a provider type that has demonstrated
significant potential for fraud or abuse to file with the
department a surety bond in a reasonable amount. The department by
rule shall require a provider of medical assistance to file with the
department a surety bond in a reasonable amount if the department
identifies an irregularity relating to the provider's services
under the medical assistance program that indicates the need for
protection against potential future acts of fraud or abuse.
SECTION 11. Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Section 32.0423 to read as follows:
Sec. 32.0423. RECOVERY OF REIMBURSEMENTS FROM HEALTH
COVERAGE PROVIDERS. To the extent allowed by federal law, a health
care service provider must seek reimbursement from available
third-party health coverage or insurance before billing the medical
assistance program.
SECTION 12. Section 32.050, Human Resources Code, is
amended by adding Subsections (d) and (e) to read as follows:
(d) For a nursing facility service provided to an individual
who is eligible under the medical assistance program and Medicare,
the medical assistance program may not pay any portion of the
Medicare deductibles or coinsurance, and the nursing facility that
provided the service shall consider the amount paid by Medicare as
payment in full if the amount paid by Medicare is equal to or
exceeds the Medicaid reimbursement rate for a service.
(e) A nursing facility, home health services provider, or
any other similar long-term care services provider must seek
reimbursement from Medicare before billing the medical assistance
program for services provided to an individual identified under
Subsection (a).
SECTION 13. Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Section 32.060 to read as follows:
Sec. 32.060. THIRD-PARTY BILLING VENDORS. (a) A
third-party billing vendor may not submit a claim with the
department for reimbursement on behalf of a provider of medical
services under the medical assistance program unless the vendor has
entered into a contract with the department authorizing that
activity.
(b) To the extent practical, the contract shall contain
provisions comparable to the provisions contained in contracts
between the department and providers of medical services, with an
emphasis on provisions designed to prevent fraud or abuse under the
medical assistance program. At a minimum, the contract must
require the third-party billing vendor to:
(1) provide documentation of the vendor's authority to
bill on behalf of each provider for whom the vendor submits claims;
(2) submit a claim in a manner that permits the
department to identify and verify the vendor, any computer or
telephone line used in submitting the claim, any relevant user
password used in submitting the claim, and any provider number
referenced in the claim; and
(3) subject to any confidentiality requirements
imposed by federal law, provide the department, the office of the
attorney general, or authorized representatives with:
(A) access to any records maintained by the
vendor, including original records and records maintained by the
vendor on behalf of a provider, relevant to an audit or
investigation of the vendor's services or another function of the
department or office of attorney general relating to the vendor;
and
(B) if requested, copies of any records described
by Paragraph (A) at no charge to the department, the office of the
attorney general, or authorized representatives.
(c) On receipt of a claim submitted by a third-party billing
vendor, the department shall send a remittance notice directly to
the provider referenced in the claim. The notice must:
(1) include detailed information regarding the claim
submitted on behalf of the provider; and
(2) require the provider to review the claim for
accuracy and notify the department promptly regarding any errors.
(d) The department shall take all action necessary,
including any modifications of the department's claims processing
system, to enable the department to identify and verify a
third-party billing vendor submitting a claim for reimbursement
under the medical assistance program, including identification and
verification of any computer or telephone line used in submitting
the claim, any relevant user password used in submitting the claim,
and any provider number referenced in the claim.
SECTION 14. Section 57.046, Utilities Code, is amended by
adding Subsection (c) to read as follows:
(c) In addition to the purposes for which the qualifying
entities account may be used, the board may use money in the account
to award grants to the Health and Human Services Commission for
technology initiatives of the commission.
SECTION 15. 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.
SECTION 16. Sections 32.0423 and 32.050(e), Human Resources
Code, as added by this Act, apply to a person receiving medical
assistance on or after the effective date of this Act regardless of
the date on which the person began receiving that medical
assistance.
SECTION 17. 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 allow families enrolled in the state Medicaid program to
opt into the child health plan program under Chapter 62, Health and
Safety Code, while retaining the appropriate federal match rate.
SECTION 18. Not later than November 1, 2003, the governor
shall appoint members to the Pharmaceutical and Therapeutics
Committee established under Section 531.068, Government Code, as
added by this Act.
SECTION 19. Not later than January 1, 2004, the Health and
Human Services Commission shall implement Section 531.064,
Government Code, as added by this Act.
SECTION 20. (a) Not later than January 1, 2004, the
Pharmaceutical and Therapeutics Committee established under
Section 531.068, Government Code, as added by this Act, shall
submit recommendations for the preferred drug lists the committee
is required to develop under that section to the Health and Human
Services Commission.
(b) Not later than March 1, 2004, the Health and Human
Services Commission shall adopt the preferred drug lists as
required by Section 531.066, Government Code, as added by this Act.
SECTION 21. Not later than January 1, 2004, the Health and
Human Services Commission shall ensure that medical assistance
services under the state Medicaid program are provided and
delivered through the Medicaid managed care system implemented
under Chapter 533, Government Code.
SECTION 22. (a) Not later than March 1, 2004, the Health
and Human Services Commission shall consolidate the Medicaid
post-payment third-party recovery divisions or activities of the
Texas Department of Human Services, the Medicaid vendor drug
program, and the state's Medicaid claims administrator with the
Medicaid post-payment third-party recovery function.
(b) The Health and Human Services Commission shall use the
commission's Medicaid post-payment third-party recovery contractor
for the consolidated division.
(c) The Health and Human Services Commission shall update
its computer system to facilitate the consolidation.
SECTION 23. Section 32.021(q), Human Resources Code, as
added by this Act, applies only to a contract for the delivery of
medical assistance by a nursing facility that is entered into or
renewed on or after May 1, 2004. A contract for the delivery of
medical assistance by a nursing facility entered into before that
date is governed by the law in effect on the date the contract was
entered into, and the former law is continued in effect for that
purpose.
SECTION 24. On September 1, 2004, or on an earlier date
specified by the Health and Human Services Commission:
(1) all powers, duties, functions, activities,
obligations, rights, contracts, records, property, and
appropriations or other money of the Texas Department of Health
that are determined by the commissioner of health and human
services to be essential to the administration of the medical
transportation program are transferred to the Health and Human
Services Commission;
(2) a rule or form adopted by the Texas Department of
Health that relates to the medical transportation program is a rule
or form of the Health and Human Services Commission and remains in
effect until altered by the commission;
(3) a reference in law or an administrative rule to the
Texas Department of Health that relates to the medical
transportation program means the Health and Human Services
Commission;
(4) a license, permit, or certification in effect that
was issued by the Texas Department of Health that relates to the
medical transportation program is continued in effect as a license,
permit, or certification of the Health and Human Services
Commission; and
(5) a complaint, investigation, or other proceeding
pending before the Texas Department of Health that relates to the
medical transportation program is transferred without change in
status to the Health and Human Services Commission.
SECTION 25. The Health and Human Services Commission shall
take all action necessary to provide for:
(1) the transfer of the medical transportation program
to the commission as soon as possible after the effective date of
this Act but not later than September 1, 2004; and
(2) the execution of a contract authorized by Section
531.070, Government Code, as added by this Act, not later than
September 1, 2004.
SECTION 26. Sections 31.0035, 32.0255, 32.027, 32.028, and
32.0315, Human Resources Code, are repealed.
SECTION 27. (a) Except as otherwise provided by Subsection
(b) of this section, this Act takes effect September 1, 2003.
(b) Section 32.060, Human Resources Code, as added by this
Act, takes effect January 1, 2004.