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.