Amend SB 1188 on third reading by adding the following 
appropriately numbered SECTION to the bill and renumbering 
subsequent SECTIONS accordingly:
	SECTION     .  (a) Chapter 533, Government Code, is amended by 
adding Subchapter D to read as follows:

SUBCHAPTER D. INTEGRATED CARE MANAGEMENT MODEL
	Sec. 533.061. INTEGRATED CARE MANAGEMENT MODEL.  (a)  The 
executive commissioner, by rule, shall develop an integrated care 
management model of Medicaid managed care.  The "integrated care 
management model" is a noncapitated primary care case management 
model of Medicaid managed care with enhanced components to:
		(1)  improve patient health and social outcomes;                       
		(2)  improve access to care;                                           
		(3)  constrain health care costs; and                                  
		(4)  integrate the spectrum of acute care and long-term 
care services and supports.
	(b)  In developing the integrated care management model, the 
executive commissioner shall ensure that the integrated care 
management model utilizes managed care principles and strategies to 
assure proper utilization of acute care and long-term care services 
and supports.  The components of the model must include:
		(1)  the assignment of recipients to a medical home;                   
		(2)  utilization management to assure appropriate 
access and utilization of services, including prescription drugs;
		(3)  health risk or functional needs assessment;                       
		(4)  a method for reporting to medical homes and other 
appropriate health care providers on the utilization by recipients 
of health care services and the associated cost of utilization of 
those services;
		(5)  mechanisms to reduce inappropriate emergency 
department utilization by recipients, including the provision of 
after-hours primary care;
		(6)  mechanisms that ensure a robust system of care 
coordination for assessing, planning, coordinating, and monitoring 
recipients with complex, chronic, or high-cost health care or 
social support needs, including attendant care and other services 
needed to remain in the community; 
		(7)  implementation of a comprehensive, community-based 
initiative to educate recipients about effective use of the health 
care delivery system;
		(8)  strategies to prevent or delay 
institutionalization of recipients through the effective 
utilization of home and community-based support services; and
		(9)  any other components the executive commissioner 
determines will improve a recipient's health outcome and are 
cost-effective.
	(c)  For purposes of this chapter, the integrated care 
management model is a managed care plan.
	Sec. 533.062.  CONTRACTING FOR INTEGRATED CARE MANAGEMENT. 
(a)  The commission may contract with one or more administrative 
services organizations to perform the coordination of care and 
other services and functions of the integrated care management 
model developed under Section 533.061.
	(b)  The commission may require that each administrative 
services organization contracting with the commission under this 
section assume responsibility for exceeding administrative costs 
and not meeting performance standards in connection with the 
provision of acute care and long-term care services and supports 
under the terms of the contract.
	(c)  The commission may include in a contract awarded under 
this section a written guarantee of state savings on Medicaid 
expenditures for recipients receiving services provided under the 
integrated care management model developed under Section 533.061.
	(d)  The commission may require that each administrative 
services organization contracting with the commission under this 
section establish pay-for-performance incentives for providers to 
improve patient outcomes. 
	(e)  In this section, "administrative services organization" 
means an entity that performs administrative and management 
functions, such as the development of a physician and provider 
network, care coordination, service coordination, utilization 
review and management, quality management, and patient and provider 
education, for a noncapitated system of health care services, 
medical services, or long-term care services and supports.
	Sec. 533.063. STATEWIDE INTEGRATED CARE MANAGEMENT ADVISORY 
COMMITTEE. (a)  The executive commissioner may appoint an advisory 
committee to assist the executive commissioner in the development 
and implementation of the integrated care management model.
	(b)  The advisory committee is subject to Chapter 551.                  
	(b)  The Health and Human Services Commission shall require 
each administrative services organization contracting with the 
commission to perform services under Section 533.062, Government 
Code, as added by this section, to coordinate with, use, and 
otherwise interface with the fee-for-service claims payment 
contractor operating in this state on August 31, 2005, until the 
date the claims payment contract expires, subject to renewal of the 
contract.
	(c)  The commission may require each administrative services 
organization contracting with the commission to perform services 
under Section 533.062, Government Code, as added by this section, 
to incorporate disease management into the integrated care 
management model established under Section 533.061, Government 
Code, as added by this section, utilizing the Medicaid disease 
management contractor operating in this state on November 1, 2004, 
until the date the disease management contract expires, subject to 
renewal of the contract.
	(d)  If any provision of this section conflicts with a statute 
enacted by the 79th Legislature, Regular Session, 2005, the 
provision of this section controls.