BILL ANALYSIS

 

 

Senate Research Center                                                                                                     H.B. 2256

80R14922 KFF-F                                                                                      By: McReynolds (Deuell)

                                                                                                                  Health & Human Services

                                                                                                                                            5/16/2007

                                                                                                                                           Engrossed

 

 

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

The Health and Human Services Commission (HHSC) administers the Medicaid and Medicare program for the State of Texas. States that participate in the Medicaid program must comply with all federal requirements governing the program.  Federal regulations require the state Medicaid agency to provide an opportunity for a fair hearing to any beneficiary who requests one.  The request may be because the beneficiary believes the agency has erroneously terminated, suspended, or reduced a Medicaid service.  Federal regulations require the agency to mail the beneficiary a notice at least 10 days before the date of the termination or a reduction of services. If the beneficiary requests a fair hearing before the date of the termination or reduction of services, federal regulations require that the services be maintained until a decision is rendered after the hearing. These federal due process protections apply to all Medicaid-funded services.

 

HHSC rules exempt services that involve prior authorization from these federal requirements. A good example is private duty nursing services. By way of example, suppose there is a young Medicaid beneficiary who had been receiving 25 hours per week of private duty nursing services for over three years, requesting and receiving prior authorization for the services every 60 days. Then one day, the doctor submits the request for the prior authorized nursing services and is denied. The denial of nursing services takes effect immediately because HHSC does not provide the 10-day notice for prior authorized services. Believing HHSC's denial of nursing services to be erroneous, the beneficiary may immediately request a fair hearing. Because nursing services are prior authorized, HHSC will not maintain the nursing services pending the outcome of the hearing. If, after the hearing, the hearing officer finds that HHSC's denial of services was erroneous, the beneficiary's nursing services will be restored but only for whatever days remain in the authorization period at issue, if any.  If the hearing decision is rendered after the end of the 60-day authorization period at issue, the beneficiary's services will not be restored, even if the hearing officer finds HHSC's denial of the services was erroneous, because a new prior authorization period will have already begun.  Thus under the current rules, the beneficiary must go without nursing services while waiting for a hearing and a decision, and, even if the hearing officer finds that HHSC's action was erroneous, the beneficiary will most likely never get the wrongfully denied nursing services restored.  The federal regulations requiring advance notice and maintaining services were enacted to protect against such an unfair result.

 

HHSC was sued in federal court, lost in 2006, and has attempted to rewrite the rules but it is unclear whether they would now be in compliance with the federal regulations.   This bill simply requires HHSC to eliminate the exemptions for prior authorized services from its fair hearing rules so that the rules comply with federal regulations.

 

H.B. 2256 requires HHSC to eliminate the exemptions for prior authorized services from its fair hearing rules so that the rules comply with federal regulations.

 

RULEMAKING AUTHORITY

 

Rulemaking authority previously granted to the executive commissioner of the Health and Human Services Commission (HHSC) is modified in SECTION 1 (Section 531.024, Government Code) of this bill.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1.  Amends Section 531.024, Government Code, as follows:

 

Sec. 531.024.  PLANNING AND DELIVERY OF HEALTH AND HUMAN SERVICES.  (a)  Creates this subsection from existing text.  Requires the executive commissioner of the Health and Human Services Commission (HHSC) to perform certain functions.

 

(b)  Requires rules promulgated under Subsection (a)(7) to provide due process to an applicant for Medicaid services and to a Medicaid recipient who seeks a Medicaid service, including a service that requires prior authorization.  Requires the rules to provide the protections for applicants and recipients required by 42 C.F.R. Part 431, Subpart E, including certain requirements regarding the applicant's right to a hearing.

 

SECTION 2.  Provides that, 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 is required to request the waiver or authorization and is authorized to delay implementing that provision until the waiver or authorization is granted.

 

SECTION 3.  Effective date: September 1, 2007.