| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to reporting of medical loss ratios by certain managed |
|
|
care organizations under the Medicaid program. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Subchapter A, Chapter 533, Government Code, is |
|
|
amended by adding Section 533.0133 to read as follows: |
|
|
Sec. 533.0133. MEDICAL LOSS RATIO. (a) In this section: |
|
|
(1) "Capitated fees earned" means the total amount of |
|
|
capitated fees received by a managed care organization under this |
|
|
chapter that is attributable to coverage already provided to |
|
|
medical assistance recipients in a given period before reinsurance |
|
|
has been ceded or assumed. |
|
|
(2) "Direct losses incurred" means the sum of direct |
|
|
losses paid in the current reporting period plus an estimate of |
|
|
losses to be paid in the future for all claims related to medical |
|
|
assistance recipients arising from the current reporting period and |
|
|
all prior periods, minus the corresponding estimate made at the |
|
|
close of business for the preceding period. This amount does not |
|
|
include home office and overhead costs, advertising costs, |
|
|
commissions and other acquisition costs, taxes, capital costs, |
|
|
administrative costs, utilization review costs, or claims |
|
|
processing costs. |
|
|
(3) "Direct losses paid" means the sum of all payments |
|
|
made during the period for medical assistance recipients before |
|
|
reinsurance has been ceded or assumed. This amount does not include |
|
|
home office and overhead costs, advertising costs, commissions and |
|
|
other acquisition costs, taxes, capital costs, administrative |
|
|
costs, utilization review costs, or claims processing costs. |
|
|
(4) "Executive commissioner" means the executive |
|
|
commissioner of the Health and Human Services Commission. |
|
|
(5) "Medical loss ratio" means direct losses incurred |
|
|
divided by capitated fees earned. |
|
|
(b) This section applies only to a managed care organization |
|
|
that contracts with the commission to provide a defined set of |
|
|
health care services to a medical assistance recipient through a |
|
|
managed care plan for a predetermined period in exchange for a |
|
|
capitated fee. |
|
|
(c) A managed care organization shall report to the |
|
|
executive commissioner the organization's medical loss ratio with |
|
|
respect to medical assistance recipients enrolled in the managed |
|
|
care plan issued by the organization. The report must be sworn to |
|
|
by a member of the governing body of the managed care organization. |
|
|
(d) The executive commissioner may: |
|
|
(1) require a managed care organization to provide any |
|
|
information or documentation necessary to analyze and verify a |
|
|
report provided under Subsection (c); and |
|
|
(2) issue a subpoena to compel the production of |
|
|
information, documentation, or testimony relating to the report. |
|
|
(e) The executive commissioner, with the assistance of the |
|
|
state auditor, may audit a managed care organization that submits a |
|
|
report under Subsection (c) as necessary to analyze and verify the |
|
|
information contained in the report. |
|
|
(f) The executive commissioner shall analyze reports |
|
|
submitted under this section. Not later than January 15 of each |
|
|
year, the executive commissioner shall submit a report to the |
|
|
governor, the lieutenant governor, and the speaker of the house of |
|
|
representatives on the results of the analysis conducted with |
|
|
respect to reports submitted under Subsection (c) during the |
|
|
preceding year. |
|
|
(g) A report submitted by a managed care organization under |
|
|
Subsection (c) and a report submitted by the executive commissioner |
|
|
under Subsection (f) are subject to Chapter 552. |
|
|
(h) The executive commissioner shall adopt rules as |
|
|
necessary to implement this section, including rules regarding the |
|
|
frequency and form of reporting medical loss ratios and the period |
|
|
for which the medical loss ratios must be reported. |
|
|
SECTION 2. Not later than September 1, 2007, the executive |
|
|
commissioner of the Health and Human Services Commission shall |
|
|
adopt rules required by Section 533.0133, Government Code, as added |
|
|
by this Act. |
|
|
SECTION 3. The change in law made by this Act applies to a |
|
|
managed care organization that enters into or renews a contract |
|
|
with the Health and Human Services Commission under Chapter 533, |
|
|
Government Code, on or after September 1, 2007. A managed care |
|
|
organization that enters into a contract before September 1, 2007, |
|
|
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 4. This Act takes effect immediately if it receives |
|
|
a vote of two-thirds of all the members elected to each house, as |
|
|
provided by Section 39, Article III, Texas Constitution. If this |
|
|
Act does not receive the vote necessary for immediate effect, this |
|
|
Act takes effect September 1, 2007. |