By: Nelson, et al.  S.B. No. 10
         (In the Senate - Filed March 1, 2007; March 7, 2007, read
  first time and referred to Committee on Health and Human Services;
  April 10, 2007, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 8, Nays 0, 1 present not
  voting; April 10, 2007, sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 10 By:  Nelson
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the operation and financing of the medical assistance
  program and other programs to provide health care benefits and
  services to persons in this state.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  (a)  Subchapter B, Chapter 531, Government Code,
  is amended by adding Sections 531.094, 531.0941, 531.097, and
  531.0971 to read as follows:
         Sec. 531.094.  PILOT PROGRAM AND OTHER PROGRAMS TO PROMOTE
  HEALTHY LIFESTYLES. (a)  The commission shall develop and
  implement a pilot program in one region of this state under which
  Medicaid recipients are provided positive incentives to lead
  healthy lifestyles, including through participating in certain
  health-related programs or engaging in certain health-conscious
  behaviors, thereby resulting in better health outcomes for those
  recipients.
         (b)  Except as provided by Subsection (c), in implementing
  the pilot program, the commission may provide:
               (1)  expanded health care benefits or value-added
  services for Medicaid recipients who participate in certain
  programs, such as specified weight loss or smoking cessation
  programs;
               (2)  individual health rewards accounts that allow
  Medicaid recipients who follow certain disease management
  protocols to receive credits in the accounts that may be exchanged
  for health-related items specified by the commission that are not
  covered by Medicaid; and
               (3)  any other positive incentive the commission
  determines would promote healthy lifestyles and improve health
  outcomes for Medicaid recipients.
         (c)  The commission shall consider similar incentive
  programs implemented in other states to determine the most
  cost-effective measures to implement in the pilot program under
  this section.
         (d)  Not later than December 1, 2010, the commission shall
  submit a report to the legislature that:
               (1)  describes the operation of the pilot program;
               (2)  analyzes the effect of the incentives provided
  under the pilot program on the health of program participants; and
               (3)  makes recommendations regarding the continuation
  or expansion of the pilot program.
         (e)  In addition to developing and implementing the pilot
  program under this section, the commission may, if feasible and
  cost-effective, develop and implement an additional incentive
  program to encourage Medicaid recipients who are younger than 21
  years of age to make timely health care visits under the early and
  periodic screening, diagnosis, and treatment program. The
  commission shall provide incentives under the program for managed
  care organizations contracting with the commission under Chapter
  533 and Medicaid providers to encourage those organizations and
  providers to support the delivery and documentation of timely and
  complete health care screenings under the early and periodic
  screening, diagnosis, and treatment program.
         (f)  This section expires September 1, 2011.
         Sec. 531.0941.  MEDICAID HEALTH SAVINGS ACCOUNT PILOT
  PROGRAM. (a)  If the commission determines that it is
  cost-effective and feasible, the commission shall develop and
  implement a Medicaid health savings account pilot program that is
  consistent with federal law to:
               (1)  encourage health care cost awareness and
  sensitivity by adult recipients; and
               (2)  promote appropriate utilization of Medicaid
  services by adult recipients.
         (b)  If the commission implements a pilot program under this
  section, the commission may only include adult recipients as
  participants in the program.
         Sec. 531.097.  TAILORED BENEFIT PACKAGES FOR CERTAIN
  CATEGORIES OF THE MEDICAID POPULATION.  (a)  The executive
  commissioner may seek a waiver under Section 1115 of the federal
  Social Security Act (42 U.S.C. Section 1315) to develop and,
  subject to Subsection (c), implement tailored benefit packages
  designed to:
               (1)  provide Medicaid benefits that are customized to
  meet the health care needs of recipients within defined categories
  of the Medicaid population through a defined system of care;
               (2)  improve health outcomes for those recipients;
               (3)  improve those recipients' access to services;
               (4)  achieve cost containment and efficiency; and
               (5)  reduce the administrative complexity of
  delivering Medicaid benefits.
         (b)  The commission:
               (1)  shall develop a tailored benefit package that is
  customized to meet the health care needs of Medicaid recipients who
  are children with special health care needs, subject to approval of
  the waiver described by Subsection (a); and
               (2)  may develop tailored benefit packages that are
  customized to meet the health care needs of other categories of
  Medicaid recipients.
         (c)  If the commission develops tailored benefit packages
  under Subsection (b)(2), the commission shall submit a report to
  the standing committees of the senate and house of representatives
  having primary jurisdiction over the Medicaid program that
  specifies, in detail, the categories of Medicaid recipients to
  which each of those packages will apply and the services available
  under each package. The commission may not implement a package
  developed under Subsection (b)(2) before September 1, 2009.
         (d)  Except as otherwise provided by this section and subject
  to the terms of the waiver authorized by this section, the
  commission has broad discretion to develop the tailored benefit
  packages under this section and determine the respective categories
  of Medicaid recipients to which the packages apply in a manner that
  preserves recipients' access to necessary services and is
  consistent with federal requirements.
         (e)  Each tailored benefit package developed under this
  section must include:
               (1)  a basic set of benefits that are provided under all
  tailored benefit packages; and
               (2)  to the extent applicable to the category of
  Medicaid recipients to which the package applies:
                     (A)  a set of benefits customized to meet the
  health care needs of recipients in that category; and
                     (B)  services to integrate the management of a
  recipient's acute and long-term care needs, to the extent feasible.
         (f)  In addition to the benefits required by Subsection (e),
  a tailored benefit package developed under this section that
  applies to Medicaid recipients who are children must provide at
  least the services required by federal law under the early and
  periodic screening, diagnosis, and treatment program.
         (g)  A tailored benefit package developed under this section
  may include any service available under the state Medicaid plan or
  under any federal Medicaid waiver, including any preventive health
  or wellness service.
         (h)  In developing the tailored benefit packages, the
  commission shall consider similar benefit packages established in
  other states as a guide.
         (i)  The executive commissioner, by rule, shall define each
  category of recipients to which a tailored benefit package applies
  and a mechanism for appropriately placing recipients in specific
  categories.  Recipient categories must include children with
  special health care needs and may include:
               (1)  persons with disabilities or special health needs;
               (2)  elderly persons;
               (3)  children without special health care needs; and
               (4)  working-age parents and caretaker relatives.
         (j)  This section does not apply to a tailored benefit
  package or similar package of benefits implemented before September
  1, 2007.
         Sec. 531.0971.  TAILORED BENEFIT PACKAGES FOR NON-MEDICAID
  POPULATIONS.  (a)  The commission shall identify state or federal
  non-Medicaid programs that provide health care services to persons
  whose health care needs could be met by providing customized
  benefits through a system of care that is used under a Medicaid
  tailored benefit package implemented under Section 531.097.
         (b)  If the commission determines that it is feasible and to
  the extent permitted by federal and state law, the commission
  shall:
               (1)  provide the health care services for persons
  identified under Subsection (a) through the applicable Medicaid
  tailored benefit package; and
               (2)  if appropriate or necessary to provide the
  services as required by Subdivision (1), develop and implement a
  system of blended funding methodologies to provide the services in
  that manner.
         (b)  Not later than September 1, 2008, the Health and Human
  Services Commission shall implement the pilot program under Section
  531.094, Government Code, as added by this section.
         SECTION 2.  (a)  Subchapter C, Chapter 531, Government Code,
  is amended by adding Section 531.1112 to read as follows:
         Sec. 531.1112.  STUDY CONCERNING INCREASED USE OF TECHNOLOGY
  TO STRENGTHEN FRAUD DETECTION AND DETERRENCE; IMPLEMENTATION.  
  (a)  The commission and the commission's office of inspector
  general shall jointly study the feasibility of increasing the use
  of technology to strengthen the detection and deterrence of fraud
  in the state Medicaid program.  The study must include the
  determination of the feasibility of using technology to verify a
  person's citizenship and eligibility for coverage.
         (b)  The commission shall implement any methods the
  commission and the commission's office of inspector general
  determine are effective at strengthening fraud detection and
  deterrence.
         (b)  Not later than December 1, 2008, the Health and Human
  Services Commission shall submit to the legislature a report
  detailing the findings of the study required by Section 531.1112,
  Government Code, as added by this section.  The report must include
  a description of any method described by Subsection (b), Section
  531.1112, Government Code, as added by this section, that the
  commission has implemented or intends to implement.
         SECTION 3.  (a)  Chapter 531, Government Code, is amended by
  adding Subchapter N to read as follows:
  SUBCHAPTER N. TEXAS HEALTH OPPORTUNITY POOL
         Sec. 531.501.  DIRECTION TO OBTAIN FEDERAL WAIVER FOR POOLED
  FUNDS. (a)  The executive commissioner may seek a waiver under
  Section 1115 of the federal Social Security Act (42 U.S.C. Section
  1315) to the state Medicaid plan to allow the commission to more
  efficiently and effectively use federal money paid to this state
  under various programs to defray costs associated with providing
  uncompensated health care in this state by:
               (1)  depositing that federal money and, to the extent
  necessary, state money, into a pooled fund established in the state
  treasury outside the general revenue fund; and
               (2)  using the money for purposes consistent with this
  subchapter.
         (b)  The federal money the executive commissioner may seek
  approval to pool includes:
               (1)  money provided under the disproportionate share
  hospitals and upper payment limit supplemental payment programs,
  other than money provided under the disproportionate share
  hospitals supplemental payment program to state-owned and operated
  hospitals;
               (2)  money provided by the federal government in lieu
  of some or all of the payments under those programs;
               (3)  any combination of funds authorized to be pooled
  by Subdivisions (1) and (2); and
               (4)  any other money available for that purpose,
  including federal money and money identified under Subsection (c).
         (c)  The commission shall seek to optimize federal funding
  by:
               (1)  identifying health care related state and local
  funds and program expenditures that, before September 1, 2007, are
  not being matched with federal money; and
               (2)  exploring the feasibility of:
                     (A)  certifying or otherwise using those funds and
  expenditures as state expenditures for which this state may receive
  federal matching money; and
                     (B)  pooling federal matching money received as
  provided by Paragraph (A) with other federal money pooled under
  Subsection (b), or substituting that federal matching money for
  federal money that otherwise would be received under the
  disproportionate share hospitals and upper payment limit
  supplemental payment programs as a match for local funds received
  by this state through intergovernmental transfers.
         (d)  The terms of a waiver approved under this section must:
               (1)  include safeguards to ensure that the total amount
  of federal money in the pooled fund and any federal money provided
  under the disproportionate share hospitals and upper payment limit
  supplemental payment programs that is not included in the pooled
  fund is, for a particular state fiscal year, at least equal to the
  greater of the annualized amount provided to this state under those
  supplemental payment programs during state fiscal year 2007,
  excluding amounts provided during that state fiscal year that are
  retroactive payments, or the state fiscal years during which the
  waiver is in effect; and
               (2)  allow for the development by this state of a
  methodology for allocating money in the pooled fund to:
                     (A)  offset, in part, the uncompensated health
  care costs incurred by hospitals;
                     (B)  reduce the number of persons in this state
  who do not have health benefits coverage; and
                     (C)  maintain and enhance the community public
  health infrastructure provided by hospitals.
         (e)  In a waiver under this section, the executive
  commissioner shall seek to:
               (1)  obtain maximum flexibility with respect to using
  the money in the pooled fund for purposes consistent with this
  subchapter;
               (2)  include an annual adjustment to the aggregate caps
  under the upper payment limit supplemental payment program to
  account for inflation, population growth, and other appropriate
  demographic factors that affect the ability of residents of this
  state to obtain health benefits coverage;
               (3)  ensure, for the term of the waiver, that the
  aggregate caps under the upper payment limit supplemental payment
  program for each of the three classes of hospitals are not less than
  the aggregate caps that applied during state fiscal year 2007; and
               (4)  to the extent allowed by federal rule, federal
  regulations, and federal waiver authority, preserve existing
  resources funded by intergovernmental transfer or certified public
  expenditure that are used to optimize Medicaid payments to safety
  net hospitals for uncompensated care, unless the need for the
  resources is revised through measures that reduce the Medicaid
  shortfall or uncompensated care costs.
         (f)  The executive commissioner shall seek broad-based
  stakeholder input in the development of the waiver under this
  section and shall provide information to stakeholders regarding the
  terms and components of the waiver for which the executive
  commissioner seeks federal approval.
         (g)  The executive commissioner shall seek the advice of the
  Legislative Budget Board before finalizing the terms and conditions
  of the negotiated waiver.
         Sec. 531.502.  ESTABLISHMENT OF TEXAS HEALTH OPPORTUNITY
  POOL. Subject to approval of the waiver authorized by Section
  531.501, the Texas health opportunity pool is established in
  accordance with the terms of that waiver as an account in the state
  treasury outside the general revenue fund. Money in the pool may be
  used only for purposes consistent with this subchapter and the
  terms of the waiver.
         Sec. 531.503.  USE OF TEXAS HEALTH OPPORTUNITY POOL IN
  GENERAL; RULES FOR ALLOCATION. (a)  Except as otherwise provided
  by the terms of a waiver authorized by Section 531.501, money in the
  Texas health opportunity pool may be used:
               (1)  subject to Section 531.504, to provide
  reimbursements to health care providers that:
                     (A)  are based on the providers' costs related to
  providing uncompensated care; and
                     (B)  compensate the providers for at least a
  portion of those costs;
               (2)  to reduce the number of persons in this state who
  do not have health benefits coverage;
               (3)  to reduce the need for uncompensated health care
  provided by hospitals in this state; and
               (4)  for any other purpose specified by this subchapter
  or the waiver.
         (b)  On approval of the waiver, the executive commissioner
  shall:
               (1)  seek input from a broad base of stakeholder
  representatives on the development of rules with respect to, and
  the implementation of, the pool; and
               (2)  by rule develop a methodology for allocating money
  in the pool that is consistent with the terms of the waiver.
         Sec. 531.504.  REIMBURSEMENTS FOR UNCOMPENSATED HEALTH CARE
  COSTS. (a)  Except as otherwise provided by the terms of a waiver
  authorized by Section 531.501 and subject to Subsections (b) and
  (c), money in the Texas health opportunity pool may be allocated to
  hospitals in this state and political subdivisions of this state to
  defray the costs of providing uncompensated health care in this
  state.
         (b)  To be eligible for money from the pool under this
  section, a hospital or political subdivision must use a portion of
  the money to implement strategies that will reduce the need for
  uncompensated inpatient and outpatient care, including care
  provided in a hospital emergency room. Strategies that may be
  implemented by a hospital or political subdivision, as applicable,
  include:
               (1)  fostering improved access for patients to primary
  care systems or other programs that offer those patients medical
  homes, including the following programs:
                     (A)  three share or multiple share programs;
                     (B)  programs to provide premium subsidies for
  health benefits coverage; and
                     (C)  other programs to increase access to health
  benefits coverage; and
               (2)  creating health care systems efficiencies, such as
  using electronic medical records systems.
         (c)  The allocation methodology adopted by the executive
  commissioner under Section 531.503(b) must specify the percentage
  of the money from the pool allocated to a hospital or political
  subdivision that the hospital or political subdivision must use for
  strategies described by Subsection (b).
         Sec. 531.505.  INCREASING ACCESS TO HEALTH BENEFITS
  COVERAGE. (a)  Except as otherwise provided by the terms of a
  waiver authorized by Section 531.501, money in the Texas health
  opportunity pool that is available to reduce the number of persons
  in this state who do not have health benefits coverage or to reduce
  the need for uncompensated health care provided by hospitals in
  this state may be used for purposes relating to increasing access to
  health benefits coverage for low-income persons, including:
               (1)  providing premium payment assistance to those
  persons through a premium payment assistance program developed
  under this section;
               (2)  making contributions to health savings accounts
  for those persons; and
               (3)  providing other financial assistance to those
  persons through alternate mechanisms established by hospitals in
  this state or political subdivisions of this state that meet
  certain criteria, as specified by the commission.
         (b)  The commission and the Texas Department of Insurance
  shall jointly develop a premium payment assistance program designed
  to assist persons described by Subsection (a) in obtaining and
  maintaining health benefits coverage.  The program may provide
  assistance in the form of payments for all or part of the premiums
  for that coverage.  In developing the program, the executive
  commissioner shall adopt rules establishing:
               (1)  eligibility criteria for the program;
               (2)  the amount of premium payment assistance that will
  be provided under the program;
               (3)  the process by which that assistance will be paid;
  and
               (4)  the mechanism for measuring and reporting the
  number of persons who obtained health insurance or other health
  benefits coverage as a result of the program.
         (c)  The commission shall implement the premium payment
  assistance program developed under Subsection (b), subject to
  appropriations for that purpose.
         Sec. 531.506.  INFRASTRUCTURE IMPROVEMENTS.  (a)  Except as
  otherwise provided by the terms of a waiver authorized by Section
  531.501 and subject to Subsection (c), money in the Texas health
  opportunity pool may be used for purposes related to developing and
  implementing initiatives to improve the infrastructure of local
  provider networks that provide services to Medicaid recipients and
  low-income uninsured persons in this state.
         (b)  Infrastructure improvements under this section may
  include developing and implementing a system for maintaining
  medical records in an electronic format.
         (c)  Not more than 10 percent of the total amount of the money
  in the pool used in a state fiscal year for purposes other than
  providing reimbursements to hospitals for uncompensated health
  care may be used for infrastructure improvements described by
  Subsection (b).
         (b)  If the executive commissioner of the Health and Human
  Services Commission obtains federal approval for a waiver under
  Section 531.501, Government Code, as added by this Act, the
  executive commissioner shall submit a report to the Legislative
  Budget Board that outlines the components and terms of that waiver
  as soon as possible after federal approval is granted.
         SECTION 4.  (a)  Chapter 531, Government Code, is amended by
  adding Subchapter O to read as follows:
  SUBCHAPTER O. UNCOMPENSATED HOSPITAL CARE
         Sec. 531.551.  UNCOMPENSATED HOSPITAL CARE REPORTING AND
  ANALYSIS. (a)  The executive commissioner shall adopt rules
  providing for:
               (1)  a standard definition of "uncompensated hospital
  care";
               (2)  a methodology to be used by hospitals in this state
  to compute the cost of that care that incorporates the standard set
  of adjustments described by Section 531.552(g)(4); and
               (3)  procedures to be used by those hospitals to report
  the cost of that care to the commission and to analyze that cost.
         (b)  The rules adopted by the executive commissioner under
  Subsection (a)(3) may provide for procedures by which the
  commission may periodically verify the completeness and accuracy of
  the information reported by hospitals.
         (c)  The commission shall notify the attorney general of a
  hospital's failure to report the cost of uncompensated care on or
  before the date the report was due in accordance with rules adopted
  under Subsection (a)(3). On receipt of the notice, the attorney
  general shall impose an administrative penalty on the hospital in
  the amount of $1,000 for each day after the date the report was due
  that the hospital has not submitted the report, not to exceed
  $10,000.
         (d)  If the commission determines through the procedures
  adopted under Subsection (b) that a hospital submitted a report
  with incomplete or inaccurate information, the commission shall
  notify the hospital of the specific information the hospital must
  submit and prescribe a date by which the hospital must provide that
  information. If the hospital fails to submit the specified
  information on or before the date prescribed by the commission, the
  commission shall notify the attorney general of that failure. On
  receipt of the notice, the attorney general shall impose an
  administrative penalty on the hospital in an amount not to exceed
  $10,000. In determining the amount of the penalty to be imposed,
  the attorney general shall consider:
               (1)  the seriousness of the violation;
               (2)  whether the hospital had previously committed a
  violation; and
               (3)  the amount necessary to deter the hospital from
  committing future violations.
         (e)  A report by the commission to the attorney general under
  Subsection (c) or (d) must state the facts on which the commission
  based its determination that the hospital failed to submit a report
  or failed to completely and accurately report information, as
  applicable.
         (f)  The attorney general shall give written notice of the
  commission's report to the hospital alleged to have failed to
  comply with a requirement. The notice must include a brief summary
  of the alleged violation, a statement of the amount of the
  administrative penalty to be imposed, and a statement of the
  hospital's right to a hearing on the alleged violation, the amount
  of the penalty, or both.
         (g)  Not later than the 20th day after the date the notice is
  sent under Subsection (f), the hospital must make a written request
  for a hearing or remit the amount of the administrative penalty to
  the attorney general. Failure to timely request a hearing or remit
  the amount of the administrative penalty results in a waiver of the
  right to a hearing under this section. If the hospital timely
  requests a hearing, the attorney general shall conduct the hearing
  in accordance with Chapter 2001, Government Code. If the hearing
  results in a finding that a violation has occurred, the attorney
  general shall:
               (1)  provide to the hospital written notice of:
                     (A)  the findings established at the hearing; and
                     (B)  the amount of the penalty; and
               (2)  enter an order requiring the hospital to pay the
  amount of the penalty.
         (h)  Not later than the 30th day after the date the hospital
  receives the order entered by the attorney general under Subsection
  (g), the hospital shall:
               (1)  pay the amount of the administrative penalty;
               (2)  remit the amount of the penalty to the attorney
  general for deposit in an escrow account and file a petition for
  judicial review contesting the occurrence of the violation, the
  amount of the penalty, or both; or
               (3)  without paying the amount of the penalty, file a
  petition for judicial review contesting the occurrence of the
  violation, the amount of the penalty, or both and file with the
  court a sworn affidavit stating that the hospital is financially
  unable to pay the amount of the penalty.
         (i)  The attorney general's order is subject to judicial
  review as a contested case under Chapter 2001, Government Code.
         (j)  If the hospital paid the penalty and on review the court
  does not sustain the occurrence of the violation or finds that the
  amount of the administrative penalty should be reduced, the
  attorney general shall remit the appropriate amount to the hospital
  not later than the 30th day after the date the court's judgment
  becomes final.
         (k)  If the court sustains the occurrence of the violation:
               (1)  the court:
                     (A)  shall order the hospital to pay the amount of
  the administrative penalty; and
                     (B)  may award to the attorney general the
  attorney's fees and court costs incurred by the attorney general in
  defending the action; and
               (2)  the attorney general shall remit the amount of the
  penalty to the comptroller for deposit in the general revenue fund.
         (l)  If the hospital does not pay the amount of the
  administrative penalty after the attorney general's order becomes
  final for all purposes, the attorney general may enforce the
  penalty as provided by law for legal judgments.
         Sec. 531.552.  WORK GROUP ON UNCOMPENSATED HOSPITAL CARE.  
  (a)  In this section, "work group" means the work group on
  uncompensated hospital care.
         (b)  The executive commissioner shall establish the work
  group on uncompensated hospital care to assist the executive
  commissioner in developing rules required by Section 531.551 by
  performing the functions described by Subsection (g).
         (c)  The executive commissioner shall determine the number
  of members of the work group. The executive commissioner shall
  ensure that the work group includes representatives from the office
  of the attorney general and the hospital industry. A member of the
  work group serves at the will of the executive commissioner.
         (d)  The executive commissioner shall designate a member of
  the work group to serve as presiding officer. The members of the
  work group shall elect any other necessary officers.
         (e)  The work group shall meet at the call of the executive
  commissioner.
         (f)  A member of the work group may not receive compensation
  for serving on the work group but is entitled to reimbursement for
  travel expenses incurred by the member while conducting the
  business of the work group as provided by the General
  Appropriations Act.
         (g)  The work group shall study and advise the executive
  commissioner in:
               (1)  identifying the number of different reports
  required to be submitted to the state that address uncompensated
  hospital care, care for low-income uninsured persons in this state,
  or both;
               (2)  standardizing the definitions used to determine
  uncompensated hospital care for purposes of those reports;
               (3)  improving the tracking of hospital charges, costs,
  and adjustments as those charges, costs, and adjustments relate to
  identifying uncompensated hospital care and maintaining a
  hospital's tax-exempt status;
               (4)  developing and applying a standard set of
  adjustments to a hospital's initial computation of the cost of
  uncompensated hospital care that account for all funding streams
  that:
                     (A)  are not patient-specific; and
                     (B)  are used to offset the hospital's initially
  computed amount of uncompensated care;
               (5)  developing a standard and comprehensive center for
  data analysis and reporting with respect to uncompensated hospital
  care; and
               (6)  analyzing the effect of the standardization of the
  definition of uncompensated hospital care and the computation of
  its cost, as determined in accordance with the rules adopted by the
  executive commissioner, on the laws of this state, and analyzing
  potential legislation to incorporate the changes made by the
  standardization.
         (b)  The executive commissioner of the Health and Human
  Services Commission shall:
               (1)  establish the work group on uncompensated hospital
  care required by Section 531.552, Government Code, as added by this
  section, not later than October 1, 2007; and
               (2)  adopt the rules required by Section 531.551,
  Government Code, as added by this section, not later than March 1,
  2008.
         (c)  The executive commissioner of the Health and Human
  Services Commission shall review the methodology used under the
  Medicaid disproportionate share hospitals supplemental payment
  program to compute low-income utilization costs to ensure that the
  Medicaid disproportionate share methodology  is consistent with the
  standardized adjustments to uncompensated care costs described by
  Subdivision (4), Subsection (g), Section 531.552, Government Code,
  as added by this Act, and adopted by the executive commissioner.
         SECTION 5.  (a)  Subchapter A, Chapter 533, Government Code,
  is amended by adding Section 533.019 to read as follows:
         Sec. 533.019.  VALUE-ADDED SERVICES. The commission shall
  actively encourage managed care organizations that contract with
  the commission to offer benefits, including health care services or
  benefits or other types of services, that:
               (1)  are in addition to the services ordinarily covered
  by the managed care plan offered by the managed care organization;
  and
               (2)  have the potential to improve the health status of
  enrollees in the plan.
         (b)  The changes in law made by Section 533.019, Government
  Code, as added by this Act, apply to a contract between the Health
  and Human Services Commission and a managed care organization under
  Chapter 533, Government Code, that is entered into or renewed on or
  after the effective date of this section.  The commission shall seek
  to amend contracts entered into with managed care organizations
  under that chapter before the effective date of this Act to
  authorize those managed care organizations to offer value-added
  services to enrollees in accordance with Section 533.019,
  Government Code, as added by this section.
         SECTION 6.  Section 32.0422, Human Resources Code, is
  amended to read as follows:
         Sec. 32.0422.  HEALTH INSURANCE PREMIUM PAYMENT
  REIMBURSEMENT PROGRAM FOR MEDICAL ASSISTANCE RECIPIENTS. (a)  In
  this section:
               (1)  "Commission" ["Department"] means the Health and
  Human Services Commission [Texas Department of Health].
               (2)  "Executive commissioner" means the executive
  commissioner of the Health and Human Services Commission.
               (3)  "Group health benefit plan" means a plan described
  by Section 1207.001, Insurance Code.
         (b)  The commission [department] shall identify individuals,
  otherwise entitled to medical assistance, who are eligible to
  enroll in a group health benefit plan. The commission [department]
  must include individuals eligible for or receiving health care
  services under a Medicaid managed care delivery system.
         (b-1)  To assist the commission in identifying individuals
  described by Subsection (b):
               (1)  the commission shall include on an application for
  medical assistance and on a form for recertification of a
  recipient's eligibility for medical assistance:
                     (A)  an inquiry regarding whether the applicant or
  recipient, as applicable, is eligible to enroll in a group health
  benefit plan; and
                     (B)  a statement informing the applicant or
  recipient, as applicable, that reimbursements for required
  premiums and cost-sharing obligations under the group health
  benefit plan may be available to the applicant or recipient; and
               (2)  not later than the 15th day of each month, the
  office of the attorney general shall provide to the commission the
  name, address, and social security number of each newly hired
  employee reported to the state directory of new hires operated
  under Chapter 234, Family Code, during the previous calendar month.
         (c)  The commission [department] shall require an individual
  requesting medical assistance or a recipient, during the
  recipient's eligibility recertification review, to provide
  information as necessary relating to any [the availability of a]
  group health benefit plan that is available to the individual or
  recipient through an employer of the individual or recipient  or an
  employer of the individual's or recipient's spouse or parent to
  assist the commission in making the determination required by
  Subsection (d).
         (d)  For an individual identified under Subsection (b), the
  commission [department] shall determine whether it is
  cost-effective to enroll the individual in the group health benefit
  plan under this section.
         (e)  If the commission [department] determines that it is
  cost-effective to enroll the individual in the group health benefit
  plan, the commission [department] shall:
               (1)  require the individual to apply to enroll in the
  group health benefit plan as a condition for eligibility under the
  medical assistance program; and
               (2)  provide written notice to the issuer of the group
  health benefit plan in accordance with Chapter 1207, Insurance
  Code.
         (e-1)  This subsection applies only to an individual who is
  identified under Subsection (b) as being eligible to enroll in a
  group health benefit plan offered by the individual's employer. If
  the commission determines under Subsection (d) that enrolling the
  individual in the group health benefit plan is not cost-effective,
  but the individual prefers to enroll in that plan instead of
  receiving benefits and services under the medical assistance
  program, the commission, if authorized by a waiver obtained under
  federal law, shall:
               (1)  allow the individual to voluntarily opt out of
  receiving services through the medical assistance program and
  enroll in the group health benefit plan;
               (2)  consider that individual to be a recipient of
  medical assistance; and
               (3)  provide written notice to the issuer of the group
  health benefit plan in accordance with Chapter 1207, Insurance
  Code.
         (f)  Except as provided by Subsection (f-1), the commission
  [The department] shall provide for payment of:
               (1)  the employee's share of required premiums for
  coverage of an individual enrolled in the group health benefit
  plan; and
               (2)  any deductible, copayment, coinsurance, or other
  cost-sharing obligation imposed on the enrolled individual for an
  item or service otherwise covered under the medical assistance
  program.
         (f-1)  For an individual described by Subsection (e-1) who
  enrolls in a group health benefit plan, the commission shall
  provide for payment of the employee's share of the required
  premiums, except that if the employee's share of the required
  premiums exceeds the total estimated Medicaid costs for the
  individual, as determined by the executive commissioner, the
  individual shall pay the difference between the required premiums
  and those estimated costs. The individual shall also pay all
  deductibles, copayments, coinsurance, and other cost-sharing
  obligations imposed on the individual under the group health
  benefit plan.
         (g)  A payment made by the commission [department] under
  Subsection (f) or (f-1) is considered to be a payment for medical
  assistance.
         (h)  A payment of a premium for an individual who is a member
  of the family of an individual enrolled in a group health benefit
  plan under Subsection (e) [this section] and who is not eligible for
  medical assistance is considered to be a payment for medical
  assistance for an eligible individual if:
               (1)  enrollment of the family members who are eligible
  for medical assistance is not possible under the plan without also
  enrolling members who are not eligible; and
               (2)  the commission [department] determines it to be
  cost-effective.
         (i)  A payment of any deductible, copayment, coinsurance, or
  other cost-sharing obligation of a family member who is enrolled in
  a group health benefit plan in accordance with Subsection (h) and
  who is not eligible for medical assistance:
               (1)  may not be paid under this chapter; and
               (2)  is not considered to be a payment for medical
  assistance for an eligible individual.
         (i-1)  The commission shall make every effort to expedite
  payments made under this section, including by ensuring that those
  payments are made through electronic transfers of money to the
  recipient's account at a financial institution, if possible. In
  lieu of reimbursing the individual enrolled in the group health
  benefit plan for required premium or cost-sharing payments made by
  the individual, the commission may, if feasible:
               (1)  make payments under this section for required
  premiums directly to the employer providing the group health
  benefit plan in which an individual is enrolled; or
               (2)  make payments under this section for required
  premiums and cost-sharing obligations directly to the group health
  benefit plan issuer.
         (j)  The commission [department] shall treat coverage under
  the group health benefit plan as a third party liability to the
  program. Subject to Subsection (j-1), enrollment [Enrollment] of
  an individual in a group health benefit plan under this section does
  not affect the individual's eligibility for medical assistance
  benefits, except that the state is entitled to payment under
  Sections 32.033 and 32.038.
         (j-1)  An individual described by Subsection (e-1) who
  enrolls in a group health benefit plan is not ineligible for
  community-based services provided under a Section 1915(c) waiver
  program or another federal waiver program solely based on the
  individual's enrollment in the group health benefit plan, and the
  individual may receive those services if the individual is
  otherwise eligible for the program.  The individual is otherwise
  limited to the health benefits coverage provided under the health
  benefit plan in which the individual is enrolled, and the
  individual may not receive any benefits or services under the
  medical assistance program other than the premium payment as
  provided by Subsection (f-1) and, if applicable, waiver program
  services described by this subsection.
         (k)  The commission [department] may not require or permit an
  individual who is enrolled in a group health benefit plan under this
  section to participate in the Medicaid managed care program under
  Chapter 533, Government Code, or a Medicaid managed care
  demonstration project under Section 32.041.
         (l)  The commission, in consultation with the Texas
  Department of Insurance, shall provide training to agents who hold
  a general life, accident, and health license under Chapter 4054,
  Insurance Code, regarding the health insurance premium payment
  reimbursement program and the eligibility requirements for
  participation in the program. Participation in a training program
  established under this subsection is voluntary, and a general life,
  accident, and health agent who successfully completes the training
  is entitled to receive continuing education credit under Subchapter
  B, Chapter 4004, Insurance Code, in accordance with rules adopted
  by the commissioner of insurance.
         (m)  The commission may pay a referral fee, in an amount
  determined by the commission, to each general life, accident, and
  health agent who, after completion of the training program
  established under Subsection (l), successfully refers an eligible
  individual to the commission for enrollment in a [Texas Department
  of Human Services shall provide information and otherwise cooperate
  with the department as necessary to ensure the enrollment of
  eligible individuals in the] group health benefit plan under this
  section.
         (n)  The commission shall develop procedures by which an
  individual described by Subsection (e-1) who enrolls in a group
  health benefit plan may, at the individual's option, resume
  receiving benefits and services under the medical assistance
  program instead of the group health benefit plan.
         (o)  The executive commissioner [department] shall adopt
  rules as necessary to implement this section.
         SECTION 7.  Subchapter B, Chapter 32, Human Resources Code,
  is amended by adding Section 32.0641 to read as follows:
         Sec. 32.0641.  COST SHARING FOR CERTAIN HIGH-COST MEDICAL
  SERVICES.  If the department determines that it is feasible and
  cost-effective, and to the extent permitted under Title XIX, Social
  Security Act (42 U.S.C. Section 1396 et seq.) and any other
  applicable law or regulation or under a federal waiver or other
  authorization, the executive commissioner of the Health and Human
  Services Commission shall adopt cost-sharing provisions that
  require a recipient who chooses a high-cost medical service
  provided through a hospital emergency room to pay a copayment,
  premium payment, or other cost-sharing payment for the high-cost
  medical service if:
               (1)  the hospital from which the recipient seeks
  service:
                     (A)  performs an appropriate medical screening
  and determines that the recipient does not have a condition
  requiring emergency medical services;
                     (B)  informs the recipient:
                           (i)  that the recipient does not have a
  condition requiring emergency medical services;
                           (ii)  that, if the hospital provides the
  nonemergency service, the hospital may require payment of a
  copayment, premium payment, or other cost-sharing payment by the
  recipient in advance; and
                           (iii)  of the name and address of a
  nonemergency Medicaid provider who can provide the appropriate
  medical service without imposing a cost-sharing payment; and
                     (C)  offers to provide the recipient with a
  referral to the nonemergency provider to facilitate scheduling of
  the service; and
               (2)  after receiving the information and assistance
  described by Subdivision (1) from the hospital, the recipient
  chooses to obtain emergency medical services despite having access
  to medically acceptable, lower-cost medical services.
         SECTION 8.  (a)  The heading to Subtitle C, Title 2, Health
  and Safety Code, is amended to read as follows:
  SUBTITLE C.  PROGRAMS PROVIDING [INDIGENT] HEALTH CARE BENEFITS AND
  SERVICES
         (b)  Subtitle C, Title 2, Health and Safety Code, is amended
  by adding Chapter 76 to read as follows:
  CHAPTER 76. MULTIPLE SHARE PROGRAM
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 76.001.  DEFINITIONS. In this chapter:
               (1)  "Commission" means the Health and Human Services
  Commission.
               (2)  "Employee" means an individual who is employed by
  an employer for compensation. The term includes a partner of a
  partnership.
               (3)  "Employer" means a person who employs two or more
  employees.
               (4)  "Executive commissioner" means the executive
  commissioner of the Health and Human Services Commission.
               (5)  "Multiple share program" means an
  employer-sponsored commercial insurance product or noninsurance
  health benefit plan funded by a combination of:
                     (A)  employer contributions;
                     (B)  employee cost sharing; and
                     (C)  public or philanthropic funds.
               (6)  "Partnering entity" means a local entity that
  partners with the commission to obtain funding for a multiple share
  program.
               (7)  "Public share" means the portion of the cost of a
  multiple share program comprised of public funds.
  [Sections 76.002-76.050 reserved for expansion]
  SUBCHAPTER B. AUTHORITY OF COMMISSION; METHODS OF FUNDING
         Sec. 76.051.  MULTIPLE SHARE PROGRAM.  A local entity may
  propose a multiple share program to the commission and may, subject
  to rules adopted under Section 76.103, act as a partnering entity.
         Sec. 76.052.  FUNDING. The commission may seek a waiver from
  the Centers for Medicare and Medicaid Services or another
  appropriate federal agency to use Medicaid or child health plan
  program funds to finance the public share of a multiple share
  program.  The commission may cooperate with a partnering entity to
  finance the public share.
         Sec. 76.053.  AUTHORITY TO DETERMINE SCOPE. The commission
  may determine if a multiple share program proposed by a partnering
  entity should be local, regional, or statewide in scope. The
  commission shall base this determination on:
               (1)  appropriate methods to meet the needs of the
  uninsured community; and
               (2)  federal guidance.
         Sec. 76.054.  METHOD OF FINANCE. If the legislature does not
  appropriate sufficient money from the general revenue to fund a
  multiple share program, a partnering entity may use the following
  types of funding to maximize this state's receipt of available
  federal matching funds provided through Medicaid and the child
  health plan:
               (1)  local funds made available to this state through
  intergovernmental transfers from local governments; and
               (2)  certified public expenditures.
  [Sections 76.055-76.100 reserved for expansion]
  SUBCHAPTER C. COST OF PROGRAM; CONTRIBUTION OF SHARES
         Sec. 76.101.  CONTRIBUTION OF SHARES. A multiple share
  program may require that:
               (1)  each participating employer contribute at least
  one-third of the cost of coverage; and
               (2)  this state, a political subdivision of this state,
  or a nonprofit organization contribute not more than one-third of
  the cost of coverage.
         Sec. 76.102.  COST SHARING. Subject to applicable federal
  law, an employee who participates in a multiple share program may be
  required to pay:
               (1)  a share of the premium;
               (2)  copayments;
               (3)  coinsurance; and
               (4)  deductibles.
         Sec. 76.103.  STANDARDS AND PROCEDURES. The executive
  commissioner by rule shall:
               (1)  define the types of local entities that may be
  partnering entities;
               (2)  determine eligibility criteria for participating
  employers and employees;
               (3)  determine a minimum benefit package for multiple
  share programs that offer noninsurance health benefit plans;
               (4)  determine methods for limiting substitution of
  coverage in multiple share programs of partnering entities;
               (5)  determine methods for limiting adverse selection
  in multiple share programs of partnering entities; and
               (6)  determine how a multiple share program participant
  may continue program coverage if the participant leaves the
  employment of a participating employer or becomes ineligible due to
  income.
         (c)  Not later than January 1, 2008, the executive
  commissioner of the Health and Human Services Commission shall
  adopt rules and procedures necessary to implement the multiple
  share program created by Chapter 76, Health and Safety Code, as
  added by this section.  In adopting the rules and procedures, the
  executive commissioner may consult with the Texas Department of
  Insurance.
         (d)  This section takes effect immediately if this Act
  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 this section to
  have immediate effect, this section takes effect September 1, 2007.
         SECTION 9.  (a)  In this section, "committee" means the
  committee on health and long-term care insurance incentives.
         (b)  The committee on health and long-term care insurance
  incentives is established to study and develop recommendations
  regarding methods by which this state may reduce the need for
  residents of this state to rely on the Medicaid program by providing
  incentives for employers to provide health insurance, long-term
  care insurance, or both, to their employees.
         (c)  The committee on health and long-term care insurance
  incentives is composed of:
               (1)  the presiding officers of:
                     (A)  the Senate Committee on Health and Human
  Services;
                     (B)  the House Committee on Public Health;
                     (C)  the Senate Committee on State Affairs; and
                     (D)  the House Committee on Insurance;
               (2)  three public members, appointed by the governor,
  who collectively represent the diversity of businesses in this
  state, including diversity with respect to:
                     (A)  the geographic regions in which those
  businesses are located;
                     (B)  the types of industries in which those
  businesses are engaged; and
                     (C)  the sizes of those businesses, as determined
  by number of employees; and
               (3)  the following ex officio members:
                     (A)  the comptroller of public accounts;
                     (B)  the commissioner of insurance; and
                     (C)  the executive commissioner of the Health and
  Human Services Commission.
         (d)  The committee shall elect a presiding officer from the
  committee members and shall meet at the call of the presiding
  officer.
         (e)  The committee shall study and develop recommendations
  regarding incentives this state may provide to employers to
  encourage those employers to provide health insurance, long-term
  care insurance, or both, to employees who would otherwise rely on
  the Medicaid program to meet their health and long-term care needs.
  In conducting the study, the committee shall:
               (1)  examine the feasibility and determine the cost of
  providing incentives through:
                     (A)  the franchise tax under Chapter 171, Tax
  Code, including allowing exclusions from an employer's total
  revenue of insurance premiums paid for employees, regardless of
  whether the employer chooses under Subparagraph (ii), Paragraph
  (B), Subdivision (1), Subsection (a), Section 171.101, Tax Code, as
  effective January 1, 2008, to subtract cost of goods sold or
  compensation for purposes of determining the employer's taxable
  margin;
                     (B)  deductions from or refunds of other taxes
  imposed on the employer; and
                     (C)  any other means, as determined by the
  committee; and
               (2)  for each incentive the committee examines under
  Subdivision (1) of this subsection, determine the impact that
  implementing the incentive would have on reducing the number of
  individuals in this state who do not have private health or
  long-term care insurance coverage, including individuals who are
  Medicaid recipients.
         (f)  Not later than September 1, 2008, the committee shall
  submit to the Senate Committee on Health and Human Services, the
  House Committee on Public Health, the Senate Committee on State
  Affairs, and the House Committee on Insurance a report regarding
  the results of the study required by this section. The report must
  include a detailed description of each incentive the committee
  examined and determined is feasible and, for each of those
  incentives, specify:
               (1)  the anticipated cost associated with providing
  that incentive;
               (2)  any statutory changes needed to implement the
  incentive; and
               (3)  the impact that implementing the incentive would
  have on reducing:
                     (A)  the number of individuals in this state who
  do not have private health or long-term care insurance coverage;
  and
                     (B)  the number of individuals in this state who
  are Medicaid recipients.
         SECTION 10.  (a)  The Health and Human Services Commission
  shall conduct a study regarding the feasibility and
  cost-effectiveness of developing and implementing an integrated
  Medicaid managed care model designed to improve the management of
  care provided to Medicaid recipients who are aging, blind, or
  disabled or have chronic health care needs and are not enrolled in a
  managed care plan offered under a capitated Medicaid managed care
  model, including recipients who reside in:
               (1)  rural areas of this state; or
               (2)  urban or surrounding areas in which the Medicaid
  Star + Plus program or another capitated Medicaid managed care
  model is not available.
         (b)  Not later than September 1, 2008, the Health and Human
  Services Commission shall submit a report regarding the results of
  the study to the standing committees of the senate and house of
  representatives having primary jurisdiction over the Medicaid
  program.
         SECTION 11.  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 12.  Except as otherwise provided by this Act, this
  Act takes effect September 1, 2007.
 
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