By: Raymond H.B. No. 2721
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
 
  relating to improving the delivery and quality of certain health
  and human services, including the delivery and quality of Medicaid
  acute care services and long-term services and supports.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. DELIVERY SYSTEM REDESIGN FOR THE PROVISION OF ACUTE CARE
  SERVICES AND LONG-TERM SERVICES AND SUPPORTS TO INDIVIDUALS WITH
  INTELLECTUAL AND DEVELOPMENTAL DISABILITIES
         SECTION 1.01.  Subtitle I, Title 4, Government Code, is
  amended by adding Chapter 534 to read as follows:
  CHAPTER 534. SYSTEM REDESIGN FOR DELIVERY OF MEDICAID ACUTE CARE
  SERVICES AND LONG-TERM SERVICES AND SUPPORTS TO PERSONS WITH
  INTELLECTUAL AND DEVELOPMENTAL DISABILITIES
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 534.001.  DEFINITIONS. In this chapter:
               (1)  "Advisory committee" means the Intellectual and
  Developmental Disability System Redesign Advisory Committee
  established under Section 534.053.
               (2)  "Basic attendant services" means assistance with
  the activities of daily living, including instrumental activities
  of daily living, provided to an individual because of a physical,
  cognitive, or behavioral limitation related to the individual's
  disability or chronic health condition.
               (3)  "Department" means the Department of Aging and
  Disability Services.
               (4)  "Habilitation services" includes assistance
  provided to an individual with acquiring, retaining, or improving:
                     (A)  skills related to the activities of daily
  living; and
                     (B)  the social and adaptive skills necessary to
  enable the individual to live and fully participate in the
  community.
               (5)  "ICF-IID" means the Medicaid program serving
  individuals with intellectual and developmental disabilities who
  receive care in intermediate care facilities other than a state
  supported living center.
               (6)  "ICF-IID program" means a program under the
  Medicaid program serving individuals with intellectual and
  developmental disabilities who reside in and receive care from:
                     (A)  intermediate care facilities licensed under
  Chapter 252, Health and Safety Code; or
                     (B)  community-based intermediate care facilities
  operated by local intellectual and developmental disability
  authorities.
               (7)  "Local intellectual and developmental disability
  authority" means a local mental retardation authority described by
  Section 533.035, Health and Safety Code.
               (8)  "Managed care organization," "managed care plan,"
  and "potentially preventable event" have the meanings assigned
  under Section 536.001.
               (9)  "Medicaid program" means the medical assistance
  program established under Chapter 32, Human Resources Code.
               (10)  "Medicaid waiver program" means only the
  following programs that are authorized under Section 1915(c) of the
  federal Social Security Act (42 U.S.C. Section 1396n(c)) for the
  provision of services to persons with intellectual and
  developmental disabilities:
                     (A)  the community living assistance and support
  services (CLASS) waiver program;
                     (B)  the home and community-based services (HCS)
  waiver program;
                     (C)  the deaf-blind with multiple disabilities
  (DBMD) waiver program; and
                     (D)  the Texas home living (TxHmL) waiver program.
               (11)  "State supported living center" has the meaning
  assigned by Section 531.002, Health and Safety Code.
         Sec. 534.002.  CONFLICT WITH OTHER LAW. To the extent of a
  conflict between a provision of this chapter and another state law,
  the provision of this chapter controls.
  SUBCHAPTER B. ACUTE CARE SERVICES AND LONG-TERM SERVICES AND
  SUPPORTS SYSTEM
         Sec. 534.051.  ACUTE CARE SERVICES AND LONG-TERM SERVICES
  AND SUPPORTS SYSTEM FOR INDIVIDUALS WITH INTELLECTUAL AND
  DEVELOPMENTAL DISABILITIES. In accordance with this chapter, the
  commission and the department shall jointly design and implement an
  acute care services and long-term services and supports system for
  individuals with intellectual and developmental disabilities that
  supports the following goals:
               (1)  provide Medicaid services to more individuals in a
  cost-efficient manner by providing the type and amount of services
  most appropriate to the individuals' needs;
               (2)  improve individuals' access to services and
  supports by ensuring that the individuals receive information about
  all available programs and services, including employment and least
  restrictive housing assistance, and how to apply for the programs
  and services;
               (3)  improve the assessment of individuals' needs and
  available supports;
               (4)  promote person-centered planning, self-direction,
  self-determination, community inclusion, and customized gainful
  employment;
               (5)  promote individualized budgeting based on an
  assessment of an individual's needs and person-centered planning;
               (6)  promote integrated service coordination of acute
  care services and long-term services and supports;
               (7)  improve acute care and long-term services and
  supports outcomes, including reducing unnecessary
  institutionalization and potentially preventable events;
               (8)  promote high-quality care;
               (9)  provide fair hearing and appeals processes in
  accordance with applicable federal law; and
               (10)  ensure the availability of a local safety net
  provider and local safety net services.
         Sec. 534.052.  IMPLEMENTATION OF SYSTEM REDESIGN. The
  commission and department shall, in consultation with the advisory
  committee, jointly implement the acute care services and long-term
  services and supports system for individuals with intellectual and
  developmental disabilities in the manner and in the stages
  described in this chapter.
         Sec. 534.053.  INTELLECTUAL AND DEVELOPMENTAL DISABILITY
  SYSTEM REDESIGN ADVISORY COMMITTEE. (a)  The Intellectual and
  Developmental Disability System Redesign Advisory Committee is
  established to advise the commission and the department on the
  implementation of the acute care services and long-term services
  and supports system redesign under this chapter. Subject to
  Subsection (b), the executive commissioner and the commissioner of
  the department shall jointly appoint members of the advisory
  committee who are stakeholders from the intellectual and
  developmental disabilities community, including:
               (1)  individuals with intellectual and developmental
  disabilities who are recipients of Medicaid waiver program services
  or individuals who are advocates of those recipients;
               (2)  representatives of health care providers
  participating in a Medicaid managed care program, including:
                     (A)  physicians who are primary care providers and
  physicians who are specialty care providers;
                     (B)  nonphysician mental health professionals;
  and
                     (C)  providers of long-term services and
  supports, including direct service workers;
               (3)  representatives of entities with responsibilities
  for the delivery of Medicaid long-term services and supports or
  other Medicaid program service delivery, including:
                     (A)  independent living centers;
                     (B)  area agencies on aging;
                     (C)  aging and disability resource centers
  established under the Aging and Disability Resource Center
  initiative funded in part by the federal Administration on Aging
  and the Centers for Medicare and Medicaid Services;
                     (D)  community mental health and intellectual
  disability centers; and
                     (E)  the NorthSTAR Behavioral Health Program
  provided under Chapter 534, Health and Safety Code; and
               (4)  representatives of managed care organizations
  contracting with the state to provide services to individuals with
  intellectual and developmental disabilities.
         (b)  To the greatest extent possible, the executive
  commissioner and the commissioner of the department shall appoint
  members of the advisory committee who reflect the geographic
  diversity of the state and include members who represent rural
  Medicaid program recipients.
         (c)  The executive commissioner shall appoint the presiding
  officer of the advisory committee.
         (d)  The advisory committee must meet at least quarterly or
  more frequently if the presiding officer determines that it is
  necessary to address planning and development needs related to
  implementation of the acute care services and long-term services
  and supports system.
         (e)  A member of the advisory committee serves without
  compensation. A member of the advisory committee who is a Medicaid
  program recipient or the relative of a Medicaid program recipient
  is entitled to a per diem allowance and reimbursement at rates
  established in the General Appropriations Act.
         (f)  The advisory committee is subject to the requirements of
  Chapter 551.
         (g)  On January 1, 2024:
               (1)  the advisory committee is abolished; and
               (2)  this section expires.
         Sec. 534.054.  ANNUAL REPORT ON IMPLEMENTATION. (a)  Not
  later than December 1 of each year, the commission shall submit a
  report to the legislature regarding:
               (1)  the implementation of the system required by this
  chapter, including appropriate information regarding the provision
  of acute care services and long-term services and supports to
  individuals with intellectual and developmental disabilities under
  the Medicaid program; and
               (2)  recommendations, including recommendations
  regarding appropriate statutory changes to facilitate the
  implementation.
         (b)  This section expires January 1, 2024.
  SUBCHAPTER C. STAGE ONE: PROGRAMS TO IMPROVE SERVICE
  DELIVERY MODELS
         Sec. 534.101.  DEFINITIONS. In this subchapter:
               (1)  "Capitation" means a method of compensating a
  provider on a monthly basis for providing or coordinating the
  provision of a defined set of services and supports that is based on
  a predetermined payment per services recipient.
               (2)  "Provider" means a person with whom the commission
  contracts for the provision of long-term services and supports
  under the Medicaid program to a specific population based on
  capitation.
         Sec. 534.102.  PILOT PROGRAMS TO TEST MANAGED CARE
  STRATEGIES BASED ON CAPITATION. The commission and the department
  may develop and implement pilot programs in accordance with this
  subchapter to test one or more service delivery models involving a
  managed care strategy based on capitation to deliver long-term
  services and supports under the Medicaid program to individuals
  with intellectual and developmental disabilities.
         Sec. 534.103.  STAKEHOLDER INPUT. As part of developing and
  implementing a pilot program under this subchapter, the department
  shall develop a process to receive and evaluate input from
  statewide stakeholders and stakeholders from the region of the
  state in which the pilot program will be implemented.
         Sec. 534.104.  MANAGED CARE STRATEGY PROPOSALS; PILOT
  PROGRAM SERVICE PROVIDERS. (a)  The department shall identify
  private services providers that are good candidates to develop a
  service delivery model involving a managed care strategy based on
  capitation and to test the model in the provision of long-term
  services and supports under the Medicaid program to individuals
  with intellectual and developmental disabilities through a pilot
  program established under this subchapter.
         (b)  The department shall solicit managed care strategy
  proposals from the private services providers identified under
  Subsection (a).
         (c)  A managed care strategy based on capitation developed
  for implementation through a pilot program under this subchapter
  must be designed to:
               (1)  increase access to long-term services and
  supports;
               (2)  improve quality of acute care services and
  long-term services and supports;
               (3)  promote meaningful outcomes by using
  person-centered planning, individualized budgeting, and
  self-determination, and promote community inclusion and customized
  gainful employment;
               (4)  promote integrated service coordination of acute
  care services and long-term services and supports;
               (5)  promote efficiency and the best use of funding;
               (6)  promote the placement of an individual in housing
  that is the least restrictive setting appropriate to the
  individual's needs;
               (7)  promote employment assistance and supported
  employment;
               (8)  provide fair hearing and appeals processes in
  accordance with applicable federal law; and
               (9)  promote sufficient flexibility to achieve the
  goals listed in this section through the pilot program.
         (d)  The department, in consultation with the advisory
  committee, shall evaluate each submitted managed care strategy
  proposal and determine whether:
               (1)  the proposed strategy satisfies the requirements
  of this section; and
               (2)  the private services provider that submitted the
  proposal has a demonstrated ability to provide the long-term
  services and supports appropriate to the individuals who will
  receive services through the pilot program based on the proposed
  strategy, if implemented.
         (e)  Based on the evaluation performed under Subsection (d),
  the department may select as pilot program service providers one or
  more private services providers.
         (f)  For each pilot program service provider, the department
  shall develop and implement a pilot program. Under a pilot program,
  the pilot program service provider shall provide long-term services
  and supports under the Medicaid program to persons with
  intellectual and developmental disabilities to test its managed
  care strategy based on capitation.
         (g)  The department shall analyze information provided by
  the pilot program service providers and any information collected
  by the department during the operation of the pilot programs for
  purposes of making a recommendation about a system of programs and
  services for implementation through future state legislation or
  rules.
         Sec. 534.105.  PILOT PROGRAM: MEASURABLE GOALS. (a)  The
  department, in consultation with the advisory committee, shall
  identify measurable goals to be achieved by each pilot program
  implemented under this subchapter. The identified goals must:
               (1)  align with information that will be collected
  under Section 534.108(a); and
               (2)  be designed to improve the quality of outcomes for
  individuals receiving services through the pilot program.
         (b)  The department, in consultation with the advisory
  committee, shall propose specific strategies for achieving the
  identified goals. A proposed strategy may be evidence-based if
  there is an evidence-based strategy available for meeting the pilot
  program's goals.
         Sec. 534.106.  IMPLEMENTATION, LOCATION, AND DURATION.
  (a)  The commission and the department shall implement any pilot
  programs established under this subchapter not later than September
  1, 2016.
         (b)  A pilot program established under this subchapter must
  operate for not less than 24 months, except that a pilot program may
  cease operation before the expiration of 24 months if the pilot
  program service provider terminates the contract with the
  commission before the agreed-to termination date.
         (c)  A pilot program established under this subchapter shall
  be conducted in one or more regions selected by the department.
         Sec. 534.107.  COORDINATING SERVICES. In providing
  long-term services and supports under the Medicaid program to an
  individual with intellectual or developmental disabilities, a
  pilot program service provider shall:
               (1)  coordinate through the pilot program
  institutional and community-based services available to the
  individual, including services provided through:
                     (A)  a facility licensed under Chapter 252, Health
  and Safety Code;
                     (B)  a Medicaid waiver program; or
                     (C)  a community-based ICF-IID operated by local
  authorities;
               (2)  collaborate with managed care organizations to
  provide integrated coordination of acute care services and
  long-term services and supports, including discharge planning from
  acute care services to community-based long-term services and
  supports;
               (3)  have a process for preventing inappropriate
  institutionalizations of individuals; and
               (4)  accept the risk of inappropriate
  institutionalizations of individuals previously residing in
  community settings.
         Sec. 534.108.  PILOT PROGRAM INFORMATION. (a)  The
  commission and the department shall collect and compute the
  following information with respect to each pilot program
  implemented under this subchapter to the extent it is available:
               (1)  the difference between the average monthly cost
  per person for all acute care services and long-term services and
  supports received by individuals participating in the pilot program
  while the program is operating, including services provided through
  the pilot program and other services with which pilot program
  services are coordinated as described by Section 534.107, and the
  average cost per person for all services received by the
  individuals before the operation of the pilot program;
               (2)  the percentage of individuals receiving services
  through the pilot program who begin receiving services in a
  nonresidential setting instead of from a facility licensed under
  Chapter 252, Health and Safety Code, or any other residential
  setting;
               (3)  the difference between the percentage of
  individuals receiving services through the pilot program who live
  in non-provider-owned housing during the operation of the pilot
  program and the percentage of individuals receiving services
  through the pilot program who lived in non-provider-owned housing
  before the operation of the pilot program;
               (4)  the difference between the average total Medicaid
  cost, by level of need, for individuals in various residential
  settings receiving services through the pilot program during the
  operation of the program and the average total Medicaid cost, by
  level of need, for those individuals before the operation of the
  program;
               (5)  the difference between the percentage of
  individuals receiving services through the pilot program who obtain
  and maintain employment in meaningful, integrated settings during
  the operation of the program and the percentage of individuals
  receiving services through the program who obtained and maintained
  employment in meaningful, integrated settings before the operation
  of the program;
               (6)  the difference between the percentage of
  individuals receiving services through the pilot program whose
  behavioral, medical, life-activity, and other personal outcomes
  have improved since the beginning of the program and the percentage
  of individuals receiving services through the program whose
  behavioral, medical, life-activity, and other personal outcomes
  improved before the operation of the program, as measured over a
  comparable period; and
               (7)  a comparison of the overall client satisfaction
  with services received through the pilot program, including for
  individuals who leave the program after a determination is made in
  the individuals' cases at hearings or on appeal, and the overall
  client satisfaction with services received before the individuals
  entered the pilot program.
         (b)  The pilot program service provider shall collect any
  information described by Subsection (a) that is available to the
  provider and provide the information to the department and the
  commission not later than the 30th day before the date the program's
  operation concludes.
         (c)  In addition to the information described by Subsection
  (a), the pilot program service provider shall collect any
  information specified by the department for use by the department
  in making an evaluation under Section 534.104(g).
         (d)  On or before December 1, 2016, and December 1, 2017, the
  commission and the department, in consultation with the advisory
  committee, shall review and evaluate the progress and outcomes of
  each pilot program implemented under this subchapter and submit a
  report to the legislature during the operation of the pilot
  programs. Each report must include recommendations for program
  improvement and continued implementation.
         Sec. 534.109.  PERSON-CENTERED PLANNING. The commission, in
  cooperation with the department, shall ensure that each individual
  with intellectual or developmental disabilities who receives
  services and supports under the Medicaid program through a pilot
  program established under this subchapter, or the individual's
  legally authorized representative, has access to a facilitated,
  person-centered plan that identifies outcomes for the individual
  and drives the development of the individualized budget. The
  consumer direction model, as defined by Section 531.051, may be an
  outcome of the plan.
         Sec. 534.110.  TRANSITION BETWEEN PROGRAMS. The commission
  shall ensure that there is a comprehensive plan for transitioning
  the provision of Medicaid program benefits between a Medicaid
  waiver program and a pilot program under this subchapter to protect
  continuity of care.
         Sec. 534.111.  CONCLUSION OF PILOT PROGRAMS; EXPIRATION. On
  September 1, 2018:
               (1)  each pilot program established under this
  subchapter that is still in operation must conclude; and
               (2)  this subchapter expires.
  SUBCHAPTER D. STAGE ONE: PROVISION OF ACUTE CARE AND
  CERTAIN OTHER SERVICES
         Sec. 534.151.  DELIVERY OF ACUTE CARE SERVICES FOR
  INDIVIDUALS WITH INTELLECTUAL AND DEVELOPMENTAL DISABILITIES. The
  commission shall provide acute care Medicaid program benefits to
  individuals with intellectual and developmental disabilities
  through the STAR + PLUS Medicaid managed care program or the most
  appropriate integrated capitated managed care program delivery
  model.
         Sec. 534.152.  DELIVERY OF CERTAIN OTHER SERVICES UNDER STAR
  + PLUS AND STAR KIDS MEDICAID MANAGED CARE PROGRAMS. The commission
  shall implement the most cost-effective option for the delivery of
  basic attendant and habilitation services for individuals with
  intellectual and developmental disabilities under the STAR + PLUS
  and STAR Kids Medicaid managed care programs that maximizes federal
  funding for the delivery of services across those and other similar
  programs.
  SUBCHAPTER E.  STAGE TWO: TRANSITION OF LONG-TERM CARE MEDICAID
  WAIVER PROGRAM RECIPIENTS TO INTEGRATED MANAGED CARE SYSTEM
         Sec. 534.201.  TRANSITION OF RECIPIENTS UNDER TEXAS HOME
  LIVING (TxHmL) WAIVER PROGRAM TO MANAGED CARE PROGRAM. (a)  This
  section applies to individuals with intellectual and developmental
  disabilities who are receiving long-term services and supports
  under the Texas home living (TxHmL) waiver program on the date the
  commission implements the transition described by Subsection (b).
         (b)  Not later than September 1, 2017, the commission shall
  transition the provision of Medicaid program benefits to
  individuals to whom this section applies to the STAR + PLUS Medicaid
  managed care program delivery model or the most appropriate
  integrated capitated managed care program delivery model, as
  determined by the commission based on cost-effectiveness and the
  experience of the STAR + PLUS Medicaid managed care program in
  providing basic attendant and habilitation services and of the
  pilot programs established under Subchapter C, subject to
  Subsection (c)(1).
         (c)  At the time of the transition described by Subsection
  (b), the commission shall determine whether to:
               (1)  continue operation of the Texas home living
  (TxHmL) waiver program for purposes of providing supplemental
  long-term services and supports not available under the managed
  care program delivery model selected by the commission; or
               (2)  provide all or a portion of the long-term services
  and supports previously available under the Texas home living
  (TxHmL) waiver program through the managed care program delivery
  model selected by the commission.
         (d)  In implementing the transition described by Subsection
  (b), the commission shall develop a process to receive and evaluate
  input from interested statewide stakeholders that is in addition to
  the input provided by the advisory committee.
         (e)  The commission shall ensure that there is a
  comprehensive plan for transitioning the provision of Medicaid
  program benefits under this section that protects the continuity of
  care provided to individuals to whom this section applies.
         Sec. 534.202.  TRANSITION OF ICF-IID PROGRAM RECIPIENTS AND
  CERTAIN OTHER MEDICAID WAIVER PROGRAM RECIPIENTS TO MANAGED CARE
  PROGRAM. (a) This section applies to individuals with
  intellectual and developmental disabilities who, on the date the
  commission implements the transition described by Subsection (b),
  are receiving long-term services and supports under:
               (1)  a Medicaid waiver program other than the Texas
  home living (TxHmL) waiver program; or
               (2)  an ICF-IID program.
         (b)  After implementing the transition required by Section
  534.201 but not later than September 1, 2020, the commission shall
  transition the provision of Medicaid program benefits to
  individuals to whom this section applies to the STAR + PLUS Medicaid
  managed care program delivery model or the most appropriate
  integrated capitated managed care program delivery model, as
  determined by the commission based on cost-effectiveness and the
  experience of the transition of Texas home living (TxHmL) waiver
  program recipients to a managed care program delivery model under
  Section 534.201, subject to Subsection (c)(1).
         (c)  At the time of the transition described by Subsection
  (b), the commission shall determine whether to:
               (1)  continue operation of the Medicaid waiver programs
  or Medicaid ICF-IID program for purposes of providing supplemental
  long-term services and supports not available under the managed
  care program delivery model selected by the commission; or
               (2)  provide all or a portion of the long-term services
  and supports previously available under the Medicaid waiver
  programs or Medicaid ICF-IID program through the managed care
  program delivery model selected by the commission.
         (d)  In implementing the transition described by Subsection
  (b), the commission shall develop a process to receive and evaluate
  input from interested statewide stakeholders that is in addition to
  the input provided by the advisory committee.
         (e)  The commission shall ensure that there is a
  comprehensive plan for transitioning the provision of Medicaid
  program benefits under this section that protects the continuity of
  care provided to individuals to whom this section applies.
         (f)  Before transitioning the provision of Medicaid program
  benefits for children under this section, a managed care
  organization providing services under the managed care program
  delivery model selected by the commission must demonstrate to the
  satisfaction of the commission that the organization's network of
  providers has experience and expertise in the provision of services
  to children with intellectual and developmental disabilities.
         SECTION 1.02.  Not later than October 1, 2013, the executive
  commissioner of the Health and Human Services Commission and the
  commissioner of the Department of Aging and Disability Services
  shall appoint the members of the Intellectual and Developmental
  Disability System Redesign Advisory Committee as required by
  Section 534.053, Government Code, as added by this article.
         SECTION 1.03.  The Health and Human Services Commission
  shall submit:
               (1)  the initial report on the implementation of the
  acute care services and long-term services and supports system for
  individuals with intellectual and developmental disabilities as
  required by Section 534.054, Government Code, as added by this
  article, not later than December 1, 2014; and
               (2)  the final report under that section not later than
  December 1, 2023.
         SECTION 1.04.  Not later than June 1, 2016, the Health and
  Human Services Commission shall submit a report to the legislature
  regarding the commission's experience in, including the
  cost-effectiveness of, delivering basic attendant and habilitation
  services for individuals with intellectual and developmental
  disabilities under the STAR + PLUS and STAR Kids Medicaid managed
  care programs under Section 534.152, Government Code, as added by
  this article.
         SECTION 1.05.  The Health and Human Services Commission and
  the Department of Aging and Disability Services shall implement any
  pilot program to be established under Subchapter C, Chapter 534,
  Government Code, as added by this article, as soon as practicable
  after the effective date of this Act.
         SECTION 1.06.  (a)  The Health and Human Services Commission
  and the Department of Aging and Disability Services shall:
               (1)  in consultation with the Intellectual and
  Developmental Disability System Redesign Advisory Committee
  established under Section 534.053, Government Code, as added by
  this article, review and evaluate the outcomes of:
                     (A)  the transition of the provision of benefits
  to individuals under the Texas home living (TxHmL) waiver program
  to a managed care program delivery model under Section 534.201,
  Government Code, as added by this article; and
                     (B)  the transition of the provision of benefits
  to individuals under the Medicaid waiver programs, other than the
  Texas home living (TxHmL) waiver program, and the ICF-IID program
  to a managed care program delivery model under Section 534.202,
  Government Code, as added by this article; and
               (2)  submit as part of an annual report required by
  Section 534.054, Government Code, as added by this article, due on
  or before December 1 of 2018, 2019, and 2020, a report on the review
  and evaluation conducted under Paragraphs (A) and (B), Subdivision
  (1), of this subsection that includes recommendations for continued
  implementation of and improvements to the acute care and long-term
  services and supports system under Chapter 534, Government Code, as
  added by this article.
         (b)  This section expires September 1, 2024.
  ARTICLE 2. MEDICAID MANAGED CARE EXPANSION
         SECTION 2.01.  Section 533.0025, Government Code, is amended
  by amending Subsections (a) and (b) and adding Subsections (f),
  (g), and (h) to read as follows:
         (a)  In this section and Sections 533.00251, 533.00252, and
  533.00253, "medical assistance" has the meaning assigned by Section
  32.003, Human Resources Code.
         (b)  Notwithstanding [Except as otherwise provided by this
  section and notwithstanding] any other law, the commission shall
  provide medical assistance for acute care services through the most
  cost-effective model of Medicaid capitated managed care as
  determined by the commission. The [If the] commission shall
  require mandatory participation in a Medicaid capitated managed
  care program for all persons eligible for acute care [determines
  that it is more cost-effective, the commission may provide] medical
  assistance benefits [for acute care in a certain part of this state
  or to a certain population of recipients using:
               [(1)     a health maintenance organization model,
  including the acute care portion of Medicaid Star + Plus pilot
  programs;
               [(2)  a primary care case management model;
               [(3)  a prepaid health plan model;
               [(4)  an exclusive provider organization model; or
               [(5)     another Medicaid managed care model or
  arrangement].
         (f)  The commission shall:
               (1)  conduct a study to evaluate the feasibility of
  automatically enrolling applicants determined eligible for
  benefits under the medical assistance program in a Medicaid managed
  care plan; and
               (2)  report the results of the study to the legislature
  not later than December 1, 2014.
         (g)  Subsection (f) and this subsection expire September 1,
  2015.
         (h)  If the commission determines that it is feasible, the
  commission may, notwithstanding any other law, implement an
  automatic enrollment process under which applicants determined
  eligible for medical assistance benefits are automatically
  enrolled in a Medicaid managed care plan. The commission may elect
  to implement the automatic enrollment process as to certain
  populations of recipients under the medical assistance program.
         SECTION 2.02.  Subchapter A, Chapter 533, Government Code,
  is amended by adding Sections 533.00251, 533.00252, and 533.00253
  to read as follows:
         Sec. 533.00251.  DELIVERY OF NURSING FACILITY BENEFITS
  THROUGH STAR + PLUS MEDICAID MANAGED CARE PROGRAM. (a)  In this
  section and Section 533.00252:
               (1)  "Advisory committee" means the STAR + PLUS Nursing
  Facility Advisory Committee established under Section 533.00252.
               (2)  "Nursing facility" means a convalescent or nursing
  home or related institution licensed under Chapter 242, Health and
  Safety Code, that provides long-term services and supports to
  Medicaid recipients.
               (3)  "Potentially preventable event" has the meaning
  assigned by Section 536.001.
         (b)  The commission shall expand the STAR + PLUS Medicaid
  managed care program to all areas of this state to serve individuals
  eligible for acute care services and long-term services and
  supports under the medical assistance program.
         (c)  Notwithstanding any other law, the commission, in
  consultation with the advisory committee, shall provide benefits
  under the medical assistance program to recipients who reside in
  nursing facilities through the STAR + PLUS Medicaid managed care
  program. In implementing this subsection, the commission shall
  ensure:
               (1)  that the commission is responsible for setting the
  minimum reimbursement rate paid to a nursing facility under the
  managed care program, including the staff rate enhancement paid to
  a nursing facility that qualifies for the enhancement;
               (2)  that a nursing facility is paid not later than the
  10th day after the date the facility submits a clean claim;
               (3)  the appropriate utilization of services;
               (4)  a reduction in the incidence of potentially
  preventable events and unnecessary institutionalizations;
               (5)  that a managed care organization providing
  services under the managed care program provides discharge
  planning, transitional care, and other education programs to
  physicians and hospitals regarding all available long-term care
  settings;
               (6)  that a managed care organization providing
  services under the managed care program provides payment incentives
  to nursing facility providers that reward reductions in preventable
  acute care costs and encourage transformative efforts in the
  delivery of nursing facility services, including efforts to promote
  a resident-centered care culture through facility design and
  services provided; and
               (7)  the establishment of a single portal through which
  nursing facility providers participating in the STAR + PLUS
  Medicaid managed care program may submit claims to any
  participating managed care organization.
         (d)  Subject to Subsection (e), the commission shall ensure
  that a nursing facility provider authorized to provide services
  under the medical assistance program on September 1, 2013, is
  allowed to participate in the STAR + PLUS Medicaid managed care
  program through August 31, 2016. This subsection expires September
  1, 2017.
         (e)  The commission shall establish credentialing and
  minimum performance standards for nursing facility providers
  seeking to participate in the STAR + PLUS Medicaid managed care
  program. A managed care organization may refuse to contract with a
  nursing facility provider if the nursing facility does not meet the
  minimum performance standards established by the commission under
  this section.
         Sec. 533.00252.  STAR + PLUS NURSING FACILITY ADVISORY
  COMMITTEE. (a)  The STAR + PLUS Nursing Facility Advisory
  Committee is established to advise the commission on the
  implementation of and other activities related to the provision of
  medical assistance benefits to recipients who reside in nursing
  facilities through the STAR + PLUS Medicaid managed care program
  under Section 533.00251, including advising the commission
  regarding its duties with respect to:
               (1)  developing quality-based outcomes and process
  measures for long-term services and supports provided in nursing
  facilities;
               (2)  developing quality-based long-term care payment
  systems and quality initiatives for nursing facilities;
               (3)  transparency of information received from managed
  care organizations;
               (4)  the reporting of outcome and process measures;
               (5)  the sharing of data among health and human
  services agencies; and
               (6)  patient care coordination, quality of care
  improvement, and cost savings.
         (b)  The executive commissioner shall appoint the members of
  the advisory committee. The committee must consist of nursing
  facility providers, representatives of managed care organizations,
  and other stakeholders interested in nursing facility services
  provided in this state, including:
               (1)  at least one member who is a nursing facility
  provider with experience providing the long-term continuum of care,
  including home care and hospice;
               (2)  at least one member who is a nonprofit nursing
  facility provider;
               (3)  at least one member who is a for-profit nursing
  facility provider;
               (4)  at least one member who is a consumer
  representative; and
               (5)  at least one member who is from a managed care
  organization providing services as provided by Section 533.00251.
         (c)  The executive commissioner shall appoint the presiding
  officer of the advisory committee.
         (d)  A member of the advisory committee serves without
  compensation.
         (e)  The advisory committee is subject to the requirements of
  Chapter 551.
         (f)  On September 1, 2016:
               (1)  the advisory committee is abolished; and
               (2)  this section expires.
         Sec. 533.00253.  STAR KIDS MEDICAID MANAGED CARE PROGRAM.
  (a) In this section:
               (1)  "Health home" means a primary care provider
  practice, or, if appropriate, a specialty care provider practice,
  incorporating several features, including comprehensive care
  coordination, family-centered care, and data management, that are
  focused on improving outcome-based quality of care and increasing
  patient and provider satisfaction under the medical assistance
  program.
               (2)  "Potentially preventable event" has the meaning
  assigned by Section 536.001.
         (b)  The commission shall establish a mandatory STAR Kids
  capitated managed care program tailored to provide medical
  assistance benefits to children with disabilities. The managed
  care program developed under this section must:
               (1)  provide medical assistance benefits that are
  customized to meet the health care needs of recipients under the
  program through a defined system of care, including benefits
  described under Section 534.152;
               (2)  better coordinate care of recipients under the
  program;
               (3)  improve the health outcomes of recipients;
               (4)  improve recipients' access to health care
  services;
               (5)  achieve cost containment and cost efficiency;
               (6)  reduce the administrative complexity of
  delivering medical assistance benefits;
               (7)  reduce the incidence of unnecessary
  institutionalizations and potentially preventable events by
  ensuring the availability of appropriate services and care
  management;
               (8)  require a health home;
               (9)  coordinate and collaborate with long-term care
  service providers and long-term care management providers, if
  recipients are receiving long-term services and supports outside of
  the managed care organization; and
               (10)  coordinate services provided to children also
  receiving services under Section 534.152.
         (c)  The commission shall provide medical assistance
  benefits through the STAR Kids managed care program established
  under this section to children who are receiving benefits under the
  medically dependent children (MDCP) waiver program. The commission
  shall ensure that the STAR Kids managed care program provides all or
  a portion of the benefits provided under the medically dependent
  children (MDCP) waiver program to the extent necessary to implement
  this subsection.
         (d)  The commission shall ensure that there is a plan for
  transitioning the provision of Medicaid program benefits to
  recipients 21 years of age or older from under the STAR Kids program
  to under the STAR + PLUS Medicaid managed care program that protects
  continuity of care. The plan must ensure that coordination between
  the programs begins when a recipient reaches 18 years of age.
         SECTION 2.03.  Section 32.0212, Human Resources Code, is
  amended to read as follows:
         Sec. 32.0212.  DELIVERY OF MEDICAL ASSISTANCE.
  Notwithstanding any other law [and subject to Section 533.0025,
  Government Code], the department shall provide medical assistance
  for acute care services through the Medicaid managed care system
  implemented under Chapter 533, Government Code, or another Medicaid
  capitated managed care program.
         SECTION 2.04.  Subsections (c) and (d), Section 533.0025,
  Government Code, and Subchapter D, Chapter 533, Government Code,
  are repealed.
         SECTION 2.05.  (a)  The Health and Human Services Commission
  and the Department of Aging and Disability Services shall:
               (1)  review and evaluate the outcomes of the transition
  of the provision of benefits to recipients under the medically
  dependent children (MDCP) waiver program to the STAR Kids managed
  care program delivery model established under Section 533.00253,
  Government Code, as added by this article;
               (2)  not later than December 1, 2016, submit an initial
  report to the legislature on the review and evaluation conducted
  under Subdivision (1) of this subsection, including
  recommendations for continued implementation and improvement of
  the program; and
               (3)  not later than December 1 of each year after 2016
  and until December 1, 2020, submit additional reports that include
  the information described by Subdivision (1) of this subsection.
         (b)  This section expires September 1, 2021.
         SECTION 2.06.  As soon as practicable after the effective
  date of this Act, the Health and Human Services Commission shall
  provide a single portal through which nursing facility providers
  participating in the STAR + PLUS Medicaid managed care program may
  submit claims in accordance with Subdivision (7), Subsection (c),
  Section 533.00251, Government Code, as added by this article.
         SECTION 2.07.  The changes in law made by this article are
  not intended to negatively affect Medicaid recipients' access to
  quality health care. The Health and Human Services Commission, as
  the state agency designated to supervise the administration and
  operation of the Medicaid program and to plan and direct the
  Medicaid program in each state agency that operates a portion of the
  Medicaid program, including directing the Medicaid managed care
  system, shall continue to timely enforce all laws applicable to the
  Medicaid program and the Medicaid managed care system, including
  laws relating to provider network adequacy, the prompt payment of
  claims, and the resolution of patient and provider complaints.
  ARTICLE 3. OTHER PROVISIONS RELATING TO INDIVIDUALS WITH
  INTELLECTUAL AND DEVELOPMENTAL DISABILITIES
         SECTION 3.01.  Subchapter B, Chapter 533, Health and Safety
  Code, is amended by adding Section 533.0335 to read as follows:
         Sec. 533.0335.  COMPREHENSIVE ASSESSMENT AND RESOURCE
  ALLOCATION PROCESS. (a) In this section:
               (1)  "Advisory committee" means the Intellectual and
  Developmental Disability System Redesign Advisory Committee
  established under Section 534.053, Government Code.
               (2)  "Department" means the Department of Aging and
  Disability Services.
               (3)  "Functional need" means the measurement of an
  individual's services and support needs, including the individual's
  intellectual, psychiatric, medical, and physical support needs.
               (4)  "Medicaid waiver program" has the meaning assigned
  by Section 534.001, Government Code.
         (b)  Subject to the availability of federal funding, the
  department shall develop and implement a comprehensive assessment
  instrument and a resource allocation process. The assessment
  instrument and resource allocation process must be designed to
  recommend for each individual with intellectual and developmental
  disabilities enrolled in a Medicaid waiver program the type,
  intensity, and range of services that are both appropriate and
  available, based on the functional needs of that individual.
         (c)  The department, in consultation with the advisory
  committee, shall establish a prior authorization process for
  requests for supervised living or residential support services
  available in the home and community-based services (HCS) Medicaid
  waiver program. The process must ensure that supervised living or
  residential support services available in the home and
  community-based services (HCS) Medicaid waiver program are
  available only to individuals for whom a more independent setting
  is not appropriate or available.
         (d)  The department shall cooperate with the advisory
  committee to establish the prior authorization process required by
  Subsection (c). This subsection expires January 1, 2024.
         SECTION 3.02.  Subchapter B, Chapter 533, Health and Safety
  Code, is amended by adding Sections 533.03551 and 533.03552 to read
  as follows:
         Sec. 533.03551.  FLEXIBLE, LOW-COST HOUSING OPTIONS.
  (a)  To the extent permitted under federal law and regulations, the
  executive commissioner shall adopt or amend rules as necessary to
  allow for the development of additional housing supports for
  individuals with intellectual and developmental disabilities in
  urban and rural areas, including:
               (1)  a selection of community-based housing options
  that comprise a continuum of integration, varying from most to
  least restrictive, that permits individuals to select the most
  integrated and least restrictive setting appropriate to the
  individual's needs and preferences;
               (2)  non-provider-owned residential settings;
               (3)  assistance with living more independently; and
               (4)  rental properties with on-site supports.
         (b)  The Department of Aging and Disability Services, in
  cooperation with the Texas Department of Housing and Community
  Affairs, the Department of Agriculture, the Texas State Affordable
  Housing Corporation, and the Intellectual and Developmental
  Disability System Redesign Advisory Committee, shall coordinate
  with federal, state, and local public housing entities as necessary
  to expand opportunities for accessible, affordable, and integrated
  housing to meet the complex needs of individuals with intellectual
  and developmental disabilities.
         (c)  The Department of Aging and Disability Services shall
  develop a process to receive input from statewide stakeholders to
  ensure the most comprehensive review of opportunities and options
  for housing services described by this section.
         Sec. 533.03552.  BEHAVIORAL SUPPORTS FOR INDIVIDUALS WITH
  INTELLECTUAL AND DEVELOPMENTAL DISABILITIES AT RISK OF
  INSTITUTIONALIZATION; INTERVENTION TEAMS. (a)  In this section,
  "department" means the Department of Aging and Disability Services.
         (b)  Subject to the availability of federal funding, the
  department shall develop and implement specialized training for
  providers, family members, caregivers, and first responders
  providing direct services and supports to individuals with
  intellectual and developmental disabilities and behavioral health
  needs who are at risk of institutionalization.
         (c)  Subject to the availability of federal funding, the
  department shall establish one or more behavioral health
  intervention teams to provide services and supports to individuals
  with intellectual and developmental disabilities and behavioral
  health needs who are at risk of institutionalization. An
  intervention team may include a:
               (1)  psychiatrist or psychologist;
               (2)  physician;
               (3)  registered nurse;
               (4)  pharmacist or representative of a pharmacy;
               (5)  behavior analyst;
               (6)  social worker;
               (7)  crisis coordinator;
               (8)  peer specialist; and
               (9)  family partner.
         (d)  In providing services and supports, a behavioral health
  intervention team established by the department shall:
               (1)  use the team's best efforts to ensure that an
  individual remains in the community and avoids
  institutionalization;
               (2)  focus on stabilizing the individual and assessing
  the individual for intellectual, medical, psychiatric,
  psychological, and other needs;
               (3)  provide support to the individual's family members
  and other caregivers;
               (4)  provide intensive behavioral assessment and
  training to assist the individual in establishing positive
  behaviors and continuing to live in the community; and
               (5)  provide clinical and other referrals.
         (e)  The department shall ensure that members of a behavioral
  health intervention team established under this section receive
  training on trauma-informed care, which is an approach to providing
  care to individuals with behavioral health needs based on awareness
  that a history of trauma or the presence of trauma symptoms may
  create the behavioral health needs of the individual.
         SECTION 3.03.  (a)  The Health and Human Services Commission
  and the Department of Aging and Disability Services shall conduct a
  study to identify crisis intervention programs currently available
  to, evaluate the need for appropriate housing for, and develop
  strategies for serving the needs of persons in this state with
  Prader-Willi syndrome.
         (b)  In conducting the study, the Health and Human Services
  Commission and the Department of Aging and Disability Services
  shall seek stakeholder input.
         (c)  Not later than December 1, 2014, the Health and Human
  Services Commission shall submit a report to the governor, the
  lieutenant governor, the speaker of the house of representatives,
  and the presiding officers of the standing committees of the senate
  and house of representatives having jurisdiction over the Medicaid
  program regarding the study required by this section.
         (d)  This section expires September 1, 2015.
  ARTICLE 4. QUALITY-BASED OUTCOMES AND PAYMENT PROVISIONS
         SECTION 4.01.  Subchapter A, Chapter 533, Government Code,
  is amended by adding Section 533.00254 to read as follows:
         Sec. 533.00254.  MANAGED CARE CLINICAL IMPROVEMENT PROGRAM.
  (a)  In consultation with the Medicaid and CHIP Quality-Based
  Payment Advisory Committee established under Section 536.002 and
  other appropriate stakeholders with an interest in the provision of
  acute care services and long-term services and supports under the
  Medicaid managed care program, the commission shall:
               (1)  establish a clinical improvement program to
  identify goals designed to improve quality of care and care
  management and to reduce potentially preventable events, as defined
  by Section 536.001; and
               (2)  require managed care organizations to develop and
  implement collaborative program improvement strategies to address
  the goals.
         (b)  Goals established under this section may be set by
  geographical region and program type.
         SECTION 4.02.  Subsections (a) and (g), Section 533.0051,
  Government Code, are amended to read as follows:
         (a)  The commission shall establish outcome-based
  performance measures and incentives to include in each contract
  between a health maintenance organization and the commission for
  the provision of health care services to recipients that is
  procured and managed under a value-based purchasing model. The
  performance measures and incentives must:
               (1)  be designed to facilitate and increase recipients'
  access to appropriate health care services; and
               (2)  to the extent possible, align with other state and
  regional quality care improvement initiatives.
         (g)  In performing the commission's duties under Subsection
  (d) with respect to assessing feasibility and cost-effectiveness,
  the commission may consult with participating Medicaid providers
  [physicians], including those with expertise in quality
  improvement and performance measurement[, and hospitals].
         SECTION 4.03.  Subchapter A, Chapter 533, Government Code,
  is amended by adding Section 533.00511 to read as follows:
         Sec. 533.00511.  QUALITY-BASED ENROLLMENT INCENTIVE PROGRAM
  FOR MANAGED CARE ORGANIZATIONS. (a)  In this section, "potentially
  preventable event" has the meaning assigned by Section 536.001.
         (b)  The commission shall create an incentive program that
  automatically enrolls a greater percentage of recipients who did
  not actively choose their managed care plan in a managed care plan,
  based on:
               (1)  the quality of care provided through the managed
  care organization offering that managed care plan;
               (2)  the organization's ability to efficiently and
  effectively provide services, taking into consideration the acuity
  of populations primarily served by the organization; and
               (3)  the organization's performance with respect to
  exceeding, or failing to achieve, appropriate outcome and process
  measures developed by the commission, including measures based on
  all potentially preventable events.
         SECTION 4.04.  Section 533.0071, Government Code, is amended
  to read as follows:
         Sec. 533.0071.  ADMINISTRATION OF CONTRACTS. The commission
  shall make every effort to improve the administration of contracts
  with managed care organizations. To improve the administration of
  these contracts, the commission shall:
               (1)  ensure that the commission has appropriate
  expertise and qualified staff to effectively manage contracts with
  managed care organizations under the Medicaid managed care program;
               (2)  evaluate options for Medicaid payment recovery
  from managed care organizations if the enrollee dies or is
  incarcerated or if an enrollee is enrolled in more than one state
  program or is covered by another liable third party insurer;
               (3)  maximize Medicaid payment recovery options by
  contracting with private vendors to assist in the recovery of
  capitation payments, payments from other liable third parties, and
  other payments made to managed care organizations with respect to
  enrollees who leave the managed care program;
               (4)  decrease the administrative burdens of managed
  care for the state, the managed care organizations, and the
  providers under managed care networks to the extent that those
  changes are compatible with state law and existing Medicaid managed
  care contracts, including decreasing those burdens by:
                     (A)  where possible, decreasing the duplication
  of administrative reporting and process requirements for the
  managed care organizations and providers, such as requirements for
  the submission of encounter data, quality reports, historically
  underutilized business reports, and claims payment summary
  reports;
                     (B)  allowing managed care organizations to
  provide updated address information directly to the commission for
  correction in the state system;
                     (C)  promoting consistency and uniformity among
  managed care organization policies, including policies relating to
  the preauthorization process, lengths of hospital stays, filing
  deadlines, levels of care, and case management services;
                     (D)  reviewing the appropriateness of primary
  care case management requirements in the admission and clinical
  criteria process, such as requirements relating to including a
  separate cover sheet for all communications, submitting
  handwritten communications instead of electronic or typed review
  processes, and admitting patients listed on separate
  notifications; and
                     (E)  providing a single portal through which
  providers in any managed care organization's provider network may
  submit acute care services and long-term services and supports
  claims; and
               (5)  reserve the right to amend the managed care
  organization's process for resolving provider appeals of denials
  based on medical necessity to include an independent review process
  established by the commission for final determination of these
  disputes.
         SECTION 4.05.  Section 533.014, Government Code, is amended
  by amending Subsection (b) and adding Subsection (c) to read as
  follows:
         (b)  Except as provided by Subsection (c), any [Any] amount
  received by the state under this section shall be deposited in the
  general revenue fund for the purpose of funding the state Medicaid
  program.
         (c)  If cost-effective, the commission may use amounts
  received by the state under this section to provide incentives to
  specific managed care organizations to promote quality of care,
  encourage payment reform, reward local service delivery reform,
  increase efficiency, and reduce inappropriate or preventable
  service utilization.
         SECTION 4.06.  Subsection (b), Section 536.002, Government
  Code, is amended to read as follows:
         (b)  The executive commissioner shall appoint the members of
  the advisory committee. The committee must consist of physicians
  and other health care providers, representatives of health care
  facilities, representatives of managed care organizations, and
  other stakeholders interested in health care services provided in
  this state, including:
               (1)  at least one member who is a physician with
  clinical practice experience in obstetrics and gynecology;
               (2)  at least one member who is a physician with
  clinical practice experience in pediatrics;
               (3)  at least one member who is a physician with
  clinical practice experience in internal medicine or family
  medicine;
               (4)  at least one member who is a physician with
  clinical practice experience in geriatric medicine;
               (5)  at least three members [one member] who are [is] or
  who represent [represents] a health care provider that primarily
  provides long-term [care] services and supports;
               (6)  at least one member who is a consumer
  representative; and
               (7)  at least one member who is a member of the Advisory
  Panel on Health Care-Associated Infections and Preventable Adverse
  Events who meets the qualifications prescribed by Section
  98.052(a)(4), Health and Safety Code.
         SECTION 4.07.  Section 536.003, Government Code, is amended
  by amending Subsections (a) and (b) and adding Subsection (a-1) to
  read as follows:
         (a)  The commission, in consultation with the advisory
  committee, shall develop quality-based outcome and process
  measures that promote the provision of efficient, quality health
  care and that can be used in the child health plan and Medicaid
  programs to implement quality-based payments for acute [and
  long-term] care services and long-term services and supports across
  all delivery models and payment systems, including
  [fee-for-service and] managed care payment systems. Subject to
  Subsection (a-1), the [The] commission, in developing outcome and
  process measures under this section, must include measures that are
  based on all [consider measures addressing] potentially
  preventable events and that advance quality improvement and
  innovation. The commission may change measures developed:
               (1)  to promote continuous system reform, improved
  quality, and reduced costs; and
               (2)  to account for managed care organizations added to
  a service area.
         (a-1)  The outcome measures based on potentially preventable
  events must:
               (1)  allow for rate-based determination of health care
  provider performance compared to statewide norms; and
               (2)  be risk-adjusted to account for the severity of
  the illnesses of patients served by the provider.
         (b)  To the extent feasible, the commission shall develop
  outcome and process measures:
               (1)  consistently across all child health plan and
  Medicaid program delivery models and payment systems;
               (2)  in a manner that takes into account appropriate
  patient risk factors, including the burden of chronic illness on a
  patient and the severity of a patient's illness;
               (3)  that will have the greatest effect on improving
  quality of care and the efficient use of services, including acute
  care services and long-term services and supports; [and]
               (4)  that are similar to outcome and process measures
  used in the private sector, as appropriate;
               (5)  that reflect effective coordination of acute care
  services and long-term services and supports;
               (6)  that can be tied to expenditures; and
               (7)  that reduce preventable health care utilization
  and costs.
         SECTION 4.08.  Subsection (a), Section 536.004, Government
  Code, is amended to read as follows:
         (a)  Using quality-based outcome and process measures
  developed under Section 536.003 and subject to this section, the
  commission, after consulting with the advisory committee and other
  appropriate stakeholders with an interest in the provision of acute
  care and long-term services and supports under the child health
  plan and Medicaid programs, shall develop quality-based payment
  systems, and require managed care organizations to develop
  quality-based payment systems, for compensating a physician or
  other health care provider participating in the child health plan
  or Medicaid program that:
               (1)  align payment incentives with high-quality,
  cost-effective health care;
               (2)  reward the use of evidence-based best practices;
               (3)  promote the coordination of health care;
               (4)  encourage appropriate physician and other health
  care provider collaboration;
               (5)  promote effective health care delivery models; and
               (6)  take into account the specific needs of the child
  health plan program enrollee and Medicaid recipient populations.
         SECTION 4.09.  Section 536.005, Government Code, is amended
  by adding Subsection (c) to read as follows:
         (c)  Notwithstanding Subsection (a) and to the extent
  possible, the commission shall convert outpatient hospital
  reimbursement systems under the child health plan and Medicaid
  programs to an appropriate prospective payment system that will
  allow the commission to:
               (1)  more accurately classify the full range of
  outpatient service episodes;
               (2)  more accurately account for the intensity of
  services provided; and
               (3)  motivate outpatient service providers to increase
  efficiency and effectiveness.
         SECTION 4.10.  Section 536.006, Government Code, is amended
  to read as follows:
         Sec. 536.006.  TRANSPARENCY. (a)  The commission and the
  advisory committee shall:
               (1)  ensure transparency in the development and
  establishment of:
                     (A)  quality-based payment and reimbursement
  systems under Section 536.004 and Subchapters B, C, and D,
  including the development of outcome and process measures under
  Section 536.003; and
                     (B)  quality-based payment initiatives under
  Subchapter E, including the development of quality of care and
  cost-efficiency benchmarks under Section 536.204(a) and efficiency
  performance standards under Section 536.204(b);
               (2)  develop guidelines establishing procedures for
  providing notice and information to, and receiving input from,
  managed care organizations, health care providers, including
  physicians and experts in the various medical specialty fields, and
  other stakeholders, as appropriate, for purposes of developing and
  establishing the quality-based payment and reimbursement systems
  and initiatives described under Subdivision (1); [and]
               (3)  in developing and establishing the quality-based
  payment and reimbursement systems and initiatives described under
  Subdivision (1), consider that as the performance of a managed care
  organization or physician or other health care provider improves
  with respect to an outcome or process measure, quality of care and
  cost-efficiency benchmark, or efficiency performance standard, as
  applicable, there will be a diminishing rate of improved
  performance over time; and
               (4)  develop web-based capability to provide managed
  care organizations and health care providers with data on their
  clinical and utilization performance, including comparisons to
  peer organizations and providers located in this state and in the
  provider's respective region.
         (b)  The web-based capability required by Subsection (a)(4)
  must support the requirements of the electronic health information
  exchange system under Sections 531.907 through 531.909.
         SECTION 4.11.  Section 536.008, Government Code, is amended
  to read as follows:
         Sec. 536.008.  ANNUAL REPORT. (a)  The commission shall
  submit to the legislature and make available to the public an annual
  report [to the legislature] regarding:
               (1)  the quality-based outcome and process measures
  developed under Section 536.003, including measures based on each
  potentially preventable event; and
               (2)  the progress of the implementation of
  quality-based payment systems and other payment initiatives
  implemented under this chapter.
         (b)  As appropriate, the [The] commission shall report
  outcome and process measures under Subsection (a)(1) by:
               (1)  geographic location, which may require reporting
  by county, health care service region, or other appropriately
  defined geographic area;
               (2)  recipient population or eligibility group served;
               (3)  type of health care provider, such as acute care or
  long-term care provider;
               (4)  number of recipients who relocated to a
  community-based setting from a less integrated setting;
               (5)  quality-based payment system; and
               (6)  service delivery model.
         (c)  The report required under this section may not identify
  specific health care providers.
         SECTION 4.12.  Subsection (a), Section 536.051, Government
  Code, is amended to read as follows:
         (a)  Subject to Section 1903(m)(2)(A), Social Security Act
  (42 U.S.C. Section 1396b(m)(2)(A)), and other applicable federal
  law, the commission shall base a percentage of the premiums paid to
  a managed care organization participating in the child health plan
  or Medicaid program on the organization's performance with respect
  to outcome and process measures developed under Section 536.003
  that address all[, including outcome measures addressing]
  potentially preventable events. The percentage of the premiums
  paid may increase each year.
         SECTION 4.13.  Subsection (a), Section 536.052, Government
  Code, is amended to read as follows:
         (a)  The commission may allow a managed care organization
  participating in the child health plan or Medicaid program
  increased flexibility to implement quality initiatives in a managed
  care plan offered by the organization, including flexibility with
  respect to financial arrangements, in order to:
               (1)  achieve high-quality, cost-effective health care;
               (2)  increase the use of high-quality, cost-effective
  delivery models; [and]
               (3)  reduce the incidence of unnecessary
  institutionalization and potentially preventable events; and
               (4)  increase the use of alternative payment systems,
  including shared savings models, in collaboration with physicians
  and other health care providers.
         SECTION 4.14.  Section 536.151, Government Code, is amended
  by amending Subsections (a), (b), and (c) and adding Subsections
  (a-1) and (d) to read as follows:
         (a)  The executive commissioner shall adopt rules for
  identifying:
               (1)  potentially preventable admissions and
  readmissions of child health plan program enrollees and Medicaid
  recipients, including preventable admissions to long-term care
  facilities;
               (2)  potentially preventable ancillary services
  provided to or ordered for child health plan program enrollees and
  Medicaid recipients;
               (3)  potentially preventable emergency room visits by
  child health plan program enrollees and Medicaid recipients; and
               (4)  potentially preventable complications experienced
  by child health plan program enrollees and Medicaid recipients.
         (a-1)  The commission shall collect data from hospitals on
  present-on-admission indicators for purposes of this section.
         (b)  The commission shall establish a program to provide a
  confidential report to each hospital in this state that
  participates in the child health plan or Medicaid program regarding
  the hospital's performance with respect to each potentially
  preventable event described under Subsection (a) [readmissions and
  potentially preventable complications]. To the extent possible, a
  report provided under this section should include all potentially
  preventable events [readmissions and potentially preventable
  complications information] across all child health plan and
  Medicaid program payment systems. A hospital shall distribute the
  information contained in the report to physicians and other health
  care providers providing services at the hospital.
         (c)  Except as provided by Subsection (d), a [A] report
  provided to a hospital under this section is confidential and is not
  subject to Chapter 552.
         (d)  The commission shall release the information in the
  report described by Subsection (b):
               (1)  not earlier than one year after the date the report
  is submitted to the hospital; and
               (2)  only after receiving and evaluating interested
  stakeholder input regarding the public release of information under
  this section generally.
         SECTION 4.15.  Subsection (a), Section 536.152, Government
  Code, is amended to read as follows:
         (a)  Subject to Subsection (b), using the data collected
  under Section 536.151 and the diagnosis-related groups (DRG)
  methodology implemented under Section 536.005, if applicable, the
  commission, after consulting with the advisory committee, shall to
  the extent feasible adjust child health plan and Medicaid
  reimbursements to hospitals, including payments made under the
  disproportionate share hospitals and upper payment limit
  supplemental payment programs, [in a manner that may reward or
  penalize a hospital] based on the hospital's performance with
  respect to exceeding, or failing to achieve, outcome and process
  measures developed under Section 536.003 that address the rates of
  potentially preventable readmissions and potentially preventable
  complications.
         SECTION 4.16.  Subsection (a), Section 536.202, Government
  Code, is amended to read as follows:
         (a)  The commission shall, after consulting with the
  advisory committee, establish payment initiatives to test the
  effectiveness of quality-based payment systems, alternative
  payment methodologies, and high-quality, cost-effective health
  care delivery models that provide incentives to physicians and
  other health care providers to develop health care interventions
  for child health plan program enrollees or Medicaid recipients, or
  both, that will:
               (1)  improve the quality of health care provided to the
  enrollees or recipients;
               (2)  reduce potentially preventable events;
               (3)  promote prevention and wellness;
               (4)  increase the use of evidence-based best practices;
               (5)  increase appropriate physician and other health
  care provider collaboration; [and]
               (6)  contain costs; and
               (7)  improve integration of acute care services and
  long-term services and supports, including discharge planning from
  acute care services to community-based long-term services and
  supports.
         SECTION 4.17.  Chapter 536, Government Code, is amended by
  adding Subchapter F to read as follows:
  SUBCHAPTER F. QUALITY-BASED LONG-TERM SERVICES AND SUPPORTS
  PAYMENT SYSTEMS
         Sec. 536.251.  QUALITY-BASED LONG-TERM SERVICES AND
  SUPPORTS PAYMENTS. (a)  Subject to this subchapter, the
  commission, after consulting with the advisory committee and other
  appropriate stakeholders representing nursing facility providers
  with an interest in the provision of long-term services and
  supports, may develop and implement quality-based payment systems
  for Medicaid long-term services and supports providers designed to
  improve quality of care and reduce the provision of unnecessary
  services. A quality-based payment system developed under this
  section must base payments to providers on quality and efficiency
  measures that may include measurable wellness and prevention
  criteria and use of evidence-based best practices, sharing a
  portion of any realized cost savings achieved by the provider, and
  ensuring quality of care outcomes, including a reduction in
  potentially preventable events.
         (b)  The commission may develop a quality-based payment
  system for Medicaid long-term services and supports providers under
  this subchapter only if implementing the system would be feasible
  and cost-effective.
         Sec. 536.252.  EVALUATION OF DATA SETS. To ensure that the
  commission is using the best data to inform the development and
  implementation of quality-based payment systems under Section
  536.251, the commission shall evaluate the reliability, validity,
  and functionality of post-acute and long-term services and supports
  data sets. The commission's evaluation under this section should
  assess:
               (1)  to what degree data sets relied on by the
  commission meet a standard:
                     (A)  for integrating care;
                     (B)  for developing coordinated care plans; and
                     (C)  that would allow for the meaningful
  development of risk adjustment techniques;
               (2)  whether the data sets will provide value for
  outcome or performance measures and cost containment; and
               (3)  how classification systems and data sets used for
  Medicaid long-term services and supports providers can be
  standardized and, where possible, simplified.
         Sec. 536.253.  COLLECTION AND REPORTING OF CERTAIN
  INFORMATION. (a) The executive commissioner shall adopt rules for
  identifying the incidence of potentially preventable admissions,
  potentially preventable readmissions, and potentially preventable
  emergency room visits by Medicaid long-term services and supports
  recipients.
         (b)  The commission shall establish a program to provide a
  report to each Medicaid long-term services and supports provider in
  this state regarding the provider's performance with respect to
  potentially preventable admissions, potentially preventable
  readmissions, and potentially preventable emergency room visits.
  To the extent possible, a report provided under this section should
  include applicable potentially preventable events information
  across all Medicaid program payment systems.
         (c)  Subject to Subsection (d), a report provided to a
  provider under this section is confidential and is not subject to
  Chapter 552.
         (d)  The commission shall release the information in the
  report described by Subsection (c):
               (1)  not earlier than one year after the date the report
  is submitted to the provider; and
               (2)  only after receiving and evaluating interested
  stakeholder input regarding the public release of information under
  this section generally.
         SECTION 4.18.  As soon as practicable after the effective
  date of this Act, the Health and Human Services Commission shall
  provide a single portal through which providers in any managed care
  organization's provider network may submit acute care services and
  long-term services and supports claims as required by Paragraph
  (E), Subdivision (4), Section 533.0071, Government Code, as amended
  by this article.
         SECTION 4.19.  Not later than September 1, 2013, the Health
  and Human Services Commission shall convert outpatient hospital
  reimbursement systems as required by Subsection (c), Section
  536.005, Government Code, as added by this article.
  ARTICLE 5. SPECIFIC PROVISIONS RELATING TO PREMIUMS UNDER THE
  MEDICAL ASSISTANCE PROGRAM
         SECTION 5.01.  Section 533.013, Government Code, is amended
  by adding Subsection (e) to read as follows:
         (e)  The commission shall pursue and, if appropriate,
  implement premium rate-setting strategies that encourage provider
  payment reform and more efficient service delivery and provider
  practices. In pursuing premium rate-setting strategies under this
  section, the commission shall review and consider strategies
  employed or under consideration by other states. If necessary, the
  commission may request a waiver or other authorization from a
  federal agency to implement strategies identified under this
  subsection.
         SECTION 5.02.  Subchapter B, Chapter 32, Human Resources
  Code, is amended by adding Section 32.0642 to read as follows:
         Sec. 32.0642.  PREMIUM REQUIREMENT FOR RECEIPT OF CERTAIN
  SERVICES. To the extent permitted under and in a manner that is
  consistent with 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 and
  implement in the most cost-effective manner a premium for long-term
  services and supports provided to a child under the medical
  assistance program to be paid by the child's parent or other legal
  guardian.
  ARTICLE 6. ADDITIONAL PROVISIONS RELATING TO QUALITY AND DELIVERY
  OF HEALTH AND HUMAN SERVICES
         SECTION 6.01.  The heading to Section 531.024, Government
  Code, is amended to read as follows:
         Sec. 531.024.  PLANNING AND DELIVERY OF HEALTH AND HUMAN
  SERVICES; DATA SHARING.
         SECTION 6.02.  Section 531.024, Government Code, is amended
  by adding Subsection (a-1) to read as follows:
         (a-1)  To the extent permitted under applicable law, the
  commission and other health and human services agencies shall share
  data to facilitate patient care coordination, quality improvement,
  and cost savings in the Medicaid program, child health plan
  program, and other health and human services programs funded using
  money appropriated from the general revenue fund.
         SECTION 6.03.  Subchapter B, Chapter 531, Government Code,
  is amended by adding Section 531.0981 to read as follows:
         Sec. 531.0981.  WELLNESS SCREENING PROGRAM. If
  cost-effective, the commission may implement a wellness screening
  program for Medicaid recipients designed to evaluate a recipient's
  risk for having certain diseases and medical conditions for
  purposes of establishing a health baseline for each recipient that
  may be used to tailor the recipient's treatment plan or for
  establishing the recipient's health goals.
  ARTICLE 7. FEDERAL AUTHORIZATIONS, FUNDING, AND EFFECTIVE DATE
         SECTION 7.01.  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 7.02.  As soon as practicable after the effective
  date of this Act, the Health and Human Services Commission shall
  apply for and actively seek a waiver or authorization from the
  appropriate federal agency to waive, with respect to a person who is
  dually eligible for Medicare and Medicaid, the requirement under 42
  C.F.R. Section 409.30 that the person be hospitalized for at least
  three consecutive calendar days before Medicare covers
  posthospital skilled nursing facility care for the person.
         SECTION 7.03.  The Health and Human Services Commission may
  use any available revenue, including legislative appropriations
  and available federal funds, for purposes of implementing any
  provision of this Act.
         SECTION 7.04.  This Act takes effect September 1, 2013.