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A BILL TO BE ENTITLED
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AN ACT
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relating to the administration and operation of the Medicaid |
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program in a managed care model. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter C, Chapter 531, Government Code, is |
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amended by adding Section 531.1133 to read as follows: |
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Sec. 531.1133. PROVIDER NOT LIABLE FOR MANAGED CARE |
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ORGANIZATION OVERPAYMENT OR DEBT. If the commission's office of |
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inspector general makes a determination to recoup an overpayment or |
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debt from a managed care organization that contracts with the |
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commission to provide health care services to recipients, a |
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provider that contracts with the managed care organization may not |
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be held liable for the good faith provision of services under the |
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provider's contract with the managed care organization. |
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SECTION 2. Section 531.120, Government Code, is amended by |
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adding Subsection (c) to read as follows: |
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(c) The commission shall provide the notice required by |
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Subsection (a) to a provider that is a hospital not later than the |
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90th day before the date the overpayment or debt that is the subject |
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of the notice must be paid. |
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SECTION 3. Section 533.005, Government Code, is amended by |
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amending Subsections (a) and (a-3) and adding Subsections (a-4), |
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(a-5), and (e) to read as follows: |
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(a) A contract between a managed care organization and the |
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commission for the organization to provide health care services to |
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recipients must contain: |
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(1) procedures to ensure accountability to the state |
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for the provision of health care services, including procedures for |
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financial reporting, quality assurance, utilization review, and |
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assurance of contract and subcontract compliance; |
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(2) capitation rates that ensure access to and the |
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cost-effective provision of quality health care; |
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(3) a requirement that the managed care organization |
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provide ready access to a person who assists recipients in |
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resolving issues relating to enrollment, plan administration, |
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education and training, access to services, and grievance |
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procedures; |
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(4) a requirement that the managed care organization |
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provide ready access to a person who assists providers in resolving |
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issues relating to payment, plan administration, education and |
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training, and grievance procedures; |
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(5) a requirement that the managed care organization |
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provide information and referral about the availability of |
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educational, social, and other community services that could |
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benefit a recipient; |
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(6) procedures for recipient outreach and education; |
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(7) subject to Subdivision (7-b), a requirement that |
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the managed care organization make payment to a physician or |
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provider for health care services rendered to a recipient under a |
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managed care plan on any claim for payment that is received with |
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documentation reasonably necessary for the managed care |
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organization to process the claim: |
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(A) not later than: |
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(i) the 10th day after the date the claim is |
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received if the claim relates to services provided by a nursing |
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facility, intermediate care facility, or group home; |
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(ii) the 30th day after the date the claim |
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is received if the claim relates to the provision of long-term |
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services and supports not subject to Subparagraph (i); and |
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(iii) the 45th day after the date the claim |
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is received if the claim is not subject to Subparagraph (i) or (ii); |
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or |
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(B) within a period, not to exceed 60 days, |
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specified by a written agreement between the physician or provider |
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and the managed care organization; |
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(7-a) a requirement that the managed care organization |
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demonstrate to the commission that the organization pays claims |
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described by Subdivision (7)(A)(ii) on average not later than the |
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21st day after the date the claim is received by the organization; |
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(7-b) a requirement that the managed care organization |
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demonstrate to the commission that, within each provider category |
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designated by the commission, the organization pays at least 98 |
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percent of claims described by Subdivision (7) within the time |
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prescribed by that subdivision; |
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(7-c) a requirement that the managed care organization |
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establish an electronic process for use by providers that complies |
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with Section 533.0055(b)(6); |
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(8) a requirement that the commission, on the date of a |
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recipient's enrollment in a managed care plan issued by the managed |
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care organization, inform the organization of the recipient's |
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Medicaid certification date; |
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(9) a requirement that the managed care organization |
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comply with Section 533.006 as a condition of contract retention |
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and renewal; |
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(10) a requirement that the managed care organization |
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provide the information required by Section 533.012 and otherwise |
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comply and cooperate with the commission's office of inspector |
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general and the office of the attorney general; |
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(11) a requirement that the managed care |
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organization's usages of out-of-network providers or groups of |
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out-of-network providers may not exceed limits for those usages |
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determined by the commission, including limits relating to: |
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(A) total inpatient admissions, total outpatient |
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services, and emergency room admissions [determined by the
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commission]; and |
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(B) therapy services, home health services, |
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long-term services and supports, and health care specialists; |
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(12) if the commission finds that a managed care |
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organization has violated Subdivision (11), a requirement that the |
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managed care organization reimburse an out-of-network provider for |
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health care services at a rate that is equal to the allowable rate |
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for those services, as determined under Sections 32.028 and |
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32.0281, Human Resources Code; |
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(13) a requirement that, notwithstanding any other |
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law, including Sections 843.312 and 1301.052, Insurance Code, the |
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organization: |
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(A) use advanced practice registered nurses and |
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physician assistants in addition to physicians as primary care |
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providers to increase the availability of primary care providers in |
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the organization's provider network; and |
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(B) treat advanced practice registered nurses |
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and physician assistants in the same manner as primary care |
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physicians with regard to: |
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(i) selection and assignment as primary |
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care providers; |
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(ii) inclusion as primary care providers in |
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the organization's provider network; and |
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(iii) inclusion as primary care providers |
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in any provider network directory maintained by the organization; |
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(14) a requirement that the managed care organization |
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reimburse a federally qualified health center or rural health |
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clinic for health care services provided to a recipient outside of |
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regular business hours, including on a weekend day or holiday, at a |
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rate that is equal to the allowable rate for those services as |
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determined under Section 32.028, Human Resources Code, if the |
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recipient does not have a referral from the recipient's primary |
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care physician; |
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(15) a requirement that the managed care organization |
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develop, implement, and maintain a system for tracking and |
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resolving all provider appeals related to claims payment, including |
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a process that will require: |
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(A) a tracking mechanism to document the status |
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and final disposition of each provider's claims payment appeal; |
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(B) the contracting with physicians and other |
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health care providers who are not network providers and who are of |
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the same or related specialty as the appealing physician to resolve |
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claims disputes related to denial on the basis of medical necessity |
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that remain unresolved subsequent to a provider appeal; |
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(C) the determination of the physician or other |
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health care provider resolving the dispute to be binding on the |
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managed care organization and the appealing provider; and |
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(D) the managed care organization to allow a |
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provider with a claim that has not been paid before the time |
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prescribed by Subdivision (7)(A)(ii) to initiate an appeal of that |
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claim; |
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(15-a) a requirement that the managed care |
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organization develop, implement, and maintain on the |
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organization's Internet website information that is accessible to |
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the public regarding provider appeals and the disposition of those |
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appeals, organized by provider and service types; |
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(16) a requirement that a medical director who is |
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authorized to make medical necessity determinations is available to |
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the region where the managed care organization provides health care |
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services; |
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(17) a requirement that the managed care organization |
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ensure that a medical director and patient care coordinators and |
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provider and recipient support services personnel are located in |
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the South Texas service region, if the managed care organization |
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provides a managed care plan in that region; |
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(18) a requirement that the managed care organization |
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provide special programs and materials for recipients with limited |
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English proficiency or low literacy skills; |
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(19) a requirement that the managed care organization |
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develop and establish a process for responding to provider appeals |
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in the region where the organization provides health care services; |
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(20) a requirement that the managed care organization: |
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(A) develop and submit to the commission, before |
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the organization begins to provide health care services to |
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recipients, a comprehensive plan that describes how the |
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organization's provider network complies with the provider access |
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standards established under Section 533.0061, as added by Chapter |
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1272 (S.B. 760), Acts of the 84th Legislature, Regular Session, |
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2015; |
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(B) as a condition of contract retention and |
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renewal: |
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(i) continue to comply with the provider |
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access standards established under Section 533.0061, as added by |
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Chapter 1272 (S.B. 760), Acts of the 84th Legislature, Regular |
|
Session, 2015; and |
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(ii) make substantial efforts, as |
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determined by the commission, to mitigate or remedy any |
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noncompliance with the provider access standards established under |
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Section 533.0061, as added by Chapter 1272 (S.B. 760), Acts of the |
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84th Legislature, Regular Session, 2015; |
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(C) pay liquidated damages for each failure, as |
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determined by the commission, to comply with the provider access |
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standards established under Section 533.0061, as added by Chapter |
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1272 (S.B. 760), Acts of the 84th Legislature, Regular Session, |
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2015, in amounts that are reasonably related to the noncompliance; |
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and |
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(D) regularly, as determined by the commission, |
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submit to the commission and make available to the public a report |
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containing data on the sufficiency of the organization's provider |
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network with regard to providing the care and services described |
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under Section 533.0061(a), as added by Chapter 1272 (S.B. 760), |
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Acts of the 84th Legislature, Regular Session, 2015, and specific |
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data with respect to access to primary care, specialty care, |
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long-term services and supports, nursing services, and therapy |
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services on: |
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(i) the average length of time between[:
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[(i)] the date a provider requests prior |
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authorization for the care or service and the date the organization |
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approves or denies the request; [and] |
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(ii) the average length of time between the |
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date the organization approves a request for prior authorization |
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for the care or service and the date the care or service is |
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initiated; and |
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(iii) the number of providers who are |
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accepting new patients; |
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(21) a requirement that the managed care organization |
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demonstrate to the commission, before the organization begins to |
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provide health care services to recipients, that, subject to the |
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provider access standards established under Section 533.0061, as |
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added by Chapter 1272 (S.B. 760), Acts of the 84th Legislature, |
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Regular Session, 2015: |
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(A) the organization's provider network has the |
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capacity to serve the number of recipients expected to enroll in a |
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managed care plan offered by the organization; |
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(B) the organization's provider network |
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includes: |
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(i) a sufficient number of primary care |
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providers; |
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(ii) a sufficient variety of provider |
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types; |
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(iii) a sufficient number of providers of |
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long-term services and supports and specialty pediatric care |
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providers of home and community-based services; and |
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(iv) providers located throughout the |
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region where the organization will provide health care services; |
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and |
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(C) health care services will be accessible to |
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recipients through the organization's provider network to a |
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comparable extent that health care services would be available to |
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recipients under a fee-for-service or primary care case management |
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model of Medicaid managed care; |
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(22) a requirement that the managed care organization |
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develop a monitoring program for measuring the quality of the |
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health care services provided by the organization's provider |
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network that: |
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(A) incorporates the National Committee for |
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Quality Assurance's Healthcare Effectiveness Data and Information |
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Set (HEDIS) measures; |
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(B) focuses on measuring outcomes; and |
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(C) includes the collection and analysis of |
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clinical data relating to prenatal care, preventive care, mental |
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health care, and the treatment of acute and chronic health |
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conditions and substance abuse; |
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(23) subject to Subsection (a-1), a requirement that |
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the managed care organization develop, implement, and maintain an |
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outpatient pharmacy benefit plan for its enrolled recipients: |
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(A) that exclusively employs the vendor drug |
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program formulary and preserves the state's ability to reduce |
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waste, fraud, and abuse under Medicaid; |
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(B) that adheres to the applicable preferred drug |
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list adopted by the commission under Section 531.072; |
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(C) that includes the prior authorization |
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procedures and requirements prescribed by or implemented under |
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Sections 531.073(b), (c), and (g) for the vendor drug program; |
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(D) for purposes of which the managed care |
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organization: |
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(i) may not negotiate or collect rebates |
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associated with pharmacy products on the vendor drug program |
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formulary; and |
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(ii) may not receive drug rebate or pricing |
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information that is confidential under Section 531.071; |
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(E) that complies with the prohibition under |
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Section 531.089; |
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(F) under which the managed care organization may |
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not prohibit, limit, or interfere with a recipient's selection of a |
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pharmacy or pharmacist of the recipient's choice for the provision |
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of pharmaceutical services under the plan through the imposition of |
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different copayments; |
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(G) that allows the managed care organization or |
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any subcontracted pharmacy benefit manager to contract with a |
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pharmacist or pharmacy providers separately for specialty pharmacy |
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services, except that: |
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(i) the managed care organization and |
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pharmacy benefit manager are prohibited from allowing exclusive |
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contracts with a specialty pharmacy owned wholly or partly by the |
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pharmacy benefit manager responsible for the administration of the |
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pharmacy benefit program; and |
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(ii) the managed care organization and |
|
pharmacy benefit manager must adopt policies and procedures for |
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reclassifying prescription drugs from retail to specialty drugs, |
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and those policies and procedures must be consistent with rules |
|
adopted by the executive commissioner and include notice to network |
|
pharmacy providers from the managed care organization; |
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(H) under which the managed care organization may |
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not prevent a pharmacy or pharmacist from participating as a |
|
provider if the pharmacy or pharmacist agrees to comply with the |
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financial terms and conditions of the contract as well as other |
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reasonable administrative and professional terms and conditions of |
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the contract; |
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(I) under which the managed care organization may |
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include mail-order pharmacies in its networks, but may not require |
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enrolled recipients to use those pharmacies, and may not charge an |
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enrolled recipient who opts to use this service a fee, including |
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postage and handling fees; |
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(J) under which the managed care organization or |
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pharmacy benefit manager, as applicable, must pay claims in |
|
accordance with Section 843.339, Insurance Code; and |
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(K) under which the managed care organization or |
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pharmacy benefit manager, as applicable: |
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(i) to place a drug on a maximum allowable |
|
cost list, must ensure that: |
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(a) the drug is listed as "A" or "B" |
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rated in the most recent version of the United States Food and Drug |
|
Administration's Approved Drug Products with Therapeutic |
|
Equivalence Evaluations, also known as the Orange Book, has an "NR" |
|
or "NA" rating or a similar rating by a nationally recognized |
|
reference; and |
|
(b) the drug is generally available |
|
for purchase by pharmacies in the state from national or regional |
|
wholesalers and is not obsolete; |
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(ii) must provide to a network pharmacy |
|
provider, at the time a contract is entered into or renewed with the |
|
network pharmacy provider, the sources used to determine the |
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maximum allowable cost pricing for the maximum allowable cost list |
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specific to that provider; |
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(iii) must review and update maximum |
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allowable cost price information at least once every seven days to |
|
reflect any modification of maximum allowable cost pricing; |
|
(iv) must, in formulating the maximum |
|
allowable cost price for a drug, use only the price of the drug and |
|
drugs listed as therapeutically equivalent in the most recent |
|
version of the United States Food and Drug Administration's |
|
Approved Drug Products with Therapeutic Equivalence Evaluations, |
|
also known as the Orange Book; |
|
(v) must establish a process for |
|
eliminating products from the maximum allowable cost list or |
|
modifying maximum allowable cost prices in a timely manner to |
|
remain consistent with pricing changes and product availability in |
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the marketplace; |
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(vi) must: |
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(a) provide a procedure under which a |
|
network pharmacy provider may challenge a listed maximum allowable |
|
cost price for a drug; |
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(b) respond to a challenge not later |
|
than the 15th day after the date the challenge is made; |
|
(c) if the challenge is successful, |
|
make an adjustment in the drug price effective on the date the |
|
challenge is resolved, and make the adjustment applicable to all |
|
similarly situated network pharmacy providers, as determined by the |
|
managed care organization or pharmacy benefit manager, as |
|
appropriate; |
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(d) if the challenge is denied, |
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provide the reason for the denial; and |
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(e) report to the commission every 90 |
|
days the total number of challenges that were made and denied in the |
|
preceding 90-day period for each maximum allowable cost list drug |
|
for which a challenge was denied during the period; |
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(vii) must notify the commission not later |
|
than the 21st day after implementing a practice of using a maximum |
|
allowable cost list for drugs dispensed at retail but not by mail; |
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and |
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(viii) must provide a process for each of |
|
its network pharmacy providers to readily access the maximum |
|
allowable cost list specific to that provider; |
|
(24) a requirement that the managed care organization |
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and any entity with which the managed care organization contracts |
|
for the performance of services under a managed care plan disclose, |
|
at no cost, to the commission and, on request, the office of the |
|
attorney general all discounts, incentives, rebates, fees, free |
|
goods, bundling arrangements, and other agreements affecting the |
|
net cost of goods or services provided under the plan; |
|
(25) a requirement that the managed care organization |
|
not implement significant, [nonnegotiated,] across-the-board |
|
provider reimbursement rate reductions unless the organization |
|
presented the reduction to providers in an attempt to negotiate the |
|
reductions and: |
|
(A) subject to Subsection (a-4) [(a-3)], the |
|
organization has the prior approval of the commission to make the |
|
reduction; or |
|
(B) the rate reductions are based on changes to |
|
the Medicaid fee schedule or cost containment initiatives |
|
implemented by the commission; and |
|
(26) a requirement that the managed care organization |
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make initial and subsequent primary care provider assignments and |
|
changes. |
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(a-3) For purposes of Subsection (a)(25), "across-the-board |
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provider reimbursement rate reductions" means provider |
|
reimbursement rate reductions proposed by a managed care |
|
organization that the commission determines are likely to affect a |
|
substantial number of providers in the organization's provider |
|
network during the 12-month period following implementation of the |
|
proposed reductions, regardless of whether: |
|
(1) the organization limits the proposed reductions to |
|
specific service areas or provider types; or |
|
(2) the affected providers are likely to experience |
|
differing percentages of rate reductions or amounts of lost revenue |
|
as a result of the proposed reductions. |
|
(a-4) A [(a)(25)(A), a] provider reimbursement rate |
|
reduction is considered to have received the commission's prior |
|
approval for purposes of Subsection (a)(25) unless the commission |
|
issues a written statement of disapproval not later than the 45th |
|
day after the date the commission receives notice of the proposed |
|
rate reduction from the managed care organization. |
|
(a-5) If a managed care organization proposes provider |
|
reimbursement rate reductions in accordance with Subsection |
|
(a)(25) and subsequently rejects alternative rate reductions |
|
suggested by an affected provider, the managed care organization |
|
must provide the provider with written notice of that rejection, |
|
including an explanation of the grounds for the rejection, prior to |
|
implementing any rate reductions. |
|
(e) In addition to the requirements specified by Subsection |
|
(a), a contract described by that subsection must provide that if |
|
the managed care organization has an ownership interest in a health |
|
care provider in the organization's provider network, the |
|
organization must include in the provider network at least one |
|
other health care provider of the same type in which the |
|
organization does not have an ownership interest. |
|
SECTION 4. Subchapter A, Chapter 533, Government Code, is |
|
amended by adding Section 533.00541 to read as follows: |
|
Sec. 533.00541. PRIOR AUTHORIZATION REQUIREMENTS. |
|
Notwithstanding any other law, the commission shall require a |
|
managed care organization that contracts with the commission to |
|
provide health care services to recipients to: |
|
(1) approve or deny a request from a provider of acute |
|
care inpatient services for prior authorization for the following |
|
services or equipment not later than 48 hours after receiving the |
|
request to allow for a safe and timely discharge of a patient from |
|
an inpatient facility: |
|
(A) home health services; |
|
(B) long-term services and supports, including |
|
care provided through a nursing facility; |
|
(C) private-duty nursing; |
|
(D) therapy services; and |
|
(E) durable medical equipment; |
|
(2) contact, notify, and negotiate with a provider |
|
before approving a prior authorization request with an expiration |
|
date different from the expiration date requested by the provider; |
|
(3) submit to a provider agency any change to a |
|
recipient's service plan not later than the 5th day before the date |
|
the plan is to be effective for purposes of giving the provider time |
|
to initiate the change and the recipient an opportunity to agree to |
|
the change; |
|
(4) include on subsequent prior authorization |
|
requests approved with a retroactive effective date an expiration |
|
date that takes into account the date the service change was |
|
implemented by the provider; and |
|
(5) provide complete electronic access to prior |
|
authorizations through the organization's process required under |
|
Section 533.005(a)(7-c). |
|
SECTION 5. Subchapter A, Chapter 533, Government Code, is |
|
amended by adding Section 533.00611 to read as follows: |
|
Sec. 533.00611. MINIMUM STANDARDS FOR DETERMINING MEDICAL |
|
NECESSITY. The commission shall establish minimum standards for |
|
determining the medical necessity of a health care service covered |
|
by Medicaid. In establishing minimum standards under this section, |
|
the commission shall ensure that each recipient has equal access to |
|
the same covered health care services regardless of the managed |
|
care plan in which the recipient is enrolled. |
|
SECTION 6. Section 533.0076, Government Code, is amended by |
|
amending Subsection (c) and adding Subsection (d) to read as |
|
follows: |
|
(c) The commission shall allow a recipient who is enrolled |
|
in a managed care plan under this chapter to disenroll from that |
|
plan and enroll in another managed care plan: |
|
(1) at any time for cause in accordance with federal |
|
law, including because: |
|
(A) the recipient moves out of the managed care |
|
organization's service area; |
|
(B) the plan does not, on the basis of moral or |
|
religious objections, cover the service the recipient seeks; |
|
(C) the recipient needs related services to be |
|
performed at the same time, not all related services are available |
|
within the organization's provider network, and the recipient's |
|
primary care provider or another provider determines that receiving |
|
the services separately would subject the recipient to unnecessary |
|
risk; |
|
(D) for recipients of long-term services or |
|
supports, the recipient would have to change the recipient's |
|
residential, institutional, or employment supports provider based |
|
on that provider's change in status from an in-network to an |
|
out-of-network provider with the managed care organization and, as |
|
a result, would experience a disruption in the recipient's |
|
residence or employment; or |
|
(E) of another reason permitted under federal |
|
law, including poor quality of care, lack of access to services |
|
covered under the contract, or lack of access to providers |
|
experienced in dealing with the recipient's care needs; and |
|
(2) once for any reason after the periods described by |
|
Subsections (a) and (b). |
|
(d) The commission shall implement a process by which the |
|
commission verifies that a recipient is permitted to disenroll from |
|
one managed care plan and enroll in another plan before the |
|
disenrollment occurs. |
|
SECTION 7. Subchapter A, Chapter 533, Government Code, is |
|
amended by adding Sections 533.0091 and 533.01316 to read as |
|
follows: |
|
Sec. 533.0091. CARE COORDINATION SERVICES. A managed care |
|
organization under contract with the commission to provide health |
|
care services to recipients shall ensure that persons providing |
|
care coordination services through the organization coordinate |
|
with hospital discharge planners to facilitate the timely discharge |
|
of recipients to the appropriate level of care and minimize |
|
potentially preventable readmissions. |
|
Sec. 533.01316. REIMBURSEMENT FOR CERTAIN HOSPITAL STAYS. |
|
The commission by rule shall adopt criteria to be used by managed |
|
care organizations under contract with the commission to provide |
|
health care services to recipients for the reimbursement of |
|
services provided to recipients for treatment related to an |
|
inpatient hospital stay, including a behavioral health hospital |
|
stay, that is less than 72 hours. The rules adopted under this |
|
section: |
|
(1) must identify criteria that warrant reimbursement |
|
of services related to the stay as inpatient hospital services or |
|
outpatient hospital services, including criteria for determining |
|
what services constitute outpatient observation services; |
|
(2) must, in identifying criteria under Subdivision |
|
(1), account for medical necessity based on recognized inpatient |
|
criteria, the severity of any psychological disorder, and the |
|
judgment of the treating physician or other provider; |
|
(3) may not allow for the classification of services |
|
as either inpatient or outpatient hospital services for purposes of |
|
reimbursement based solely on the duration of the stay; and |
|
(4) require documentation in a recipient's medical |
|
record that supports the medical necessity of the inpatient |
|
hospital stay at the time of admission for reimbursement of |
|
services related to the stay. |
|
SECTION 8. Subchapter B, Chapter 534, Government Code, is |
|
amended by adding Section 534.0511 to read as follows: |
|
Sec. 534.0511. ENSURING PROVISION OF MEDICALLY NECESSARY |
|
SERVICES. (a) This section applies only to an individual with an |
|
intellectual or developmental disability who is receiving services |
|
under a Medicaid waiver program or ICF-IID program and who requires |
|
medically necessary acute care services or long-term services and |
|
supports that are not available to the individual through the |
|
delivery model implemented under this chapter. |
|
(b) Notwithstanding any other law, the Medicaid waiver |
|
program or ICF-IID program through which an individual to which |
|
this section applies shall pay the cost of the service and may |
|
submit to the commission a claim for reimbursement for the cost of |
|
that service. |
|
SECTION 9. Section 533.005, Government Code, as amended by |
|
this Act, applies to a contract entered into or renewed on or after |
|
the effective date of this Act. A contract entered into or renewed |
|
before that date is governed by the law in effect on the date the |
|
contract was entered into or renewed, and that law is continued in |
|
effect for that purpose. |
|
SECTION 10. 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 11. This Act takes effect September 1, 2017. |