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A BILL TO BE ENTITLED
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AN ACT
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relating to the Health and Human Services Commission's strategy for |
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managing audit resources, including procedures for auditing and |
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collecting payments from Medicaid managed care organizations. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 533, Government Code, is amended by |
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adding Subchapter B to read as follows: |
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SUBCHAPTER B. STRATEGY FOR MANAGING AUDIT RESOURCES |
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Sec. 533.051. DEFINITIONS. In this subchapter: |
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(1) "Accounts receivable tracking system" means the |
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system the commission uses to track experience rebates and other |
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payments collected from managed care organizations. |
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(2) "Agreed-upon procedures engagement" means an |
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evaluation of a managed care organization's financial statistical |
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reports or other data conducted by an independent auditing firm |
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engaged by the commission as agreed in the managed care |
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organization's contract with the commission. |
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(3) "Experience rebate" means the amount a managed |
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care organization is required to pay the state according to the |
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graduated rebate method described in the managed care |
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organization's contract with the commission. |
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(4) "External quality review organization" means an |
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organization that performs an external quality review of a managed |
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care organization in accordance with 42 C.F.R. Section 438.350. |
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Sec. 533.052. APPLICABILITY AND CONSTRUCTION OF |
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SUBCHAPTER. This subchapter does not apply to and may not be |
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construed as affecting the conduct of audits by the commission's |
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office of inspector general under the authority provided by |
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Subchapter C, Chapter 531, including an audit of a managed care |
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organization conducted by the office after coordinating the |
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office's audit and oversight activities with the commission as |
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required by Section 531.102(q), as added by Chapter 837 (S.B. 200), |
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Acts of the 84th Legislature, Regular Session, 2015. |
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Sec. 533.053. OVERALL STRATEGY FOR MANAGING AUDIT |
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RESOURCES. The commission shall develop and implement an overall |
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strategy for planning, managing, and coordinating audit resources |
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that the commission uses to verify the accuracy and reliability of |
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program and financial information reported by managed care |
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organizations. |
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Sec. 533.054. PERFORMANCE AUDIT SELECTION PROCESS AND |
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FOLLOW-UP. (a) To improve the commission's processes for |
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performance audits of managed care organizations, the commission |
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shall: |
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(1) document the process by which the commission |
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selects managed care organizations to audit; |
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(2) include previous audit coverage as a risk factor |
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in selecting managed care organizations to audit; and |
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(3) prioritize the highest risk managed care |
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organizations to audit. |
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(b) To verify that managed care organizations correct |
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negative performance audit findings, the commission shall: |
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(1) establish a process to: |
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(A) document how the commission follows up on |
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negative performance audit findings; and |
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(B) verify that managed care organizations |
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implement performance audit recommendations; and |
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(2) establish and implement policies and procedures |
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to: |
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(A) determine under what circumstances the |
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commission must issue a corrective action plan to a managed care |
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organization based on a performance audit; and |
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(B) follow up on the managed care organization's |
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implementation of the corrective action plan. |
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Sec. 533.055. AGREED-UPON PROCEDURES ENGAGEMENTS AND |
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CORRECTIVE ACTION PLANS. To enhance the commission's use of |
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agreed-upon procedures engagements to identify managed care |
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organizations' performance and compliance issues, the commission |
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shall: |
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(1) ensure that financial risks identified in |
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agreed-upon procedures engagements are adequately and consistently |
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addressed; and |
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(2) establish policies and procedures to determine |
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under what circumstances the commission must issue a corrective |
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action plan based on an agreed-upon procedures engagement. |
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Sec. 533.056. AUDITS OF PHARMACY BENEFIT MANAGERS. To |
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obtain greater assurance about the effectiveness of pharmacy |
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benefit managers' internal controls and compliance with state |
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requirements, the commission shall: |
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(1) periodically audit each pharmacy benefit manager |
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that contracts with a managed care organization; and |
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(2) develop, document, and implement a monitoring |
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process to ensure that managed care organizations correct and |
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resolve negative findings reported in performance audits or |
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agreed-upon procedures engagements of pharmacy benefit managers. |
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Sec. 533.057. COLLECTION OF COSTS FOR AUDIT-RELATED |
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SERVICES. The commission shall develop, document, and implement |
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billing processes in the Medicaid and CHIP services department of |
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the commission to ensure that managed care organizations reimburse |
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the commission for audit-related services as required by contract. |
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Sec. 533.058. COLLECTION ACTIVITIES RELATED TO PROFIT |
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SHARING. To strengthen the commission's process for collecting |
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shared profits from managed care organizations, the commission |
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shall develop, document, and implement monitoring processes in the |
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Medicaid and CHIP services department of the commission to ensure |
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that the commission: |
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(1) identifies experience rebates deposited in the |
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commission's suspense account and timely transfers those rebates to |
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the appropriate accounts; and |
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(2) timely follows up on and resolves disputes over |
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experience rebates claimed by managed care organizations. |
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Sec. 533.059. USE OF INFORMATION FROM EXTERNAL QUALITY |
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REVIEWS. (a) To enhance the commission's monitoring of managed |
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care organizations, the commission shall use the information |
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provided by the external quality review organization, including: |
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(1) detailed data from results of surveys of Medicaid |
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recipients and, if applicable, child health plan program enrollees, |
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caregivers of those recipients and enrollees, and Medicaid and, as |
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applicable, child health plan program providers; and |
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(2) the validation results of matching paid claims |
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data with medical records. |
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(b) The commission shall document how the commission uses |
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the information described by Subsection (a) to monitor managed care |
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organizations. |
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Sec. 533.060. SECURITY AND PROCESSING CONTROLS OVER |
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INFORMATION TECHNOLOGY SYSTEMS. The commission shall: |
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(1) strengthen user access controls for the |
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commission's accounts receivable tracking system and network |
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folders that the commission uses to manage the collection of |
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experience rebates; |
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(2) document daily reconciliations of deposits |
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recorded in the accounts receivable tracking system to the |
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transactions processed in: |
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(A) the commission's cost accounting system for |
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all health and human services agencies; and |
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(B) the uniform statewide accounting system; and |
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(3) develop, document, and implement a process to |
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ensure that the commission formally documents: |
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(A) all programming changes made to the accounts |
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receivable tracking system; and |
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(B) the authorization and testing of the changes |
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described by Paragraph (A). |
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SECTION 2. As soon as practicable after the effective date |
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of this Act, the executive commissioner of the Health and Human |
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Services Commission shall adopt the rules necessary to implement |
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Subchapter B, Chapter 533, Government Code, as added by this Act. |
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SECTION 3. This Act takes effect September 1, 2017. |
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