By: Rodríguez S.B. No. 2223

A BILL TO BE ENTITLED

AN ACT

relating to Medicaid funding in this state, including the federal government's participation in that funding.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 531.02113, Government Code, is amended to read as follows:

Sec. 531.02113. OPTIMIZATION OF MEDICAID FINANCING. The commission shall ensure that the Medicaid finance system:

(1) is optimized to:

(A) [(1)] maximize the state's receipt of federal funds;

(B) [(2)] create incentives for providers to use preventive care;

(C) [(3)] increase and retain providers in the system to maintain an adequate provider network;

(D) [(4)] more accurately reflect the costs borne by providers; and

(E) [(5)] encourage the improvement of the quality of care; and

(2) complies with the requirements of Chapter 540, if applicable.

SECTION 2. Subtitle I, Title 4, Government Code, is amended by adding Chapter 540 to read as follows:

CHAPTER 540. MEDICAID FUNDING MODIFICATION

Sec. 540.0001. APPLICABILITY. This chapter applies to a waiver to the requirements of this state's Medicaid state plan or other authorization under Medicaid:

(1) for which the commission seeks approval from the federal government; and

(2) that, if approved, would change this state's receipt of federal money for Medicaid from the funding system in effect on January 1, 2017, to a block grant or other funding system.

Sec. 540.0002. PRIMARY GOAL OF MEDICAID FUNDING MODIFICATION. (a) The primary goal of a Medicaid funding modification the commission seeks through a waiver or other authorization to which this chapter applies must be to preserve the best interests of the residents of this state.

(b) The commission may not seek a waiver or other authorization to which this chapter applies that is contrary to the primary goal specified by Subsection (a) or that otherwise does not meet the requirements of this chapter.

Sec. 540.0003. ADEQUACY OF MEDICAID PROGRAM FUNDING. A Medicaid funding modification the commission seeks through a waiver or other authorization to which this chapter applies:

(1) must account for and ensure adequate, continued funding for:

(A) anticipated growth in the number of persons in this state who will be eligible for and enroll in the Medicaid program; and

(B) health care trends that may affect costs, including:

(i) increases in utilization rates;

(ii) increases in the acuity of Medicaid recipients;

(iii) advancements in medical technology; and

(iv) advancements in specialized prescription drugs; and

(2) may not be designed in a manner that allows for reductions in federal financial participation based on this state's effective management of Medicaid cost growth.

Sec. 540.0004. MAINTENANCE OF ELIGIBILITY REQUIREMENTS AND COVERED SERVICES. A waiver or other authorization to which this chapter applies must ensure that, at a minimum:

(1) the eligibility criteria for full Medicaid benefits in effect on January 1, 2017, are not made more restrictive under the waiver or authorization, including the eligibility criteria for low-income families, pregnant women, children, persons who are 65 years of age or older, and persons with disabilities;

(2) the eligibility criteria for limited Medicaid benefits in effect on January 1, 2017, are not made more restrictive under the waiver or authorization; and

(3) all acute care services and long-term services and supports covered by Medicaid on January 1, 2017, continue to be covered, regardless of whether those services are mandatory or optional services under federal law.

Sec. 540.0005. PROVIDER REIMBURSEMENTS AND OTHER PAYMENTS. (a) A waiver or other authorization to which this chapter applies must ensure that the Medicaid funding modification the commission seeks through the waiver or authorization will:

(1) support the provision of adequate reimbursements to Medicaid providers, require reimbursement rates for those providers for the provision of Medicaid services to be at least equal to the rates in effect on January 1, 2017, and support periodic reimbursement rate increases based on health care trends;

(2) ensure continued provision of payments to hospitals equal to supplemental payments by this state to hospitals under supplemental payment programs in effect on January 1, 2017, which may include continued provision through increases in rates paid for direct hospital services to Medicaid enrollees; and

(3) prioritize use of supplemental payments to encourage continued development of comprehensive local and regional health care systems that include preventive, primary, specialty, outpatient, inpatient, mental health, and substance abuse services for individuals without health insurance.

(b) Reimbursement systems under a waiver or other authorization to which this chapter applies must encourage value-based payment arrangements for Medicaid providers and support efforts to promote quality of care.

SECTION 3. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2017.