88R6189 BDP-F
 
  By: Collier H.B. No. 1701
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to administrative and judicial review of certain Medicaid
  reimbursement disputes; authorizing a fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter A, Chapter 533, Government Code, is
  amended by adding Section 533.0057 to read as follows:
         Sec. 533.0057.  CONFISCATORY REIMBURSEMENT RATES
  PROHIBITED; ADMINISTRATIVE AND JUDICIAL REVIEW OF CERTAIN
  REIMBURSEMENT DISPUTES. (a)  In this section, "confiscatory"
  means, with respect to the reimbursement rate paid by a managed care
  organization to a provider, a rate that is below the rate necessary
  to:
               (1)  recover the provider's reasonable operating
  expenses; 
               (2)  realize a reasonable return on the provider's
  costs; and
               (3)  ensure confidence in the provider's continued:
                     (A)  financial integrity; and
                     (B)  participation in Medicaid.
         (b)  A managed care organization may not pay a confiscatory
  reimbursement rate to a provider under a Medicaid managed care
  model or arrangement implemented under this chapter.
         (c)  Notwithstanding any other law, a provider, including a
  pharmacy provider, has the right to a contested case hearing under
  Chapter 2001 to dispute the amount of a reimbursement rate paid to
  the provider by a managed care organization or the organization's
  pharmacy benefit manager if, subject to Subsection (f), the
  provider believes the rate is confiscatory in violation of
  Subsection (b), except that the decision of the hearing officer or
  the administrative law judge, as applicable, is not subject to
  judicial review under Chapter 2001. Solely for purposes of this
  section, a managed care organization is to be treated as a state
  agency under Chapter 2001.
         (d)  A contested case hearing under Subsection (c) shall be
  conducted by an administrative law judge, unless the commission's
  appeals division employs at least one full-time hearing officer
  whose sole duty is to preside over contested cases. If the
  commission's appeals division employs a hearing officer described
  by this subsection, that officer shall conduct the contested case
  hearing under Subsection (c).
         (e)  Parties to a contested case brought under this section:
               (1)  must include:
                     (A)  the provider; and
                     (B)  the managed care organization and any
  appropriate agent of the organization, including a pharmacy benefit
  manager; and
               (2)  may not include the commission.
         (f)  If the provider's contract with the managed care
  organization or the organization's agent contains a process for
  handling disputes relating to provider reimbursement, the provider
  may request a contested case hearing under Subsection (c) only if:
               (1)  the provider first submits the dispute for
  resolution through the contractual process; and
               (2)  the managed care organization or the
  organization's agent, as appropriate, fails to resolve the dispute
  through the contractual process not later than the 45th day after
  the day the dispute is submitted, or if the provider is dissatisfied
  with the resolution of the contractual process.
         (g)  In a contested case brought under this section, the
  hearing officer or administrative law judge, as applicable, shall
  determine whether the reimbursement rate is confiscatory and may
  order the managed care organization or the organization's agent to
  pay a rate that is not confiscatory. A hearing officer or
  administrative law judge, as applicable, may not award an amount:
               (1)  to any one provider that, as a percentage of the
  provider's average net income before taxes, exceeds the managed
  care organization's percentage of net income before taxes that is
  computed in accordance with the contract between the organization
  and the commission and is authorized to be retained by the
  organization under that contract, averaged over all financial
  statistical reporting periods; or
               (2)  that, in the aggregate, exceeds the amount of
  resources maintained by the managed care organization to reasonably
  accommodate program changes at no additional cost to the commission
  in accordance with the contract between the organization and the
  commission.
         (h)  In a contested case brought under this section, the
  hearing officer or administrative law judge, as applicable, has the
  discretion:
               (1)  considering the interest of judicial economy and
  efficiency, to combine cases wholly or partly that involve the same
  type of provider and the same or substantially similar
  reimbursement issues; or
               (2)  to impose part or all of the costs for the hearing
  against the party or parties that do not substantially prevail.
         (i)  In awarding costs in a contested case brought under this
  section, the hearing officer or administrative law judge, as
  applicable:
               (1)  shall consider whether the position of the party
  was taken in good faith and had a reasonable basis in fact and law;
  and
               (2)  may not award attorney's fees.
         (j)  The commission or the State Office of Administrative
  Hearings may impose a fee in an amount not to exceed $500 on each
  party to a contested case brought under this section for the purpose
  of offsetting the costs of the hearing.
         SECTION 2.  The change in law made by this Act applies only
  to a reimbursement paid to a Medicaid provider on or after the
  effective date of this Act.
         SECTION 3.  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 4.  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, 2023.