88R4145 BDP-F
 
  By: Miles S.B. No. 504
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a "Texas solution" to reforming and addressing issues
  related to the Medicaid program, including the creation of an
  alternative program designed to ensure health benefit plan coverage
  to certain low-income individuals through the private marketplace;
  requiring a fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1.  BLOCK GRANT FUNDING SYSTEM FOR STATE MEDICAID PROGRAM
         SECTION 1.01.  Subtitle I, Title 4, Government Code, is
  amended by adding Chapter 540 to read as follows:
  CHAPTER 540.  BLOCK GRANT FUNDING SYSTEM FOR STATE MEDICAID PROGRAM
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 540.0001.  DEFINITIONS. Notwithstanding Section
  531.001, in this chapter:
               (1)  "Health benefit exchange" means an American Health
  Benefit Exchange administered by the federal government or an
  exchange created under Section 1311(b) of the Patient Protection
  and Affordable Care Act (42 U.S.C. Section 18031(b)).
               (2)  "Medicaid program" means the medical assistance
  program established and operated under Title XIX, Social Security
  Act (42 U.S.C. Section 1396 et seq.).
               (3)  "State Medicaid program" means the medical
  assistance program provided by this state under the Medicaid
  program.
         Sec. 540.0002.  FEDERAL AUTHORIZATION TO REFORM MEDICAID
  REQUIRED. If the federal government establishes, through
  conversion or otherwise, a block grant funding system for the
  Medicaid program or otherwise authorizes the state Medicaid program
  to operate under a block grant funding system, including under a
  Medicaid program waiver, the commission, in cooperation with
  applicable health and human services agencies, shall, subject to
  Section 540.0003, administer and operate the state Medicaid program
  in accordance with this chapter.
         Sec. 540.0003.  CONFLICT WITH OTHER LAW. To the extent of a
  conflict between a provision of this chapter and:
               (1)  another provision of state law, the provision of
  this chapter controls, subject to Section 540A.0002(b); and
               (2)  a provision of federal law or any authorization
  described under Section 540.0002, the federal law or authorization
  controls.
         Sec. 540.0004.  ESTABLISHMENT OF REFORMED STATE MEDICAID
  PROGRAM. The commission shall establish a state Medicaid program
  that provides benefits under a risk-based Medicaid managed care
  model.
         Sec. 540.0005.  RULES. The executive commissioner shall
  adopt rules necessary to implement this chapter.
  SUBCHAPTER B.  ACUTE CARE
         Sec. 540.0051.  ELIGIBILITY FOR MEDICAID ACUTE CARE. (a)  An
  individual is eligible to receive acute care benefits under the
  state Medicaid program if the individual:
               (1)  has a household income at or below 100 percent of
  the federal poverty level;
               (2)  is under 19 years of age and:
                     (A)  is receiving Supplemental Security Income
  (SSI) under 42 U.S.C. Section 1381 et seq.; or
                     (B)  is in foster care or resides in another
  residential care setting under the conservatorship of the
  Department of Family and Protective Services; or
               (3)  meets the eligibility requirements that were in
  effect in this state on August 31, 2023.
         (b)  The commission shall provide acute care benefits under
  the state Medicaid program to each individual eligible under this
  section through the most cost-effective means, as determined by the
  commission.
         (c)  If an individual is not eligible for the state Medicaid
  program under Subsection (a), the commission shall refer the
  individual to the program established under Chapter 540A that helps
  connect eligible residents with health benefit plan coverage
  through private market solutions, a health benefit exchange, or any
  other resource the commission determines appropriate.
         Sec. 540.0052.  MEDICAID SLIDING SCALE SUBSIDIES. (a)  An
  individual who is eligible for the state Medicaid program under
  Section 540.0051 may receive a Medicaid sliding scale subsidy to
  purchase a health benefit plan from an authorized health benefit
  plan issuer.
         (b)  A sliding scale subsidy provided to an individual under
  this section must:
               (1)  be based on:
                     (A)  the average premium in the market; and
                     (B) a realistic assessment of the individual's
  ability to pay a portion of the premium; and
               (2)  include an enhancement for individuals who choose
  a high deductible health plan with a health savings account.
         (c)  The commission shall ensure that counselors are made
  available to individuals receiving a subsidy to advise the
  individuals on selecting a health benefit plan that meets the
  individuals' needs.
         (d)  An individual receiving a subsidy under this section is
  responsible for paying:
               (1)  any difference between the premium costs
  associated with the purchase of a health benefit plan and the amount
  of the individual's subsidy under this section; and
               (2)  any copayments associated with the health benefit
  plan, except to the extent the individual receives an additional
  subsidy under Section 540.0053 to pay the copayments.
         (e)  If the amount of a subsidy received by an individual
  under this section exceeds the premium costs associated with the
  individual's purchase of a health benefit plan, the individual may
  deposit the excess amount in a health savings account that may be
  used only in the manner described by Section 540.0054(b).
         Sec. 540.0053.  ADDITIONAL COST-SHARING SUBSIDIES. In
  addition to providing a subsidy to an individual under Section
  540.0052, the commission shall provide additional subsidies for
  coinsurance payments, copayments, deductibles, and other
  cost-sharing requirements associated with the individual's health
  benefit plan.  The commission shall provide the additional
  subsidies on a sliding scale based on income.
         Sec. 540.0054.  DELIVERY OF SUBSIDIES; HEALTH SAVINGS
  ACCOUNTS.  (a)  The commission shall determine the most appropriate
  manner for delivering and administering subsidies provided under
  Sections 540.0052 and 540.0053. In determining the most
  appropriate manner, the commission shall consider depositing
  subsidy amounts for an individual in a health savings account
  established for that individual.
         (b)  A health savings account established under this section
  may be used only to:
               (1)  pay health benefit plan premiums and cost-sharing
  amounts; and
               (2)  if appropriate, purchase health care-related
  goods and services.
         Sec. 540.0055.  MEDICAID HEALTH BENEFIT PLAN ISSUERS AND
  MINIMUM COVERAGE. The commission shall allow any health benefit
  plan issuer authorized to write health benefit plans in this state
  to participate in the state Medicaid program.  The commission in
  consultation with the commissioner of insurance shall establish
  minimum coverage requirements for a health benefit plan to be
  eligible for purchase under the state Medicaid program, subject to
  the requirements specified by this chapter.
         Sec. 540.0056.  REINSURANCE FOR PARTICIPATING HEALTH
  BENEFIT PLAN ISSUERS.  (a)  The commission in consultation with the
  commissioner of insurance shall study a reinsurance program to
  reinsure participating health benefit plan issuers.
         (b)  In examining options for a reinsurance program, the
  commission and the commissioner of insurance shall consider a plan
  design under which:
               (1)  a participating health benefit plan is not charged
  a premium for the reinsurance; and
               (2)  the health benefit plan issuer retains risk on a
  sliding scale.
  SUBCHAPTER C. LONG-TERM SERVICES AND SUPPORTS
         Sec. 540.0101.  PLAN TO REFORM DELIVERY OF LONG-TERM
  SERVICES AND SUPPORTS.  The commission shall develop a
  comprehensive plan to reform the delivery of long-term services and
  supports that is designed to achieve the following objectives under
  the state Medicaid program or any other program created as an
  alternative to the state Medicaid program:
               (1)  encourage consumer direction;
               (2)  simplify and streamline the provision of services;
               (3)  provide flexibility to design benefits packages
  that meet the needs of individuals receiving long-term services and
  supports under the program;
               (4)  improve the cost-effectiveness and sustainability
  of the provision of long-term services and supports;
               (5)  reduce reliance on institutional settings; and
               (6)  encourage cost-sharing by family members when
  appropriate.
  ARTICLE 2. IMMEDIATE REFORM: PROGRAM TO ENSURE HEALTH BENEFIT
  COVERAGE FOR CERTAIN INDIVIDUALS THROUGH PRIVATE MARKETPLACE
         SECTION 2.01.  Subtitle I, Title 4, Government Code, is
  amended by adding Chapter 540A to read as follows:
  CHAPTER 540A.  PROGRAM TO ENSURE HEALTH BENEFIT PLAN COVERAGE FOR
  CERTAIN INDIVIDUALS THROUGH PRIVATE MARKET SOLUTIONS
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 540A.0001.  DEFINITION. In this chapter, "state
  Medicaid program" has the meaning assigned by Section 540.0001.
         Sec. 540A.0002.  CONFLICT WITH OTHER LAW. (a)  Except as
  provided by Subsection (b), to the extent of a conflict between a
  provision of this chapter and:
               (1)  another provision of state law, the provision of
  this chapter controls; and
               (2)  a provision of federal law or any authorization
  described under Subchapter B, the federal law or authorization
  controls.
         (b)  The program operated under this chapter is in addition
  to the state Medicaid program operated under Chapter 32, Human
  Resources Code, or under a block grant funding system under Chapter
  540.
         Sec. 540A.0003.  PROGRAM FOR HEALTH BENEFIT PLAN COVERAGE
  THROUGH PRIVATE MARKET SOLUTIONS. Subject to the requirements of
  this chapter, the commission in consultation with the commissioner
  of insurance shall develop and implement a program that helps
  connect certain low-income residents of this state with health
  benefit plan coverage through private market solutions.
         Sec. 540A.0004.  NOT AN ENTITLEMENT. This chapter does not
  establish an entitlement to assistance in obtaining health benefit
  plan coverage.
         Sec. 540A.0005.  RULES. The executive commissioner shall
  adopt rules necessary to implement this chapter.
  SUBCHAPTER B.  FEDERAL AUTHORIZATION
         Sec. 540A.0051.  FEDERAL AUTHORIZATION FOR FLEXIBILITY TO
  ESTABLISH PROGRAM. (a)  The commission in consultation with the
  commissioner of insurance shall negotiate with the United States
  secretary of health and human services, the Centers for Medicare
  and Medicaid Services, and other appropriate persons for purposes
  of seeking a waiver or other authorization necessary to obtain the
  flexibility to use federal matching funds to help provide, in
  accordance with Subchapter C, health benefit plan coverage to
  certain low-income individuals through private market solutions.
         (b)  Any agreement reached under this section must:
               (1)  create a program that is made cost neutral to this
  state by:
                     (A)  leveraging premium tax revenues; and
                     (B)  achieving cost savings through offsets to
  general revenue health care costs or the implementation of other
  cost savings mechanisms;
               (2)  create more efficient health benefit plan coverage
  options for eligible individuals through:
                     (A)  program changes that may be made without the
  need for additional federal approval; and
                     (B)  program changes that require additional
  federal approval;
               (3)  require the commission to achieve efficiency and
  reduce unnecessary utilization, including duplication, of health
  care services;
               (4)  be designed with the goals of:
                     (A)  relieving local tax burdens;
                     (B)  reducing general revenue reliance so as to
  make general revenue available for other state priorities; and
                     (C)  minimizing the impact of any federal health
  care laws on Texas-based businesses; and
               (5)  afford this state the opportunity to develop a
  state-specific solution with benefits that specifically meet the
  unique needs of this state's population.
         (c)  An agreement reached under this section may be:
               (1)  limited in duration; and
               (2)  contingent on continued funding by the federal
  government.
  SUBCHAPTER C.  PROGRAM REQUIREMENTS
         Sec. 540A.0101.  ENROLLMENT ELIGIBILITY. (a)  Subject to
  Subsection (b), an individual may be eligible to enroll in a program
  designed and established under this chapter if the person:
               (1)  is younger than 65;
               (2)  has a household income at or below 133 percent of
  the federal poverty level; and
               (3)  is not otherwise eligible to receive benefits
  under the state Medicaid program, including through a program
  operated under Chapter 32, Human Resources Code, or under Chapter
  540 through a block grant funding system or a waiver, other than a
  waiver granted under this chapter, to the program.
         (b)  The executive commissioner may modify or further define
  the eligibility requirements of this section if the commission
  determines it necessary to reach an agreement under Subchapter B.
         Sec. 540A.0102.  MINIMUM PROGRAM REQUIREMENTS. A program
  designed and established under this chapter must:
               (1)  if cost-effective for this state, provide premium
  assistance to purchase health benefit plan coverage in the private
  market, including health benefit plan coverage offered through a
  managed care delivery model;
               (2)  provide enrollees with access to health benefits,
  including benefits provided through a managed care delivery model,
  that:
                     (A)  are tailored to the enrollees;
                     (B)  provide levels of coverage that are
  customized to meet health care needs of individuals within defined
  categories of the enrolled population; and
                     (C)  emphasize personal responsibility and
  accountability through flexible and meaningful cost-sharing
  requirements and wellness initiatives, including through
  incentives for compliance with health, wellness, and treatment
  strategies and disincentives for noncompliance;
               (3)  include pay-for-performance initiatives for
  private health benefit plan issuers that participate in the
  program;
               (4)  use technology to maximize the efficiency with
  which the commission and any health benefit plan issuer, health
  care provider, or managed care organization participating in the
  program manage enrollee participation;
               (5)  allow recipients under the state Medicaid program
  to enroll in the program to receive premium assistance as an
  alternative to the state Medicaid program;
               (6)  encourage eligible individuals to enroll in other
  private or employer-sponsored health benefit plan coverage, if
  available and appropriate;
               (7)  encourage the utilization of health care services
  in the most appropriate low-cost settings; and
               (8)  establish health savings accounts for enrollees,
  as appropriate.
         SECTION 2.02.  The Health and Human Services Commission in
  consultation with the commissioner of insurance and the Medicaid
  Reform Task Force established under Article 4 of this Act shall
  actively develop a proposal for the authorization from the
  appropriate federal entity as required by Subchapter B, Chapter
  540A, Government Code, as added by this article. As soon as
  possible after the effective date of this Act, the Health and Human
  Services Commission shall request and actively pursue obtaining the
  authorization from the appropriate federal entity.
  ARTICLE 3.  MEDICAID: INCREMENTAL REFORM
         SECTION 3.01.  Subchapter B, Chapter 531, Government Code,
  is amended by adding Section 531.0974 to read as follows:
         Sec. 531.0974.  CUSTOMIZED BENEFITS PACKAGE. The commission
  shall, for individuals receiving home and community-based services
  and supports instead of institutional long-term services and
  supports, develop and implement customized benefits packages that
  are designed to prevent the overutilization of services.
  Customized benefits packages under this section must be based on an
  individualized needs assessment administered at a single point of
  entry.
         SECTION 3.02.  Subchapter B, Chapter 32, Human Resources
  Code, is amended by adding Sections 32.0501, 32.0642, and 32.078 to
  read as follows:
         Sec. 32.0501.  DUAL ELIGIBLE INTEGRATED CARE DEMONSTRATION
  PROJECT. (a)  In this section:
               (1)  "ICF-IID" has the meaning assigned by Section
  531.002, Health and Safety Code.
               (2)  "Nursing facility" has the meaning assigned by
  Section 531.912, Government Code.
               (3)  "State supported living center" has the meaning
  assigned by Section 531.002, Health and Safety Code.
         (b)  Subject to Subsection (c), the commission shall
  establish a dual eligible integrated care demonstration project
  that would allow appropriate individuals described by Section
  32.050(a), as determined by the commission, to receive long-term
  services and supports under both the medical assistance program and
  the Medicare program through a single managed care plan.
         (c)  An individual who is a resident of a nursing facility,
  ICF-IID, or state supported living center is exempt from
  participation in the demonstration project.
         Sec. 32.0642.  PARENTAL FEE PROGRAM. (a)  To the extent
  allowed by federal law, the commission shall establish a parental
  fee program that requires the parent or legal guardian of a child
  receiving institutional long-term services and supports or home and
  community-based services and supports under the medical assistance
  program established under this chapter to pay a fee that:
               (1)  correlates with the services and supports
  provided; and
               (2)  takes into consideration the child's household
  income.
         (b)  Failure to pay a fee under this section may not affect a
  child's eligibility for benefits under the medical assistance
  program.
         (c)  The executive commissioner shall adopt rules necessary
  to implement this section.
         Sec. 32.078.  HOUSING BENEFITS FOR CERTAIN RECIPIENTS. To
  the extent allowed by federal law, the commission shall provide
  housing payment assistance for recipients receiving home and
  community-based services and supports under the medical assistance
  program established under this chapter.
         SECTION 3.03.  (a)  The Health and Human Services Commission
  shall conduct a study to examine the estate recovery program
  implemented by this state under 42 U.S.C. Section 1396p(b)(1) and
  determine options the state has to improve recovery under and
  increase the efficacy of the program.
         (b)  Not later than December 1, 2024, the commission shall
  submit a written report containing the findings of the study
  conducted under this section together with the commission's
  recommendations to the governor, the lieutenant governor, and the
  standing committees of the senate and house of representatives
  having primary jurisdiction over Medicaid.
         SECTION 3.04.  (a)  The Health and Human Services Commission
  shall conduct a study on imposing alternative income and asset
  limits for purposes of determining eligibility for long-term
  services and supports under the medical assistance program under
  Chapter 32, Human Resources Code. The commission shall consider:
               (1)  imposing greater restrictions on exempt assets;
               (2)  limiting the amount of income that an individual
  may transfer into a qualified trust under 42 U.S.C. Section
  1396p(d)(4)(B) to an amount equal to the average cost of nursing
  home care; and
               (3)  reducing the income eligibility limit to qualify
  for Medicaid institutional long-term services and supports or home
  and community-based waiver services under the medical assistance
  program under Chapter 32, Human Resources Code.
         (b)  Not later than December 1, 2024, the commission shall
  submit a written report containing the findings of the study
  conducted under this section together with the commission's
  recommendations to the governor, the lieutenant governor, and the
  standing committees of the senate and house of representatives
  having primary jurisdiction over Medicaid.
  ARTICLE 4. MEDICAID REFORM TASK FORCE
         SECTION 4.01.  (a)  In this section:
               (1)  "Commission" means the Health and Human Services
  Commission.
               (2)  "Medicaid program" and "state Medicaid program"
  have the meanings assigned by Section 540.0001, Government Code, as
  added by this Act.
               (3)  "Task force" means the Medicaid Reform Task Force
  established under this section.
         (b)  The Medicaid Reform Task Force is established for
  purposes of advising the commission in designing a state Medicaid
  program and a program for ensuring health benefit plan coverage for
  low-income individuals that are:
               (1)  consistent with Articles 2 and 3 of this Act; and
               (2)  if the federal government establishes a block
  grant funding system in accordance with Section 540.0002,
  Government Code, as added by this Act, consistent with Article 1 of
  this Act.
         (c)  The task force consists of 12 members appointed as
  follows:
               (1)  one member appointed by the governor;
               (2)  two members of the senate appointed by the
  lieutenant governor;
               (3)  two members of the house of representatives
  appointed by the speaker of the house of representatives;
               (4)  one member of the Senate Committee on Finance,
  appointed by the presiding officer;
               (5)  one member of the House Appropriations Committee,
  appointed by the presiding officer;
               (6)  one member of the Senate Committee on Health and
  Human Services, appointed by the presiding officer;
               (7)  one member of the House Public Health Committee,
  appointed by the presiding officer;
               (8)  the executive commissioner of the commission or
  the executive commissioner's designee;
               (9)  the commissioner of insurance or the
  commissioner's designee to represent the Texas Department of
  Insurance; and
               (10)  the director of the Legislative Budget Board or
  the director's designee.
         (d)  The lieutenant governor and the speaker of the house of
  representatives shall each appoint a member of the task force to act
  as co-presiding officers.
         (e)  A member of the task force serves without compensation.
         (f)  Not later than January 1, 2024, the appropriate
  appointing officers shall appoint the members of the task force.
         (g)  Not later than December 1, 2024, the task force shall
  submit a report to the legislature regarding its activities under
  this section.
         (h)  This section expires September 1, 2025.
  ARTICLE 5.  FEDERAL AUTHORIZATION AND EFFECTIVE DATE
         SECTION 5.01.  Subject to Section 2.02 of this Act, 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 5.02.  This Act takes effect September 1, 2023.