By: Geren H.B. No. 3538

A BILL TO BE ENTITLED

AN ACT

relating to the Managed Care Consumer Choice Program.

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

SECTION 1. Subchapter A, Chapter 533, Government Code, is amended by adding Section 533.0021 and 533.0022 to read as follows:

Sec. 533.0021. MANAGED CARE CONSUMER CHOICE PROGRAM. (a) The commission may periodically issue a request for applications to enter into a contract with the commission to provide health care services to recipients.

(b) The commission shall not enter into a contract under this section with a managed care organization until the commission has:

(1) Certified the managed care organization under Section 533.0035 for any service delivery area for which the managed care organization will provide services to recipients under the contract;

(2) Determined in writing the managed care organization has provided satisfactory assurances regarding its financial solvency; and

(3) Determined in writing the managed care organization complies with the performance measures outlined in Section 533.0036.

(c) Any contract entered under this section shall contain the required contract provisions in Section 533.005 and all other provisions required to be included in a contract between a managed care organization and the commission under this chapter.

(d) The managed care organization shall not provide any services to recipients, and the commission shall not make any payments, under any contract entered into under this section until the managed care organization completes readiness review as required by federal law.

(e) The commission shall offer to contract with any managed care organization that submits an application in response to a request for applications under Section 533.011 and meets the requirements of Subsection (a) of this section for the programs and service delivery areas for which the managed care organization will provide services under the contract.

(f) The programs to which this section applies include STAR, CHIP, STAR Kids, and STAR + PLUS. This section does not apply to the STAR Health program.

(g) The commission shall ensure that a recipient may select any managed care plan offered by a managed care organization in good standing that has entered into a contract with the commission under this section to provide services in the recipient’s service delivery area for the program under which the recipient is eligible for services.

(h) If a managed care organization that has contracted with the commission under this section fails to comply with a material requirement of this section or its contract with the commission, or does not comply with the performance measures defined in Section 533.0036, the commission may pursue any or all of the following remedies in addition to any remedies available to the commission under the contract:

(1) require submission of and compliance with a corrective action plan;

(2) seek recovery of actual damages or liquidated damages specified in the contract;

(3) suspend automatic enrollment process of recipients to the managed care organization in one or more service delivery areas; or

(4) terminate the contract for cause.

Sec. 533.0022. MINIMUM SELECTION CRITERIA. (a) The commission shall publish criteria by which managed care organizations will be measured prior to participation in the managed care program consistent with the performance measures in Section 533.0036.

(b) An applicant managed care organization is responsible for providing the necessary data for analysis to determine performance on the minimum selection criteria published by the commission under subsection (a). The commission shall allow the applicant managed care organization an adequate opportunity to cure any deficiency identified by the commission related to the minimum selection criteria.

SECTION 2. Subchapter A, Chapter 533, Government Code, is amended by adding Section 533.0036 fto read as follows:

Sec. 533.0036. PERFORMANCE MEASURES. (a) The commission shall establish quality and performance measures to evaluate managed care organizations participating in the Managed Care Consumer Choice Program under Section 533.0021 based on experience in the Texas Medicaid and CHIP market.

(b) In adopting the measures under Subsection (a), the commission shall consider:

(1) cost efficiency, quality of care, experience of care, member and provider satisfaction;

(2) the quality of a managed care organization’s provider network; and

(3) provider experience with the managed care organization.

(c) The commission shall:

(1) annually evaluate a managed care organization’s performance and quality by service delivery area; and

(2) post on its Internet website the results of the annual performance evaluations conducted under this section in a format that is readily accessible to and understandable by a member of the public.

SECTION 3. Section 62.155(a), Health and Safety Code, is amended to read as follows:

Sec. 62.155 HEALTH PLAN PROVIDERS. (a) Beginning with services provided on or after September 1, 2027, the commission shall contract with [select the] health plan providers under the program through the Managed Care Consumer Choice Program in Section 533.0021[a competitive procurement process]. A health plan provider, other than a state administered primary care case management network, must hold a certificate of authority or other appropriate license issued by the Texas Department of Insurance that authorizes the health plan provider to provide the type of child health plan offered and must satisfy, except as provided by this chapter, any applicable requirement of the Insurance Code or another insurance law of this state.

SECTION 4. As soon as practicable after the effective date of this act, but not later than September 1, 2026, the Health and Human Services Commission shall begin requesting applications for the Managed Care Consumer Choice Program, and begin entering into contracts with managed care organizations under Section 533.0021, Government Code.

SECTION 5. (a) The Health and Human Services Commission shall extend contracts that were in effect as of January 1, 2025 with managed care organizations for the STAR, CHIP, STAR Kids, and STAR + PLUS programs until new contracts are entered under Subsections (b) or (c). The commission shall cancel all procurements for the STAR, CHIP, or STAR Kids programs that were pending as of January 1, 2025.

(b) The commission shall enter into contracts with managed care organizations under the Managed Care Consumer Choice Program, Section 533.0021, Government Code, for the STAR and CHIP programs with services to recipients under such contracts no later than September 1, 2027.

(c) The commission shall enter into contracts with managed care organizations under the Managed Care Consumer Choice Program, Section 533.0021, Government Code, for the STAR Kids and STAR + PLUS program with services to recipients under such contracts on September 1, 2030.

(d) The Managed Care Consumer Choice Program, Section 533.0021, Government Code, shall be the exclusive means by which the commission may enter into new contracts with managed care organizations for the STAR, CHIP, STAR Kids, and STAR + PLUS programs after the effective date of this Act.

(e) A recipient enrolled in a managed care plan prior to the date services are provided under a contract entered into under Subsections (b) or (c) shall, until such time as the recipient chooses to be enrolled in a different managed care plan or is no longer eligible for services continue enrollment in the same managed care plan if the managed care organization contracts to provide services in the recipient’s service delivery area under Section 533.0021.

SECTION 6. 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 7. 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, 2025.