By: Kolkhorst, et al. S.B. No. 457
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of certain nursing facilities, including
  licensing requirements and Medicaid participation and
  reimbursement requirements.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 540.0752(b), Government Code, is amended
  to read as follows:
         (b)  Subject to Section 540.0701 and notwithstanding any
  other law, the commission shall provide Medicaid benefits through
  the STAR+PLUS Medicaid managed care program to recipients who
  reside in nursing facilities. In implementing this subsection, the
  commission shall ensure that:
               (1)  a nursing facility is paid not later than the 10th
  day after the date the facility submits a clean claim;
               (1-a) a nursing facility complies with the patient care
  expense ratio adopted under Section 32.0286, Human Resources Code;
               (2)  services are used appropriately, consistent with
  criteria the commission establishes;
               (3)  the incidence of potentially preventable events
  and unnecessary institutionalizations is reduced;
               (4)  a Medicaid managed care organization providing
  services under the program:
                     (A)  provides discharge planning, transitional
  care, and other education programs to physicians and hospitals
  regarding all available long-term care settings;
                     (B)  assists in collecting applied income from
  recipients; and
                     (C)  provides payment incentives to nursing
  facility providers that:
                           (i)  reward reductions in preventable acute
  care costs; and
                           (ii)  encourage transformative efforts in
  the delivery of nursing facility services, including efforts to
  promote a resident-centered care culture through facility design
  and services provided;
               (5)  a portal is established that complies with state
  and federal regulations, including standard coding requirements,
  through which nursing facility providers participating in the
  program may submit claims to any participating Medicaid managed
  care organization;
               (6)  rules and procedures relating to certifying and
  decertifying nursing facility beds under Medicaid are not affected;
  and
               (7)  a Medicaid managed care organization providing
  services under the program, to the greatest extent possible, offers
  nursing facility providers access to:
                     (A)  acute care professionals; and
                     (B)  telemedicine, when feasible and in
  accordance with state law, including rules adopted by the Texas
  Medical Board[; and
               [(8)  the commission approves the staff rate
  enhancement methodology for the staff rate enhancement paid to a
  nursing facility that qualifies for the enhancement under the
  program].
         SECTION 2.  Subchapter F, Chapter 540, Government Code, is
  amended by adding Section 540.0283 to read as follows:
         Sec. 540.0283.  NURSING FACILITY PROVIDER AGREEMENTS:  
  COMPLIANCE WITH PATIENT CARE EXPENSE RATIO. (a) A contract to
  which this subchapter applies must require that each provider
  agreement between the contracting Medicaid managed care
  organization and a nursing facility include a requirement that the
  facility comply with the patient care expense ratio adopted under
  Section 32.0286, Human Resources Code.
         (b)  This section does not apply to a state-owned facility.
         SECTION 3.  Section 242.032, Health and Safety Code, is
  amended by adding Subsection (b-1) to read as follows:
         (b-1)  The application must:
               (1)  include the name of each person with a direct or
  indirect ownership interest of five percent or more in:
                     (A)  the nursing facility, including a subsidiary
  or parent company of the facility; and
                     (B)  the real property on which the nursing
  facility is located, including any owner, common owner, tenant, or
  sublessee; and
               (2)  describe the exact ownership interest of each of
  those persons in relation to the facility or property.
         SECTION 4.  Subchapter B, Chapter 242, Health and Safety
  Code, is amended by adding Section 242.0333 to read as follows:
         Sec. 242.0333.  NOTIFICATION OF CHANGE TO OWNERSHIP INTEREST
  APPLICATION INFORMATION. A license holder shall notify the
  commission, in the form and manner the commission requires, of any
  change to the ownership interest application information provided
  under Section 242.032(b-1).
         SECTION 5.  Subchapter B, Chapter 32, Human Resources Code,
  is amended by adding Section 32.0286 to read as follows:
         Sec. 32.0286.  ANNUAL PATIENT CARE EXPENSE RATIO FOR
  REIMBURSEMENT OF CERTAIN NURSING FACILITY PROVIDERS. (a) In this
  section, "patient care expense":
               (1)  includes an expense incurred by a nursing facility
  for:
                     (A)  providing compensation and benefits to:
                           (i)  direct care staff of a facility,
  whether the staff are employees of or contract labor for the
  facility, including:
                                 (a)  licensed registered nurses and
  licensed vocational nurses, including directors of nursing and
  assistant directors of nursing;
                                 (b)  medication aides;
                                 (c)  restorative aides;
                                 (d)  nurse aides who provide
  nursing-related care to residents occupying medical assistance
  beds;
                                 (e)  licensed social workers; and
                                 (f)  social services assistants;
                           (ii)  additional staff associated with
  providing care to facility residents with a severe cognitive
  impairment;
                           (iii)  nonprofessional administrative
  staff, including medical records staff and accounting or
  bookkeeping staff;
                           (iv)  central supply staff and ancillary
  facility staff;
                           (v)  laundry staff; and
                           (vi)  food service staff;
                     (B)  central supply costs and ancillary costs for
  facility services and supplies, including:
                           (i)  diagnostic laboratory and radiology
  costs;
                           (ii)  durable medical equipment costs,
  including costs to purchase, rent, or lease the equipment;
                           (iii)  costs for oxygen used to provide
  oxygen treatment;
                           (iv)  prescription and nonprescription drug
  costs; and
                           (v)  therapy consultant costs; and
                     (C)  costs for dietary and nutrition services,
  including costs for:
                           (i)  food service and related supplies; and
                           (ii)  nutritionist services; and
               (2)  does not include an expense for:
                     (A)  administrative or operational costs, other
  than administrative or operational costs described by Subdivision
  (1); or
                     (B)  fixed capital asset costs.
         (b)  The executive commissioner by rule shall establish an
  annual patient care expense ratio, including a process for
  determining the ratio, applicable to the reimbursement of nursing
  facility providers for providing services to recipients under the
  medical assistance program. In establishing the ratio, the
  executive commissioner shall require that at least 85 percent of
  the portion of the medical assistance reimbursement amount paid to
  a nursing facility that is attributable to patient care expenses is
  spent on reasonable and necessary patient care expenses.
         (c)  The executive commissioner shall adopt rules necessary
  to ensure each nursing facility provider that participates in the
  medical assistance program complies with the patient care expense
  ratio adopted under this section.
         (d)  Except as provided by Subsection (e) and to the extent
  permitted by federal law, the commission may recoup all or part of
  the medical assistance reimbursement amount paid to a nursing
  facility that is subject to the patient care expense ratio under
  this section if the facility fails to spend the reimbursement
  amount in accordance with the patient care expense ratio.
         (e)  The commission may not recoup a medical assistance
  reimbursement amount under Subsection (d) if, during the period
  patient care expenses attributable to the reimbursement amount are
  calculated, the facility:
               (1)  held at least a four-star rating under the Centers
  for Medicare and Medicaid Services five-star quality rating system
  for nursing facilities in two or more of the following categories:
                     (A)  overall;
                     (B)  health inspections;
                     (C)  staffing; and
                     (D)  long-stay quality measures;
               (2)  both:
                     (A)  maintained an average daily occupancy rate of
  75 percent or less; and
                     (B)  spent at least 70 percent of the portion of
  the reimbursement amount paid to the facility that was attributable
  to patient care expenses on reasonable and necessary patient care
  expenses; or
               (3)  incurred expenses related to a disaster for which
  the governor issued a disaster declaration under Chapter 418,
  Government Code.
         (f)  The commission shall publish and maintain on the
  commission's Internet website a list of all nursing facilities from
  which the commission recouped medical assistance reimbursement
  amounts under Subsection (d).
         (g)  The commission may not require a nursing facility to
  comply with the patient care expense ratio as a condition of
  participation in the medical assistance program.
         (h)  This section does not apply to a state-owned facility.
         SECTION 6.  Sections 32.028(g), (i), and (m), Human
  Resources Code, are repealed.
         SECTION 7.  (a) The Health and Human Services Commission
  shall, subject to this section, require compliance with the initial
  annual patient care expense ratio adopted under Section 32.0286,
  Human Resources Code, as added by this Act, beginning on September
  1, 2025.
         (b)  The Health and Human Services Commission shall, in a
  contract between the commission and a managed care organization
  under Chapter 540, Government Code, that is entered into or renewed
  on or after the effective date of this Act, require the managed care
  organization to comply with Section 540.0283, Government Code, as
  added by this Act.
         (c)  The Health and Human Services Commission shall seek to
  amend contracts entered into with managed care organizations under
  Chapter 533 or 540, Government Code, before the effective date of
  this Act to require those managed care organizations to comply with
  Section 540.0283, Government Code, as added by this Act. To the
  extent of a conflict between that section and a provision of a
  contract with a managed care organization entered into before the
  effective date of this Act, the contract provision prevails.
         SECTION 8.  Not later than November 1, 2027, the Health and
  Human Services Commission shall prepare and submit to the
  legislature a written report that includes an assessment of the
  impact of the patient care expense ratio established under Section
  32.0286, Human Resources Code, as added by this Act, on nursing
  facility care provided to Medicaid recipients during the preceding
  state fiscal biennium, including the impact on the cost and quality
  of care and any other information the commission determines
  appropriate.
         SECTION 9.  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 10.  This Act takes effect September 1, 2025.