HBA-MPM H.B. 2896 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2896
By: Coleman
Public Health
3/30/1999
Introduced



BACKGROUND AND PURPOSE 

In 1993, Texas began the transition to managed care for certain recipients
of Medicaid services, with pilot programs in Travis County and the
tri-county area of Jefferson, Chambers, and Galveston counties.  Since that
time, Medicaid managed care has been implemented in four additional service
areas:  Bexar, Tarrant, Lubbock, and Harris Counties.  The Dallas County
and El Paso County service areas are scheduled for implementation in the
fall of 1999, which would bring total enrollment in Medicaid managed care
to more than 800,000 individuals. 

The transition to Medicaid managed care has produced difficulties with
client enrollment, access to services, and provider reimbursement.  The
Health and Human Services Commission and the Texas Department of Health
jointly operate the Medical program and are charged with ensuring that the
implementation of Medicaid managed care meets the state's goals of
improving the health of needy Texans while realizing cost efficiencies in
the system. 

H.B. 2896 places a moratorium on future implementation of Medicaid managed
care until the commission demonstrates that certain issues are resolved.
Additionally, this bill requires the commission to develop rules regarding
the sharing of annual profit earned by Medicaid managed care.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Health and Human Services
Commission in SECTION 7 (Section 533.014, Government Code), of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 533.002, Government Code, as follows:

Sec. 533.002.  PURPOSE.  Includes developing strategies to encourage more
personal responsibility in health care maintenance and decisions among
those tenets that are required to be set forth by the Health and Human
Services Commission (commission) when contracting with managed care
organizations (organizations).  Makes a nonsubstantive change. 

SECTION 2. Amends Section 533.003, Government Code, as follows:

Section 533.003.  CONSIDERATIONS IN AWARDING CONTRACTS.  Requires the
commission, in awarding contracts to organizations, to give extra
consideration to organizations demonstrating provider-friendly policies,
such as flexible authorization periods and policies, electronic billing,
and electronic payment, in addition to other considerations. Makes
nonsubstantive changes. 

SECTION 3.  Amends Section 533.005, Government Code, as follows:

Section 533.005.  REQUIRED CONTRACT PROVISIONS.  Provides that a contract
between an organization and the commission for the organization to provide
health care  services to recipients must contain, in addition to other
procedures and requirements, a prohibition that the managed care plan not
delegate any function or functions to a physician network that includes
exclusivity clauses in its contracts with physicians or other providers and
a requirement that the organization provide patient education and referral
through a 24hour hotline which adheres to certain procedures. Makes a
nonsubstantive change. 

SECTION 4.  Amends Subchapter A, Chapter 533, Government Code, by adding
Section 533.0055, as follows: 

Sec. 533.0055.  EXTERNAL REVIEW OF CONTRACTS.  (a)  Requires the commission
to contract with an external entity to review proposed contracts between
the commission and managed care plans in each region and comment on
proposed premium rates, sanctions for failure to meet performance goals,
and other areas as directed by the commission.   

(b)  Requires the commission to enter into a contract with an external
entity no later than 120 days prior to the reenrollment date for a region.
Requires the entity to report to the commission no later than 60 days prior
to the reenrollment date for a region. 

SECTION 5.  Amends Section 533.007, Government Code, by adding Subsection
(g), as follows: 

(g)  Requires the commission to evaluate and report on the performance of
all managed care plans and other contractors to the state participating in
support of the Medicaid managed care program.  Requires the commission to
hold all plans and any other contractors to the state who participate in
support of the program to equal standards of accountability. 

SECTION 6.  Amends Section 533.0075, Government Code, as follows:

Sec. 533.0075.  RECIPIENT ENROLLMENT.  Requires the commission to develop
and implement an expedited process for determining eligibility and
enrolling pregnant women into Medicaid and ensure immediate access to
prenatal services, among other requirements. Makes nonsubstantive changes. 

SECTION 7.  Amends Subchapter A, Chapter 533, Government Code, by adding
Sections 533.012533.016, as follows: 

Sec. 533.012.  MORATORIUM ON IMPLEMENTATION; REVIEW; REPORT.  (a) Prohibits
the commission from implementing Medicaid managed care or Medicaid
long-term care pilot programs in any additional regions after
implementation of Medicaid managed care or Medicaid long-term care pilot
programs in currently bid and contracted regions until the commission
reviews certain data and submits a report to the governor and the 77th
Legislature including certain information and recommendations. 

(b) Requires the commission to submit the report by January 1, 2001.

Sec. 533.013.  PREMIUM RATE DETERMINATION; REVIEW AND COMMENT.  (a)
Requires the commission, in determining premium rates paid to managed care
plans, to consider certain factors with respect to a particular region. 

(b) Requires the Texas Department of Insurance (department) to concurrently
review and comment on the premium rates developed by the commission, with
special focus on the requirements set forth in Subsection (a). 

Sec. 533.014.  PROFIT SHARING.  (a)  Requires the commission to develop
rules regarding the sharing of annual profit earned by managed care plans
under the Medicaid program. Requires the rules to make certain provisions
with respect to annual profit. 

(b)  Requires all profit shared with the state or returned to the state
under this section to be deposited into the state's general revenue fund. 
 
Sec. 533.015.  UNIFORM DOCUMENT REVIEW.  Requires the commission to develop
and administer a single uniform procedure for review and approval or
disapproval each document that the state requires an organization to submit
for approval.  Requires that the commission mandate that each agency
involved in administering Medicaid managed care for acute or long-term care
use this system. 

Sec. 533.016.  COORDINATION OF MEDICAID LONG-TERM CARE PILOTS.  Requires
the commission, if it delegates all or part of its functions, powers, and
duties under Section 532.002, Subchapter B, or Subchapter C, Government
Code, related to long-term care, including but not limited to the operation
of pilot projects, to designate a single lead agency to ameliorate the
impact of multiple agencies responsible for the functions related to
longterm care.  Requires the commission to ensure that long-term care is
administered as efficiently and effectively as if it were administered by a
single state agency. 

SECTION 8.  Repealer:  Chapter 1153, Section 2.07 (Development of New
Provider Contract), Government Code (Acts of the 75th Legislature, Regular
Session, 1997).  This section states that as soon as possible after the
effective date of this section, the commission is required to develop a new
provider contract for health care services that contains provisions
designed to strengthen the commission's ability to prevent provider fraud
under the state Medicaid program.  Sets forth the process by which this
contract shall be implemented. 

SECTION 9.Emergency clause.
  Effective date: upon passage.