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.