Office of House Bill AnalysisS.B. 1248
By: Nelson
Public Health


Legislators of the 74th and 75th Regular Sessions changed the structure of
the health care industry to ensure that third-party recovery efforts
remained effective by passing bills which covered most health insurance
plans.  The expansion of managed care, the use of claims administrators,
increased use of subcontractors, and numerous corporate health care mergers
have affected Medicaid thirdparty identification and recovery.  State law
governing Medicaid data matches does not specify any penalty for
noncompliance.  Although current law requires insurers to provide Medicaid
information, few carriers submit all of the information requested.  While
this data is enough to conduct data matches to identify and verify policies
that cover Medicaid-eligible recipients, it is not sufficient to conduct
post-payment, third-party recovery activities.  Potential claims against
several entities refusing to participate are estimated to total several
million dollars in federal and state funds. 

S.B. 1248 mandates requirements for health insurers' participation in
Medicaid data matches by requiring them to maintain more comprehensive
information regarding insured persons and their dependents in their filing
system.  This bill also imposes an administrative penalty on those who are
not in compliance with a request for information, and requires the Health
and Human Services Commission to enter into an agreement to reimburse an
insurer for necessary and reasonable costs incurred in providing requested


It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 


SECTION 1.  Amends Section 32.042, Human Resources Code, as follows:

address, including claim submission address, and group policy number of
each subscriber or policyholder covered by an insurer among the information
that is required to be maintained in a file system by an insurer.  Requires
the name, address, including claim submission address, and date of birth of
each dependent of each subscriber or policyholder covered by the insurer to
be additionally maintained in a file system by the insurer. 

(b)  Provides that a plan, rather than a third-party administrator, is
subject to this subsection, regarding identification of state medical
assistance recipients with third-party health coverage or other insurance
provided by this subsection, to the extent the information described in it
is made available to the plan administrator from the plan. 

(c)  Prohibits an insurer from being required to provide information in
response to a request under this section more than once every six months,
rather than once during a calendar year. 

(d)  Makes no changes.

(e)  Requires the Health and Human Services Commission (HHS) to enter into
an  agreement to reimburse an insurer for necessary and reasonable costs
incurred in providing information requested under this section.  Deletes
the requirement that the procedures agreed to under this subsection must
include financial arrangements to reimburse an insurer for necessary costs
incurred in providing the requested information. 

(f)  Makes no changes.

(g)  Makes no changes.

(h)  Makes this section applicable to a plan administrator in the same
manner and to the same extent as an insurer if the plan administrator has
the information necessary to comply with the applicable requirement. 

(i)  Redesignated from Subsection (h).  Defines "plan administrator" as a
third-party administrator, prescription drug payer or administrator,
pharmacy benefit manager, or dental payer or administrator. Makes
nonsubstantive changes. 

SECTION 2.  Amends Subchapter B, Chapter 32, Human Resources Code, by
adding Section 32.0421, as follows: 

(a)  Authorizes HHS to impose an administrative penalty on a person who is
not in compliance with a request for information made under Section

(b)  Prohibits the penalty from exceeding $10,000 for each day of
noncompliance that occurs after the 180th day after the date of the
request.  Requires the amount to be based on certain factors.  

(c)  Authorizes the enforcement of the penalty to be stayed during the time
the order is under judicial review if the person pays the penalty to the
clerk of the court or files a supersedeas bond with the court in the amount
of the penalty.  Authorizes a person who is unable to pay the penalty or
file the bond to stay the enforcement by filing an affidavit as required by
the Texas Rules of Civil Procedure for a party who is unable to file
security for costs, subject to the right of HHS to contest the affidavit as
provided by those rules.  

(d)  Authorizes the attorney general to sue to collect the penalty.

(e)  Provides that a proceeding to impose the penalty is considered a
contested case under Chapter 2001 (Administrative Procedure), Government

SECTION 3.  Requires HHS to submit a report to the legislature relating to
third-party Medicaid recoveries made by HHS under Section 32.042, Human
Resources Code, as amended by this Act, by September 1, 2000.  Provides
that the report must include cost avoidance and cost savings from liable
third parties and recommendations to increase the amount of recoveries made
by HHS. 

SECTION 4.  Effective date: September 1, 1999.

SECTION 5.  Emergency clause.