HBA-JRA S.B. 1248 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1248 By: Nelson Public Health 4/21/1999 Engrossed BACKGROUND AND PURPOSE 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 information. RULEMAKING AUTHORITY 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 BY SECTION ANALYSIS SECTION 1. Amends Section 32.042, Human Resources Code, as follows: Sec. 32.042. INFORMATION REQUIRED FROM HEALTH INSURERS. (a) Includes the 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: Sec. 32.0421. ADMINISTRATIVE PENALTY FOR FAILURE TO PROVIDE INFORMATION (a) Authorizes HHS to impose an administrative penalty on a person who is not in compliance with a request for information made under Section 32.042(b). (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 Code. 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.