HBA-NMO S.B. 1585 76(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 1585
By: Zaffirini
Public Health
4/26/1999
Engrossed



BACKGROUND AND PURPOSE 

The Texas Department of Health (TDH) administers the state's Medicaid
Vendor Program, which serves approximately two million Medicaid recipients
through more than 3,800 state pharmacies. Pharmacies' claims under this
program are processed through an automated system operated by the Texas
Department of Human Services (DHS).  This claim processing must compete
with other transactions overseen by DHS.  

The comptroller of public accounts recently determined that 38 states other
than Texas outsource the processing of Medicaid prescription drug claims.
In California, the cost of an outsourced arrangement is nine cents per
claim. By contrast, TDH estimates its transactions cost at about 10.6 cents
per transaction for the 1998 fiscal year. 

S.B. 1585 requires TDH to seek competitive bids for the claims processing
functions of the vendor drug program. 

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 Subchapter B, Chapter 32, Human Resources Code, by
adding Section 32.0461, as follows: 

Section 32.0461.  VENDOR DRUG PROGRAM; COMPETITIVE BIDDING. (a)  Requires
the Texas Department of Health (TDH), in consultation and coordination with
the State Council on Competitive Government (council), to seek competitive
bids for the claims processing function of the vendor drug program.
Authorizes TDH and the Texas Department of Human Services to submit a bid
proposal under this section in the same manner as a private entity. 

(b)  Requires TDH to require any person seeking to contract for services
under this section to comply with competitive bidding procedures adopted by
TDH. 

(c)  Authorizes TDH to award a contract under this section to another
person only if the Health and Human Services Commission (HHSC) and the
council determine that the provision of services under that contract would
be more cost effective and the time to process claims under the contract
would be the same as or faster than having HHSC employees continue to
process claims. 

SECTION 2.  Effective date:  September 1, 1999.

SECTION 3.  Emergency clause.