HBA-MPM C.S.H.B. 1001 77(R)    BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 1001
By: Naishtat
Human Services
4/3/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

The House Human Services Committee reports that both industry
representatives and nursing home resident advocacy groups point to the
methodology for calculating Medicaid reimbursement rates as an underlying
cause for much of the nursing home industry's problems.  The current
methodology may not accurately reflect all justifiably reimbursable costs
of doing business.  In addition, the current Texas Index for Level of
Effort (TILE) reimbursement system does not always reflect the true
resource needs of residents.  For example, facilities generally receive the
lowest rate of reimbursement for patients with Alzheimer's or related
dementia, even though caring for these patients demands more staff time.
Furthermore, the reimbursement methodology needs to provide incentives for
increased direct care spending.  C.S.H.B. 1001 requires the Health and
Human Services Commission and the Department of Human Services to review
the base reimbursement methodology for nursing home care.  

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. 

ANALYSIS

C.S.H.B. 1001 requires the Health and Human Services Commission (HHSC) in
conjunction with the Texas Department of Human Services (DHS) to evaluate
the methodology and rates used for determining Medicaid reimbursement rates
for nursing facilities.  The bill requires HHSC and DHS to:  

_consider including legitimate costs of doing business that are currently
not in the reimbursement rate; 

_explore methods to adjust the reimbursement rate to account for sudden
increases in liability insurance rates and other business costs; 

_evaluate the effectiveness of the Medicaid nursing facility (facility)
reimbursement rate methodology in providing incentives for increased direct
staffing; 

_examine the possibility of adding incentives to improve the care, diet,
and quality of life for facility residents  

_examine the possibility of developing a system of adjusted Medicaid
reimbursement for facilities with a high-level of performance based on
quality indicators established in this bill; 

_examine any inadequacies of the current flat-rate system in accounting for
regional and facilityspecific differences in the cost of providing care and
explore alternatives to the flat-rate system; and 

_examine all the current methodology components, including inflation
factors and occupancy  adjustments. 

C.S.H.B. 1001 requires HHSC and DHS to evaluate the Texas Index for Level
of Effort classification system to determine whether the system accurately
accounts for the care needs of patients with dementia, including those with
Alzheimer's disease, and in doing so to seek the input of relevant
professionals and other individuals or groups with expertise in caring for
people with these conditions.  The bill requires HHSC to report the results
of the evaluations to the governor, lieutenant governor, and the speaker of
the house of representatives no later than December 1, 2002. 

EFFECTIVE DATE

September 1, 2001.


COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 1001 differs from the original by expanding the topics of
evaluation required to be examined by the Health and Human Services
Commission (HHSC) and the Texas Department of Human Services (DHS) to
include examining the possibility of developing a system of adjusted
Medicaid reimbursement for nursing facilities with a high-level of
performance including specified criteria for indicating quality, examining
any inadequacies of the current flat-rate system in accounting for regional
and facility-specific differences in the cost of providing care, and
examining all current methodology components.  The substitute also requires
HHSC and DHS, when evaluating the Texas Index for Level of Effort
classification system, to seek the input of relevant professionals or other
individuals or groups with expertise in caring for people with specified
medical conditions.