HBA-MPM S.B. 1156 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1156 By: Zaffirini Public Health 4/30/2001 Engrossed BACKGROUND AND PURPOSE Currently, the state of Texas and the nation are experiencing an increase in cost per Medicaid recipient due to the general rise in health care utilization, the recent rise in caseload, the increasing utilization and prices of prescription drugs, and a comparative decrease in federal funding. Senate Bill 1156 contains provisions for Medicaid reform, including the establishment of a demonstration project to provide individuals with psychotropic medications and related services, the establishment of a Medicaid Legislative Oversight Committee (committee), the transfer of authority relating to the administration of the Medicaid program from the Texas Department of Health to the Health and Human Services Commission if approved by the committee, and additional reporting and budgetary requirements. 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 Senate Bill 1156 amends the Human Resources Code to require the Health and Human Services Commission (HHSC) in its rules and standards governing the Medicaid vendor drug program to provide for cost-sharing by recipients of prescription drug benefits under Medicaid program in a manner that ensures that recipients with higher levels of income are required to pay progressively higher percentages of the costs of prescription drugs (Sec. 32.024). The bill requires HHSC in its adoption of reasonable rules and standards governing the allocation of any funds appropriated for rate increases for physician services and outpatient services to establish a provider reimbursement methodology that recognizes and rewards high volume providers (Sec. 32.028). S.B. 1156 requires HHSC to establish a demonstration project to provide psychotropic medications and related laboratory and medical services to a person through Medicaid. The bill sets forth the eligibility criteria for participation in the project and requires HHSC to provide each participant in the project with a 12-month period of continuous eligibility for participation in the project. The bill specifies that participation in the project does not entitle a participant to other services provided under Medicaid. The bill requires HHSC to establish an appropriate enrollment limit and once the limit is reached, to establish a waiting list for enrollment in the project. HHSC is authorized to the extent permitted by federal law to require a participant in the project to make cost-sharing payments for services provided through the project. HHSC is required to use existing resources to fund the project to the maximum extent possible. The bill sets forth reporting and evaluation requirements. The program ends September 1, 2009 (Sec. 32.053). S.B. 1156 amends the Government Code to require HHSC to develop and implement strategies to improve management of the cost, quality, and use of services provided under the Medicaid program to achieve administrative efficiency and cost savings (Sec. 531.02103) To achieve these goals as well as increased accountability the bill authorizes HHSC to transfer authority relating to administration of the Medicaid program from a health and human services agency to HHSC, it the transfer is approved by the Medicaid legislative oversight committee (committee) established by the bill (Secs. 531.02101 and 531.02102 and SECTION 14). The bill sets forth provisions for the transfer from the Texas Department of Health to HHSC on January 1, 2002 or an earlier date specified by HHSC (SECTION 11). The bill provides that HHSC must notify the Legislative Budget Board and the governor's office of budget and planning no later than the 30th day before the effective date of an authorized transfer (Sec. 531.02101). The bill requires the lieutenant governor and speaker of the house of representatives to appoint the committee members as soon as possible after this bill takes effect (SECTION 14). The bill requires HHSC to submit the consolidated health and human services budget to the lieutenant governor, the speaker of the house of representatives, the comptroller, the governor's office of planning and budget, each member of the appropriations committees of the senate and house of representatives, and each member of the standing committees of the senate and house of representatives with responsibility for oversight of health and human services issues (Sec. 531.026). The bill requires HHSC to include in the consolidated budget recommendation a consolidated Medicaid appropriations request for the subsequent fiscal biennium and to prepare a comprehensive Medicaid operating budget at the beginning of each fiscal year and sets forth provisions for the development of the request and budget. The bill also requires HHSC to monitor all Medicaid expenditures and submit quarterly expenditure reports (Secs. 531.0261 and 531.0272). The bill requires HHSC no later than December 1 of each even-numbered year to prepare and deliver to the governor, lieutenant governor, speaker of the house of representatives and each member of the legislature a report that identifies the Medicaid reimbursement rates for each county in Texas and compares the state's Medicaid reimbursement rates to those of the top 15 industrial states (Sec. 531.055). S.B. 1156 requires HHSC to evaluate on-site inspection procedures of managed care organizations (organizations) contracting with HHSC for purposes of providing services under the Medicaid managed care program (program) and methods to streamline inspection procedures and reporting requirements. The bill also requires HHSC to require the organizations to evaluate reporting requirements to identify methods of reducing the administrative burden of health care providers. The bill requires HHSC to submit a report on streamlining methods to the legislature no later than November 1, 2002. This provision expires September 1, 2002 (Sec. 533.0055 and SECTION 13). HHSC shall require a health and human services agency (agency) implementing a Medicaid managed care program to provide to each other agency implementing the program information reported to that agency by an organization or health care provider providing services to recipients (Sec. 533.016). EFFECTIVE DATE September 1, 2001. Provisions related to the demonstration projects for psychotropic medications, the evaluation of reporting requirements and inspection procedures for Medicaid managed care take effect on passage, or if the Act does not receive the necessary vote, the provisions take effect September 1, 2001.