HBA-JRA H.B. 1710 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1710
By: Maxey
Public Health
3/18/1999
Introduced



BACKGROUND AND PURPOSE 

In 1997, the 75th Texas Legislature approved a measure to improve the
state's efforts to combat Medicaid fraud and overpayments and directed the
Comptroller of Public Accounts to study the size and nature of fraud and
overpayments in the state's health care programs.  The comptroller made
several recommendations for improving the management of insurance fraud,
one of which was to prevent fraud in companies that contract with the state
for health care services.  H.B. 1710 requires managed care organizations
contracting with the Health and Human Services Commission (HHS) to report
to HHS descriptions of the fraud control programs used by their
subcontractors and requires HHS's office of investigations and enforcement
to review the information submitted. 

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 A, Chapter 533, Government Code, by adding
Section 533.012, as follows: 

Sec. 533.012.  INFORMATION FOR FRAUD CONTROL.  (a)  Requires each managed
care organization contracting with Health and Human Services Commission
(HHS) or an agency operating part of the state Medicaid managed care
program, as appropriate, under this chapter (Implementation of Medicaid
Managed Care Program), to submit to HHS a description of any financial or
other business relationship between the organization and any subcontractor
providing health care services under the contract, a copy of any such
contract relating to the delivery of or payment for health care services,
and a description of the fraud control program used by any subcontractor
that delivers health care services. 

(b)  Requires each managed care organization contracting with HHS under
this chapter to submit to HHS specific information relating to each
encounter in which a health care service was provided to a recipient under
the contract. 

(c)  Requires the above information to be submitted in the form and updated
as required by HHS. 

(d)  Requires HHS's office of investigations and enforcement to review the
information submitted under this section as appropriate in the
investigation of fraud in the Medicaid managed care program.  Authorizes
the Comptroller of Public Accounts to review the information in connection
with its health care fraud study. 

SECTION 2.  Amends Section 533.005, Government Code, to provide that a
contract between a managed care organization and HHS for the organization
to provide health care services to recipients must contain a requirement
that the managed care organization provide the information required by
Section 533.012 and otherwise comply and cooperate with HHS's office of
investigations and enforcement.  Makes conforming changes. 

 SECTION 3.  Makes application of SECTION 2 of this Act prospective.

SECTION 4.Emergency clause.
  Effective date: upon passage.