HBA-SEB, MPM C.S.S.B. 1331 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 1331 By: Moncrief Public Health 5/13/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE With the rollout of Medicaid managed care in Texas, the state has yet to evaluate the impact of managed care on both quality of care and costs. C.S.S.B.1331 requires the Texas Department of Health (TDH) to contract with an independent auditor to perform annual independent external financial and performance audits of any Medicaid contractor used by TDH in its operation of a part of the state Medicaid program. This bill prohibits the Health and Human Services Commission (HHSC) from implementing certain Medicaid pilot programs in a region for which HHSC has not received a bid from or entered into a contract with a managed care organization to provide health care services to recipients in the region through a managed care plan. C.S.S.B. 1331 also requires HHSC to review the impact of the Medicaid managed care delivery system. 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 12, Health and Safety Code, by adding Section 12.0123, as follows: Sec. 12.0123. EXTERNAL AUDITS OF CERTAIN MEDICAID CONTRACTORS. Defines "Medicaid contractor." Requires the Texas Department of Health (TDH) to contract with an independent auditor to perform annual independent external financial and performance audits of any Medicaid contractor used by TDH in its operation of a part of the state Medicaid program. Requires TDH to ensure that audit procedures are used consistently. Sets forth the time frame for an audit to be conducted. SECTION 2. Amends Subchapter A, Chapter 533, Government Code, by adding Section 533.012, as follows: Sec. 533.012. MORATORIUM ON IMPLEMENTATION OF CERTAIN PILOT PROGRAMS; REVIEW; REPORT. (a) Prohibits the Health and Human Services Commission (HHSC) from implementing certain Medicaid pilot programs in a region for which HHSC has not received a bid from or entered into a contract with a managed care organization to provide health care services to recipients in the region through a managed care plan, notwithstanding any other law. (b) Requires HHSC to review any outstanding administrative and financial issues with respect to Medicaid pilot programs implemented in health care service regions. Requires HHSC to review the impact of the Medicaid managed care delivery system, including managed care organizations, prepaid health plans, and primary care management on certain related issues. (c) Requires HHSC, in performing its duties under Subsection (b), to consult with certain entities, state agencies, and political subdivisions with a constitutional or statutory obligation to provide health care for the indigent. Authorizes HHSC to coordinate the review with any other study or review that HHSC is required to complete. (d) Authorizes HHSC to implement the Medicaid pilot programs in a region described by Subsection (a) if HHSC finds that outstanding administrative and financial issues with respect to the implementation of those programs in health care service regions have been resolved and that implementation of those programs would benefit both recipients and providers. (e) Requires HHSC, not later than November 1, 2000, to submit a report to the governor and legislature that contains information regarding the resolution of administrative and financial issues, review findings, and recommendations. (f) Prohibits this section, to the extent practicable, from being construed to affect the duty of HHSC to plan the continued expansion of the Medicaid pilot programs in health care regions described by Subsection (a) after July 1, 2001. (g) Provides that this section expires July 1, 2001. SECTION 3. Requires HHSC to request a waiver or authorization from a federal agency if a state agency determines that the waiver or authorization is necessary for implementation of any provision of this Act. Authorizes HHSC to delay implementation until the waiver or authorization is granted. SECTION 4.Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original to expand the idea of the original. The substitute requires the Texas Department of Health (TDH) to perform a financial and performance audit of Medicaid contractors. The substitute requires the Health and Human Services Commission (HHSC) to review outstanding issues relating to certain Medicaid pilot programs and to review the impact of the Medicaid managed care delivery system. The original would have required HHSC to assess the effectiveness of certain managed care contracts prior to the issuance of documents relating to additional contracts with managed care organizations. The substitute modifies the original in by adding a new SECTION 1, which amends Subchapter B, Chapter 12, Health and Safety Code, by adding Section 12.0123 (External Audits of Certain Medicaid Contractors). For more information regarding this new SECTION, please see the Sectionby-Section Analysis in this document. SECTION 1 of the original would have amended Section 2, Chapter 1262, Acts of the 75th Legislature, Regular Session 1997, by adding Subsections (i) and (j), to require HHSC to assess the effectiveness of current managed care contracts, as stated above. The substitute modifies the original by adding a new SECTION 2, which Amends Subchapter A, Chapter 533, Government Code, by adding Section 533.012 (Moratorium on Implementation of Certain Pilot Programs; Review; Support). For more information regarding this new SECTION, please see the Section-by-Section Analysis in this document. SECTION 2 of the original would have required the assessment to be completed and a report to be submitted to certain government officials by December 1, 2000. The substitute modifies the original by adding a new SECTION 3 to require HHSC to request a waiver or authorization from a federal agency if a state agency determines that the waiver or authorization is necessary for implementation of any provision of this Act. The substitute authorizes HHSC to delay implementation until the waiver or authorization is granted. SECTION 3 of the original would have set forth the conditions of the effectiveness of this Act with respect to the General Appropriations Act.