HBA-MPM H.B. 1223 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1223
By: Coleman
Human Services
3/28/2001
Introduced



BACKGROUND AND PURPOSE 

In 1993, Texas began the transition to managed care for certain recipients
of Medicaid services with pilot programs in Travis County and in the
tri-county area of Jefferson, Chambers, and Galveston counties. Since that
time, Medicaid managed care has been implemented in six additional service
areas.  In fiscal year 2000, 29 percent of Texas Medicaid clients and most
of the state's major urban areas were in Medicaid managed care.  The
transition to Medicaid managed care posed difficulties with client
enrollment, access to services, and provider reimbursement.  The 76th Texas
Legislature passed legislation that imposed a moratorium on future
implementations of Medicaid managed care until July 1, 2001, and required
the Health and Human Services Commission (HHSC) to conduct a comprehensive
study of Medicaid managed care in Texas. The study concluded that Medicaid
managed care has succeeded in providing Medicaid enrollees with a medical
home, improved access to services, and better case management.  However,
the study also identified continuing concerns about Medicaid managed care,
including a high level of administrative complexity for providers that
hinders timely reimbursement, low rates of reimbursement for providers,
eligibility rules for children that do not provide continuity of care,
burdensome regulation of managed care organizations, and lack of timely and
accurate data about the program.  House Bill 1223 continues the moratorium
on the future implementation of Medicaid managed care programs and sets
forth provisions to address the concerns in existing programs as identified
by HHSC. 

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

House Bill 1223 amends the Government Code to require the Health and Human
Services Commission (HHSC) to: 

_evaluate the number of managed care organizations contracted with HHSC to
provide health care services to Medicaid recipients within each health care
service region, with a focus on the market share of each managed care
organization; and 

_limit the number of managed care organizations contracted with HHSC in a
manner that will promote successful implementation of health care service
delivery to Medicaid recipients through managed care (Sec. 533.0035). 

The bill requires HHSC to develop and assess administrative penalties for
failure to meet the required contract (Sec. 533.0055).  The bill requires
HHSC when renewing a contract for services provided by a third party on
behalf of the state Medicaid program to ensure that the contract's renewal
date coincides with the beginning of a state fiscal year (Sec. 533.0056). 

The bill requires HHSC to require all entities contracted with the state
Medicaid program to conduct outreach to locate eligible recipients and
provide education to recipients regarding the processes of  managed care
(Sec. 533.0085).  The bill prohibits HHSC or a health and human services
agency from implementing managed care for substance abuse delivery or
protective and regulatory services (Sec. 533.0125). 

The bill authorizes HHSC to contract with a third party to assist with
negotiation of rates paid to managed care organizations or any other entity
contracted with HHSC or a health and human services agency to perform
administrative services for the state Medicaid program (Sec. 533.0135). 

H.B. 1223 requires HHSC to streamline on-site inspection procedures of
managed care organizations contracting with HHSC as well as reporting
requirements for managed care organizations with HHSC.   The bill also
requires HHSC to require managed care organizations contracting with HHSC
to reduce the administrative burden placed on providers (Sec. 533.016). 

The bill requires HHSC in cooperation with the Texas Department of
Insurance to require managed care organizations providing health care
services to Medicaid recipients to eliminate preauthorization requirements
for routine health care services customarily approved by the managed care
organizations, and develop procedures for identifying the services for
which preauthorization requirements should be eliminated and ensure that
health care providers receive notice of services that require
preauthorization (Sec. 533.017). 

The bill requires HHSC to develop uniform forms for referral of services,
credentialing of health care providers providing health care services to
Medicaid recipients, and preauthorization for health care services
delivered to recipients.  HHSC shall require managed care organizations to
use the forms and revise its contracts with managed care organizations to
reflect this requirement (Sec. 533.018). 

The bill requires HHSC to develop a uniform assessment tool for managed
care organizations to use in identifying members with a disability or
condition requiring chronic and long term care (Sec. 533.019). 

The bill prohibits HHSC from implementing a Medicaid managed care pilot
program, Medicaid behavioral health pilot program, or Medicaid Star + Plus
pilot program in a region in which HHSC is not currently operating a pilot
program.  This provision expires July 1, 2003 (Sec. 533.012). 

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.