HBA-CCH H.B. 2906 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2906 By: Eiland Human Services 3/21/2001 Introduced BACKGROUND AND PURPOSE The Texas Medicaid program supports approximately 65,000 nursing home residents. The current Texas daily reimbursement rate for the care of each nursing home resident is $81 per day, more than $20 per day less than the national average. The reimbursement rate can be increased with additional provider fees that would be collected by the state and then used to draw down matching funds from the federal Medicaid program. The collected funds, combined with the federal match, would then be returned to the nursing homes in the Medicaid reimbursement rate. It is estimated that a 6 percent quality assurance fee combined with a federal match could bring $225 million to $250 million to Texas that could then be used to improve the quality of nursing home care. House Bill 2906 establishes a quality assurance fee for nursing homes that is equal to six percent of the institution's gross receipts from its operations in Texas. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Department of Human Services in SECTION 1 (Section 242.0341, Health and Safety Code) of this bill. ANALYSIS House Bill 2906 amends the Health and Safety Code to impose a quality assurance fee, in addition to other fees, on each nursing home for which a license fee must be paid. The bill requires the Health and Human Services Commission (HHSC) or the Texas Department of Human Services (DHS) at the direction of HHSC to collect the fee, and provides that the fee is equal to six percent of the institution's gross receipts from its operations in Texas, payable monthly, and an allowable cost for reimbursement under the state Medicaid program. The bill sets forth provisions for nursing homes to pay the fee, and verify the amount of the fee and submit the required information at the appropriate time. The bill provides that amounts received are to be appropriated only for the purposes of paying the cost of administering the fee and increasing the rate of reimbursement paid to institutions under the state Medicaid program. HHSC or DHS, at the direction of HHSC, is required to devise the formula by which amounts received increase the rate of reimbursement paid to institutions under the state Medicaid program. The bill requires DHS to adopt rules to require nursing homes to provide higher quality of care for residents as a result of the higher rate of reimbursement. If HHSC determines that the imposition of the fee and the expenditure of amounts collected will not entitle the state to receive additional federal funds under the Medicaid program, the quality assurance fee may not be imposed and collected, and DHS is not required to adopt rules or enforce rules already adopted under these provisions. EFFECTIVE DATE September 1, 2001.