Bill Text: TX HB3982 | 2017-2018 | 85th Legislature | Comm Sub

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Bill Title: Relating to the Medicaid program, including the administration and operation of the Medicaid managed care program.

Sponsorship: Partisan Bill (Democrat 2)

Status: (Introduced - Dead) 2017-05-10 - Placed on General State Calendar [HB3982 Detail]

Download: Texas-2017-HB3982-Comm_Sub.html

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85R24666 KFF-F
By: Raymond H.B. No. 3982
Substitute the following for H.B. No. 3982:
By: Minjarez C.S.H.B. No. 3982

A BILL TO BE ENTITLED
AN ACT
relating to the Medicaid program, including the administration and
operation of the Medicaid managed care program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 531.024172, Government Code, is amended
to read as follows:
Sec. 531.024172. ELECTRONIC VISIT VERIFICATION SYSTEM;
REIMBURSEMENT OF CERTAIN RELATED CLAIMS. (a) Subject to
Subsection (g), [In this section, "acute nursing services" has the
meaning assigned by Section 531.02417.
[(b) If it is cost-effective and feasible,] the commission
shall, in accordance with federal law, implement an electronic
visit verification system to electronically verify [and document,]
through a telephone, global positioning, or computer-based system
that personal care services or attendant care services provided to
recipients under Medicaid, including personal care services or
attendant care services provided under the Texas Health Care
Transformation and Quality Improvement Program waiver issued under
Section 1115 of the federal Social Security Act (42 U.S.C. Section
1315) or any other Medicaid waiver program, are provided to
recipients in accordance with a prior authorization or plan of
care. The electronic visit verification system implemented under
this subsection must allow for verification of only the following[,
basic] information relating to the delivery of Medicaid [acute
nursing] services[, including]:
(1) the type of service provided [the provider's
name];
(2) the name of the recipient to whom the service is
provided [the recipient's name]; [and]
(3) the date and times [time] the provider began
[begins] and ended the [ends each] service delivery visit;
(4) the location, including the address, at which the
service was provided;
(5) the name of the individual who provided the
service; and
(6) other information the commission determines is
necessary to ensure the accurate adjudication of Medicaid claims.
(b) The commission shall establish minimum requirements for
third-party entities seeking to provide electronic visit
verification system services to health care providers providing
Medicaid services and must certify that a third-party entity
complies with those minimum requirements before the entity may
provide electronic visit verification system services to a health
care provider.
(c) The commission shall inform each Medicaid recipient who
receives personal care services or attendant care services that the
health care provider providing the services and the recipient are
each required to comply with the electronic visit verification
system. A managed care organization that contracts with the
commission to provide health care services to Medicaid recipients
described by this subsection shall also inform recipients enrolled
in a managed care plan offered by the organization of those
requirements.
(d) In implementing the electronic visit verification
system:
(1) subject to Subsection (e), the executive
commissioner shall adopt compliance standards for health care
providers; and
(2) the commission shall ensure that:
(A) the information required to be reported by
health care providers is standardized across managed care
organizations that contract with the commission to provide health
care services to Medicaid recipients and across commission
programs; and
(B) time frames for the maintenance of electronic
visit verification data by health care providers align with claims
payment time frames.
(e) In establishing compliance standards for health care
providers under this section, the executive commissioner shall
consider:
(1) the administrative burdens placed on health care
providers required to comply with the standards; and
(2) the benefits of using emerging technologies for
ensuring compliance, including Internet-based, mobile
telephone-based, and global positioning-based technologies.
(f) A health care provider that provides personal care
services or attendant care services to Medicaid recipients shall:
(1) use an electronic visit verification system to
document the provision of those services;
(2) comply with all documentation requirements
established by the commission;
(3) comply with applicable federal and state laws
regarding confidentiality of recipients' information;
(4) ensure that the commission or the managed care
organization with which a claim for reimbursement for a service is
filed may review electronic visit verification system
documentation related to the claim or obtain a copy of that
documentation at no charge to the commission or the organization;
and
(5) at any time, allow the commission or a managed care
organization with which a health care provider contracts to provide
health care services to recipients enrolled in the organization's
managed care plan to have direct, on-site access to the electronic
visit verification system in use by the health care provider.
(g) The commission may recognize a health care provider's
proprietary electronic visit verification system as complying with
this section and allow the health care provider to use that system
for a period determined by the commission if the commission
determines that the system:
(1) complies with all necessary data submission,
exchange, and reporting requirements established under this
section;
(2) meets all other standards and requirements
established under this section; and
(3) has been in use by the health care provider since
at least June 1, 2014.
(h) The commission or a managed care organization that
contracts with the commission to provide health care services to
Medicaid recipients may not pay a claim for reimbursement for
personal care services or attendant care services provided to a
recipient unless the information from the electronic visit
verification system corresponds with the information contained in
the claim and the services were provided consistent with a prior
authorization or plan of care. A previously paid claim is subject
to retrospective review and recoupment if unverified.
(i) The commission shall create a stakeholder work group
comprised of representatives of affected health care providers,
managed care organizations, and Medicaid recipients and
periodically solicit from that work group input regarding the
ongoing operation of the electronic visit verification system under
this section.
(j) The executive commissioner may adopt rules necessary to
implement this section.
SECTION 2. Subchapter C, Chapter 531, Government Code, is
amended by adding Section 531.1133 to read as follows:
Sec. 531.1133. PROVIDER NOT LIABLE FOR MANAGED CARE
ORGANIZATION OVERPAYMENT OR DEBT. (a) If the commission's office
of inspector general makes a determination to recoup an overpayment
or debt from a managed care organization that contracts with the
commission to provide health care services to Medicaid recipients,
a provider that contracts with the managed care organization may
not be held liable for the good faith provision of services under
the provider's contract with the managed care organization that
were provided with prior authorization.
(b) This section does not:
(1) limit the office of inspector general's authority
to recoup an overpayment or debt from a provider that is owed by the
provider as a result of the provider's failure to comply with
applicable law or a contract provision, notwithstanding any prior
authorization for a service provided; or
(2) apply to an action brought under Chapter 36, Human
Resources Code.
SECTION 3. Section 531.120, Government Code, is amended by
adding Subsection (c) to read as follows:
(c) The commission shall provide the notice required by
Subsection (a) to a provider that is a hospital not later than the
90th day before the date the overpayment or debt that is the subject
of the notice must be paid.
SECTION 4. Section 533.00281, Government Code, is
redesignated as Section 533.0121, Government Code, and amended to
read as follows:
Sec. 533.0121 [533.00281]. UTILIZATION REVIEW AND
FINANCIAL AUDIT PROCESS FOR [STAR + PLUS] MEDICAID MANAGED CARE
ORGANIZATIONS CONDUCTED BY OFFICE OF CONTRACT MANAGEMENT. (a) The
commission's office of contract management shall establish an
annual utilization review and financial audit process for managed
care organizations participating in the [STAR + PLUS] Medicaid
managed care program. The commission shall determine the topics to
be examined in a [the] review [process], except that with respect to
a managed care organization participating in the STAR + PLUS
Medicaid managed care program, the review [process] must include a
thorough investigation of the [each managed care] organization's
procedures for determining whether a recipient should be enrolled
in the STAR + PLUS home and community-based services and supports
(HCBS) program, including the conduct of functional assessments for
that purpose and records relating to those assessments.
(b) The office of contract management shall use the
utilization review and financial audit process established under
this section to review each fiscal year:
(1) each managed care organization [every managed care
organization] participating in the [STAR + PLUS] Medicaid managed
care program in this state for that organization's first five years
of participation; [or]
(2) each managed care organization providing health
care services to a population of recipients new to receiving those
services through a Medicaid [only the] managed care delivery model
for the first three years that organization provides those services
to that population; or
(3) managed care organizations that, using a
risk-based assessment process and evaluation of prior history, the
office determines have a higher likelihood of contract or financial
noncompliance [inappropriate client placement in the STAR + PLUS
home and community-based services and supports (HCBS) program].
(c) In addition to the reviews required by Subsection (b),
the office of contract management shall use the utilization review
and financial audit process established under this section to
review each managed care organization participating in the Medicaid
managed care program at least once every five years.
(d) In conjunction with the commission's office of contract
management, the commission shall provide a report to the standing
committees of the senate and house of representatives with
jurisdiction over Medicaid not later than December 1 of each year.
The report must:
(1) summarize the results of the [utilization] reviews
conducted under this section during the preceding fiscal year;
(2) provide analysis of errors committed by each
reviewed managed care organization; and
(3) extrapolate those findings and make
recommendations for improving the efficiency of the Medicaid
managed care program.
(e) If a [utilization] review conducted under this section
results in a determination to recoup money from a managed care
organization, the provider protections from liability under
Section 531.1133 apply [a service provider who contracts with the
managed care organization may not be held liable for the good faith
provision of services based on an authorization from the managed
care organization].
SECTION 5. Section 533.005, Government Code, is amended by
amending Subsection (a) and adding Subsection (d) to read as
follows:
(a) A contract between a managed care organization and the
commission for the organization to provide health care services to
recipients must contain:
(1) procedures to ensure accountability to the state
for the provision of health care services, including procedures for
financial reporting, quality assurance, utilization review, and
assurance of contract and subcontract compliance;
(2) capitation rates that ensure access to and the
cost-effective provision of quality health care;
(3) a requirement that the managed care organization
provide ready access to a person who assists recipients in
resolving issues relating to enrollment, plan administration,
education and training, access to services, and grievance
procedures;
(4) a requirement that the managed care organization
provide ready access to a person who assists providers in resolving
issues relating to payment, plan administration, education and
training, and grievance procedures;
(5) a requirement that the managed care organization
provide information and referral about the availability of
educational, social, and other community services that could
benefit a recipient;
(6) procedures for recipient outreach and education;
(7) subject to Subdivision (7-b), a requirement that
the managed care organization make payment to a physician or
provider for health care services rendered to a recipient under a
managed care plan offered by the managed care organization on any
claim for payment that is received with documentation reasonably
necessary for the managed care organization to process the claim:
(A) not later than[:
[(i)] the 10th day after the date the claim
is received if the claim relates to services provided by a nursing
facility, intermediate care facility, or group home; and
(B) on average, not later than [(ii)] the 15th
[30th] day after the date the claim is received if the claim,
including a claim that relates to the provision of long-term
services and supports, is not subject to Paragraph (A)
[Subparagraph (i); and
[(iii) the 45th day after the date the claim
is received if the claim is not subject to Subparagraph (i) or (ii);
or
[(B) within a period, not to exceed 60 days,
specified by a written agreement between the physician or provider
and the managed care organization];
(7-a) a requirement that the managed care organization
demonstrate to the commission that the organization pays claims to
which [described by] Subdivision (7)(B) applies [(7)(A)(ii)] on
average not later than the 15th [21st] day after the date the claim
is received by the organization;
(7-b) a requirement that the managed care organization
demonstrate to the commission that, within each provider category
and service delivery area designated by the commission, the
organization pays at least 98 percent of claims within the times
prescribed by Subdivision (7);
(7-c) a requirement that the managed care organization
establish an electronic process for use by providers in submitting
claims documentation that complies with Section 533.0055(b)(6) and
allows providers to submit additional documentation on a claim when
the organization determines the claim was not submitted with
documentation reasonably necessary to process the claim;
(8) a requirement that the commission, on the date of a
recipient's enrollment in a managed care plan issued by the managed
care organization, inform the organization of the recipient's
Medicaid certification date;
(9) a requirement that the managed care organization
comply with Section 533.006 as a condition of contract retention
and renewal;
(10) a requirement that the managed care organization
provide the information required by Section 533.012 and otherwise
comply and cooperate with the commission's office of inspector
general and the office of the attorney general;
(11) a requirement that the managed care
organization's utilization [usages] of out-of-network providers or
groups of out-of-network providers may not exceed limits determined
by the commission, including limits [for those usages] relating to:
(A) total inpatient admissions, total outpatient
services, and emergency room admissions [determined by the
commission];
(B) acute care services not described by
Paragraph (A); and
(C) long-term services and supports;
(12) if the commission finds that a managed care
organization has violated Subdivision (11), a requirement that the
managed care organization reimburse an out-of-network provider for
health care services at a rate that is equal to the allowable rate
for those services, as determined under Sections 32.028 and
32.0281, Human Resources Code;
(13) a requirement that, notwithstanding any other
law, including Sections 843.312 and 1301.052, Insurance Code, the
organization:
(A) use advanced practice registered nurses and
physician assistants in addition to physicians as primary care
providers to increase the availability of primary care providers in
the organization's provider network; and
(B) treat advanced practice registered nurses
and physician assistants in the same manner as primary care
physicians with regard to:
(i) selection and assignment as primary
care providers;
(ii) inclusion as primary care providers in
the organization's provider network; and
(iii) inclusion as primary care providers
in any provider network directory maintained by the organization;
(14) a requirement that the managed care organization
reimburse a federally qualified health center or rural health
clinic for health care services provided to a recipient outside of
regular business hours, including on a weekend day or holiday, at a
rate that is equal to the allowable rate for those services as
determined under Section 32.028, Human Resources Code, if the
recipient does not have a referral from the recipient's primary
care physician;
(15) a requirement that the managed care organization
develop, implement, and maintain a system for tracking and
resolving all provider complaints and appeals related to claims
payment and prior authorization and service denials, including a
system [process] that will [require]:
(A) allow providers to electronically track and
determine [a tracking mechanism to document] the status and final
disposition of the [each] provider's [claims payment] appeal or
complaint, as applicable;
(B) require the contracting with physicians or
other health care providers who are not network providers and who
are of the same or related specialty as the appealing physician or
other provider, as appropriate, to resolve claims disputes related
to denial on the basis of medical necessity that remain unresolved
subsequent to a provider appeal; and
(C) require the determination of the physician or
other health care provider resolving the dispute to be binding on
the managed care organization and the appealing provider; [and
[(D) the managed care organization to allow a
provider with a claim that has not been paid before the time
prescribed by Subdivision (7)(A)(ii) to initiate an appeal of that
claim;]
(15-a) a requirement that the managed care
organization make available on the organization's Internet website
summary information that is accessible to the public regarding the
number of provider appeals and the disposition of those appeals,
organized by provider and service types;
(16) a requirement that a medical director who is
authorized to make medical necessity determinations is available to
the region where the managed care organization provides health care
services;
(17) a requirement that the managed care organization
ensure that a medical director and patient care coordinators and
provider and recipient support services personnel are located in
the South Texas service region, if the managed care organization
provides Medicaid services to recipients [a managed care plan] in
that region;
(18) a requirement that the managed care organization
provide special programs and materials for recipients with limited
English proficiency or low literacy skills;
(19) a requirement that the managed care organization
develop and establish a process for responding to provider appeals
in the region where the organization provides health care services;
(20) a requirement that the managed care organization:
(A) develop and submit to the commission, before
the organization begins to provide health care services to
recipients, a comprehensive plan that describes how the
organization's provider network complies with the provider access
standards established under Section 533.0061, as added by Chapter
1272 (S.B. 760), Acts of the 84th Legislature, Regular Session,
2015;
(B) as a condition of contract retention and
renewal:
(i) continue to comply with the provider
access standards established under Section 533.0061, as added by
Chapter 1272 (S.B. 760), Acts of the 84th Legislature, Regular
Session, 2015; and
(ii) make substantial efforts, as
determined by the commission, to mitigate or remedy any
noncompliance with the provider access standards established under
Section 533.0061, as added by Chapter 1272 (S.B. 760), Acts of the
84th Legislature, Regular Session, 2015;
(C) pay liquidated damages for each failure, as
determined by the commission, to comply with the provider access
standards established under Section 533.0061, as added by Chapter
1272 (S.B. 760), Acts of the 84th Legislature, Regular Session,
2015, in amounts that are reasonably related to the noncompliance;
and
(D) annually [regularly, as determined by the
commission,] submit to the commission and make available to the
public a report containing data on the sufficiency of the
organization's provider network with regard to providing the care
and services described under Section 533.0061(a), as added by
Chapter 1272 (S.B. 760), Acts of the 84th Legislature, Regular
Session, 2015, and specific data with respect to access to primary
care, specialty care, long-term services and supports, nursing
services, and therapy services on:
(i) the average length of time between[:
[(i)] the date a provider requests prior
authorization for the care or service and the date the organization
approves or denies the request; [and]
(ii) the average length of time between the
date the organization approves a request for prior authorization
for the care or service and the date the care or service is
initiated; and
(iii) the number of providers who are
accepting new patients;
(21) a requirement that the managed care organization
demonstrate to the commission, before the organization begins to
provide health care services to recipients, that, subject to the
provider access standards established under Section 533.0061, as
added by Chapter 1272 (S.B. 760), Acts of the 84th Legislature,
Regular Session, 2015:
(A) the organization's provider network has the
capacity to serve the number of recipients expected to enroll in a
managed care plan offered by the organization;
(B) the organization's provider network
includes:
(i) a sufficient number of primary care
providers;
(ii) a sufficient variety of provider
types;
(iii) a sufficient number of providers of
long-term services and supports and specialty pediatric care
providers of home and community-based services; and
(iv) providers located throughout the
region where the organization will provide health care services;
and
(C) health care services will be accessible to
recipients through the organization's provider network to a
comparable extent that health care services would be available to
recipients under a fee-for-service [or primary care case
management] model of Medicaid [managed care];
(22) a requirement that the managed care organization
develop a monitoring program for measuring the quality of the
health care services provided by the organization's provider
network that:
(A) incorporates the National Committee for
Quality Assurance's Healthcare Effectiveness Data and Information
Set (HEDIS) measures;
(B) focuses on measuring outcomes; and
(C) includes the collection and analysis of
clinical data relating to prenatal care, preventive care, mental
health care, and the treatment of acute and chronic health
conditions and substance abuse;
(23) subject to Subsection (a-1), a requirement that
the managed care organization develop, implement, and maintain an
outpatient pharmacy benefit plan for its enrolled recipients:
(A) that exclusively employs the vendor drug
program formulary and preserves the state's ability to reduce
waste, fraud, and abuse under Medicaid;
(B) that adheres to the applicable preferred drug
list adopted by the commission under Section 531.072;
(C) that includes the prior authorization
procedures and requirements prescribed by or implemented under
Sections 531.073(b), (c), and (g) for the vendor drug program;
(D) for purposes of which the managed care
organization:
(i) may not negotiate or collect rebates
associated with pharmacy products on the vendor drug program
formulary; and
(ii) may not receive drug rebate or pricing
information that is confidential under Section 531.071;
(E) that complies with the prohibition under
Section 531.089;
(F) under which the managed care organization may
not prohibit, limit, or interfere with a recipient's selection of a
pharmacy or pharmacist of the recipient's choice for the provision
of pharmaceutical services under the plan through the imposition of
different copayments;
(G) that allows the managed care organization or
any subcontracted pharmacy benefit manager to contract with a
pharmacist or pharmacy providers separately for specialty pharmacy
services, except that:
(i) the managed care organization and
pharmacy benefit manager are prohibited from allowing exclusive
contracts with a specialty pharmacy owned wholly or partly by the
pharmacy benefit manager responsible for the administration of the
pharmacy benefit program; and
(ii) the managed care organization and
pharmacy benefit manager must adopt policies and procedures for
reclassifying prescription drugs from retail to specialty drugs,
and those policies and procedures must be consistent with rules
adopted by the executive commissioner and include notice to network
pharmacy providers from the managed care organization;
(H) under which the managed care organization may
not prevent a pharmacy or pharmacist from participating as a
provider if the pharmacy or pharmacist agrees to comply with the
financial terms and conditions of the contract as well as other
reasonable administrative and professional terms and conditions of
the contract;
(I) under which the managed care organization may
include mail-order pharmacies in its networks, but may not require
enrolled recipients to use those pharmacies, and may not charge an
enrolled recipient who opts to use this service a fee, including
postage and handling fees;
(J) under which the managed care organization or
pharmacy benefit manager, as applicable, must pay claims in
accordance with Section 843.339, Insurance Code; and
(K) under which the managed care organization or
pharmacy benefit manager, as applicable:
(i) to place a drug on a maximum allowable
cost list, must ensure that:
(a) the drug is listed as "A" or "B"
rated in the most recent version of the United States Food and Drug
Administration's Approved Drug Products with Therapeutic
Equivalence Evaluations, also known as the Orange Book, has an "NR"
or "NA" rating or a similar rating by a nationally recognized
reference; and
(b) the drug is generally available
for purchase by pharmacies in the state from national or regional
wholesalers and is not obsolete;
(ii) must provide to a network pharmacy
provider, at the time a contract is entered into or renewed with the
network pharmacy provider, the sources used to determine the
maximum allowable cost pricing for the maximum allowable cost list
specific to that provider;
(iii) must review and update maximum
allowable cost price information at least once every seven days to
reflect any modification of maximum allowable cost pricing;
(iv) must, in formulating the maximum
allowable cost price for a drug, use only the price of the drug and
drugs listed as therapeutically equivalent in the most recent
version of the United States Food and Drug Administration's
Approved Drug Products with Therapeutic Equivalence Evaluations,
also known as the Orange Book;
(v) must establish a process for
eliminating products from the maximum allowable cost list or
modifying maximum allowable cost prices in a timely manner to
remain consistent with pricing changes and product availability in
the marketplace;
(vi) must:
(a) provide a procedure under which a
network pharmacy provider may challenge a listed maximum allowable
cost price for a drug;
(b) respond to a challenge not later
than the 15th day after the date the challenge is made;
(c) if the challenge is successful,
make an adjustment in the drug price effective on the date the
challenge is resolved, and make the adjustment applicable to all
similarly situated network pharmacy providers, as determined by the
managed care organization or pharmacy benefit manager, as
appropriate;
(d) if the challenge is denied,
provide the reason for the denial; and
(e) report to the commission every 90
days the total number of challenges that were made and denied in the
preceding 90-day period for each maximum allowable cost list drug
for which a challenge was denied during the period;
(vii) must notify the commission not later
than the 21st day after implementing a practice of using a maximum
allowable cost list for drugs dispensed at retail but not by mail;
and
(viii) must provide a process for each of
its network pharmacy providers to readily access the maximum
allowable cost list specific to that provider;
(24) a requirement that the managed care organization
and any entity with which the managed care organization contracts
for the performance of services under a managed care plan disclose,
at no cost, to the commission and, on request, the office of the
attorney general all discounts, incentives, rebates, fees, free
goods, bundling arrangements, and other agreements affecting the
net cost of goods or services provided under the plan; and
(25) a requirement that the managed care organization
[not implement significant, nonnegotiated, across-the-board
provider reimbursement rate reductions unless:
[(A) subject to Subsection (a-3), the
organization has the prior approval of the commission to make the
reduction; or
[(B) the rate reductions are based on changes to
the Medicaid fee schedule or cost containment initiatives
implemented by the commission; and
[(26) a requirement that the managed care
organization] make initial and subsequent primary care provider
assignments and changes.
(d) In addition to the requirements specified by Subsection
(a), a contract described by that subsection must provide that if
the managed care organization has an ownership interest in a health
care provider in the organization's provider network, the
organization:
(1) must include in the provider network at least one
other health care provider of the same type in which the
organization does not have an ownership interest unless the
organization is able to demonstrate to the commission that the
provider included in the provider network is the only provider
located in an area that meets requirements established by the
commission relating to the time and distance a recipient is
expected to travel to receive services; and
(2) may not give preference in authorizing referrals
to the provider in which the organization has an ownership interest
as compared to other providers of the same or similar services
participating in the organization's provider network.
SECTION 6. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.00541 to read as follows:
Sec. 533.00541. PRIOR AUTHORIZATION REQUIREMENTS FOR
CERTAIN POST-ACUTE CARE SERVICES. Notwithstanding any other law
and except as otherwise provided by a settlement agreement filed
with and approved by a court, the commission shall require a managed
care organization that contracts with the commission to provide
health care services to recipients to:
(1) approve or pend a request from a provider of acute
care inpatient services for prior authorization for the following
services or equipment not later than 72 hours after receiving the
request to allow for a safe and timely discharge of a patient from
an inpatient facility:
(A) home health services;
(B) long-term services and supports, including
care provided through a nursing facility;
(C) private-duty nursing;
(D) therapy services; and
(E) durable medical equipment;
(2) ensure that a provider described by Subdivision
(1) has an opportunity to engage in direct discussions with the
organization regarding the appropriate level of post-acute care
while a request for prior authorization is pending;
(3) contact, notify, and negotiate with a provider
described by Subdivision (1) before approving a prior authorization
request for personal care services or attendant care services with
an expiration date different from the expiration date requested by
the provider;
(4) submit to a provider of personal care services or
attendant care services any change to a recipient's service plan
relating to personal care services or attendant care services not
later than the fifth day before the date the plan is to be effective
for purposes of giving the provider time to initiate the change and
the recipient an opportunity to agree to the change, unless the
organization is changing the plan in order to meet an emerging need
for personal care services or attendant care services;
(5) include on subsequent prior authorization
requests approved with a retroactive effective date an expiration
date that takes into account the date the service change described
by Subdivision (4) was implemented by the provider; and
(6) provide complete electronic access to prior
authorizations through the organization's process required under
Section 533.005(a)(7-c).
SECTION 7. Section 533.0055(b), Government Code, is amended
to read as follows:
(b) The provider protection plan required under this
section must provide for:
(1) prompt payment and proper reimbursement of
providers by managed care organizations;
(2) prompt and accurate adjudication of claims
through:
(A) provider education on the proper submission
of clean claims and on appeals;
(B) acceptance of uniform forms, including HCFA
Forms 1500 and UB-92 and subsequent versions of those forms,
through an electronic portal; and
(C) the establishment of standards for claims
payments in accordance with a provider's contract;
(3) adequate and clearly defined provider network
standards that are specific to provider type, including physicians,
general acute care facilities, and other provider types defined in
the commission's network adequacy standards [in effect on January
1, 2013], and that ensure choice among multiple providers to the
greatest extent possible;
(4) a prompt credentialing process for providers;
(5) uniform efficiency standards and requirements for
managed care organizations for the submission and electronic
tracking of prior authorization [preauthorization] requests for
services provided under Medicaid;
(6) establishment of an electronic process, including
the use of an Internet portal, through which providers in any
managed care organization's provider network may:
(A) submit electronic claims, prior
authorization request forms and attachments [requests], claims
appeals and reconsiderations, clinical data, and other
documentation that the managed care organization requests for prior
authorization and claims processing, including an electronic
process that allows for the resubmission of a claim without a
requirement that the resubmitted claim be submitted in paper form
in order to avoid treatment of the resubmitted claim as a duplicate
claim; and
(B) obtain electronic remittance advice
documents, explanation of benefits statements, service plans under
the STAR Kids Medicaid managed care program, and other standardized
reports;
(7) the measurement of the rates of retention by
managed care organizations of significant traditional providers;
(8) the creation of a work group to review and make
recommendations to the commission concerning any requirement under
this subsection for which immediate implementation is not feasible
at the time the plan is otherwise implemented, including the
required process for submission and acceptance of attachments for
claims processing and prior authorization requests through an
electronic process under Subdivision (6) and, for any requirement
that is not implemented immediately, recommendations regarding the
expected:
(A) fiscal impact of implementing the
requirement; and
(B) timeline for implementation of the
requirement; and
(9) any other provision that the commission determines
will ensure efficiency or reduce administrative burdens on
providers participating in a Medicaid managed care model or
arrangement.
SECTION 8. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.0058 to read as follows:
Sec. 533.0058. RESTRICTIONS ON CERTAIN REIMBURSEMENT RATE
REDUCTIONS. (a) In this section, "across-the-board provider
reimbursement rate reduction" means a provider reimbursement rate
reduction proposed by a managed care organization that the
commission determines is likely to affect more than 50 percent of a
particular type of provider participating in the organization's
provider network during the 12-month period following
implementation of the proposed reduction, regardless of whether:
(1) the organization limits the proposed reduction to
specific service areas or provider types; or
(2) the affected providers are likely to experience
differing percentages of rate reductions or amounts of lost revenue
as a result of the proposed reduction.
(b) Except as provided by Subsection (e), a managed care
organization that contracts with the commission to provide health
care services to recipients may not implement a significant, as
determined by the commission, across-the-board provider
reimbursement rate reduction unless the organization:
(1) at least 90 days before the proposed rate
reduction is to take effect:
(A) provides the commission and affected
providers with written notice of the proposed rate reduction; and
(B) makes a good faith effort to negotiate the
reduction with the affected providers; and
(2) receives prior approval from the commission,
subject to Subsection (c).
(c) An across-the-board provider reimbursement rate
reduction is considered to have received the commission's prior
approval for purposes of Subsection (b)(2) unless the commission
issues a written statement of disapproval not later than the 45th
day after the date the commission receives notice of the proposed
rate reduction from the managed care organization under Subsection
(b)(1)(A).
(d) If a managed care organization proposes an
across-the-board provider reimbursement rate reduction in
accordance with this section and subsequently rejects alternative
rate reductions suggested by an affected provider, the organization
must provide the provider with written notice of that rejection,
including an explanation of the grounds for the rejection, before
implementing any rate reduction.
(e) This section does not apply to rate reductions that are
implemented because of reductions to the Medicaid fee schedule or
cost containment initiatives that are specifically directed by the
legislature and implemented by the commission.
SECTION 9. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.00611 to read as follows:
Sec. 533.00611. STANDARDS FOR DETERMINING MEDICAL
NECESSITY. (a) Except as provided by Subsection (b), the
commission shall establish standards that govern the processes,
criteria, and guidelines under which managed care organizations
determine the medical necessity of a health care service covered by
Medicaid. In establishing standards under this section, the
commission shall:
(1) ensure that each recipient has equal access in
scope and duration to the same covered health care services for
which the recipient is eligible, regardless of the managed care
organization with which the recipient is enrolled;
(2) provide managed care organizations with
flexibility to approve covered medically necessary services for
recipients that may not be within prescribed criteria and
guidelines;
(3) require managed care organizations to make
available to providers all criteria and guidelines used to
determine medical necessity through an Internet portal accessible
by the providers;
(4) ensure that managed care organizations
consistently apply the same medical necessity criteria and
guidelines for the approval of services and in retrospective
utilization reviews; and
(5) ensure that managed care organizations include in
any service or prior authorization denial specific information
about the medical necessity criteria or guidelines that were not
met.
(b) This section does not apply to or affect the
commission's authority to:
(1) determine medical necessity for home and
community-based services provided under the STAR + PLUS Medicaid
managed care program; or
(2) conduct utilization reviews of those services.
SECTION 10. Section 533.0071, Government Code, is amended
to read as follows:
Sec. 533.0071. ADMINISTRATION OF CONTRACTS. The
commission shall make every effort to improve the administration of
contracts with managed care organizations. To improve the
administration of these contracts, the commission shall:
(1) ensure that the commission has appropriate
expertise and qualified staff to effectively manage contracts with
managed care organizations under the Medicaid managed care program;
(2) evaluate options for Medicaid payment recovery
from managed care organizations if the enrollee dies or is
incarcerated or if an enrollee is enrolled in more than one state
program or is covered by another liable third party insurer;
(3) maximize Medicaid payment recovery options by
contracting with private vendors to assist in the recovery of
capitation payments, payments from other liable third parties, and
other payments made to managed care organizations with respect to
enrollees who leave the managed care program;
(4) decrease the administrative burdens of managed
care for the state, the managed care organizations, and the
providers under managed care networks to the extent that those
changes are compatible with state law and existing Medicaid managed
care contracts, including decreasing those burdens by:
(A) where possible, decreasing the duplication
of administrative reporting and process requirements for the
managed care organizations and providers, such as requirements for
the submission of encounter data, quality reports, historically
underutilized business reports, and claims payment summary
reports;
(B) allowing managed care organizations to
provide updated address and other contact information directly to
the commission for correction in the state eligibility system;
(C) promoting consistency and uniformity among
managed care organization policies, including policies relating to
the prior authorization processes [preauthorization process],
lengths of hospital stays, filing deadlines, levels of care, and
case management services; and
(D) [reviewing the appropriateness of primary
care case management requirements in the admission and clinical
criteria process, such as requirements relating to including a
separate cover sheet for all communications, submitting
handwritten communications instead of electronic or typed review
processes, and admitting patients listed on separate
notifications; and
[(E)] providing a portal that complies with
Section 533.0055(b)(6) through which providers in any managed care
organization's provider network may submit acute care services and
long-term services and supports claims; and
(5) reserve the right to amend the managed care
organization's process for resolving provider appeals of denials
based on medical necessity to include an independent review process
established by the commission for final determination of these
disputes.
SECTION 11. Section 533.0076, Government Code, is amended
by amending Subsection (c) and adding Subsection (d) to read as
follows:
(c) The commission shall allow a recipient who is enrolled
in a managed care plan under this chapter to disenroll from that
plan and enroll in another managed care plan[:
[(1)] at any time for cause in accordance with federal
law, including because:
(1) the recipient moves out of the managed care
organization's service area;
(2) the plan does not, on the basis of moral or
religious objections, cover the service the recipient seeks;
(3) the recipient needs related services to be
performed at the same time, not all related services are available
within the organization's provider network, and the recipient's
primary care provider or another provider determines that receiving
the services separately would subject the recipient to unnecessary
risk;
(4) for recipients of long-term services or supports,
the recipient would have to change the recipient's residential,
institutional, or employment supports provider based on that
provider's change in status from an in-network to an out-of-network
provider with the managed care organization and, as a result, would
experience a disruption in the recipient's residence or employment;
or
(5) of another reason permitted under federal law,
including poor quality of care, lack of access to services covered
under the contract, or lack of access to providers experienced in
dealing with the recipient's care needs[; and
[(2) once for any reason after the periods described
by Subsections (a) and (b)].
(d) The commission shall implement a process by which the
commission verifies that a recipient is permitted to disenroll from
one managed care plan offered by a managed care organization and
enroll in another managed care plan, including a plan offered by
another managed care organization, before the disenrollment
occurs.
SECTION 12. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.0091 to read as follows:
Sec. 533.0091. CARE COORDINATION SERVICES. A managed care
organization that contracts with the commission to provide health
care services to recipients shall ensure that persons providing
care coordination services through the organization coordinate
with hospital discharge planners, who must notify the organization
of an inpatient admission of a recipient, to facilitate the timely
discharge of the recipient to the appropriate level of care and
minimize potentially preventable readmissions.
SECTION 13. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.0122 to read as follows:
Sec. 533.0122. UTILIZATION REVIEW AUDITS CONDUCTED BY
OFFICE OF INSPECTOR GENERAL. (a) If the commission's office of
inspector general intends to conduct a utilization review audit of
a provider of services under a Medicaid managed care delivery
model, the office shall inform both the provider and the managed
care organization with which the provider contracts of any
applicable criteria and guidelines the office will use in the
course of the audit.
(b) The commission's office of inspector general shall
ensure that each person conducting a utilization review audit under
this section has experience and training regarding the operations
of managed care organizations.
(c) The commission's office of inspector general may not, as
the result of a utilization review audit, recoup an overpayment or
debt from a provider that contracts with a managed care
organization based on a determination that a provided service was
not medically necessary unless the office:
(1) uses the same criteria and guidelines that were
used by the managed care organization in its determination of
medical necessity for the service; and
(2) verifies with the managed care organization and
the provider that the provider:
(A) at the time the service was delivered, had
reasonable notice of the criteria and guidelines used by the
managed care organization to determine medical necessity; and
(B) did not follow the criteria and guidelines
used by the managed care organization to determine medical
necessity that were in effect at the time the service was delivered.
(d) If the commission's office of inspector general
conducts a utilization review audit that results in a determination
to recoup money from a managed care organization that contracts
with the commission to provide health care services to recipients,
the provider protections from liability under Section 531.1133
apply.
SECTION 14. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.01316 to read as follows:
Sec. 533.01316. MANAGED CARE ORGANIZATION POLICIES FOR
CERTAIN HOSPITAL STAYS. The commission shall ensure that managed
care organizations that contract with the commission to provide
health care services to recipients have policies regarding
treatment and services related to a recipient's inpatient hospital
stay, including a behavioral health hospital stay, that is less
than 48 hours. For purposes of this section, the commission shall
ensure that the organization:
(1) specifies criteria that:
(A) warrant reimbursement of services related to
the stay as either inpatient hospital services or outpatient
hospital services, including criteria for determining what
services constitute outpatient observation services;
(B) account for medical necessity based on
recognized inpatient criteria, the severity of any psychological
disorder, and the judgment of the treating physician or other
provider; and
(C) do not permit classification of services as
either inpatient or outpatient hospital services for purposes of
reimbursement based solely on the duration of the stay;
(2) provides an opportunity for direct discussions
regarding the medical necessity of a recipient's inpatient hospital
admission; and
(3) reviews documentation in a recipient's medical
record that supports the medical necessity of the inpatient
hospital stay at the time of admission for reimbursement of
services related to the stay.
SECTION 15. Subchapter B, Chapter 534, Government Code, is
amended by adding Section 534.0511 to read as follows:
Sec. 534.0511. ENSURING PROVISION OF MEDICALLY NECESSARY
SERVICES. (a) This section applies only to an individual with an
intellectual or developmental disability who is receiving services
under a Medicaid waiver program or ICF-IID program and who requires
medically necessary acute care services or long-term services and
supports that are not available to the individual through the
delivery model implemented under this chapter.
(b) Notwithstanding any other law, the Medicaid waiver
program or ICF-IID program that serves an individual to which this
section applies shall pay the cost of the service and may submit to
the commission a claim for reimbursement for the cost of that
service.
(c) If the commission determines that a claim paid by the
commission under Subsection (b) should have been covered and paid
by a managed care organization that contracts with the commission,
the commission may recoup the entire cost of that claim from the
organization.
SECTION 16. (a) In this section, "commission" and
"Medicaid" have the meanings assigned by Section 531.001,
Government Code.
(b) As soon as practicable after the effective date of this
Act, the commission shall develop and implement a pilot program in
up to three urban service delivery areas that is designed to
increase the incidence of ambulance service providers directing
recipients of Medicaid managed care program services who are
experiencing a behavioral health emergency to more appropriate
health care providers for treatment of behavioral health illnesses.
(c) Not later than December 1, 2018, the commission shall
develop a report analyzing any cost savings and other benefits
realized as a result of the pilot program and deliver a copy of the
report to the governor, lieutenant governor, speaker of the house
of representatives, and chairs of the standing legislative
committees having primary jurisdiction over Medicaid.
(d) This section expires January 1, 2019.
SECTION 17. (a) In this section, "commission" and
"Medicaid" have the meanings assigned by Section 531.001,
Government Code.
(b) Not later than November 30, 2017, the commission shall,
consistent with the purpose of Sections 533.0025(b) and (d),
Government Code, conduct a study to determine the
cost-effectiveness and feasibility of providing prescription drug
benefits to recipients of acute care services under Medicaid by
pharmacies with a Class A pharmacy license, as described by Section
560.051, Occupations Code, through a single statewide prescription
drug administrator that adheres to a pharmacy services
reimbursement methodology that uses:
(1) the most accurate and transparent ingredient drug
pricing model;
(2) the National Average Drug Acquisition Cost
published by the Centers for Medicare and Medicaid Services as the
drug acquisition cost; and
(3) the most recent dispensing fee study contracted
for by the commission to set an accurate and transparent
professional dispensing fee as defined by 1 T.A.C. Section
355.8551.
(c) In conducting a study under this section, the commission
shall:
(1) for purposes of determining cost-effectiveness,
assume and calculate reductions to the anticipated capitation rate
paid to Medicaid managed care organizations, including reductions
resulting from:
(A) the elimination or reduction of the per
member per month administrative expense fee and the consolidation
of the contracts relating to the prescription drug benefits;
(B) the elimination of the guaranteed risk
margin; and
(C) any difference between pharmacy premiums
paid by the commission to managed care organizations and
prescription expenses reported by the managed care organizations
for the preceding four fiscal years;
(2) determine and consider cost savings that would be
achieved through maintaining a single pharmacy claims database to
enhance patient quality outcomes through implementation of:
(A) a medication therapy management program;
(B) a prescription monitoring program;
(C) an adverse drug interaction avoidance
program; or
(D) other similar results-oriented programs
based on pay-for-performance outcome models;
(3) determine and consider cost savings associated
with enhancing system audit capabilities and reducing contractor
and subcontractor noncompliance, including enhanced auditing
capabilities and reducing noncompliance in relation to:
(A) the payment of rebates;
(B) drug utilization;
(C) the use of prior authorization; and
(D) claims adjudication;
(4) determine and consider cost savings associated
with improving patient access to prescribed medications;
(5) determine and consider cost savings related to
further streamlining both the fee-for-service and managed care
prescription drug benefits under one contract;
(6) assume that the administrator described by
Subsection (b) of this section is, if advantageous to the state,
subject to Chapter 222, Insurance Code; and
(7) consider and determine whether the administrator
could be excluded from Section 9010 of the federal Patient
Protection and Affordable Care Act (Pub. L. No. 111-148), as
amended by the Health Care and Education Reconciliation Act of 2010
(Pub. L. No. 111-152).
(d) This section does not apply to and the commission may
not consider in conducting the study required by this section the
provision of prescription drug benefits by long-term care facility
pharmacies and specialty pharmacies.
(e) The commission shall combine the study required by this
section with any other similar study required to be conducted by the
commission.
(f) Not later than November 30, 2017, the commission shall
report its findings under this section to the legislature.
(g) This section expires December 31, 2017.
SECTION 18. Section 533.005(a-3), Government Code, is
repealed.
SECTION 19. As soon as practicable after the effective date
of this Act, the Health and Human Services Commission shall
implement an electronic visit verification system in accordance
with Section 531.024172, Government Code, as amended by this Act.
SECTION 20. Section 533.005, Government Code, as amended by
this Act, applies to a contract entered into or renewed on or after
the effective date of this Act. A contract entered into or renewed
before that date is governed by the law in effect on the date the
contract was entered into or renewed, and that law is continued in
effect for that purpose.
SECTION 21. If before implementing any provision of this
Act a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 22. This Act takes effect September 1, 2017.