S.B. No. 7
 
 
 
  AN ACT
  relating to improving the delivery and quality of certain health
  and human services, including the delivery and quality of Medicaid
  acute care services and long-term services and supports.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1.  DELIVERY SYSTEM REDESIGN FOR THE PROVISION OF ACUTE
  CARE SERVICES AND LONG-TERM SERVICES AND SUPPORTS TO INDIVIDUALS
  WITH INTELLECTUAL AND DEVELOPMENTAL DISABILITIES
         SECTION 1.01.  Subtitle I, Title 4, Government Code, is
  amended by adding Chapter 534 to read as follows:
  CHAPTER 534. SYSTEM REDESIGN FOR DELIVERY OF MEDICAID ACUTE CARE
  SERVICES AND LONG-TERM SERVICES AND SUPPORTS TO PERSONS WITH
  INTELLECTUAL AND DEVELOPMENTAL DISABILITIES
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 534.001.  DEFINITIONS. In this chapter:
               (1)  "Advisory committee" means the Intellectual and
  Developmental Disability System Redesign Advisory Committee
  established under Section 534.053.
               (2)  "Basic attendant services" means assistance with
  the activities of daily living, including instrumental activities
  of daily living, provided to an individual because of a physical,
  cognitive, or behavioral limitation related to the individual's
  disability or chronic health condition.
               (3)  "Department" means the Department of Aging and
  Disability Services.
               (4)  "Functional need" means the measurement of an
  individual's services and supports needs, including the
  individual's intellectual, psychiatric, medical, and physical
  support needs.
               (5)  "Habilitation services" includes assistance
  provided to an individual with acquiring, retaining, or improving:
                     (A)  skills related to the activities of daily
  living; and
                     (B)  the social and adaptive skills necessary to
  enable the individual to live and fully participate in the
  community.
               (6)  "ICF-IID" means the Medicaid program serving
  individuals with intellectual and developmental disabilities who
  receive care in intermediate care facilities other than a state
  supported living center.
               (7)  "ICF-IID program" means a program under the
  Medicaid program serving individuals with intellectual and
  developmental disabilities who reside in and receive care from:
                     (A)  intermediate care facilities licensed under
  Chapter 252, Health and Safety Code; or
                     (B)  community-based intermediate care facilities
  operated by local intellectual and developmental disability
  authorities.
               (8)  "Local intellectual and developmental disability
  authority" means an authority defined by Section 531.002(11),
  Health and Safety Code.
               (9)  "Managed care organization," "managed care plan,"
  and "potentially preventable event" have the meanings assigned
  under Section 536.001.
               (10)  "Medicaid program" means the medical assistance
  program established under Chapter 32, Human Resources Code.
               (11)  "Medicaid waiver program" means only the
  following programs that are authorized under Section 1915(c) of the
  federal Social Security Act (42 U.S.C. Section 1396n(c)) for the
  provision of services to persons with intellectual and
  developmental disabilities:
                     (A)  the community living assistance and support
  services (CLASS) waiver program;
                     (B)  the home and community-based services (HCS)
  waiver program;
                     (C)  the deaf-blind with multiple disabilities
  (DBMD) waiver program; and
                     (D)  the Texas home living (TxHmL) waiver program.
               (12)  "State supported living center" has the meaning
  assigned by Section 531.002, Health and Safety Code.
         Sec. 534.002.  CONFLICT WITH OTHER LAW. To the extent of a
  conflict between a provision of this chapter and another state law,
  the provision of this chapter controls.
  SUBCHAPTER B. ACUTE CARE SERVICES AND LONG-TERM SERVICES AND
  SUPPORTS SYSTEM
         Sec. 534.051.  ACUTE CARE SERVICES AND LONG-TERM SERVICES
  AND SUPPORTS SYSTEM FOR INDIVIDUALS WITH INTELLECTUAL AND
  DEVELOPMENTAL DISABILITIES. In accordance with this chapter, the
  commission and the department shall jointly design and implement an
  acute care services and long-term services and supports system for
  individuals with intellectual and developmental disabilities that
  supports the following goals:
               (1)  provide Medicaid services to more individuals in a
  cost-efficient manner by providing the type and amount of services
  most appropriate to the individuals' needs;
               (2)  improve individuals' access to services and
  supports by ensuring that the individuals receive information about
  all available programs and services, including employment and least
  restrictive housing assistance, and how to apply for the programs
  and services;
               (3)  improve the assessment of individuals' needs and
  available supports, including the assessment of individuals'
  functional needs;
               (4)  promote person-centered planning, self-direction,
  self-determination, community inclusion, and customized,
  integrated, competitive employment;
               (5)  promote individualized budgeting based on an
  assessment of an individual's needs and person-centered planning;
               (6)  promote integrated service coordination of acute
  care services and long-term services and supports;
               (7)  improve acute care and long-term services and
  supports outcomes, including reducing unnecessary
  institutionalization and potentially preventable events;
               (8)  promote high-quality care;
               (9)  provide fair hearing and appeals processes in
  accordance with applicable federal law;
               (10)  ensure the availability of a local safety net
  provider and local safety net services;
               (11)  promote independent service coordination and
  independent ombudsmen services; and
               (12)  ensure that individuals with the most significant
  needs are appropriately served in the community and that processes
  are in place to prevent inappropriate institutionalization of
  individuals.
         Sec. 534.052.  IMPLEMENTATION OF SYSTEM REDESIGN. The
  commission and department shall, in consultation with the advisory
  committee, jointly implement the acute care services and long-term
  services and supports system for individuals with intellectual and
  developmental disabilities in the manner and in the stages
  described in this chapter.
         Sec. 534.053.  INTELLECTUAL AND DEVELOPMENTAL DISABILITY
  SYSTEM REDESIGN ADVISORY COMMITTEE. (a)  The Intellectual and
  Developmental Disability System Redesign Advisory Committee is
  established to advise the commission and the department on the
  implementation of the acute care services and long-term services
  and supports system redesign under this chapter. Subject to
  Subsection (b), the executive commissioner and the commissioner of
  the department shall jointly appoint members of the advisory
  committee who are stakeholders from the intellectual and
  developmental disabilities community, including:
               (1)  individuals with intellectual and developmental
  disabilities who are recipients of services under the Medicaid
  waiver programs, individuals with intellectual and developmental
  disabilities who are recipients of services under the ICF-IID
  program, and individuals who are advocates of those recipients,
  including at least three representatives from intellectual and
  developmental disability advocacy organizations;
               (2)  representatives of Medicaid managed care and
  nonmanaged care health care providers, including:
                     (A)  physicians who are primary care providers and
  physicians who are specialty care providers;
                     (B)  nonphysician mental health professionals;
  and
                     (C)  providers of long-term services and
  supports, including direct service workers;
               (3)  representatives of entities with responsibilities
  for the delivery of Medicaid long-term services and supports or
  other Medicaid program service delivery, including:
                     (A)  representatives of aging and disability
  resource centers established under the Aging and Disability
  Resource Center initiative funded in part by the federal
  Administration on Aging and the Centers for Medicare and Medicaid
  Services;
                     (B)  representatives of community mental health
  and intellectual disability centers;
                     (C)  representatives of and service coordinators
  or case managers from private and public home and community-based
  services providers that serve individuals with intellectual and
  developmental disabilities; and
                     (D)  representatives of private and public
  ICF-IID providers; and
               (4)  representatives of managed care organizations
  contracting with the state to provide services to individuals with
  intellectual and developmental disabilities.
         (b)  To the greatest extent possible, the executive
  commissioner and the commissioner of the department shall appoint
  members of the advisory committee who reflect the geographic
  diversity of the state and include members who represent rural
  Medicaid program recipients.
         (c)  The executive commissioner shall appoint the presiding
  officer of the advisory committee.
         (d)  The advisory committee must meet at least quarterly or
  more frequently if the presiding officer determines that it is
  necessary to address planning and development needs related to
  implementation of the acute care services and long-term services
  and supports system.
         (e)  A member of the advisory committee serves without
  compensation. A member of the advisory committee who is a Medicaid
  program recipient or the relative of a Medicaid program recipient
  is entitled to a per diem allowance and reimbursement at rates
  established in the General Appropriations Act.
         (f)  The advisory committee is subject to the requirements of
  Chapter 551.
         (g)  On January 1, 2024:
               (1)  the advisory committee is abolished; and
               (2)  this section expires.
         Sec. 534.054.  ANNUAL REPORT ON IMPLEMENTATION. (a)  Not
  later than September 30 of each year, the commission shall submit a
  report to the legislature regarding:
               (1)  the implementation of the system required by this
  chapter, including appropriate information regarding the provision
  of acute care services and long-term services and supports to
  individuals with intellectual and developmental disabilities under
  the Medicaid program; and
               (2)  recommendations, including recommendations
  regarding appropriate statutory changes to facilitate the
  implementation.
         (b)  This section expires January 1, 2024.
         Sec. 534.055.  REPORT ON ROLE OF LOCAL INTELLECTUAL AND
  DEVELOPMENTAL DISABILITY AUTHORITIES AS SERVICE PROVIDERS.
  (a)  The commission and department shall submit a report to the
  legislature not later than December 1, 2014, that includes the
  following information:
               (1)  the percentage of services provided by each local
  intellectual and developmental disability authority to individuals
  receiving ICF-IID or Medicaid waiver program services, compared to
  the percentage of those services provided by private providers;
               (2)  the types of evidence provided by local
  intellectual and developmental disability authorities to the
  department to demonstrate the lack of available private providers
  in areas of the state where local authorities provide services to
  more than 40 percent of the Texas home living (TxHmL) waiver program
  clients or 20 percent of the home and community-based services
  (HCS) waiver program clients;
               (3)  the types and amounts of services received by
  clients from local intellectual and developmental disability
  authorities compared to the types and amounts of services received
  by clients from private providers;
               (4)  the provider capacity of each local intellectual
  and developmental disability authority as determined under Section
  533.0355(d), Health and Safety Code;
               (5)  the number of individuals served above or below
  the applicable provider capacity by each local intellectual and
  developmental disability authority; and
               (6)  if a local intellectual and developmental
  disability authority is serving clients over the authority's
  provider capacity, the length of time the local authority has
  served clients above the authority's approved provider capacity.
         (b)  This section expires September 1, 2015.
  SUBCHAPTER C.  STAGE ONE:  PROGRAMS TO IMPROVE SERVICE DELIVERY
  MODELS
         Sec. 534.101.  DEFINITIONS. In this subchapter:
               (1)  "Capitation" means a method of compensating a
  provider on a monthly basis for providing or coordinating the
  provision of a defined set of services and supports that is based on
  a predetermined payment per services recipient.
               (2)  "Provider" means a person with whom the commission
  contracts for the provision of long-term services and supports
  under the Medicaid program to a specific population based on
  capitation.
         Sec. 534.102.  PILOT PROGRAMS TO TEST MANAGED CARE
  STRATEGIES BASED ON CAPITATION. The commission and the department
  may develop and implement pilot programs in accordance with this
  subchapter to test one or more service delivery models involving a
  managed care strategy based on capitation to deliver long-term
  services and supports under the Medicaid program to individuals
  with intellectual and developmental disabilities.
         Sec. 534.103.  STAKEHOLDER INPUT. As part of developing and
  implementing a pilot program under this subchapter, the department
  shall develop a process to receive and evaluate input from
  statewide stakeholders and stakeholders from the region of the
  state in which the pilot program will be implemented.
         Sec. 534.104.  MANAGED CARE STRATEGY PROPOSALS; PILOT
  PROGRAM SERVICE PROVIDERS. (a)  The department shall identify
  private services providers that are good candidates to develop a
  service delivery model involving a managed care strategy based on
  capitation and to test the model in the provision of long-term
  services and supports under the Medicaid program to individuals
  with intellectual and developmental disabilities through a pilot
  program established under this subchapter.
         (b)  The department shall solicit managed care strategy
  proposals from the private services providers identified under
  Subsection (a). In addition, the department may accept and approve
  a managed care strategy proposal from any qualified entity that is a
  private services provider if the proposal provides for a
  comprehensive array of long-term services and supports, including
  case management and service coordination.
         (c)  A managed care strategy based on capitation developed
  for implementation through a pilot program under this subchapter
  must be designed to:
               (1)  increase access to long-term services and
  supports;
               (2)  improve quality of acute care services and
  long-term services and supports;
               (3)  promote meaningful outcomes by using
  person-centered planning, individualized budgeting, and
  self-determination, and promote community inclusion and
  customized, integrated, competitive employment;
               (4)  promote integrated service coordination of acute
  care services and long-term services and supports;
               (5)  promote efficiency and the best use of funding;
               (6)  promote the placement of an individual in housing
  that is the least restrictive setting appropriate to the
  individual's needs;
               (7)  promote employment assistance and supported
  employment;
               (8)  provide fair hearing and appeals processes in
  accordance with applicable federal law; and
               (9)  promote sufficient flexibility to achieve the
  goals listed in this section through the pilot program.
         (d)  The department, in consultation with the advisory
  committee, shall evaluate each submitted managed care strategy
  proposal and determine whether:
               (1)  the proposed strategy satisfies the requirements
  of this section; and
               (2)  the private services provider that submitted the
  proposal has a demonstrated ability to provide the long-term
  services and supports appropriate to the individuals who will
  receive services through the pilot program based on the proposed
  strategy, if implemented.
         (e)  Based on the evaluation performed under Subsection (d),
  the department may select as pilot program service providers one or
  more private services providers.
         (f)  For each pilot program service provider, the department
  shall develop and implement a pilot program. Under a pilot program,
  the pilot program service provider shall provide long-term services
  and supports under the Medicaid program to persons with
  intellectual and developmental disabilities to test its managed
  care strategy based on capitation.
         (g)  The department shall analyze information provided by
  the pilot program service providers and any information collected
  by the department during the operation of the pilot programs for
  purposes of making a recommendation about a system of programs and
  services for implementation through future state legislation or
  rules.
         Sec. 534.105.  PILOT PROGRAM: MEASURABLE GOALS. (a)  The
  department, in consultation with the advisory committee, shall
  identify measurable goals to be achieved by each pilot program
  implemented under this subchapter. The identified goals must:
               (1)  align with information that will be collected
  under Section 534.108(a); and
               (2)  be designed to improve the quality of outcomes for
  individuals receiving services through the pilot program.
         (b)  The department, in consultation with the advisory
  committee, shall propose specific strategies for achieving the
  identified goals. A proposed strategy may be evidence-based if
  there is an evidence-based strategy available for meeting the pilot
  program's goals.
         Sec. 534.106.  IMPLEMENTATION, LOCATION, AND DURATION.
  (a)  The commission and the department shall implement any pilot
  programs established under this subchapter not later than September
  1, 2016.
         (b)  A pilot program established under this subchapter must
  operate for not less than 24 months, except that a pilot program may
  cease operation before the expiration of 24 months if the pilot
  program service provider terminates the contract with the
  commission before the agreed-to termination date.
         (c)  A pilot program established under this subchapter shall
  be conducted in one or more regions selected by the department.
         Sec. 534.1065.  RECIPIENT PARTICIPATION IN PROGRAM
  VOLUNTARY. Participation in a pilot program established under this
  subchapter by an individual with an intellectual or developmental
  disability is voluntary, and the decision whether to participate in
  a program and receive long-term services and supports from a
  provider through that program may be made only by the individual or
  the individual's legally authorized representative.
         Sec. 534.107.  COORDINATING SERVICES. In providing
  long-term services and supports under the Medicaid program to
  individuals with intellectual and developmental disabilities, a
  pilot program service provider shall:
               (1)  coordinate through the pilot program
  institutional and community-based services available to the
  individuals, including services provided through:
                     (A)  a facility licensed under Chapter 252, Health
  and Safety Code;
                     (B)  a Medicaid waiver program; or
                     (C)  a community-based ICF-IID operated by local
  authorities;
               (2)  collaborate with managed care organizations to
  provide integrated coordination of acute care services and
  long-term services and supports, including discharge planning from
  acute care services to community-based long-term services and
  supports;
               (3)  have a process for preventing inappropriate
  institutionalizations of individuals; and
               (4)  accept the risk of inappropriate
  institutionalizations of individuals previously residing in
  community settings.
         Sec. 534.108.  PILOT PROGRAM INFORMATION. (a)  The
  commission and the department shall collect and compute the
  following information with respect to each pilot program
  implemented under this subchapter to the extent it is available:
               (1)  the difference between the average monthly cost
  per person for all acute care services and long-term services and
  supports received by individuals participating in the pilot program
  while the program is operating, including services provided through
  the pilot program and other services with which pilot program
  services are coordinated as described by Section 534.107, and the
  average monthly cost per person for all services received by the
  individuals before the operation of the pilot program;
               (2)  the percentage of individuals receiving services
  through the pilot program who begin receiving services in a
  nonresidential setting instead of from a facility licensed under
  Chapter 252, Health and Safety Code, or any other residential
  setting;
               (3)  the difference between the percentage of
  individuals receiving services through the pilot program who live
  in non-provider-owned housing during the operation of the pilot
  program and the percentage of individuals receiving services
  through the pilot program who lived in non-provider-owned housing
  before the operation of the pilot program;
               (4)  the difference between the average total Medicaid
  cost, by level of need, for individuals in various residential
  settings receiving services through the pilot program during the
  operation of the program and the average total Medicaid cost, by
  level of need, for those individuals before the operation of the
  program;
               (5)  the difference between the percentage of
  individuals receiving services through the pilot program who obtain
  and maintain employment in meaningful, integrated settings during
  the operation of the program and the percentage of individuals
  receiving services through the program who obtained and maintained
  employment in meaningful, integrated settings before the operation
  of the program;
               (6)  the difference between the percentage of
  individuals receiving services through the pilot program whose
  behavioral, medical, life-activity, and other personal outcomes
  have improved since the beginning of the program and the percentage
  of individuals receiving services through the program whose
  behavioral, medical, life-activity, and other personal outcomes
  improved before the operation of the program, as measured over a
  comparable period; and
               (7)  a comparison of the overall client satisfaction
  with services received through the pilot program, including for
  individuals who leave the program after a determination is made in
  the individuals' cases at hearings or on appeal, and the overall
  client satisfaction with services received before the individuals
  entered the pilot program.
         (b)  The pilot program service provider shall collect any
  information described by Subsection (a) that is available to the
  provider and provide the information to the department and the
  commission not later than the 30th day before the date the program's
  operation concludes.
         (c)  In addition to the information described by Subsection
  (a), the pilot program service provider shall collect any
  information specified by the department for use by the department
  in making an evaluation under Section 534.104(g).
         (d)  On or before December 1, 2016, and December 1, 2017, the
  commission and the department, in consultation with the advisory
  committee, shall review and evaluate the progress and outcomes of
  each pilot program implemented under this subchapter and submit a
  report to the legislature during the operation of the pilot
  programs. Each report must include recommendations for program
  improvement and continued implementation.
         Sec. 534.109.  PERSON-CENTERED PLANNING. The commission, in
  cooperation with the department, shall ensure that each individual
  with an intellectual or developmental disability who receives
  services and supports under the Medicaid program through a pilot
  program established under this subchapter, or the individual's
  legally authorized representative, has access to a facilitated,
  person-centered plan that identifies outcomes for the individual
  and drives the development of the individualized budget. The
  consumer direction model, as defined by Section 531.051, may be an
  outcome of the plan.
         Sec. 534.110.  TRANSITION BETWEEN PROGRAMS. The commission
  shall ensure that there is a comprehensive plan for transitioning
  the provision of Medicaid program benefits between a Medicaid
  waiver program or an ICF-IID program and a pilot program under this
  subchapter to protect continuity of care.
         Sec. 534.111.  CONCLUSION OF PILOT PROGRAMS; EXPIRATION. On
  September 1, 2018:
               (1)  each pilot program established under this
  subchapter that is still in operation must conclude; and
               (2)  this subchapter expires.
  SUBCHAPTER D. STAGE ONE: PROVISION OF ACUTE CARE AND CERTAIN OTHER
  SERVICES
         Sec. 534.151.  DELIVERY OF ACUTE CARE SERVICES FOR
  INDIVIDUALS WITH INTELLECTUAL AND DEVELOPMENTAL DISABILITIES.
  Subject to Section 533.0025, the commission shall provide acute
  care Medicaid program benefits to individuals with intellectual and
  developmental disabilities through the STAR + PLUS Medicaid managed
  care program or the most appropriate integrated capitated managed
  care program delivery model and monitor the provision of those
  benefits.
         Sec. 534.152.  DELIVERY OF CERTAIN OTHER SERVICES UNDER STAR
  + PLUS MEDICAID MANAGED CARE PROGRAM. (a)  The commission shall:
               (1)  implement the most cost-effective option for the
  delivery of basic attendant and habilitation services for
  individuals with intellectual and developmental disabilities under
  the STAR + PLUS Medicaid managed care program that maximizes
  federal funding for the delivery of services for that program and
  other similar programs; and
               (2)  provide voluntary training to individuals
  receiving services under the STAR + PLUS Medicaid managed care
  program or their legally authorized representatives regarding how
  to select, manage, and dismiss personal attendants providing basic
  attendant and habilitation services under the program.
         (b)  The commission shall require that each managed care
  organization that contracts with the commission for the provision
  of basic attendant and habilitation services under the STAR + PLUS
  Medicaid managed care program in accordance with this section:
               (1)  include in the organization's provider network for
  the provision of those services:
                     (A)  home and community support services agencies
  licensed under Chapter 142, Health and Safety Code, with which the
  department has a contract to provide services under the community
  living assistance and support services (CLASS) waiver program; and
                     (B)  persons exempted from licensing under
  Section 142.003(a)(19), Health and Safety Code, with which the
  department has a contract to provide services under:
                           (i)  the home and community-based services
  (HCS) waiver program; or
                           (ii)  the Texas home living (TxHmL) waiver
  program;
               (2)  review and consider any assessment conducted by a
  local intellectual and developmental disability authority
  providing intellectual and developmental disability service
  coordination under Subsection (c); and
               (3)  enter into a written agreement with each local
  intellectual and developmental disability authority in the service
  area regarding the processes the organization and the authority
  will use to coordinate the services of individuals with
  intellectual and developmental disabilities.
         (c)  The department shall contract with and make contract
  payments to local intellectual and developmental disability
  authorities to conduct the following activities under this section:
               (1)  provide intellectual and developmental disability
  service coordination to individuals with intellectual and
  developmental disabilities under the STAR + PLUS Medicaid managed
  care program by assisting those individuals who are eligible to
  receive services in a community-based setting, including
  individuals transitioning to a community-based setting;
               (2)  provide an assessment to the appropriate managed
  care organization regarding whether an individual with an
  intellectual or developmental disability needs attendant or
  habilitation services, based on the individual's functional need,
  risk factors, and desired outcomes;
               (3)  assist individuals with intellectual and
  developmental disabilities with developing the individuals' plans
  of care under the STAR + PLUS Medicaid managed care program,
  including with making any changes resulting from periodic
  reassessments of the plans;
               (4)  provide to the appropriate managed care
  organization and the department information regarding the
  recommended plans of care with which the authorities provide
  assistance as provided by Subdivision (3), including documentation
  necessary to demonstrate the need for care described by a plan; and
               (5)  on an annual basis, provide to the appropriate
  managed care organization and the department a description of
  outcomes based on an individual's plan of care.
         (d)  Local intellectual and developmental disability
  authorities providing service coordination under this section may
  not also provide attendant and habilitation services under this
  section.
         (e)  During the first three years basic attendant and
  habilitation services are provided to individuals with
  intellectual and developmental disabilities under the STAR + PLUS
  Medicaid managed care program in accordance with this section,
  providers eligible to participate in the home and community-based
  services (HCS) waiver program, the Texas home living (TxHmL) waiver
  program, or the community living assistance and support services
  (CLASS) waiver program on September 1, 2013, are considered
  significant traditional providers.
         (f)  A local intellectual and developmental disability
  authority with which the department contracts under Subsection (c)
  may subcontract with an eligible person, including a nonprofit
  entity, to coordinate the services of individuals with intellectual
  and developmental disabilities under this section.  The executive
  commissioner by rule shall establish minimum qualifications a
  person must meet to be considered an "eligible person" under this
  subsection.
  SUBCHAPTER E.  STAGE TWO: TRANSITION OF LONG-TERM CARE MEDICAID
  WAIVER PROGRAM RECIPIENTS TO INTEGRATED MANAGED CARE SYSTEM
         Sec. 534.201.  TRANSITION OF RECIPIENTS UNDER TEXAS HOME
  LIVING (TxHmL) WAIVER PROGRAM TO MANAGED CARE PROGRAM. (a)  This
  section applies to individuals with intellectual and developmental
  disabilities who are receiving long-term services and supports
  under the Texas home living (TxHmL) waiver program on the date the
  commission implements the transition described by Subsection (b).
         (b)  Not later than September 1, 2017, the commission shall
  transition the provision of Medicaid program benefits to
  individuals to whom this section applies to the STAR + PLUS Medicaid
  managed care program delivery model or the most appropriate
  integrated capitated managed care program delivery model, as
  determined by the commission based on cost-effectiveness and the
  experience of the STAR + PLUS Medicaid managed care program in
  providing basic attendant and habilitation services and of the
  pilot programs established under Subchapter C, subject to
  Subsection (c)(1).
         (c)  At the time of the transition described by Subsection
  (b), the commission shall determine whether to:
               (1)  continue operation of the Texas home living
  (TxHmL) waiver program for purposes of providing supplemental
  long-term services and supports not available under the managed
  care program delivery model selected by the commission; or
               (2)  provide all or a portion of the long-term services
  and supports previously available under the Texas home living
  (TxHmL) waiver program through the managed care program delivery
  model selected by the commission.
         (d)  In implementing the transition described by Subsection
  (b), the commission shall develop a process to receive and evaluate
  input from interested statewide stakeholders that is in addition to
  the input provided by the advisory committee.
         (e)  The commission shall ensure that there is a
  comprehensive plan for transitioning the provision of Medicaid
  program benefits under this section that protects the continuity of
  care provided to individuals to whom this section applies.
         (f)  In addition to the requirements of Section 533.005, a
  contract between a managed care organization and the commission for
  the organization to provide Medicaid program benefits under this
  section must contain a requirement that the organization implement
  a process for individuals with intellectual and developmental
  disabilities that:
               (1)  ensures that the individuals have a choice among
  providers;
               (2)  to the greatest extent possible, protects those
  individuals' continuity of care with respect to access to primary
  care providers, including the use of single-case agreements with
  out-of-network providers; and
               (3)  provides access to a member services phone line
  for individuals or their legally authorized representatives to
  obtain information on and assistance with accessing services
  through network providers, including providers of primary,
  specialty, and other long-term services and supports.
         Sec. 534.202.  TRANSITION OF ICF-IID PROGRAM RECIPIENTS AND
  CERTAIN OTHER MEDICAID WAIVER PROGRAM RECIPIENTS TO MANAGED CARE
  PROGRAM. (a)  This section applies to individuals with
  intellectual and developmental disabilities who, on the date the
  commission implements the transition described by Subsection (b),
  are receiving long-term services and supports under:
               (1)  a Medicaid waiver program other than the Texas
  home living (TxHmL) waiver program; or
               (2)  an ICF-IID program.
         (b)  After implementing the transition required by Section
  534.201 but not later than September 1, 2020, the commission shall
  transition the provision of Medicaid program benefits to
  individuals to whom this section applies to the STAR + PLUS
  Medicaid managed care program delivery model or the most
  appropriate integrated capitated managed care program delivery
  model, as determined by the commission based on cost-effectiveness
  and the experience of the transition of Texas home living (TxHmL)
  waiver program recipients to a managed care program delivery model
  under Section 534.201, subject to Subsections (c)(1) and (g).
         (c)  At the time of the transition described by Subsection
  (b), the commission shall determine whether to:
               (1)  continue operation of the Medicaid waiver programs
  or ICF-IID program only for purposes of providing, if applicable:
                     (A)  supplemental long-term services and supports
  not available under the managed care program delivery model
  selected by the commission; or
                     (B)  long-term services and supports to Medicaid
  waiver program recipients who choose to continue receiving benefits
  under the waiver program as provided by Subsection (g); or
               (2)  subject to Subsection (g), provide all or a
  portion of the long-term services and supports previously available
  under the Medicaid waiver programs or ICF-IID program through the
  managed care program delivery model selected by the commission.
         (d)  In implementing the transition described by Subsection
  (b), the commission shall develop a process to receive and evaluate
  input from interested statewide stakeholders that is in addition to
  the input provided by the advisory committee.
         (e)  The commission shall ensure that there is a
  comprehensive plan for transitioning the provision of Medicaid
  program benefits under this section that protects the continuity of
  care provided to individuals to whom this section applies.
         (f)  Before transitioning the provision of Medicaid program
  benefits for children under this section, a managed care
  organization providing services under the managed care program
  delivery model selected by the commission must demonstrate to the
  satisfaction of the commission that the organization's network of
  providers has experience and expertise in the provision of services
  to children with intellectual and developmental disabilities.
  Before transitioning the provision of Medicaid program benefits for
  adults with intellectual and developmental disabilities under this
  section, a managed care organization providing services under the
  managed care program delivery model selected by the commission must
  demonstrate to the satisfaction of the commission that the
  organization's network of providers has experience and expertise in
  the provision of services to adults with intellectual and
  developmental disabilities.
         (g)  If the commission determines that all or a portion of
  the long-term services and supports previously available under the
  Medicaid waiver programs should be provided through a managed care
  program delivery model under Subsection (c)(2), the commission
  shall, at the time of the transition, allow each recipient
  receiving long-term services and supports under a Medicaid waiver
  program the option of:
               (1)  continuing to receive the services and supports
  under the Medicaid waiver program; or
               (2)  receiving the services and supports through the
  managed care program delivery model selected by the commission.
         (h)  A recipient who chooses to receive long-term services
  and supports through a managed care program delivery model under
  Subsection (g) may not, at a later time, choose to receive the
  services and supports under a Medicaid waiver program.
         (i)  In addition to the requirements of Section 533.005, a
  contract between a managed care organization and the commission for
  the organization to provide Medicaid program benefits under this
  section must contain a requirement that the organization implement
  a process for individuals with intellectual and developmental
  disabilities that:
               (1)  ensures that the individuals have a choice among
  providers;
               (2)  to the greatest extent possible, protects those
  individuals' continuity of care with respect to access to primary
  care providers, including the use of single-case agreements with
  out-of-network providers; and
               (3)  provides access to a member services phone line
  for individuals or their legally authorized representatives to
  obtain information on and assistance with accessing services
  through network providers, including providers of primary,
  specialty, and other long-term services and supports.
         Sec. 534.203.  RESPONSIBILITIES OF COMMISSION UNDER
  SUBCHAPTER. In administering this subchapter, the commission shall
  ensure:
               (1)  that the commission is responsible for setting the
  minimum reimbursement rate paid to a provider of ICF-IID services
  or a group home provider under the integrated managed care system,
  including the staff rate enhancement paid to a provider of ICF-IID
  services or a group home provider;
               (2)  that an ICF-IID service provider or a group home
  provider is paid not later than the 10th day after the date the
  provider submits a clean claim in accordance with the criteria used
  by the department for the reimbursement of ICF-IID service
  providers or a group home provider, as applicable; and
               (3)  the establishment of an electronic portal through
  which a provider of ICF-IID services or a group home provider
  participating in the STAR + PLUS Medicaid managed care program
  delivery model or the most appropriate integrated capitated managed
  care program delivery model, as appropriate, may submit long-term
  services and supports claims to any participating managed care
  organization.
         SECTION 1.02.  Subsection (a), Section 142.003, Health and
  Safety Code, is amended to read as follows:
         (a)  The following persons need not be licensed under this
  chapter:
               (1)  a physician, dentist, registered nurse,
  occupational therapist, or physical therapist licensed under the
  laws of this state who provides home health services to a client
  only as a part of and incidental to that person's private office
  practice;
               (2)  a registered nurse, licensed vocational nurse,
  physical therapist, occupational therapist, speech therapist,
  medical social worker, or any other health care professional as
  determined by the department who provides home health services as a
  sole practitioner;
               (3)  a registry that operates solely as a clearinghouse
  to put consumers in contact with persons who provide home health,
  hospice, or personal assistance services and that does not maintain
  official client records, direct client services, or compensate the
  person who is providing the service;
               (4)  an individual whose permanent residence is in the
  client's residence;
               (5)  an employee of a person licensed under this
  chapter who provides home health, hospice, or personal assistance
  services only as an employee of the license holder and who receives
  no benefit for providing the services, other than wages from the
  license holder;
               (6)  a home, nursing home, convalescent home, assisted
  living facility, special care facility, or other institution for
  individuals who are elderly or who have disabilities that provides
  home health or personal assistance services only to residents of
  the home or institution;
               (7)  a person who provides one health service through a
  contract with a person licensed under this chapter;
               (8)  a durable medical equipment supply company;
               (9)  a pharmacy or wholesale medical supply company
  that does not furnish services, other than supplies, to a person at
  the person's house;
               (10)  a hospital or other licensed health care facility
  that provides home health or personal assistance services only to
  inpatient residents of the hospital or facility;
               (11)  a person providing home health or personal
  assistance services to an injured employee under Title 5, Labor
  Code;
               (12)  a visiting nurse service that:
                     (A)  is conducted by and for the adherents of a
  well-recognized church or religious denomination; and
                     (B)  provides nursing services by a person exempt
  from licensing by Section 301.004, Occupations Code, because the
  person furnishes nursing care in which treatment is only by prayer
  or spiritual means;
               (13)  an individual hired and paid directly by the
  client or the client's family or legal guardian to provide home
  health or personal assistance services;
               (14)  a business, school, camp, or other organization
  that provides home health or personal assistance services,
  incidental to the organization's primary purpose, to individuals
  employed by or participating in programs offered by the business,
  school, or camp that enable the individual to participate fully in
  the business's, school's, or camp's programs;
               (15)  a person or organization providing
  sitter-companion services or chore or household services that do
  not involve personal care, health, or health-related services;
               (16)  a licensed health care facility that provides
  hospice services under a contract with a hospice;
               (17)  a person delivering residential acquired immune
  deficiency syndrome hospice care who is licensed and designated as
  a residential AIDS hospice under Chapter 248;
               (18)  the Texas Department of Criminal Justice;
               (19)  a person that provides home health, hospice, or
  personal assistance services only to persons receiving benefits
  under:
                     (A)  the home and community-based services (HCS)
  waiver program;
                     (B)  the Texas home living (TxHmL) waiver program;
  or
                     (C)  Section 534.152, Government Code [enrolled
  in a program funded wholly or partly by the Texas Department of
  Mental Health and Mental Retardation and monitored by the Texas
  Department of Mental Health and Mental Retardation or its
  designated local authority in accordance with standards set by the
  Texas Department of Mental Health and Mental Retardation]; or
               (20)  an individual who provides home health or
  personal assistance services as the employee of a consumer or an
  entity or employee of an entity acting as a consumer's fiscal agent
  under Section 531.051, Government Code.
         SECTION 1.03.  Not later than October 1, 2013, the executive
  commissioner of the Health and Human Services Commission and the
  commissioner of the Department of Aging and Disability Services
  shall appoint the members of the Intellectual and Developmental
  Disability System Redesign Advisory Committee as required by
  Section 534.053, Government Code, as added by this article.
         SECTION 1.04.  (a)  In this section, "health and human
  services agencies" has the meaning assigned by Section 531.001,
  Government Code.
         (b)  The Health and Human Services Commission and any other
  health and human services agency implementing a provision of this
  Act that affects individuals with intellectual and developmental
  disabilities shall consult with the Intellectual and Developmental
  Disability System Redesign Advisory Committee established under
  Section 534.053, Government Code, as added by this article,
  regarding implementation of the provision.
         SECTION 1.05.  The Health and Human Services Commission
  shall submit:
               (1)  the initial report on the implementation of the
  Medicaid acute care services and long-term services and supports
  delivery system for individuals with intellectual and
  developmental disabilities as required by Section 534.054,
  Government Code, as added by this article, not later than September
  30, 2014; and
               (2)  the final report under that section not later than
  September 30, 2023.
         SECTION 1.06.  Not later than June 1, 2016, the Health and
  Human Services Commission shall submit a report to the legislature
  regarding the commission's experience in, including the
  cost-effectiveness of, delivering basic attendant and habilitation
  services for individuals with intellectual and developmental
  disabilities under the STAR + PLUS Medicaid managed care program
  under Section 534.152, Government Code, as added by this article.
         SECTION 1.07.  The Health and Human Services Commission and
  the Department of Aging and Disability Services shall implement any
  pilot program to be established under Subchapter C, Chapter 534,
  Government Code, as added by this article, as soon as practicable
  after the effective date of this Act.
         SECTION 1.08.  (a)  The Health and Human Services Commission
  and the Department of Aging and Disability Services shall:
               (1)  in consultation with the Intellectual and
  Developmental Disability System Redesign Advisory Committee
  established under Section 534.053, Government Code, as added by
  this article, review and evaluate the outcomes of:
                     (A)  the transition of the provision of benefits
  to individuals under the Texas home living (TxHmL) waiver program
  to a managed care program delivery model under Section 534.201,
  Government Code, as added by this article; and
                     (B)  the transition of the provision of benefits
  to individuals under the Medicaid waiver programs, other than the
  Texas home living (TxHmL) waiver program, and the ICF-IID program
  to a managed care program delivery model under Section 534.202,
  Government Code, as added by this article; and
               (2)  submit as part of an annual report required by
  Section 534.054, Government Code, as added by this article, due on
  or before September 30 of 2018, 2019, and 2020, a report on the
  review and evaluation conducted under Paragraphs (A) and (B),
  Subdivision (1), of this subsection that includes recommendations
  for continued implementation of and improvements to the acute care
  and long-term services and supports system under Chapter 534,
  Government Code, as added by this article.
         (b)  This section expires September 1, 2024.
  ARTICLE 2.  MEDICAID MANAGED CARE EXPANSION
         SECTION 2.01.  Section 533.0025, Government Code, is amended
  by amending Subsections (a) and (b) and adding Subsections (f),
  (g), (h), and (i) to read as follows:
         (a)  In this section and Sections 533.00251, 533.002515,
  533.00252, 533.00253, and 533.00254, "medical assistance" has the
  meaning assigned by Section 32.003, Human Resources Code.
         (b)  Except as otherwise provided by this section and
  notwithstanding any other law, the commission shall provide medical
  assistance for acute care services through the most cost-effective
  model of Medicaid capitated managed care as determined by the
  commission. The [If the] commission shall require mandatory
  participation in a Medicaid capitated managed care program for all
  persons eligible for acute care [determines that it is more
  cost-effective, the commission may provide] medical assistance
  benefits, but may implement alternative models or arrangements,
  including a traditional fee-for-service arrangement, if the
  commission determines the alternative would be more cost-effective
  or efficient [for acute care in a certain part of this state or to a
  certain population of recipients using:
               [(1)     a health maintenance organization model,
  including the acute care portion of Medicaid Star   +   Plus pilot
  programs;
               [(2)  a primary care case management model;
               [(3)  a prepaid health plan model;
               [(4)  an exclusive provider organization model; or
               [(5)     another Medicaid managed care model or
  arrangement].
         (f)  The commission shall:
               (1)  conduct a study to evaluate the feasibility of
  automatically enrolling applicants determined eligible for
  benefits under the medical assistance program in a Medicaid managed
  care plan chosen by the applicant; and
               (2)  report the results of the study to the legislature
  not later than December 1, 2014.
         (g)  Subsection (f) and this subsection expire September 1,
  2015.
         (h)  If the commission determines that it is feasible, the
  commission may, notwithstanding any other law, implement an
  automatic enrollment process under which applicants determined
  eligible for medical assistance benefits are automatically
  enrolled in a Medicaid managed care plan chosen by the applicant.
  The commission may elect to implement the automatic enrollment
  process as to certain populations of recipients under the medical
  assistance program.
         (i)  Subject to Section 534.152, the commission shall:
               (1)  implement the most cost-effective option for the
  delivery of basic attendant and habilitation services for
  individuals with disabilities under the STAR + PLUS Medicaid
  managed care program that maximizes federal funding for the
  delivery of services for that program and other similar programs;
  and
               (2)  provide voluntary training to individuals
  receiving services under the STAR + PLUS Medicaid managed care
  program or their legally authorized representatives regarding how
  to select, manage, and dismiss personal attendants providing basic
  attendant and habilitation services under the program.
         SECTION 2.02.  Subchapter A, Chapter 533, Government Code,
  is amended by adding Sections 533.00251, 533.002515, 533.00252,
  533.00253, and 533.00254 to read as follows:
         Sec. 533.00251.  DELIVERY OF CERTAIN BENEFITS, INCLUDING
  NURSING FACILITY BENEFITS, THROUGH STAR + PLUS MEDICAID MANAGED
  CARE PROGRAM. (a)  In this section and Sections 533.002515 and
  533.00252:
               (1)  "Advisory committee" means the STAR + PLUS Nursing
  Facility Advisory Committee established under Section 533.00252.
               (2)  "Clean claim" means a claim that meets the same
  criteria for a clean claim used by the Department of Aging and
  Disability Services for the reimbursement of nursing facility
  claims.
               (3)  "Nursing facility" means a convalescent or nursing
  home or related institution licensed under Chapter 242, Health and
  Safety Code, that provides long-term services and supports to
  Medicaid recipients.
               (4)  "Potentially preventable event" has the meaning
  assigned by Section 536.001.
         (b)  Subject to Section 533.0025, the commission shall
  expand the STAR + PLUS Medicaid managed care program to all areas of
  this state to serve individuals eligible for acute care services
  and long-term services and supports under the medical assistance
  program.
         (c)  Subject to Section 533.0025 and notwithstanding any
  other law, the commission, in consultation with the advisory
  committee, shall provide benefits under the medical assistance
  program to recipients who reside in nursing facilities through the
  STAR + PLUS Medicaid managed care program. In implementing this
  subsection, the commission shall ensure:
               (1)  that the commission is responsible for setting the
  minimum reimbursement rate paid to a nursing facility under the
  managed care program, including the staff rate enhancement paid to
  a nursing facility that qualifies for the enhancement;
               (2)  that a nursing facility is paid not later than the
  10th day after the date the facility submits a clean claim;
               (3)  the appropriate utilization of services
  consistent with criteria adopted by the commission;
               (4)  a reduction in the incidence of potentially
  preventable events and unnecessary institutionalizations;
               (5)  that a managed care organization providing
  services under the managed care program provides discharge
  planning, transitional care, and other education programs to
  physicians and hospitals regarding all available long-term care
  settings;
               (6)  that a managed care organization providing
  services under the managed care program:
                     (A)  assists in collecting applied income from
  recipients; and
                     (B)  provides payment incentives to nursing
  facility providers that reward reductions in preventable acute care
  costs and encourage transformative efforts in the delivery of
  nursing facility services, including efforts to promote a
  resident-centered care culture through facility design and
  services provided;
               (7)  the establishment of a portal that is in
  compliance with state and federal regulations, including standard
  coding requirements, through which nursing facility providers
  participating in the STAR + PLUS Medicaid managed care program may
  submit claims to any participating managed care organization;
               (8)  that rules and procedures relating to the
  certification and decertification of nursing facility beds under
  the medical assistance program are not affected; and
               (9)  that a managed care organization providing
  services under the managed care program, to the greatest extent
  possible, offers nursing facility providers access to:
                     (A)  acute care professionals; and
                     (B)  telemedicine, when feasible and in
  accordance with state law, including rules adopted by the Texas
  Medical Board.
         (d)  Subject to Subsection (e), the commission shall ensure
  that a nursing facility provider authorized to provide services
  under the medical assistance program on September 1, 2013, is
  allowed to participate in the STAR + PLUS Medicaid managed care
  program through August 31, 2017.
         (e)  The commission shall establish credentialing and
  minimum performance standards for nursing facility providers
  seeking to participate in the STAR + PLUS Medicaid managed care
  program that are consistent with adopted federal and state
  standards. A managed care organization may refuse to contract with
  a nursing facility provider if the nursing facility does not meet
  the minimum performance standards established by the commission
  under this section.
         (f)  A managed care organization may not require prior
  authorization for a nursing facility resident in need of emergency
  hospital services.
         (g)  Subsections (c), (d), (e), and (f) and this subsection
  expire September 1, 2019.
         Sec. 533.002515.  PLANNED PREPARATION FOR DELIVERY OF
  NURSING FACILITY BENEFITS THROUGH STAR + PLUS MEDICAID MANAGED CARE
  PROGRAM. (a)  The commission shall develop a plan in preparation
  for implementing the requirement under Section 533.00251(c) that
  the commission provide benefits under the medical assistance
  program to recipients who reside in nursing facilities through the
  STAR + PLUS Medicaid managed care program. The plan required by
  this section must be completed in two phases as follows:
               (1)  phase one: contract planning phase; and
               (2)  phase two: initial testing phase.
         (b)  In phase one, the commission shall develop a contract
  template to be used by the commission when the commission contracts
  with a managed care organization to provide nursing facility
  services under the STAR + PLUS Medicaid managed care program. In
  addition to the requirements of Section 533.005 and any other
  applicable law, the template must include:
               (1)  nursing home credentialing requirements;
               (2)  appeals processes;
               (3)  termination provisions;
               (4)  prompt payment requirements and a liquidated
  damages provision that contains financial penalties for failure to
  meet prompt payment requirements;
               (5)  a description of medical necessity criteria;
               (6)  a requirement that the managed care organization
  provide recipients and recipients' families freedom of choice in
  selecting a nursing facility; and
               (7)  a description of the managed care organization's
  role in discharge planning and imposing prior authorization
  requirements.
         (c)  In phase two, the commission shall:
               (1)  design and test the portal required under Section
  533.00251(c)(7);
               (2)  establish and inform managed care organizations of
  the minimum technological or system requirements needed to use the
  portal required under Section 533.00251(c)(7);
               (3)  establish operating policies that require that
  managed care organizations maintain a portal through which
  providers may confirm recipient eligibility on a monthly basis; and
               (4)  establish the manner in which managed care
  organizations are to assist the commission in collecting from
  recipients applied income or cost-sharing payments, including
  copayments, as applicable.
         (d)  This section expires September 1, 2015.
         Sec. 533.00252.  STAR + PLUS NURSING FACILITY ADVISORY
  COMMITTEE. (a)  The STAR + PLUS Nursing Facility Advisory
  Committee is established to advise the commission on the
  implementation of and other activities related to the provision of
  medical assistance benefits to recipients who reside in nursing
  facilities through the STAR + PLUS Medicaid managed care program
  under Section 533.00251, including advising the commission
  regarding its duties with respect to:
               (1)  developing quality-based outcomes and process
  measures for long-term services and supports provided in nursing
  facilities;
               (2)  developing quality-based long-term care payment
  systems and quality initiatives for nursing facilities;
               (3)  transparency of information received from managed
  care organizations;
               (4)  the reporting of outcome and process measures;
               (5)  the sharing of data among health and human
  services agencies; and
               (6)  patient care coordination, quality of care
  improvement, and cost savings.
         (b)  The governor, lieutenant governor, and speaker of the
  house of representatives shall each appoint five members of the
  advisory committee as follows:
               (1)  one member who is a physician and medical director
  of a nursing facility provider with experience providing the
  long-term continuum of care, including home care and hospice;
               (2)  one member who is a nonprofit nursing facility
  provider;
               (3)  one member who is a for-profit nursing facility
  provider;
               (4)  one member who is a consumer representative; and
               (5)  one member who is from a managed care organization
  providing services as provided by Section 533.00251.
         (c)  The executive commissioner shall appoint the presiding
  officer of the advisory committee.
         (d)  A member of the advisory committee serves without
  compensation.
         (e)  The advisory committee is subject to the requirements of
  Chapter 551.
         (f)  On September 1, 2016:
               (1)  the advisory committee is abolished; and
               (2)  this section expires.
         Sec. 533.00253.  STAR KIDS MEDICAID MANAGED CARE PROGRAM.
  (a)  In this section:
               (1)  "Advisory committee" means the STAR Kids Managed
  Care Advisory Committee established under Section 533.00254.
               (2)  "Health home" means a primary care provider
  practice, or, if appropriate, a specialty care provider practice,
  incorporating several features, including comprehensive care
  coordination, family-centered care, and data management, that are
  focused on improving outcome-based quality of care and increasing
  patient and provider satisfaction under the medical assistance
  program.
               (3)  "Potentially preventable event" has the meaning
  assigned by Section 536.001.
         (b)  Subject to Section 533.0025, the commission shall, in
  consultation with the advisory committee and the Children's Policy
  Council established under Section 22.035, Human Resources Code,
  establish a mandatory STAR Kids capitated managed care program
  tailored to provide medical assistance benefits to children with
  disabilities. The managed care program developed under this
  section must:
               (1)  provide medical assistance benefits that are
  customized to meet the health care needs of recipients under the
  program through a defined system of care;
               (2)  better coordinate care of recipients under the
  program;
               (3)  improve the health outcomes of recipients;
               (4)  improve recipients' access to health care
  services;
               (5)  achieve cost containment and cost efficiency;
               (6)  reduce the administrative complexity of
  delivering medical assistance benefits;
               (7)  reduce the incidence of unnecessary
  institutionalizations and potentially preventable events by
  ensuring the availability of appropriate services and care
  management;
               (8)  require a health home; and
               (9)  coordinate and collaborate with long-term care
  service providers and long-term care management providers, if
  recipients are receiving long-term services and supports outside of
  the managed care organization.
         (c)  The commission may require that care management
  services made available as provided by Subsection (b)(7):
               (1)  incorporate best practices, as determined by the
  commission;
               (2)  integrate with a nurse advice line to ensure
  appropriate redirection rates;
               (3)  use an identification and stratification
  methodology that identifies recipients who have the greatest need
  for services;
               (4)  provide a care needs assessment for a recipient
  that is comprehensive, holistic, consumer-directed,
  evidence-based, and takes into consideration social and medical
  issues, for purposes of prioritizing the recipient's needs that
  threaten independent living;
               (5)  are delivered through multidisciplinary care
  teams located in different geographic areas of this state that use
  in-person contact with recipients and their caregivers;
               (6)  identify immediate interventions for transition
  of care;
               (7)  include monitoring and reporting outcomes that, at
  a minimum, include:
                     (A)  recipient quality of life;
                     (B)  recipient satisfaction; and
                     (C)  other financial and clinical metrics
  determined appropriate by the commission; and
               (8)  use innovations in the provision of services.
         (d)  The commission shall provide medical assistance
  benefits through the STAR Kids managed care program established
  under this section to children who are receiving benefits under the
  medically dependent children (MDCP) waiver program. The commission
  shall ensure that the STAR Kids managed care program provides all of
  the benefits provided under the medically dependent children (MDCP)
  waiver program to the extent necessary to implement this
  subsection.
         (e)  The commission shall ensure that there is a plan for
  transitioning the provision of Medicaid program benefits to
  recipients 21 years of age or older from under the STAR Kids program
  to under the STAR + PLUS Medicaid managed care program that protects
  continuity of care. The plan must ensure that coordination between
  the programs begins when a recipient reaches 18 years of age.
         (f)  The commission shall seek ongoing input from the
  Children's Policy Council regarding the establishment and
  implementation of the STAR Kids managed care program.
         Sec. 533.00254.  STAR KIDS MANAGED CARE ADVISORY COMMITTEE.
  (a)  The STAR Kids Managed Care Advisory Committee is established
  to advise the commission on the establishment and implementation of
  the STAR Kids managed care program under Section 533.00253.
         (b)  The executive commissioner shall appoint the members of
  the advisory committee. The committee must consist of:
               (1)  families whose children will receive private duty
  nursing under the program;
               (2)  health care providers;
               (3)  providers of home and community-based services,
  including at least one private duty nursing provider and one
  pediatric therapy provider; and
               (4)  other stakeholders as the executive commissioner
  determines appropriate.
         (c)  The executive commissioner shall appoint the presiding
  officer of the advisory committee.
         (d)  A member of the advisory committee serves without
  compensation.
         (e)  The advisory committee is subject to the requirements of
  Chapter 551.
         (f)  On September 1, 2016:
               (1)  the advisory committee is abolished; and
               (2)  this section expires.
         SECTION 2.03.  Subchapter A, Chapter 533, Government Code,
  is amended by adding Section 533.00285 to read as follows:
         Sec. 533.00285.  STAR + PLUS QUALITY COUNCIL. (a)  The STAR
  + PLUS Quality Council is established to advise the commission on
  the development of policy recommendations that will ensure eligible
  recipients receive quality, person-centered, consumer-directed
  acute care services and long-term services and supports in an
  integrated setting under the STAR + PLUS Medicaid managed care
  program.
         (b)  The executive commissioner shall appoint the members of
  the council, who must be stakeholders from the acute care services
  and long-term services and supports community, including:
               (1)  representatives of health and human services
  agencies;
               (2)  recipients under the STAR + PLUS Medicaid managed
  care program;
               (3)  representatives of advocacy groups representing
  individuals with disabilities and seniors who are recipients under
  the STAR + PLUS Medicaid managed care program;
               (4)  representatives of service providers for
  individuals with disabilities; and
               (5)  representatives of health maintenance
  organizations.
         (c)  The executive commissioner shall appoint the presiding
  officer of the council.
         (d)  The council shall meet at least quarterly or more
  frequently if the presiding officer determines that it is necessary
  to carry out the responsibilities of the council.
         (e)  Not later than November 1 of each year, the council in
  coordination with the commission shall submit a report to the
  executive commissioner that includes:
               (1)  an analysis and assessment of the quality of acute
  care services and long-term services and supports provided under
  the STAR + PLUS Medicaid managed care program;
               (2)  recommendations regarding how to improve the
  quality of acute care services and long-term services and supports
  provided under the program; and
               (3)  recommendations regarding how to ensure that
  recipients eligible to receive services and supports under the
  program receive person-centered, consumer-directed care in the
  most integrated setting achievable.
         (f)  Not later than December 1 of each even-numbered year,
  the commission, in consultation with the council, shall submit a
  report to the legislature regarding the assessments and
  recommendations contained in any report submitted by the council
  under Subsection (e) during the most recent state fiscal biennium.
         (g)  The council is subject to the requirements of Chapter
  551.
         (h)  A member of the council serves without compensation.
         (i)  On January 1, 2017:
               (1)  the council is abolished; and
               (2)  this section expires.
         SECTION 2.04.  Section 533.005, Government Code, is amended
  by amending Subsections (a) and (a-1) and adding Subsection (a-3)
  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 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)  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 on any [not later
  than the 45th day after the date a] 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;
                           (ii)  the 30th day after the date the claim
  is received if the claim relates to the provision of long-term
  services and supports not subject to 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
  described by Subdivision (7)(A)(ii) on average not later than the
  21st day after the date the claim is received by the organization;
               (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 usages of out-of-network providers or groups of
  out-of-network providers may not exceed limits for those usages
  relating to total inpatient admissions, total outpatient services,
  and emergency room admissions determined by the commission;
               (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 the organization use advanced
  practice nurses in addition to physicians as primary care providers
  to increase the availability of primary care providers in the
  organization's provider network;
               (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 appeals related to claims payment, including
  a process that will require:
                     (A)  a tracking mechanism to document the status
  and final disposition of each provider's claims payment appeal;
                     (B)  the contracting with physicians who are not
  network providers and who are of the same or related specialty as
  the appealing physician to resolve claims disputes related to
  denial on the basis of medical necessity that remain unresolved
  subsequent to a provider appeal; [and]
                     (C)  the determination of the physician resolving
  the dispute to be binding on the managed care organization and
  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;
               (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 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 will provide recipients sufficient
  access to:
                           (i) [(A)]  preventive care;
                           (ii) [(B)]  primary care;
                           (iii) [(C)]  specialty care;
                           (iv) [(D)]  after-hours urgent care; [and]
                           (v) [(E)]  chronic care;
                           (vi)  long-term services and supports;
                           (vii)  nursing services; and
                           (viii)  therapy services, including
  services provided in a clinical setting or in a home or
  community-based setting; and
                     (B)  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 Paragraph (A) and specific data with respect to Paragraphs
  (A)(iii), (vi), (vii), and (viii) on the average length of time
  between:
                           (i)  the date a provider makes a referral for
  the care or service and the date the organization approves or denies
  the referral; and
                           (ii)  the date the organization approves a
  referral for the care or service and the date the care or service is
  initiated;
               (21)  a requirement that the managed care organization
  demonstrate to the commission, before the organization begins to
  provide health care services to recipients, that:
                     (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; [and]
                           (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 the Medicaid program;
                     (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; and
                     (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]
               (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.
         (a-1)  The requirements imposed by Subsections (a)(23)(A),
  (B), and (C) do not apply, and may not be enforced, on and after
  August 31, 2018 [2013].
         (a-3)  For purposes of Subsection (a)(25)(A), a provider
  reimbursement rate reduction is considered to have received the
  commission's prior approval 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.
         SECTION 2.05.  Section 533.041, Government Code, is amended
  by amending Subsection (a) and adding Subsections (c) and (d) to
  read as follows:
         (a)  The executive commissioner [commission] shall appoint a
  state Medicaid managed care advisory committee. The advisory
  committee consists of representatives of:
               (1)  hospitals;
               (2)  managed care organizations and participating
  health care providers;
               (3)  primary care providers and specialty care
  providers;
               (4)  state agencies;
               (5)  low-income recipients or consumer advocates
  representing low-income recipients;
               (6)  recipients with disabilities, including
  recipients with intellectual and developmental disabilities or
  physical disabilities, or consumer advocates representing those
  recipients [with a disability];
               (7)  parents of children who are recipients;
               (8)  rural providers;
               (9)  advocates for children with special health care
  needs;
               (10)  pediatric health care providers, including
  specialty providers;
               (11)  long-term services and supports [care]
  providers, including nursing facility [home] providers and direct
  service workers;
               (12)  obstetrical care providers;
               (13)  community-based organizations serving low-income
  children and their families; [and]
               (14)  community-based organizations engaged in
  perinatal services and outreach;
               (15)  recipients who are 65 years of age or older;
               (16)  recipients with mental illness;
               (17)  nonphysician mental health providers
  participating in the Medicaid managed care program; and
               (18)  entities with responsibilities for the delivery
  of long-term services and supports or other Medicaid program
  service delivery, including:
                     (A)  independent living centers;
                     (B)  area agencies on aging;
                     (C)  aging and disability resource centers
  established under the Aging and Disability Resource Center
  initiative funded in part by the federal Administration on Aging
  and the Centers for Medicare and Medicaid Services;
                     (D)  community mental health and intellectual
  disability centers; and
                     (E)  the NorthSTAR Behavioral Health Program
  provided under Chapter 534, Health and Safety Code.
         (c)  The executive commissioner shall appoint the presiding
  officer of the advisory committee.
         (d)  To the greatest extent possible, the executive
  commissioner shall appoint members of the advisory committee who
  reflect the geographic diversity of the state and include members
  who represent rural Medicaid program recipients.
         SECTION 2.06.  Section 533.042, Government Code, is amended
  to read as follows:
         Sec. 533.042.  MEETINGS. (a)  The advisory committee shall
  meet at the call of the presiding officer at least semiannually, but
  no more frequently than quarterly.
         (b)  The advisory committee:
               (1)  [,] shall develop procedures that provide the
  public with reasonable opportunity to appear before the committee
  [committtee] and speak on any issue under the jurisdiction of the
  committee;[,] and
               (2)  is subject to Chapter 551.
         SECTION 2.07.  Section 533.043, Government Code, is amended
  to read as follows:
         Sec. 533.043.  POWERS AND DUTIES. (a)  The advisory
  committee shall:
               (1)  provide recommendations and ongoing advisory
  input to the commission on the statewide implementation and
  operation of Medicaid managed care, including:
                     (A)  program design and benefits;
                     (B)  systemic concerns from consumers and
  providers;
                     (C)  the efficiency and quality of services
  delivered by Medicaid managed care organizations;
                     (D)  contract requirements for Medicaid managed
  care organizations;
                     (E)  Medicaid managed care provider network
  adequacy;
                     (F)  trends in claims processing; and
                     (G)  other issues as requested by the executive
  commissioner;
               (2)  assist the commission with issues relevant to
  Medicaid managed care to improve the policies established for and
  programs operating under Medicaid managed care, including the early
  and periodic screening, diagnosis, and treatment program, provider
  and patient education issues, and patient eligibility issues; and
               (3)  disseminate or make available to each regional
  advisory committee appointed under Subchapter B information on best
  practices with respect to Medicaid managed care that is obtained
  from a regional advisory committee.
         (b)  The commission and the Department of Aging and
  Disability Services shall ensure coordination and communication
  between the advisory committee, regional Medicaid managed care
  advisory committees appointed by the commission under Subchapter B,
  and other advisory committees or groups that perform functions
  related to Medicaid managed care, including the Intellectual and
  Developmental Disability System Redesign Advisory Committee
  established under Section 534.053, in a manner that enables the
  state Medicaid managed care advisory committee to act as a central
  source of agency information and stakeholder input relevant to the
  implementation and operation of Medicaid managed care.
         (c)  The advisory committee may establish work groups that
  meet at other times for purposes of studying and making
  recommendations on issues the committee determines appropriate.
         SECTION 2.08.  Section 533.044, Government Code, is amended
  to read as follows:
         Sec. 533.044.  OTHER LAW.  (a)  Except as provided by
  Subsection (b) and other provisions of this subchapter, the
  advisory committee is subject to Chapter 2110.
         (b)  Section 2110.008 does not apply to the advisory
  committee.
         SECTION 2.09.  Subchapter C, Chapter 533, Government Code,
  is amended by adding Section 533.045 to read as follows:
         Sec. 533.045.  COMPENSATION; REIMBURSEMENT. (a)  Except as
  provided by Subsection (b), a member of the advisory committee is
  not entitled to receive compensation or reimbursement for travel
  expenses.
         (b)  A member of the advisory committee who is a Medicaid
  program recipient or the relative of a Medicaid program recipient
  is entitled to a per diem allowance and reimbursement at rates
  established in the General Appropriations Act.
         SECTION 2.10.  Section 32.0212, Human Resources Code, is
  amended to read as follows:
         Sec. 32.0212.  DELIVERY OF MEDICAL ASSISTANCE.
  Notwithstanding any other law and subject to Section 533.0025,
  Government Code, the department shall provide medical assistance
  for acute care services through the Medicaid managed care system
  implemented under Chapter 533, Government Code, or another Medicaid
  capitated managed care program.
         SECTION 2.11.  (a)  The senate health and human services
  committee and the house human services committee shall study and
  review:
               (1)  the requirement under Subsection (c), Section
  533.00251, Government Code, as added by this article, that medical
  assistance program recipients who reside in nursing facilities
  receive nursing facility benefits through the STAR + PLUS Medicaid
  managed care program; and
               (2)  the implementation of that requirement.
         (b)  Not later than January 15, 2015, the committees shall
  report the committees' findings and recommendations to the
  lieutenant governor, the speaker of the house of representatives,
  and the governor. The committees shall include in the
  recommendations specific statutory, rule, and procedural changes
  that appear necessary from the results of the committees' study
  under Subsection (a) of this section.
         (c)  This section expires September 1, 2015.
         SECTION 2.12.  (a)  The Health and Human Services Commission
  and the Department of Aging and Disability Services shall:
               (1)  review and evaluate the outcomes of the transition
  of the provision of benefits to recipients under the medically
  dependent children (MDCP) waiver program to the STAR Kids managed
  care program delivery model established under Section 533.00253,
  Government Code, as added by this article;
               (2)  not later than December 1, 2016, submit an initial
  report to the legislature on the review and evaluation conducted
  under Subdivision (1) of this subsection, including
  recommendations for continued implementation and improvement of
  the program; and
               (3)  not later than December 1 of each year after 2016
  and until December 1, 2020, submit additional reports that include
  the information described by Subdivision (1) of this subsection.
         (b)  This section expires September 1, 2021.
         SECTION 2.13.  (a)  Not later than October 1, 2013, the
  executive commissioner of the Health and Human Services Commission
  shall appoint the members of the STAR + PLUS Quality Council as
  required by Section 533.00285, Government Code, as added by this
  article.
         (b)  The STAR + PLUS Quality Council, in coordination with
  the Health and Human Services Commission, shall submit:
               (1)  the initial report required under Subsection (e),
  Section 533.00285, Government Code, as added by this article, not
  later than November 1, 2014; and
               (2)  the final report required under that subsection
  not later than November 1, 2016.
         (c)  The Health and Human Services Commission shall submit:
               (1)  the initial report required under Subsection (f),
  Section 533.00285, Government Code, as added by this article, not
  later than December 1, 2014; and
               (2)  the final report required under that subsection
  not later than December 1, 2016.
         SECTION 2.14.  Not later than June 1, 2016, the Health and
  Human Services Commission shall submit a report to the legislature
  regarding the commission's experience in, including the
  cost-effectiveness of, delivering basic attendant and habilitation
  services for individuals with disabilities under the STAR + PLUS
  Medicaid managed care program under Subsection (i), Section
  533.0025, Government Code, as added by this article. The
  commission may combine the report required under this section with
  the report required under Section 1.06 of this Act.
         SECTION 2.15.  (a)  The Health and Human Services Commission
  shall, in a contract between the commission and a managed care
  organization under Chapter 533, Government Code, that is entered
  into or renewed on or after the effective date of this Act, require
  that the managed care organization comply with applicable
  provisions of Subsection (a), Section 533.005, Government Code, as
  amended by this article.
         (b)  The Health and Human Services Commission shall seek to
  amend contracts entered into with managed care organizations under
  Chapter 533, Government Code, before the effective date of this Act
  to require those managed care organizations to comply with
  applicable provisions of Subsection (a), Section 533.005,
  Government Code, as amended by this article. To the extent of a
  conflict between the applicable provisions of that subsection and a
  provision of a contract with a managed care organization entered
  into before the effective date of this Act, the contract provision
  prevails.
         SECTION 2.16.  Not later than September 15, 2013, the
  governor, lieutenant governor, and speaker of the house of
  representatives shall appoint the members of the STAR + PLUS
  Nursing Facility Advisory Committee as required by Section
  533.00252, Government Code, as added by this article.
         SECTION 2.17.  (a)  Not later than October 1, 2013, the
  Health and Human Services Commission shall:
               (1)  complete phase one of the plan required under
  Section 533.002515, Government Code, as added by this article; and
               (2)  submit a report regarding the implementation of
  phase one of the plan together with a copy of the contract template
  required by that section to the STAR + PLUS Nursing Facility
  Advisory Committee established under Section 533.00252, Government
  Code, as added by this article.
         (b)  Not later than July 15, 2014, the Health and Human
  Services Commission shall:
               (1)  complete phase two of the plan required under
  Section 533.002515, Government Code, as added by this article; and
               (2)  submit a report regarding the implementation of
  phase two to the STAR + PLUS Nursing Facility Advisory Committee
  established under Section 533.00252, Government Code, as added by
  this article.
         SECTION 2.18.  (a)  The Health and Human Services Commission
  may not:
               (1)  implement Paragraph (B), Subdivision (6),
  Subsection (c), Section 533.00251, Government Code, as added by
  this article, unless the commission seeks and obtains a waiver or
  other authorization from the federal Centers for Medicare and
  Medicaid Services or other appropriate entity that ensures a
  significant portion, but not more than 80 percent, of accrued
  savings to the Medicare program as a result of reduced
  hospitalizations and institutionalizations and other care and
  efficiency improvements to nursing facilities participating in the
  medical assistance program in this state will be returned to this
  state and distributed to those facilities; and
               (2)  begin providing medical assistance benefits to
  recipients under Section 533.00251, Government Code, as added by
  this article, before September 1, 2014.
         (b)  As soon as practicable after the implementation date of
  Section 533.00251, Government Code, as added by this article, the
  Health and Human Services Commission shall provide a portal through
  which nursing facility providers participating in the STAR + PLUS
  Medicaid managed care program may submit claims in accordance with
  Subdivision (7), Subsection (c), Section 533.00251, Government
  Code, as added by this article.
         SECTION 2.19.  (a)  Not later than October 1, 2013, the
  executive commissioner of the Health and Human Services Commission
  shall appoint additional members to the state Medicaid managed care
  advisory committee to comply with Section 533.041, Government Code,
  as amended by this article.
         (b)  Not later than December 1, 2013, the presiding officer
  of the state Medicaid managed care advisory committee shall convene
  the first meeting of the advisory committee following appointment
  of additional members as required by Subsection (a) of this
  section.
         SECTION 2.20.  As soon as practicable after the effective
  date of this Act, but not later than January 1, 2014, the executive
  commissioner of the Health and Human Services Commission shall
  adopt rules and managed care contracting guidelines governing the
  transition of appropriate duties and functions from the commission
  and other health and human services agencies to managed care
  organizations that are required as a result of the changes in law
  made by this article.
         SECTION 2.21.  The changes in law made by this article are
  not intended to negatively affect Medicaid recipients' access to
  quality health care. The Health and Human Services Commission, as
  the state agency designated to supervise the administration and
  operation of the Medicaid program and to plan and direct the
  Medicaid program in each state agency that operates a portion of the
  Medicaid program, including directing the Medicaid managed care
  system, shall continue to timely enforce all laws applicable to the
  Medicaid program and the Medicaid managed care system, including
  laws relating to provider network adequacy, the prompt payment of
  claims, and the resolution of patient and provider complaints.
  ARTICLE 3.  OTHER PROVISIONS RELATING TO INDIVIDUALS WITH
  INTELLECTUAL AND DEVELOPMENTAL DISABILITIES
         SECTION 3.01.  Subchapter B, Chapter 533, Health and Safety
  Code, is amended by adding Section 533.0335 to read as follows:
         Sec. 533.0335.  COMPREHENSIVE ASSESSMENT AND RESOURCE
  ALLOCATION PROCESS. (a)  In this section:
               (1)  "Advisory committee" means the Intellectual and
  Developmental Disability System Redesign Advisory Committee
  established under Section 534.053, Government Code.
               (2)  "Department" means the Department of Aging and
  Disability Services.
               (3)  "Functional need," "ICF-IID program," and
  "Medicaid waiver program" have the meanings assigned those terms by
  Section 534.001, Government Code.
         (b)  Subject to the availability of federal funding, the
  department shall develop and implement a comprehensive assessment
  instrument and a resource allocation process for individuals with
  intellectual and developmental disabilities as needed to ensure
  that each individual with an intellectual or developmental
  disability receives the type, intensity, and range of services that
  are both appropriate and available, based on the functional needs
  of that individual, if the individual receives services through one
  of the following:
               (1)  a Medicaid waiver program;
               (2)  the ICF-IID program; or
               (3)  an intermediate care facility operated by the
  state and providing services for individuals with intellectual and
  developmental disabilities.
         (b-1)  In developing a comprehensive assessment instrument
  for purposes of Subsection (b), the department shall evaluate any
  assessment instrument in use by the department. In addition, the
  department may implement an evidence-based, nationally recognized,
  comprehensive assessment instrument that assesses the functional
  needs of an individual with intellectual and developmental
  disabilities as the comprehensive assessment instrument required
  by Subsection (b). This subsection expires September 1, 2015.
         (c)  The department, in consultation with the advisory
  committee, shall establish a prior authorization process for
  requests for supervised living or residential support services
  available in the home and community-based services (HCS) Medicaid
  waiver program. The process must ensure that supervised living or
  residential support services available in the home and
  community-based services (HCS) Medicaid waiver program are
  available only to individuals for whom a more independent setting
  is not appropriate or available.
         (d)  The department shall cooperate with the advisory
  committee to establish the prior authorization process required by
  Subsection (c). This subsection expires January 1, 2024.
         SECTION 3.02.  Subchapter B, Chapter 533, Health and Safety
  Code, is amended by adding Sections 533.03551 and 533.03552 to read
  as follows:
         Sec. 533.03551.  FLEXIBLE, LOW-COST HOUSING OPTIONS.
  (a)  To the extent permitted under federal law and regulations, the
  executive commissioner shall adopt or amend rules as necessary to
  allow for the development of additional housing supports for
  individuals with disabilities, including individuals with
  intellectual and developmental disabilities, in urban and rural
  areas, including:
               (1)  a selection of community-based housing options
  that comprise a continuum of integration, varying from most to
  least restrictive, that permits individuals to select the most
  integrated and least restrictive setting appropriate to the
  individual's needs and preferences;
               (2)  provider-owned and non-provider-owned residential
  settings;
               (3)  assistance with living more independently; and
               (4)  rental properties with on-site supports.
         (b)  The Department of Aging and Disability Services, in
  cooperation with the Texas Department of Housing and Community
  Affairs, the Department of Agriculture, the Texas State Affordable
  Housing Corporation, and the Intellectual and Developmental
  Disability System Redesign Advisory Committee established under
  Section 534.053, Government Code, shall coordinate with federal,
  state, and local public housing entities as necessary to expand
  opportunities for accessible, affordable, and integrated housing
  to meet the complex needs of individuals with disabilities,
  including individuals with intellectual and developmental
  disabilities.
         (c)  The Department of Aging and Disability Services shall
  develop a process to receive input from statewide stakeholders to
  ensure the most comprehensive review of opportunities and options
  for housing services described by this section.
         Sec. 533.03552.  BEHAVIORAL SUPPORTS FOR INDIVIDUALS WITH
  INTELLECTUAL AND DEVELOPMENTAL DISABILITIES AT RISK OF
  INSTITUTIONALIZATION; INTERVENTION TEAMS. (a)  In this section,
  "department" means the Department of Aging and Disability Services.
         (b)  Subject to the availability of federal funding, the
  department shall develop and implement specialized training for
  providers, family members, caregivers, and first responders
  providing direct services and supports to individuals with
  intellectual and developmental disabilities and behavioral health
  needs who are at risk of institutionalization.
         (c)  Subject to the availability of federal funding, the
  department shall establish one or more behavioral health
  intervention teams to provide services and supports to individuals
  with intellectual and developmental disabilities and behavioral
  health needs who are at risk of institutionalization. An
  intervention team may include a:
               (1)  psychiatrist or psychologist;
               (2)  physician;
               (3)  registered nurse;
               (4)  pharmacist or representative of a pharmacy;
               (5)  behavior analyst;
               (6)  social worker;
               (7)  crisis coordinator;
               (8)  peer specialist; and
               (9)  family partner.
         (d)  In providing services and supports, a behavioral health
  intervention team established by the department shall:
               (1)  use the team's best efforts to ensure that an
  individual remains in the community and avoids
  institutionalization;
               (2)  focus on stabilizing the individual and assessing
  the individual for intellectual, medical, psychiatric,
  psychological, and other needs;
               (3)  provide support to the individual's family members
  and other caregivers;
               (4)  provide intensive behavioral assessment and
  training to assist the individual in establishing positive
  behaviors and continuing to live in the community; and
               (5)  provide clinical and other referrals.
         (e)  The department shall ensure that members of a behavioral
  health intervention team established under this section receive
  training on trauma-informed care, which is an approach to providing
  care to individuals with behavioral health needs based on awareness
  that a history of trauma or the presence of trauma symptoms may
  create the behavioral health needs of the individual.
         SECTION 3.03.  (a)  The Health and Human Services Commission
  and the Department of Aging and Disability Services shall conduct a
  study to identify crisis intervention programs currently available
  to, evaluate the need for appropriate housing for, and develop
  strategies for serving the needs of persons in this state with
  Prader-Willi syndrome.
         (b)  In conducting the study, the Health and Human Services
  Commission and the Department of Aging and Disability Services
  shall seek stakeholder input.
         (c)  Not later than December 1, 2014, the Health and Human
  Services Commission shall submit a report to the governor, the
  lieutenant governor, the speaker of the house of representatives,
  and the presiding officers of the standing committees of the senate
  and house of representatives having jurisdiction over the Medicaid
  program regarding the study required by this section.
         (d)  This section expires September 1, 2015.
         SECTION 3.04.  (a)  In this section:
               (1)  "Medicaid program" means the medical assistance
  program established under Chapter 32, Human Resources Code.
               (2)  "Section 1915(c) waiver program" has the meaning
  assigned by Section 531.001, Government Code.
         (b)  The Health and Human Services Commission shall conduct a
  study to evaluate the need for applying income disregards to
  persons with intellectual and developmental disabilities receiving
  benefits under the medical assistance program, including through a
  Section 1915(c) waiver program.
         (c)  Not later than January 15, 2015, the Health and Human
  Services Commission shall submit a report to the governor, the
  lieutenant governor, the speaker of the house of representatives,
  and the presiding officers of the standing committees of the senate
  and house of representatives having jurisdiction over the Medicaid
  program regarding the study required by this section.
         (d)  This section expires September 1, 2015.
  ARTICLE 4.  QUALITY-BASED OUTCOMES AND PAYMENT PROVISIONS
         SECTION 4.01.  Subchapter A, Chapter 533, Government Code,
  is amended by adding Section 533.00256 to read as follows:
         Sec. 533.00256.  MANAGED CARE CLINICAL IMPROVEMENT PROGRAM.
  (a)  In consultation with the Medicaid and CHIP Quality-Based
  Payment Advisory Committee established under Section 536.002 and
  other appropriate stakeholders with an interest in the provision of
  acute care services and long-term services and supports under the
  Medicaid managed care program, the commission shall:
               (1)  establish a clinical improvement program to
  identify goals designed to improve quality of care and care
  management and to reduce potentially preventable events, as defined
  by Section 536.001; and
               (2)  require managed care organizations to develop and
  implement collaborative program improvement strategies to address
  the goals.
         (b)  Goals established under this section may be set by
  geographic region and program type.
         SECTION 4.02.  Subsections (a) and (g), Section 533.0051,
  Government Code, are amended to read as follows:
         (a)  The commission shall establish outcome-based
  performance measures and incentives to include in each contract
  between a health maintenance organization and the commission for
  the provision of health care services to recipients that is
  procured and managed under a value-based purchasing model. The
  performance measures and incentives must:
               (1)  be designed to facilitate and increase recipients'
  access to appropriate health care services; and
               (2)  to the extent possible, align with other state and
  regional quality care improvement initiatives.
         (g)  In performing the commission's duties under Subsection
  (d) with respect to assessing feasibility and cost-effectiveness,
  the commission may consult with participating Medicaid providers
  [physicians], including those with expertise in quality
  improvement and performance measurement[, and hospitals].
         SECTION 4.03.  Subchapter A, Chapter 533, Government Code,
  is amended by adding Section 533.00511 to read as follows:
         Sec. 533.00511.  QUALITY-BASED ENROLLMENT INCENTIVE PROGRAM
  FOR MANAGED CARE ORGANIZATIONS. (a)  In this section, "potentially
  preventable event" has the meaning assigned by Section 536.001.
         (b)  The commission shall create an incentive program that
  automatically enrolls a greater percentage of recipients who did
  not actively choose their managed care plan in a managed care plan,
  based on:
               (1)  the quality of care provided through the managed
  care organization offering that managed care plan;
               (2)  the organization's ability to efficiently and
  effectively provide services, taking into consideration the acuity
  of populations primarily served by the organization; and
               (3)  the organization's performance with respect to
  exceeding, or failing to achieve, appropriate outcome and process
  measures developed by the commission, including measures based on
  potentially preventable events.
         SECTION 4.04.  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 information directly to the commission for
  correction in the state system;
                     (C)  promoting consistency and uniformity among
  managed care organization policies, including policies relating to
  the preauthorization process, lengths of hospital stays, filing
  deadlines, levels of care, and case management services;
                     (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 [single] portal 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 4.05.  Section 533.014, Government Code, is amended
  by amending Subsection (b) and adding Subsection (c) to read as
  follows:
         (b)  Except as provided by Subsection (c), any [Any] amount
  received by the state under this section shall be deposited in the
  general revenue fund for the purpose of funding the state Medicaid
  program.
         (c)  If cost-effective, the commission may use amounts
  received by the state under this section to provide incentives to
  specific managed care organizations to promote quality of care,
  encourage payment reform, reward local service delivery reform,
  increase efficiency, and reduce inappropriate or preventable
  service utilization.
         SECTION 4.06.  Subsection (b), Section 536.002, Government
  Code, is amended to read as follows:
         (b)  The executive commissioner shall appoint the members of
  the advisory committee. The committee must consist of physicians
  and other health care providers, representatives of health care
  facilities, representatives of managed care organizations, and
  other stakeholders interested in health care services provided in
  this state, including:
               (1)  at least one member who is a physician with
  clinical practice experience in obstetrics and gynecology;
               (2)  at least one member who is a physician with
  clinical practice experience in pediatrics;
               (3)  at least one member who is a physician with
  clinical practice experience in internal medicine or family
  medicine;
               (4)  at least one member who is a physician with
  clinical practice experience in geriatric medicine;
               (5)  at least three members [one member] who are [is] or
  who represent [represents] a health care provider that primarily
  provides long-term [care] services and supports;
               (6)  at least one member who is a consumer
  representative; and
               (7)  at least one member who is a member of the Advisory
  Panel on Health Care-Associated Infections and Preventable Adverse
  Events who meets the qualifications prescribed by Section
  98.052(a)(4), Health and Safety Code.
         SECTION 4.07.  Section 536.003, Government Code, is amended
  by amending Subsections (a) and (b) and adding Subsection (a-1) to
  read as follows:
         (a)  The commission, in consultation with the advisory
  committee, shall develop quality-based outcome and process
  measures that promote the provision of efficient, quality health
  care and that can be used in the child health plan and Medicaid
  programs to implement quality-based payments for acute [and
  long-term] care services and long-term services and supports across
  all delivery models and payment systems, including fee-for-service
  and managed care payment systems. Subject to Subsection (a-1), the
  [The] commission, in developing outcome and process measures under
  this section, must include measures that are based on [consider
  measures addressing] potentially preventable events and that
  advance quality improvement and innovation. The commission may
  change measures developed:
               (1)  to promote continuous system reform, improved
  quality, and reduced costs; and
               (2)  to account for managed care organizations added to
  a service area.
         (a-1)  The outcome measures based on potentially preventable
  events must:
               (1)  allow for rate-based determination of health care
  provider performance compared to statewide norms; and
               (2)  be risk-adjusted to account for the severity of
  the illnesses of patients served by the provider.
         (b)  To the extent feasible, the commission shall develop
  outcome and process measures:
               (1)  consistently across all child health plan and
  Medicaid program delivery models and payment systems;
               (2)  in a manner that takes into account appropriate
  patient risk factors, including the burden of chronic illness on a
  patient and the severity of a patient's illness;
               (3)  that will have the greatest effect on improving
  quality of care and the efficient use of services, including acute
  care services and long-term services and supports; [and]
               (4)  that are similar to outcome and process measures
  used in the private sector, as appropriate;
               (5)  that reflect effective coordination of acute care
  services and long-term services and supports;
               (6)  that can be tied to expenditures; and
               (7)  that reduce preventable health care utilization
  and costs.
         SECTION 4.08.  Subsection (a), Section 536.004, Government
  Code, is amended to read as follows:
         (a)  Using quality-based outcome and process measures
  developed under Section 536.003 and subject to this section, the
  commission, after consulting with the advisory committee and other
  appropriate stakeholders with an interest in the provision of acute
  care and long-term services and supports under the child health
  plan and Medicaid programs, shall develop quality-based payment
  systems, and require managed care organizations to develop
  quality-based payment systems, for compensating a physician or
  other health care provider participating in the child health plan
  or Medicaid program that:
               (1)  align payment incentives with high-quality,
  cost-effective health care;
               (2)  reward the use of evidence-based best practices;
               (3)  promote the coordination of health care;
               (4)  encourage appropriate physician and other health
  care provider collaboration;
               (5)  promote effective health care delivery models; and
               (6)  take into account the specific needs of the child
  health plan program enrollee and Medicaid recipient populations.
         SECTION 4.09.  Section 536.005, Government Code, is amended
  by adding Subsection (c) to read as follows:
         (c)  Notwithstanding Subsection (a) and to the extent
  possible, the commission shall convert outpatient hospital
  reimbursement systems under the child health plan and Medicaid
  programs to an appropriate prospective payment system that will
  allow the commission to:
               (1)  more accurately classify the full range of
  outpatient service episodes;
               (2)  more accurately account for the intensity of
  services provided; and
               (3)  motivate outpatient service providers to increase
  efficiency and effectiveness.
         SECTION 4.10.  Section 536.006, Government Code, is amended
  to read as follows:
         Sec. 536.006.  TRANSPARENCY. (a)  The commission and the
  advisory committee shall:
               (1)  ensure transparency in the development and
  establishment of:
                     (A)  quality-based payment and reimbursement
  systems under Section 536.004 and Subchapters B, C, and D,
  including the development of outcome and process measures under
  Section 536.003; and
                     (B)  quality-based payment initiatives under
  Subchapter E, including the development of quality of care and
  cost-efficiency benchmarks under Section 536.204(a) and efficiency
  performance standards under Section 536.204(b);
               (2)  develop guidelines establishing procedures for
  providing notice and information to, and receiving input from,
  managed care organizations, health care providers, including
  physicians and experts in the various medical specialty fields, and
  other stakeholders, as appropriate, for purposes of developing and
  establishing the quality-based payment and reimbursement systems
  and initiatives described under Subdivision (1); [and]
               (3)  in developing and establishing the quality-based
  payment and reimbursement systems and initiatives described under
  Subdivision (1), consider that as the performance of a managed care
  organization or physician or other health care provider improves
  with respect to an outcome or process measure, quality of care and
  cost-efficiency benchmark, or efficiency performance standard, as
  applicable, there will be a diminishing rate of improved
  performance over time; and
               (4)  develop web-based capability to provide managed
  care organizations and health care providers with data on their
  clinical and utilization performance, including comparisons to
  peer organizations and providers located in this state and in the
  provider's respective region.
         (b)  The web-based capability required by Subsection (a)(4)
  must support the requirements of the electronic health information
  exchange system under Sections 531.907 through 531.909.
         SECTION 4.11.  Section 536.008, Government Code, is amended
  to read as follows:
         Sec. 536.008.  ANNUAL REPORT. (a)  The commission shall
  submit to the legislature and make available to the public an annual
  report [to the legislature] regarding:
               (1)  the quality-based outcome and process measures
  developed under Section 536.003, including measures based on each
  potentially preventable event; and
               (2)  the progress of the implementation of
  quality-based payment systems and other payment initiatives
  implemented under this chapter.
         (b)  As appropriate, the [The] commission shall report
  outcome and process measures under Subsection (a)(1) by:
               (1)  geographic location, which may require reporting
  by county, health care service region, or other appropriately
  defined geographic area;
               (2)  recipient population or eligibility group served;
               (3)  type of health care provider, such as acute care or
  long-term care provider;
               (4)  number of recipients who relocated to a
  community-based setting from a less integrated setting;
               (5)  quality-based payment system; and
               (6)  service delivery model.
         (c)  The report required under this section may not identify
  specific health care providers.
         SECTION 4.12.  Subsection (a), Section 536.051, Government
  Code, is amended to read as follows:
         (a)  Subject to Section 1903(m)(2)(A), Social Security Act
  (42 U.S.C. Section 1396b(m)(2)(A)), and other applicable federal
  law, the commission shall base a percentage of the premiums paid to
  a managed care organization participating in the child health plan
  or Medicaid program on the organization's performance with respect
  to outcome and process measures developed under Section 536.003
  that address[, including outcome measures addressing] potentially
  preventable events. The percentage of the premiums paid may
  increase each year.
         SECTION 4.13.  Subsection (a), Section 536.052, Government
  Code, is amended to read as follows:
         (a)  The commission may allow a managed care organization
  participating in the child health plan or Medicaid program
  increased flexibility to implement quality initiatives in a managed
  care plan offered by the organization, including flexibility with
  respect to financial arrangements, in order to:
               (1)  achieve high-quality, cost-effective health care;
               (2)  increase the use of high-quality, cost-effective
  delivery models; [and]
               (3)  reduce the incidence of unnecessary
  institutionalization and potentially preventable events; and
               (4)  increase the use of alternative payment systems,
  including shared savings models, in collaboration with physicians
  and other health care providers.
         SECTION 4.14.  Section 536.151, Government Code, is amended
  by amending Subsections (a), (b), and (c) and adding Subsections
  (a-1) and (d) to read as follows:
         (a)  The executive commissioner shall adopt rules for
  identifying:
               (1)  potentially preventable admissions and
  readmissions of child health plan program enrollees and Medicaid
  recipients, including preventable admissions to long-term care
  facilities;
               (2)  potentially preventable ancillary services
  provided to or ordered for child health plan program enrollees and
  Medicaid recipients;
               (3)  potentially preventable emergency room visits by
  child health plan program enrollees and Medicaid recipients; and
               (4)  potentially preventable complications experienced
  by child health plan program enrollees and Medicaid recipients.
         (a-1)  The commission shall collect data from hospitals on
  present-on-admission indicators for purposes of this section.
         (b)  The commission shall establish a program to provide a
  confidential report to each hospital in this state that
  participates in the child health plan or Medicaid program regarding
  the hospital's performance with respect to each potentially
  preventable event described under Subsection (a) [readmissions and
  potentially preventable complications]. To the extent possible, a
  report provided under this section should include all potentially
  preventable events [readmissions and potentially preventable
  complications information] across all child health plan and
  Medicaid program payment systems. A hospital shall distribute the
  information contained in the report to physicians and other health
  care providers providing services at the hospital.
         (c)  Except as provided by Subsection (d), a [A] report
  provided to a hospital under this section is confidential and is not
  subject to Chapter 552.
         (d)  The commission may release the information in the report
  described by Subsection (b):
               (1)  not earlier than one year after the date the report
  is submitted to the hospital; and
               (2)  only after deleting any data that relates to a
  hospital's performance with respect to particular
  diagnosis-related groups or individual patients.
         SECTION 4.15.  Subsection (a), Section 536.152, Government
  Code, is amended to read as follows:
         (a)  Subject to Subsection (b), using the data collected
  under Section 536.151 and the diagnosis-related groups (DRG)
  methodology implemented under Section 536.005, if applicable, the
  commission, after consulting with the advisory committee, shall to
  the extent feasible adjust child health plan and Medicaid
  reimbursements to hospitals, including payments made under the
  disproportionate share hospitals and upper payment limit
  supplemental payment programs, [in a manner that may reward or
  penalize a hospital] based on the hospital's performance with
  respect to exceeding, or failing to achieve, outcome and process
  measures developed under Section 536.003 that address the rates of
  potentially preventable readmissions and potentially preventable
  complications.
         SECTION 4.16.  Subsection (a), Section 536.202, Government
  Code, is amended to read as follows:
         (a)  The commission shall, after consulting with the
  advisory committee, establish payment initiatives to test the
  effectiveness of quality-based payment systems, alternative
  payment methodologies, and high-quality, cost-effective health
  care delivery models that provide incentives to physicians and
  other health care providers to develop health care interventions
  for child health plan program enrollees or Medicaid recipients, or
  both, that will:
               (1)  improve the quality of health care provided to the
  enrollees or recipients;
               (2)  reduce potentially preventable events;
               (3)  promote prevention and wellness;
               (4)  increase the use of evidence-based best practices;
               (5)  increase appropriate physician and other health
  care provider collaboration; [and]
               (6)  contain costs; and
               (7)  improve integration of acute care services and
  long-term services and supports, including discharge planning from
  acute care services to community-based long-term services and
  supports.
         SECTION 4.17.  Chapter 536, Government Code, is amended by
  adding Subchapter F to read as follows:
  SUBCHAPTER F. QUALITY-BASED LONG-TERM SERVICES AND SUPPORTS
  PAYMENT SYSTEMS
         Sec. 536.251.  QUALITY-BASED LONG-TERM SERVICES AND
  SUPPORTS PAYMENTS. (a)  Subject to this subchapter, the
  commission, after consulting with the advisory committee and other
  appropriate stakeholders representing nursing facility providers
  with an interest in the provision of long-term services and
  supports, may develop and implement quality-based payment systems
  for Medicaid long-term services and supports providers designed to
  improve quality of care and reduce the provision of unnecessary
  services. A quality-based payment system developed under this
  section must base payments to providers on quality and efficiency
  measures that may include measurable wellness and prevention
  criteria and use of evidence-based best practices, sharing a
  portion of any realized cost savings achieved by the provider, and
  ensuring quality of care outcomes, including a reduction in
  potentially preventable events.
         (b)  The commission may develop a quality-based payment
  system for Medicaid long-term services and supports providers under
  this subchapter only if implementing the system would be feasible
  and cost-effective.
         Sec. 536.252.  EVALUATION OF DATA SETS. To ensure that the
  commission is using the best data to inform the development and
  implementation of quality-based payment systems under Section
  536.251, the commission shall evaluate the reliability, validity,
  and functionality of post-acute and long-term services and supports
  data sets. The commission's evaluation under this section should
  assess:
               (1)  to what degree data sets relied on by the
  commission meet a standard:
                     (A)  for integrating care;
                     (B)  for developing coordinated care plans; and
                     (C)  that would allow for the meaningful
  development of risk adjustment techniques;
               (2)  whether the data sets will provide value for
  outcome or performance measures and cost containment; and
               (3)  how classification systems and data sets used for
  Medicaid long-term services and supports providers can be
  standardized and, where possible, simplified.
         Sec. 536.253.  COLLECTION AND REPORTING OF CERTAIN
  INFORMATION. (a)  The executive commissioner shall adopt rules for
  identifying the incidence of potentially preventable admissions,
  potentially preventable readmissions, and potentially preventable
  emergency room visits by Medicaid long-term services and supports
  recipients.
         (b)  The commission shall establish a program to provide a
  report to each Medicaid long-term services and supports provider in
  this state regarding the provider's performance with respect to
  potentially preventable admissions, potentially preventable
  readmissions, and potentially preventable emergency room visits.
  To the extent possible, a report provided under this section should
  include applicable potentially preventable events information
  across all Medicaid program payment systems.
         (c)  Subject to Subsection (d), a report provided to a
  provider under this section is confidential and is not subject to
  Chapter 552.
         (d)  The commission may release the information in the report
  described by Subsection (b):
               (1)  not earlier than one year after the date the report
  is submitted to the provider; and
               (2)  only after deleting any data that relates to a
  provider's performance with respect to particular resource
  utilization groups or individual recipients.
         SECTION 4.18.  As soon as practicable after the effective
  date of this Act, the Health and Human Services Commission shall
  provide a portal through which providers in any managed care
  organization's provider network may submit acute care services and
  long-term services and supports claims as required by Paragraph
  (E), Subdivision (4), Section 533.0071, Government Code, as amended
  by this article.
         SECTION 4.19.  Not later than September 1, 2013, the Health
  and Human Services Commission shall convert outpatient hospital
  reimbursement systems as required by Subsection (c), Section
  536.005, Government Code, as added by this article.
  ARTICLE 5.  SPECIFIC PROVISIONS RELATING TO PREMIUMS UNDER THE
  MEDICAL ASSISTANCE PROGRAM
         SECTION 5.01.  Section 533.013, Government Code, is amended
  by adding Subsection (e) to read as follows:
         (e)  The commission shall pursue and, if appropriate,
  implement premium rate-setting strategies that encourage provider
  payment reform and more efficient service delivery and provider
  practices. In pursuing premium rate-setting strategies under this
  section, the commission shall review and consider strategies
  employed or under consideration by other states. If necessary, the
  commission may request a waiver or other authorization from a
  federal agency to implement strategies identified under this
  subsection.
  ARTICLE 6.  ADDITIONAL PROVISIONS RELATING TO QUALITY AND DELIVERY
  OF HEALTH AND HUMAN SERVICES
         SECTION 6.01.  The heading to Section 531.024, Government
  Code, is amended to read as follows:
         Sec. 531.024.  PLANNING AND DELIVERY OF HEALTH AND HUMAN
  SERVICES; DATA SHARING.
         SECTION 6.02.  Section 531.024, Government Code, is amended
  by adding Subsection (a-1) to read as follows:
         (a-1)  To the extent permitted under applicable federal law
  and notwithstanding any provision of Chapter 191 or 192, Health and
  Safety Code, the commission and other health and human services
  agencies shall share data to facilitate patient care coordination,
  quality improvement, and cost savings in the Medicaid program,
  child health plan program, and other health and human services
  programs funded using money appropriated from the general revenue
  fund.
         SECTION 6.03.  Subchapter B, Chapter 531, Government Code,
  is amended by adding Section 531.024115 to read as follows:
         Sec. 531.024115.  SERVICE DELIVERY AREA ALIGNMENT.
  Notwithstanding Section 533.0025(e) or any other law, to the extent
  possible, the commission shall align service delivery areas under
  the Medicaid and child health plan programs.
         SECTION 6.04.  Subchapter B, Chapter 531, Government Code,
  is amended by adding Section 531.0981 to read as follows:
         Sec. 531.0981.  WELLNESS SCREENING PROGRAM. If
  cost-effective, the commission may implement a wellness screening
  program for Medicaid recipients designed to evaluate a recipient's
  risk for having certain diseases and medical conditions for
  purposes of establishing a health baseline for each recipient that
  may be used to tailor the recipient's treatment plan or for
  establishing the recipient's health goals.
         SECTION 6.05.  Section 531.024115, Government Code, as added
  by this article:
               (1)  applies only with respect to a contract between
  the Health and Human Services Commission and a managed care
  organization, service provider, or other person or entity under the
  medical assistance program, including Chapter 533, Government
  Code, or the child health plan program established under Chapter
  62, Health and Safety Code, that is entered into or renewed on or
  after the effective date of this Act; and
               (2)  does not authorize the Health and Human Services
  Commission to alter the terms of a contract that was entered into or
  renewed before the effective date of this Act.
         SECTION 6.06.  Section 533.0354, Health and Safety Code, is
  amended by adding Subsections (a-1), (a-2), and (b-1) to read as
  follows:
         (a-1)  In addition to the services required under Subsection
  (a) and using money appropriated for that purpose or money received
  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), a local mental health
  authority may ensure, to the extent feasible, the provision of
  assessment services, crisis services, and intensive and
  comprehensive services using disease management practices for
  children with serious emotional, behavioral, or mental disturbance
  not described by Subsection (a) and adults with severe mental
  illness who are experiencing significant functional impairment due
  to a mental health disorder not described by Subsection (a) that is
  defined by the Diagnostic and Statistical Manual of Mental
  Disorders, 5th Edition (DSM-5), including:
               (1)  major depressive disorder, including single
  episode or recurrent major depressive disorder;
               (2)  post-traumatic stress disorder;
               (3)  schizoaffective disorder, including bipolar and
  depressive types;
               (4)  obsessive-compulsive disorder;
               (5)  anxiety disorder;
               (6)  attention deficit disorder;
               (7)  delusional disorder;
               (8)  bulimia nervosa, anorexia nervosa, or other eating
  disorders not otherwise specified; or
               (9)  any other diagnosed mental health disorder.
         (a-2)  The local mental health authority shall ensure that
  individuals described by Subsection (a-1) are engaged with
  treatment services in a clinically appropriate manner.
         (b-1)  The department shall require each local mental health
  authority to incorporate jail diversion strategies into the
  authority's disease management practices to reduce the involvement
  of the criminal justice system in managing adults with the
  following disorders as defined by the Diagnostic and Statistical
  Manual of Mental Disorders, 5th Edition (DSM-5), who are not
  described by Subsection (b):
               (1)  post-traumatic stress disorder;
               (2)  schizoaffective disorder, including bipolar and
  depressive types;
               (3)  anxiety disorder; or
               (4)  delusional disorder.
         SECTION 6.07.  Subchapter B, Chapter 32, Human Resources
  Code, is amended by adding Section 32.0284 to read as follows:
         Sec. 32.0284.  CALCULATION OF PAYMENTS UNDER CERTAIN
  SUPPLEMENTAL HOSPITAL PAYMENT PROGRAMS. (a)  In this section:
               (1)  "Commission" means the Health and Human Services
  Commission.
               (2)  "Supplemental hospital payment program" means:
                     (A)  the disproportionate share hospitals
  supplemental payment program administered according to 42 U.S.C.
  Section 1396r-4; and
                     (B)  the uncompensated care payment program
  established 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).
         (b)  For purposes of calculating the hospital-specific limit
  used to determine a hospital's uncompensated care payment under a
  supplemental hospital payment program, the commission shall ensure
  that to the extent a third-party commercial payment exceeds the
  Medicaid allowable cost for a service provided to a recipient and
  for which reimbursement was not paid under the medical assistance
  program, the payment is not considered a medical assistance
  payment.
         SECTION 6.08.  Section 32.053, Human Resources Code, is
  amended by adding Subsection (i) to read as follows:
         (i)  To the extent allowed by the General Appropriations Act,
  the Health and Human Services Commission may transfer general
  revenue funds appropriated to the commission for the medical
  assistance program to the Department of Aging and Disability
  Services to provide PACE services in PACE program service areas to
  eligible recipients whose medical assistance benefits would
  otherwise be delivered as home and community-based services through
  the STAR + PLUS Medicaid managed care program and whose personal
  incomes are at or below the level of income required to receive
  Supplemental Security Income (SSI) benefits under 42 U.S.C. Section
  1381 et seq.
         SECTION 6.09.  LIMITATION ON PROVISION OF MEDICAL
  ASSISTANCE. Under this Act, the Health and Human Services
  Commission may only provide medical assistance to a person who
  would have been otherwise eligible for medical assistance or for
  whom federal matching funds were available under the eligibility
  criteria for medical assistance in effect on December 31, 2013.
  ARTICLE 7.  FEDERAL AUTHORIZATIONS, FUNDING, AND EFFECTIVE DATE
         SECTION 7.01.  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 7.02.  As soon as practicable after the effective
  date of this Act, the Health and Human Services Commission shall
  apply for and actively seek a waiver or authorization from the
  appropriate federal agency to waive, with respect to a person who is
  dually eligible for Medicare and Medicaid, the requirement under 42
  C.F.R. Section 409.30 that the person be hospitalized for at least
  three consecutive calendar days before Medicare covers
  posthospital skilled nursing facility care for the person.
         SECTION 7.03.  If the Health and Human Services Commission
  determines that it is cost-effective, the commission shall apply
  for and actively seek a waiver or authorization from the
  appropriate federal agency to allow the state to provide medical
  assistance under the waiver or authorization to medically fragile
  individuals:
               (1)  who are at least 21 years of age; and
               (2)  whose costs to receive care exceed cost limits
  under existing Medicaid waiver programs.
         SECTION 7.04.  The Health and Human Services Commission may
  use any available revenue, including legislative appropriations
  and available federal funds, for purposes of implementing any
  provision of this Act.
         SECTION 7.05.  (a)  Except as provided by Subsection (b) of
  this section, this Act takes effect September 1, 2013.
         (b)  Section 533.0354, Health and Safety Code, as amended by
  this Act, takes effect January 1, 2014.
 
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 7 passed the Senate on
  March 25, 2013, by the following vote:  Yeas 31, Nays 0;
  May 22, 2013, Senate refused to concur in House amendments and
  requested appointment of Conference Committee; May 23, 2013, House
  granted request of the Senate; May 26, 2013, Senate adopted
  Conference Committee Report by the following vote:  Yeas 30,
  Nays 1.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 7 passed the House, with
  amendments, on May 21, 2013, by the following vote:  Yeas 139,
  Nays 5, two present not voting; May  23, 2013, House granted
  request of the Senate for appointment of Conference Committee;
  May 26, 2013, House adopted Conference Committee Report by the
  following vote:  Yeas 146, Nays 1, one present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
             Date
 
 
  ______________________________ 
            Governor