Bill Text: TX SB894 | 2017-2018 | 85th Legislature | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to auditing and verification of information under certain health and human services programs, including the collection of certain payments following an investigation.
Spectrum: Bipartisan Bill
Status: (Passed) 2017-06-15 - Effective on 9/1/17 [SB894 Detail]
Download: Texas-2017-SB894-Engrossed.html
Bill Title: Relating to auditing and verification of information under certain health and human services programs, including the collection of certain payments following an investigation.
Spectrum: Bipartisan Bill
Status: (Passed) 2017-06-15 - Effective on 9/1/17 [SB894 Detail]
Download: Texas-2017-SB894-Engrossed.html
By: Buckingham | S.B. No. 894 |
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relating to the Health and Human Services Commission's strategy for | ||
managing audit resources, including procedures for auditing and | ||
collecting payments from Medicaid managed care organizations. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 533, Government Code, is amended by | ||
adding Subchapter B to read as follows: | ||
SUBCHAPTER B. STRATEGY FOR MANAGING AUDIT RESOURCES | ||
Sec. 533.051. DEFINITIONS. In this subchapter: | ||
(1) "Accounts receivable tracking system" means the | ||
system the commission uses to track experience rebates and other | ||
payments collected from managed care organizations. | ||
(2) "Agreed-upon procedures engagement" means an | ||
evaluation of a managed care organization's financial statistical | ||
reports or other data conducted by an independent auditing firm | ||
engaged by the commission as agreed in the managed care | ||
organization's contract with the commission. | ||
(3) "Experience rebate" means the amount a managed | ||
care organization is required to pay the state according to the | ||
graduated rebate method described in the managed care | ||
organization's contract with the commission. | ||
(4) "External quality review organization" means an | ||
organization that performs an external quality review of a managed | ||
care organization in accordance with 42 C.F.R. Section 438.350. | ||
Sec. 533.052. APPLICABILITY AND CONSTRUCTION OF | ||
SUBCHAPTER. This subchapter does not apply to and may not be | ||
construed as affecting the conduct of audits by the commission's | ||
office of inspector general under the authority provided by | ||
Subchapter C, Chapter 531, including an audit of a managed care | ||
organization conducted by the office after coordinating the | ||
office's audit and oversight activities with the commission as | ||
required by Section 531.102(q), as added by Chapter 837 (S.B. 200), | ||
Acts of the 84th Legislature, Regular Session, 2015. | ||
Sec. 533.053. OVERALL STRATEGY FOR MANAGING AUDIT | ||
RESOURCES. The commission shall develop and implement an overall | ||
strategy for planning, managing, and coordinating audit resources | ||
that the commission uses to verify the accuracy and reliability of | ||
program and financial information reported by managed care | ||
organizations. | ||
Sec. 533.054. PERFORMANCE AUDIT SELECTION PROCESS AND | ||
FOLLOW-UP. (a) To improve the commission's processes for | ||
performance audits of managed care organizations, the commission | ||
shall: | ||
(1) document the process by which the commission | ||
selects managed care organizations to audit; | ||
(2) include previous audit coverage as a risk factor | ||
in selecting managed care organizations to audit; and | ||
(3) prioritize the highest risk managed care | ||
organizations to audit. | ||
(b) To verify that managed care organizations correct | ||
negative performance audit findings, the commission shall: | ||
(1) establish a process to: | ||
(A) document how the commission follows up on | ||
negative performance audit findings; and | ||
(B) verify that managed care organizations | ||
implement performance audit recommendations; and | ||
(2) establish and implement policies and procedures | ||
to: | ||
(A) determine under what circumstances the | ||
commission must issue a corrective action plan to a managed care | ||
organization based on a performance audit; and | ||
(B) follow up on the managed care organization's | ||
implementation of the corrective action plan. | ||
Sec. 533.055. AGREED-UPON PROCEDURES ENGAGEMENTS AND | ||
CORRECTIVE ACTION PLANS. To enhance the commission's use of | ||
agreed-upon procedures engagements to identify managed care | ||
organizations' performance and compliance issues, the commission | ||
shall: | ||
(1) ensure that financial risks identified in | ||
agreed-upon procedures engagements are adequately and consistently | ||
addressed; and | ||
(2) establish policies and procedures to determine | ||
under what circumstances the commission must issue a corrective | ||
action plan based on an agreed-upon procedures engagement. | ||
Sec. 533.056. AUDITS OF PHARMACY BENEFIT MANAGERS. To | ||
obtain greater assurance about the effectiveness of pharmacy | ||
benefit managers' internal controls and compliance with state | ||
requirements, the commission shall: | ||
(1) periodically audit each pharmacy benefit manager | ||
that contracts with a managed care organization; and | ||
(2) develop, document, and implement a monitoring | ||
process to ensure that managed care organizations correct and | ||
resolve negative findings reported in performance audits or | ||
agreed-upon procedures engagements of pharmacy benefit managers. | ||
Sec. 533.057. COLLECTION OF COSTS FOR AUDIT-RELATED | ||
SERVICES. The commission shall develop, document, and implement | ||
billing processes in the Medicaid and CHIP services department of | ||
the commission to ensure that managed care organizations reimburse | ||
the commission for audit-related services as required by contract. | ||
Sec. 533.058. COLLECTION ACTIVITIES RELATED TO PROFIT | ||
SHARING. To strengthen the commission's process for collecting | ||
shared profits from managed care organizations, the commission | ||
shall develop, document, and implement monitoring processes in the | ||
Medicaid and CHIP services department of the commission to ensure | ||
that the commission: | ||
(1) identifies experience rebates deposited in the | ||
commission's suspense account and timely transfers those rebates to | ||
the appropriate accounts; and | ||
(2) timely follows up on and resolves disputes over | ||
experience rebates claimed by managed care organizations. | ||
Sec. 533.059. USE OF INFORMATION FROM EXTERNAL QUALITY | ||
REVIEWS. (a) To enhance the commission's monitoring of managed | ||
care organizations, the commission shall use the information | ||
provided by the external quality review organization, including: | ||
(1) detailed data from results of surveys of Medicaid | ||
recipients and, if applicable, child health plan program enrollees, | ||
caregivers of those recipients and enrollees, and Medicaid and, as | ||
applicable, child health plan program providers; and | ||
(2) the validation results of matching paid claims | ||
data with medical records. | ||
(b) The commission shall document how the commission uses | ||
the information described by Subsection (a) to monitor managed care | ||
organizations. | ||
Sec. 533.060. SECURITY AND PROCESSING CONTROLS OVER | ||
INFORMATION TECHNOLOGY SYSTEMS. The commission shall: | ||
(1) strengthen user access controls for the | ||
commission's accounts receivable tracking system and network | ||
folders that the commission uses to manage the collection of | ||
experience rebates; | ||
(2) document daily reconciliations of deposits | ||
recorded in the accounts receivable tracking system to the | ||
transactions processed in: | ||
(A) the commission's cost accounting system for | ||
all health and human services agencies; and | ||
(B) the uniform statewide accounting system; and | ||
(3) develop, document, and implement a process to | ||
ensure that the commission formally documents: | ||
(A) all programming changes made to the accounts | ||
receivable tracking system; and | ||
(B) the authorization and testing of the changes | ||
described by Paragraph (A). | ||
SECTION 2. As soon as practicable after the effective date | ||
of this Act, the executive commissioner of the Health and Human | ||
Services Commission shall adopt the rules necessary to implement | ||
Subchapter B, Chapter 533, Government Code, as added by this Act. | ||
SECTION 3. This Act takes effect September 1, 2017. |