82R25156 E
By: Gonzales of Hidalgo, Schwertner, Coleman, H.B. No. 3744
et al.
Substitute the following for H.B. No. 3744:
By: Kolkhorst C.S.H.B. No. 3744
A BILL TO BE ENTITLED
AN ACT
relating to the reimbursements for certain services provided to
Medicaid recipients and reimbursement adjustments relating to
those services.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 531.001, Government Code, is amended by
adding Subdivisions (4-a) and (4-b) to read as follows:
(4-a) "Potentially preventable complication" means a
harmful event or negative outcome with respect to a person,
including an infection or surgical complication, that:
(A) occurs after the person's admission to a
hospital or long-term care facility;
(B) results from the care, lack of care, or
treatment provided during the hospital or long-term care facility
stay, as applicable, rather than from a natural progression of an
underlying disease; and
(C) could reasonably have been prevented if care
and treatment had been provided in accordance with accepted
standards of care.
(4-b) "Potentially preventable readmission" means a
return hospitalization of a person within a period specified by the
commission that results from deficiencies in the care or treatment
provided to the person during a previous hospital stay or from
deficiencies in post-hospital discharge follow-up. The term does
not include a hospital readmission necessitated by the occurrence
of unrelated events after the discharge. The term includes the
readmission of a person to a hospital for:
(A) the same condition or procedure for which the
person was previously admitted;
(B) an infection or other complication resulting
from care previously provided;
(C) a condition or procedure that indicates that
a surgical intervention performed during a previous admission was
unsuccessful in achieving the anticipated outcome; or
(D) another condition or procedure of a similar
nature, as determined by the executive commissioner.
SECTION 2. Subchapter B, Chapter 531, Government Code, is
amended by adding Sections 531.02115 and 531.02117 to read as
follows:
Sec. 531.02115. REIMBURSEMENT METHODOLOGY FOR MEDICAID
INPATIENT HOSPITAL SERVICES. (a) To incentivize controlling costs
and improving efficiency, the commission shall, subject to
adjustments required by this section:
(1) convert the reimbursement methodology used under
the Medicaid program to reimburse inpatient hospital services to an
all patient refined diagnosis-related groups (DRG) methodology;
and
(2) establish a statewide standard dollar amount (SDA)
rate that is based on the average of all hospital costs associated
with providing services under the Medicaid program during the
preceding fiscal year.
(b) In converting to the reimbursement methodology under
Subsection (a)(1), the commission shall, to the extent possible,
examine reimbursement methodologies, including nationally
implemented reimbursement methodologies, that address historical
disparities in the provision of health care services to women,
children, and persons with mental illnesses.
(c) The commission may adjust rates determined using the
factors under Subsection (a) to ensure the equitable reimbursement
of hospitals for inpatient services by adjusting the rates as
necessary to take into account different markets and provider
responsibilities, including by making rate adjustments to account
for:
(1) whether a hospital is a teaching institution;
(2) market wage indexes; and
(3) whether the hospital is a state-designated trauma
facility or a burn center.
(d) The commission shall adjust rates determined using the
factors under Subsection (a) to provide incentives for hospitals to
provide higher quality of care. To provide the incentives, the
commission shall establish a hospital value-based purchasing
program that includes quality standards established by the
executive commissioner by rule, other than quality standards
relating to potentially preventable readmissions and potentially
preventable complications. Incentives provided under the program
must be based on whether a hospital meets, or improves the
hospital's performance with respect to meeting, those quality
standards. Under the program, the commission may:
(1) reduce a hospital's reimbursement rates by two
percent each fiscal year the hospital fails to meet, or to make
progress toward meeting, the quality standards; and
(2) use 50 percent of the money saved as a result of
the reimbursement rate reductions to award hospitals that meet, or
make progress toward meeting, the quality standards.
(e) Notwithstanding Subsection (d)(1), the commission may
reduce reimbursement rates as provided by that subsection only by
the following percentages:
(1) one percent for the state fiscal year beginning
September 1, 2012;
(2) 1.25 percent for the state fiscal year beginning
September 1, 2013;
(3) 1.5 percent for the state fiscal year beginning
September 1, 2014; and
(4) 1.75 percent for the state fiscal year beginning
September 1, 2015.
(f) Except as provided by Subsection (g), this section does
not apply to a hospital:
(1) located in a county with a population of less than
50,000 according to the 2000 federal decennial census;
(2) owned or operated by this state;
(3) whose inpatients are predominately individuals
under 18 years of age as described under Section
1886(d)(1)(B)(iii), Social Security Act (42 U.S.C. Section
1395ww(d)(1)(B)(iii));
(4) classified as a rural referral center under
Section 1886(d)(1)(C)(i), Social Security Act (42 U.S.C. Section
1395ww(d)(1)(C)(i));
(5) that is a sole community hospital as defined under
Section 1886(d)(1)(D)(iii), Social Security Act (42 U.S.C. Section
1395ww(d)(1)(D)(iii)), that is not located in a metropolitan
statistical area as defined by the United States Office of
Management and Budget; or
(6) that is a critical access hospital as defined
under Section 1861(mm)(1), Social Security Act (42 U.S.C. Section
1395x(mm)(1)).
(g) The commission shall reimburse hospitals described
under Subsection (f) for inpatient care services in a manner that is
consistent with provision of payments for inpatient care services
under Title XVIII, Social Security Act (42 U.S.C. Section 1395 et
seq.).
(h) This subsection and Subsection (e) expire September 1,
2017.
Sec. 531.02117. REIMBURSEMENT ADJUSTMENTS. (a) Subject to
Subsection (b), using the data collected under Section 531.02116
and the all patient refined diagnosis-related groups (DRG)
methodology implemented under Section 531.02115, the commission
shall to the extent feasible adjust Medicaid reimbursements to
hospitals, including payments made under the disproportionate
share hospitals and upper payment limit supplemental payment
programs, in a manner that penalizes a hospital based on the
hospital's failure to reduce potentially preventable readmissions
and potentially preventable complications.
(b) The commission must provide the report required under
Section 531.02116(b) to a hospital at least one year before the
commission adjusts Medicaid reimbursements to the hospital under
this section.
(c) This section does not apply to a hospital described
under Section 531.02115(f).
SECTION 3. Section 531.913, Government Code, is transferred
to Subchapter B, Chapter 531, Government Code, redesignated as
Section 531.02116, Government Code, and amended to read as follows:
Sec. 531.02116 [531.913]. COLLECTION AND REPORTING OF
CERTAIN [HOSPITAL HEALTH] INFORMATION [EXCHANGE]. (a) [In this
section, "potentially preventable readmission" means a return
hospitalization of a person within a period specified by the
commission that results from deficiencies in the care or treatment
provided to the person during a previous hospital stay or from
deficiencies in post-hospital discharge follow-up. The term does
not include a hospital readmission necessitated by the occurrence
of unrelated events after the discharge. The term includes the
readmission of a person to a hospital for:
[(1) the same condition or procedure for which the
person was previously admitted;
[(2) an infection or other complication resulting from
care previously provided;
[(3) a condition or procedure that indicates that a
surgical intervention performed during a previous admission was
unsuccessful in achieving the anticipated outcome; or
[(4) another condition or procedure of a similar
nature, as determined by the executive commissioner.
[(b)] The executive commissioner shall adopt rules for
identifying potentially preventable readmissions of Medicaid
recipients and potentially preventable complications experienced
by those recipients. The [and the] commission shall collect
[exchange] data from [with] hospitals on present-on-admission
indicators for purposes of this section.
(b) [(c)] The commission shall establish a [health
information exchange] program to provide a [exchange] confidential
report to [information with] each hospital in this state that
participates in the Medicaid program regarding the hospital's
performance with respect to potentially preventable readmissions
and potentially preventable complications. To the extent possible,
a report provided under this section should include potentially
preventable readmissions and potentially preventable complications
information across all payment systems. A hospital shall
distribute the information contained in the report [received from
the commission] to health care providers providing services at the
hospital.
(c) A report provided to a hospital under this section is
confidential and is not subject to Chapter 552.
(d) This section does not apply to a hospital described
under Section 531.02115(f).
SECTION 4. (a) As soon as possible after the effective date
of this Act, but not later than September 1, 2012:
(1) the Health and Human Services Commission shall
convert the Medicaid hospital services reimbursement methodology
to an all patient refined diagnosis-related groups (DRG)
methodology as required by Section 531.02115(a), Government Code,
as added by this Act, under which hospitals are reimbursed for the
provision of services under the Medicaid program at a rate that is
based on the statewide standard dollar amount (SDA) rate also
required under that section; and
(2) the executive commissioner of the Health and Human
Services Commission shall adopt the quality standards for use in
the hospital value-based purchasing program as required by Section
531.02115(d), Government Code, as added by this Act.
(b) The Health and Human Services Commission shall provide
reimbursements to hospitals for the provision of services under the
Medicaid program using the reimbursement rates in effect on August
31, 2011, until the commission meets the requirements of Subsection
(a)(1) of this section. After the commission implements that
methodology and notwithstanding any other law, the commission may
not use appropriated money to provide reimbursements under any
other methodology.
(c) Notwithstanding Sections 531.02115(d) and (e) and
531.02117, Government Code, as added by this Act, the Health and
Human Services Commission may only implement the hospital
value-based purchasing program as required by Section
531.02115(d), Government Code, as added by this Act, or otherwise
adjust reimbursement rates as provided by this Act after the Health
and Human Services Commission converts the Medicaid hospital
services reimbursement methodology and establishes the statewide
standard dollar amount (SDA) rate under Section 531.02115(a),
Government Code, as added by this Act.
(d) Not later than September 1, 2012, the Health and Human
Services Commission shall begin providing performance reports to
hospitals regarding the hospitals' performances with respect to
potentially preventable complications as required by Section
531.02116, Government Code, as transferred, redesignated, and
amended by this Act.
SECTION 5. 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 6. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2011.