Texas 2011 - 82nd Regular

Texas Senate Bill SB7 Compare Versions

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1	1	By: Nelson S.B. No. 7
2	2	(Kolkhorst)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to strategies for and improvements in quality of health
8	8	care provided through and care management in the child health plan
9	9	and medical assistance programs designed to achieve healthy
10	10	outcomes and efficiency.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. QUALITY-BASED OUTCOME AND PAYMENT INITIATIVES.
13	13	(a) Subtitle I, Title 4, Government Code, is amended by adding
14	14	Chapter 536, and Section 531.913, Government Code, is transferred
15	15	to Subchapter D, Chapter 536, Government Code, redesignated as
16	16	Section 536.151, Government Code, and amended to read as follows:
17	17	CHAPTER 536. MEDICAID AND CHILD HEALTH PLAN PROGRAMS:
18	18	QUALITY-BASED OUTCOMES AND PAYMENTS
19	19	SUBCHAPTER A. GENERAL PROVISIONS
20	20	Sec. 536.001. DEFINITIONS. In this chapter:
21	21	(1) "Advisory committee" means the Medicaid and CHIP
22	22	Quality-Based Payment Advisory Committee established under Section
23	23	536.002.
24	24	(2) "Alternative payment system" includes:
25	25	(A) a global payment system;
26	26	(B) an episode-based bundled payment system; and
27	27	(C) a blended payment system.
28	28	(3) "Blended payment system" means a system for
29	29	compensating a health care provider or facility that includes at
30	30	least one or more features of a global payment system and an
31	31	episode-based bundled payment system, but that may also include a
32	32	system under which a portion of the compensation paid to a health
33	33	care provider or facility is based on a fee-for-service payment
34	34	arrangement.
35	35	(4) "Child health plan program," "commission,"
36	36	"executive commissioner," and "health and human services agencies"
37	37	have the meanings assigned by Section 531.001.
38	38	(5) "Episode-based bundled payment system" means a
39	39	system for compensating a health care provider or facility for
40	40	arranging for or providing health care services to child health
41	41	plan program enrollees or Medicaid recipients that is based on a
42	42	flat payment for all services provided in connection with a single
43	43	episode of medical care.
44	44	(6) "Exclusive provider benefit plan" means a managed
45	45	care plan subject to 28 T.A.C. Part 1, Chapter 3, Subchapter KK.
46	46	(7) "Global payment system" means a system for
47	47	compensating a health care provider or facility for arranging for
48	48	or providing a defined set of covered health care services to child
49	49	health plan program enrollees or Medicaid recipients for a
50	50	specified period that is based on a predetermined payment per
51	51	enrollee or recipient, as applicable, for the specified period,
52	52	without regard to the quantity of services actually provided.
53	53	(8) "Hospital" means a public or private institution
54	54	licensed under Chapter 241 or 577, Health and Safety Code,
55	55	including a general or special hospital as defined by Section
56	56	241.003, Health and Safety Code.
57	57	(9) "Managed care organization" means a person that is
58	58	authorized or otherwise permitted by law to arrange for or provide a
59	59	managed care plan. The term includes health maintenance
60	60	organizations and exclusive provider organizations.
61	61	(10) "Managed care plan" means a plan, including an
62	62	exclusive provider benefit plan, under which a person undertakes to
63	63	provide, arrange for, pay for, or reimburse any part of the cost of
64	64	any health care services. A part of the plan must consist of
65	65	arranging for or providing health care services as distinguished
66	66	from indemnification against the cost of those services on a
67	67	prepaid basis through insurance or otherwise. The term includes a
68	68	primary care case management provider network. The term does not
69	69	include a plan that indemnifies a person for the cost of health care
70	70	services through insurance.
71	71	(11) "Medicaid program" means the medical assistance
72	72	program established under Chapter 32, Human Resources Code.
73	73	(12) "Potentially preventable admission" means an
74	74	admission of a person to a health care facility that could
75	75	reasonably have been prevented if care and treatment had been
76	76	provided by a health care provider in accordance with accepted
77	77	standards of care.
78	78	(13) "Potentially preventable ancillary service"
79	79	means a health care service provided or ordered by a health care
80	80	provider to supplement or support the evaluation or treatment of a
81	81	patient, including a diagnostic test, laboratory test, therapy
82	82	service, or radiology service, that is not reasonably necessary for
83	83	the provision of quality health care or treatment.
84	84	(14) "Potentially preventable complication" means a
85	85	harmful event or negative outcome with respect to a person,
86	86	including an infection or surgical complication, that:
87	87	(A) occurs after the person's admission to a
88	88	health care facility;
89	89	(B) may have resulted from the care, lack of
90	90	care, or treatment provided during the health care facility stay
91	91	rather than from a natural progression of an underlying disease;
92	92	and
93	93	(C) could reasonably have been prevented if care
94	94	and treatment had been provided in accordance with accepted
95	95	standards of care.
96	96	(15) "Potentially preventable event" means a
97	97	potentially preventable admission, a potentially preventable
98	98	ancillary service, a potentially preventable complication, a
99	99	potentially preventable hospital emergency room visit, a
100	100	potentially preventable readmission, or a combination of those
101	101	events.
102	102	(16) "Potentially preventable hospital emergency room
103	103	visit" means treatment of a person in a hospital emergency room for
104	104	a condition that does not require emergency medical attention
105	105	because the condition could be treated by a health care provider in
106	106	a nonemergency setting.
107	107	(17) "Potentially preventable readmission" means a
108	108	return hospitalization of a person within a period specified by the
109	109	commission that may have resulted from deficiencies in the care or
110	110	treatment provided to the person during a previous hospital stay or
111	111	from deficiencies in post-hospital discharge follow-up. The term
112	112	does not include a hospital readmission necessitated by the
113	113	occurrence of unrelated events after the discharge. The term
114	114	includes the readmission of a person to a hospital for:
115	115	(A) the same condition or procedure for which the
116	116	person was previously admitted;
117	117	(B) an infection or other complication resulting
118	118	from care previously provided;
119	119	(C) a condition or procedure that indicates that
120	120	a surgical intervention performed during a previous admission was
121	121	unsuccessful in achieving the anticipated outcome; or
122	122	(D) another condition or procedure of a similar
123	123	nature, as determined by the executive commissioner in consultation
124	124	with the advisory committee.
125	125	(18) "Quality-based payment system" means a system for
126	126	compensating a health care provider or facility, including an
127	127	alternative payment system, that provides incentives to the
128	128	provider or facility for providing high-quality, cost-effective
129	129	care and bases some portion of the payment made to the provider or
130	130	facility on quality of care outcomes, including the extent to which
131	131	the provider or facility reduces potentially preventable events.
132	132	Sec. 536.002. MEDICAID AND CHIP QUALITY-BASED PAYMENT
133	133	ADVISORY COMMITTEE. (a) The Medicaid and CHIP Quality-Based
134	134	Payment Advisory Committee is established to advise the commission
135	135	on establishing, for purposes of the child health plan and Medicaid
136	136	programs administered by the commission or a health and human
137	137	services agency:
138	138	(1) reimbursement systems used to compensate health
139	139	care providers and facilities under those programs that reward the
140	140	provision of high-quality, cost-effective health care and quality
141	141	performance and quality of care outcomes with respect to health
142	142	care services;
143	143	(2) standards and benchmarks for quality performance,
144	144	quality of care outcomes, efficiency, and accountability by managed
145	145	care organizations and health care providers and facilities;
146	146	(3) programs and reimbursement policies that
147	147	encourage high-quality, cost-effective health care delivery models
148	148	that increase appropriate provider collaboration, promote wellness
149	149	and prevention, and improve health outcomes; and
150	150	(4) outcome and process measures under Section
151	151	536.003.
152	152	(b) The executive commissioner shall appoint the members of
153	153	the advisory committee. The committee must consist of health care
154	154	providers, representatives of health care facilities,
155	155	representatives of managed care organizations, and other
156	156	stakeholders interested in health care services provided in this
157	157	state, including:
158	158	(1) at least one member who is a physician with
159	159	clinical practice experience in obstetrics and gynecology;
160	160	(2) at least one member who is a physician with
161	161	clinical practice experience in pediatrics;
162	162	(3) at least one member who is a physician with
163	163	clinical practice experience in internal medicine or family
164	164	medicine;
165	165	(4) at least one member who is a physician with
166	166	clinical practice experience in geriatric medicine;
167	167	(5) at least one member who is a consumer
168	168	representative; and
169	169	(6) at least one member who is a member of the Advisory
170	170	Panel on Health Care-Associated Infections and Preventable Adverse
171	171	Events who meets the qualifications prescribed by Section
172	172	98.052(a)(4), Health and Safety Code.
173	173	(c) The executive commissioner shall appoint the presiding
174	174	officer of the advisory committee.
175	175	Sec. 536.003. DEVELOPMENT OF QUALITY-BASED OUTCOME AND
176	176	PROCESS MEASURES. (a) The commission, in consultation with the
177	177	advisory committee, shall develop quality-based outcome and
178	178	process measures that promote the provision of efficient, quality
179	179	health care and that can be used in the child health plan and
180	180	Medicaid programs to implement quality-based payments for acute and
181	181	long-term care services across all delivery models and payment
182	182	systems, including fee-for-service and managed care payment
183	183	systems. The commission, in developing outcome measures under this
184	184	section, must consider measures addressing potentially preventable
185	185	events.
186	186	(b) To the extent feasible, the commission shall develop
187	187	outcome and process measures:
188	188	(1) consistently across all child health plan and
189	189	Medicaid program delivery models and payment systems;
190	190	(2) in a manner that takes into account appropriate
191	191	patient risk factors, including the burden of chronic illness on a
192	192	patient and the severity of a patient's illness;
193	193	(3) that will have the greatest effect on improving
194	194	quality of care and the efficient use of services; and
195	195	(4) that are similar to outcome and process measures
196	196	used in the private sector, as appropriate.
197	197	(c) The commission may align outcome and process measures
198	198	developed under this section with measures required or recommended
199	199	under reporting guidelines established by the federal Centers for
200	200	Medicare and Medicaid Services, the Agency for Healthcare Research
201	201	and Quality, or another federal agency.
202	202	(d) The executive commissioner by rule may require managed
203	203	care organizations and health care providers and facilities
204	204	participating in the child health plan and Medicaid programs to
205	205	report to the commission in a format specified by the executive
206	206	commissioner information necessary to develop outcome and process
207	207	measures under this section.
208	208	(e) If the commission increases provider reimbursement
209	209	rates under the child health plan or Medicaid program as a result of
210	210	an increase in the amounts appropriated for the programs for a state
211	211	fiscal biennium as compared to the preceding state fiscal biennium,
212	212	the commission shall, to the extent permitted under federal law and
213	213	to the extent otherwise possible considering other relevant
214	214	factors, correlate the increased reimbursement rates with the
215	215	quality-based outcome and process measures developed under this
216	216	section.
217	217	Sec. 536.004. DEVELOPMENT OF QUALITY-BASED PAYMENT
218	218	SYSTEMS. (a) Using quality-based outcome and process measures
219	219	developed under Section 536.003 and subject to this section, the
220	220	commission, after consulting with the advisory committee, shall
221	221	develop quality-based payment systems for compensating a health
222	222	care provider or facility participating in the child health plan or
223	223	Medicaid program that:
224	224	(1) align payment incentives with high-quality,
225	225	cost-effective health care;
226	226	(2) reward the use of evidence-based best practices;
227	227	(3) promote the coordination of health care;
228	228	(4) encourage appropriate provider collaboration;
229	229	(5) promote effective health care delivery models; and
230	230	(6) take into account the specific needs of the child
231	231	health plan program enrollee and Medicaid recipient populations.
232	232	(b) The commission shall develop quality-based payment
233	233	systems in the manner specified by this chapter. To the extent
234	234	necessary, the commission shall coordinate the timeline for the
235	235	development and implementation of a payment system with the
236	236	implementation of other initiatives such as the Medicaid
237	237	Information Technology Architecture (MITA) initiative of the
238	238	Center for Medicaid and State Operations, the ICD-10 code sets
239	239	initiative, or the ongoing Enterprise Data Warehouse (EDW) planning
240	240	process in order to maximize the receipt of federal funds or reduce
241	241	any administrative burden.
242	242	(c) In developing quality-based payment systems under this
243	243	chapter, the commission shall examine and consider implementing:
244	244	(1) an alternative payment system;
245	245	(2) any existing performance-based payment system
246	246	used under the Medicare program that meets the requirements of this
247	247	chapter, modified as necessary to account for programmatic
248	248	differences, if implementing the system would:
249	249	(A) reduce unnecessary administrative burdens;
250	250	and
251	251	(B) align quality-based payment incentives for
252	252	health care providers or facilities with the Medicare program; and
253	253	(3) alternative payment methodologies within the
254	254	system that are used in the Medicare program, modified as necessary
255	255	to account for programmatic differences, and that will achieve cost
256	256	savings and improve quality of care in the child health plan and
257	257	Medicaid programs.
258	258	(d) In developing quality-based payment systems under this
259	259	chapter, the commission shall ensure that a managed care
260	260	organization, health care provider, or health care facility will
261	261	not be rewarded by the system for withholding or delaying the
262	262	provision of medically necessary care.
263	263	Sec. 536.005. CONVERSION OF PAYMENT METHODOLOGY. (a) To
264	264	the extent possible, the commission shall convert reimbursement
265	265	systems under the child health plan and Medicaid programs to a
266	266	diagnosis-related groups (DRG) methodology that will allow the
267	267	commission to more accurately classify specific patient
268	268	populations and account for severity of patient illness and
269	269	mortality risk.
270	270	(b) Subsection (a) does not authorize the commission to
271	271	direct a managed care organization regarding how the organization
272	272	compensates health care providers and facilities providing
273	273	services under the organization's managed care plan.
274	274	Sec. 536.006. TRANSPARENCY. The commission and the
275	275	advisory committee shall:
276	276	(1) ensure transparency in the development and
277	277	establishment of:
278	278	(A) quality-based payment and reimbursement
279	279	systems under Section 536.004 and Subchapters B, C, and D,
280	280	including the development of outcome and process measures under
281	281	Section 536.003; and
282	282	(B) quality-based payment initiatives under
283	283	Subchapter E, including the development of quality of care and
284	284	cost-efficiency benchmarks under Section 536.204(a) and efficiency
285	285	performance standards under Section 536.204(b);
286	286	(2) develop guidelines establishing procedures for
287	287	providing notice and actionable valid information to, and receiving
288	288	input from, managed care organizations, health care providers,
289	289	including physicians and experts in the various medical specialty
290	290	fields, health care facilities, and other stakeholders, as
291	291	appropriate, for purposes of developing and establishing the
292	292	quality-based payment and reimbursement systems and initiatives
293	293	described under Subdivision (1); and
294	294	(3) in developing and establishing the quality-based
295	295	payment and reimbursement systems and initiatives described under
296	296	Subdivision (1), consider that as the performance of a managed care
297	297	organization, health care provider, or health care facility
298	298	improves with respect to an outcome or process measure, quality of
299	299	care and cost-efficiency benchmark, or efficiency performance
300	300	standard, as applicable, there will be a diminishing rate of
301	301	improved performance over time.
302	302	Sec. 536.007. PERIODIC EVALUATION. (a) At least once each
303	303	two-year period, the commission shall evaluate the outcomes and
304	304	cost-effectiveness of any quality-based payment system or other
305	305	payment initiative implemented under this chapter.
306	306	(b) The commission shall:
307	307	(1) present the results of its evaluation under
308	308	Subsection (a) to the advisory committee for the committee's input
309	309	and recommendations; and
310	310	(2) provide a process by which managed care
311	311	organizations and health care providers and facilities may comment
312	312	and provide input into the committee's recommendations under
313	313	Subdivision (1).
314	314	Sec. 536.008. ANNUAL REPORT. (a) The commission shall
315	315	submit an annual report to the legislature regarding:
316	316	(1) the quality-based outcome and process measures
317	317	developed under Section 536.003; and
318	318	(2) the progress of the implementation of
319	319	quality-based payment systems and other payment initiatives
320	320	implemented under this chapter.
321	321	(b) The commission shall report outcome and process
322	322	measures under Subsection (a)(1) by health care service region and
323	323	service delivery model.
324	324	[Sections 536.009-536.050 reserved for expansion]
325	325	SUBCHAPTER B. QUALITY-BASED PAYMENTS RELATING TO MANAGED CARE
326	326	ORGANIZATIONS
327	327	Sec. 536.051. DEVELOPMENT OF QUALITY-BASED PREMIUM
328	328	PAYMENTS; PERFORMANCE REPORTING. (a) Subject to Section
329	329	1903(m)(2)(A), Social Security Act (42 U.S.C. Section
330	330	1396b(m)(2)(A)), and other applicable federal law, the commission
331	331	shall base a percentage of the premiums paid to a managed care
332	332	organization participating in the child health plan or Medicaid
333	333	program on the organization's performance with respect to outcome
334	334	and process measures developed under Section 536.003, including
335	335	outcome measures addressing potentially preventable events.
336	336	(b) The commission shall report information relating to the
337	337	performance of a managed care organization with respect to outcome
338	338	and process measures under this subchapter to child health plan
339	339	program enrollees and Medicaid recipients before those enrollees
340	340	and recipients choose their managed care plans.
341	341	Sec. 536.052. PAYMENT AND CONTRACT AWARD INCENTIVES FOR
342	342	MANAGED CARE ORGANIZATIONS. (a) The commission may allow a
343	343	managed care organization participating in the child health plan or
344	344	Medicaid program increased flexibility to implement quality
345	345	initiatives in a managed care plan offered by the organization,
346	346	including flexibility with respect to network requirements and
347	347	financial arrangements, in order to:
348	348	(1) achieve high-quality, cost-effective health care;
349	349	(2) increase the use of high-quality, cost-effective
350	350	delivery models; and
351	351	(3) reduce potentially preventable events.
352	352	(b) The commission, after consulting with the advisory
353	353	committee, shall develop quality of care and cost-efficiency
354	354	benchmarks, including benchmarks based on a managed care
355	355	organization's performance with respect to reducing potentially
356	356	preventable events and containing the growth rate of health care
357	357	costs.
358	358	(c) The commission may include in a contract between a
359	359	managed care organization and the commission financial incentives
360	360	that are based on the organization's successful implementation of
361	361	quality initiatives under Subsection (a) or success in achieving
362	362	quality of care and cost-efficiency benchmarks under Subsection
363	363	(b).
364	364	(d) In awarding contracts to managed care organizations
365	365	under the child health plan and Medicaid programs, the commission
366	366	shall, in addition to considerations under Section 533.003 of this
367	367	code and Section 62.155, Health and Safety Code, give preference to
368	368	an organization that offers a managed care plan that implements
369	369	quality initiatives under Subsection (a) or meets quality of care
370	370	and cost-efficiency benchmarks under Subsection (b).
371	371	(e) The commission may implement financial incentives under
372	372	this section only if implementing the incentives would not require
373	373	additional state funding because the cost associated with the
374	374	implementation would be offset by expected savings or additional
375	375	federal funding.
376	376	[Sections 536.053-536.100 reserved for expansion]
377	377	SUBCHAPTER C. QUALITY-BASED HEALTH HOME PAYMENT SYSTEMS
378	378	Sec. 536.101. DEFINITIONS. In this subchapter:
379	379	(1) "Health home" means a primary care provider
380	380	practice or, if appropriate, a specialty practice, incorporating
381	381	several features, including comprehensive care coordination,
382	382	family-centered care, and data management, that are focused on
383	383	improving outcome-based quality of care and increasing patient and
384	384	provider satisfaction under the child health plan and Medicaid
385	385	programs.
386	386	(2) "Participating enrollee" means a child health plan
387	387	program enrollee or Medicaid recipient who has a health home.
388	388	Sec. 536.102. QUALITY-BASED HEALTH HOME PAYMENTS.
389	389	(a) Subject to this subchapter, the commission, after consulting
390	390	with the advisory committee, may develop and implement
391	391	quality-based payment systems for health homes designed to improve
392	392	quality of care and reduce the provision of unnecessary medical
393	393	services. A quality-based payment system developed under this
394	394	section must:
395	395	(1) base payments made to a participating enrollee's
396	396	health home on quality and efficiency measures that may include
397	397	measurable wellness and prevention criteria and use of
398	398	evidence-based best practices, sharing a portion of any realized
399	399	cost savings achieved by the health home, and ensuring quality of
400	400	care outcomes, including a reduction in potentially preventable
401	401	events; and
402	402	(2) allow for the examination of measurable wellness
403	403	and prevention criteria, use of evidence-based best practices, and
404	404	quality of care outcomes based on the type of primary or specialty
405	405	care provider.
406	406	(b) The commission may develop a quality-based payment
407	407	system for health homes under this subchapter only if implementing
408	408	the system would be feasible and cost-effective.
409	409	Sec. 536.103. PROVIDER ELIGIBILITY. To be eligible to
410	410	receive reimbursement under a quality-based payment system under
411	411	this subchapter, a provider must:
412	412	(1) provide participating enrollees, directly or
413	413	indirectly, with access to health care services outside of regular
414	414	business hours;
415	415	(2) educate participating enrollees about the
416	416	availability of health care services outside of regular business
417	417	hours; and
418	418	(3) provide evidence satisfactory to the commission
419	419	that the provider meets the requirement of Subdivision (1).
420	420	[Sections 536.104-536.150 reserved for expansion]
421	421	SUBCHAPTER D. QUALITY-BASED HOSPITAL REIMBURSEMENT SYSTEM
422	422	Sec. 536.151 [531.913]. COLLECTION AND REPORTING OF
423	423	CERTAIN [HOSPITAL HEALTH] INFORMATION [EXCHANGE]. (a) [In this
424	424	section, "potentially preventable readmission" means a return
425	425	hospitalization of a person within a period specified by the
426	426	commission that results from deficiencies in the care or treatment
427	427	provided to the person during a previous hospital stay or from
428	428	deficiencies in post-hospital discharge follow-up. The term does
429	429	not include a hospital readmission necessitated by the occurrence
430	430	of unrelated events after the discharge. The term includes the
431	431	readmission of a person to a hospital for:
432	432	[(1) the same condition or procedure for which the
433	433	person was previously admitted;
434	434	[(2) an infection or other complication resulting from
435	435	care previously provided;
436	436	[(3) a condition or procedure that indicates that a
437	437	surgical intervention performed during a previous admission was
438	438	unsuccessful in achieving the anticipated outcome; or
439	439	[(4) another condition or procedure of a similar
440	440	nature, as determined by the executive commissioner.
441	441	[(b)] The executive commissioner shall adopt rules for
442	442	identifying potentially preventable readmissions of child health
443	443	plan program enrollees and Medicaid recipients and potentially
444	444	preventable complications experienced by child health plan program
445	445	enrollees and Medicaid recipients. The [and the] commission shall
446	446	collect [exchange] data from [with] hospitals on
447	447	present-on-admission indicators for purposes of this section.
448	448	(b) [(c)] The commission shall establish a [health
449	449	information exchange] program to provide a [exchange] confidential
450	450	report to [information with] each hospital in this state that
451	451	participates in the child health plan or Medicaid program regarding
452	452	the hospital's performance with respect to potentially preventable
453	453	readmissions and potentially preventable complications. To the
454	454	extent possible, a report provided under this section should
455	455	include potentially preventable readmissions and potentially
456	456	preventable complications information across all child health plan
457	457	and Medicaid program payment systems. A hospital shall distribute
458	458	the information contained in the report [received from the
459	459	commission] to health care providers providing services at the
460	460	hospital.
461	461	(c) A report provided to a hospital under this section is
462	462	confidential and is not subject to Chapter 552.
463	463	Sec. 536.152. REIMBURSEMENT ADJUSTMENTS. (a) Subject to
464	464	Subsection (b), using the data collected under Section 536.151 and
465	465	the diagnosis-related groups (DRG) methodology implemented under
466	466	Section 536.005, the commission, after consulting with the advisory
467	467	committee, shall to the extent feasible adjust child health plan
468	468	and Medicaid reimbursements to hospitals, including payments made
469	469	under the disproportionate share hospitals and upper payment limit
470	470	supplemental payment programs, in a manner that may reward or
471	471	penalize a hospital based on the hospital's performance with
472	472	respect to exceeding, or failing to achieve, outcome and process
473	473	measures developed under Section 536.003 that address potentially
474	474	preventable readmissions and potentially preventable
475	475	complications.
476	476	(b) The commission must provide the report required under
477	477	Section 536.151(b) to a hospital at least one year before the
478	478	commission adjusts child health plan and Medicaid reimbursements to
479	479	the hospital under this section.
480	480	[Sections 536.153-536.200 reserved for expansion]
481	481	SUBCHAPTER E. QUALITY-BASED PAYMENT INITIATIVES
482	482	Sec. 536.201. DEFINITION. In this subchapter, "payment
483	483	initiative" means a quality-based payment initiative established
484	484	under this subchapter.
485	485	Sec. 536.202. PAYMENT INITIATIVES; DETERMINATION OF
486	486	BENEFIT TO STATE. (a) The commission shall, after consulting with
487	487	the advisory committee, establish payment initiatives to test the
488	488	effectiveness of quality-based payment systems, alternative
489	489	payment methodologies, and high-quality, cost-effective health
490	490	care delivery models that provide incentives to health care
491	491	providers and facilities to develop health care interventions for
492	492	child health plan program enrollees or Medicaid recipients, or
493	493	both, that will:
494	494	(1) improve the quality of health care provided to the
495	495	enrollees or recipients;
496	496	(2) reduce potentially preventable events;
497	497	(3) promote prevention and wellness;
498	498	(4) increase the use of evidence-based best practices;
499	499	(5) increase appropriate provider collaboration; and
500	500	(6) contain costs.
501	501	(b) The commission shall:
502	502	(1) establish a process by which managed care
503	503	organizations and health care providers and facilities may submit
504	504	proposals for payment initiatives described by Subsection (a); and
505	505	(2) determine whether it is feasible and
506	506	cost-effective to implement one or more of the proposed payment
507	507	initiatives.
508	508	Sec. 536.203. PURPOSE AND IMPLEMENTATION OF PAYMENT
509	509	INITIATIVES. (a) If the commission determines under Section
510	510	536.202 that implementation of one or more payment initiatives is
511	511	feasible and cost-effective for this state, the commission shall
512	512	establish one or more payment initiatives as provided by this
513	513	subchapter.
514	514	(b) The commission shall administer any payment initiative
515	515	established under this subchapter. The executive commissioner may
516	516	adopt rules, plans, and procedures and enter into contracts and
517	517	other agreements as the executive commissioner considers
518	518	appropriate and necessary to administer this subchapter.
519	519	(c) The commission may limit a payment initiative to:
520	520	(1) one or more regions in this state;
521	521	(2) one or more organized networks of health care
522	522	providers and facilities; or
523	523	(3) specified types of services provided under the
524	524	child health plan or Medicaid program, or specified types of
525	525	enrollees or recipients under those programs.
526	526	(d) A payment initiative implemented under this subchapter
527	527	must be operated for at least one calendar year.
528	528	Sec. 536.204. STANDARDS; PROTOCOLS. (a) The executive
529	529	commissioner shall:
530	530	(1) consult with the advisory committee to develop
531	531	quality of care and cost-efficiency benchmarks and measurable goals
532	532	that a payment initiative must meet to ensure high-quality and
533	533	cost-effective health care services and healthy outcomes; and
534	534	(2) approve benchmarks and goals developed as provided
535	535	by Subdivision (1).
536	536	(b) In addition to the benchmarks and goals under Subsection
537	537	(a), the executive commissioner may approve efficiency performance
538	538	standards that may include the sharing of realized cost savings
539	539	with health care providers and facilities that provide health care
540	540	services that exceed the efficiency performance standards. The
541	541	efficiency performance standards may not create any financial
542	542	incentive for or involve making a payment to a health care provider
543	543	or facility that directly or indirectly induces the limitation of
544	544	medically necessary services.
545	545	Sec. 536.205. PAYMENT RATES UNDER PAYMENT INITIATIVES. The
546	546	executive commissioner may contract with appropriate entities,
547	547	including qualified actuaries, to assist in determining
548	548	appropriate payment rates for a payment initiative implemented
549	549	under this subchapter.
550	550	(b) As soon as practicable after the effective date of this
551	551	Act, but not later than September 1, 2012, the Health and Human
552	552	Services Commission shall convert the reimbursement systems used
553	553	under the child health plan program under Chapter 62, Health and
554	554	Safety Code, and medical assistance program under Chapter 32, Human
555	555	Resources Code, to the diagnosis-related groups (DRG) methodology
556	556	to the extent possible as required by Section 536.005, Government
557	557	Code, as added by this section.
558	558	(c) Not later than September 1, 2012, the Health and Human
559	559	Services Commission shall begin providing performance reports to
560	560	hospitals regarding the hospitals' performances with respect to
561	561	potentially preventable complications as required by Section
562	562	536.151, Government Code, as designated and amended by this
563	563	section.
564	564	(d) Subject to Subsection (b), Section 536.004, Government
565	565	Code, as added by this section, the Health and Human Services
566	566	Commission shall begin making adjustments to child health plan and
567	567	Medicaid reimbursements to hospitals as required by Section
568	568	536.152, Government Code, as added by this section:
569	569	(1) not later than September 1, 2012, based on the
570	570	hospitals' performances with respect to reducing potentially
571	571	preventable readmissions; and
572	572	(2) not later than September 1, 2013, based on the
573	573	hospitals' performances with respect to reducing potentially
574	574	preventable complications.
575	575	SECTION 2. APPROPRIATE UTILIZATION OF CERTAIN HEALTH CARE
576	576	SERVICES. (a) Subchapter B, Chapter 531, Government Code, is
577	577	amended by adding Sections 531.086 and 531.0861 to read as follows:
578	578	Sec. 531.086. STUDY REGARDING PHYSICIAN INCENTIVE PROGRAMS
579	579	TO REDUCE HOSPITAL EMERGENCY ROOM USE FOR NON-EMERGENT CONDITIONS.
580	580	(a) The commission shall conduct a study to evaluate physician
581	581	incentive programs that attempt to reduce hospital emergency room
582	582	use for non-emergent conditions by recipients under the medical
583	583	assistance program. Each physician incentive program evaluated in
584	584	the study must:
585	585	(1) be administered by a health maintenance
586	586	organization participating in the STAR or STAR + PLUS Medicaid
587	587	managed care program; and
588	588	(2) provide incentives to primary care providers who
589	589	attempt to reduce emergency room use for non-emergent conditions by
590	590	recipients.
591	591	(b) The study conducted under Subsection (a) must evaluate:
592	592	(1) the cost-effectiveness of each component included
593	593	in a physician incentive program; and
594	594	(2) any change in statute required to implement each
595	595	component within the Medicaid fee-for-service or primary care case
596	596	management model.
597	597	(c) Not later than August 31, 2012, the executive
598	598	commissioner shall submit to the governor and the Legislative
599	599	Budget Board a report summarizing the findings of the study
600	600	required by this section.
601	601	(d) This section expires September 1, 2013.
602	602	Sec. 531.0861. PHYSICIAN INCENTIVE PROGRAM TO REDUCE
603	603	HOSPITAL EMERGENCY ROOM USE FOR NON-EMERGENT CONDITIONS. (a) If
604	604	cost-effective, the executive commissioner by rule shall establish
605	605	a physician incentive program designed to reduce the use of
606	606	hospital emergency room services for non-emergent conditions by
607	607	recipients under the medical assistance program.
608	608	(b) In establishing the physician incentive program under
609	609	Subsection (a), the executive commissioner may include only the
610	610	program components identified as cost-effective in the study
611	611	conducted under Section 531.086.
612	612	(c) If the physician incentive program includes the payment
613	613	of an enhanced reimbursement rate for routine after-hours
614	614	appointments, the executive commissioner shall implement controls
615	615	to ensure that the after-hours services billed are actually being
616	616	provided outside of normal business hours.
617	617	(b) Section 32.0641, Human Resources Code, is amended to
618	618	read as follows:
619	619	Sec. 32.0641. RECIPIENT ACCOUNTABILITY PROVISIONS;
620	620	COST-SHARING REQUIREMENT TO IMPROVE APPROPRIATE UTILIZATION OF
621	621	[COST SHARING FOR CERTAIN HIGH-COST MEDICAL] SERVICES. (a) To [If
622	622	the department determines that it is feasible and cost-effective,
623	623	and to] the extent permitted under Title XIX, Social Security Act
624	624	(42 U.S.C. Section 1396 et seq.) and any other applicable law or
625	625	regulation or under a federal waiver or other authorization, the
626	626	executive commissioner of the Health and Human Services Commission
627	627	shall adopt, after consulting with the Medicaid and CHIP
628	628	Quality-Based Payment Advisory Committee established under Section
629	629	536.002, Government Code, cost-sharing provisions that encourage
630	630	personal accountability and appropriate utilization of health care
631	631	services, including a cost-sharing provision applicable to
632	632	[require] a recipient who chooses to receive a nonemergency [a
633	633	high-cost] medical service [provided] through a hospital emergency
634	634	room [to pay a copayment, premium payment, or other cost-sharing
635	635	payment for the high-cost medical service] if:
636	636	(1) the hospital from which the recipient seeks
637	637	service:
638	638	(A) performs an appropriate medical screening
639	639	and determines that the recipient does not have a condition
640	640	requiring emergency medical services;
641	641	(B) informs the recipient:
642	642	(i) that the recipient does not have a
643	643	condition requiring emergency medical services;
644	644	(ii) that, if the hospital provides the
645	645	nonemergency service, the hospital may require payment of a
646	646	copayment, premium payment, or other cost-sharing payment by the
647	647	recipient in advance; and
648	648	(iii) of the name and address of a
649	649	nonemergency Medicaid provider who can provide the appropriate
650	650	medical service without imposing a cost-sharing payment; and
651	651	(C) offers to provide the recipient with a
652	652	referral to the nonemergency provider to facilitate scheduling of
653	653	the service; and
654	654	(2) after receiving the information and assistance
655	655	described by Subdivision (1) from the hospital, the recipient
656	656	chooses to obtain [emergency] medical services through the hospital
657	657	emergency room despite having access to medically acceptable,
658	658	appropriate [lower-cost] medical services.
659	659	(b) The department may not seek a federal waiver or other
660	660	authorization under this section [Subsection (a)] that would:
661	661	(1) prevent a Medicaid recipient who has a condition
662	662	requiring emergency medical services from receiving care through a
663	663	hospital emergency room; or
664	664	(2) waive any provision under Section 1867, Social
665	665	Security Act (42 U.S.C. Section 1395dd).
666	666	[(c) If the executive commissioner of the Health and Human
667	667	Services Commission adopts a copayment or other cost-sharing
668	668	payment under Subsection (a), the commission may not reduce
669	669	hospital payments to reflect the potential receipt of a copayment
670	670	or other payment from a recipient receiving medical services
671	671	provided through a hospital emergency room.]
672	672	SECTION 3. LONG-TERM CARE PAYMENT INCENTIVE INITIATIVES.
673	673	(a) The heading to Section 531.912, Government Code, is amended to
674	674	read as follows:
675	675	Sec. 531.912. PAY-FOR-PERFORMANCE INCENTIVES FOR [QUALITY
676	676	OF CARE HEALTH INFORMATION EXCHANGE WITH] CERTAIN NURSING
677	677	FACILITIES.
678	678	(b) Subsections (b), (c), and (f), Section 531.912,
679	679	Government Code, are amended to read as follows:
680	680	(b) If feasible, the executive commissioner by rule shall
681	681	establish an incentive payment program for [a quality of care
682	682	health information exchange with] nursing facilities that choose to
683	683	participate. The [in a] program must be designed to improve the
684	684	quality of care and services provided to medical assistance
685	685	recipients. Subject to Subsection (f), the program may provide
686	686	incentive payments in accordance with this section to encourage
687	687	facilities to participate in the program.
688	688	(c) In establishing an incentive payment [a quality of care
689	689	health information exchange] program under this section, the
690	690	executive commissioner shall, subject to Subsection (d), adopt
691	691	outcome-based [exchange information with participating nursing
692	692	facilities regarding] performance measures. The performance
693	693	measures:
694	694	(1) must be:
695	695	(A) recognized by the executive commissioner as
696	696	valid indicators of the overall quality of care received by medical
697	697	assistance recipients; and
698	698	(B) designed to encourage and reward
699	699	evidence-based practices among nursing facilities; and
700	700	(2) may include measures of:
701	701	(A) quality of life;
702	702	(B) direct-care staff retention and turnover;
703	703	(C) recipient satisfaction;
704	704	(D) employee satisfaction and engagement;
705	705	(E) the incidence of preventable acute care
706	706	emergency room services use;
707	707	(F) regulatory compliance;
708	708	(G) level of person-centered care; and
709	709	(H) level of occupancy or of facility
710	710	utilization.
711	711	(f) The commission may make incentive payments under the
712	712	program only if money is [specifically] appropriated for that
713	713	purpose.
714	714	(c) The Department of Aging and Disability Services shall
715	715	conduct a study to evaluate the feasibility of expanding any
716	716	incentive payment program established for nursing facilities under
717	717	Section 531.912, Government Code, as amended by this section, by
718	718	providing incentive payments for the following types of providers
719	719	of long-term care services, as defined by Section 22.0011, Human
720	720	Resources Code, under the medical assistance program:
721	721	(1) intermediate care facilities for persons with
722	722	mental retardation licensed under Chapter 252, Health and Safety
723	723	Code; and
724	724	(2) providers of home and community-based services, as
725	725	described by 42 U.S.C. Section 1396n(c), who are licensed or
726	726	otherwise authorized to provide those services in this state.
727	727	(d) Not later than September 1, 2012, the Department of
728	728	Aging and Disability Services shall submit to the legislature a
729	729	written report containing the findings of the study conducted under
730	730	Subsection (c) of this section and the department's
731	731	recommendations.
732	732	SECTION 4. FEDERAL AUTHORIZATION. If before implementing
733	733	any provision of this Act a state agency determines that a waiver or
734	734	authorization from a federal agency is necessary for implementation
735	735	of that provision, the agency affected by the provision shall
736	736	request the waiver or authorization and may delay implementing that
737	737	provision until the waiver or authorization is granted.
738	738	SECTION 5. EFFECTIVE DATE. This Act takes effect September
739	739	1, 2011.