85R3110 LED-D
By: Muñoz, Jr. H.B. No. 3596
A BILL TO BE ENTITLED
AN ACT
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. 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. 533.053. 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. 533.054. 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. 533.055. 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 or require each
managed care organization to periodically audit each pharmacy
benefit manager that contracts with the 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. 533.056. 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. 533.057. 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. 533.058. 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. 533.059. 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.