Texas 2017 - 85th Regular

Texas House Bill HB3982 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	85R24666 KFF-F
2	1		By: Raymond H.B. No. 3982
3		-	Substitute the following for H.B. No. 3982:
4		-	By: Minjarez C.S.H.B. No. 3982
5	2
6	3
7	4		A BILL TO BE ENTITLED
8	5		AN ACT
9		-	relating to the ~~Medicaid program,~~ ~~including~~ the ~~administration and~~
10		-	~~operation of the Medicaid~~ managed care ~~program~~.
	6	+	relating to the administration and operation of the Medicaid
	7	+	program in a managed care model.
11	8		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12		-	SECTION 1. Section 531.024172, Government Code, is amended
13		-	to read as follows:
14		-	Sec. 531.024172. ELECTRONIC VISIT VERIFICATION SYSTEM;
15		-	REIMBURSEMENT OF CERTAIN RELATED CLAIMS. (a) Subject to
16		-	Subsection (g), [In this section, "acute nursing services" has the
17		-	meaning assigned by Section 531.02417.
18		-	[(b) If it is cost-effective and feasible,] the commission
19		-	shall, in accordance with federal law, implement an electronic
20		-	visit verification system to electronically verify [and document,]
21		-	through a telephone, global positioning, or computer-based system
22		-	that personal care services or attendant care services provided to
23		-	recipients under Medicaid, including personal care services or
24		-	attendant care services provided under the Texas Health Care
25		-	Transformation and Quality Improvement Program waiver issued under
26		-	Section 1115 of the federal Social Security Act (42 U.S.C. Section
27		-	1315) or any other Medicaid waiver program, are provided to
28		-	recipients in accordance with a prior authorization or plan of
29		-	care. The electronic visit verification system implemented under
30		-	this subsection must allow for verification of only the following[,
31		-	basic] information relating to the delivery of Medicaid [acute
32		-	nursing] services[, including]:
33		-	(1) the type of service provided [the provider's
34		-	name];
35		-	(2) the name of the recipient to whom the service is
36		-	provided [the recipient's name]; [and]
37		-	(3) the date and times [time] the provider began
38		-	[begins] and ended the [ends each] service delivery visit;
39		-	(4) the location, including the address, at which the
40		-	service was provided;
41		-	(5) the name of the individual who provided the
42		-	service; and
43		-	(6) other information the commission determines is
44		-	necessary to ensure the accurate adjudication of Medicaid claims.
45		-	(b) The commission shall establish minimum requirements for
46		-	third-party entities seeking to provide electronic visit
47		-	verification system services to health care providers providing
48		-	Medicaid services and must certify that a third-party entity
49		-	complies with those minimum requirements before the entity may
50		-	provide electronic visit verification system services to a health
51		-	care provider.
52		-	(c) The commission shall inform each Medicaid recipient who
53		-	receives personal care services or attendant care services that the
54		-	health care provider providing the services and the recipient are
55		-	each required to comply with the electronic visit verification
56		-	system. A managed care organization that contracts with the
57		-	commission to provide health care services to Medicaid recipients
58		-	described by this subsection shall also inform recipients enrolled
59		-	in a managed care plan offered by the organization of those
60		-	requirements.
61		-	(d) In implementing the electronic visit verification
62		-	system:
63		-	(1) subject to Subsection (e), the executive
64		-	commissioner shall adopt compliance standards for health care
65		-	providers; and
66		-	(2) the commission shall ensure that:
67		-	(A) the information required to be reported by
68		-	health care providers is standardized across managed care
69		-	organizations that contract with the commission to provide health
70		-	care services to Medicaid recipients and across commission
71		-	programs; and
72		-	(B) time frames for the maintenance of electronic
73		-	visit verification data by health care providers align with claims
74		-	payment time frames.
75		-	(e) In establishing compliance standards for health care
76		-	providers under this section, the executive commissioner shall
77		-	consider:
78		-	(1) the administrative burdens placed on health care
79		-	providers required to comply with the standards; and
80		-	(2) the benefits of using emerging technologies for
81		-	ensuring compliance, including Internet-based, mobile
82		-	telephone-based, and global positioning-based technologies.
83		-	(f) A health care provider that provides personal care
84		-	services or attendant care services to Medicaid recipients shall:
85		-	(1) use an electronic visit verification system to
86		-	document the provision of those services;
87		-	(2) comply with all documentation requirements
88		-	established by the commission;
89		-	(3) comply with applicable federal and state laws
90		-	regarding confidentiality of recipients' information;
91		-	(4) ensure that the commission or the managed care
92		-	organization with which a claim for reimbursement for a service is
93		-	filed may review electronic visit verification system
94		-	documentation related to the claim or obtain a copy of that
95		-	documentation at no charge to the commission or the organization;
96		-	and
97		-	(5) at any time, allow the commission or a managed care
98		-	organization with which a health care provider contracts to provide
99		-	health care services to recipients enrolled in the organization's
100		-	managed care plan to have direct, on-site access to the electronic
101		-	visit verification system in use by the health care provider.
102		-	(g) The commission may recognize a health care provider's
103		-	proprietary electronic visit verification system as complying with
104		-	this section and allow the health care provider to use that system
105		-	for a period determined by the commission if the commission
106		-	determines that the system:
107		-	(1) complies with all necessary data submission,
108		-	exchange, and reporting requirements established under this
109		-	section;
110		-	(2) meets all other standards and requirements
111		-	established under this section; and
112		-	(3) has been in use by the health care provider since
113		-	at least June 1, 2014.
114		-	(h) The commission or a managed care organization that
115		-	contracts with the commission to provide health care services to
116		-	Medicaid recipients may not pay a claim for reimbursement for
117		-	personal care services or attendant care services provided to a
118		-	recipient unless the information from the electronic visit
119		-	verification system corresponds with the information contained in
120		-	the claim and the services were provided consistent with a prior
121		-	authorization or plan of care. A previously paid claim is subject
122		-	to retrospective review and recoupment if unverified.
123		-	(i) The commission shall create a stakeholder work group
124		-	comprised of representatives of affected health care providers,
125		-	managed care organizations, and Medicaid recipients and
126		-	periodically solicit from that work group input regarding the
127		-	ongoing operation of the electronic visit verification system under
128		-	this section.
129		-	(j) The executive commissioner may adopt rules necessary to
130		-	implement this section.
131		-	SECTION 2. Subchapter C, Chapter 531, Government Code, is
	9	+	SECTION 1. Subchapter C, Chapter 531, Government Code, is
132	10		amended by adding Section 531.1133 to read as follows:
133	11		Sec. 531.1133. PROVIDER NOT LIABLE FOR MANAGED CARE
134		-	ORGANIZATION OVERPAYMENT OR DEBT. (a) If the commission's office
135		-	of inspector general makes a determination to recoup an overpayment
136		-	or debt from a managed care organization that contracts with the
137		-	commission to provide health care services to Medicaid recipients,
138		-	a provider that contracts with the managed care organization may
139		-	not be held liable for the good faith provision of services under
140		-	the provider's contract with the managed care organization that
141		-	were provided with prior authorization.
142		-	(b) This section does not:
143		-	(1) limit the office of inspector general's authority
144		-	to recoup an overpayment or debt from a provider that is owed by the
145		-	provider as a result of the provider's failure to comply with
146		-	applicable law or a contract provision, notwithstanding any prior
147		-	authorization for a service provided; or
148		-	(2) apply to an action brought under Chapter 36, Human
149		-	Resources Code.
150		-	SECTION 3. Section 531.120, Government Code, is amended by
	12	+	ORGANIZATION OVERPAYMENT OR DEBT. If the commission's office of
	13	+	inspector general makes a determination to recoup an overpayment or
	14	+	debt from a managed care organization that contracts with the
	15	+	commission to provide health care services to recipients, a
	16	+	provider that contracts with the managed care organization may not
	17	+	be held liable for the good faith provision of services under the
	18	+	provider's contract with the managed care organization.
	19	+	SECTION 2. Section 531.120, Government Code, is amended by
151	20		adding Subsection (c) to read as follows:
152	21		(c) The commission shall provide the notice required by
153	22		Subsection (a) to a provider that is a hospital not later than the
154	23		90th day before the date the overpayment or debt that is the subject
155	24		of the notice must be paid.
156		-	SECTION 4. Section 533.00281, Government Code, is
157		-	redesignated as Section 533.0121, Government Code, and amended to
158		-	read as follows:
159		-	Sec. 533.0121 [533.00281]. UTILIZATION REVIEW AND
160		-	FINANCIAL AUDIT PROCESS FOR [STAR + PLUS] MEDICAID MANAGED CARE
161		-	ORGANIZATIONS CONDUCTED BY OFFICE OF CONTRACT MANAGEMENT. (a) The
162		-	commission's office of contract management shall establish an
163		-	annual utilization review and financial audit process for managed
164		-	care organizations participating in the [STAR + PLUS] Medicaid
165		-	managed care program. The commission shall determine the topics to
166		-	be examined in a [the] review [process], except that with respect to
167		-	a managed care organization participating in the STAR + PLUS
168		-	Medicaid managed care program, the review [process] must include a
169		-	thorough investigation of the [each managed care] organization's
170		-	procedures for determining whether a recipient should be enrolled
171		-	in the STAR + PLUS home and community-based services and supports
172		-	(HCBS) program, including the conduct of functional assessments for
173		-	that purpose and records relating to those assessments.
174		-	(b) The office of contract management shall use the
175		-	utilization review and financial audit process established under
176		-	this section to review each fiscal year:
177		-	(1) each managed care organization [every managed care
178		-	organization] participating in the [STAR + PLUS] Medicaid managed
179		-	care program in this state for that organization's first five years
180		-	of participation; [or]
181		-	(2) each managed care organization providing health
182		-	care services to a population of recipients new to receiving those
183		-	services through a Medicaid [only the] managed care delivery model
184		-	for the first three years that organization provides those services
185		-	to that population; or
186		-	(3) managed care organizations that, using a
187		-	risk-based assessment process and evaluation of prior history, the
188		-	office determines have a higher likelihood of contract or financial
189		-	noncompliance [inappropriate client placement in the STAR + PLUS
190		-	home and community-based services and supports (HCBS) program].
191		-	(c) In addition to the reviews required by Subsection (b),
192		-	the office of contract management shall use the utilization review
193		-	and financial audit process established under this section to
194		-	review each managed care organization participating in the Medicaid
195		-	managed care program at least once every five years.
196		-	(d) In conjunction with the commission's office of contract
197		-	management, the commission shall provide a report to the standing
198		-	committees of the senate and house of representatives with
199		-	jurisdiction over Medicaid not later than December 1 of each year.
200		-	The report must:
201		-	(1) summarize the results of the [utilization] reviews
202		-	conducted under this section during the preceding fiscal year;
203		-	(2) provide analysis of errors committed by each
204		-	reviewed managed care organization; and
205		-	(3) extrapolate those findings and make
206		-	recommendations for improving the efficiency of the Medicaid
207		-	managed care program.
208		-	(e) If a [utilization] review conducted under this section
209		-	results in a determination to recoup money from a managed care
210		-	organization, the provider protections from liability under
211		-	Section 531.1133 apply [a service provider who contracts with the
212		-	managed care organization may not be held liable for the good faith
213		-	provision of services based on an authorization from the managed
214		-	care organization].
215		-	SECTION 5. Section 533.005, Government Code, is amended by
216		-	amending Subsection (a) and adding Subsection (d) to read as
217		-	follows:
	25	+	SECTION 3. Section 533.005, Government Code, is amended by
	26	+	amending Subsections (a) and (a-3) and adding Subsections (a-4),
	27	+	(a-5), and (e) to read as follows:
218	28		(a) A contract between a managed care organization and the
219	29		commission for the organization to provide health care services to
220	30		recipients must contain:
221	31		(1) procedures to ensure accountability to the state
222	32		for the provision of health care services, including procedures for
223	33		financial reporting, quality assurance, utilization review, and
224	34		assurance of contract and subcontract compliance;
225	35		(2) capitation rates that ensure access to and the
226	36		cost-effective provision of quality health care;
227	37		(3) a requirement that the managed care organization
228	38		provide ready access to a person who assists recipients in
229	39		resolving issues relating to enrollment, plan administration,
230	40		education and training, access to services, and grievance
231	41		procedures;
232	42		(4) a requirement that the managed care organization
233	43		provide ready access to a person who assists providers in resolving
234	44		issues relating to payment, plan administration, education and
235	45		training, and grievance procedures;
236	46		(5) a requirement that the managed care organization
237	47		provide information and referral about the availability of
238	48		educational, social, and other community services that could
239	49		benefit a recipient;
240	50		(6) procedures for recipient outreach and education;
241	51		(7) subject to Subdivision (7-b), a requirement that
242	52		the managed care organization make payment to a physician or
243	53		provider for health care services rendered to a recipient under a
244		-	managed care plan offered by the managed care organization on any
245		-	claim for payment that is received with documentation reasonably
246		-	necessary for the managed care organization to process the claim:
247		-	(A) not later than[:
248		-	[(i)] the 10th day after the date the claim
249		-	is received if the claim relates to services provided by a nursing
250		-	facility, intermediate care facility, or group home; and
251		-	(B) on average, not later than [(ii)] the 15th
252		-	[30th] day after the date the claim is received if the claim,
253		-	including a claim that relates to the provision of long-term
254		-	services and supports, is not subject to Paragraph (A)
255		-	[Subparagraph (i); and
256		-	[(iii) the 45th day after the date the claim
	54	+	managed care plan on any claim for payment that is received with
	55	+	documentation reasonably necessary for the managed care
	56	+	organization to process the claim:
	57	+	(A) not later than:
	58	+	(i) the 10th day after the date the claim is
	59	+	received if the claim relates to services provided by a nursing
	60	+	facility, intermediate care facility, or group home;
	61	+	(ii) the 30th day after the date the claim
	62	+	is received if the claim relates to the provision of long-term
	63	+	services and supports not subject to Subparagraph (i); and
	64	+	(iii) the 45th day after the date the claim
257	65		is received if the claim is not subject to Subparagraph (i) or (ii);
258	66		or
259		-	[(B) within a period, not to exceed 60 days,
	67	+	(B) within a period, not to exceed 60 days,
260	68		specified by a written agreement between the physician or provider
261		-	and the managed care organization];
	69	+	and the managed care organization;
262	70		(7-a) a requirement that the managed care organization
263		-	demonstrate to the commission that the organization pays claims to
264		-	which [described by] Subdivision (7)(B) applies [(7)(A)(ii)] on
265		-	average not later than the 15th [21st] day after the date the claim
266		-	is received by the organization;
	71	+	demonstrate to the commission that the organization pays claims
	72	+	described by Subdivision (7)(A)(ii) on average not later than the
	73	+	21st day after the date the claim is received by the organization;
267	74		(7-b) a requirement that the managed care organization
268	75		demonstrate to the commission that, within each provider category
269		-	~~and service delivery area~~ designated by the commission, the
270		-	~~organization pays at least 98~~ percent of claims within the ~~times~~
271		-	prescribed by Subdivision ~~(7)~~;
	76	+	designated by the commission, the organization pays at least 98
	77	+	percent of claims described by Subdivision (7) within the time
	78	+	prescribed by that subdivision;
272	79		(7-c) a requirement that the managed care organization
273		-	establish an electronic process for use by providers in submitting
274		-	claims documentation that complies with Section 533.0055(b)(6) and
275		-	allows providers to submit additional documentation on a claim when
276		-	the organization determines the claim was not submitted with
277		-	documentation reasonably necessary to process the claim;
	80	+	establish an electronic process for use by providers that complies
	81	+	with Section 533.0055(b)(6);
278	82		(8) a requirement that the commission, on the date of a
279	83		recipient's enrollment in a managed care plan issued by the managed
280	84		care organization, inform the organization of the recipient's
281	85		Medicaid certification date;
282	86		(9) a requirement that the managed care organization
283	87		comply with Section 533.006 as a condition of contract retention
284	88		and renewal;
285	89		(10) a requirement that the managed care organization
286	90		provide the information required by Section 533.012 and otherwise
287	91		comply and cooperate with the commission's office of inspector
288	92		general and the office of the attorney general;
289	93		(11) a requirement that the managed care
290		-	organization's ~~utilization [~~usages] of out-of-network providers or
291		-	~~groups of~~ out-of-network providers may not exceed limits ~~determined~~
292		-	by the commission, including limits ~~[for those usages]~~ relating to:
	94	+	organization's usages of out-of-network providers or groups of
	95	+	out-of-network providers may not exceed limits for those usages
	96	+	determined by the commission, including limits relating to:
293	97		(A) total inpatient admissions, total outpatient
294	98		services, and emergency room admissions [determined by the
295		-	commission];
296		-	(B) acute care services not described by
297		-	Paragraph (A); and
298		-	(C) long-term services and supports;
	99	+	commission]; and
	100	+	(B) therapy services, home health services,
	101	+	long-term services and supports, and health care specialists;
299	102		(12) if the commission finds that a managed care
300	103		organization has violated Subdivision (11), a requirement that the
301	104		managed care organization reimburse an out-of-network provider for
302	105		health care services at a rate that is equal to the allowable rate
303	106		for those services, as determined under Sections 32.028 and
304	107		32.0281, Human Resources Code;
305	108		(13) a requirement that, notwithstanding any other
306	109		law, including Sections 843.312 and 1301.052, Insurance Code, the
307	110		organization:
308	111		(A) use advanced practice registered nurses and
309	112		physician assistants in addition to physicians as primary care
310	113		providers to increase the availability of primary care providers in
311	114		the organization's provider network; and
312	115		(B) treat advanced practice registered nurses
313	116		and physician assistants in the same manner as primary care
314	117		physicians with regard to:
315	118		(i) selection and assignment as primary
316	119		care providers;
317	120		(ii) inclusion as primary care providers in
318	121		the organization's provider network; and
319	122		(iii) inclusion as primary care providers
320	123		in any provider network directory maintained by the organization;
321	124		(14) a requirement that the managed care organization
322	125		reimburse a federally qualified health center or rural health
323	126		clinic for health care services provided to a recipient outside of
324	127		regular business hours, including on a weekend day or holiday, at a
325	128		rate that is equal to the allowable rate for those services as
326	129		determined under Section 32.028, Human Resources Code, if the
327	130		recipient does not have a referral from the recipient's primary
328	131		care physician;
329	132		(15) a requirement that the managed care organization
330	133		develop, implement, and maintain a system for tracking and
331		-	resolving all provider complaints and appeals related to claims
332		-	payment and prior authorization and service denials, including a
333		-	system [process] that will [require]:
334		-	(A) allow providers to electronically track and
335		-	determine [a tracking mechanism to document] the status and final
336		-	disposition of the [each] provider's [claims payment] appeal or
337		-	complaint, as applicable;
338		-	(B) require the contracting with physicians or
339		-	other health care providers who are not network providers and who
340		-	are of the same or related specialty as the appealing physician or
341		-	other provider, as appropriate, to resolve claims disputes related
342		-	to denial on the basis of medical necessity that remain unresolved
343		-	subsequent to a provider appeal; and
344		-	(C) require the determination of the physician or
345		-	other health care provider resolving the dispute to be binding on
346		-	the managed care organization and the appealing provider; [and
347		-	[(D) the managed care organization to allow a
	134	+	resolving all provider appeals related to claims payment, including
	135	+	a process that will require:
	136	+	(A) a tracking mechanism to document the status
	137	+	and final disposition of each provider's claims payment appeal;
	138	+	(B) the contracting with physicians and other
	139	+	health care providers who are not network providers and who are of
	140	+	the same or related specialty as the appealing physician to resolve
	141	+	claims disputes related to denial on the basis of medical necessity
	142	+	that remain unresolved subsequent to a provider appeal;
	143	+	(C) the determination of the physician or other
	144	+	health care provider resolving the dispute to be binding on the
	145	+	managed care organization and the appealing provider; and
	146	+	(D) the managed care organization to allow a
348	147		provider with a claim that has not been paid before the time
349	148		prescribed by Subdivision (7)(A)(ii) to initiate an appeal of that
350		-	claim;]
	149	+	claim;
351	150		(15-a) a requirement that the managed care
352		-	organization ~~make available~~ on the ~~organization's Internet website~~
353		-	~~summary~~ information that is accessible to ~~the public regarding the~~
354		-	~~number of~~ provider appeals and the disposition of those ~~appeals,~~
355		-	organized by provider and service types;
	151	+	organization develop, implement, and maintain on the
	152	+	organization's Internet website information that is accessible to
	153	+	the public regarding provider appeals and the disposition of those
	154	+	appeals, organized by provider and service types;
356	155		(16) a requirement that a medical director who is
357	156		authorized to make medical necessity determinations is available to
358	157		the region where the managed care organization provides health care
359	158		services;
360	159		(17) a requirement that the managed care organization
361	160		ensure that a medical director and patient care coordinators and
362	161		provider and recipient support services personnel are located in
363	162		the South Texas service region, if the managed care organization
364		-	provides Medicaid services to recipients [a managed care plan] in
365		-	that region;
	163	+	provides a managed care plan in that region;
366	164		(18) a requirement that the managed care organization
367	165		provide special programs and materials for recipients with limited
368	166		English proficiency or low literacy skills;
369	167		(19) a requirement that the managed care organization
370	168		develop and establish a process for responding to provider appeals
371	169		in the region where the organization provides health care services;
372	170		(20) a requirement that the managed care organization:
373	171		(A) develop and submit to the commission, before
374	172		the organization begins to provide health care services to
375	173		recipients, a comprehensive plan that describes how the
376	174		organization's provider network complies with the provider access
377	175		standards established under Section 533.0061, as added by Chapter
378	176		1272 (S.B. 760), Acts of the 84th Legislature, Regular Session,
379	177		2015;
380	178		(B) as a condition of contract retention and
381	179		renewal:
382	180		(i) continue to comply with the provider
383	181		access standards established under Section 533.0061, as added by
384	182		Chapter 1272 (S.B. 760), Acts of the 84th Legislature, Regular
385	183		Session, 2015; and
386	184		(ii) make substantial efforts, as
387	185		determined by the commission, to mitigate or remedy any
388	186		noncompliance with the provider access standards established under
389	187		Section 533.0061, as added by Chapter 1272 (S.B. 760), Acts of the
390	188		84th Legislature, Regular Session, 2015;
391	189		(C) pay liquidated damages for each failure, as
392	190		determined by the commission, to comply with the provider access
393	191		standards established under Section 533.0061, as added by Chapter
394	192		1272 (S.B. 760), Acts of the 84th Legislature, Regular Session,
395	193		2015, in amounts that are reasonably related to the noncompliance;
396	194		and
397		-	(D) ~~annually [~~regularly, as determined by the
398		-	~~commission,]~~ submit to the commission and make available to the
399		-	~~public a report~~ containing data on the sufficiency of the
400		-	~~organization's provider~~ network with regard to providing the care
401		-	~~and services described~~ under Section 533.0061(a), as added by
402		-	~~Chapter 1272 (S.B. 760),~~ Acts of the 84th Legislature, Regular
403		-	~~Session, 2015, and specific~~ data with respect to access to primary
404		-	~~care, specialty care,~~ long-term services and supports, nursing
405		-	~~services, and therapy~~ services on:
	195	+	(D) regularly, as determined by the commission,
	196	+	submit to the commission and make available to the public a report
	197	+	containing data on the sufficiency of the organization's provider
	198	+	network with regard to providing the care and services described
	199	+	under Section 533.0061(a), as added by Chapter 1272 (S.B. 760),
	200	+	Acts of the 84th Legislature, Regular Session, 2015, and specific
	201	+	data with respect to access to primary care, specialty care,
	202	+	long-term services and supports, nursing services, and therapy
	203	+	services on:
406	204		(i) the average length of time between[:
407	205		[(i)] the date a provider requests prior
408	206		authorization for the care or service and the date the organization
409	207		approves or denies the request; [and]
410	208		(ii) the average length of time between the
411	209		date the organization approves a request for prior authorization
412	210		for the care or service and the date the care or service is
413	211		initiated; and
414	212		(iii) the number of providers who are
415	213		accepting new patients;
416	214		(21) a requirement that the managed care organization
417	215		demonstrate to the commission, before the organization begins to
418	216		provide health care services to recipients, that, subject to the
419	217		provider access standards established under Section 533.0061, as
420	218		added by Chapter 1272 (S.B. 760), Acts of the 84th Legislature,
421	219		Regular Session, 2015:
422	220		(A) the organization's provider network has the
423	221		capacity to serve the number of recipients expected to enroll in a
424	222		managed care plan offered by the organization;
425	223		(B) the organization's provider network
426	224		includes:
427	225		(i) a sufficient number of primary care
428	226		providers;
429	227		(ii) a sufficient variety of provider
430	228		types;
431	229		(iii) a sufficient number of providers of
432	230		long-term services and supports and specialty pediatric care
433	231		providers of home and community-based services; and
434	232		(iv) providers located throughout the
435	233		region where the organization will provide health care services;
436	234		and
437	235		(C) health care services will be accessible to
438	236		recipients through the organization's provider network to a
439	237		comparable extent that health care services would be available to
440		-	recipients under a fee-for-service [or primary care case
441		-	~~management]~~ model of Medicaid [managed care];
	238	+	recipients under a fee-for-service or primary care case management
	239	+	model of Medicaid managed care;
442	240		(22) a requirement that the managed care organization
443	241		develop a monitoring program for measuring the quality of the
444	242		health care services provided by the organization's provider
445	243		network that:
446	244		(A) incorporates the National Committee for
447	245		Quality Assurance's Healthcare Effectiveness Data and Information
448	246		Set (HEDIS) measures;
449	247		(B) focuses on measuring outcomes; and
450	248		(C) includes the collection and analysis of
451	249		clinical data relating to prenatal care, preventive care, mental
452	250		health care, and the treatment of acute and chronic health
453	251		conditions and substance abuse;
454	252		(23) subject to Subsection (a-1), a requirement that
455	253		the managed care organization develop, implement, and maintain an
456	254		outpatient pharmacy benefit plan for its enrolled recipients:
457	255		(A) that exclusively employs the vendor drug
458	256		program formulary and preserves the state's ability to reduce
459	257		waste, fraud, and abuse under Medicaid;
460	258		(B) that adheres to the applicable preferred drug
461	259		list adopted by the commission under Section 531.072;
462	260		(C) that includes the prior authorization
463	261		procedures and requirements prescribed by or implemented under
464	262		Sections 531.073(b), (c), and (g) for the vendor drug program;
465	263		(D) for purposes of which the managed care
466	264		organization:
467	265		(i) may not negotiate or collect rebates
468	266		associated with pharmacy products on the vendor drug program
469	267		formulary; and
470	268		(ii) may not receive drug rebate or pricing
471	269		information that is confidential under Section 531.071;
472	270		(E) that complies with the prohibition under
473	271		Section 531.089;
474	272		(F) under which the managed care organization may
475	273		not prohibit, limit, or interfere with a recipient's selection of a
476	274		pharmacy or pharmacist of the recipient's choice for the provision
477	275		of pharmaceutical services under the plan through the imposition of
478	276		different copayments;
479	277		(G) that allows the managed care organization or
480	278		any subcontracted pharmacy benefit manager to contract with a
481	279		pharmacist or pharmacy providers separately for specialty pharmacy
482	280		services, except that:
483	281		(i) the managed care organization and
484	282		pharmacy benefit manager are prohibited from allowing exclusive
485	283		contracts with a specialty pharmacy owned wholly or partly by the
486	284		pharmacy benefit manager responsible for the administration of the
487	285		pharmacy benefit program; and
488	286		(ii) the managed care organization and
489	287		pharmacy benefit manager must adopt policies and procedures for
490	288		reclassifying prescription drugs from retail to specialty drugs,
491	289		and those policies and procedures must be consistent with rules
492	290		adopted by the executive commissioner and include notice to network
493	291		pharmacy providers from the managed care organization;
494	292		(H) under which the managed care organization may
495	293		not prevent a pharmacy or pharmacist from participating as a
496	294		provider if the pharmacy or pharmacist agrees to comply with the
497	295		financial terms and conditions of the contract as well as other
498	296		reasonable administrative and professional terms and conditions of
499	297		the contract;
500	298		(I) under which the managed care organization may
501	299		include mail-order pharmacies in its networks, but may not require
502	300		enrolled recipients to use those pharmacies, and may not charge an
503	301		enrolled recipient who opts to use this service a fee, including
504	302		postage and handling fees;
505	303		(J) under which the managed care organization or
506	304		pharmacy benefit manager, as applicable, must pay claims in
507	305		accordance with Section 843.339, Insurance Code; and
508	306		(K) under which the managed care organization or
509	307		pharmacy benefit manager, as applicable:
510	308		(i) to place a drug on a maximum allowable
511	309		cost list, must ensure that:
512	310		(a) the drug is listed as "A" or "B"
513	311		rated in the most recent version of the United States Food and Drug
514	312		Administration's Approved Drug Products with Therapeutic
515	313		Equivalence Evaluations, also known as the Orange Book, has an "NR"
516	314		or "NA" rating or a similar rating by a nationally recognized
517	315		reference; and
518	316		(b) the drug is generally available
519	317		for purchase by pharmacies in the state from national or regional
520	318		wholesalers and is not obsolete;
521	319		(ii) must provide to a network pharmacy
522	320		provider, at the time a contract is entered into or renewed with the
523	321		network pharmacy provider, the sources used to determine the
524	322		maximum allowable cost pricing for the maximum allowable cost list
525	323		specific to that provider;
526	324		(iii) must review and update maximum
527	325		allowable cost price information at least once every seven days to
528	326		reflect any modification of maximum allowable cost pricing;
529	327		(iv) must, in formulating the maximum
530	328		allowable cost price for a drug, use only the price of the drug and
531	329		drugs listed as therapeutically equivalent in the most recent
532	330		version of the United States Food and Drug Administration's
533	331		Approved Drug Products with Therapeutic Equivalence Evaluations,
534	332		also known as the Orange Book;
535	333		(v) must establish a process for
536	334		eliminating products from the maximum allowable cost list or
537	335		modifying maximum allowable cost prices in a timely manner to
538	336		remain consistent with pricing changes and product availability in
539	337		the marketplace;
540	338		(vi) must:
541	339		(a) provide a procedure under which a
542	340		network pharmacy provider may challenge a listed maximum allowable
543	341		cost price for a drug;
544	342		(b) respond to a challenge not later
545	343		than the 15th day after the date the challenge is made;
546	344		(c) if the challenge is successful,
547	345		make an adjustment in the drug price effective on the date the
548	346		challenge is resolved, and make the adjustment applicable to all
549	347		similarly situated network pharmacy providers, as determined by the
550	348		managed care organization or pharmacy benefit manager, as
551	349		appropriate;
552	350		(d) if the challenge is denied,
553	351		provide the reason for the denial; and
554	352		(e) report to the commission every 90
555	353		days the total number of challenges that were made and denied in the
556	354		preceding 90-day period for each maximum allowable cost list drug
557	355		for which a challenge was denied during the period;
558	356		(vii) must notify the commission not later
559	357		than the 21st day after implementing a practice of using a maximum
560	358		allowable cost list for drugs dispensed at retail but not by mail;
561	359		and
562	360		(viii) must provide a process for each of
563	361		its network pharmacy providers to readily access the maximum
564	362		allowable cost list specific to that provider;
565	363		(24) a requirement that the managed care organization
566	364		and any entity with which the managed care organization contracts
567	365		for the performance of services under a managed care plan disclose,
568	366		at no cost, to the commission and, on request, the office of the
569	367		attorney general all discounts, incentives, rebates, fees, free
570	368		goods, bundling arrangements, and other agreements affecting the
571		-	net cost of goods or services provided under the plan; ~~and~~
	369	+	net cost of goods or services provided under the plan;
572	370		(25) a requirement that the managed care organization
573		-	[not implement significant, nonnegotiated, across-the-board
574		-	provider reimbursement rate reductions unless:
575		-	[(A) subject to Subsection (a-3), the
	371	+	not implement significant, [nonnegotiated,] across-the-board
	372	+	provider reimbursement rate reductions unless the organization
	373	+	presented the reduction to providers in an attempt to negotiate the
	374	+	reductions and:
	375	+	(A) subject to Subsection (a-4) [(a-3)], the
576	376		organization has the prior approval of the commission to make the
577	377		reduction; or
578		-	[(B) the rate reductions are based on changes to
	378	+	(B) the rate reductions are based on changes to
579	379		the Medicaid fee schedule or cost containment initiatives
580	380		implemented by the commission; and
581		-	[(26) a requirement that the managed care
582		-	organization] make initial and subsequent primary care provider
583		-	assignments and changes.
584		-	(d) In addition to the requirements specified by Subsection
	381	+	(26) a requirement that the managed care organization
	382	+	make initial and subsequent primary care provider assignments and
	383	+	changes.
	384	+	(a-3) For purposes of Subsection (a)(25), "across-the-board
	385	+	provider reimbursement rate reductions" means provider
	386	+	reimbursement rate reductions proposed by a managed care
	387	+	organization that the commission determines are likely to affect a
	388	+	substantial number of providers in the organization's provider
	389	+	network during the 12-month period following implementation of the
	390	+	proposed reductions, regardless of whether:
	391	+	(1) the organization limits the proposed reductions to
	392	+	specific service areas or provider types; or
	393	+	(2) the affected providers are likely to experience
	394	+	differing percentages of rate reductions or amounts of lost revenue
	395	+	as a result of the proposed reductions.
	396	+	(a-4) A [(a)(25)(A), a] provider reimbursement rate
	397	+	reduction is considered to have received the commission's prior
	398	+	approval for purposes of Subsection (a)(25) unless the commission
	399	+	issues a written statement of disapproval not later than the 45th
	400	+	day after the date the commission receives notice of the proposed
	401	+	rate reduction from the managed care organization.
	402	+	(a-5) If a managed care organization proposes provider
	403	+	reimbursement rate reductions in accordance with Subsection
	404	+	(a)(25) and subsequently rejects alternative rate reductions
	405	+	suggested by an affected provider, the managed care organization
	406	+	must provide the provider with written notice of that rejection,
	407	+	including an explanation of the grounds for the rejection, prior to
	408	+	implementing any rate reductions.
	409	+	(e) In addition to the requirements specified by Subsection
585	410		(a), a contract described by that subsection must provide that if
586	411		the managed care organization has an ownership interest in a health
587	412		care provider in the organization's provider network, the
588		-	organization:
589		-	(1) must include in the provider network at least one
	413	+	organization must include in the provider network at least one
590	414		other health care provider of the same type in which the
591		-	organization does not have an ownership interest unless the
592		-	organization is able to demonstrate to the commission that the
593		-	provider included in the provider network is the only provider
594		-	located in an area that meets requirements established by the
595		-	commission relating to the time and distance a recipient is
596		-	expected to travel to receive services; and
597		-	(2) may not give preference in authorizing referrals
598		-	to the provider in which the organization has an ownership interest
599		-	as compared to other providers of the same or similar services
600		-	participating in the organization's provider network.
601		-	SECTION 6. Subchapter A, Chapter 533, Government Code, is
	415	+	organization does not have an ownership interest.
	416	+	SECTION 4. Subchapter A, Chapter 533, Government Code, is
602	417		amended by adding Section 533.00541 to read as follows:
603		-	Sec. 533.00541. PRIOR AUTHORIZATION REQUIREMENTS FOR
604		-	CERTAIN POST-ACUTE CARE SERVICES. Notwithstanding any other law
605		-	and except as otherwise provided by a settlement agreement filed
606		-	with and approved by a court, the commission shall require a managed
607		-	care organization that contracts with the commission to provide
608		-	health care services to recipients to:
609		-	(1) approve or pend a request from a provider of acute
	418	+	Sec. 533.00541. PRIOR AUTHORIZATION REQUIREMENTS.
	419	+	Notwithstanding any other law, the commission shall require a
	420	+	managed care organization that contracts with the commission to
	421	+	provide health care services to recipients to:
	422	+	(1) approve or deny a request from a provider of acute
610	423		care inpatient services for prior authorization for the following
611		-	services or equipment not later than 72 hours after receiving the
	424	+	services or equipment not later than 48 hours after receiving the
612	425		request to allow for a safe and timely discharge of a patient from
613	426		an inpatient facility:
614	427		(A) home health services;
615	428		(B) long-term services and supports, including
616	429		care provided through a nursing facility;
617	430		(C) private-duty nursing;
618	431		(D) therapy services; and
619	432		(E) durable medical equipment;
620		-	(2) ensure that a provider described by Subdivision
621		-	(1) has an opportunity to engage in direct discussions with the
622		-	organization regarding the appropriate level of post-acute care
623		-	while a request for prior authorization is pending;
624		-	(3) contact, notify, and negotiate with a provider
625		-	described by Subdivision (1) before approving a prior authorization
626		-	request for personal care services or attendant care services with
627		-	an expiration date different from the expiration date requested by
628		-	the provider;
629		-	(4) submit to a provider of personal care services or
630		-	attendant care services any change to a recipient's service plan
631		-	relating to personal care services or attendant care services not
632		-	later than the fifth day before the date the plan is to be effective
633		-	for purposes of giving the provider time to initiate the change and
634		-	the recipient an opportunity to agree to the change, unless the
635		-	organization is changing the plan in order to meet an emerging need
636		-	for personal care services or attendant care services;
637		-	(5) include on subsequent prior authorization
	433	+	(2) contact, notify, and negotiate with a provider
	434	+	before approving a prior authorization request with an expiration
	435	+	date different from the expiration date requested by the provider;
	436	+	(3) submit to a provider agency any change to a
	437	+	recipient's service plan not later than the 5th day before the date
	438	+	the plan is to be effective for purposes of giving the provider time
	439	+	to initiate the change and the recipient an opportunity to agree to
	440	+	the change;
	441	+	(4) include on subsequent prior authorization
638	442		requests approved with a retroactive effective date an expiration
639		-	date that takes into account the date the service change ~~described~~
640		-	~~by Subdivision (4) was~~ implemented by the provider; and
641		-	(6) provide complete electronic access to prior
	443	+	date that takes into account the date the service change was
	444	+	implemented by the provider; and
	445	+	(5) provide complete electronic access to prior
642	446		authorizations through the organization's process required under
643	447		Section 533.005(a)(7-c).
644		-	SECTION 7. Section 533.0055(b), Government Code, is amended
645		-	to read as follows:
646		-	(b) The provider protection plan required under this
647		-	section must provide for:
648		-	(1) prompt payment and proper reimbursement of
649		-	providers by managed care organizations;
650		-	(2) prompt and accurate adjudication of claims
651		-	through:
652		-	(A) provider education on the proper submission
653		-	of clean claims and on appeals;
654		-	(B) acceptance of uniform forms, including HCFA
655		-	Forms 1500 and UB-92 and subsequent versions of those forms,
656		-	through an electronic portal; and
657		-	(C) the establishment of standards for claims
658		-	payments in accordance with a provider's contract;
659		-	(3) adequate and clearly defined provider network
660		-	standards that are specific to provider type, including physicians,
661		-	general acute care facilities, and other provider types defined in
662		-	the commission's network adequacy standards [in effect on January
663		-	1, 2013], and that ensure choice among multiple providers to the
664		-	greatest extent possible;
665		-	(4) a prompt credentialing process for providers;
666		-	(5) uniform efficiency standards and requirements for
667		-	managed care organizations for the submission and electronic
668		-	tracking of prior authorization [preauthorization] requests for
669		-	services provided under Medicaid;
670		-	(6) establishment of an electronic process, including
671		-	the use of an Internet portal, through which providers in any
672		-	managed care organization's provider network may:
673		-	(A) submit electronic claims, prior
674		-	authorization request forms and attachments [requests], claims
675		-	appeals and reconsiderations, clinical data, and other
676		-	documentation that the managed care organization requests for prior
677		-	authorization and claims processing, including an electronic
678		-	process that allows for the resubmission of a claim without a
679		-	requirement that the resubmitted claim be submitted in paper form
680		-	in order to avoid treatment of the resubmitted claim as a duplicate
681		-	claim; and
682		-	(B) obtain electronic remittance advice
683		-	documents, explanation of benefits statements, service plans under
684		-	the STAR Kids Medicaid managed care program, and other standardized
685		-	reports;
686		-	(7) the measurement of the rates of retention by
687		-	managed care organizations of significant traditional providers;
688		-	(8) the creation of a work group to review and make
689		-	recommendations to the commission concerning any requirement under
690		-	this subsection for which immediate implementation is not feasible
691		-	at the time the plan is otherwise implemented, including the
692		-	required process for submission and acceptance of attachments for
693		-	claims processing and prior authorization requests through an
694		-	electronic process under Subdivision (6) and, for any requirement
695		-	that is not implemented immediately, recommendations regarding the
696		-	expected:
697		-	(A) fiscal impact of implementing the
698		-	requirement; and
699		-	(B) timeline for implementation of the
700		-	requirement; and
701		-	(9) any other provision that the commission determines
702		-	will ensure efficiency or reduce administrative burdens on
703		-	providers participating in a Medicaid managed care model or
704		-	arrangement.
705		-	SECTION 8. Subchapter A, Chapter 533, Government Code, is
706		-	amended by adding Section 533.0058 to read as follows:
707		-	Sec. 533.0058. RESTRICTIONS ON CERTAIN REIMBURSEMENT RATE
708		-	REDUCTIONS. (a) In this section, "across-the-board provider
709		-	reimbursement rate reduction" means a provider reimbursement rate
710		-	reduction proposed by a managed care organization that the
711		-	commission determines is likely to affect more than 50 percent of a
712		-	particular type of provider participating in the organization's
713		-	provider network during the 12-month period following
714		-	implementation of the proposed reduction, regardless of whether:
715		-	(1) the organization limits the proposed reduction to
716		-	specific service areas or provider types; or
717		-	(2) the affected providers are likely to experience
718		-	differing percentages of rate reductions or amounts of lost revenue
719		-	as a result of the proposed reduction.
720		-	(b) Except as provided by Subsection (e), a managed care
721		-	organization that contracts with the commission to provide health
722		-	care services to recipients may not implement a significant, as
723		-	determined by the commission, across-the-board provider
724		-	reimbursement rate reduction unless the organization:
725		-	(1) at least 90 days before the proposed rate
726		-	reduction is to take effect:
727		-	(A) provides the commission and affected
728		-	providers with written notice of the proposed rate reduction; and
729		-	(B) makes a good faith effort to negotiate the
730		-	reduction with the affected providers; and
731		-	(2) receives prior approval from the commission,
732		-	subject to Subsection (c).
733		-	(c) An across-the-board provider reimbursement rate
734		-	reduction is considered to have received the commission's prior
735		-	approval for purposes of Subsection (b)(2) unless the commission
736		-	issues a written statement of disapproval not later than the 45th
737		-	day after the date the commission receives notice of the proposed
738		-	rate reduction from the managed care organization under Subsection
739		-	(b)(1)(A).
740		-	(d) If a managed care organization proposes an
741		-	across-the-board provider reimbursement rate reduction in
742		-	accordance with this section and subsequently rejects alternative
743		-	rate reductions suggested by an affected provider, the organization
744		-	must provide the provider with written notice of that rejection,
745		-	including an explanation of the grounds for the rejection, before
746		-	implementing any rate reduction.
747		-	(e) This section does not apply to rate reductions that are
748		-	implemented because of reductions to the Medicaid fee schedule or
749		-	cost containment initiatives that are specifically directed by the
750		-	legislature and implemented by the commission.
751		-	SECTION 9. Subchapter A, Chapter 533, Government Code, is
	448	+	SECTION 5. Subchapter A, Chapter 533, Government Code, is
752	449		amended by adding Section 533.00611 to read as follows:
753		-	Sec. 533.00611. STANDARDS FOR DETERMINING MEDICAL
754		-	NECESSITY. (a) Except as provided by Subsection (b), the
755		-	commission shall establish standards that govern the processes,
756		-	criteria, and guidelines under which managed care organizations
757		-	determine the medical necessity of a health care service covered by
758		-	Medicaid. In establishing standards under this section, the
759		-	commission shall:
760		-	(1) ensure that each recipient has equal access in
761		-	scope and duration to the same covered health care services for
762		-	which the recipient is eligible, regardless of the managed care
763		-	organization with which the recipient is enrolled;
764		-	(2) provide managed care organizations with
765		-	flexibility to approve covered medically necessary services for
766		-	recipients that may not be within prescribed criteria and
767		-	guidelines;
768		-	(3) require managed care organizations to make
769		-	available to providers all criteria and guidelines used to
770		-	determine medical necessity through an Internet portal accessible
771		-	by the providers;
772		-	(4) ensure that managed care organizations
773		-	consistently apply the same medical necessity criteria and
774		-	guidelines for the approval of services and in retrospective
775		-	utilization reviews; and
776		-	(5) ensure that managed care organizations include in
777		-	any service or prior authorization denial specific information
778		-	about the medical necessity criteria or guidelines that were not
779		-	met.
780		-	(b) This section does not apply to or affect the
781		-	commission's authority to:
782		-	(1) determine medical necessity for home and
783		-	community-based services provided under the STAR + PLUS Medicaid
784		-	managed care program; or
785		-	(2) conduct utilization reviews of those services.
786		-	SECTION 10. Section 533.0071, Government Code, is amended
787		-	to read as follows:
788		-	Sec. 533.0071. ADMINISTRATION OF CONTRACTS. The
789		-	commission shall make every effort to improve the administration of
790		-	contracts with managed care organizations. To improve the
791		-	administration of these contracts, the commission shall:
792		-	(1) ensure that the commission has appropriate
793		-	expertise and qualified staff to effectively manage contracts with
794		-	managed care organizations under the Medicaid managed care program;
795		-	(2) evaluate options for Medicaid payment recovery
796		-	from managed care organizations if the enrollee dies or is
797		-	incarcerated or if an enrollee is enrolled in more than one state
798		-	program or is covered by another liable third party insurer;
799		-	(3) maximize Medicaid payment recovery options by
800		-	contracting with private vendors to assist in the recovery of
801		-	capitation payments, payments from other liable third parties, and
802		-	other payments made to managed care organizations with respect to
803		-	enrollees who leave the managed care program;
804		-	(4) decrease the administrative burdens of managed
805		-	care for the state, the managed care organizations, and the
806		-	providers under managed care networks to the extent that those
807		-	changes are compatible with state law and existing Medicaid managed
808		-	care contracts, including decreasing those burdens by:
809		-	(A) where possible, decreasing the duplication
810		-	of administrative reporting and process requirements for the
811		-	managed care organizations and providers, such as requirements for
812		-	the submission of encounter data, quality reports, historically
813		-	underutilized business reports, and claims payment summary
814		-	reports;
815		-	(B) allowing managed care organizations to
816		-	provide updated address and other contact information directly to
817		-	the commission for correction in the state eligibility system;
818		-	(C) promoting consistency and uniformity among
819		-	managed care organization policies, including policies relating to
820		-	the prior authorization processes [preauthorization process],
821		-	lengths of hospital stays, filing deadlines, levels of care, and
822		-	case management services; and
823		-	(D) [reviewing the appropriateness of primary
824		-	care case management requirements in the admission and clinical
825		-	criteria process, such as requirements relating to including a
826		-	separate cover sheet for all communications, submitting
827		-	handwritten communications instead of electronic or typed review
828		-	processes, and admitting patients listed on separate
829		-	notifications; and
830		-	[(E)] providing a portal that complies with
831		-	Section 533.0055(b)(6) through which providers in any managed care
832		-	organization's provider network may submit acute care services and
833		-	long-term services and supports claims; and
834		-	(5) reserve the right to amend the managed care
835		-	organization's process for resolving provider appeals of denials
836		-	based on medical necessity to include an independent review process
837		-	established by the commission for final determination of these
838		-	disputes.
839		-	SECTION 11. Section 533.0076, Government Code, is amended
840		-	by amending Subsection (c) and adding Subsection (d) to read as
	450	+	Sec. 533.00611. MINIMUM STANDARDS FOR DETERMINING MEDICAL
	451	+	NECESSITY. The commission shall establish minimum standards for
	452	+	determining the medical necessity of a health care service covered
	453	+	by Medicaid. In establishing minimum standards under this section,
	454	+	the commission shall ensure that each recipient has equal access to
	455	+	the same covered health care services regardless of the managed
	456	+	care plan in which the recipient is enrolled.
	457	+	SECTION 6. Section 533.0076, Government Code, is amended by
	458	+	amending Subsection (c) and adding Subsection (d) to read as
841	459		follows:
842	460		(c) The commission shall allow a recipient who is enrolled
843	461		in a managed care plan under this chapter to disenroll from that
844		-	plan and enroll in another managed care plan[:
845		-	[(1)] at any time for cause in accordance with federal
	462	+	plan and enroll in another managed care plan:
	463	+	(1) at any time for cause in accordance with federal
846	464		law, including because:
847		-	(1) the recipient moves out of the managed care
	465	+	(A) the recipient moves out of the managed care
848	466		organization's service area;
849		-	(2) the plan does not, on the basis of moral or
	467	+	(B) the plan does not, on the basis of moral or
850	468		religious objections, cover the service the recipient seeks;
851		-	(3) the recipient needs related services to be
	469	+	(C) the recipient needs related services to be
852	470		performed at the same time, not all related services are available
853	471		within the organization's provider network, and the recipient's
854	472		primary care provider or another provider determines that receiving
855	473		the services separately would subject the recipient to unnecessary
856	474		risk;
857		-	(4) for recipients of long-term services or ~~supports,~~
858		-	the recipient would have to change the recipient's ~~residential,~~
859		-	institutional, or employment supports provider based ~~on that~~
860		-	provider's change in status from an in-network to an ~~out-of-network~~
861		-	provider with the managed care organization and, as ~~a result, would~~
862		-	experience a disruption in the recipient's ~~residence or employment;~~
863		-	or
864		-	(5) of another reason permitted under federal ~~law,~~
865		-	including poor quality of care, lack of access to services ~~covered~~
866		-	under the contract, or lack of access to providers ~~experienced in~~
867		-	dealing with the recipient's care needs[; and
868		-	[(2) once for any reason after the periods described
869		-	by Subsections (a) and (b)].
	475	+	(D) for recipients of long-term services or
	476	+	supports, the recipient would have to change the recipient's
	477	+	residential, institutional, or employment supports provider based
	478	+	on that provider's change in status from an in-network to an
	479	+	out-of-network provider with the managed care organization and, as
	480	+	a result, would experience a disruption in the recipient's
	481	+	residence or employment; or
	482	+	(E) of another reason permitted under federal
	483	+	law, including poor quality of care, lack of access to services
	484	+	covered under the contract, or lack of access to providers
	485	+	experienced in dealing with the recipient's care needs; and
	486	+	(2) once for any reason after the periods described by
	487	+	Subsections (a) and (b).
870	488		(d) The commission shall implement a process by which the
871	489		commission verifies that a recipient is permitted to disenroll from
872		-	one managed care plan offered by a managed care organization and
873		-	enroll in another managed care plan, including a plan offered by
874		-	another managed care organization, before the disenrollment
875		-	occurs.
876		-	SECTION 12. Subchapter A, Chapter 533, Government Code, is
877		-	amended by adding Section 533.0091 to read as follows:
	490	+	one managed care plan and enroll in another plan before the
	491	+	disenrollment occurs.
	492	+	SECTION 7. Subchapter A, Chapter 533, Government Code, is
	493	+	amended by adding Sections 533.0091 and 533.01316 to read as
	494	+	follows:
878	495		Sec. 533.0091. CARE COORDINATION SERVICES. A managed care
879		-	organization ~~that contracts~~ with the commission to provide health
	496	+	organization under contract with the commission to provide health
880	497		care services to recipients shall ensure that persons providing
881	498		care coordination services through the organization coordinate
882		-	with hospital discharge planners, who must notify the organization
883		-	of an inpatient admission of a recipient, to facilitate the timely
884		-	discharge of the recipient to the appropriate level of care and
885		-	minimize potentially preventable readmissions.
886		-	SECTION 13. Subchapter A, Chapter 533, Government Code, is
887		-	amended by adding Section 533.0122 to read as follows:
888		-	Sec. 533.0122. UTILIZATION REVIEW AUDITS CONDUCTED BY
889		-	OFFICE OF INSPECTOR GENERAL. (a) If the commission's office of
890		-	inspector general intends to conduct a utilization review audit of
891		-	a provider of services under a Medicaid managed care delivery
892		-	model, the office shall inform both the provider and the managed
893		-	care organization with which the provider contracts of any
894		-	applicable criteria and guidelines the office will use in the
895		-	course of the audit.
896		-	(b) The commission's office of inspector general shall
897		-	ensure that each person conducting a utilization review audit under
898		-	this section has experience and training regarding the operations
899		-	of managed care organizations.
900		-	(c) The commission's office of inspector general may not, as
901		-	the result of a utilization review audit, recoup an overpayment or
902		-	debt from a provider that contracts with a managed care
903		-	organization based on a determination that a provided service was
904		-	not medically necessary unless the office:
905		-	(1) uses the same criteria and guidelines that were
906		-	used by the managed care organization in its determination of
907		-	medical necessity for the service; and
908		-	(2) verifies with the managed care organization and
909		-	the provider that the provider:
910		-	(A) at the time the service was delivered, had
911		-	reasonable notice of the criteria and guidelines used by the
912		-	managed care organization to determine medical necessity; and
913		-	(B) did not follow the criteria and guidelines
914		-	used by the managed care organization to determine medical
915		-	necessity that were in effect at the time the service was delivered.
916		-	(d) If the commission's office of inspector general
917		-	conducts a utilization review audit that results in a determination
918		-	to recoup money from a managed care organization that contracts
919		-	with the commission to provide health care services to recipients,
920		-	the provider protections from liability under Section 531.1133
921		-	apply.
922		-	SECTION 14. Subchapter A, Chapter 533, Government Code, is
923		-	amended by adding Section 533.01316 to read as follows:
924		-	Sec. 533.01316. MANAGED CARE ORGANIZATION POLICIES FOR
925		-	CERTAIN HOSPITAL STAYS. The commission shall ensure that managed
926		-	care organizations that contract with the commission to provide
927		-	health care services to recipients have policies regarding
928		-	treatment and services related to a recipient's inpatient hospital
929		-	stay, including a behavioral health hospital stay, that is less
930		-	than 48 hours. For purposes of this section, the commission shall
931		-	ensure that the organization:
932		-	(1) specifies criteria that:
933		-	(A) warrant reimbursement of services related to
934		-	the stay as either inpatient hospital services or outpatient
935		-	hospital services, including criteria for determining what
936		-	services constitute outpatient observation services;
937		-	(B) account for medical necessity based on
938		-	recognized inpatient criteria, the severity of any psychological
939		-	disorder, and the judgment of the treating physician or other
940		-	provider; and
941		-	(C) do not permit classification of services as
942		-	either inpatient or outpatient hospital services for purposes of
943		-	reimbursement based solely on the duration of the stay;
944		-	(2) provides an opportunity for direct discussions
945		-	regarding the medical necessity of a recipient's inpatient hospital
946		-	admission; and
947		-	(3) reviews documentation in a recipient's medical
	499	+	with hospital discharge planners to facilitate the timely discharge
	500	+	of recipients to the appropriate level of care and minimize
	501	+	potentially preventable readmissions.
	502	+	Sec. 533.01316. REIMBURSEMENT FOR CERTAIN HOSPITAL STAYS.
	503	+	The commission by rule shall adopt criteria to be used by managed
	504	+	care organizations under contract with the commission to provide
	505	+	health care services to recipients for the reimbursement of
	506	+	services provided to recipients for treatment related to an
	507	+	inpatient hospital stay, including a behavioral health hospital
	508	+	stay, that is less than 72 hours. The rules adopted under this
	509	+	section:
	510	+	(1) must identify criteria that warrant reimbursement
	511	+	of services related to the stay as inpatient hospital services or
	512	+	outpatient hospital services, including criteria for determining
	513	+	what services constitute outpatient observation services;
	514	+	(2) must, in identifying criteria under Subdivision
	515	+	(1), account for medical necessity based on recognized inpatient
	516	+	criteria, the severity of any psychological disorder, and the
	517	+	judgment of the treating physician or other provider;
	518	+	(3) may not allow for the classification of services
	519	+	as either inpatient or outpatient hospital services for purposes of
	520	+	reimbursement based solely on the duration of the stay; and
	521	+	(4) require documentation in a recipient's medical
948	522		record that supports the medical necessity of the inpatient
949	523		hospital stay at the time of admission for reimbursement of
950	524		services related to the stay.
951		-	SECTION 15. Subchapter B, Chapter 534, Government Code, is
	525	+	SECTION 8. Subchapter B, Chapter 534, Government Code, is
952	526		amended by adding Section 534.0511 to read as follows:
953	527		Sec. 534.0511. ENSURING PROVISION OF MEDICALLY NECESSARY
954	528		SERVICES. (a) This section applies only to an individual with an
955	529		intellectual or developmental disability who is receiving services
956	530		under a Medicaid waiver program or ICF-IID program and who requires
957	531		medically necessary acute care services or long-term services and
958	532		supports that are not available to the individual through the
959	533		delivery model implemented under this chapter.
960	534		(b) Notwithstanding any other law, the Medicaid waiver
961		-	program or ICF-IID program that serves an individual to which this
962		-	section applies shall pay the cost of the service and may submit to
963		-	the commission a claim for reimbursement for the cost of that
964		-	service.
965		-	(c) If the commission determines that a claim paid by the
966		-	commission under Subsection (b) should have been covered and paid
967		-	by a managed care organization that contracts with the commission,
968		-	the commission may recoup the entire cost of that claim from the
969		-	organization.
970		-	SECTION 16. (a) In this section, "commission" and
971		-	"Medicaid" have the meanings assigned by Section 531.001,
972		-	Government Code.
973		-	(b) As soon as practicable after the effective date of this
974		-	Act, the commission shall develop and implement a pilot program in
975		-	up to three urban service delivery areas that is designed to
976		-	increase the incidence of ambulance service providers directing
977		-	recipients of Medicaid managed care program services who are
978		-	experiencing a behavioral health emergency to more appropriate
979		-	health care providers for treatment of behavioral health illnesses.
980		-	(c) Not later than December 1, 2018, the commission shall
981		-	develop a report analyzing any cost savings and other benefits
982		-	realized as a result of the pilot program and deliver a copy of the
983		-	report to the governor, lieutenant governor, speaker of the house
984		-	of representatives, and chairs of the standing legislative
985		-	committees having primary jurisdiction over Medicaid.
986		-	(d) This section expires January 1, 2019.
987		-	SECTION 17. (a) In this section, "commission" and
988		-	"Medicaid" have the meanings assigned by Section 531.001,
989		-	Government Code.
990		-	(b) Not later than November 30, 2017, the commission shall,
991		-	consistent with the purpose of Sections 533.0025(b) and (d),
992		-	Government Code, conduct a study to determine the
993		-	cost-effectiveness and feasibility of providing prescription drug
994		-	benefits to recipients of acute care services under Medicaid by
995		-	pharmacies with a Class A pharmacy license, as described by Section
996		-	560.051, Occupations Code, through a single statewide prescription
997		-	drug administrator that adheres to a pharmacy services
998		-	reimbursement methodology that uses:
999		-	(1) the most accurate and transparent ingredient drug
1000		-	pricing model;
1001		-	(2) the National Average Drug Acquisition Cost
1002		-	published by the Centers for Medicare and Medicaid Services as the
1003		-	drug acquisition cost; and
1004		-	(3) the most recent dispensing fee study contracted
1005		-	for by the commission to set an accurate and transparent
1006		-	professional dispensing fee as defined by 1 T.A.C. Section
1007		-	355.8551.
1008		-	(c) In conducting a study under this section, the commission
1009		-	shall:
1010		-	(1) for purposes of determining cost-effectiveness,
1011		-	assume and calculate reductions to the anticipated capitation rate
1012		-	paid to Medicaid managed care organizations, including reductions
1013		-	resulting from:
1014		-	(A) the elimination or reduction of the per
1015		-	member per month administrative expense fee and the consolidation
1016		-	of the contracts relating to the prescription drug benefits;
1017		-	(B) the elimination of the guaranteed risk
1018		-	margin; and
1019		-	(C) any difference between pharmacy premiums
1020		-	paid by the commission to managed care organizations and
1021		-	prescription expenses reported by the managed care organizations
1022		-	for the preceding four fiscal years;
1023		-	(2) determine and consider cost savings that would be
1024		-	achieved through maintaining a single pharmacy claims database to
1025		-	enhance patient quality outcomes through implementation of:
1026		-	(A) a medication therapy management program;
1027		-	(B) a prescription monitoring program;
1028		-	(C) an adverse drug interaction avoidance
1029		-	program; or
1030		-	(D) other similar results-oriented programs
1031		-	based on pay-for-performance outcome models;
1032		-	(3) determine and consider cost savings associated
1033		-	with enhancing system audit capabilities and reducing contractor
1034		-	and subcontractor noncompliance, including enhanced auditing
1035		-	capabilities and reducing noncompliance in relation to:
1036		-	(A) the payment of rebates;
1037		-	(B) drug utilization;
1038		-	(C) the use of prior authorization; and
1039		-	(D) claims adjudication;
1040		-	(4) determine and consider cost savings associated
1041		-	with improving patient access to prescribed medications;
1042		-	(5) determine and consider cost savings related to
1043		-	further streamlining both the fee-for-service and managed care
1044		-	prescription drug benefits under one contract;
1045		-	(6) assume that the administrator described by
1046		-	Subsection (b) of this section is, if advantageous to the state,
1047		-	subject to Chapter 222, Insurance Code; and
1048		-	(7) consider and determine whether the administrator
1049		-	could be excluded from Section 9010 of the federal Patient
1050		-	Protection and Affordable Care Act (Pub. L. No. 111-148), as
1051		-	amended by the Health Care and Education Reconciliation Act of 2010
1052		-	(Pub. L. No. 111-152).
1053		-	(d) This section does not apply to and the commission may
1054		-	not consider in conducting the study required by this section the
1055		-	provision of prescription drug benefits by long-term care facility
1056		-	pharmacies and specialty pharmacies.
1057		-	(e) The commission shall combine the study required by this
1058		-	section with any other similar study required to be conducted by the
1059		-	commission.
1060		-	(f) Not later than November 30, 2017, the commission shall
1061		-	report its findings under this section to the legislature.
1062		-	(g) This section expires December 31, 2017.
1063		-	SECTION 18. Section 533.005(a-3), Government Code, is
1064		-	repealed.
1065		-	SECTION 19. As soon as practicable after the effective date
1066		-	of this Act, the Health and Human Services Commission shall
1067		-	implement an electronic visit verification system in accordance
1068		-	with Section 531.024172, Government Code, as amended by this Act.
1069		-	SECTION 20. Section 533.005, Government Code, as amended by
	535	+	program or ICF-IID program through which an individual to which
	536	+	this section applies shall pay the cost of the service and may
	537	+	submit to the commission a claim for reimbursement for the cost of
	538	+	that service.
	539	+	SECTION 9. Section 533.005, Government Code, as amended by
1070	540		this Act, applies to a contract entered into or renewed on or after
1071	541		the effective date of this Act. A contract entered into or renewed
1072	542		before that date is governed by the law in effect on the date the
1073	543		contract was entered into or renewed, and that law is continued in
1074	544		effect for that purpose.
1075		-	SECTION 21. If before implementing any provision of this
	545	+	SECTION 10. If before implementing any provision of this
1076	546		Act a state agency determines that a waiver or authorization from a
1077	547		federal agency is necessary for implementation of that provision,
1078	548		the agency affected by the provision shall request the waiver or
1079	549		authorization and may delay implementing that provision until the
1080	550		waiver or authorization is granted.
1081		-	SECTION 22. This Act takes effect September 1, 2017.
	551	+	SECTION 11. This Act takes effect September 1, 2017.