86R6908 LED-D
By: Watson S.B. No. 1139
A BILL TO BE ENTITLED
AN ACT
relating to the operation and administration of Medicaid, including
the Medicaid managed care program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 531.001, Government Code, is amended by
adding Subdivision (4-c) to read as follows:
(4-c) "Medicaid managed care organization" means a
managed care organization as defined by Section 533.001 that
contracts with the commission under Chapter 533 to provide health
care services to Medicaid recipients.
SECTION 2. Subchapter A, Chapter 531, Government Code, is
amended by adding Section 531.0172 to read as follows:
Sec. 531.0172. OMBUDSMAN FOR MEDICAID PROVIDERS. (a) In
this section, "office" means the office of ombudsman for Medicaid
providers.
(b) The office of ombudsman for Medicaid providers is
established within the commission's office of inspector general to
support Medicaid providers in resolving disputes, complaints, or
other issues between the provider and the commission or a Medicaid
managed care organization under a Medicaid managed care or
fee-for-service delivery model.
(c) The staff of the office shall work in conjunction with
the other staff of the office of inspector general to ensure that,
in assessing administrative penalties otherwise authorized by law
on behalf of the commission or a health and human services agency,
the office of inspector general assesses penalties against a
Medicaid managed care organization for a rule violation that
results in a provider dispute or complaint in an amount that is
sufficient to deter future violations.
(d) The office shall report issues regarding the Medicaid
managed care program to the Medicaid director with timely
information.
(e) The office shall provide feedback to a person who files
a grievance with the office, such as feedback concerning any
investigation resulting from and the outcome of the grievance, in
accordance with the no-wrong-door system established under Section
533.027.
(f) Data collected by the office must be collected and
reported by provider type and population served. The office shall
use the data to develop and make to the commission's Medicaid and
CHIP services division recommendations for reforming providers'
experiences with Medicaid, including Medicaid managed care.
(g) The executive commissioner shall adopt rules as
necessary to implement this section.
SECTION 3. Subchapter B, Chapter 531, Government Code, is
amended by adding Section 531.02133 to read as follows:
Sec. 531.02133. REQUESTING INFORMATION IN STAR HEALTH
PROGRAM. The commission shall provide clear guidance on the
process for requesting and responding to requests for documents
relating to and medical records of a recipient under the STAR Health
program to:
(1) a Medicaid managed care organization that provides
health care services under that program; and
(2) attorneys ad litem representing recipients under
that program.
SECTION 4. Section 531.02141, Government Code, is amended
by adding Subsection (f) to read as follows:
(f) For each hearing officer that conducts Medicaid fair
hearings, the commission or the third-party arbiter described by
Section 533.00715 annually shall collect data regarding the
officer's decisions and rate of upholding or reversing decisions on
appeal. The commission or third-party arbiter shall analyze the
data to identify outliers. The third-party arbiter shall provide
corrective education to hearing officers whose decisions or rates
are outliers.
SECTION 5. Section 531.024, Government Code, is amended by
adding Subsection (c) to read as follows:
(c) The rules promulgated under Subsection (a)(7) must
provide a Medicaid recipient the right to an in-person hearing,
regardless of whether the recipient demonstrates good cause.
SECTION 6. Section 531.02411, Government Code, is amended
to read as follows:
Sec. 531.02411. STREAMLINING ADMINISTRATIVE PROCESSES.
(a) The commission shall make every effort using the commission's
existing resources to reduce the paperwork and other administrative
burdens placed on Medicaid recipients and providers and other
participants in Medicaid and shall use technology and efficient
business practices to decrease those burdens. In addition, the
commission shall make every effort to improve the business
practices associated with the administration of Medicaid by any
method the commission determines is cost-effective, including:
(1) expanding the utilization of the electronic claims
payment system;
(2) developing an Internet portal system for prior
authorization requests;
(3) encouraging Medicaid providers to submit their
program participation applications electronically;
(4) ensuring that the Medicaid provider application is
easy to locate on the Internet so that providers may conveniently
apply to the program;
(5) working with federal partners to take advantage of
every opportunity to maximize additional federal funding for
technology in Medicaid; and
(6) encouraging the increased use of medical
technology by providers, including increasing their use of:
(A) electronic communications between patients
and their physicians or other health care providers;
(B) electronic prescribing tools that provide
up-to-date payer formulary information at the time a physician or
other health care practitioner writes a prescription and that
support the electronic transmission of a prescription;
(C) ambulatory computerized order entry systems
that facilitate physician and other health care practitioner orders
at the point of care for medications and laboratory and
radiological tests;
(D) inpatient computerized order entry systems
to reduce errors, improve health care quality, and lower costs in a
hospital setting;
(E) regional data-sharing to coordinate patient
care across a community for patients who are treated by multiple
providers; and
(F) electronic intensive care unit technology to
allow physicians to fully monitor hospital patients remotely.
(b) The commission shall adopt and implement policies that
encourage the use of electronic transactions in Medicaid. The
policies must:
(1) promote electronic payment systems for Medicaid
providers, including electronic funds transfer or other electronic
payment remittance and electronic payment status reports; and
(2) encourage providers through the use of incentives
to submit claims and prior authorization requests electronically to
help promote faster response times and reduce the administrative
costs related to paper claims processing.
SECTION 7. Section 531.0317, Government Code, is amended by
adding Subsections (c-1) and (c-2) to read as follows:
(c-1) For the portion of the Internet site relating to
Medicaid, the commission shall:
(1) ensure the information is accessible and usable;
(2) publish Medicaid managed care organization
performance measures; and
(3) organize and maintain that portion of the Internet
site in a manner that serves Medicaid recipients, providers, and
managed care organizations, stakeholders, and the public.
(c-2) The commission shall establish and maintain an
interactive, public portal on the Internet site that incorporates
data collected under Section 533.026 to allow Medicaid recipients
to compare Medicaid managed care organizations within a service
region.
SECTION 8. Section 531.073, Government Code, is amended by
adding Subsection (k) to read as follows:
(k) The commission annually shall review prior
authorization requirements in the Medicaid vendor drug program and
determine whether to change, update, or delete any of the
requirements.
SECTION 9. Section 531.076, Government Code, is amended by
amending Subsection (b) and adding Subsections (c), (d), (e), (f),
(g), and (h) to read as follows:
(b) The commission shall monitor Medicaid managed care
organizations to ensure that the organizations:
(1) are using prior authorization and utilization
review processes to reduce authorizations of unnecessary services
and inappropriate use of services; and
(2) are not using prior authorization to negatively
impact recipients' access to care.
(c) The commission annually shall review a Medicaid managed
care organization's prior authorization requirements and determine
whether the organization should change, update, or delete any of
those requirements.
(d) To enable the commission to increase the commission's
utilization review resources with respect to Medicaid managed care
organization performance, the commission shall:
(1) increase the sample size and types of services
subject to utilization review to ensure an adequate and
representative sample;
(2) use a data-driven approach to efficiently select
cases for utilization review that aligns with the commission's
priorities for improved outcomes; and
(3) use additional measures the commission considers
appropriate.
(e) The commission shall request information regarding and
review the outcomes and timeliness of a Medicaid managed care
organization's prior authorizations to determine for particular
service requests:
(1) the number of service hours and units requested,
delivered, and billed;
(2) the period the prior authorization request was
pending;
(3) whether the organization denied, approved, or
amended the prior authorization request; and
(4) whether a denied prior authorization request
resulted in an internal appeal or an appeal to the third-party
arbiter described by Section 533.00715.
(f) The commission may:
(1) require an assessment of a Medicaid managed care
organization's employee who conducts utilization review to ensure
the employee's decisions and assessments are consistent with those
of other employees, clinical criteria, and guidelines;
(2) require the organization to provide a sample case
to:
(A) test how the organization conducts service
planning and utilization review; and
(B) determine whether the organization is
following the organization's utilization management policies and
procedures as expressed in the contract between the organization
and the commission, the organization's patient handbook, and other
publicly available written documents; and
(3) randomly select an employee to test how the
organization conducts service planning and utilization review,
particularly in the:
(A) STAR+PLUS Medicaid managed care program;
(B) STAR Kids managed care program; and
(C) STAR Health program.
(g) To the extent feasible, the commission shall align
treatments and conditions subject to prior authorization to create
uniformity among Medicaid managed care plans. The commission by
rule shall require each Medicaid managed care organization to
submit to the commission at least every two years a list of the
conditions and treatments subject to prior authorization under the
managed care plan offered by the organization. The commission
shall designate a single, searchable, public-facing Internet
website that contains prior authorization lists categorized by
Medicaid managed care program and subcategorized by Medicaid
managed care organization.
(h) The commission's and each Medicaid managed care
organization's prior authorization requirements, including prior
authorization requirements applicable in the Medicaid vendor drug
program, must be based on publicly available clinical criteria and
posted in an easily searchable format on their respective Internet
websites. Information posted under this subsection must include
the date of last review.
SECTION 10. Section 533.00253, Government Code, is amended
by adding Subsections (f) and (g) to read as follows:
(f) The commission shall ensure that the care coordinator
for a Medicaid managed care organization under the STAR Kids
managed care program offers a recipient's parent or legally
authorized representative the opportunity to review and comment on
the recipient's completed care needs assessment before the
assessment is used to determine the services to be provided to the
recipient. The commission shall require the parent's or
representative's electronic signature to verify the parent or
representative received the opportunity to review and comment on
the assessment and indicate whether the parent or representative
agrees with the assessment or disagrees and wishes to dispute the
assessment based on medical necessity. The commission shall
provide a parent or representative who disagrees with a care needs
assessment an opportunity to dispute the assessment with the
commission.
(g) The commission, in consultation with stakeholders,
shall redesign the care needs assessment used in the STAR Kids
managed care program to ensure the assessment collects useable data
pertinent to a child's physical, behavioral, and long-term care
needs. This subsection expires September 1, 2021.
SECTION 11. Subchapter A, Chapter 533, Government Code, is
amended by adding Sections 533.002533 and 533.00271 to read as
follows:
Sec. 533.002533. CONTINUATION OF STAR KIDS MANAGED CARE
ADVISORY COMMITTEE. The commission shall periodically evaluate
whether to continue the STAR Kids Managed Care Advisory Committee
established under former Section 533.00254 as a forum to identify
and make recommendations for resolving eligibility, clinical, and
administrative issues with the STAR Kids managed care program.
Sec. 533.00271. EXTERNAL QUALITY REVIEW ORGANIZATION:
EVALUATION OF MEDICAID MANAGED CARE GENERALLY. (a) The commission
annually shall identify and study areas of Medicaid managed care
organization services for which the commission needs additional
information. The external quality review organization annually
shall study and report to the commission on at least three measures
related to the identified areas and included in the core set of
children's health care quality measures or core set of adults'
health care quality measures published by the United States
Department of Health and Human Services.
(b) The external quality review organization annually
shall:
(1) compare private health plans, including
not-for-profit community health plans and for-profit health plans,
and managed care plans offered through contracts under this
chapter; and
(2) report to the commission the comparison between
those plans on the following under the plans:
(A) rates of:
(i) inquiries about services and benefits;
(ii) inquiries and complaints about access
to a provider in an enrollee's local area;
(iii) formal complaints; and
(iv) service denials;
(B) outcomes of internal appeals, including the
number of appeals reversed;
(C) outcomes of fair hearing requests, if
applicable;
(D) constituent complaints brought to the health
plan's or Medicaid managed care organization's attention by an
individual or entity, including a state legislator or the
commission; and
(E) data disaggregated by the individual or
entity that initiated an inquiry or complaint.
(c) The commission shall require each Medicaid managed care
organization to submit monthly the information described by
Subsection (b).
SECTION 12. Section 533.005, Government Code, is amended by
amending Subsection (a) and adding Subsection (g) to read as
follows:
(a) A contract between a managed care organization and the
commission for the organization to provide health care services to
recipients must contain:
(1) procedures to ensure accountability to the state
for the provision of health care services, including procedures for
financial reporting, quality assurance, utilization review, and
assurance of contract and subcontract compliance;
(2) capitation rates that ensure the cost-effective
provision of quality health care;
(3) a requirement that the managed care organization
provide ready access to a person who assists recipients in
resolving issues relating to enrollment, plan administration,
education and training, access to services, and grievance
procedures;
(4) a requirement that the managed care organization
provide ready access to a person who assists providers in resolving
issues relating to payment, plan administration, education and
training, and grievance procedures;
(5) a requirement that the managed care organization
provide information and referral about the availability of
educational, social, and other community services that could
benefit a recipient;
(6) procedures for recipient outreach and education;
(7) a requirement that the managed care organization
make payment to a physician or provider for health care services
rendered to a recipient under a managed care plan on any claim for
payment that is received with documentation reasonably necessary
for the managed care organization to process the claim:
(A) not later than:
(i) the 10th day after the date the claim is
received if the claim relates to services provided by a nursing
facility, intermediate care facility, or group home;
(ii) the 30th day after the date the claim
is received if the claim relates to the provision of long-term
services and supports not subject to Subparagraph (i); and
(iii) the 45th day after the date the claim
is received if the claim is not subject to Subparagraph (i) or (ii);
or
(B) within a period, not to exceed 60 days,
specified by a written agreement between the physician or provider
and the managed care organization;
(7-a) a requirement that the managed care organization
demonstrate to the commission that the organization pays claims
described by Subdivision (7)(A)(ii) on average not later than the
21st day after the date the claim is received by the organization;
(7-b) a requirement that the managed care organization
pay liquidated damages for each failure, as determined by the
commission, to comply with Subdivision (7) in an amount that is a
reasonable forecast of the damages caused by the noncompliance;
(8) a requirement that the commission, on the date of a
recipient's enrollment in a managed care plan issued by the managed
care organization, inform the organization of the recipient's
Medicaid certification date;
(9) a requirement that the managed care organization
comply with Section 533.006 as a condition of contract retention
and renewal;
(10) a requirement that the managed care organization
provide the information required by Section 533.012 and otherwise
comply and cooperate with the commission's office of inspector
general and the office of the attorney general;
(11) a requirement that the managed care
organization's usages of out-of-network providers or groups of
out-of-network providers may not exceed limits for those usages
relating to total inpatient admissions, total outpatient services,
and emergency room admissions determined by the commission;
(12) if the commission finds that a managed care
organization has violated Subdivision (11), a requirement that the
managed care organization reimburse an out-of-network provider for
health care services at a rate that is equal to the allowable rate
for those services, as determined under Sections 32.028 and
32.0281, Human Resources Code;
(13) a requirement that, notwithstanding any other
law, including Sections 843.312 and 1301.052, Insurance Code, the
organization:
(A) use advanced practice registered nurses and
physician assistants in addition to physicians as primary care
providers to increase the availability of primary care providers in
the organization's provider network; and
(B) treat advanced practice registered nurses
and physician assistants in the same manner as primary care
physicians with regard to:
(i) selection and assignment as primary
care providers;
(ii) inclusion as primary care providers in
the organization's provider network; and
(iii) inclusion as primary care providers
in any provider network directory maintained by the organization;
(14) a requirement that the managed care organization
reimburse a federally qualified health center or rural health
clinic for health care services provided to a recipient outside of
regular business hours, including on a weekend day or holiday, at a
rate that is equal to the allowable rate for those services as
determined under Section 32.028, Human Resources Code, if the
recipient does not have a referral from the recipient's primary
care physician;
(15) a requirement that the managed care organization
comply with the recipient appeals procedure established under
Section 533.00715 and develop, implement, and maintain a system for
tracking and resolving all provider appeals related to claims
payment, including a process that will require:
(A) a tracking mechanism to document the status
and final disposition of each provider's claims payment appeal;
(B) the contracting with physicians who are not
network providers and who are of the same or related specialty as
the appealing physician to resolve claims disputes related to
denial on the basis of medical necessity that remain unresolved
subsequent to a provider appeal;
(C) the determination of the physician resolving
the dispute to be binding on the managed care organization and
provider; and
(D) the managed care organization to allow a
provider with a claim that has not been paid before the time
prescribed by Subdivision (7)(A)(ii) to initiate an appeal of that
claim;
(16) a requirement that a medical director who is
authorized to make medical necessity determinations is available to
the region where the managed care organization provides health care
services;
(17) a requirement that the managed care organization
ensure that a medical director and patient care coordinators and
provider and recipient support services personnel are located in
the South Texas service region, if the managed care organization
provides a managed care plan in that region;
(18) a requirement that the managed care organization
provide special programs and materials for recipients with limited
English proficiency or low literacy skills;
(19) a requirement that the managed care organization
develop and establish a process for responding to provider appeals
in the region where the organization provides health care services;
(20) a requirement that the managed care organization:
(A) develop and submit to the commission, before
the organization begins to provide health care services to
recipients, a comprehensive plan that describes how the
organization's provider network complies with the provider access
standards established under Section 533.0061;
(B) as a condition of contract retention and
renewal:
(i) continue to comply with the provider
access standards established under Section 533.0061; and
(ii) make substantial efforts, as
determined by the commission, to mitigate or remedy any
noncompliance with the provider access standards established under
Section 533.0061;
(C) pay liquidated damages for each failure, as
determined by the commission, to comply with the provider access
standards established under Section 533.0061 in amounts that are
reasonably related to the noncompliance; and
(D) regularly, as determined by the commission,
submit to the commission and make available to the public a report
containing data on the sufficiency of the organization's provider
network with regard to providing the care and services described
under Section 533.0061(a-1) [533.0061(a)] and specific data with
respect to access to primary care, specialty care, long-term
services and supports, nursing services, and therapy services on
the average length of time between:
(i) the date a provider requests prior
authorization for the care or service and the date the organization
approves or denies the request; and
(ii) the date the organization approves a
request for prior authorization for the care or service and the date
the care or service is initiated;
(21) a requirement that the managed care organization
demonstrate to the commission, before the organization begins to
provide health care services to recipients, that, subject to the
provider access standards established under Section 533.0061:
(A) the organization's provider network has the
capacity to serve the number of recipients expected to enroll in a
managed care plan offered by the organization;
(B) the organization's provider network
includes:
(i) a sufficient number of primary care
providers;
(ii) a sufficient variety of provider
types;
(iii) a sufficient number of providers of
long-term services and supports and specialty pediatric care
providers of home and community-based services; and
(iv) providers located throughout the
region where the organization will provide health care services;
and
(C) health care services will be accessible to
recipients through the organization's provider network to a
comparable extent that health care services would be available to
recipients under a fee-for-service or primary care case management
model of Medicaid managed care;
(22) a requirement that the managed care organization
develop a monitoring program for measuring the quality of the
health care services provided by the organization's provider
network that:
(A) incorporates the National Committee for
Quality Assurance's Healthcare Effectiveness Data and Information
Set (HEDIS) measures and the core sets of children's and adults'
health care quality measures published by the United States
Department of Health and Human Services;
(B) focuses on measuring outcomes; and
(C) includes the collection and analysis of
clinical data relating to prenatal care, preventive care, mental
health care, and the treatment of acute and chronic health
conditions and substance abuse;
(23) subject to Subsection (a-1), a requirement that
the managed care organization develop, implement, and maintain an
outpatient pharmacy benefit plan for its enrolled recipients:
(A) that exclusively employs the vendor drug
program formulary and preserves the state's ability to reduce
waste, fraud, and abuse under Medicaid;
(B) that adheres to the applicable preferred drug
list adopted by the commission under Section 531.072;
(C) that includes the prior authorization
procedures and requirements prescribed by or implemented under
Sections 531.073(b), (c), and (g) for the vendor drug program;
(D) for purposes of which the managed care
organization:
(i) may not negotiate or collect rebates
associated with pharmacy products on the vendor drug program
formulary; and
(ii) may not receive drug rebate or pricing
information that is confidential under Section 531.071;
(E) that complies with the prohibition under
Section 531.089;
(F) under which the managed care organization may
not prohibit, limit, or interfere with a recipient's selection of a
pharmacy or pharmacist of the recipient's choice for the provision
of pharmaceutical services under the plan through the imposition of
different copayments;
(G) that allows the managed care organization or
any subcontracted pharmacy benefit manager to contract with a
pharmacist or pharmacy providers separately for specialty pharmacy
services, except that:
(i) the managed care organization and
pharmacy benefit manager are prohibited from allowing exclusive
contracts with a specialty pharmacy owned wholly or partly by the
pharmacy benefit manager responsible for the administration of the
pharmacy benefit program; and
(ii) the managed care organization and
pharmacy benefit manager must adopt policies and procedures for
reclassifying prescription drugs from retail to specialty drugs,
and those policies and procedures must be consistent with rules
adopted by the executive commissioner and include notice to network
pharmacy providers from the managed care organization;
(H) under which the managed care organization may
not prevent a pharmacy or pharmacist from participating as a
provider if the pharmacy or pharmacist agrees to comply with the
financial terms and conditions of the contract as well as other
reasonable administrative and professional terms and conditions of
the contract;
(I) under which the managed care organization may
include mail-order pharmacies in its networks, but may not require
enrolled recipients to use those pharmacies, and may not charge an
enrolled recipient who opts to use this service a fee, including
postage and handling fees;
(J) under which the managed care organization or
pharmacy benefit manager, as applicable, must pay claims in
accordance with Section 843.339, Insurance Code; and
(K) under which the managed care organization or
pharmacy benefit manager, as applicable:
(i) to place a drug on a maximum allowable
cost list, must ensure that:
(a) the drug is listed as "A" or "B"
rated in the most recent version of the United States Food and Drug
Administration's Approved Drug Products with Therapeutic
Equivalence Evaluations, also known as the Orange Book, has an "NR"
or "NA" rating or a similar rating by a nationally recognized
reference; and
(b) the drug is generally available
for purchase by pharmacies in the state from national or regional
wholesalers and is not obsolete;
(ii) must provide to a network pharmacy
provider, at the time a contract is entered into or renewed with the
network pharmacy provider, the sources used to determine the
maximum allowable cost pricing for the maximum allowable cost list
specific to that provider;
(iii) must review and update maximum
allowable cost price information at least once every seven days to
reflect any modification of maximum allowable cost pricing;
(iv) must, in formulating the maximum
allowable cost price for a drug, use only the price of the drug and
drugs listed as therapeutically equivalent in the most recent
version of the United States Food and Drug Administration's
Approved Drug Products with Therapeutic Equivalence Evaluations,
also known as the Orange Book;
(v) must establish a process for
eliminating products from the maximum allowable cost list or
modifying maximum allowable cost prices in a timely manner to
remain consistent with pricing changes and product availability in
the marketplace;
(vi) must:
(a) provide a procedure under which a
network pharmacy provider may challenge a listed maximum allowable
cost price for a drug;
(b) respond to a challenge not later
than the 15th day after the date the challenge is made;
(c) if the challenge is successful,
make an adjustment in the drug price effective on the date the
challenge is resolved[,] and make the adjustment applicable to all
similarly situated network pharmacy providers, as determined by the
managed care organization or pharmacy benefit manager, as
appropriate;
(d) if the challenge is denied,
provide the reason for the denial; and
(e) report to the commission every 90
days the total number of challenges that were made and denied in the
preceding 90-day period for each maximum allowable cost list drug
for which a challenge was denied during the period;
(vii) must notify the commission not later
than the 21st day after implementing a practice of using a maximum
allowable cost list for drugs dispensed at retail but not by mail;
and
(viii) must provide a process for each of
its network pharmacy providers to readily access the maximum
allowable cost list specific to that provider;
(24) a requirement that the managed care organization
and any entity with which the managed care organization contracts
for the performance of services under a managed care plan disclose,
at no cost, to the commission and, on request, the office of the
attorney general all discounts, incentives, rebates, fees, free
goods, bundling arrangements, and other agreements affecting the
net cost of goods or services provided under the plan;
(25) a requirement that the managed care organization
not implement significant, nonnegotiated, across-the-board
provider reimbursement rate reductions unless:
(A) subject to Subsection (a-3), the
organization has the prior approval of the commission to make the
reductions [reduction]; or
(B) the rate reductions are based on changes to
the Medicaid fee schedule or cost containment initiatives
implemented by the commission; [and]
(26) a requirement that the managed care organization
make initial and subsequent primary care provider assignments and
changes;
(27) a requirement that the managed care organization
pend a prior authorization request or claim awaiting a peer-to-peer
review;
(28) a requirement that the managed care organization:
(A) timely respond to prior authorization
requests;
(B) not deny a reasonable prior authorization
request or claim for a technical or minimal error;
(C) not abuse the appeals process to deter a
recipient or provider from requesting health care services; and
(D) pay liquidated damages for each failure, as
determined by the commission, to comply with this subdivision in an
amount that is a reasonable forecast of the damages caused by the
noncompliance;
(29) a requirement that the managed care organization:
(A) automatically, without a request from a
recipient or program, continue to provide the pre-reduction or
pre-denial level of services to the recipient during an internal
appeal or an appeal to the third-party arbiter described by Section
533.00715 of a reduction in or denial of services, unless the
recipient or the recipient's parent on behalf of the recipient opts
out of the automatic continuation of services;
(B) provide the commission and the recipient with
a notice of continuing services, receipt of which is verified by
electronic signature or through other electronic means; and
(C) pay liquidated damages for each failure, as
determined by the commission, to comply with this subdivision in an
amount that is a reasonable forecast of the damages caused by the
noncompliance; and
(30) a requirement that the managed care organization,
after a prior authorization denial or adverse benefit
determination, provide a recipient with a letter that includes a
thorough and detailed explanation for the prior authorization
denial or adverse determination.
(g) The commission shall provide guidance and additional
education to managed care organizations regarding requirements
under federal law and Subsection (a)(29) to continue to provide
services during an internal appeal and a Medicaid fair hearing.
SECTION 13. Section 533.0051, Government Code, is amended
by adding Subsection (h) to read as follows:
(h) To monitor performance measures, the commission shall
develop a data-sharing platform that enables divisions within the
commission to electronically view data and access data analysis in
a single location.
SECTION 14. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.0058 to read as follows:
Sec. 533.0058. STAR HEALTH PROGRAM: INITIAL THERAPY
EVALUATION. A Medicaid managed care organization that provides
health care services under the STAR Health program may not require
prior authorization for an initial therapy evaluation for a
recipient.
SECTION 15. The heading to Section 533.0061, Government
Code, is amended to read as follows:
Sec. 533.0061. PROVIDER ACCESS STANDARDS AND NETWORK
ADEQUACY; REPORT.
SECTION 16. Section 533.0061, Government Code, is amended
by amending Subsection (a) and adding Subsections (a-1), (b-1),
(b-2), (b-3), (b-4), (d), and (e) to read as follows:
(a) In this section:
(1) "Access to care" means access to care and services
available under Medicaid at least to the same extent that similar
care and services are available to the general population in the
recipient's geographic area.
(2) "Network adequacy" means the adequacy of a
Medicaid managed care organization's provider network determined
according to standards established by federal law.
(a-1) The commission shall establish minimum provider
access standards for the provider network of a managed care
organization that contracts with the commission to provide health
care services to recipients. The access standards must ensure that
a Medicaid managed care organization provides recipients
sufficient access to:
(1) preventive care;
(2) primary care;
(3) specialty care;
(4) after-hours urgent care;
(5) chronic care;
(6) long-term services and supports;
(7) nursing services;
(8) therapy services, including services provided in a
clinical setting or in a home or community-based setting; and
(9) any other services identified by the commission.
(b-1) Except as provided by Subsection (b-4), the
commission shall use travel time and distance standards to measure
network adequacy.
(b-2) In determining network adequacy, the commission shall
use automated data validation and calculation tools to decrease
processing time and resources required for calculating provider
distance and travel time.
(b-3) The commission shall integrate access to care data
with network adequacy data to evaluate and monitor provider network
adequacy based on both provider location and availability.
(b-4) To account for differences in recipient population
and provider entity size, the commission shall establish provider
network adequacy standards, other than travel time and distance
standards, applicable in assessing the network adequacy for
personal care attendants and providers of long-term services and
supports who travel to a recipient to provide care. The external
quality review organization shall periodically evaluate and report
to the commission on personal care attendant network adequacy.
(d) The executive commissioner by rule shall ensure that an
evaluation of a Medicaid managed care organization's provider
network adequacy conducted by the commission or the external
quality review organization with information obtained from a
managed care organization's provider network directory is based on
the total number of providers listed in the directory. The
commission or external quality review organization must consider a
provider with incorrect contact information or who is no longer
participating in Medicaid as having no appointment availability for
purposes of the evaluation.
(e) The external quality review organization shall use
existing encounter data to monitor a Medicaid managed care
organization's network adequacy and the accuracy of the
organization's provider directories.
SECTION 17. Section 533.0063, Government Code, is amended
by adding Subsection (d) to read as follows:
(d) The commission shall use the commission's master file of
Medicaid providers to validate the provider network directory of a
managed care organization described by Subsection (a).
SECTION 18. Section 533.0071, Government Code, is amended
to read as follows:
Sec. 533.0071. ADMINISTRATION OF CONTRACTS. (a) The
commission shall make every effort to improve the administration of
contracts with Medicaid managed care organizations. To improve the
administration of these contracts, the commission shall:
(1) ensure that the commission has appropriate
expertise and qualified staff to effectively manage contracts with
managed care organizations under the Medicaid managed care program;
(2) evaluate options for Medicaid payment recovery
from managed care organizations if the enrollee dies or is
incarcerated or if an enrollee is enrolled in more than one state
program or is covered by another liable third party insurer;
(3) maximize Medicaid payment recovery options by
contracting with private vendors to assist in the recovery of
capitation payments, payments from other liable third parties, and
other payments made to managed care organizations with respect to
enrollees who leave the managed care program; and
(4) decrease the administrative burdens of managed
care for the state, the managed care organizations, and the
providers under managed care networks to the extent that those
changes are compatible with state law and existing Medicaid managed
care contracts, including decreasing those burdens by:
(A) where possible, decreasing the duplication
of administrative reporting and process requirements for the
managed care organizations and providers, such as requirements for
the submission of encounter data, quality reports, historically
underutilized business reports, and claims payment summary
reports;
(B) allowing managed care organizations to
provide updated address information directly to the commission for
correction in the state system;
(C) promoting consistency and uniformity among
managed care organization policies, including policies relating to
the preauthorization process, lengths of hospital stays, filing
deadlines, levels of care, and case management services;
(D) reviewing the appropriateness of primary
care case management requirements in the admission and clinical
criteria process, such as requirements relating to including a
separate cover sheet for all communications, submitting
handwritten communications instead of electronic or typed review
processes, and admitting patients listed on separate
notifications; and
(E) providing a portal through which providers in
any managed care organization's provider network may submit acute
care services and long-term services and supports claims[; and
[(5) reserve the right to amend the managed care
organization's process for resolving provider appeals of denials
based on medical necessity to include an independent review process
established by the commission for final determination of these
disputes].
(b) For a contract described by Subsection (a), the
commission shall:
(1) automate the process for receiving and tracking
contract amendment requests and incorporating an amendment into a
contract;
(2) make the most recent contract amendment
information readily available among divisions within the
commission; and
(3) provide technical assistance and education to help
a commission employee determine whether a requested contract
amendment is necessary or whether the issue could be resolved
through the uniform managed care manual, a memorandum, or guidance.
(c) The commission shall create a summary compliance
framework that summarizes contract provisions to help Medicaid
managed care organizations comply with those provisions.
(d) The commission shall annually review and assess
contract deliverables and eliminate unnecessary deliverables for
Medicaid managed care contracts. The commission may identify
measures to strengthen the contract deliverables and implement
those measures as needed.
SECTION 19. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.00715 to read as follows:
Sec. 533.00715. INDEPENDENT APPEALS PROCEDURE. (a) In
this section, "third-party arbiter" means a third-party medical
review organization that provides objective, unbiased medical
necessity determinations conducted by clinical staff with
education and practice in the same or similar practice area as the
procedure for which an independent determination of medical
necessity is sought.
(b) The commission shall contract with an independent,
third-party arbiter to resolve recipient appeals related to a
reduction in or denial of health care services on the basis of
medical necessity in the Medicaid managed care program.
(c) The arbiter shall establish a common procedure for
appeals. The procedure must provide that a health care service
ordered by a health care provider is presumed medically necessary
and the Medicaid managed care organization bears the burden of
proof to show the health care service is not medically necessary.
The arbiter shall also establish a procedure for expedited appeals
that allows the arbiter to:
(1) identify an appeal that requires an expedited
resolution; and
(2) resolve the appeal within a specified period.
(d) The arbiter shall establish and maintain an Internet
portal through which a recipient may track the status and final
disposition of an appeal.
(e) The arbiter shall educate recipients and employees of
Medicaid managed care organizations regarding appeals processes,
options, and proper and improper denials of health care services on
the basis of medical necessity.
(f) The third-party arbiter shall review aggregate denial
data categorized by Medicaid managed care plan to identify trends
and determine whether a Medicaid managed care organization is
disproportionately denying prior authorization requests from a
single provider or set of providers.
SECTION 20. The heading to Section 533.0072, Government
Code, is amended to read as follows:
Sec. 533.0072. CORRECTIVE ACTION PLANS AND [INTERNET
POSTING OF] SANCTIONS IMPOSED FOR CONTRACTUAL VIOLATIONS.
SECTION 21. Section 533.0072, Government Code, is amended
by amending Subsections (a), (b), and (c) and adding Subsections
(b-1) and (b-2) to read as follows:
(a) The commission shall prepare and maintain a record of
each enforcement action initiated by the commission [that results
in a sanction, including a penalty, being imposed] against a
managed care organization for failure to comply with the terms of a
contract to provide health care services to recipients through a
managed care plan issued by the organization, including:
(1) an enforcement action that results in a sanction,
including a penalty;
(2) the imposition of a corrective action plan;
(3) the imposition of liquidated damages;
(4) the suspension of default enrollment; and
(5) the termination of the organization's contract.
(b) The record must include:
(1) the name and address of the organization;
(2) a description of the contractual obligation the
organization failed to meet;
(3) the date of determination of noncompliance;
(4) the date the sanction was imposed, if applicable;
(5) the maximum sanction that may be imposed under the
contract for the violation, if applicable; and
(6) the actual sanction imposed against the
organization, if applicable.
(b-1) In assessing liquidated damages against a Medicaid
managed care organization, the commission shall:
(1) include in the record prepared under Subsection
(a):
(A) each step taken in the process of
recommending and assessing liquidated damages; and
(B) the reason for any reduction of liquidated
damages from the recommended amount;
(2) assess liquidated damages in an amount that is
sufficient to ensure compliance with the uniform managed care
contract and is a reasonable forecast of the damages caused by the
noncompliance; and
(3) apply liquidated damages and other enforcement
actions consistently among Medicaid managed care organizations for
similar violations.
(b-2) If the commission reduces the sanction or penalty in
an enforcement action, the commission shall include in the record
prepared under Subsection (a) the reason for the reduction.
(c) The commission shall post and maintain the records
required by this section on the commission's Internet website in
English and Spanish. The commission's office of inspector general
shall post and maintain the records relating to corrective action
plans required by this section on the office's Internet website.
The records must be posted in a format that is readily accessible to
and understandable by a member of the public. The commission and
the office shall update the list of records on the website at least
quarterly.
SECTION 22. Section 533.0075, Government Code, is amended
to read as follows:
Sec. 533.0075. RECIPIENT ENROLLMENT. (a) The commission
shall:
(1) encourage recipients to choose appropriate
managed care plans and primary health care providers by:
(A) providing initial information to recipients
and providers in a region about the need for recipients to choose
plans and providers not later than the 90th day before the date on
which a managed care organization plans to begin to provide health
care services to recipients in that region through managed care;
(B) providing follow-up information before
assignment of plans and providers and after assignment, if
necessary, to recipients who delay in choosing plans and providers;
and
(C) allowing plans and providers to provide
information to recipients or engage in marketing activities under
marketing guidelines established by the commission under Section
533.008 after the commission approves the information or
activities;
(2) consider the following factors in assigning
managed care plans and primary health care providers to recipients
who fail to choose plans and providers:
(A) the importance of maintaining existing
provider-patient and physician-patient relationships, including
relationships with specialists, public health clinics, and
community health centers;
(B) to the extent possible, the need to assign
family members to the same providers and plans; [and]
(C) geographic convenience of plans and
providers for recipients;
(D) a recipient's previous plan assignment;
(E) the Medicaid managed care organization's
performance on quality assurance and improvement;
(F) enforcement actions, including liquidated
damages, imposed against the managed care organization;
(G) corrective action plans the commission has
required the managed care organization to implement; and
(H) other reasonable factors that support the
objectives of the managed care program;
(3) retain responsibility for enrollment and
disenrollment of recipients in managed care plans, except that the
commission may delegate the responsibility to an independent
contractor who receives no form of payment from, and has no
financial ties to, any managed care organization;
(4) develop and implement an expedited process for
determining eligibility for and enrolling pregnant women and
newborn infants in managed care plans; and
(5) ensure immediate access to prenatal services and
newborn care for pregnant women and newborn infants enrolled in
managed care plans, including ensuring that a pregnant woman may
obtain an appointment with an obstetrical care provider for an
initial maternity evaluation not later than the 30th day after the
date the woman applies for Medicaid.
(b) To help new recipients easily compare managed care plans
with regard to quality and patient satisfaction measures, the
commission shall incorporate information the commission determines
is relevant in Medicaid managed care report cards, including:
(1) feedback from recipient complaints;
(2) a Medicaid managed care organization's rate of
denials and appeals;
(3) outcomes of internal appeals; and
(4) information for each organization related to
independent appeals under Section 533.00715.
(c) After enrolling a recipient in the medically dependent
children (MDCP) waiver program or the STAR+PLUS Medicaid managed
care program, the commission shall require the recipient's or
legally authorized representative's electronic signature to verify
the recipient received the recipient handbook.
(d) The commission shall:
(1) survey a select sample of recipients receiving
benefits under the medically dependent children (MDCP) waiver
program or the STAR+PLUS Medicaid managed care program to determine
whether the recipients:
(A) received the recipient handbook required by
contract to be provided within the required period; and
(B) understand the information in the recipient
handbook; and
(2) provide a sample recipient handbook to Medicaid
managed care organizations.
SECTION 23. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.0095 to read as follows:
Sec. 533.0095. CERTAIN PRIOR AUTHORIZATION EXTENSIONS. (a)
The commission shall establish a list of health care services and
prescription drugs for which a Medicaid managed care organization
must grant extended prior authorization periods or amounts, as
applicable, without requiring additional proof or documentation.
The commission shall also establish a list of chronic health and
mental health conditions the treatments for which a Medicaid
managed care organization must grant extended prior authorization
periods without requiring additional proof or documentation. The
commission shall establish the extended periods and amounts.
(b) The commission shall establish the lists in
consultation with stakeholders, including physicians, hospitals,
patient advocacy groups, and Medicaid managed care organizations.
The commission shall consult with stakeholders through the Medicaid
managed care advisory committee.
(c) The commission's medical director shall solicit and
receive provider feedback regarding extended prior authorization
periods, including feedback related to which health care services,
prescription drugs, and health and mental health conditions should
be subject to extended prior authorization periods.
(d) The commission shall update the lists semiannually with
input from the medical care advisory committee established under
Section 32.022, Human Resources Code.
SECTION 24. The heading to Section 533.015, Government
Code, is amended to read as follows:
Sec. 533.015. [COORDINATION OF] EXTERNAL OVERSIGHT
ACTIVITIES.
SECTION 25. Section 533.015, Government Code, is amended by
adding Subsection (d) to read as follows:
(d) In overseeing Medicaid managed care organizations, the
commission's office of inspector general shall use a program
integrity methodology appropriate for managed care. The office may
explore different options to measure program integrity efforts,
including:
(1) quantifying and validating cost avoidance in a
managed care context; and
(2) adapting existing program integrity tools to
address specific risks and incentives related to risk-based and
value-based arrangements.
SECTION 26. Subchapter A, Chapter 533, Government Code, is
amended by adding Sections 533.026, 533.027, 533.028, and 533.031
to read as follows:
Sec. 533.026. ENHANCED DATA COLLECTION AND REPORTING OF
ADMINISTRATIVE COSTS; CONTRACT OVERSIGHT. (a) The commission
shall collect accurate, consistent, and verifiable data from
Medicaid managed care organizations, including line-item data for
administrative costs.
(b) The commission shall use data collected from a Medicaid
managed care organization under this section to:
(1) identify grievances, as defined by Section
533.027;
(2) monitor contract compliance;
(3) identify other programmatic issues; and
(4) identify whether the organization is:
(A) unnecessarily denying, reducing, or
otherwise failing to provide health care services to recipients;
(B) delaying or denying provider claims due to
technical or minimal errors; or
(C) otherwise engaging in behavior that merits an
enforcement action.
(c) A Medicaid managed care organization shall report
administrative costs in the organization's financial statistical
report and shall report those costs to the commission at least
annually. The commission shall report information provided under
this subsection annually to the lieutenant governor, the speaker of
the house, and each standing committee of the legislature with
jurisdiction over financing, operating, and overseeing Medicaid.
(d) The commission shall use data from grievances collected
under Section 533.027 for contract oversight and to determine
contract risk.
(e) The commission shall:
(1) provide financial subject matter expertise for
Medicaid managed care contract review and compliance oversight
among divisions within the commission;
(2) conduct extensive validation of Medicaid managed
care financial data; and
(3) analyze the ultimate underlying cause of an issue
to resolve that cause and prevent similar issues from arising in the
future within Medicaid managed care.
(f) The commission's office of inspector general shall
assist the commission in implementing this section.
Sec. 533.027. MANAGED CARE GRIEVANCES: PROCESSES AND
TRACKING. (a) In this section, "grievance" includes an inquiry
about services or benefits, an inquiry or complaint about access to
a provider in a recipient's local area, a formal complaint, a
request for internal appeal, a request for a fair hearing, and a
complaint brought by an individual or entity, including a
legislator or the commission, submitted to or received by:
(1) a commission employee;
(2) a Medicaid managed care organization;
(3) the commission's office of inspector general;
(4) the commission's office of the ombudsman;
(5) the office of ombudsman for Medicaid providers; or
(6) the Department of Family and Protective Services.
(b) The commission shall:
(1) provide education and training to commission
employees on the correct issue resolution processes for Medicaid
managed care grievances; and
(2) require those employees to promptly report
grievances into the commission's grievance tracking system to
enable employees to track and timely resolve grievances.
(c) To ensure all grievances are managed consistently, the
commission shall ensure the definition of a grievance is consistent
among:
(1) commission employees and divisions within the
commission;
(2) Medicaid managed care organizations;
(3) the commission's office of inspector general;
(4) the commission's office of the ombudsman;
(5) the office of ombudsman for Medicaid providers;
and
(6) the Department of Family and Protective Services.
(d) The commission shall enhance the Medicaid managed care
grievance-tracking system's reporting capabilities and standardize
data reporting among divisions within the commission.
(e) In coordination with the executive commissioner's
duties under Section 531.0171, the commission shall implement a
no-wrong-door system for Medicaid managed care grievances reported
to the commission. The commission shall ensure that commission
employees, Medicaid managed care organizations, the commission's
office of inspector general, the commission's office of the
ombudsman, the office of ombudsman for Medicaid providers, and the
Department of Family and Protective Services use common practices
and policies and provide consistent resolutions for Medicaid
managed care grievances.
(f) The commission in conjunction with the commission's
office of inspector general shall:
(1) implement a data analytics program to aggregate
rates of inquiries, complaints, calls, denials, and fair hearing
requests; and
(2) include the aggregate rating and data analysis in
each Medicaid managed care organization's quality rating.
Sec. 533.028. CARE COORDINATION AND CARE COORDINATORS. (a)
In this section, "care coordination" means assisting recipients to
develop a plan of care, including a service plan, that meets the
recipient's needs and coordinating the provision of Medicaid
benefits in a manner that is consistent with the plan of care. The
term is synonymous with "case management," "service coordination,"
and "service management."
(b) The commission shall ensure a person, including a case
manager, who is engaged by a Medicaid managed care organization to
provide care coordination benefits is consistently referred to as a
"care coordinator" throughout divisions within the commission and
across all Medicaid programs and services for recipients receiving
benefits under a managed care delivery model.
(c) The commission shall expeditiously develop materials
explaining the role of care coordinators by Medicaid managed care
product line. The commission shall establish clear expectations
that the care coordinator communicate with a recipient's health
care providers with the goal of ensuring coordinated, effective,
and efficient care delivery.
(d) The commission shall collect data on care coordination
touchpoints with recipients.
(e) The commission shall provide to each Medicaid managed
care organization information regarding best practices for care
coordination services for the organization to incorporate into
providing care.
(f) The commission shall require a Medicaid managed care
organization to offer a provider in the organization's provider
network the option to have an organization's care coordinator
on-site at the provider's practice. The commission shall ensure a
care coordinator is reimbursed for care coordination services
provided on-site and encourage managed care organizations to place
care coordinators on-site.
(g) In this subsection, "potentially preventable admission"
and "potentially preventable readmission" have the meanings
assigned by Section 536.001. The commission shall change the
methodology for calculating potentially preventable admissions and
potentially preventable readmissions to exclude from those
admission and readmission rates hospitalizations in which a
Medicaid managed care organization did not adequately coordinate
the patient's care. The methodology must apply to physical and
behavioral health conditions.
(h) The executive commissioner shall include a provision
establishing key performance metrics for care coordination in a
contract between a managed care organization and the commission for
the organization to provide health care services to recipients
receiving home and community-based services under the:
(1) STAR+PLUS Medicaid managed care program;
(2) STAR Kids managed care program; or
(3) STAR Health program.
(i) The commission shall establish for Medicaid managed
care organizations and ensure compliance with metrics for the
following:
(1) a dedicated toll-free care coordination telephone
number;
(2) the time frame for the return of telephone calls;
(3) notice of the name and telephone number of a
recipient's care coordinator;
(4) notice of changes in the name or telephone number
of a recipient's care coordinator;
(5) initiation of assessments and reassessments;
(6) establishment and regular updating of
comprehensive, person-centered individual service plans; and
(7) number of face-to-face and telephonic contacts for
each care coordination level.
Sec. 533.031. COORDINATION OF BENEFITS UNDER MEDICALLY
DEPENDENT CHILDREN (MDCP) WAIVER PROGRAM. The commission shall
prohibit a Medicaid managed care organization providing health care
services under the medically dependent children (MDCP) waiver
program from requiring additional authorization from an enrolled
child's health care provider for a service if the child's third
party health benefit plan issuer authorizes the service.
SECTION 27. Section 536.007, Government Code, is amended by
adding Subsection (b) to read as follows:
(b) The commission's medical director is responsible for
convening periodic meetings with Medicaid health care providers,
including hospitals, to analyze and evaluate all Medicaid managed
care and health care provider quality-based programs to ensure
feasibility and alignment among programs.
SECTION 28. As soon as practicable after the effective date
of this Act, the Health and Human Services Commission shall
implement the changes in law made by this Act.
SECTION 29. Section 533.005, Government Code, as amended by
this Act, applies only to a contract entered into or renewed on or
after the effective date of this Act. A contract entered into or
renewed before that date is governed by the law in effect on the
date the contract was entered into or renewed, and that law is
continued in effect for that purpose.
SECTION 30. If before implementing any provision of this
Act a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 31. If any provision of this Act or its application
to any person or circumstance is held invalid, the invalidity does
not affect other provisions or applications of this Act that can be
given effect without the invalid provision or application, and to
this end the provisions of this Act are declared to be severable.
SECTION 32. This Act takes effect September 1, 2019.