Texas 2025 - 89th Regular

Texas Senate Bill SB2388 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R3600 SCF-D
2	2	By: Hinojosa of Hidalgo, et al. S.B. No. 2388
3	3
4	4
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to managed care contracts, including the procurement of
10	10	managed care contracts, under Medicaid and the child health plan
11	11	program.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Subtitle I, Title 4, Government Code, is amended
14	14	by adding Chapter 527 to read as follows:
15	15	CHAPTER 527. MANAGED CARE CLIENT CHOICE PROGRAM
16	16	SUBCHAPTER A. GENERAL PROVISIONS
17	17	Sec. 527.0001. DEFINITIONS. In this chapter:
18	18	(1) "Client" means a recipient or an enrollee, as
19	19	appropriate.
20	20	(2) Notwithstanding Section 521.0001(2), "commission"
21	21	means the Health and Human Services Commission or an agency
22	22	operating part of the Medicaid managed care program or the child
23	23	health plan program, as appropriate.
24	24	(3) "Contracted managed care organization" means a
25	25	managed care organization that contracts with the commission to
26	26	provide health care services to clients under Medicaid or the child
27	27	health care program, as appropriate.
28	28	(4) "Enrollee" means a child enrolled in the child
29	29	health plan program.
30	30	(5) "Health care service region" or "region" means a
31	31	managed care service area under Medicaid or the child health plan
32	32	program, as delineated by the commission.
33	33	(6) "Managed care contract" means a contract entered
34	34	into by the commission and a managed care organization under which
35	35	the organization agrees to provide comprehensive health care
36	36	services to clients under a managed care program.
37	37	(7) "Managed care organization" means a person that is
38	38	authorized or otherwise permitted by law to arrange for or provide a
39	39	managed care plan.
40	40	(8) "Managed care plan" means a plan under which a
41	41	person undertakes to provide, arrange for, pay for, or reimburse
42	42	any part of the cost of any health care service. A part of the plan
43	43	must consist of arranging for or providing health care services as
44	44	distinguished from indemnification against the cost of those
45	45	services on a prepaid basis through insurance or otherwise. The
46	46	term includes a primary care case management provider network. The
47	47	term does not include a plan that indemnifies a person for the cost
48	48	of health care services through insurance.
49	49	(9) "Managed care program" means a managed care
50	50	program under Medicaid or the child health plan program, including
51	51	the:
52	52	(A) STAR Medicaid managed care program;
53	53	(B) STAR+PLUS Medicaid managed care program;
54	54	(C) STAR Kids managed care program established
55	55	under Subchapter R, Chapter 540; and
56	56	(D) STAR Health program.
57	57	(10) "Recipient" means a Medicaid recipient.
58	58	Sec. 527.0002. APPLICABILITY OF CHAPTER. This chapter
59	59	applies only to a managed care contract, including the procurement
60	60	of a managed care contract, under Medicaid and the child health plan
61	61	program.
62	62	Sec. 527.0003. APPLICABILITY OF OTHER LAW; CONFLICT. (a)
63	63	The requirements of this chapter are in addition to the applicable
64	64	requirements of Chapter 540, including Subchapter F of that
65	65	chapter, Chapters 540A and 2155 of this code, Chapter 62, Health and
66	66	Safety Code, Chapter 32, Human Resources Code, and other law
67	67	relating to managed care contracts and the procurement of those
68	68	contracts under Medicaid and the child health plan program.
69	69	(b) If a requirement of this chapter conflicts with a
70	70	requirement of other law relating to managed care contracts under
71	71	Medicaid or the child health plan program, as applicable, the
72	72	stricter requirement prevails.
73	73	Sec. 527.0004. MANAGED CARE CLIENT CHOICE PROGRAM. (a) In
74	74	accordance with the requirements of this chapter, the commission
75	75	shall implement a managed care client choice program under which
76	76	the commission shall contract with managed care organizations to
77	77	provide health care services to clients under Medicaid or the child
78	78	health plan program, as applicable, in a manner that emphasizes
79	79	strong client choice among multiple managed care plans in all
80	80	health care service regions of this state.
81	81	(b) In implementing this chapter, the commission shall
82	82	ensure that each client, including a client residing in a rural
83	83	region, has a sufficient number of contracted managed care
84	84	organizations providing services in the region from which to
85	85	choose.
86	86	SUBCHAPTER B. CONTRACT PROCUREMENT
87	87	Sec. 527.0051. ANNUAL REQUEST FOR APPLICATIONS. The
88	88	commission shall annually issue a request for applications for each
89	89	health care service region to solicit multiple managed care
90	90	organizations to contract with the commission to provide health
91	91	care services to clients under a managed care program in the region.
92	92	Sec. 527.0052. CONTRACT ELIGIBILITY REQUIREMENTS. A
93	93	managed care organization is eligible to be awarded a managed care
94	94	contract only if the commission has:
95	95	(1) certified the organization is reasonably able to
96	96	fill the contract terms under Section 527.0053; and
97	97	(2) made a written determination that the
98	98	organization:
99	99	(A) is financially solvent based on the
100	100	commission's review of and satisfactory assurances made by the
101	101	organization; and
102	102	(B) meets the performance and quality standards
103	103	established under Section 527.0054.
104	104	Sec. 527.0053. CERTIFICATION BY COMMISSION. (a) Before
105	105	the commission may award a managed care contract to a managed care
106	106	organization, the commission shall evaluate and certify that the
107	107	organization is reasonably able to fulfill the contract terms,
108	108	including all applicable federal and state law requirements.
109	109	(b) Notwithstanding any other law, the commission may not
110	110	award a managed care contract to an organization that does not
111	111	receive the certification required under this section.
112	112	(c) A managed care organization may appeal the commission's
113	113	denial of certification by the commission under this section.
114	114	(d) After a managed care organization is certified by the
115	115	commission to provide health care services in a health care service
116	116	region, the organization is not required to obtain a separate
117	117	certification to be awarded another contract to provide health care
118	118	services in the same region.
119	119	Sec. 527.0054. PERFORMANCE AND QUALITY STANDARDS. (a) The
120	120	commission shall:
121	121	(1) subject to Subsection (b), adopt performance and
122	122	quality standards each managed care organization must meet to be
123	123	awarded a managed care contract; and
124	124	(2) evaluate each managed care organization that
125	125	submits an application in response to a request for applications
126	126	under Section 527.0051 to verify that the organization meets the
127	127	standards adopted under Subdivision (1).
128	128	(b) Performance and quality standards adopted by the
129	129	commission under this section must be designed to evaluate and
130	130	assess:
131	131	(1) if applicable, a managed care organization's past
132	132	performance under Medicaid and the child health plan program, based
133	133	on reviews conducted under Section 527.0103, and the organization's
134	134	experience in a given Medicaid or child health plan program market
135	135	or health care service region;
136	136	(2) the quality-of-care provided by the organization;
137	137	(3) the organization's cost-efficiency;
138	138	(4) the results of customer satisfaction surveys
139	139	completed by clients who have received health care services under a
140	140	managed care plan offered by the organization; and
141	141	(5) the results of satisfaction surveys completed by
142	142	providers participating in the provider network under the
143	143	organization's managed care plan.
144	144	Sec. 527.0055. REQUIRED CONTRACT AWARDS. If a managed care
145	145	organization submits a complete application in response to a
146	146	request for applications under Section 527.0051 and the
147	147	organization meets the requirements of Section 527.0052, the
148	148	commission shall award a contract to the organization to provide
149	149	health care services to clients under the managed care program in
150	150	the health care service region for which the application was
151	151	submitted, provided the contract substantially complies with the
152	152	terms contained in the written solicitation for the contract and
153	153	applicable state and federal law.
154	154	Sec. 527.0056. CONTRACT AWARDS NOT LIMITED. The commission
155	155	may not limit the number of managed care organizations awarded a
156	156	managed care contract in a health care service region of this state.
157	157	SUBCHAPTER C. CONTRACT ADMINISTRATION
158	158	Sec. 527.0101. INITIAL CONTRACT READINESS REVIEW. (a) The
159	159	commission shall review each managed care organization awarded a
160	160	managed care contract to determine whether the organization is
161	161	prepared to meet the organization's contractual obligations.
162	162	(b) A managed care organization may not begin providing
163	163	health care services under a managed care contract and the
164	164	commission may not issue a payment to the organization under the
165	165	contract until the commission conducts the review required under
166	166	this section and other applicable state or federal law.
167	167	Sec. 527.0102. MINIMUM CRITERIA FOR EVALUATING MANAGED CARE
168	168	CONTRACT PERFORMANCE. (a) The executive commissioner by rule
169	169	shall adopt criteria for measuring the performance of a contracted
170	170	managed care organization. The criteria must include:
171	171	(1) the same performance measures developed by the
172	172	commission under Section 540.0504(3);
173	173	(2) the same quality-of-care and cost-efficiency
174	174	benchmarks developed under Section 543A.0052(b);
175	175	(3) if applicable, the results of the organization's
176	176	performance under the most recent quality care and consumer
177	177	satisfaction measures included in the Consumer Assessment of
178	178	Healthcare Providers and Systems survey required under federal law;
179	179	and
180	180	(4) not more than six additional criteria for
181	181	measuring a managed care organization's performance, as determined
182	182	by the commission.
183	183	(b) A managed care organization shall provide to the
184	184	commission all data and information necessary for the commission to
185	185	measure the organization's performance under this section.
186	186	Sec. 527.0103. CONTRACT PERFORMANCE EVALUATION: ANNUAL
187	187	REVIEW. (a) Using the minimum criteria developed under Section
188	188	527.0102, the commission shall annually conduct a review to
189	189	evaluate each managed care organization's performance in the health
190	190	care service region in which the organization provides health care
191	191	services to clients.
192	192	(b) The commission shall post on the commission's Internet
193	193	website the results of each managed care organization's annual
194	194	evaluation conducted under this section in a format that is easily
195	195	accessible to and understandable by the public.
196	196	Sec. 527.0104. DURATION OF CONTRACT. An initial managed
197	197	care contract entered into in accordance with this chapter between
198	198	the commission and a managed care organization in a health care
199	199	service region may have an initial term of six years with an option
200	200	to annually extend the contract based on the organization's
201	201	performance under the preceding annual performance review
202	202	conducted under Section 527.0103.
203	203	Sec. 527.0105. EFFECT OF NONCOMPLIANCE. If the executive
204	204	commissioner determines a contracted managed care organization has
205	205	failed to comply with this chapter or other applicable law or a
206	206	material requirement of the organization's contract with the
207	207	commission, the commission may:
208	208	(1) pursue any remedy available under the contract,
209	209	including recovery of actual or liquidated damages;
210	210	(2) require the organization to submit to the
211	211	commission and comply with a corrective action plan approved by the
212	212	commission;
213	213	(3) suspend the organization's enrollment of clients
214	214	in one or more regions where the organization provides health care
215	215	services under a managed care program; or
216	216	(4) under the terms of the contract, terminate the
217	217	organization's contract.
218	218	Sec. 527.0106. RULES. The executive commissioner shall
219	219	adopt rules necessary to implement this chapter.
220	220	SECTION 2. The heading to Section 540.0206, Government
221	221	Code, as effective April 1, 2025, is amended to read as follows:
222	222	Sec. 540.0206. MANAGED CARE ORGANIZATIONS: CERTIFICATE OF
223	223	AUTHORITY REQUIRED [MANDATORY CONTRACTS].
224	224	SECTION 3. Section 540.0206(a), Government Code, as
225	225	effective April 1, 2025, is amended to read as follows:
226	226	[(a)] The [Subject to the certification required under
227	227	Section 540.0203 and the considerations required under Section
228	228	540.0204, in providing health care services through Medicaid
229	229	managed care to recipients in a health care service region, the]
230	230	commission shall contract with [a] managed care organizations in
231	231	accordance with Chapter 527. A managed care organization, other
232	232	than a state administered primary care case management network, in
233	233	a health care service [that] region must hold [that holds] a
234	234	certificate of authority issued under Chapter 843, Insurance Code,
235	235	to provide health care in that region [and that is:
236	236	[(1) wholly owned and operated by a hospital district
237	237	in that region;
238	238	[(2) created by a nonprofit corporation that:
239	239	[(A) has a contract, agreement, or other
240	240	arrangement with a hospital district in that region or with a
241	241	municipality in that region that owns a hospital licensed under
242	242	Chapter 241, Health and Safety Code, and has an obligation to
243	243	provide health care to indigent patients; and
244	244	[(B) under the contract, agreement, or other
245	245	arrangement, assumes the obligation to provide health care to
246	246	indigent patients and leases, manages, or operates a hospital
247	247	facility the hospital district or municipality owns; or
248	248	[(3) created by a nonprofit corporation that has a
249	249	contract, agreement, or other arrangement with a hospital district
250	250	in that region under which the nonprofit corporation acts as an
251	251	agent of the district and assumes the district's obligation to
252	252	arrange for services under the Medicaid expansion for children as
253	253	authorized by Chapter 444 (S.B. 10), Acts of the 74th Legislature,
254	254	Regular Session, 1995].
255	255	SECTION 4. Section 540.0502, Government Code, as effective
256	256	April 1, 2025, is amended to read as follows:
257	257	Sec. 540.0502. AUTOMATIC ENROLLMENT IN MEDICAID MANAGED
258	258	CARE PLAN. (a) The [If the] commission shall [determines that it
259	259	is feasible and notwithstanding any other law, the commission may]
260	260	implement an automatic enrollment process under which an applicant
261	261	determined eligible for Medicaid is automatically enrolled in a
262	262	Medicaid managed care plan the applicant chooses.
263	263	(b) The commission shall ensure recipients are allowed to
264	264	change the managed care plan in which the recipient enrolls as
265	265	frequently as is permitted under federal law. A Medicaid managed
266	266	care organization may not prohibit, limit, or interfere with a
267	267	recipient's selection of a managed care plan [may elect to
268	268	implement the automatic enrollment process for certain recipient
269	269	populations].
270	270	SECTION 5. Section 540A.0101(b), Government Code, as
271	271	effective April 1, 2025, is amended to read as follows:
272	272	(b) The commission may temporarily waive the applicability
273	273	of Subsection (a) to a Medicaid managed care organization as
274	274	necessary based on the results of a review conducted under Sections
275	275	527.0103 [540.0207] and 540.0209 and until enrollment of recipients
276	276	in a Medicaid managed care plan offered by the organization is
277	277	permitted under that section.
278	278	SECTION 6. Section 540A.0151(d), Government Code, as
279	279	effective April 1, 2025, is amended to read as follows:
280	280	(d) The commission may waive the applicability of
281	281	Subsection (a) to a Medicaid managed care organization for not more
282	282	than three months as necessary based on the results of a review
283	283	conducted under Sections 527.0103 [540.0207] and 540.0209 and until
284	284	enrollment of recipients in a Medicaid managed care plan offered by
285	285	the organization is permitted under that section.
286	286	SECTION 7. Section 543A.0052(d), Government Code, as
287	287	effective April 1, 2025, is amended to read as follows:
288	288	(d) In awarding contracts to managed care organizations
289	289	under the child health plan program and Medicaid, the commission
290	290	shall, in addition to considerations under Chapter 527 [Section
291	291	540.0204] of this code and Section 62.155, Health and Safety Code,
292	292	give preference to an organization that offers a managed care plan
293	293	that:
294	294	(1) successfully implements quality initiatives under
295	295	Subsection (a) as the commission determines based on data or other
296	296	evidence the organization provides; or
297	297	(2) meets quality-of-care and cost-efficiency
298	298	benchmarks under Subsection (b).
299	299	SECTION 8. Section 62.055(f), Health and Safety Code, is
300	300	amended to read as follows:
301	301	(f) The commission shall:
302	302	(1) procure all contracts with a third party
303	303	administrator through a competitive procurement process in
304	304	compliance with all applicable federal and state laws or
305	305	regulations; and
306	306	(2) ensure that all contracts with child health plan
307	307	providers under Section 62.155 are procured through a [competitive]
308	308	procurement process in accordance with this chapter, Chapter 527,
309	309	Government Code, and other [compliance with all] applicable federal
310	310	and state laws or regulations.
311	311	SECTION 9. Subchapter C, Chapter 62, Health and Safety
312	312	Code, is amended by adding Section 62.1041 to read as follows:
313	313	Sec. 62.1041. AUTOMATIC ENROLLMENT WITH HEALTH PLAN
314	314	PROVIDER. (a) The commission shall implement an automatic
315	315	enrollment process under which an applicant determined eligible for
316	316	the child health plan is automatically enrolled with a child health
317	317	plan provider the applicant chooses.
318	318	(b) The commission shall ensure enrollees under the child
319	319	health plan are allowed to change the managed care plan in which
320	320	enrolled as frequently as is permitted under federal law. A health
321	321	plan provider may not prohibit, limit, or interfere with an
322	322	enrollee's choice of health plan providers.
323	323	SECTION 10. Section 62.155(a), Health and Safety Code, is
324	324	amended to read as follows:
325	325	(a) The commission shall contract with [select the] health
326	326	plan providers under the program in accordance with Chapter 527,
327	327	Government Code [through a competitive procurement process]. A
328	328	health plan provider, other than a state administered primary care
329	329	case management network, must hold a certificate of authority or
330	330	other appropriate license issued by the Texas Department of
331	331	Insurance that authorizes the health plan provider to provide the
332	332	type of child health plan offered and must satisfy, except as
333	333	provided by this chapter, any applicable requirement of the
334	334	Insurance Code or another insurance law of this state.
335	335	SECTION 11. The following provisions are repealed:
336	336	(1) Sections 540.0203, 540.0204, and 540.0207,
337	337	Government Code, as effective April 1, 2025;
338	338	(2) Sections 540.0206(b), (c), (d), and (e),
339	339	Government Code, as effective April 1, 2025;
340	340	(3) Sections 62.155(c) and (d), Health and Safety
341	341	Code; and
342	342	(4) Section 32.049(a), Human Resources Code.
343	343	SECTION 12. The Health and Human Services Commission shall
344	344	conduct public hearings for purposes of determining the six
345	345	additional criteria required under Section 527.0102(a)(4),
346	346	Government Code, as added by this Act, for measuring the
347	347	performance of managed care organizations described by that
348	348	section.
349	349	SECTION 13. (a) In this section:
350	350	(1) "Child health plan program" and "Medicaid" have
351	351	the meanings assigned by Section 521.0001, Government Code.
352	352	(2) "Client," "health care service region," "managed
353	353	care contract," "managed care organization," and "managed care
354	354	program" have the meanings assigned by Section 527.0001, Government
355	355	Code, as added by this Act.
356	356	(b) Subject to this section, the changes in law made by this
357	357	Act apply only to a managed care contract entered into on or after
358	358	the effective date of this Act. A contract entered into before the
359	359	effective date of this Act is governed by the law as it existed
360	360	immediately before the effective date of this Act, and that law is
361	361	continued in effect for that purpose.
362	362	(c) The procurement of a managed care contract that was
363	363	initiated before the effective date of this Act and that is pending
364	364	on the effective date of this Act is terminated on that date.
365	365	(d) As soon as practicable after the effective date of this
366	366	Act, the Health and Human Services Commission shall seek to extend
367	367	the effective date of termination of a managed care contract in
368	368	effect on the effective date of this Act until the date a managed
369	369	care organization is authorized to provide health care services to
370	370	clients under the managed care program in the health care service
371	371	region under a contract entered into in accordance with Subsection
372	372	(e) of this section.
373	373	(e) The Health and Human Services Commission shall issue a
374	374	request for applications to enter into a managed care contract with
375	375	the commission procured in accordance with Chapter 527, Government
376	376	Code, as added by this Act, and other applicable law as follows:
377	377	(1) subject to Subsection (f) of this section, a
378	378	contract to provide health care services to clients under the STAR
379	379	Medicaid managed care program, the STAR Kids Medicaid managed care
380	380	program established under Subchapter R, Chapter 540, Government
381	381	Code, and the child health plan program, must have an anticipated
382	382	operational start date on or after September 1, 2027; or
383	383	(2) a contract to provide health care services to
384	384	clients under the STAR Health program or the STAR+PLUS Medicaid
385	385	managed care program must have an anticipated operational start
386	386	date on or after September 1, 2030.
387	387	(f) The commission shall issue a request for applications
388	388	under Subsection (e)(1) of this section as soon as practicable
389	389	after the effective date of this Act, but not later than September
390	390	1, 2026.
391	391	SECTION 14. If before implementing any provision of this
392	392	Act a state agency determines that a waiver or authorization from a
393	393	federal agency is necessary for implementation of that provision,
394	394	the agency affected by the provision shall request the waiver or
395	395	authorization and may delay implementing that provision until the
396	396	waiver or authorization is granted.
397	397	SECTION 15. This Act takes effect immediately if it
398	398	receives a vote of two-thirds of all the members elected to each
399	399	house, as provided by Section 39, Article III, Texas Constitution.
400	400	If this Act does not receive the vote necessary for immediate
401	401	effect, this Act takes effect September 1, 2025.