By: Kolkhorst S.B. No. 457
(In the Senate - Filed November 21, 2024; February 3, 2025,
read first time and referred to Committee on Health & Human
Services; April 28, 2025, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 9, Nays 0;
April 28, 2025, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 457 By: Hancock
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of certain nursing facilities, including
licensing requirements and Medicaid participation and
reimbursement requirements.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 540.0752(b), Government Code, is amended
to read as follows:
(b) Subject to Section 540.0701 and notwithstanding any
other law, the commission shall provide Medicaid benefits through
the STAR+PLUS Medicaid managed care program to recipients who
reside in nursing facilities. In implementing this subsection, the
commission shall ensure that:
(1) a nursing facility is paid not later than the 10th
day after the date the facility submits a clean claim;
(1-a) a nursing facility complies with the patient care
expense ratio adopted under Section 32.0286, Human Resources Code;
(2) services are used appropriately, consistent with
criteria the commission establishes;
(3) the incidence of potentially preventable events
and unnecessary institutionalizations is reduced;
(4) a Medicaid managed care organization providing
services under the program:
(A) provides discharge planning, transitional
care, and other education programs to physicians and hospitals
regarding all available long-term care settings;
(B) assists in collecting applied income from
recipients; and
(C) provides payment incentives to nursing
facility providers that:
(i) reward reductions in preventable acute
care costs; and
(ii) encourage transformative efforts in
the delivery of nursing facility services, including efforts to
promote a resident-centered care culture through facility design
and services provided;
(5) a portal is established that complies with state
and federal regulations, including standard coding requirements,
through which nursing facility providers participating in the
program may submit claims to any participating Medicaid managed
care organization;
(6) rules and procedures relating to certifying and
decertifying nursing facility beds under Medicaid are not affected;
and
(7) a Medicaid managed care organization providing
services under the program, to the greatest extent possible, offers
nursing facility providers access to:
(A) acute care professionals; and
(B) telemedicine, when feasible and in
accordance with state law, including rules adopted by the Texas
Medical Board[; and
[(8) the commission approves the staff rate
enhancement methodology for the staff rate enhancement paid to a
nursing facility that qualifies for the enhancement under the
program].
SECTION 2. Subchapter F, Chapter 540, Government Code, is
amended by adding Section 540.0283 to read as follows:
Sec. 540.0283. NURSING FACILITY PROVIDER AGREEMENTS:
COMPLIANCE WITH PATIENT CARE EXPENSE RATIO. (a) A contract to
which this subchapter applies must require that each provider
agreement between the contracting Medicaid managed care
organization and a nursing facility include a requirement that the
facility comply with the patient care expense ratio adopted under
Section 32.0286, Human Resources Code.
(b) This section does not apply to a state-owned facility.
SECTION 3. Section 242.032, Health and Safety Code, is
amended by adding Subsection (b-1) to read as follows:
(b-1) The application must:
(1) include the name of each person with a direct or
indirect ownership interest of five percent or more in:
(A) the nursing facility, including a subsidiary
or parent company of the facility; and
(B) the real property on which the nursing
facility is located, including any owner, common owner, tenant, or
sublessee; and
(2) describe the exact ownership interest of each of
those persons in relation to the facility or property.
SECTION 4. Subchapter B, Chapter 242, Health and Safety
Code, is amended by adding Section 242.0333 to read as follows:
Sec. 242.0333. NOTIFICATION OF CHANGE TO OWNERSHIP INTEREST
APPLICATION INFORMATION. A license holder shall notify the
commission, in the form and manner the commission requires, of any
change to the ownership interest application information provided
under Section 242.032(b-1).
SECTION 5. Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Section 32.0286 to read as follows:
Sec. 32.0286. ANNUAL PATIENT CARE EXPENSE RATIO FOR
REIMBURSEMENT OF CERTAIN NURSING FACILITY PROVIDERS. (a) In this
section, "patient care expense":
(1) includes an expense incurred by a nursing facility
for:
(A) providing compensation and benefits to:
(i) direct care staff of a facility,
whether the staff are employees of or contract labor for the
facility, including:
(a) licensed registered nurses and
licensed vocational nurses, including directors of nursing and
assistant directors of nursing;
(b) medication aides;
(c) restorative aides;
(d) nurse aides who provide
nursing-related care to residents occupying medical assistance
beds;
(e) licensed social workers; and
(f) social services assistants;
(ii) additional staff associated with
providing care to facility residents with a severe cognitive
impairment;
(iii) nonprofessional administrative
staff, including medical records staff and accounting or
bookkeeping staff;
(iv) central supply staff and ancillary
facility staff;
(v) laundry staff; and
(vi) food service staff;
(B) central supply costs and ancillary costs for
facility services and supplies, including:
(i) diagnostic laboratory and radiology
costs;
(ii) durable medical equipment costs,
including costs to purchase, rent, or lease the equipment;
(iii) costs for oxygen used to provide
oxygen treatment;
(iv) prescription and nonprescription drug
costs; and
(v) therapy consultant costs; and
(C) costs for dietary and nutrition services,
including costs for:
(i) food service and related supplies; and
(ii) nutritionist services; and
(2) does not include an expense for:
(A) administrative or operational costs, other
than administrative or operational costs described by Subdivision
(1); or
(B) fixed capital asset costs.
(b) The executive commissioner by rule shall establish an
annual patient care expense ratio, including a process for
determining the ratio, applicable to the reimbursement of nursing
facility providers for providing services to recipients under the
medical assistance program. In establishing the ratio, the
executive commissioner shall require that at least 85 percent of
the portion of the medical assistance reimbursement amount paid to
a nursing facility that is attributable to patient care expenses is
spent on reasonable and necessary patient care expenses.
(c) The executive commissioner shall adopt rules necessary
to ensure each nursing facility provider that participates in the
medical assistance program complies with the patient care expense
ratio adopted under this section.
(d) Except as provided by Subsection (e) and to the extent
permitted by federal law, the commission may recoup all or part of
the medical assistance reimbursement amount paid to a nursing
facility that is subject to the patient care expense ratio under
this section if the facility fails to spend the reimbursement
amount in accordance with the patient care expense ratio.
(e) The commission may not recoup a medical assistance
reimbursement amount under Subsection (d) if, during the period
patient care expenses attributable to the reimbursement amount are
calculated, the facility:
(1) held at least a four-star rating under the Centers
for Medicare and Medicaid Services five-star quality rating system
for nursing facilities in two or more of the following categories:
(A) overall;
(B) health inspections;
(C) staffing; and
(D) long-stay quality measures;
(2) both:
(A) maintained an average daily occupancy rate of
75 percent or less; and
(B) spent at least 70 percent of the portion of
the reimbursement amount paid to the facility that was attributable
to patient care expenses on reasonable and necessary patient care
expenses; or
(3) incurred expenses related to a disaster for which
the governor issued a disaster declaration under Chapter 418,
Government Code.
(f) The commission shall publish and maintain on the
commission's Internet website a list of all nursing facilities from
which the commission recouped medical assistance reimbursement
amounts under Subsection (d).
(g) The commission may not require a nursing facility to
comply with the patient care expense ratio as a condition of
participation in the medical assistance program.
(h) This section does not apply to a state-owned facility.
SECTION 6. Sections 32.028(g), (i), and (m), Human
Resources Code, are repealed.
SECTION 7. (a) The Health and Human Services Commission
shall, subject to this section, require compliance with the initial
annual patient care expense ratio adopted under Section 32.0286,
Human Resources Code, as added by this Act, beginning on September
1, 2025.
(b) The Health and Human Services Commission shall, in a
contract between the commission and a managed care organization
under Chapter 540, Government Code, that is entered into or renewed
on or after the effective date of this Act, require the managed care
organization to comply with Section 540.0283, Government Code, as
added by this Act.
(c) The Health and Human Services Commission shall seek to
amend contracts entered into with managed care organizations under
Chapter 533 or 540, Government Code, before the effective date of
this Act to require those managed care organizations to comply with
Section 540.0283, Government Code, as added by this Act. To the
extent of a conflict between that section and a provision of a
contract with a managed care organization entered into before the
effective date of this Act, the contract provision prevails.
SECTION 8. Not later than November 1, 2027, the Health and
Human Services Commission shall prepare and submit to the
legislature a written report that includes an assessment of the
impact of the patient care expense ratio established under Section
32.0286, Human Resources Code, as added by this Act, on nursing
facility care provided to Medicaid recipients during the preceding
state fiscal biennium, including the impact on the cost and quality
of care and any other information the commission determines
appropriate.
SECTION 9. 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 10. This Act takes effect September 1, 2025.
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