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Medicaid Provisions
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CHIP Provisions
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Fraud and Abuse Provision
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Agency Reorganization
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Medicaid Disease Management
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Prior Authorization for Nonemergency Ambulance
Transport
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Continuous Eligibility for Children's
Medicaid
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Local Medicaid Demonstration Projects
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Group Health Insurance for CHIP Eligibles
]
In addition to reductions in services and eligibility described
above, the legislature made numerous changes to the Medicaid and
Children's Health Insurance Program (CHIP) delivery systems and to
the structure of the agencies that oversee all health and human
services.
One omnibus bill governs almost all changes to the delivery of
Medicaid and CHIP: House Bill 2292 by Rep. Arlene Wohlgemuth
(R-Burleson) and Sen. Jane Nelson (R-Flower Mound). The bill is
divided into two sections, one addressing the structure of the
health and human services enterprise (see below) and the other
addressing service delivery. Many of the provisions within HB 2292
codify budget decisions, such as the freeze in continuous
eligibility for children's Medicaid. Other provisions will change
the way patients and physicians interact with the programs. Major
changes to Medicaid include:
Enactment of a preferred drug list (PDL).
The bill directs the Health and Human Services Commission
(HHSC) to establish a PDL with assistance from a Pharmacy and
Therapeutics Committee. TMA strongly supported a PDL as a means to
reduce prescription drug utilization and costs. However, the PDL
enacted by HB 2292 is not as flexible as TMA desired. While the
bill specifies that development of the PDL must be based on safety
and quality in addition to cost, inclusion - or exclusion - of a
drug on the PDL will be driven by whether the manufacturer agrees
to a supplemental rebate or other cost reduction strategies. The
Pharmacy and Therapeutics Committee established by the bill will
include six physicians and five pharmacists, with a physician
designated as the presiding officer.
Roll out of the most "cost effective" Medicaid managed care
model
.
HHSC is required to expand Medicaid managed care to all regions of
the state. Delivery models HHSC can consider are HMO, primary care
case management, or an exclusive provider organization. HHSC must
examine the "cost effectiveness" of the model by region and
Medicaid population, though "cost effective" is not defined. TMA,
working closely with the Border Health Caucus, successfully amended
the bill to exclude the Medicaid HMO model from largest urban
border counties, with the exception of Webb County. This county
includes a hospital-based HMO, Mercy, which wanted to preserve the
Medicaid HMO model as an option. If HHSC determines that managed
care is not cost-effective for a region of the state or a Medicaid
population, then the commission may continue to use traditional,
fee-for-service Medicaid.
Medicaid Provisions
Maintains term of children's coverage (continuous eligibility
period) at six months through Sept. 1, 2005;
Allows HHSC to use create more thorough procedures (such as
using information from consumer reporting agencies, appraisal
districts, or vehicle registration records) to verify assets;
Allows recertification through telephone interview or mail
correspondence, unless HHSC determines a personal interview is
necessary, and allows rules based on risk factors to require a
personal interview for recertification in cases with a high
probability that eligibility will not be recertified;
Allows establishment of cost sharing (i.e., copays and monthly
premiums) based on federal maximum levels, to the extent it is
cost-efficient;
Allows HHSC to establish prior authorization for high-cost
medical services;
Makes provision of services under Medically Needy Program
subject to appropriation of funds;
Eliminates requirement for providing services by podiatrists,
psychologists, and licensed marriage and family therapists;
Allows HHSC to limit prescriptions to a 34-day supply and
to impose a cap of four
brand name
drugs per month (does not affect current three-prescription limits
for certain clients);
Allows establishment of rules for purchase and distribution of
over-the-counter medications if more cost-effective than the
prescription alternative;
Establishes a statutory basis for estate recovery of Medicaid
expenditures pursuant to federal requirements;
Provides for input of the Public Assistance Health Benefit
Review and Design Committee in designing covered benefits;
Requires consolidation of health insurance premium payment
programs for Medicaid and CHIP;
Requires HHSC to request federal matching funds for the
employee's share of required premiums for Medicaid-eligible
children enrolled in a group health plan; and
Requires HHSC to establish a consumer-directed services program
to provide a monthly stipend for certain Medicaid waiver clients
receiving home- and community-based services and to direct the
delivery of those services.
CHIP Provisions
Maintains income eligibility at 200 percent of federal poverty
level ($36,800 for a family of four);
Eliminates deductions to income so that eligibility is based on
gross income;
Restricts eligibility for families at or above 150 percent of
federal poverty level to those with assets within allowable
levels;
Changes term of coverage (continuous eligibility period) from 12
months to six months until Sept. 1, 2005;
Establishes a 90-day waiting period between eligibility
determination and coverage; exceptions from this waiting period are
allowed for loss of insurance coverage due to:
-Layoff or business closing,
-Termination of COBRA coverage,
-Change in marital status of parent,
-Loss of Medicaid eligibility, or
-Termination of coverage because cost of coverage exceeded 10
percent of family income;
Allows establishment of cost-sharing (i.e., copays and monthly
premiums) at maximum federal level to the extent it is
cost-efficient;
Allows HHSC to limit prescriptions to a 34-day supply and
to impose a cap of four
brand name
drugs per month;
Subjects children of school district employees and state
employees to same requirements as CHIP enrollees with regard to
eligibility and coverage;
Removes provisions requiring the benefit package to be
actuarially equivalent to state employee HMO benefits upon
inception of CHIP and to provide at least the level of benefits
recommended by the CHIP Interim Report to the 76th legislature;
Reduces CHIP outreach efforts to the federal minimum;
Provides for input of the Public Assistance Health Benefit
Review and Design Committee in designing covered benefits;
Requires HHSC to request federal matching funds for the
employee's share of required premiums for CHIP-eligible children
enrolled in a group health plan; and
Requires HHSC to request a waiver to allow Medicaid families to
opt in to CHIP.
Fraud and Abuse Provisions
Adds "abuse" to fraud statutes;
Outlines duties of the Office of Inspector General (OIG), which
replaces HHSC's Office of Investigations and Enforcement:
-Provides for appointment of an inspector general by the
governor for a one-year term;
-Allows HHSC to obtain any information or technology necessary to
meet responsibilities;
-Allows the office to access any information maintained by an HHS
agency;
-Requires OIG to conduct an integrity review to determine a need
for full investigation;
-Requires referral of cases within 30 days by OIG to the attorney
general (AG) in cases of suspected criminal conduct, and allows
continuation of investigation by OIG for purposes of imposing
administrative or civil sanctions;
-Allows imposition of payment holds on providers to compel
production of records (provides for expedited administrative
hearing or informal resolution); and
-Allows OIG to provide coordination with special investigative
units for managed care organizations, audit use and effectiveness
of state and federal funds, and recommend policies promoting
economical and efficient administration in state and federal funds;
Allows OIG to issue subpoenas, with approval of HHSC
commissioner;
Outlines requirement for the memorandum of understanding between
OIG and the AG:
-Must include procedures for processing cases of fraud within
the Temporary Assistance to Needy Families (TANF), food stamp, and
CHIP programs;
-Must require OIG to refer cases of suspected fraud, waste, or
abuse to the AG within 20 business days after determination that
existence of fraud, waste, or abuse is reasonably indicated;
-Must require the AG to take appropriate action and allow the AG to
refer cases to the U.S. attorney or local prosecutor;
-Direct initiation of prosecution by the AG must be with consent of
the local prosecutor;
-Must require facilitation of direct referrals to the AG's office
and communication between the AG's office and employees of the
Medicaid agency;
-Adds comptroller to the list of government officials who is to
receive the semiannual report on Medicaid fraud and adds other HHS
programs to the content of the report; and
-Must specify the type, scope, and format of investigative support
provided by OIG;
Outlines criteria and sanctions for TANF fraud; transfers
enforcement for TANF fraud to HHSC;
Allows AG to pursue criminal asset forfeiture for felony
violations relating to Medicaid fraud, and allows transfer of
proceeds from forfeited property to HHSC;
Allows concurrent jurisdiction between the AG and the local
prosecutor, with consent of the local prosecutor;
Allows award for reporting Medicaid fraud and modifies terms for
receipt and calculation of award:
-Reward is prohibited if HHSC or AG had independent knowledge of
fraudulent activity,
-Award is limited to 5 percent of administrative penalty, and
-Award will be paid out of administrative penalty;
Establishes Medicaid front-end fraud pilot program:
-Can be implemented in one or more counties;
-May be extended to other counties if determined cost-effective;
-Must be designed to reduce number of fraud cases, fraudulent
participants, and total Medicaid expenditures;
-Must include smart cards; biometric readers at point of contact
with providers; a secure, HIPAA-compliant finger imaging system;
and a monitoring system;
-Allows HHSC to exempt children, or elderly or disabled persons and
to obtain a fingerprint from a parent or caretaker;
-Requires HHSC to consider transportation barriers and work
schedules; and
-Requires HHSC to begin implementation by Jan. 1, 2004, and to
report to the governor, lieutenant governor, and speaker by Feb. 1,
2005;
Adds a representative of TDH to the Medicaid and Public
Assistance Fraud Oversight Task Force and requires study of
procedures used to determine identity;
Prohibits solicitation of business by Medicaid and CHIP
providers;
Requires each managed care organization to have a fraud
investigation unit;
Requires HHSC to cross-reference eligibility information for
health and human services programs with the federal list of
fugitive felons;
Requires third-party billing vendors for CHIP and Medicaid to
contract with HHSC;
Allows prepayment reviews and postpayment holds and allows a
provider subject to a payment hold to request an expedited
administrative hearing or an informal resolution; and
Requires a surety bond for Medicaid providers with
irregularities.
(Portions of HB 2292 summary prepared by the Health and Human
Services Commission.)
AGENCY REORGANIZATION
As mentioned above, HB 2292 dramatically alters HHSC
organization, consolidating 12 agencies into four. The HHSC will
remain the umbrella agency, with each of the new agency executive
directors reporting directly to the HHSC commissioner. The HHSC
commissioner, with approval of the governor, will hire agency
directors.
In addition to its current Medicaid and CHIP policy functions,
HHSC will be responsible for all cross-agency functions, such as
consolidated human resources and information management.
Additionally, HHSC will absorb all eligibility determination
functions. Most significantly, HHSC will be responsible for
promulgating all rules and policies for the agencies it oversees.
Currently, each agency has its own board and rulemaking
authority.
The four new agencies reporting to HHSC are:
Department of State Health Services, which replaces the Texas
Department of Health and also absorbs the mental health functions
of the Mental Health and Mental Retardation Department, Texas
Commission on Alcohol and Drug Abuse, and all of the Texas Health
Care Information Council;
Department of Aging and Disability Services, which includes most
functions of the Department of Human Services, including all
long-term care and aging services;
Department of Assistive and Rehabilitative Services; and
Department of Family and Protective Services.
A council composed of nine gubernatorial appointees will be
created for each agency to advise the agency director on agency
policies and programs. Additionally, HB 2292 requires the
appointment of a transition council to assist HHSC in devising a
transition plan. Council members will include two senators, two
representatives, and three public members. The council must submit
its initial plan to the legislature by Dec. 1, 2003. Development of
the transition plan must include public input.
MEDICAID DISEASE MANAGEMENT
HB 727 by Rep. Dianne Delisi (R-Temple) and Sen. Kyle Janek
(R-Houston) requires a request-for-proposal (RFP) process with
providers of disease management programs to provide program
services to certain recipients of medical assistance (Medicaid).
Those recipients must have a disease/health condition for which it
is determined that disease management is needed and the recipients
are not eligible for those services under a Medicaid managed care
plan. Initial language required disease management services
specifically for Medicaid pregnant women and children residing in
the Rio Grande Valley and who receive treatment of asthma-related
health conditions. This language was removed in the substitute that
passed. The contract with the disease management vendor(s) is
required to include a written guarantee of state savings on
expenditures for the recipients covered by the program. Also, HHSC
is required to conduct a study to analyze the potential for state
savings and to consider the results of the study when doing the RFP
process. The study must be completed no later than Dec. 31,
2003.
TMA has strong policy supporting disease management as a
cost-effective means of managing chronic and other conditions.
TMA's requirements that the disease management be an evidence-based
model, the patient's physician direct the health care team dealing
with the patient, and standardized protocols and criteria be used
were added to the bill's language. Governor Perry signed the bill
into law on June 16 and it took effect immediately.
HB 1735, also by Representative Delisi, establishes a uniform
disease management process for state-funded or state-administered
health plans, including CHIP, Medicaid managed care, the Teacher
Retirement System, and the Employee Retirement System. Agencies or
boards overseeing the state- funded or -administered plans must
establish criteria and standards regarding (1) patient
self-management education, (2) provider education, (3)
evidence-based models and minimum standards of care, (4)
standardized protocols and participation criteria, and (5)
physician-directed or physician-supervised care. Chronic
illnesses referenced in the bill as potential targets for disease
management are heart disease, diabetes, respiratory illnesses,
end-stage renal disease, and HIV or AIDS. A study of the models by
each agency or board is required to determine whether the covered
populations' outcomes improved as a result of disease management.
Additionally, HHSC is required to determine whether implementation
of disease management achieved savings for the state. TMA supported
the legislation.
PRIOR AUTHORIZATION FOR NONEMERGENCY AMBULANCE TRANSPORT
Over TMA's strenuous objection, HB 111 by Rep. Norma Chavez
(D-El Paso) passed, requiring physicians, hospitals, and nursing
homes to reimburse costs of requested nonemergency ambulance
transports when Medicaid fails to approve payment for the service.
TMA worked throughout the session to exclude physicians from the
bill, since data show that less than 1 percent of nonemergency
ambulance transport originates from physicians. TMA instead offered
to work with the bill author to educate physicians about how
properly to obtain prior approval for such services. Representative
Chavez agreed to accept TMA's amendment, removing physicians from
the bill in the House version. However, Representative Chavez
stripped the compromise language from the bill in conference
committee.
CONTINUOUS ELIGIBILITY FOR CHILDREN'S MEDICAID
HB 728 by Representative Delisi freezes until September 2005 the
implementation of 12 months of continuous eligibility for
children's Medicaid. Currently, children in Medicaid are guaranteed
six months' continuous coverage. Law passed in 2001 would have
extended the continuous enrollment period to 12 months by June of
this year. The bill is a pragmatic compromise given the budget
deficit faced by the state. TMA, the Texas Pediatric Society, and
the Texas Academy of Family Physicians strongly supported the
bill.
Senate Bill 1522 by Sen. Judith Zaffirini (D-Laredo), like HB
728, freezes children's Medicaid continuous enrollment at six
months with the option of expanding to 12 months in June 2005. As
the original author of children's Medicaid simplification, Senator
Zaffirini worked mightily to protect initiatives such as simplified
application and enrollment and elimination of the face-to-face
interview. SB 1522 retains most elements of simplification but as a
compromise, does allow the Department of Human Services (DHS) to
request an in-person interview when information cannot be obtained
any other way. The bill does allow DHS to obtain asset and other
information from third-party resources when available. TMA
supported the bill.
HB 2292 (described above) also freezes children's Medicaid
continuous eligibility at six months and incorporates provisions
within SB 1522. HB 2292 language prevails whenever there is a
conflict.
LOCAL MEDICAID DEMONSTRATION PROJECTS
HB 3122 by Rep. Vicky Truitt (R-Keller) allows for two Medicaid
demonstration projects to expand Medicaid to low-income parents not
currently eligible for Medicaid. Projects will be funded by
hospital districts or other funding entities that agree to certify
the availability of local funds to provide the state portion to
obtain federal matching dollars. Two pilots are envisioned. One
would expand Medicaid coverage to uninsured parents up to 100
percent of federal poverty; hospital districts would not be
required to provide the full Medicaid benefit package since the
targeted population is optional. The second pilot would target
working
parents by blending dollars from local hospital districts and
employers to achieve an affordable insurance product. A task force
comprising officials from hospital districts, health care
providers, employers, and others would oversee development of the
projects. TMA supported the legislation.
GROUP HEALTH INSURANCE FOR CHIP ELIGIBLES
SB 240 by Sen. Kip Averitt (R-Waco) amends statute enacted in
2001 allowing children eligible for CHIP to enroll in
employer-sponsored health plans under what is called the "Health
Insurance Premium Payment" program. TMA supported the
legislation
Health and human services reorganization TMA staff
contacts:
-Helen Kent Davis, director, Office of Governmental
Affairs, (512) 370-1401
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[
Overview
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Professional Liability Reform
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Patient Safety/Quality
Improvement
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Managed Care/Insurance Reform
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Health Care Funding
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Scope of Practice
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Public Health
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Rural Health
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Mental Health
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Medical Science
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Workers' Compensation
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Tax Reform
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Long-Term Care
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Workforce/Medical Education
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Abortion and Related
Legislation
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Health Facility Regulation
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Transplantation/Organ Donation
]