Bill Text: TX HB2453 | 2019-2020 | 86th Legislature | Comm Sub


Bill Title: Relating to the operation and administration of Medicaid, including the Medicaid managed care program.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2019-05-02 - Committee report sent to Calendars [HB2453 Detail]

Download: Texas-2019-HB2453-Comm_Sub.html
  86R27984 LED-D
 
  By: Davis of Harris, Zerwas, Krause, H.B. No. 2453
      Bonnen of Galveston, Turner of Tarrant,
 
      et al.
 
  Substitute the following for H.B. 
 
 
 
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 Medicaid and CHIP services
  division 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 commission shall consider disputes, complaints, and
  other issues reported to the office in renewing a contract with a
  Medicaid managed care organization.
         (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 commission shall align the office's data collection
  practices with the data collection practices used by the
  commission's office of the ombudsman to facilitate comparisons.
         (h)  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 Department of Family and Protective Services 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 external medical reviewer described
  by Section 533.00715 annually shall collect data regarding the
  officer's decisions and rates of upholding or reversing decisions
  on appeal. The commission shall analyze the data to identify
  outliers. The commission shall provide corrective education to
  hearing officers whose decisions or rates are outliers. The
  commission shall document the outliers identified and the
  corrective education provided.
         SECTION 5.  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 6.  Subchapter B, Chapter 531, Government Code, is
  amended by adding Sections 531.024162 and 531.024163 to read as
  follows:
         Sec. 531.024162.  NOTICE REQUIREMENTS REGARDING MEDICAID
  COVERAGE OR PRIOR AUTHORIZATION DENIAL AND INCOMPLETE REQUESTS.
  (a)  The commission shall ensure that notice sent by the commission
  or a Medicaid managed care organization to a Medicaid recipient or
  provider regarding the denial of coverage or prior authorization
  for a service includes:
               (1)  information required by federal and state law;
               (2)  for the recipient, a clear and easy-to-understand
  explanation of the reason for the denial; and
               (3)  for the provider, a thorough and detailed clinical
  explanation of the reason for the denial, including, as applicable,
  information required under Subsection (b).
         (b)  The commission or a Medicaid managed care organization
  that receives from a provider a coverage or prior authorization
  request that contains insufficient or inadequate documentation to
  approve the request shall issue a notice to the provider and the
  Medicaid recipient on whose behalf the request was submitted.  The
  notice issued under this subsection must:
               (1)  include a section specifically for the provider
  that contains:
                     (A)  a clear and specific list and description of
  the documentation necessary for the commission or organization to
  make a final determination on the request;
                     (B)  the applicable timeline, based on the
  requested service, for the provider to submit the documentation and
  a description of the reconsideration process described by Section
  533.00284, if applicable; and
                     (C)  information on the manner through which a
  provider may contact a Medicaid managed care organization or other
  entity as required by Section 531.024163; and
               (2)  be sent to the provider:
                     (A)  using the provider's preferred method of
  contact most recently provided to the commission or the Medicaid
  managed care organization and using any alternative and known
  methods of contact; and
                     (B)  as applicable, through an electronic
  notification on an Internet portal.
         Sec. 531.024163.  ACCESSIBILITY OF INFORMATION REGARDING
  MEDICAID PRIOR AUTHORIZATION REQUIREMENTS. (a) The executive
  commissioner by rule shall require each Medicaid managed care
  organization or other entity responsible for authorizing coverage
  for health care services under Medicaid to ensure that the
  organization or entity maintains on the organization's or entity's
  Internet website in an easily searchable and accessible format:
               (1)  the applicable timelines for prior authorization
  requirements, including:
                     (A)  the time within which the organization or
  entity must make a determination on a prior authorization request;
                     (B)  a description of the communications the
  organization or entity provides to a provider and Medicaid
  recipient regarding the documentation required to complete a
  determination on a prior authorization request; and
                     (C)  the deadline by which the organization or
  entity is required to submit the communications described by
  Paragraph (B); and
               (2)  an accurate and up-to-date catalogue of coverage
  criteria and prior authorization requirements, including:
                     (A)  for a prior authorization requirement first
  imposed on or after September 1, 2019, the effective date of the
  requirement;
                     (B)  a list or description of any necessary or
  supporting documentation necessary to obtain prior authorization
  for a specified service; and
                     (C)  the date and results of each review of the
  prior authorization requirement conducted under Section 533.00283,
  if applicable.
         (b)  The executive commissioner by rule shall require each
  Medicaid managed care organization or other entity responsible for
  authorizing coverage for health care services under Medicaid to:
               (1)  adopt and maintain a process for a provider or
  Medicaid recipient to contact the organization or entity to clarify
  prior authorization requirements or assist the provider or
  recipient in submitting a prior authorization request; and
               (2)  ensure that the process described by Subdivision
  (1) is not arduous or overly burdensome to a provider or recipient.
         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, in consultation with physicians and
  Medicaid managed care organizations, annually shall review prior
  authorization requirements in the Medicaid vendor drug program and
  determine whether to change, update, or delete any of the
  requirements based on publicly available, up-to-date,
  evidence-based, and peer-reviewed clinical criteria.
         SECTION 9.  Section 531.076, Government Code, is amended by
  amending Subsection (b) and adding Subsections (c), (d), (e), (f),
  (g), (h), (i), (j), (k), (l), and (m) 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 shall monitor whether a Medicaid managed
  care organization complies with applicable laws and rules in
  establishing prior authorization requirements.
         (d)  The commission shall hold a Medicaid managed care
  organization accountable for services and coordination the
  organization is by contract required to provide.
         (e)  The commission annually shall review a Medicaid managed
  care organization's prior authorization requirements and recommend
  whether the organization should change, update, or delete any of
  those requirements based on publicly available, up-to-date,
  evidence-based, and peer-reviewed clinical criteria.
         (f)  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, including considering
  data on provider grievances filed with the office of ombudsman for
  Medicaid providers, to efficiently select cases for utilization
  review that aligns with the commission's priorities for improved
  outcomes; and
               (3)  use additional national measures the commission
  considers appropriate.
         (g)  Before posting on the commission's Internet website the
  findings of a Medicaid managed care organization's utilization
  review performance or assessing liquidated damages related to that
  performance, the commission shall allow the organization to review
  and dispute the findings and discuss concerns with the commission.
  The commission shall document comments from the organization not
  later than the 60th day after the date the comments are received.
  The commission shall post the comments along with the utilization
  review findings.
         (h)  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)  whether the organization denied, approved, or
  amended the prior authorization request; and
               (3)  whether a denied prior authorization request
  resulted in an internal appeal or a review by the external medical
  reviewer described by Section 533.00715 and the final decision in
  the appeal or review.
         (i)  The executive commissioner by rule shall determine the
  frequency with which the commission may request information under
  Subsection (h).
         (j)  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.
         (k)  To the extent feasible, the commission shall give
  guidance on aligning treatments and conditions subject to prior
  authorization to create uniformity among Medicaid managed care
  plans. The commission, in consultation with physicians, other
  relevant providers, and Medicaid managed care organizations, shall
  take into account differences in the region and recipient
  populations, including ages of those populations, served under a
  plan and other relevant factors.
         (l)  The commission by rule shall require each Medicaid
  managed care organization to submit to the commission at least
  annually:
               (1)  a list of the conditions and treatments subject to
  prior authorization under the managed care plan offered by the
  organization;
               (2)  a specific description of the documentation the
  organization requires to approve a prior authorization request;
               (3)  the effective date of each prior authorization
  requirement;
               (4)  a description of the basis of each prior
  authorization requirement and the applicable medical screening
  criteria; and
               (5)  the dates of each previous prior authorization
  review conducted under Subsection (e) and the results and findings
  of those reviews.
         (m)  The commission shall develop a template for a Medicaid
  managed care organization to use to post prior authorization
  information on the organization's Internet website.
         SECTION 10.  Section 533.00253, Government Code, is amended
  by adding Subsections (f), (g), and (h) 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 the
  recipient's completed care needs assessment.  The commission shall
  ensure the review does not delay the determination of the services
  to be provided to the recipient or the ability to authorize and
  initiate services. The commission shall require the parent's or
  representative's signature to verify the parent or representative
  received the opportunity to review the assessment with the care
  coordinator.  A Medicaid managed care organization may not delay
  the delivery of care pending the signature. The commission shall
  provide a parent or representative who disagrees with a care needs
  assessment an opportunity to dispute the assessment with the
  commission through a peer-to-peer review with the treating
  physician of choice.
         (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 and
  actionable data pertinent to a child's physical, behavioral, and
  long-term care needs. This subsection expires September 1, 2021.
         (h)  The advisory committee or a successor committee shall
  provide recommendations to the commission for the redesign of the
  private duty nursing assessment tools used in the STAR Kids managed
  care program based on observations from other states to be more
  comprehensive and allow for the streamlining of the documentation
  for prior authorization of private duty nursing.  This subsection
  expires September 1, 2021.
         SECTION 11.  Subchapter A, Chapter 533, Government Code, is
  amended by adding Sections 533.002533, 533.00271, 533.00282,
  533.00283, and 533.00284 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 Section 531.012 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 other measures the commission
  considers appropriate, which may include measures 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)  individually compare not-for-profit and
  for-profit managed care plans offered by Medicaid managed care
  organizations; and
               (2)  report to the commission the comparison between
  those plans on the following under the plans:
                     (A)  rates of:
                           (i)  inquiries and complaints about access
  to a provider in an enrollee's local area;
                           (ii)  grievances, as defined by Section
  533.027, received by the commission; and
                           (iii)  service denials for Medicaid-covered
  services;
                     (B)  the number of Medicaid providers within a
  specific provider type in an enrollee's local area;
                     (C)  outcomes of internal appeals and external
  medical reviews, including the number of appeals reversed;
                     (D)  outcomes of fair hearing requests;
                     (E)  constituent complaints brought to the
  Medicaid managed care organization's attention by an individual or
  entity, including a state legislator or the commission;
                     (F)  provider opinions of the Medicaid managed
  care organization's quality; and
                     (G)  differences in Medicaid managed care
  business and operation practices that may contribute to differences
  in recipient medical acuity.
         (c)  The commission shall require each Medicaid managed care
  organization to submit quarterly the information necessary to make
  the comparison described by Subsection (b).
         (d)  The external quality review organization 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.
         (e)  The external quality review organization shall conduct
  a study to determine whether Medicaid managed care organizations
  could provide care coordination remotely through technology,
  including synchronous audio-visual interaction.  Not later than
  September 1, 2020, the external quality review organization shall
  prepare and submit a written report of the results of the study to
  the commission.  This subsection expires September 1, 2021.
         Sec. 533.00282.  UTILIZATION REVIEW AND PRIOR AUTHORIZATION
  PROCEDURES.  In addition to the requirements of Section 533.005, a
  contract between a Medicaid managed care organization and the
  commission must require that:
               (1)  before issuing an adverse determination on a prior
  authorization request, the organization provide the physician
  requesting the prior authorization with a reasonable opportunity to
  discuss the request with another physician who practices in the
  same or a similar specialty, but not necessarily the same
  subspecialty, and has experience in treating the same category of
  population as the recipient on whose behalf the request is
  submitted;
               (2)  the organization review and issue determinations
  on prior authorization requests according to the following time
  frames:
                     (A)  with respect to a recipient who is
  hospitalized at the time of the request:
                           (i)  within one business day after receiving
  the request, except as provided by Subparagraphs (ii) and (iii);
                           (ii)  within 72 hours after receiving the
  request if the request is submitted by a provider of acute care
  inpatient services for services or equipment necessary to discharge
  the recipient from an inpatient facility; or
                           (iii)  within one hour after receiving the
  request if the request is related to poststabilization care or a
  life-threatening condition; or
                     (B)  with respect to a recipient who is not
  hospitalized at the time of the request, within three business days
  after receiving the request; and
               (3)  the organization:
                     (A)  have appropriate personnel reasonably
  available at a toll-free telephone number to respond to a prior
  authorization request between 6 a.m. and 6 p.m. central time Monday
  through Friday on each day that is not a legal holiday and between 9
  a.m. and noon central time on Saturday, Sunday, and legal holidays;
                     (B)  have a telephone system capable of receiving
  and recording incoming telephone calls for prior authorization
  requests after 6 p.m. central time Monday through Friday and after
  noon central time on Saturday, Sunday, and legal holidays; and
                     (C)  have appropriate personnel to respond to each
  call described by Paragraph (B) not later than 24 hours after
  receiving the call.
         Sec. 533.00283.  ANNUAL REVIEW OF PRIOR AUTHORIZATION
  REQUIREMENTS. (a) Each Medicaid managed care organization shall
  develop and implement a process to conduct an annual review of the
  organization's prior authorization requirements, other than a
  prior authorization requirement prescribed by or implemented under
  Section 531.073 for the vendor drug program. In conducting a
  review, the organization must:
               (1)  solicit, receive, and consider input from
  providers in the organization's provider network; and
               (2)  ensure that each prior authorization requirement
  is based on accurate, up-to-date, evidence-based, and
  peer-reviewed clinical criteria that distinguish, as appropriate,
  between categories, including age, of recipients for whom prior
  authorization requests are submitted.
         (b)  A Medicaid managed care organization may not impose a
  prior authorization requirement, other than a prior authorization
  requirement prescribed by or implemented under Section 531.073 for
  the vendor drug program, unless the organization has reviewed the
  requirement during the most recent annual review required under
  this section.
         Sec. 533.00284.  RECONSIDERATION FOLLOWING ADVERSE
  DETERMINATIONS ON CERTAIN PRIOR AUTHORIZATION REQUESTS. (a) In
  addition to the requirements of Section 533.005, a contract between
  a Medicaid managed care organization and the commission must
  include a requirement that the organization establish a process for
  reconsidering an adverse determination on a prior authorization
  request that resulted solely from the submission of insufficient or
  inadequate documentation.
         (b)  The process for reconsidering an adverse determination
  on a prior authorization request under this section must:
               (1)  allow a provider to, not later than the seventh
  business day following the date of the determination, submit any
  documentation that was identified as insufficient or inadequate in
  the notice provided under Section 531.024162;
               (2)  allow the physician requesting the prior
  authorization to discuss the request with another physician who
  practices in the same or a similar specialty, but not necessarily
  the same subspecialty, and has experience in treating the same
  category of population as the recipient on whose behalf the request
  is submitted; and
               (3)  require the Medicaid managed care organization to,
  not later than the first business day following the date the
  provider submits sufficient and adequate documentation under
  Subdivision (1), amend the determination to approve the prior
  authorization request.
         (c)  An adverse determination on a prior authorization
  request is considered a denial of services in an evaluation of the
  Medicaid managed care organization only if the determination is not
  amended under Subsection (b)(3).
         (d)  The process for reconsidering an adverse determination
  on a prior authorization request under this section does not
  affect:
               (1)  any related timelines, including the timeline for
  an internal appeal, an external medical review, or a Medicaid fair
  hearing; or
               (2)  any rights of a recipient to appeal a
  determination on a prior authorization request.
         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 after receiving the claim and [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;
               (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
  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 or, as applicable, the national core
  indicators adult consumer survey and the national core indicators
  child family survey for individuals with an intellectual or
  developmental disability;
                     (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:
                     (A)  not deny a reasonable prior authorization
  request or claim for a technical or minimal error; and
                     (B)  not abuse the appeals or external medical
  review process to deter a recipient or provider from requesting
  health care services;
               (28)  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 a review by the external medical reviewer 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; and
                     (B)  provide the commission and the recipient with
  a notice of continuing services;
               (29)  a requirement that the managed care organization
  comply with the external medical review procedure established under
  Section 533.00715 and comply with the external medical reviewer's
  determination; and
               (30)  a requirement that the managed care organization
  pay liquidated damages for each substantiated failure to adhere to
  contractual requirements.
         (g)  The commission shall provide guidance and additional
  education to managed care organizations regarding requirements
  under federal law and Subsection (a)(28) to continue to provide
  services during an internal appeal, an external medical review, 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.  INITIAL THERAPY EVALUATION IN CERTAIN
  MANAGED CARE PROGRAMS. A Medicaid managed care organization that
  provides health care services under the STAR Health program or the
  STAR Kids managed care program may require prior authorization for
  an initial therapy evaluation for a recipient only if the
  requirement aligns with clinical criteria.
         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. The commission shall use Medicaid
  managed care organization contract data to validate network
  adequacy determinations.
         (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 licensed providers of home and
  community-based services in the home who travel to a recipient to
  provide care. The commission shall develop and implement a process
  to assist Medicaid managed care organizations in implementing the
  network adequacy standards. 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 Subsections (d) and (e) 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).  The
  commission shall establish a procedure to ensure the commission's
  master file of Medicaid providers is accurate and up-to-date.
         (e)  The commission shall prepare and submit to the
  legislature not later than December 1, 2020, a report describing
  the procedure required by Subsection (d) and how the procedure
  improves the current method of verifying and updating provider
  lists and the master file described by that subsection.  This
  subsection expires September 1, 2021.
         SECTION 18.  Subchapter A, Chapter 533, Government Code, is
  amended by adding Section 533.00661 to read as follows:
         Sec. 533.00661.  PROVIDER INCENTIVES:  SELECTIVE PRIOR
  AUTHORIZATION REQUIREMENTS.  (a)  The commission may implement
  quality-based incentives designed to reduce the administrative
  burdens and number of prior authorization requirements for
  providers who are providing appropriate, quality care. The
  commission may include incentives under which Medicaid managed care
  organizations selectively require prior authorization for services
  ordered by providers based on provider performance on quality
  measures and adherence to evidence-based medicine or other
  contractual agreements, such as risk-sharing arrangements.
         (b)  Criteria for selectively requiring prior authorization
  described by Subsection (a) may include ordering or prescribing
  patterns that align with evidence-based guidelines or historically
  high prior authorization request approval rates.
         (c)  As part of the incentives under this section, the
  commission may encourage Medicaid managed care organizations to:
               (1)  use programs that selectively require prior
  authorization based on classifications of provider performance and
  adherence to evidence-based medicine;
               (2)  develop criteria, with the input of the providers
  or provider organizations, for the selection of providers to
  participate in the selective prior authorization programs and for
  their continued participation in the programs;
               (3)  make the criteria described by Subdivision (2)
  transparent and easily accessible to providers; and
               (4)  make appropriate adjustments to prior
  authorization requirements for providers participating in
  risk-based payment contracts.
         SECTION 19.  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 20.  Subchapter A, Chapter 533, Government Code, is
  amended by adding Section 533.00715 to read as follows:
         Sec. 533.00715.  EXTERNAL MEDICAL REVIEW. (a) In this
  section, "external medical reviewer" and "reviewer" mean 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 in accordance with applicable state law
  and rules.
         (b)  The commission shall contract with an independent
  external medical reviewer to conduct external medical reviews and
  review:
               (1)  the resolution of a recipient appeal related to a
  reduction in or denial of services on the basis of medical necessity
  in the Medicaid managed care program; or
               (2)  a denial by the commission of eligibility for a
  Medicaid program in which eligibility is based on a recipient's
  medical and functional needs.
         (c)  A Medicaid managed care organization may not have a
  financial relationship with or ownership interest in the external
  medical reviewer with which the commission contracts.
         (d)  The external medical reviewer with which the commission
  contracts must:
               (1)  be overseen by a medical director who is a
  physician licensed in this state; and
               (2)  employ or be able to consult with staff with
  experience in providing private duty nursing services and long-term
  services and supports.
         (e)  The commission shall establish a common procedure for
  reviews. The procedure must provide that a 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 service is not medically necessary. Medical necessity
  must be based on publicly available, up-to-date, evidence-based,
  and peer-reviewed clinical criteria. The reviewer shall conduct
  the review within a period specified by the commission. The
  commission shall also establish a procedure for expedited reviews
  that allows the reviewer to identify an appeal that requires an
  expedited resolution.
         (f)  An external medical review described by Subsection
  (b)(1) occurs after the internal Medicaid managed care organization
  appeal and before the Medicaid fair hearing and is granted when a
  recipient contests the internal appeal decision of the Medicaid
  managed care organization. An external medical review described by
  Subsection (b)(2) occurs after the eligibility denial and before
  the Medicaid fair hearing. The recipient or applicant, or the
  recipient's or applicant's parent or legally authorized
  representative, must affirmatively opt out of the external medical
  review to proceed to a Medicaid fair hearing without first
  participating in the external medical review.
         (g)  The external medical reviewer's determination of
  medical necessity establishes the minimum level of services a
  recipient must receive.
         (h)  The external medical reviewer shall require a Medicaid
  managed care organization, in an external medical review relating
  to a reduction in services, to submit a detailed reason for the
  reduction and supporting documents.
         (i)  The external medical reviewer shall establish and
  maintain an Internet portal through which a recipient may track the
  status and final disposition of a review.
         (j)  The external medical reviewer shall educate recipients
  and employees of Medicaid managed care organizations regarding
  appeal and review processes, options, and proper and improper
  denials of services on the basis of medical necessity.
         SECTION 21.  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 22.  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 23.  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 of Medicaid-covered services, appeals, and external
  medical reviews;
               (3)  outcomes of internal appeals and external medical
  reviews; and
               (4)  information for each organization related to
  external medical reviews 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 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 24.  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 disabilities, chronic
  health conditions, 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 clinical experts, physicians, hospitals, patient
  advocacy groups, and Medicaid managed care organizations. The
  commission shall also 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 disabilities and health and mental health
  conditions should be subject to extended prior authorization
  periods.
         (d)  The commission shall update the lists every two years
  with input from the medical care advisory committee established
  under Section 32.022, Human Resources Code.
         SECTION 25.  The heading to Section 533.015, Government
  Code, is amended to read as follows:
         Sec. 533.015.  [COORDINATION OF] EXTERNAL OVERSIGHT
  ACTIVITIES.
         SECTION 26.  Section 533.015, Government Code, is amended by
  adding Subsections (d) and (e) 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 within
  the office to permit the office to address specific risks and
  incentives related to risk-based and value-based arrangements.
         (e)  The commission's office of inspector general shall
  apply standards established in a contract between a Medicaid
  managed care organization and a provider to the extent the contract
  is allowed by a contract between the commission and a Medicaid
  managed care organization or state or federal law, rules, or
  policy.
         SECTION 27.  Subchapter A, Chapter 533, Government Code, is
  amended by adding Sections 533.026, 533.027, 533.028, 533.031, and
  533.032 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:
               (1)  "Comprehensive long-term services and supports
  provider" means a provider of long-term services and supports under
  Chapter 534 that ensures the coordinated, seamless delivery of the
  full range of services in a recipient's program plan. The term
  includes:
                     (A)  a provider under the ICF-IID program, as
  defined by Section 534.001; and
                     (B)  a provider under a Medicaid waiver program,
  as defined by Section 534.001.
               (2)  "Grievance" means any expression of
  dissatisfaction or dispute, other than a denial, expressing
  dissatisfaction with any aspect of a Medicaid managed care
  organization's operations, activities, or behavior. The term
  includes a complaint about access to a provider in a recipient's
  local area, a formal complaint, a request for an internal appeal, a
  request for an external medical review, 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:
                     (A)  a commission employee;
                     (B)  a Medicaid managed care organization;
                     (C)  a comprehensive long-term services and
  supports provider;
                     (D)  the commission's office of inspector
  general;
                     (E)  the commission's office of the ombudsman;
                     (F)  the office of ombudsman for Medicaid
  providers; or
                     (G)  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)  comprehensive long-term services and supports
  providers;
               (4)  the commission's office of inspector general;
               (5)  the commission's office of the ombudsman;
               (6)  the office of ombudsman for Medicaid providers;
  and
               (7)  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, comprehensive
  long-term services and supports providers, 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 shall:
               (1)  implement a data analytics program to aggregate
  rates of inquiries, complaints, calls, and denials; and
               (2)  include in each Medicaid managed care
  organization's quality rating:
                     (A)  the aggregate rating and data analysis; and
                     (B)  fair hearing requests and outcomes data.
         (g)  The commission's office of inspector general shall
  review the commission's duties under Subsection (f).
         (h)  The commission shall ensure that a comprehensive
  long-term services and supports provider may submit a grievance on
  behalf of a recipient.
         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 "service coordination" and "service
  management."
         (b)  The commission shall ensure a person 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 executive commissioner by rule shall determine
  which providers are eligible to have a Medicaid managed care
  organization's care coordinator on-site or available through
  virtual means at the provider's practice.  The commission shall
  ensure a care coordinator is reimbursed for care coordination
  services provided on-site or virtually and encourage managed care
  organizations to place care coordinators on-site or make the care
  coordinators available through virtual means.
         (g)  The commission shall ensure that care coordinators
  coordinate with physicians and other health care providers in
  compiling documentation to satisfy Medicaid managed care
  organization requirements, including prior authorization
  requirements.
         (h)  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.  The change in methodology must be
  clinical in nature.
         (i)  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.
         (j)  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 for a recipient that has an assigned
  care coordinator;
               (4)  notice of changes in the name or telephone number
  of a recipient's care coordinator for a recipient that has an
  assigned care coordinator;
               (5)  initiation of assessments and reassessments;
               (6)  establishment and regular updating of
  comprehensive, person-centered individual service plans;
               (7)  number of face-to-face and telephonic contacts for
  each care coordination level;
               (8)  care coordinator turnover rates; and
               (9)  follow-up after hospitalization.
         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,
  except to minimize the opportunity for fraud, waste, abuse, gross
  overuse, inappropriate or medically unnecessary care, or clinical
  abuse or misuse.
         Sec. 533.032.  NOTICE OF CONTRACT AMENDMENT. (a) For
  purposes of this section, "contract" includes a manual or document
  that is incorporated by reference into a contract.
         (b)  Subject to Subsection (d), the commission must provide
  notice of the commission's intent to amend a contract with a
  Medicaid managed care organization to and allow for the receipt of
  comments on the proposed amendment from:
               (1)  the Medicaid managed care organization;
               (2)  appropriate stakeholders, including organizations
  representing each provider type that provides health care services
  to recipients; and
               (3)  other interested parties.
         (c)  A contract amendment may not take effect before the 21st
  day after the date the commission provides notice under this
  section.
         (d)  The commission:
               (1)  shall provide the notice required by Subsection
  (b) by:
                     (A)  e-mail, if the commission has the e-mail
  address of the person to whom the commission is required to send the
  notice; and
                     (B)  posting the notice on the commission's
  Internet website;
               (2)  may provide the notice required by Subsection (b)
  in any other format the commission determines appropriate; and
               (3)  shall include in the notice required by Subsection
  (b):
                     (A)  the proposed contract amendment;
                     (B)  the method by which a person may comment on
  the proposed contract amendment; and
                     (C)  directions for providing comment.
         (e)  If the commission seeks to amend a contract in
  accordance with a change in state or federal law, rule, policy, or
  guideline, the commission shall make all reasonable efforts to
  ensure that the effective date of the contract amendment, subject
  to Subsections (b) and (c), is on or before the effective date of
  the change in state or federal law, rule, policy, or guideline.
         SECTION 28.  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 29.  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 30.  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 31.  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 32.  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 33.  This Act takes effect September 1, 2019.
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