Bill Text: TX SB2082 | 2019-2020 | 86th Legislature | Introduced

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

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2019-03-21 - Referred to Health & Human Services [SB2082 Detail]

Download: Texas-2019-SB2082-Introduced.html

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86R14210 KFF-F
By: Hinojosa S.B. No. 2082

A BILL TO BE ENTITLED
AN ACT
relating to the Medicaid program, including the administration and
operation of the Medicaid managed care program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter C, Chapter 531, Government Code, is
amended by adding Section 531.1133 to read as follows:
Sec. 531.1133. PROVIDER NOT LIABLE FOR MANAGED CARE
ORGANIZATION OVERPAYMENT OR DEBT. (a) If the commission's office
of inspector general makes a determination to recoup an overpayment
or debt from a managed care organization that contracts with the
commission to provide health care services to Medicaid recipients,
a provider that contracts with the managed care organization may
not be held liable for the good faith provision of services under
the provider's contract with the managed care organization that
were provided with prior authorization.
(b) This section does not:
(1) limit the office of inspector general's authority
to recoup an overpayment or debt from a provider that is owed by the
provider as a result of the provider's failure to comply with
applicable law or a contract provision, notwithstanding any prior
authorization for a service provided; or
(2) apply to an action brought under Chapter 36, Human
Resources Code.
SECTION 2. Section 533.005, Government Code, is amended by
amending Subsection (a) and adding Subsection (e) 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 access to and 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) subject to Subdivision (7-b), 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 offered by the managed care organization on any
claim for payment that is received with documentation reasonably
necessary for the managed care organization to process the claim:
(A) not later than[:
[(i)] the 10th day after the date the claim
is received if the claim relates to services provided by a nursing
facility, intermediate care facility, or group home; and
(B) on average, not later than [(ii)] the 15th
[30th] day after the date the claim is received if the claim,
including a claim that relates to the provision of long-term
services and supports, is not subject to Paragraph (A)
[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 to
which [described by] Subdivision (7)(B) applies [(7)(A)(ii)] on
average not later than the 15th [21st] day after the date the claim
is received by the organization;
(7-b) a requirement that the managed care organization
demonstrate to the commission that, within each provider category
and service delivery area designated by the commission, the
organization pays at least 98 percent of claims within the times
prescribed by Subdivision (7);
(7-c) a requirement that the managed care organization
establish an electronic process for use by providers in submitting
claims documentation that complies with Section 533.0055(b)(6) and
allows providers to submit additional documentation on a claim when
the organization determines the claim was not submitted with
documentation reasonably necessary to process the claim;
(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 utilization [usages] of out-of-network providers or
groups of out-of-network providers may not exceed limits determined
by the commission, including limits [for those usages] relating to:
(A) total inpatient admissions, total outpatient
services, and emergency room admissions [determined by the
commission];
(B) acute care services not described by
Paragraph (A); and
(C) long-term services and supports;
(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 complaints and appeals related to claims
payment and prior authorization and service denials, including a
system [process] that will [require]:
(A) allow providers to electronically track and
determine [a tracking mechanism to document] the status and final
disposition of the [each] provider's [claims payment] appeal or
complaint, as applicable;
(B) require the contracting with physicians or
other health care providers who are not network providers and who
are of the same or a related specialty as the appealing physician or
other provider, as appropriate, to resolve claims disputes related
to denial on the basis of medical necessity that remain unresolved
subsequent to a provider appeal; and
(C) require the determination of the physician or
other health care provider resolving the dispute to be binding on
the managed care organization and the appealing 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;]
(15-a) a requirement that the managed care
organization make available on the organization's Internet website
summary information that is accessible to the public regarding the
number of provider appeals and the disposition of those appeals,
organized by provider and service types;
(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 Medicaid services to recipients [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) annually [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) and specific data
with respect to access to primary care, specialty care, long-term
services and supports, nursing services, and therapy services on:
(i) 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 average length of time between the
date the organization approves a request for prior authorization
for the care or service and the date the care or service is
initiated; and
(iii) the number of providers who are
accepting new patients;
(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;
(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 this [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; and
(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
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.
(e) In addition to the requirements specified by Subsection
(a), a contract described by that subsection must provide that if
the managed care organization has an ownership interest in a health
care provider in the organization's provider network, the
organization:
(1) must include in the provider network at least one
other health care provider of the same type in which the
organization does not have an ownership interest unless the
organization is able to demonstrate to the commission that the
provider included in the provider network is the only provider
located in an area that meets requirements established by the
commission relating to the time and distance a recipient is
expected to travel to receive services; and
(2) may not give preference in authorizing referrals
to the provider in which the organization has an ownership interest
as compared to other providers of the same or similar services
participating in the organization's provider network.
SECTION 3. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.00541 to read as follows:
Sec. 533.00541. PRIOR AUTHORIZATION REQUIREMENT FOR
CERTAIN POST-ACUTE CARE SERVICES BEFORE DISCHARGE.
Notwithstanding any other law and except as otherwise provided by a
settlement agreement filed with and approved by a court, the
commission shall require a managed care organization that contracts
with the commission to provide health care services to recipients
to, not later than 72 hours after receiving a request from a
provider of acute care inpatient services for prior authorization
for services or equipment to allow for discharge of a patient from
an inpatient facility, approve or pend the request.
SECTION 4. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.00611 to read as follows:
Sec. 533.00611. STANDARDS FOR DETERMINING MEDICAL
NECESSITY. (a) Except as provided by Subsection (b), the
commission shall establish standards that govern the processes,
criteria, and guidelines under which managed care organizations
determine the medical necessity of a health care service covered by
Medicaid. In establishing standards under this section, the
commission shall:
(1) ensure that each recipient has equal access in
scope and duration to the same covered health care services for
which the recipient is eligible, regardless of the managed care
organization with which the recipient is enrolled;
(2) provide managed care organizations with
flexibility to approve covered medically necessary services for
recipients that may not be within prescribed criteria and
guidelines;
(3) require managed care organizations to make
available to providers all criteria and guidelines used to
determine medical necessity through an Internet portal accessible
by the providers;
(4) ensure that managed care organizations
consistently apply the same medical necessity criteria and
guidelines for the approval of services and in retrospective
utilization reviews; and
(5) ensure that managed care organizations include in
any service or prior authorization denial specific information
about the medical necessity criteria or guidelines that were not
met.
(b) This section does not apply to or affect the
commission's authority to:
(1) determine medical necessity for home and
community-based services provided under the STAR+PLUS Medicaid
managed care program; or
(2) conduct utilization reviews of those services.
SECTION 5. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.0091 to read as follows:
Sec. 533.0091. CARE COORDINATION SERVICES. (a) In this
section:
(1) "Care coordination" means assisting recipients to
develop a plan of care, including an individual service plan, that
meets the recipient's needs and coordinating the provision of
Medicaid benefits in a manner that is consistent with the plan of
care. The term is synonymous with "case management," "service
coordination," and "service management."
(2) "Care coordinator" means a person, including a
case manager, engaged by a managed care organization that contracts
with the commission under this chapter to provide care coordination
services.
(b) A managed care organization that contracts with the
commission to provide health care services to recipients shall:
(1) ensure that care coordinators for the organization
coordinate with hospital discharge planners, who must notify the
organization of an inpatient admission of a recipient, to
facilitate the timely discharge of the recipient to the appropriate
level of care and minimize potentially preventable readmissions;
and
(2) provide comprehensive care coordination services
to adult recipients with multiple chronic conditions, including
trauma-related injuries, cardiac events, and cancer.
(c) For purposes of this chapter, the commission and a
managed care organization shall classify care coordination
services as medical services instead of as an administrative
service or expense.
SECTION 6. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.0122 to read as follows:
Sec. 533.0122. UTILIZATION REVIEW AUDITS CONDUCTED BY
OFFICE OF INSPECTOR GENERAL. (a) If the commission's office of
inspector general intends to conduct a utilization review audit of
a provider of services under a Medicaid managed care delivery
model, the office shall inform both the provider and the managed
care organization with which the provider contracts of any
applicable criteria and guidelines the office will use in the
course of the audit.
(b) The commission's office of inspector general shall
ensure that each person conducting a utilization review audit under
this section has experience and training regarding the operations
of managed care organizations.
(c) The commission's office of inspector general may not, as
the result of a utilization review audit, recoup an overpayment or
debt from a provider that contracts with a managed care
organization based on a determination that a provided service was
not medically necessary unless the office:
(1) uses the same criteria and guidelines that were
used by the managed care organization in its determination of
medical necessity for the service; and
(2) verifies with the managed care organization and
the provider that the provider:
(A) at the time the service was delivered, had
reasonable notice of the criteria and guidelines used by the
managed care organization to determine medical necessity; and
(B) did not follow the criteria and guidelines
used by the managed care organization to determine medical
necessity that were in effect at the time the service was delivered.
(d) If the commission's office of inspector general
conducts a utilization review audit that results in a determination
to recoup money from a managed care organization that contracts
with the commission to provide health care services to recipients,
the provider protections from liability under Section 531.1133
apply.
SECTION 7. Sections 531.02176 and 533.005(a-3), Government
Code, are repealed.
SECTION 8. Section 533.005, Government Code, as amended by
this Act, applies 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 9. If before implementing any provision of this Act
a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 10. This Act takes effect September 1, 2019.