85R24666 KFF-F     By: Raymond H.B. No. 3982     Substitute the following for H.B. No. 3982:     By:  Minjarez C.S.H.B. No. 3982       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.  Section 531.024172, Government Code, is amended   to read as follows:          Sec. 531.024172.  ELECTRONIC VISIT VERIFICATION SYSTEM;   REIMBURSEMENT OF CERTAIN RELATED CLAIMS. (a)  Subject to   Subsection (g), [In this section, "acute nursing services" has the   meaning assigned by Section 531.02417.          [(b)  If it is cost-effective and feasible,] the commission   shall, in accordance with federal law, implement an electronic   visit verification system to electronically verify [and document,]   through a telephone, global positioning, or computer-based system   that personal care services or attendant care services provided to   recipients under Medicaid, including personal care services or   attendant care services provided under the Texas Health Care   Transformation and Quality Improvement Program waiver issued under   Section 1115 of the federal Social Security Act (42 U.S.C. Section   1315) or any other Medicaid waiver program, are provided to   recipients in accordance with a prior authorization or plan of   care. The electronic visit verification system implemented under   this subsection must allow for verification of only the following[,   basic] information relating to the delivery of Medicaid [acute   nursing] services[, including]:                (1)  the type of service provided [the provider's   name];                (2)  the name of the recipient to whom the service is   provided [the recipient's name]; [and]                (3)  the date and times [time] the provider began   [begins] and ended the [ends each] service delivery visit;                (4)  the location, including the address, at which the   service was provided;                (5)  the name of the individual who provided the   service; and                (6)  other information the commission determines is   necessary to ensure the accurate adjudication of Medicaid claims.          (b)  The commission shall establish minimum requirements for   third-party entities seeking to provide electronic visit   verification system services to health care providers providing   Medicaid services and must certify that a third-party entity   complies with those minimum requirements before the entity may   provide electronic visit verification system services to a health   care provider.          (c)  The commission shall inform each Medicaid recipient who   receives personal care services or attendant care services that the   health care provider providing the services and the recipient are   each required to comply with the electronic visit verification   system.  A managed care organization that contracts with the   commission to provide health care services to Medicaid recipients   described by this subsection shall also inform recipients enrolled   in a managed care plan offered by the organization of those   requirements.          (d)  In implementing the electronic visit verification   system:                (1)  subject to Subsection (e), the executive   commissioner shall adopt compliance standards for health care   providers; and                (2)  the commission shall ensure that:                      (A)  the information required to be reported by   health care providers is standardized across managed care   organizations that contract with the commission to provide health   care services to Medicaid recipients and across commission   programs; and                      (B)  time frames for the maintenance of electronic   visit verification data by health care providers align with claims   payment time frames.          (e)  In establishing compliance standards for health care   providers under this section, the executive commissioner shall   consider:                (1)  the administrative burdens placed on health care   providers required to comply with the standards; and                (2)  the benefits of using emerging technologies for   ensuring compliance, including Internet-based, mobile   telephone-based, and global positioning-based technologies.          (f)  A health care provider that provides personal care   services or attendant care services to Medicaid recipients shall:                (1)  use an electronic visit verification system to   document the provision of those services;                (2)  comply with all documentation requirements   established by the commission;                (3)  comply with applicable federal and state laws   regarding confidentiality of recipients' information;                (4)  ensure that the commission or the managed care   organization with which a claim for reimbursement for a service is   filed may review electronic visit verification system   documentation related to the claim or obtain a copy of that   documentation at no charge to the commission or the organization;   and                (5)  at any time, allow the commission or a managed care   organization with which a health care provider contracts to provide   health care services to recipients enrolled in the organization's   managed care plan to have direct, on-site access to the electronic   visit verification system in use by the health care provider.          (g)  The commission may recognize a health care provider's   proprietary electronic visit verification system as complying with   this section and allow the health care provider to use that system   for a period determined by the commission if the commission   determines that the system:                (1)  complies with all necessary data submission,   exchange, and reporting requirements established under this   section;                (2)  meets all other standards and requirements   established under this section; and                (3)  has been in use by the health care provider since   at least June 1, 2014.          (h)  The commission or a managed care organization that   contracts with the commission to provide health care services to   Medicaid recipients may not pay a claim for reimbursement for   personal care services or attendant care services provided to a   recipient unless the information from the electronic visit   verification system corresponds with the information contained in   the claim and the services were provided consistent with a prior   authorization or plan of care.  A previously paid claim is subject   to retrospective review and recoupment if unverified.          (i)  The commission shall create a stakeholder work group   comprised of representatives of affected health care providers,   managed care organizations, and Medicaid recipients and   periodically solicit from that work group input regarding the   ongoing operation of the electronic visit verification system under   this section.          (j)  The executive commissioner may adopt rules necessary to   implement this section.          SECTION 2.  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 3.  Section 531.120, Government Code, is amended by   adding Subsection (c) to read as follows:          (c)  The commission shall provide the notice required by   Subsection (a) to a provider that is a hospital not later than the   90th day before the date the overpayment or debt that is the subject   of the notice must be paid.          SECTION 4.  Section 533.00281, Government Code, is   redesignated as Section 533.0121, Government Code, and amended to   read as follows:          Sec. 533.0121 [533.00281].  UTILIZATION REVIEW AND   FINANCIAL AUDIT PROCESS FOR [STAR + PLUS] MEDICAID MANAGED CARE   ORGANIZATIONS CONDUCTED BY OFFICE OF CONTRACT MANAGEMENT. (a) The   commission's office of contract management shall establish an   annual utilization review and financial audit process for managed   care organizations participating in the [STAR + PLUS] Medicaid   managed care program. The commission shall determine the topics to   be examined in a [the] review [process], except that with respect to   a managed care organization participating in the STAR + PLUS   Medicaid managed care program, the review [process] must include a   thorough investigation of the [each managed care] organization's   procedures for determining whether a recipient should be enrolled   in the STAR + PLUS home and community-based services and supports   (HCBS) program, including the conduct of functional assessments for   that purpose and records relating to those assessments.          (b)  The office of contract management shall use the   utilization review and financial audit process established under   this section to review each fiscal year:                (1)  each managed care organization [every managed care   organization] participating in the [STAR + PLUS] Medicaid managed   care program in this state for that organization's first five years   of participation; [or]                (2)  each managed care organization providing health   care services to a population of recipients new to receiving those   services through a Medicaid [only the] managed care delivery model   for the first three years that organization provides those services   to that population; or                (3)  managed care organizations that, using a   risk-based assessment process and evaluation of prior history, the   office determines have a higher likelihood of contract or financial   noncompliance [inappropriate client placement in the STAR + PLUS   home and community-based services and supports (HCBS) program].          (c)  In addition to the reviews required by Subsection (b),   the office of contract management shall use the utilization review   and financial audit process established under this section to   review each managed care organization participating in the Medicaid   managed care program at least once every five years.          (d)  In conjunction with the commission's office of contract   management, the commission shall provide a report to the standing   committees of the senate and house of representatives with   jurisdiction over Medicaid not later than December 1 of each year.   The report must:                (1)  summarize the results of the [utilization] reviews   conducted under this section during the preceding fiscal year;                (2)  provide analysis of errors committed by each   reviewed managed care organization; and                (3)  extrapolate those findings and make   recommendations for improving the efficiency of the Medicaid   managed care program.          (e)  If a [utilization] review conducted under this section   results in a determination to recoup money from a managed care   organization, the provider protections from liability under   Section 531.1133 apply [a service provider who contracts with the   managed care organization may not be held liable for the good faith   provision of services based on an authorization from the managed   care organization].          SECTION 5.  Section 533.005, Government Code, is amended by   amending Subsection (a) and adding Subsection (d) 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 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, as added by Chapter   1272 (S.B. 760), Acts of the 84th Legislature, Regular Session,   2015;                      (B)  as a condition of contract retention and   renewal:                            (i)  continue to comply with the provider   access standards established under Section 533.0061, as added by   Chapter 1272 (S.B. 760), Acts of the 84th Legislature, Regular   Session, 2015; 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, as added by Chapter 1272 (S.B. 760), Acts of the   84th Legislature, Regular Session, 2015;                      (C)  pay liquidated damages for each failure, as   determined by the commission, to comply with the provider access   standards established under Section 533.0061, as added by Chapter   1272 (S.B. 760), Acts of the 84th Legislature, Regular Session,   2015, 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), as added by   Chapter 1272 (S.B. 760), Acts of the 84th Legislature, Regular   Session, 2015, 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, as   added by Chapter 1272 (S.B. 760), Acts of the 84th Legislature,   Regular Session, 2015:                      (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 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.          (d)  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 6.  Subchapter A, Chapter 533, Government Code, is   amended by adding Section 533.00541 to read as follows:          Sec. 533.00541.  PRIOR AUTHORIZATION REQUIREMENTS FOR   CERTAIN POST-ACUTE CARE SERVICES. 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:                (1)  approve or pend a request from a provider of acute   care inpatient services for prior authorization for the following   services or equipment not later than 72 hours after receiving the   request to allow for a safe and timely discharge of a patient from   an inpatient facility:                      (A)  home health services;                      (B)  long-term services and supports, including   care provided through a nursing facility;                      (C)  private-duty nursing;                      (D)  therapy services; and                      (E)  durable medical equipment;                (2)  ensure that a provider described by Subdivision   (1) has an opportunity to engage in direct discussions with the   organization regarding the appropriate level of post-acute care   while a request for prior authorization is pending;                (3)  contact, notify, and negotiate with a provider   described by Subdivision (1) before approving a prior authorization   request for personal care services or attendant care services with   an expiration date different from the expiration date requested by   the provider;                (4)  submit to a provider of personal care services or   attendant care services any change to a recipient's service plan   relating to personal care services or attendant care services not   later than the fifth day before the date the plan is to be effective   for purposes of giving the provider time to initiate the change and   the recipient an opportunity to agree to the change, unless the   organization is changing the plan in order to meet an emerging need   for personal care services or attendant care services;                (5)  include on subsequent prior authorization   requests approved with a retroactive effective date an expiration   date that takes into account the date the service change described   by Subdivision (4) was implemented by the provider; and                (6)  provide complete electronic access to prior   authorizations through the organization's process required under   Section 533.005(a)(7-c).          SECTION 7.  Section 533.0055(b), Government Code, is amended   to read as follows:          (b)  The provider protection plan required under this   section must provide for:                (1)  prompt payment and proper reimbursement of   providers by managed care organizations;                (2)  prompt and accurate adjudication of claims   through:                      (A)  provider education on the proper submission   of clean claims and on appeals;                      (B)  acceptance of uniform forms, including HCFA   Forms 1500 and UB-92 and subsequent versions of those forms,   through an electronic portal; and                      (C)  the establishment of standards for claims   payments in accordance with a provider's contract;                (3)  adequate and clearly defined provider network   standards that are specific to provider type, including physicians,   general acute care facilities, and other provider types defined in   the commission's network adequacy standards [in effect on January   1, 2013], and that ensure choice among multiple providers to the   greatest extent possible;                (4)  a prompt credentialing process for providers;                (5)  uniform efficiency standards and requirements for   managed care organizations for the submission and electronic   tracking of prior authorization [preauthorization] requests for   services provided under Medicaid;                (6)  establishment of an electronic process, including   the use of an Internet portal, through which providers in any   managed care organization's provider network may:                      (A)  submit electronic claims, prior   authorization request forms and attachments [requests], claims   appeals and reconsiderations, clinical data, and other   documentation that the managed care organization requests for prior   authorization and claims processing, including an electronic   process that allows for the resubmission of a claim without a   requirement that the resubmitted claim be submitted in paper form   in order to avoid treatment of the resubmitted claim as a duplicate   claim; and                      (B)  obtain electronic remittance advice   documents, explanation of benefits statements, service plans under   the STAR Kids Medicaid managed care program, and other standardized   reports;                (7)  the measurement of the rates of retention by   managed care organizations of significant traditional providers;                (8)  the creation of a work group to review and make   recommendations to the commission concerning any requirement under   this subsection for which immediate implementation is not feasible   at the time the plan is otherwise implemented, including the   required process for submission and acceptance of attachments for   claims processing and prior authorization requests through an   electronic process under Subdivision (6) and, for any requirement   that is not implemented immediately, recommendations regarding the   expected:                      (A)  fiscal impact of implementing the   requirement; and                      (B)  timeline for implementation of the   requirement; and                (9)  any other provision that the commission determines   will ensure efficiency or reduce administrative burdens on   providers participating in a Medicaid managed care model or   arrangement.          SECTION 8.  Subchapter A, Chapter 533, Government Code, is   amended by adding Section 533.0058 to read as follows:          Sec. 533.0058.  RESTRICTIONS ON CERTAIN REIMBURSEMENT RATE   REDUCTIONS. (a)  In this section, "across-the-board provider   reimbursement rate reduction" means a provider reimbursement rate   reduction proposed by a managed care organization that the   commission determines is likely to affect more than 50 percent of a   particular type of provider participating in the organization's   provider network during the 12-month period following   implementation of the proposed reduction, regardless of whether:                (1)  the organization limits the proposed reduction to   specific service areas or provider types; or                (2)  the affected providers are likely to experience   differing percentages of rate reductions or amounts of lost revenue   as a result of the proposed reduction.          (b)  Except as provided by Subsection (e), a managed care   organization that contracts with the commission to provide health   care services to recipients may not implement a significant, as   determined by the commission, across-the-board provider   reimbursement rate reduction unless the organization:                (1)  at least 90 days before the proposed rate   reduction is to take effect:                      (A)  provides the commission and affected   providers with written notice of the proposed rate reduction; and                      (B)  makes a good faith effort to negotiate the   reduction with the affected providers; and                (2)  receives prior approval from the commission,   subject to Subsection (c).          (c)  An across-the-board provider reimbursement rate   reduction is considered to have received the commission's prior   approval for purposes of Subsection (b)(2) unless the commission   issues a written statement of disapproval not later than the 45th   day after the date the commission receives notice of the proposed   rate reduction from the managed care organization under Subsection   (b)(1)(A).          (d)  If a managed care organization proposes an   across-the-board provider reimbursement rate reduction in   accordance with this section and subsequently rejects alternative   rate reductions suggested by an affected provider, the organization   must provide the provider with written notice of that rejection,   including an explanation of the grounds for the rejection, before   implementing any rate reduction.          (e)  This section does not apply to rate reductions that are   implemented because of reductions to the Medicaid fee schedule or   cost containment initiatives that are specifically directed by the   legislature and implemented by the commission.          SECTION 9.  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 10.  Section 533.0071, Government Code, is amended   to read as follows:          Sec. 533.0071.  ADMINISTRATION OF CONTRACTS.  The   commission shall make every effort to improve the administration of   contracts with 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;                (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 and other contact information directly to   the commission for correction in the state eligibility system;                      (C)  promoting consistency and uniformity among   managed care organization policies, including policies relating to   the prior authorization processes [preauthorization process],   lengths of hospital stays, filing deadlines, levels of care, and   case management services; and                      (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 that complies with   Section 533.0055(b)(6) 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.          SECTION 11.  Section 533.0076, Government Code, is amended   by amending Subsection (c) and adding Subsection (d) to read as   follows:          (c)  The commission shall allow a recipient who is enrolled   in a managed care plan under this chapter to disenroll from that   plan and enroll in another managed care plan[:                [(1)]  at any time for cause in accordance with federal   law, including because:                (1)  the recipient moves out of the managed care   organization's service area;                (2)  the plan does not, on the basis of moral or   religious objections, cover the service the recipient seeks;                (3)  the recipient needs related services to be   performed at the same time, not all related services are available   within the organization's provider network, and the recipient's   primary care provider or another provider determines that receiving   the services separately would subject the recipient to unnecessary   risk;                (4)  for recipients of long-term services or supports,   the recipient would have to change the recipient's residential,   institutional, or employment supports provider based on that   provider's change in status from an in-network to an out-of-network   provider with the managed care organization and, as a result, would   experience a disruption in the recipient's residence or employment;   or                (5)  of another reason permitted under federal law,   including poor quality of care, lack of access to services covered   under the contract, or lack of access to providers experienced in   dealing with the recipient's care needs[; and                [(2)     once for any reason after the periods described   by Subsections (a) and (b)].          (d)  The commission shall implement a process by which the   commission verifies that a recipient is permitted to disenroll from   one managed care plan offered by a managed care organization and   enroll in another managed care plan, including a plan offered by   another managed care organization, before the disenrollment   occurs.          SECTION 12.  Subchapter A, Chapter 533, Government Code, is   amended by adding Section 533.0091 to read as follows:          Sec. 533.0091.  CARE COORDINATION SERVICES. A managed care   organization that contracts with the commission to provide health   care services to recipients shall ensure that persons providing   care coordination services through 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.          SECTION 13.  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 14.  Subchapter A, Chapter 533, Government Code, is   amended by adding Section 533.01316 to read as follows:          Sec. 533.01316.  MANAGED CARE ORGANIZATION POLICIES FOR   CERTAIN HOSPITAL STAYS. The commission shall ensure that managed   care organizations that contract with the commission to provide   health care services to recipients have policies regarding   treatment and services related to a recipient's inpatient hospital   stay, including a behavioral health hospital stay, that is less   than 48 hours. For purposes of this section, the commission shall   ensure that the organization:                (1)  specifies criteria that:                      (A)  warrant reimbursement of services related to   the stay as either inpatient hospital services or outpatient   hospital services, including criteria for determining what   services constitute outpatient observation services;                      (B)  account for medical necessity based on   recognized inpatient criteria, the severity of any psychological   disorder, and the judgment of the treating physician or other   provider; and                      (C)  do not permit classification of services as   either inpatient or outpatient hospital services for purposes of   reimbursement based solely on the duration of the stay;                (2)  provides an opportunity for direct discussions   regarding the medical necessity of a recipient's inpatient hospital   admission; and                (3)  reviews documentation in a recipient's medical   record that supports the medical necessity of the inpatient   hospital stay at the time of admission for reimbursement of   services related to the stay.          SECTION 15.  Subchapter B, Chapter 534, Government Code, is   amended by adding Section 534.0511 to read as follows:          Sec. 534.0511.  ENSURING PROVISION OF MEDICALLY NECESSARY   SERVICES. (a) This section applies only to an individual with an   intellectual or developmental disability who is receiving services   under a Medicaid waiver program or ICF-IID program and who requires   medically necessary acute care services or long-term services and   supports that are not available to the individual through the   delivery model implemented under this chapter.          (b)  Notwithstanding any other law, the Medicaid waiver   program or ICF-IID program that serves an individual to which this   section applies shall pay the cost of the service and may submit to   the commission a claim for reimbursement for the cost of that   service.          (c)  If the commission determines that a claim paid by the   commission under Subsection (b) should have been covered and paid   by a managed care organization that contracts with the commission,   the commission may recoup the entire cost of that claim from the   organization.          SECTION 16.  (a) In this section, "commission" and   "Medicaid" have the meanings assigned by Section 531.001,   Government Code.          (b)  As soon as practicable after the effective date of this   Act, the commission shall develop and implement a pilot program in   up to three urban service delivery areas that is designed to   increase the incidence of ambulance service providers directing   recipients of Medicaid managed care program services who are   experiencing a behavioral health emergency to more appropriate   health care providers for treatment of behavioral health illnesses.          (c)  Not later than December 1, 2018, the commission shall   develop a report analyzing any cost savings and other benefits   realized as a result of the pilot program and deliver a copy of the   report to the governor, lieutenant governor, speaker of the house   of representatives, and chairs of the standing legislative   committees having primary jurisdiction over Medicaid.          (d)  This section expires January 1, 2019.          SECTION 17.  (a) In this section, "commission" and   "Medicaid" have the meanings assigned by Section 531.001,   Government Code.          (b)  Not later than November 30, 2017, the commission shall,   consistent with the purpose of Sections 533.0025(b) and (d),   Government Code, conduct a study to determine the   cost-effectiveness and feasibility of providing prescription drug   benefits to recipients of acute care services under Medicaid by   pharmacies with a Class A pharmacy license, as described by Section   560.051, Occupations Code, through a single statewide prescription   drug administrator that adheres to a pharmacy services   reimbursement methodology that uses:                (1)  the most accurate and transparent ingredient drug   pricing model;                (2)  the National Average Drug Acquisition Cost   published by the Centers for Medicare and Medicaid Services as the   drug acquisition cost; and                (3)  the most recent dispensing fee study contracted   for by the commission to set an accurate and transparent   professional dispensing fee as defined by 1 T.A.C. Section   355.8551.          (c)  In conducting a study under this section, the commission   shall:                (1)  for purposes of determining cost-effectiveness,   assume and calculate reductions to the anticipated capitation rate   paid to Medicaid managed care organizations, including reductions   resulting from:                      (A)  the elimination or reduction of the per   member per month administrative expense fee and the consolidation   of the contracts relating to the prescription drug benefits;                      (B)  the elimination of the guaranteed risk   margin; and                      (C)  any difference between pharmacy premiums   paid by the commission to managed care organizations and   prescription expenses reported by the managed care organizations   for the preceding four fiscal years;                (2)  determine and consider cost savings that would be   achieved through maintaining a single pharmacy claims database to   enhance patient quality outcomes through implementation of:                      (A)  a medication therapy management program;                      (B)  a prescription monitoring program;                      (C)  an adverse drug interaction avoidance   program; or                      (D)  other similar results-oriented programs   based on pay-for-performance outcome models;                (3)  determine and consider cost savings associated   with enhancing system audit capabilities and reducing contractor   and subcontractor noncompliance, including enhanced auditing   capabilities and reducing noncompliance in relation to:                      (A)  the payment of rebates;                      (B)  drug utilization;                      (C)  the use of prior authorization; and                      (D)  claims adjudication;                (4)  determine and consider cost savings associated   with improving patient access to prescribed medications;                (5)  determine and consider cost savings related to   further streamlining both the fee-for-service and managed care   prescription drug benefits under one contract;                (6)  assume that the administrator described by   Subsection (b) of this section is, if advantageous to the state,   subject to Chapter 222, Insurance Code; and                (7)  consider and determine whether the administrator   could be excluded from Section 9010 of the federal Patient   Protection and Affordable Care Act (Pub. L. No. 111-148), as   amended by the Health Care and Education Reconciliation Act of 2010   (Pub. L. No. 111-152).          (d)  This section does not apply to and the commission may   not consider in conducting the study required by this section the   provision of prescription drug benefits by long-term care facility   pharmacies and specialty pharmacies.          (e)  The commission shall combine the study required by this   section with any other similar study required to be conducted by the   commission.          (f)  Not later than November 30, 2017, the commission shall   report its findings under this section to the legislature.          (g)  This section expires December 31, 2017.          SECTION 18.  Section 533.005(a-3), Government Code, is   repealed.          SECTION 19.  As soon as practicable after the effective date   of this Act, the Health and Human Services Commission shall   implement an electronic visit verification system in accordance   with Section 531.024172, Government Code, as amended by this Act.          SECTION 20.  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 21.  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 22.  This Act takes effect September 1, 2017.