83(R) SB 7 - Senate Committee Report version

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	By: Nelson, Patrick	S.B. No. 7
	(In the Senate - Filed January 16, 2013; January 28, 2013,
	read first time and referred to Committee on Health and Human
	Services; March 5, 2013, reported adversely, with favorable
	Committee Substitute by the following vote: Yeas 8, Nays 0;
	March 5, 2013, sent to printer.)

	COMMITTEE SUBSTITUTE FOR S.B. No. 7	By: Nelson


	A BILL TO BE ENTITLED
	AN ACT

	relating to improving the delivery and quality of certain health
	and human services, including the delivery and quality of Medicaid
	acute care services and long-term services and supports.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	ARTICLE 1. DELIVERY SYSTEM REDESIGN FOR THE PROVISION OF ACUTE CARE
	SERVICES AND LONG-TERM SERVICES AND SUPPORTS TO INDIVIDUALS WITH
	INTELLECTUAL AND DEVELOPMENTAL DISABILITIES
	SECTION 1.01. Subtitle I, Title 4, Government Code, is
	amended by adding Chapter 534 to read as follows:
	CHAPTER 534. SYSTEM REDESIGN FOR DELIVERY OF MEDICAID ACUTE CARE
	SERVICES AND LONG-TERM SERVICES AND SUPPORTS TO PERSONS WITH
	INTELLECTUAL AND DEVELOPMENTAL DISABILITIES
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 534.001. DEFINITIONS. In this chapter:
	(1) "Advisory committee" means the Intellectual and
	Developmental Disability System Redesign Advisory Committee
	established under Section 534.053.
	(2) "Basic attendant services" means assistance with
	the activities of daily living, including instrumental activities
	of daily living, provided to an individual because of a physical,
	cognitive, or behavioral limitation related to the individual's
	disability or chronic health condition.
	(3) "Department" means the Department of Aging and
	Disability Services.
	(4) "Habilitation services" includes assistance
	provided to an individual with acquiring, retaining, or improving:
	(A) skills related to the activities of daily
	living; and
	(B) the social and adaptive skills necessary to
	enable the individual to live and fully participate in the
	community.
	(5) "ICF-IID" means the Medicaid program serving
	individuals with intellectual and developmental disabilities who
	receive care in intermediate care facilities other than a state
	supported living center.
	(6) "ICF-IID program" means a program under the
	Medicaid program serving individuals with intellectual and
	developmental disabilities who reside in and receive care from:
	(A) intermediate care facilities licensed under
	Chapter 252, Health and Safety Code; or
	(B) community-based intermediate care facilities
	operated by local intellectual and developmental disability
	authorities.
	(7) "Local intellectual and developmental disability
	authority" means a local mental retardation authority described by
	Section 533.035, Health and Safety Code.
	(8) "Managed care organization," "managed care plan,"
	and "potentially preventable event" have the meanings assigned
	under Section 536.001.
	(9) "Medicaid program" means the medical assistance
	program established under Chapter 32, Human Resources Code.
	(10) "Medicaid waiver program" means only the
	following programs that are authorized under Section 1915(c) of the
	federal Social Security Act (42 U.S.C. Section 1396n(c)) for the
	provision of services to persons with intellectual and
	developmental disabilities:
	(A) the community living assistance and support
	services (CLASS) waiver program;
	(B) the home and community-based services (HCS)
	waiver program;
	(C) the deaf-blind with multiple disabilities
	(DBMD) waiver program; and
	(D) the Texas home living (TxHmL) waiver program.
	(11) "State supported living center" has the meaning
	assigned by Section 531.002, Health and Safety Code.
	Sec. 534.002. CONFLICT WITH OTHER LAW. To the extent of a
	conflict between a provision of this chapter and another state law,
	the provision of this chapter controls.
	SUBCHAPTER B. ACUTE CARE SERVICES AND LONG-TERM SERVICES AND
	SUPPORTS SYSTEM
	Sec. 534.051. ACUTE CARE SERVICES AND LONG-TERM SERVICES
	AND SUPPORTS SYSTEM FOR INDIVIDUALS WITH INTELLECTUAL AND
	DEVELOPMENTAL DISABILITIES. In accordance with this chapter, the
	commission and the department shall jointly design and implement an
	acute care services and long-term services and supports system for
	individuals with intellectual and developmental disabilities that
	supports the following goals:
	(1) provide Medicaid services to more individuals in a
	cost-efficient manner by providing the type and amount of services
	most appropriate to the individuals' needs;
	(2) improve individuals' access to services and
	supports by ensuring that the individuals receive information about
	all available programs and services, including employment and least
	restrictive housing assistance, and how to apply for the programs
	and services;
	(3) improve the assessment of individuals' needs and
	available supports;
	(4) promote person-centered planning, self-direction,
	self-determination, community inclusion, and customized gainful
	employment;
	(5) promote individualized budgeting based on an
	assessment of an individual's needs and person-centered planning;
	(6) promote integrated service coordination of acute
	care services and long-term services and supports;
	(7) improve acute care and long-term services and
	supports outcomes, including reducing unnecessary
	institutionalization and potentially preventable events;
	(8) promote high-quality care;
	(9) provide fair hearing and appeals processes in
	accordance with applicable federal law; and
	(10) ensure the availability of a local safety net
	provider and local safety net services.
	Sec. 534.052. IMPLEMENTATION OF SYSTEM REDESIGN. The
	commission and department shall, in consultation with the advisory
	committee, jointly implement the acute care services and long-term
	services and supports system for individuals with intellectual and
	developmental disabilities in the manner and in the stages
	described in this chapter.
	Sec. 534.053. INTELLECTUAL AND DEVELOPMENTAL DISABILITY
	SYSTEM REDESIGN ADVISORY COMMITTEE. (a) The Intellectual and
	Developmental Disability System Redesign Advisory Committee is
	established to advise the commission and the department on the
	implementation of the acute care services and long-term services
	and supports system redesign under this chapter. Subject to
	Subsection (b), the executive commissioner and the commissioner of
	the department shall jointly appoint members of the advisory
	committee who are stakeholders from the intellectual and
	developmental disabilities community, including:
	(1) individuals with intellectual and developmental
	disabilities who are recipients of Medicaid waiver program services
	or individuals who are advocates of those recipients;
	(2) representatives of health care providers
	participating in a Medicaid managed care program, including:
	(A) physicians who are primary care providers and
	physicians who are specialty care providers;
	(B) nonphysician mental health professionals;
	and
	(C) providers of long-term services and
	supports, including direct service workers;
	(3) representatives of entities with responsibilities
	for the delivery of Medicaid long-term services and supports or
	other Medicaid program service delivery, including:
	(A) independent living centers;
	(B) area agencies on aging;
	(C) aging and disability resource centers
	established under the Aging and Disability Resource Center
	initiative funded in part by the federal Administration on Aging
	and the Centers for Medicare and Medicaid Services;
	(D) community mental health and intellectual
	disability centers; and
	(E) the NorthSTAR Behavioral Health Program
	provided under Chapter 534, Health and Safety Code; and
	(4) representatives of managed care organizations
	contracting with the state to provide services to individuals with
	intellectual and developmental disabilities.
	(b) To the greatest extent possible, the executive
	commissioner and the commissioner of the department shall appoint
	members of the advisory committee who reflect the geographic
	diversity of the state and include members who represent rural
	Medicaid program recipients.
	(c) The executive commissioner shall appoint the presiding
	officer of the advisory committee.
	(d) The advisory committee must meet at least quarterly or
	more frequently if the presiding officer determines that it is
	necessary to address planning and development needs related to
	implementation of the acute care services and long-term services
	and supports system.
	(e) A member of the advisory committee serves without
	compensation. A member of the advisory committee who is a Medicaid
	program recipient or the relative of a Medicaid program recipient
	is entitled to a per diem allowance and reimbursement at rates
	established in the General Appropriations Act.
	(f) The advisory committee is subject to the requirements of
	Chapter 551.
	(g) On January 1, 2024:
	(1) the advisory committee is abolished; and
	(2) this section expires.
	Sec. 534.054. ANNUAL REPORT ON IMPLEMENTATION. (a) Not
	later than December 1 of each year, the commission shall submit a
	report to the legislature regarding:
	(1) the implementation of the system required by this
	chapter, including appropriate information regarding the provision
	of acute care services and long-term services and supports to
	individuals with intellectual and developmental disabilities under
	the Medicaid program; and
	(2) recommendations, including recommendations
	regarding appropriate statutory changes to facilitate the
	implementation.
	(b) This section expires January 1, 2024.
	SUBCHAPTER C. STAGE ONE: PROGRAMS TO IMPROVE SERVICE
	DELIVERY MODELS
	Sec. 534.101. DEFINITIONS. In this subchapter:
	(1) "Capitation" means a method of compensating a
	provider on a monthly basis for providing or coordinating the
	provision of a defined set of services and supports that is based on
	a predetermined payment per services recipient.
	(2) "Provider" means a person with whom the commission
	contracts for the provision of long-term services and supports
	under the Medicaid program to a specific population based on
	capitation.
	Sec. 534.102. PILOT PROGRAMS TO TEST MANAGED CARE
	STRATEGIES BASED ON CAPITATION. The commission and the department
	may develop and implement pilot programs in accordance with this
	subchapter to test one or more service delivery models involving a
	managed care strategy based on capitation to deliver long-term
	services and supports under the Medicaid program to individuals
	with intellectual and developmental disabilities.
	Sec. 534.103. STAKEHOLDER INPUT. As part of developing and
	implementing a pilot program under this subchapter, the department
	shall develop a process to receive and evaluate input from
	statewide stakeholders and stakeholders from the region of the
	state in which the pilot program will be implemented.
	Sec. 534.104. MANAGED CARE STRATEGY PROPOSALS; PILOT
	PROGRAM SERVICE PROVIDERS. (a) The department shall identify
	private services providers that are good candidates to develop a
	service delivery model involving a managed care strategy based on
	capitation and to test the model in the provision of long-term
	services and supports under the Medicaid program to individuals
	with intellectual and developmental disabilities through a pilot
	program established under this subchapter.
	(b) The department shall solicit managed care strategy
	proposals from the private services providers identified under
	Subsection (a).
	(c) A managed care strategy based on capitation developed
	for implementation through a pilot program under this subchapter
	must be designed to:
	(1) increase access to long-term services and
	supports;
	(2) improve quality of acute care services and
	long-term services and supports;
	(3) promote meaningful outcomes by using
	person-centered planning, individualized budgeting, and
	self-determination, and promote community inclusion and customized
	gainful employment;
	(4) promote integrated service coordination of acute
	care services and long-term services and supports;
	(5) promote efficiency and the best use of funding;
	(6) promote the placement of an individual in housing
	that is the least restrictive setting appropriate to the
	individual's needs;
	(7) promote employment assistance and supported
	employment;
	(8) provide fair hearing and appeals processes in
	accordance with applicable federal law; and
	(9) promote sufficient flexibility to achieve the
	goals listed in this section through the pilot program.
	(d) The department, in consultation with the advisory
	committee, shall evaluate each submitted managed care strategy
	proposal and determine whether:
	(1) the proposed strategy satisfies the requirements
	of this section; and
	(2) the private services provider that submitted the
	proposal has a demonstrated ability to provide the long-term
	services and supports appropriate to the individuals who will
	receive services through the pilot program based on the proposed
	strategy, if implemented.
	(e) Based on the evaluation performed under Subsection (d),
	the department may select as pilot program service providers one or
	more private services providers.
	(f) For each pilot program service provider, the department
	shall develop and implement a pilot program. Under a pilot program,
	the pilot program service provider shall provide long-term services
	and supports under the Medicaid program to persons with
	intellectual and developmental disabilities to test its managed
	care strategy based on capitation.
	(g) The department shall analyze information provided by
	the pilot program service providers and any information collected
	by the department during the operation of the pilot programs for
	purposes of making a recommendation about a system of programs and
	services for implementation through future state legislation or
	rules.
	Sec. 534.105. PILOT PROGRAM: MEASURABLE GOALS. (a) The
	department, in consultation with the advisory committee, shall
	identify measurable goals to be achieved by each pilot program
	implemented under this subchapter. The identified goals must:
	(1) align with information that will be collected
	under Section 534.108(a); and
	(2) be designed to improve the quality of outcomes for
	individuals receiving services through the pilot program.
	(b) The department, in consultation with the advisory
	committee, shall propose specific strategies for achieving the
	identified goals. A proposed strategy may be evidence-based if
	there is an evidence-based strategy available for meeting the pilot
	program's goals.
	Sec. 534.106. IMPLEMENTATION, LOCATION, AND DURATION.
	(a) The commission and the department shall implement any pilot
	programs established under this subchapter not later than September
	1, 2016.
	(b) A pilot program established under this subchapter must
	operate for not less than 24 months, except that a pilot program may
	cease operation before the expiration of 24 months if the pilot
	program service provider terminates the contract with the
	commission before the agreed-to termination date.
	(c) A pilot program established under this subchapter shall
	be conducted in one or more regions selected by the department.
	Sec. 534.107. COORDINATING SERVICES. In providing
	long-term services and supports under the Medicaid program to an
	individual with intellectual or developmental disabilities, a
	pilot program service provider shall:
	(1) coordinate through the pilot program
	institutional and community-based services available to the
	individual, including services provided through:
	(A) a facility licensed under Chapter 252, Health
	and Safety Code;
	(B) a Medicaid waiver program; or
	(C) a community-based ICF-IID operated by local
	authorities;
	(2) collaborate with managed care organizations to
	provide integrated coordination of acute care services and
	long-term services and supports, including discharge planning from
	acute care services to community-based long-term services and
	supports;
	(3) have a process for preventing inappropriate
	institutionalizations of individuals; and
	(4) accept the risk of inappropriate
	institutionalizations of individuals previously residing in
	community settings.
	Sec. 534.108. PILOT PROGRAM INFORMATION. (a) The
	commission and the department shall collect and compute the
	following information with respect to each pilot program
	implemented under this subchapter to the extent it is available:
	(1) the difference between the average monthly cost
	per person for all acute care services and long-term services and
	supports received by individuals participating in the pilot program
	while the program is operating, including services provided through
	the pilot program and other services with which pilot program
	services are coordinated as described by Section 534.107, and the
	average cost per person for all services received by the
	individuals before the operation of the pilot program;
	(2) the percentage of individuals receiving services
	through the pilot program who begin receiving services in a
	nonresidential setting instead of from a facility licensed under
	Chapter 252, Health and Safety Code, or any other residential
	setting;
	(3) the difference between the percentage of
	individuals receiving services through the pilot program who live
	in non-provider-owned housing during the operation of the pilot
	program and the percentage of individuals receiving services
	through the pilot program who lived in non-provider-owned housing
	before the operation of the pilot program;
	(4) the difference between the average total Medicaid
	cost, by level of need, for individuals in various residential
	settings receiving services through the pilot program during the
	operation of the program and the average total Medicaid cost, by
	level of need, for those individuals before the operation of the
	program;
	(5) the difference between the percentage of
	individuals receiving services through the pilot program who obtain
	and maintain employment in meaningful, integrated settings during
	the operation of the program and the percentage of individuals
	receiving services through the program who obtained and maintained
	employment in meaningful, integrated settings before the operation
	of the program;
	(6) the difference between the percentage of
	individuals receiving services through the pilot program whose
	behavioral, medical, life-activity, and other personal outcomes
	have improved since the beginning of the program and the percentage
	of individuals receiving services through the program whose
	behavioral, medical, life-activity, and other personal outcomes
	improved before the operation of the program, as measured over a
	comparable period; and
	(7) a comparison of the overall client satisfaction
	with services received through the pilot program, including for
	individuals who leave the program after a determination is made in
	the individuals' cases at hearings or on appeal, and the overall
	client satisfaction with services received before the individuals
	entered the pilot program.
	(b) The pilot program service provider shall collect any
	information described by Subsection (a) that is available to the
	provider and provide the information to the department and the
	commission not later than the 30th day before the date the program's
	operation concludes.
	(c) In addition to the information described by Subsection
	(a), the pilot program service provider shall collect any
	information specified by the department for use by the department
	in making an evaluation under Section 534.104(g).
	(d) On or before December 1, 2016, and December 1, 2017, the
	commission and the department, in consultation with the advisory
	committee, shall review and evaluate the progress and outcomes of
	each pilot program implemented under this subchapter and submit a
	report to the legislature during the operation of the pilot
	programs. Each report must include recommendations for program
	improvement and continued implementation.
	Sec. 534.109. PERSON-CENTERED PLANNING. The commission, in
	cooperation with the department, shall ensure that each individual
	with intellectual or developmental disabilities who receives
	services and supports under the Medicaid program through a pilot
	program established under this subchapter, or the individual's
	legally authorized representative, has access to a facilitated,
	person-centered plan that identifies outcomes for the individual
	and drives the development of the individualized budget. The
	consumer direction model, as defined by Section 531.051, may be an
	outcome of the plan.
	Sec. 534.110. TRANSITION BETWEEN PROGRAMS. The commission
	shall ensure that there is a comprehensive plan for transitioning
	the provision of Medicaid program benefits between a Medicaid
	waiver program and a pilot program under this subchapter to protect
	continuity of care.
	Sec. 534.111. CONCLUSION OF PILOT PROGRAMS; EXPIRATION. On
	September 1, 2018:
	(1) each pilot program established under this
	subchapter that is still in operation must conclude; and
	(2) this subchapter expires.
	SUBCHAPTER D. STAGE ONE: PROVISION OF ACUTE CARE AND
	CERTAIN OTHER SERVICES
	Sec. 534.151. DELIVERY OF ACUTE CARE SERVICES FOR
	INDIVIDUALS WITH INTELLECTUAL AND DEVELOPMENTAL DISABILITIES. The
	commission shall provide acute care Medicaid program benefits to
	individuals with intellectual and developmental disabilities
	through the STAR + PLUS Medicaid managed care program or the most
	appropriate integrated capitated managed care program delivery
	model.
	Sec. 534.152. DELIVERY OF CERTAIN OTHER SERVICES UNDER STAR
	+ PLUS AND STAR KIDS MEDICAID MANAGED CARE PROGRAMS. The commission
	shall implement the most cost-effective option for the delivery of
	basic attendant and habilitation services for individuals with
	intellectual and developmental disabilities under the STAR + PLUS
	and STAR Kids Medicaid managed care programs that maximizes federal
	funding for the delivery of services across those and other similar
	programs.
	SUBCHAPTER E. STAGE TWO: TRANSITION OF LONG-TERM CARE MEDICAID
	WAIVER PROGRAM RECIPIENTS TO INTEGRATED MANAGED CARE SYSTEM
	Sec. 534.201. TRANSITION OF RECIPIENTS UNDER TEXAS HOME
	LIVING (TxHmL) WAIVER PROGRAM TO MANAGED CARE PROGRAM. (a) This
	section applies to individuals with intellectual and developmental
	disabilities who are receiving long-term services and supports
	under the Texas home living (TxHmL) waiver program on the date the
	commission implements the transition described by Subsection (b).
	(b) Not later than September 1, 2017, the commission shall
	transition the provision of Medicaid program benefits to
	individuals to whom this section applies to the STAR + PLUS Medicaid
	managed care program delivery model or the most appropriate
	integrated capitated managed care program delivery model, as
	determined by the commission based on cost-effectiveness and the
	experience of the STAR + PLUS Medicaid managed care program in
	providing basic attendant and habilitation services and of the
	pilot programs established under Subchapter C, subject to
	Subsection (c)(1).
	(c) At the time of the transition described by Subsection
	(b), the commission shall determine whether to:
	(1) continue operation of the Texas home living
	(TxHmL) waiver program for purposes of providing supplemental
	long-term services and supports not available under the managed
	care program delivery model selected by the commission; or
	(2) provide all or a portion of the long-term services
	and supports previously available under the Texas home living
	(TxHmL) waiver program through the managed care program delivery
	model selected by the commission.
	(d) In implementing the transition described by Subsection
	(b), the commission shall develop a process to receive and evaluate
	input from interested statewide stakeholders that is in addition to
	the input provided by the advisory committee.
	(e) The commission shall ensure that there is a
	comprehensive plan for transitioning the provision of Medicaid
	program benefits under this section that protects the continuity of
	care provided to individuals to whom this section applies.
	Sec. 534.202. TRANSITION OF ICF-IID PROGRAM RECIPIENTS AND
	CERTAIN OTHER MEDICAID WAIVER PROGRAM RECIPIENTS TO MANAGED CARE
	PROGRAM. (a) This section applies to individuals with
	intellectual and developmental disabilities who, on the date the
	commission implements the transition described by Subsection (b),
	are receiving long-term services and supports under:
	(1) a Medicaid waiver program other than the Texas
	home living (TxHmL) waiver program; or
	(2) an ICF-IID program.
	(b) After implementing the transition required by Section
	534.201 but not later than September 1, 2020, the commission shall
	transition the provision of Medicaid program benefits to
	individuals to whom this section applies to the STAR + PLUS Medicaid
	managed care program delivery model or the most appropriate
	integrated capitated managed care program delivery model, as
	determined by the commission based on cost-effectiveness and the
	experience of the transition of Texas home living (TxHmL) waiver
	program recipients to a managed care program delivery model under
	Section 534.201, subject to Subsection (c)(1).
	(c) At the time of the transition described by Subsection
	(b), the commission shall determine whether to:
	(1) continue operation of the Medicaid waiver programs
	or Medicaid ICF-IID program for purposes of providing supplemental
	long-term services and supports not available under the managed
	care program delivery model selected by the commission; or
	(2) provide all or a portion of the long-term services
	and supports previously available under the Medicaid waiver
	programs or Medicaid ICF-IID program through the managed care
	program delivery model selected by the commission.
	(d) In implementing the transition described by Subsection
	(b), the commission shall develop a process to receive and evaluate
	input from interested statewide stakeholders that is in addition to
	the input provided by the advisory committee.
	(e) The commission shall ensure that there is a
	comprehensive plan for transitioning the provision of Medicaid
	program benefits under this section that protects the continuity of
	care provided to individuals to whom this section applies.
	(f) Before transitioning the provision of Medicaid program
	benefits for children under this section, a managed care
	organization providing services under the managed care program
	delivery model selected by the commission must demonstrate to the
	satisfaction of the commission that the organization's network of
	providers has experience and expertise in the provision of services
	to children with intellectual and developmental disabilities.
	SECTION 1.02. Not later than October 1, 2013, the executive
	commissioner of the Health and Human Services Commission and the
	commissioner of the Department of Aging and Disability Services
	shall appoint the members of the Intellectual and Developmental
	Disability System Redesign Advisory Committee as required by
	Section 534.053, Government Code, as added by this article.
	SECTION 1.03. The Health and Human Services Commission
	shall submit:
	(1) the initial report on the implementation of the
	acute care services and long-term services and supports system for
	individuals with intellectual and developmental disabilities as
	required by Section 534.054, Government Code, as added by this
	article, not later than December 1, 2014; and
	(2) the final report under that section not later than
	December 1, 2023.
	SECTION 1.04. Not later than June 1, 2016, the Health and
	Human Services Commission shall submit a report to the legislature
	regarding the commission's experience in, including the
	cost-effectiveness of, delivering basic attendant and habilitation
	services for individuals with intellectual and developmental
	disabilities under the STAR + PLUS and STAR Kids Medicaid managed
	care programs under Section 534.152, Government Code, as added by
	this article.
	SECTION 1.05. The Health and Human Services Commission and
	the Department of Aging and Disability Services shall implement any
	pilot program to be established under Subchapter C, Chapter 534,
	Government Code, as added by this article, as soon as practicable
	after the effective date of this Act.
	SECTION 1.06. (a) The Health and Human Services Commission
	and the Department of Aging and Disability Services shall:
	(1) in consultation with the Intellectual and
	Developmental Disability System Redesign Advisory Committee
	established under Section 534.053, Government Code, as added by
	this article, review and evaluate the outcomes of:
	(A) the transition of the provision of benefits
	to individuals under the Texas home living (TxHmL) waiver program
	to a managed care program delivery model under Section 534.201,
	Government Code, as added by this article; and
	(B) the transition of the provision of benefits
	to individuals under the Medicaid waiver programs, other than the
	Texas home living (TxHmL) waiver program, and the ICF-IID program
	to a managed care program delivery model under Section 534.202,
	Government Code, as added by this article; and
	(2) submit as part of an annual report required by
	Section 534.054, Government Code, as added by this article, due on
	or before December 1 of 2018, 2019, and 2020, a report on the review
	and evaluation conducted under Paragraphs (A) and (B), Subdivision
	(1), of this subsection that includes recommendations for continued
	implementation of and improvements to the acute care and long-term
	services and supports system under Chapter 534, Government Code, as
	added by this article.
	(b) This section expires September 1, 2024.
	ARTICLE 2. MEDICAID MANAGED CARE EXPANSION
	SECTION 2.01. Section 533.0025, Government Code, is amended
	by amending Subsections (a) and (b) and adding Subsections (f),
	(g), and (h) to read as follows:
	(a) In this section and Sections 533.00251, 533.00252, and
	533.00253, "medical assistance" has the meaning assigned by Section
	32.003, Human Resources Code.
	(b) Notwithstanding [~~Except as otherwise provided by this~~
	~~section and notwithstanding~~] any other law, the commission shall
	provide medical assistance for acute care services through the most
	cost-effective model of Medicaid capitated managed care as
	determined by the commission. The [~~If the~~] commission shall
	require mandatory participation in a Medicaid capitated managed
	care program for all persons eligible for acute care [~~determines~~
	~~that it is more cost-effective, the commission may provide~~] medical
	assistance benefits [~~for acute care in a certain part of this state~~
	~~or to a certain population of recipients using:~~
	[~~(1)~~ ~~a health maintenance organization model,~~
	~~including the acute care portion of Medicaid Star + Plus pilot~~
	~~programs;~~
	[~~(2) a primary care case management model;~~
	[~~(3) a prepaid health plan model;~~
	[~~(4) an exclusive provider organization model; or~~
	[~~(5)~~ ~~another Medicaid managed care model or~~
	~~arrangement~~].
	(f) The commission shall:
	(1) conduct a study to evaluate the feasibility of
	automatically enrolling applicants determined eligible for
	benefits under the medical assistance program in a Medicaid managed
	care plan; and
	(2) report the results of the study to the legislature
	not later than December 1, 2014.
	(g) Subsection (f) and this subsection expire September 1,
	2015.
	(h) If the commission determines that it is feasible, the
	commission may, notwithstanding any other law, implement an
	automatic enrollment process under which applicants determined
	eligible for medical assistance benefits are automatically
	enrolled in a Medicaid managed care plan. The commission may elect
	to implement the automatic enrollment process as to certain
	populations of recipients under the medical assistance program.
	SECTION 2.02. Subchapter A, Chapter 533, Government Code,
	is amended by adding Sections 533.00251, 533.00252, and 533.00253
	to read as follows:
	Sec. 533.00251. DELIVERY OF NURSING FACILITY BENEFITS
	THROUGH STAR + PLUS MEDICAID MANAGED CARE PROGRAM. (a) In this
	section and Section 533.00252:
	(1) "Advisory committee" means the STAR + PLUS Nursing
	Facility Advisory Committee established under Section 533.00252.
	(2) "Nursing facility" means a convalescent or nursing
	home or related institution licensed under Chapter 242, Health and
	Safety Code, that provides long-term services and supports to
	Medicaid recipients.
	(3) "Potentially preventable event" has the meaning
	assigned by Section 536.001.
	(b) The commission shall expand the STAR + PLUS Medicaid
	managed care program to all areas of this state to serve individuals
	eligible for acute care services and long-term services and
	supports under the medical assistance program.
	(c) Notwithstanding any other law, the commission, in
	consultation with the advisory committee, shall provide benefits
	under the medical assistance program to recipients who reside in
	nursing facilities through the STAR + PLUS Medicaid managed care
	program. In implementing this subsection, the commission shall
	ensure:
	(1) that the commission is responsible for setting the
	minimum reimbursement rate paid to a nursing facility under the
	managed care program, including the staff rate enhancement paid to
	a nursing facility that qualifies for the enhancement;
	(2) that a nursing facility is paid not later than the
	10th day after the date the facility submits a clean claim;
	(3) the appropriate utilization of services;
	(4) a reduction in the incidence of potentially
	preventable events and unnecessary institutionalizations;
	(5) that a managed care organization providing
	services under the managed care program provides discharge
	planning, transitional care, and other education programs to
	physicians and hospitals regarding all available long-term care
	settings;
	(6) that a managed care organization providing
	services under the managed care program provides payment incentives
	to nursing facility providers that reward reductions in preventable
	acute care costs and encourage transformative efforts in the
	delivery of nursing facility services, including efforts to promote
	a resident-centered care culture through facility design and
	services provided; and
	(7) the establishment of a single portal through which
	nursing facility providers participating in the STAR + PLUS
	Medicaid managed care program may submit claims to any
	participating managed care organization.
	(d) Subject to Subsection (e), the commission shall ensure
	that a nursing facility provider authorized to provide services
	under the medical assistance program on September 1, 2013, is
	allowed to participate in the STAR + PLUS Medicaid managed care
	program through August 31, 2016. This subsection expires September
	1, 2017.
	(e) The commission shall establish credentialing and
	minimum performance standards for nursing facility providers
	seeking to participate in the STAR + PLUS Medicaid managed care
	program. A managed care organization may refuse to contract with a
	nursing facility provider if the nursing facility does not meet the
	minimum performance standards established by the commission under
	this section.
	Sec. 533.00252. STAR + PLUS NURSING FACILITY ADVISORY
	COMMITTEE. (a) The STAR + PLUS Nursing Facility Advisory
	Committee is established to advise the commission on the
	implementation of and other activities related to the provision of
	medical assistance benefits to recipients who reside in nursing
	facilities through the STAR + PLUS Medicaid managed care program
	under Section 533.00251, including advising the commission
	regarding its duties with respect to:
	(1) developing quality-based outcomes and process
	measures for long-term services and supports provided in nursing
	facilities;
	(2) developing quality-based long-term care payment
	systems and quality initiatives for nursing facilities;
	(3) transparency of information received from managed
	care organizations;
	(4) the reporting of outcome and process measures;
	(5) the sharing of data among health and human
	services agencies; and
	(6) patient care coordination, quality of care
	improvement, and cost savings.
	(b) The executive commissioner shall appoint the members of
	the advisory committee. The committee must consist of nursing
	facility providers, representatives of managed care organizations,
	and other stakeholders interested in nursing facility services
	provided in this state, including:
	(1) at least one member who is a nursing facility
	provider with experience providing the long-term continuum of care,
	including home care and hospice;
	(2) at least one member who is a nonprofit nursing
	facility provider;
	(3) at least one member who is a for-profit nursing
	facility provider;
	(4) at least one member who is a consumer
	representative; and
	(5) at least one member who is from a managed care
	organization providing services as provided by Section 533.00251.
	(c) The executive commissioner shall appoint the presiding
	officer of the advisory committee.
	(d) A member of the advisory committee serves without
	compensation.
	(e) The advisory committee is subject to the requirements of
	Chapter 551.
	(f) On September 1, 2016:
	(1) the advisory committee is abolished; and
	(2) this section expires.
	Sec. 533.00253. STAR KIDS MEDICAID MANAGED CARE PROGRAM.
	(a) In this section:
	(1) "Health home" means a primary care provider
	practice, or, if appropriate, a specialty care provider practice,
	incorporating several features, including comprehensive care
	coordination, family-centered care, and data management, that are
	focused on improving outcome-based quality of care and increasing
	patient and provider satisfaction under the medical assistance
	program.
	(2) "Potentially preventable event" has the meaning
	assigned by Section 536.001.
	(b) The commission shall establish a mandatory STAR Kids
	capitated managed care program tailored to provide medical
	assistance benefits to children with disabilities. The managed
	care program developed under this section must:
	(1) provide medical assistance benefits that are
	customized to meet the health care needs of recipients under the
	program through a defined system of care, including benefits
	described under Section 534.152;
	(2) better coordinate care of recipients under the
	program;
	(3) improve the health outcomes of recipients;
	(4) improve recipients' access to health care
	services;
	(5) achieve cost containment and cost efficiency;
	(6) reduce the administrative complexity of
	delivering medical assistance benefits;
	(7) reduce the incidence of unnecessary
	institutionalizations and potentially preventable events by
	ensuring the availability of appropriate services and care
	management;
	(8) require a health home;
	(9) coordinate and collaborate with long-term care
	service providers and long-term care management providers, if
	recipients are receiving long-term services and supports outside of
	the managed care organization; and
	(10) coordinate services provided to children also
	receiving services under Section 534.152.
	(c) The commission shall provide medical assistance
	benefits through the STAR Kids managed care program established
	under this section to children who are receiving benefits under the
	medically dependent children (MDCP) waiver program. The commission
	shall ensure that the STAR Kids managed care program provides all or
	a portion of the benefits provided under the medically dependent
	children (MDCP) waiver program to the extent necessary to implement
	this subsection.
	(d) The commission shall ensure that there is a plan for
	transitioning the provision of Medicaid program benefits to
	recipients 21 years of age or older from under the STAR Kids program
	to under the STAR + PLUS Medicaid managed care program that protects
	continuity of care. The plan must ensure that coordination between
	the programs begins when a recipient reaches 18 years of age.
	SECTION 2.03. Section 32.0212, Human Resources Code, is
	amended to read as follows:
	Sec. 32.0212. DELIVERY OF MEDICAL ASSISTANCE.
	Notwithstanding any other law [~~and subject to Section 533.0025,~~
	~~Government Code~~], the department shall provide medical assistance
	for acute care services through the Medicaid managed care system
	implemented under Chapter 533, Government Code, or another Medicaid
	capitated managed care program.
	SECTION 2.04. Subsections (c) and (d), Section 533.0025,
	Government Code, and Subchapter D, Chapter 533, Government Code,
	are repealed.
	SECTION 2.05. (a) The Health and Human Services Commission
	and the Department of Aging and Disability Services shall:
	(1) review and evaluate the outcomes of the transition
	of the provision of benefits to recipients under the medically
	dependent children (MDCP) waiver program to the STAR Kids managed
	care program delivery model established under Section 533.00253,
	Government Code, as added by this article;
	(2) not later than December 1, 2016, submit an initial
	report to the legislature on the review and evaluation conducted
	under Subdivision (1) of this subsection, including
	recommendations for continued implementation and improvement of
	the program; and
	(3) not later than December 1 of each year after 2016
	and until December 1, 2020, submit additional reports that include
	the information described by Subdivision (1) of this subsection.
	(b) This section expires September 1, 2021.
	SECTION 2.06. As soon as practicable after the effective
	date of this Act, the Health and Human Services Commission shall
	provide a single portal through which nursing facility providers
	participating in the STAR + PLUS Medicaid managed care program may
	submit claims in accordance with Subdivision (7), Subsection (c),
	Section 533.00251, Government Code, as added by this article.
	SECTION 2.07. The changes in law made by this article are
	not intended to negatively affect Medicaid recipients' access to
	quality health care. The Health and Human Services Commission, as
	the state agency designated to supervise the administration and
	operation of the Medicaid program and to plan and direct the
	Medicaid program in each state agency that operates a portion of the
	Medicaid program, including directing the Medicaid managed care
	system, shall continue to timely enforce all laws applicable to the
	Medicaid program and the Medicaid managed care system, including
	laws relating to provider network adequacy, the prompt payment of
	claims, and the resolution of patient and provider complaints.
	ARTICLE 3. OTHER PROVISIONS RELATING TO INDIVIDUALS WITH
	INTELLECTUAL AND DEVELOPMENTAL DISABILITIES
	SECTION 3.01. Subchapter B, Chapter 533, Health and Safety
	Code, is amended by adding Section 533.0335 to read as follows:
	Sec. 533.0335. COMPREHENSIVE ASSESSMENT AND RESOURCE
	ALLOCATION PROCESS. (a) In this section:
	(1) "Advisory committee" means the Intellectual and
	Developmental Disability System Redesign Advisory Committee
	established under Section 534.053, Government Code.
	(2) "Department" means the Department of Aging and
	Disability Services.
	(3) "Functional need" means the measurement of an
	individual's services and support needs, including the individual's
	intellectual, psychiatric, medical, and physical support needs.
	(4) "Medicaid waiver program" has the meaning assigned
	by Section 534.001, Government Code.
	(b) Subject to the availability of federal funding, the
	department shall develop and implement a comprehensive assessment
	instrument and a resource allocation process. The assessment
	instrument and resource allocation process must be designed to
	recommend for each individual with intellectual and developmental
	disabilities enrolled in a Medicaid waiver program the type,
	intensity, and range of services that are both appropriate and
	available, based on the functional needs of that individual.
	(c) The department, in consultation with the advisory
	committee, shall establish a prior authorization process for
	requests for supervised living or residential support services
	available in the home and community-based services (HCS) Medicaid
	waiver program. The process must ensure that supervised living or
	residential support services available in the home and
	community-based services (HCS) Medicaid waiver program are
	available only to individuals for whom a more independent setting
	is not appropriate or available.
	(d) The department shall cooperate with the advisory
	committee to establish the prior authorization process required by
	Subsection (c). This subsection expires January 1, 2024.
	SECTION 3.02. Subchapter B, Chapter 533, Health and Safety
	Code, is amended by adding Sections 533.03551 and 533.03552 to read
	as follows:
	Sec. 533.03551. FLEXIBLE, LOW-COST HOUSING OPTIONS.
	(a) To the extent permitted under federal law and regulations, the
	executive commissioner shall adopt or amend rules as necessary to
	allow for the development of additional housing supports for
	individuals with intellectual and developmental disabilities in
	urban and rural areas, including:
	(1) a selection of community-based housing options
	that comprise a continuum of integration, varying from most to
	least restrictive, that permits individuals to select the most
	integrated and least restrictive setting appropriate to the
	individual's needs and preferences;
	(2) non-provider-owned residential settings;
	(3) assistance with living more independently; and
	(4) rental properties with on-site supports.
	(b) The Department of Aging and Disability Services, in
	cooperation with the Texas Department of Housing and Community
	Affairs, the Department of Agriculture, the Texas State Affordable
	Housing Corporation, and the Intellectual and Developmental
	Disability System Redesign Advisory Committee, shall coordinate
	with federal, state, and local public housing entities as necessary
	to expand opportunities for accessible, affordable, and integrated
	housing to meet the complex needs of individuals with intellectual
	and developmental disabilities.
	(c) The Department of Aging and Disability Services shall
	develop a process to receive input from statewide stakeholders to
	ensure the most comprehensive review of opportunities and options
	for housing services described by this section.
	Sec. 533.03552. BEHAVIORAL SUPPORTS FOR INDIVIDUALS WITH
	INTELLECTUAL AND DEVELOPMENTAL DISABILITIES AT RISK OF
	INSTITUTIONALIZATION; INTERVENTION TEAMS. (a) In this section,
	"department" means the Department of Aging and Disability Services.
	(b) Subject to the availability of federal funding, the
	department shall develop and implement specialized training for
	providers, family members, caregivers, and first responders
	providing direct services and supports to individuals with
	intellectual and developmental disabilities and behavioral health
	needs who are at risk of institutionalization.
	(c) Subject to the availability of federal funding, the
	department shall establish one or more behavioral health
	intervention teams to provide services and supports to individuals
	with intellectual and developmental disabilities and behavioral
	health needs who are at risk of institutionalization. An
	intervention team may include a:
	(1) psychiatrist or psychologist;
	(2) physician;
	(3) registered nurse;
	(4) pharmacist or representative of a pharmacy;
	(5) behavior analyst;
	(6) social worker;
	(7) crisis coordinator;
	(8) peer specialist; and
	(9) family partner.
	(d) In providing services and supports, a behavioral health
	intervention team established by the department shall:
	(1) use the team's best efforts to ensure that an
	individual remains in the community and avoids
	institutionalization;
	(2) focus on stabilizing the individual and assessing
	the individual for intellectual, medical, psychiatric,
	psychological, and other needs;
	(3) provide support to the individual's family members
	and other caregivers;
	(4) provide intensive behavioral assessment and
	training to assist the individual in establishing positive
	behaviors and continuing to live in the community; and
	(5) provide clinical and other referrals.
	(e) The department shall ensure that members of a behavioral
	health intervention team established under this section receive
	training on trauma-informed care, which is an approach to providing
	care to individuals with behavioral health needs based on awareness
	that a history of trauma or the presence of trauma symptoms may
	create the behavioral health needs of the individual.
	SECTION 3.03. (a) The Health and Human Services Commission
	and the Department of Aging and Disability Services shall conduct a
	study to identify crisis intervention programs currently available
	to, evaluate the need for appropriate housing for, and develop
	strategies for serving the needs of persons in this state with
	Prader-Willi syndrome.
	(b) In conducting the study, the Health and Human Services
	Commission and the Department of Aging and Disability Services
	shall seek stakeholder input.
	(c) Not later than December 1, 2014, the Health and Human
	Services Commission shall submit a report to the governor, the
	lieutenant governor, the speaker of the house of representatives,
	and the presiding officers of the standing committees of the senate
	and house of representatives having jurisdiction over the Medicaid
	program regarding the study required by this section.
	(d) This section expires September 1, 2015.
	ARTICLE 4. QUALITY-BASED OUTCOMES AND PAYMENT PROVISIONS
	SECTION 4.01. Subchapter A, Chapter 533, Government Code,
	is amended by adding Section 533.00254 to read as follows:
	Sec. 533.00254. MANAGED CARE CLINICAL IMPROVEMENT PROGRAM.
	(a) In consultation with the Medicaid and CHIP Quality-Based
	Payment Advisory Committee established under Section 536.002 and
	other appropriate stakeholders with an interest in the provision of
	acute care services and long-term services and supports under the
	Medicaid managed care program, the commission shall:
	(1) establish a clinical improvement program to
	identify goals designed to improve quality of care and care
	management and to reduce potentially preventable events, as defined
	by Section 536.001; and
	(2) require managed care organizations to develop and
	implement collaborative program improvement strategies to address
	the goals.
	(b) Goals established under this section may be set by
	geographical region and program type.
	SECTION 4.02. Subsections (a) and (g), Section 533.0051,
	Government Code, are amended to read as follows:
	(a) The commission shall establish outcome-based
	performance measures and incentives to include in each contract
	between a health maintenance organization and the commission for
	the provision of health care services to recipients that is
	procured and managed under a value-based purchasing model. The
	performance measures and incentives must:
	(1) be designed to facilitate and increase recipients'
	access to appropriate health care services; and
	(2) to the extent possible, align with other state and
	regional quality care improvement initiatives.
	(g) In performing the commission's duties under Subsection
	(d) with respect to assessing feasibility and cost-effectiveness,
	the commission may consult with participating Medicaid providers
	[~~physicians~~], including those with expertise in quality
	improvement and performance measurement[~~, and hospitals~~].
	SECTION 4.03. Subchapter A, Chapter 533, Government Code,
	is amended by adding Section 533.00511 to read as follows:
	Sec. 533.00511. QUALITY-BASED ENROLLMENT INCENTIVE PROGRAM
	FOR MANAGED CARE ORGANIZATIONS. (a) In this section, "potentially
	preventable event" has the meaning assigned by Section 536.001.
	(b) The commission shall create an incentive program that
	automatically enrolls a greater percentage of recipients who did
	not actively choose their managed care plan in a managed care plan,
	based on:
	(1) the quality of care provided through the managed
	care organization offering that managed care plan;
	(2) the organization's ability to efficiently and
	effectively provide services, taking into consideration the acuity
	of populations primarily served by the organization; and
	(3) the organization's performance with respect to
	exceeding, or failing to achieve, appropriate outcome and process
	measures developed by the commission, including measures based on
	all potentially preventable events.
	SECTION 4.04. 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 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 single 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.
	SECTION 4.05. Section 533.014, Government Code, is amended
	by amending Subsection (b) and adding Subsection (c) to read as
	follows:
	(b) Except as provided by Subsection (c), any [~~Any~~] amount
	received by the state under this section shall be deposited in the
	general revenue fund for the purpose of funding the state Medicaid
	program.
	(c) If cost-effective, the commission may use amounts
	received by the state under this section to provide incentives to
	specific managed care organizations to promote quality of care,
	encourage payment reform, reward local service delivery reform,
	increase efficiency, and reduce inappropriate or preventable
	service utilization.
	SECTION 4.06. Subsection (b), Section 536.002, Government
	Code, is amended to read as follows:
	(b) The executive commissioner shall appoint the members of
	the advisory committee. The committee must consist of physicians
	and other health care providers, representatives of health care
	facilities, representatives of managed care organizations, and
	other stakeholders interested in health care services provided in
	this state, including:
	(1) at least one member who is a physician with
	clinical practice experience in obstetrics and gynecology;
	(2) at least one member who is a physician with
	clinical practice experience in pediatrics;
	(3) at least one member who is a physician with
	clinical practice experience in internal medicine or family
	medicine;
	(4) at least one member who is a physician with
	clinical practice experience in geriatric medicine;
	(5) at least three members [~~one member~~] who are [is] or
	who represent [~~represents~~] a health care provider that primarily
	provides long-term [~~care~~] services and supports;
	(6) at least one member who is a consumer
	representative; and
	(7) at least one member who is a member of the Advisory
	Panel on Health Care-Associated Infections and Preventable Adverse
	Events who meets the qualifications prescribed by Section
	98.052(a)(4), Health and Safety Code.
	SECTION 4.07. Section 536.003, Government Code, is amended
	by amending Subsections (a) and (b) and adding Subsection (a-1) to
	read as follows:
	(a) The commission, in consultation with the advisory
	committee, shall develop quality-based outcome and process
	measures that promote the provision of efficient, quality health
	care and that can be used in the child health plan and Medicaid
	programs to implement quality-based payments for acute [~~and~~
	~~long-term~~] care services and long-term services and supports across
	all delivery models and payment systems, including
	[~~fee-for-service and~~] managed care payment systems. Subject to
	Subsection (a-1), the [~~The~~] commission, in developing outcome and
	process measures under this section, must include measures that are
	based on all [~~consider measures addressing~~] potentially
	preventable events and that advance quality improvement and
	innovation. The commission may change measures developed:
	(1) to promote continuous system reform, improved
	quality, and reduced costs; and
	(2) to account for managed care organizations added to
	a service area.
	(a-1) The outcome measures based on potentially preventable
	events must:
	(1) allow for rate-based determination of health care
	provider performance compared to statewide norms; and
	(2) be risk-adjusted to account for the severity of
	the illnesses of patients served by the provider.
	(b) To the extent feasible, the commission shall develop
	outcome and process measures:
	(1) consistently across all child health plan and
	Medicaid program delivery models and payment systems;
	(2) in a manner that takes into account appropriate
	patient risk factors, including the burden of chronic illness on a
	patient and the severity of a patient's illness;
	(3) that will have the greatest effect on improving
	quality of care and the efficient use of services, including acute
	care services and long-term services and supports; [~~and~~]
	(4) that are similar to outcome and process measures
	used in the private sector, as appropriate;
	(5) that reflect effective coordination of acute care
	services and long-term services and supports;
	(6) that can be tied to expenditures; and
	(7) that reduce preventable health care utilization
	and costs.
	SECTION 4.08. Subsection (a), Section 536.004, Government
	Code, is amended to read as follows:
	(a) Using quality-based outcome and process measures
	developed under Section 536.003 and subject to this section, the
	commission, after consulting with the advisory committee and other
	appropriate stakeholders with an interest in the provision of acute
	care and long-term services and supports under the child health
	plan and Medicaid programs, shall develop quality-based payment
	systems, and require managed care organizations to develop
	quality-based payment systems, for compensating a physician or
	other health care provider participating in the child health plan
	or Medicaid program that:
	(1) align payment incentives with high-quality,
	cost-effective health care;
	(2) reward the use of evidence-based best practices;
	(3) promote the coordination of health care;
	(4) encourage appropriate physician and other health
	care provider collaboration;
	(5) promote effective health care delivery models; and
	(6) take into account the specific needs of the child
	health plan program enrollee and Medicaid recipient populations.
	SECTION 4.09. Section 536.005, Government Code, is amended
	by adding Subsection (c) to read as follows:
	(c) Notwithstanding Subsection (a) and to the extent
	possible, the commission shall convert outpatient hospital
	reimbursement systems under the child health plan and Medicaid
	programs to an appropriate prospective payment system that will
	allow the commission to:
	(1) more accurately classify the full range of
	outpatient service episodes;
	(2) more accurately account for the intensity of
	services provided; and
	(3) motivate outpatient service providers to increase
	efficiency and effectiveness.
	SECTION 4.10. Section 536.006, Government Code, is amended
	to read as follows:
	Sec. 536.006. TRANSPARENCY. (a) The commission and the
	advisory committee shall:
	(1) ensure transparency in the development and
	establishment of:
	(A) quality-based payment and reimbursement
	systems under Section 536.004 and Subchapters B, C, and D,
	including the development of outcome and process measures under
	Section 536.003; and
	(B) quality-based payment initiatives under
	Subchapter E, including the development of quality of care and
	cost-efficiency benchmarks under Section 536.204(a) and efficiency
	performance standards under Section 536.204(b);
	(2) develop guidelines establishing procedures for
	providing notice and information to, and receiving input from,
	managed care organizations, health care providers, including
	physicians and experts in the various medical specialty fields, and
	other stakeholders, as appropriate, for purposes of developing and
	establishing the quality-based payment and reimbursement systems
	and initiatives described under Subdivision (1); [~~and~~]
	(3) in developing and establishing the quality-based
	payment and reimbursement systems and initiatives described under
	Subdivision (1), consider that as the performance of a managed care
	organization or physician or other health care provider improves
	with respect to an outcome or process measure, quality of care and
	cost-efficiency benchmark, or efficiency performance standard, as
	applicable, there will be a diminishing rate of improved
	performance over time; and
	(4) develop web-based capability to provide managed
	care organizations and health care providers with data on their
	clinical and utilization performance, including comparisons to
	peer organizations and providers located in this state and in the
	provider's respective region.
	(b) The web-based capability required by Subsection (a)(4)
	must support the requirements of the electronic health information
	exchange system under Sections 531.907 through 531.909.
	SECTION 4.11. Section 536.008, Government Code, is amended
	to read as follows:
	Sec. 536.008. ANNUAL REPORT. (a) The commission shall
	submit to the legislature and make available to the public an annual
	report [~~to the legislature~~] regarding:
	(1) the quality-based outcome and process measures
	developed under Section 536.003, including measures based on each
	potentially preventable event; and
	(2) the progress of the implementation of
	quality-based payment systems and other payment initiatives
	implemented under this chapter.
	(b) As appropriate, the [~~The~~] commission shall report
	outcome and process measures under Subsection (a)(1) by:
	(1) geographic location, which may require reporting
	by county, health care service region, or other appropriately
	defined geographic area;
	(2) recipient population or eligibility group served;
	(3) type of health care provider, such as acute care or
	long-term care provider;
	(4) number of recipients who relocated to a
	community-based setting from a less integrated setting;
	(5) quality-based payment system; and
	(6) service delivery model.
	(c) The report required under this section may not identify
	specific health care providers.
	SECTION 4.12. Subsection (a), Section 536.051, Government
	Code, is amended to read as follows:
	(a) Subject to Section 1903(m)(2)(A), Social Security Act
	(42 U.S.C. Section 1396b(m)(2)(A)), and other applicable federal
	law, the commission shall base a percentage of the premiums paid to
	a managed care organization participating in the child health plan
	or Medicaid program on the organization's performance with respect
	to outcome and process measures developed under Section 536.003
	that address all[~~, including outcome measures addressing~~]
	potentially preventable events. The percentage of the premiums
	paid may increase each year.
	SECTION 4.13. Subsection (a), Section 536.052, Government
	Code, is amended to read as follows:
	(a) The commission may allow a managed care organization
	participating in the child health plan or Medicaid program
	increased flexibility to implement quality initiatives in a managed
	care plan offered by the organization, including flexibility with
	respect to financial arrangements, in order to:
	(1) achieve high-quality, cost-effective health care;
	(2) increase the use of high-quality, cost-effective
	delivery models; [~~and~~]
	(3) reduce the incidence of unnecessary
	institutionalization and potentially preventable events; and
	(4) increase the use of alternative payment systems,
	including shared savings models, in collaboration with physicians
	and other health care providers.
	SECTION 4.14. Section 536.151, Government Code, is amended
	by amending Subsections (a), (b), and (c) and adding Subsections
	(a-1) and (d) to read as follows:
	(a) The executive commissioner shall adopt rules for
	identifying:
	(1) potentially preventable admissions and
	readmissions of child health plan program enrollees and Medicaid
	recipients, including preventable admissions to long-term care
	facilities;
	(2) potentially preventable ancillary services
	provided to or ordered for child health plan program enrollees and
	Medicaid recipients;
	(3) potentially preventable emergency room visits by
	child health plan program enrollees and Medicaid recipients; and
	(4) potentially preventable complications experienced
	by child health plan program enrollees and Medicaid recipients.
	(a-1) The commission shall collect data from hospitals on
	present-on-admission indicators for purposes of this section.
	(b) The commission shall establish a program to provide a
	confidential report to each hospital in this state that
	participates in the child health plan or Medicaid program regarding
	the hospital's performance with respect to each potentially
	preventable event described under Subsection (a) [~~readmissions and~~
	~~potentially preventable complications~~]. To the extent possible, a
	report provided under this section should include all potentially
	preventable events [~~readmissions and potentially preventable~~
	~~complications information~~] across all child health plan and
	Medicaid program payment systems. A hospital shall distribute the
	information contained in the report to physicians and other health
	care providers providing services at the hospital.
	(c) Except as provided by Subsection (d), a [A] report
	provided to a hospital under this section is confidential and is not
	subject to Chapter 552.
	(d) The commission shall release the information in the
	report described by Subsection (b):
	(1) not earlier than one year after the date the report
	is submitted to the hospital; and
	(2) only after receiving and evaluating interested
	stakeholder input regarding the public release of information under
	this section generally.
	SECTION 4.15. Subsection (a), Section 536.152, Government
	Code, is amended to read as follows:
	(a) Subject to Subsection (b), using the data collected
	under Section 536.151 and the diagnosis-related groups (DRG)
	methodology implemented under Section 536.005, if applicable, the
	commission, after consulting with the advisory committee, shall to
	the extent feasible adjust child health plan and Medicaid
	reimbursements to hospitals, including payments made under the
	disproportionate share hospitals and upper payment limit
	supplemental payment programs, [~~in a manner that may reward or~~
	~~penalize a hospital~~] based on the hospital's performance with
	respect to exceeding, or failing to achieve, outcome and process
	measures developed under Section 536.003 that address the rates of
	potentially preventable readmissions and potentially preventable
	complications.
	SECTION 4.16. Subsection (a), Section 536.202, Government
	Code, is amended to read as follows:
	(a) The commission shall, after consulting with the
	advisory committee, establish payment initiatives to test the
	effectiveness of quality-based payment systems, alternative
	payment methodologies, and high-quality, cost-effective health
	care delivery models that provide incentives to physicians and
	other health care providers to develop health care interventions
	for child health plan program enrollees or Medicaid recipients, or
	both, that will:
	(1) improve the quality of health care provided to the
	enrollees or recipients;
	(2) reduce potentially preventable events;
	(3) promote prevention and wellness;
	(4) increase the use of evidence-based best practices;
	(5) increase appropriate physician and other health
	care provider collaboration; [~~and~~]
	(6) contain costs; and
	(7) improve integration of acute care services and
	long-term services and supports, including discharge planning from
	acute care services to community-based long-term services and
	supports.
	SECTION 4.17. Chapter 536, Government Code, is amended by
	adding Subchapter F to read as follows:
	SUBCHAPTER F. QUALITY-BASED LONG-TERM SERVICES AND SUPPORTS
	PAYMENT SYSTEMS
	Sec. 536.251. QUALITY-BASED LONG-TERM SERVICES AND
	SUPPORTS PAYMENTS. (a) Subject to this subchapter, the
	commission, after consulting with the advisory committee and other
	appropriate stakeholders representing nursing facility providers
	with an interest in the provision of long-term services and
	supports, may develop and implement quality-based payment systems
	for Medicaid long-term services and supports providers designed to
	improve quality of care and reduce the provision of unnecessary
	services. A quality-based payment system developed under this
	section must base payments to providers on quality and efficiency
	measures that may include measurable wellness and prevention
	criteria and use of evidence-based best practices, sharing a
	portion of any realized cost savings achieved by the provider, and
	ensuring quality of care outcomes, including a reduction in
	potentially preventable events.
	(b) The commission may develop a quality-based payment
	system for Medicaid long-term services and supports providers under
	this subchapter only if implementing the system would be feasible
	and cost-effective.
	Sec. 536.252. EVALUATION OF DATA SETS. To ensure that the
	commission is using the best data to inform the development and
	implementation of quality-based payment systems under Section
	536.251, the commission shall evaluate the reliability, validity,
	and functionality of post-acute and long-term services and supports
	data sets. The commission's evaluation under this section should
	assess:
	(1) to what degree data sets relied on by the
	commission meet a standard:
	(A) for integrating care;
	(B) for developing coordinated care plans; and
	(C) that would allow for the meaningful
	development of risk adjustment techniques;
	(2) whether the data sets will provide value for
	outcome or performance measures and cost containment; and
	(3) how classification systems and data sets used for
	Medicaid long-term services and supports providers can be
	standardized and, where possible, simplified.
	Sec. 536.253. COLLECTION AND REPORTING OF CERTAIN
	INFORMATION. (a) The executive commissioner shall adopt rules for
	identifying the incidence of potentially preventable admissions,
	potentially preventable readmissions, and potentially preventable
	emergency room visits by Medicaid long-term services and supports
	recipients.
	(b) The commission shall establish a program to provide a
	report to each Medicaid long-term services and supports provider in
	this state regarding the provider's performance with respect to
	potentially preventable admissions, potentially preventable
	readmissions, and potentially preventable emergency room visits.
	To the extent possible, a report provided under this section should
	include applicable potentially preventable events information
	across all Medicaid program payment systems.
	(c) Subject to Subsection (d), a report provided to a
	provider under this section is confidential and is not subject to
	Chapter 552.
	(d) The commission shall release the information in the
	report described by Subsection (c):
	(1) not earlier than one year after the date the report
	is submitted to the provider; and
	(2) only after receiving and evaluating interested
	stakeholder input regarding the public release of information under
	this section generally.
	SECTION 4.18. As soon as practicable after the effective
	date of this Act, the Health and Human Services Commission shall
	provide a single portal through which providers in any managed care
	organization's provider network may submit acute care services and
	long-term services and supports claims as required by Paragraph
	(E), Subdivision (4), Section 533.0071, Government Code, as amended
	by this article.
	SECTION 4.19. Not later than September 1, 2013, the Health
	and Human Services Commission shall convert outpatient hospital
	reimbursement systems as required by Subsection (c), Section
	536.005, Government Code, as added by this article.
	ARTICLE 5. SPECIFIC PROVISIONS RELATING TO PREMIUMS UNDER THE
	MEDICAL ASSISTANCE PROGRAM
	SECTION 5.01. Section 533.013, Government Code, is amended
	by adding Subsection (e) to read as follows:
	(e) The commission shall pursue and, if appropriate,
	implement premium rate-setting strategies that encourage provider
	payment reform and more efficient service delivery and provider
	practices. In pursuing premium rate-setting strategies under this
	section, the commission shall review and consider strategies
	employed or under consideration by other states. If necessary, the
	commission may request a waiver or other authorization from a
	federal agency to implement strategies identified under this
	subsection.
	SECTION 5.02. Subchapter B, Chapter 32, Human Resources
	Code, is amended by adding Section 32.0642 to read as follows:
	Sec. 32.0642. PREMIUM REQUIREMENT FOR RECEIPT OF CERTAIN
	SERVICES. To the extent permitted under and in a manner that is
	consistent with Title XIX, Social Security Act (42 U.S.C. Section
	1396 et seq.), and any other applicable law or regulation or under a
	federal waiver or other authorization, the executive commissioner
	of the Health and Human Services Commission shall adopt and
	implement in the most cost-effective manner a premium for long-term
	services and supports provided to a child under the medical
	assistance program to be paid by the child's parent or other legal
	guardian.
	ARTICLE 6. ADDITIONAL PROVISIONS RELATING TO QUALITY AND DELIVERY
	OF HEALTH AND HUMAN SERVICES
	SECTION 6.01. The heading to Section 531.024, Government
	Code, is amended to read as follows:
	Sec. 531.024. PLANNING AND DELIVERY OF HEALTH AND HUMAN
	SERVICES; DATA SHARING.
	SECTION 6.02. Section 531.024, Government Code, is amended
	by adding Subsection (a-1) to read as follows:
	(a-1) To the extent permitted under applicable law, the
	commission and other health and human services agencies shall share
	data to facilitate patient care coordination, quality improvement,
	and cost savings in the Medicaid program, child health plan
	program, and other health and human services programs funded using
	money appropriated from the general revenue fund.
	SECTION 6.03. Subchapter B, Chapter 531, Government Code,
	is amended by adding Section 531.0981 to read as follows:
	Sec. 531.0981. WELLNESS SCREENING PROGRAM. If
	cost-effective, the commission may implement a wellness screening
	program for Medicaid recipients designed to evaluate a recipient's
	risk for having certain diseases and medical conditions for
	purposes of establishing a health baseline for each recipient that
	may be used to tailor the recipient's treatment plan or for
	establishing the recipient's health goals.
	ARTICLE 7. FEDERAL AUTHORIZATIONS, FUNDING, AND EFFECTIVE DATE
	SECTION 7.01. 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 7.02. As soon as practicable after the effective
	date of this Act, the Health and Human Services Commission shall
	apply for and actively seek a waiver or authorization from the
	appropriate federal agency to waive, with respect to a person who is
	dually eligible for Medicare and Medicaid, the requirement under 42
	C.F.R. Section 409.30 that the person be hospitalized for at least
	three consecutive calendar days before Medicare covers
	posthospital skilled nursing facility care for the person.
	SECTION 7.03. The Health and Human Services Commission may
	use any available revenue, including legislative appropriations
	and available federal funds, for purposes of implementing any
	provision of this Act.
	SECTION 7.04. This Act takes effect September 1, 2013.

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