Frank Bill Gives Medicaid Plans Open-Ended Contracts

The text as introduced · 1,011 words

By: Frank
H.B. No. 5185

A BILL TO BE ENTITLED

AN ACT

relating to contracts with managed care organizations, including

the procurement of managed care contracts, under Medicaid and the

child health plan program.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter E, Chapter 540, Government Code, is

amended by adding Sections 540.02041, 540.02042, and

540.02043533.0038 to read as follows:

Sec. 540.02041. DURATION OF CONTRACTS. (a) Contracts the

commission signs with managed care organizations do not have a set

term length.

(b) A contract the commission signs with a managed care

organization shall not be terminated except through the process

described in Sec. 540.02042(h) and (i) or upon the request of the

managed care organization.

Sec. 540.02042. PERFORMANCE MEASURES. (a) The programs to

which this section applies include STAR, STAR Kids, STAR + Plus, and

the child health plan program.

(b) The commission shall adopt and publish clear and

comprehensive measures by which the quality and performance of

managed care organizations will be measured.

(c) In adopting the measures under Subsection (a), the

commission shall consider:

(1) cost efficiency, quality of care, experience of

care, and member and provider satisfaction;

(2) the size and quality of a managed care

organization's provider network; and

(3) past experience of the managed care organization

in providing similar services in this or other states.

(d) The measures shall include:

(1) outcome-based performance measures described by

Section 533.0051;

(2) the most recent results from the Agency for

Healthcare Research and Quality's Consumer Assessment of

Healthcare Providers and Systems (CAHPS) Health Plan Survey; and

(3) Healthcare Effectiveness Data and Information Set

(HEDIS) measurement results.

(e) The commission may adopt measures only after a public

hearing and comment process that considers proposed measures.

(f) A managed care organization is responsible for

providing the commission with data necessary for the commission to

determine whether the applicant has met the qualifying criteria.

(g) The commission shall:

(1) monthly evaluate a managed care organization

performance and quality by region; and

(2) post on its Internet website the results of the

monthly evaluations conducted under this section in a format that

is readily accessible to and understandable by a member of the

public.

(h) If a managed care organization that has contracted with

the commission under this section fails to comply with the terms of

its contract and the commission determines the managed care

organization has not made substantial efforts to mitigate or remedy

the noncompliance, or if its results on the measurements described

in subsection (b) are in the bottom quartile of all plans operating

in the state in the same program, or if their results on the

measurements described in subsection (b) are the lowest in the

region, the commissioner shall pursue the following remedies in

addition to any remedies available to the commission under the

contract, in this order:

(1) require submission of and compliance with a

corrective action plan;

(2) seek recovery of actual damages or liquidated

damages specified in the contract;

(3) suspend default enrollment of recipients to the

managed care organization in one or more regions; and

(4) terminate the contract.

(i) If the commission has taken remedies described in

(h)(1), (h)(2), and (h)(3), and the plan has not shown significant

improvement over 18 months, then the commission shall take the

action described by (h)(4).

Sec. 540.02043. LIMITS ON MANAGED CARE ORGANIZATIONS. (a)

The commission shall limit the number of managed care organizations

operating in each Medicaid program in each region.

(b) In each Medicaid program, the commission may limit the

number of regions in which a managed care organization may operate.

SECTION 2. Section 62.002, Health and Safety Code, is

amended by adding Subsection (5) to read as follows:

(5) "Region" means a service area delineated by the

commission.

SECTION 3. Section 62.155, Health and Safety Code, is

amended by amending Subsection (a) and adding Subsections (e) and

(f) to read as follows:

(a) Following the termination of a health plan provider's

contract in a region, the commission may select a health plan

provider to operate in that region [ The commission shall select the

health plan providers ] under the program through a competitive

procurement process. A health plan provider, other than a state

administered primary care case management network, must hold a

certificate of authority or other appropriate license issued by the

Texas Department of Insurance that authorizes the health plan

provider to provide the type of child health plan offered and must

satisfy, except as provided by this chapter, any applicable

requirement of the Insurance Code or another insurance law of this

state.

(e) The commission shall limit the number of health plan

providers operating under the program in each region of the state.

(f) The commission may limit the number of regions in which

a health plan provider may operate under the program.

(g) Contracts the commission signs with health plan

providers do not have a set term length.

(h) A contract the commission signs with a managed care

organization shall not be terminated except through the process

described in Sec. 540.02042(h) and (i) or upon the request of the

health plan provider.

SECTION 4. Section 540.0204, Government Code, is amended to

read as follows:

Sec. 540.0204. CONTRACT CONSIDERATIONS RELATING TO MANAGED

CARE ORGANIZATIONS. Following the termination of a managed care

organization's contract, [ I ] i n awarding a contract[ s ] to a managed

care organization[ s ] in that region , the commission shall:

(1) give preference to an organization that has

significant participation in the organization's provider network

from each health care provider in the region who has traditionally

provided care to Medicaid and charity care patients;

(2) give extra consideration to an organization that

agrees to assure continuity of care for at least three months beyond

a recipient's Medicaid eligibility period;

(3) consider the need to use different managed care

plans to meet the needs of different populations; and

(4) consider the ability of an organization to process

Medicaid claims electronically.

SECTION 5. This Act takes effect September 1, 2025.