HB5183 - Relating to contracts with managed care organizations, including the procurement of managed care contracts, under Medicaid and the child health plan program.

      By: Frank H.B. No. 5183       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 3.  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 4.  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 5.  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 6.  (a) The Health and Human Services Commission   shall enter into contracts with the managed care organizations that   had contracts in effect as of January 1, 2025 for the STAR, CHIP,   and STAR Kids programs.  These contracts shall be subject to   Sections 540.0204, 540.02041, and 540.02042 of the Government Code   and Section 62.155 of the Health and Safety Code.  The commission   shall cancel all procurements for the STAR, CHIP, or STAR Kids   programs that were pending as of January 1, 2025.          (b)  As specified in the notice of intent to award, the   commission shall enter into contracts with managed care   organizations that are awardees designated in the notice of intent   to award of any pending procurements.  These contracts shall be   subject to Sections 540.0204, 540.02041, and 540.02042 of the   Government Code and Section 62.155 of the Health and Safety Code.          (c)  By January 1, 2030, the Health and Human Services   Commission shall have entered into contracts with the managed care   organizations for the Star + Plus program that had contracts in   effect as of January 1, 2029 for the Star + Plus program.  These   contracts shall be subject to Sections 540.0204, 540.02041, and   540.02042 of the Government Code and Section 62.155 of the Health   and Safety Code.          (d)  A Medicaid recipient or child health plan program   participant enrolled in a managed care plan with a contract   described by Subsection (a) shall continue enrollment in the   managed care plan until the recipient or participant chooses to be   enrolled in a different managed care plan, is no longer eligible for   services, or is enrolled in a plan subject to contract termination   in the region in which the recipient or participant resides.          SECTION 7.  This Act takes effect September 1, 2025.