Where Are the Texas Medicaid Managed Care Protections?

Will the reforms survive to become law this Legislative session?

Legislation to improve health care for Medicaid participants and improve insurer performance and accountability is at risk of failing to become law due to late-hour conflicts and legislative process delays. Will all the extensive analysis, public hearings, and negotiations over the last nine months to develop improved policies have been a waste?

Lawmakers filed over 50 bills aimed at reforming Texas Medicaid Managed Care this legislative session, and many had public hearings in April. Today, some clear frontrunners have emerged, but we remain a long way from final decisions about which bills will pass and which reforms will survive the process. Health care provider and health insurance industry associations have put in long hours lobbying for their respective goals and priorities, and the consumer advocates have added their two cents wherever possible.

Notably, several substantial agreed-to policy proposals emerged from a working group of physician, hospital, and insurer lobbyists. While disagreements on other important issues remain, some fundamental improvements have come out of this work. These include the implementation of a new independent medical review option to which participants and providers can appeal denials and reductions of care made by Medicaid Managed Care plans (often referred to as MCOs). There also seems to be consensus around robust new transparency and accountability requirements for MCO “Prior Authorization” requirements before people can access a service. If those two general concepts survive the hectic last month of this legislative session relatively intact, there will be meaningful progress. Advocates for Texans with disabilities and medically fragile children have made important expert contributions to the development of bills.

A number of critical proposed consumer protections for Texas’ 4 million Medicaid participants are in the bills that are “moving.” This post and policy brief looks at five bills. HB 2453 by Sarah Davis, HB 4178 by James Frank, and SB 1105 by Lois Kolkhorst are lengthier bills that cover multiple Medicaid Managed Care topics. HB 3721 by Joe Deshotel and SB 1140 by Kirk Watson (joint authors Hinojosa and West) are single-topic bills to create the new independent medical review option for denials and reductions of care. However, HB 2453 and HB 4178 each also contain provisions to establish the independent medical review function. Together these bills include important proposals on these fundamental Medicaid Managed Care reform topics:

  • New Independent Medical Review option, to appeal denials or reductions of care by MCOs, or eligibility denials by HHSC based on medical necessity or functional need
  • MCO Accountability: tracking and creating public records of complaints, appeals, denials and corrective actions
  • Issues for STAR Kids (children with disabilities and medically fragile kids) and STAR Health (kids in foster care, which includes some medically fragile children)
  • Care Coordination Transparency and Adequacy
  • “Prior Authorization” (PA) Reforms: Reducing Barriers and Red Tape between enrollees and the care they need.
  • Improved Benefits, Network Adequacy, and Quality
  • Provisions to Improve the Medicaid Managed Care Provider Experience

Details on each of these topics and the bills are summarized here, beginning with the proposals for an independent medical review option.

Put simply, to get the best protections for Texas Medicaid, the Legislature will need to incorporate provisions from several bills: no single bill currently delivers all of the needed consumer protections. The 86th Legislature has just a few short weeks to get the job done to protect 4 million Texans and the integrity of our public investment in Medicaid Managed Care.

Note: “MCO” stands for Managed Care Organization. All Texas Medicaid Managed Care health plans are licensed as HMOs, but “MCO” is a term used nationally in Medicaid, in order to be inclusive in states where HMOs are not the only vehicle for Medicaid Managed Care delivery.

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