Text of section effective until April 01, 2025
Sec. 533.013.  PREMIUM PAYMENT RATE DETERMINATION;  REVIEW AND COMMENT.  (a)  In determining premium payment rates paid to a managed care organization under a managed care plan, the commission shall consider:
(1)  the regional variation in costs of health care services;
(2)  the range and type of health care services to be covered by premium payment rates;
(3)  the number of managed care plans in a region;
(4)  the current and projected number of recipients in each region, including the current and projected number for each category of recipient;
(5)  the ability of the managed care plan to meet costs of operation under the proposed premium payment rates;
(6)  the applicable requirements of the federal Balanced Budget Act of 1997 and implementing regulations that require adequacy of premium payments to managed care organizations participating in Medicaid;
(7)  the adequacy of the management fee paid for assisting enrollees of Supplemental Security Income (SSI) (42 U.S.C. Section 1381 et seq.) who are voluntarily enrolled in the managed care plan;
(8)  the impact of reducing premium payment rates for the category of recipients who are pregnant; and
(9)  the ability of the managed care plan to pay under the proposed premium payment rates inpatient and outpatient hospital provider payment rates that are comparable to the inpatient and outpatient hospital provider payment rates paid by the commission under a primary care case management model or a partially capitated model.
(b)  In determining the maximum premium payment rates paid to a managed care organization that is licensed under Chapter 843, Insurance Code, the commission shall consider and adjust for the regional variation in costs of services under the traditional fee-for-service component of Medicaid, utilization patterns, and other factors that influence the potential for cost savings.  For a service area with a service area factor of.93 or less, or another appropriate service area factor, as determined by the commission, the commission may not discount premium payment rates in an amount that is more than the amount necessary to meet federal budget neutrality requirements for projected fee-for-service costs unless:
(1)  a historical review of managed care financial results among managed care organizations in the service area served by the organization demonstrates that additional savings are warranted;
(2)  a review of Medicaid fee-for-service delivery in the service area served by the organization has historically shown a significant overutilization by recipients of certain services covered by the premium payment rates in comparison to utilization patterns throughout the rest of the state; or
(3)  a review of Medicaid fee-for-service delivery in the service area served by the organization has historically shown an above-market cost for services for which there is substantial evidence that Medicaid managed care delivery will reduce the cost of those services.
(c)  The premium payment rates paid to a managed care organization that is licensed under Chapter 843, Insurance Code, shall be established by a competitive bid process but may not exceed the maximum premium payment rates established by the commission under Subsection (b).
(d)  Subsection (b) applies only to a managed care organization with respect to Medicaid managed care pilot programs, Medicaid behavioral health pilot programs, and Medicaid Star + Plus pilot programs implemented in a health care service region after June 1, 1999.
(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.
Added by Acts 1999, 76th Leg., ch. 1447, Sec. 8, eff. June 19, 1999;  Acts 1999, 76th Leg., ch. 1460, Sec. 9.08, eff. Sept. 1, 1999.  Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.516, eff. Sept. 1, 2003.
Amended by: 
Acts 2013, 83rd Leg., R.S., Ch. 1310 (S.B. 7), Sec. 5.01, eff. September 1, 2013.
Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 2.230, eff. April 2, 2015.
Repealed by Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 3.01(3), eff. April 1, 2025.