April 12, 2017

Texas Legislative Digest - Issue 14

Issue 14 – April 10, 2017

• House Debates Budget
• Bills Heard in House Insurance Committee
• Risk Pool Bills Considered
• Bills of Interest
• Tidbits
• Timetable

House Debates Budget
Senate Bill 1, this session’s budget bill, was considered by the full House on April 6. At press time, the debate had not concluded. More than 400 amendments were submitted and up for consideration.

Rep. Sergio Muñoz (D-Palmview), House Insurance committee vice-chair, and Rep. Richard Peña Raymond (D-Laredo), House Human Services committee chair, submitted amendments to modify the state’s Medicaid managed care program. Muñoz’s amendments would have required the Health and Human Services Commission (HHSC) to do the following:
 

1. Seek input from participating providers before reducing funding or implementing cost containment measures in the Medicaid program
2. Provide a report to the legislature on network adequacy requirement violations by managed care organizations (MCOs) for the previous five years
3. Prepare a study on the number of single-case agreements between out-of-network providers and Medicaid MCOs during the previous five years. A single-case agreement is between a Medicaid MCO and an out-of-network provider to provide a covered service to a specific member
4. Direct HHSC to conduct audits to verify the accuracy and reliability of program and financial information reported by Medicaid MCOs. Audits are used to certify the accuracy of information that determines MCO compliance with contract requirements
5. Track funding to Medicaid MCOs to ensure compliance with contract provisions addressing provider payments

Raymond’s amendment directs HHSC to study potential cost savings in administering prescription drug programs under its purview.

Muñoz would also appropriate an additional $500 million to TRS-Care, the state’s retired teacher health benefit program, from amounts intended for border security. TRS-Care currently faces a $1.1 billion budget shortfall.

Three legislators — Rep. Four Price (R-Amarillo), Rep. J.D. Sheffield, M.D. (R-Gatesville), and Rep. Chris Turner (D-Arlington) — submitted amendments that would provide direction to HHSC should the agency make requests for federal flexibility to create a more efficient Medicaid program under a block grant.

Amendment authors hope their House colleagues will support their changes to the chamber’s proposed $218.2 billion two-year budget. Not every amendment filed will be brought up on the floor, but the debate was expected to continue late into the night. During the 2015 session, the budget bill was voted out of the House after 17 hours of discussion. The budget is the only bill the legislature is constitutionally required to pass.

Bills Heard in House Insurance
The House Insurance committee met on April 4 and considered several bills of interest to health plans:
 

• House Bill 3102 by Greg Bonnen, M.D. (R-Friendswood) prohibits a health plan from requiring prior authorization for prescription eye drops and related medications. The Texas Association of Health Plans (TAHP) testified in opposition to the bill, asserting that prior authorization requirements are an important and necessary safeguard to protect patients and control costs. The Texas Optometric Association supported the bill.
   
• House Bill 3276 by Rep. Tom Oliverson, M.D. (R-Cypress) requires freestanding emergency rooms (FSERs) to inform patients of their network status. This may be done by posting a notice that either lists the health plan provider networks in which the FSER participates or states that the facility is not a participating provider with any health plan. The TAHP testified in support of the bill that FSERs are responsible for nearly 70 percent of out-of-network ER facility claims in Texas. AARP testified in support of the bill and expressed concern that the language sometimes used by FSERs to indicate network status can mislead its members.
   
• House Bill 2760 by Bonnen and Oliverson imposes strict requirements for updating provider directories including daily updates. The TAHP opposed the bill, pointing out that the legislature had approved extensive reforms of directory requirements in the previous session. The Texas Medical Association supported the bill.
   
• House Bill 3218 by Rep. Larry Phillips (R-Sherman) allows HMOs to contract with entities such as prescription benefit managers, rather than contracting with individual health care providers. This is priority legislation for the TAHP and Blue Cross and Blue Shield of Texas (BCBSTX).

The four bills were left pending and will likely be considered for a vote at the committee’s next meeting on April 11.

Risk Pool Bills Considered
House Bill 3226 by Rep. Phillips and Senate Bill 2087 by Sen. Kelly Hancock (R-North Richland Hills) were both heard in public hearings on April 4. Phillips and Hancock are chairs of the House Insurance committee and the Senate Business and Commerce committee, respectively. As part of this year's health reform efforts, legislation is pending at the federal level that would provide federal funding for state risk pools to cover individuals with high-cost medical conditions or provide for a state reinsurance program for the individual market.

Because the final form of the federal funding is unknown at this time, but might be available prior to the next legislative session, changes in state law under HB 3226 and SB 2087 would authorize the Texas Department of Insurance to create a temporary high-risk pool or state reinsurance program, and access the federal funds on an interim basis. Phillips also filed an amendment to the proposed budget bill that would provide some state funding for implementation if HB 3226 is passed. Texas previously had a high-risk pool, the Texas Health Insurance Pool, that was established in 1997 as a result of passage of the Health Insurance Portability and Accountability Act. In 2013, legislation was passed to dissolve the Pool because of changes in federal law that generally prohibited health plans from rejecting applicants with health conditions.

Bills of Interest

• House Bill 1227 filed by Rep. John Smithee (R-Amarillo) was approved by the House and is headed to the Senate. The bill will modify formulary disclosure requirements passed in the previous legislative session in House Bill 1624. The requirements applied to both small group and individual products. HB 1227 modifies the statute to limit formulary disclosure to individual products only, which is widely viewed as a simple technical fix. This legislation was filed at the request of the TAHP and is a priority for BCBSTX.
   
• House Bill 265 filed by Rep. Ana E. Hernandez (D-Houston) and Rep. Dan Flynn (R-Van) was voted favorably from the House Pensions committee, which Flynn chairs. The bill changes the composition of the Employees Retirement System (ERS) board by requiring that two of the elected members be ERS members, while a third may either be a member or a retiree.
   
• Senate Bill 1592 by Sen. Charles Schwertner, M.D. (R-Georgetown) was voted favorably from the Senate Health and Human Services committee on April 5. The bill increases to $25,000 the total amount of administrative penalties that may be assessed against freestanding emergency centers for regulatory violations. SB 1592 is priority legislation for the TAHP.

Tidbits

• The word “filibuster” originated in the United States in the 1880s and was the former semantic equivalence to “freebooter.” A freebooter is defined as “anyone who lives by plundering others, especially a pirate.” In the middle of the nineteenth century, bands of adventurers organized in the U.S. were stirring up revolutions in Central America and the West Indies. Such an adventurer came to be known in English as a filibuster, from the Spanish “filibustero.” The word had originated in Dutch, as “vrijbuiter.” Its travels on the way from Dutch to Spanish are uncertain, but it is likely that the Spanish borrowed the word from the French, “flibustier” or “fribustier,” who apparently got it from the English “flee-booter” or “freebooter.”

The filibuster has a long history in the U.S. Senate. In 1841, when the Democratic minority hoped to block a bank bill promoted by Kentucky Senator Henry Clay, he threatened to change Senate rules to allow the majority to close debate. Missouri Senator Thomas Hart Benton rebuked Clay for trying to stifle the Senate's right to unlimited debate. Three quarters of a century later, in 1917, senators adopted a rule, at the urging of President Woodrow Wilson, that allowed the Senate to end a debate with a two-thirds majority vote – a device known as "cloture."

The new Senate rule was first put to the test in 1919, when the Senate invoked cloture to end a filibuster against the Treaty of Versailles. Even with the new cloture rule, filibusters remained an effective means to block legislation since a two-thirds vote is difficult to obtain. Over the next five decades, the Senate occasionally tried to invoke cloture, but usually failed to gain the necessary two-thirds vote. In 1975, the Senate reduced the number of votes required for cloture from two-thirds to three-fifths, or 60 of the current one hundred senators. Only 51 votes are needed to change the Senate rules.

• Texas Comptroller Glenn Hegar announced that state sales tax revenue totaled $2.24 billion in March, 3 percent more than in March 2016. Total sales tax revenue for the three months ending in March 2017 was up by 2.1 percent compared with the same period a year ago. Sales tax revenue is the largest source of state funding for the state budget, accounting for 58 percent of all tax collections in fiscal 2016. Motor vehicle sales and rental, motor fuel, and oil and natural gas production taxes are also large revenue sources for the state.

• Local Austin media reported that a Travis County judge has denied a request to dismiss four felony charges against state Rep. Dawnna Dukes (D-Austin). In January, Dukes was indicted on 13 felony corruption charges and two misdemeanors with a maximum penalty of 28 years in prison per an announcement by the Travis County District Attorney at the time. The indictment was based on an investigation for improper use of office staff and resources. Her attorney said she would continue to serve in the legislature during the legal proceedings and will plead not guilty to all charges.

• Action movie and television actor Chuck Norris, an Oklahoma native, was named an “Honorary Texan” last Tuesday by the state Senate. Norris and his wife appeared in the Senate chamber for the award at the start of the chamber’s daily session. After a recitation of his screen accomplishments and his star-turn in the TV series Walker: Texas Ranger, Norris stood for applause and posed for photos with senators.

Timetable
April 10 is the 91st day of the 85th Legislature with 49 days remaining until final adjournment. Important dates related to the legislative session are:

• May 29, 2017  “Sine Die,” which is the last day of 85th Regular Session
• June 18, 2017  Last day governor can sign or veto bills passed during regular session
• Aug. 28, 2017  Date that bills without specific effective dates become law