Legislative Priorities

SB 73: Medicaid MCO Billing

Under the current Managed Care environment, local health departments (LHDs) are not listed as a provider type. Senator Borris Miles, who authored Senate Bill 2021 in the 2019 Legislative Session, was determined to help fund the preventative health programs provided by the Houston Health Department.

Services include the following Local Health Department (LHD) services:

  1. Immunization (Clinical Services/Administration)
  2. Sexually Transmitted Diseases identification, diagnosis, and treatment
  3. School and community-based programming (Vision services, etc.)
  4. Environmental Health Services
  5. Tuberculosis identification, diagnosis, and treatment
  6. Chronic disease (screening, monitoring and self-management)
  7. Dental care
  8. Care Transition programs
  9. Enhanced services (Care Coordination, Telehealth, Home visitation, Reminder Recall, Health Education, Provider Technical Assistance, Super utilizer services)

Senate Bill 73 defines a local public health entity as including a local health unit, a local health department, and a public health district; and requires the executive commissioner of Texas Health and Human Services Commission to establish a separate provider type for a local public health entity for purposes of enrollment as a provider for and reimbursement under the medical assistance program. This law goes into effect September 1, 2021.

The bill requires Managed Care Organizations (MCOs) to update their contracts and panels to include local health departments as a provider type that can seek reimbursement. This will address the following issues:

  • With the roll out of Managed Care, in addition to enrolling as a State recognized Medicaid provider, the health departments must now contract with the Managed Care Organizations to be paid for services that are provided to covered members of the MCOs Medicaid plan.
  • If the LHD does not have a contract with a MCO they are an out-of-network provider and are not guaranteed to be reimbursed for services that they provide to covered members.

The provider type designation is the first step mitigating administrative burdens that local health departments experience when attempting to contract and complete the credentialing process as they do not for the most part function like primary care providers.

  • In FY19, the Houston Health Department (HHD) submitted over $700,000 in charges to Medicaid plans but only received reimbursements for $260,000 (37%). This is due, in large part, to not being able to contracts with MCOs.

Since 2019, HHD has been working diligently to establish contracts with each MCO in Harris County. This includes MCOs that provide STAR, STAR PLUS, STAR Kids and CHIP, two dental networks and one vision administrator. HHD was only successful in executing contracts with the two dental networks because they actively and willingly negotiated with us.

  • MCO contracts are typically boilerplate templates that have been pre-approved by HHSC. The terminology targets private physicians, hospitals, nursing homes or other ambulatory services and are not consistent with public health practice.

When HHD attempted to negotiate some of the inapplicable terms, the MCOs were unwilling to consider the requested changes. As LHD and MCO contract issues go unresolved, it directly impacts the ability for LHDs to receive revenue to conduct core public health functions and improve the overall health and well-being of their communities.

  • Senate Bill 73 is not an expansion of Medicaid – it is a solution for a provider type that distinguishes a governmental entity from a nonprofit or private entity in order to establish a set of contracting requirements that are more appropriate to LHDs that provide low risk, preventative services.

Senate Bill 73 allows HHD to enter into contracts with MCOs, allowing HHD to maximize reimbursements. House Public Health Chair Stephanie Klick carried the bill on the House side, showing what a priority the measure is for the statewide public health system.