The commission must consider specified factors when setting premium payment rates for managed care organizations, use a competitive bid process for certain rates, and may pursue rate-setting strategies and request a federal waiver if needed.
Sec. 540.0351. PREMIUM PAYMENT RATE DETERMINATION. (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 health care service costs; (2) the range and type of health care services that premium payment rates are to cover; (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 managed care plan's ability to meet operating costs under the proposed premium payment rates; (6) the requirements of the Balanced Budget Act of 1997 (Pub. L. No. 105-33) and implementing regulations that require adequacy of premium payments to Medicaid managed care organizations; (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 pregnant recipients; and (9) the managed care plan's ability under the proposed premium payment rates to pay inpatient and outpatient hospital provider payment rates that are comparable to the inpatient and outpatient hospital provider payment rates the commission pays under a primary care case management model or a partially capitated model. (b) The premium payment rates paid to a managed care organization that holds a certificate of authority issued under Chapter 843, Insurance Code, must be established by a competitive bid process but may not exceed the maximum premium payment rates the commission establishes under Section 540.0352(b). (c) 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 the strategies, 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 the commission identifies under this subsection. Added by Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 1.01, eff. April 1, 2025.