1. (a) Each managed care organization (MCO) shall develop and follow quality standards based on current Quality Assurance Reform Initiative (QARI) and Health Plan Employer Data and Information Set (HEDIS) guidelines as a minimum requirement of its internal quality improvement program (QIP). MCOs shall establish a QIP system that includes at least the following:

   1. (1) a system of oversight and supervision for the MCO quality improvement (QI) processes;
   2. (2) an independent organizational structure within the MCO responsible for performing QI functions. This organization must meet operational and documentation requirements of the department, including the requirement that membership includes Medicaid managed care members and members with disabilities or a chronic or complex condition;
   3. (3) written contracts for all QI functions subcontracted to outside contractors;
   4. (4) written policies and procedures for ensuring providers in the MCO's network are qualified and properly credentialed, and a system to periodically update and review qualifications and credentials of all providers;
   5. (5) policies and procedures for disciplinary actions against providers and an appeal process for providers who have disciplinary action taken against them;
   6. (6) a procedure for informing MCO members of their rights and responsibilities, benefits and services, MCO policies, and other information required in the Texas Health and Human Services Commission's rules on client education and member bill of rights and responsibilities, and the MCO contract with the department;
   7. (7) performance standards for the availability of and accessibility to routine and emergency care, referral to specialists, and telephone services;
   8. (8) time standards within which providers must respond to the medically necessary physical and behavioral health needs of the members;
   9. (9) standards for the confidentiality, accessibility, and availability of medical records;
   10. (10) a written utilization review and management program which gives guidelines and criteria for determining medical necessity, preauthorization, and utilization of services;
   11. (11) an effective referral and coordination of care system to ensure comprehensive and coordinated care for members through the PCPs; and
   12. (12) a complaint system for members as described in §30.29 of this title (relating to Member Complaint Procedures).
2. (b) The QIP functions may be subcontracted but the responsibility for QIP compliance cannot be delegated by the MCO.

3. (c) The department shall develop monitoring and review systems and procedures to ensure MCO compliance with MCO contracts, this subchapter, and all related state and federal rules, regulations, and guidelines. Department monitoring and review shall include but not be limited to the following.

   1. (1) The department shall monitor each MCO to ensure it is following its QIP standards.
   2. (2) The department shall require MCOs to submit QIP information at regular and periodic intervals.
   3. (3) The department shall require all MCOs to submit to periodic inspection and review to determine compliance with all contract terms, and state and federal rules, regulations, and policies.
4. (d) Evaluations of each MCO's quality of services in each Medicaid managed care service area and the cost-effectiveness, member access, and quality of care under each waiver shall be conducted by independent, external entities after initial implementation of Medicaid managed care in a particular service delivery area. The quality evaluation shall be conducted at the end of the first year following initial implementation; and the assessment of cost-effectiveness, member access, and quality of care under each waiver shall be conducted once during the first two years of the time period for which a waiver has been approved. The periodicity of both evaluation types shall be re-evaluated by the department after each evaluation is initially completed in a managed care service delivery area.

Source Note:The provisions of this §353.417 adopted to be effective December 18, 1996, 21 TexReg 11822; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4561.