Transition to Managed Care for People with IDD

83rd Legislative Session

Senate Bill (SB) 7, as passed by the 83rd Texas Legislature, provides a comprehensive and long-range plan for the Medicaid long-term services and supports system (LTSS) used by persons with intellectual and developmental disabilities (IDD), among others. It is designed to integrate Medicaid medical (acute) care and LTSS in an effort to create a more efficient system.

The legislation requires mandatory Medicaid STAR+PLUS (capitated managed care) for all medical benefits unless alternative models (fee-for-service) are more cost-effective or efficient. It is anticipated that STAR+PLUS will be the single system for Medicaid acute medical services for all adults with disabilities. STAR Kids will be the system for children with disabilities.

SB 7 is a complex mix of provisions with overlapping timelines. The following summary was adapted from multiple sources and is not a comprehensive list of provisions, but an outline of the provisions important to people with IDD.

System Transition

STAR+PLUS Statewide Expansion

  • The Health and Human Services Commission (HHSC) must expand Medicaid STAR+PLUS benefits (both medical and LTSS) for seniors and people with physical disabilities to all areas of the state no sooner than September 1, 2014.
  • All recipients of IDD Medicaid waiver services will receive medical services through STAR+PLUS.

Community First Choice

  • Habilitation/attendant services will become a state plan benefit and will be available to all eligible people with disabilities in STAR+PLUS.
  • Managed Care Organizations (MCOs) must contract with significant traditional providers for at least three years — Community Living Assistance and Support Services (CLASS) home and community support services agencies (HCSSAs) and certified Home and Community-based Services (HCS)/Texas Home Living (TxHmL) providers.
  • MCOs must consider IDD Local Authority (LA) assessments and contract with LAs regarding service coordination.
  • DADS must contract with and pay LAs to:
    • provide IDD service coordination to Community First Choice (CFC) clients with IDD by helping individuals eligible to receive community services, including individuals transitioning to a community setting;
    • provide assessments to the individuals’ MCO regarding whether the individual needs attendant and/or habilitation services based on functional need, risk factors, and desired outcomes;
    • assist individuals with developing individual plans of care; and
    • provide the MCO and Department of Aging and Disability Services (DADS) information regarding recommended plans of care and outcomes based on the individual’s plan of care.
  • LAs may not provide CFC attendant or habilitation services.
  • LAs may subcontract with an eligible person (e.g., a nonprofit) to coordinate services of individuals with IDD receiving CFC services. HHSC must set minimum qualifications to be considered an “eligible person.”
  • HHSC must submit CFC report to Legislature by June 1, 2016.


  • Establishes Medicaid STAR Kids for children with disabilities.
  • STAR Kids requirements: customized benefits; care coordination; improved outcomes and access; cost efficiency; reduce administrative complexity, unnecessary institutionalizations, and potentially preventable events; health home; and coordination with LTSS providers, if children receiving STAR Kids services receive LTSS outside of the MCO.
  • HHSC may require STAR Kids care management services to incorporate best practices; integrate with a nurse line; identify enrollees with the greatest need for services; provide a comprehensive evidence-based assessment; be delivered through multidisciplinary care teams throughout the state; identify immediate interventions for care transition; include monitoring and reporting of outcomes; and use innovations in the provision of services.
  • Requires continuity of care for children transitioning from STAR Kids to STAR+PLUS.
  • HHSC must seek ongoing input from the Children’s Policy Council regarding STAR Kids implementation.

MDCP Benefits Transfer to STAR Kids

Transitions Medically Dependent Children Program (MDCP) benefits into STAR Kids. HHSC and DADS must evaluate the transition and submit annual reports to the Legislature on December 1, 2016 and December 1, 2020.

IDD Pilots

  • Allows HHSC and DADS to implement one or more private provider pilots to test Medicaid managed care strategies based on capitation.
  • Requires stakeholder input process.
  • DADS must analyze information from pilot providers to make recommendations regarding future system design.
  • DADS must identify pilot goals and strategies designed to improve outcomes.
  • HHSC and DADS must implement pilots by September 1, 2016 and operate pilots for at least 24 months (DADS selects regions). Provider may terminate the contract before agreed termination date.
  • Participation of waiver participants in pilots is voluntary.
  • Pilot providers must:
    • coordinate Intermediate Care Facilities (ICF) and Medicaid waiver services;
    • work with MCOs to provide integrated service coordination;
    • have a process to prevent inappropriate institutionalizations; and
    • accept risk of inappropriate institutionalizations.
  • HHSC and DADS must collect certain pilot data and pilot providers must provide pilot data 30 days before pilots end.
  • HHSC and DADS must evaluate IDD pilot progress and outcomes by December 1, 2016 and December 1, 2017 and submit reports to Legislature.
  • Pilot participants must have access to a person-centered plan that identifies outcomes and drives development of the individualized budget.
  • HHSC must ensure person-centered planning and continuity of care during transition from a waiver to a pilot.
  • Terminates pilots by September 1, 2018 unless terminated at an earlier date by provider.


  • HHSC must transition the provision of some or all TxHmL benefits to STAR+PLUS by September 1, 2017.
  • HHSC must determine whether to provide supplemental Medicaid LTSS through TxHmL or some/all TxHmL through STAR+PLUS.
  • Requires statewide stakeholder input and continuity of care.
  • MCOs must:
    • ensure choice of providers;
    • ensure continuity of care regarding access to primary care providers (including use of single-case agreements with out-of-network providers); and
    • provide access to a member services phone line.


  • HHSC must transition the provision of some or all HCS, CLASS, Deaf Blind Multiple Disabilities (DBMD), and community ICF benefits into STAR+PLUS by September 1, 2020, subject to provisions allowing individuals to remain in their current waivers and allowing HHSC to continue operating the waivers or ICF program only for purposes of providing supplemental LTSS not available in managed care.
  • HHSC must determine whether to:
    • continue operation of waivers or ICF program only to provide supplemental LTSS through waivers and ICF program, or provide LTSS to individuals who choose to continue receiving 1915(c) waiver services through their current waiver program; or
    • provide some/all LTSS previously available under the waivers or ICF program through STAR+PLUS (subject to provision allowing individuals to continue receiving 1915(c) waiver services).
  • Requires statewide stakeholder input and continuity of care.
  • Individuals receiving Medicaid waiver services can continue to receive LTSS through their waiver. If an individual chooses STAR+PLUS, that individual cannot later choose to receive LTSS under the waiver.
  • MCOs must have expertise serving children and adults with IDD before HHSC transitions individuals with IDD into STAR+PLUS.
  • MCOs must ensure choice of providers; ensure continuity of care regarding access to primary care providers (PCPs) (including use of single-case agreements with out-of-network providers); and provide access to a member services phone line.
  • HHSC must:
    • set minimum reimbursement rates for ICF and HCS group home providers under managed care, including staff enhancement;
    • ensure payment within 10 days of ICF or HCS group home provider submitting a clean claim; and
    • establish a portal for ICF and HCS group home providers to submit LTSS claims.
  • HHSC and DADS must evaluate STAR+PLUS transition outcomes and submit a report to the Legislature on September 30, 2018, 2019, and 2020.

Other Provisions

Comprehensive Assessment and Resource Allocation Process: DADS must evaluate existing assessments and implement a comprehensive assessment and resource allocation process for individuals with IDD who receive Medicaid waiver or ICF services (including State Supported Living Center services).

Prior Authorization for HCS Group Home: Requires prior authorization process for HCS group home to be developed by DADS in cooperation with IDD system redesign advisory committee.

Flexible Low-Cost Housing Options for People with Disabilities

  • HHSC must adopt rules to allow for additional housing supports for individuals with disabilities, including individuals with IDD, including:
    • community housing options including the most restrictive settings;
    • provider-owned and non-provider owned residential settings;
    • assistance with living more independently; and
    • rental properties with onsite supports.
  • DADS, other state agencies, and the IDD system redesign advisory committee must work with public housing entities to expand opportunities for affordable, accessible, and integrated housing to meet the complex needs of individuals with disabilities, including individuals with IDD.
  • Requires statewide stakeholder input process to ensure the most comprehensive review of opportunities and options for housing services.

Behavioral Intervention Teams: Implements specialized training (including trauma informed care) and one or more Behavioral Intervention Teams for individuals with IDD at risk of institutionalization.

Income Disregards Study: Directs HHSC to study the need for applying income disregards to individuals with IDD receiving Medicaid benefits and submit a report by January 15, 2015 to the governor, lieutenant governor, House speaker, and the chairs of the Senate Health and Human Services and the House Human Services Committees.

Department of State Health Services Mental Health Priority Populations and Jail Diversion Strategies

  • Local Mental Health Authorities (LMHAs) may ensure, to the extent feasible, provision of assessment, crisis and intensive and comprehensive services for children and adults experiencing significant functional impairment due to certain mental health disorders. Effective January 1, 2014.
  • HHSC must amend MCO contracts to require network adequacy.


  • HHSC must submit an annual report regarding IDD LTSS redesign implementation and recommendations to the Legislature September 30, 2014. Final report due September 30, 2023.
  • HHSC must study automatic managed care enrollment and report to the Legislature by December 1, 2014. Allows automatic enrollment if feasible.
  • Requires study of service and support needs of individuals with Prader-Willi (including stakeholder input) and report by December 1, 2014 regarding housing needs, available crisis intervention programs, and strategies to serve these individuals.
  • HHSC and DADS must submit report to Legislature regarding LA role as service provider by December 1, 2014.
  • Directs HHSC to study the need for applying income disregards to individuals with IDD receiving Medicaid benefits and submit a report by January 15, 2015.
  • HHSC must submit CFC report to Legislature by June 1, 2016.
  • HHSC and DADS must evaluate STAR+PLUS transition outcomes and submit a report to the Legislature on September 30, 2018, 2019, and 2020.

Stakeholder Input

IDD System Redesign Advisory Committee

  • HHSC and DADS must consult with committee on all provisions impacting individuals with IDD.
  • Membership: IDD waiver and ICF clients, IDD advocates; managed care and non-managed care providers (primary and specialty care, mental health, LTSS providers, direct service workers); aging and disability resource centers (ADRCs); LAs; LMHAs; private and public IDD and ICF providers; and MCOs that provide IDD services.
  • HHSC and DADS must appoint members by October 1, 2013.
  • Committee abolished January 1, 2024.

STAR Kids Managed Care Advisory Committee (MCAC)

  • Membership: families of children receiving STAR Kids private duty nursing; providers including at least one private duty nursing provider and one pediatric therapy provider; and other stakeholders as HHSC sees fit.
  • Abolishes committee September 1, 2016.

New Medicaid MCAC Members

  • New Medicaid Managed Care Advisory Committee (MCAC) members: participating providers (not just MCOs); specialty providers; nursing facility attendants; managed care recipients age 65 and over; managed care recipients with mental illness; managed care mental health providers; and independent living centers, area agencies on aging, ADRCs, LAs, LMHAs, and NorthSTAR.
  • Members may also include low-income managed care recipients and recipients with disabilities.
  • MCAC must provide ongoing input regarding managed care program design and benefits; concerns; service efficiency and quality; contract requirements and network adequacy; trends in claims processing and other issues.
  • HHSC must make new MCAC appointments by October 1, 2013.
  • Requires first MCAC meeting with new members by December 1, 2013.
  • Requires coordination between MCAC, regional advisory committees and other committees or groups. MCAC to act as a central source of agency information and stakeholder input regarding Medicaid managed care implementation and operation.

STAR+PLUS Quality Council

  • Establishes the STAR+PLUS Quality Council to advise HHSC on recommendations to ensure individuals receive quality, person-centered, consumer-directed acute care and LTSS in an integrated setting under STAR+PLUS.
  • HHSC must appoint members by October 1, 2013.
  • Membership: HHS agencies, recipients of STAR+PLUS services, advocates, health maintenance organizations, and providers.
  • Council must submit annual reports on November 1, 2014 and November 1, 2016 to HHSC with analysis of STAR+PLUS acute care and LTSS quality and recommendations.
  • HHSC must submit bi-annual reports on December 1, 2014 and December 1, 2016 to the Legislature regarding the Council’s assessments and recommendations.
  • Council abolished January 1, 2017.