House committee substitute makes the following changes to 1st edition. Deletes provision directing the Department of Health and Human Services (DHHS) to prepare and publish, by April 1, 2011, the Request for Applications (RFA) for Local Management Entities (LMEs) to seek approval to operate a 1915(b)/(c) Medicaid Waiver. Provides that by August 1, 2011, DHHS must select LMEs that have been assessed to meet minimum criteria for Waiver operations under the requirements of RFA #2011-261 issued on April 1, 2011. Provides that county governments are not financially liable for overspending or cost overruns of Medicaid services that are associated with a county program or multicounty program’s operation of a 1915(b)/(c) Medicaid Waiver beyond the county or multicounty program’s Medicaid risk reserve and Medicaid fund balance amounts. Adds Treatment Plan development and Referral to Services to the managed care functions that LMEs may subcontract to other entities. Makes organizational changes and technical changes.