By: Maxey H.B. No. 1845
73R3169 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the creation, operation, and funding of the Texas
1-3 Health Plan; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. GENERAL PROVISIONS
1-6 SECTION 1.01. PREAMBLE. (a) The Texas Health Plan is
1-7 created to contain the rising costs of health care through controls
1-8 on spending, rather than through the elimination of services or
1-9 restrictions on access.
1-10 (b) The plan shall:
1-11 (1) provide access to needed health and related
1-12 services to all eligible persons, without regard to income, age,
1-13 race, gender, sexual orientation, health, disability, or employment
1-14 status;
1-15 (2) provide a full array of health, mental health,
1-16 rehabilitation, and personal support services on the basis of
1-17 individual need, preference, and choice through a system that
1-18 ensures access to a full range of service delivery settings and
1-19 providers;
1-20 (3) assure participation so that no individual or
1-21 public or private entity is burdened with a disproportionate share
1-22 of the cost;
1-23 (4) provide quality services with cost containment and
1-24 a minimum of administrative expenses; and
2-1 (5) provide for consumer representation in the
2-2 determination of benefits, resource allocation, planning, and
2-3 quality assurance.
2-4 SECTION 1.02. SHORT TITLE. Articles 1 through 10 of this
2-5 Act may be cited as the Texas Health Plan Act.
2-6 SECTION 1.03. DEFINITIONS. In this Act:
2-7 (1) "Board" means the Texas Board of Health.
2-8 (2) "Capital budget" means that portion of a total
2-9 budget that applies to real property and fixed assets, including
2-10 buildings, machinery, equipment, and maintenance and repair of
2-11 fixed assets. The term does not include regular cleaning and minor
2-12 repairs.
2-13 (3) "Capitation" means a set fee for providing
2-14 specified health care services for all members of an enrolled
2-15 group.
2-16 (4) "Department" means the Texas Department of Health.
2-17 (5) "Division" means the Texas Health Plan division of
2-18 the department.
2-19 (6) "Executive director" means the executive director
2-20 of the department.
2-21 (7) "Fund" means the Texas Health Plan fund created
2-22 under Article 9 of this Act.
2-23 (8) "Global budget" means the prospective operating
2-24 budget of a health care facility, excluding the capital budget of
2-25 the facility.
2-26 (9) "Group practice" means a health maintenance
2-27 organization or other association of health care practitioners that
3-1 provides one or more specialized health care services, including
3-2 laboratory services, X-ray services, emergency care, and inpatient
3-3 or outpatient hospital services.
3-4 (10) "Health care facility" means a clinic, general or
3-5 special hospital, outpatient facility, psychiatric hospital,
3-6 laboratory, skilled nursing facility, intermediate nursing
3-7 facility, or long-term care facility. For the purpose of
3-8 determining global budgets, the term includes a group practice or
3-9 transportation service.
3-10 (11) "Health care practitioner" means an individual
3-11 who is licensed to provide health care in this state.
3-12 (12) "Health care provider" means a health care
3-13 facility or health care practitioner.
3-14 (13) "Implicit price deflator" means a measure of
3-15 inflation published by the United States Department of Commerce.
3-16 (14) "Major capital expenditure" means:
3-17 (A) the purchase of diagnostic, treatment, or
3-18 transportation equipment costing at least $50,000; or
3-19 (B) construction or renovation of facilities.
3-20 (15) "Participating provider" means a health care
3-21 provider who provides health care under the plan.
3-22 (16) "Personal support service" means a service
3-23 designed to assist individuals with disabilities or other acute or
3-24 chronic conditions to engage in the activities of daily living.
3-25 The term includes personal assistance care, attendant care,
3-26 provision of durable medical equipment and supplies, and assistive
3-27 technology, including augmentative communication devices and
4-1 environmental controls.
4-2 (17) "Plan" means the Texas Health Plan.
4-3 (18) "Primary care provider" means a physician,
4-4 osteopathic physician, nurse practitioner, physician's assistant,
4-5 or osteopathic physician's assistant who:
4-6 (A) is certified by the division as a primary
4-7 care provider; and
4-8 (B) provides the first level of health care for
4-9 an eligible person's health needs, including diagnostic and
4-10 treatment services.
4-11 (19) "Texas Health Plan" means the statewide insurance
4-12 plan for comprehensive health care coverage created under this Act.
4-13 (20) "Transportation" means:
4-14 (A) an ambulance, helicopter, or other transport
4-15 that is equipped with emergency supplies and equipment and is used
4-16 to transport patients to health care facilities; and
4-17 (B) other transportation authorized by the
4-18 division.
4-19 SECTION 1.04. CONFIDENTIALITY; PUBLIC RECORDS. (a) Patient
4-20 confidentiality shall be protected under the plan. Information
4-21 that is confidential under other law remains confidential under
4-22 this Act.
4-23 (b) The reports of the board or division that are made under
4-24 this Act are public information except as required to comply with
4-25 the requirements of Subsection (a) of this section.
4-26 SECTION 1.05. DISCRIMINATION PROHIBITED. A health care
4-27 provider may not discriminate against or refuse to furnish health
5-1 care services to a person covered by the plan because of the
5-2 person's race, color, income level, national origin, religion,
5-3 gender, sexual orientation, disabling condition, or payment status
5-4 or because of another nonmedical criterion.
5-5 ARTICLE 2. TEXAS HEALTH PLAN
5-6 SECTION 2.01. CREATION. (a) The Texas Health Plan is
5-7 created to provide a single payor, publicly financed statewide
5-8 insurance plan for comprehensive health care coverage for all
5-9 residents of this state. The plan shall be designed to provide
5-10 comprehensive, necessary, and appropriate health care benefits as
5-11 provided by this Act.
5-12 (b) The plan shall delineate the services to be covered and
5-13 the amount, scope, and duration of benefits. The plan must include
5-14 minimum access standards for all areas of the state and reasonable
5-15 caps on administrative costs.
5-16 (c) The plan shall seek to control health care costs so that
5-17 all eligible persons may receive comprehensive health care services
5-18 consistent with state budget constraints, including needed health
5-19 care services in rural and other underserved areas.
5-20 (d) The plan may phase in coverage for eligible persons as
5-21 full participation in the plan becomes possible through agreements,
5-22 waivers, or federal legislation.
5-23 ARTICLE 3. TEXAS HEALTH PLAN ADMINISTRATION
5-24 SECTION 3.01. BOARD POWERS AND DUTIES; RULES. (a) The
5-25 Texas Board of Health shall adopt and administer the plan through
5-26 the Texas Health Plan division created under this article.
5-27 (b) The board shall:
6-1 (1) adopt a plan of operation to implement this Act;
6-2 (2) educate the public and health care providers about
6-3 the plan and the persons eligible to receive benefits under the
6-4 plan;
6-5 (3) study and adopt the most cost-effective methods of
6-6 providing health care services to all eligible persons, with
6-7 priority given to increased reliance on:
6-8 (A) preventive and primary care;
6-9 (B) providing care in rural or other underserved
6-10 areas of this state;
6-11 (C) community-based alternatives to
6-12 institutional care; and
6-13 (D) case management services as appropriate;
6-14 (4) negotiate and enter into health care reciprocity
6-15 agreements with other states, foreign countries, and out-of-state
6-16 health care providers;
6-17 (5) adopt standard claim forms to be used by all
6-18 health care providers, insurance companies, and other claimants;
6-19 (6) collect and analyze health care data and other
6-20 information necessary to improve the efficiency and effectiveness
6-21 of health care and to control health care costs in this state;
6-22 (7) establish a health care delivery system that is
6-23 efficient to administer and that eliminates unnecessary
6-24 administrative costs;
6-25 (8) study and evaluate the adequacy and quality of
6-26 health care services furnished under the plan, the cost of each
6-27 type of service, and the effectiveness of cost containment measures
7-1 in the plan;
7-2 (9) set or approve changes in benefit standards
7-3 covered by the plan; and
7-4 (10) conduct necessary investigations and inquiries
7-5 and compel the submission of information and documents necessary to
7-6 implement its duties under this Act.
7-7 (c) The board shall establish uniform reporting requirements
7-8 for participating providers.
7-9 (d) The board shall adopt rules as necessary to implement
7-10 this Act and administer the plan.
7-11 SECTION 3.02. CONTRACTS. (a) The board shall adopt
7-12 standards and procedures for negotiating and entering into
7-13 contracts with participating providers.
7-14 (b) A contract entered into under this Act with a health
7-15 care provider is not subject to competitive bidding requirements
7-16 imposed by other law.
7-17 SECTION 3.03. ANNUAL REPORT. The board annually shall
7-18 report to the presiding officer of each house of the legislature
7-19 and the governor relating to the operation of the plan. The annual
7-20 report shall summarize the activities of the board and the division
7-21 and shall recommend any legislative changes required to:
7-22 (1) improve access to health care for the residents of
7-23 this state; and
7-24 (2) effectively implement and administer the plan.
7-25 SECTION 3.04. PROTECTION AGAINST MISUSE OF SYSTEM; REPORT.
7-26 (a) The board by rule shall establish a mechanism to monitor
7-27 periodically the migration of new residents to this state to
8-1 determine if individuals with serious and costly medical needs are
8-2 seeking residency to secure health care coverage in this state. If
8-3 the board determines that that migration is occurring in a manner
8-4 that is detrimental to the continued operation of the plan, the
8-5 board may make recommendations to the legislature to establish more
8-6 stringent requirements for eligibility for coverage under the plan.
8-7 (b) The board shall report the results of each study
8-8 conducted under Subsection (a) of this section to the legislature
8-9 not later than the 20th day after the first day of each regular
8-10 legislative session.
8-11 SECTION 3.05. DIVISION. The Texas Health Plan division is
8-12 created as a division of the Texas Department of Health.
8-13 SECTION 3.06. DIVISION SECTIONS. (a) The executive
8-14 director, with the approval of the board, may establish sections
8-15 within the division for the effective administration and
8-16 performance of the division's functions. The executive director
8-17 may allocate and reallocate functions among the sections.
8-18 (b) In addition to sections authorized under Subsection (a)
8-19 of this section, the following sections are established:
8-20 (1) the operating section;
8-21 (2) the budget section;
8-22 (3) the payment review section;
8-23 (4) the resource planning section; and
8-24 (5) the benefits section.
8-25 SECTION 3.07. DIVISION POWERS AND DUTIES. The division
8-26 shall:
8-27 (1) implement and administer the Texas Health Plan;
9-1 (2) establish a budget, policy guidelines, and a
9-2 benefit package for the plan;
9-3 (3) establish fee schedules and determine aggregate
9-4 capital expenditures for the plan;
9-5 (4) contract with health care providers to provide
9-6 health care services to persons enrolled in the plan;
9-7 (5) monitor the operation of the plan through regular
9-8 data collection and evaluation activities, including evaluation of
9-9 the adequacy and quality of services furnished under the plan, the
9-10 need for changes in the benefit package, the cost of each type of
9-11 service, and the effectiveness of cost containment measures under
9-12 the plan;
9-13 (6) develop and implement enrollment procedures for
9-14 providers and persons eligible for the plan, and disseminate, to
9-15 providers of services and to the public, information concerning the
9-16 plan and the persons eligible to receive benefits under the plan;
9-17 (7) develop and implement cost containment and quality
9-18 assurance procedures, including a professional peer review system;
9-19 (8) specify the terms and conditions for participation
9-20 of health care providers in the plan; and
9-21 (9) establish global budgets for health care
9-22 facilities, including:
9-23 (A) standards and procedures for determining
9-24 base budgets and annual global budgets for health care facilities;
9-25 and
9-26 (B) a capital expenditure program that requires
9-27 prior approval for major capital expenditures for health care
10-1 facilities.
10-2 SECTION 3.08. HEALTH CARE DELIVERY REGIONS. The board may
10-3 divide the state into health care delivery regions based on
10-4 geography and health care resources. The regions may have
10-5 different global budgets, capital allocations, or other features to
10-6 encourage the provision of health care services in rural and other
10-7 underserved areas of this state and may have differential or
10-8 supplemental payment rates or fee schedules in accordance with
10-9 Article 6 of this Act.
10-10 SECTION 3.09. REGIONAL ADVISORY PLANNING COMMITTEES. (a)
10-11 The board shall appoint regional advisory planning committees to
10-12 provide local input into the state health care planning process.
10-13 (b) Each regional advisory planning committee is composed of
10-14 nine members as follows:
10-15 (1) two members who represent employers;
10-16 (2) two members who represent health care providers;
10-17 and
10-18 (3) five members who represent the public.
10-19 (c) A member of a regional advisory planning committee
10-20 serves a two-year term. A member may not serve more than two
10-21 consecutive terms.
10-22 (d) Each committee shall elect a chairman by majority vote.
10-23 (e) Each committee shall meet at least quarterly and more
10-24 frequently as called by the presiding officer.
10-25 (f) A member of the committee who is absent from more than
10-26 two of the quarterly meetings is ineligible to serve the remainder
10-27 of the member's term, and the resulting vacancy shall be filled in
11-1 the manner provided for the initial appointment of that member.
11-2 (g) Each committee shall annually develop and present a
11-3 regional plan to the resource planning section of the division.
11-4 ARTICLE 4. COVERAGE
11-5 SECTION 4.01. COMPREHENSIVE COVERAGE. (a) The plan shall
11-6 offer a comprehensive array of health, mental health,
11-7 rehabilitation, and personal support services that are designed to
11-8 diagnose and treat injury, illness, or disease and to improve or
11-9 maintain the physical and mental health or functional capacities of
11-10 individuals covered by the plan.
11-11 (b) The plan shall provide coverage for:
11-12 (1) chronic and acute primary, secondary, and tertiary
11-13 care;
11-14 (2) long-term care, including personal support
11-15 services and respite care, in the home and, when appropriate, in
11-16 facilities regulated under Chapter 242, Health and Safety Code;
11-17 (3) preventive care, including dental care, vision
11-18 care, and hearing care;
11-19 (4) prescription drugs, including medication
11-20 prescribed to maintain health, psychotropic drugs, and medically
11-21 necessary nutritional products;
11-22 (5) mental health services;
11-23 (6) substance abuse services; and
11-24 (7) family planning and reproductive services.
11-25 (c) The plan may not provide coverage for:
11-26 (1) cosmetic surgery performed on an elective basis;
11-27 (2) a private hospital room unless specifically
12-1 prescribed for a medical reason; or
12-2 (3) a physical examination performed for an insurance,
12-3 lawsuit or occupational health and safety reason.
12-4 SECTION 4.02. ELIGIBILITY FOR PLAN COVERAGE. (a) Each
12-5 resident of this state is entitled to receive benefits for any
12-6 service covered by the plan.
12-7 (b) In addition to persons eligible under Subsection (a) of
12-8 this section, the following persons are eligible for full health
12-9 care benefits under the plan:
12-10 (1) each nonresident who works in this state and the
12-11 dependents of the person, if the person's employer elects to
12-12 purchase coverage under Section 4.08 of this Act;
12-13 (2) each nonresident student enrolled full-time in a
12-14 course of instruction at an institution of higher education in this
12-15 state; and
12-16 (3) each person eligible for Medicare coverage in this
12-17 state.
12-18 (c) If a student at a state institution of higher education
12-19 has not resided in this state for at least one year, the
12-20 institution shall purchase coverage under the plan for the student
12-21 through student fees assessed for this purpose unless the student
12-22 proves health insurance coverage acceptable to the commission by a
12-23 policy issued in another state. The governing body of the
12-24 institution shall assess the fee in an amount set by the board.
12-25 (d) The board shall adopt rules to determine proof of a
12-26 person's eligibility for the plan or a student's proof of
12-27 nonresident insurance coverage. The rules must include a method to
13-1 terminate eligibility when a person is no longer eligible for
13-2 coverage.
13-3 (e) Each eligible person shall receive an identification
13-4 card issued by the plan as proof of eligibility. The card is not
13-5 transferable. A person who lends the card to another and any
13-6 person who uses another's card are each liable to the commission
13-7 for the full cost of the health care services provided to the user.
13-8 (f) Except as provided by Subsection (b)(1) of this section,
13-9 a person is eligible for coverage under the plan without regard to
13-10 whether a premium is paid for the person under Article 9 of this
13-11 Act.
13-12 SECTION 4.03. CHOICE OF PRIMARY CARE PROVIDER. (a) An
13-13 eligible person may choose any participating provider as the
13-14 person's primary care provider, including a practitioner practicing
13-15 on an independent basis, in a group practice, or through a health
13-16 maintenance organization. If an eligible person does not choose a
13-17 primary care provider, the division shall assign the person to a
13-18 primary care provider.
13-19 (b) An eligible person who enrolls in a health maintenance
13-20 organization may change the person's primary care provider only at
13-21 intervals stipulated by the health maintenance organization.
13-22 SECTION 4.04. REFERRALS. The primary care provider shall
13-23 screen all initial requests for medical treatment other than
13-24 medical emergencies. If the expertise of another health care
13-25 provider is needed, the primary care provider shall make a referral
13-26 to a provider in the appropriate specialty area. A secondary
13-27 health care provider shall be paid only if the patient has been
14-1 referred by the patient's primary care provider.
14-2 SECTION 4.05. SPECIALIST AS PRIMARY CARE PROVIDER. The
14-3 board by rule shall specify the conditions under which an eligible
14-4 person may select a specialist as a primary care provider. The
14-5 division shall set nonspecialist rates for specialists serving as
14-6 primary care providers.
14-7 SECTION 4.06. COVERAGE FOR SERVICES PROVIDED IN THIS STATE.
14-8 Services provided in this state must be provided by a participating
14-9 provider.
14-10 SECTION 4.07. COVERAGE FOR OUT-OF-STATE SERVICES. (a) The
14-11 plan, in accordance with Subsection (c) of this section, shall pay
14-12 for services rendered to eligible persons outside this state for
14-13 compelling reasons relating to the suitability of medical care, the
14-14 nature of the condition, and personal circumstances. If an
14-15 eligible person needs health care services while outside this
14-16 state, those services shall be covered under the plan at the same
14-17 rate provided for those services in this state. Additional charges
14-18 for those services may not be paid by the plan unless the board has
14-19 negotiated a reciprocity agreement or other agreement with the
14-20 jurisdiction in which the services were performed or with the
14-21 out-of-state health care provider.
14-22 (b) If a plan member who has previously contributed to the
14-23 plan and who is receiving a pension, benefit, or allowance from a
14-24 public or private retirement system in this state establishes
14-25 residence in another state, the division, in accordance with
14-26 Subsection (c) of this section, shall pay for services comparable
14-27 to the benefits for the covered services provided by the plan to
15-1 plan members residing in this state and receiving a pension,
15-2 benefit, or allowance from a public or private retirement system in
15-3 this state. The division may establish a schedule of partial
15-4 payments for services based on accumulation of service credits
15-5 under a retirement system.
15-6 (c) The board shall establish and operate an indemnity plan
15-7 to provide payments for services under this section. The payments
15-8 shall be made at rates negotiated by the board for benefits for
15-9 comparable services provided by the plan in this state.
15-10 SECTION 4.08. EMPLOYER PARTICIPATION. (a) An employer
15-11 located in this state may purchase coverage under the plan for any
15-12 employee who is a resident of another state but performs services
15-13 related to the course and scope of the employment in this state.
15-14 (b) The division shall charge employers located in another
15-15 state for covered services rendered in this state to their
15-16 employees who are residents of this state.
15-17 ARTICLE 5. COST CONTAINMENT
15-18 SECTION 5.01. EVALUATION; STANDARDS. (a) The board shall
15-19 implement an evaluation and monitoring program that considers, at a
15-20 minimum, the access to care, quality of care, and utilization of
15-21 care provided by the plan, including geographic distribution of
15-22 health care resources.
15-23 (b) The board shall set standards and review benefits to
15-24 ensure that effective, cost-efficient, and appropriate health care
15-25 services are rendered.
15-26 SECTION 5.02. PAYMENT RECOUPMENT. (a) The board by rule
15-27 shall adopt procedures for recouping payments or withholding
16-1 payments for health care services determined by the division to be
16-2 medically unnecessary.
16-3 (b) The board by rule also may assess administrative
16-4 penalties against a health care provider who violates this Act by
16-5 charging the plan for medically unnecessary services. An
16-6 administrative penalty assessed under this section may not exceed
16-7 three times the amount of the charge for the unnecessary service.
16-8 In determining the amount of the penalty, the board shall consider
16-9 the seriousness of the violation.
16-10 (c) If, after examination of a possible violation and the
16-11 facts relating to that possible violation, the board determines
16-12 that a violation has occurred, the board shall issue a preliminary
16-13 report that states the facts on which the conclusion is based, the
16-14 fact that an administrative penalty is to be imposed, and the
16-15 amount to be assessed. Not later than the 10th day after the date
16-16 on which the board issues the preliminary report, the board shall
16-17 send a copy of the report to the person charged with the violation,
16-18 together with a statement of the right of the person to a hearing
16-19 relating to the alleged violation and the amount of the penalty.
16-20 (d) Not later than the 20th day after the day on which the
16-21 report is sent, the person charged either may make a written
16-22 request for a hearing, or may remit the amount of the
16-23 administrative penalty to the board. Failure either to request a
16-24 hearing or to remit the amount of the administrative penalty within
16-25 the time provided by this subsection results in a waiver of a right
16-26 to a hearing under this Act. If the person charged requests a
16-27 hearing, the hearing shall be conducted in the manner provided for
17-1 a hearing under Section 8.02 of this Act. If it is determined
17-2 after hearing that the person has committed the alleged violation,
17-3 the board shall give written notice to the person of the findings
17-4 established by the hearing and the amount of the penalty, and shall
17-5 enter an order requiring the person to pay the penalty.
17-6 (e) Not later than the 30th day after the day on which the
17-7 notice is received, the person charged shall pay the administrative
17-8 penalty in full, or, if the person wishes to contest either the
17-9 amount of the penalty or the fact of the violation, forward the
17-10 assessed amount to the board for deposit in an escrow account. If,
17-11 after judicial review, it is determined that no violation occurred
17-12 or that the amount of the penalty should be reduced, the board
17-13 shall remit the appropriate amount to the person charged with the
17-14 violation not later than the 30th day after the day on which the
17-15 judicial determination becomes final.
17-16 (f) Failure to remit the amount of the administrative
17-17 penalty to the board within the time provided by Subsection (e) of
17-18 this section results in a waiver of all legal rights to contest the
17-19 violation or the amount of the penalty.
17-20 (g) Recouped payments shall be deposited in the Texas Health
17-21 Plan fund. Administrative penalties shall be deposited in the
17-22 general revenue fund.
17-23 SECTION 5.03. SUSPENSION OR REVOCATION OF PARTICIPATION BY
17-24 CERTAIN PROVIDERS. (a) The board may suspend or revoke the
17-25 privilege of a health care provider to provide services under the
17-26 plan for aberrant patterns of practice, including overutilization,
17-27 unnecessary referrals, or other practices that constitute a
18-1 violation of this Act or rules adopted under this Act.
18-2 (b) The board shall report a suspension or revocation under
18-3 this section to the licensing agency of the provider for
18-4 appropriate action.
18-5 SECTION 5.04. FRAUD. The board shall report cases of
18-6 suspected fraud to the attorney general for investigation and
18-7 prosecution.
18-8 SECTION 5.05. PROFESSIONAL PRACTICE GUIDELINES. The board
18-9 shall review and adopt professional practice guidelines developed
18-10 by state and national medical and specialty organizations, federal
18-11 agencies for health care policy and research, and other
18-12 organizations as it considers necessary to promote the quality and
18-13 cost-effectiveness of health care services provided through the
18-14 plan.
18-15 SECTION 5.06. PROVISION OF INFORMATION BY PROVIDER. (a)
18-16 Each participating provider shall furnish information that may
18-17 reasonably be required by the board for utilization review, quality
18-18 assurance, cost containment, payments, and statistical and other
18-19 studies of the operation of the plan.
18-20 (b) Each participating provider shall permit the board to
18-21 examine its records as necessary to verify payment.
18-22 ARTICLE 6. PROVIDER PAYMENTS
18-23 SECTION 6.01. PAYMENT METHODS. (a) Consistent with state
18-24 budget constraints, the plan shall provide payment for all covered
18-25 health care services rendered by health care providers. A variety
18-26 of payment plans, including fee-for-service payments, compensation
18-27 caps, capitated payments, and prospective payments may be used by
19-1 the plan as provided by this Act.
19-2 (b) The plan may use differential or supplemental payment
19-3 rates or fee schedules in different health care delivery regions to
19-4 provide incentives to help ensure the delivery of needed health
19-5 care services in rural and other underserved areas of this state.
19-6 (c) The plan may require that certain highly technical
19-7 procedures be reimbursed only when performed in certain types of
19-8 health care facilities or by certain categories of health care
19-9 practitioners.
19-10 SECTION 6.02. PROVIDER REIMBURSEMENT. (a) A health care
19-11 provider is entitled to reimbursement from the plan as provided by
19-12 this article for services provided to a covered person if the
19-13 services are within the scope of the provider's license.
19-14 (b) Payment, or the offer of payment whether or not
19-15 accepted, to a health care provider for services covered by the
19-16 plan constitutes payment in full for those services. A provider
19-17 may not charge a patient covered under the plan any additional
19-18 amounts for covered services.
19-19 SECTION 6.03. INSTITUTIONAL PROVIDERS. The plan shall pay
19-20 the expenses of health maintenance organizations, and the expenses
19-21 of hospitals, nursing homes, and other health care facilities that
19-22 provide inpatient services, including institutions providing
19-23 inpatient or overnight care, and ambulatory diagnostic, treatment,
19-24 and surgical facilities, on the basis of annual budgets approved by
19-25 the board under Article 7 of this Act.
19-26 SECTION 6.04. NONINSTITUTIONAL PROVIDERS. (a) The plan
19-27 shall reimburse noninstitutional health care providers on a
20-1 fee-for-service basis.
20-2 (b) The division annually shall adopt the fee schedule after
20-3 consulting with the appropriate licensing agency and any
20-4 appropriate professional group or trade association.
20-5 (c) In developing fee schedules, the division may consider
20-6 recognized geographic differences in the cost of practice.
20-7 (d) To the greatest extent possible, fee schedule categories
20-8 must include payment for all procedures routinely performed for a
20-9 given diagnosis.
20-10 SECTION 6.05. CAPITATED PAYMENTS. (a) A health maintenance
20-11 organization or other multispecialty organization of health care
20-12 practitioners may elect to be reimbursed on a capitation basis
20-13 instead of on a fee-for-service basis.
20-14 (b) Payment on a capitation basis does not cover inpatient
20-15 services provided by a multispecialty organization for an
20-16 institutional provider.
20-17 ARTICLE 7. BUDGET REQUIREMENTS
20-18 SECTION 7.01. STATE HEALTH PLAN BUDGET. (a) The board
20-19 biennially shall develop a state health plan budget for each year
20-20 of the state fiscal biennium. The budget shall establish the total
20-21 amount to be spent by the plan for covered health care services in
20-22 each year covered by the budget. The budget shall include payments
20-23 available for all participating health care providers and for
20-24 capital expenditures.
20-25 (b) The board shall present the budget plan to the
20-26 Legislative Budget Board and the governor in a timely manner for
20-27 consideration in the legislative appropriations process.
21-1 SECTION 7.02. GLOBAL BUDGET; PAYMENT TO FACILITIES. (a)
21-2 Each health care facility shall negotiate an annual global budget
21-3 with the board, based on past performance and projected changes in
21-4 costs and services anticipated for the subsequent year. If a
21-5 negotiated agreement is not reached, the board shall set the global
21-6 budget for the facility. The initial budget shall be based on
21-7 calendar year 1994, appropriately adjusted by the implicit price
21-8 deflator not to exceed five percent annually from 1994 to the first
21-9 global budget. Thereafter, increases in global budgets are limited
21-10 by the implicit price deflator.
21-11 (b) Each health care practitioner employed by a globally
21-12 budgeted health care facility shall be paid from the budget
21-13 allocation in a manner determined by the health care facility.
21-14 SECTION 7.03. CAPITAL BUDGETS; MAJOR CAPITAL EXPENDITURES.
21-15 (a) The board shall adopt an annual capital budget.
21-16 (b) Allocations to geographic areas and to individual health
21-17 care providers shall be based on need, as defined by the plan,
21-18 shall be computed so that the minimum access standards of the plan
21-19 are considered for all areas of the state, and shall ensure the
21-20 efficient development and operation of necessary facilities.
21-21 (c) A participating provider may not make a major capital
21-22 expenditure without prior approval. The division may approve major
21-23 capital expenditures between $50,000 and $500,000 as provided by
21-24 rules adopted by the board. The board must approve major capital
21-25 expenditures of more than $500,000.
21-26 (d) The approval of a major capital expenditure must be
21-27 based on efforts to achieve the following:
22-1 (1) fulfill unmet needs;
22-2 (2) preclude unnecessary expansion of facilities and
22-3 services;
22-4 (3) ensure the efficient development of health care
22-5 facilities that are appropriate to the services provided;
22-6 (4) ensure sufficient access to health care
22-7 facilities; and
22-8 (5) ensure access to efficacious new technologies.
22-9 (e) A participating provider may not engage in component
22-10 purchasing to avoid restrictions on major capital expenditures.
22-11 The board may deduct the total cost of component purchases in the
22-12 next year's capital budget or the appropriate operating budget.
22-13 For purposes of this subsection, "component purchasing" means the
22-14 purchase of component parts or other purchasing practices with the
22-15 effect of circumventing major capital expenditure restrictions.
22-16 ARTICLE 8. DISPUTE RESOLUTION
22-17 SECTION 8.01. APPEALS. (a) An applicant for or a recipient
22-18 of a health care service provided under the plan may appeal a
22-19 decision regarding eligibility, a decision regarding covered
22-20 services, or a primary care provider's referral decision.
22-21 (b) A health care provider may appeal a decision regarding a
22-22 claim, a budget, or the right to practice.
22-23 (c) An appeal may be settled summarily by the executive
22-24 director if the person making the appeal presents evidence
22-25 satisfactory to the executive director that an erroneous decision
22-26 was made. If the summary appeal is unsuccessful, the person may
22-27 request a hearing.
23-1 SECTION 8.02. HEARING. (a) The board shall establish by
23-2 rule procedures for the filing of a request for a hearing and the
23-3 period within which a request may be filed. The board may grant
23-4 reasonable extensions of the filing period. If the request for a
23-5 hearing is not filed in a timely manner, the initial decision is
23-6 final. On receipt of a timely request, the board shall give the
23-7 appellant reasonable notice of the opportunity for a hearing.
23-8 (b) A hearing under this section shall be conducted by the
23-9 State Office of Administrative Hearings. The board shall review
23-10 the record of the proceedings and shall make a final decision based
23-11 on that record. The board may set aside the decision of the State
23-12 Office of Administrative Hearings only if the board finds that the
23-13 decision is:
23-14 (1) arbitrary, capricious, or an abuse of discretion;
23-15 (2) not supported by substantial evidence in the
23-16 record as a whole; or
23-17 (3) otherwise not in accordance with this Act or rules
23-18 adopted under this Act.
23-19 SECTION 8.03. JUDICIAL REVIEW. A person who has exhausted
23-20 all administrative remedies under this Act and who is aggrieved by
23-21 a final decision of the board under Section 8.02 of this Act is
23-22 entitled to judicial review in the manner provided for judicial
23-23 review of a contested case under Section 19, Administrative
23-24 Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
23-25 Civil Statutes), and its subsequent amendments.
23-26 ARTICLE 9. PLAN FUNDING
23-27 SECTION 9.01. TEXAS HEALTH PLAN FUND. (a) The Texas Health
24-1 Plan fund is created as a special fund in the state treasury. The
24-2 fund is composed of:
24-3 (1) premiums paid into the fund under Section 9.03 of
24-4 this Act;
24-5 (2) state money credited to the fund under Subsection
24-6 (b) of this section;
24-7 (3) federal money credited to the fund under
24-8 Subsection (c) of this section; and
24-9 (4) any other local, state, or federal funds
24-10 deposited, transferred, distributed, or otherwise accruing or
24-11 credited to the fund for the operation of the plan.
24-12 (b) All state money appropriated for the delivery,
24-13 administration, and eligibility determination of health care shall
24-14 be deposited in the fund, including:
24-15 (1) the disability and accident insurance portion of
24-16 workers' compensation benefits for state employees;
24-17 (2) state paid health insurance premiums for state
24-18 employees;
24-19 (3) mental health and mental retardation funds;
24-20 (4) substance abuse treatment and education funds;
24-21 (5) state contributions to the Medicaid program;
24-22 (6) funds used by state agencies to establish health
24-23 insurance coverage for special populations;
24-24 (7) prisoner and detainee health care funds; and
24-25 (8) medical research and education funds.
24-26 (c) To the extent consistent with Section 9.04 of this Act,
24-27 all federal money received by this state or a political subdivision
25-1 of this state for health care shall be deposited in the fund,
25-2 including:
25-3 (1) Medicaid contributions;
25-4 (2) medical research and education funds;
25-5 (3) substance abuse treatment and education funds; and
25-6 (4) federal grants for health care delivery, planning,
25-7 and education purposes.
25-8 (d) Any amounts earned from investment of the fund shall be
25-9 credited to the fund.
25-10 (e) The fund may be used only for the operation of the plan.
25-11 (f) The institutional budgets of state agencies shall remain
25-12 distinct from the fund, except for those portions of a budget that
25-13 provide health care services provided to residents of this state
25-14 through the plan.
25-15 SECTION 9.02. PREMIUMS. (a) The board shall set health
25-16 care premium rates for persons covered by the plan.
25-17 (b) Employee premium rates shall be based on annual employee
25-18 compensation. The board shall prepare tables to inform employers
25-19 of the amount to withhold under Section 9.03 of this Act for
25-20 premium payments. In preparing the tables, the board shall include
25-21 as a factor the number of dependents of each employee, so that the
25-22 premium amount assessed an individual employee does not present a
25-23 hardship for an employee with limited resources.
25-24 (c) Employer premium rates shall be based on the employer's
25-25 total payroll within this state.
25-26 (d) Premium rates for a person who is self-employed shall be
25-27 based on the person's annual income and shall be adjusted to
26-1 reflect the joint employer/employee status of that employment
26-2 situation.
26-3 SECTION 9.03. DUTIES OF EMPLOYERS. (a) Each employer who
26-4 deducts and withholds a portion of an employee's wages for payment
26-5 of federal income tax shall deduct and withhold for each payroll
26-6 period after January 1, 1994, the state health plan premium due for
26-7 each employee. The premiums shall be paid to the comptroller for
26-8 deposit in the fund.
26-9 (b) The amount deducted and withheld for each employee in a
26-10 payroll period shall be the amount of the estimated annual state
26-11 health plan premium due for that employee divided by the number of
26-12 payroll periods in the calendar year.
26-13 (c) The comptroller by rule shall:
26-14 (1) determine adjustments in premium withholding
26-15 amounts for employees who have multiple employers or multiple
26-16 sources of income, including unearned income, and for employees in
26-17 households in which more than one employee is subject to the state
26-18 health plan premium deduction; and
26-19 (2) establish a quarterly payment system for
26-20 collection of premiums from eligible persons who are not subject to
26-21 federal income tax withholding by an employer.
26-22 (d) Each employer shall file an annual statement of premium
26-23 withholding for each eligible person for whom premium payments have
26-24 been deducted and withheld by the employer. The statement shall be
26-25 in a form prescribed by the comptroller and shall be filed with the
26-26 comptroller on or before March 1st of the year after the year for
26-27 which the statement is made. The statement must include the total
27-1 amount of state health plan premium payments deducted and withheld
27-2 for each employee for the calendar year.
27-3 (e) In addition to the statement required under Subsection
27-4 (d) of this section, the comptroller by rule may require employers
27-5 to provide information to the comptroller as necessary to
27-6 administer this section.
27-7 SECTION 9.04. FEDERAL HEALTH INSURANCE PROGRAM WAIVERS;
27-8 REIMBURSEMENT TO PLAN FROM FEDERAL AND OTHER HEALTH INSURANCE
27-9 PROGRAMS. (a) The board shall:
27-10 (1) apply to the United States Department of Health
27-11 and Human Services for all waivers of requirements under health
27-12 care programs established under the Social Security Act and its
27-13 subsequent amendments that are necessary to enable this state to
27-14 deposit federal payments for services covered by the state health
27-15 plan into the fund and to be the supplemental payer of benefits for
27-16 persons receiving Medicare benefits; and
27-17 (2) identify other federal programs that provide
27-18 federal funds for payment of health care services to individuals
27-19 and apply for any waivers or enter into any agreements necessary to
27-20 enable this state to deposit those federal payments for health care
27-21 services covered by the plan into the fund.
27-22 (b) The board shall seek payment to the plan from Medicaid,
27-23 Medicare, or any other federal program for any reimbursable payment
27-24 for a service provided under the plan.
27-25 (c) The board shall seek to maximize federal contributions
27-26 and payments for health care services provided in this state and
27-27 shall ensure that the contributions of the federal government for
28-1 health care services in this state do not decrease in relation to
28-2 other states as a result of any waiver, exemption, or agreement.
28-3 SECTION 9.05. ERISA. The board may take appropriate action
28-4 to seek any amendments to the Employee Retirement Income Security
28-5 Act of 1974 (29 U.S.C. Section 1001 et seq.) and its subsequent
28-6 amendments that are necessary to exempt this state from the
28-7 provisions of that Act that relate to health care services or
28-8 health insurance or may apply to the appropriate federal agency for
28-9 waivers of any requirements of that Act if the United States
28-10 Congress provides for waivers.
28-11 ARTICLE 10. INSURANCE ISSUES
28-12 SECTION 10.01. DUPLICATE COVERAGE PROHIBITED. (a) A
28-13 policy, plan, or contract of health insurance coverage issued,
28-14 sold, or renewed in this state by an insurance company on or after
28-15 January 1, 1995, may not offer benefits that duplicate coverage
28-16 offered under the plan.
28-17 (b) A policy, plan, or contract may offer benefits that do
28-18 not duplicate coverage offered by the plan.
28-19 (c) This section does not affect insurance coverage subject
28-20 to the Employee Retirement Income Security Act of 1974 (29 U.S.C.
28-21 Section 1001 et seq.) unless the state obtains a waiver from the
28-22 federal government under Section 9.04 of this Act.
28-23 SECTION 10.02. PRIVATE COVERAGE EXPIRATION. A person may
28-24 not insure the person or the person's employees for health care
28-25 coverages after January 1, 1995, unless the coverage terminates on
28-26 the date that the insureds are eligible for coverage under the
28-27 plan.
29-1 SECTION 10.03. COOPERATION WITH TEXAS DEPARTMENT OF
29-2 INSURANCE. (a) The board shall cooperate with the Texas
29-3 Department of Insurance to identify health care cost savings that
29-4 are achieved through the implementation of the plan. The board and
29-5 that department shall monitor savings by insurance companies on
29-6 payments made by those companies for medical services provided
29-7 under motor vehicle liability insurance, homeowners' insurance,
29-8 workers' compensation insurance, and other insurance coverages that
29-9 have a medical payment component. The board and that department
29-10 shall report the results of the findings in a joint annual report
29-11 to the legislature at each regular legislative session.
29-12 (b) The Texas Department of Insurance shall require
29-13 insurance companies to lower premiums paid under any policy of
29-14 insurance that contains coverage for medical benefits as soon as
29-15 data indicates that health care costs paid by those companies are
29-16 decreasing because of implementation of the plan.
29-17 ARTICLE 11. TRANSITION; EFFECTIVE DATE; EMERGENCY
29-18 SECTION 11.01. CONSOLIDATION OF LOCAL SPENDING; REPORT. (a)
29-19 The Texas Board of Health, in cooperation with the comptroller,
29-20 shall submit to the legislature and governor by May 1, 1994, a
29-21 report identifying and evaluating the probable effects on the
29-22 quality and costs of health care in this state that would result
29-23 from a requirement that all money raised by political subdivisions
29-24 of this state through local taxes and spent for local health care
29-25 concerns be deposited in the Texas Health Plan fund and
29-26 administered through the Texas Health Plan.
29-27 (b) The report must include an analysis of local health care
30-1 provided through hospital districts created under Article IX of the
30-2 Texas Constitution and the effect on local health care that would
30-3 result if those districts were abolished.
30-4 SECTION 11.02. EFFECT ON COLLECTIVE BARGAINING AGREEMENTS.
30-5 An employer who, on January 1, 1995, is subject to a collective
30-6 bargaining agreement that provides benefits:
30-7 (1) greater than or equal to those benefits provided
30-8 by the Texas Health Plan shall, unless the agreement otherwise
30-9 provides, maintain the negotiated level of benefits until the
30-10 expiration of the agreement; or
30-11 (2) less than those benefits provided by the Texas
30-12 Health Plan shall until the expiration of the agreement provide
30-13 additional benefits so that the benefits provided under the
30-14 agreement equal the benefits provided under the plan.
30-15 SECTION 11.03. SPENDING MORATORIUM. Effective September 1,
30-16 1993, there is a two-year moratorium on major capital expenditures
30-17 funded in whole or in part with state funds by health providers.
30-18 The Texas Board of Health by rule may grant a waiver of the
30-19 moratorium to a health care provider who presents evidence
30-20 satisfactory to the board of an urgent need for a major capital
30-21 expenditure because of an emergency situation.
30-22 SECTION 11.04. REPORT. Not later than January 15, 1995, the
30-23 Texas Board of Health shall report to the appropriate committees of
30-24 the 74th Legislature on the capital needs of health care
30-25 facilities, including state and local government facilities, with a
30-26 focus on the underserved geographic areas of the state with
30-27 substantially below average health care facilities and investment
31-1 per capita as compared to the state average. The report shall also
31-2 address geographic areas in which the distance to health care
31-3 facilities imposes a barrier to care. The report shall include a
31-4 section regarding health care transportation needs, including
31-5 capital, personnel, and training needs.
31-6 SECTION 11.05. EFFECTIVE DATE. (a) Except as provided by
31-7 Subsection (b) of this Act, this Act takes effect September 1,
31-8 1993.
31-9 (b) A person eligible for coverage under the Texas Health
31-10 Plan as adopted by this Act is not entitled to receive benefits
31-11 under the plan until January 1, 1995.
31-12 SECTION 11.06. EMERGENCY. The importance of this
31-13 legislation and the crowded condition of the calendars in both
31-14 houses create an emergency and an imperative public necessity that
31-15 the constitutional rule requiring bills to be read on three several
31-16 days in each house be suspended, and this rule is hereby suspended.