By Wolens H.B. No. 1884
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to cooperative agreements among hospitals.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Title 4, Health and Safety Code, is amended by
1-5 adding Chapter 313 to read as follows:
1-6 CHAPTER 313. COOPERATIVE AGREEMENTS AMONG HOSPITALS
1-7 Sec. 313.001. DEFINITIONS. In this chapter:
1-8 (1) "Attorney General" means the Attorney General of
1-9 Texas or any assistant attorney general acting under the direction
1-10 of the Attorney General of Texas.
1-11 (2) "Cooperative agreement" means an agreement among
1-12 two or more hospitals for the allocation or sharing of health care
1-13 equipment, facilities, personnel or services.
1-14 (3) "Department" means the Texas Department of Health.
1-15 (4) "Hospital" means a general or special hospital
1-16 licensed under Chapter 241 or a private mental hospital licensed
1-17 under Chapter 577.
1-18 Sec. 313.002. REVIEW AND CERTIFICATION OF COOPERATIVE
1-19 AGREEMENTS
1-20 (a) A hospital may negotiate and enter into cooperative
1-21 agreements with other hospitals in the state if the likely benefits
1-22 resulting from the agreement outweigh any disadvantages
1-23 attributable to a reduction in competition that may result from the
2-1 agreements. A board member, employee or officer of a hospital may
2-2 conduct discussions or negotiations with board members, employees
2-3 or officers of other hospitals concerning cooperative agreements,
2-4 and participation in such discussions or negotiations shall not
2-5 subject the board member, employee or officer to civil or criminal
2-6 enforcement action under Chapter 15 of the Business and Commerce
2-7 Code.
2-8 (b) Parties to a cooperative agreement may apply to the
2-9 department for a certification of public advantage governing the
2-10 cooperative agreement. The application must include a written copy
2-11 of the cooperative agreement and describe the nature and scope of
2-12 the cooperation in the agreement and any consideration passing to
2-13 any party under the agreement. A copy of the application and
2-14 copies of all additional related materials must be submitted to the
2-15 attorney general and to the department at the same time.
2-16 (c) The department shall review the application in
2-17 accordance with the standards set forth in subsection (e) and may
2-18 hold a public hearing in accordance with rules adopted by the
2-19 department. The department shall grant or deny the application
2-20 with 120 days of the date of filing of the application and that
2-21 decision must be in writing and set forth the basis for the
2-22 decision. The department shall furnish a copy of the decision to
2-23 the applicants, the attorney general and any intervenor within 10
2-24 days of its issuance.
2-25 (d) The department shall issue a certificate of public
3-1 advantage for a cooperative agreement if it determines that the
3-2 applicants have demonstrated by clear and convincing evidence that
3-3 the likely benefits resulting from the agreement outweigh any
3-4 disadvantages attributable to a reduction in competition that may
3-5 result from the agreement.
3-6 (e) In evaluating the potential benefits of a cooperative
3-7 agreement, the department shall consider whether one or more of the
3-8 following benefits may result from the cooperative agreement:
3-9 (1) Enhancement of the quality of hospital and
3-10 hospital-related care provided to Texas citizens;
3-11 (2) Preservation of hospital facilities in
3-12 geographical proximity to the communities traditionally served by
3-13 those facilities.
3-14 (3) Gains in the cost efficiency of services provided
3-15 by the hospitals involved;
3-16 (4) Improvements in the utilization of hospital
3-17 resources and equipment; and
3-18 (5) Avoidance of duplication of hospital resources.
3-19 (f) The department's evaluation of any disadvantages
3-20 attributable to any reduction in competition likely to result from
3-21 the agreement may include, but need not be limited to, the
3-22 following factors:
3-23 (1) The extent of any adverse impact on the ability of
3-24 health maintenance organizations, preferred provider organizations
3-25 or other health care payors to negotiate payment and service
4-1 arrangements with hospitals, physicians, allied health care
4-2 professionals or other health care providers;
4-3 (2) The extent of any reduction in competition among
4-4 physicians, allied health professionals, other health care
4-5 providers or other persons furnishing goods or services to, or in
4-6 competition with, hospitals;
4-7 (3) The extent of any adverse impact on patients in
4-8 the quality, availability, and price of health care services; and
4-9 (4) The availability of arrangements that are less
4-10 restrictive to competition and achieve the similar benefits.
4-11 (g) The department shall consult with the attorney general
4-12 regarding any potential reduction in competition that may result
4-13 from a cooperative agreement. The attorney general shall review
4-14 the application and all supporting documents provided by the
4-15 applicants, any documents or other information provided by any
4-16 intervenors, any documents or testimony provided at a public
4-17 hearing, if any, on the application and shall advise the department
4-18 whether the proposed cooperative agreement would have inappropriate
4-19 impact on competition. If the attorney general advises the
4-20 department to deny an application, the attorney general shall state
4-21 the basis and reasons for the recommended denial.
4-22 SEC. 313.003. IMMUNITY PROVIDED APPROVED COOPERATIVE
4-23 AGREEMENTS
4-24 (a) Hospitals participating in an approved cooperative
4-25 agreement are immune from civil enforcement action and criminal
5-1 prosecution for actions that otherwise violate Section 15.05 of the
5-2 Business and Commerce Code.
5-3 (b) A board member, employee or officer of a hospital who
5-4 participates in the implementation of an approved cooperative
5-5 agreement are also immune from any civil enforcement action or
5-6 criminal prosecution for actions that might otherwise violate
5-7 Section 15.05 of the Business and Commerce Code.
5-8 Sec. 313.004. MONITORING OF APPROVED COOPERATIVE AGREEMENTS
5-9 (a) If, at any time following the approval of a
5-10 cooperative agreement by the department, the attorney general or
5-11 the department determines that as a result of changed circumstances
5-12 the benefits resulting from an approved agreement no longer
5-13 outweigh any disadvantages attributable to a reduction in
5-14 competition resulting from the agreement, the department may
5-15 initiate proceedings to terminate the certificate of public
5-16 advantage.
5-17 (b) The department may request documents from the
5-18 parties to the cooperative agreement regarding the current status
5-19 of the agreement, including information relative to the continued
5-20 benefits and any disadvantages of the agreement and may hold a
5-21 public hearing to solicit additional information concerning the
5-22 effects of the cooperative agreement.
5-23 (c) The attorney general may issue a civil
5-24 investigative demand on the parties to the cooperative agreement as
5-25 authorized by Section 15.10 of the Business and Commerce Code, and
6-1 may participate in any investigations or hearings conducted by the
6-2 department relative to the termination of a certificate of public
6-3 advantage.
6-4 (d) If the department determines that the likely
6-5 benefits resulting from an approved cooperative agreement no longer
6-6 outweigh any disadvantages attributable to any potential reduction
6-7 in competition resulting from the agreement, the department may
6-8 terminate the certificate of public advantage.
6-9 SEC. 313.005. JUDICIAL REVIEW OF DEPARTMENT ACTION
6-10 (a) Any party aggrieved by a decision of the
6-11 department in granting or denying an application, refusing to act
6-12 on an application or terminating a certificate is entitled to
6-13 judicial review of the decision in accordance with the
6-14 Administrative Procedure and Texas Register Act (Article 6252-13a,
6-15 Vernon's Texas Civil Statutes).
6-16 SEC. 313.006. ATTORNEY GENERAL AUTHORITY
6-17 Nothing in this section shall limit the authority of the
6-18 attorney general to initiate civil enforcement action or criminal
6-19 enforcement if the attorney general determines that the hospitals
6-20 participating in an approved cooperative agreement have exceeded
6-21 the scope of the approved agreement.
6-22 SECTION 2. This Act takes effect September 1, 1993.
6-23 SECTION 3. The importance of this legislation and the
6-24 crowded condition of the calendars in both houses create an
6-25 emergency and an imperative public necessity that the
7-1 constitutional rule requiring bills to be read on three several
7-2 days in each house be suspended, and this rule is hereby suspended.