1-1 By: Zaffirini, Moncrief, Harris of Tarrant S.B. No. 211
1-2 (In the Senate - Filed February 1, 1993; February 1, 1993,
1-3 read first time and referred to Committee on Health and Human
1-4 Services; March 19, 1993, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 8, Nays 0;
1-6 March 19, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Zaffirini x
1-10 Ellis x
1-11 Madla x
1-12 Moncrief x
1-13 Nelson x
1-14 Patterson x
1-15 Shelley x
1-16 Truan x
1-17 Wentworth x
1-18 COMMITTEE SUBSTITUTE FOR S.B. No. 211 By: Zaffirini
1-19 A BILL TO BE ENTITLED
1-20 AN ACT
1-21 relating to illegal remuneration; creating an offense; providing
1-22 penalties.
1-23 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-24 SECTION 1. Subchapter I, Chapter 161, Health and Safety
1-25 Code, as added by Chapter 15, Acts of the 72nd Legislature, 1st
1-26 Called Session, 1991, is amended to read as follows:
1-27 SUBCHAPTER I. ILLEGAL REMUNERATION
1-28 Sec. 161.091. PROHIBITION ON ILLEGAL REMUNERATION. (a) A
1-29 person <licensed, certified, or registered by a health care
1-30 regulatory agency of this state> commits an offense if the person
1-31 intentionally or knowingly offers to pay or agrees to accept any
1-32 remuneration directly or indirectly, overtly or covertly, in cash
1-33 or in kind, to or from any person, firm, association of persons,
1-34 partnership, or corporation for securing or soliciting patients or
1-35 patronage for or from a person licensed, certified, or registered
1-36 by a state health care regulatory agency.
1-37 (b) It is a rebuttable presumption that a person has
1-38 violated this section if:
1-39 (1) the person refers or accepts a referral of a
1-40 person to an inpatient mental health facility or chemical
1-41 dependency treatment facility;
1-42 (2) before the patient is discharged or furloughed
1-43 from the inpatient facility, the person pays the referring person
1-44 or accepts payment from the inpatient facility for outpatient
1-45 services to be provided by the referring person after the patient
1-46 is discharged or furloughed from the inpatient facility; and
1-47 (3) the referring person does not provide the
1-48 outpatient services for which payment was made and does not return
1-49 to the inpatient facility the payment for the services not
1-50 provided.
1-51 (c) This section shall not be construed to prohibit
1-52 advertising except that which is false, misleading, or deceptive or
1-53 that which advertises professional superiority or the performance
1-54 of a professional service in a superior manner and that is not
1-55 readily subject to verification.
1-56 (d) <(c)> Except as provided by this section, an offense
1-57 under this section is a Class A misdemeanor. If it is shown on
1-58 <in> the trial of a person under <violation of> this section that
1-59 the person has previously been convicted of an offense under <a
1-60 violation of> this section or that the person was employed by a
1-61 federal, state, or local government at the time the offense
1-62 occurred, the offense is<, on conviction the person shall be
1-63 punished for> a felony of the third degree. In addition to any
1-64 other penalties or remedies provided, a violation of this section
1-65 shall be grounds for disciplinary action by a <the> regulatory
1-66 agency that has issued a license, certification, or registration to
1-67 the person.
1-68 (e) <(d) The appropriate health care regulatory agency may
2-1 institute an action to enjoin a violation or potential violation of
2-2 this section. The action for an injunction shall be in addition to
2-3 any other action, proceeding, or remedy authorized by law. The
2-4 regulatory agency shall be represented by the attorney general.>
2-5 <(e) This section shall not be construed to prohibit
2-6 remuneration for advertising, marketing, or other services that are
2-7 provided for the purpose of securing or soliciting patients
2-8 provided the remuneration is set in advance, is consistent with the
2-9 fair market value of the services, and is not based on the volume
2-10 or value of any patient referrals or business otherwise generated
2-11 between the parties.>
2-12 <(f)> This section shall <not> be construed to permit
2-13 <prohibit> any payment, business arrangements, or payments practice
2-14 permitted <not prohibited> by 42 U.S.C. Section 1320a-7b(b) or any
2-15 regulations promulgated pursuant thereto.
2-16 (f) <(g)> This section shall not apply to licensed insurers,
2-17 governmental entities, including intergovernmental risk pools
2-18 established under Chapter 172, Local Government Code, and
2-19 institutions as defined in the Texas State College and University
2-20 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
2-21 Texas Insurance Code), group hospital service corporations, or
2-22 health maintenance organizations which reimburse, provide, offer to
2-23 provide, or administer hospital, medical, dental, or other
2-24 health-related benefits under a health benefits plan for which it
2-25 is the payor.
2-26 Sec. 161.0915. EXEMPTION. (a) This subchapter does not
2-27 apply to a health care information service that:
2-28 (1) provides its services to a consumer only by
2-29 telephone communication on request initiated by the consumer and
2-30 without charge to the consumer;
2-31 (2) provides information about health care providers
2-32 to enable consumer selection of health care provider services
2-33 without any direct influence by a health care provider on actual
2-34 consumer selection of those services;
2-35 (3) in response to each consumer inquiry, on a
2-36 nondiscriminatory basis, provides information identifying health
2-37 care providers who substantially meet the consumer's detailed
2-38 criteria based on consumer responses to standard questions designed
2-39 to elicit a consumer's criteria for a health care provider,
2-40 including criteria concerning location of the practice, practice
2-41 specialties, costs and payment policies, acceptance of insurance
2-42 coverage, general background and practice experience, and various
2-43 personal characteristics;
2-44 (4) does not attempt through its standard questions
2-45 for solicitation of consumer criteria or through any other means or
2-46 methods to steer or lead a consumer to select or consider selection
2-47 of a particular health care provider for health care provider
2-48 services;
2-49 (5) identifies to a consumer:
2-50 (A) all health care providers who substantially
2-51 meet the consumer's stated criteria and who are located within the
2-52 zip code area in which the consumer elects to obtain services from
2-53 a health care provider; or
2-54 (B) all health care providers substantially
2-55 meeting the consumer's stated criteria who are located in zip code
2-56 areas in the closest proximity to the elected zip code area if no
2-57 health care provider substantially meeting the consumer's criteria
2-58 is located within that zip code area;
2-59 (6) discloses to each consumer the relationship
2-60 between the health care information service and health care
2-61 providers participating in its services;
2-62 (7) does not provide or represent itself as providing
2-63 diagnostic or counseling services or assessment of illness or
2-64 injury and does not make any promises of cure or guarantees of
2-65 treatment;
2-66 (8) does not provide or arrange for transportation of
2-67 a consumer to or from the location of a health care provider;
2-68 (9) does not limit the scope of or direct its
2-69 advertising or other marketing of its services to a particular
2-70 health care provider specialty, to a particular segment of the
3-1 population, or to persons suffering from a particular illness,
3-2 condition, or infirmity;
3-3 (10) charges to and collects fees from a health care
3-4 provider participating in its services that are set in advance, are
3-5 consistent with the fair market value for those information
3-6 services, and are not based on the potential value of a patient or
3-7 patients to a health care provider or on the value of or a
3-8 percentage of the value of a professional service provided by the
3-9 health care provider;
3-10 (11) does not limit participation by a health care
3-11 provider in its services to a particular health care specialty or
3-12 to a particular service provided by a health care provider;
3-13 (12) does not limit participation by a health care
3-14 provider in its services for a reason other than:
3-15 (A) failure to have a current, valid license
3-16 without limitation to practice in this state;
3-17 (B) failure to maintain professional liability
3-18 insurance while participating in the service;
3-19 (C) significant dissatisfaction of consumers of
3-20 the health care information service that is documented and can be
3-21 proved;
3-22 (D) a decision by a peer review committee that
3-23 the health care provider has failed to meet prescribed standards or
3-24 has not acted in a professional or ethical manner; or
3-25 (E) termination of the contract between the
3-26 health care provider and the health care information service by
3-27 either party under the terms of the contract;
3-28 (13) maintains a customer service department to handle
3-29 complaints and answer questions for consumers;
3-30 (14) maintains a customer follow-up system to monitor
3-31 consumer satisfaction; and
3-32 (15) does not use, maintain, distribute, or provide
3-33 for any purpose any information that will identify a particular
3-34 consumer, such as a name, address, or telephone number, obtained
3-35 from a consumer seeking its services other than for the purposes
3-36 of:
3-37 (A) providing the information to the health care
3-38 provider with whom an appointment is made;
3-39 (B) performing administrative functions
3-40 necessary to operate the health care information service;
3-41 (C) providing directly to a consumer, at the
3-42 request of that consumer on that consumer's initial contact with
3-43 the health care information service, information relating to
3-44 health-related support groups or providers of health-care-related
3-45 services or equipment within the area or areas of interest
3-46 requested by the consumer; or
3-47 (D) conducting analytical research on data
3-48 obtained through provision of services and preparing statistical
3-49 reports that generally analyze that data but do not in any manner
3-50 identify one or more specific consumers.
3-51 (b) In this section:
3-52 (1) "Health care information service" means a person
3-53 who provides information to a consumer regarding health care
3-54 providers that can enable the consumer to select one or more health
3-55 care providers to furnish health care services.
3-56 (2) "Health care provider" means a person licensed,
3-57 certified, or registered by a state health care regulatory agency
3-58 other than a:
3-59 (A) mental health facility as defined by Section
3-60 571.003; or
3-61 (B) treatment facility as defined by Section
3-62 464.001.
3-63 Sec. 161.092. NOTIFICATION OF REMUNERATION. (a) A person
3-64 commits an offense if:
3-65 (1) the person, in a manner otherwise permitted under
3-66 Section 161.091, accepts remuneration to secure or solicit patients
3-67 or patronage for a person licensed, certified, or registered by a
3-68 state health care regulatory agency; and
3-69 (2) does not, at the time of initial contact and at
3-70 the time of referral, disclose to the patient:
4-1 (A) the person's affiliation, if any, with the
4-2 person for whom the patient is secured or solicited; and
4-3 (B) that the person will receive remuneration,
4-4 directly or indirectly, for securing or soliciting the patient.
4-5 (b) Except as otherwise provided by this section, an offense
4-6 under this section is a Class A misdemeanor. If it is shown on the
4-7 trial of a person under this section that the person has previously
4-8 been convicted of an offense under this section or that the person
4-9 was employed by a federal, state, or local government at the time
4-10 the offense occurred, the offense is a felony of the third degree.
4-11 (c) In addition to other penalties or remedies provided by
4-12 this subchapter, a violation of this section is grounds for
4-13 disciplinary action by a regulatory agency that has issued a
4-14 license, certification, or registration to the person.
4-15 Sec. 161.093. INJUNCTION. (a) The attorney general or the
4-16 appropriate district or county attorney, in the name of the state,
4-17 may institute and conduct an action in a district court of Travis
4-18 County or of a county in which any part of the violation occurs for
4-19 an injunction or other process against a person who is violating
4-20 this subchapter.
4-21 (b) The district court may grant any prohibitory or
4-22 mandatory relief warranted by the facts, including a temporary
4-23 restraining order, temporary injunction, or permanent injunction.
4-24 Sec. 161.094. CIVIL PENALTIES. (a) A person who violates
4-25 this subchapter is subject to a civil penalty of not more than
4-26 $10,000 for each day of violation and each act of violation. In
4-27 determining the amount of the civil penalty, the court shall
4-28 consider:
4-29 (1) the person's previous violations;
4-30 (2) the seriousness of the violation, including the
4-31 nature, circumstances, extent, and gravity of the violation;
4-32 (3) whether the health and safety of the public was
4-33 threatened by the violation;
4-34 (4) the demonstrated good faith of the person; and
4-35 (5) the amount necessary to deter future violations.
4-36 (b) The attorney general or the appropriate district or
4-37 county attorney, in the name of the state, may institute and
4-38 conduct an action authorized by this section in a district court of
4-39 Travis County or of a county in which any part of the violation
4-40 occurs.
4-41 (c) The party bringing the suit may:
4-42 (1) combine a suit to assess and recover civil
4-43 penalties with a suit for injunctive relief brought under Section
4-44 161.093; or
4-45 (2) file a suit to assess and recover civil penalties
4-46 independently of a suit for injunctive relief.
4-47 (d) The party bringing the suit may recover reasonable
4-48 expenses incurred in obtaining injunctive relief, civil penalties,
4-49 or both, including investigation costs, court costs, reasonable
4-50 attorney fees, witness fees, and deposition expenses.
4-51 (e) A penalty collected under this section by the attorney
4-52 general shall be deposited to the credit of the general revenue
4-53 fund. A penalty collected under this section by a district or
4-54 county attorney shall be deposited to the credit of the general
4-55 fund of the county in which the suit was heard.
4-56 (f) The civil penalty and injunction authorized by this
4-57 subchapter are in addition to any other civil, administrative, or
4-58 criminal action provided by law.
4-59 SECTION 2. (a) The changes in law made by this Act apply
4-60 only to an offense or violation committed on or after the effective
4-61 date of this Act. For purposes of this Act, an offense or
4-62 violation is committed before the effective date of this Act if any
4-63 element of the offense or violation occurs before that date.
4-64 (b) An offense or violation committed before the effective
4-65 date of this Act is covered by the law in effect when the offense
4-66 or violation was committed, and the former law is continued in
4-67 effect for that purpose.
4-68 SECTION 3. The importance of this legislation and the
4-69 crowded condition of the calendars in both houses create an
4-70 emergency and an imperative public necessity that the
5-1 constitutional rule requiring bills to be read on three several
5-2 days in each house be suspended, and this rule is hereby suspended,
5-3 and that this Act take effect and be in force from and after its
5-4 passage, and it is so enacted.
5-5 * * * * *
5-6 Austin,
5-7 Texas
5-8 March 19, 1993
5-9 Hon. Bob Bullock
5-10 President of the Senate
5-11 Sir:
5-12 We, your Committee on Health and Human Services to which was
5-13 referred S.B. No. 211, have had the same under consideration, and I
5-14 am instructed to report it back to the Senate with the
5-15 recommendation that it do not pass, but that the Committee
5-16 Substitute adopted in lieu thereof do pass and be printed.
5-17 Zaffirini,
5-18 Chair
5-19 * * * * *
5-20 WITNESSES
5-21 FOR AGAINST ON
5-22 ___________________________________________________________________
5-23 Name: Dan Morales x
5-24 Representing: State of Texas
5-25 City: Austin
5-26 -------------------------------------------------------------------
5-27 Name: Dr. Charles Arnold x
5-28 Representing: Self
5-29 City: San Antonio
5-30 -------------------------------------------------------------------
5-31 Name: David F. Briones, M.D. x
5-32 Representing: TSPP & TMA
5-33 City: El Paso
5-34 -------------------------------------------------------------------
5-35 Name: Florence Winn-Salmon x
5-36 Representing: TAMI
5-37 City: Austin
5-38 -------------------------------------------------------------------
5-39 Name: Ben Marroquin x
5-40 Representing: MHMR
5-41 City: Austin
5-42 -------------------------------------------------------------------
5-43 Name: Matt Donaldson x
5-44 Representing: Consumer Health Services
5-45 City: Austin
5-46 -------------------------------------------------------------------
5-47 Name: Tom Wright x
5-48 Representing: Citizens Comm on Human
5-49 Rights
5-50 City: Houston
5-51 -------------------------------------------------------------------
5-52 Name: Wylie Jordan, M.D. x
5-53 Representing: Self
5-54 City: Austin
5-55 -------------------------------------------------------------------
5-56 Name: Don Cavness x
5-57 Representing: Tx Psychological Asso.
5-58 City: Austin
5-59 -------------------------------------------------------------------
5-60 Name: Nancy Sims x
5-61 Representing: Tx Business Group on Health
5-62 City: Houston
5-63 -------------------------------------------------------------------
5-64 Name: Paul Mascot x
5-65 Representing: TXMHMR
5-66 City: Austin
5-67 -------------------------------------------------------------------
5-68 FOR AGAINST ON
5-69 ___________________________________________________________________
5-70 Name: Mike Ezzell x
6-1 Representing: TCADA
6-2 City: Austin
6-3 -------------------------------------------------------------------
6-4 Name: Aaryce Hayes x
6-5 Representing: Advocacy, Inc.
6-6 City: Austin
6-7 -------------------------------------------------------------------
6-8 Name: Sandra Pelton, P.T. x
6-9 Representing: Tx Physical Therapy Asso.
6-10 City: Richmond
6-11 -------------------------------------------------------------------
6-12 Name: Marcia Baum x
6-13 Representing: NASW
6-14 City: Austin
6-15 -------------------------------------------------------------------
6-16 Name: Christine Devall x
6-17 Representing: Mental Health Assn.
6-18 City: Austin
6-19 -------------------------------------------------------------------
6-20 Name: Kevin O'Hanlon x
6-21 Representing: TEA
6-22 City: Austin
6-23 -------------------------------------------------------------------
6-24 Name: G. K. Sprinkle x
6-25 Representing: Tx Counseling Assoc
6-26 City: Austin
6-27 -------------------------------------------------------------------
6-28 Name: Mark Chouteau x
6-29 Representing: Attorney General
6-30 City: Austin
6-31 -------------------------------------------------------------------
6-32 Name: Lisa McGiffert x
6-33 Representing: Consumers Union
6-34 City: Austin
6-35 -------------------------------------------------------------------