By: Moncrief S.B. No. 589
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the Health Care Provider Referral Act; creating
1-2 offenses and providing penalties.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Chapter 161, Health and Safety Code, is amended
1-5 by adding Subchapter K to read as follows:
1-6 SUBCHAPTER K. HEALTH CARE PROVIDER
1-7 REFERRAL ACT
1-8 Sec. 161.111. SHORT TITLE. This subchapter shall be known
1-9 and may be cited as the Health Care Provider Referral Act.
1-10 Sec. 161.112. DEFINITIONS. In this subchapter:
1-11 (1) "Entity" means any individual, partnership, firm,
1-12 corporation or other business entity.
1-13 (2) "Family member" means a health care provider's
1-14 relationship to a person within the second degree of consanguinity
1-15 or affinity.
1-16 (3) "Group practice" means a group of two or more
1-17 licensed health care providers legally organized as a partnership,
1-18 professional corporation, or similar association for which:
1-19 (A) each member of the group provides a full
1-20 range of health care services, including medical care,
1-21 consultation, diagnosis, or treatment through the joint use of
1-22 shared office space, facilities, equipment, and personnel;
1-23 (B) substantially all of the services of the
2-1 members of the group are provided through the group and are billed
2-2 under a billing number assigned to the group, and payments received
2-3 are treated as receipts of the group; and
2-4 (C) the overhead expenses of and the income from
2-5 the practice are distributed in accordance with methods previously
2-6 determined.
2-7 (4) "Health care facility" means an ambulatory
2-8 surgical center, a hospice, a nursing home, a home health agency, a
2-9 diagnostic imaging center, a freestanding radiation therapy center,
2-10 an infusion center, a pharmacy, a clinical laboratory, a
2-11 psychiatric treatment facility, a cardiac catheterization
2-12 laboratory, a medical equipment supplier, an alcohol or chemical
2-13 dependency treatment center, a physical rehabilitation center, an
2-14 ambulatory care center, a birth center, a subacute care facility, a
2-15 nursing home component licensed under Subchapter B, Chapter 242,
2-16 within a continuing care facility certified under Chapter 246, or a
2-17 mental health care center, which health care facility provides or
2-18 supplies health care goods or services used in the treatment of
2-19 patients.
2-20 (5) "Health care goods or services" means health care
2-21 procedures, including treatment, diagnosis, and medical care,
2-22 provided by or through a health care provider or health care
2-23 facility or medical equipment, supplies, drugs, or other items used
2-24 in the treatment of a patient. For the purposes of this
2-25 subchapter, "health care goods and services" may refer to either
3-1 health care goods or health care services or both health care goods
3-2 and services.
3-3 (6) "Health care provider" means a individual who
3-4 furnishes health care goods or services under a license,
3-5 certificate, regulation, or other similar evidence of regulation
3-6 issued by this state or another state of the United States.
3-7 (7) "Investor" means a person or entity owning,
3-8 directly or indirectly, a legal or beneficial ownership or
3-9 investment interest, including without limitation through a family
3-10 member, trust, or another entity related to the investor within the
3-11 meaning of 42 C.F.R. Section 413.17.
3-12 (8) "Ownership or investment interest" means an equity
3-13 or debt security issued by an entity, including without limitation,
3-14 shares of stock in a corporation, units or other interest in a
3-15 partnership, bonds, debentures, notes, or other equity interest or
3-16 debt instruments. "Ownership or investment interest" includes any
3-17 consideration paid as compensation or in any manner which is a
3-18 product of or incident to or in any way related to such equity or
3-19 debt security, shares of stock in a corporation, units or other
3-20 interest in a partnership, bonds, debentures, notes, or other
3-21 equity interest or debt instruments. "Ownership or investment
3-22 interest" does not include an investment interest in an entity that
3-23 is the sole provider of health goods or services in a rural area.
3-24 (9) "Referral" means any referral of a patient for
3-25 health care goods or services by a health care provider with the
4-1 authority to order such health care goods or services, including:
4-2 (A) the forwarding of a patient by a health care
4-3 provider to another health care provider, a health care facility,
4-4 or a health care supplier; or
4-5 (B) the request or establishment of a plan of
4-6 care by a health care provider, which includes the provision of
4-7 health care goods or services.
4-8 (10) "Rural area" means a county with a population
4-9 density of no more than 100 persons per square mile as defined by
4-10 the United State Department of Commerce Bureau of the Census.
4-11 Sec. 161.113. PROHIBITED AND MANDATORY ACTS AND PRACTICES.
4-12 (a) A health care provider shall not refer a patient for the
4-13 provision of any health care good or service to a health care
4-14 facility in which the health care provider or a family member of
4-15 the health care provider is an investor.
4-16 (b) A health care provider or health care facility shall not
4-17 present to any individual, third-party payor, or other person a
4-18 bill or claim for payment for a health care good or service
4-19 furnished pursuant to a referral prohibited by this subchapter.
4-20 (c) If a health care provider or health care facility
4-21 receives any amount billed or claimed in violation of this section,
4-22 the health care provider or health care facility shall refund
4-23 promptly to the applicable payor or individual the amount received.
4-24 (d) A hospital, licensed pursuant to Chapter 241, shall not
4-25 discriminate against or otherwise penalize a health care provider
5-1 for complying with this Act.
5-2 (e) A health care provider who is an investor in a health
5-3 care facility shall disclose any ownership or investment interest
5-4 in the health care facility to:
5-5 (1) a patient when making a referral to the health
5-6 care facility; and
5-7 (2) a third-party payor on request.
5-8 Sec. 161.114. EXEMPTIONS. Section 161.113 does not apply
5-9 to:
5-10 (1) a health care provider whose ownership or
5-11 investment interest in a health care facility is permitted by 42
5-12 U.S.C. Section 1320a-7b(b) or any regulations promulgated pursuant
5-13 thereto;
5-14 (2) a referral made for health care goods or services
5-15 within a group practice by one member of the group practice to
5-16 another member of the group practice acting within the member's
5-17 licensure, area of competence, and recognized scope of practice or
5-18 specialty;
5-19 (3) a health care provider or health care facility
5-20 which furnishes health care goods or services in a rural area;
5-21 (4) a health care provider who provides health care
5-22 goods or services at a health care facility by or under the
5-23 personal supervision of the health care provider, if the health
5-24 care goods or services are within the health care provider's
5-25 licensure, area of competence, and recognized scope of practice or
6-1 specialty. If the health care provider is a member of a group
6-2 practice, the health care provider may refer a patient to another
6-3 member of the group practice for the provision of health care goods
6-4 or services at a health care facility if the health care goods or
6-5 services are furnished by or under the personal supervision of the
6-6 health care provider to whom the patient is referred and the health
6-7 care goods or services are within the health care provider's
6-8 licensure, area of competence, and recognized scope of practice or
6-9 specialty; or
6-10 (5) a referral made pursuant to an arrangement between
6-11 the referring health care provider and a health maintenance
6-12 organization, competitive medical plan, prepaid health plan, or
6-13 another health plan permitted by 42 U.S.C. Section 1320a-7b(b) or
6-14 any regulation promulgated pursuant thereto.
6-15 Sec. 161.115. VIOLATIONS. (a) It is a violation of this
6-16 subchapter for a person to:
6-17 (1) make a referral prohibited by this subchapter;
6-18 (2) present or cause to be presented a bill or a claim
6-19 for a good or service which is prohibited by this subchapter; or
6-20 (3) fail to refund an amount received in violation of
6-21 this subchapter.
6-22 (b) It is a violation of this subchapter for a hospital,
6-23 licensed pursuant to Chapter 241, to discriminate against or
6-24 otherwise penalize a health care provider for complying with this
6-25 Act.
7-1 (c) It is a violation of this subchapter for a health care
7-2 provider to enter into an arrangement or scheme which the health
7-3 care provider knew or should have known has the principal purpose
7-4 of assuring referrals by the health care provider to a particular
7-5 health care facility which, if the health care provider made
7-6 referrals to such health care facility, would be a violation of
7-7 this subchapter.
7-8 Sec. 161.116. DECEPTIVE TRADE PRACTICES. A violation of
7-9 this subchapter constitutes a false, misleading, or deceptive act
7-10 or practice within the meaning of Section 17.46(a), Subchapter E,
7-11 Chapter 17, Business & Commerce Code, and any remedy prescribed by
7-12 that subchapter may be used by the attorney general or a district
7-13 or county attorney to enforce this subchapter. Nothing in this
7-14 section shall be construed to permit a private cause of action
7-15 under Subchapter E, Chapter 17, Business & Commerce Code.
7-16 Sec. 161.117. CIVIL PENALTY AND INJUNCTION. (a) A person
7-17 is subject to a civil penalty of not more than $15,000 for each
7-18 violation of this subchapter. Each bill or claim submitted for a
7-19 health care good or service constitutes a separate violation. Each
7-20 referral of a patient constitutes a separate violation.
7-21 (b) A person is subject to a civil penalty of not more than
7-22 $100,000 for each violation of Section 161.115(c). Each agreement,
7-23 arrangement, or scheme constitutes a separate violation.
7-24 (c) In determining the amount of the civil penalty, the
7-25 court shall consider:
8-1 (1) the person's, facility's, or supplier's previous
8-2 violations;
8-3 (2) the seriousness of the violation, including the
8-4 nature, circumstances, extent, and gravity of the violation;
8-5 (3) whether the health and safety of the public was
8-6 threatened by the violation;
8-7 (4) the demonstrated good faith of the person,
8-8 facility, or supplier; and
8-9 (5) the amount necessary to deter future violations.
8-10 (d) The attorney general or a district or county attorney
8-11 may maintain an action for a violation of this subchapter in the
8-12 name of the state.
8-13 (e) Venue may be maintained in Travis County or in the
8-14 county in which the violation occurred.
8-15 (f) The district court may grant any prohibitory or
8-16 mandatory injunctive relief warranted by the facts, including a
8-17 temporary restraining order, temporary injunction, or permanent
8-18 injunction.
8-19 (g) The party bringing the suit may:
8-20 (1) combine a suit to assess and recover civil
8-21 penalties with a suit for injunctive relief; or
8-22 (2) file a suit to assess and recover civil penalties
8-23 independently of a suit for injunctive relief.
8-24 (h) The party bringing the suit may recover reasonable
8-25 expenses incurred in obtaining injunctive relief, civil penalties,
9-1 or both, including investigative costs, court costs, reasonable
9-2 attorney fees, witness fees, and deposition expenses. A penalty
9-3 collected under this section by the attorney general shall be
9-4 deposited to the credit of the general revenue fund. A penalty
9-5 collected under this section by a district or county attorney shall
9-6 be deposited to the credit of the general fund of the county which
9-7 has brought the suit.
9-8 (i) The injunctive relief and civil penalty authorized by
9-9 this subchapter are in addition to any other civil, administrative,
9-10 or criminal remedies provided by law.
9-11 Sec. 161.118. DISCIPLINARY ACTION. In addition to the
9-12 penalties prescribed by this subchapter, a violation of a provision
9-13 of this subchapter by an individual or facility that is licensed by
9-14 a state regulatory agency constitutes grounds for disciplinary
9-15 action by the appropriate regulatory agency.
9-16 Sec. 161.119. MARKUP ON CHARGES PROHIBITED. (a) A bill,
9-17 claim, or other request for payment presented by a health care
9-18 provider for health care goods or services that includes a charge
9-19 for an ancillary service that was not furnished by or under the
9-20 personal supervision of the health care provider or by or under the
9-21 personal supervision of another member of the group practice acting
9-22 within the member's licensure, area of competence, and recognized
9-23 scope of practice or specialty shall not exceed:
9-24 (1) the health care provider's actual acquisition
9-25 cost, after deducting any discounts; and
10-1 (2) a reasonable charge for billing expenses or
10-2 administrative expenses incurred in the collection, delivery,
10-3 receipt, or storage of any specimen, test material, or result
10-4 utilized by the health care provider, or for interpretation of
10-5 reports or data made in conjunction with diagnosis or the
10-6 establishment of a regimen of treatment for the health care
10-7 provider's patient.
10-8 SECTION 2. Section 161.091, Health and Safety Code, is
10-9 amended to read as follows:
10-10 Sec. 161.091. PROHIBITION ON ILLEGAL REMUNERATION. (a) A
10-11 person <licensed, certified, or registered by a health care
10-12 regulatory agency of this state> commits an offense if the person
10-13 intentionally or knowingly accepts <offers to pay> or agrees to
10-14 accept any remuneration directly or indirectly, overtly or
10-15 covertly, in cash or in kind, <to or> from any person, firm,
10-16 association of persons, partnership, or corporation in exchange
10-17 for:
10-18 (1) securing or soliciting patients for a person
10-19 licensed, certified, or registered by a state health care
10-20 regulatory agency; or
10-21 (2) purchasing, leasing, ordering, or arranging for or
10-22 recommending any purchase, lease, or order of health care goods or
10-23 services <or patronage>.
10-24 (b) A person commits an offense if the person intentionally
10-25 or knowingly offers to pay, agrees to pay, or pays any remuneration
11-1 directly or indirectly, overtly or covertly, in cash or in kind, to
11-2 any person, firm, association of persons, partnership, or
11-3 corporation in exchange for:
11-4 (1) securing or soliciting patients for a person
11-5 licensed, certified, or registered by a state health care
11-6 regulatory agency; or
11-7 (2) purchasing, leasing, ordering, or arranging for or
11-8 recommending any purchase, lease, or order of health care goods or
11-9 services. This section shall not be construed to prohibit
11-10 advertising except that which is false, misleading, or deceptive or
11-11 that which advertises professional superiority or the performance
11-12 of a professional service in a superior manner and that is not
11-13 readily subject to verification.
11-14 (c) Except as provided by this section, an offense under
11-15 this section is a Class A misdemeanor. If it is shown on <in> the
11-16 trial of a person under <violation of> this section that the person
11-17 has previously been convicted of an offense under <a violation of>
11-18 this section or that the person was employed by a federal, state,
11-19 or local government at the time the offense occurred, the offense
11-20 is<, on conviction the person shall be punished for> a felony of
11-21 the third degree. In addition to any other penalties or remedies
11-22 provided, a violation of this section shall be grounds for
11-23 disciplinary action by a <the> regulatory agency that has issued a
11-24 license, certification, or registration to the person.
11-25 (d) <The appropriate health care regulatory agency may
12-1 institute an action to enjoin a violation or potential violation of
12-2 this section. The action for an injunction shall be in addition to
12-3 any other action, proceeding, or remedy authorized by law. The
12-4 regulatory agency shall be represented by the attorney general.>
12-5 <(e) This section shall not be construed to prohibit
12-6 remuneration for advertising, marketing, or other services that are
12-7 provided for the purpose of securing or soliciting patients
12-8 provided the remuneration is set in advance, is consistent with the
12-9 fair market value of the services, and is not based on the volume
12-10 or value of any patient referrals or business otherwise generated
12-11 between the parties.>
12-12 <(f)> This section shall <not> be construed to permit
12-13 <prohibit> any payment, business arrangements, or payments practice
12-14 permitted <not prohibited> by 42 U.S.C. Section 1320a-7b(b) or any
12-15 regulations promulgated pursuant thereto.
12-16 (e) <(g)> This section shall not apply to licensed insurers,
12-17 governmental entities, including intergovernmental risk pools
12-18 established under Chapter 172, Local Government Code, and
12-19 institutions as defined in the Texas State College and University
12-20 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
12-21 Texas Insurance Code), group hospital service corporations, or
12-22 health maintenance organizations which reimburse, provide, offer to
12-23 provide, or administer hospital, medical, dental, or other
12-24 health-related benefits under a health benefits plan for which it
12-25 is the payor.
13-1 SECTION 3. (a) The change in law made by Section 2 of this
13-2 Act applies only to an offense or violation committed on or after
13-3 the effective date of this Act. For purposes of this section, an
13-4 offense or violation is committed before the effective date of this
13-5 Act if any element of the offense or violation occurs before that
13-6 date.
13-7 (b) An offense or violation committed before the effective
13-8 date of this Act is covered by the law in effect when the offense
13-9 or violation was committed, and the former law is continued in
13-10 effect for that purpose.
13-11 SECTION 4. This Act takes effect September 1, 1993, except
13-12 that for a health care provider who acquires an ownership or
13-13 investment interest in a health care facility or health care
13-14 supplier prior to May 1, 1993, Subchapter K, Chapter 161, Health
13-15 and Safety Code, as added by this Act, does not apply to a referral
13-16 for health care goods or services which occurs before September 1,
13-17 1996.
13-18 SECTION 5. The importance of this legislation and the
13-19 crowded condition of the calendars in both houses create an
13-20 emergency and an imperative public necessity that the
13-21 constitutional rule requiring bills to be read on three several
13-22 days in each house be suspended, and this rule is hereby suspended.