BILL ANALYSIS Public Health Committee H.B. 1023 By: Coleman 04-19-95 Committee Report (Substituted) BACKGROUND In May 1994, an outbreak of Hepatitis B infected nine patients at an End Stage Renal Disease (ESRD) facility in Houston. The outbreak was due to poor patient screening procedures and a lack of quality inspection mechanisms. Currently ESRD facilities are overseen by the federal Health Care Financing Administration. Monitoring of compliance with regulations has been minimal. PURPOSE This legislation would authorize the Texas Department of Health (TDH) to license and routinely inspect ESRD facilities, create civil and administrative penalties for patient health and safety violations and establish minimum education qualifications for ESRD employees. It would also standardize the certification process and establish a training program for dialysis technicians. RULEMAKING AUTHORITY It is the committee's opinion that SECTION 1 of the bill grants additional rulemaking authority to the Texas Board of Health in the following sections of Chapter 251, the Health and Safety Code: Sec. 251.003, Sec. 251.013(g), Sec. 251.014, and Sec. 251.032. In addition, the bill establishes a medical review board, which is required in Sec. 251.015 to advise the Texas Board of Health on rules to be adopted under this chapter, among other matters. SECTION BY SECTION ANALYSIS SECTION 1. Adds Chapter 251 to Subtitle B, Title 4, Health and Safety Code, "END STAGE RENAL DISEASE FACILITIES," as follows: SUBCHAPTER A: GENERAL PROVISIONS. Sec. 251.001. Defines terms used in this Chapter. Sec. 251.002. Requires the Texas Board of Health to set fees imposed by this Chapter, stipulates factors the Board must consider in setting the fees, and exempts a facility owned or operated by a state agency from paying the fees. Sec. 251.003. Requires the board to adopt rules to implement the Chapter and outlines matters which the rules must address. Sec. 251.004-251.010 are reserved for expansion. SUBCHAPTER B. LICENSING OF END STAGE RENAL DISEASE FACILITIES. Sec. 251.011. Prohibits a person from operating an end stage renal disease facilities without a license, except as provided in Sec. 251.012 of this subchapter. Sec. 251.012. Exempts the following entities from licensing requirements: (1) a specified home community support services agency. (2) a hospital that provides dialysis on inpatient basis only. (3) a physician whose office is not primarily used as an end stage renal disease facility. Sec. 251.013. (a) States that an applicant for licensure must submit an application to the TDH on a form prescribed by the TBH. (b) Requires a nonrefundable license fee to be submitted. (c) States that each applying facility must have at least one qualified physician on staff and each technician must have completed the training program required by this chapter. (d) Allows the TDH to grant temporary initial licenses, which expire no later than six months after issuance. (e) Requires the TDH to issue a license if the applicant meets requirements and standards of this chapter. (f) States that the license is renewable annually after a renewal application, fee, and an report are submitted to TDH. (g) The annual report required under Subsection (f) must include information regarding the quality of care at the ESRD facility, and must be in the form and documented by evidence as required by board rule. Sec. 251.014. Requires the rules adopted under Section 251.003 to contain minimum standards, and specifies that the standards must address the following factors: (1) professional staff qualifications and supervision; (2) equipment; (3) sanitary and hygienic conditions; (4) quality; (5) treatment coordination; (6) clinical and business records; (7) facility design and space requirements to ensure safety and privacy of patients; (8) management structure; (9) indicators of the quality of care; (10) water treatment and reuse; (11) any other aspect of service necessary to protect public health. Section 251.015 (a) Requires a medical review board to advise the TBH on minimum standards and rules to be adopted under this Chapter. Subsection (b) requires the medical review board to review information on the quality of care in the annual report as required by Section 251.013(f), and gives the review board the authority to advise the department about the quality of care and recommend an appropriate corrective action plan under Section 251.061 or other remedy provided by the Chapter. Subsection (c) states that information gathered by the TDH or review board concerning quality of care and the review board's recommendation are confidential and are not subject to disclosure. Subsection (d) allows TDH to release the confidential information gathered to that facility only. States that release of this information to a facility does not waive the confidentiality of the information or the privilege from compulsory legal process. Sections 251.016-.030 reserved for expansion. Subchapter C. DIALYSIS TECHNICIANS. Sec. 251.031. Requires end stage renal disease dialysis technicians be trained and competent. Sec. 251.032. Outlines areas for which the board must establish minimum standards and requirements in adopting rules under Section 251.003, as follows: (1) Curricula and instructors used to train individuals as dialysis technicians. (2) Dialysis technician competency. (3) Documentation of dialysis technician competency. (4) Prohibited and allowable practices. Sections 251.033-.050 are reserved for expansion. Subchapter D. INSPECTIONS. Sec. 251.051. Subsection (a) allows TDH to conduct an inspection of an ESRD facility to verify compliance with this chapter. Subsection (b) states that the inspection may be unannounced. Sec. 251.052. Subsection (a) states that a person commits an offense if the person discloses specified information about an unannounced inspection to an authorized person, and Subsection (b) clarifies the terms "unauthorized person." Subsection (c) classifies the offense as a Class B misdemeanor, and Subsection (d) excludes a person convicted under this section from eligibility for state employment. Sections 251.053-.060 are reserved for expansion. Subchapter E. ENFORCEMENT. Sec. 251.061. Subsection (a) allows TDH to use a corrective action plan as an alternative to enforcement action, and (b) stipulates that TDH must determine whether the use of a corrective action plan is appropriate by considering specified factors related to a facility's history and actions. Subsection (c) allows TDH to use a level one, level two, or level three plan, and (d), (e), and (f) describe the plans and violations for which each is appropriate. Subsection (g) states that the corrective action plan is not confidential but may be excepted from required disclosure as allowed in this Chapter, and (h) stipulates that TDH shall select the monitor for the plan and defines a monitor and the purposes of a monitor. Requires the facility to pay for the cost of the monitor. Sec. 251.062. Allows TDH to (a) deny, suspend or revoke a license for violation of Chapter 251, and (b) stipulates that such actions by the TDH and the appeal of those actions are governed by Chapter 2001, Government Code. Sec. 251.063. Subsection (a) allows TDH to petition for a temporary restraining order in a district court to restrain a continuing violator of the Chapter or rules adopted under it if it is found that the facility creates an immediate threat to health and safety of patients. Subsection (b) prescribes actions allowed by injunction, (c) allows the attorney general to institute a suit at the request of TDH, and (d) specifies the venue for such a suit. Sec. 251.064. (a) An offense is committed if Section 251.011 or 251.031 are violated. (b) Violation is a Class C misdemeanor. (c) Each day of continuing violation is a separate offense. Sec. 251.065. (a) Penalty assessed can be no more than $1,000 per violation. (b) Each day is a separate violation. Sec. 251.066. (a) TDH may assess an administrative penalty against violators. (b) Prohibits the penalty from exceeding $1,000. (c) In determining the amount of the penalty, the board shall consider the following: (1) seriousness of the violation; (2) history of previous violations; (3) deterrent effect of fine; (4) efforts to rectify violation; (5) any other matters the board deems as necessary; Sec. 251.067. Subsection (a) requires TDH to give written notice of the violation to the person alleged to have committed the violation. Requires the notice to include a brief summary of the violation, the amount of the proposed penalty, and a statement of the person's right to hearings on the violation and the penalty amount. Subsection (b) gives the person 20 days to respond to the notice of the TDH's determination, and (c) states that if the determination is accepted by the person notified, the commissioner or the commissioner's designee shall issue an order approving the determination and ordering the person to pay the penalty. Sec. 251.068. Subsection (a) requires the commissioner or a designee to set a hearing, give written notice of a hearing, and designate an examiner if the person either fails to respond, or requests a hearing. Subsection (b) requires the hearing examiner to issue a proposal for decision regarding the occurrence of the violation and recommended penalty. Subsection (c) stipulates that upon recommendation of the hearings examiner, the commissioner may find by order that the violation has occurred and assess a penalty, or decide no violation has occurred. Sec. 251.069. (a) Requires the commissioner or the designee to give notice of the commissioner's order. It must include the following: (1) Statements of the findings of fact. (2) Penalty assessed. (3) The person's right to judicial review of order. (b) No more than 30 days after final decision, the person must do one of the following: pay the penalty in full; pay and file a petition for judicial review contesting the violation, the amount of the penalty, or both; or file a petition for review without paying the penalty. (c) A person who does not pay the penalty and files for review within 30 days may give the amount of penalty to a court to hold in escrow, or give to the court a bond in the amount of the penalty that is effective until all matters of judicial review are final. The person may also request a stay of enforcement of the penalty by filing a sworn affidavit saying the person is unable to pay with the court, or by giving a copy to the executive director by certified mail. (d) If the TDH receives an affidavit, it may contest the affidavit in court within five days of receiving the affidavit. The court then shall hold a hearing on the facts alleged in the affidavit. The person who files the affidavit has the burden of proving he or she is unable to pay the fine. (e) If the person does not pay the fine after it has not been stayed, the TDH may refer the matter to the attorney general. (f) Judicial review is instituted by filing a petition under Subchapter G, Chapter 2001, Government Code, and is under the substantial evidence rule. (g) The court may uphold or reduce the fine and order the person to pay the full or reduced amount. Requires the court to order that no penalty is owed if the court does not sustain the violation. (h) Outlines procedures the court shall follow when the judgment of the court becomes final, including ordering that interest be paid by the person charged if the penalty is not upheld or reduced. If the person paid a bond, the court shall release the bond. Sec. 251.070. States that an administrative or civil penalty collected to be deposited in the state treasury. Sec. 251.071. TDH may assess expenses to recover costs. This payment shall be paid within 30 days of the board's order to reimburse. The attorney general may also recover expenses if an action is brought against the person. Defines reasonable expenses and costs. Sec. 251.072 through Sec. 251.090 reserved for expansion. SUBCHAPTER F. TEMPORARY MANAGER. Sec. 251.091. Subsection (a) states that a person holding a controlling interest in an ESRD facility may, at any time, request TDH to assume the management of the facility by appointing a temporary manager in accordance with this subchapter. Subsection (b) stipulates that upon receiving such a request, TDH may enter into an agreement for a temporary manager. Subsection (c) states that an agreement for a temporary manager must specify the terms of the appointment, and preserve individual rights of the facility under law, and (d) states that the primary duty of a temporary manager is to ensure that service to the patients is safe and adequate. Subsection (e) stipulates that the appointment ends at a time specified by the agreement. Sec. 251.092. Subsection (a) states that TDH may request the attorney general to bring action on behalf of the state to appoint a temporary manager if one of six specified circumstances exists. Subsection (b) states that a court shall appoint a temporary manager if, after a hearing, it deems one necessary, and (c) states that the order must outline the manager's duties and authority. Subsection (d) states that the court shall appoint someone with a background in ESRD if possible, and (e) stipulates the venue for a proceeding. Sec. 251.093. Subsection (a) stipulates that the temporary manager is entitled to a reasonable fee as determined by the court and required to be paid by the facility. Subsection (b) states that the temporary manager may petition the court to order payment if it has been previously withheld. Subsection (c) states that withheld payments that may be released under (b) may include payments from governmental agencies or another third party. SECTION 2. The Act takes effect September 1, 1995, with exceptions. SECTION 3. Exceptions under Subchapter B in which facilities are not required to obtain license or training until September 1, 1996. SECTION 4. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute version of the bill adds provisions for the establishment and operation of a medical review board, appointment of a temporary manager as requested by the affected facility, a court-appointed temporary manager requested by the TDH, and defines corrective action plans, which are given as an alternative to other enforcement measures outlined in both versions of the bill. SUMMARY OF COMMITTEE ACTION H.B. 1023 was considered by the Public Health Committee in a public hearing on April 4, 1995. The bill was left pending. The committee considered the bill in a public hearing on April 19, 1995, as pending business. The committee considered a complete substitute for the bill. The substitute was adopted without objection. The bill was reported favorably as substituted, with the recommendation that it do pass and be printed, by a record vote of 7 AYES, 0 NAYS, 0 PNV, and 2 ABSENT.