BILL ANALYSIS C.S.H.B. 1023 By: Coleman (Ellis) Health and Human Services 5-24-95 Senate Committee Report (Substituted) BACKGROUND In May 1994, an outbreak of Hepatitis B infected nine patients at an end stage renal disease facility in Houston. The outbreak was due to poor patient screening procedures and a lack of quality inspection mechanisms. Currently, end stage renal disease facilities are overseen by the federal Health Care Financing Administration. Monitoring of compliance with regulations has been minimal. PURPOSE As proposed, C.S.H.B. 1023 requires the Texas Department of Health to license and regulate end stage renal disease facilities, and provides criminal penalties. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is granted to the Texas Board of Health under SECTION 1 (Sections 251.003, 251.014, and 251.033, Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 4B, Health and Safety Code, by adding Chapter 251, as follows: CHAPTER 251. END STAGE RENAL DISEASE FACILITIES SUBCHAPTER A. GENERAL PROVISIONS Sec. 251.001. DEFINITIONS. Defines "board," "commissioner," "department," "dialysis," "dialysis technician," "end stage renal disease," "end stage renal disease facility," "medical review board," and "physician." Sec. 251.002. FEES. (a) Requires the Texas Board of Health (board) to set fees necessary to defray the cost of administering this chapter. (b) Requires the board, in setting fees under this section, to consider setting a range of license and renewal fees based on the number of dialysis stations at each end stage renal disease facility (facility) and the patient census. (c) Provides that a facility owned or operated by a state agency is not required to pay fees imposed under this chapter. Sec. 251.003. ADOPTION OF RULES. Requires the board to adopt rules to implement this chapter. SUBCHAPTER B. LICENSING OF END STAGE RENAL DISEASE FACILITIES Sec. 251.011. LICENSE REQUIRED. Prohibits a person from operating an end stage renal disease facility (facility) without a license issued under this chapter. Sec. 251.012. EXEMPTIONS FROM LICENSING REQUIREMENT. Exempts certain facilities from the license requirement under this chapter. Sec. 251.013. ISSUANCE AND RENEWAL OF LICENSE. (a) Requires an applicant for a license under this chapter to submit an application, on a form prescribed by the board, to the Texas Department of Health (department). (b) Requires each application to be accompanied by a nonrefundable license fee. (c) Requires each application to contain evidence that there is at least one qualified physician on the staff of the facility and that each dialysis technician on staff has completed the training program required by this chapter. (d) Authorizes the department to grant a temporary initial license to an applicant, to expire on a specific date. (e) Requires the department to issue a license if it finds that the applicant meets the requirements and standards under this chapter. (f) Makes the license renewable annually after the submission of the renewal application and fee, and an annual report. (g) Requires the annual report to include information related to the quality of care at the facility, and to be in the form and documented by evidence as required by board rule. Sec. 251.014. MINIMUM STANDARDS. (a) Requires the rules adopted under Section 251.003 to contain certain minimum standards to protect the health and safety of a facility patient. (b) Requires the standards described in Subsection (a)(7) of this section to apply only to certain facilities. Sec. 251.015. MEDICAL REVIEW BOARD. (a) Requires a medical review board to advise the board on minimum standards and rules to be adopted under this chapter. (b) Requires the medical review board to review the information on quality of care provided in the annual report under Section 251.013(f) and other appropriate information provided to or compiled by the department with respect to a facility. Authorizes the medical review board to advise the department about the quality of care provided by a facility, and to recommend an appropriate corrective action plan under Section 251.061 or other enforcement proceedings against the facility. (c) Provides that information concerning quality of care provided to or compiled by the department or medical review board and a recommendation of the medical review board are confidential. Provides that the information or recommendation may not be made available for public inspection, and is not subject to disclosure, discovery, subpoena, or other compulsory legal process. (d) Authorizes the department to release to a facility information relating to that facility that is made confidential under Subsection (c). Provides that release of information to a facility under this section does not waive the confidentiality of that information or the privilege from compulsory legal process. SUBCHAPTER C. DIALYSIS TECHNICIANS Sec. 251.031. TRAINING REQUIRED. Prohibits an individual from acting as a dialysis technician employed by or working in a facility unless that individual is trained and competent under this subchapter. Sec. 251.032. MINIMUM REQUIREMENTS; TRAINING. Requires the rules adopted under Section 251.003 to establish minimum standards for the curricula and instructors for dialysis technician training and for determining the competency of individuals trained as dialysis technicians, minimum requirements for documentation of training and competency, and the acts and practices allowed or prohibited for dialysis technicians. SUBCHAPTER D. INSPECTIONS Sec. 251.051. INSPECTIONS. (a) Authorizes the department to inspect a facility to verify compliance with this chapter, rules adopted under this chapter, or a corrective action plan under Section 251.061. (b) Authorizes an inspection under this section to be unannounced. Sec. 251.052. DISCLOSURE OF UNANNOUNCED INSPECTION; CRIMINAL PENALTY. (a) Provides that a person commits an offense if the person intentionally, knowingly, or recklessly discloses to an unauthorized person the date, time, or any other facts about an unannounced inspection of a facility before the inspection occurs. (b) Exempts certain entities from the definition of "unauthorized person." SUBCHAPTER E. ENFORCEMENT Sec. 251.061. CORRECTIVE ACTION PLAN. (a) Authorizes the department to use a corrective action plan (action plan) as an alternative to enforcement action. (b) Requires the department, before taking enforcement action, to consider whether the use of an action plan is appropriate. (c) Authorizes the department to use a level one, level two, or level three action plan after inspection of the facility. (d) Describes a level one action plan and the appropriateness of its use. (e) Describes a level two action plan and the appropriateness of its use. (f) Describes a level three action plan and the appropriateness of its use. (g) Provides that an action plan is not confidential, and that information in the plan may be excepted from required disclosure. (h) Requires the department to select the monitor for an action plan in order to observe, supervise, consult, and educate the facility and employees of that facility under an action plan. Sets forth qualifications for a monitor. Requires the facility to pay the cost of the monitor. Sec. 251.062. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE. (a) Authorizes the department to deny, suspend, or revoke a license under this chapter for a violation of or rules adopted under this chapter. (b) Provides that an action under Subsection (a) and the appeal from that action are governed by the procedures for a contested case hearing under Chapter 2001, Government Code. Sec. 251.063. INJUNCTION. (a) Authorizes the department to petition a district court for a temporary restraining order to restrain a continuing violation of this chapter, if the department finds that the violation creates an immediate threat to the health and safety of facility patients. (b) Authorizes a district court, by injunction, to prohibit a person from continuing the violation, restrain or prevent the operation of a facility without a license under this chapter, or grant other injunctive relief warranted by the facts. (c) Authorizes the attorney general to institute and conduct a suit authorized by this section at the request of the department. (d) Provides that venue for a suit brought under this section is in the county where the facility is located or in Travis County. Sec. 251.064. CRIMINAL PENALTY. Provides that a person commits an offense, classified as a Class C misdemeanor, if the person violates Section 251.011 or 251.031, and that each day of a continuing violation constitutes a separate offense. Sec. 251.065. CIVIL PENALTY. Provides that a person who knowingly violates this chapter or fails to comply with a rule under this chapter is liable for a civil penalty of not more than $1,000 for each violation, if the department finds that the violation threatens the health and safety of a facility patient; and that each day of continuing violation constitutes a separate ground for recovery. Sec. 251.066. ADMINISTRATIVE PENALTY. (a) Authorizes the department to assess an administrative penalty against a person in violation of this chapter. (b) Prohibits the penalty from exceeding $1,000 for each violation, and provides that each day of a continuing violation constitutes a separate violation. (c) Requires the board to consider certain factors in determining the amount of an administrative penalty. (d) Subjects all proceedings for the assessment of an administrative penalty under this chapter to Chapter 2001, Government Code. Sec. 251.067. REPORT RECOMMENDING ADMINISTRATIVE PENALTY. Requires the department, if it determines that a violation has occurred, to give written notice of the violation, including certain information, to the person alleged to have committed the violation. (b) Authorizes the person notified, not later than the 20th day after the date the notice is received, to accept the determination or make a written request for a hearing on the determination. (c) Requires the commissioner of public health (commissioner) or designee, if the person notified accepts the determination, to issue an order approving the determination and ordering the person to pay the recommended penalty. Sec. 251.068. HEARING; ORDER. (a) Requires the commissioner or designee, if the person notified fails to respond in a timely manner or requests a hearing, to set a hearing, give written notice of the hearing to the person, and designate a hearings examiner to conduct the hearing. (b) Requires the hearings examiner to make findings of fact and conclusions of law and to promptly issue to the commissioner a proposal for decision concerning the violation and a recommendation for the amount of the proposed penalty. (c) Authorizes the commissioner to find that a violation has occurred and to assess a penalty, or to find that no violation has occurred. Sec. 251.069. NOTICE AND PAYMENT OF ADMINISTRATIVE PENALTY; JUDICIAL REVIEW; REFUND. (a) Requires the commissioner or designee to give notice of the order under Section 251.068(c), including specific information, to the person notified. (b) Requires the person, within a certain 30-day period, to pay the penalty, or, with or without paying the penalty in full, to file a petition for judicial review contesting the occurrence of the violation, the amount of the penalty, or both. (c) Authorizes the person, within the 30-day period, to stay enforcement of the penalty or request the court to stay enforcement of the penalty. (d) Authorizes the department, if it receives a copy of an affidavit under Subsection (c)(2) to file with the court a contest to the affidavit. Requires the court to hold a hearing on the facts alleged in the affidavit, and to stay enforcement of the penalty if it finds the alleged facts to be true. Places the burden of proving financial inability to pay the penalty and to give a supersedeas bond on the person filing the affidavit. (e) Authorizes the executive director, if the person does not pay the penalty and the enforcement of the penalty is not stayed, to refer the matter to the attorney general for collection of the amount of the penalty. (f) Provides that judicial review of the board's order is instituted by filing a petition under Chapter 2001G, Government Code, and is under the substantial evidence rule. (g) Authorizes the court, if it sustains the occurrence of the violation, to uphold or reduce the amount of the penalty and to order the person to pay the full or reduced amount of the penalty. Requires the court, if it does not sustain the occurrence of the violation, to order that no penalty is owed. (h) Requires the court to proceed under this subsection when the court's judgment becomes final. Sets forth requirements when a person pays the amount of the penalty or gave a supersedeas bond and the amount of the penalty or bond is reduced or not upheld by the court. Sec. 251.070. PENALTY DEPOSITED TO STATE TREASURY. Requires a civil or administrative penalty collected under this chapter to be deposited in the state treasury to the credit of the general revenue fund. Sec. 251.071. RECOVERY OF COSTS. (a) Authorizes the department to assess reasonable expenses and costs against a person in an administrative hearing if, as a result of the hearing, the person's license is denied, suspended, or revoked, or if administrative penalties are assessed against the person. Sets forth requirements for payment. (b) Authorizes the attorney general, when an injunction is granted to a person or the person is found liable of a civil or administrative penalty under certain conditions, to recover reasonable expenses and costs. (c) Defines "reasonable expenses and costs." SUBCHAPTER F. TEMPORARY MANAGER Sec. 251.091. APPOINTMENT BY AGREEMENT. (a) Authorizes a person holding a controlling interest in a facility to request the department to assume the management of the facility through the appointment of a temporary manager. (b) Authorizes the department to enter into an agreement providing for the appointment of a temporary manager to manage the facility under conditions considered appropriate by both parties if the department considers the appointment desirable. (c) Sets forth requirements for an agreement under this section. (d) Declares that the primary duty of the temporary manager is to ensure that adequate and safe services are provided to patients until temporary management ceases. (e) Declares that the appointment terminates at the time specified by the agreement. Sec. 251.092. INVOLUNTARY APPOINTMENT. (a) Authorizes the department to request the attorney general to bring an action in the name and on behalf of the state for the appointment of a temporary manager under certain circumstances. (b) Requires the court, after a hearing, to appoint a temporary manager if the court finds that the appointment is necessary. (c) Requires the court order to address the duties and authority of the temporary manager. (d) Requires the court to appoint as temporary manager an individual whose background includes administration of end stage renal disease facilities or similar facilities. (e) Declares that venue for an action under this section is in Travis County. Sec. 251.093. FEE; RELEASE OF FUNDS. (a) Entitles a temporary manager to a reasonable fee, to be paid by the facility, as determined by the court. (b) Authorizes the temporary manager to petition the court to order the release to the manager of any payment owed the manager for care and services provided to patients of the facility if the payment has been withheld. (c) Authorizes withheld payments that may be released under Subsection (b) to include payments withheld by a governmental agency or other entity before or during the appointment of the temporary manager. SECTION 2. (a) Effective date: September 1, 1995, except as provided by Subsection (b), except as provided by Subsection (b) and SECTION 3. (b) Effective date of Sections 251.011 and 251.031 and Subchapter E, Health and Safety Code: September 1, 1996. SECTION 3. Provides that a person is not required to obtain a license under Chapter 251B, Health and Safety Code, and an individual is not required to be trained and competent under Chapter 251C, Health and Safety code, until September 1, 1996. SECTION 4. Emergency clause.