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.