BILL ANALYSIS C.S.H.B. 2032 By: Uher April 29, 1995 Committee Report (Substituted) BACKGROUND During the 73rd interim, public medical schools formed various task forces designed to address the issue of how medical and dental schools could cope with the changing health care market. Recent years have seen the spread of managed care throughout this market. The various task forces recommended a number of measures aimed at improving institutional to better participate in the health care market place. Two of these recommendations revolve around legislative changes permitting the institutions to better participate in the health care market place. One would allow institutions to offer retirement incentives to employees, allowing medical and dental units to facilitate needed employment reductions. The second would increase institutional savings by reducing state purchasing regulations applicable to the institutions, allowing them to make acquisitions under private business standards. Similar provisions were included in S.B. 192, 74th Legislative Session, relating to the M.D. Anderson Cancer Center. This bill has passed both houses and been signed by the governor. PURPOSE CSHB 2032 gives medical and dental units more management flexibility by reducing state regulations relating to purchasing laws and allowing the institution to provide retirement incentives to reduce employment levels. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter Z, Chapter 51, Education Code, by adding Sections 51.932 and 51.933. Sec. 51.932 allows medical and dental units to offer retirement incentives to employees of the unit who are eligible to retire under the Optional Retirement Program or the Teachers Retirement System. Requires the medical and dental units to provide information to the Legislative Budget Board and file any retirement plan with the Legislative Budget Board. Also requires that any incentive be paid by institutional funds or hospital and clinic fees, clarifies that any incentive payments are not to be considered as entitling employees to additional benefits, and restricts hiring of employees receiving retirement incentives. Defines "institutional fund" and "medical and dental unit". Sec. 51.933 allows a medical and dental unit to acquire goods and service by any method providing the best value. Lists the types of methods that can be used; states what factors the medical and dental units shall consider in determining what is the best value; state that all purchases are subject to audit by the state auditor; and provides that a medical and dental unit shall comply with all state laws concerning contracting with historically underutilized businesses. Also allows the legislative audit committee to contract for a report on the purchasing operations of the medical and dental unit, and provides that the unit shall bear the cost of the study. Defines "medical and dental unit." SECTION 2. Effective date: upon passage. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute adds language to Sec. 51.932, Education Code, of the original providing that any retirement incentive plan shall be filed with the LBB and that any retirement incentives paid to an employee shall not entitle the employee to additional benefits based on salary or compensation. The substitute also adds "a school of veterinary medicine" to the definition of "medical and dental unit." SUMMARY OF COMMITTEE ACTION Pursuant to public notice posted on March 30, 1995, the Committee on State Affairs convened in a public hearing on April 4, 1995 to consider HB 2032. The Chair laid out HB 2032 and recognized Rep. Uher to explain the bill. The Chair laid out a complete committee substitute which was not adopted. The following persons testified neutrally on the bill: Ken Wildenthal, MD representing the UT Southwestern Medical Center; and Dr. M. David Low representing UTHSC-Houston. The Chair recognized Rep. Uher to close. The Chair left HB 2032 pending. In a formal meeting on April 27, 1995, the Chair laid out HB 2032. Rep. D. Jones laid out a complete committee substitute. Rep. D. Jones laid out Committee amendment #1 which was adopted without objection. The substitute as amended was adopted without objection. The Chair directed the staff to incorporate the amendment into the substitute. The bill was reported favorably as substituted with the recommendation that it do pass and be printed by a record vote of 15 ayes, 0 nays, 0 pnv, and 0 absent.