BILL ANALYSIS
C.S.H.B. 2644
By: Hilderbran (Patterson)
Health and Human Services
05-25-95
Senate Committee Report (Substituted)
BACKGROUND
Regulation of long-term care facilities falls under the authority
of the Texas Department of Human Services. In 1993, the state
auditor reviewed state regulations regarding long-term care and
recommended that the rules be streamlined because of their
complexity. In addition, newly revised federal rules have caused
the department to reconsider its own regulatory scheme and
promulgate new enforcement rules.
PURPOSE
As proposed, C.S.H.B. 2644 streamlines licensing and Medicaid
certification requirements for nursing facilities participating in
the Medicaid program. H.B. 2644 also establishes provisions
authorizing the arbitration of disputed cases in nursing facility
regulation.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is granted
to the Department of Human Services under SECTION 1 (Section
32.021(d), Human Resources Code) and to the chief administrative
law judge of the State Office of Administrative hearings under
SECTION 5 (Section 242.253(b), Health and Safety Code) of this
bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 32.021, Human Resources Code, by amending
Subsection (d), and adding Subsections (h)-(k), as follows:
(d) Authorizes the Department of Human Services (DHS) to
include in its contracts for the delivery of medical
assistance by nursing facilities provisions for monetary
penalties to be assessed for contract violations, provided
that DHS, among other conditions, develops rules in accordance
with Subsection (i) to adjudicate claims in contested cases.
(h) Prohibits the rules adopted by DHS for certification of
nursing facilities as being in compliance with the
requirements for participation in the state Medicaid program
from being different from the standards imposed by federal
law, except to the extent necessary to implement rights
granted to an elderly individual under Chapter 102. Provides
that this subsection does not prevent DHS from using any
civil, administrative, or criminal remedy authorized by state
or federal law with respect to a facility that is in violation
of a certification or licensing requirement.
(i) Requires the rules adopted under Subsection (d)(2) to make
certain provisions.
(j) Declares that a finding by DHS that an institution has
violated a standard for participation in the state Medicaid
program, or the assessment or payment of a monetary penalty
under this section, is not admissible as evidence in a civil
action to prove that the institution has committed a
violation. Provides that this subsection does not apply in an
enforcement action or related proceeding in which the state or
an agency or political subdivision of the state is a party.
(k) Subjects an assessment of monetary penalties under this
section to arbitration under Chapter 242H, Health and Safety
Code.
SECTION 2. Amends Section 242.037, Health and Safety Code, as
follows:
(a) Created from existing text.
(b) Provides that an institution that is certified as being in
compliance with each standard of participation in the state
Medicaid program that relates to the same subject matter as a
minimum standard established under Subsection (a) is not
required to satisfy the minimum standard established under
that subsection.
SECTION 3. Amends Section 242.069, Health and Safety Code, by
adding Subsection (g), to require a penalty collected under this
section to be deposited to the credit of the nursing and
convalescent home trust fund established under Section 242.096.
SECTION 4. Amends Chapter 242G, Health and Safety Code, by adding
Section 242.070, as follows:
Sec. 242.070. APPLICATION OF OTHER LAW. Prohibits the Texas
Department of Health (TDH) from assessing a penalty under both
this subchapter and Section 32.021, Human Resources Code, for
a violation arising out of the same act or failure to act.
SECTION 5. Amends Chapter 242, Health and Safety Code, by adding
Subchapter H, as follows:
SUBCHAPTER H. ARBITRATION OF CERTAIN DISPUTES
Sec. 242.251. SCOPE OF SUBCHAPTER. Provides that this
subchapter applies to any dispute between an institution
licensed under this chapter and TDH relating to the renewal,
suspension or revocation of certain licenses, or the
assessment of certain penalties.
Sec. 242.252. ELECTION OF ARBITRATION. (a) Authorizes an
affected institution to elect binding arbitration of any
dispute to which this subchapter applies. Declares that
arbitration under this subchapter is an alternative to a
contested case hearing or to a judicial proceeding relating to
the assessment of a civil penalty.
(b) Authorizes an affected institution to elect arbitration
under this subchapter by filing the election with TDH not
later than the 10th day after a notice of hearing relating
to any dispute described by Section 242.251 is received by
the institution.
(c) Authorizes TDH to elect arbitration under this
subchapter by notifying the institution of the election not
later than the date that the institution may elect
arbitration under Subsection (b).
(d) Declares that an election to engage in arbitration under
this subchapter is irrevocable and binding on the
institution and TDH.
Sec. 242.253. ARBITRATION PROCEDURES. (a) Requires the
arbitration to be conducted by an arbitrator.
(b) Requires the arbitration and appointment of the
arbitrator to be conducted in accordance with rules adopted
by the chief administrative law judge (chief judge) of the
State Office of Administrative Hearings (office). Requires
the chief judge, before adopting rules under this
subsection, to consult with TDH and consider appropriate
rules developed by any nationally recognized association
that performs arbitration services.
(c) Requires the department to pay the cost of the
arbitration, if the department elects the arbitration.
Requires the cost of the arbitration to be shared equally by
TDH and the institution, if the institution elects the
arbitration. Prohibits the total fees and expenses paid for
an arbitrator from exceeding $500 per day.
(d) Authorizes the office to designate a nationally
recognized association that performs arbitration services to
conduct arbitrations under this subchapter, and to contract
with that association for the arbitration.
Sec. 242.254. ARBITRATOR; QUALIFICATIONS. Requires each
arbitrator to be on an approved list of a nationally
recognized association that performs arbitration services, or
be otherwise qualified as provided in the rules adopted under
Section 242.253(b).
Sec. 242.255. ARBITRATOR; SELECTION. Requires the arbitrator
to be appointed in accordance with rules adopted under Section
242.253(b).
Sec. 242.256. DUTIES OF ARBITRATOR. Requires the arbitrator
to protect the interests of TDH and the institution, ensure
that all relevant evidence has been disclosed, and render an
order consistent with this chapter and rules.
Sec. 242.257. SCHEDULING OF ARBITRATION. (a) Requires the
arbitrator conducting the arbitration to schedule arbitration
to be held not later than the 90th day after the date the
arbitrator is selected, and to notify TDH and the institution
of the date.
(b) Authorizes the arbitrator to grant a continuance of the
arbitration at the request of TDH or the institution.
Prohibits the arbitrator from unreasonably denying a request
for a continuance.
Sec. 242.258. EXCHANGE AND FILING OF INFORMATION. Requires
TDH and the institution, not later than the seventh day before
the first day of arbitration, to exchange and file with the
arbitrator all documentary evidence not previously exchanged
and filed that is relevant to the dispute, and information
relating to a proposed resolution of the dispute.
Sec. 242.259. ATTENDANCE REQUIRED. (a) Authorizes the
arbitrator to proceed in the absence of any party or
representative of a party who, after notice of the proceeding,
fails to be present or to obtain a postponement.
(b) Prohibits an arbitrator from making an order solely on
the default of a party. Requires the arbitrator to require
the party who is present to submit evidence required by the
arbitrator before making an award.
Sec. 242.260. TESTIMONY; RECORD. (a) Authorizes the
arbitrator to require witnesses to testify under oath.
Requires the arbitrator to require testimony under oath if
requested by TDH or the institution.
(b) Requires TDH to make an electronic recording of the
proceeding.
(c) Authorizes TDH or the institution to make a stenographic
record. Requires the party that makes the record to pay the
expense of having the record made.
Sec. 242.261. EVIDENCE. (a) Authorizes TDH or the
institution to offer evidence as desired, and requires TDH or
the institution to produce additional evidence as the
arbitrator considers necessary to understand and resolve the
dispute.
(b) Declares that the arbitrator is the judge of the
relevance and materiality of the evidence offered, and that
strict conformity to the rules applicable to judicial
proceedings is not required.
Sec. 242.262. CLOSING STATEMENTS; BRIEFS. Authorizes TDH and
the institution to present closing statements as they desire,
but prohibits the record from remaining open for written
briefs unless requested by the arbitrator.
Sec. 242.263. EX PARTE CONTACTS PROHIBITED. (a) Authorizes
TDH and the institution, except as provided by Subsection (b),
from communicating with an arbitrator other than at an oral
hearing, unless the parties and arbitrator agree otherwise.
(b) Requires any oral or written communication, other than
that under Subsection (a), from the parties to the
arbitrator to be directed to the association that is
conducting the arbitration or to the office for transmittal
to the arbitrator.
Sec. 242.264. ORDER. (a) Authorizes the arbitrator to enter
any order that may be entered by TDH, the Texas Board of
Health, commissioner of health, or court under this chapter in
relation to a dispute described by Section 242.251.
(b) Requires the arbitrator to enter the order not later
than the 60th day after the last day of the arbitration.
(c) Requires the arbitrator to base the order on the facts
established at arbitration and on the law as properly
applied to those facts.
(d) Sets forth requirements for the order.
(e) Requires the arbitrator to file a copy of the order with
TDH and to notify TDH and the institution in writing of the
decision.
Sec. 242.265. EFFECT OF ORDER. Declares that an order of an
arbitrator under this subchapter is final and binding on all
parties. Provides that there is no right of appeal, except as
provided by Section 242.267.
Sec. 242.266. CLERICAL ERROR. Provides that an arbitrator
retains jurisdiction of the award for 20 days after the date
of the award for the purpose of correcting a clerical error.
Sec. 242.267. COURT VACATING ORDER. (a) Requires a court, on
application of the institution, to vacate an arbitrator's
order with respect to an arbitration conducted at the election
of TDH upon certain findings.
(b) Requires the dispute to be remanded to TDH for another
arbitration hearing if the order is vacated.
(c) Requires a suit to vacate an arbitrator's order to be
filed by a certain date.
(d) Declares that venue for a suit to vacate an arbitrator's
order is in the county in which the arbitration was
conducted.
Sec. 242.268. NO ARBITRATION OF EMERGENCY ORDER OR CLOSING
ORDER. Provides that this subchapter does not apply to an
order issued under Section 242.062.
SECTION 6. Effective date: September 1, 1995. Makes application
of Chapter 242H, Health and Safety Code, prospective beginning with
respect to formal proceedings commenced on or after January 1,
1996.
SECTION 7. Emergency clause.