BILL ANALYSIS C.S.H.B. 3118 By: Coleman 05-01-95 Committee Report (Substituted) BACKGROUND Texas entered the Intermediate Care Facilities for people with mental retardation (ICF/MR) program in 1974 to draw matching federal funds through the Medicaid program, as well as to improve staff ratios in MHMR state schools. Originally identified with nursing facilities as providing large facility-based long-term services for people with mental retardation, state laws establishing regulation under the ICF/MR program were incorporated in Chapter 242 of the Health and Safety Code, the nursing facility statute. Over the years, national trends and changes in philosophy regarding services to people with mental retardation changed dramatically. The ICF/MR program no longer shares many characteristics with the Medicaid nursing home program, having moved away from large, congregate settings to community-based homes of six beds or less. These small facilities not only offer room and board, but also provide active treatment to help clients function as independently as possible. In contrast, the trend in services for residents of nursing facilities has changed little over the years, except to emphasize medical care and treatment in these larger institutional settings. In FY 1994, the ICF-MR community-based program served over 7,000 clients at an annual expense of about $211 million. The more institutional-type state schools served another 6,200 persons and generated $238 million in federal matching funds. PURPOSE H.B. 3118 would remove the ICF/MR program from the nursing facility statute and create a new chapter in the Health and Safety Code, Chapter 251, to support current best practices in delivering services to people with mental retardation. The bill would provide licensing requirements and set minimum standards governing ICF/MR homes. Standards contained in H.B. 3118 derive from current licensing standards. Minimum modifications were made in the language to ensure that standards reflect current trends in services to persons with mental retardation and current federal requirements. RULEMAKING AUTHORITY It is the committee's opinion that H.B. 3118 expressly grants rulemaking authority to the Texas Board of Human Services in SECTION 1 of the bill. SECTION BY SECTION ANALYSIS Section 1. Amends Subtitle B, Title 4, Health and Safety Code, by adding new Chapter 251, as follows: CHAPTER 251. INTERMEDIATE CARE FACILITIES FOR THE MENTALLY RETARDED SUBCHAPTER A: GENERAL PROVISIONS Section 251.001 PURPOSE. Specifies the purpose of the new chapter as promoting public health, safety, and welfare by developing, establishing, and enforcing standards for services to persons residing in ICFs/MR. Section 251.002 DEFINITIONS. Provides definitions for "board," "Department" (meaning Dept. of Human Services [DHS]), "designee," "facility," "governmental unit," "person," and "resident." Section 251.003 EXEMPTIONS. Specifies certain entities as exempt from regulation under this chapter, including training, habilitation, rehabilitation, or education programs; programs operated by another state agency or federal agency; and programs certified by other state or federal agencies. Section 251.004 FEDERAL FUNDS. Permits DHS to use of funds allocated by the federal government for administrative expenses. Section 251.005 LANGUAGE REQUIREMENTS PROHIBITED. Prohibits facilities from allowing residents or employees to communicate in the person's native language. Section 251.006 RIGHTS OF RESIDENTS. Requires facilities to enforce Chapter 102, Human Resources Code, relating to resident rights. Section 251.007 PAPERWORK REDUCTION RULES. (a) Permits DHS and any designee to: (1) adopt rules reducing paperwork that facilities must complete and retain; and (2) attempt to minimize paperwork requirements of state and federal laws unless resident safety would be jeopardized. (b) Requires DHS, any designee and facilities to work together to review rules and propose changes to paperwork requirements. Section 251.008 RULES. Authorizes DHS to adopt rules necessary for the administration and implementation of this Chapter, including rules for: (1) Secs. 251.031-.033 (requirements for related fees and denial, suspension or revocation of license); and (2) Secs. 251.038-.041 (requirements for inspections and surveys). Section 251.009 CONSULTATION AND COORDINATION. (a) Requires DHS, whenever possible, to use and consult with state and local agencies and use Dept. facilities to perform functions under this chapter and establish and maintain standards for humane treatment of residents. (b) Permits DHS to cooperate with local public health officials and delegate to them the power to make inspections and recommendations to the Dept. (c) Permits DHS to coordinate personnel and facilities with local agencies and provide advice for local officials who decide to supplement the state program with additional rules to meet local conditions. Section 251.010 CHANGE OF ADMINISTRATORS. Requires facilities hiring new administrators to notify DHS of the change and pay a $20 administrative fee to DHS. SUBCHAPTER B: LICENSING, FEES, AND INSPECTIONS Section 251.031 LICENSE REQUIRED. Requires license to operate an ICF/MR. Section 251.032 LICENSE APPLICATION. (a) Requires application for license to be made on form provided by DHS and be accompanied by a license fee. (b) Requires application to contain information as required by DHS, including affirmative evidence of ability to comply with standards and rules. Section 251.033 ISSUANCE AND RENEWAL OF LICENSE. (a) Requires DHS to issue license if applicant and facility meet requirements. (b) Permits DHS to issue license only for premises and persons or governmental unit named in application; and maximum number of beds specified in the application. (c) Prohibits transfer or assignment of license. (d) Permits licenses to be renewed every two years after an inspection, filing and approval of renewal report, and payment of renewal fee. (e) Requires renewal report above to follow DHS rules regarding form and submission date. (f) Prohibits DHS from issuing licenses unless licensed beds are also approved under the state's plan for long-term care facilities for persons with MR. Section 251.034 MINIMUM STANDARDS. Permits the Board of Human Service to adopt, public and enforce minimum standards for ICFs/MR relating to construction or remodeling issues, sanitary conditions, essential equipment, reporting and investigation of injuries and accidents, behavior management, control of communicable disease, use and administration of medication, in conformity with applicable law and rules for pharmacy services, nutrition support, employee training, quality and quantity of staff, and quality of resident life. Section 251.035 REASONABLE TIME TO COMPLY. Requires the Board of Human Services by rule to permit a reasonable amount of time to comply with rules or standards. Section 251.036 FIRE SAFETY REQUIREMENTS. (a) Requires facilities to comply with fire safety requirements. (b) Directs the Board, by rule, to adopt fire safety standards which are the same as fire safety standards established by an edition of the life Safety Code of the Nat'l Fire Protection Ass'n, similar to that designated by federal law, and may be different for facilities or portions of facilities at different times. (c) Prohibits the Board from adopting more stringent fire safety standards than those required by federal law and regulation. (d) Requires licensed facilities to comply with fire safety standards imposed by municipal ordinance applicable to the facility on that date. (e) Declares that rules adopted for fire safety do not prevent licensed facilities from voluntarily conforming to standards compatible with, equal to, or more stringent than those adopted by the Board. (f) Permits municipalities to enact additional and more stringent fire safety standards for new construction begun on or after Sept. 1, 1995. Section 251.037 POSTING. Requires facilities to post prominently their licenses, signs specifying complaint procedures, notice that DHS inspections and reports are available for inspection and the toll-free number for information about the facility, and summaries of recent facility investigations. Section 251.038 INSPECTIONS. (a) Permits DHS or its designee to make inspections, surveys, or investigations needed and enter the premises for those purposes according to board rules. (b) Entitles DHS access to books, records and other documents as necessary for enforcement. (c) Declares that holding or applying for a license amounts to consent for DHS to enter and inspect the premises of the facility. (d) Requires DHS to set procedures to preserve relevant evidence of conditions found during inspections, surveys, or investigations, including photography. (e) When photographing residents, DHS must maintain privacy of the resident. (f) Declares that facilities, officers or employees of the facility, and resident's attending physician are not civilly liable for surrendering confidential information. (g) Requires DHS to establish a clear form summarizing each inspection report and complaint investigation report. (h) Requires DHS to establish proper procedures to ensure that copies of forms and reports are available to consumers and service recipients, as appropriate. Section 251.039 UNANNOUNCED INSPECTIONS. (a) Requires DHS to conduct at least two unannounced inspections of each facility during each licensing period. (b) Requires DHS to randomly select a sufficient percentage of facilities for unannounced, but cursory inspections held between 5 p.m. and 8 a.m. (c) Permits DHS to require additional inspections. (d) As appropriate, DHS may invite at least one citizen advocate to participate in inspections. Section 251.040 DISCLOSURE OF UNANNOUNCED INSPECTIONS; CRIMINAL PENALTY. (a) Provides an offense when a person intentionally, knowingly, or recklessly discloses to an unauthorized person information about unannounced inspections. (b) Defines "unauthorized" person to include DHS, the AG, representatives of Medicaid-survey teams, and other persons authorized by law to enter or accompany an inspector. (c) Declares an offense under this section to be a Class B misdemeanor. (d) Prohibits a person convicted herein from state employment. Section 251.041 LICENSING SURVEYS. Requires DHS to send teams to conduct surveys to validate findings of licensing surveys, to assure fair and consistent surveys; requires facilities to correct deficiencies cited by the team, but does not subject them to punitive action for the deficiencies. SUBSECTION C: GENERAL ENFORCEMENT Section 251.061 EMERGENCY SUSPENSION OR CLOSING ORDER. (a) Requires DHS to suspend a facility license if: (1) DHS finds the facility operating in violation of the standards herein; and (2) such violation creates an immediate threat to the health and safety of a resident. (b) Requires the Board of Human Services by rule to provide placement for residents displaced during license suspension or closure. (c) Declares an order suspending or closing a facility to be effective on the date received by the license holder. (d) Declares an order suspending or closing a facility to be valid for 10 days after the order's effective date. Section 251.062 INJUNCTION. (a) Permits DHS to petition to the district court for temporary restraining order to restrain a continuing violation, upon a finding of immediate threat to residents' health and safety. (b) Permits the court to prohibit a continuing violation; restrain or prevent operation without a license; or grant injunctive relief as warranted, upon a finding that a violation has occurred. (c) Requires the AG, at DHS' request, to institute and conduct suits authorized herein. (d) Requires suits for temporary restraining orders or other injunctive relief to be brought in the county in which the alleged violation occurred. Section 251.063 LICENSE REQUIREMENTS: CRIMINAL PENALTY. (a) Declares an offense if person violated Sec. 251.031 (license requirement). (b) Sets fine for offense under this section of as much as $1,000 for the first offense, and as much as $500 for each subsequent offense. Section 251.064 CIVIL PENALTY. (a) Subjects person violating this chapter or board rule to civil penalty of $100-$1,000 for each violation, if resident health and safety is threatened. (b) Permits each day of continuing violation to constitute a separate ground for recovery. Section 251.065 ADMINISTRATIVE PENALTY. (a) Permits DHS to assess administrative penalties for violations of this chapter or board rules. (b) Requires DHS to establish gradations of penalties and amounts in accordance with the relative seriousness of the violations. (c) Requires DHS to consider other matters when setting penalties, including: (1) gradations under (b) above; (2) seriousness of the violation; (3) history of previous violations; (4) amount necessary to deter future violations; (5) efforts to correct violation; and (6) efforts by DHS to use other sanctions to ensure compliance. (d) Sets maximum penalty at $5,000 for each violation, with each day of continuing violation constituting a separate violation. (e) Requires DHS to establish rules governing the assessment of administrative penalties, including notification of violation, appeals and hearing processes, and payment and refund of the penalty. SUBCHAPTER D: TRUSTEES FOR FACILITIES Section 251.091 FINDINGS AND PURPOSE. (a) Declares that closing of an ICF/MR may have an adverse effect on residents and families; and may result in a lack of readily available funds to meet residents' basic needs. (b) Declares purpose of this subchapter, as providing for appointment of trustees to assume facility operations, and set up a fund to assist court-appointed trustees in meeting residents' basic needs. Section 251.092 APPOINTMENT BY AGREEMENT. (a) Permits person holding controlling interest in a facility to request DHS to assume operations of the facility through appointment of a trustee. (b) Permits DHS to enter into an agreement providing for appointment of a trustee to take charge of the facility, as necessary. (c) Requires such agreements to specify all terms and conditions of trustee's appointment and authority; and preserve all resident rights granted by law. (d) Terminates such agreements at time specified by parties or when either party notifies the other in writing. Section 251.093 INVOLUNTARY APPOINTMENT. Permits DHS to ask the AG to bring an action on behalf of the state for appointment of a trustee to operate a facility if: (1) the facility is operating without a license; (2) DHS has suspended or revoked the license; (3) license suspension or revocation procedures are pending and DHS determines that an imminent threat to resident health and safety exists; (4) DHS determines that an emergency exists presenting an immediate threat to resident health & safety; or (5) facility is closing and arrangements for resident relocation have not been made before closure. (b) Permits a trustee only to ensure an orderly and safe relocation of residents. (c) Requires the court, after a hearing, to appoint a trustee to take charge of the facility (d) Requires the court to appoint as trustee a person whose background includes mental retardation service administration. (e) Declares venue to be in Travis County. Section 251.094 FEE; RELEASE OF FUNDS. (a) Entitles a trustee to a reasonable fee, determined by the court. (b) Permits trustee to petition the court to order the release of payments owed to the trustee for care and services provided to residents, including payments withheld by DHS. (c) Defines withheld payments to include payments withheld by governmental agencies or other entities during the appointment of the trustee, such as Medicaid, insurance, third party payments, or medical expenses borne by residents. Section 251.095 EMERGENCY ASSISTANCE FUNDS; ADDITIONAL LICENSING FEE. (a) Permits DHS to collect an annual fee to be used for emergency assistance funds. (b) Requires the annual fee to be the amount prescribed in Section 242.097(b) for deposit in the nursing and convalescent home trust fund under Section 242.096, Health & Safety Code. (c) Permits DHS to disburse funds from the trust fund to facilities in accordance with purposes in Sec. 242.096. (d) Permits court to order DHS to disburse emergency assistance funds to ICFs/MR pursuant to Sec. 242.096(c). Section 251.096 REIMBURSEMENT. (a) Requires facilities receiving emergency assistance funds to reimburse DHS for the funds received, plus interest. (b) States that interest begins to accrue on the date which funds are disbursed to the facility, at a rate of interest set by Art. 5069.1.05, V.T.C.S. (c) Designates facility owners when trustees are appointed to be responsible to pay the reimbursement. (d) Declares delinquent any amount remaining unreimbursed on the first anniversary of the date on which funds were received; permits DHS to determine the facility to be ineligible for a Medicaid contract. (e) Requires DHS to deposit the reimbursement and interest received in the trust fund. (f) Requires the AG to institute an action to collect funds due at DHS' request; venue is in Travis County. Section 251.097 NOTIFICATION OF CLOSING. (a) Requires facilities to notify residents and families of closing within a reasonable time before closing. (b) Requires facility to notify residents orally or in writing, upon notice from DHS about an involuntary closing. (c) Requires facility to notify residents within one week of the decision to close, if closing is voluntary. SUBCHAPTER E: REPORTS OF ABUSE AND NEGLECT Section 251.121 DEFINITIONS. Establishes definition of "designated agency," meaning an agency designated by the court to be responsible for the protection of a resident who is the subject of a report of abuse or neglect. Section 251.122 REPORTING OF ABUSE AND NEGLECT. (a) Requires persons having cause to believe that a resident's physical or mental health or welfare has been or may be adversely affected by abuse or neglect to report the abuse or neglect to DHS, to a designated agency, or to both, as specified in DHS rules. (b) Requires employees at each facility to sign a statement recognizing the employees' criminal liability for failure to report abuse or neglect. (c) Requires persons to make oral reports immediately upon learning of abuse or neglect, and make written reports by the 5th day after the oral report is made. Section 251.123 CONTENTS OF REPORT. (a) Declares nonaccusatory reports of abuse and neglect, reflecting the person's own belief. (b) Requires report to contain name and address of resident and person responsible for care of resident, and other relevant information. Section 251.124 ANONYMOUS REPORTS OF ABUSE OR NEGLECT. (a) Requires that anonymous reports be received and acted on in same manner as acknowledged reports. (b) Requires state or local law enforcement agencies receiving reports of abuse or neglect to refer cases to DHS or the designated agency. Section 251.125 INVESTIGATION AND REPORT OF RECEIVING AGENCY. (a) Requires DHS or its designee to make thorough investigations promptly after receiving report. (b) Declares primary purpose of investigations to be resident protection. (c) Requires DHS or its designee, in investigations to determine the nature, extent and cause of the abuse and neglect, identity of the person responsible, names and conditions of other residents, evaluation of persons responsible for care of residents, adequacy of facility environment, and any other information required by the Dept. (d) Permits investigators to visit the resident's facility and interview the resident, if appropriate. (e) Requires a probate or county court, in cases where DHS attempts to perform an on-site investigation and cannot gain entry, to order the person responsible for the resident's care to allow admission and interview of the resident. (f) Requires DHS, before completing an investigation, to file a petition for temporary care and protection of the resident if immediate removal is necessary. (g) Requires DHS or its designee to make a written report of the investigation for submission to the DA and appropriate law enforcement agencies, and to DHS if necessary. Section 251.126 CONFIDENTIALITY. Deems reports, records, or working papers used or developed in investigations to be confidential, for disclosure only for purposes consistent with Board rules. Section 251.127 IMMUNITY. (a) Provides immunity from civil or criminal liability for persons who report acts of abuse or neglect that might result from making the report. (b) Extends immunity to participation in judicial proceedings arising therefrom. (c) Disallows immunity protection to persons reporting in violation of Sec. 251.131, below. Section 251.128 PRIVILEGED COMMUNICATIONS. Prohibits exclusion of evidence in cases involving resident abuse or neglect or the cause of abuse or neglect on the grounds of privileged communication, except in the case of attorney-client privilege. Section 251.129 CENTRAL REGISTRY. (a) Requires DHS to maintain in Austin a central registry of reported cases of resident abuse or neglect. (b) Permits Board of Human Services to adopt rules necessary to maintain the registry. (c) Requires Board rules to provide for cooperation with hospitals and clinics in exchanging reports of abuse or neglect. Section 251.130 FAILURE TO REPORT; CRIMINAL PENALTY. (a) Declares an offense in cases involving a person who has cause to believe that a resident's physical or mental health or welfare has been or may be further adversely affected and knowingly fails to report. (b) Deems offense to be Class A misdemeanor. Section 251.131 BAD FAITH, MALICIOUS, OR RECKLESS REPORTING; CRIMINAL PENALTY. (a) Declares an offense in cases involving a person who reports under this Subchapter in bad faith, maliciously, or recklessly. (b) Deems offense to be Class A misdemeanor. (c) Allows criminal penalty provided herein to be assessed in addition to civil penalties. Section 251.132 SUIT FOR RETALIATION. (a) Provides cause of action against a facility or owners or employees of facility, in cases of suspension or termination of employment or disciplinary action resulting from reporting abuse or neglect. (b) Permits the petitioner to recover actual damages, exemplary damages, court costs and attorney's fees. (c) Entitles wrongfully suspended or terminated employee to reinstatement to the former position. (d) Requires petitioner to bring suit or notify TEC (TX Employment Commission) of intent to sue within 90 days of suspension or termination. Requires suit to be brought within 90 days after notice to TEC; requires TEC to notify facility of intent to sue. (e) Places burden of proof on petitioner, except for rebuttable presumption if that suspension or termination occurred within 60 days of report of abuse or neglect. (f) Permits suit to be brought in district court in county of plaintiff's residence; plaintiff's employment by defendant, or defendant's place of business. (g) Requires facilities to require employees to sign a statement that employee understands his or her rights herein. If no signature is obtained, the periods prescribed in this section to not apply, and petitioner must bring suit within two years or suspension or termination. Section 251.133 REPORTS RELATING TO RESIDENT DEATHS. (a) Requires licensed facilities to submit reports to DHS concerning resident deaths, within 10 working days of the last day of each month in which a resident death occurs; deaths must also be reporting within 24 hours of transfer from facility to hospital. (b) Requires facilities to report on DHS form, including information on person's name and social security number. (c) Requires DHS to correlate reports derived herein with death certification information. (d) Deems records under this section confidential, unless specified otherwise by Board rule and not subject to the Open Records Act. SUBCHAPTER F: MEDICATION Section 251.151 ADMINISTRATION OF MEDICATION. Requires DHS to establish necessary rules for the administration of medication in ICFs/MR. SUBCHAPTER G: RESPITE CARE Section 251.181 DEFINITIONS. Includes definitions of "plan of care" and "respite care." Section 251.182 RESPITE CARE. (a) Permits licensed facilities to provide respite care for persons with MR or related conditions without regard to whether person is eligible for intermediate care services under federal law. (b) Permits Board to adopt rules to regulate respite care in ICFs/MR. Section 251.183 PLAN OF CARE. (a) Requires facility and person arranging care to agree on the plan of care to be filed at the facility before person's admission. (b) Requires plan of care to be signed by a licensed physician, if medical care is needed, or person arranging for respite care. (c) Permits facility to keep an agreed plan of care for 6 months; permits facility to admit the person as frequently as necessary and space is available. Section 251.184 NOTIFICATION. Requires facilities offering respite care to notify DHS. Section 251.185 INSPECTIONS. Requires DHS, at time of licensing or other times as necessary, to inspect a facility's records, services, physical accommodations, and plans of care for compliance with Board rules. Section 251.186 SUSPENSION. (a) Permits DHS to require a facility to cease providing respite care if facility does not meet standards. (b) Permits DHS to suspend a license if facility continues to provide care after written notice to cease has been received. SECTION 2. Amends Sec. 242.002(6), Health & Safety Code, by striking from the definition of "institution," intermediate care facilities (ICFs/MR). SECTION 3. Amends Sec. 242.003, Health & Safety Code, by adding to the list of exemptions from licensing a new subsection (8), designating facilities licensed under Chapter 251. SECTION 4. (a) Effective date, Sept. 1, 1995, except for (b). (b) Section 2, changing the definition of "institution," takes effect on Jan. 1, 1996. SECTION 5. (a) Requires facilities to be licensed under Chapter 251 by January 1, 1996; allows facilities required to be licensed under Chapter 251, but already holding license under Chapter 242, to continue operating until December 31, 1995, or the date on which the license is subject to renewal. (b) Prohibits ICF/MR licenses issued under Chapter 242 from renewal after Dec. 1, 1995. SECTION 6. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The committee substitute put the filed bill in Legislative Counsel form. In the process, many sections were renumbered. Numerous other small changes were incorporated after negotiations between DHS, the TX Dept. of Mental Health and Mental Retardation, which sets policy for people with mental retardation and operates state schools and ICFs/MR, and providers, permitting the Board of Human Services broad rulemaking authority with regard to licensing, health and safety standards, employee conduct, reports of abuse and neglect, inspections of facilities, and penalties for violations of the law, among others. The committee substitute also added new Section 2, striking the definition of ICF/MR from Chapter 242, Health and Safety Code; new Section 3 adding ICFs/MR to the list of exemptions in Chapter 242, Health and Safety Code; and establishing a new effective date, allowing existing facilities to operate under old rules until December 31, 1995. SUMMARY OF COMMITTEE ACTION The Human Services Committee convened in a public hearing on April 24, 1995, and the Chairman laid out H.B. 3118 by Rep. Coleman. Rep. Maxey offered a committee substitute for H.B. 3118. The following witnesses testified for H.B. 3118: Carole L. Smith, Private Providers Ass'n of Texas Gordon Israel, representing himself and Draco Residences, Inc. Barrett Markland, Advocacy, Inc. The following witness testified as neutral on H.B. 3118: Penny Steele, Texas Dept. of Mental Health & Mental Retardation. No one testified against H.B. 3118. The substitute was withdrawn and H.B. 3118 was left pending. In a formal meeting on May 1, the committee took up H.B. 3118 which had been pending. Rep. Maxey offered a committee substitute and moved adoption. Hearing no objection, the committee substitute for H.B. 3118 was adopted. The Chairman recognized Rep. Maxey to move that the committee report to the full House H.B. 3118 favorably as substituted and send the bill to the Committee on the Local and Consent Calendars. Rep. Naishtat seconded the motion. The motion prevailed by a record vote of 8 Ayes, 0 Nays, 0 PNV, 1 Absent.