SRC-JFA C.S.H.B. 587 75(R)BILL ANALYSIS


Senate Research CenterC.S.H.B. 587
By: Hunter (Shapleigh)
Health & Human Services
5-16-97
Committee Report (Substituted)


DIGEST 

The Texas Council Risk Management Fund Board (TCRMF) has requested that
certain statutory amendments be made to clarify the ability of community
centers to take advantage of the cost savings and advantages of "pooling"
their employee group benefits programs under Chapter 172, Local Government
Code.  Clarifying that community centers are "political subdivisions"
under Chapter 172, Local Government Code, will increase the ability of
these entities to pool their employee benefits programs.  This will
improve benefit plans, lower costs, and improve employee morale at
community centers.  Clarifying that community centers are "local
governments" will help increase the centers' ability to pool employee
group benefits programs, as well as support the existing product lines of
the TCRMF.  The TCRMF has saved community centers millions of dollars
during its eight year existence, both in actual costs and through its loss
prevention services.  This bill would expand the definition of community
centers in order to improve their abilities to function and provide for
their employees.  Additionally, this bill would one or more community
centers create or operate a nonprofit corporation pursuant to the laws of
this state for the purpose of accepting capitated or other at-risk payment
arrangements for the provision of services designated in a plan approved
by the Department of Insurance under Subchapter A, Health and Safety Code.

PURPOSE

As proposed, C.S.H.B. 587 expands the definition of community centers in
order to improve their abilities to function and provide for their
employees.  Additionally, this bill authorizes one or more community
centers to create or operate a nonprofit corporation for the purposes of
accepting capitated or other at-risk payment arrangement for the provision
of services designated in a plan approved by the Department of Insurance
under Subchapter A, Health and Safety Code.   

RULEMAKING AUTHORITY

Rulemaking authority is given to the Department of Insurance in SECTION 3
of this Act.  

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Sections 534.001(c) and (f), Health and Safety Code, to
provide that a community center is, among other things, a local government
for the purposes of Chapter 1084, Acts of the 70th Legislature, Regular
Session, 1987 (Article 715c, V.T.C.S.); and a political subdivision for
the purposes of Chapter 172, Local Government Code.  Provides that
notwithstanding any other law, a community center is subject to Chapter
554, Government Code.   

SECTION 2. Amends Chapter 534, Health and Safety Code, by adding
Subchapter C, as follows: 

SUBCHAPTER C.  HEALTH MAINTENANCE ORGANIZATIONS

Sec. 534.101.  HEALTH MAINTENANCE ORGANIZATION CERTIFICATE OF AUTHORITY.
(a)  Authorizes one or more community centers to create or operate a
nonprofit corporation pursuant to the laws of this state for the purpose
of accepting capitated or other at-risk payment arrangements for the
provision of services designated in a plan approved by the Texas
Department of Mental Health and Mental Retardation (department) under
Subchapter A.   

 (b)  Requires the nonprofit corporation, before a nonprofit corporation
organized or operating under Subsection (a) accepts or enters into any
capitated or other at-risk payment arrangement for services designated in
a plan approved by the department under Subchapter A, to obtain the
appropriate certificate of authority from the Texas Department of
Insurance (DOI) to operate as a health maintenance organization (HMO)
pursuant to the Texas Health Maintenance Organization Act (Chapter 20A,
V.T.C.S.).  

(c)  Requires a nonprofit corporation operating under this chapter, before
submitting any bids, to disclose in writing to the department the services
to be provided by the community center to be provided by the community
center through any capitated or other at-risk payment arrangement by the
nonprofit corporation.  Requires the department to verify that the
services provided under any capitated or other at-risk payment arrangement
are within the scope of services approved by the department in each
community center's plan required under Subchapter A.   

(d)  Requires the Texas Board of Mental Health and Mental Retardation
(board) to perform certain actions. 

(e)  Requires the nonprofit corporation to provide a public notice, an
opportunity for public comment, and certain information.   

(f)  Sets forth certain requirements and conditions imposed upon a
nonprofit corporation operating under this subchapter 

Sec. 534.102.  LAWS AND RULES.  Authorizes a nonprofit corporation created
or operated under this subchapter that obtains and holds a valid
certificate of authority as an HMO to exercise the powers and authority
and is subject to the conditions and limitations provided by this
subchapter, the Texas Health Maintenance Organization Act (Chapter 20A,
V.T.C.S.), the Texas Non-Profit Corporation Act (Article 1396-1.01 et
seq., V.T.C.S.), and rules of DOI. 

Sec. 534.103.  APPLICATION OF LAWS AND RULES.  Provides that an HMO
created and operating under this subchapter is governed as, and is subject
to the same laws and rules of DOI as, any other HMO of the same type.  

Sec. 534.104.  APPLICATION OF SPECIFIC LAWS.  Provides that an HMO created
and operating under this subchapter is a governmental unit and a unit of
local government, for purposes of Chapters 101 and 102, Civil Practice and
Remedies Code, respectively, and a local government for purposes of
Chapter 791, Government Code.  

(b)  Provides that nothing in this subchapter precludes one or more
community centers from forming a nonprofit corporation under Section 5.01,
Medical Practice Act (Article 4495b, V.T.C.S.), to provide services on a
risk-sharing or capitated basis as permitted under Article 21.52F,
Insurance Code.   

SECTION 3. Requires DOI to adopt rules by September 1, 1997, that describe
the procedures an entity must follow and the standards an entity must meet
to obtain a certificate of authority as a single health care service plan
providing behavioral health care services.    

SECTION 4. Effective date: September 1, 1997.

SECTION 5. Emergency clause.

SUMMARY OF COMMITTEE CHANGES

SECTION 1.

Amends Section 534.001, Health and Safety Code, to add Subsection (f).  

 SECTION 2.

Amends Chapter 534, Health and Safety Code, to add Subchapter C, relating
to one or more community centers creating or operating a nonprofit
corporation pursuant to the laws of this state for the purpose of
accepting capitated or other at-risk payment arrangements for the
provisions of services designated in a plan approved by the department
under Subchapter A. 

SECTION 3.

Sets forth rulemaking authority granted to DOI, relating to an entity
obtaining a certificate of authority as a single health care service plan
providing behavioral health care services. 

SECTIONS 4-5. 

Effective date and expiration clause, originally set forth in SECTIONS 2
and 3.