BG C.S.H.B. 2226 75(R)BILL ANALYSIS PUBLIC HEALTH C.S.H.B. 2226 By: Delisi 4-16-97 Committee Report (Substituted) BACKGROUND In recognition of the importance of contract regulatory responsibilities, the Texas Department of Mental Health and Mental Retardation (TDMHMR) has modified and strengthened performance contracts with community mental health and mental retardation centers to include services delivery targets, require use of a uniform assessment, and specific sanctions for non-compliance. However, statutory change is necessary to ensure that TDMHMR has the authority and appropriate mechanisms to ensure both contract compliance and continued provision of services should the board of trustees of a local community center be unable or unwilling to take the action necessary to fulfill contractual obligations, ensure health and safety, or maintain fiscal responsibility. Recommendations from the comptroller's office and The Texas Performance Review's "Disturbing the Peace" are also being addressed by this bill. PURPOSE CSHB 2226 creates a mechanism to enable TDMHMR to manage and operate a community center with which the department has a contract, if the community center board is unable or unwilling to fulfill its contractual obligations. RULEMAKING AUTHORITY It is the committee's opinion that this bill expressly grants additional rulemaking authority to the Board of Mental Health and Mental Retardation (board) in SECTION 3 (Section 534.059(c), Health and Safety Code) and is referenced in SECTION 2 (Section 534.036(j), Health and Safety Code). Additionally, TDMHMR rulemaking is referenced in SECTION 2 (Section 534.036a, Health and Safety Code). SECTION BY SECTION ANALYSIS SECTION 1.Amends Section 534.035, Health and Safety Code, as follows: Subsection (g) replaces the words "discontinue the transfer of" with "withhold" in regards to TDMHMR funds being disputed. Adds to the reference concerning dispute resolution to clarify that it be "in accordance with Section 534.059. Omits language regarding the community center's notice and opportunity for a hearing. Omits the requirement that the board prescribe the hearings procedure. Removes the subsection which allowed TDMHMR to withhold funds during an appeal process and required transfer of funds per a favorable final determination. Makes conforming changes. SECTION 2.Amends Subchapter A, Chapter 534, Health and Safety Code, by adding Section 534.036 as follows: Sec. 534.036. MANAGEMENT IN CERTAIN CIRCUMSTANCES. (a) allows the commissioner to appoint a management team or individual to manage and operate a community center if the center is unable or unwilling to fulfill contractual obligations, ensure health and safety, or maintain fiscal responsibility as specified. Subsection (b) requires TDMHMR, in writing, to notify the community center and local agency or organizational combination as specified of the appointment of the management team or individual and circumstances of the appointment as specified. Subsection (c) allows the management team or individual to perform any or all of the functions, as specified, as defined by the commissioner. Subsection (d) requires the management or individual to report to the commissioner and the local board of trustees monthly on the activities of the team or individual. Subsection (e) requires the commissioner to review and evaluate the community center performance, as specified, each month. Subsection (f) requires the powers and duties of the board of trustees to be exercised under supervision as specified. Subsection (g) allows the commissioner to direct that all costs of the management team or individual be paid by the community center. Subsection (h) establishes that the appointment of a management team or individual continue until commissioner determination, as specified, or cancellation of the contract by TDMHMR. Subsection (i) requires the commissioner to terminate the powers and appointment of the team or individual when the commissioner finds circumstances as specified, and after termination, requires the community center's authorized officers and employees to manage and operate the center. Subsection (j) allows the community center to appeal an appointment as specified and as prescribed by board rule. Establishes that the filing of an appeal notice does not stay the appointment as specified, if the appointment is made on a finding made under Subsection (a)(4). Subsection (k) establishes immunity, as specified, for the appointed individual or member of the management team. SECTION 3. Amends Section 534.059, Health and Safety Code, as follows: Subsection (a) revises language to specify that required performance standards "ensure the provision" of services to priority populations rather than "provide" them. Makes conforming change. Subsection (b) allows TDMHMR to withhold funds, as specified, to a local authority that fails to fulfill its contractual obligations, as specified. Requires TDMHMR to notify the local authority in writing as specified. Subsection (c) allows the local authority to appeal TDMHMR's decision to the board as specified. Requires the board, by rule, to prescribe the appeal procedure. Establishes that the filing of a notice of appeal under this subsection stays the imposition of TDMHMR's decision to withhold money. Subsection (d) allows TDMHMR to limit general revenue allocations to the local authority as specified, notwithstanding Subsection (c). Subsection (e) allows TDMHMR to withhold money during an appeal to the court if the board affirms the decision as specified. SECTION 4. Amends Section 534.060(b), Health and Safety Code, by removing the "at least once each fiscal year" provision of the program review requirement and replacing it with the phrase "in accordance with a risk assessment and evaluation system appropriate to contract requirements." SECTION 5.Amends Section 534.061, Health and Safety Code, as follows: Subsection (a) deletes the word "private" in reference to a provider contracting to provide mental retardation or mental illness services at the community level, as specified, and the required development of a mechanism for periodic monitoring by TDMHMR. Subsection (b) revises the language to require the local health or mental retardation authority, instead of TDMHMR, to monitor the services as specified. Makes conforming change to remove the word "private." Omits the requirement concerning TDMHMR's periodic auditing of private providers. Subsection (c) adds language to provide that provider contracts involving state oversight must authorize "the local mental health or mental retardation authority or the authority's designee" as well as authorizing TDMHMR or it's designee as specified. Makes conforming change. SECTION 6.Establishes that this Act take effect September 1, 1997. SECTION 7.Emergency Clause. COMPARISON OF ORIGINAL TO SUBSTITUTE In Section 1, the original bill would have provided that TDMHMR is the lead agency in policy and services related to mental health, mental retardation, and behavioral health. CSHB 2226 does not include such a provision. In Section 2, the original bill would have established additional requirements for consumer membership on the state board of TDMHMR. The substitute bill does not include such a provision. In Section 3, the original bill would have mandated TDMHMR to comply with existing Government Code requirements for space allocation. The substitute bill does not include such a provision. In Section 4, the original bill would have mandated long range planning by local mental health or mental retardation authorities. The substitute bill does not include such a provision. In Section 5, the original bill would have require the development of guidelines for penalties for violations of contracts. The substitute bill does not include such provisions. In Section 6, the original bill would have required the development of a reimbursement system for contracts with local authorities. The substitute bill does not include such provisions. In Sections 7, 8, 9, and 10, the original bill would have set additional requirements for consumer participation on the boards of trustees of local community centers. The substitute does not include such provisions. In Section 11, the original bill would have required TDMHMR to provide training and technical assistance to local boards of trustees. The substitute bill does not include such a provision. In Section 12, the original bill would have amended the code to require comprehensive reviews of program quality and performance results at least every three years. CSHB 2226 requires reviews in accordance with a risk assessment and evaluation system appropriate to contract requirements in Section 4. In Section 13, the original bill would have required TDMHMR to implement a voucher system to promote consumer choice. The substitute bill does not include such a provision. In Section 14, the original would have authorized TDMHMR to use a receivership process for poorly performing providers. The substitute bill, in Section 2, allows the commissioner to appoint a management team or individual to manage and operate a community center if the center is unable or unwilling to fulfill contractual obligations, ensure health and safety, or maintain fiscal responsibility. In Sections 1 and 3, the substitute allows the TDMHMR to withhold funds to a local authority that fails to fulfill its contractual obligations and directs the board to prescribe a procedure for appealing a decision to withhold funds. In Section 15, the original bill would have required the implementation of certain provisions of the bill by community centers during the center's first fiscal year that would begin after the bill became law. The substitute bill does not include such a provision. In Section 16, the original bill would have established time frames for the implementation of certain provisions relating to membership on the state board of MHMR and community center boards. The substitute bill does not include such a provision. Section 17 of the original bill was the emergency clause which is Section 7 in the substitute bill.