BG C.S.H.B. 2389 75(R)BILL ANALYSIS PUBLIC HEALTH C.S.H.B. 2389 By: Maxey 4-17-97 Committee Report (Substituted) BACKGROUND Over the last few years, the Texas Department of Health (TDH) has upgraded its laboratory, assembling a team of knowledgeable, well-trained professionals. It is currently building a stateof-the-art laboratory facility which will provide the staff with the necessary infrastructure to offer a wide array of services. Providing these services to other states and federal agencies could generate considerable revenue for Texas. States have previously approached TDH about carrying out such assignments, but the department has declined these offers due to a lack of statutory clarity regarding the laboratory's role. PURPOSE CSHB 2389 allows TDH to enter into contracts for the sale and provision of laboratory services, and authorizes adoption of necessary rules for setting and collecting fees. RULEMAKING AUTHORITY It is the committee's opinion that this bill expressly grants additional rulemaking authority to the Texas Department of Health in SECTION 1 (Section 12.020(d),Health and Safety Code). SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter B, Chapter 12, Health & Safety Code, by adding Section 12.020, entitled "Sale of Laboratory Services" as follows: Subsection (a) allows TDH to enter into a contract for the sale and provision of laboratory services. Subsection (b) allows TDH to enter into a contract with a federal, state or local government entity or a freestanding public health clinic owned or controlled by a nonprofit organization. Subsection (c) excludes TDH from entering into a contract with a federal government entity that relates to Medicare managed care services. Subsection (d) allows TDH by rule to establish charges for the sale of laboratory services. Subsection (e) allows TDH to enter into a contract with a party in or outside of the state. Subsection (f) defines "laboratory services" for this section. The term includes the provision of supplies and test materials and the performance of scientific procedures to analyze or assess specimens from any source. It, however, does not include tissue and cytology specimens, except for pap smears for recipients under federally funded programs or genetic testing. SECTION 2. Amends Section 12.035 of the Health and Safety Code as follows: Subsection (a) clarifies that funds collected by TDH for the sale of laboratory services includes charges and that these funds, including those cited in Sec. 12.020(d), will be credited to the department's public health services fee fund. Subsection (c) is added to exempt the public health services fee fund from Section 403.095 (b) of the Government Code. SECTION 3. Emergency Clause. Establishes that this Act takes effect upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE In SECTION 1, Sec. 12.020 of CSHB 2389 the words "any person" are deleted from the original bill as it was a drafting error and intent was to limit the sale of laboratory services to public entities, not to have the state compete with private entities or individuals. Subsection (a) is added to the substitute bill as an explanation of the purpose of the bill. CSHB 2389 adds subsection (b) to clarify which types of entities with which the state laboratory can contract. CSHB 2389 adds subsection (c) in order to exclude Medicare managed care services from federal contracts for laboratory services. Subsection (d) and (e) are added to the substitute bill from language that was already in HB 2389, but now are in separate subsections. Plus CSHB 2389 adds subsection (f) which defines "laboratory services". A new SECTION 2 amending Section 12.035 of Health and Safety Code, is inserted into the substitute bill in order to clean-up language in subsection (a); and to add subsection (c) which exempts public health services fee funds from Sec. 403.095 (b) of the Government Code. SECTION 3, which is emergency clause in the substitute bill, is renumbered from HB 2389.