SRC-JRN S.B. 276 75(R)    BILL ANALYSIS


Senate Research CenterS.B. 276
By: Patterson
Health & Human Services
1-30-97
As Filed


DIGEST 

Currently, mental health, chemical dependency, and or mental retardation
services cannot be provided through networks because the system is
limited.  Because public health organizations are performing more
services, it is important that networks of service providers are created
that are flexible enough to meet the needs of those it serves.  S.B. 276
establishes the requirements for the creation and function of networks by
community centers providing mental health, chemical dependency, and mental
retardation services.  

PURPOSE

As proposed, S.B. 276 establishes requirements for the creation of
networks to provide mental health, chemical dependency, and mental
retardation services. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 534, Health and Safety Code, by adding
Subchapters C and D, as follows: 

SUBCHAPTER C. NETWORKS

Sec. 534.101. DEFINITIONS.  Defines "network," "network board," and
"provider." 

Sec. 534.102. ESTABLISHMENT AND OPERATION OF NETWORKS.  Authorizes  a
community center to create a network to assist in ensuring that a
continuum of mental health, chemical dependency, and/or mental retardation
services (services) is available and that this service is provided
efficiently and effectively and sets forth duties of the network.
Requires the board of trustees of the community center to function as the
network board if one community center creates a network.  Requires a board
to be established by participating community centers under interlocal
agreement if more than one community center creates a network.  Provides
that a network board may engage in activities and sets forth types of
activities in which the board may engage.  Authorizes a community center
to be a provider and participate in its network as a provider of services
if the community center meets certain requirements. 

Sec. 534.103. CONTRACTUAL AUTHORITY.  Provides that a network established
and operating under this subchapter meeting certain definitions is
considered a "provider" and may enter into "provider" contracts with any
health maintenance organization (HMO) in Texas.  Provides that neither a
network or a community center that creates a network is required to be
licensed as an HMO.  Authorizes a network board to enter into
administrative and management contracts with an HMO. 

Sec. 534.104. COMPENSATION OF PROVIDERS.  Authorizes a network to
compensate providers contracted to it for services under any compensation
arrangement authorized by the network board. 
 
Sec. 534.105. OBTAINING FUNDS.  Sets forth authorization for a network to
obtain funds and establishes entities from which funds may be obtained. 

Sec. 534.106. LIMITATIONS ON SERVICES PROVIDED BY A NETWORK.  Authorizes a
network to provide only services as approved by the Texas Department of
Mental Health and Mental Retardation under Subchapter A of this Chapter. 

Sec. 534.107. ADDITIONAL DUTIES.  Provides that a person who serves on a
network board who is also an officer, trustee, or employee of a
governmental entity, performs duties on the network board as an additional
duty to regular employment. 

Sec. 534.108. LIABILITY. Provides that certain persons are not liable to
claims or judgments against the community center, the network board, the
network, or any network provider, unless the claims relate to the
network's operation. 

SUBCHAPTER D.  NETWORK FUND MANAGEMENT

Sec. 534.125. DEFINITIONS.  Defines "operational plan," "network pool,"
"network," "network board," and "provider." 

Sec. 534.126. FUNDS MANAGEMENT.  Requires all funds received by a network
board under contract with any payor to remain the property of the
community center or group of community centers that created the network.
Provides that neither a community center or network board is required to
return to a payor any funds received under a contract that exceed the
actual costs of services, if conditions of the contract are met.   

Sec. 534.127. CREATION OF NETWORK POOL.  Requires a network board entering
into at-risk contracts to create a network pool for the management of the
funds received under such contracts.  Requires funds allocated to the
network pool to be deposited and maintained in separate accounts and be
segregated from other community center or network funds. 

Sec. 534.128. PURPOSE OF NETWORK POOL.  Requires the network pool to be
used to cover the network's costs and any obligations in providing service
for at-risk contracts and to establish surplus funds to assure that the
network can meet its obligations under such contracts and this subchapter. 

Sec. 534.129. NETWORK POOL ADMINISTRATION.  Establishes duties of the
network board.  Authorizes the network board to employ or contract with
persons and businesses to manage and operate the network pool. 

Sec. 534.130. POOL OPERATIONAL PLAN.  Requires the network board to adopt,
at the time of creation of a network pool, the initial operational plan
for the pool.  Sets forth requirements of the operational plan that
addresses the organization, operation, management, and finances of the
network pool.  Authorizes the board to amend the operational plan as
necessary to carry out the provisions of this subchapter. 

Sec. 534.131.  BOND.  Requires persons who have any authority over funds
in the network pool to execute a bond in an amount determined by the
network board, payable to the network pool, based on the faithful
performance of the persons' duties.  Requires the cost of the bond to be
paid by the network pool. 

Sec. 534.134. FUNDS IN NETWORK POOL.  Sets forth funds to be included in
the network pool.  Authorizes the board of trustees of a community center
to use funds from any source to initially provide operating funds and
surplus for the network pool at the creation of the pool. 

Sec. 534.132. USE OF NETWORK POOL FUNDS.  Sets forth conditions for which
funds in the network pool are to be used. 
 
Sec. 534.133. PURCHASE OF REINSURANCE, ETC.  Authorizes the network board
to purchase any risk protection benefit for protecting the solvency of the
network pool and for fulfilling its responsibilities. 

Sec. 534.134. RISK MANAGEMENT.  Authorizes the network board to adopt a
risk management program. 

Sec. 534.135. APPLICATION OF CERTAIN LAWS.   Provides that a network pool
created under this subchapter is not considered to be related to the
business of insurance, and the Texas Department of Insurance and the
Commissioner of Insurance have no jurisdiction over a network pool created
under this section. 

Sec. 534.136. UTILIZATION OF EXCESS FUNDS.  Authorizes the network board
to utilize excess funds to expand services offered by the community center
or community centers, if the amount remaining in the network pool exceeds
the amount of funds necessary to cover the obligations at the end of the
network's fiscal year.  Requires expanded programs offered by the
community centers with excess network pool funds to be programs that will
further the missions of the community centers. 

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.