1-1     By:  Hunter (Senate Sponsor - Shapleigh)               H.B. No. 587

 1-2           (In the Senate - Received from the House April 27, 1997;

 1-3     April 27, 1997, read first time and referred to Committee on Health

 1-4     and Human Services; May 17, 1997, reported adversely, with

 1-5     favorable Committee Substitute by the following vote:  Yeas 8, Nays

 1-6     0; May 17, 1997, sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR H.B. No. 587                 By:  Moncrief

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to certain community centers.

1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-12           SECTION 1.  Sections 534.001(c) and (f), Health and Safety

1-13     Code, are amended to read as follows:

1-14           (c)  A community center is:

1-15                 (1)  an agency of the state, a governmental unit, and a

1-16     unit of local government, as defined and specified by Chapters 101

1-17     and 102, Civil Practice and Remedies Code; [and]

1-18                 (2)  a local government, as defined by Section 791.003,

1-19     Government Code;

1-20                 (3)  a local government for the purposes of Chapter

1-21     1084, Acts of the 70th Legislature, Regular Session, 1987 (Article

1-22     715c, Vernon's Texas Civil Statutes); and

1-23                 (4)  a political subdivision for the purposes of

1-24     Chapter 172, Local Government Code.

1-25           (f)  Each function performed by a community center under this

1-26     title is a governmental function if the function is required or

1-27     affirmatively approved by any statute of this state or of the

1-28     United States or by a regulatory agency of this state or of the

1-29     United States duly acting under any constitutional or statutory

1-30     authority vesting the agency with such power.  Notwithstanding any

1-31     other law, a community center is subject to Chapter 554, Government

1-32     Code.

1-33           SECTION 2.  Chapter 534, Health and Safety Code, is amended

1-34     by adding Subchapter C to read as follows:

1-35               SUBCHAPTER C.  HEALTH MAINTENANCE ORGANIZATIONS

1-36           Sec. 534.101.  HEALTH MAINTENANCE ORGANIZATION CERTIFICATE OF

1-37     AUTHORITY.  (a)  One or more community centers may create or

1-38     operate a nonprofit corporation pursuant to the laws of this state

1-39     for the purpose of accepting capitated or other at-risk payment

1-40     arrangements for the provision of services designated in a plan

1-41     approved by the department under Subchapter A.

1-42           (b)  Before a nonprofit corporation organized or operating

1-43     under Subsection (a) accepts or enters into any capitated or other

1-44     at-risk payment arrangement for services designated in a plan

1-45     approved by the department under Subchapter A, the nonprofit

1-46     corporation must obtain the appropriate certificate of authority

1-47     from the Texas Department of Insurance to operate as a health

1-48     maintenance organization pursuant to the Texas Health Maintenance

1-49     Organization Act (Chapter 20A, Vernon's Texas Insurance Code).

1-50           (c)  Before submitting any bids, a nonprofit corporation

1-51     operating under this subchapter shall disclose in writing to the

1-52     department the  services to be provided by the community center

1-53     through any capitated or other at-risk payment arrangement by the

1-54     nonprofit corporation.  The department shall verify that the

1-55     services provided under any capitated or other at-risk payment

1-56     arrangement are within the scope of services approved by the

1-57     department in each community center's plan required under

1-58     Subchapter A.

1-59           (d)  The board shall:

1-60                 (1)  provide for public notice of the nonprofit

1-61     corporation's intent to submit a bid to provide or arrange services

1-62     through a capitated or other at-risk payment arrangement through

1-63     placement as a board agenda item on the next regularly scheduled

1-64     board meeting that allows at least 15 days' public review of the

 2-1     plan; and

 2-2                 (2)  provide an opportunity for public comment on the

 2-3     services to be provided through such arrangements and on the

 2-4     consideration of local input into the plan.

 2-5           (e)  The nonprofit corporation shall provide:

 2-6                 (1)  public notice before verification and disclosure

 2-7     of services to be provided by the community center through any

 2-8     capitated or other at-risk payment arrangements by the nonprofit

 2-9     corporation;

2-10                 (2)  an opportunity for public comment on the community

2-11     center services within the capitated or other at-risk payment

2-12     arrangements offered by the nonprofit corporation;

2-13                 (3)  published summaries of all relevant documentation

2-14     concerning community center services arranged through the nonprofit

2-15     corporation, including summaries of any similar contracts the

2-16     nonprofit corporation has entered into; and

2-17                 (4)  public access and review of all relevant

2-18     documentation.

2-19           (f)  A nonprofit corporation operating under this subchapter:

2-20                 (1)  is subject to the requirements of Chapters 551 and

2-21     552, Government Code;

2-22                 (2)  shall solicit public input on the operations of

2-23     the nonprofit corporation and allow public access to information on

2-24     the operations, including services, administration, governance,

2-25     revenues, and expenses, on request unless disclosure is expressly

2-26     prohibited by law or the information is confidential under law; and

2-27                 (3)  shall publish an annual report detailing the

2-28     services, administration, governance, revenues, and expenses of the

2-29     nonprofit corporation, including the disposition of any excess

2-30     revenues.

2-31           Sec. 534.102.  LAWS AND RULES.  A nonprofit corporation

2-32     created or operated under this subchapter that obtains and holds a

2-33     valid certificate of authority as a health maintenance organization

2-34     may exercise the powers and authority and is subject to the

2-35     conditions and limitations provided by this subchapter, the Texas

2-36     Health Maintenance Organization Act (Chapter 20A, Vernon's Texas

2-37     Insurance Code), the Texas Non-Profit Corporation Act (Article

2-38     1396-1.01 et seq., Vernon's Texas Civil Statutes), and rules of the

2-39     Texas Department of Insurance.

2-40           Sec. 534.103.  APPLICATION OF LAWS AND RULES.  A health

2-41     maintenance organization created and operating under this

2-42     subchapter is governed as, and is subject to the same laws and

2-43     rules of the Texas Department of Insurance as, any other health

2-44     maintenance organization of the same type.

2-45           Sec. 534.104.  APPLICATION OF SPECIFIC LAWS.  (a)  A health

2-46     maintenance organization created and operating under this

2-47     subchapter is a governmental unit and a unit of local government,

2-48     for purposes of  Chapters 101 and 102, Civil Practice and Remedies

2-49     Code, respectively, and a local government  for purposes of Chapter

2-50     791, Government Code.

2-51           (b)  Nothing in this subchapter precludes one or more

2-52     community centers from forming a nonprofit corporation under

2-53     Section 5.01, Medical Practice Act (Article 4495b, Vernon's Texas

2-54     Civil Statutes), to provide services on a risk-sharing or capitated

2-55     basis as permitted under Article 21.52F, Insurance Code.

2-56           SECTION 3.  The Texas Department of Insurance shall adopt

2-57     rules by September 1, 1997, that describe the procedures an entity

2-58     must follow and the standards an entity must meet to obtain a

2-59     certificate of authority as a single health care service plan

2-60     providing behavioral health care services.

2-61           SECTION 4.  This Act takes effect September 1, 1997.

2-62           SECTION 5.  The importance of this legislation and the

2-63     crowded condition of the calendars in both houses create an

2-64     emergency and an imperative public necessity that the

2-65     constitutional rule requiring bills to be read on three several

2-66     days in each house be suspended, and this rule is hereby suspended.

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