1-1 AN ACT 1-2 relating to the administration and allocation of Medicaid and other 1-3 funds used to pay for graduate medical education. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subchapter B, Chapter 32, Human Resources Code, 1-6 is amended by adding Section 32.0315 to read as follows: 1-7 Sec. 32.0315. FUNDS FOR GRADUATE MEDICAL EDUCATION. 1-8 (a) The department shall establish procedures and formulas for the 1-9 allocation of federal medical assistance funds that are directed to 1-10 be used to support graduate medical education in connection with 1-11 the medical assistance program. 1-12 (b) The department shall allocate the funds in the manner 1-13 the department determines most effectively and equitably achieves 1-14 the purposes for which those federal funds are received, consistent 1-15 with the needs of this state for graduate medical education and the 1-16 training of resident physicians in accredited residency programs in 1-17 appropriate fields and specialties, taking into account other money 1-18 available to support graduate medical education. In determining 1-19 the needs of this state for graduate medical education, the 1-20 department shall give emphasis to graduate medical education in 1-21 primary care specialties. 1-22 (c) The department shall consult with the Texas Higher 1-23 Education Coordinating Board before adopting or revising a formula 1-24 under this section. At the request of the department, the 2-1 coordinating board shall provide the department with any 2-2 information the board possesses to assist the department in 2-3 administering this section. 2-4 (d) The department shall reimburse each teaching hospital 2-5 under this section using the following formula: 2-6 R = GME/P x WNP x MD/TD 2-7 where: 2-8 "R" is the annual amount to be reimbursed; 2-9 "GME" is the hospital's annual cost of training resident 2-10 physicians for the fiscal year; 2-11 "P" is the number of resident physicians for the fiscal year; 2-12 "WNP" is the weighted number of full-time equivalent resident 2-13 physicians trained by the hospital during the fiscal year and 2-14 reported on its Medicaid cost report, adjusted to count each 2-15 full-time equivalent resident in primary care as 1.2 residents and 2-16 each other full-time equivalent resident as 1.0 residents; 2-17 "MD" means the number of patient days for the hospital for 2-18 the fiscal year that are attributable to Medicaid patients; and 2-19 "TD" means the total number of patient days for the hospital 2-20 for the fiscal year. 2-21 (d-1) For purposes of the calculation under Subsection (d) 2-22 made to determine the amount of reimbursement for a teaching 2-23 hospital for the state fiscal year ending August 31, 1998, WNP 2-24 shall be calculated counting each full-time equivalent resident in 2-25 primary care as 1.0 residents and each other full-time equivalent 2-26 resident as 1.0 residents, and a teaching hospital's average annual 2-27 cost for training residents shall be determined using current cost 3-1 reports for the hospital. This subsection expires January 1, 1999. 3-2 (e) To determine a teaching hospital's average annual cost 3-3 for training residents for purposes of this section, the department 3-4 may use the most recent Medicaid cost report submitted to the 3-5 department by the hospital, or may establish alternative procedures 3-6 to determine that cost. 3-7 (f) The department shall make payments under this section in 3-8 equal monthly installments, except that the department may make 3-9 adjustments in any payment or make additional payments as necessary 3-10 to ensure that each teaching hospital or other entity receives the 3-11 appropriate annual amount under this section. 3-12 (g) For purposes of this section, primary care means a field 3-13 or specialty described by Section 58.008(a), Education Code. 3-14 (h) Notwithstanding Subsections (d) and (e), each teaching 3-15 hospital that received federal medical assistance funds for 3-16 training residents in the state fiscal year ending August 31, 1995, 3-17 shall receive an amount under this section that is: 3-18 (1) for the state fiscal year ending August 31, 1999, 3-19 not less than 90 percent of the amount of those funds the hospital 3-20 would have received in that fiscal year under the formulas used to 3-21 determine the amount of federal medical assistance funds for 3-22 training residents the hospital received in that 1995 fiscal year; 3-23 (2) for the state fiscal year ending August 31, 2000, 3-24 not less than 85 percent of the amount of those funds the hospital 3-25 would have received in that fiscal year under the formulas used to 3-26 determine the amount of federal medical assistance funds for 3-27 training residents the hospital received in that 1995 fiscal year; 4-1 (3) for the state fiscal year ending August 31, 2001, 4-2 not less than 80 percent of the amount of those funds the hospital 4-3 would have received in that fiscal year under the formulas used to 4-4 determine the amount of federal medical assistance funds for 4-5 training residents the hospital received in that 1995 fiscal year; 4-6 and 4-7 (4) for the state fiscal year ending August 31, 2002, 4-8 not less than 75 percent of the amount of those funds the hospital 4-9 would have received in that fiscal year under the formulas used to 4-10 determine the amount of federal medical assistance funds for 4-11 training residents the hospital received in that 1995 fiscal year. 4-12 SECTION 2. Subchapter C, Chapter 61, Education Code, is 4-13 amended by adding Section 61.0594 to read as follows: 4-14 Sec. 61.0594. COORDINATED FUNDING OF GRADUATE MEDICAL 4-15 EDUCATION. (a) The board shall administer a program to support 4-16 graduate medical education programs in this state consistent with 4-17 the needs of this state for graduate medical education and the 4-18 training of resident physicians in accredited residency programs in 4-19 appropriate fields and specialties, including primary care 4-20 specialties described by Section 58.008(a). 4-21 (b) From money available to the program, the board may make 4-22 grants or formula distributions to: 4-23 (1) support appropriate graduate medical education 4-24 programs and activities for which adequate funds are not otherwise 4-25 available; or 4-26 (2) foster new or expanded graduate medical education 4-27 programs or activities that the board determines will address the 5-1 state's needs for graduate medical education. 5-2 (c) To be eligible to receive a grant or distribution under 5-3 this section, an institution or other entity must incur the costs 5-4 of faculty supervision and education or the stipend costs of 5-5 resident physicians in accredited clinical residency programs in 5-6 this state. In making grants and distributions under this section, 5-7 the board shall give consideration to the costs incurred by medical 5-8 schools or other entities to support faculty responsible for the 5-9 education or supervision of resident physicians in accredited 5-10 graduate medical education programs, including programs in 5-11 osteopathic medical education. 5-12 (d) The program is funded by appropriations, by gifts, 5-13 grants, and donations made to support the program, and by any other 5-14 funds the board obtains, including federal funds, for the program. 5-15 From program funds, the comptroller of public accounts shall issue 5-16 warrants to each institution or other entity determined by the 5-17 board as eligible to receive a grant or distribution from the 5-18 program in the amount certified by the board. An amount granted to 5-19 an institution or other entity under the program may be used only 5-20 to cover expenses of training residents of the particular program 5-21 or activity for which the award is made in accordance with any 5-22 conditions imposed by the board and may not otherwise be expended 5-23 for the general support of the institution or entity. 5-24 (e) The board shall appoint an advisory committee to advise 5-25 the board regarding the development and administration of the 5-26 program, including considering requests for program grants and 5-27 establishing formulas for distribution of money under the program. 6-1 The advisory committee shall consist of: 6-2 (1) the executive director of the Texas State Board of 6-3 Medical Examiners or the executive director's designee; 6-4 (2) the chair of the Family Practice Residency 6-5 Advisory Committee or the chair's designee; 6-6 (3) the chair of the Primary Care Residency Advisory 6-7 Committee or the chair's designee; 6-8 (4) the commissioner of the Health and Human Services 6-9 Commission or the commissioner's designee; and 6-10 (5) the following members appointed by the board: 6-11 (A) one representative of a teaching hospital 6-12 affiliated with a Texas medical school; 6-13 (B) one representative of a teaching hospital 6-14 not affiliated with a Texas medical school; 6-15 (C) three representatives of medical schools, at 6-16 least one representing a medical school in The University of Texas 6-17 System, and at least one representing a medical school not in The 6-18 University of Texas System; 6-19 (D) two physicians active in private practice, 6-20 one of whom must be a generalist; 6-21 (E) one doctor of osteopathic medicine active in 6-22 private practice; 6-23 (F) one representative of an entity providing 6-24 managed health care; 6-25 (G) three clinical faculty members, at least one 6-26 of whom must be a generalist; 6-27 (H) one resident physician, who is a nonvoting 7-1 member; and 7-2 (I) one medical student, who is a nonvoting 7-3 member. 7-4 (f) The appointed advisory committee members serve staggered 7-5 three-year terms. The board shall make the initial committee 7-6 appointments to terms of one, two, and three years as necessary so 7-7 that one-third of the appointed members' terms expire each year, as 7-8 nearly as practicable. The committee shall elect one of its 7-9 members as presiding officer for a term of one year. The committee 7-10 shall meet at least once each year at the times requested by the 7-11 board or set by the presiding officer of the committee. A member 7-12 of the advisory committee may not be compensated for service on the 7-13 committee but is entitled to be reimbursed by the board for actual 7-14 expenses incurred in the performance of the member's duties as a 7-15 committee member. 7-16 (g) The advisory committee shall: 7-17 (1) review applications for funding of graduate 7-18 medical education programs under this section and make 7-19 recommendations for approval or disapproval of those applications; 7-20 (2) make recommendations relating to the standards and 7-21 criteria used for consideration and approval of grants or for the 7-22 development of formulas for distribution of funding under this 7-23 section; 7-24 (3) recommend to the board an allocation of funds 7-25 among medical schools, teaching hospitals, and other entities that 7-26 may receive funds under this section; and 7-27 (4) perform other duties assigned by the board. 8-1 SECTION 3. (a) This Act takes effect September 1, 1997. 8-2 (b) Section 32.0315, Human Resources Code, as added by this 8-3 Act, applies to the distribution of federal medical assistance 8-4 funds for the support of graduate medical education received on or 8-5 after the effective date of this Act, and to any such federal funds 8-6 received before the effective date of this Act that have not been 8-7 promised, obligated, or otherwise identified for distribution to 8-8 specific entities before the effective date. 8-9 SECTION 4. The importance of this legislation and the 8-10 crowded condition of the calendars in both houses create an 8-11 emergency and an imperative public necessity that the 8-12 constitutional rule requiring bills to be read on three several 8-13 days in each house be suspended, and this rule is hereby suspended. _______________________________ _______________________________ President of the Senate Speaker of the House I certify that H.B. No. 1511 was passed by the House on April 11, 1997, by a non-record vote. _______________________________ Chief Clerk of the House I certify that H.B. No. 1511 was passed by the Senate on May 12, 1997, by the following vote: Yeas 31, Nays 0. _______________________________ Secretary of the Senate APPROVED: _____________________ Date _____________________ Governor