1-1     By:  Berlanga, et al. (Senate Sponsor - Zaffirini)    H.B. No. 1511

 1-2           (In the Senate - Received from the House April 14, 1997;

 1-3     April 16, 1997, read first time and referred to Committee on Health

 1-4     and Human Services; May 1, 1997, reported favorably by the

 1-5     following vote:  Yeas 11, Nays 0; May 1, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to the administration and allocation of Medicaid and other

 1-9     funds used to pay for graduate medical education.

1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-11           SECTION 1.  Subchapter B, Chapter 32, Human Resources Code,

1-12     is amended by adding Section 32.0315 to read as follows:

1-13           Sec. 32.0315.  FUNDS FOR GRADUATE MEDICAL EDUCATION.

1-14     (a)  The department shall establish procedures and formulas for the

1-15     allocation of federal medical assistance funds that are directed to

1-16     be used to support graduate medical education in connection with

1-17     the medical assistance program.

1-18           (b)  The department shall allocate the funds in the manner

1-19     the department determines most effectively and equitably achieves

1-20     the purposes for which those federal funds are received, consistent

1-21     with the needs of this state for graduate medical education and the

1-22     training of resident physicians in accredited residency programs in

1-23     appropriate fields and specialties, taking into account other money

1-24     available to support graduate medical education.  In determining

1-25     the needs of this state for graduate medical education, the

1-26     department shall give emphasis to graduate medical education in

1-27     primary care specialties.

1-28           (c)  The department shall consult with the Texas Higher

1-29     Education Coordinating Board before adopting or revising a formula

1-30     under this section.  At the request of the department, the

1-31     coordinating board shall provide the department with any

1-32     information the board possesses to assist the department in

1-33     administering this section.

1-34           (d)  The department shall reimburse each teaching hospital

1-35     under this section using the following formula:

1-36                           R = GME/P x WNP x MD/TD

1-37     where:

1-38           "R" is the annual amount to be reimbursed;

1-39           "GME" is the hospital's annual cost of training resident

1-40     physicians for the fiscal year;

1-41           "P" is the number of resident physicians for the fiscal year;

1-42           "WNP" is the weighted number of full-time equivalent resident

1-43     physicians trained by the hospital during the fiscal year and

1-44     reported on its Medicaid cost report, adjusted to count each

1-45     full-time equivalent resident in primary care as 1.2 residents and

1-46     each other full-time equivalent resident as 1.0 residents;

1-47           "MD" means the number of patient days for the hospital for

1-48     the fiscal year that are attributable to Medicaid patients; and

1-49           "TD" means the total number of patient days for the hospital

1-50     for the fiscal year.

1-51           (d-1)  For purposes of the calculation under Subsection (d)

1-52     made to determine the amount of reimbursement for a teaching

1-53     hospital for the state fiscal year ending August 31, 1998, WNP

1-54     shall be calculated counting each full-time equivalent resident in

1-55     primary care as 1.0 residents and each other full-time equivalent

1-56     resident as 1.0 residents, and a teaching hospital's average annual

1-57     cost for training residents shall be determined using current cost

1-58     reports for the hospital.  This subsection expires January 1, 1999.

1-59           (e)  To determine a teaching hospital's average annual cost

1-60     for training residents for purposes of this section, the department

1-61     may use the most recent Medicaid cost report submitted to the

1-62     department by the hospital, or may establish alternative procedures

1-63     to determine that cost.

1-64           (f)  The department shall make payments under this section in

 2-1     equal monthly installments, except that the department may make

 2-2     adjustments in any payment or make additional payments as necessary

 2-3     to ensure that each teaching hospital or other entity receives the

 2-4     appropriate annual amount under this section.

 2-5           (g)  For purposes of this section, primary care means a field

 2-6     or specialty described by Section 58.008(a), Education Code.

 2-7           (h)  Notwithstanding Subsections (d) and (e), each teaching

 2-8     hospital that received federal medical assistance funds for

 2-9     training residents in the state fiscal year ending August 31, 1995,

2-10     shall receive an amount under this section that is:

2-11                 (1)  for the state fiscal year ending August 31, 1999,

2-12     not less than 90 percent of the amount of those funds the hospital

2-13     would have received in that fiscal year under the formulas used to

2-14     determine the amount of federal medical assistance funds for

2-15     training residents the hospital received in that 1995 fiscal year;

2-16                 (2)  for the state fiscal year ending August 31, 2000,

2-17     not less than 85 percent of the amount of those funds the hospital

2-18     would have received in that fiscal year under the formulas used to

2-19     determine the amount of federal medical assistance funds for

2-20     training residents the hospital received in that 1995 fiscal year;

2-21                 (3)  for the state fiscal year ending August 31, 2001,

2-22     not less than 80 percent of the amount of those funds the hospital

2-23     would have received in that fiscal year under the formulas used to

2-24     determine the amount of federal medical assistance funds for

2-25     training residents the hospital received in that 1995 fiscal year;

2-26     and

2-27                 (4)  for the state fiscal year ending August 31, 2002,

2-28     not less than 75 percent of the amount of those funds the hospital

2-29     would have received in that fiscal year under the formulas used to

2-30     determine the amount of federal medical assistance funds for

2-31     training residents the hospital received in that 1995 fiscal year.

2-32           SECTION 2.  Subchapter C, Chapter 61, Education Code, is

2-33     amended by adding Section 61.0594 to read as follows:

2-34           Sec. 61.0594.  COORDINATED FUNDING OF GRADUATE MEDICAL

2-35     EDUCATION.  (a)  The board shall administer a program to support

2-36     graduate medical education programs in this state consistent with

2-37     the needs of this state for graduate medical education and the

2-38     training of resident physicians in accredited residency programs in

2-39     appropriate fields and specialties, including primary care

2-40     specialties described by Section 58.008(a).

2-41           (b)  From money available to the program, the board may make

2-42     grants or formula distributions to:

2-43                 (1)  support appropriate graduate medical education

2-44     programs and activities for which adequate funds are not otherwise

2-45     available; or

2-46                 (2)  foster new or expanded graduate medical education

2-47     programs or activities that the board determines will address the

2-48     state's needs for graduate medical education.

2-49           (c)  To be eligible to receive a grant or distribution under

2-50     this section, an institution or other entity must incur the costs

2-51     of faculty supervision and education or the stipend costs of

2-52     resident physicians in accredited clinical residency programs in

2-53     this state. In making grants and distributions under this section,

2-54     the board shall give consideration to the costs incurred by medical

2-55     schools or other entities to support faculty responsible for the

2-56     education or supervision of resident physicians in accredited

2-57     graduate medical education programs, including programs in

2-58     osteopathic medical education.

2-59           (d)  The program is funded by appropriations, by gifts,

2-60     grants, and donations made to support the program, and by any other

2-61     funds the board obtains, including federal funds, for the program.

2-62     From program funds, the comptroller of public accounts shall issue

2-63     warrants to each institution or other entity determined by the

2-64     board as eligible to receive a grant or distribution from the

2-65     program in the amount certified by the board.  An amount granted to

2-66     an institution or other entity under the program may be used only

2-67     to cover expenses of training residents of the particular program

2-68     or activity for which the award is made in accordance with any

2-69     conditions imposed by the board and may not otherwise be expended

 3-1     for the general support of the institution or entity.

 3-2           (e)  The board shall appoint an advisory committee to advise

 3-3     the board regarding the development and administration of the

 3-4     program, including considering requests for program grants and

 3-5     establishing formulas for distribution of money under the program.

 3-6     The advisory committee shall consist of:

 3-7                 (1)  the executive director of the Texas State Board of

 3-8     Medical Examiners or the executive director's designee;

 3-9                 (2)  the chair of the Family Practice Residency

3-10     Advisory Committee or the chair's designee;

3-11                 (3)  the chair of the Primary Care Residency Advisory

3-12     Committee or the chair's designee;

3-13                 (4)  the commissioner of the Health and Human Services

3-14     Commission or the commissioner's designee; and

3-15                 (5)  the following members appointed by the board:

3-16                       (A)  one representative of a teaching hospital

3-17     affiliated with a Texas medical school;

3-18                       (B)  one representative of a teaching hospital

3-19     not affiliated with a Texas medical school;

3-20                       (C)  three representatives of medical schools, at

3-21     least one representing a medical school in The University of Texas

3-22     System, and at least one representing a medical school not in The

3-23     University of Texas System;

3-24                       (D)  two physicians active in private practice,

3-25     one of whom must be a generalist;

3-26                       (E)  one doctor of osteopathic medicine active in

3-27     private practice;

3-28                       (F)  one representative of an entity providing

3-29     managed health care;

3-30                       (G)  three clinical faculty members, at least one

3-31     of whom must be a generalist;

3-32                       (H)  one resident physician, who is a nonvoting

3-33     member; and

3-34                       (I)  one medical student, who is a nonvoting

3-35     member.

3-36           (f)  The appointed advisory committee members serve staggered

3-37     three-year terms.  The board shall make the initial committee

3-38     appointments to terms of one, two, and three years as necessary so

3-39     that one-third of the appointed members' terms expire each year, as

3-40     nearly as practicable.  The committee shall elect one of its

3-41     members as presiding officer for a term of one year.  The committee

3-42     shall meet at least once each year at the times requested by the

3-43     board or set by the presiding officer of the committee.  A member

3-44     of the advisory committee may not be compensated for service on the

3-45     committee but is entitled to be reimbursed by the board for actual

3-46     expenses incurred in the performance of the member's duties as a

3-47     committee member.

3-48           (g)  The advisory committee shall:

3-49                 (1)  review applications for funding of graduate

3-50     medical education programs under this section and make

3-51     recommendations for approval or disapproval of those applications;

3-52                 (2)  make recommendations relating to the standards and

3-53     criteria used for consideration and approval of grants or for the

3-54     development of formulas for distribution of funding under this

3-55     section;

3-56                 (3)  recommend to the board an allocation of funds

3-57     among medical schools, teaching hospitals, and other entities that

3-58     may receive funds under this section; and

3-59                 (4)  perform other duties assigned by the board.

3-60           SECTION 3.  (a)  This Act takes effect September 1, 1997.

3-61           (b)  Section 32.0315, Human Resources Code, as added by this

3-62     Act, applies to the distribution of federal medical assistance

3-63     funds for the support of graduate medical education received on or

3-64     after the effective date of this Act, and to any such federal funds

3-65     received before the effective date of this Act that have not been

3-66     promised, obligated, or otherwise identified for distribution to

3-67     specific entities before the effective date.

3-68           SECTION 4.  The importance of this legislation and the

3-69     crowded condition of the calendars in both houses create an

 4-1     emergency and an imperative public necessity that the

 4-2     constitutional rule requiring bills to be read on three several

 4-3     days in each house be suspended, and this rule is hereby suspended.

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