1-1     By:  Delisi (Senate Sponsor - Moncrief)               H.B. No. 1734

 1-2           (In the Senate - Received from the House May 8, 1997;

 1-3     May 9, 1997, read first time and referred to Committee on Health

 1-4     and Human Services; May 17, 1997, reported favorably, as amended,

 1-5     by the following vote:  Yeas 10, Nays 0; May 17, 1997, sent to

 1-6     printer.)

 1-7     COMMITTEE AMENDMENT NO. 1                             By:  Moncrief

 1-8           Amend Engrossed HB 1734 as follows:

 1-9           Strike subsection (e) of SECTION 1 of the bill (Engrossed

1-10     printing page 2, line 28 through page 2, line 45) and substitute

1-11     the following:

1-12                 (e)  The Board shall direct the Commissioner to appoint

1-13     a committee to develop a plan which recommends:

1-14                 (1)  the most efficient and effective number of local

1-15     authorities;

1-16                 (2)  the scope of responsibilities to be delegated by

1-17     the state authority to the local authority;

1-18                 (3)  criteria by which local authorities shall be

1-19     selected, including:

1-20                       (A)  demonstrated ability to assure consumer and

1-21     family member participation in service planning and service

1-22     evaluation;

1-23                       (B)  ability to demonstrate public accountability

1-24     for service costs, quality, and outcomes for persons served;

1-25                       (C)  demonstrated ability to assemble and manage

1-26     a network of service providers, assuring consumer choice;

1-27                       (D)  demonstrated ability to coordinate and

1-28     direct a comprehensive array of mental health or mental retardation

1-29     services; and

1-30                       (E)  a requirement that local authorities comply

1-31     with V.T.C.A. Government Code Chapters 551 and 552;

1-32                 (4)  a selection process that:

1-33                       (A)  allows all qualified and interested entities

1-34     to be fairly and objectively considered for the designation as a

1-35     local authority; and

1-36                       (B)   results in a final selection that is based

1-37     on cost effectiveness and ultimately the best interest of consumers

1-38     and their families;

1-39                 (5)  criteria to ensure that contracting by the local

1-40     authorities with providers:

1-41                       (A)  allows all qualified providers to be

1-42     eligible to compete for contracts;

1-43                       (B)  results in the selection of the best bid,

1-44     evaluated by cost-effectiveness and quality; and

1-45                       (C)  promotes choice by consumers among services

1-46     and service providers;

1-47                 (6)  a time frame for implementation; and

1-48                 (7)  strategies to ensure that services are not

1-49     disrupted.

1-50           (f)  The Commissioner shall assure that:

1-51                 (1)  the committee membership includes an equal number

1-52     of representatives of consumers, family members, existing local

1-53     authorities, and private sector entities, including not for profit

1-54     and for profit entities;

1-55                 (2)  safeguards are established to prevent any member

1-56     from participating in the adoption of specific selection or bid

1-57     criteria, any committee decision or any other action that may

1-58     result in an unfair competitive advantage or otherwise compromise

1-59     the selection process; and

1-60                 (3)  the committee deliberations are fully accessible

1-61     to the public with ample opportunities for public input and

1-62     participation.

1-63           (g)  The plan approved by the committee shall be submitted to

1-64     the Board for approval.  Prior to approval of the plan, the Board

 2-1     shall provide:

 2-2                 (1)  public notice of its intent to consider the

 2-3     proposed plan;

 2-4                 (2)  an opportunity for public hearings on the proposed

 2-5     plan; and

 2-6                 (3)  public access to the proposed plan.

 2-7           (h)  The Board shall submit the approved plan to the Senate

 2-8     Health and Human Services Committee and the House Public Health

 2-9     Committee by September 1, 1998.

2-10                            A BILL TO BE ENTITLED

2-11                                   AN ACT

2-12     relating to the monitoring of community mental health and mental

2-13     retardation centers and local mental health and mental retardation

2-14     authorities.

2-15           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

2-16           SECTION 1.  Section 533.035, Health and Safety Code, is

2-17     amended by amending Subsection (b) and adding Subsection (e) to

2-18     read as follows:

2-19           (b)  The department by contract or other method of

2-20     allocation, including a case-rate or capitated arrangement, may

2-21     disburse to a local mental health and mental retardation authority

2-22     department federal and department state funds to be spent in the

2-23     local service area for:

2-24                 (1)  community mental health and mental retardation

2-25     services; and

2-26                 (2)  chemical dependency services for persons who are

2-27     dually diagnosed as having both chemical dependency and mental

2-28     illness or mental retardation.

2-29           (e)  The department shall develop by September 1, 1998, a

2-30     plan that:

2-31                 (1)  identifies the most efficient and effective number

2-32     of local authorities;

2-33                 (2)  includes a competitive process for designation of

2-34     local mental health or mental retardation authorities;

2-35                 (3)  specifies criteria to ensure that contracting by

2-36     the local authorities with providers:

2-37                       (A)  allows all qualified providers to be

2-38     eligible to compete for contracts;

2-39                       (B)  results in a selection of the best bid,

2-40     evaluated by cost-effectiveness and quality; and

2-41                       (C)  promotes choice by consumers among services

2-42     and service providers;

2-43                 (4)  includes strategies to ensure that services are

2-44     not disrupted; and

2-45                 (5)  includes a timetable for implementation of the

2-46     plan.

2-47           SECTION 2.  Subchapter A, Chapter 534, Health and Safety

2-48     Code, is amended by adding Section 534.036 to read as follows:

2-49           Sec. 534.036.  FINANCIAL AUDIT.  (a)  The department shall

2-50     prescribe procedures for financial audits of community centers.

2-51     The department shall develop the procedures with the assistance of

2-52     the state agencies and departments that contract with community

2-53     centers.  The department shall coordinate with each of those state

2-54     agencies and departments to incorporate each agency's financial and

2-55     compliance requirements for a community center into a single audit

2-56     that meets the requirements of Section 534.068.  Before prescribing

2-57     or amending the procedures, the department shall set a deadline for

2-58     those state agencies and departments to submit to the department

2-59     proposals relating to the financial audit procedures.  The

2-60     procedures must be consistent with any requirements connected with

2-61     federal funding received by the community center.  The department

2-62     may not implement the procedures without the approval of the Health

2-63     and Human Services Commission.

2-64           (b)  Each state agency or department that contracts with a

2-65     community center shall comply with the procedures developed under

2-66     this section.

2-67           (c)  The department shall develop protocols for a state

2-68     agency or department to conduct additional financial audit

2-69     activities of a community center.  A state agency or department may

 3-1     not conduct additional financial audit activities of a community

 3-2     center without the approval of the Health and Human Services

 3-3     Commission.

 3-4           (d)  The department shall evaluate the fiscal impact of

 3-5     financial audit procedures developed under this section.  The

 3-6     department shall complete the evaluation and submit a report to

 3-7     each house of the legislature not later than December 1, 1998.

 3-8     This subsection expires January 1, 1999.

 3-9           SECTION 3.  Subchapter A, Chapter 534, Health and Safety

3-10     Code, is amended by adding Section 534.037 to read as follows:

3-11           Sec. 534.037.  PROGRAM AUDIT.  (a)  The department shall

3-12     coordinate with each state agency or department that contracts with

3-13     a community center to prescribe procedures based on risk assessment

3-14     for coordinated program audits of the activities of a community

3-15     center.  The department may not implement the procedures without

3-16     the approval of the Health and Human Services Commission.  The

3-17     procedures must be consistent with any requirements connected with

3-18     federal funding received by the community center.

3-19           (b)  A program audit of a community center must be performed

3-20     in accordance with procedures developed under this section.

3-21           (c)  This section does not prohibit a state agency or

3-22     department or an entity providing funding to a community center

3-23     from investigating a complaint against or performing additional

3-24     contract monitoring of a community center.

3-25           (d)  A program audit under this section must evaluate:

3-26                 (1)  the extent to which the community center is

3-27     achieving the desired results or benefits established by the

3-28     legislature or by a state agency or department;

3-29                 (2)  the effectiveness of the community center's

3-30     organizations, programs, activities, or functions; and

3-31                 (3)  whether the community center is in compliance with

3-32     applicable laws.

3-33           (e)  The department shall evaluate the fiscal impact of the

3-34     program audit procedures developed under this section.  The

3-35     department shall complete the evaluation and submit a report to

3-36     each house of the legislature not later than December 1, 1998.

3-37     This subsection expires January 1, 1999.

3-38           SECTION 4.  Section 534.060(b), Health and Safety Code, is

3-39     amended to read as follows:

3-40           (b)  The department shall review the program quality and

3-41     program performance results of each local mental health or mental

3-42     retardation authority in accordance with a risk assessment and

3-43     evaluation system appropriate to contract requirements [at least

3-44     once each fiscal year].  The department may determine the scope of

3-45     each review.

3-46           SECTION 5.   Sections 534.034 and 534.054(b) and (d), Health

3-47     and Safety Code, are repealed.

3-48           SECTION 6.  (a)  This Act takes effect September 1, 1997.

3-49           (b)  The Texas Department of Mental Health and Mental

3-50     Retardation shall prescribe and receive approval of the Health and

3-51     Human Services Commission for procedures for audits under Sections

3-52     534.036 and 534.037, Health and Safety Code, as added by this Act,

3-53     not later than January 1, 1998.  The commission shall make a ruling

3-54     on the procedures not later than 30 days after the date the

3-55     department prescribed the procedures.

3-56           SECTION 7.  The importance of this legislation and the

3-57     crowded condition of the calendars in both houses create an

3-58     emergency and an imperative public necessity that the

3-59     constitutional rule requiring bills to be read on three several

3-60     days in each house be suspended, and this rule is hereby suspended.

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