By Zaffirini, et al.                             S.B. No. 190

      75R1274 DLF-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the regulation of nursing homes and similar facilities;

 1-3     providing penalties.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5       ARTICLE 1.  REGULATION OF NURSING HOMES AND SIMILAR FACILITIES

 1-6           SECTION 1.01.  Section 242.001, Health and Safety Code, is

 1-7     amended to read as follows:

 1-8           Sec. 242.001.  SCOPE, PURPOSE, AND IMPLEMENTATION.  (a)  It

 1-9     is the goal of this chapter to ensure that institutions in this

1-10     state deliver the highest possible quality of care.  This chapter,

1-11     and the rules and standards adopted under this chapter, establish

1-12     minimum acceptable levels of care.  Each institution licensed under

1-13     this chapter shall, at a minimum, provide quality care in

1-14     accordance with this chapter and the rules and standards.

1-15     Components of quality of care addressed by these rules and

1-16     standards include:

1-17                 (1)  quality of life;

1-18                 (2)  access to care;

1-19                 (3)  continuity of care;

1-20                 (4)  comprehensiveness of care;

1-21                 (5)  coordination of services;

1-22                 (6)  humaneness of treatment;

1-23                 (7)  conservatism in intervention;

1-24                 (8)  safety of the environment;

 2-1                 (9)  professionalism of caregivers; and

 2-2                 (10)  participation in useful studies.

 2-3           (b)  The rules and standards adopted under this chapter may

 2-4     be more stringent than the standards imposed by federal law for

 2-5     certification for participation in the state Medicaid program.  The

 2-6     rules and standards may not be less stringent than the Medicaid

 2-7     certification standards imposed under the Omnibus Budget

 2-8     Reconciliation Act of 1987 (OBRA), Pub. L. No. 100-203.

 2-9           (c)  The rules and standards adopted under this chapter apply

2-10     to each licensed institution.  The rules and standards are intended

2-11     for use in state surveys of the facilities and any investigation

2-12     and enforcement action and are designed to be useful to consumers

2-13     and providers in assessing the quality of care provided in an

2-14     institution.

2-15           (d)  The legislature finds that the construction,

2-16     maintenance, and operation of institutions shall be regulated in a

2-17     manner that protects the residents of the institutions by:

2-18                 (1)  providing the highest possible quality of care;

2-19                 (2)  strictly monitoring all factors relating to the

2-20     health, safety, welfare, and dignity of each resident;

2-21                 (3)  imposing prompt and effective penalties for

2-22     noncompliance with licensing standards; and

2-23                 (4)  providing the public with information concerning

2-24     the operation of institutions in this state.

2-25           (e)  It is the legislature's intent that this chapter

2-26     accomplish the goals listed by Subsection (d).

2-27           (f)  This chapter shall be construed broadly to accomplish

 3-1     the purposes set forth in this section. [The purpose of this

 3-2     chapter is  to promote the public health, safety, and welfare by

 3-3     providing for the development, establishment, and enforcement of

 3-4     standards for the treatment of residents of institutions and the

 3-5     establishment, construction, maintenance, and operation of

 3-6     institutions that, in the light of advancing knowledge, will

 3-7     promote safe and adequate treatment of residents.]

 3-8           SECTION 1.02.  Section 242.002, Health and Safety Code, is

 3-9     amended by adding Subdivision (10) to read as follows:

3-10                 (10)  "Restraints" means a device, a material, or

3-11     equipment that is attached or adjacent to a person and that

3-12     prevents free bodily movement to a position of choice. The term

3-13     does not include a device used for positioning supports.

3-14           SECTION 1.03.  Subchapter A, Chapter 242, Health and Safety

3-15     Code, is amended by adding Section 242.0021 to read as follows:

3-16           Sec. 242.0021.  CONTROL.  (a)  In this chapter, a person

3-17     controls  an institution or other entity if the person directly or

3-18     indirectly possesses the power to direct or cause the direction of

3-19     the management and policies of the institution or other entity by

3-20     any means, including:

3-21                 (1)  through the ownership of voting securities; or

3-22                 (2)  by contract, other than a commercial contract for

3-23     goods or nonmanagement services.

3-24           (b)  It is presumed that a person controls an institution or

3-25     other entity under this chapter if:

3-26                 (1)  the person, alone or together with members of the

3-27     person's immediate family, directly or indirectly:

 4-1                       (A)  owns five percent of the institution or

 4-2     other entity; or

 4-3                       (B)  holds, with the power to vote, at least five

 4-4     percent of the voting securities of the institution or other

 4-5     entity; or

 4-6                 (2)  the person, if other than a corporate officer or

 4-7     director of the institution or other entity, holds proxies

 4-8     representing at least five percent of the voting securities or

 4-9     authority of the institution or other entity.

4-10           SECTION 1.04.  Subchapter A, Chapter 242, Health and Safety

4-11     Code, is amended by adding Sections 242.015 and 242.016 to read as

4-12     follows:

4-13           Sec. 242.015.  DOCUMENTS PUBLIC.  Subject to Sections

4-14     242.126, 242.127, 242.552, and 242.553, a document received, owned,

4-15     used, or retained by the department in connection with this chapter

4-16     is public information for purposes of Chapter 552, Government Code.

4-17           Sec. 242.016.  LICENSED ADMINISTRATOR.  (a)  Each institution

4-18     must have a licensed nursing facility administrator.

4-19           (b)  The administrator shall:

4-20                 (1)  manage the institution;

4-21                 (2)  be responsible for:

4-22                       (A)  delivery of quality care to all residents;

4-23     and

4-24                       (B)  implementation of the policies and

4-25     procedures of the institution; and

4-26                 (3)  work at least 40 hours per week on administrative

4-27     duties.

 5-1           SECTION 1.05.  Section 242.032, Health and Safety Code, is

 5-2     amended to read as follows:

 5-3           Sec. 242.032.  LICENSE OR RENEWAL APPLICATION.  (a)  An

 5-4     application for a license or renewal of a license is made to the

 5-5     department on a form provided by the department and must be

 5-6     accompanied by the license fee.

 5-7           (b)  The application must contain information that the

 5-8     department requires.

 5-9           (c)  The applicant or license holder must furnish evidence to

5-10     affirmatively establish the applicant's or license holder's ability

5-11     to comply with:

5-12                 (1)  minimum standards of medical care, nursing care,

5-13     and financial condition; and

5-14                 (2)  any other applicable state or federal standard.

5-15           (d)  The department shall consider the background and

5-16     qualifications of:

5-17                 (1)  the applicant or license holder;

5-18                 (2)  a partner, officer, director, or managing employee

5-19     of the applicant or license holder;

5-20                 (3)  a person who owns or who controls the owner of the

5-21     physical plant of a facility in which the institution operates or

5-22     is to operate; and

5-23                 (4)  a person who controls the applicant, license

5-24     holder, or institution for which a license or license renewal is

5-25     requested.

5-26           (e)  In making the  evaluation required by Subsection (d),

5-27     the department shall require the applicant or license holder to

 6-1     file a  sworn affidavit of a satisfactory compliance history

 6-2     relating to  each state or other jurisdiction in which the

 6-3     applicant or license holder and any other person described by

 6-4     Subsection (d) operated an institution at any time during the

 6-5     10-year period preceding the date on which the application is

 6-6     made[, which may include affirmative evidence of ability to comply

 6-7     with the standards and rules adopted under this chapter].

 6-8           SECTION 1.06.  Section 242.033(a), Health and Safety Code, is

 6-9     amended to read as follows:

6-10           (a)  After receiving an application for a license, the

6-11     department may [shall] issue the license if, after inspection and

6-12     investigation, it  finds that the applicant or license holder, and

6-13     any other person described by Section 242.032(d), [and facilities]

6-14     meet the requirements established under this chapter.

6-15           SECTION 1.07.  Section 242.034, Health and Safety Code, is

6-16     amended to read as follows:

6-17           Sec. 242.034. LICENSE FEES.  (a)  The board may establish by

6-18     rule license fees for institutions licensed by the department under

6-19     this chapter.  The license fee may not exceed $150 plus:

6-20                 (1)  $5 for each unit of capacity or bed space for

6-21     which a license is sought; and

6-22                 (2)  a background examination fee imposed under

6-23     Subsection (c).

6-24           (b)  An additional license fee may be charged as provided by

6-25     Section 242.097.

6-26           (c)  The board may establish a background examination fee in

6-27     an amount necessary to defray the department's expenses in

 7-1     administering its duties under Sections 242.032(d) and (e).

 7-2           (d) [(b)]  The license fee must be paid with each application

 7-3     for an initial license, a renewal license, or a change of ownership

 7-4     license.

 7-5           (e) [(c)]  The state is not required to pay the license fee.

 7-6           (f) [(d)]  An approved increase in bed space is subject to an

 7-7     additional fee.

 7-8           (g) [(e)]  Except as provided by Section 242.097, all license

 7-9     fees collected shall be deposited in the state treasury to the

7-10     credit of the department and may be appropriated to the department

7-11     to administer and enforce this chapter.

7-12           (h) [(f)]  The license fees established under this chapter

7-13     are an allowable cost for reimbursement under the medical

7-14     assistance program administered by the Texas Department of Human

7-15     Services under Chapter 32, Human Resources Code.  Any fee increases

7-16     shall be reflected in reimbursement rates prospectively.

7-17           SECTION 1.08.  Section 242.037, Health and Safety Code, as

7-18     amended by Chapters 583 and 1049, Acts of the 74th Legislature,

7-19     Regular Session, 1995, is amended to read as follows:

7-20           Sec. 242.037.  RULES; MINIMUM STANDARDS.  (a)  The department

7-21     shall make and enforce rules and minimum standards to implement

7-22     this chapter.

7-23           (b)  The rules and standards adopted under this chapter may

7-24     be more stringent than the standards imposed by federal law for

7-25     certification for participation in the state Medicaid program.

7-26           (c)  The rules and standards adopted by the department may

7-27     not be less stringent than the Medicaid certification standards and

 8-1     regulations imposed under the Omnibus Budget Reconciliation Act of

 8-2     1987 (OBRA), Pub. L. No. 100-203.

 8-3           (d)  In addition to standards or rules required by other

 8-4     provisions of this chapter, the [The] board shall [may] adopt,

 8-5     publish, and enforce minimum standards relating to:

 8-6                 (1)  the construction of an institution, including

 8-7     plumbing, heating, lighting, ventilation, and other housing

 8-8     conditions, to ensure the residents' health, safety, comfort, and

 8-9     protection from fire hazard;

8-10                 (2)  the regulation of the number and qualification of

8-11     all personnel, including management and nursing personnel,

8-12     responsible for any part of the care given to the residents;

8-13                 (3)  requirements for in-service education of all

8-14     employees who have any contact with the residents;

8-15                 (4)  training on the care of persons with Alzheimer's

8-16     disease and related disorders for employees who work with those

8-17     persons;

8-18                 (5)  sanitary and related conditions in an institution

8-19     and its surroundings, including water supply, sewage disposal, food

8-20     handling, and general hygiene in order to ensure the residents'

8-21     health, safety, and comfort;

8-22                 (6)  the dietary needs of each resident according to

8-23     good nutritional practice or the recommendations of the physician

8-24     attending the resident;

8-25                 (7)  equipment essential to the residents' health and

8-26     welfare; and

8-27                 (8)  the use and administration of medication in

 9-1     conformity with applicable law and rules.

 9-2           (e) [(b)]  The board shall adopt, publish, and enforce

 9-3     minimum standards requiring appropriate training in geriatric care

 9-4     for each individual who provides services to geriatric residents as

 9-5     an employee of an institution and who holds a license or

 9-6     certificate issued by an agency of this state that authorizes the

 9-7     person to provide the services.  The minimum standards may require

 9-8     that each licensed or certified individual complete an appropriate

 9-9     program of continuing education or in-service training, as

9-10     determined by board rule, on a schedule determined by board rule.

9-11           (f)  To administer the Provider Certification Survey provided

9-12     for by federal law and regulation, the department must identify

9-13     each area of care that is subject to both state licensing

9-14     requirements and federal certification requirements.  For each area

9-15     of care that is subject to the same standard under both federal

9-16     certification and state licensing requirements, an institution that

9-17     is in compliance with the certification standard is considered to

9-18     be in compliance with the same state licensing requirement.

9-19     [(b)  Notwithstanding Section 222.0255(b), an institution that is

9-20     certified as being in compliance with each standard of

9-21     participation in the state Medicaid program that relates to the

9-22     same subject matter as a minimum standard established under

9-23     Subsection (a) is not required to satisfy the minimum standard

9-24     established under that subsection.]

9-25           SECTION 1.09.  Section 242.042, Health and Safety Code, is

9-26     amended to read as follows:

9-27           Sec. 242.042.  POSTING.  Each institution shall prominently

 10-1    and conspicuously post for display in a public area of the

 10-2    institution that is readily available to residents, employees, and

 10-3    visitors:

 10-4                (1)  the license issued under this chapter;

 10-5                (2)  a sign prescribed by the department that specifies

 10-6    complaint procedures established under this chapter or rules

 10-7    adopted under this chapter and that specifies how complaints may be

 10-8    registered with the department;

 10-9                (3)  a notice in a form prescribed by the department

10-10    stating that inspection and related reports are available at the

10-11    institution for public inspection and providing the department's

10-12    toll-free telephone number that may be used to obtain information

10-13    concerning the institution; [and]

10-14                (4)  a concise summary of the most recent inspection

10-15    report relating to the institution;

10-16                (5)  notice that the department can provide summary

10-17    reports relating to the quality of care, recent investigations,

10-18    litigation, and other aspects of the operation of the institution;

10-19                (6)  notice that the Texas Board of Nursing Facility

10-20    Administrators can provide information about the nursing facility

10-21    administrator; and

10-22                (7)  any notice or written statement required to be

10-23    posted under Section 242.071(b) or 242.504.

10-24          SECTION 1.10.  Section 242.061(a), Health and Safety Code, is

10-25    amended to read as follows:

10-26          (a)  The department, after providing notice and opportunity

10-27    for a hearing to the applicant or license holder, may deny,

 11-1    suspend, or revoke a license if the department finds that the

 11-2    applicant or license holder has:

 11-3                (1)  violated this chapter or a rule, standard, or

 11-4    order adopted or license issued under this chapter;

 11-5                (2)  committed any act described by Sections

 11-6    242.066(a)(2)-(7); or

 11-7                (3)  otherwise substantially failed to comply with the

 11-8    requirements established under this chapter.

 11-9          SECTION 1.11.  Section 242.065(a), Health and Safety Code, is

11-10    amended to read as follows:

11-11          (a)  A person who violates this chapter or a rule or standard

11-12    adopted under this chapter is liable for a civil penalty of not

11-13    [less than $100 or] more than $25,000 [$10,000] for each act of

11-14    violation if the department determines the violation threatens the

11-15    health and safety of a resident.

11-16          SECTION 1.12.  Section 242.066, Health and Safety Code, is

11-17    amended by amending Subsections (a) and (b) and adding Subsections

11-18    (f), (g), and (h) to read as follows:

11-19          (a)  The department may assess an administrative [a civil]

11-20    penalty against a person who:

11-21                (1)  violates this chapter or a rule, standard, or

11-22    order adopted or license issued under this chapter;

11-23                (2)  operates an institution without a valid license;

11-24                (3)  makes a false statement, that the person knows or

11-25    should know is false, of a material fact:

11-26                      (A)  on an application for issuance or renewal of

11-27    a license or in an attachment to the application; or

 12-1                      (B)  with respect to a matter under investigation

 12-2    by the department;

 12-3                (4)  refuses to allow a representative of the

 12-4    department to inspect:

 12-5                      (A)  a book, record, or file required to be

 12-6    maintained  by an institution; or

 12-7                      (B)  any portion of the premises of an

 12-8    institution;

 12-9                (5)  wilfully interferes with the work of a

12-10    representative of the department or the enforcement of this

12-11    chapter;

12-12                (6)  wilfully interferes with a representative of the

12-13    department preserving evidence of a violation of this chapter or a

12-14    rule, standard, or order adopted or license issued under this

12-15    chapter; or

12-16                (7)  fails to pay a penalty assessed by the department

12-17    under this chapter not later than the 10th day after the date the

12-18    assessment of the penalty becomes final.

12-19          (b)  Except as provided by Subsection (f) and Section

12-20    242.0665(c), the [The] penalty may not exceed $25,000 [$10,000] a

12-21    day for each violation.

12-22          (f)  The penalty for a violation of Section 242.071(b),

12-23    Section 242.1225, or a right of a resident adopted under Subchapter

12-24    L may not exceed $1,000 a day for each violation.  This subsection

12-25    does not apply to conduct that violates both Subchapter K or a

12-26    standard adopted under Subchapter K and a right of a resident

12-27    adopted under Subchapter L.

 13-1          (g)  The persons against whom an administrative penalty may

 13-2    be assessed under Subsection (a) include:

 13-3                (1)  an applicant for a license under this chapter;

 13-4                (2)  a license holder;

 13-5                (3)  a partner, officer,  director, or managing

 13-6    employee of a license holder or applicant; and

 13-7                (4)  a person who controls an institution.

 13-8          (h)  A penalty assessed under Subsection (a)(7) is in

 13-9    addition to the penalty previously assessed and not timely paid.

13-10          SECTION 1.13.  Subchapter C, Chapter 242, Health and Safety

13-11    Code, is amended by adding Section 242.0665 to read as follows:

13-12          Sec. 242.0665.  RIGHT TO CORRECT.  (a)  The department may

13-13    not assess an administrative penalty against an institution under

13-14    this subchapter if, not later than the 60th day after the date the

13-15    institution receives notice under Section 242.067(c), the

13-16    institution corrects the violation.

13-17          (b)  Subsection (a) does not apply:

13-18                (1)  to a violation that the department determines:

13-19                      (A)  results in serious harm to or death of a

13-20    resident;

13-21                      (B)  constitutes a serious threat to the health

13-22    or safety of a resident; or

13-23                      (C)  substantially limits the institution's

13-24    capacity to provide care;

13-25                (2)  to a violation described by Sections

13-26    242.066(a)(2)-(7);

13-27                (3)  to a violation of Section 242.1225, 242.133, or

 14-1    242.1335; or

 14-2                (4)  to a violation of a right of a resident adopted

 14-3    under Subchapter L.

 14-4          (c)  An institution that corrects a violation under

 14-5    Subsection (a) must maintain the correction.  If the institution

 14-6    fails to maintain the correction until at least the first

 14-7    anniversary of the date the correction was made, the department may

 14-8    assess an administrative penalty under this subchapter for the

 14-9    subsequent violation.  A penalty assessed under this subsection may

14-10    not exceed $75,000 a day for each violation.  The department is not

14-11    required to provide the institution an opportunity to correct the

14-12    subsequent violation under this section.

14-13          SECTION 1.14.  Section 242.068(d), Health and Safety Code, is

14-14    amended to read as follows:

14-15          (d)  Based on the findings of fact and recommendations of the

14-16    hearing examiner, the commissioner by order may find:

14-17                (1)  a violation has occurred and assess an

14-18    administrative [a civil] penalty; or

14-19                (2)  a violation has not occurred.

14-20          SECTION 1.15.  Sections 242.067, 242.069, and 242.070, Health

14-21    and Safety Code, are amended to read as follows:

14-22          Sec. 242.067.  REPORT RECOMMENDING ADMINISTRATIVE PENALTY.

14-23    (a)  The department may issue a preliminary report stating the

14-24    facts on which it concludes that a violation of this chapter or a

14-25    rule, standard, or order adopted or license issued under this

14-26    chapter has occurred if it has:

14-27                (1)  [it has] examined the possible violation and facts

 15-1    surrounding the possible violation; and

 15-2                (2)  concluded that a violation has occurred.

 15-3          (b)  The report may recommend a penalty under Section 242.069

 15-4    and the amount of the penalty.

 15-5          (c)  The department shall give written notice of the report

 15-6    to the person charged with the violation not later than the 10th

 15-7    day after the date on which the report is issued.  The notice must

 15-8    include:

 15-9                (1)  a brief summary of the charges;

15-10                (2)  a statement of the amount of penalty recommended;

15-11    [and]

15-12                (3)  a statement of whether the violation is subject to

15-13    correction under Section 242.0665 and, if the violation is subject

15-14    to correction under that section, a statement of:

15-15                      (A)  the steps necessary to correct the

15-16    violation; and

15-17                      (B)  the date on which the steps must be

15-18    completed to avoid assessment of the penalty; and

15-19                (4)  a statement that the person charged has a right to

15-20    a hearing on the occurrence of the violation, the amount of the

15-21    penalty, or both.

15-22          (d)  Not later than the 60th [20th] day after the date on

15-23    which the notice under Subsection (c) is sent, the person charged

15-24    may:

15-25                (1)  give to the department written consent to the

15-26    department's report, including the recommended penalty; [or]

15-27                (2)  make a written request for a hearing; or

 16-1                (3)  if the violation is subject to correction under

 16-2    Section 242.0665, report to the department that the violation has

 16-3    been corrected and request an inspection of the correction.

 16-4          (e)  If the violation is subject to correction under Section

 16-5    242.0665, and the person reports to the department that the

 16-6    violation has been corrected, the department shall inspect the

 16-7    correction or take any other step necessary to confirm that the

 16-8    violation has been corrected and shall notify the person that:

 16-9                (1)  the correction is satisfactory and that a penalty

16-10    is not assessed; or

16-11                (2)  the correction is not satisfactory and that a

16-12    penalty is recommended.

16-13          (f)  Not later than the 20th day after the date on which a

16-14    notice under Subsection (e)(2) is sent, the person charged may:

16-15                (1)  give to the department written consent to the

16-16    department's report, including the recommended penalty; or

16-17                (2)  make a written request for a hearing.

16-18          (g)  If the person charged with the violation consents to the

16-19    administrative penalty recommended by the department, [or] does not

16-20    timely respond to a [the] notice sent under Subsection (c) or (e),

16-21    or fails to correct the violation to the department's satisfaction,

16-22    the commissioner or the commissioner's designee shall:

16-23                (1)  assess the administrative penalty recommended by

16-24    the department;  or

16-25                (2)  order a hearing to be held on the findings and

16-26    recommendations in the department's report.

16-27          (h) [(f)]  If the commissioner or the commissioner's designee

 17-1    assesses the recommended penalty, the department shall give written

 17-2    notice to the person charged of the decision and the person shall

 17-3    pay the penalty.

 17-4          Sec. 242.069.  NOTICE AND PAYMENT OF ADMINISTRATIVE PENALTY;

 17-5    INTEREST; REFUND.  (a)  The commissioner shall give notice of the

 17-6    decision  taken under Section 242.068(d) to the person charged.  If

 17-7    the commissioner finds that a violation has occurred and has

 17-8    assessed an administrative [a civil] penalty, the commissioner

 17-9    shall give written  notice to the person charged of:

17-10                (1)  the findings;

17-11                (2)  [,] the amount of the penalty;

17-12                (3)  the rate of interest payable with respect to the

17-13    penalty and the date on which interest begins to accrue;

17-14                (4)  whether payment of the penalty or other action

17-15    under Section 242.070 is required;[,] and

17-16                (5)  the person's right to judicial review of the

17-17    order.

17-18          (b)  Not later than the 30th day after the date on which the

17-19    commissioner's order is final, the person charged with the penalty

17-20    shall:

17-21                (1)  pay the full amount of the penalty;

17-22                (2)  pay the penalty and file a petition for judicial

17-23    review contesting the occurrence of the violation, the amount of

17-24    the penalty, the failure to correct the violation to the

17-25    department's satisfaction, or all of the above; or

17-26                (3)  without paying the penalty, file a petition for

17-27    judicial review contesting the occurrence of the violation, the

 18-1    amount of the penalty, the failure to correct the violation to the

 18-2    department's satisfaction, or all of the above.

 18-3          (c)  Notwithstanding Subsection (b), the department may

 18-4    permit the person to pay the penalty in installments or may require

 18-5    the person to use the amount of the penalty under the department's

 18-6    supervision in accordance with Section 242.070.

 18-7          (d)  Within the 30-day period, a person who acts under

 18-8    Subsection (b)(3) may:

 18-9                (1)  stay enforcement of the penalty by:

18-10                      (A)  paying the penalty to the court for

18-11    placement in an escrow account; or

18-12                      (B)  giving to the court a supersedeas bond that

18-13    is approved by the court for the amount of the penalty and that is

18-14    effective until all judicial review of the order is final; or

18-15                (2)  request the court to stay enforcement of the

18-16    penalty by:

18-17                      (A)  filing with the court a sworn affidavit of

18-18    the person stating that the person is financially unable to pay the

18-19    amount of the penalty and is financially unable to give the

18-20    supersedeas bond; and

18-21                      (B)  giving a copy of the affidavit to the

18-22    department by certified mail.

18-23          (e)  If the department receives a copy of an affidavit under

18-24    Subsection (d)(2), the department may file with the court, not

18-25    later than the fifth day after the date the copy is received, a

18-26    contest to the affidavit.  The court shall hold a hearing on the

18-27    facts alleged in the affidavit as soon as practicable and shall

 19-1    stay the enforcement of the penalty on finding that the alleged

 19-2    facts are true.  The person who files an affidavit has the burden

 19-3    of proving that the person is financially unable to pay the penalty

 19-4    and to give a supersedeas bond.

 19-5          (f)  If the person does not pay the penalty within the 30-day

 19-6    period and the enforcement of the penalty is not stayed:

 19-7                (1)  the penalty is subject to interest; and

 19-8                (2)  the department may refer the matter to the

 19-9    attorney general for collection of the penalty and interest [If the

19-10    person seeks judicial  review of the violation, the amount of the

19-11    penalty, or both, the person, within the time provided by

19-12    Subsection (b), shall:]

19-13                [(1)  send the amount of the penalty to the

19-14    commissioner for placement in an escrow account; or]

19-15                [(2)  post with the commissioner a supersedeas bond in

19-16    a form approved by the commissioner for the amount of the penalty,

19-17    the bond to be effective until the judicial review of the order or

19-18    decision is final.]

19-19          [(d)  A person who fails to comply with Subsection (c) waives

19-20    the right to judicial review, and the commissioner may request

19-21    enforcement by the attorney general].

19-22          (g) [(e)]  If a penalty is reduced or not assessed, the

19-23    commissioner shall:

19-24                (1)  remit to the person charged the appropriate amount

19-25    of any penalty payment plus accrued interest; or

19-26                (2)  execute a release of the supersedeas bond if one

19-27    has been posted.

 20-1          (h) [(f)]  Accrued interest on amounts remitted by the

 20-2    commissioner under Subsection (g)(1) [(e)(1)] shall be paid:

 20-3                (1)  at a rate equal to the rate charged on loans to

 20-4    depository institutions by the New York Federal Reserve Bank; and

 20-5                (2)  for the period beginning on the date the penalty

 20-6    is paid [to the commissioner] under Subsection (d) [(c)] and ending

 20-7    on the date the penalty is remitted.

 20-8          (i)  Accrued interest on amounts collected after the

 20-9    expiration of the 30-day period under Subsection (f) shall be paid:

20-10                (1)  at a rate equal to the rate charged on loans to

20-11    the depository institutions by the New York Federal Reserve Bank;

20-12    and

20-13                (2)  for the period beginning on the date the notice of

20-14    the commissioner's order is received by the person and ending on

20-15    the date the penalty is paid.

20-16          (j) [(g)]  Except as provided by Section 242.070, a [A]

20-17    penalty collected under this section shall be deposited to the

20-18    credit of the nursing and convalescent home trust fund established

20-19    under Section 242.096.

20-20          Sec. 242.070.  AMELIORATION OF VIOLATION.  In lieu of

20-21    ordering payment of the administrative penalty under Section

20-22    242.069, the commissioner may require the person to use, under the

20-23    supervision of the department, any portion of the penalty to

20-24    ameliorate the violation or to improve services, other than

20-25    administrative services, in the institution affected by the

20-26    violation.  [APPLICATION OF OTHER LAW.  The department may not

20-27    assess a penalty under both this subchapter and Section 32.021,

 21-1    Human Resources Code, for a violation arising out of the same act

 21-2    or failure to act.]

 21-3          SECTION 1.16.  Subchapter C, Chapter 242, Health and Safety

 21-4    Code, is amended by adding Section 242.071 to read as follows:

 21-5          Sec. 242.071.  OTHER REMEDIES.  (a)  If, after notice and

 21-6    hearing, the commissioner finds that an institution has committed

 21-7    an act for which an administrative penalty may be imposed under

 21-8    Section 242.066, the commissioner may, as appropriate under the

 21-9    circumstances, order the institution to suspend admissions.

21-10          (b)  During the period that an institution is ordered to

21-11    suspend admissions, the institution shall post a notice of the

21-12    suspension on all doors providing ingress to and egress from the

21-13    institution.  The notice shall be posted in the form required by

21-14    the department.

21-15          (c)  A person commits an offense if the person knowingly:

21-16                (1)  violates Subsection (b); or

21-17                (2)  removes a notice posted under Subsection (b)

21-18    before the facility is allowed to admit residents.

21-19          (d)  An offense under Subsection (c) is a Class C

21-20    misdemeanor.

21-21          SECTION 1.17.  Subchapter E, Chapter 242, Health and Safety

21-22    Code, is amended by adding Section 242.1225 to read as follows:

21-23          Sec. 242.1225.  REPORTING UNLAWFUL OR UNSATISFACTORY

21-24    CONDITIONS.  An institution, an employee of an institution, or a

21-25    physician, professional nurse, nursing facility administrator,

21-26    nurse's aide, or pharmacist shall report in accordance with this

21-27    subchapter if the person suspects that:

 22-1                (1)  an institution is violating state law, including

 22-2    department rules or standards or federal law or regulations; or

 22-3                (2)  the conditions at an institution are unsanitary or

 22-4    otherwise unsatisfactory.

 22-5          SECTION 1.18.  Section 242.123(a), Health and Safety Code, is

 22-6    amended to read as follows:

 22-7          (a)  A report under Section 242.122 or 242.1225 [of abuse or

 22-8    neglect] is nonaccusatory and reflects the reporting person's

 22-9    belief that:

22-10                (1)  a resident has been or will be abused or neglected

22-11    or has died of abuse or neglect; or

22-12                (2)  a fact described by Section 242.1225(1) or (2)

22-13    exists.

22-14          SECTION 1.19.  Section 242.124(a), Health and Safety Code, is

22-15    amended to read as follows:

22-16          (a)  An anonymous report under Section 242.122 or 242.1225

22-17    [of abuse or neglect], although not encouraged, shall be received

22-18    and acted on in the same manner as an acknowledged report.

22-19          SECTION 1.20.  Sections 242.125 and 242.126, Health and

22-20    Safety Code, are amended to read as follows:

22-21          Sec. 242.125.  PROCESSING OF REPORTS.  (a)  A report of abuse

22-22    or neglect under Section 242.122 shall be made to the department or

22-23    a local or state law enforcement agency.  A report under Section

22-24    242.1225 shall be made to the department.

22-25          (b)  A local or state law enforcement agency that receives a

22-26    report of abuse or neglect may investigate the report and shall

22-27    refer the report to the department or the designated agency.  The

 23-1    agency shall investigate the report of abuse or neglect if the

 23-2    report alleges that a resident's health or safety is in imminent

 23-3    danger.

 23-4          Sec. 242.126.  INVESTIGATION AND REPORT OF DEPARTMENT OR

 23-5    DESIGNATED [RECEIVING] AGENCY.  (a)  The department or the

 23-6    designated agency shall make a thorough investigation  [promptly]

 23-7    after receiving an [either the] oral or written report of abuse or

 23-8    neglect under Section 242.122 or another complaint alleging  abuse

 23-9    or neglect.

23-10          (b)  The primary purpose of the investigation is the

23-11    protection of the resident.

23-12          (c)  The agency shall begin the investigation:

23-13                (1)  within two hours of receipt of the report or other

23-14    allegation, if the report of abuse or neglect or other complaint

23-15    alleges that:

23-16                      (A)  a resident's health or safety is in imminent

23-17    danger;

23-18                      (B)  a resident has recently died because of

23-19    conduct alleged in the report of abuse or neglect or other

23-20    complaint; or

23-21                      (C)  a resident has been hospitalized or been

23-22    treated in an emergency room because of conduct alleged in the

23-23    report of abuse or neglect or other complaint; or

23-24                (2)  before the end of the next working day after the

23-25    date of receipt of the report of abuse or neglect or other

23-26    complaint, if the report or complaint alleges the existence of

23-27    circumstances that could result in abuse or neglect and that could

 24-1    place a resident's health or safety in imminent danger.

 24-2          (d)  Except in cases where the investigation is part of

 24-3    nursing facility  surveyor activity under federal law, the

 24-4    investigating agency shall complete an initial status report not

 24-5    later than the second working day after the date the investigation

 24-6    is begun.  The initial status report must include:

 24-7                (1)  a summary of the report of abuse or neglect or

 24-8    other complaint that identifies each alleged incident or problem;

 24-9                (2)  the status of the investigation;

24-10                (3)  a statement as to whether a report of abuse or

24-11    neglect was initially filed at the direction of the administration

24-12    of the institution;

24-13                (4)  a determination of whether protection of the

24-14    resident is needed and whether the institution must take action;

24-15                (5)  the name and telephone number of the investigator;

24-16    and

24-17                (6)  the projected date the investigation report will

24-18    be completed and a statement that the report will be available on

24-19    request after the department issues a letter of determination.

24-20          (e)  Subject to Subsection (g), as soon as practicable and

24-21    not later than the second working day after the date the initial

24-22    status report described in Subsection (d) is completed, the

24-23    investigating agency shall provide, in person or by mail, a copy of

24-24    the report to:

24-25                (1)  the person making the report of abuse or neglect

24-26    or other complaint, unless the person waives this requirement;

24-27                (2)  the resident or a person designated to receive

 25-1    information concerning the resident, if the report of abuse or

 25-2    neglect or other complaint involves a specific resident;

 25-3                (3)  a representative of the office of the state

 25-4    long-term care ombudsman, at the request of the person making the

 25-5    report of abuse or neglect or other complaint; and

 25-6                (4)  the institution.

 25-7          (f)  Subject to Subsection (g), the investigating agency

 25-8    shall permit public inspection of the initial status report.

 25-9          (g)  The investigating agency must delete from a copy of the

25-10    initial status report that is made available to the public or

25-11    provided to an individual listed in Subsection (e) the name of:

25-12                (1)  any resident involved;

25-13                (2)  the person making the report of abuse or neglect

25-14    or other complaint; and

25-15                (3)  an individual interviewed in the investigation.

25-16          (h)  In investigating the report of abuse or neglect or other

25-17    complaint, the investigator for the investigating agency shall:

25-18                (1)  make an unannounced visit to the institution to

25-19    determine the nature and cause of the alleged abuse or neglect of

25-20    the resident;

25-21                (2)  interview each available witness identified by any

25-22    source as having personal knowledge relevant to the report of abuse

25-23    or neglect or other complaint;

25-24                (3)  personally inspect any physical circumstance that

25-25    is relevant and material to the report of abuse or neglect or other

25-26    complaint and that may be objectively observed; and

25-27                (4)  write an investigation report that includes:

 26-1                      (A)  the investigator's personal observations;

 26-2                      (B)  a review of relevant documents and records;

 26-3                      (C)  a summary of each witness statement; and

 26-4                      (D)  a statement of the factual basis for the

 26-5    findings for each incident or problem alleged in the report or

 26-6    other allegation.

 26-7          (i)  An investigator for an investigating agency shall

 26-8    conduct an interview under Subsection (h)(2) in private unless the

 26-9    witness expressly requests that the interview not be private.

26-10          (j)  Not later than the fifth working day after the date the

26-11    investigation is complete and not later than the 45th day after the

26-12    date the initial status report is completed, the investigator shall

26-13    prepare the written report required by Subsection (h).  The

26-14    department shall make the investigation report available to the

26-15    public on request after the date the department's letter of

26-16    determination is complete.  The department shall delete from any

26-17    copy made available to the public the name of any person listed in

26-18    Subsections (g)(1)-(3).

26-19          (k)  In the investigation, the department or the designated

26-20    agency shall determine:

26-21                (1)  the nature, extent, and cause of the abuse or

26-22    neglect;

26-23                (2)  the identity of the person responsible for the

26-24    abuse or neglect;

26-25                (3)  the names and conditions of the other residents;

26-26                (4)  an evaluation of the persons responsible for the

26-27    care of the residents;

 27-1                (5)  the adequacy of the institution environment; and

 27-2                (6)  any other information required by the department.

 27-3          (l) [(d)  The investigation may include a visit to the

 27-4    resident's institution and an interview with the resident if these

 27-5    actions are determined by the department to be appropriate.]

 27-6          [(e)]  If the department attempts to carry out an on-site

 27-7    investigation and it is shown that admission to the institution, or

 27-8    any place where the resident is located, cannot be obtained, a

 27-9    probate or county court shall order the person responsible for the

27-10    care of the resident or the person in charge of a place where the

27-11    resident is located to allow entrance for the interview and

27-12    investigation.

27-13          (m) [(f)]  Before the completion of the investigation the

27-14    department shall file a petition for temporary care and protection

27-15    of the resident if the department determines that immediate removal

27-16    is necessary to protect the resident from further abuse or neglect.

27-17          (n) [(g)]  The department or the designated agency shall make

27-18    a complete final written report of the investigation and submit the

27-19    report and its recommendations to the district attorney and, if a

27-20    law enforcement agency has not investigated the report of abuse or

27-21    neglect or other complaint, to the appropriate law enforcement

27-22    agency.

27-23          SECTION 1.21.  Section 242.127, Health and Safety Code, is

27-24    amended to read as follows:

27-25          Sec. 242.127.  CONFIDENTIALITY.  The name of a person making

27-26    a [A] report[, record, or working paper used or developed in an

27-27    investigation made] under this subchapter is confidential and may

 28-1    be disclosed only for purposes consistent with the rules adopted by

 28-2    the board or the designated agency.

 28-3          SECTION 1.22.  Section 242.133(a), Health and Safety Code, is

 28-4    amended to read as follows:

 28-5          (a)  A person has a cause of action against an institution,

 28-6    or the owner or employee of the institution, that suspends or

 28-7    terminates the employment of the person or otherwise disciplines or

 28-8    discriminates or retaliates against the person for making a report

 28-9    under this subchapter to [reporting the abuse or neglect of a

28-10    resident to the person's supervisors,] the department[,] or a law

28-11    enforcement agency or for reporting the abuse or neglect or other

28-12    complaint to the person's supervisors.

28-13          SECTION 1.23.  Section 242.1335(a), Health and Safety Code,

28-14    is amended to read as follows:

28-15          (a)  An institution may not retaliate or discriminate against

28-16    a resident if the resident, the resident's guardian, or any other

28-17    person reports [abuse or neglect] in accordance with this

28-18    subchapter.

28-19          SECTION 1.24.  Subchapter H, Chapter 242, Health and Safety

28-20    Code, as added by Section 5, Chapter 1049, Acts of the 74th

28-21    Legislature, Regular Session, 1995, is redesignated as Subchapter J

28-22    and the subchapter heading is amended to read as follows:

28-23            SUBCHAPTER J [H].  ARBITRATION OF CERTAIN DISPUTES

28-24          SECTION 1.25.  Sections 242.267 and 242.268, Health and

28-25    Safety Code, are amended to read as follows:

28-26          Sec. 242.267.  COURT VACATING ORDER.  (a)  On a finding

28-27    described by Subsection (b), [application of the institution,] a

 29-1    court shall:

 29-2                (1)  on application of an institution, vacate an

 29-3    arbitrator's order with respect to an arbitration conducted at the

 29-4    election of the department; or

 29-5                (2)  on application of the department, vacate an

 29-6    arbitrator's order with respect to an arbitration conducted at the

 29-7    election of an institution.

 29-8          (b)  A court shall vacate an arbitrator's order under

 29-9    Subsection (a) only on a finding that:

29-10                (1)  the order was procured by corruption, fraud, or

29-11    misrepresentation;

29-12                (2)  the decision of the arbitrator was arbitrary or

29-13    capricious and against the weight of the evidence;  or

29-14                (3)  the order exceeded the jurisdiction of the

29-15    arbitrator under Section 242.264(a).

29-16          (c) [(b)]  If the order is vacated, the dispute shall be

29-17    remanded to the department for another arbitration proceeding.

29-18          (d) [(c)]  A suit to vacate an arbitrator's order must be

29-19    filed not later than the 30th day after:

29-20                (1)  the date of the award; or

29-21                (2)  the date the institution or department knew or

29-22    should have known of a basis for suit under this section, but in no

29-23    event later than the first anniversary of the date of the order.

29-24          (e) [(d)]  Venue for a suit to vacate an arbitrator's order

29-25    is in the county in which the arbitration was conducted.

29-26          Sec. 242.268.  NO ARBITRATION IN CASE OF EMERGENCY ORDER OR

29-27    CLOSING ORDER.  This subchapter does not apply to an order issued

 30-1    under Section 242.062, and neither the department nor the

 30-2    institution may elect to arbitrate a dispute if the subject matter

 30-3    of the dispute is part of the basis for suspension of an

 30-4    institution's license or issuance of a closing order under Section

 30-5    242.062.

 30-6          SECTION 1.26.  Chapter 242, Health and Safety Code, is

 30-7    amended by redesignating Subchapter F as Subchapter N and adding a

 30-8    new Subchapter F and Subchapters K, L, and M to read as follows:

 30-9           SUBCHAPTER F.  MEDICAL, NURSING, AND DENTAL SERVICES

30-10                  OTHER THAN ADMINISTRATION OF MEDICATION

30-11          Sec. 242.151.  ATTENDING PHYSICIAN.  (a)  An institution

30-12    shall have at least one attending physician who is licensed in this

30-13    state.

30-14          (b)  The attending physician is responsible for a resident's

30-15    assessment and comprehensive plan of care and shall review, revise,

30-16    and sign orders relating to any medication or treatment in the plan

30-17    of care.

30-18          (c)  Each resident has the right to choose a personal

30-19    attending physician.

30-20          Sec. 242.152.  PHYSICIAN SERVICES FOR RESIDENTS YOUNGER THAN

30-21    18 YEARS OF AGE.  (a)  An institution shall use appropriate

30-22    pediatric consultative services for a resident younger than 18

30-23    years of age, in accordance with the resident's assessment and

30-24    comprehensive  plan of care.

30-25          (b)  A pediatrician or other physician with training or

30-26    expertise in the clinical care of children with complex medical

30-27    needs shall participate in all aspects of the resident's medical

 31-1    care.

 31-2          Sec. 242.153.  DIRECTOR OF NURSING SERVICES.  An institution

 31-3    shall have a director of nursing services who shall be a registered

 31-4    nurse or an advanced registered nurse practitioner.  The director

 31-5    of nursing services is responsible for:

 31-6                (1)  coordinating each resident's comprehensive plan of

 31-7    care; and

 31-8                (2)  ensuring that only licensed personnel administer

 31-9    medication, subject to Subchapter N.

31-10          Sec. 242.154.  NURSING SERVICES.  (a)  An institution shall

31-11    provide the nursing care required for the classification  given

31-12    each resident to allow each resident to achieve and maintain the

31-13    highest possible degree of function and independence medically

31-14    possible.

31-15          (b)  The institution shall, at a minimum, maintain a ratio of

31-16    one licensed nursing staff person for each 20 residents.  A

31-17    registered nurse must be on duty at least eight hours a day, seven

31-18    days a week.  In an institution with 60 or fewer residents,  the

31-19    director of nursing services may also serve as the required

31-20    registered nurse.

31-21          Sec. 242.155.  PEDIATRIC NURSING SERVICES.  An institution

31-22    shall ensure that:

31-23                (1)  nursing services for a resident younger than 18

31-24    years of age are provided by staff who have been instructed and

31-25    have demonstrated competence in the care of children; and

31-26                (2)  consultative pediatric nursing services are

31-27    available to staff if the institution has a resident younger than

 32-1    18 years of age.

 32-2          Sec. 242.156.  REQUIRED MEDICAL EXAMINATION.  (a)  The

 32-3    department shall require that each resident be given at least one

 32-4    medical examination each year.

 32-5          (b)  The department shall specify the details of the

 32-6    examination.

 32-7          Sec. 242.157.  DENTAL EXAMINATION.  (a)  The department shall

 32-8    require that each resident of a nursing home or custodial care home

 32-9    or the resident's custodian be asked at least once each year if the

32-10    resident desires a dental examination and possible treatment at the

32-11    resident's own expense.

32-12          (b)  Each nursing home or custodial care home shall be

32-13    encouraged to use all reasonable efforts to arrange for a dental

32-14    examination for each resident who desires one.

32-15          (c)  The nursing home or custodial care home is not liable

32-16    for any costs relating to a dental examination under this section.

32-17                      SUBCHAPTER K.  QUALITY OF CARE

32-18          Sec. 242.401.  QUALITY OF LIFE.  An institution shall care

32-19    for its residents in a manner and in an environment that promotes

32-20    maintenance or enhancement of each resident's quality of life.  An

32-21    institution that admits a resident who is younger than 18 years of

32-22    age must provide care to meet the resident's unique medical and

32-23    developmental needs.

32-24          Sec. 242.402.  QUALITY OF CARE.  An institution shall provide

32-25    to each resident any care or service needed to enable the resident

32-26    to attain and maintain the highest practicable level of physical,

32-27    emotional, and social well-being, in accordance with each

 33-1    resident's individual assessment and comprehensive plan of care.

 33-2          Sec. 242.403.  STANDARDS FOR QUALITY OF LIFE AND QUALITY OF

 33-3    CARE.  (a)  The department shall adopt standards to implement

 33-4    Sections 242.401 and 242.402.  Those standards must, at a minimum,

 33-5    address:

 33-6                (1)  the circumstances in which an institution may

 33-7    admit residents, including appropriate prohibitions on admission of

 33-8    a resident the institution is unable to adequately serve;

 33-9                (2)  the circumstances in which an institution may

33-10    admit a resident younger than 18 years of age and the actions the

33-11    institution must take to meet the resident's unique medical and

33-12    developmental needs, including necessary accommodations,

33-13    furnishings, and equipment and staff training;

33-14                (3)  development by an institution of an initial

33-15    assessment and comprehensive plan of care for each resident,

33-16    including the matters to be addressed by the initial assessment and

33-17    the comprehensive plan of care and the time frame for developing

33-18    the assessment and the plan;

33-19                (4)  transfer and discharge of a resident, including

33-20    appropriate notice to the resident and the resident's guardian or

33-21    next of kin;

33-22                (5)  clinical records required to be maintained by an

33-23    institution for each resident, the content of the records, and the

33-24    manner in which the records are maintained, including standards to

33-25    ensure the confidentiality of the records;

33-26                (6)  infection control at each institution;

33-27                (7)  action to be taken by an institution to restore

 34-1    the resident to the maximum possible function, including

 34-2    rehabilitative services to be provided or made available by the

 34-3    institution and the circumstances in which the services are

 34-4    required;

 34-5                (8)  food services at an institution, including the

 34-6    manner in which menus are selected, the times at which meals are

 34-7    served, and the manner in which meals are served;

 34-8                (9)  social services and activities to be provided or

 34-9    to be made available by an institution and the circumstances in

34-10    which the social services and activities are required;

34-11                (10)  the manner in which an institution must monitor a

34-12    resident's weight;

34-13                (11)  care to be provided to nonambulatory residents,

34-14    including care necessary to prevent and treat pressure sores;

34-15                (12)  bladder and bowel retraining programs for

34-16    residents;

34-17                (13)  prevention of complications from nasogastric or

34-18    gastrostomy tube feedings;

34-19                (14)  relocation of a resident within an institution;

34-20    and

34-21                (15)  postmortem procedures for deceased residents,

34-22    including procedures necessary to protect the dignity of a deceased

34-23    resident and to properly deliver the deceased resident's personal

34-24    belongings.

34-25          (b)  The department may adopt standards in addition to those

34-26    required by Subsection (a) to implement Sections 242.401 and

34-27    242.402.

 35-1          Sec. 242.404.  RESTRAINTS; INTERDISCIPLINARY COMMITTEE.

 35-2    (a)  The department shall adopt standards for the use of restraints

 35-3    by an institution in accordance with this section. The standards,

 35-4    at a minimum, must address:

 35-5                (1)  the circumstances in which an institution may use

 35-6    restraints, subject to Subsections (b), (c), and (d);

 35-7                (2)  the manner in which restraints may be used;

 35-8                (3)  the use of psychopharmacological agents; and

 35-9                (4)  actions to be taken to minimize the use of

35-10    restraints.

35-11          (b)  An institution may not use chemical or physical

35-12    restraints to restrain a resident unless the restraints are

35-13    authorized by a physician for a limited period to protect the

35-14    resident or others from injury and the physician has executed an

35-15    order for the restraints that is included in the resident's

35-16    comprehensive plan of care.

35-17          (c)  A resident may not be restrained through the use of

35-18    excessive drug dosages.

35-19          (d)  A resident may not be  restrained for punishment or for

35-20    the convenience of the institution or the institution's staff.

35-21          (e)  An institution shall have an interdisciplinary committee

35-22    that has responsibility for the use of restraints in the

35-23    institution.

35-24          (f)  The interdisciplinary committee shall develop and

35-25    implement written policies and procedures for the use of

35-26    restraints.  The department shall adopt rules governing the manner

35-27    in which the policies and procedures may be adopted and amended and

 36-1    the subjects that the policies and procedures must address. The

 36-2    written policies and procedures must comply with this section.

 36-3          Sec. 242.405.  POLICIES, PROCEDURES, AND PRACTICES FOR

 36-4    QUALITY OF CARE AND QUALITY OF LIFE.  (a)  Each institution shall

 36-5    comply with the standards adopted under this subchapter and  shall

 36-6    develop written operating policies to implement those standards.

 36-7          (b)  The department shall adopt standards governing the

 36-8    subject matter to be addressed by the policies and procedures and

 36-9    the manner in which each institution shall implement the policies

36-10    and procedures.

36-11          (c)  The policies and procedures must be available to each

36-12    physician, staff member, resident, and resident's next of kin or

36-13    guardian and to the public.

36-14             (Sections 242.406-242.500 reserved for expansion

36-15                    SUBCHAPTER L.  RIGHTS OF RESIDENTS

36-16          Sec. 242.501.  RESIDENT'S RIGHTS.  (a)  The department by

36-17    rule shall adopt a statement of the rights of a resident.  The

36-18    statement must be consistent with Chapter 102, Human Resources

36-19    Code, but shall reflect the unique circumstances of a resident at

36-20    an institution.  At a minimum, the statement of the rights of a

36-21    resident must address the resident's constitutional, civil, and

36-22    legal rights and the resident's right:

36-23                (1)  to be free from abuse and exploitation;

36-24                (2)  to safe, decent, and clean conditions;

36-25                (3)  to be treated with courtesy, consideration, and

36-26    respect;

36-27                (4)  to not be subjected to discrimination based on

 37-1    age, race, religion, sex, nationality, or disability and to

 37-2    practice the resident's own religious beliefs;

 37-3                (5)  to privacy, including privacy during visits and

 37-4    telephone calls;

 37-5                (6)  to complain about the institution and to organize

 37-6    or participate in any program that presents residents' concerns to

 37-7    the administrator of the institution;

 37-8                (7)  to have information about the resident in the

 37-9    possession of the institution maintained as confidential;

37-10                (8)  to retain the services of a physician the resident

37-11    chooses, at the resident's own expense or through a health care

37-12    plan, and to have a physician explain to the resident, in language

37-13    that the resident understands, the resident's complete medical

37-14    condition, the recommended treatment, and the expected results of

37-15    the treatment;

37-16                (9)  to participate in developing a plan of care, to

37-17    refuse treatment, and to refuse to participate in experimental

37-18    research;

37-19                (10)  to be free from the use of restraints, except

37-20    where permitted by Section 242.404 and standards adopted under that

37-21    section;

37-22                (11)  to a written statement or admission agreement

37-23    describing the services provided by the institution and the related

37-24    charges;

37-25                (12)  to manage the resident's own finances or to

37-26    delegate that responsibility to another person;

37-27                (13)  to access money and property that the resident

 38-1    has deposited with the institution and to an accounting of the

 38-2    resident's money and property that are deposited with the

 38-3    institution and of all financial transactions made with or on

 38-4    behalf of the resident;

 38-5                (14)  to keep and use personal property, secure from

 38-6    theft or loss;

 38-7                (15)  to not be relocated within the institution,

 38-8    except in accordance with standards adopted by the department under

 38-9    Section 242.403;

38-10                (16)  to receive visitors;

38-11                (17)  to receive unopened mail and to receive

38-12    assistance in reading or writing correspondence;

38-13                (18)  to participate in activities inside and outside

38-14    the institution;

38-15                (19)  to wear the resident's own clothes;

38-16                (20)  to discharge himself or herself from the

38-17    institution unless the resident is an adjudicated mental

38-18    incompetent; and

38-19                (21)  to not be discharged from the institution except

38-20    as provided in the standards adopted by the department under

38-21    Section 242.403.

38-22          (b)  The statement of rights may indicate the circumstances

38-23    in which a right of a resident may be restricted.  Except as

38-24    provided by the statement of rights, a resident's rights may be

38-25    restricted only if the resident's physician:

38-26                (1)  determines that the exercise of the right by the

38-27    resident is medically inadvisable;

 39-1                (2)  states the reason for this determination in the

 39-2    resident's clinical record; and

 39-3                (3)  provides an explanation to the resident's next of

 39-4    kin or guardian.

 39-5          (c)  The department may adopt rights of residents in addition

 39-6    to those required by Subsection (a) and may consider additional

 39-7    rights applicable to residents in other jurisdictions.

 39-8          Sec. 242.502.  RIGHTS CUMULATIVE.  The rights established

 39-9    under this subchapter are cumulative of the rights established

39-10    under Chapter 102, Human Resources Code, and any other law.

39-11          Sec. 242.503.  DUTIES OF INSTITUTION.  (a)  An institution

39-12    shall develop and implement policies to protect resident rights.

39-13          (b)  An institution and the staff of an institution may not

39-14    violate a right adopted under this subchapter.

39-15          Sec. 242.504.  INFORMATION ABOUT RESIDENT'S RIGHTS AND

39-16    VIOLATIONS.  (a)  An institution shall inform each resident and the

39-17    resident's next of kin or guardian of the rights adopted under this

39-18    subchapter and shall explain the rights to the resident and the

39-19    resident's next of kin or guardian.  The institution shall provide

39-20    a written statement of:

39-21                (1)  all of the resident's rights; and

39-22                (2)  any additional rules adopted by the institution

39-23    involving resident rights and responsibilities.

39-24          (b)  The institution shall provide a copy of the written

39-25    statement to:

39-26                (1)  each resident;

39-27                (2)  the next of kin or guardian of each resident; and

 40-1                (3)  each member of the staff of the institution.

 40-2          (c)  The institution shall maintain a copy of the statement,

 40-3    signed by the resident or the resident's next of kin or guardian,

 40-4    in the institution's records.

 40-5          (d)  The institution shall post the written statement in the

 40-6    manner required by Section 242.042.

 40-7          (e)  An institution that has been cited by the department for

 40-8    a violation of any right adopted under this subchapter shall post a

 40-9    notice of the citation in the manner required by Section 242.042

40-10    and on each door providing ingress to and egress from the

40-11    institution.  The notice of citation must remain posted until any

40-12    regulatory action or proceeding with respect to the violation is

40-13    complete and the department has determined that the institution is

40-14    in full compliance with the applicable requirement.

40-15             (Sections 242.505-242.550 reserved for expansion

40-16                  SUBCHAPTER M.   REQUEST FOR INSPECTION

40-17          Sec. 242.551.  COMPLAINT REQUESTING INSPECTION.  (a)  A

40-18    person may request an inspection of an institution in accordance

40-19    with this chapter by making a complaint notifying the department of

40-20    an alleged violation of law and requesting an inspection.

40-21          (b)  The department shall encourage a person who makes an

40-22    oral complaint under Subsection (a) to submit a written, signed

40-23    complaint.

40-24          Sec. 242.552.  DISCLOSURE OF SUBSTANCE OF COMPLAINT.  The

40-25    department may not provide information to the institution relating

40-26    to the substance of a complaint made under this subchapter before

40-27    an on-site inspection is begun in accordance with this subchapter.

 41-1          Sec. 242.553.  CONFIDENTIALITY.  The name of the person

 41-2    making the complaint is confidential and may not be released to the

 41-3    institution or any other person, unless the person making the

 41-4    complaint specifically requests that the person's name be released.

 41-5          Sec. 242.554.  PRELIMINARY REVIEW OF COMPLAINT; INSPECTION.

 41-6    (a)  On receipt of a complaint under this subchapter, the

 41-7    department shall make a preliminary review of the complaint.

 41-8          (b)  Within a reasonable time after receipt of the complaint,

 41-9    the department shall make an on-site inspection or otherwise

41-10    respond to the complaint unless the department determines that:

41-11                (1)  the person making the complaint made the complaint

41-12    to harass the institution;

41-13                (2)  the complaint is without any reasonable basis; or

41-14                (3)  sufficient information in the possession of the

41-15    department indicates that corrective action has been taken.

41-16          (c)  The department shall promptly notify  the person making

41-17    the complaint of the department's proposed course of action under

41-18    Subsection (b) and the reasons for that action.

41-19          Sec. 242.555.  PERSONS WHO MAY ACCOMPANY INSPECTOR.  (a)  On

41-20    request of the person making the complaint, the department may

41-21    permit the person or the person's representative, or both, to

41-22    accompany the inspector to the site of the alleged violation during

41-23    an on-site inspection conducted under this subchapter.

41-24          (b)  A person may not be permitted to accompany an inspector

41-25    if the inspector determines  that permitting the person to

41-26    accompany the inspector would violate the privacy of a resident.

41-27             (Sections 242.556-242.600 reserved for expansion

 42-1              SUBCHAPTER N [F]. ADMINISTRATION OF MEDICATION

 42-2                         [MEDICAL AND DENTAL CARE]

 42-3          Sec. 242.601.  MEDICATION ADMINISTRATION.  (a)  An

 42-4    institution must establish medication administration procedures to

 42-5    ensure that:

 42-6                (1)  medications to be administered are checked against

 42-7    the physician's orders;

 42-8                (2)  the resident is identified before the

 42-9    administration of a medication;

42-10                (3)  each resident's clinical record includes an

42-11    individual medication record in which the dose of medication

42-12    administered is properly recorded by the person who administered

42-13    the medication;

42-14                (4)  medications and biologicals are prepared and

42-15    administered to a resident by the same individual, except under

42-16    unit-of-use package distribution systems; and

42-17                (5)  a medication prescribed for one resident is not

42-18    administered to any other person.

42-19          (b)  The medication administration procedures must comply

42-20    with this subchapter and the rules adopted by the board under

42-21    Section 242.608.

42-22          Sec. 242.602.  PHARMACIST SERVICES.  (a)  An institution

42-23    shall:

42-24                (1)  employ a licensed pharmacist responsible for

42-25    operating the institution's pharmacy; or

42-26                (2)  contract, in writing, with a licensed pharmacist

42-27    to advise the institution on ordering, storage, administration, and

 43-1    disposal of medications and biologicals and related recordkeeping.

 43-2          (b)  The institution shall allow residents to choose their

 43-3    pharmacy provider from any pharmacy that is qualified to perform

 43-4    the services.

 43-5          Sec. 242.603.  STORAGE AND DISPOSAL OF MEDICATIONS.  (a)  An

 43-6    institution shall store medications under appropriate conditions of

 43-7    sanitation, temperature, light, moisture, ventilation, segregation,

 43-8    and security.  Poisons, medications used externally, and

 43-9    medications taken internally shall be stored on separate shelves or

43-10    in separate cabinets. Medication stored in a refrigerator

43-11    containing other items shall be kept in a separate compartment with

43-12    appropriate security. The institution shall store a medication  in

43-13    a locked area that must remain locked unless an individual

43-14    authorized to distribute the medication is present.

43-15          (b)  The institution shall properly dispose of:

43-16                (1)  any medication that is discontinued or outdated,

43-17    except as provided by Subsection (c); and

43-18                (2)  any medication in a container with a worn or

43-19    illegible label or missing a label.

43-20          (c)  A discontinued medication that has not been destroyed

43-21    must be reinstated if reordered.

43-22          (d)  An institution shall release the medications of a

43-23    resident who is transferred directly to another institution or who

43-24    is discharged to home or to the new institution or to the resident

43-25    or resident's next of kin or guardian, as appropriate.  The

43-26    institution may release a medication to a resident only on the

43-27    written or verbal authorization of the attending physician.

 44-1          Sec. 242.604.  REPORTS OF MEDICATION ERRORS AND ADVERSE

 44-2    REACTIONS.  An institution's nursing staff must report medication

 44-3    errors and adverse reactions to the resident's physician in a

 44-4    timely manner, as warranted by an assessment of the resident's

 44-5    condition, and record the errors and reactions in the resident's

 44-6    clinical record.

 44-7          Sec. 242.605.  MEDICATION REFERENCE SOURCES.  An institution

 44-8    shall maintain updated medication reference texts or sources.  If

 44-9    the institution has a resident younger than 18 years of age, these

44-10    texts or sources must include information on pediatric medications,

44-11    dosages, sites, routes, techniques of administration of

44-12    medications, desired effects, and possible side effects.

44-13          Sec. 242.606 [242.151].  PERMITS TO ADMINISTER MEDICATION.  A

44-14    person may not administer medication to a resident unless the

44-15    person:

44-16                (1)  holds a license under state law that authorizes

44-17    the person to administer medication; or

44-18                (2)  holds a permit issued under Section 242.610

44-19    [242.154] and acts under the authority of a person who holds a

44-20    license under state law that authorizes the person to administer

44-21    medication.

44-22          Sec. 242.607 [242.1511].  EXEMPTIONS FOR NURSING STUDENTS AND

44-23    MEDICATION AIDE TRAINEES.  (a)  Sections 242.606 and 242.614

44-24    [242.151  and 242.158] do not apply to:

44-25                (1)  a graduate nurse holding a temporary permit issued

44-26    by the Board of Nurse Examiners;

44-27                (2)  a student enrolled in an accredited school of

 45-1    nursing or program for the education of registered nurses who is

 45-2    administering medications as part of the student's clinical

 45-3    experience;

 45-4                (3)  a graduate vocational nurse holding a temporary

 45-5    permit issued by the Board of Vocational Nurse Examiners;

 45-6                (4)  a student enrolled in an accredited school of

 45-7    vocational nursing or program for the education of vocational

 45-8    nurses who is administering medications as part of the student's

 45-9    clinical experience; or

45-10                (5)  a trainee in a medication aide training program

45-11    approved by the department under this subchapter who is

45-12    administering medications as part of the trainee's clinical

45-13    experience.

45-14          (b)  The administration of medications by persons exempted

45-15    under Subdivisions (1) through (4) of Subsection (a) is governed by

45-16    the terms of the memorandum of understanding executed by the

45-17    department and the Board of Nurse Examiners or the department and

45-18    the Board of Vocational Nurse Examiners, as appropriate.

45-19          Sec. 242.608 [242.152].  RULES FOR ADMINISTRATION OF

45-20    MEDICATION.  The board by rule shall establish:

45-21                (1)  minimum requirements for the issuance, denial,

45-22    renewal, suspension, emergency suspension, and revocation of a

45-23    permit to administer medication to a resident;

45-24                (2)  curricula to train persons to administer

45-25    medication to a resident;

45-26                (3)  minimum standards for the approval of programs to

45-27    train persons to administer medication to a resident and for

 46-1    rescinding approval; and

 46-2                (4)  the acts and practices that are allowed or

 46-3    prohibited to a permit holder.

 46-4          Sec. 242.609 [242.153].  TRAINING PROGRAMS TO ADMINISTER

 46-5    MEDICATION.  (a)  An application for the approval of a training

 46-6    program must be made to the department on a form and under rules

 46-7    prescribed by the board.

 46-8          (b)  The department shall approve a training program that

 46-9    meets the minimum standards adopted under Section 242.608

46-10    [242.152].  The department may review the approval annually.

46-11          Sec. 242.610 [242.154].  ISSUANCE AND RENEWAL OF PERMIT TO

46-12    ADMINISTER MEDICATION.  (a)  To be issued or to have renewed a

46-13    permit to administer medication, a person shall apply to the

46-14    department on a form prescribed and under rules adopted by the

46-15    board.

46-16          (b)  The department shall prepare and conduct, at the site of

46-17    the training program, an examination for the issuance of a permit.

46-18          (c)  The department shall require a permit holder to

46-19    satisfactorily complete a continuing education course approved by

46-20    the department for renewal of the permit.

46-21          (d)  The department shall issue a permit or renew a permit to

46-22    an applicant who:

46-23                (1)  meets the minimum requirements adopted under

46-24    Section 242.608 [242.152];

46-25                (2)  successfully completes the examination or the

46-26    continuing education requirements; and

46-27                (3)  pays a nonrefundable application fee determined by

 47-1    the board.

 47-2          (e)  A permit is valid for one year and is not transferable.

 47-3          (f)  The department may issue a permit to an employee of a

 47-4    state or federal agency listed in Section 242.003(a)(6)(B).

 47-5          Sec. 242.611 [242.155].  FEES FOR ISSUANCE AND RENEWAL OF

 47-6    PERMIT TO ADMINISTER MEDICATION.  (a)  The board shall set the fees

 47-7    in amounts reasonable and necessary to recover the amount projected

 47-8    by the department as required to administer its functions.  The

 47-9    fees may not exceed:

47-10                (1)  $25 for a combined permit application and

47-11    examination fee;  and

47-12                (2)  $15 for a renewal permit application fee.

47-13          (b)  Fees received under this section may only be

47-14    appropriated to the department to defray costs incurred under this

47-15    section.

47-16          Sec. 242.612 [242.156].  VIOLATION OF PERMITS TO ADMINISTER

47-17    MEDICATION.  (a)  For the violation of this subchapter or a rule

47-18    adopted under this subchapter, the department may:

47-19                (1)  suspend, revoke, or refuse to renew a permit;

47-20                (2)  suspend a permit in an emergency; or

47-21                (3)  rescind training program approval.

47-22          (b)  Except as provided by Section 242.613 [242.157], the

47-23    procedure by which the department takes a disciplinary action and

47-24    the procedure by which a disciplinary action is appealed are

47-25    governed by the department's rules for a formal hearing and by

47-26    Chapter 2001, Government Code.

47-27          Sec. 242.613 [242.157].  EMERGENCY SUSPENSION OF PERMITS TO

 48-1    ADMINISTER MEDICATION.  (a)  The department shall issue an order to

 48-2    suspend a permit issued under this subchapter if the department has

 48-3    reasonable cause to believe that the conduct of the permit holder

 48-4    creates an imminent danger to the public health or safety.

 48-5          (b)  An emergency suspension is effective immediately without

 48-6    a hearing on notice to the permit holder.

 48-7          (c)  If requested in writing by a permit holder whose permit

 48-8    is suspended, the department shall conduct a hearing to continue,

 48-9    modify, or rescind the emergency suspension.

48-10          (d)  The hearing must be held not earlier than the 10th day

48-11    or later than the 30th day after the date on which the hearing

48-12    request is received.

48-13          (e)  The hearing and an appeal from a disciplinary action

48-14    related to the hearing are governed by the department's rules for a

48-15    formal hearing and Chapter 2001, Government Code.

48-16          Sec. 242.614 [242.158].  ADMINISTRATION OF MEDICATION;

48-17    CRIMINAL PENALTY.  (a)  A person commits an offense if the person

48-18    knowingly administers medication to a resident and the person:

48-19                (1)  does not hold a license under state law that

48-20    authorizes the person to administer medication; or

48-21                (2)  does not hold a permit issued by the department

48-22    under this subchapter.

48-23          (b)  An offense under this section is a Class B misdemeanor.

48-24          [Sec. 242.159.  REQUIRED MEDICAL EXAMINATION.  (a)  The

48-25    department shall require each resident to be given at least one

48-26    medical examination each year.]

48-27          [(b)  The department shall specify the details of the

 49-1    examination.]

 49-2          [Sec. 242.160.  DENTAL EXAMINATION.  (a)  The department

 49-3    shall require that each resident of a nursing home or custodial

 49-4    care home or the resident's custodian be asked at least once each

 49-5    year if the resident desires a dental examination and possible

 49-6    treatment at the resident's own expense.]

 49-7          [(b)  Each nursing home or custodial care home shall be

 49-8    encouraged to use all reasonable efforts to arrange for a dental

 49-9    examination for each resident who desires one.]

49-10          [(c)  The nursing home or custodial care home is not liable

49-11    for any costs relating to a dental examination under this section.]

49-12          Sec. 242.615 [242.161].  EMERGENCY MEDICATION KIT.  (a)  An

49-13    institution licensed under this chapter is entitled to maintain a

49-14    supply of controlled substances in an emergency medication kit for

49-15    a resident's emergency medication needs.

49-16          (b)  The controlled substances shall be labeled in accordance

49-17    with all applicable state and federal food and drug laws, including

49-18    Chapter 481 (Texas Controlled Substances Act).

49-19          (c)  The board shall adopt rules governing the amount, type,

49-20    and procedure for use of the controlled substances in the emergency

49-21    medication kit.  The storage of the controlled substances in the

49-22    kit is under the supervision of the consultant pharmacist.

49-23          (d)  The administration of the controlled substances in the

49-24    emergency medication kit shall comply with all applicable laws.

49-25          SECTION 1.27.  Section 222.0255, Health and Safety Code, is

49-26    amended to read as follows:

49-27          Sec. 222.0255.  NURSING HOMES.  (a)  The Texas Department of

 50-1    Human Services shall adopt separate [develop one set of] standards

 50-2    for nursing homes for [that apply to] licensing under Chapter 242

 50-3    and for [to] certification for participation in the medical

 50-4    assistance program under Chapter 32, Human Resources Code.

 50-5          (b)  The certification standards must, at a minimum, comply

 50-6    with federal regulations.  [If the federal regulations at the time

 50-7    of adoption are less stringent than the state standards, the

 50-8    department shall keep and comply with the state standards.]

 50-9          (c)  The department by rule shall adopt [the] standards for

50-10    licensing an institution under Chapter 242 [and any amendments to

50-11    the standards].

50-12          (d)  The standards for licensing an institution under Chapter

50-13    242 must include enforcement measures to ensure that the health,

50-14    safety, dignity, and welfare of each resident of an institution are

50-15    protected, in accordance with Chapter 242 [department shall

50-16    maintain a set of standards for nursing homes that are licensed

50-17    only].

50-18          (e)  Chapter 242 establishes the minimum licensing standards

50-19    for an institution.  The licensing standards adopted by the

50-20    department under this chapter shall be adopted subject to Section

50-21    242.037(b) and must comply with Section 242.037(c) and the other

50-22    provisions of Chapter 242.

50-23          SECTION 1.28.  Section 242.012, Health and Safety Code, is

50-24    repealed.

50-25          SECTION 1.29.  The Texas Board of Human Services shall adopt

50-26    rules as necessary to implement the change in law made by this

50-27    article not later than January 1, 1998.

 51-1          SECTION 1.30.  This article applies only to conduct occurring

 51-2    on or after January 1, 1998.  Conduct occurring before January 1,

 51-3    1998, is governed by the law as it existed immediately before

 51-4    September 1, 1997, and that law is continued in effect for that

 51-5    purpose.

 51-6            ARTICLE 2.  GOVERNMENT FUNDING OF NURSING SERVICES

 51-7          SECTION 2.01.  Section 32.021, Human Resources Code, is

 51-8    amended by amending Subsections (d), (h), (i), (j), and (k) and

 51-9    adding Subsections (l), (m), and (n) to read as follows:

51-10          (d)  The department shall [may] include in its contracts for

51-11    the delivery of medical assistance by nursing facilities provisions

51-12    for monetary penalties to be assessed for contract violations as

51-13    required by 42 U.S.C. Section 1396r, including without limitation

51-14    the Omnibus Budget Reconciliation Act (OBRA), P.L. 100-203, Nursing

51-15    Home Reform Amendments of 1987, provided that the department

51-16    shall[:]

51-17                [(1)  establish a penalties and sanctions advisory

51-18    committee of consumer advocates and long-term care providers to

51-19    help develop and monitor an appropriate system for assessing

51-20    penalties; and]

51-21                [(2)]  develop rules [in accordance with Subsection

51-22    (i)] to adjudicate claims in contested cases.

51-23          (h)  The [Except to the extent necessary to implement rights

51-24    granted to an elderly individual under Chapter 102, the] rules

51-25    adopted by the department for certification of nursing facilities

51-26    as being in compliance with the requirements for participation in

51-27    the state Medicaid program must comply with the more stringent of

 52-1    state or [may not be different from the standards imposed by]

 52-2    federal law.  The [This subsection does not prevent the] department

 52-3    shall use appropriate [from using any] civil, administrative, or

 52-4    criminal remedies [remedy] authorized by state or federal law with

 52-5    respect to a facility that is in violation of a certification or

 52-6    licensing requirement.

 52-7          (i)  The department shall institute a reimbursement system to

 52-8    compensate a nursing facility for the fair rental value, or the

 52-9    equivalent, of the facility's investment in property.  The

52-10    reimbursement shall begin on the date on which the facility is

52-11    built or substantially remodeled.  The reimbursement must be

52-12    available  for property owned or leased by the nursing facility.

52-13    [The rules adopted under Subsection (d)(2) must provide for:]

52-14                [(1)  an informal dispute resolution process that

52-15    provides for adjudication by an appropriate disinterested person in

52-16    a regional office of the department and an informal appeal to the

52-17    department's central office;]

52-18                [(2)  an administrative appeals process under Chapter

52-19    2001, Government Code; and]

52-20                [(3)  the arbitration process described by Subsection

52-21    (k).]

52-22          (j)  Except as provided by Subsections (k) and (l), a

52-23    department survey, complaint investigation, incident investigation,

52-24    or survey report [A finding by the department] that documents that

52-25    an  institution has violated a standard for participation in the

52-26    state Medicaid program, or the assessment of a monetary penalty by

52-27    the department or the payment of a monetary penalty by the

 53-1    institution [under this  section], is not admissible as evidence in

 53-2    a civil action to prove that the institution has committed a

 53-3    violation.

 53-4          (k)  Subsection (j) [This subsection] does not:

 53-5                (1)  apply in an enforcement action or related

 53-6    proceeding in which the state or an agency or political subdivision

 53-7    of the state is a party;

 53-8                (2)  prohibit or limit the testimony of a department

 53-9    surveyor or investigator in a civil action; or

53-10                (3)  bar the admission into evidence in a civil action

53-11    of a written finding, survey report, complaint investigation,

53-12    incident investigation, or inspection report of the department that

53-13    is offered:

53-14                      (A)  to establish warning or notice to an

53-15    institution of a relevant finding; or

53-16                      (B)  under any rule or evidentiary predicate of

53-17    the Texas Rules of Civil Evidence.

53-18          (l)  A department surveyor or investigator may testify in a

53-19    civil action as to observations, factual findings, conclusions, or

53-20    violations of requirements for licensure or for certification  for

53-21    participation in the state Medicaid program that were made in the

53-22    discharge of official duties for the department, in accordance with

53-23    the Texas Rules of Civil Evidence.

53-24          (m)  The department may not include as a reimbursable item to

53-25    a nursing facility an administrative or civil penalty assessed

53-26    against the facility under this chapter or under Chapter 242,

53-27    Health and Safety Code.

 54-1          (n)  Notwithstanding any provision of law to the contrary,

 54-2    the department shall terminate a nursing facility's provider

 54-3    agreement if the department has imposed required Category II or III

 54-4    remedies on the facility three times within a 24-month period.

 54-5          [(k)  An assessment of monetary penalties under this section

 54-6    is subject to arbitration under Subchapter H, Chapter 242, Health

 54-7    and Safety Code.]

 54-8                   ARTICLE 3.  EFFECTIVE DATE; EMERGENCY

 54-9          SECTION 3.01.  This Act takes effect September 1, 1997.

54-10          SECTION 3.02.  The importance of this legislation and the

54-11    crowded condition of the calendars in both houses create an

54-12    emergency and an imperative public necessity that the

54-13    constitutional rule requiring bills to be read on three several

54-14    days in each house be suspended, and this rule is hereby suspended.