By Patterson S.B. No. 276
75R3180 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the delivery and funding of certain mental health,
1-3 chemical dependency, and mental retardation services through
1-4 networks established by community centers; establishing
1-5 requirements for capitation and other at-risk contracts for members
1-6 of the state's priority population; and declaring an emergency.
1-7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-8 SECTION 1. Chapter 534, Health & Safety Code is amended by
1-9 adding new Subchapters C and D as follows:
1-10 SUBCHAPTER C. NETWORKS
1-11 Sec. 534.101. DEFINITIONS. In this Subchapter:
1-12 (1) "Network" means an organized mental health,
1-13 chemical dependency, and/or mental retardation services delivery
1-14 system through which one or more community centers arrange to
1-15 provide mental health, chemical dependency, and/or mental
1-16 retardation services, both directly or indirectly through contracts
1-17 and subcontracts with providers who meet criteria for participation
1-18 in the network.
1-19 (2) "Network board" means the board of trustees of a
1-20 center that establishes a network or the governing board of a
1-21 network created by two or more community centers, as applicable.
1-22 (3) "Provider" means a person or business entity that
1-23 provides mental health, chemical dependency or mental retardation
1-24 services and meets the criteria for participation in the network.
2-1 Sec. 534.102. ESTABLISHMENT AND OPERATION OF NETWORKS. (a)
2-2 To assist in ensuring that a continuum of mental health, chemical
2-3 dependency, and/or mental retardation services is available and
2-4 that these services are provided in an efficient and effective
2-5 manner, one or more community centers may create a network to:
2-6 (1) contract directly or indirectly through
2-7 subcontracts with providers and administer and manage providers to
2-8 render mental health, chemical dependency, and/or mental
2-9 retardation services in a region in accordance with this
2-10 Subchapter;
2-11 (2) contract with or otherwise enter into agreements
2-12 with any person or business entity to accept funds for the
2-13 provision of mental health, chemical dependency, and/or mental
2-14 retardation services by providers;
2-15 (3) a network may only accept capitated or other
2-16 at-risk payment arrangements to provide mental health, chemical
2-17 dependency or mental retardation services, other than residential
2-18 services for persons with mental retardation, for persons in the
2-19 priority population, as defined by the department, and the network
2-20 must meet the network pool requirements for fund management set out
2-21 in Subchapter D of this Chapter.
2-22 (b) If one community center creates a network, the board of
2-23 trustees of the community center shall also function as the network
2-24 board. If more than one community center creates a network, such
2-25 network shall be created pursuant to Chapter 791, Local Government
2-26 Code (The Interlocal Cooperation Act), and the community centers
2-27 under the interlocal agreement shall establish a board to carry out
3-1 the duties and responsibilities under Subchapter C and Subchapter
3-2 D, and shall establish criteria for the governance and operation of
3-3 network that are in compliance with Subchapter C and Subchapter D.
3-4 (c) A network board may, or the network board may delegate
3-5 to a designated individual, the authority to engage in the
3-6 following activities:
3-7 (1) contract with any person or business entity for
3-8 the network to provide mental health, chemical dependency, and/or
3-9 mental retardation services for compensation;
3-10 (2) contract directly or indirectly through
3-11 subcontracts with providers and administer and manage providers;
3-12 (3) spend funds necessary to establish and operate the
3-13 network;
3-14 (4) adopt appropriate qualification standards,
3-15 credentialing and recredentialing procedures, and disciplinary and
3-16 grievance procedures for providers contracted to the network and
3-17 credential and recredential providers for participation in the
3-18 network;
3-19 (5) adopt and amend on a continuing basis, as
3-20 necessary, quality assurance plans, procedures and criteria
3-21 governing network providers and mental health, chemical dependency,
3-22 and/or mental retardation services provided by the network;
3-23 (6) establish utilization review procedures for mental
3-24 health, chemical dependency, and/or mental retardation services and
3-25 provide utilization review services for payors as part of any
3-26 network services contracts;
3-27 (7) submit bid proposals on behalf of the network on
4-1 any bid solicitations, public or private, for mental health,
4-2 chemical dependency, and/or mental retardation services and comply
4-3 with any bidding requirements necessary to obtain public or private
4-4 contracts for the provision of mental health, chemical dependency,
4-5 and/or mental retardation services;
4-6 (8) administer and manage mental health, chemical
4-7 dependency, and/or mental retardation services provided by the
4-8 network;
4-9 (9) contract on behalf of its network for
4-10 credentialing, claims processing and/or quality assurance services
4-11 with any person or business entity which the network board
4-12 determines to have the qualifications to provide such services; and
4-13 (10) perform any other functions and activities
4-14 necessary to carry out the provisions of Subchapter C and
4-15 Subchapter D.
4-16 (d) In addition to carrying out its powers and duties under
4-17 this Subchapter, a community center may be a provider and may
4-18 participate in its network as a provider of mental health, chemical
4-19 dependency, and/or mental retardation services provided:
4-20 (1) the community center, in its role as a provider in
4-21 the network, meets the same standards and credentialing criteria,
4-22 follows the same rules and procedures and receives similar
4-23 compensation for services under an agreement for services as any
4-24 other providers in the network; and
4-25 (2) nothing in this Subchapter precludes a community
4-26 center from entering into contracts with other medical or health
4-27 care providers or other health care delivery systems solely in its
5-1 role as and on behalf of the community center and these contracts
5-2 shall not be network contracts.
5-3 Sec. 534.103. CONTRACTUAL AUTHORITY. (a) A network
5-4 established and operating under this Subchapter is considered a
5-5 "provider" pursuant to the definition provided by Section 2, Texas
5-6 Health Maintenance Organization Act (Chapter 20A, Vernon's Texas
5-7 Insurance Code), and may enter into "provider" contracts with any
5-8 health maintenance organization licensed to do business in Texas to
5-9 provide mental health, chemical dependency, and/or mental
5-10 retardation services to the health maintenance organization.
5-11 Neither a network nor a community center that creates a network
5-12 must be licensed as a health maintenance organization under the
5-13 Texas Health Maintenance Organization Act (Chapter 20A, Vernon's
5-14 Texas Insurance Code).
5-15 (b) A network board may enter into administrative and
5-16 management contracts with a health maintenance organization
5-17 pursuant to Section 6, Texas Health Maintenance Organization Act
5-18 (Chapter 20A, Vernon's Texas Insurance Code).
5-19 Sec. 534.104. COMPENSATION OF PROVIDERS. A network may
5-20 compensate providers contracted to it for mental health, chemical
5-21 dependency, and/or mental retardation services on a capitated,
5-22 fee-for-service, or risk-sharing basis or under any other
5-23 compensation arrangement authorized by the network board.
5-24 Sec. 534.105. OBTAINING FUNDS. (a) A network may solicit,
5-25 bid for, contract for, accept gifts and grants, or obtain funds
5-26 from any person or business entity, including any health
5-27 maintenance organization, any insurance company, indemnity plan,
6-1 ERISA plan, or federal, state, or local health, mental health,
6-2 chemical dependency, and/or mental retardation agency for the
6-3 purpose of providing mental health, chemical dependency, and/or
6-4 mental retardation services to individuals residing within the
6-5 network's region.
6-6 Sec. 534.106. LIMITATIONS ON SERVICES PROVIDED BY A NETWORK.
6-7 (a) A network may only provide those mental health, chemical
6-8 dependency, and/or mental retardation services as approved by the
6-9 Department under Subchapter A of this Chapter.
6-10 Sec. 534.107. ADDITIONAL DUTIES. A person who serves on a
6-11 network board who is also an officer, trustee, or employee of a
6-12 governmental entity, performs duties on the network board as an
6-13 additional duty required of his or her original office or
6-14 employment.
6-15 Sec. 534.108. LIABILITY. A member of the network board, an
6-16 employee of the network, or a trustee or employee of a community
6-17 center or centers creating a network is not liable with respect to
6-18 claims or judgments against the community center, the network
6-19 board, the network, or any network provider, provided however this
6-20 provision is applicable to only those claims or judgments relating
6-21 to the operation or management of the network.
6-22 SUBCHAPTER D. NETWORK FUND MANAGEMENT
6-23 Sec. 534.125. DEFINITIONS. (a) In this Subchapter:
6-24 (1) "Operational plan" means a network pool's plan of
6-25 operation.
6-26 (2) "Network Pool" means a funds management pool
6-27 created for a network under this Subchapter.
7-1 (b) In this Subchapter the terms "network," "network board,"
7-2 and "provider" have the meanings assigned by Section 534.101 of
7-3 this Code.
7-4 Sec. 534.126. FUNDS MANAGEMENT. (a) Notwithstanding any
7-5 other law to the contrary, all funds received by a network board
7-6 under a contract with any payor or business entity, including the
7-7 department or another state agency, shall be and shall remain the
7-8 property of the community center or group of community centers
7-9 creating the network.
7-10 (b) Notwithstanding any other law to the contrary, neither a
7-11 community center nor network board, as applicable, shall be
7-12 obligated to return to a payor or business entity under such a
7-13 network contract, including the department or another state agency,
7-14 any funds received under a contract that exceed the actual costs of
7-15 services provided so long as the services rendered are of the
7-16 amount and quality agreed to under such contract, and if
7-17 performance requirements and conditions of the contract are met.
7-18 Sec. 534.127. CREATION OF NETWORK POOL. (a) A network
7-19 board that enters into capitation and/or other at-risk contracts,
7-20 in accordance with Section 534.102(a)(3), shall create, a network
7-21 pool for the management of the funds received under such contracts
7-22 which shall be administered in accordance with this Subchapter.
7-23 (b) Funds allocated to the network pool under subsection (a)
7-24 of this section shall be deposited and maintained in separate
7-25 accounts and be segregated from other community center or network
7-26 funds.
7-27 Sec. 534.128. PURPOSE OF NETWORK POOL. The network pool
8-1 shall be utilized to cover the network's costs and any obligations
8-2 in providing mental health, chemical dependency, and mental
8-3 retardation services under capitation or other at-risk contracts
8-4 and to establish surplus funds to assure that the network can meet
8-5 its obligations under such contracts and this Subchapter.
8-6 Sec. 534.129. NETWORK POOL ADMINISTRATION. (a) The network
8-7 board shall have general administrative duties, management, and
8-8 control of the operations of the network pool.
8-9 (b) The network board may employ or contract with qualified
8-10 actuaries, accountants, attorneys, consultants, and other
8-11 professional and technical persons and business entities with
8-12 necessary credentials, as determined by the network board, to
8-13 manage and operate the activities of the network pool.
8-14 Sec. 534.130. POOL OPERATIONAL PLAN. (a) At the time of
8-15 creation of a network pool under Section 534.127, the network board
8-16 shall adopt the initial operational plan for the pool. The
8-17 operational plan may address any matters relating to the
8-18 organization, operation, management and finances of the network
8-19 pool and shall include:
8-20 (1) the organizational structure;
8-21 (2) guidelines and methods for management and
8-22 operation;
8-23 (3) guidelines and procedures for evaluating risks
8-24 assumed;
8-25 (4) procedures for the purchase of reinsurance,
8-26 stop-loss insurance coverage, and any other types of insurance
8-27 coverage or risk protection mechanisms that the network board
9-1 considers necessary to assure the solvency and to protect the
9-2 financial integrity of the network and the network pool;
9-3 (5) methods, procedures, and guidelines governing the
9-4 management of funds, the purposes for and authorization under which
9-5 funds may be paid, and any other matters relating to funds which
9-6 constitute a part of the network pool;
9-7 (6) procedures for the payment of funds to network
9-8 providers for services provided under the network's contracts;
9-9 (7) methods and procedures for defraying losses and
9-10 expenses;
9-11 (8) methods, procedures, and guidelines for the
9-12 management and investment of funds and for designation of persons
9-13 who will manage and invest such funds in accordance with applicable
9-14 state law;
9-15 (9) minimum limits of surplus to be maintained; and
9-16 (10) criteria and procedures for selection and
9-17 contracting with actuaries, accountants, attorneys, consultants,
9-18 and other professional and technical personnel necessary to manage
9-19 and operate and carry out the various responsibilities of the
9-20 network pool.
9-21 (b) The governing board may amend the operational plan from
9-22 time to time as necessary to carry out the provisions of this
9-23 Subchapter.
9-24 Sec. 534.131. BOND. Members of the network board that
9-25 creates a network pool, and trustees and employees of a community
9-26 center who have any authority over funds in the network pool or
9-27 funds collected or invested by the network pool shall execute a
10-1 bond in an amount determined by the network board, payable to the
10-2 network pool, conditioned on the faithful performance of his or her
10-3 duties. The cost of the bond shall be paid by the network pool.
10-4 Sec. 534.134. FUNDS IN NETWORK POOL. (a) Except as
10-5 provided by subsection (b) of this section, the network pool shall
10-6 include:
10-7 (1) all fees and payments paid under capitation or
10-8 other at-risk network contracts;
10-9 (2) investments made with funds in the network pool;
10-10 (3) interest earned on funds in the network pool; and
10-11 (4) any other income, except as otherwise specifically
10-12 provided in this Subchapter, received by the network pool.
10-13 (b) The board of trustees of a community center may use
10-14 funds from any source not otherwise prohibited by law to initially
10-15 provide operating funds and surplus for the network pool at the
10-16 time of network pool creation by the network board.
10-17 Sec. 534.132. USE OF NETWORK POOL FUNDS. The funds in the
10-18 network pool shall be used to compensate network providers for
10-19 services provided under capitated or other at-risk network
10-20 contracts, to pay for other activities or services authorized under
10-21 this Subchapter and to pay administrative and management costs of
10-22 the network pool.
10-23 Sec. 534.133. PURCHASE OF REINSURANCE, ETC. The network
10-24 board may purchase reinsurance, stop-loss insurance coverage or any
10-25 other insurance coverage or risk protection benefit which may be
10-26 necessary to protect the solvency of the network pool and its
10-27 financial integrity in carrying out the powers, duties, and
11-1 responsibilities under this Subchapter.
11-2 Sec. 534.134. RISK MANAGEMENT. The network board may adopt
11-3 a risk management program to minimize risk, to conserve funds, and
11-4 to assure the solvency of the network pool.
11-5 Sec. 534.135. APPLICATION OF CERTAIN LAWS. A network pool
11-6 created under this Subchapter is not considered to be the business
11-7 of insurance under the Texas Insurance Code, other insurance laws
11-8 of this state, and other laws of this state, and the Texas
11-9 Department of Insurance and the Commissioner of Insurance have no
11-10 jurisdiction over a network pool created under this Section.
11-11 Sec. 534.136. UTILIZATION OF EXCESS FUNDS. (a) At the end
11-12 of the network's fiscal year, if the amount remaining in the
11-13 network pool exceeds the amount of the funds estimated by an
11-14 independent actuary as necessary to cover the obligations of the
11-15 network pool for the next fiscal year, the network board may
11-16 authorize the utilization of these excess funds to expand the types
11-17 or amount of services and programs offered by the community center
11-18 or community centers, as applicable.
11-19 (b) The expanded programs and services offered by the
11-20 community centers with excess network pool funds must be programs
11-21 and services that will further the missions of the community
11-22 centers as set out in the Plan of the community center or community
11-23 centers approved by the department under Subchapter A.
11-24 SECTION 2. EFFECTIVE DATE. This Act takes effect on
11-25 September 1, 1997.
11-26 SECTION 3. EMERGENCY CLAUSE. The importance of this
11-27 legislation and the crowded condition of the calendars in both
12-1 houses create an emergency and an imperative public necessity that
12-2 the constitutional rule requiring bills to be read on three several
12-3 days in each house be suspended, and this rule is hereby suspended,
12-4 and that this Act take effect and be in force according to its
12-5 terms.