1-1     By:  Patterson                                         S.B. No. 276

 1-2           (In the Senate - Filed January 23, 1997; January 27, 1997,

 1-3     read first time and referred to Committee on Health and Human

 1-4     Services; April 28, 1997, reported adversely, with favorable

 1-5     Committee Substitute by the following vote:  Yeas 9, Nays 0;

 1-6     April 28, 1997, sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 276                By:  Patterson

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to organizational and health maintenance organization

1-11     requirements for community centers to provide certain services

1-12     under capitation and other at-risk agreements in plans approved by

1-13     the Texas Department of Mental Health and Mental Retardation.

1-14           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-15           SECTION 1.  Chapter 534, Health and Safety Code, is amended

1-16     by adding Subchapter C to read as follows:

1-17               SUBCHAPTER C.  HEALTH MAINTENANCE ORGANIZATIONS

1-18           Sec. 534.101.  HEALTH MAINTENANCE ORGANIZATION CERTIFICATE OF

1-19     AUTHORITY.  (a)  One or more community centers may create or

1-20     operate a nonprofit corporation pursuant to the laws of this state

1-21     for the purpose of accepting capitated or other at-risk payment

1-22     arrangements for the provision of services designated in a plan

1-23     approved by the department under Subchapter A.

1-24           (b)  Before a nonprofit corporation organized or operating

1-25     under Subsection (a) accepts or enters into any capitated or other

1-26     at-risk payment arrangement for services designated in a plan

1-27     approved by the department under Subchapter A, the nonprofit

1-28     corporation must obtain the appropriate certificate of authority

1-29     from the Texas Department of Insurance to operate as a health

1-30     maintenance organization pursuant to the Texas Health Maintenance

1-31     Organization Act (Chapter 20A, Vernon's Texas Insurance Code).

1-32           (c)(1)  Prior to submitting any bids, a nonprofit corporation

1-33     operating under this subchapter shall disclose in writing to the

1-34     department those services to be provided by the community center

1-35     through any capitated or other at-risk payment arrangement by the

1-36     nonprofit corporation.  The department shall verify that the

1-37     services provided under any capitated or other at-risk payment

1-38     arrangement are within the scope of services approved by the

1-39     department in each  community center's plan required under

1-40     Subchapter A.

1-41                 (2)  The board shall:

1-42                       (A)  provide for public notice of the nonprofit

1-43     corporation's intent to submit a bid to provide or arrange services

1-44     through a capitated or other at-risk payment arrangement through

1-45     placement as a board agenda item on the next regularly scheduled

1-46     board meeting which allows at least 15 days' public review of the

1-47     plan; and

1-48                       (B)  provide an opportunity for public comment on

1-49     the services to be provided through such arrangements and on the

1-50     consideration of local input into the plan.

1-51                 (3)  The nonprofit corporation shall provide:

1-52                       (A)  public notice prior to such verification and

1-53     disclosure of services to be provided by the community center

1-54     through any capitated or other at-risk payment arrangements by the

1-55     nonprofit corporation;

1-56                       (B)  an opportunity for public comment on the

1-57     community center services within the capitated or other at-risk

1-58     payment arrangements offered by the nonprofit corporation;

1-59                       (C)  published summaries of all relevant

1-60     documentation concerning community center services arranged through

1-61     the nonprofit corporation, including summaries of any other similar

1-62     contracts the nonprofit corporation has entered into; and

1-63                       (D)  public access and review of all relevant

1-64     documentation.

 2-1           (d)  A nonprofit corporation operating under this subchapter

 2-2     shall:

 2-3                 (1)  be subject to the requirements of the open

 2-4     meetings law, Chapter 551, Government Code, and the open records

 2-5     law, Chapter 552, Government Code;

 2-6                 (2)  solicit public input as to the operations of the

 2-7     nonprofit corporation and allow public access to information

 2-8     regarding such operations, including services, administration,

 2-9     governance, revenues, and expenses, on request unless disclosure is

2-10     expressly prohibited by law or the information is confidential

2-11     under law; and

2-12                 (3)  publish an annual report detailing the services,

2-13     administration, governance, revenues, and expenses of the nonprofit

2-14     corporation, including the disposition of any excess revenues.

2-15           Sec. 534.102.  LAWS AND RULES.  A nonprofit corporation

2-16     created or operated pursuant to the authority of this subchapter

2-17     which obtains and holds a valid certificate of authority as a

2-18     health maintenance organization may exercise the powers and

2-19     authority and is subject to the conditions and limitations provided

2-20     by this subchapter, the Texas Health Maintenance Organization Act

2-21     (Chapter 20A, Vernon's Texas Insurance Code), the Texas Non-Profit

2-22     Corporation Act (Article 1396-1.01, et seq., Vernon's Texas Civil

2-23     Statutes), and rules of the Texas Department of Insurance.

2-24           Sec. 534.103.  APPLICATION OF LAWS AND RULES.  A health

2-25     maintenance organization created and operating under this

2-26     subchapter shall be governed as, and is subject to the same laws

2-27     and rules of the Texas Department of Insurance as, any other health

2-28     maintenance organization of the same type.

2-29           Sec. 534.104.  APPLICATION OF SPECIFIC LAWS.  (a)  A health

2-30     maintenance organization created and operating under this

2-31     subchapter is a governmental unit and a unit of local government,

2-32     as those terms are defined and specified by Chapters 101 and 102,

2-33     Civil Practice and Remedies Code, and a local government as defined

2-34     by Section 791.003, Government Code.

2-35           (b)  Nothing in this subchapter precludes one or more

2-36     community centers from forming a nonprofit corporation under

2-37     Section 5.01, Medical Practice Act (Article 4495b, Vernon's Texas

2-38     Civil Statutes), to provide services on a risk-sharing or capitated

2-39     basis as permitted under Article 21.52F, Insurance Code.

2-40           SECTION 2.  The Texas Department of Insurance shall adopt

2-41     rules by September 1, 1997, which describe the procedures an entity

2-42     must follow and the standards an entity must meet to obtain a

2-43     certificate of authority as a single health care service plan

2-44     providing behavioral health care services.

2-45           SECTION 3.  This Act takes effect September 1, 1997.

2-46           SECTION 4.  The importance of this legislation and the

2-47     crowded condition of the calendars in both houses create an

2-48     emergency and an imperative public necessity that the

2-49     constitutional rule requiring bills to be read on three several

2-50     days in each house be suspended, and this rule is hereby suspended.

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