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. 2-51 * * * * *