AN ACT
1-1 relating to the duty of certain hospitals to provide community
1-2 benefits and charity care.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subsections (b), (c), and (d), Section 311.045,
1-5 Health and Safety Code, are amended to read as follows:
1-6 (b)(1) A nonprofit hospital or hospital system may elect to
1-7 provide community benefits, which include charity care and
1-8 government-sponsored indigent health care, according to any of the
1-9 following standards:
1-10 (A) charity care and government-sponsored
1-11 indigent health care are provided at a level which is reasonable in
1-12 relation to the community needs, as determined through the
1-13 community needs assessment, the available resources of the hospital
1-14 or hospital system, and the tax-exempt benefits received by the
1-15 hospital or hospital system;
1-16 (B) [charity care and government-sponsored
1-17 indigent health care are provided in an amount equal to at least
1-18 four percent of the hospital's or hospital system's net patient
1-19 revenue;]
1-20 [(C)] charity care and government-sponsored
1-21 indigent health care are provided in an amount equal to at least
1-22 100 percent of the hospital's or hospital system's tax-exempt
1-23 benefits, excluding federal income tax; or
2-1 (C) [(D) prior to January 1, 1996, charity care
2-2 and community benefits are provided in a combined amount equal to
2-3 at least five percent of the hospital's or hospital system's net
2-4 patient revenue, provided that charity care and
2-5 government-sponsored indigent health care are provided in an amount
2-6 equal to at least three percent of net patient revenue; or]
2-7 [(E) beginning with the hospital's or hospital
2-8 system's fiscal year starting after December 31, 1995,] charity
2-9 care and community benefits are provided in a combined amount equal
2-10 to at least five percent of the hospital's or hospital system's net
2-11 patient revenue, provided that charity care and
2-12 government-sponsored indigent health care are provided in an amount
2-13 equal to at least four percent of net patient revenue.
2-14 (2) For purposes of satisfying Subdivision (1)(C)
2-15 [(1)(E)], a hospital or hospital system may not change its existing
2-16 fiscal year unless the hospital or hospital system changes its
2-17 ownership or corporate structure as a result of a sale or merger.
2-18 (3) A nonprofit hospital that has been designated as a
2-19 disproportionate share hospital under the state Medicaid program in
2-20 the current fiscal year or in either of the previous two fiscal
2-21 years shall be considered to have provided a reasonable amount of
2-22 charity care and government-sponsored indigent health care and
2-23 shall be deemed in compliance with the standards in this
2-24 subsection.
2-25 (c) The providing of charity care and government-sponsored
3-1 indigent health care in accordance with Subsection (b)(1)(A) shall
3-2 be guided by the prudent business judgment of the hospital which
3-3 will ultimately determine the appropriate level of charity care and
3-4 government-sponsored indigent health care based on the community
3-5 needs, the available resources of the hospital, the tax-exempt
3-6 benefits received by the hospital, and other factors that may be
3-7 unique to the hospital, such as the hospital's volume of Medicare
3-8 and Medicaid patients. These criteria shall not be determinative
3-9 factors, but shall be guidelines contributing to the hospital's
3-10 decision, along with other factors which may be unique to the
3-11 hospital. The standards set forth in Subsections (b)(1)(B) and [,]
3-12 (b)(1)(C)[, (b)(1)(D), and (b)(1)(E)] shall also not be considered
3-13 determinative of the amount of charity care and
3-14 government-sponsored indigent health care that will be considered
3-15 reasonable under Subsection (b)(1)(A).
3-16 (d) For purposes of this section, a hospital that satisfies
3-17 Subsection (b)(1)(A) or (b)(3) shall be excluded in determining a
3-18 hospital system's compliance with the standards provided by
3-19 Subsection (b)(1)(B) or [,] (b)(1)(C)[, (b)(1)(D), or (b)(1)(E)].
3-20 SECTION 2. Subchapter D, Chapter 311, Health and Safety
3-21 Code, is amended by adding Section 311.0455 to read as follows:
3-22 Sec. 311.0455. ANNUAL REPORT BY THE DEPARTMENT. (a) The
3-23 department shall submit to the attorney general and comptroller not
3-24 later than July 1 of each year a report listing each nonprofit
3-25 hospital or hospital system that did not meet the requirements of
4-1 Section 311.045 during the preceding fiscal year.
4-2 (b) The department shall submit to the attorney general and
4-3 the comptroller not later than November 1 of each year a report
4-4 containing the following information for each nonprofit hospital or
4-5 hospital system during the preceding fiscal year:
4-6 (1) the amount of charity care, as defined by Section
4-7 311.031, provided;
4-8 (2) the amount of government-sponsored indigent health
4-9 care, as defined by Section 311.031, provided;
4-10 (3) the amount of community benefits, as defined by
4-11 Section 311.042, provided;
4-12 (4) the amount of net patient revenue, as defined by
4-13 Section 311.042, and the amount constituting four percent of net
4-14 patient revenue;
4-15 (5) the dollar amount of the hospital's or hospital
4-16 system's charity care and community benefits requirements met;
4-17 (6) a computation of the percentage by which the
4-18 amount described by Subdivision (5) is above or below the dollar
4-19 amount of the hospital's or hospital system's charity care and
4-20 community benefits requirements;
4-21 (7) the amount of tax-exempt benefits, as defined by
4-22 Section 311.042, provided, if the hospital is required to report
4-23 tax-exempt benefits under Section 311.045(b)(1)(A) or (b)(1)(B);
4-24 and
4-25 (8) the amount of charity care expenses reported in
5-1 the hospital's or hospital system's audited financial statement.
5-2 (c) The department shall make the report required by
5-3 Subsection (b) available to the public and shall issue a press
5-4 release concerning the availability of the report.
5-5 (d) For purposes of Subsection (b), "nonprofit hospital"
5-6 includes the following if the hospital is not located in a county
5-7 with a population under 50,000 where the entire county or the
5-8 population of the entire county has been designated as a Health
5-9 Professionals Shortage Area:
5-10 (1) a Medicaid disproportionate share hospital; or
5-11 (2) a public hospital that is owned or operated by a
5-12 political subdivision or municipal corporation of the state,
5-13 including a hospital district or authority.
5-14 SECTION 3. Section 311.046, Health and Safety Code, is
5-15 amended by amending Subsections (a) and (b) and adding Subsection
5-16 (e) to read as follows:
5-17 (a) A nonprofit hospital shall prepare an annual report of
5-18 the community benefits plan and shall include in the report at
5-19 least the following information:
5-20 (1) the hospital's mission statement;
5-21 (2) a disclosure of the health care needs of the
5-22 community that were considered in developing the hospital's
5-23 community benefits plan pursuant to Section 311.044(b); [and]
5-24 (3) a disclosure of the amount and types of community
5-25 benefits, including charity care, actually provided. Charity care
6-1 shall be reported as a separate item from other community benefits;
6-2 (4) a statement of its total operating expenses
6-3 computed in accordance with generally accepted accounting
6-4 principles for hospitals from the most recent completed and audited
6-5 prior fiscal year of the hospital; and
6-6 (5) a completed worksheet that computes the ratio of
6-7 cost to charge for the fiscal year referred to in Subdivision (4)
6-8 and that includes the same requirements as Worksheet 1-A adopted by
6-9 the department in August 1994 for the 1994 "Annual Statement of
6-10 Community Benefits Standards".
6-11 (b) A nonprofit hospital shall file the annual report of the
6-12 community benefits plan with the Bureau of State Health Data and
6-13 Policy Analysis at the department. The report shall be filed no
6-14 later than April 30 of each year. In addition to the annual
6-15 report, a completed worksheet as required by Subsection (a)(5)
6-16 shall be filed no later than 10 working days after the date the
6-17 hospital files its Medicare cost report [120 days after the end of
6-18 the hospital's fiscal year; provided, however, that the first
6-19 report shall be filed no later than 120 days after the end of the
6-20 hospital's fiscal year ending during 1994].
6-21 (e) For purposes of this section, "nonprofit hospital"
6-22 includes the following if the hospital is not located in a county
6-23 with a population under 50,000 where the entire county or the
6-24 population of the entire county has been designated as a Health
6-25 Professionals Shortage Area:
7-1 (1) a Medicaid disproportionate share hospital; or
7-2 (2) a public hospital that is owned or operated by a
7-3 political subdivision or municipal corporation of the state,
7-4 including a hospital district or authority.
7-5 SECTION 4. (a) This Act takes effect January 1, 1998.
7-6 (b) Section 3 of this Act applies only to reports filed for
7-7 fiscal years ending on or after January 1, 1998. The filing date
7-8 of a report for a fiscal year ending before January 1, 1998, is
7-9 governed by the law as it existed immediately before September 1,
7-10 1997, and that law is continued in effect for that purpose.
7-11 SECTION 5. The importance of this legislation and the
7-12 crowded condition of the calendars in both houses create an
7-13 emergency and an imperative public necessity that the
7-14 constitutional rule requiring bills to be read on three several
7-15 days in each house be suspended, and this rule is hereby suspended.
S.B. No. 788
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 788 passed the Senate on
March 24, 1997, by a viva-voce vote; and that the Senate concurred
in House amendment on May 10, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 788 passed the House, with
amendment, on May 7, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor