By: Madla S.B. No. 1246
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the establishment of a statewide rural health care
1-2 system.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. The Insurance Code is amended by adding Chapter
1-5 20C to read as follows:
1-6 CHAPTER 20C. STATEWIDE RURAL HEALTH CARE SYSTEM
1-7 Art. 20C.01. SHORT TITLE. This chapter may be cited as the
1-8 Statewide Rural Health Care System Act.
1-9 Art. 20C.02. DEFINITIONS. In this chapter:
1-10 (1) "Board" means the board of directors of the
1-11 system.
1-12 (2) "Enrollee" means an individual entitled to receive
1-13 health care services through a health care plan arranged for or
1-14 provided by the system.
1-15 (3) "Health care services" has the meaning assigned
1-16 by Section 2, Texas Health Maintenance Organization Act (Article
1-17 20A.02, Vernon's Texas Insurance Code).
1-18 (4) "Hospital provider" means a county hospital, a
1-19 county hospital authority, a hospital district, a municipal
1-20 hospital, or a municipal hospital authority.
1-21 (5) "Local health care provider" means a person
1-22 licensed, registered, or certified as a health care practitioner in
1-23 this state who resides in or practices in a rural area in which the
2-1 person provides health care services.
2-2 (6) "Participating provider" means a hospital provider
2-3 that participates in the system.
2-4 (7) "Person" means an individual, a professional
2-5 association, a professional corporation, a partnership, a limited
2-6 liability corporation, a limited liability partnership, or a
2-7 nonprofit corporation, including a nonprofit corporation created
2-8 under Section 5.01(a), Medical Practice Act (Article 4495b,
2-9 Vernon's Texas Civil Statutes).
2-10 (8) "Rural area" means:
2-11 (A) a county with a population of 50,000 or
2-12 less;
2-13 (B) an area that is not delineated as an
2-14 urbanized area by the federal census bureau; or
2-15 (C) any other area designated as rural by rules
2-16 adopted by the commissioner.
2-17 (9) "System" means the statewide rural health care
2-18 system established by this chapter.
2-19 (10) "Territorial jurisdiction" means the geographical
2-20 area in which a participating provider is obligated by law to
2-21 provide health care services.
2-22 Art. 20C.03. ESTABLISHMENT OF SYSTEM. The statewide rural
2-23 health care system is established to arrange for or provide health
2-24 care services on a prepaid basis to enrollees who reside in rural
2-25 areas.
3-1 Art. 20C.04. DESIGNATION AS SYSTEM; QUALIFICATIONS.
3-2 (a) The commissioner shall designate as the system one
3-3 organization created under Article 20C.05 of this chapter. Except
3-4 as provided by Subsection (b) of this article, to be eligible for
3-5 designation as the system, the organization must meet each
3-6 requirement imposed by the Texas Health Maintenance Organization
3-7 Act (Chapter 20A, Vernon's Texas Insurance Code), as if the
3-8 organization were a person under the Act.
3-9 (b) The system shall meet all reserve requirements required
3-10 by the commissioner through the purchase of reinsurance from
3-11 insurance companies approved for that purpose by the commissioner.
3-12 Art. 20C.05. ORGANIZATION OF SYSTEM; APPLICATION OF OTHER
3-13 LAWS. (a) The system must be:
3-14 (1) a corporation organized under the Texas Non-Profit
3-15 Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
3-16 Statutes); and
3-17 (2) composed of a combination of two or more hospital
3-18 providers that are members of the corporation and that are located
3-19 in a rural area.
3-20 (b) The system is:
3-21 (1) a unit of local government that is a governmental
3-22 unit for purposes of Chapter 101, Civil Practice and Remedies Code;
3-23 and
3-24 (2) a local government for purposes of Chapter 102,
3-25 Civil Practice and Remedies Code.
4-1 (c) The system may enter into interlocal cooperation
4-2 contracts under Chapter 791, Government Code, and is a local
4-3 government for purposes of that chapter.
4-4 Art. 20C.06. BOARD. (a) The system is governed by a board
4-5 of directors composed of 18 members. Notwithstanding the Texas
4-6 Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
4-7 Texas Civil Statutes), the board of directors is selected as
4-8 provided by this chapter.
4-9 (b) The participating providers shall appoint as
4-10 representatives of the participating providers six directors
4-11 selected in the manner provided by Article 20C.10 of this code.
4-12 (c) The governor shall appoint six directors from persons
4-13 residing in the territorial jurisdictions of the participating
4-14 providers, including:
4-15 (1) two persons who represent employers;
4-16 (2) two persons who are local government officials;
4-17 and
4-18 (3) two persons who are consumers of health care
4-19 services.
4-20 (d) In addition to the directors appointed under Subsection
4-21 (c) of this article, the governor shall appoint six directors from
4-22 among licensed physicians who reside and practice in the
4-23 territorial jurisdictions of the participating providers. At least
4-24 three of the physicians appointed under this subsection must
4-25 perform as their professional practice the general practice of
5-1 medicine.
5-2 (e) Directors appointed under Subsection (c) or (d) of this
5-3 article shall be appointed in such a manner as to represent the
5-4 territorial jurisdictions of all participating providers.
5-5 Art. 20C.07. TERMS; VACANCIES. (a) The members of the
5-6 board serve staggered six-year terms, with the terms of six members
5-7 expiring February 1 of each odd-numbered year.
5-8 (b) A member of the board may not serve consecutive terms.
5-9 A person who has served as a member and has left the board at the
5-10 expiration of the person's term is eligible for consideration for
5-11 appointment to the board for a nonconsecutive term.
5-12 (c) A vacancy on the board is filled for the remainder of
5-13 the unexpired term by appointment by the same entity that appointed
5-14 the director vacating the position.
5-15 Art. 20C.08. ADMINISTRATION BY BOARD; COMMITTEES. (a) The
5-16 board shall administer the system and shall adopt policies and
5-17 procedures for the system that are consistent with the purposes of
5-18 this chapter. The board may elect officers as it considers
5-19 appropriate.
5-20 (b) The board may appoint an executive committee as
5-21 determined by the board to be useful in conducting the business of
5-22 the board. The board may delegate to the executive committee any
5-23 responsibility considered reasonable by the board.
5-24 (c) An executive committee appointed under this article must
5-25 be composed of six members, as follows:
6-1 (1) two representatives of the participating
6-2 providers;
6-3 (2) two persons who are community representatives,
6-4 including employers, local government officials, or consumers of
6-5 health care services; and
6-6 (3) two physicians who meet the requirements adopted
6-7 under Article 20C.06(d) of this code.
6-8 (d) On a majority vote, the board may:
6-9 (1) contract for administrative services; or
6-10 (2) hire an executive director, consultants, attorneys
6-11 and other professionals, and other staff as necessary to implement
6-12 the duties of the system.
6-13 (e) If the board hires an executive director for the system,
6-14 the board shall delegate to the executive director the authority to
6-15 hire staff for the system and may delegate to the executive
6-16 director other duties determined to be appropriate by the board.
6-17 (f) The board shall appoint an advisory committee composed
6-18 of:
6-19 (1) hospital administrators who represent nonprofit
6-20 and investor-owned facilities;
6-21 (2) representatives of hospital districts located in
6-22 urban areas;
6-23 (3) representatives of health care teaching
6-24 facilities;
6-25 (4) representatives of health care specialty
7-1 facilities;
7-2 (5) representatives of medical residency programs in
7-3 family practice; and
7-4 (6) representatives of rural health clinics and
7-5 ambulatory surgical centers.
7-6 (g) In addition to the advisory committee appointed under
7-7 Subsection (f) of this article, the board may appoint other
7-8 advisory committees as determined to be appropriate by the board.
7-9 (h) A member of an advisory committee appointed under this
7-10 article is not entitled to compensation for service on the
7-11 committee.
7-12 Art. 20C.09. MEETINGS; RECORD. (a) The board shall adopt
7-13 rules for the holding of regular and special meetings.
7-14 (b) Meetings of the board are open to the public in
7-15 accordance with Chapter 551, Government Code. This subsection does
7-16 not require the board to conduct an open meeting to deliberate:
7-17 (1) pricing or financial planning information relating
7-18 to a bid or negotiation for arranging or providing services or
7-19 product lines to another person if disclosure of the information
7-20 would give the advantage to competitors;
7-21 (2) information relating to a proposed new service,
7-22 product line, or marketing strategy;
7-23 (3) patient information made confidential under
7-24 Section 5.08, Medical Practice Act (Article 4495b, Vernon's Texas
7-25 Civil Statutes), or Subchapter G, Chapter 241, Health and Safety
8-1 Code; or
8-2 (4) information relating to the credentialing of
8-3 physicians or peer review made confidential under Section 5.06,
8-4 Medical Practice Act (Article 4495b, Vernon's Texas Civil
8-5 Statutes), or Subchapter G, Chapter 241, Health and Safety Code.
8-6 (c) The board shall keep a record of its proceedings in
8-7 accordance with Chapter 551, Government Code.
8-8 Art. 20C.10. LIMITATION ON AUTHORITY OF PARTICIPATING
8-9 PROVIDERS. The powers of the participating providers are limited
8-10 to:
8-11 (1) the election, by a majority vote of the governing
8-12 bodies of the participating providers, of the six members of the
8-13 board of directors of the system to be appointed by the combined
8-14 participating providers under Article 20C.06(b) of this code;
8-15 (2) the authorization by a two-thirds vote of the sale
8-16 of the system or substantially all of the assets of the system; and
8-17 (3) the removal by a two-thirds vote of any member of
8-18 the board who was appointed by the participating providers.
8-19 Art. 20C.11. PROVISION OF ADMINISTRATIVE SERVICES. (a) The
8-20 board may adopt rules regarding the provision of administrative
8-21 services by the system.
8-22 (b) The system may enter into contracts or joint ventures to
8-23 provide administrative services under this chapter.
8-24 (c) The system may enter into intergovernmental and
8-25 interlocal agreements.
9-1 (d) The system may provide technical assistance and
9-2 management services to local health care providers as necessary to
9-3 deliver health care services.
9-4 Art. 20C.12. PROVISION OF HEALTH CARE SERVICES. (a) The
9-5 board may adopt rules to regulate the provision of health care
9-6 services by the system.
9-7 (b) The system shall contract with or otherwise arrange for
9-8 local health care providers to deliver health care services to
9-9 enrollees residing in the rural areas of the territorial
9-10 jurisdiction of the participants. If those local health care
9-11 providers are unable to provide the type and quality of services
9-12 needed by the enrollees, the system may contract with health care
9-13 practitioners who are not local health care providers.
9-14 Art. 20C.13. GIFTS AND GRANTS. The system may accept gifts
9-15 and grants of money, personal property, and real property to use in
9-16 the provision of the system's programs and services.
9-17 Art. 20C.14. MANDATED PROVIDER; EXCEPTION. (a) The state
9-18 shall award to the system at least one of any state contracts
9-19 awarded to provide health care services to beneficiaries of a
9-20 governmental health program to the rural areas within the
9-21 territorial jurisdiction of the participating providers.
9-22 (b) This article does not apply to a contract that expands
9-23 coverage of the Texas Medical Assistance Program under Chapter 32,
9-24 Human Resources Code, to certain children that is implemented
9-25 during the 1997-1998 state fiscal biennium.
10-1 (c)(1) As a requirement of participation in any state
10-2 contract, the system must satisfactorily address the qualifications
10-3 for arranging to provide health care services to beneficiaries of
10-4 certain governmental health care programs as delineated in the
10-5 contractor's request for proposal, including:
10-6 (A) readiness reviews and adequacy of
10-7 credentialing, medical management, quality assurance, claims
10-8 payment, information management, provider and patient education,
10-9 and complaint and grievance procedures; and
10-10 (B) adequacy of physician and provider networks,
10-11 including such factors as diversity, geographic accessibility,
10-12 inclusion of physicians and other providers that have furnished a
10-13 significant amount of Medicaid or charity care to beneficiaries,
10-14 and tertiary and subspecialty services.
10-15 (2) The system shall be reimbursed by the Medicaid
10-16 contracting agency at the state-defined capitation rate for each
10-17 service area in which the system operates.
10-18 (3) It is not a condition of participation for the
10-19 system to accept from the Medicaid contracting agency a capitation
10-20 rate which is lower than the state-defined capitation rate for each
10-21 service area in which the system operates.
10-22 Art. 20C.15. RULES. The commissioner shall adopt rules as
10-23 necessary to implement this chapter.
10-24 SECTION 2. Subsection (l), Section 2, Texas Health
10-25 Maintenance Organization Act (Article 20A.02, Vernon's Texas
11-1 Insurance Code), is amended to read as follows:
11-2 (l) "Person" means any natural or artificial person,
11-3 including, but not limited to, individuals, partnerships,
11-4 associations, organizations, trusts, hospital districts, limited
11-5 liability companies, limited liability partnerships, [or]
11-6 corporations, or the rural community health care system under
11-7 Chapter 20C, Insurance Code.
11-8 SECTION 3. In appointing the initial members of the board of
11-9 directors of the statewide rural health care system established
11-10 under Chapter 20C, Insurance Code, as added by this Act:
11-11 (1) the participating providers shall designate two
11-12 members for terms expiring February 1, 1999, two members for terms
11-13 expiring February 1, 2001, and two members for terms expiring
11-14 February 1, 2003; and
11-15 (2) of the members appointed under Subsection (c) or
11-16 (d), Section 20C.06, Insurance Code, as added by this Act, the
11-17 governor shall designate two for terms expiring February 1, 1999,
11-18 two for terms expiring February 1, 2001, and two for terms expiring
11-19 February 1, 2003.
11-20 SECTION 4. (a) Except as provided by Subsections (b) and
11-21 (c) of this section, this Act takes effect September 1, 1997.
11-22 (b) The Commissioner of Insurance shall adopt rules as
11-23 necessary to implement Chapter 20C, Insurance Code, as added by
11-24 this Act, not later than January 1, 1998.
11-25 (c) The statewide rural health care system established under
12-1 Chapter 20C, Insurance Code, as added by this Act, shall begin
12-2 offering health care services under that chapter not later than
12-3 March 1, 1998.
12-4 SECTION 5. The importance of this legislation and the
12-5 crowded condition of the calendars in both houses create an
12-6 emergency and an imperative public necessity that the
12-7 constitutional rule requiring bills to be read on three several
12-8 days in each house be suspended, and this rule is hereby suspended.