75R14635 PB-D
By Madla S.B. No. 1246
Substitute the following for S.B. No. 1246:
By Berlanga C.S.S.B. No. 1246
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the establishment of a statewide rural health care
1-3 system.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. The Insurance Code is amended by adding Chapter
1-6 20C to read as follows:
1-7 CHAPTER 20C. STATEWIDE RURAL HEALTH CARE SYSTEM
1-8 Art. 20C.01. SHORT TITLE. This chapter may be cited as the
1-9 Statewide Rural Health Care System Act.
1-10 Art. 20C.02. DEFINITIONS. In this chapter:
1-11 (1) "Board" means the board of directors of the
1-12 system.
1-13 (2) "Enrollee" means an individual entitled to receive
1-14 health care services through a health care plan arranged for or
1-15 provided by the system.
1-16 (3) "Health care services" has the meaning assigned
1-17 by Section 2, Texas Health Maintenance Organization Act (Article
1-18 20A.02, Vernon's Texas Insurance Code).
1-19 (4) "Hospital provider" means a county hospital,
1-20 county hospital authority, hospital district, municipal hospital,
1-21 or municipal hospital authority.
1-22 (5) "Local health care provider" means:
1-23 (A) a person licensed, registered, or certified
1-24 as a health care practitioner in this state who resides in or
2-1 practices in a rural area in which the person provides health care
2-2 services; or
2-3 (B) a general or specialty hospital that is not
2-4 a hospital provider under this chapter.
2-5 (6) "Participating provider" means a hospital provider
2-6 that participates in the system.
2-7 (7) "Person" means an individual, professional
2-8 association, professional corporation, partnership, limited
2-9 liability corporation, limited liability partnership, or nonprofit
2-10 corporation, including a nonprofit corporation created under
2-11 Section 5.01(a), Medical Practice Act (Article 4495b, Vernon's
2-12 Texas Civil Statutes).
2-13 (8) "Rural area" means:
2-14 (A) a county with a population of 50,000 or
2-15 less;
2-16 (B) an area that is not delineated as an
2-17 urbanized area by the federal census bureau; or
2-18 (C) any other area designated as rural by rules
2-19 adopted by the commissioner.
2-20 (9) "System" means the statewide rural health care
2-21 system established by this chapter.
2-22 (10) "Territorial jurisdiction" means the geographical
2-23 area in which a participating provider is obligated by law to
2-24 provide health care services.
2-25 Art. 20C.03. ESTABLISHMENT OF SYSTEM. The statewide rural
2-26 health care system is established to arrange for or provide health
2-27 care services on a prepaid basis to enrollees who reside in rural
3-1 areas.
3-2 Art. 20C.04. DESIGNATION AS SYSTEM; QUALIFICATIONS.
3-3 (a) The commissioner shall designate as the system one
3-4 organization created under Article 20C.05 of this code. Except as
3-5 provided by Subsection (b) of this article, to be eligible for
3-6 designation as the system, the organization must meet each
3-7 requirement imposed by the Texas Health Maintenance Organization
3-8 Act (Chapter 20A, Vernon's Texas Insurance Code), as if the
3-9 organization were a person under the Act.
3-10 (b) The system shall meet all reserve requirements required
3-11 by the commissioner. The system may fulfill the requirements of
3-12 this subsection through the purchase of reinsurance from insurance
3-13 companies approved for that purpose by the commissioner.
3-14 Art. 20C.05. ORGANIZATION OF SYSTEM; APPLICATION OF OTHER
3-15 LAWS. (a) The system must be:
3-16 (1) a corporation organized under the Texas Non-Profit
3-17 Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
3-18 Statutes); and
3-19 (2) composed of a combination of two or more hospital
3-20 providers that are members of the corporation and that are located
3-21 in a rural area.
3-22 (b) The system is:
3-23 (1) a unit of local government that is a governmental
3-24 unit for purposes of Chapter 101, Civil Practice and Remedies Code;
3-25 and
3-26 (2) a local government for purposes of Chapter 102,
3-27 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
4-26 medicine.
4-27 (e) Directors appointed under Subsection (c) or (d) of this
5-1 article shall be appointed in such a manner as to represent the
5-2 territorial jurisdictions of all participating providers.
5-3 Art. 20C.07. TERMS; VACANCIES. (a) The members of the
5-4 board serve staggered six-year terms, with the terms of six
5-5 members expiring February 1 of each odd-numbered year.
5-6 (b) A member of the board may not serve consecutive terms.
5-7 A person who has served as a member and has left the board at the
5-8 expiration of the person's term is eligible for consideration for
5-9 appointment to the board for a nonconsecutive term.
5-10 (c) A vacancy on the board is filled for the remainder of
5-11 the unexpired term by appointment by the same entity that appointed
5-12 the director vacating the position.
5-13 Art. 20C.08. ADMINISTRATION BY BOARD; COMMITTEES. (a) The
5-14 board shall administer the system and shall adopt policies and
5-15 procedures for the system that are consistent with the purposes of
5-16 this chapter. The board may elect officers as it considers
5-17 appropriate.
5-18 (b) The board may appoint an executive committee as
5-19 determined by the board to be useful in conducting the business of
5-20 the board. The board may delegate to the executive committee any
5-21 responsibility considered reasonable by the board.
5-22 (c) An executive committee appointed under this article must
5-23 be composed of six members, as follows:
5-24 (1) two representatives of the participating
5-25 providers;
5-26 (2) two persons who are community representatives,
5-27 including employers, local government officials, or consumers of
6-1 health care services; and
6-2 (3) two physicians who meet the requirements adopted
6-3 under Article 20C.06(d) of this code.
6-4 (d) On a majority vote, the board may:
6-5 (1) contract for administrative services; or
6-6 (2) hire an executive director, consultants, attorneys
6-7 and other professionals, and other staff as necessary to implement
6-8 the duties of the system.
6-9 (e) If the board hires an executive director for the system,
6-10 the board shall delegate to the executive director the authority to
6-11 hire staff for the system and may delegate to the executive
6-12 director other duties determined to be appropriate by the board.
6-13 (f) The board shall appoint an advisory committee composed
6-14 of:
6-15 (1) hospital administrators who represent nonprofit
6-16 and investor-owned facilities;
6-17 (2) representatives of hospital districts located in
6-18 urban areas;
6-19 (3) representatives of health care teaching
6-20 facilities;
6-21 (4) representatives of health care specialty
6-22 facilities;
6-23 (5) representatives of medical residency programs in
6-24 family practice; and
6-25 (6) representatives of rural health clinics, federally
6-26 qualified health centers, and ambulatory surgical centers.
6-27 (g) In addition to the advisory committee appointed under
7-1 Subsection (f) of this article, the board may appoint other
7-2 advisory committees as determined to be appropriate by the board.
7-3 (h) A member of an advisory committee appointed under this
7-4 article is not entitled to compensation for service on the
7-5 committee.
7-6 Art. 20C.09. MEETINGS; RECORD. (a) The board shall adopt
7-7 rules for the holding of regular and special meetings.
7-8 (b) Meetings of the board are open to the public in
7-9 accordance with Chapter 551, Government Code. This subsection does
7-10 not require the board to conduct an open meeting to deliberate:
7-11 (1) pricing or financial planning information relating
7-12 to a bid or negotiation for arranging or providing services or
7-13 product lines to another person if disclosure of the information
7-14 would give the advantage to competitors;
7-15 (2) information relating to a proposed new service,
7-16 product line, or marketing strategy;
7-17 (3) patient information made confidential under
7-18 Section 5.08, Medical Practice Act (Article 4495b, Vernon's Texas
7-19 Civil Statutes), or Subchapter G, Chapter 241, Health and Safety
7-20 Code; or
7-21 (4) information relating to the credentialing of
7-22 physicians or peer review made confidential under Section 5.06,
7-23 Medical Practice Act (Article 4495b, Vernon's Texas Civil
7-24 Statutes), or Subchapter G, Chapter 241, Health and Safety Code.
7-25 (c) The board shall keep a record of its proceedings in
7-26 accordance with Chapter 551, Government Code.
7-27 Art. 20C.10. LIMITATION ON AUTHORITY OF PARTICIPATING
8-1 PROVIDERS; EFFECT OF SALE OR DISSOLUTION. (a) The powers of the
8-2 participating providers are limited to:
8-3 (1) the election, by a majority vote of the governing
8-4 bodies of the participating providers, of the six members of the
8-5 board of directors of the system to be appointed by the combined
8-6 participating providers under Article 20C.06(b) of this code;
8-7 (2) the authorization by a two-thirds vote of the sale
8-8 of the system or substantially all of the assets of the system; and
8-9 (3) the removal by a two-thirds vote of any member of
8-10 the board who was appointed by the participating providers.
8-11 (b) Except as otherwise provided by law, in the event of the
8-12 sale or dissolution of the system or substantially all of the
8-13 assets of the system, the net revenue shall be redistributed on an
8-14 equal basis to the participating providers after payment of any
8-15 outstanding debts, liabilities, or other obligations incurred by
8-16 the system.
8-17 Art. 20C.11. PROVISION OF ADMINISTRATIVE SERVICES. (a) The
8-18 board may adopt rules regarding the provision of administrative
8-19 services by the system.
8-20 (b) The system may enter into contracts or joint ventures to
8-21 provide administrative services under this chapter.
8-22 (c) The system may enter into intergovernmental and
8-23 interlocal agreements.
8-24 (d) The system may provide technical assistance and
8-25 management services to local health care providers as necessary to
8-26 deliver health care services.
8-27 Art. 20C.12. PROVISION OF HEALTH CARE SERVICES. (a) The
9-1 board may adopt rules to regulate the provision of health care
9-2 services by the system.
9-3 (b) The system shall contract with or otherwise arrange for
9-4 local health care providers to deliver health care services to
9-5 enrollees residing in the rural areas of the territorial
9-6 jurisdiction of the participants. If those local health care
9-7 providers are unable to provide the type and quality of services
9-8 needed by the enrollees, the system may contract with health care
9-9 practitioners who are not local health care providers.
9-10 (c) In contracting with or otherwise arranging for local
9-11 health care providers to deliver health care services to rural
9-12 enrollees, the system may contract only with local health care
9-13 provider networks that are composed of not more than 19 counties.
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 managed care
9-19 contracts awarded to provide health care services to beneficiaries
9-20 of the Texas Medical Assistance Program under Chapter 32, Human
9-21 Resources Code, in the rural areas within the territorial
9-22 jurisdiction of the participating providers.
9-23 (b) This article does not apply to a contract that expands
9-24 coverage of the Texas Medical Assistance Program under Chapter 32,
9-25 Human Resources Code, to certain children that is implemented
9-26 during the 1997-1998 state fiscal biennium.
9-27 (c) As a requirement of participation in any state contract,
10-1 the system must satisfactorily address the qualifications for
10-2 arranging to provide health care services to beneficiaries of
10-3 certain governmental health care programs as delineated in the
10-4 contractor's request for proposal, including:
10-5 (1) readiness reviews and adequacy of credentialing,
10-6 medical management, quality assurance, claims payment, information
10-7 management, provider and patient education, and complaint and
10-8 grievance procedures; and
10-9 (2) adequacy of physician and provider networks,
10-10 including such factors as diversity, geographic accessibility,
10-11 inclusion of physicians and other providers that have furnished a
10-12 significant amount of Medicaid or charity care to beneficiaries,
10-13 and tertiary and subspecialty services.
10-14 (d) The system shall be reimbursed by the Medicaid
10-15 contracting agency at the state-defined capitation rate for each
10-16 service area in which the system operates.
10-17 (e) It is not a condition of participation for the system to
10-18 accept from the Medicaid contracting agency a capitation rate which
10-19 is lower than the state-defined capitation rate for each service
10-20 area in which the system operates.
10-21 Art. 20C.15. RULES. The commissioner shall adopt rules as
10-22 necessary to implement this chapter.
10-23 SECTION 2. Subsection (l), Section 2, Texas Health
10-24 Maintenance Organization Act (Article 20A.02, Vernon's Texas
10-25 Insurance Code), is amended to read as follows:
10-26 (l) "Person" means any natural or artificial person,
10-27 including, but not limited to, individuals, partnerships,
11-1 associations, organizations, trusts, hospital districts, limited
11-2 liability companies, limited liability partnerships, [or]
11-3 corporations, or the rural community health care system under
11-4 Chapter 20C, Insurance Code.
11-5 SECTION 3. In appointing the initial members of the board of
11-6 directors of the statewide rural health care system established
11-7 under Chapter 20C, Insurance Code, as added by this Act:
11-8 (1) the participating providers shall designate two
11-9 members for terms expiring February 1, 1999, two members for terms
11-10 expiring February 1, 2001, and two members for terms expiring
11-11 February 1, 2003; and
11-12 (2) of the members appointed under Subsection (c) or
11-13 (d), Article 20C.06, Insurance Code, as added by this Act, the
11-14 governor shall designate two for terms expiring February 1, 1999,
11-15 two for terms expiring February 1, 2001, and two for terms expiring
11-16 February 1, 2003.
11-17 SECTION 4. (a) Except as provided by Subsections (b) and
11-18 (c) of this section, this Act takes effect September 1, 1997.
11-19 (b) The Commissioner of Insurance shall adopt rules as
11-20 necessary to implement Chapter 20C, Insurance Code, as added by
11-21 this Act, not later than January 1, 1998.
11-22 (c) The statewide rural health care system established under
11-23 Chapter 20C, Insurance Code, as added by this Act, shall begin
11-24 offering health care services under that chapter not later than
11-25 March 1, 1998, unless the system determines that it is not prepared
11-26 to fulfill its regulatory or contractual obligations by that date.
11-27 SECTION 5. The importance of this legislation and the
12-1 crowded condition of the calendars in both houses create an
12-2 emergency and an imperative public necessity that the
12-3 constitutional rule requiring bills to be read on three several
12-4 days in each house be suspended, and this rule is hereby suspended.