1-1 By: Madla S.B. No. 1246
1-2 (In the Senate - Filed March 12, 1997; March 17, 1997, read
1-3 first time and referred to Committee on Health and Human Services;
1-4 April 21, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 10, Nays 0; April 21, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1246 By: Madla
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the establishment of a statewide rural health care
1-11 system.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. The Insurance Code is amended by adding Chapter
1-14 20C to read as follows:
1-15 CHAPTER 20C. STATEWIDE RURAL HEALTH CARE SYSTEM
1-16 Art. 20C.01. SHORT TITLE. This chapter may be cited as the
1-17 Statewide Rural Health Care System Act.
1-18 Art. 20C.02. DEFINITIONS. In this chapter:
1-19 (1) "Board" means the board of directors of the
1-20 system.
1-21 (2) "Enrollee" means an individual entitled to receive
1-22 health care services through a health care plan arranged for or
1-23 provided by the system.
1-24 (3) "Health care services" has the meaning assigned
1-25 by Section 2, Texas Health Maintenance Organization Act (Article
1-26 20A.02, Vernon's Texas Insurance Code).
1-27 (4) "Hospital provider" means a county hospital, a
1-28 county hospital authority, a hospital district, a municipal
1-29 hospital, or a municipal hospital authority.
1-30 (5) "Local health care provider" means a person
1-31 licensed, registered, or certified as a health care practitioner in
1-32 this state who resides in or practices in a rural area in which the
1-33 person provides health care services.
1-34 (6) "Participating provider" means a hospital provider
1-35 that participates in the system.
1-36 (7) "Person" means an individual, a professional
1-37 association, a professional corporation, a partnership, a limited
1-38 liability corporation, a limited liability partnership, or a
1-39 nonprofit corporation, including a nonprofit corporation created
1-40 under Section 5.01(a), Medical Practice Act (Article 4495b,
1-41 Vernon's Texas Civil Statutes).
1-42 (8) "Rural area" means:
1-43 (A) a county with a population of 50,000 or
1-44 less;
1-45 (B) an area that is not delineated as an
1-46 urbanized area by the federal census bureau; or
1-47 (C) any other area designated as rural by rules
1-48 adopted by the commissioner.
1-49 (9) "System" means the statewide rural health care
1-50 system established by this chapter.
1-51 (10) "Territorial jurisdiction" means the geographical
1-52 area in which a participating provider is obligated by law to
1-53 provide health care services.
1-54 Art. 20C.03. ESTABLISHMENT OF SYSTEM. The statewide rural
1-55 health care system is established to arrange for or provide health
1-56 care services on a prepaid basis to enrollees who reside in rural
1-57 areas.
1-58 Art. 20C.04. DESIGNATION AS SYSTEM; QUALIFICATIONS.
1-59 (a) The commissioner shall designate as the system one
1-60 organization created under Article 20C.05 of this chapter. Except
1-61 as provided by Subsection (b) of this article, to be eligible for
1-62 designation as the system, the organization must meet each
1-63 requirement imposed by the Texas Health Maintenance Organization
1-64 Act (Chapter 20A, Vernon's Texas Insurance Code), as if the
2-1 organization were a person under the Act.
2-2 (b) The system may meet all reserve requirements required by
2-3 the commissioner through the purchase of reinsurance from insurance
2-4 companies approved for that purpose by the commissioner.
2-5 Art. 20C.05. ORGANIZATION OF SYSTEM; APPLICATION OF OTHER
2-6 LAWS. (a) The system must be:
2-7 (1) a corporation organized under the Texas Non-Profit
2-8 Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
2-9 Statutes); and
2-10 (2) composed of a combination of two or more hospital
2-11 providers that are members of the corporation and that are located
2-12 in a rural area.
2-13 (b) The system is:
2-14 (1) a unit of local government that is a governmental
2-15 unit for purposes of Chapter 101, Civil Practice and Remedies Code;
2-16 and
2-17 (2) a local government for purposes of Chapter 102,
2-18 Civil Practice and Remedies Code.
2-19 (c) The system may enter into interlocal cooperation
2-20 contracts under Chapter 791, Government Code, and is a local
2-21 government for purposes of that chapter.
2-22 Art. 20C.06. BOARD. (a) The system is governed by a board
2-23 of directors composed of 18 members. Notwithstanding the Texas
2-24 Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
2-25 Texas Civil Statutes), the board of directors is selected as
2-26 provided by this chapter.
2-27 (b) The participating providers shall appoint as
2-28 representatives of the participating providers six directors
2-29 selected in the manner provided by Article 20C.10 of this code.
2-30 (c) The governor shall appoint six directors from persons
2-31 residing in the territorial jurisdictions of the participating
2-32 providers, including:
2-33 (1) two persons who represent employers;
2-34 (2) two persons who are local government officials;
2-35 and
2-36 (3) two persons who are consumers of health care
2-37 services.
2-38 (d) In addition to the directors appointed under Subsection
2-39 (c) of this article, the governor shall appoint six directors from
2-40 among licensed physicians who reside and practice in the
2-41 territorial jurisdictions of the participating providers. At least
2-42 three of the physicians appointed under this subsection must
2-43 perform as their professional practice the general practice of
2-44 medicine.
2-45 (e) Directors appointed under Subsection (c) or (d) of this
2-46 article shall be appointed in such a manner as to represent the
2-47 territorial jurisdictions of all participating providers.
2-48 Art. 20C.07. TERMS; VACANCIES. (a) The members of the
2-49 board serve staggered six-year terms, with the terms of six members
2-50 expiring February 1 of each odd-numbered year.
2-51 (b) A member of the board may not serve consecutive terms.
2-52 A person who has served as a member and has left the board at the
2-53 expiration of the person's term is eligible for consideration for
2-54 appointment to the board for a nonconsecutive term.
2-55 (c) A vacancy on the board is filled for the remainder of
2-56 the unexpired term by appointment by the same entity that appointed
2-57 the director vacating the position.
2-58 Art. 20C.08. ADMINISTRATION BY BOARD; COMMITTEES. (a) The
2-59 board shall administer the system and shall adopt policies and
2-60 procedures for the system that are consistent with the purposes of
2-61 this chapter. The board may elect officers as it considers
2-62 appropriate.
2-63 (b) The board may appoint an executive committee as
2-64 determined by the board to be useful in conducting the business of
2-65 the board. The board may delegate to the executive committee any
2-66 responsibility considered reasonable by the board.
2-67 (c) An executive committee appointed under this article must
2-68 be composed of six members, as follows:
2-69 (1) two representatives of the participating
3-1 providers;
3-2 (2) two persons who are community representatives,
3-3 including employers, local government officials, or consumers of
3-4 health care services; and
3-5 (3) two physicians who meet the requirements adopted
3-6 under Article 20C.06(d) of this code.
3-7 (d) On a majority vote, the board may:
3-8 (1) contract for administrative services; or
3-9 (2) hire an executive director, consultants, attorneys
3-10 and other professionals, and other staff as necessary to implement
3-11 the duties of the system.
3-12 (e) If the board hires an executive director for the system,
3-13 the board shall delegate to the executive director the authority to
3-14 hire staff for the system and may delegate to the executive
3-15 director other duties determined to be appropriate by the board.
3-16 (f) The board shall appoint an advisory committee composed
3-17 of:
3-18 (1) hospital administrators who represent nonprofit
3-19 and investor-owned facilities;
3-20 (2) representatives of hospital districts located in
3-21 urban areas;
3-22 (3) representatives of health care teaching
3-23 facilities;
3-24 (4) representatives of health care specialty
3-25 facilities;
3-26 (5) representatives of medical residency programs in
3-27 family practice; and
3-28 (6) representatives of rural health clinics and
3-29 ambulatory surgical centers.
3-30 (g) In addition to the advisory committee appointed under
3-31 Subsection (f) of this article, the board may appoint other
3-32 advisory committees as determined to be appropriate by the board.
3-33 (h) A member of an advisory committee appointed under this
3-34 article is not entitled to compensation for service on the
3-35 committee.
3-36 Art. 20C.09. MEETINGS; RECORD. (a) The board shall adopt
3-37 rules for the holding of regular and special meetings.
3-38 (b) Meetings of the board are open to the public in
3-39 accordance with Chapter 551, Government Code. This subsection does
3-40 not require the board to conduct an open meeting to deliberate:
3-41 (1) pricing or financial planning information relating
3-42 to a bid or negotiation for arranging or providing services or
3-43 product lines to another person if disclosure of the information
3-44 would give the advantage to competitors;
3-45 (2) information relating to a proposed new service,
3-46 product line, or marketing strategy;
3-47 (3) patient information made confidential under
3-48 Section 5.08, Medical Practice Act (Article 4495b, Vernon's Texas
3-49 Civil Statutes), or Subchapter G, Chapter 241, Health and Safety
3-50 Code; or
3-51 (4) information relating to the credentialing of
3-52 physicians or peer review made confidential under Section 5.06,
3-53 Medical Practice Act (Article 4495b, Vernon's Texas Civil
3-54 Statutes), or Subchapter G, Chapter 241, Health and Safety Code.
3-55 (c) The board shall keep a record of its proceedings in
3-56 accordance with Chapter 551, Government Code.
3-57 Art. 20C.10. LIMITATION ON AUTHORITY OF PARTICIPATING
3-58 PROVIDERS. The powers of the participating providers are limited
3-59 to:
3-60 (1) the election, by a majority vote of the governing
3-61 bodies of the participating providers, of the six members of the
3-62 board of directors of the system to be appointed by the combined
3-63 participating providers under Article 20C.06(b) of this code;
3-64 (2) the authorization by a two-thirds vote of the sale
3-65 of the system or substantially all of the assets of the system; and
3-66 (3) the removal by a two-thirds vote of any member of
3-67 the board who was appointed by the participating providers.
3-68 Art. 20C.11. PROVISION OF ADMINISTRATIVE SERVICES. (a) The
3-69 board may adopt rules regarding the provision of administrative
4-1 services by the system.
4-2 (b) The system may enter into contracts or joint ventures to
4-3 provide administrative services under this chapter.
4-4 (c) The system may enter into intergovernmental and
4-5 interlocal agreements.
4-6 (d) The system may provide technical assistance and
4-7 management services to local health care providers as necessary to
4-8 deliver health care services.
4-9 Art. 20C.12. PROVISION OF HEALTH CARE SERVICES. (a) The
4-10 board may adopt rules to regulate the provision of health care
4-11 services by the system.
4-12 (b) The system shall contract with or otherwise arrange for
4-13 local health care providers to deliver health care services to
4-14 enrollees residing in the rural areas of the territorial
4-15 jurisdiction of the participants. If those local health care
4-16 providers are unable to provide the type and quality of services
4-17 needed by the enrollees, the system may contract with health care
4-18 practitioners who are not local health care providers.
4-19 Art. 20C.13. GIFTS AND GRANTS. The system may accept gifts
4-20 and grants of money, personal property, and real property to use in
4-21 the provision of the system's programs and services.
4-22 Art. 20C.14. MANDATED PROVIDER; EXCEPTION. (a) The state
4-23 shall award to the system at least one of any state contracts
4-24 awarded to provide health care services to beneficiaries of a
4-25 governmental health program to the rural areas within the
4-26 territorial jurisdiction of the participating providers.
4-27 (b) This article does not apply to a contract that expands
4-28 coverage of the Texas Medical Assistance Program under Chapter 32,
4-29 Human Resources Code, to certain children that is implemented
4-30 during the 1997-1998 state fiscal biennium.
4-31 Art. 20C.15. RULES. The commissioner shall adopt rules as
4-32 necessary to implement this chapter.
4-33 SECTION 2. Subsection (l), Section 2, Texas Health
4-34 Maintenance Organization Act (Article 20A.02, Vernon's Texas
4-35 Insurance Code), is amended to read as follows:
4-36 (l) "Person" means any natural or artificial person,
4-37 including, but not limited to, individuals, partnerships,
4-38 associations, organizations, trusts, hospital districts, limited
4-39 liability companies, limited liability partnerships, [or]
4-40 corporations, or the rural community health care system under
4-41 Chapter 20C, Insurance Code.
4-42 SECTION 3. In appointing the initial members of the board of
4-43 directors of the statewide rural health care system established
4-44 under Chapter 20C, Insurance Code, as added by this Act:
4-45 (1) the participating providers shall designate two
4-46 members for terms expiring February 1, 1999, two members for terms
4-47 expiring February 1, 2001, and two members for terms expiring
4-48 February 1, 2003; and
4-49 (2) of the members appointed under Subsection (c) or
4-50 (d), Section 20C.06, Insurance Code, as added by this Act, the
4-51 governor shall designate two for terms expiring February 1, 1999,
4-52 two for terms expiring February 1, 2001, and two for terms expiring
4-53 February 1, 2003.
4-54 SECTION 4. (a) Except as provided by Subsections (b) and
4-55 (c) of this section, this Act takes effect September 1, 1997.
4-56 (b) The Commissioner of Insurance shall adopt rules as
4-57 necessary to implement Chapter 20C, Insurance Code, as added by
4-58 this Act, not later than January 1, 1998.
4-59 (c) The statewide rural health care system established under
4-60 Chapter 20C, Insurance Code, as added by this Act, shall begin
4-61 offering health care services under that chapter not later than
4-62 March 1, 1998.
4-63 SECTION 5. The importance of this legislation and the
4-64 crowded condition of the calendars in both houses create an
4-65 emergency and an imperative public necessity that the
4-66 constitutional rule requiring bills to be read on three several
4-67 days in each house be suspended, and this rule is hereby suspended.
4-68 * * * * *