By:  Shapleigh                                        S.B. No. 1824

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the formation of an integrated health care system by a

 1-2     hospital district and a medical school.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Subchapter C, Chapter 281, Health and Safety

 1-5     Code, is amended by adding Section 281.0517 to read as follows:

 1-6           Sec. 281.0517.  INTEGRATED HEALTH CARE SYSTEM.  (a)  In this

 1-7     section:

 1-8                 (1)  "Integrated health care system" means a nonprofit

 1-9     corporation established and operated by a district and a medical

1-10     school to provide or arrange for comprehensive health care services

1-11     for residents of the district.

1-12                 (2)  "Provider" means a physician or a provider as

1-13     defined under Section 2, Texas Health Maintenance Organization Act

1-14     (Article 20A.02, Vernon's Texas Insurance Code).

1-15                 (3)  "Medical school" has the meaning assigned by

1-16     Section 61.501, Education Code.

1-17           (b)  A district and a medical school may establish and

1-18     operate an integrated health care system.

1-19           (c)  To provide or arrange for comprehensive health care

1-20     services, an integrated health care system created under this

1-21     section may:

1-22                 (1)  own, acquire, lease, or contract for all necessary

1-23     assets;

 2-1                 (2)  enter into contracts with providers for the

 2-2     provision of health care services directly or indirectly through

 2-3     subcontract;

 2-4                 (3)  provide or enter into a contract with an

 2-5     individual or business entity under which the individual or entity

 2-6     provides necessary administrative services for the system and the

 2-7     system's providers;

 2-8                 (4)  enter into a contract or other agreement with a

 2-9     business or governmental entity under which the system is paid to

2-10     provide health care services; and

2-11                 (5)  enter into a fee-for-service, capitated, or

2-12     risk-sharing health care service arrangement.

2-13           (d)  An integrated health care system created under this

2-14     section is:

2-15                 (1)  subject to:

2-16                       (A)  Chapter 551, Government Code;

2-17                       (B)  Chapter 552, Government Code;

2-18                       (C)  the Texas Health Maintenance Organization

2-19     Act (Chapter 20A, Vernon's Texas Insurance Code); and

2-20                       (D)  Article 21.52F, Insurance Code; and

2-21                 (2)  a unit of local government for the purposes of

2-22     Chapter 101, Civil Practice and Remedies Code.

2-23           (e)  Notwithstanding Subsection (d)(1)(A), an integrated

2-24     health care system created under this section may hold a closed

2-25     meeting to deliberate:

 3-1                 (1)  pricing or financial planning relating to a bid or

 3-2     negotiation for a contract to provide a service or product line, if

 3-3     an open meeting would have a detrimental effect on the position of

 3-4     the system in the bid or negotiation process; or

 3-5                 (2)  a proposed new service or product line, if the

 3-6     meeting is held before public announcement of the service or

 3-7     product line.

 3-8           (f)  Notwithstanding Subsection (d)(1)(B), information

 3-9     relating to the following is confidential and not subject to

3-10     disclosure:

3-11                 (1)  pricing or financial planning relating to a bid or

3-12     negotiation for a contract to provide a service or product line, if

3-13     disclosure would have a detrimental effect on the position of the

3-14     system in the bid or negotiation process; or

3-15                 (2)  a proposed new service or product line, if

3-16     disclosure is requested before public announcement of the service

3-17     or product line.

3-18           (g)  Subject to the requirements and limitations of the local

3-19     health care market, an integrated health care system created under

3-20     this section shall make reasonable efforts to include in its

3-21     provider group community providers other than the district hospital

3-22     and the medical school.

3-23           SECTION 2.  This Act takes effect September 1, 1997.

3-24           SECTION 3.  The importance of this legislation and the

3-25     crowded condition of the calendars in both houses create an

 4-1     emergency and an imperative public necessity that the

 4-2     constitutional rule requiring bills to be read on three several

 4-3     days in each house be suspended, and this rule is hereby suspended.