1-1     By:  Shapleigh                                        S.B. No. 1824

 1-2           (In the Senate - Filed March 14, 1997; March 24, 1997, read

 1-3     first time and referred to Committee on Health and Human Services;

 1-4     April 14, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 11, Nays 0; April 14, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1824                By:  Moncrief

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to the formation of an integrated health care system by a

1-11     hospital district and a medical school.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Subchapter C, Chapter 281, Health and Safety

1-14     Code, is amended by adding Section 281.0517 to read as follows:

1-15           Sec. 281.0517.  INTEGRATED HEALTH CARE SYSTEM.  (a)  In this

1-16     section:

1-17                 (1)  "Integrated health care system" means a nonprofit

1-18     corporation established and operated by a district and a medical

1-19     school to provide or arrange for comprehensive health care services

1-20     for residents of the district.

1-21                 (2)  "Provider" means a physician or a provider as

1-22     defined under Section 2, Texas Health Maintenance Organization Act

1-23     (Article 20A.02, Vernon's Texas Insurance Code).

1-24                 (3)  "Medical school" has the meaning assigned by

1-25     Section 61.501, Education Code.

1-26           (b)  A district and a medical school may establish and

1-27     operate an integrated health care system.

1-28           (c)  To provide or arrange for comprehensive health care

1-29     services, an integrated health care system created under this

1-30     section may:

1-31                 (1)  own, acquire, lease, or contract for all necessary

1-32     assets;

1-33                 (2)  enter into contracts with providers for the

1-34     provision of health care services directly or indirectly through

1-35     subcontract;

1-36                 (3)  provide or enter into a contract with an

1-37     individual or business entity under which the individual or entity

1-38     provides necessary administrative services for the system and the

1-39     system's providers;

1-40                 (4)  enter into a contract or other agreement with a

1-41     business or governmental entity under which the system is paid to

1-42     provide health care services; and

1-43                 (5)  enter into a fee-for-service, capitated, or

1-44     risk-sharing health care service arrangement.

1-45           (d)  An integrated health care system created under this

1-46     section is:

1-47                 (1)  subject to:

1-48                       (A)  Chapter 551, Government Code;

1-49                       (B)  Chapter 552, Government Code;

1-50                       (C)  the Texas Health Maintenance Organization

1-51     Act (Chapter 20A, Vernon's Texas Insurance Code); and

1-52                       (D)  Article 21.52F, Insurance Code; and

1-53                 (2)  a unit of local government for the purposes of

1-54     Chapter 101, Civil Practice and Remedies Code.

1-55           (e)  Notwithstanding Subsection (d)(1)(A), an integrated

1-56     health care system created under this section may hold a closed

1-57     meeting to deliberate:

1-58                 (1)  pricing or financial planning relating to a bid or

1-59     negotiation for a contract to provide a service or product line, if

1-60     an open meeting would have a detrimental effect on the position of

1-61     the system in the bid or negotiation process; or

1-62                 (2)  a proposed new service or product line, if the

1-63     meeting is held before public announcement of the service or

1-64     product line.

 2-1           (f)  Notwithstanding Subsection (d)(1)(B), information

 2-2     relating to the following is confidential and not subject to

 2-3     disclosure:

 2-4                 (1)  pricing or financial planning relating to a bid or

 2-5     negotiation for a contract to provide a service or product line, if

 2-6     disclosure would have a detrimental effect on the position of the

 2-7     system in the bid or negotiation process; or

 2-8                 (2)  a proposed new service or product line, if

 2-9     disclosure is requested before public announcement of the service

2-10     or product line.

2-11           (g)  Subject to the requirements and limitations of the local

2-12     health care market, an integrated health care system created under

2-13     this section shall make reasonable efforts to include in its

2-14     provider group community providers other than the district hospital

2-15     and the medical school.

2-16           SECTION 2.  This Act takes effect September 1, 1997.

2-17           SECTION 3.  The importance of this legislation and the

2-18     crowded condition of the calendars in both houses create an

2-19     emergency and an imperative public necessity that the

2-20     constitutional rule requiring bills to be read on three several

2-21     days in each house be suspended, and this rule is hereby suspended.

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