By Turner of Coleman, Glaze, Cook                     H.B. No. 1194
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the operation of a statewide rural health care system.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Article 20C.02, Insurance Code, is amended to
 1-5     read as follows:
 1-6           Art. 20C.02.  DEFINITIONS.  (a)  In this chapter:
 1-7                 (1)  "Board" means the board of directors of the
 1-8     system.
 1-9                 (2)  "Enrollee" means an individual entitled to receive
1-10     health care services through a health care plan arranged for or
1-11     provided by the system.
1-12                 (3)  "Health care services" has the meaning assigned by
1-13     Section 2, Texas Health Maintenance Organization Act (Article
1-14     20A.02, Vernon's Texas Insurance Code).
1-15                 (4)  "Hospital provider" means a county hospital,
1-16     county hospital authority, hospital district, municipal hospital,
1-17     or municipal hospital authority.
1-18                 (5)  "Local health care provider" means:
1-19                       (A)  a person licensed, registered, or certified
1-20     as a health care practitioner in this state who resides in or
1-21     practices in a rural area in which the person provides health care
1-22     services; or
1-23                       (B)  a general or specialty hospital that is not
1-24     a hospital provider under this chapter.
 2-1                 (6)  "Participating provider" means a hospital provider
 2-2     that participates in the system.
 2-3                 (7)  "Person" means an individual, professional
 2-4     association, professional corporation, partnership, limited
 2-5     liability corporation, limited liability partnership, or nonprofit
 2-6     corporation, including a nonprofit corporation created under
 2-7     Section 5.01(a), Medical Practice Act (Article 4495b, Vernon's
 2-8     Texas Civil Statutes).
 2-9                 (8)  "Rural area" means:
2-10                       (A)  a county with a population of 50,000 or
2-11     less;
2-12                       (B)  an area that is not delineated as an
2-13     urbanized area by the federal census bureau; or
2-14                       (C)  any other area designated as rural by rules
2-15     adopted by the commissioner, subject to Subsection (b) of this
2-16     article.
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           (b)  In designating rural areas under Subsection (a)(8) of
2-23     this article, the commissioner shall consider any area not located
2-24     within a municipality with a population of 400,000 or more:
2-25                 (1)  in which appropriate emergency, acute, specialty,
2-26     or primary care services are limited or unavailable and could be
2-27     made more accessible through contracting with the system or a
 3-1     participating community health network; or
 3-2                 (2)  the demographics of which indicate a high
 3-3     population of aged, at-risk, or low-income persons, including
 3-4     persons with serious mental illness or serious emotional
 3-5     disturbance, whose needs would be better served by allowing access
 3-6     to care in a contiguous area that is eligible to participate in the
 3-7     system.
 3-8           SECTION 2.  Article 20C.03, Insurance Code, is amended to
 3-9     read as follows:
3-10           Art. 20C.03.  ESTABLISHMENT OF SYSTEM.  The statewide rural
3-11     health care system is established to arrange for or provide health
3-12     care services [on a prepaid basis] to enrollees who reside in rural
3-13     areas.
3-14           SECTION 3.  Article 20C.04, Insurance Code, is amended to
3-15     read as follows:
3-16           Art. 20C.04.  DESIGNATION AS SYSTEM; QUALIFICATIONS.  (a)
3-17     The commissioner shall designate as the system one organization
3-18     created under Article 20C.05 of this code.
3-19           (b)  Except as provided by Subsection (c) [(b)] of this
3-20     article, if the system arranges for or provides health care
3-21     services to enrollees in exchange for a predetermined payment per
3-22     enrollee on a prepaid basis, the system must obtain a certificate
3-23     of authority under, and [to be eligible for designation as the
3-24     system, the organization must] meet each requirement imposed by,
3-25     the Texas Health Maintenance Organization Act (Chapter 20A,
3-26     Vernon's Texas Insurance Code), as if the organization were a
3-27     person under the Act.
 4-1           (c)  If the system seeks a certificate of authority under the
 4-2     Texas Health Maintenance Organization Act (Chapter 20A, Vernon's
 4-3     Texas Insurance Code), the commissioner by rule may provide
 4-4     exceptions to the application of provisions of the Texas Health
 4-5     Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
 4-6     Code) relating to mileage, distance, and network adequacy and
 4-7     scope.
 4-8           (d)  If the system seeks a certificate of authority under the
 4-9     Texas Health Maintenance Organization Act (Chapter 20A, Vernon's
4-10     Texas Insurance Code), the [(b) The] system shall meet all reserve
4-11     requirements required by the commissioner under the Texas Health
4-12     Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
4-13     Code).  The system may fulfill the requirements of this  subsection
4-14     through the purchase of reinsurance from insurance companies
4-15     approved for that purpose by the commissioner.
4-16           SECTION 4.  Article 20C.07(a), Insurance Code, is amended to
4-17     read as follows:
4-18           (a)  The members of the board serve staggered six-year terms,
4-19     with the terms of six members expiring December 1 of each
4-20     even-numbered year [February 1 of each odd-numbered year].
4-21           SECTION 5.  Article 20C.08(f), Insurance Code, is amended to
4-22     read as follows:
4-23           (f)  The board may [shall] appoint an advisory committee to
4-24     represent health care services, including representatives of rural,
4-25     urban, and  educational groups and organizations.  The advisory
4-26     committee shall meet at the will of the board and advise the board
4-27     on any matters as directed by the board [composed of:]
 5-1                 [(1)  hospital administrators who represent nonprofit
 5-2     and investor-owned facilities;]
 5-3                 [(2)  representatives of hospital districts located in
 5-4     urban areas;]
 5-5                 [(3)  representatives of health care teaching
 5-6     facilities;]
 5-7                 [(4)  representatives of health care specialty
 5-8     facilities;]
 5-9                 [(5)  representatives of medical residency programs in
5-10     family practice; and]
5-11                 [(6)  representatives of rural health clinics,
5-12     federally qualified health centers, and ambulatory surgical
5-13     centers].
5-14           SECTION 6.  Article 20C.14, Insurance Code, is amended to
5-15     read as follows:
5-16           Art. 20C.14.  MANDATED PROVIDER[; EXCEPTION].  (a)  To the
5-17     extent consistent with federal law, the state shall award to the
5-18     system at least one of any state managed care contracts awarded to
5-19     provide health care services to beneficiaries of the Texas Medical
5-20     Assistance Program under Chapter 32, Human Resources Code, in the
5-21     rural areas within the territorial jurisdiction of the
5-22     participating providers.
5-23           (b)  [This article does not apply to a contract that expands
5-24     coverage of the Texas Medical Assistance Program under Chapter 32,
5-25     Human Resources Code, to certain children that is implemented
5-26     during the 1997-1998 state fiscal biennium, except that the system
5-27     shall receive a subcontract from the funding entity to provide
 6-1     services to those children if the system elects to receive a
 6-2     subcontract not later than November 1, 1997, the system provides
 6-3     the state share of matching funds for the entire population covered
 6-4     by the subcontract, and the subcontract does not cover an area that
 6-5     is included in the statutory territorial jurisdiction of a hospital
 6-6     district.  If the system elects not to receive a subcontract or to
 6-7     provide the state share of matching funds, then any entity that is
 6-8     selected by the state Medicaid contracting entity to provide health
 6-9     care to those children shall use local health care providers and
6-10     hospital providers in establishing its provider network.]
6-11           [(c)]  As a requirement of participation in any state
6-12     contract, the system must satisfactorily address the qualifications
6-13     for arranging to provide health care services to beneficiaries of
6-14     certain governmental health care programs as delineated in the
6-15     contractor's request for proposal, including:
6-16                 (1)  readiness reviews and adequacy of credentialing,
6-17     medical management, quality assurance, claims payment, information
6-18     management, provider and patient education, and complaint and
6-19     grievance procedures; and
6-20                 (2)  adequacy of physician and provider networks,
6-21     including such factors as diversity, geographic accessibility,
6-22     inclusion of physicians and other providers that have furnished a
6-23     significant amount of Medicaid or charity care to beneficiaries,
6-24     and tertiary and subspecialty services.
6-25           (c)  To the extent the system operates under a certificate of
6-26     authority issued under the Texas Health Maintenance Organization
6-27     Act (Chapter 20A, Vernon's Texas Insurance Code), the [(d) The]
 7-1     system shall be reimbursed by the Medicaid contracting agency at
 7-2     the state-defined capitation rate for each service area in which
 7-3     the system operates.
 7-4           (d) [(e)]  It is not a condition of participation for the
 7-5     system to accept from the Medicaid contracting agency a capitation
 7-6     rate which is lower than the state-defined capitation rate for each
 7-7     service area in which the system operates.
 7-8           (e) [(f)]  The state retains the right to cancel a contract
 7-9     awarded under this article if the system is sold or dissolved.
7-10           SECTION 7.  (a)  This Act takes effect September 1, 1999.
7-11           (b)  The term of a member of the board of directors of the
7-12     statewide rural health care system appointed before the effective
7-13     date of this Act expires December 1 of the year before the year the
7-14     term was to expire under Chapter 20C, Insurance Code, as that
7-15     chapter existed before amendment by this Act.
7-16           SECTION 8.  The importance of this legislation and the
7-17     crowded condition of the calendars in both houses create an
7-18     emergency and an imperative public necessity that the
7-19     constitutional rule requiring bills to be read on three several
7-20     days in each house be suspended, and this rule is hereby suspended.