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. (a) GOALS OF SYSTEM. The statewide rural health
1-5 care system established under Chapter 20C, Insurance Code, is
1-6 designed to incorporate consumer-oriented attributes considered
1-7 important to a successful health care organization. These
1-8 attributes include consideration of patient rights, preservation of
1-9 patient rights, preservation of the physician-patient relationship,
1-10 emphasis on prevention and wellness, an appropriate credentialing
1-11 and peer review program, and emphasis on quality improvement,
1-12 including obtaining accreditation.
1-13 (b) PATIENT RIGHTS POLICIES. The statewide rural health
1-14 care system is intended to incorporate patient-focused
1-15 considerations that include:
1-16 (1) open communication;
1-17 (2) informed consent;
1-18 (3) protection of confidentiality and privacy;
1-19 (4) full disclosure of program policies and procedures
1-20 to patients and providers;
1-21 (5) coverage of emergency care;
1-22 (6) disclosure of compensation arrangements with
1-23 providers; and
1-24 (7) efficient appeal of coverage decisions.
2-1 (c) PATIENT-PHYSICIAN RELATIONSHIP. The statewide rural
2-2 health care system is intended to preserve significant traditional
2-3 and ethical relationships between a patient and the patient's
2-4 health care provider by ensuring that:
2-5 (1) medical management does not intrude on the
2-6 delivery of quality patient care;
2-7 (2) the process of making health care decisions
2-8 remains a matter between a patient and the patient's health care
2-9 provider; and
2-10 (3) nothing in the system will place a health care
2-11 provider in an adverse relationship with a patient.
2-12 (d) PUBLIC HEALTH AND PREVENTION. The statewide rural
2-13 health care system is intended to use incentives to promote healthy
2-14 communities and individuals by using a public health model that
2-15 focuses on health promotion, illness prevention, patient self-care
2-16 education, and incentives that encourage positive health behavior.
2-17 (e) CREDENTIALS AND PEER REVIEW. To ensure that enrollees
2-18 will receive quality health care, the statewide rural health care
2-19 system is intended to focus on processes for obtaining credentials
2-20 and performing peer review that take into consideration the unique
2-21 nature of rural communities and that track processes required under
2-22 federal and state law. Local physicians and hospitals are intended
2-23 to retain responsibility for these processes. These processes are
2-24 not intended to exclude otherwise qualified practitioners from
2-25 participating in the system.
2-26 (f) QUALITY IMPROVEMENT AND MANAGEMENT. The statewide rural
2-27 health care system is intended to utilize standard guidelines
3-1 established by the National Committee on Quality Assurance and
3-2 other recognized accrediting organizations to ensure that the
3-3 program achieves its objectives of providing quality patient care
3-4 and to emphasize establishing benchmarks to measure program
3-5 outcomes that will be made available to the public through proper
3-6 reporting procedures.
3-7 SECTION 2. Article 20C.02, Insurance Code, is amended to
3-8 read as follows:
3-9 Art. 20C.02. DEFINITIONS. (a) In this chapter:
3-10 (1) "Board" means the board of directors of the
3-11 system.
3-12 (2) "Enrollee" means an individual entitled to receive
3-13 health care services through a health care plan arranged for or
3-14 provided by the system.
3-15 (3) "Health care services" has the meaning assigned by
3-16 Section 2, Texas Health Maintenance Organization Act (Article
3-17 20A.02, Vernon's Texas Insurance Code).
3-18 (4) "Hospital provider" means a county hospital,
3-19 county hospital authority, hospital district, municipal hospital,
3-20 or municipal hospital authority.
3-21 (5) "Local health care provider" means:
3-22 (A) a person licensed, registered, or certified
3-23 as a health care practitioner in this state who resides in or
3-24 practices in a rural area in which the person provides health care
3-25 services; or
3-26 (B) a general or specialty hospital that is not
3-27 a hospital provider under this chapter.
4-1 (6) "Participating provider" means a hospital provider
4-2 that participates in the system.
4-3 (7) "Person" means an individual, professional
4-4 association, professional corporation, partnership, limited
4-5 liability corporation, limited liability partnership, or nonprofit
4-6 corporation, including a nonprofit corporation created under
4-7 Section 5.01(a), Medical Practice Act (Article 4495b, Vernon's
4-8 Texas Civil Statutes).
4-9 (8) "Rural area" means:
4-10 (A) a county with a population of 50,000 or
4-11 less;
4-12 (B) an area that is not delineated as an
4-13 urbanized area by the federal census bureau; or
4-14 (C) any other area designated as rural by rules
4-15 adopted by the commissioner, subject to Subsection (b) of this
4-16 article.
4-17 (9) "System" means the statewide rural health care
4-18 system established by this chapter.
4-19 (10) "Territorial jurisdiction" means the geographical
4-20 area in which a participating provider is obligated by law to
4-21 provide health care services.
4-22 (b) In designating rural areas under Subsection (a)(8) of
4-23 this article, the commissioner shall consider any area that is
4-24 delineated as an urbanized area by the federal census bureau and:
4-25 (1) is contiguous with and not more than 10 miles away
4-26 from a rural area described by Subsection (a)(8)(A) or (B) of this
4-27 section;
5-1 (2) is sparsely populated, compared to areas within a
5-2 10-mile radius that are delineated as urbanized areas by the
5-3 federal census bureau;
5-4 (3) has not increased in population in any single
5-5 calendar year in the seven years before the commissioner makes the
5-6 designation; and
5-7 (4) in which emergency or primary care services are
5-8 limited or unavailable in accordance with network access standards
5-9 imposed by the commissioner under the Texas Health Maintenance
5-10 Organization Act (Chapter 20A, Vernon's Texas Insurance Code) and
5-11 in which those services would be made materially more accessible by
5-12 allowing access to care in a contiguous area that is eligible to
5-13 participate in the system.
5-14 SECTION 3. Article 20C.03, Insurance Code, is amended to
5-15 read as follows:
5-16 Art. 20C.03. ESTABLISHMENT OF SYSTEM. The statewide rural
5-17 health care system is established to arrange for or provide health
5-18 care services [on a prepaid basis] to enrollees who reside in rural
5-19 areas.
5-20 SECTION 4. Article 20C.04, Insurance Code, is amended to
5-21 read as follows:
5-22 Art. 20C.04. DESIGNATION AS SYSTEM; QUALIFICATIONS.
5-23 (a) The commissioner shall designate as the system one
5-24 organization created under Article 20C.05 of this code.
5-25 (b) Except as provided by Subsection (c) [(b)] of this
5-26 article, if the system arranges for or provides health care
5-27 services to enrollees in exchange for a predetermined payment per
6-1 enrollee on a prepaid basis, the system must obtain a certificate
6-2 of authority under, and [to be eligible for designation as the
6-3 system, the organization must] meet each requirement imposed by,
6-4 the Texas Health Maintenance Organization Act (Chapter 20A,
6-5 Vernon's Texas Insurance Code), as if the organization were a
6-6 person under the Act.
6-7 (c) If the system seeks a certificate of authority under the
6-8 Texas Health Maintenance Organization Act (Chapter 20A, Vernon's
6-9 Texas Insurance Code), the commissioner by rule may provide
6-10 exceptions to the application of provisions of the Texas Health
6-11 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
6-12 Code) relating to mileage, distance, and network adequacy and
6-13 scope.
6-14 (d) If the system seeks a certificate of authority under the
6-15 Texas Health Maintenance Organization Act (Chapter 20A, Vernon's
6-16 Texas Insurance Code), the [(b) The] system shall meet all reserve
6-17 requirements required by the commissioner under the Texas Health
6-18 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
6-19 Code). The system may fulfill the requirements of this subsection
6-20 through the purchase of reinsurance from insurance companies
6-21 approved for that purpose by the commissioner.
6-22 SECTION 5. Article 20C.07(a), Insurance Code, is amended to
6-23 read as follows:
6-24 (a) The members of the board serve staggered six-year terms,
6-25 with the terms of six members expiring December 1 of each
6-26 even-numbered year [February 1 of each odd-numbered year].
6-27 SECTION 6. Article 20C.08(f), Insurance Code, is amended to
7-1 read as follows:
7-2 (f) The board may [shall] appoint an advisory committee to
7-3 represent health care services, including representatives of rural,
7-4 urban, and educational groups and organizations. The advisory
7-5 committee shall meet at the will of the board and advise the board
7-6 on any matters as directed by the board [composed of:]
7-7 [(1) hospital administrators who represent nonprofit
7-8 and investor-owned facilities;]
7-9 [(2) representatives of hospital districts located in
7-10 urban areas;]
7-11 [(3) representatives of health care teaching
7-12 facilities;]
7-13 [(4) representatives of health care specialty
7-14 facilities;]
7-15 [(5) representatives of medical residency programs in
7-16 family practice; and]
7-17 [(6) representatives of rural health clinics,
7-18 federally qualified health centers, and ambulatory surgical
7-19 centers].
7-20 SECTION 7. Article 20C.14, Insurance Code, is amended to
7-21 read as follows:
7-22 Art. 20C.14. MANDATED PROVIDER[; EXCEPTION]. (a) To the
7-23 extent consistent with federal law, the state shall award to the
7-24 system at least one of any state managed care contracts awarded to
7-25 provide health care services to beneficiaries of the Texas Medical
7-26 Assistance Program under Chapter 32, Human Resources Code, in the
7-27 rural areas within the territorial jurisdiction of the
8-1 participating providers.
8-2 (b) [This article does not apply to a contract that expands
8-3 coverage of the Texas Medical Assistance Program under Chapter 32,
8-4 Human Resources Code, to certain children that is implemented
8-5 during the 1997-1998 state fiscal biennium, except that the system
8-6 shall receive a subcontract from the funding entity to provide
8-7 services to those children if the system elects to receive a
8-8 subcontract not later than November 1, 1997, the system provides
8-9 the state share of matching funds for the entire population covered
8-10 by the subcontract, and the subcontract does not cover an area that
8-11 is included in the statutory territorial jurisdiction of a hospital
8-12 district. If the system elects not to receive a subcontract or to
8-13 provide the state share of matching funds, then any entity that is
8-14 selected by the state Medicaid contracting entity to provide health
8-15 care to those children shall use local health care providers and
8-16 hospital providers in establishing its provider network.]
8-17 [(c)] As a requirement of participation in any state
8-18 contract, the system must satisfactorily address the qualifications
8-19 for arranging to provide health care services to beneficiaries of
8-20 certain governmental health care programs as delineated in the
8-21 contractor's request for proposal, including:
8-22 (1) readiness reviews and adequacy of credentialing,
8-23 medical management, quality assurance, claims payment, information
8-24 management, provider and patient education, and complaint and
8-25 grievance procedures; and
8-26 (2) adequacy of physician and provider networks,
8-27 including such factors as diversity, geographic accessibility,
9-1 inclusion of physicians and other providers that have furnished a
9-2 significant amount of Medicaid or charity care to beneficiaries,
9-3 and tertiary and subspecialty services.
9-4 (c) To the extent the system operates under a certificate of
9-5 authority issued under the Texas Health Maintenance Organization
9-6 Act (Chapter 20A, Vernon's Texas Insurance Code), the [(d) The]
9-7 system shall be reimbursed by the Medicaid contracting agency at
9-8 the state-defined capitation rate for each service area in which
9-9 the system operates.
9-10 (d) [(e)] It is not a condition of participation for the
9-11 system to accept from the Medicaid contracting agency a capitation
9-12 rate which is lower than the state-defined capitation rate for each
9-13 service area in which the system operates.
9-14 (e) [(f)] The state retains the right to cancel a contract
9-15 awarded under this article if the system is sold or dissolved.
9-16 SECTION 8. (a) This Act takes effect September 1, 1999.
9-17 (b) The term of a member of the board of directors of the
9-18 statewide rural health care system appointed before the effective
9-19 date of this Act expires December 1 of the year before the year the
9-20 term was to expire under Chapter 20C, Insurance Code, as that
9-21 chapter existed before amendment by this Act.
9-22 SECTION 9. The importance of this legislation and the
9-23 crowded condition of the calendars in both houses create an
9-24 emergency and an imperative public necessity that the
9-25 constitutional rule requiring bills to be read on three several
9-26 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1194 was passed by the House on April
28, 1999, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 1194 on May 22, 1999, by a non-record
vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1194 was passed by the Senate, with
amendments, on May 20, 1999, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor