1-1 By: Fraser S.B. No. 1063
1-2 (In the Senate - Filed March 9, 1999; March 11, 1999, read
1-3 first time and referred to Committee on Economic Development;
1-4 April 23, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 5, Nays 0; April 23, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1063 By: Fraser
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the operation of a statewide rural health care system.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. (a) GOALS OF SYSTEM. The statewide rural health
1-13 care system established under Chapter 20C, Insurance Code, is
1-14 designed to incorporate consumer-oriented attributes considered
1-15 important to a successful health care organization. These
1-16 attributes include consideration of patient rights, preservation of
1-17 patient rights, preservation of the physician-patient relationship,
1-18 emphasis on prevention and wellness, an appropriate credentialing
1-19 and peer review program, and emphasis on quality improvement,
1-20 including obtaining accreditation.
1-21 (b) PATIENT RIGHTS POLICIES. The statewide rural health
1-22 care system is intended to incorporate patient-focused
1-23 considerations that include:
1-24 (1) open communication;
1-25 (2) informed consent;
1-26 (3) protection of confidentiality and privacy;
1-27 (4) full disclosure of program policies and procedures
1-28 to patients and providers;
1-29 (5) coverage of emergency care;
1-30 (6) disclosure of compensation arrangements with
1-31 providers; and
1-32 (7) efficient appeal of coverage decisions.
1-33 (c) PATIENT-PHYSICIAN RELATIONSHIP. The statewide rural
1-34 health care system is intended to preserve significant traditional
1-35 and ethical relationships between a patient and the patient's
1-36 health care provider by ensuring that:
1-37 (1) medical management does not intrude on the
1-38 delivery of quality patient care;
1-39 (2) the process of making health care decisions
1-40 remains a matter between a patient and the patient's health care
1-41 provider; and
1-42 (3) nothing in the system will place a health care
1-43 provider in an adverse relationship with a patient.
1-44 (d) PUBLIC HEALTH AND PREVENTION. The statewide rural
1-45 health care system is intended to use incentives to promote healthy
1-46 communities and individuals by using a public health model that
1-47 focuses on health promotion, illness prevention, patient self-care
1-48 education, and incentives that encourage positive health behavior.
1-49 (e) CREDENTIALS AND PEER REVIEW. To ensure that enrollees
1-50 will receive quality health care, the statewide rural health care
1-51 system is intended to focus on processes for obtaining credentials
1-52 and performing peer review that take into consideration the unique
1-53 nature of rural communities and that track processes required under
1-54 federal and state law. Local physicians and hospitals are intended
1-55 to retain responsibility for these processes. These processes are
1-56 not intended to exclude otherwise qualified practitioners from
1-57 participating in the system.
1-58 (f) QUALITY IMPROVEMENT AND MANAGEMENT. The statewide rural
1-59 health care system is intended to utilize standard guidelines
1-60 established by the National Committee on Quality Assurance and
1-61 other recognized accrediting organizations to ensure that the
1-62 program achieves its objectives of providing quality patient care
1-63 and to emphasize establishing benchmarks to measure program
1-64 outcomes that will be made available to the public through proper
2-1 reporting procedures.
2-2 SECTION 2. Article 20C.02, Insurance Code, is amended to
2-3 read as follows:
2-4 Art. 20C.02. DEFINITIONS. (a) In this chapter:
2-5 (1) "Board" means the board of directors of the
2-6 system.
2-7 (2) "Enrollee" means an individual entitled to receive
2-8 health care services through a health care plan arranged for or
2-9 provided by the system.
2-10 (3) "Health care services" has the meaning assigned by
2-11 Section 2, Texas Health Maintenance Organization Act (Article
2-12 20A.02, Vernon's Texas Insurance Code).
2-13 (4) "Hospital provider" means a county hospital,
2-14 county hospital authority, hospital district, municipal hospital,
2-15 or municipal hospital authority.
2-16 (5) "Local health care provider" means:
2-17 (A) a person licensed, registered, or certified
2-18 as a health care practitioner in this state who resides in or
2-19 practices in a rural area in which the person provides health care
2-20 services; or
2-21 (B) a general or specialty hospital that is not
2-22 a hospital provider under this chapter.
2-23 (6) "Participating provider" means a hospital provider
2-24 that participates in the system.
2-25 (7) "Person" means an individual, professional
2-26 association, professional corporation, partnership, limited
2-27 liability corporation, limited liability partnership, or nonprofit
2-28 corporation, including a nonprofit corporation created under
2-29 Section 5.01(a), Medical Practice Act (Article 4495b, Vernon's
2-30 Texas Civil Statutes).
2-31 (8) "Rural area" means:
2-32 (A) a county with a population of 50,000 or
2-33 less;
2-34 (B) an area that is not delineated as an
2-35 urbanized area by the federal census bureau; or
2-36 (C) any other area designated as rural by rules
2-37 adopted by the commissioner, subject to Subsection (b) of this
2-38 article.
2-39 (9) "System" means the statewide rural health care
2-40 system established by this chapter.
2-41 (10) "Territorial jurisdiction" means the geographical
2-42 area in which a participating provider is obligated by law to
2-43 provide health care services.
2-44 (b) In designating rural areas under Subsection (a)(8) of
2-45 this article, the commissioner shall consider any area that is
2-46 delineated as an urbanized area by the federal census bureau and:
2-47 (1) is contiguous with and not more than 10 miles away
2-48 from a rural area described by Subsection (a)(8)(A) or (B) of this
2-49 article;
2-50 (2) is sparsely populated, compared to areas within a
2-51 10-mile radius that are delineated as urbanized areas by the
2-52 federal census bureau;
2-53 (3) has not increased in population in any single
2-54 calendar year in the seven years before the commissioner makes the
2-55 designation; and
2-56 (4) in which emergency or primary care services are
2-57 limited or unavailable in accordance with network access standards
2-58 imposed by the commissioner under the Texas Health Maintenance
2-59 Organization Act (Chapter 20A, Vernon's Texas Insurance Code) and
2-60 in which those services would be made materially more accessible by
2-61 allowing access to care in a contiguous area that is eligible to
2-62 participate in the system.
2-63 SECTION 3. Article 20C.03, Insurance Code, is amended to
2-64 read as follows:
2-65 Art. 20C.03. ESTABLISHMENT OF SYSTEM. The statewide rural
2-66 health care system is established to arrange for or provide health
2-67 care services [on a prepaid basis] to enrollees who reside in rural
2-68 areas.
2-69 SECTION 4. Article 20C.04, Insurance Code, is amended to
3-1 read as follows:
3-2 Art. 20C.04. DESIGNATION AS SYSTEM; QUALIFICATIONS.
3-3 (a) The commissioner shall designate as the system one
3-4 organization created under Article 20C.05 of this code.
3-5 (b) Except as provided by Subsection (c) [(b)] of this
3-6 article, if the system arranges for or provides health care
3-7 services to enrollees in exchange for a predetermined payment per
3-8 enrollee on a prepaid basis, the system must obtain a certificate
3-9 of authority under, and [to be eligible for designation as the
3-10 system, the organization must] meet each requirement imposed by,
3-11 the Texas Health Maintenance Organization Act (Chapter 20A,
3-12 Vernon's Texas Insurance Code), as if the organization were a
3-13 person under the Act.
3-14 (c) If the system seeks a certificate of authority under the
3-15 Texas Health Maintenance Organization Act (Chapter 20A, Vernon's
3-16 Texas Insurance Code), the commissioner by rule may provide
3-17 exceptions to the application of provisions of the Texas Health
3-18 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
3-19 Code) relating to mileage, distance, and network adequacy and
3-20 scope.
3-21 (d) If the system seeks a certificate of authority under the
3-22 Texas Health Maintenance Organization Act (Chapter 20A, Vernon's
3-23 Texas Insurance Code), the [(b) The] system shall meet all reserve
3-24 requirements required by the commissioner under the Texas Health
3-25 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
3-26 Code). The system may fulfill the requirements of this subsection
3-27 through the purchase of reinsurance from insurance companies
3-28 approved for that purpose by the commissioner.
3-29 SECTION 5. Subsection (a), Article 20C.07, Insurance Code,
3-30 is amended to read as follows:
3-31 (a) The members of the board serve staggered six-year terms,
3-32 with the terms of six members expiring December 1 of each
3-33 even-numbered year [February 1 of each odd-numbered year].
3-34 SECTION 6. Subsection (f), Article 20C.08, Insurance Code,
3-35 is amended to read as follows:
3-36 (f) The board may [shall] appoint an advisory committee to
3-37 represent health care services, including representatives of rural,
3-38 urban, and educational groups and organizations. The advisory
3-39 committee shall meet at the will of the board and advise the board
3-40 on any matters as directed by the board [composed of:]
3-41 [(1) hospital administrators who represent nonprofit
3-42 and investor-owned facilities;]
3-43 [(2) representatives of hospital districts located in
3-44 urban areas;]
3-45 [(3) representatives of health care teaching
3-46 facilities;]
3-47 [(4) representatives of health care specialty
3-48 facilities;]
3-49 [(5) representatives of medical residency programs in
3-50 family practice; and]
3-51 [(6) representatives of rural health clinics,
3-52 federally qualified health centers, and ambulatory surgical
3-53 centers].
3-54 SECTION 7. Article 20C.14, Insurance Code, is amended to
3-55 read as follows:
3-56 Art. 20C.14. MANDATED PROVIDER[; EXCEPTION]. (a) To the
3-57 extent consistent with federal law, the state shall award to the
3-58 system at least one of any state managed care contracts awarded to
3-59 provide health care services to beneficiaries of the Texas Medical
3-60 Assistance Program under Chapter 32, Human Resources Code, in the
3-61 rural areas within the territorial jurisdiction of the
3-62 participating providers.
3-63 (b) [This article does not apply to a contract that expands
3-64 coverage of the Texas Medical Assistance Program under Chapter 32,
3-65 Human Resources Code, to certain children that is implemented
3-66 during the 1997-1998 state fiscal biennium, except that the system
3-67 shall receive a subcontract from the funding entity to provide
3-68 services to those children if the system elects to receive a
3-69 subcontract not later than November 1, 1997, the system provides
4-1 the state share of matching funds for the entire population covered
4-2 by the subcontract, and the subcontract does not cover an area that
4-3 is included in the statutory territorial jurisdiction of a hospital
4-4 district. If the system elects not to receive a subcontract or to
4-5 provide the state share of matching funds, then any entity that is
4-6 selected by the state Medicaid contracting entity to provide health
4-7 care to those children shall use local health care providers and
4-8 hospital providers in establishing its provider network.]
4-9 [(c)] As a requirement of participation in any state
4-10 contract, the system must satisfactorily address the qualifications
4-11 for arranging to provide health care services to beneficiaries of
4-12 certain governmental health care programs as delineated in the
4-13 contractor's request for proposal, including:
4-14 (1) readiness reviews and adequacy of credentialing,
4-15 medical management, quality assurance, claims payment, information
4-16 management, provider and patient education, and complaint and
4-17 grievance procedures; and
4-18 (2) adequacy of physician and provider networks,
4-19 including such factors as diversity, geographic accessibility,
4-20 inclusion of physicians and other providers that have furnished a
4-21 significant amount of Medicaid or charity care to beneficiaries,
4-22 and tertiary and subspecialty services.
4-23 (c) To the extent the system operates under a certificate of
4-24 authority issued under the Texas Health Maintenance Organization
4-25 Act (Chapter 20A, Vernon's Texas Insurance Code), the [(d) The]
4-26 system shall be reimbursed by the Medicaid contracting agency at
4-27 the state-defined capitation rate for each service area in which
4-28 the system operates.
4-29 (d) [(e)] It is not a condition of participation for the
4-30 system to accept from the Medicaid contracting agency a capitation
4-31 rate which is lower than the state-defined capitation rate for each
4-32 service area in which the system operates.
4-33 (e) [(f)] The state retains the right to cancel a contract
4-34 awarded under this article if the system is sold or dissolved.
4-35 SECTION 8. (a) This Act takes effect September 1, 1999.
4-36 (b) The term of a member of the board of directors of the
4-37 statewide rural health care system appointed before the effective
4-38 date of this Act expires December 1 of the year before the year the
4-39 term was to expire under Chapter 20C, Insurance Code, as that
4-40 chapter existed before amendment by this Act.
4-41 SECTION 9. The importance of this legislation and the
4-42 crowded condition of the calendars in both houses create an
4-43 emergency and an imperative public necessity that the
4-44 constitutional rule requiring bills to be read on three several
4-45 days in each house be suspended, and this rule is hereby suspended.
4-46 * * * * *