SRC-CTC H.B. 2423 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 2423
77R9059 MCK-DBy: Hawley (Madla)
Health & Human Services
5/8/2001
Engrossed


DIGEST AND PURPOSE 

Provisions of the Federal Balanced Budget Refinement Act of 1999 allow a
hospital in an urban county to be reclassified as a rural hospital if the
hospital meets specific criteria.  Under Medicare payment policies, the
designation of a hospital as rural or urban can affect payment amounts.
For some Texas hospitals, reclassification of a hospital as a rural
hospital may result in increased Medicare payments to that hospital.  A
hospital seeking reclassification from urban to rural must apply with the
regional office of the federal Health Care Financing Administration (HCFA)
and must include documentation satisfying one of the criteria for
reclassification.  While the determination is ultimately made by HCFA, a
state may designate an area as a rural area or certain hospitals as rural
hospitals through state legislation or regulations.  Allowing hospitals to
apply for reclassification directly through the state would provide Texas
hospitals with the opportunity to take advantage of more favorable Medicare
payment rates in a more timely manner.  H.B. 2423 establishes a procedure
through the Center for Rural Initiatives by which a hospital may obtain a
rural classification. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Center for Rural Health
Initiatives in SECTION 1 (Section 106.029, Health and Safety Code) of this
bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 106B, Health and Safety Code, by adding Section
106.029, as follows: 

Sec. 106.029.  DESIGNATING RURAL HOSPITALS.  Requires  the Center for Rural
Health Initiatives (center) to adopt rules that establish a procedure for
designating a hospital as a rural hospital in order for the hospital to
qualify for federal funds under 42 C.F.R. Part 412. Requires the center, at
the hospital's request, to designate the hospital as a rural hospital if
the hospital meets the requirements for a rural hospital under the center's
rules. 

SECTION 2.  Effective date: September 1, 2001.