SRC-MWN S.B. 1838 77(R) BILL ANALYSIS
Senate Research Center S.B. 1838
By: Duncan
Finance
5/4/2001
As Filed
DIGEST AND PURPOSE
Currently, the nursing home industry is experiencing various crises in this
state. As proposed, S.B. 1838 provides certain solutions in addressing
these problems within the nursing home industry.
RULEMAKING AUTHORITY
Rulemaking authority is expressly granted to the commissioner of insurance
in SECTIONS 4.01 (Article 5.132, Insurance Code) and 4.02, to the Health
and Human Services Commission in SECTIONS 7.02 (Section 531.058, Government
Code), 9.01 (Section 242.855, Health and Safety Code), to the commissioner
of health and human services in SECTION 7.04.
SECTION BY SECTION ANALYSIS
SECTION 1.01. Authorizes this Act to be cited as the Long-Term Care
Facility Improvement Act.
SECTION 1.02. Sets forth legislative purpose.
ARTICLE 2. EXEMPLARY DAMAGES IN CERTAIN ACTIONS
SECTION 2.01. Amends Chapter 41, Civil Practices and Remedies Code, by
adding Subchapter B, as follows:
SUBCHAPTER B. NURSING INSTITUTIONS
Sec. 41.051. DEFINITIONS. Defines "insurer" and "nursing institution."
Sec. 41.052. INSURER LIABILITY FOR EXEMPLARY DAMAGES IN CERTAIN CLAIMS. (a)
Sets forth provisions regarding insurer liability for exemplary damages in
certain claims.
(b) Provides that this section does not affect the contractual duties
imposed under an insurance policy.
(c) Provides that this section does not prohibit a nursing institution from
purchasing a policy to cover exemplary damages.
Sec. 41.053. NOTIFICATION OF AWARD OF EXEMPLARY DAMAGES. Sets forth
provisions regarding notification of award of exemplary damages.
SECTION 2.02. Amends Chapter 242B, Health and Safety Code, by adding
Section 242.051, as follows:
Sec. 242.051. INSPECTION OR SURVEY AFTER CERTAIN DAMAGE AWARDS. Requires
the Texas Department of Human Services (department), under certain
situations, to conduct an inspection or survey of the institution after
certain damage awards.
SECTION 2.03. Makes application of this Act prospective.
ARTICLE 3. ADMISSIBILITY OF CERTAIN EVIDENCE IN CIVIL ACTION
SECTION 3.01. Amends Section 32.021(i) and (k), Human Resources Code, as
follows:
(i) Authorizes a record of the department, including a record of a
department survey, complaint investigation, incident investigation, or
survey report, that relates to an institution, including an intermediate
care facility for the mentally retarded, to be introduced into evidence in
certain proceedings if the record is admissible under the Texas Rules of
Evidence. Deletes text regarding documents. Deletes text regarding state
Medicaid program. Makes a conforming change.
(k) Authorizes a department surveyor or investigator to testify in a civil
action under certain criteria if the testimony is admissible under the
Texas Rules of Evidence. Makes conforming changes.
SECTION 3.02. Amends Chapter 242B, Health and Safety Code, by adding
Section 242.050, as follows:
Sec. 242.050. ADMISSIBILITY OF CERTAIN DOCUMENTS OR TESTIMONY. Provides
that Sections 32.021(i) and (k), Human Resources Code, govern the
admissibility in a civil action against an institution of certain items.
SECTION 3.03. Amends Chapter 252B, Health and Safety Code, by adding
Section 252.045, to make a conforming change.
SECTION 3.04. Repealer: Section 32.021(j) (relating to certain civil
actions), Human Resources Code.
SECTION 3.05. Makes application of this Act prospective.
ARTICLE 4. RATE ROLLBACK FOR CERTAIN LIABILITY INSURANCE COVERAGE
SECTION 4.01. Amends Chapter 5O, Insurance Code, by adding Article 5.132,
to read as follows:
Art. 5.132. TEMPORARY RATE ROLLBACKS FOR CERTAIN LIABILITY INSURANCE
Sec. 1. PURPOSE OF ARTICLE. Sets forth legislative purpose.
Sec. 2. APPLICABILITY OF ARTICLE. Set forth provisions regarding the
applicability of the article.
Sec. 3. RATE ROLLBACK. (a) Requires the commissioner of insurance
(commissioner), notwithstanding Chapter 40 of this code, on or before
September 1 of each year, to hold a rulemaking hearing under Chapter 2001,
Government Code, to perform certain actions.
(b) Requires the rate reduction adopted under this section to be based on
the evidence presented at the hearing required by Subsection (a) of this
section. Requires the rates resulting from the rate reductions adopted
under this section to be reasonable, adequate, not unfairly discriminatory,
and not excessive.
(c) Provides that a rate reduction adopted under this section applies only
to a policy delivered, issued for delivery, or renewed on or after the 90th
day after the date the rule establishing the rate reduction is adopted.
(d) Provides that any rule or order of the commissioner that determines,
approves, or sets a rate reduction under this section that is appealed or
challenged remains in effect during the pendency of the appeal or
challenge. Requires an insurer, during the pendency of the appeal or
challenge, to use the rate reduction provided in the order being appealed
or challenged, and provides that the rate reduction is lawful and valid
during the period of the appeal or challenge.
Sec. 4. ADMINISTRATIVE RELIEF. (a) Requires a rate filed for policies
described by Section 2 of this article after the adoption of a rate
reduction under Section 3 of this article, except as provided by Subsection
(b) of this section, to reflect the rate reduction. Requires the
commissioner to disapprove a rate, subject to the procedures established by
Section 7, Article 5.13-2 of this code, if the commissioner finds that the
filed rate does not reflect that reduction.
(b) Provides that the commissioner is not required to disapprove a filed
rate that reflects less than the full amount of the rate reduction imposed
under Section 3 of this article if certain conditions exist.
Sec. 5. DECLARATION OF INAPPLICABILITY TO CERTAIN POLICIES. Requires the
commissioner by order to declare this article inapplicable to insurance
policies otherwise subject to this article at the time the commissioner
finds, based on actuarially credible data, that rates for those policies
reflect the actual experience for those policies under the legislation
described by Section 1 of this article.
Sec. 6. DURATION OF REDUCTIONS. Provides that unless the commissioner
grants an exemption under Section 4 or 5 of this article, each rate
resulting from the reduction required under Section 3 of this article
remains in effect until the first anniversary of the date the rate becomes
effective.
Sec. 7. MODIFICATION. Authorizes the commissioner by bulletin or
directive to, based on the evidence accumulated by the commissioner before
the bulletin or directive is issued, modify a rate reduction adopted under
this article if a final, unappealable judgment of a court with appropriate
jurisdiction stays the effect of, enjoins, or otherwise modifies or
declares unconstitutional any of the legislation described by Section 1 of
this article on which the commissioner based the rate reduction.
Sec. 8. HEARINGS AND ORDERS. Requires that notwithstanding Chapter 40 of
this code, a rulemaking hearing under this article be held before the
commissioner or the commissioner's designee. Provides that the rulemaking
procedures established by this section do not apply to any other rate
promulgation proceeding.
Sec. 9. INSURER DATA REPORTING. (a) Requires each insurer that writes
professional liability insurance policies for nursing institutions licensed
under Chapter 242 (Convalescent and Nursing Homes and Related
Institutions), Health and Safety Code, including an insurer whose rates are
not regulated, to, as a condition of writing those policies in this state,
comply with a request for information from the commissioner under this
section.
(b) Authorizes the commissioner to require information in rate filings,
special data calls, informational hearings, and any other means consistent
with this code applicable to the affected insurer that the commissioner
believes will allow the commissioner to perform certain procedures.
(c) Provides that information provided under this section is privileged
and confidential to the same extent as the information is privileged and
confidential under this code or any other law governing an insurer
described by Subsection (a) of this section. Provides that the
information remains privileged and confidential unless and until
introduced into evidence at an administrative hearing or in a court of
competent jurisdiction.
Sec. 10. RECOMMENDATIONS TO LEGISLATURE. Requires the commissioner to
assemble information, conduct hearings, and take other appropriate measures
to assess and evaluate changes in the marketplace resulting from the
implementation of this article and to report the commissioner's findings
and recommendations to the legislature.
Sec. 11. EXPIRATION. Provides that this article expires January 1, 2006.
Provides that a rate resulting from a reduction adopted by the commissioner
under Section 3 of this article in 2005 remains in effect until the first
anniversary of the date the rate becomes effective.
SECTION 4.02. (a) Requires the commissioner of insurance by rule,
notwithstanding Section 3(a), Article 5.132, Insurance Code, as added by
this article, on or before October 1, 2001, to adopt an appropriate rate
reduction for insurance policies described by Section 2 of that article.
Requires the rate reduction adopted under this subsection to be developed
without consideration of the effect of the legislation described by Section
1, Article 5.132, Insurance Code, as added by this article.
(b) Provides that notwithstanding Subsection (a) of this section, if the
commissioner of insurance has not adopted rate reductions required by that
subsection before January 1, 2002, a 20 percent rate reduction, measured
from the base rates in effect on April 1, 2001, applies to each policy
described by Section 2, Article 5.132, Insurance Code, as added by this
article, which is delivered, issued for delivery, or renewed on or after
January 1, 2002.
(c) Provides that a rate filed under an order of the commissioner of
insurance issued before May 1, 2001, is not subject to the rate reduction
required by this article before January 1, 2002.
ARTICLE 5. AVAILABILITY OF CERTAIN INSURANCE COVERAGE
SECTION 5.01. Amends Section 2(2), Article 5.15-1, Insurance Code, to
define "health care provider."
SECTION 5.02. Amends Section 8, Article 5.15-1, Insurance Code, to add
for-profit nursing homes to the provision of this section concerning
punitive damages under medical professional liability insurance.
SECTION 5.03. Amends Article 5.15-1, Insurance Code, by adding Section 11,
as follows:
Sec. 11. REQUIRED PROVISION FOR CERTAIN PROFESSIONAL LIABILITY POLICIES.
Requires a professional liability insurance policy issued to a for-profit
or not-for-profit nursing home to provide that the insurer may not settle a
claim that the insurer has a duty under the policy to defend without the
consent of the insured nursing home.
SECTION 5.04. Amends Chapter 5B, Insurance Code, by adding Article 5.15-4,
as follows:
Art. 5.15-4. BEST PRACTICES FOR NURSING HOMES. (a) Requires the
commissioner to adopt best practices for risk management and loss control
that may be used by for-profit and not-for-profit nursing homes.
(b) Authorizes an insurance company or the Texas Medical Liability
Insurance Underwriting Association, in determining rates for professional
liability insurance applicable to a for-profit or not-for-profit nursing
home, to consider whether the nursing home adopts and implements the best
practices adopted by the commissioner under Subsection (a) of this article.
(c) Requires the commissioner, in developing or amending best practices
for-profit and not-for-profit nursing homes, to consult with the Health and
Human Services Commission and a task force appointed by the commissioner.
Requires the task force to be composed of certain representatives.
SECTION 5.05. Amends Section 2(6), Article 21.49-3, Insurance Code, to
define "health care provider."
SECTION 5.06. Amends Article 21.49-3(3A), Insurance Code, by adding
Subsection (c) to provide that a for-profit or not-for-profit nursing home
not otherwise eligible under this section for coverage from the association
is eligible for coverage if the nursing home demonstrates, in accordance
with the requirements of the association, that the nursing home made a bona
fide effort to obtain coverage from authorized insurers and eligible
surplus lines insurers and was unable to obtain coverage.
SECTION 5.07. Amends Article 21.49-3(4B(1)), Insurance Code, (1), to
provide that for purposes of this article, rates, rating plans, rating
rules, rating classifications, territories, and policy forms for-profit
nursing homes are subject to the requirements of Article 5.15-1 of this
code to the same extent as not-for-profit nursing homes. Makes a conforming
change.
SECTION 5.08. Amends Article 21.49-3(4A), Insurance Code, to read as
follows:
Sec. 4A. POLICYHOLDER'S STABILIZATION RESERVE FUND. (c) Deletes
"policyholder's" from the title of the reserve fund.
(d) Requires collections of the stabilization reserve fund charge, except
as provided by Subsection (e) of this section, to continue only until such
time as the net balance of the stabilization reserve fund is not less than
the projected sum of premiums to be written in the year following valuation
date.
(e) Authorizes the commissioner, if in any fiscal year the incurred losses
and defense and cost-containment expenses from physicians or any single
category of health care provider result in a net underwriting loss and
exceed 25 percent of the stabilization reserve fund, as valued for that
year, to by order direct the initiation or continuation of the
stabilization reserve fund charge for physicians or that category of health
care provider until the fund recovers the amount by which those losses and
cost-containment expenses exceed 25 percent of the fund.
(f) Requires the stabilization reserve fund to be credited
with all stabilization reserve fund charges collected from policyholders
and to be charged with any deficit from the prior year's operation of the
association.
SECTION 5.09. Amends Chapter 21E, Insurance Code, by adding Article
21.49-3d, to read as follows:
Art. 21.49-3d. REVENUE BOND PROGRAM AND PROCEDURES FOR CERTAIN LIABILITY
INSURANCE
Sec. 1. LEGISLATIVE FINDING; PURPOSE. Sets forth provisions regarding
legislative finding and purpose.
Sec. 2. DEFINITION. Defines "association," "bond resolution," "board,"
and "insurer."
Sec. 3. BONDS AUTHORIZED; APPLICATION OF TEXAS PUBLIC FINANCE AUTHORITY
ACT. Requires the Texas Public Finance Authority to issue revenue bonds to
meet certain criteria. Provides that Chapter 1232, Government Code, applies
to bonds issued under this article.
Sec. 4. APPLICABILITY OF OTHER STATUTES. Provides that certain laws apply
to bonds issued under this article to the extent consistent with this
article.
Sec. 5. LIMITS. Authorizes the Texas Public Finance Authority to issue,
on behalf of the association, bonds in a total amount not to exceed $75
million.
Sec. 6. CONDITIONS. (a) Authorizes bonds to be issued at public or
private sale.
(b) Requires bonds to mature not more than 10 years after the date
issued.
(c) Requires bonds to be issued in the name of the association.
Sec. 7. ADDITIONAL COVENANTS. Authorizes the board, in a bond resolution,
to make additional covenants with respect to the bonds and the designated
income and receipts of the association pledged to their payment and to
provide for the flow of funds and the establishment, maintenance, and
investment of funds and accounts with respect to the bonds.
Sec. 8. SPECIAL ACCOUNTS. (a) Authorizes a bond resolution to establish
special accounts, including an interest and sinking fund account, reserve
account, and other accounts.
(b) Requires the association to administer the accounts in accordance with
Article 21.49-3 of this code.
Sec. 9. SECURITY. (a) Provides that bonds are payable only from the
maintenance tax surcharge established in Section 10 of this article or
other sources the fund is authorized to levy, charge, and collect in
connection with paying any portion of the bonds.
(b) Provides that bonds are obligations solely of the association.
Provides that bonds do not create a pledging, giving, or lending of the
faith, credit, or taxing authority of this state.
(c) Requires each bond to include a statement that the state is not
obligated to pay any amount on the bond and that the faith, credit, and
taxing authority of this state are not pledged, given, or lent to those
payments.
(d) Requires each bond issued under this article to state on its face that
the bond is payable solely from the revenues pledged for that purpose and
that the bond does not and may not constitute a legal or moral obligation
of the state.
Sec. 10. MAINTENANCE TAX SURCHARGE. (a) Provides that a maintenance tax
surcharge is assessed against certain entities.
(b) Requires the maintenance tax surcharge to be set in an amount
sufficient to pay all debt service on the bonds. Provides that the
maintenance tax surcharge is set by the commissioner in the same time and
is required to be collected by the comptroller on behalf of the association
in the same manner as applicable maintenance taxes are collected under
Article 5.24 of this code.
(c) Requires the department, on determining the rate of assessment, to
increase the maintenance tax rate applicable to correctly reported gross
premiums for liability insurance to a rate sufficient to pay all debt
service on the bonds, subject to the maximum maintenance tax rate
applicable to the insurer under Article 5.24 of this code. Authorizes the
department, if the resulting tax rate is insufficient to pay all debt
service on the bonds, to assess an additional surcharge not to exceed one
percent of correctly reported gross premiums for liability insurance to
cover all debt service on the bonds. Provides that in this code, the
maintenance tax surcharge includes the additional maintenance tax assessed
under this subsection and the surcharge assessed under this subsection to
pay all debt service of the bonds.
(d) Authorizes the association and each insurer to pass through the
maintenance tax surcharge to each of its policyholders.
(e) Provides that as a condition of engaging in the business of insurance
in this state, an insurer agrees that if the company leaves the market for
liability insurance in this state the insurer remains obligated to pay,
until the bonds are retired, the insurer's share of the maintenance tax
surcharge assessed under this section in an amount proportionate to that
insurer's share of the market for liability insurance in this state as of
the last complete reporting period before the date on which the insurer
ceases to engage in that insurance business in this state. Requires the
proportion assessed against the insurer to be based on the insurer's gross
premiums for liability insurance for the insurer's last reporting period.
Provides that however, an insurer is not required to pay the proportionate
amount in any year in which the surcharge assessed against insurers
continuing to write liability insurance in this state is sufficient to
service the bond obligation.
Sec. 11. TAX EXEMPT. Provides that the bonds issued under this article,
and any interest from the bonds, and all assets pledged to secure the
payment of the bonds are free from taxation by the state or a political
subdivision of this state.
Sec. 12. AUTHORIZED INVESTMENTS. Provides that the bonds issued under
this article constitute authorized investments under Article 2.10 and
Subpart A, Part I, Article 3.39 of this code.
Sec. 13. STATE PLEDGE. Provides that the state pledges to and agrees with
the owners of any bonds issued in accordance with this article that the
state will not limit or alter the rights vested in the association to
fulfill the terms of any agreements made with the owners of the bonds or in
any way impair the rights and remedies of those owners until the bonds, any
premium or interest, and all costs and expenses in connection with any
action or proceeding by or on behalf of those owners are fully met and
discharged. Authorizes the association to include this pledge and
agreement of the state in any agreement with the owners of the bonds.
Sec. 14. ENFORCEMENT BY MANDAMUS. Provides that a writ of mandamus and
all other legal and equitable remedies are available to any party at
interest to require the association and any other party to carry out
agreements and to perform functions and duties under this article, the
Texas Constitution, or a bond resolution.
SECTION 5.10. Requires the commissioner of insurance, not later than
December 1, 2001, to adopt the initial best practices for-profit and
not-for-profit nursing homes adopted as required by Article 5.15-4,
Insurance Code, as added by this article.
SECTION 5.11. Provides that Section 11, Article 5.15-1, Insurance Code, as
added by this article, and Sections 2, 3A, and 4, Article 21.49-3,
Insurance Code, as amended by this article, apply only to an insurance
policy delivered, issued for delivery, or renewed on or after January 1,
2002. Provides that a policy delivered, issued for delivery, or renewed
before January 1, 2002, is governed by the law as it existed immediately
before the effective date of this Act, and that law is continued in effect
for that purpose.
ARTICLE 6. MANDATORY LIABILITY INSURANCE FOR
NURSING INSTITUTIONS
SECTION 6.01. Amends Chapter 242B, Health and Safety Code, by adding
Section 242.0372, as follows:
Sec. 242.0372. LIABILITY INSURANCE COVERAGE. (a) Provides that in this
section, "health care liability claim" has the meaning assigned by the
Medical Liability and Insurance Improvement Act of Texas (Article 4590i,
V.T.C.S.).
(b) Requires an institution, to hold a license under this chapter, to
maintain professional liability insurance coverage against the liability of
the institution for a health care liability claim.
(c) Requires the insurance coverage maintained by an institution under
this section to meet certain criteria.
(d) Provides that to the extent permitted by federal law and applicable
state and federal rules, the cost of insurance coverage required to be
maintained under this section is an allowable cost for reimbursement under
the state Medicaid program.
SECTION 6.02. Provides that notwithstanding Section 242.0372, Health and
Safety Code, as added by this article, an institution licensed under
Chapter 242, Health and Safety Code, is not required to maintain
professional liability insurance as required by that section before
September 1, 2003.
ARTICLE 7. SURVEYS AND RELATED PROCESSES
SECTION 7.01. Amends Chapter 22, Human Resources Code, by adding Section
22.037, to read as follows:
Sec. 22.037. TRAINING AND CONTINUING EDUCATION RELATED TO CERTAIN
LONG-TERM CARE FACILITIES. (a) Defines "long-term facility," "provider,"
and "surveyor."
(b) Requires the department to require a surveyor to complete a basic
training program before the surveyor inspects, surveys, or investigates a
long-term care facility. Requires the training to include observation of
the operations of a long-term care facility unrelated to the survey,
inspection, or investigation process for a minimum of 10 working days
within a 14-day period.
(c) Requires the department to semiannually provide training for surveyors
and providers on subjects that address at least one of the 10 most common
violations by long-term care facilities under federal or state law.
(d) Requires a surveyor who is a health care professional licensed under
the laws of this state, except as provided by Subsection (e), to receive a
minimum of 50 percent of the professional's required continuing education
credits, if any, in gerontology or care for individuals with cognitive or
physical disabilities, as appropriate.
(e) Requires a surveyor who is a pharmacist to receive a minimum of 30
percent of the pharmacist's required continuing education credits in
gerontology or care for individuals with cognitive or physical
disabilities, as appropriate.
SECTION 7.02. Amends Chapter 531B, Government Code, by adding Sections
531.056, 531.057, and 531.058, to read as follows:
Sec. 531.056. REVIEW OF SURVEY PROCESS IN CERTAIN INSTITUTIONS AND
FACILITIES. (a) Requires the Health and Human Services Commission
(commission) to adopt procedures to review certain criteria.
(b) Requires the commission to annually report to the speaker of the house
of representatives, the lieutenant governor, and the governor on the
findings of the review conducted under Subsection (a).
Sec. 531.057. QUALITY ASSURANCE EARLY WARNING SYSTEM FOR LONG-TERM CARE
FACILITIES; RAPID RESPONSE TEAMS. (a) Defines "long-term care facility"
and "quality-of-care monitor."
(b) Requires the commission to establish an early warning system to detect
conditions that could be detrimental to the health, safety, and welfare of
residents. Requires the early warning system to include analysis of
financial and quality-of-care indicators that would predict the need for
the commission to take action.
(c) Requires the commission to establish regional offices with one or more
quality-of-care monitors, based on the number of long-term care facilities
in the region, to monitor the facilities in the region on a regular,
unannounced, aperiodic basis, including nights, evenings, weekends, and
holidays.
(d) Requires priority for monitoring visits to be given to long-term care
facilities with a history of patient care deficiencies.
(e) Prohibits quality-of-care monitors from being deployed by the
commission as a part of the regional survey team in the conduct of routine,
scheduled surveys.
(f) Requires quality-of-care monitors to assess certain criteria.
(g) Requires the quality-of-care monitor to include certain items in an
assessment visit.
(h) Requires the identity of a resident or a family member of a resident
interviewed by a quality-of-care monitor as provided by Subsection (g)(2)
to remain confidential and to be prohibited from being disclosed to any
person under any other provision of this section.
(i) Requires the findings of a monitoring visit, both positive and
negative, to be provided orally and in writing to the long-term care
facility administrator or, in the absence of the facility administrator, to
the administrator on duty or the director of nursing.
(j) Authorizes the quality-of-care monitor to recommend to the long-term
care facility administrator procedural and policy changes and staff
training to improve the care or quality of life of facility residents.
(k) Requires conditions observed by the quality-of-care monitor that
create an immediate threat to the health or safety of a resident to be
reported immediately to the regional office supervisor for appropriate
action and, as appropriate or as required by law, to law enforcement, adult
protective services, or other responsible agencies.
(l) Prohibits any record, whether written or oral, or any written or oral
communication, except as provided by Subsections (m), (n), and (o), from
being subject to discovery or introduction into evidence in any civil or
administrative action against a long-term care facility arising out of
matters that are the subject of quality-of-care monitoring, and a person
who was in attendance at a monitoring visit or evaluation is prohibited
from being permitted or required to testify in any civil or administrative
action as to any evidence or other matters produced or presented during the
monitoring visits or evaluations.
(m) Provides that information, documents, or records otherwise available
from other sources are not immune from discovery or use in a civil or
administrative action solely because the information, document, or record
was reviewed in connection with quality-of-care monitoring.
(n) Prohibits a person who participates in quality-of-care monitoring
visits or evaluations from being prevented from testifying as to matters
within the person's knowledge, but is prohibited from being asked about the
person's participation in the activities.
(o) Provides that the exclusion from discovery or introduction of evidence
under this section in any civil or administrative action does not apply
when the quality-of-care monitor makes a report to the appropriate
authorities regarding a threat to the health or safety of a resident.
(p) Requires the commission to create rapid response teams composed of
health care experts that can visit long-term care facilities identified
through the commission's early warning system.
(q) Authorizes rapid response teams to visit long-term care facilities
that request the commission's assistance.
(r) Prohibits the rapid response teams from being deployed for the purpose
of helping a long-term care facility prepare for a regular inspection or
survey conducted under Chapter 242, 247 (Assisted Living Facilities), or
252 (Intermediate Care Facilities), Health and Safety Code, or in
accordance with Chapter 32 (Medical Assistance Program), Human Resources
Code.
Sec. 531.058. INFORMAL DISPUTE RESOLUTION FOR CERTAIN LONG-TERM CARE
FACILITIES. (a) Requires the commission by rule to establish an informal
dispute resolution process in accordance with this section. Requires the
process to provide for adjudication by an appropriate disinterested person
of disputes relating to a proposed enforcement action or related proceeding
of the Texas Department of Human Services under Section 32.021(d), Human
Resources Code, or Chapter 242, 247, or 252, Health and Safety Code.
Requires the informal dispute resolution process to require certain
criteria to be met.
(b) Requires the commission to adopt rules to adjudicate claims in
contested cases.
(c) Prohibits the commission from delegating its responsibility to
administer the informal dispute resolution process established by this
section to another state agency.
SECTION 7.03. Amends Section 32.021(d), Human Resources Code, to require
the department to include in its contracts for the delivery of medical
assistance by nursing facilities provisions for monetary penalties to be
assessed for violations as required by 42 U.S.C. Section 1396r, including
without limitation the Omnibus Budget Reconciliation Act (OBRA), P.L.
100-203, Nursing Home Reform Amendments of 1987, provided that the
department is required to meet certain criteria.
SECTION 7.04. Requires the commissioner of health and human services, not
later than January 1, 2002, to adopt any rules necessary to implement
Sections 531.056, 531.057, and 531.058, Government Code, as added by this
Act.
SECTION 7.05. Requires the Texas Department of Human Services, not later
than January 1, 2002, to develop training necessary to implement Section
22.037, Human Resources Code, as added by this Act.
SECTION 7.06. Provides that for the transfer of certain property, records,
rules, and forms from the Texas Department of Human Services to the Health
and Human Services Commission, effective January 1, 2002.
ARTICLE 8. AMELIORATION OF VIOLATIONS
SECTION 8.01. Amends Section 242.071, Health and Safety Code, as follows:
Sec. 242.071. AMELIORATION OF VIOLATION. (a) Authorizes the commissioner,
in lieu of demanding, rather than ordering, payment of an administrative
penalty assessed under Section 242.066, rather than 242.069, in accordance
with this section, to allow, rather than require, the person to use, under
the supervision of the department, any portion of the penalty to ameliorate
the violation or to improve services, other than administrative services,
in the institution affected by the violation.
(b) Requires the department to offer amelioration to a person for a
charged violation if the department determines that the violation does not
constitute immediate jeopardy to the health and safety of an institution
resident.
(c) Prohibits the department from offering amelioration to a person if
certain conditions exist.
(d) Requires the department to offer amelioration to a person under this
section not later than the 10th day after the date the person receives from
the department a final notification of assessment of administrative penalty
that is sent to the person after an informal dispute resolution process but
before an administrative hearing under Section 242.068.
(e) Requires a person to whom amelioration has been offered to file a plan
for amelioration not later than the 45th day after the date the person
receives the offer of amelioration from the department. Requires the
person, in submitting the plan, to agree to waive the person's right to an
administrative hearing under Section 242.068 if the department approves the
plan.
(f) Requires a plan for amelioration, at a minimum, to meet certain
criteria.
(g) Authorizes the department to require that an amelioration plan propose
changes that would result in conditions that exceed the requirements of
this chapter or the rules adopted under this chapter.
(h) Requires the department to approve or deny an amelioration plan not
later than the 45th day after the date the department receives the plan.
Requires the department, on approval of a person's plan, to deny a pending
request for a hearing submitted by the person under Section 242.067(d).
(i) Prohibits the department from offering amelioration to certain
persons.
(j) Provides that in this section, "immediate jeopardy to health and
safety" means a situation in which there is a high probability that serious
harm or injury to a resident could occur at any time or already has
occurred and may occur again if the resident is not protected from the harm
or if the threat is not removed.
SECTION 8.02. Amends Section 252.071, Health and Safety Code, as follows:
(a) Makes conforming changes.
(b) Requires the department to offer amelioration to a person for a
charged violation if the department determines that the violation does not
constitute immediate jeopardy to the health and safety of a facility
resident.
(c) Prohibits the department from offering amelioration to a person if the
department determines that the charged violation constitutes immediate
jeopardy to the health and safety of a facility resident.
(d) Requires the department to offer amelioration to a person under this
section not later than the 10th day after the date the person receives from
the department a final notification of assessment of administrative penalty
that is sent to the person after an informal dispute resolution process but
before an administrative hearing under Section 252.067.
(e) Requires a person to whom amelioration has been offered to file a plan
for amelioration not later than the 45th day after the date the person
receives the offer of amelioration from the department. Requires the
person, in submitting the plan, to agree to waive the person's right to an
administrative hearing under Section 252.067 if the department approves the
plan.
(f) Makes conforming changes.
(g) Makes a conforming change.
(h) Requires the department to approve or deny an amelioration plan not
later than the 45th day after the date the department receives the plan.
Requires the department, on approval of a person's plan, to deny a pending
request for a hearing submitted by the person under Section 252.066(b).
(i) Makes a conforming change.
(j) Makes a conforming change.
SECTION 8.03. Makes application of this Act prospective.
ARTICLE 9. QUALITY ASSURANCE FEE
SECTION 9.01. Amends Chapter 242, Health and Safety Code, by adding
Subchapter Q, as follows:
SUBCHAPTER Q. QUALITY ASSURANCE FEE
Sec. 242.851. DEFINITION. Defines "gross receipts."
Sec. 242.852. COMPUTING QUALITY ASSURANCE FEE. (a) Requires a quality
assurance fee to be imposed on each institution for which a license fee to
be paid under Section 242.034. Sets forth provisions regarding the fee.
(b) Requires the Health and Human Services Commission or the department at
the direction of the commission to set the quality assurance fee for each
day in the amount necessary to produce annual revenues equal to six percent
of the total annual gross receipts for institutions in this state.
Provides that the fee is subject to a prospective adjustment as necessary.
(c) Requires the amount of the quality assurance fee to be determined
using patient days and gross receipts reported to the department and
covering a period of at least six months.
(d) Provides that the quality assurance fee is an allowable cost for
reimbursement under the state Medicaid program.
Sec. 242.853. PATIENT DAYS. Requires an institution, for each calendar
day, to determine the number of patient days by meeting certain criteria.
Sec. 242.854. REPORTING AND COLLECTION. (a) Requires the Health and
Human Services Commission or the department at the direction of the
commission to collect the fee.
(b) Requires each institution to meet certain criteria.
Sec. 242.855. RULES; ADMINISTRATIVE PENALTY. (a) Requires the Health and
Human Services Commission to adopt rules for the administration of this
subchapter, including rules related to the imposition and collection of the
quality assurance fee.
(b) Prohibits the Health and Human Services Commission from adopting rules
granting any exceptions from the quality assurance fee.
(c) Prohibits an administrative penalty assessed under this subchapter in
accordance with Section 242.066 from exceeding one-half of the amount of
the outstanding quality assurance fee or $20,000, whichever is greater.
Sec. 242.856. QUALITY ASSURANCE FUND. (a) Provides that the quality
assurance fund is a fund outside the state treasury held by the Texas
Treasury Safekeeping Trust Company. Requires the comptroller,
notwithstanding any other law, to deposit fees collected under this
subchapter to the credit of the fund.
(b) Provides that the fund is composed of certain monies.
(c) Provides that money deposited to the fund remains the property of the
fund and may be used only for the purposes of this subchapter.
(d) Provides that subject to legislative appropriation, quality assurance
fees collected under this chapter, combined with federal matching funds,
will support or maintain an increase in Medicaid reimbursement for
institutions.
Sec. 242.857. REIMBURSEMENT OF INSTITUTIONS. (a) Requires the Health and
Human Services Commission to use money in the quality assurance fund,
together with any federal money available to match that money, for certain
purposes.
(b) Requires the Health and Human Services Commission or the department at
the direction of the commission to devise the formula by which amounts
received under this section increase the reimbursement rates paid to
institutions under the state Medicaid program.
Sec. 242.858. INVALIDITY; FEDERAL FUNDS. Requires the commission, if any
portion of this subchapter is held invalid by a final order of a court that
is not subject to appeal, or if the Health and Human Services Commission
determines that the imposition of the fee and the expenditure as prescribed
by this subchapter of amounts collected will not entitle the state to
receive additional federal funds under the Medicaid program, to stop
collection of the quality assurance fee and to return, not later than the
30th day after the date collection is stopped, any money collected, but not
spent, under this subchapter to the institutions that paid the fees in
proportion to the total amount paid by those institutions.
Sec. 242.859. LEGISLATIVE REVIEW; EXPIRATION. Requires the 79th
Legislature to review the operation and effectiveness of this subchapter.
Provides that unless continued in effect by the 79th Legislature, this
subchapter expires effective September 1, 2005.
SECTION 9.02. Provides that notwithstanding Section 242.852, Health and
Safety Code, as added by this article, the quality assurance fee imposed
under Subchapter Q, Chapter 242, Health and Safety Code, as added by this
article, that is effective for the first month following the effective date
of this Act is equal to $5.25 multiplied by the number of patient days as
determined under that subchapter. Provides that the quality assurance fee
established under this section remains in effect until the Health and Human
Services Commission, or the Texas Department of Human Services at the
direction of the commission, obtains the information necessary to set the
fee under Section 242.852, Health and Safety Code, as added by this Act.
SECTION 9.03. Requires the Health and Human Services Commission to adopt
rules as necessary to implement Subchapter Q, Chapter 242, Health and
Safety Code, as added by this Act.
SECTION 9.04. Requires the agency affected by the provision, if before
implementing any provision of this article a state agency determines a
waiver or authorization from a federal agency is necessary for
implementation of that provision, to request the waiver or authorization
and may delay implementing that provision until the waiver or authorization
is granted.
ARTICLE 10. TEXAS DEPARTMENT OF INSURANCE STUDY AND REPORT
SECTION 10.01. DEFINITIONS. Defines "commissioner" and "department."
SECTION 10.02. STUDY. Requires the Texas Department of Insurance
(department) to study the implementation of Articles 2, 3, 4, 5, and 6 of
this Act and, in particular, to study certain other information.
SECTION 10.03. REPORTS. (a) Requires the commissioner, not later than
December 1, 2002, to submit an interim report on the study conducted under
Section 10.02 of this Act to the governor, lieutenant governor, and speaker
of the house of representatives.
(b) Requires the commissioner, not later than December 1, 2004, to submit
a final report on the study to the governor, lieutenant governor, and
speaker of the house of representatives. Requires the final report to
include a recommendation as to whether the changes in law made by Articles
5 and 6 of this Act should be repealed, continued, or modified.
SECTION 10.04. EXPIRATION. Provides that this article expires September
1, 2005.
ARTICLE 11. EFFECTIVE DATE
SECTION 11.01. Effective date: upon passage or September 1, 2001.