SRC-MKV S.B. 1839 77(R)BILL ANALYSIS
Senate Research CenterS.B. 1839
By: Moncrief
Health & Human Services
7/6/2001
Enrolled
DIGEST AND PURPOSE
The nursing home industry is facing a crisis in this state. Liability
insurance rates are rising quickly, availability to insurance is dwindling,
and lawsuit settlements are growing. S.B. 1839 is a comprehensive approach
to addressing the nursing home crisis facing Texas. This approach looks at
the current system including quality of care, insurance rates, and damage
awards.
RULEMAKING AUTHORITY
Rulemaking authority is expressly granted to the Health and Human Services
Commission in SECTION 7.02 (Section 531.058, Government Code), SECTION 9.01
(Section 252.205, Health and Safety Code), and SECTION 9.03; to the
commissioner of health and human services in SECTION 5.10 (Article
21.49-3d, Insurance Code), and SECTION 7.06; to the Texas Board of Human
Services in SECTION 7.07, and to the Health and Human Services Commission
or the Texas Department of Human Services at the direction of the
commission in SECTION 9.01 of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1.01. SHORT TITLE. Authorizes this Act to be cited as the
Long-Term Care Facility Improvement Act.
SECTION 1.02. LEGISLATIVE INTENT; PURPOSE. Sets forth the legislative
intent and purpose of this Act.
ARTICLE 2. NOTICE OF EXEMPLARY DAMAGES IN CERTAIN ACTIONS
SECTION 2.01. Amends Chapter 242B, Health and Safety Code, by adding
Section 242.051, as follows:
Sec. 242.051. NOTIFICATION OF AWARD OF EXEMPLARY DAMAGES. (a) Requires
the court to notify the Texas Department of Human Services (department) if
exemplary damages are awarded under Chapter 41, Civil Practice and Remedies
Code, against an institution or an officer, employee, or agent of an
institution.
(b) Requires the department, if the department receives notice under
Subsection (a), to maintain the information contained in the notice in the
records of the department relating to the history of the institution.
SECTION 2.02. Makes application of this article prospective.
ARTICLE 3. ADMISSIBILITY OF CERTAIN EVIDENCE IN CIVIL ACTION
SECTION 3.01. Amends Sections 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 exception as provided by Subsections (j) and (k). 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 article prospective.
ARTICLE 4. DATA REPORTING FOR CERTAIN LIABILITY INSURANCE COVERAGE
SECTION 4.01. Amends Chapter 38, Insurance Code, by adding Subchapter F,
as follows:
SUBCHAPTER F. DATA REPORTING BY CERTAIN LIABILITY INSURERS
Sec. 38.251. INSURER DATA REPORTING. (a) Requires each insurer that
writes professional liability insurance policies for nursing institutions
licensed under Chapter 242, 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
of insurance (commissioner) under this section.
(b) Authorizes the commissioner to require information by certain means
consistent with this code applicable to the affected insurer that the
commissioner believes will allow the commissioner to carry out certain
duties.
(c) Sets forth provisions relating to privileged and confidential
information.
Sec. 38.252. RECOMMENDATIONS TO LEGISLATURE. Requires the commissioner
to assemble information and take other appropriate measures to assess and
evaluate changes in the marketplace resulting from the implementation of
the legislation described by Section 38.251 and to report the
commissioner's findings and recommendations to the legislature.
ARTICLE 5. AVAILABILITY OF AND COVERAGE UNDER CERTAIN PROFESSIONAL
LIABILITY INSURANCE
SECTION 5.01. Amends Section 2(2), Article 5.15-1, Insurance Code, to
redefine "health care provider."
SECTION 5.02. Amends Section 8, Article 5.15-1, Insurance Code, as follows:
Sec. 8. New heading: EXEMPLARY DAMAGES UNDER MEDICAL PROFESSIONAL
LIABILITY INSURANCE. Prohibits a policy of medical professional liability
insurance issued to or renewed for a health care provider or physician in
this state from including coverage for exemplary damages that may be
assessed against the health care provider or physician; provided, however,
that the commissioner may approve an endorsement form that provides for
coverage for punitive damages to be used on a policy of medical
professional liability insurance issued to a hospital, as the term
"hospital" is defined in this article, or to a for-profit or not-for-profit
nursing home.
SECTION 5.03. 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 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.
(d) Provides that the best practices for risk management and loss control
adopted under this article do not establish standards of care for nursing
homes applicable in a civil action against a nursing home.
SECTION 5.04. Amends Section 2(6), Article 21.49-3, Insurance Code, to
redefine "health care provider."
SECTION 5.05. 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
verifiable effort to obtain coverage from authorized insurers and eligible
surplus lines insurers and was unable to obtain substantially equivalent
coverage and rates.
SECTION 5.06. Amends Section 4(b), Article 21.49-3, Insurance Code, by
amending Subdivisions (1) and (3) and adding Subdivision (6), as follows:
(1) Adds language to provide that for purposes of this article, rates,
rating plans, rating rules, rating classifications, territories, and policy
forms for 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; changes reference from "board" to "commissioner"; and makes a
conforming change.
(3) Adds language relating to any deficit sustained by the association with
respect to physicians and health care providers, other than for-profit and
not-for-profit nursing homes, or by forprofit or not-for-profit nursing
homes, and makes conforming changes.
(6) Provides that the rates applicable to professional liability insurance
provided by the association that cover nursing homes that are not for
profit must reflect a discount of 30 percent from the rates for the same
coverage provided to others in the same category of insureds. Requires the
commissioner to ensure compliance with this subdivision.
SECTION 5.07. Amends Article 21.49-3(4A), Insurance Code, to read as
follows:
Sec. 4A. POLICYHOLDER'S STABILIZATION RESERVE FUND FOR PHYSICIANS AND
HEALTH CARE PROVIDERS OTHER THAN FOR-PROFIT AND NOT-FORPROFIT NURSING
HOMES. (a) Adds language providing that a policyholder's stabilization
reserve fund for physician and health care providers, other than for-profit
and not-for-profit nursing homes is created. Adds language providing that
the stabilization reserve fund created by this section is separate and
distinct from the stabilization reserve fund for for-profit and
notfor-profit nursing homes created by Section 4B of this article.
(b) Makes a conforming change.
(c) Deletes reference to "policyholder's."
(d) Requires collections of the stabilization reserve fund charge to
continue only until such time as the net balance of the stabilization
reserve fund is not less than the projected sum of premiums for physicians
and health care providers, other than forprofit and not-for-profit nursing
homes, to be written in the year following valuation date.
(e) Requires the stabilization reserve fund to be credited
with all stabilization reserve fund charges collected from physicians and
health care providers, other than for-profit and not-for-profit nursing
homes, and to be charged with any deficit sustained by physicians and
health care providers, other than for-profit and not-for-profit nursing
homes, from the prior year's operation of the association.
SECTION 5.08. Amends Article 21.49-3, Insurance Code, by adding Sections
4B and 4C, as follows:
Sec. 4B. STABILIZATION RESERVE FUND FOR FOR-PROFIT AND NOT-FOR-PROFIT
NURSING HOMES. (a) Creates a stabilization reserve fund for for-profit
and not-for-profit nursing homes that requires that it be administered as
provided in this section and in the plan of operation of the association.
Provides that the stabilization reserve fund created by this section is
separate and distinct from the policyholder's stabilization reserve fund
for physicians and health care providers, other than for-profit and
not-for-profit nursing homes, created by Section 4A of this article.
(b) Requires each policyholder to pay annually into the stabilization
reserve fund a charge, the amount of which shall be established annually by
advisory directors chosen by for-profit and not-for-profit nursing homes
eligible for insurance in the association in accordance with the plan of
operation. Requires the charge to be in proportion to each premium payment
due for liability insurance through the association. Requires the charge
to be separately stated in the policy, but not constitute a part of
premiums or be subject to premium taxation, servicing fees, acquisition
costs, or any other similar charges.
(c) Requires the stabilization reserve fund to be collected and
administered by the association and to be treated as a liability of the
association along with and in the same manner as premium and loss reserves.
Requires the fund to be valued annually by the board of directors as of the
close of the last preceding year.
(d) Requires collections of the stabilization reserve fund charge to
continue only until such time as the net balance of the stabilization
reserve fund is not less than the projected sum of premiums for for-profit
and not-for-profit nursing homes to be written in the year following the
valuation date.
(e) Requires rhe stabilization reserve fund to be credited with all
stabilization reserve fund charges collected from for-profit and
not-for-profit nursing homes and the net earnings on liability insurance
policies issued to for-profit and not-for-profit nursing homes and to be
charged with any deficit sustained by for-profit and not-for-profit nursing
homes from the prior year's operation of the association.
(f) Provides that the stabilization reserve fund established under this
section, and any earnings of the fund, are state funds and are required to
be held by the comptroller outside the state treasury on behalf of, and
with legal title in, the department. Authorizes no part of the fund, or the
earnings of the fund, to inure to the benefit of a member of the
association, a policyholder, or any other individual, and authorizes the
assets of the fund to be used in accordance with the association's plan of
operation only to implement this article and for the purposes of the
association, including making payment to satisfy, in whole or in part, the
liability of the association regarding a claim made on a policy written by
the association.
(g) Authorizes the stabilization reserve fund established under this
section, notwithstanding Sections 11, 12, and 13 of this article, to be
terminated only by law.
(h) Requires that, notwithstanding Section 11 of this article, on
termination of the stabilization reserve fund established under this
section, all assets of the fund be transferred to the general revenue fund
to be appropriated for purposes related to ensuring the kinds of liability
insurance coverage that may be provided by the association under this
article for for-profit and not-for-profit nursing homes.
Sec. 4C. LIABILITY FOR EXEMPLARY DAMAGES; EXPIRATION. (a) Provides that
the association is not liable for exemplary damages under a professional
liability insurance policy that covers a for-profit or not-for-profit
nursing home and that excludes coverage for exemplary damages awarded in
relation to a covered claim award under Chapter 41, Civil Practice and
Remedies Code, or any other law. Provides that this subsection applies
without regard to the application of the common law theory or recovery
known in Texas as the "Stowers Doctrine." Provides that this subsection
does not affect the application of that doctrine to the liability of the
association for compensatory damages.
(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 for-profit or
not-for-profit nursing home from purchasing a policy to cover exemplary
damages.
(d) Provides that this section only applies to the liability of the
association for exemplary damages under an insurance policy delivered,
issued for delivery, or renewed by the association to a for-profit or
not-for-profit nursing home on or after January 1, 2002, and applies only
to coverage provided under the policy for any portion of the term of the
policy that occurs before January 1, 2006. Provides that this section
applies only to the liability of the association for exemplary damages with
respect to a claim for which a notice of loss or notice of occurrence was
made, or should have been made, in accordance with the terms of the policy,
on or after January 1, 2002, but before January 1, 2006.
(e) Provides that this section expires January 1, 2007.
SECTION 5.09. Amends Section 5, Article 21.49-3, Insurance Code, as
follows:
Sec. 5. PARTICIPATION. (a) Requires each policy holder within the group
of physicians and health care providers, other than for-profit and
not-for-profit nursing homes, or within the group of for-profit and
not-for-profit nursing homes to have contingent liability for a
proportionate share of any assessment of policyholders in the applicable
group made under the authority of this article. Adds reference to
policyholders in the applicable group and makes conforming changes.
(b) Changes references from "deficit" to "deficits."
SECTION 5.10. 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. (a) Requires the Texas Public Finance Authority, on behalf of the
association, to issue revenue bonds to meet certain criteria.
(b) Provides that, to the extent not inconsistent with this article,
Chapter 1232, Government Code, applies to bonds issued under this article.
Provides that in the event of a conflict, this article controls.
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) Authorizes 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
surcharge fee 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. SURCHARGE FEE. (a) Provides that a surcharge fee is assessed
against certain entities.
(b) Requires the surcharge fee to be set by the commissioner in an amount
sufficient to pay all debt service on the bonds. Requires the surcharge to
be paid by each insurer and the association as required by commissioner
rule.
(c) Requires the comptroller to collect the surcharge fee and the
department to reimburse the comptroller in the manner described by Article
4.19 of this code.
(d) Authorizes the commissioner, in consultation with the comptroller, to
coordinate payment and collection of the surcharge fee with other payments
made by insurers and collected by the comptroller.
(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 surcharge fee
assessed under this section in an amount proportionate to that insurer's
share of the market for liability insurance, including motor vehicle
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, including motor vehicle liability insurance, for the insurer's
last reporting period. Provides, however, that 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 5.11. Requires the commissioner of insurance, not later than
December 1, 2001, to adopt the initial best practices for for-profit and
not-for-profit nursing homes adopted as required by Article 5.15-4,
Insurance Code, as added by this article.
SECTION 5.12. Provides that 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) Requires that for an institution that is owned and operated by a
governmental unit, as that term is defined by Section 101.001. Civil
Practice and Remedies Code, the insurance coverage maintained by the
institution provide coverage only to the extent of the governmental unit's
liability under Section 101.023, Civil Practice and Remedies Code.
(e) 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 this article takes effect 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 Texas Department of Human Services (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 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. 531.058. 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 Title 4B, Health and Safety Code, by adding Chapter
255, as follows:
CHAPTER 255. QUALITY ASSURANCE EARLY WARNING SYSTEM FOR
LONG-TERM CARE FACILITIES; RAPID RESPONSE TEAMS
Sec. 255.001. DEFINITIONS. Defines "department," "long-term care
facility," and "qualityof-care monitor."
Sec. 255.002. EARLY WARNING SYSTEM. Requires the Texas Department of
Human Services (department) 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 department to take action.
Sec. 255.003. QUALITY-OF-CARE MONITORS. (a) Requires the department 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.
(b) Requires priority for monitoring visits to be given to long-term care
facilities with a history of patient care deficiencies.
(c) Prohibits quality-of-care monitors from being deployed by the
department as a part of the regional survey team in the conduct of routine,
scheduled surveys.
(d) Prohibits a quality-of-care monitor from interfering with, impeding,
or otherwise adversely affecting the performance of the duties of a
surveyor, inspector, or investigator of the department.
(e) Requires quality-of-care monitors to assess:
(1) the overall quality of life in the long-term care facility; and
(2) specific conditions in the facility directly related to patient
care.
(f) Requires the quality-of-care monitor to include in an assessment
visit:
(1) observation of the care and services rendered to residents; and
(2) formal and informal interviews with residents, family members,
facility staff, resident guests, volunteers, other regulatory staff, and
representatives of a human rights advocacy committee.
(g) Requires the identity of a resident or a family member of a resident
interviewed by a quality-of-care monitor as provided by Subsection (f)(2)
to remain confidential and prohibits it from being disclosed to any person
under any other provision of this section.
(h) 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.
(i) 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.
(j) 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, other divisions of the department, or other
responsible agencies.
Sec. 255.004. RAPID RESPONSE TEAMS. (a) The department shall create
rapid response teams composed of health care experts that can visit
long-term care facilities identified through the department's early warning
system.
(b) Authorizes rapid response teams to visit long-term care facilities
that request the department's assistance. Prohibits a visit under this
subsection from occurring before the 60th day after the date of an exit
interview following an annual or follow-up survey or inspection.
(c) 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, or 252 or in
accordance with Chapter 32, Human Resources Code.
Sec. 255.005. REPORT. Requires the department to assess and evaluate the
effectiveness of the quality assurance early warning system and to report
its findings annually to the governor, the lieutenant governor, and the
speaker of the house of representatives.
SECTION 7.04. 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. Deletes language relating
to requirements of the informal dispute resolution process.
SECTION 7.05. (a) Amends Section 242.0335, Health and Safety Code, as
added by S.B. No. 772, Acts of the 77th Legislature, Regular Session, 2001,
by adding Subsection (d), as follows:
(d) Provides that Subsection (c) applies only to a license holder
designated as eligible for and placed on the list maintained under
Subsection (a).
(b) Provides that this section takes effect only if S.B. No. 772, as
enacted by the 77th Legislature, Regular Session, 2001, becomes law.
Provides that if S.B. No. 72 does not become law, this section has no
effect.
SECTION 7.06. Requires the commissioner of health and human services, not
later than January 1, 2002, to adopt any rules necessary to implement
Sections 531.056 and 531.058, Government Code, as added by this article.
SECTION 7.07. Requires the Texas Board of Human Service, not later than
January 1, 2002, to adopt any rules necessary to implement Chapter 255,
Health and Safety Code, as added by this article.
SECTION 7.08. 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 article.
SECTION 7.09. Provides that certain criteria concerning the Texas
Department of Human Services and the Health and Human Services Commission
are prospective to 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 immediate corrective action is necessary
because the institution's noncompliance with one or more requirements has
caused, or is likely to cause, serious injury, harm, impairment, or death
to a resident receiving care in the institution.
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) 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 252.066(b).
(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 immediate corrective action is necessary
because the institution's noncompliance with one or more requirements has
caused, or is likely to cause, serious injury, harm, impairment, or death
to a resident receiving care in the institution.
SECTION 8.03. Makes application of this article prospective.
ARTICLE 9. QUALITY ASSURANCE FEE
SECTION 9.01. Amends Chapter 252, Health and Safety Code, by adding
Subchapter H, as follows:
SUBCHAPTER H. QUALITY ASSURANCE FEE
Sec. 252.201. DEFINITION. Defines "gross receipts."
Sec. 252.202. COMPUTING QUALITY ASSURANCE FEE. (a) Requires a quality
assurance fee to be imposed on each facility for which a license fee to be
paid under Section 242.034 and on each facility owned by a community mental
health and mental retardation center, as described by Chapter 534A.. 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 an amount
that is not more than six percent of the facility's 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. 252.203. PATIENT DAYS. Requires an institution, for each calendar
day, to determine the number of patient days by meeting certain criteria.
Sec. 252.204. REPORTING AND COLLECTION. (a) Requires the Health and
Human Services Commission or the department at the direction of the
commission to collect the quality assurance fee.
(b) Requires each facility to meet certain criteria.
Sec. 252.205. 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 252.065 from exceeding one-half of the amount of
the outstanding quality assurance fee or $20,000, whichever is greater.
Sec. 252.206. 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 quality assurance fund is composed of certain
monies.
(c) Provides that money deposited to the quality assurance 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
facilities. Authorizes the Health and Human Services Commission, after
reimbursement rates have been established for the biennium and money is
allocated from the fund for that purpose, to allocate any money remaining
in the fund to the Home and Community-Based Services and Mental Retardation
Local Authority waiver programs for persons with mental retardation adopted
in accordance with 42 U.S.C. Section 1396n(c).
Sec. 252.207. 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
facilities and to the Home and Community-Based Services and Mental
Retardation Local Authority waiver programs under the Medicaid program.
(c) Requires the Health and Human Services Commission to ensure that the
formula devised under Subsection (b) provides incentives to increase direct
care staffing and direct care wages and benefits.
(d) Prohibits the increased Medicaid reimbursement paid to a facility under
this section from being based solely on the amount of the quality assurance
fee paid by that facility unless authorized by 42 C.F.R. Section 433.68 or
other federal law.
Sec. 252.208. 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 facilities that paid the fees in
proportion to the total amount paid by those facilities.
Sec. 252.209. 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 252.202, Health and
Safety Code, as added by this article, the quality assurance fee imposed
under Chapter 252H, 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 252.202, 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 Chapter 252H, Health and Safety Code, as
added by this Act.
SECTION 9.04. Requires a state agency affected by a provision of this Act
to request a waiver or authorization and authorizes the agency to delay
implementing that provision until the waiver or authorization is granted,
if the agency determines before implementing any provision of this Act that
a waiver or authorization from a federal agency is necessary.
ARTICLE 10. RATES PAID FOR NURSING HOME SERVICES.
SECTION 10.01. Amends Section 32.028, Human Resources Code, by adding
Subsection (g) to require the Health and Human Services Commission to
ensure that the rules governing the determination of rates paid for nursing
homes services improve the quality of care in a certain manner.
ARTICLE 11. TEXAS DEPARTMENT OF INSURANCE STUDY AND REPORT
SECTION 11.01. DEFINITIONS. Defines "commissioner" and "department."
SECTION 11.02. STUDY. Requires the Texas Department of Insurance
(department) to study the implementation of Articles 3, 5, and 6 of this
Act and, in particular, to study certain other information.
SECTION 11.03. 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.
SECTION 11.04. EXPIRATION. Provides that this article expires September
1, 2005.
ARTICLE 12. EFFECT OF ACT; EFFECTIVE DATE
SECTION 12.01. Provides that, to the extent of any conflict, this Act
prevails over any other Act of the 77th Legislature, Regular Session, 2001,
regardless of the relative dates of enactment, including an Act that has
certain intentions.
SECTION 12.02. Effective date: upon passage or September 1, 2001, except
as provided by Section 6.02 of this Act.