By Coleman H.B. No. 2419
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to charity care requirements for certain hospitals.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 311.045, Health and Safety Code, is
1-5 amended by amending Subsections (b), (c), and (d) and adding
1-6 Subsection (f) to read as follows:
1-7 (b)(1) A nonprofit hospital or hospital system may elect to
1-8 provide community benefits, which include charity care and
1-9 government-sponsored indigent health care, according to one [any]
1-10 of the following standards:
1-11 (A) [charity care and government-sponsored
1-12 indigent health care are provided at a level which is reasonable in
1-13 relation to the community needs, as determined through the
1-14 community needs assessment, the available resources of the hospital
1-15 or hospital system, and the tax-exempt benefits received by the
1-16 hospital or hospital system;]
1-17 [(B)] charity care and government-sponsored
1-18 indigent health care are provided in an amount equal to at least
1-19 100 percent of the hospital's or hospital system's tax-exempt
1-20 benefits, excluding federal income tax; or
1-21 (B) [(C)] charity care and community benefits
1-22 are provided in a combined amount equal to at least five percent of
2-1 the hospital's or hospital system's net patient revenue, provided
2-2 that charity care and government-sponsored indigent health care are
2-3 provided in an amount equal to at least four percent of net patient
2-4 revenue.
2-5 (2) For purposes of satisfying Subdivision (1)(B)
2-6 [(1)(C)], a hospital or hospital system may not change its existing
2-7 fiscal year unless the hospital or hospital system changes its
2-8 ownership or corporate structure as a result of a sale or merger.
2-9 (3) A nonprofit hospital that has been designated as a
2-10 disproportionate share hospital under the state Medicaid program in
2-11 the current fiscal year or in either of the previous two fiscal
2-12 years shall be considered to have provided a reasonable amount of
2-13 charity care and government-sponsored indigent health care and
2-14 shall be deemed in compliance with the standards in this
2-15 subsection.
2-16 (c) A nonprofit hospital or hospital system may credit
2-17 expenditures for community benefits under Subsection (b)(1)(B) only
2-18 if:
2-19 (1) the nonprofit hospital demonstrates to the
2-20 department how those expenditures will benefit the communities they
2-21 serve; and
2-22 (2) the department approves the credit [The providing
2-23 of charity care and government-sponsored indigent health care in
2-24 accordance with Subsection (b)(1)(A) shall be guided by the prudent
2-25 business judgment of the hospital which will ultimately determine
2-26 the appropriate level of charity care and government-sponsored
3-1 indigent health care based on the community needs, the available
3-2 resources of the hospital, the tax-exempt benefits received by the
3-3 hospital, and other factors that may be unique to the hospital,
3-4 such as the hospital's volume of Medicare and Medicaid patients.
3-5 These criteria shall not be determinative factors, but shall be
3-6 guidelines contributing to the hospital's decision, along with
3-7 other factors which may be unique to the hospital. The standards
3-8 set forth in Subsections (b)(1)(B) and (b)(1)(C) shall also not be
3-9 considered determinative of the amount of charity care and
3-10 government-sponsored indigent health care that will be considered
3-11 reasonable under Subsection (b)(1)(A)].
3-12 (d) For purposes of this section, a hospital that satisfies
3-13 Subsection [(b)(1)(A) or] (b)(3) shall be excluded in determining a
3-14 hospital system's compliance with the standards provided by
3-15 Subsection (b)(1)(A) or (b)(1)(B) [or (b)(1)(C)].
3-16 (f) A nonprofit hospital or hospital system under contract
3-17 with a local county to provide indigent health care services under
3-18 Chapter 61 may credit direct care provided to an eligible county
3-19 resident toward meeting the nonprofit hospital's or system's
3-20 charity care and government-sponsored indigent health care
3-21 requirement.
3-22 SECTION 2. Section 311.0455(b), Health and Safety Code, is
3-23 amended to read as follows:
3-24 (b) The department shall submit to the attorney general and
3-25 the comptroller not later than November 1 of each year a report
3-26 containing the following information for each nonprofit hospital or
4-1 hospital system during the preceding fiscal year:
4-2 (1) the amount of charity care, as defined by Section
4-3 311.031, provided;
4-4 (2) the amount of government-sponsored indigent health
4-5 care, as defined by Section 311.031, provided;
4-6 (3) the amount of community benefits, as defined by
4-7 Section 311.042, provided;
4-8 (4) the amount of net patient revenue, as defined by
4-9 Section 311.042, and the amount constituting four percent of net
4-10 patient revenue;
4-11 (5) the dollar amount of the hospital's or hospital
4-12 system's charity care and community benefits requirements met;
4-13 (6) a computation of the percentage by which the
4-14 amount described by Subdivision (5) is above or below the dollar
4-15 amount of the hospital's or hospital system's charity care and
4-16 community benefits requirements;
4-17 (7) the amount of tax-exempt benefits, as defined by
4-18 Section 311.042, provided, if the hospital is required to report
4-19 tax-exempt benefits under Section 311.045(b)(1)(A) [or (b)(1)(B)];
4-20 and
4-21 (8) the amount of charity care expenses reported in
4-22 the hospital's or hospital system's audited financial statement.
4-23 SECTION 3. Sections 311.046(a) and (d), Health and Safety
4-24 Code, are amended to read as follows:
4-25 (a) A nonprofit hospital shall prepare an annual report of
4-26 the community benefits plan and shall include in the report at
5-1 least the following information:
5-2 (1) the hospital's mission statement;
5-3 (2) a disclosure of the health care needs of the
5-4 community that were considered in developing the hospital's
5-5 community benefits plan pursuant to Section 311.044(b);
5-6 (3) a detailed disclosure of the amount and types of
5-7 community benefits, including charity care, actually provided, the
5-8 populations affected by the benefits, and the anticipated outcomes.
5-9 Charity care shall be reported as a separate item from other
5-10 community benefits;
5-11 (4) a statement of its total operating expenses
5-12 computed in accordance with generally accepted accounting
5-13 principles for hospitals from the most recent completed and audited
5-14 prior fiscal year of the hospital; and
5-15 (5) a completed worksheet that computes the ratio of
5-16 cost to charge for the fiscal year referred to in Subdivision (4)
5-17 and that includes the same requirements as Worksheet 1-A adopted by
5-18 the department in August 1994 for the 1994 "Annual Statement of
5-19 Community Benefits Standards".
5-20 (d) Each hospital shall provide, to each person who seeks
5-21 any health care service at the hospital, notice, in appropriate
5-22 languages, if possible, about the charity care program, including
5-23 the charity care and eligibility policies of the program, and how
5-24 to apply for charity care. Such notice shall also be conspicuously
5-25 posted in the general waiting area, in the waiting area for
5-26 emergency services, in the business office, and in such other
6-1 locations as the hospital deems likely to give notice of the
6-2 charity care program and policies. Each hospital shall annually
6-3 publish notice of the hospital's charity care program and policies
6-4 in a local newspaper of general circulation in the county. Each
6-5 notice under this subsection must be written in language readily
6-6 understandable to the average reader.
6-7 SECTION 4. Subchapter D, Chapter 311, Health and Safety
6-8 Code, is amended by adding Sections 311.0461, 311.0462, and
6-9 311.0463 to read as follows:
6-10 Sec. 311.0461. INFORMATIONAL MANUAL. The department shall
6-11 annually publish a manual that lists each nonprofit hospital in
6-12 this state with a brief summary of the charity care policies and
6-13 community benefits that the nonprofit hospital provides.
6-14 Sec. 311.0462. STATE ACCESS FUND. (a) The state access fund
6-15 is created as a trust fund with the comptroller and shall be
6-16 administered by the department as a trustee on behalf of recipients
6-17 of money from the fund. The fund is composed of:
6-18 (1) money donated to the fund under Section 311.0463;
6-19 (2) gifts, grants, and other donations received by the
6-20 department for the fund; and
6-21 (3) any amounts appropriated by the legislature for
6-22 the fund from the general revenue fund.
6-23 (b) Money in the state access fund may be used only to
6-24 finance initiatives to expand access to charity care and community
6-25 benefits, including administrative costs.
6-26 (c) The department may authorize the commissioner to use
7-1 money in the state access fund for any purpose authorized under
7-2 this section.
7-3 Sec. 311.0463. CREDIT FOR DONATION TO FUND. (a) A nonprofit
7-4 hospital or hospital system may credit donations to the state
7-5 access fund toward meeting the hospital's or system's charity care
7-6 and community benefits requirements.
7-7 (b) The department shall adopt rules for the administration
7-8 of this section.
7-9 SECTION 5. COMPTROLLER TO APPRAISE. Not later than September
7-10 1, 2002, the comptroller shall randomly select five nonprofit
7-11 hospitals from the state and conduct, or cause to be conducted, an
7-12 appraisal of the taxable value of the hospitals.
7-13 SECTION 6. This Act takes effect September 1, 2001.