1-1                                   AN ACT
 1-2     relating to the operation of a statewide rural health care system.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Subsection (a), Section 1, Chapter 757, Acts of
 1-5     the 76th Legislature, Regular Session, 1999, is amended to read as
 1-6     follows:
 1-7           (a)  GOALS OF SYSTEM.  The statewide rural health care system
 1-8     established under Chapter 20C, Insurance Code, is designed to
 1-9     protect and enhance the rural health care delivery system by
1-10     establishing a statewide rural health care network, supporting
1-11     funding to rural communities, enabling administrative
1-12     simplification for the benefit of rural providers that participate
1-13     in various health care plans, and ensuring the inclusion of
1-14     [incorporate] consumer-oriented attributes considered important to
1-15     a successful health care organization.  These attributes include
1-16     consideration of patient rights, preservation of patient rights,
1-17     preservation of the provider-patient [physician-patient]
1-18     relationship, emphasis on prevention and wellness, an appropriate
1-19     credentialing and peer review program, and emphasis on quality
1-20     improvement and disease management[, including obtaining
1-21     accreditation].
1-22           SECTION 2.  Article 20C.02, Insurance Code, is amended to
1-23     read as follows:
1-24           Art. 20C.02.  DEFINITIONS.  (a)  In this chapter:
1-25                 (1)  "Board" means the board of directors of the
 2-1     system.
 2-2                 (2)  "Enrollee" means an individual who is:
 2-3                       (A)  residing in a rural area; and
 2-4                       (B)  entitled to receive health care services
 2-5     through a health care plan sponsored by, arranged for, or provided
 2-6     by the system.
 2-7                 (3)  "Health care services" has the meaning assigned by
 2-8     Section 2, Texas Health Maintenance Organization Act (Article
 2-9     20A.02, Vernon's Texas Insurance Code).
2-10                 (4)  "Health care provider" means a physician,
2-11     facility, practitioner, or other person or organization who, under
2-12     a license or grant of authority issued by this state, provides care
2-13     or supplies to individuals under a health benefit plan.  The term
2-14     does not include a hospital provider.
2-15                 (5)  "Hospital provider" means a county hospital,
2-16     county hospital authority, hospital district, municipal hospital,
2-17     or municipal hospital authority.
2-18                 (6) [(5)]  "Local health care provider" means:
2-19                       (A)  a person licensed, registered, or certified
2-20     as a health care practitioner in this state who resides in or
2-21     practices in a rural area in which the person provides health care
2-22     services; or
2-23                       (B)  a general or specialty hospital that is not
2-24     a hospital provider under this chapter.
2-25                 (7) [(6)]  "Participating provider" means a hospital
2-26     provider that participates in the system.
 3-1                 (8) [(7)]  "Person" means an individual, professional
 3-2     association, professional corporation, partnership, limited
 3-3     liability corporation, limited liability partnership, or nonprofit
 3-4     corporation, including a nonprofit corporation certified under
 3-5     Section 162.001, Occupations Code [created under Section 5.01(a),
 3-6     Medical Practice Act (Article 4495b, Vernon's Texas Civil
 3-7     Statutes)].
 3-8                 (9) [(8)]  "Rural area" means:
 3-9                       (A)  a county with a population of 50,000 or
3-10     less;
3-11                       (B)  an area that is not delineated as an
3-12     urbanized area by the federal census bureau; or
3-13                       (C)  any other area designated as rural by rules
3-14     adopted by the commissioner, subject to Subsection (b) of this
3-15     article.
3-16                 (10) [(9)]  "System" means the statewide rural health
3-17     care system established by this chapter.
3-18                 (11) [(10)]  "Territorial jurisdiction" means the
3-19     geographical area in which a participating provider is obligated by
3-20     law to provide health care services.
3-21           (b)  In designating rural areas under Subsection (a)(9)
3-22     [(a)(8)] of this article, the commissioner shall consider any area
3-23     that is delineated as an urbanized area by the federal census
3-24     bureau and:
3-25                 (1)  is contiguous with and not more than 10 miles away
3-26     from a rural area described by Subsection (a)(9)(A) [(a)(8)(A)] or
 4-1     (B) of this section;
 4-2                 (2)  is sparsely populated, compared to areas within a
 4-3     10-mile radius that are delineated as urbanized areas by the
 4-4     federal census bureau;
 4-5                 (3)  has not increased in population in any single
 4-6     calendar year in the seven years before the commissioner makes the
 4-7     designation; and
 4-8                 (4)  in which emergency or primary care services are
 4-9     limited or unavailable in accordance with network access standards
4-10     imposed by the commissioner [under the Texas Health Maintenance
4-11     Organization Act (Chapter 20A, Vernon's Texas Insurance Code)] and
4-12     in which those services would be made materially more accessible by
4-13     allowing access to care in a contiguous area that is eligible to
4-14     participate in the system.
4-15           SECTION 3.  Article 20C.03, Insurance Code, is amended to
4-16     read as follows:
4-17           Art. 20C.03.  ESTABLISHMENT OF SYSTEM.  The statewide rural
4-18     health care system is established to sponsor, arrange for, or
4-19     provide health care services for programs in rural areas that are
4-20     not subject to:
4-21                 (1)  a law requiring coverage or the offer of coverage
4-22     for services by a particular health care provider under:
4-23                       (A)  Chapter 62, Health and Safety Code;
4-24                       (B)  Chapter 32, Human Resources Code;
4-25                       (C)  any state, county, or local government
4-26     sponsored indigent care initiative; or
 5-1                       (D)  any federal Medicare Plus Choice program; or
 5-2                 (2)  Article 3.51-6 under any state, county, or local
 5-3     government sponsored uninsured or indigent care initiative [to
 5-4     enrollees who reside in rural areas].
 5-5           SECTION 4.  Subsection (b), Article 20C.04, Insurance Code,
 5-6     is amended to read as follows:
 5-7           (b)  The system is authorized to sponsor, provide, or arrange
 5-8     for the provision of health care services for enrollees as
 5-9     described in Article 20C.03.  If [Except as provided by Subsection
5-10     (c) of this article, if] the system seeks to sponsor, arrange
5-11     [arranges] for, or provide [provides] health care services to
5-12     enrollees in exchange for a predetermined payment per enrollee on a
5-13     prepaid basis, the system must comply with:
5-14                 (1)  all requirements under this code imposed on health
5-15     plans, including health maintenance organizations, except the
5-16     requirements the commissioner determines are not applicable to the
5-17     system under this chapter relating to mileage, distance, network
5-18     adequacy, and scope of coverage; and
5-19                 (2)  any additional requirements the commissioner
5-20     determines are necessary to ensure enrollee access to health care
5-21     providers and health care services [obtain a certificate of
5-22     authority under, and meet each requirement imposed by, the Texas
5-23     Health Maintenance Organization Act (Chapter 20A, Vernon's Texas
5-24     Insurance Code), as if the organization were a person under the
5-25     Act].
5-26           SECTION 5.  Subsections (b), (c), and (d), Article 20C.06,
 6-1     Insurance Code, are amended to read as follows:
 6-2           (b)  The participating providers shall appoint [as
 6-3     representatives of the participating providers] six directors
 6-4     [selected] in the manner provided by Article 20C.10 of this code.
 6-5           (c)  Six [The governor shall appoint six] directors shall be
 6-6     appointed in accordance with the system's bylaws from persons
 6-7     residing in the territorial jurisdictions of the participating
 6-8     providers, including two persons to represent each of the
 6-9     following:
6-10                 (1)  [two persons who represent] employers;
6-11                 (2)  [two persons who are] local government officials;
6-12     and
6-13                 (3)  [two persons who are] consumers of health care
6-14     services.
6-15           (d)  In addition to the directors appointed under Subsection
6-16     (c) of this article, [the governor shall appoint] six directors
6-17     shall be appointed in accordance with the system's bylaws from
6-18     among licensed physicians who reside and practice in the
6-19     territorial jurisdictions of the participating providers.  At least
6-20     three of the physicians appointed under this subsection must
6-21     perform as their professional practice the general practice of
6-22     medicine.
6-23           SECTION 6.  Subsection (d), Article 20C.08, Insurance Code,
6-24     is amended to read as follows:
6-25           (d)  On a majority vote, the board may:
6-26                 (1)  contract for administrative, management, or
 7-1     support services; [or]
 7-2                 (2)  hire an executive director;
 7-3                 (3)  contract with[,] consultants, attorneys and other
 7-4     professionals; [,] and
 7-5                 (4)  retain other staff as necessary to implement the
 7-6     duties of the system.
 7-7           SECTION 7.  Subsection (a), Article 20C.14, Insurance Code,
 7-8     is amended to read as follows:
 7-9           (a)  To the extent consistent with federal law, the state
7-10     shall award to the system at least one of any state managed care
7-11     contracts awarded to provide health care services to beneficiaries
7-12     of the Texas Medical Assistance Program under Chapter 32, Human
7-13     Resources Code, in the rural areas within the territorial
7-14     jurisdiction of the participating providers.  Notwithstanding any
7-15     other law, the commissioner of health and human services may use
7-16     the system for:
7-17                 (1)  a voluntary pilot or demonstration program that:
7-18                       (A)  evaluates the use of an insured model for
7-19     beneficiaries of a medical assistance program in a rural area not
7-20     currently included in an existing Medicaid managed care pilot
7-21     program area; and
7-22                       (B)  incorporates the principles of prevention
7-23     and disease management; and
7-24                 (2)  a study of the use of promotoras as defined by
7-25     Section 46.001, Health and Safety Code, as added by Chapter 857,
7-26     Acts of the 76th Legislature, Regular Session, 1999.
 8-1           SECTION 8.  Sections (c) and (d), Article 20C.04, Insurance
 8-2     Code, are repealed.
 8-3           SECTION 9.  This Act takes effect September 1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 1394 passed the Senate on
         April 20, 2001, by the following vote:  Yeas 30, Nays 0, one
         present, not voting.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 1394 passed the House on
         May 17, 2001, by a non-record vote.
                                             _______________________________
                                                Chief Clerk of the House
         Approved:
         _______________________________
                      Date
         _______________________________
                    Governor