1-1     By:  Fraser, Madla                                    S.B. No. 1394
 1-2           (In the Senate - Filed March 8, 2001; March 13, 2001, read
 1-3     first time and referred to Committee on Health and Human Services;
 1-4     April 10, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 7, Nays 0; April 10, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1394                  By:  Nelson
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the operation of a statewide rural health care system.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1.  Subsection (a), Section 1, Chapter 757, Acts of
1-13     the 76th Legislature, Regular Session, 1999, is amended to read as
1-14     follows:
1-15           (a)  GOALS OF SYSTEM.  The statewide rural health care system
1-16     established under Chapter 20C, Insurance Code, is designed to
1-17     protect and enhance the rural health care delivery system by
1-18     establishing a statewide rural health care network, supporting
1-19     funding to rural communities, enabling administrative
1-20     simplification for the benefit of rural providers that participate
1-21     in various health care plans, and ensuring the inclusion of
1-22     [incorporate] consumer-oriented attributes considered important to
1-23     a successful health care organization.  These attributes include
1-24     consideration of patient rights, preservation of patient rights,
1-25     preservation of the provider-patient [physician-patient]
1-26     relationship, emphasis on prevention and wellness, an appropriate
1-27     credentialing and peer review program, and emphasis on quality
1-28     improvement and disease management[, including obtaining
1-29     accreditation].
1-30           SECTION 2.  Article 20C.02, Insurance Code, is amended to
1-31     read as follows:
1-32           Art. 20C.02.  DEFINITIONS.  (a)  In this chapter:
1-33                 (1)  "Board" means the board of directors of the
1-34     system.
1-35                 (2)  "Enrollee" means an individual who is:
1-36                       (A)  residing in a rural area; and
1-37                       (B)  entitled to receive health care services
1-38     through a health care plan sponsored by, arranged for, or provided
1-39     by the system.
1-40                 (3)  "Health care services" has the meaning assigned by
1-41     Section 2, Texas Health Maintenance Organization Act (Article
1-42     20A.02, Vernon's Texas Insurance Code).
1-43                 (4)  "Health care provider" means a physician,
1-44     facility, practitioner, or other person or organization who, under
1-45     a license or grant of authority issued by this state, provides care
1-46     or supplies to individuals under a health benefit plan.  The term
1-47     does not include a hospital provider.
1-48                 (5)  "Hospital provider" means a county hospital,
1-49     county hospital authority, hospital district, municipal hospital,
1-50     or municipal hospital authority.
1-51                 (6) [(5)]  "Local health care provider" means:
1-52                       (A)  a person licensed, registered, or certified
1-53     as a health care practitioner in this state who resides in or
1-54     practices in a rural area in which the person provides health care
1-55     services; or
1-56                       (B)  a general or specialty hospital that is not
1-57     a hospital provider under this chapter.
1-58                 (7) [(6)]  "Participating provider" means a hospital
1-59     provider that participates in the system.
1-60                 (8) [(7)]  "Person" means an individual, professional
1-61     association, professional corporation, partnership, limited
1-62     liability corporation, limited liability partnership, or nonprofit
1-63     corporation, including a nonprofit corporation certified under
1-64     Section 162.001, Occupations Code [created under Section 5.01(a),
 2-1     Medical Practice Act (Article 4495b, Vernon's Texas Civil
 2-2     Statutes)].
 2-3                 (9) [(8)]  "Rural area" means:
 2-4                       (A)  a county with a population of 50,000 or
 2-5     less;
 2-6                       (B)  an area that is not delineated as an
 2-7     urbanized area by the federal census bureau; or
 2-8                       (C)  any other area designated as rural by rules
 2-9     adopted by the commissioner, subject to Subsection (b) of this
2-10     article.
2-11                 (10) [(9)]  "System" means the statewide rural health
2-12     care system established by this chapter.
2-13                 (11) [(10)]  "Territorial jurisdiction" means the
2-14     geographical area in which a participating provider is obligated by
2-15     law to provide health care services.
2-16           (b)  In designating rural areas under Subsection (a)(9)
2-17     [(a)(8)] of this article, the commissioner shall consider any area
2-18     that is delineated as an urbanized area by the federal census
2-19     bureau and:
2-20                 (1)  is contiguous with and not more than 10 miles away
2-21     from a rural area described by Subsection (a)(9)(A) [(a)(8)(A)] or
2-22     (B) of this section;
2-23                 (2)  is sparsely populated, compared to areas within a
2-24     10-mile radius that are delineated as urbanized areas by the
2-25     federal census bureau;
2-26                 (3)  has not increased in population in any single
2-27     calendar year in the seven years before the commissioner makes the
2-28     designation; and
2-29                 (4)  in which emergency or primary care services are
2-30     limited or unavailable in accordance with network access standards
2-31     imposed by the commissioner [under the Texas Health Maintenance
2-32     Organization Act (Chapter 20A, Vernon's Texas Insurance Code)] and
2-33     in which those services would be made materially more accessible by
2-34     allowing access to care in a contiguous area that is eligible to
2-35     participate in the system.
2-36           SECTION 3.  Article 20C.03, Insurance Code, is amended to
2-37     read as follows:
2-38           Art. 20C.03.  ESTABLISHMENT OF SYSTEM.  The statewide rural
2-39     health care system is established to sponsor, arrange for, or
2-40     provide health care services for programs in rural areas that are
2-41     not subject to:
2-42                 (1)  a law requiring coverage or the offer of coverage
2-43     for services by a particular health care provider under:
2-44                       (A)  Chapter 62, Health and Safety Code;
2-45                       (B)  Chapter 32, Human Resources Code;
2-46                       (C)  any state, county, or local government
2-47     sponsored indigent care initiative; or
2-48                       (D)  any federal Medicare Plus Choice program; or
2-49                 (2)  Article 3.51-6 under any state, county, or local
2-50     government sponsored uninsured or indigent care initiative [to
2-51     enrollees who reside in rural areas].
2-52           SECTION 4.  Subsection (b), Article 20C.04, Insurance Code,
2-53     is amended to read as follows:
2-54           (b)  The system is authorized to sponsor, provide, or arrange
2-55     for the provision of health care services for enrollees as
2-56     described in Article 20C.03.  If [Except as provided by Subsection
2-57     (c) of this article, if] the system seeks to sponsor, arrange
2-58     [arranges] for, or provide [provides] health care services to
2-59     enrollees in exchange for a predetermined payment per enrollee on a
2-60     prepaid basis, the system must comply with:
2-61                 (1)  all requirements under this code imposed on health
2-62     plans, including health maintenance organizations, except the
2-63     requirements the commissioner determines are not applicable to the
2-64     system under this chapter relating to mileage, distance, network
2-65     adequacy, and scope of coverage; and
2-66                 (2)  any additional requirements the commissioner
2-67     determines are necessary to ensure enrollee access to health care
2-68     providers and health care services [obtain a certificate of
2-69     authority under, and meet each requirement imposed by, the Texas
 3-1     Health Maintenance Organization Act (Chapter 20A, Vernon's Texas
 3-2     Insurance Code), as if the organization were a person under the
 3-3     Act].
 3-4           SECTION 5.  Subsections (b), (c), and (d), Article 20C.06,
 3-5     Insurance Code, are amended to read as follows:
 3-6           (b)  The participating providers shall appoint [as
 3-7     representatives of the participating providers] six directors
 3-8     [selected] in the manner provided by Article 20C.10 of this code.
 3-9           (c)  Six [The governor shall appoint six] directors shall be
3-10     appointed in accordance with the system's bylaws from persons
3-11     residing in the territorial jurisdictions of the participating
3-12     providers, including two persons to represent each of the
3-13     following:
3-14                 (1)  [two persons who represent] employers;
3-15                 (2)  [two persons who are] local government officials;
3-16     and
3-17                 (3)  [two persons who are] consumers of health care
3-18     services.
3-19           (d)  In addition to the directors appointed under Subsection
3-20     (c) of this article, [the governor shall appoint] six directors
3-21     shall be appointed in accordance with the system's bylaws from
3-22     among licensed physicians who reside and practice in the
3-23     territorial jurisdictions of the participating providers.  At least
3-24     three of the physicians appointed under this subsection must
3-25     perform as their professional practice the general practice of
3-26     medicine.
3-27           SECTION 6.  Subsection (d), Article 20C.08, Insurance Code,
3-28     is amended to read as follows:
3-29           (d)  On a majority vote, the board may:
3-30                 (1)  contract for administrative, management, or
3-31     support services;  [or]
3-32                 (2)  hire an executive director;
3-33                 (3)  contract with[,] consultants, attorneys and other
3-34     professionals; [,] and
3-35                 (4)  retain other staff as necessary to implement the
3-36     duties of the system.
3-37           SECTION 7.  Subsection (a), Article 20C.14, Insurance Code,
3-38     is amended to read as follows:
3-39           (a)  To the extent consistent with federal law, the state
3-40     shall award to the system at least one of any state managed care
3-41     contracts awarded to provide health care services to beneficiaries
3-42     of the Texas Medical Assistance Program under Chapter 32, Human
3-43     Resources Code, in the rural areas within the territorial
3-44     jurisdiction of the participating providers.  Notwithstanding any
3-45     other law, the commissioner of health and human services may use
3-46     the system for:
3-47                 (1)  a voluntary pilot or demonstration program that:
3-48                       (A)  evaluates the use of an insured model for
3-49     beneficiaries of a medical assistance program in a rural area not
3-50     currently included in an existing Medicaid managed care pilot
3-51     program area; and
3-52                       (B)  incorporates the principles of prevention
3-53     and disease management; and
3-54                 (2)  a study of the use of promotoras as defined by
3-55     Section 46.001, Health and Safety Code, as added by Chapter 857,
3-56     Acts of the 76th Legislature, Regular Session, 1999.
3-57           SECTION 8.  Sections (c) and (d), Article 20C.04, Insurance
3-58     Code, are repealed.
3-59           SECTION 9.  This Act takes effect September 1, 2001.
3-60                                  * * * * *