1-1     By:  Moncrief                                         S.B. No. 1592
 1-2           (In the Senate - Filed March 9, 2001; March 14, 2001, read
 1-3     first time and referred to Committee on Health and Human Services;
 1-4     April 2, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 6, Nays 2; April 2, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1592                By:  Moncrief
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the imposition of a quality assurance fee on nursing
1-11     institutions; providing an administrative penalty.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Chapter 242, Health and Safety Code, is amended
1-14     by adding Subchapter Q to read as follows:
1-15                    SUBCHAPTER Q.  QUALITY ASSURANCE FEE
1-16           Sec. 242.851.  DEFINITION.  In this subchapter, "gross
1-17     receipts" means money paid as compensation for services provided to
1-18     residents, including client participation.  The term does not
1-19     include charitable contributions to an institution.
1-20           Sec. 242.852.  COMPUTING QUALITY ASSURANCE FEE.  (a)  A
1-21     quality assurance fee is imposed on each institution for which a
1-22     license fee must be paid under Section 242.034.  The fee is:
1-23                 (1)  an amount established under Subsection (b)
1-24     multiplied by the number of patient days as determined in
1-25     accordance with Section 242.853;
1-26                 (2)  payable monthly; and
1-27                 (3)  in addition to other fees imposed under this
1-28     chapter.
1-29           (b)  The Health and Human Services Commission or the
1-30     department at the direction of the commission shall set the quality
1-31     assurance fee for each day in the amount necessary to produce
1-32     annual revenues equal to six percent of the total annual gross
1-33     receipts for institutions in this state.  The fee is subject to a
1-34     prospective adjustment as necessary.
1-35           (c)  The amount of the quality assurance fee must be
1-36     determined using patient days and gross receipts reported to the
1-37     department and covering a period of at least six months.
1-38           (d)  The quality assurance fee is an allowable cost for
1-39     reimbursement under the state Medicaid program.
1-40           Sec. 242.853.  PATIENT DAYS.  For each calendar day, an
1-41     institution shall determine the number of patient days by adding
1-42     the following:
1-43                 (1)  the number of patients occupying an institution
1-44     bed immediately before midnight of that day;
1-45                 (2)  the number of beds that are on hold on that day
1-46     and that have been placed on hold for a period not to exceed five
1-47     consecutive calendar days during which a patient is in the
1-48     hospital; and
1-49                 (3)  the number of beds that are on hold on that day
1-50     and that have been placed on hold for a period not to exceed 14
1-51     consecutive calendar days during which a patient is on therapeutic
1-52     home leave.
1-53           Sec. 242.854.  REPORTING AND COLLECTION.  (a)  The Health and
1-54     Human Services Commission or the department at the direction of the
1-55     commission shall collect the fee.
1-56           (b)  Each institution shall:
1-57                 (1)  not later than the 10th day after the last day of
1-58     a month file a report with the Health and Human Services Commission
1-59     or the department, as appropriate, stating the total patient days
1-60     for the month; and
1-61                 (2)  not later than the 30th day after the last day of
1-62     the month pay the quality assurance fee.
1-63           Sec. 242.855.  RULES; ADMINISTRATIVE PENALTY.  (a)  The
1-64     Health and Human Services Commission shall adopt rules for the
 2-1     administration of this subchapter, including rules related to the
 2-2     imposition and collection of the quality assurance fee.
 2-3           (b)  The Health and Human Services Commission may not adopt
 2-4     rules granting any exceptions from the quality assurance fee.
 2-5           (c)  An administrative penalty assessed under this subchapter
 2-6     in accordance with Section 242.066 may not exceed one-half of the
 2-7     amount of the outstanding quality assurance fee or $20,000,
 2-8     whichever is greater.
 2-9           Sec. 242.856.  QUALITY ASSURANCE FUND.  (a)  The quality
2-10     assurance fund is a fund outside the state treasury held by the
2-11     Texas Treasury Safekeeping Trust Company.  Notwithstanding any
2-12     other law, the comptroller shall deposit fees collected under this
2-13     subchapter to the credit of the fund.
2-14           (b)  The fund is composed of:
2-15                 (1)  fees deposited to the credit of the fund under
2-16     this subchapter; and
2-17                 (2)  the earnings of the fund.
2-18           (c)  Money deposited to the fund remains the property of the
2-19     fund and may be used only for the purposes of this subchapter.
2-20           Sec. 242.857.  REIMBURSEMENT OF INSTITUTIONS.  (a)  The
2-21     Health and Human Services Commission shall use money in the quality
2-22     assurance fund, together with any federal money available to match
2-23     that money, to:
2-24                 (1)  offset allowable expenses under the state Medicaid
2-25     program; and
2-26                 (2)  increase reimbursement rates paid under the
2-27     Medicaid program to institutions.
2-28           (b)  The Health and Human Services Commission or the
2-29     department at the direction of the commission shall devise the
2-30     formula by which amounts received under this section increase the
2-31     reimbursement rates paid to institutions under the state Medicaid
2-32     program.
2-33           Sec. 242.858.  INVALIDITY; FEDERAL FUNDS.  If  any portion of
2-34     this chapter is held invalid by a final order of a court that is
2-35     not subject to appeal, or if the Health and Human Services
2-36     Commission determines that the imposition of the fee and the
2-37     expenditure as prescribed by this subchapter of amounts collected
2-38     will not entitle the state to receive additional federal funds
2-39     under the Medicaid program, the commission shall stop collection of
2-40     the quality assurance fee and shall return, not later  than the
2-41     30th day after the date collection is stopped, any money collected,
2-42     but not spent, under this subchapter to the institutions that paid
2-43     the fees in proportion to the total amount paid by those
2-44     institutions.
2-45           Sec. 242.859.  LEGISLATIVE REVIEW; EXPIRATION.  The 79th
2-46     Legislature shall review the operation and effectiveness of this
2-47     subchapter.  Unless continued in effect by the 79th Legislature,
2-48     this subchapter expires effective September 1, 2005.
2-49           SECTION 2.  Notwithstanding Section 242.852, Health and
2-50     Safety Code, as added by this Act, the quality assurance fee
2-51     imposed under Subchapter Q, Chapter 242, Health and Safety Code, as
2-52     added by this Act, that is effective for the first month following
2-53     the effective date of this Act is equal to $5.25 multiplied by the
2-54     number of patient days as determined under that subchapter.  The
2-55     quality assurance fee established under this section remains in
2-56     effect until the Health and Human Services Commission, or the Texas
2-57     Department of Human Services at the direction of the commission,
2-58     obtains the information necessary to set the fee under Section
2-59     242.852, Health and Safety Code, as added by this Act.
2-60           SECTION 3.  As soon as practicable after the effective date
2-61     of this Act, the Health and Human Services Commission shall adopt
2-62     rules as necessary to implement Subchapter Q, Chapter 242, Health
2-63     and Safety Code, as added by this Act.
2-64           SECTION 4.  If before implementing any provision of this Act
2-65     a state agency determines a waiver or authorization from a federal
2-66     agency is necessary for implementation of that provision, the
2-67     agency affected by the provision shall request the waiver or
2-68     authorization and may delay implementing that provision until the
2-69     waiver or authorization is granted.
 3-1           SECTION 5.  This Act takes effect immediately if it receives
 3-2     a vote of two-thirds of all the members elected to each house, as
 3-3     provided by Section 39, Article III, Texas Constitution.  If this
 3-4     Act does not receive the vote necessary for immediate effect, this
 3-5     Act takes effect September 1, 2001.
 3-6                                  * * * * *