By: Moncrief, Duncan S.B. No. 1839
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain long-term care facilities.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 ARTICLE 1. SHORT TITLE; PURPOSE
1-5 SECTION 1.01. SHORT TITLE. This Act may be cited as the
1-6 Long-Term Care Facility Improvement Act.
1-7 SECTION 1.02. LEGISLATIVE INTENT; PURPOSE. (a) The
1-8 legislature specifically acknowledges an existing crisis
1-9 confronting long-term care facilities in Texas and the critical
1-10 importance of the services provided to Texans by these facilities,
1-11 and in particular to the growing population of older Texans.
1-12 (b) In response to this crisis, this Act is intended to
1-13 ensure that long-term care facilities continue to be available to
1-14 provide care to Texans, that this care be of the highest quality,
1-15 and that the residents of these facilities be financially protected
1-16 by available and affordable professional liability insurance.
1-17 (c) This Act includes extraordinary measures that are
1-18 necessary to address an emergency in long-term care in this state.
1-19 These measures are intended as temporary solutions that will
1-20 facilitate the efficient recovery of both for-profit and
1-21 not-for-profit private long-term care facilities so that, in the
1-22 future, these facilities will be financially sound and capable of
1-23 providing high-quality care.
1-24 (d) With respect to the legal concepts incorporated in the
1-25 measures contained in this Act, the legislature does not intend for
2-1 these concepts to be applied outside the realm of long-term care.
2-2 Because the application of the measures contained in this Act in
2-3 relation to these legal concepts is temporary and because of the
2-4 extraordinary complexity and uniqueness of the crisis facing
2-5 nursing homes, these measures should not be construed as the
2-6 legislature's interpretation of the current law applicable to these
2-7 legal concepts. In enacting the extraordinary measures contained
2-8 in this Act, the legislature specifically rejects any suggestion
2-9 that these measures represent solutions that are appropriate for
2-10 any area involving liability insurance, insurance practices, or
2-11 medical care other than long-term care facilities.
2-12 ARTICLE 2. NOTICE OF EXEMPLARY DAMAGES IN CERTAIN ACTIONS
2-13 SECTION 2.01. Subchapter B, Chapter 242, Health and Safety
2-14 Code, is amended by adding Section 242.051 to read as follows:
2-15 Sec. 242.051. NOTIFICATION OF AWARD OF EXEMPLARY DAMAGES.
2-16 (a) If exemplary damages are awarded under Chapter 41, Civil
2-17 Practice and Remedies Code, against an institution or an officer,
2-18 employee, or agent of an institution, the court shall notify the
2-19 department.
2-20 (b) If the department receives notice under Subsection (a),
2-21 the department shall maintain the information contained in the
2-22 notice in the records of the department relating to the history of
2-23 the institution.
2-24 SECTION 2.02. This article applies only to an award of
2-25 exemplary damages in a cause of action that accrues on or after
2-26 September 1, 2001.
3-1 ARTICLE 3. ADMISSIBILITY OF CERTAIN EVIDENCE IN CIVIL ACTION
3-2 SECTION 3.01. Subsections (i) and (k), Section 32.021, Human
3-3 Resources Code, are amended to read as follows:
3-4 (i) A record of the department, including a record of
3-5 [Except as provided by Subsections (j) and (k),] a department
3-6 survey, complaint investigation, incident investigation, or survey
3-7 report, that relates to [documents that] an institution, including
3-8 an intermediate care facility for the mentally retarded, may be
3-9 introduced into evidence in a civil action, enforcement action, or
3-10 related proceeding if the record is admissible under the Texas
3-11 Rules of Evidence [has violated a standard for participation in the
3-12 state Medicaid program, or the assessment of a monetary penalty by
3-13 the department or the payment of a monetary penalty by the
3-14 institution, is not admissible as evidence in a civil action to
3-15 prove that the institution has committed a violation].
3-16 (k) A department surveyor or investigator may testify in a
3-17 civil action as to observations, factual findings, conclusions, or
3-18 violations of requirements for licensure or for certification for
3-19 participation in the state Medicaid program that were made in the
3-20 discharge of official duties for the department, if the testimony
3-21 is admissible under [in accordance with] the Texas Rules of [Civil]
3-22 Evidence.
3-23 SECTION 3.02. Subchapter B, Chapter 242, Health and Safety
3-24 Code, is amended by adding Section 242.050 to read as follows:
3-25 Sec. 242.050. ADMISSIBILITY OF CERTAIN DOCUMENTS OR
3-26 TESTIMONY. Sections 32.021(i) and (k), Human Resources Code,
4-1 govern the admissibility in a civil action against an institution
4-2 of:
4-3 (1) a record of the department described by Section
4-4 32.021(i), Human Resources Code; or
4-5 (2) the testimony of a department surveyor or
4-6 investigator described by Section 32.021(k), Human Resources Code.
4-7 SECTION 3.03. Subchapter B, Chapter 252, Health and Safety
4-8 Code, is amended by adding Section 252.045 to read as follows:
4-9 Sec. 252.045. ADMISSIBILITY OF CERTAIN DOCUMENTS OR
4-10 TESTIMONY. Sections 32.021(i) and (k), Human Resources Code,
4-11 govern the admissibility in a civil action against a facility of:
4-12 (1) a record of the department described by Section
4-13 32.021(i), Human Resources Code; or
4-14 (2) the testimony of a department surveyor or
4-15 investigator described by Section 32.021(k), Human Resources Code.
4-16 SECTION 3.04. Subsection (j), Section 32.021, Human
4-17 Resources Code, is repealed.
4-18 SECTION 3.05. This article applies only to a civil action,
4-19 enforcement action, or related proceeding that is commenced on or
4-20 after the effective date of this Act. A civil action, enforcement
4-21 action, or related proceeding that is commenced before the
4-22 effective date of this Act is governed by the law applicable to the
4-23 action or proceeding immediately before the effective date of this
4-24 Act, and that law is continued in effect for that purpose.
4-25 ARTICLE 4. DATA REPORTING FOR CERTAIN LIABILITY INSURANCE COVERAGE
4-26 SECTION 4.01. Chapter 38, Insurance Code, is amended by
5-1 adding Subchapter F to read as follows:
5-2 SUBCHAPTER F. DATA REPORTING BY CERTAIN LIABILITY INSURERS
5-3 Sec. 38.251. INSURER DATA REPORTING. (a) Each insurer that
5-4 writes professional liability insurance policies for nursing
5-5 institutions licensed under Chapter 242, Health and Safety Code,
5-6 including an insurer whose rates are not regulated, shall, as a
5-7 condition of writing those policies in this state, comply with a
5-8 request for information from the commissioner under this section.
5-9 (b) The commissioner may require information in rate
5-10 filings, special data calls, or informational hearings or by any
5-11 other means consistent with this code applicable to the affected
5-12 insurer that the commissioner believes will allow the commissioner
5-13 to:
5-14 (1) determine whether insurers writing insurance
5-15 coverage described by Subsection (a) are passing to insured nursing
5-16 institutions on a prospective basis the savings that accrue as a
5-17 result of the reduction in risk to insurers writing that coverage
5-18 that will result from legislation enacted by the 77th Legislature,
5-19 Regular Session, including legislation that:
5-20 (A) amended Article 5.15-1 to limit the exposure
5-21 of an insurer to exemplary damages for certain claims against a
5-22 nursing institution; and
5-23 (B) amended Sections 32.021(i) and (k), Human
5-24 Resources Code, added Section 242.050, Health and Safety Code, and
5-25 repealed Section 32.021(j), Human Resources Code, to clarify the
5-26 admissibility of certain documents in a civil action against a
6-1 nursing institution; or
6-2 (2) prepare the report required of the commissioner
6-3 under Section 38.252 or any other report the commissioner is
6-4 required to submit to the legislature in connection with the
6-5 legislation described by Subdivision (1).
6-6 (c) Information provided under this section is privileged
6-7 and confidential to the same extent as the information is
6-8 privileged and confidential under this code or any other law
6-9 governing an insurer described by Subsection (a). The information
6-10 remains privileged and confidential unless and until introduced
6-11 into evidence at an administrative hearing or in a court of
6-12 competent jurisdiction.
6-13 Sec. 38.252. RECOMMENDATIONS TO LEGISLATURE. The
6-14 commissioner shall assemble information and take other appropriate
6-15 measures to assess and evaluate changes in the marketplace
6-16 resulting from the implementation of the legislation described by
6-17 Section 38.251 and shall report the commissioner's findings and
6-18 recommendations to the legislature.
6-19 ARTICLE 5. AVAILABILITY OF AND COVERAGE UNDER CERTAIN
6-20 PROFESSIONAL LIABILITY INSURANCE
6-21 SECTION 5.01. Subdivision (2), Section 2, Article 5.15-1,
6-22 Insurance Code, is amended to read as follows:
6-23 (2) "Health care provider" means any person,
6-24 partnership, professional association, corporation, facility, or
6-25 institution licensed or chartered by the State of Texas to provide
6-26 health care as a registered nurse, hospital, dentist, podiatrist,
7-1 chiropractor, optometrist, pharmacist, veterinarian, not-for-profit
7-2 kidney dialysis center, blood bank that is a nonprofit corporation
7-3 chartered to operate a blood bank and which is accredited by the
7-4 American Association of Blood Banks, for-profit nursing home or
7-5 not-for-profit nursing home, or an officer, employee, or agent of
7-6 any of them acting in the course and scope of his employment.
7-7 SECTION 5.02. Section 8, Article 5.15-1, Insurance Code, is
7-8 amended to read as follows:
7-9 Sec. 8. EXEMPLARY [PUNITIVE] DAMAGES UNDER MEDICAL
7-10 PROFESSIONAL LIABILITY INSURANCE. No policy of medical
7-11 professional liability insurance issued to or renewed for a health
7-12 care provider or physician in this state may include coverage for
7-13 exemplary [punitive] damages that may be assessed against the
7-14 health care provider or physician; provided, however, that the
7-15 commissioner may approve an endorsement form that provides for
7-16 coverage for exemplary [punitive] damages to be used on a policy of
7-17 medical professional liability insurance issued to a hospital, as
7-18 the term "hospital" is defined in this article, or to a for-profit
7-19 or not-for-profit nursing home.
7-20 SECTION 5.03. Subchapter B, Chapter 5, Insurance Code, is
7-21 amended by adding Article 5.15-4 to read as follows:
7-22 Art. 5.15-4. BEST PRACTICES FOR NURSING HOMES. (a) The
7-23 commissioner shall adopt best practices for risk management and
7-24 loss control that may be used by for-profit and not-for-profit
7-25 nursing homes.
7-26 (b) In determining rates for professional liability
8-1 insurance applicable to a for-profit or not-for-profit nursing
8-2 home, an insurance company or the Texas Medical Liability Insurance
8-3 Underwriting Association may consider whether the nursing home
8-4 adopts and implements the best practices adopted by the
8-5 commissioner under Subsection (a) of this article.
8-6 (c) In developing or amending best practices for for-profit
8-7 and not-for-profit nursing homes, the commissioner shall consult
8-8 with the Health and Human Services Commission and a task force
8-9 appointed by the commissioner. The task force must be composed of
8-10 representatives of:
8-11 (1) insurance companies that write professional
8-12 liability insurance for nursing homes;
8-13 (2) the Texas Medical Liability Insurance Underwriting
8-14 Association;
8-15 (3) nursing homes; and
8-16 (4) consumers.
8-17 (d) The best practices for risk management and loss control
8-18 adopted under this article do not establish standards of care for
8-19 nursing homes applicable in a civil action against a nursing home.
8-20 SECTION 5.04. Subdivision (6), Section 2, Article 21.49-3,
8-21 Insurance Code, is amended to read as follows:
8-22 (6) "Health care provider" means:
8-23 (A) any person, partnership, professional
8-24 association, corporation, facility, or institution duly licensed or
8-25 chartered by the State of Texas to provide health care as defined
8-26 in Section 1.03(a)(2) [1.03(2)], Medical Liability and Insurance
9-1 Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
9-2 Statutes), as:
9-3 (i) a registered nurse, hospital, dentist,
9-4 podiatrist, pharmacist, chiropractor, or optometrist;
9-5 (ii) a for-profit[,] or not-for-profit
9-6 nursing home;
9-7 (iii) [, or] a radiation therapy center
9-8 that is independent of any other medical treatment facility and
9-9 which is licensed by the Texas Department of Health in that
9-10 agency's capacity as the Texas [State] Radiation Control Agency
9-11 pursuant to the provisions of Chapter 401, Health and Safety Code,
9-12 and which is in compliance with the regulations promulgated under
9-13 that chapter;
9-14 (iv) [by the Texas State Radiation Control
9-15 Agency,] a blood bank that is a nonprofit corporation chartered to
9-16 operate a blood bank and which is accredited by the American
9-17 Association of Blood Banks;
9-18 (v) [,] a nonprofit corporation which is
9-19 organized for the delivery of health care to the public and which
9-20 is certified under Chapter 162, Occupations Code; [Article 4509a,
9-21 Revised Civil Statutes of Texas, 1925,] or
9-22 (vi) a [migrant] health center as defined
9-23 by 42 U.S.C. Section 254b [P.L. 94-63], as amended; [(42 U.S.C.
9-24 Section 254b), or a community health center as defined by P.L.
9-25 94-63, as amended (42 U.S.C. Section 254c), that is receiving
9-26 federal funds under an application approved under either Title IV,
10-1 P.L. 94-63, as amended (42 U.S.C. Section 254b), or Title V, P.L.
10-2 94-63, as amended (42 U.S.C. Section 254c),] or
10-3 (B) an officer, employee, or agent of any of
10-4 them acting in the course and scope of that person's [his]
10-5 employment.
10-6 SECTION 5.05. Section 3A, Article 21.49-3, Insurance Code,
10-7 is amended by adding Subsection (c) to read as follows:
10-8 (c) A for-profit or not-for-profit nursing home not
10-9 otherwise eligible under this section for coverage from the
10-10 association is eligible for coverage if the nursing home
10-11 demonstrates, in accordance with the requirements of the
10-12 association, that the nursing home made a verifiable effort to
10-13 obtain coverage from authorized insurers and eligible surplus lines
10-14 insurers and was unable to obtain substantially equivalent coverage
10-15 and rates.
10-16 SECTION 5.06. Subsection (b), Section 4, Article 21.49-3,
10-17 Insurance Code, is amended by amending Subdivision (1) and adding
10-18 Subdivision (6) to read as follows:
10-19 (1) Subject to Subdivision (6) of this subsection, the
10-20 [The] rates, rating plans, rating rules, rating classification,
10-21 territories, and policy forms applicable to the insurance written
10-22 by the association and statistics relating thereto shall be subject
10-23 to Subchapter B of Chapter 5 of the Insurance Code, as amended,
10-24 giving due consideration to the past and prospective loss and
10-25 expense experience for medical professional liability insurance
10-26 within and without this state of all of the member companies of the
11-1 association, trends in the frequency and severity of losses, the
11-2 investment income of the association, and such other information as
11-3 the commissioner [board] may require; provided, that if any article
11-4 of the above subchapter is in conflict with any provision of this
11-5 Act, this Act shall prevail. For purposes of this article, rates,
11-6 rating plans, rating rules, rating classifications, territories,
11-7 and policy forms for for-profit nursing homes are subject to the
11-8 requirements of Article 5.15-1 of this code to the same extent as
11-9 not-for-profit nursing homes.
11-10 (6) The rates applicable to professional liability
11-11 insurance provided by the association that cover nursing homes that
11-12 are not for profit must reflect a discount of 30 percent from the
11-13 rates for the same coverage provided to others in the same category
11-14 of insureds. The commissioner shall ensure compliance with this
11-15 subdivision.
11-16 SECTION 5.07. Section 4A, Article 21.49-3, Insurance Code,
11-17 is amended to read as follows:
11-18 Sec. 4A. POLICYHOLDER'S STABILIZATION RESERVE FUND.
11-19 (a) There is hereby created a policyholder's stabilization reserve
11-20 fund which shall be administered as provided herein and in the plan
11-21 of operation of the association. The purpose of the fund is to
11-22 ensure the financial soundness of the association. The fund may be
11-23 used only for the purposes of this article.
11-24 (b) Each policyholder shall pay annually into the
11-25 stabilization reserve fund a charge, the amount of which shall be
11-26 established annually by advisory directors chosen by health care
12-1 providers and physicians eligible for insurance in the association
12-2 in accordance with the plan of operation. The charge shall be in
12-3 proportion to each premium payment due for liability insurance
12-4 through the association. Such charge shall be separately stated in
12-5 the policy, but shall not constitute a part of premiums or be
12-6 subject to premium taxation, servicing fees, acquisition costs, or
12-7 any other such charges.
12-8 (c) The [policyholder's] stabilization reserve fund shall be
12-9 collected and administered by the association and shall be treated
12-10 as a liability of the association along with and in the same manner
12-11 as premium and loss reserves. The fund shall be valued annually by
12-12 the board of directors as of the close of the last preceding year.
12-13 (d) Except as provided by Subsection (e) of this section,
12-14 collections [Collections] of the stabilization reserve fund charge
12-15 shall continue only until such time as the net balance of the
12-16 stabilization reserve fund is not less than the projected sum of
12-17 premiums to be written in the year following valuation date.
12-18 (e) If in any fiscal year the incurred losses and defense
12-19 and cost containment expenses from physicians or any single
12-20 category of health care provider result in a net underwriting loss
12-21 and exceed 25 percent of the stabilization reserve fund, as valued
12-22 for that year, the commissioner may by order direct the initiation
12-23 or continuation of the stabilization reserve fund charge for
12-24 physicians or that category of health care provider until the fund
12-25 recovers the amount by which those losses and cost containment
12-26 expenses exceed 25 percent of the fund.
13-1 (f) The stabilization reserve fund shall be credited with
13-2 all stabilization reserve fund charges collected from policyholders
13-3 and shall be charged with any deficit from the prior year's
13-4 operation of the association.
13-5 (g) The stabilization reserve fund, and any earnings of the
13-6 fund, are state funds and shall be held by the comptroller outside
13-7 the state treasury on behalf of, and with legal title in, the
13-8 department. No part of the fund, or the earnings of the fund, may
13-9 inure to the benefit of a member of the association, a
13-10 policyholder, or any other individual, and the assets of the fund
13-11 may be used in accordance with the association's plan of operation
13-12 only to implement this article and for the purposes of the
13-13 association, including making payment to satisfy, in whole or in
13-14 part, the liability of the association regarding a claim made on a
13-15 policy written by the association.
13-16 (h) Notwithstanding Sections 11, 12, and 13 of this article,
13-17 the stabilization reserve fund may be terminated only by law.
13-18 (i) Notwithstanding Section 11 of this article, on
13-19 termination of the stabilization reserve fund, all assets of the
13-20 fund shall be transferred to the general revenue fund to be
13-21 appropriated for purposes related to ensuring the kinds of
13-22 liability insurance coverage that may be provided by the
13-23 association under this article.
13-24 SECTION 5.08. Article 21.49-3, Insurance Code, is amended by
13-25 adding Section 4B to read as follows:
13-26 Sec. 4B. LIABILITY FOR EXEMPLARY DAMAGES; EXPIRATION.
14-1 (a) The association is not liable for exemplary damages under a
14-2 professional liability insurance policy that covers a for-profit or
14-3 not-for-profit nursing home and that excludes coverage for
14-4 exemplary damages awarded in relation to a covered claim awarded
14-5 under Chapter 41, Civil Practice and Remedies Code, or any other
14-6 law. This subsection applies without regard to the application of
14-7 the common law theory of recovery commonly known in Texas as the
14-8 "Stowers Doctrine." This subsection does not affect the
14-9 application of that doctrine to the liability of the association
14-10 for compensatory damages.
14-11 (b) This section does not affect the contractual duties
14-12 imposed under an insurance policy.
14-13 (c) This section does not prohibit a for-profit or
14-14 not-for-profit nursing home from purchasing a policy to cover
14-15 exemplary damages.
14-16 (d) This section applies only to the liability of the
14-17 association for exemplary damages under an insurance policy
14-18 delivered, issued for delivery, or renewed by the association to a
14-19 for-profit or not-for-profit nursing home on or after January 1,
14-20 2002, and applies only to coverage provided under the policy for
14-21 any portion of the term of the policy that occurs before January 1,
14-22 2006. This section applies only to the liability of the
14-23 association for exemplary damages with respect to a claim for which
14-24 a notice of loss or notice of occurrence was made, or should have
14-25 been made, in accordance with the terms of the policy, on or after
14-26 January 1, 2002, but before January 1, 2006.
15-1 (e) This section expires January 1, 2007.
15-2 SECTION 5.09. Subchapter E, Chapter 21, Insurance Code, is
15-3 amended by adding Article 21.49-3d to read as follows:
15-4 Art. 21.49-3d. REVENUE BOND PROGRAM AND PROCEDURES FOR
15-5 CERTAIN LIABILITY INSURANCE
15-6 Sec. 1. LEGISLATIVE FINDING; PURPOSE. The legislature finds
15-7 that the issuance of bonds to provide a method to raise funds to
15-8 provide professional liability insurance through the association
15-9 for nursing homes in this state is for the benefit of the public
15-10 and in furtherance of a public purpose.
15-11 Sec. 2. DEFINITIONS. In this article:
15-12 (1) "Association" means the joint underwriting
15-13 association established under Article 21.49-3 of this code.
15-14 (2) "Bond resolution" means the resolution or order
15-15 authorizing the bonds to be issued under this article.
15-16 (3) "Board" means the board of directors of the Texas
15-17 Public Finance Authority.
15-18 (4) "Insurer" means any insurer required to be a
15-19 member of the association under Section 3, Article 21.49-3 of this
15-20 code.
15-21 Sec. 3. BONDS AUTHORIZED; APPLICATION OF TEXAS PUBLIC
15-22 FINANCE AUTHORITY ACT. (a) On behalf of the fund, the Texas
15-23 Public Finance Authority shall issue revenue bonds to:
15-24 (1) fund the policyholder's stabilization reserve fund
15-25 established under Section 4A, Article 21.49-3 of this code;
15-26 (2) pay costs related to issuance of the bonds; and
16-1 (3) pay other costs related to the bonds as may be
16-2 determined by the board.
16-3 (b) To the extent not inconsistent with this article,
16-4 Chapter 1232, Government Code, applies to bonds issued under this
16-5 article. In the event of a conflict, this article controls.
16-6 Sec. 4. APPLICABILITY OF OTHER STATUTES. The following laws
16-7 apply to bonds issued under this article to the extent consistent
16-8 with this article:
16-9 (1) Chapters 1201, 1202, 1204, 1205, 1231, and 1371,
16-10 Government Code; and
16-11 (2) Subchapter A, Chapter 1206, Government Code.
16-12 Sec. 5. LIMITS. The Texas Public Finance Authority may
16-13 issue, on behalf of the association, bonds in a total amount not to
16-14 exceed $75 million.
16-15 Sec. 6. CONDITIONS. (a) Bonds may be issued at public or
16-16 private sale.
16-17 (b) Bonds may mature not more than 10 years after the date
16-18 issued.
16-19 (c) Bonds must be issued in the name of the association.
16-20 Sec. 7. ADDITIONAL COVENANTS. In a bond resolution, the
16-21 board may make additional covenants with respect to the bonds and
16-22 the designated income and receipts of the association pledged to
16-23 their payment and may provide for the flow of funds and the
16-24 establishment, maintenance, and investment of funds and accounts
16-25 with respect to the bonds.
16-26 Sec. 8. SPECIAL ACCOUNTS. (a) A bond resolution may
17-1 establish special accounts, including an interest and sinking fund
17-2 account, reserve account, and other accounts.
17-3 (b) The association shall administer the accounts in
17-4 accordance with Article 21.49-3 of this code.
17-5 Sec. 9. SECURITY. (a) Bonds are payable only from the
17-6 maintenance tax surcharge established in Section 10 of this article
17-7 or other sources the fund is authorized to levy, charge, and
17-8 collect in connection with paying any portion of the bonds.
17-9 (b) Bonds are obligations solely of the association. Bonds
17-10 do not create a pledging, giving, or lending of the faith, credit,
17-11 or taxing authority of this state.
17-12 (c) Each bond must include a statement that the state is not
17-13 obligated to pay any amount on the bond and that the faith, credit,
17-14 and taxing authority of this state are not pledged, given, or lent
17-15 to those payments.
17-16 (d) Each bond issued under this article must state on its
17-17 face that the bond is payable solely from the revenues pledged for
17-18 that purpose and that the bond does not and may not constitute a
17-19 legal or moral obligation of the state.
17-20 Sec. 10. MAINTENANCE TAX SURCHARGE. (a) A maintenance tax
17-21 surcharge is assessed against:
17-22 (1) each insurer; and
17-23 (2) the association.
17-24 (b) The maintenance tax surcharge shall be set in an amount
17-25 sufficient to pay all debt service on the bonds. The maintenance
17-26 tax surcharge is set by the commissioner in the same time and shall
18-1 be collected by the comptroller on behalf of the association in the
18-2 same manner as applicable maintenance taxes are collected under
18-3 Article 5.24 of this code.
18-4 (c) On determining the rate of assessment, the department
18-5 shall increase the maintenance tax rate applicable to correctly
18-6 reported gross premiums for liability insurance to a rate
18-7 sufficient to pay all debt service on the bonds, subject to the
18-8 maximum maintenance tax rate applicable to the insurer under
18-9 Article 5.24 of this code. If the resulting tax rate is
18-10 insufficient to pay all debt service on the bonds, the department
18-11 may assess an additional surcharge not to exceed one percent of
18-12 correctly reported gross premiums for liability insurance to cover
18-13 all debt service on the bonds. In this code, the maintenance tax
18-14 surcharge includes the additional maintenance tax assessed under
18-15 this subsection and the surcharge assessed under this subsection to
18-16 pay all debt service of the bonds.
18-17 (d) The association and each insurer may pass through the
18-18 maintenance tax surcharge to each of its policyholders.
18-19 (e) As a condition of engaging in the business of insurance
18-20 in this state, an insurer agrees that if the company leaves the
18-21 market for liability insurance in this state the insurer remains
18-22 obligated to pay, until the bonds are retired, the insurer's share
18-23 of the maintenance tax surcharge assessed under this section in an
18-24 amount proportionate to that insurer's share of the market for
18-25 liability insurance in this state as of the last complete reporting
18-26 period before the date on which the insurer ceases to engage in
19-1 that insurance business in this state. The proportion assessed
19-2 against the insurer shall be based on the insurer's gross premiums
19-3 for liability insurance for the insurer's last reporting period.
19-4 However, an insurer is not required to pay the proportionate amount
19-5 in any year in which the surcharge assessed against insurers
19-6 continuing to write liability insurance in this state is sufficient
19-7 to service the bond obligation.
19-8 Sec. 11. TAX EXEMPT. The bonds issued under this article,
19-9 and any interest from the bonds, and all assets pledged to secure
19-10 the payment of the bonds are free from taxation by the state or a
19-11 political subdivision of this state.
19-12 Sec. 12. AUTHORIZED INVESTMENTS. The bonds issued under
19-13 this article constitute authorized investments under Article 2.10
19-14 and Subpart A, Part I, Article 3.39 of this code.
19-15 Sec. 13. STATE PLEDGE. The state pledges to and agrees with
19-16 the owners of any bonds issued in accordance with this article that
19-17 the state will not limit or alter the rights vested in the
19-18 association to fulfill the terms of any agreements made with the
19-19 owners of the bonds or in any way impair the rights and remedies of
19-20 those owners until the bonds, any premium or interest, and all
19-21 costs and expenses in connection with any action or proceeding by
19-22 or on behalf of those owners are fully met and discharged. The
19-23 association may include this pledge and agreement of the state in
19-24 any agreement with the owners of the bonds.
19-25 Sec. 14. ENFORCEMENT BY MANDAMUS. A writ of mandamus and
19-26 all other legal and equitable remedies are available to any party
20-1 at interest to require the association and any other party to carry
20-2 out agreements and to perform functions and duties under this
20-3 article, the Texas Constitution, or a bond resolution.
20-4 SECTION 5.10. Not later than December 1, 2001, the
20-5 commissioner of insurance shall adopt the initial best practices
20-6 for for-profit and not-for-profit nursing homes adopted as required
20-7 by Article 5.15-4, Insurance Code, as added by this article.
20-8 SECTION 5.11. Sections 2, 3A, and 4, Article 21.49-3,
20-9 Insurance Code, as amended by this article, apply only to an
20-10 insurance policy delivered, issued for delivery, or renewed on or
20-11 after January 1, 2002. A policy delivered, issued for delivery, or
20-12 renewed before January 1, 2002, is governed by the law as it
20-13 existed immediately before the effective date of this Act, and that
20-14 law is continued in effect for that purpose.
20-15 ARTICLE 6. MANDATORY LIABILITY INSURANCE FOR
20-16 NURSING INSTITUTIONS
20-17 SECTION 6.01. Subchapter B, Chapter 242, Health and Safety
20-18 Code, is amended by adding Section 242.0372 to read as follows:
20-19 Sec. 242.0372. LIABILITY INSURANCE COVERAGE. (a) In this
20-20 section, "health care liability claim" has the meaning assigned by
20-21 the Medical Liability and Insurance Improvement Act of Texas
20-22 (Article 4590i, Vernon's Texas Civil Statutes).
20-23 (b) To hold a license under this chapter, an institution
20-24 must maintain professional liability insurance coverage against the
20-25 liability of the institution for a health care liability claim.
20-26 (c) The insurance coverage maintained by an institution
21-1 under this section must:
21-2 (1) provide coverage annually in the minimum amount of
21-3 $1 million per occurrence and $3 million aggregate;
21-4 (2) be written on a claims-made basis;
21-5 (3) be issued by:
21-6 (A) an admitted insurer authorized to write
21-7 professional liability insurance in this state;
21-8 (B) the Texas Medical Liability Insurance
21-9 Underwriting Association established under Article 21.49-3,
21-10 Insurance Code; or
21-11 (C) an eligible surplus lines insurer in
21-12 accordance with Article 1.14-2, Insurance Code; and
21-13 (4) be in a form acceptable to the department.
21-14 (d) To the extent permitted by federal law and applicable
21-15 state and federal rules, the cost of insurance coverage required to
21-16 be maintained under this section is an allowable cost for
21-17 reimbursement under the state Medicaid program.
21-18 SECTION 6.02. (a) Notwithstanding Section 242.0372, Health
21-19 and Safety Code, as added by this article, and subject to
21-20 Subsection (b) of this section, an institution licensed under
21-21 Chapter 242, Health and Safety Code, is not required to maintain
21-22 professional liability insurance as required by that section before
21-23 September 1, 2002.
21-24 (b) Before September 1, 2003, the Texas Department of Human
21-25 Services may not take any enforcement action, including an action
21-26 to suspend or revoke a license, because an institution fails to
22-1 maintain professional liability insurance as required by Section
22-2 242.0372, Health and Safety Code, as added by this article, if the
22-3 Health and Human Services Commission, in conjunction with the Texas
22-4 Department of Insurance, determines, considering the totality of
22-5 the circumstances, that the institution does not have the financial
22-6 ability to obtain the insurance without jeopardizing the quality of
22-7 care to residents.
22-8 ARTICLE 7. SURVEYS AND RELATED PROCESSES
22-9 SECTION 7.01. Chapter 22, Human Resources Code, is amended
22-10 by adding Section 22.037 to read as follows:
22-11 Sec. 22.037. TRAINING AND CONTINUING EDUCATION RELATED TO
22-12 CERTAIN LONG-TERM CARE FACILITIES. (a) In this section:
22-13 (1) "Long-term care facility" means a nursing
22-14 institution, an assisted living facility, or an intermediate care
22-15 facility for the mentally retarded licensed under Chapter 242, 247,
22-16 or 252, Health and Safety Code.
22-17 (2) "Provider" means an employee or agent of a
22-18 long-term care facility.
22-19 (3) "Surveyor" means an employee or agent of the
22-20 department or another state agency responsible for licensing,
22-21 inspecting, surveying, or investigating a long-term care facility
22-22 in relation to:
22-23 (A) licensing under Chapter 242, 247, or 252,
22-24 Health and Safety Code; or
22-25 (B) certification for participation in the
22-26 medical assistance program in accordance with Chapter 32.
23-1 (b) The department shall require a surveyor to complete a
23-2 basic training program before the surveyor inspects, surveys, or
23-3 investigates a long-term care facility. The training must include
23-4 observation of the operations of a long-term care facility
23-5 unrelated to the survey, inspection, or investigation process for a
23-6 minimum of 10 working days within a 14-day period.
23-7 (c) The department shall semiannually provide training for
23-8 surveyors and providers on subjects that address at least one of
23-9 the 10 most common violations by long-term care facilities under
23-10 federal or state law.
23-11 (d) Except as provided by Subsection (e), a surveyor who is
23-12 a health care professional licensed under the laws of this state
23-13 must receive a minimum of 50 percent of the professional's required
23-14 continuing education credits, if any, in gerontology or care for
23-15 individuals with cognitive or physical disabilities, as
23-16 appropriate.
23-17 (e) A surveyor who is a pharmacist must receive a minimum of
23-18 30 percent of the pharmacist's required continuing education
23-19 credits in gerontology or care for individuals with cognitive or
23-20 physical disabilities, as appropriate.
23-21 SECTION 7.02. Subchapter B, Chapter 531, Government Code, is
23-22 amended by adding Sections 531.056, 531.057, and 531.058 to read as
23-23 follows:
23-24 Sec. 531.056. REVIEW OF SURVEY PROCESS IN CERTAIN
23-25 INSTITUTIONS AND FACILITIES. (a) The commission shall adopt
23-26 procedures to review:
24-1 (1) citations or penalties assessed for a violation of
24-2 a rule or law against an institution or facility licensed under
24-3 Chapter 242, 247, or 252, Health and Safety Code, or certified in
24-4 accordance with Chapter 32, Human Resources Code, considering:
24-5 (A) the number of violations by geographic
24-6 region;
24-7 (B) the patterns of violations in each region;
24-8 and
24-9 (C) the outcomes following the assessment of a
24-10 penalty or citation; and
24-11 (2) the performance of duties by employees and agents
24-12 of the Texas Department of Human Services or another state agency
24-13 responsible for licensing, inspecting, surveying, or investigating
24-14 institutions and facilities licensed under Chapter 242, 247, or
24-15 252, Health and Safety Code, or certified in accordance with
24-16 Chapter 32, Human Resources Code, related to:
24-17 (A) complaints received by the commission; or
24-18 (B) any standards or rules violated by an
24-19 employee or agent of a state agency.
24-20 (b) The commission shall annually report to the speaker of
24-21 the house of representatives, the lieutenant governor, and the
24-22 governor on the findings of the review conducted under Subsection
24-23 (a).
24-24 Sec. 531.057. QUALITY ASSURANCE EARLY WARNING SYSTEM FOR
24-25 LONG-TERM CARE FACILITIES; RAPID RESPONSE TEAMS. (a) In this
24-26 section:
25-1 (1) "Long-term care facility" means a nursing
25-2 institution, an assisted living facility, or an intermediate care
25-3 facility for the mentally retarded licensed under Chapter 242, 247,
25-4 or 252, Health and Safety Code, or certified under Chapter 32,
25-5 Human Resources Code.
25-6 (2) "Quality-of-care monitor" means a registered
25-7 nurse, pharmacist, or nutritionist who:
25-8 (A) is employed by the commission;
25-9 (B) is trained and experienced in long-term care
25-10 facility regulation, standards of practice in long-term care, and
25-11 evaluation of patient care; and
25-12 (C) functions independently of the Texas
25-13 Department of Human Services.
25-14 (b) The commission shall establish an early warning system
25-15 to detect conditions that could be detrimental to the health,
25-16 safety, and welfare of residents. The early warning system shall
25-17 include analysis of financial and quality-of-care indicators that
25-18 would predict the need for the commission to take action.
25-19 (c) The commission shall establish regional offices with one
25-20 or more quality-of-care monitors, based on the number of long-term
25-21 care facilities in the region, to monitor the facilities in the
25-22 region on a regular, unannounced, aperiodic basis, including
25-23 nights, evenings, weekends, and holidays.
25-24 (d) Priority for monitoring visits shall be given to
25-25 long-term care facilities with a history of patient care
25-26 deficiencies.
26-1 (e) Quality-of-care monitors may not be deployed by the
26-2 commission as a part of the regional survey team in the conduct of
26-3 routine, scheduled surveys.
26-4 (f) A quality-of-care monitor may not interfere with,
26-5 impede, or otherwise adversely affect the performance of the duties
26-6 of a surveyor, inspector, or investigator of the Texas Department
26-7 of Human Services.
26-8 (g) Quality-of-care monitors shall assess:
26-9 (1) the overall quality of life in the long-term care
26-10 facility; and
26-11 (2) specific conditions in the facility directly
26-12 related to patient care.
26-13 (h) The quality-of-care monitor shall include in an
26-14 assessment visit:
26-15 (1) observation of the care and services rendered to
26-16 residents; and
26-17 (2) formal and informal interviews with residents,
26-18 family members, facility staff, resident guests, volunteers, other
26-19 regulatory staff, and representatives of a human rights advocacy
26-20 committee.
26-21 (i) The identity of a resident or a family member of a
26-22 resident interviewed by a quality-of-care monitor as provided by
26-23 Subsection (h)(2) shall remain confidential and may not be
26-24 disclosed to any person under any other provision of this section.
26-25 (j) The findings of a monitoring visit, both positive and
26-26 negative, shall be provided orally and in writing to the long-term
27-1 care facility administrator or, in the absence of the facility
27-2 administrator, to the administrator on duty or the director of
27-3 nursing.
27-4 (k) The quality-of-care monitor may recommend to the
27-5 long-term care facility administrator procedural and policy changes
27-6 and staff training to improve the care or quality of life of
27-7 facility residents.
27-8 (l) Conditions observed by the quality-of-care monitor that
27-9 create an immediate threat to the health or safety of a resident
27-10 shall be reported immediately to the regional office supervisor for
27-11 appropriate action and, as appropriate or as required by law, to
27-12 law enforcement, adult protective services, or other responsible
27-13 agencies.
27-14 (m) The commission shall create rapid response teams
27-15 composed of health care experts that can visit long-term care
27-16 facilities identified through the commission's early warning
27-17 system.
27-18 (n) Rapid response teams may visit long-term care facilities
27-19 that request the commission's assistance. A visit under this
27-20 subsection may not occur before the 60th day after the date of an
27-21 exit interview following an annual or follow-up survey or
27-22 inspection.
27-23 (o) The rapid response teams may not be deployed for the
27-24 purpose of helping a long-term care facility prepare for a regular
27-25 inspection or survey conducted under Chapter 242, 247, or 252,
27-26 Health and Safety Code, or in accordance with Chapter 32, Human
28-1 Resources Code.
28-2 Sec. 531.058. INFORMAL DISPUTE RESOLUTION FOR CERTAIN
28-3 LONG-TERM CARE FACILITIES. (a) The commission by rule shall
28-4 establish an informal dispute resolution process in accordance with
28-5 this section. The process must provide for adjudication by an
28-6 appropriate disinterested person of disputes relating to a proposed
28-7 enforcement action or related proceeding of the Texas Department of
28-8 Human Services under Section 32.021(d), Human Resources Code, or
28-9 Chapter 242, 247, or 252, Health and Safety Code. The informal
28-10 dispute resolution process must require:
28-11 (1) the institution or facility to request informal
28-12 dispute resolution not later than the 10th calendar day after
28-13 notification by the department of the violation of a standard or
28-14 standards;
28-15 (2) the commission to complete the process not later
28-16 than the 30th calendar day after receipt of a request from the
28-17 institution or facility for informal dispute resolution; and
28-18 (3) any individual representing an institution or
28-19 facility in an informal dispute resolution process to register with
28-20 the commission and disclose the following:
28-21 (A) the individual's employment history during
28-22 the preceding five years, including employment in regulatory
28-23 agencies of this state and other states;
28-24 (B) ownership, including the identity of the
28-25 controlling person or persons, of the institution or facility the
28-26 individual is representing before the commission; and
29-1 (C) the identity of other entities the
29-2 individual represents or has represented before the commission
29-3 during the previous 24 months.
29-4 (b) The commission shall adopt rules to adjudicate claims in
29-5 contested cases.
29-6 (c) The commission may not delegate its responsibility to
29-7 administer the informal dispute resolution process established by
29-8 this section to another state agency.
29-9 SECTION 7.03. Subsection (d), Section 32.021, Human
29-10 Resources Code, is amended to read as follows:
29-11 (d) The department shall include in its contracts for the
29-12 delivery of medical assistance by nursing facilities provisions for
29-13 monetary penalties to be assessed for violations as required by 42
29-14 U.S.C. Section 1396r, including without limitation the Omnibus
29-15 Budget Reconciliation Act (OBRA), P.L. 100-203, Nursing Home Reform
29-16 Amendments of 1987, provided that the department shall:
29-17 (1) provide for an informal dispute resolution process
29-18 in the Health and Human Services Commission as provided by Section
29-19 531.058, Government Code [department's central office; the informal
29-20 dispute resolution process shall:]
29-21 [(A) require the institution to request informal
29-22 dispute resolution no later than the 10th calendar day after
29-23 notification by the department of a violation of a standard or
29-24 standards;]
29-25 [(B) require the department to complete the
29-26 process no later than the 30th calendar day after receipt of a
30-1 request from the institution for informal dispute resolution; and]
30-2 [(C) require any individual representing an
30-3 institution in an informal dispute resolution process to register
30-4 with the department and disclose the following:]
30-5 [(i) the individual's five-year employment
30-6 history during the preceding five years, including employment in
30-7 regulatory agencies of this state and other states;]
30-8 [(ii) ownership, including the identity of
30-9 the controlling person or persons, of the institution the person is
30-10 representing before the department; and]
30-11 [(iii) the identity of other entities the
30-12 person represents or has represented before the agency during the
30-13 previous 24 months]; and
30-14 (2) develop rules to adjudicate claims in contested
30-15 cases, including claims unresolved by the informal dispute
30-16 resolution process of the Health and Human Services Commission.
30-17 SECTION 7.04. Not later than January 1, 2002, the
30-18 commissioner of health and human services shall adopt any rules
30-19 necessary to implement Sections 531.056, 531.057, and 531.058,
30-20 Government Code, as added by this article.
30-21 SECTION 7.05. Not later than January 1, 2002, the Texas
30-22 Department of Human Services shall develop training necessary to
30-23 implement Section 22.037, Human Resources Code, as added by this
30-24 article.
30-25 SECTION 7.06. (a) Effective January 1, 2002:
30-26 (1) all property and records in the custody of the
31-1 Texas Department of Human Services related to the informal dispute
31-2 resolution function under Subsection (d), Section 32.021, Human
31-3 Resources Code, as it existed before amendment by this article, and
31-4 all funds appropriated by the legislature to the Texas Department
31-5 of Human Services for the function are transferred to the Health
31-6 and Human Services Commission;
31-7 (2) a rule or form adopted by the Texas Department of
31-8 Human Services that relates to the informal dispute resolution
31-9 function under Subsection (d), Section 32.021, Human Resources
31-10 Code, as it existed before amendment by this article, is a rule or
31-11 form of the Health and Human Services Commission and remains in
31-12 effect until altered by that agency;
31-13 (3) the assumption of the informal dispute resolution
31-14 function by the Health and Human Services Commission does not
31-15 affect or impair any act done, any obligation, right, order,
31-16 license, permit, rule, criterion, standard, or requirement
31-17 existing, any investigation begun, or any penalty accrued under
31-18 former law, and that law remains in effect for any action
31-19 concerning those matters; and
31-20 (4) an action brought or proceeding commenced before
31-21 the assumption by the Health and Human Services Commission of the
31-22 informal dispute resolution function under this article is
31-23 effected, including a contested case or a remand of an action or
31-24 proceeding by a reviewing court, is governed by the law and rules
31-25 applicable to the action or proceeding before the date of the
31-26 assumption of the function by the Health and Human Services
32-1 Commission.
32-2 (b) In implementing Section 531.057, Government Code, as
32-3 added by this article, the Health and Human Services Commission may
32-4 not transfer to the commission employees or funding from the
32-5 regulatory functions of the Texas Department of Human Services.
32-6 ARTICLE 8. AMELIORATION OF VIOLATIONS
32-7 SECTION 8.01. Section 242.071, Health and Safety Code, is
32-8 amended to read as follows:
32-9 Sec. 242.071. AMELIORATION OF VIOLATION. (a) In lieu of
32-10 demanding [ordering] payment of an [the] administrative penalty
32-11 assessed under Section 242.066 [242.069], the commissioner may, in
32-12 accordance with this section, allow [require] the person to use,
32-13 under the supervision of the department, any portion of the penalty
32-14 to ameliorate the violation or to improve services, other than
32-15 administrative services, in the institution affected by the
32-16 violation.
32-17 (b) The department shall offer amelioration to a person for
32-18 a charged violation if the department determines that the violation
32-19 does not constitute immediate jeopardy to the health and safety of
32-20 an institution resident.
32-21 (c) The department may not offer amelioration to a person
32-22 if:
32-23 (1) the person has been charged with a violation which
32-24 is subject to correction under Section 242.0665; or
32-25 (2) the department determines that the charged
32-26 violation constitutes immediate jeopardy to the health and safety
33-1 of an institution resident.
33-2 (d) The department shall offer amelioration to a person
33-3 under this section not later than the 10th day after the date the
33-4 person receives from the department a final notification of
33-5 assessment of administrative penalty that is sent to the person
33-6 after an informal dispute resolution process but before an
33-7 administrative hearing under Section 242.068.
33-8 (e) A person to whom amelioration has been offered must file
33-9 a plan for amelioration not later than the 45th day after the date
33-10 the person receives the offer of amelioration from the department.
33-11 In submitting the plan, the person must agree to waive the person's
33-12 right to an administrative hearing under Section 242.068 if the
33-13 department approves the plan.
33-14 (f) At a minimum, a plan for amelioration must:
33-15 (1) propose changes to the management or operation of
33-16 the institution that will improve services to or quality of care of
33-17 residents of the institution;
33-18 (2) identify, through measurable outcomes, the ways in
33-19 which and the extent to which the proposed changes will improve
33-20 services to or quality of care of residents of the institution;
33-21 (3) establish clear goals to be achieved through the
33-22 proposed changes;
33-23 (4) establish a timeline for implementing the proposed
33-24 changes; and
33-25 (5) identify specific actions necessary to implement
33-26 the proposed changes.
34-1 (g) The department may require that an amelioration plan
34-2 propose changes that would result in conditions that exceed the
34-3 requirements of this chapter or the rules adopted under this
34-4 chapter.
34-5 (h) The department shall approve or deny an amelioration
34-6 plan not later than the 45th day after the date the department
34-7 receives the plan. On approval of a person's plan, the department
34-8 shall deny a pending request for a hearing submitted by the person
34-9 under Section 242.067(d).
34-10 (i) The department may not offer amelioration to a person:
34-11 (1) more than three times in a two-year period; or
34-12 (2) more than one time in a two-year period for the
34-13 same or similar violation.
34-14 (j) In this section, "immediate jeopardy to health and
34-15 safety" means a situation in which there is a high probability that
34-16 serious harm or injury to a resident could occur at any time or
34-17 already has occurred and may occur again if the resident is not
34-18 protected from the harm or if the threat is not removed.
34-19 SECTION 8.02. Section 252.071, Health and Safety Code, is
34-20 amended to read as follows:
34-21 Sec. 252.071. AMELIORATION OF VIOLATION. (a) In lieu of
34-22 demanding [ordering] payment of an administrative penalty
34-23 authorized by this subchapter, the department may allow [require] a
34-24 person subject to the penalty to use, under the supervision of the
34-25 department, all or part of the amount of the penalty to ameliorate
34-26 the violation or to improve services, other than administrative
35-1 services, in the facility affected by the violation.
35-2 (b) The department shall offer amelioration to a person for
35-3 a charged violation if the department determines that the violation
35-4 does not constitute immediate jeopardy to the health and safety of
35-5 a facility resident.
35-6 (c) The department may not offer amelioration to a person if
35-7 the department determines that the charged violation constitutes
35-8 immediate jeopardy to the health and safety of a facility resident.
35-9 (d) The department shall offer amelioration to a person
35-10 under this section not later than the 10th day after the date the
35-11 person receives from the department a final notification of
35-12 assessment of administrative penalty that is sent to the person
35-13 after an informal dispute resolution process but before an
35-14 administrative hearing under Section 252.067.
35-15 (e) A person to whom amelioration has been offered must file
35-16 a plan for amelioration not later than the 45th day after the date
35-17 the person receives the offer of amelioration from the department.
35-18 In submitting the plan, the person must agree to waive the person's
35-19 right to an administrative hearing under Section 252.067 if the
35-20 department approves the plan.
35-21 (f) At a minimum, a plan for amelioration must:
35-22 (1) propose changes to the management or operation of
35-23 the facility that will improve services to or quality of care of
35-24 residents of the facility;
35-25 (2) identify, through measurable outcomes, the ways in
35-26 which and the extent to which the proposed changes will improve
36-1 services to or quality of care of residents of the facility;
36-2 (3) establish clear goals to be achieved through the
36-3 proposed changes;
36-4 (4) establish a timeline for implementing the proposed
36-5 changes; and
36-6 (5) identify specific actions necessary to implement
36-7 the proposed changes.
36-8 (g) The department may require that an amelioration plan
36-9 propose changes that would result in conditions that exceed the
36-10 requirements of this chapter or the rules adopted under this
36-11 chapter.
36-12 (h) The department shall approve or deny an amelioration
36-13 plan not later than the 45th day after the date the department
36-14 receives the plan. On approval of a person's plan, the department
36-15 shall deny a pending request for a hearing submitted by the person
36-16 under Section 252.066(b).
36-17 (i) The department may not offer amelioration to a person:
36-18 (1) more than three times in a two-year period; or
36-19 (2) more than one time in a two-year period for the
36-20 same or similar violation.
36-21 (j) In this section, "immediate jeopardy to health and
36-22 safety" means a situation in which there is a high probability that
36-23 serious harm or injury to a resident could occur at any time or
36-24 already has occurred and may occur again if the resident is not
36-25 protected from the harm or if the threat is not removed.
36-26 SECTION 8.03. This article applies only to a violation that
37-1 occurs on or after the effective date of this Act. A violation
37-2 that occurs before that date is covered by the law in effect on the
37-3 date the violation occurred, and the former law is continued in
37-4 effect for that purpose.
37-5 ARTICLE 9. QUALITY ASSURANCE FEE
37-6 SECTION 9.01. Chapter 242, Health and Safety Code, is
37-7 amended by adding Subchapter Q to read as follows:
37-8 SUBCHAPTER Q. QUALITY ASSURANCE FEE
37-9 Sec. 242.851. DEFINITION. In this subchapter, "gross
37-10 receipts" means money paid as compensation for services provided to
37-11 residents, including client participation. The term does not
37-12 include charitable contributions to an institution.
37-13 Sec. 242.852. COMPUTING QUALITY ASSURANCE FEE. (a) A
37-14 quality assurance fee is imposed on each institution for which a
37-15 license fee must be paid under Section 242.034. The fee is:
37-16 (1) an amount established under Subsection (b)
37-17 multiplied by the number of patient days as determined in
37-18 accordance with Section 242.853;
37-19 (2) payable monthly; and
37-20 (3) in addition to other fees imposed under this
37-21 chapter.
37-22 (b) The Health and Human Services Commission or the
37-23 department at the direction of the commission shall set the quality
37-24 assurance fee for each day in the amount necessary to produce
37-25 annual revenues equal to an amount that is not more than six
37-26 percent of the institution's total annual gross receipts in this
38-1 state. The fee is subject to a prospective adjustment as
38-2 necessary.
38-3 (c) The amount of the quality assurance fee must be
38-4 determined using patient days and gross receipts reported to the
38-5 department and covering a period of at least six months.
38-6 (d) The quality assurance fee is an allowable cost for
38-7 reimbursement under the state Medicaid program.
38-8 Sec. 242.853. PATIENT DAYS. For each calendar day, an
38-9 institution shall determine the number of patient days by adding
38-10 the following:
38-11 (1) the number of patients occupying an institution
38-12 bed immediately before midnight of that day;
38-13 (2) the number of beds that are on hold on that day
38-14 and that have been placed on hold for a period not to exceed three
38-15 consecutive calendar days during which a patient is in the
38-16 hospital; and
38-17 (3) the number of beds that are on hold on that day
38-18 and that have been placed on hold for a period not to exceed three
38-19 consecutive calendar days during which a patient is on therapeutic
38-20 home leave.
38-21 Sec. 242.854. REPORTING AND COLLECTION. (a) The Health and
38-22 Human Services Commission or the department at the direction of the
38-23 commission shall collect the quality assurance fee.
38-24 (b) Each institution shall:
38-25 (1) not later than the 10th day after the last day of
38-26 a month file a report with the Health and Human Services Commission
39-1 or the department, as appropriate, stating the total patient days
39-2 for the month; and
39-3 (2) not later than the 30th day after the last day of
39-4 the month pay the quality assurance fee.
39-5 Sec. 242.855. RULES; ADMINISTRATIVE PENALTY. (a) The
39-6 Health and Human Services Commission shall adopt rules for the
39-7 administration of this subchapter, including rules related to the
39-8 imposition and collection of the quality assurance fee.
39-9 (b) The Health and Human Services Commission may not adopt
39-10 rules granting any exceptions from the quality assurance fee.
39-11 (c) An administrative penalty assessed under this subchapter
39-12 in accordance with Section 242.066 may not exceed one-half of the
39-13 amount of the outstanding quality assurance fee or $20,000,
39-14 whichever is greater.
39-15 Sec. 242.856. QUALITY ASSURANCE FUND. (a) The quality
39-16 assurance fund is a fund outside the state treasury held by the
39-17 Texas Treasury Safekeeping Trust Company. Notwithstanding any
39-18 other law, the comptroller shall deposit fees collected under this
39-19 subchapter to the credit of the fund.
39-20 (b) The quality assurance fund is composed of:
39-21 (1) fees deposited to the credit of the fund under
39-22 this subchapter; and
39-23 (2) the earnings of the fund.
39-24 (c) Money deposited to the quality assurance fund remains
39-25 the property of the fund and may be used only for the purposes of
39-26 this subchapter.
40-1 (d) Subject to legislative appropriation and this
40-2 subchapter, quality assurance fees collected under this subchapter,
40-3 combined with federal matching funds, will support or maintain an
40-4 increase in Medicaid reimbursement for institutions.
40-5 Sec. 242.857. REIMBURSEMENT OF INSTITUTIONS. (a) The
40-6 Health and Human Services Commission shall use money in the quality
40-7 assurance fund, together with any federal money available to match
40-8 that money, to:
40-9 (1) offset allowable expenses under the state Medicaid
40-10 program; or
40-11 (2) increase reimbursement rates paid under the
40-12 Medicaid program to institutions.
40-13 (b) The Health and Human Services Commission or the
40-14 department at the direction of the commission shall devise the
40-15 formula by which amounts received under this section increase the
40-16 reimbursement rates paid to institutions under the state Medicaid
40-17 program.
40-18 (c) The Health and Human Services Commission shall ensure
40-19 that the formula devised under Subsection (b) provides incentives
40-20 for institutions to increase direct care staffing and direct care
40-21 wages and benefits.
40-22 Sec. 242.858. INVALIDITY; FEDERAL FUNDS. If any portion of
40-23 this subchapter is held invalid by a final order of a court that is
40-24 not subject to appeal, or if the Health and Human Services
40-25 Commission determines that the imposition of the fee and the
40-26 expenditure as prescribed by this subchapter of amounts collected
41-1 will not entitle the state to receive additional federal funds
41-2 under the Medicaid program, the commission shall stop collection of
41-3 the quality assurance fee and shall return, not later than the 30th
41-4 day after the date collection is stopped, any money collected, but
41-5 not spent, under this subchapter to the institutions that paid the
41-6 fees in proportion to the total amount paid by those institutions.
41-7 Sec. 242.859. LEGISLATIVE REVIEW; EXPIRATION. The 79th
41-8 Legislature shall review the operation and effectiveness of this
41-9 subchapter. Unless continued in effect by the 79th Legislature,
41-10 this subchapter expires effective September 1, 2005.
41-11 SECTION 9.02. Notwithstanding Section 242.852, Health and
41-12 Safety Code, as added by this article, the quality assurance fee
41-13 imposed under Subchapter Q, Chapter 242, Health and Safety Code, as
41-14 added by this article, that is effective for the first month
41-15 following the effective date of this Act is equal to $5.25
41-16 multiplied by the number of patient days as determined under that
41-17 subchapter. The quality assurance fee established under this
41-18 section remains in effect until the Health and Human Services
41-19 Commission, or the Texas Department of Human Services at the
41-20 direction of the commission, obtains the information necessary to
41-21 set the fee under Section 242.852, Health and Safety Code, as added
41-22 by this article.
41-23 SECTION 9.03. As soon as practicable after the effective
41-24 date of this Act, the Health and Human Services Commission shall
41-25 adopt rules as necessary to implement Subchapter Q, Chapter 242,
41-26 Health and Safety Code, as added by this article.
42-1 SECTION 9.04. If before implementing any provision of this
42-2 article a state agency determines a waiver or authorization from a
42-3 federal agency is necessary for implementation of that provision,
42-4 the agency affected by the provision shall request the waiver or
42-5 authorization and may delay implementing that provision until the
42-6 waiver or authorization is granted.
42-7 ARTICLE 10. TEXAS DEPARTMENT OF INSURANCE STUDY AND REPORT
42-8 SECTION 10.01. DEFINITIONS. In this article:
42-9 (1) "Commissioner" means the commissioner of
42-10 insurance.
42-11 (2) "Department" means the Texas Department of
42-12 Insurance.
42-13 SECTION 10.02. STUDY. The department shall study the
42-14 implementation of Articles 3, 5, and 6 of this Act and, in
42-15 particular, shall study:
42-16 (1) the effect of the changes in law made by Articles
42-17 5 and 6 of this Act on:
42-18 (A) fostering the development of a competitive
42-19 market for professional liability insurance for nursing
42-20 institutions; and
42-21 (B) improving the availability and affordability
42-22 of professional liability insurance for nursing institutions;
42-23 (2) whether the Medicaid rate component applicable to
42-24 institutions' reimbursement for professional liability insurance
42-25 costs is adequate; and
42-26 (3) the impact of awards of exemplary damages on rates
43-1 for professional liability insurance for nursing homes.
43-2 SECTION 10.03. REPORTS. (a) Not later than December 1,
43-3 2002, the commissioner shall submit an interim report on the study
43-4 conducted under Section 10.02 of this Act to the governor,
43-5 lieutenant governor, and speaker of the house of representatives.
43-6 (b) Not later than December 1, 2004, the commissioner shall
43-7 submit a final report on the study to the governor, lieutenant
43-8 governor, and speaker of the house of representatives.
43-9 SECTION 10.04. EXPIRATION. This article expires September
43-10 1, 2005.
43-11 ARTICLE 11. EFFECT OF ACT; EFFECTIVE DATE
43-12 SECTION 11.01. To the extent of any conflict, this Act
43-13 prevails over any other Act of the 77th Legislature, Regular
43-14 Session, 2001, regardless of the relative dates of enactment,
43-15 including an Act that purports to:
43-16 (1) affect the admissibility in a civil action,
43-17 enforcement action, or related proceeding of evidence subject to
43-18 Subsections (i) and (k), Section 32.021, Human Resources Code, as
43-19 amended by this Act, or Sections 242.050 or 252.045, Health and
43-20 Safety Code, as added by this Act;
43-21 (2) affect coverage for for-profit or not-for-profit
43-22 nursing homes under Articles 5.15-1 and 21.49-3, Insurance Code, or
43-23 funding for the joint underwriting association under Article
43-24 21.49-3, Insurance Code;
43-25 (3) affect the liability of the joint underwriting
43-26 association established under Article 21.49-3, Insurance Code, for
44-1 exemplary damages awarded under Chapter 41, Civil Practice and
44-2 Remedies Code;
44-3 (4) require a nursing home to maintain liability
44-4 insurance coverage;
44-5 (5) require training for surveyors of long-term care
44-6 facilities, as described by Section 22.037, Human Resources Code,
44-7 as added by this Act;
44-8 (6) require review of the survey process for certain
44-9 long-term care facilities, as described by Section 531.056,
44-10 Government Code, as added by this Act;
44-11 (7) establish a quality assurance early warning system
44-12 for certain long-term care facilities, as described by Section
44-13 531.057, Government Code, as added by this Act;
44-14 (8) affect informal dispute resolution of disputes
44-15 subject to Section 531.058, Government Code, as added by this Act;
44-16 (9) affect amelioration of violations subject to
44-17 Sections 242.071 and 252.071, Health and Safety Code; or
44-18 (10) establish a quality assurance fee for nursing
44-19 homes, as described by Subchapter Q, Chapter 242, Health and Safety
44-20 Code, as added by this Act.
44-21 SECTION 11.02. This Act takes effect immediately if it
44-22 receives a vote of two-thirds of all the members elected to each
44-23 house, as provided by Section 39, Article III, Texas Constitution.
44-24 If this Act does not receive the vote necessary for immediate
44-25 effect, this Act takes effect September 1, 2001.