By Moncrief S.B. No. 1839
77R15066 DLF/AJA-F
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. This Act may be cited as the Long-Term Care
1-6 Facility Improvement Act.
1-7 SECTION 1.02. (a) The purpose of this Act is to:
1-8 (1) improve the quality of care for residents in
1-9 certain long-term care facilities in this state;
1-10 (2) ensure the continued availability of those
1-11 facilities for the residents of this state;
1-12 (3) improve the financial condition of those
1-13 facilities;
1-14 (4) increase the protections available to residents of
1-15 those facilities who may have liability claims against those
1-16 facilities; and
1-17 (5) increase the availability and improve
1-18 affordability of professional liability insurance for those
1-19 facilities.
1-20 (b) The sole purpose of Articles 5 and 6 of this Act is to
1-21 address the crisis in availability and affordability of
1-22 professional liability insurance for certain long-term care
1-23 facilities.
1-24 (c) This Act does not diminish the rights of residents of
2-1 long-term care facilities or diminish the responsibilities of
2-2 persons who own or operate long-term care facilities in this state.
2-3 ARTICLE 2. NOTICE OF EXEMPLARY DAMAGES IN CERTAIN ACTIONS
2-4 SECTION 2.01. Subchapter B, Chapter 242, Health and Safety
2-5 Code, is amended by adding Section 242.051 to read as follows:
2-6 Sec. 242.051. NOTIFICATION OF AWARD OF EXEMPLARY DAMAGES.
2-7 (a) If exemplary damages are awarded under Chapter 41, Civil
2-8 Practice and Remedies Code, against an institution or an officer,
2-9 employee, or agent of an institution, the court shall notify the
2-10 department.
2-11 (b) If the department receives notice under Subsection (a),
2-12 the department shall maintain the information contained in the
2-13 notice in the records of the department relating to the history of
2-14 the institution.
2-15 SECTION 2.02. This article applies only to an award of
2-16 exemplary damages in a cause of action that accrues on or after
2-17 September 1, 2001.
2-18 ARTICLE 3. ADMISSIBILITY OF CERTAIN EVIDENCE IN CIVIL ACTION
2-19 SECTION 3.01. Subsections (i) and (k), Section 32.021, Human
2-20 Resources Code, are amended to read as follows:
2-21 (i) A record of the department, including a record of
2-22 [Except as provided by Subsections (j) and (k),] a department
2-23 survey, complaint investigation, incident investigation, or survey
2-24 report, that relates to [documents that] an institution, including
2-25 an intermediate care facility for the mentally retarded, may be
2-26 introduced into evidence in a civil action, enforcement action, or
2-27 related proceeding if the record is admissible under the Texas
3-1 Rules of Evidence [has violated a standard for participation in the
3-2 state Medicaid program, or the assessment of a monetary penalty by
3-3 the department or the payment of a monetary penalty by the
3-4 institution, is not admissible as evidence in a civil action to
3-5 prove that the institution has committed a violation].
3-6 (k) A department surveyor or investigator may testify in a
3-7 civil action as to observations, factual findings, conclusions, or
3-8 violations of requirements for licensure or for certification for
3-9 participation in the state Medicaid program that were made in the
3-10 discharge of official duties for the department, if the testimony
3-11 is admissible under [in accordance with] the Texas Rules of [Civil]
3-12 Evidence.
3-13 SECTION 3.02. Subchapter B, Chapter 242, Health and Safety
3-14 Code, is amended by adding Section 242.050 to read as follows:
3-15 Sec. 242.050. ADMISSIBILITY OF CERTAIN DOCUMENTS OR
3-16 TESTIMONY. Sections 32.021(i) and (k), Human Resources Code, govern
3-17 the admissibility in a civil action against an institution of:
3-18 (1) a record of the department described by Section
3-19 32.021(i), Human Resources Code; or
3-20 (2) the testimony of a department surveyor or
3-21 investigator described by Section 32.021(k), Human Resources Code.
3-22 SECTION 3.03. Subchapter B, Chapter 252, Health and Safety
3-23 Code, is amended by adding Section 252.045 to read as follows:
3-24 Sec. 252.045. ADMISSIBILITY OF CERTAIN DOCUMENTS OR
3-25 TESTIMONY. Sections 32.021(i) and (k), Human Resources Code, govern
3-26 the admissibility in a civil action against a facility of:
3-27 (1) a record of the department described by Section
4-1 32.021(i), Human Resources Code; or
4-2 (2) the testimony of a department surveyor or
4-3 investigator described by Section 32.021(k), Human Resources Code.
4-4 SECTION 3.04. Subsection (j), Section 32.021, Human Resources
4-5 Code, is repealed.
4-6 SECTION 3.05. This article applies only to a civil action,
4-7 enforcement action, or related proceeding that is commenced on or
4-8 after the effective date of this Act. A civil action, enforcement
4-9 action, or related proceeding that is commenced before the
4-10 effective date of this Act is governed by the law applicable to the
4-11 action or proceeding immediately before the effective date of this
4-12 Act, and that law is continued in effect for that purpose.
4-13 ARTICLE 4. DATA REPORTING FOR CERTAIN LIABILITY INSURANCE COVERAGE
4-14 SECTION 4.01. Chapter 38, Insurance Code, is amended by
4-15 adding Subchapter F to read as follows:
4-16 SUBCHAPTER F. DATA REPORTING BY CERTAIN LIABILITY INSURERS
4-17 Sec. 38.251. INSURER DATA REPORTING. (a) Each insurer that
4-18 writes professional liability insurance policies for nursing
4-19 institutions licensed under Chapter 242, Health and Safety Code,
4-20 including an insurer whose rates are not regulated, shall, as a
4-21 condition of writing those policies in this state, comply with a
4-22 request for information from the commissioner under this section.
4-23 (b) The commissioner may require information in rate
4-24 filings, special data calls, or informational hearings or by any
4-25 other means consistent with this code applicable to the affected
4-26 insurer that the commissioner believes will allow the commissioner
4-27 to:
5-1 (1) determine whether insurers writing insurance
5-2 coverage described by Subsection (a) are passing to insured nursing
5-3 institutions on a prospective basis the savings that accrue as a
5-4 result of the reduction in risk to insurers writing that coverage
5-5 that will result from legislation enacted by the 77th Legislature,
5-6 Regular Session, including legislation that:
5-7 (A) amended Article 5.15-1 to limit the exposure
5-8 of an insurer to exemplary damages for certain claims against a
5-9 nursing institution; and
5-10 (B) amended Sections 32.021(i) and (k), Human
5-11 Resources Code, added Section 242.050, Health and Safety Code, and
5-12 repealed Section 32.021(j), Human Resources Code, to clarify the
5-13 admissibility of certain documents in a civil action against a
5-14 nursing institution; or
5-15 (2) prepare the report required of the commissioner
5-16 under Section 38.252 or any other report the commissioner is
5-17 required to submit to the legislature in connection with the
5-18 legislation described by Subdivision (1).
5-19 (c) Information provided under this section is privileged
5-20 and confidential to the same extent as the information is
5-21 privileged and confidential under this code or any other law
5-22 governing an insurer described by Subsection (a). The information
5-23 remains privileged and confidential unless and until introduced
5-24 into evidence at an administrative hearing or in a court of
5-25 competent jurisdiction.
5-26 Sec. 38.252. RECOMMENDATIONS TO LEGISLATURE. The
5-27 commissioner shall assemble information and take other appropriate
6-1 measures to assess and evaluate changes in the marketplace
6-2 resulting from the implementation of the legislation described by
6-3 Section 38.251 and shall report the commissioner's findings and
6-4 recommendations to the legislature.
6-5 ARTICLE 5. AVAILABILITY OF AND COVERAGE UNDER CERTAIN
6-6 PROFESSIONAL LIABILITY INSURANCE
6-7 SECTION 5.01. Subdivision (2), Section 2, Article 5.15-1,
6-8 Insurance Code, is amended to read as follows:
6-9 (2) "Health care provider" means any person,
6-10 partnership, professional association, corporation, facility, or
6-11 institution licensed or chartered by the State of Texas to provide
6-12 health care as a registered nurse, hospital, dentist, podiatrist,
6-13 chiropractor, optometrist, pharmacist, veterinarian, not-for-profit
6-14 kidney dialysis center, blood bank that is a nonprofit corporation
6-15 chartered to operate a blood bank and which is accredited by the
6-16 American Association of Blood Banks, for-profit nursing home or
6-17 not-for-profit nursing home, or an officer, employee, or agent of
6-18 any of them acting in the course and scope of his employment.
6-19 SECTION 5.02. Section 8, Article 5.15-1, Insurance Code, is
6-20 amended to read as follows:
6-21 Sec. 8. EXEMPLARY [PUNITIVE] DAMAGES UNDER MEDICAL
6-22 PROFESSIONAL LIABILITY INSURANCE. No policy of medical professional
6-23 liability insurance issued to or renewed for a health care provider
6-24 or physician in this state may include coverage for exemplary
6-25 [punitive] damages that may be assessed against the health care
6-26 provider or physician; provided, however, that the commissioner may
6-27 approve an endorsement form that provides for coverage for
7-1 exemplary [punitive] damages to be used on a policy of medical
7-2 professional liability insurance issued to a hospital, as the term
7-3 "hospital" is defined in this article, or to a for-profit or
7-4 not-for-profit nursing home.
7-5 SECTION 5.03. Article 5.15-1, Insurance Code, is amended by
7-6 adding Section 8A to read as follows:
7-7 Sec. 8A. INDEMNITY FOR EXEMPLARY DAMAGES. (a) In an action
7-8 in which a judgment has been entered against an insured nursing
7-9 home for exemplary damages based on conduct described as a felony
7-10 in Section 22.04, Penal Code, an insurer who issues a policy of
7-11 professional liability insurance subject to this article to a
7-12 nursing home is not required to indemnify the insured nursing home
7-13 for an amount in excess of $10 million in that action related to
7-14 that conduct.
7-15 (b) This section applies only to a professional liability
7-16 insurance policy delivered, issued for delivery, or renewed on or
7-17 after September 1, 2001, and before December 31, 2003.
7-18 (c) A provision in a professional liability policy that
7-19 offers or affords the protections of this section after December
7-20 31, 2004, is void and unenforceable.
7-21 (d) This section does not limit the liability of any insurer
7-22 in a circumstance in which facts exist that would enable a party to
7-23 invoke the common law theory of recovery commonly known in Texas as
7-24 the "Stowers Doctrine."
7-25 SECTION 5.04. Subchapter B, Chapter 5, Insurance Code, is
7-26 amended by adding Article 5.15-4 to read as follows:
7-27 Art. 5.15-4. BEST PRACTICES FOR NURSING HOMES. (a) The
8-1 commissioner shall adopt best practices for risk management and
8-2 loss control that may be used by for-profit and not-for-profit
8-3 nursing homes.
8-4 (b) In determining rates for professional liability
8-5 insurance applicable to a for-profit or not-for-profit nursing
8-6 home, an insurance company or the Texas Medical Liability Insurance
8-7 Underwriting Association may consider whether the nursing home
8-8 adopts and implements the best practices adopted by the
8-9 commissioner under Subsection (a) of this article.
8-10 (c) In developing or amending best practices for for-profit
8-11 and not-for-profit nursing homes, the commissioner shall consult
8-12 with the Health and Human Services Commission and a task force
8-13 appointed by the commissioner. The task force must be composed of
8-14 representatives of:
8-15 (1) insurance companies that write professional
8-16 liability insurance for nursing homes;
8-17 (2) the Texas Medical Liability Insurance Underwriting
8-18 Association;
8-19 (3) nursing homes; and
8-20 (4) consumers.
8-21 (d) The best practices for risk management and loss control
8-22 adopted under this article do not establish standards of care for
8-23 nursing homes applicable in a civil action against a nursing home.
8-24 SECTION 5.05. Subdivision (6), Section 2, Article 21.49-3,
8-25 Insurance Code, is amended to read as follows:
8-26 (6) "Health care provider" means:
8-27 (A) any person, partnership, professional
9-1 association, corporation, facility, or institution duly licensed or
9-2 chartered by the State of Texas to provide health care as defined
9-3 in Section 1.03(a)(2) [1.03(2)], Medical Liability and Insurance
9-4 Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
9-5 Statutes), as:
9-6 (i) a registered nurse, hospital, dentist,
9-7 podiatrist, pharmacist, chiropractor, or optometrist;
9-8 (ii) a for-profit[,] or not-for-profit
9-9 nursing home;
9-10 (iii) [, or] a radiation therapy center
9-11 that is independent of any other medical treatment facility and
9-12 which is licensed by the Texas Department of Health in that
9-13 agency's capacity as the Texas [State] Radiation Control Agency
9-14 pursuant to the provisions of Chapter 401, Health and Safety Code,
9-15 and which is in compliance with the regulations promulgated under
9-16 that chapter;
9-17 (iv) [by the Texas State Radiation Control
9-18 Agency,] a blood bank that is a nonprofit corporation chartered to
9-19 operate a blood bank and which is accredited by the American
9-20 Association of Blood Banks;
9-21 (v) [,] a nonprofit corporation which is
9-22 organized for the delivery of health care to the public and which
9-23 is certified under Chapter 162, Occupations Code; [Article 4509a,
9-24 Revised Civil Statutes of Texas, 1925,] or
9-25 (vi) a [migrant] health center as defined
9-26 by 42 U.S.C. Section 254b [P.L. 94-63], as amended; [(42 U.S.C.
9-27 Section 254b), or a community health center as defined by P.L.
10-1 94-63, as amended (42 U.S.C. Section 254c), that is receiving
10-2 federal funds under an application approved under either Title IV,
10-3 P.L. 94-63, as amended (42 U.S.C. Section 254b), or Title V, P.L.
10-4 94-63, as amended (42 U.S.C. Section 254c),] or
10-5 (B) an officer, employee, or agent of any of
10-6 them acting in the course and scope of that person's [his]
10-7 employment.
10-8 SECTION 5.06. Section 3A, Article 21.49-3, Insurance Code, is
10-9 amended by adding Subsection (c) to read as follows:
10-10 (c) A for-profit or not-for-profit nursing home not
10-11 otherwise eligible under this section for coverage from the
10-12 association is eligible for coverage if the nursing home
10-13 demonstrates, in accordance with the requirements of the
10-14 association, that the nursing home made a bona fide effort to
10-15 obtain coverage from authorized insurers and eligible surplus lines
10-16 insurers and was unable to obtain coverage.
10-17 SECTION 5.07. Subdivision (1), Subsection (b), Section 4,
10-18 Article 21.49-3, Insurance Code, is amended to read as follows:
10-19 (1) The rates, rating plans, rating rules, rating
10-20 classifications, territories, and policy forms applicable to the
10-21 insurance written by the association and statistics relating
10-22 thereto shall be subject to Subchapter B of Chapter 5 of the
10-23 Insurance Code, as amended, giving due consideration to the past
10-24 and prospective loss and expense experience for medical
10-25 professional liability insurance within and without this state of
10-26 all of the member companies of the association, trends in the
10-27 frequency and severity of losses, the investment income of the
11-1 association, and such other information as the commissioner [board]
11-2 may require; provided, that if any article of the above subchapter
11-3 is in conflict with any provision of this Act, this Act shall
11-4 prevail. For purposes of this article, rates, rating plans, rating
11-5 rules, rating classifications, territories, and policy forms for
11-6 for-profit nursing homes are subject to the requirements of Article
11-7 5.15-1 of this code to the same extent as not-for-profit nursing
11-8 homes.
11-9 SECTION 5.08. Section 4A, Article 21.49-3, Insurance Code, is
11-10 amended to read as follows:
11-11 Sec. 4A. POLICYHOLDER'S STABILIZATION RESERVE FUND. (a)
11-12 There is hereby created a policyholder's stabilization reserve fund
11-13 which shall be administered as provided herein and in the plan of
11-14 operation of the association.
11-15 (b) Each policyholder shall pay annually into the
11-16 stabilization reserve fund a charge, the amount of which shall be
11-17 established annually by advisory directors chosen by health care
11-18 providers and physicians eligible for insurance in the association
11-19 in accordance with the plan of operation. The charge shall be in
11-20 proportion to each premium payment due for liability insurance
11-21 through the association. Such charge shall be separately stated in
11-22 the policy, but shall not constitute a part of premiums or be
11-23 subject to premium taxation, servicing fees, acquisition costs, or
11-24 any other such charges.
11-25 (c) The [policyholder's] stabilization reserve fund shall be
11-26 collected and administered by the association and shall be treated
11-27 as a liability of the association along with and in the same manner
12-1 as premium and loss reserves. The fund shall be valued annually by
12-2 the board of directors as of the close of the last preceding year.
12-3 (d) Except as provided by Subsection (e) of this section,
12-4 collections [Collections] of the stabilization reserve fund charge
12-5 shall continue only until such time as the net balance of the
12-6 stabilization reserve fund is not less than the projected sum of
12-7 premiums to be written in the year following valuation date.
12-8 (e) If in any fiscal year the incurred losses and defense
12-9 and cost-containment expenses from physicians or any single
12-10 category of health care provider result in a net underwriting loss
12-11 and exceed 25 percent of the stabilization reserve fund, as valued
12-12 for that year, the commissioner may by order direct the initiation
12-13 or continuation of the stabilization reserve fund charge for
12-14 physicians or that category of health care provider until the fund
12-15 recovers the amount by which those losses and cost-containment
12-16 expenses exceed 25 percent of the fund.
12-17 (f) The stabilization reserve fund shall be credited with
12-18 all stabilization reserve fund charges collected from policyholders
12-19 and shall be charged with any deficit from the prior year's
12-20 operation of the association.
12-21 SECTION 5.09. Subchapter E, Chapter 21, Insurance Code, is
12-22 amended by adding Article 21.49-3d to read as follows:
12-23 Art. 21.49-3d. REVENUE BOND PROGRAM AND PROCEDURES FOR
12-24 CERTAIN LIABILITY INSURANCE
12-25 Sec. 1. LEGISLATIVE FINDING; PURPOSE. The legislature finds
12-26 that the issuance of bonds to provide a method to raise funds to
12-27 provide professional liability insurance through the association
13-1 for nursing homes in this state is for the benefit of the public
13-2 and in furtherance of a public purpose.
13-3 Sec. 2. DEFINITIONS. In this article:
13-4 (1) "Association" means the joint underwriting
13-5 association established under Article 21.49-3 of this code.
13-6 (2) "Bond resolution" means the resolution or order
13-7 authorizing the bonds to be issued under this article.
13-8 (3) "Board" means the board of directors of the Texas
13-9 Public Finance Authority.
13-10 (4) "Insurer" means any insurer required to be a
13-11 member of the association under Section 3, Article 21.49-3, of this
13-12 code.
13-13 Sec. 3. BONDS AUTHORIZED; APPLICATION OF TEXAS PUBLIC
13-14 FINANCE AUTHORITY ACT. (a) On behalf of the association, the Texas
13-15 Public Finance Authority shall issue revenue bonds to:
13-16 (1) fund the policyholder's stabilization reserve fund
13-17 established under Section 4A, Article 21.49-3, of this code;
13-18 (2) pay costs related to issuance of the bonds; and
13-19 (3) pay other costs related to the bonds as may be
13-20 determined by the board.
13-21 (b) To the extent not inconsistent with this article,
13-22 Chapter 1232, Government Code, applies to bonds issued under this
13-23 article. In the event of a conflict, this article controls.
13-24 Sec. 4. APPLICABILITY OF OTHER STATUTES. The following laws
13-25 apply to bonds issued under this article to the extent consistent
13-26 with this article:
13-27 (1) Chapters 1201, 1202, 1204, 1205, 1231, and 1371,
14-1 Government Code; and
14-2 (2) Subchapter A, Chapter 1206, Government Code.
14-3 Sec. 5. LIMITS. The Texas Public Finance Authority may
14-4 issue, on behalf of the association, bonds in a total amount not to
14-5 exceed $75 million.
14-6 Sec. 6. CONDITIONS. (a) Bonds may be issued at public or
14-7 private sale.
14-8 (b) Bonds may mature not more than 10 years after the date
14-9 issued.
14-10 (c) Bonds must be issued in the name of the association.
14-11 Sec. 7. ADDITIONAL COVENANTS. In a bond resolution, the
14-12 board may make additional covenants with respect to the bonds and
14-13 the designated income and receipts of the association pledged to
14-14 their payment and may provide for the flow of funds and the
14-15 establishment, maintenance, and investment of funds and accounts
14-16 with respect to the bonds.
14-17 Sec. 8. SPECIAL ACCOUNTS. (a) A bond resolution may
14-18 establish special accounts, including an interest and sinking fund
14-19 account, reserve account, and other accounts.
14-20 (b) The association shall administer the accounts in
14-21 accordance with Article 21.49-3 of this code.
14-22 Sec. 9. SECURITY. (a) Bonds are payable only from the
14-23 maintenance tax surcharge established in Section 10 of this article
14-24 or other sources the fund is authorized to levy, charge, and
14-25 collect in connection with paying any portion of the bonds.
14-26 (b) Bonds are obligations solely of the association. Bonds
14-27 do not create a pledging, giving, or lending of the faith, credit,
15-1 or taxing authority of this state.
15-2 (c) Each bond must include a statement that the state is not
15-3 obligated to pay any amount on the bond and that the faith, credit,
15-4 and taxing authority of this state are not pledged, given, or lent
15-5 to those payments.
15-6 (d) Each bond issued under this article must state on its
15-7 face that the bond is payable solely from the revenues pledged for
15-8 that purpose and that the bond does not and may not constitute a
15-9 legal or moral obligation of the state.
15-10 Sec. 10. MAINTENANCE TAX SURCHARGE. (a) A maintenance tax
15-11 surcharge is assessed against:
15-12 (1) each insurer; and
15-13 (2) the association.
15-14 (b) The maintenance tax surcharge shall be set in an amount
15-15 sufficient to pay all debt service on the bonds. The maintenance
15-16 tax surcharge is set by the commissioner in the same time and shall
15-17 be collected by the comptroller on behalf of the association in the
15-18 same manner as applicable maintenance taxes are collected under
15-19 Article 5.24 of this code.
15-20 (c) On determining the rate of assessment, the department
15-21 shall increase the maintenance tax rate applicable to correctly
15-22 reported gross premiums for liability insurance to a rate
15-23 sufficient to pay all debt service on the bonds, subject to the
15-24 maximum maintenance tax rate applicable to the insurer under
15-25 Article 5.24 of this code. If the resulting tax rate is
15-26 insufficient to pay all debt service on the bonds, the department
15-27 may assess an additional surcharge not to exceed one percent of
16-1 correctly reported gross premiums for liability insurance to cover
16-2 all debt service on the bonds. In this code, the maintenance tax
16-3 surcharge includes the additional maintenance tax assessed under
16-4 this subsection and the surcharge assessed under this subsection to
16-5 pay all debt service of the bonds.
16-6 (d) The association and each insurer may pass through the
16-7 maintenance tax surcharge to each of its policyholders.
16-8 (e) As a condition of engaging in the business of insurance
16-9 in this state, an insurer agrees that if the company leaves the
16-10 market for liability insurance in this state the insurer remains
16-11 obligated to pay, until the bonds are retired, the insurer's share
16-12 of the maintenance tax surcharge assessed under this section in an
16-13 amount proportionate to that insurer's share of the market for
16-14 liability insurance in this state as of the last complete reporting
16-15 period before the date on which the insurer ceases to engage in
16-16 that insurance business in this state. The proportion assessed
16-17 against the insurer shall be based on the insurer's gross premiums
16-18 for liability insurance for the insurer's last reporting period.
16-19 However, an insurer is not required to pay the proportionate amount
16-20 in any year in which the surcharge assessed against insurers
16-21 continuing to write liability insurance in this state is sufficient
16-22 to service the bond obligation.
16-23 Sec. 11. TAX EXEMPT. The bonds issued under this article,
16-24 and any interest from the bonds, and all assets pledged to secure
16-25 the payment of the bonds are free from taxation by the state or a
16-26 political subdivision of this state.
16-27 Sec. 12. AUTHORIZED INVESTMENTS. The bonds issued under this
17-1 article constitute authorized investments under Article 2.10 and
17-2 Subpart A, Part I, Article 3.39, of this code.
17-3 Sec. 13. STATE PLEDGE. The state pledges to and agrees with
17-4 the owners of any bonds issued in accordance with this article that
17-5 the state will not limit or alter the rights vested in the
17-6 association to fulfill the terms of any agreements made with the
17-7 owners of the bonds or in any way impair the rights and remedies of
17-8 those owners until the bonds, any premium or interest, and all
17-9 costs and expenses in connection with any action or proceeding by
17-10 or on behalf of those owners are fully met and discharged. The
17-11 association may include this pledge and agreement of the state in
17-12 any agreement with the owners of the bonds.
17-13 Sec. 14. ENFORCEMENT BY MANDAMUS. A writ of mandamus and all
17-14 other legal and equitable remedies are available to any party at
17-15 interest to require the association and any other party to carry
17-16 out agreements and to perform functions and duties under this
17-17 article, the Texas Constitution, or a bond resolution.
17-18 SECTION 5.10. Not later than December 1, 2001, the
17-19 commissioner of insurance shall adopt the initial best practices
17-20 for for-profit and not-for-profit nursing homes adopted as required
17-21 by Article 5.15-4, Insurance Code, as added by this article.
17-22 SECTION 5.11. Sections 2, 3A, and 4, Article 21.49-3,
17-23 Insurance Code, as amended by this article, apply only to an
17-24 insurance policy delivered, issued for delivery, or renewed on or
17-25 after January 1, 2002. A policy delivered, issued for delivery, or
17-26 renewed before January 1, 2002, is governed by the law as it
17-27 existed immediately before the effective date of this Act, and that
18-1 law is continued in effect for that purpose.
18-2 ARTICLE 6. MANDATORY LIABILITY INSURANCE FOR
18-3 NURSING INSTITUTIONS
18-4 SECTION 6.01. Subchapter B, Chapter 242, Health and Safety
18-5 Code, is amended by adding Section 242.0372 to read as follows:
18-6 Sec. 242.0372. LIABILITY INSURANCE COVERAGE. (a) In this
18-7 section, "health care liability claim" has the meaning assigned by
18-8 the Medical Liability and Insurance Improvement Act of Texas
18-9 (Article 4590i, Vernon's Texas Civil Statutes).
18-10 (b) To hold a license under this chapter, a license holder
18-11 must maintain professional liability insurance coverage against the
18-12 liability of the license holder for a health care liability claim.
18-13 (c) The insurance coverage maintained by a license holder
18-14 under this section must:
18-15 (1) provide coverage in the minimum amount of $1
18-16 million for each single occurrence and $3 million in the aggregate;
18-17 (2) be written on a claims-made basis;
18-18 (3) be issued by:
18-19 (A) an admitted insurer authorized to write
18-20 professional liability insurance in this state;
18-21 (B) the Texas Medical Liability Insurance
18-22 Underwriting Association established under Article 21.49-3,
18-23 Insurance Code; or
18-24 (C) an eligible surplus lines insurer in
18-25 accordance with Article 1.14-2, Insurance Code; and
18-26 (4) be in a form acceptable to the department.
18-27 (d) To the extent permitted by federal law and applicable
19-1 state and federal rules, the cost of insurance coverage required to
19-2 be maintained under this section is an allowable cost for
19-3 reimbursement under the state Medicaid program.
19-4 SECTION 6.02. Notwithstanding Section 242.0372, Health and
19-5 Safety Code, as added by this article, an institution licensed
19-6 under Chapter 242, Health and Safety Code, is not required to
19-7 maintain professional liability insurance as required by that
19-8 section before September 1, 2002.
19-9 ARTICLE 7. SURVEYS AND RELATED PROCESSES
19-10 SECTION 7.01. Chapter 22, Human Resources Code, is amended
19-11 by adding Section 22.037 to read as follows:
19-12 Sec. 22.037. TRAINING AND CONTINUING EDUCATION RELATED TO
19-13 CERTAIN LONG-TERM CARE FACILITIES. (a) In this section:
19-14 (1) "Long-term care facility" means a nursing
19-15 institution, an assisted living facility, or an intermediate care
19-16 facility for the mentally retarded licensed under Chapter 242, 247,
19-17 or 252, Health and Safety Code.
19-18 (2) "Provider" means an employee or agent of a
19-19 long-term care facility.
19-20 (3) "Surveyor" means an employee or agent of the
19-21 department or another state agency responsible for licensing,
19-22 inspecting, surveying, or investigating a long-term care facility
19-23 in relation to:
19-24 (A) licensing under Chapter 242, 247, or 252,
19-25 Health and Safety Code; or
19-26 (B) certification for participation in the
19-27 medical assistance program in accordance with Chapter 32.
20-1 (b) The department shall require a surveyor to complete a
20-2 basic training program before the surveyor inspects, surveys, or
20-3 investigates a long-term care facility. The training must include
20-4 observation of the operations of a long-term care facility
20-5 unrelated to the survey, inspection, or investigation process for a
20-6 minimum of 10 working days within a 14-day period.
20-7 (c) The department shall semiannually provide training for
20-8 surveyors and providers on subjects that address at least one of
20-9 the 10 most common violations by long-term care facilities under
20-10 federal or state law.
20-11 (d) Except as provided by Subsection (e), a surveyor who is
20-12 a health care professional licensed under the laws of this state
20-13 must receive a minimum of 50 percent of the professional's required
20-14 continuing education credits, if any, in gerontology or care for
20-15 individuals with cognitive or physical disabilities, as
20-16 appropriate.
20-17 (e) A surveyor who is a pharmacist must receive a minimum of
20-18 30 percent of the pharmacist's required continuing education
20-19 credits in gerontology or care for individuals with cognitive or
20-20 physical disabilities, as appropriate.
20-21 SECTION 7.02. Subchapter B, Chapter 531, Government Code, is
20-22 amended by adding Sections 531.056, 531.057, and 531.058 to read as
20-23 follows:
20-24 Sec. 531.056. REVIEW OF SURVEY PROCESS IN CERTAIN
20-25 INSTITUTIONS AND FACILITIES. (a) The commission shall adopt
20-26 procedures to review:
20-27 (1) citations or penalties assessed for a violation of
21-1 a rule or law against an institution or facility licensed under
21-2 Chapter 242, 247, or 252, Health and Safety Code, or certified in
21-3 accordance with Chapter 32, Human Resources Code, considering:
21-4 (A) the number of violations by geographic
21-5 region;
21-6 (B) the patterns of violations in each region;
21-7 and
21-8 (C) the outcomes following the assessment of a
21-9 penalty or citation; and
21-10 (2) the performance of duties by employees and agents
21-11 of the Texas Department of Human Services or another state agency
21-12 responsible for licensing, inspecting, surveying, or investigating
21-13 institutions and facilities licensed under Chapter 242, 247, or
21-14 252, Health and Safety Code, or certified in accordance with
21-15 Chapter 32, Human Resources Code, related to:
21-16 (A) complaints received by the commission; or
21-17 (B) any standards or rules violated by an
21-18 employee or agent of a state agency.
21-19 (b) The commission shall annually report to the speaker of
21-20 the house of representatives, the lieutenant governor, and the
21-21 governor on the findings of the review conducted under Subsection
21-22 (a).
21-23 Sec. 531.057. QUALITY ASSURANCE EARLY WARNING SYSTEM FOR
21-24 LONG-TERM CARE FACILITIES; RAPID RESPONSE TEAMS. (a) In this
21-25 section:
21-26 (1) "Long-term care facility" means a nursing
21-27 institution, an assisted living facility, or an intermediate care
22-1 facility for the mentally retarded licensed under Chapter 242, 247,
22-2 or 252, Health and Safety Code, or certified under Chapter 32,
22-3 Human Resources Code.
22-4 (2) "Quality-of-care monitor" means a registered
22-5 nurse, pharmacist, or nutritionist who:
22-6 (A) is employed by the commission;
22-7 (B) is trained and experienced in long-term care
22-8 facility regulation, standards of practice in long-term care, and
22-9 evaluation of patient care; and
22-10 (C) functions independently of the Texas
22-11 Department of Human Services.
22-12 (b) The commission shall establish an early warning system
22-13 to detect conditions that could be detrimental to the health,
22-14 safety, and welfare of residents. The early warning system shall
22-15 include analysis of financial and quality-of-care indicators that
22-16 would predict the need for the commission to take action.
22-17 (c) The commission shall establish regional offices with one
22-18 or more quality-of-care monitors, based on the number of long-term
22-19 care facilities in the region, to monitor the facilities in the
22-20 region on a regular, unannounced, aperiodic basis, including
22-21 nights, evenings, weekends, and holidays.
22-22 (d) Priority for monitoring visits shall be given to
22-23 long-term care facilities with a history of patient care
22-24 deficiencies.
22-25 (e) Quality-of-care monitors may not be deployed by the
22-26 commission as a part of the regional survey team in the conduct of
22-27 routine, scheduled surveys.
23-1 (f) A quality-of-care monitor may not interfere with,
23-2 impede, or otherwise adversely affect the performance of the duties
23-3 of a surveyor, inspector, or investigator of the Texas Department
23-4 of Human Services.
23-5 (g) Quality-of-care monitors shall assess:
23-6 (1) the overall quality of life in the long-term care
23-7 facility; and
23-8 (2) specific conditions in the facility directly
23-9 related to patient care.
23-10 (h) The quality-of-care monitor shall include in an
23-11 assessment visit:
23-12 (1) observation of the care and services rendered to
23-13 residents; and
23-14 (2) formal and informal interviews with residents,
23-15 family members, facility staff, resident guests, volunteers, other
23-16 regulatory staff, and representatives of a human rights advocacy
23-17 committee.
23-18 (i) The identity of a resident or a family member of a
23-19 resident interviewed by a quality-of-care monitor as provided by
23-20 Subsection (h)(2) shall remain confidential and may not be
23-21 disclosed to any person under any other provision of this section.
23-22 (j) The findings of a monitoring visit, both positive and
23-23 negative, shall be provided orally and in writing to the long-term
23-24 care facility administrator or, in the absence of the facility
23-25 administrator, to the administrator on duty or the director of
23-26 nursing.
23-27 (k) The quality-of-care monitor may recommend to the
24-1 long-term care facility administrator procedural and policy changes
24-2 and staff training to improve the care or quality of life of
24-3 facility residents.
24-4 (l) Conditions observed by the quality-of-care monitor that
24-5 create an immediate threat to the health or safety of a resident
24-6 shall be reported immediately to the regional office supervisor for
24-7 appropriate action and, as appropriate or as required by law, to
24-8 law enforcement, adult protective services, or other responsible
24-9 agencies.
24-10 (m) The commission shall create rapid response teams
24-11 composed of health care experts that can visit long-term care
24-12 facilities identified through the commission's early warning
24-13 system.
24-14 (n) Rapid response teams may visit long-term care facilities
24-15 that request the commission's assistance. A visit under this
24-16 subsection may not occur before the 60th day after the date of an
24-17 exit interview following an annual or follow-up survey or
24-18 inspection.
24-19 (o) The rapid response teams may not be deployed for the
24-20 purpose of helping a long-term care facility prepare for a regular
24-21 inspection or survey conducted under Chapter 242, 247, or 252,
24-22 Health and Safety Code, or in accordance with Chapter 32, Human
24-23 Resources Code.
24-24 Sec. 531.058. INFORMAL DISPUTE RESOLUTION FOR CERTAIN
24-25 LONG-TERM CARE FACILITIES. (a) The commission by rule shall
24-26 establish an informal dispute resolution process in accordance with
24-27 this section. The process must provide for adjudication by an
25-1 appropriate disinterested person of disputes relating to a proposed
25-2 enforcement action or related proceeding of the Texas Department of
25-3 Human Services under Section 32.021(d), Human Resources Code, or
25-4 Chapter 242, 247, or 252, Health and Safety Code. The informal
25-5 dispute resolution process must require:
25-6 (1) the institution or facility to request informal
25-7 dispute resolution not later than the 10th calendar day after
25-8 notification by the department of the violation of a standard or
25-9 standards;
25-10 (2) the commission to complete the process not later
25-11 than the 30th calendar day after receipt of a request from the
25-12 institution or facility for informal dispute resolution; and
25-13 (3) any individual representing an institution or
25-14 facility in an informal dispute resolution process to register with
25-15 the commission and disclose the following:
25-16 (A) the individual's employment history during
25-17 the preceding five years, including employment in regulatory
25-18 agencies of this state and other states;
25-19 (B) ownership, including the identity of the
25-20 controlling person or persons, of the institution or facility the
25-21 individual is representing before the commission; and
25-22 (C) the identity of other entities the
25-23 individual represents or has represented before the commission
25-24 during the previous 24 months.
25-25 (b) The commission shall adopt rules to adjudicate claims in
25-26 contested cases.
25-27 (c) The commission may not delegate its responsibility to
26-1 administer the informal dispute resolution process established by
26-2 this section to another state agency.
26-3 SECTION 7.03. Subsection (d), Section 32.021, Human
26-4 Resources Code, is amended to read as follows:
26-5 (d) The department shall include in its contracts for the
26-6 delivery of medical assistance by nursing facilities provisions for
26-7 monetary penalties to be assessed for violations as required by 42
26-8 U.S.C. Section 1396r, including without limitation the Omnibus
26-9 Budget Reconciliation Act (OBRA), P.L. 100-203, Nursing Home Reform
26-10 Amendments of 1987, provided that the department shall:
26-11 (1) provide for an informal dispute resolution process
26-12 in the Health and Human Services Commission as provided by Section
26-13 531.058, Government Code [department's central office; the informal
26-14 dispute resolution process shall:]
26-15 [(A) require the institution to request informal
26-16 dispute resolution no later than the 10th calendar day after
26-17 notification by the department of a violation of a standard or
26-18 standards;]
26-19 [(B) require the department to complete the
26-20 process no later than the 30th calendar day after receipt of a
26-21 request from the institution for informal dispute resolution; and]
26-22 [(C) require any individual representing an
26-23 institution in an informal dispute resolution process to register
26-24 with the department and disclose the following:]
26-25 [(i) the individual's five-year employment
26-26 history during the preceding five years, including employment in
26-27 regulatory agencies of this state and other states;]
27-1 [(ii) ownership, including the identity of
27-2 the controlling person or persons, of the institution the person is
27-3 representing before the department; and]
27-4 [(iii) the identity of other entities the
27-5 person represents or has represented before the agency during the
27-6 previous 24 months]; and
27-7 (2) develop rules to adjudicate claims in contested
27-8 cases, including claims unresolved by the informal dispute
27-9 resolution process of the Health and Human Services Commission.
27-10 SECTION 7.04. Not later than January 1, 2002, the
27-11 commissioner of health and human services shall adopt any rules
27-12 necessary to implement Sections 531.056, 531.057, and 531.058,
27-13 Government Code, as added by this article.
27-14 SECTION 7.05. Not later than January 1, 2002, the Texas
27-15 Department of Human Services shall develop training necessary to
27-16 implement Section 22.037, Human Resources Code, as added by this
27-17 article.
27-18 SECTION 7.06. (a) Effective January 1, 2002:
27-19 (1) all property and records in the custody of the
27-20 Texas Department of Human Services related to the informal dispute
27-21 resolution function under Subsection (d), Section 32.021, Human
27-22 Resources Code, as it existed before amendment by this Act, and all
27-23 funds appropriated by the legislature to the Texas Department of
27-24 Human Services for the function are transferred to the Health and
27-25 Human Services Commission;
27-26 (2) a rule or form adopted by the Texas Department of
27-27 Human Services that relates to the informal dispute resolution
28-1 function under Subsection (d), Section 32.021, Human Resources
28-2 Code, as it existed before amendment by this Act, is a rule or form
28-3 of the Health and Human Services Commission and remains in effect
28-4 until altered by that agency;
28-5 (3) the assumption of the informal dispute resolution
28-6 function by the Health and Human Services Commission does not
28-7 affect or impair any act done, any obligation, right, order,
28-8 license, permit, rule, criterion, standard, or requirement
28-9 existing, any investigation begun, or any penalty accrued under
28-10 former law, and that law remains in effect for any action
28-11 concerning those matters; and
28-12 (4) an action brought or proceeding commenced before
28-13 the assumption by the Health and Human Services Commission of the
28-14 informal dispute resolution function under this Act is effected,
28-15 including a contested case or a remand of an action or proceeding
28-16 by a reviewing court, is governed by the law and rules applicable
28-17 to the action or proceeding before the date of the assumption of
28-18 the function by the Health and Human Services Commission.
28-19 (b) In implementing Section 531.057, Government Code, as
28-20 added by this article, the Health and Human Services Commission may
28-21 not transfer to the commission employees or funding from the
28-22 regulatory functions of the Texas Department of Human Services.
28-23 ARTICLE 8. AMELIORATION OF VIOLATIONS
28-24 SECTION 8.01. Section 242.071, Health and Safety Code, is
28-25 amended to read as follows:
28-26 Sec. 242.071. AMELIORATION OF VIOLATION. (a) In lieu of
28-27 demanding [ordering] payment of an [the] administrative penalty
29-1 assessed under Section 242.066 [242.069], the commissioner may, in
29-2 accordance with this section, allow [require] the person to use,
29-3 under the supervision of the department, any portion of the penalty
29-4 to ameliorate the violation or to improve services, other than
29-5 administrative services, in the institution affected by the
29-6 violation.
29-7 (b) The department shall offer amelioration to a person for
29-8 a charged violation if the department determines that the violation
29-9 does not constitute immediate jeopardy to the health and safety of
29-10 an institution resident.
29-11 (c) The department may not offer amelioration to a person
29-12 if:
29-13 (1) the person has been charged with a violation that
29-14 is subject to correction under Section 242.0665; or
29-15 (2) the department determines that the charged
29-16 violation constitutes immediate jeopardy to the health and safety
29-17 of an institution resident.
29-18 (d) The department shall offer amelioration to a person
29-19 under this section not later than the 10th day after the date the
29-20 person receives from the department a final notification of
29-21 assessment of administrative penalty that is sent to the person
29-22 after an informal dispute resolution process but before an
29-23 administrative hearing under Section 242.068.
29-24 (e) A person to whom amelioration has been offered must file
29-25 a plan for amelioration not later than the 45th day after the date
29-26 the person receives the offer of amelioration from the department.
29-27 In submitting the plan, the person must agree to waive the person's
30-1 right to an administrative hearing under Section 242.068 if the
30-2 department approves the plan.
30-3 (f) At a minimum, a plan for amelioration must:
30-4 (1) propose changes to the management or operation of
30-5 the institution that will improve services to or quality of care of
30-6 residents of the institution;
30-7 (2) identify, through measurable outcomes, the ways in
30-8 which and the extent to which the proposed changes will improve
30-9 services to or quality of care of residents of the institution;
30-10 (3) establish clear goals to be achieved through the
30-11 proposed changes;
30-12 (4) establish a timeline for implementing the proposed
30-13 changes; and
30-14 (5) identify specific actions necessary to implement
30-15 the proposed changes.
30-16 (g) The department may require that an amelioration plan
30-17 propose changes that would result in conditions that exceed the
30-18 requirements of this chapter or the rules adopted under this
30-19 chapter.
30-20 (h) The department shall approve or deny an amelioration
30-21 plan not later than the 45th day after the date the department
30-22 receives the plan. On approval of a person's plan, the department
30-23 shall deny a pending request for a hearing submitted by the person
30-24 under Section 242.067(d).
30-25 (i) The department may not offer amelioration to a person:
30-26 (1) more than three times in a two-year period; or
30-27 (2) more than one time in a two-year period for the
31-1 same or similar violation.
31-2 (j) In this section, "immediate jeopardy to health and
31-3 safety" means a situation in which there is a high probability that
31-4 serious harm or injury to a resident could occur at any time or
31-5 already has occurred and may occur again if the resident is not
31-6 protected from the harm or if the threat is not removed.
31-7 SECTION 8.02. Section 252.071, Health and Safety Code, is
31-8 amended to read as follows:
31-9 Sec. 252.071. AMELIORATION OF VIOLATION. (a) In lieu of
31-10 demanding [ordering] payment of an administrative penalty
31-11 authorized by this subchapter, the department may allow [require] a
31-12 person subject to the penalty to use, under the supervision of the
31-13 department, all or part of the amount of the penalty to ameliorate
31-14 the violation or to improve services, other than administrative
31-15 services, in the facility affected by the violation.
31-16 (b) The department shall offer amelioration to a person for
31-17 a charged violation if the department determines that the violation
31-18 does not constitute immediate jeopardy to the health and safety of
31-19 a facility resident.
31-20 (c) The department may not offer amelioration to a person if
31-21 the department determines that the charged violation constitutes
31-22 immediate jeopardy to the health and safety of a facility resident.
31-23 (d) The department shall offer amelioration to a person
31-24 under this section not later than the 10th day after the date the
31-25 person receives from the department a final notification of
31-26 assessment of administrative penalty that is sent to the person
31-27 after an informal dispute resolution process but before an
32-1 administrative hearing under Section 252.067.
32-2 (e) A person to whom amelioration has been offered must file
32-3 a plan for amelioration not later than the 45th day after the date
32-4 the person receives the offer of amelioration from the department.
32-5 In submitting the plan, the person must agree to waive the person's
32-6 right to an administrative hearing under Section 252.067 if the
32-7 department approves the plan.
32-8 (f) At a minimum, a plan for amelioration must:
32-9 (1) propose changes to the management or operation of
32-10 the facility that will improve services to or quality of care of
32-11 residents of the facility;
32-12 (2) identify, through measurable outcomes, the ways in
32-13 which and the extent to which the proposed changes will improve
32-14 services to or quality of care of residents of the facility;
32-15 (3) establish clear goals to be achieved through the
32-16 proposed changes;
32-17 (4) establish a timeline for implementing the proposed
32-18 changes; and
32-19 (5) identify specific actions necessary to implement
32-20 the proposed changes.
32-21 (g) The department may require that an amelioration plan
32-22 propose changes that would result in conditions that exceed the
32-23 requirements of this chapter or the rules adopted under this
32-24 chapter.
32-25 (h) The department shall approve or deny an amelioration
32-26 plan not later than the 45th day after the date the department
32-27 receives the plan. On approval of a person's plan, the department
33-1 shall deny a pending request for a hearing submitted by the person
33-2 under Section 252.066(b).
33-3 (i) The department may not offer amelioration to a person:
33-4 (1) more than three times in a two-year period; or
33-5 (2) more than one time in a two-year period for the
33-6 same or similar violation.
33-7 (j) In this section, "immediate jeopardy to health and
33-8 safety" means a situation in which there is a high probability that
33-9 serious harm or injury to a resident could occur at any time or
33-10 already has occurred and may occur again if the resident is not
33-11 protected from the harm or if the threat is not removed.
33-12 SECTION 8.03. This article applies only to a violation that
33-13 occurs on or after the effective date of this Act. A violation
33-14 that occurs before that date is covered by the law in effect on the
33-15 date the violation occurred, and the former law is continued in
33-16 effect for that purpose.
33-17 ARTICLE 9. QUALITY ASSURANCE FEE
33-18 SECTION 9.01. Chapter 242, Health and Safety Code, is amended
33-19 by adding Subchapter Q to read as follows:
33-20 SUBCHAPTER Q. QUALITY ASSURANCE FEE
33-21 Sec. 242.851. DEFINITION. In this subchapter, "gross
33-22 receipts" means money paid as compensation for services provided to
33-23 residents, including client participation. The term does not
33-24 include charitable contributions to an institution.
33-25 Sec. 242.852. COMPUTING QUALITY ASSURANCE FEE. (a) A
33-26 quality assurance fee is imposed on each institution for which a
33-27 license fee must be paid under Section 242.034. The fee is:
34-1 (1) an amount established under Subsection (b)
34-2 multiplied by the number of patient days as determined in
34-3 accordance with Section 242.853;
34-4 (2) payable monthly; and
34-5 (3) in addition to other fees imposed under this
34-6 chapter.
34-7 (b) The Health and Human Services Commission or the
34-8 department at the direction of the commission shall set the quality
34-9 assurance fee for each day in the amount necessary to produce
34-10 annual revenues equal to six percent of the institution's total
34-11 annual gross receipts in this state. The fee is subject to a
34-12 prospective adjustment as necessary.
34-13 (c) The amount of the quality assurance fee must be
34-14 determined using patient days and gross receipts reported to the
34-15 department and covering a period of at least six months.
34-16 (d) The quality assurance fee is an allowable cost for
34-17 reimbursement under the state Medicaid program.
34-18 Sec. 242.853. PATIENT DAYS. For each calendar day, an
34-19 institution shall determine the number of patient days by adding
34-20 the following:
34-21 (1) the number of patients occupying an institution
34-22 bed immediately before midnight of that day;
34-23 (2) the number of beds that are on hold on that day
34-24 and that have been placed on hold for a period not to exceed five
34-25 consecutive calendar days during which a patient is in the
34-26 hospital; and
34-27 (3) the number of beds that are on hold on that day
35-1 and that have been placed on hold for a period not to exceed 14
35-2 consecutive calendar days during which a patient is on therapeutic
35-3 home leave.
35-4 Sec. 242.854. REPORTING AND COLLECTION. (a) The Health and
35-5 Human Services Commission or the department at the direction of the
35-6 commission shall collect the fee.
35-7 (b) Each institution shall:
35-8 (1) not later than the 10th day after the last day of
35-9 a month file a report with the Health and Human Services Commission
35-10 or the department, as appropriate, stating the total patient days
35-11 for the month; and
35-12 (2) not later than the 30th day after the last day of
35-13 the month pay the quality assurance fee.
35-14 Sec. 242.855. RULES; ADMINISTRATIVE PENALTY. (a) The
35-15 Health and Human Services Commission shall adopt rules for the
35-16 administration of this subchapter, including rules related to the
35-17 imposition and collection of the quality assurance fee.
35-18 (b) The Health and Human Services Commission may not adopt
35-19 rules granting any exceptions from the quality assurance fee.
35-20 (c) An administrative penalty assessed under this subchapter
35-21 in accordance with Section 242.066 may not exceed one-half of the
35-22 amount of the outstanding quality assurance fee or $20,000,
35-23 whichever is greater.
35-24 Sec. 242.856. QUALITY ASSURANCE FUND. (a) The quality
35-25 assurance fund is a fund outside the state treasury held by the
35-26 Texas Treasury Safekeeping Trust Company. Notwithstanding any
35-27 other law, the comptroller shall deposit fees collected under this
36-1 subchapter to the credit of the fund.
36-2 (b) The fund is composed of:
36-3 (1) fees deposited to the credit of the fund under
36-4 this subchapter; and
36-5 (2) the earnings of the fund.
36-6 (c) Money deposited to the fund remains the property of the
36-7 fund and may be used only for the purposes of this subchapter.
36-8 (d) Subject to legislative appropriation and this
36-9 subchapter, quality assurance fees collected under this subchapter,
36-10 combined with federal matching funds, will support or maintain an
36-11 increase in Medicaid reimbursement for institutions.
36-12 Sec. 242.857. REIMBURSEMENT OF INSTITUTIONS. (a) The
36-13 Health and Human Services Commission shall use money in the quality
36-14 assurance fund, together with any federal money available to match
36-15 that money, to:
36-16 (1) offset allowable expenses under the state Medicaid
36-17 program; or
36-18 (2) increase reimbursement rates paid under the
36-19 Medicaid program to institutions.
36-20 (b) The Health and Human Services Commission or the
36-21 department at the direction of the commission shall devise the
36-22 formula by which amounts received under this section increase the
36-23 reimbursement rates paid to institutions under the state Medicaid
36-24 program.
36-25 (c) The Health and Human Services Commission shall ensure
36-26 that the formula devised under Subsection (b) provides incentives
36-27 for institutions to increase direct care staffing and direct care
37-1 wages and benefits.
37-2 Sec. 242.858. INVALIDITY; FEDERAL FUNDS. If any portion of
37-3 this subchapter is held invalid by a final order of a court that is
37-4 not subject to appeal, or if the Health and Human Services
37-5 Commission determines that the imposition of the fee and the
37-6 expenditure as prescribed by this subchapter of amounts collected
37-7 will not entitle the state to receive additional federal funds
37-8 under the Medicaid program, the commission shall stop collection of
37-9 the quality assurance fee and shall return, not later than the
37-10 30th day after the date collection is stopped, any money collected,
37-11 but not spent, under this subchapter to the institutions that paid
37-12 the fees in proportion to the total amount paid by those
37-13 institutions.
37-14 Sec. 242.859. LEGISLATIVE REVIEW; EXPIRATION. The 79th
37-15 Legislature shall review the operation and effectiveness of this
37-16 subchapter. Unless continued in effect by the 79th Legislature,
37-17 this subchapter expires effective September 1, 2005.
37-18 SECTION 9.02. Notwithstanding Section 242.852, Health and
37-19 Safety Code, as added by this article, the quality assurance fee
37-20 imposed under Subchapter Q, Chapter 242, Health and Safety Code, as
37-21 added by this article, that is effective for the first month
37-22 following the effective date of this Act is equal to $5.25
37-23 multiplied by the number of patient days as determined under that
37-24 subchapter. The quality assurance fee established under this
37-25 section remains in effect until the Health and Human Services
37-26 Commission, or the Texas Department of Human Services at the
37-27 direction of the commission, obtains the information necessary to
38-1 set the fee under Section 242.852, Health and Safety Code, as added
38-2 by this article.
38-3 SECTION 9.03. As soon as practicable after the effective
38-4 date of this Act, the Health and Human Services Commission shall
38-5 adopt rules as necessary to implement Subchapter Q, Chapter 242,
38-6 Health and Safety Code, as added by this article.
38-7 SECTION 9.04. If before implementing any provision of this
38-8 article a state agency determines a waiver or authorization from a
38-9 federal agency is necessary for implementation of that provision,
38-10 the agency affected by the provision shall request the waiver or
38-11 authorization and may delay implementing that provision until the
38-12 waiver or authorization is granted.
38-13 ARTICLE 10. TEXAS DEPARTMENT OF INSURANCE STUDY AND REPORT
38-14 SECTION 10.01. DEFINITIONS. In this article:
38-15 (1) "Commissioner" means the commissioner of
38-16 insurance.
38-17 (2) "Department" means the Texas Department of
38-18 Insurance.
38-19 SECTION 10.02. STUDY. The department shall study the
38-20 implementation of Articles 3, 5, and 6 of this Act and, in
38-21 particular, shall study:
38-22 (1) the effect of the changes in law made by Articles
38-23 5 and 6 of this Act on:
38-24 (A) fostering the development of a competitive
38-25 market for professional liability insurance for nursing
38-26 institutions; and
38-27 (B) improving the availability and affordability
39-1 of professional liability insurance for nursing institutions; and
39-2 (2) the impact of awards of exemplary damages on rates
39-3 for professional liability insurance for nursing homes.
39-4 SECTION 10.03. REPORTS. (a) Not later than December 1,
39-5 2002, the commissioner shall submit an interim report on the study
39-6 conducted under Section 10.02 of this Act to the governor,
39-7 lieutenant governor, and speaker of the house of representatives.
39-8 (b) Not later than December 1, 2004, the commissioner shall
39-9 submit a final report on the study to the governor, lieutenant
39-10 governor, and speaker of the house of representatives. The final
39-11 report must include a recommendation as to whether the changes in
39-12 law made by Articles 5 and 6 of this Act should be repealed,
39-13 continued, or modified.
39-14 SECTION 10.04. EXPIRATION. This article expires September 1,
39-15 2005.
39-16 ARTICLE 11. EFFECTIVE DATE
39-17 SECTION 11.01. This Act takes effect immediately if it
39-18 receives a vote of two-thirds of all the members elected to each
39-19 house, as provided by Section 39, Article III, Texas Constitution.
39-20 If this Act does not receive the vote necessary for immediate
39-21 effect, this Act takes effect September 1, 2001.