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79R8276 JJT-D
By: Dutton H.B. No. 3089
A BILL TO BE ENTITLED
AN ACT
relating to contracts with private entities to operate state
hospitals for persons with mental illness.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 533.050, Health and Safety Code, is
amended to read as follows:
Sec. 533.050. PRIVATIZATION OF STATE MENTAL HOSPITAL;
CONSTRUCTION AND OPERATION OF REPLACEMENT FACILITY. (a) The
Department of State Health Services [After August 31, 2004, and
before September 1, 2005, the department] may contract with a
private service provider to operate a state mental hospital [owned
by the department] only if:
(1) the executive commissioner of the Health and Human
Services Commission determines that the private service provider
will operate the hospital at a cost that is at least five [25]
percent less than the cost to the department to operate the
hospital;
(2) the executive commissioner of the Health and Human
Services Commission approves the contract;
(3) the hospital, when operated under the contract,
treats a population with the same characteristics and acuity levels
as the population treated at the hospital when operated by the
department; and
(4) the private service provider is required under the
contract to operate the hospital at a quality level at least equal
to the quality level achieved by the department when the department
operated the hospital, as measured by the hospital's most recent
applicable accreditation determination from the Joint Commission
on Accreditation of Healthcare Organizations (JCAHO).
(b) The Department of State Health Services [On or before
April 1, 2004, the department] shall report to the executive
commissioner of the Health and Human Services Commission regarding
[health and human services] whether the department has received a
proposal by a private service provider to operate a state mental
hospital. The report must include an evaluation of the private
service provider's qualifications, experience, and financial
strength, a determination of whether the provider can operate the
hospital under the same standard of care as the department, and an
analysis of the projected savings under a proposed contract with
the provider. The savings analysis must include all department
costs to operate the hospital, including costs, such as employee
benefits, that are not appropriated to the department.
(c) A contract entered into under Subsection (a) must:
(1) provide that the Department of State Health
Services retains the right to assume management of the hospital if
contract terms are not met or if the five percent cost savings
requirement is not met; and
(2) establish specific goals for the provider to meet:
(A) in significantly reducing the use of
restraints on and the seclusion of patients;
(B) in significantly reducing patient waiting
lists;
(C) in significantly reducing average length of
stay for patients; and
(D) in increasing access to mental health
inpatient services.
(d) The Department of State Health Services shall monitor
care of patients at a state hospital operated by contract. The
department shall develop and maintain information on activities
carried out under the contract without violating privacy or
confidentiality rules. The information developed under this
subsection must include:
(1) the number of incidents in which patients were
restrained or secluded;
(2) the number of incidents of assaults in the
hospital setting;
(3) the number of occurrences in the hospital setting
involving contacts with law enforcement personnel;
(4) individual and average lengths of stay, including
computation of lengths of stay according to the number of days a
patient is in the facility during each calendar year, regardless of
discharge and readmission; and
(5) client outcomes.
(e) The Department of State Health Services may not enter
into a contract under this section with a private service provider
unless the provider has a documented and verified successful record
of:
(1) providing mental health services over a five-year
period; and
(2) managing a mental health facility with a
population of at least 250 patients.
(f) If the Department of State Health Services [department]
contracts with a private service provider to operate a state mental
hospital, the department, the Governor's Office of Budget and
Planning, and the Legislative Budget Board shall identify sources
of funding that must be transferred to the department to fund the
contract.
(g) [(d)] The Department of State Health Services
[department] may renew a contract under this section. The
conditions provided by this section [listed in Subsections
(a)(1)-(3)] apply to the renewal of the contract.
(h) The Department of State Health Services shall enter into
an agreement with a private entity to finance, design, build, and
operate a new facility to replace one or more state hospitals. The
agreement may be for a term not to exceed 20 years. The agreement
must provide for the department to acquire the facility under a
lease-purchase agreement with a term not to exceed 20 years and
authorize the private entity to issue certificates of participation
or other appropriate securities to finance the construction of the
facility. The portions of the agreement that govern the provision
of services must meet the requirements for a contract entered into
under Subsection (a).
(i) The Department of State Health Services and each private
entity that contracts with the department under this section shall
provide to the legislature a report on the progress of activities
under the contract and performance of services under the contract.
The report must be provided to the legislature not later than
November 1 of each even-numbered year.
SECTION 2. The Department of State Health Services shall
issue a request for proposals for a private service provider to
contract with the department to operate a state hospital not later
than October 14, 2005.
SECTION 3. This Act takes effect September 1, 2005.