By: Nelson S.B. No. 872
A BILL TO BE ENTITLED
AN ACT
relating to a study regarding the impact of niche hospitals on other
general hospitals and to certain reports and disclosure
requirements regarding niche hospitals.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 105.002, Occupations Code, is amended by
amending Subsection (a) and adding Subsections (c) and (d) to read
as follows:
(a) A health care provider commits unprofessional conduct
if the health care provider, in connection with the provider's
professional activities:
(1) knowingly presents or causes to be presented a
false or fraudulent claim for the payment of a loss under an
insurance policy; [or]
(2) knowingly prepares, makes, or subscribes to any
writing, with intent to present or use the writing, or to allow it
to be presented or used, in support of a false or fraudulent claim
under an insurance policy; or
(3) knowingly directs or requires a patient to obtain
health care goods or services from a niche hospital in which the
health care provider or an immediate family member of the provider
has a financial interest, unless the provider:
(A) discloses to the patient, in writing, that
the provider or the provider's family member has a financial
interest in the niche hospital; and
(B) informs the patient that the patient has the
option of using an alternative health care facility.
(c) Subsection (a)(3) does not apply to a financial interest
in publicly available shares of a registered investment company,
such as a mutual fund, that owns publicly traded equity securities
or debt obligations issued by a niche hospital or an entity that
owns the niche hospital.
(d) In this section:
(1) "Diagnosis-related group" means the
classification system mandated by Medicare regulations for
reimbursement purposes that groups patients according to principal
diagnosis, presence of a surgical procedure, age, presence or
absence of significant complications, and other relevant criteria.
(2) "Niche hospital" means a hospital that:
(A) classifies at least two-thirds of the
hospital's Medicare patients or, if data is available, all
patients:
(i) in not more than two major
diagnosis–related groups; or
(ii) in surgical diagnosis-related groups;
(B) specializes in one or more of the following
areas:
(i) cardiac;
(ii) orthopedics;
(iii) surgery; or
(iv) women's health; and
(C) is not:
(i) a public hospital;
(ii) a hospital for which the majority of
inpatient claims are for major diagnosis-related groups relating to
rehabilitation, psychiatry, alcohol and drug treatment, or
children or newborns; or
(iii) a hospital with fewer than 10 claims
per bed per year.
SECTION 2. Subchapter B, Chapter 162, Occupations Code, is
amended by adding Section 162.052 to read as follows:
Sec. 162.052. NOTICE OF CERTAIN OWNERSHIP INTERESTS.
(a) In this section, "niche hospital" has the meaning assigned by
Section 105.002.
(b) A physician shall notify the Department of State Health
Services of any ownership interest held by the physician in a niche
hospital.
(c) Subsection (b) does not apply to an ownership interest
in publicly available shares of a registered investment company,
such as a mutual fund, that owns publicly traded equity securities
or debt obligations issued by a niche hospital or an entity that
owns the niche hospital.
(d) The board, in consultation with the Department of State
Health Services, shall adopt rules governing the form and content
of the notice required by Subsection (b).
SECTION 3. Section 108.011, Health and Safety Code, is
amended by adding Subsections (c-1) and (c-2) to read as follows:
(c-1) The council shall use public use data to prepare and
issue reports that provide information for review and analysis by
the Health and Human Services Commission relating to services that
are provided in a niche hospital, as defined by Section 105.002,
Occupations Code, and that are provided by a physician with an
ownership interest in the niche hospital.
(c-2) Subsection (c-1) does not apply to an ownership
interest in publicly available shares of a registered investment
company, such as a mutual fund, that owns publicly traded equity
securities or debt obligations issued by a niche hospital or an
entity that owns the niche hospital.
SECTION 4. (a) In this section, "niche hospital" has the
meaning assigned by Section 105.002, Occupations Code.
(b) The Department of State Health Services shall conduct a
study regarding the impact of niche hospitals on the financial
viability of other general hospitals located in this state.
(c) In conducting the study, the Department of State Health
Services shall evaluate:
(1) the number of niche hospitals currently operating
in this state;
(2) the number of niche hospitals in this state that
are currently under construction or in the planning phase of
construction;
(3) the location of each niche hospital and its
proximity to other general hospitals;
(4) the financial impact of niche hospitals on other
general hospitals;
(5) the referral patterns of physicians with an
ownership interest in a niche hospital as compared to the referral
patterns of physicians with privileges at a niche hospital who do
not have an ownership interest in the niche hospital; and
(6) the range of services provided by niche hospitals
in this state, with particular emphasis on the provision of
emergency and charity care services.
(d) Not later than December 1, 2006, the Department of State
Health Services shall submit a report to the legislature regarding
the results of the study conducted under this section.
(e) This section expires September 1, 2007.
SECTION 5. Section 105.002, Occupations Code, as amended by
this Act, applies only to conduct that occurs on or after the
effective date of this Act. Conduct that occurs before the
effective date of this Act is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 6. This Act takes effect September 1, 2005.