79R4572 HLT-D

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 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.  (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 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 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 3.  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 4.  This Act takes effect September 1, 2005.