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Amend HB 1218 (Senate committee printing) by adding the 
following appropriately numbered SECTION to the bill:
	SECTION ____.  LONG-TERM CARE INCENTIVES.  (a)  Subchapter 
B, Chapter 32, Human Resources Code, is amended by adding Section 
32.0283 to read as follows:
	Sec. 32.0283.  PAY-FOR-PERFORMANCE INCENTIVES FOR CERTAIN 
NURSING FACILITIES.  (a)  In this section, "nursing facility" means 
a convalescent or nursing home or related institution licensed 
under Chapter 242, Health and Safety Code, that provides long-term 
care services, as defined by Section 22.0011, to medical assistance 
recipients.
	(b)  If feasible, the executive commissioner of the Health 
and Human Services Commission by rule shall establish an incentive 
payment program for nursing facilities that is designed to improve 
the quality of care and services provided to medical assistance 
recipients.  The program must provide additional payments in 
accordance with this section to the facilities that meet or exceed 
performance standards established by the executive commissioner.
	(c)  In establishing an incentive payment program under this 
section, the executive commissioner of the Health and Human 
Services Commission shall, subject to Subsection (d), adopt 
outcome-based performance measures.  The performance measures:
		(1)  must be:                                                          
			(A)  recognized by the executive commissioner as 
valid indicators of the overall quality of care received by medical 
assistance recipients; and
			(B)  designed to encourage and reward 
evidence-based practices among nursing facilities; and
		(2)  may include measures of:                                          
			(A)  quality of life;                                                 
			(B)  direct-care staff retention and turnover;                        
			(C)  recipient satisfaction;                                          
			(D)  employee satisfaction and engagement;                            
			(E)  the incidence of preventable acute care 
emergency room services use;
			(F)  regulatory compliance;                                           
			(G)  level of person-centered care; and                               
			(H)  level of occupancy or of facility 
utilization.                 
	(d)  The executive commissioner of the Health and Human 
Services Commission shall:
		(1)  maximize the use of available information 
technology and limit the number of performance measures adopted 
under Subsection (c) to achieve administrative cost efficiency and 
avoid an unreasonable administrative burden on nursing facilities; 
and
		(2)  for each performance measure adopted under 
Subsection (c), establish a performance threshold for purposes of 
determining eligibility for an incentive payment under the program.
	(e)  To be eligible for an incentive payment under the 
program, a nursing facility must meet or exceed applicable 
performance thresholds in at least two of the performance measures 
adopted under Subsection (c), at least one of which is an indicator 
of quality of care.
	(f)  The executive commissioner of the Health and Human 
Services Commission may:
		(1)  determine the amount of an incentive payment under 
the program based on a performance index that gives greater weight 
to performance measures that are shown to be stronger indicators of 
a nursing facility's overall performance quality; and
		(2)  enter into a contract with a qualified person, as 
determined by the executive commissioner, for the following 
services related to the program:
			(A)  data collection;                                                 
			(B)  data analysis; and                                               
			(C)  reporting of nursing facility performance on 
the performance measures adopted under Subsection (c).
	(b)  Subsection (a), Section 32.060, Human Resources Code, 
as added by Section 16.01, Chapter 204 (H.B. 4), Acts of the 78th 
Legislature, Regular Session, 2003, is amended to read as follows:
	(a)  The following are not admissible as evidence in a civil 
action:         
		(1)  any finding by the department that an institution 
licensed under Chapter 242, Health and Safety Code, has violated a 
standard for participation in the medical assistance program under 
this chapter; [or]
		(2)  the fact of the assessment of a monetary penalty 
against an institution under Section 32.021 or the payment of the 
penalty by an institution; or
		(3)  any information obtained or used by the department 
to determine the eligibility of a nursing facility for an incentive 
payment, or to determine the facility's performance rating, under 
Section 32.028(g) or 32.0283(f).
	(c)  The Health and Human Services Commission shall conduct a 
study to evaluate the feasibility of providing an incentive payment 
program for the following types of providers of long-term care 
services, as defined by Section 22.0011, Human Resources Code, 
under the medical assistance program similar to the incentive 
payment program established for nursing facilities under Section 
32.0283, Human Resources Code, as added by this section:
		(1)  intermediate care facilities for persons with 
mental retardation licensed under Chapter 252, Health and Safety 
Code; and
		(2)  providers of home and community-based services, as 
described by 42 U.S.C. Section 1396n(c), who are licensed or 
otherwise authorized to provide those services in this state.
	(d)  Not later than September 1, 2010, the Health and Human 
Services Commission shall submit to the legislature a written 
report containing the findings of the study conducted under 
Subsection (c) of this section and the commission's 
recommendations.
	(e)  As soon as practicable after the effective date of this 
Act, the executive commissioner of the Health and Human Services 
Commission shall adopt the rules required by Section 32.0283, Human 
Resources Code, as added by this section.