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A BILL TO BE ENTITLED
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AN ACT
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relating to charity care. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 311.031(2) and (16), Health and Safety |
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Code, are amended to read as follows: |
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(2) "Charity care" means the unreimbursed cost, not |
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including bad debt expense, to a hospital of: |
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(A) providing, funding, or otherwise financially |
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supporting health care services on an inpatient or outpatient basis |
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to a person classified by the hospital as "financially indigent" or |
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"medically indigent"; and/or |
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(B) providing, funding, or otherwise financially |
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supporting health care services provided to financially indigent |
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persons through other nonprofit or public outpatient clinics, |
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hospitals, or health care organizations. |
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(16) "Unreimbursed costs" means the costs a hospital |
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incurs for providing services after subtracting payments received |
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from any source for such services including but not limited to the |
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following: third-party insurance payments; Medicare payments; |
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Medicaid payments; Medicare education reimbursements; state |
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reimbursements for education; payments from drug companies to |
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pursue research; grant funds for research; and disproportionate |
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share payments. For purposes of this definition, the term "costs" |
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shall be calculated by applying the hospital's Medicare cost ratio |
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[to charge ratios derived in accordance with generally accepted
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accounting principles for hospitals] to billed charges. The |
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executive commissioner of the Health and Human Services Commission |
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by rule may supplement the Medicare cost ratio with additional |
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expenses and revenues that are reasonable and medically necessary |
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and subject to third-party insurer reimbursement. The calculation |
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of the cost to charge ratios shall be based on the most recently |
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completed and audited prior fiscal year of the hospital or hospital |
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system. Prior to January 1, 1996, for purposes of this definition, |
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charitable contributions and grants to a hospital, including |
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transfers from endowment or other funds controlled by the hospital |
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or its nonprofit supporting entities, shall not be subtracted from |
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the costs of providing services for purposes of determining |
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unreimbursed costs. After January 1, 1996, for purposes of this |
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definition, charitable contributions and grants to a hospital, |
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including transfers from endowment or other funds controlled by the |
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hospital or its nonprofit supporting entities, shall not be |
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subtracted from the costs of providing services for purposes of |
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determining the unreimbursed costs of charity care and |
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government-sponsored indigent health care. |
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SECTION 2. Amend Texas Government Code, Chapter 531 to add a |
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new Subchapter Q to read as follows: |
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Subchapter Q. Study on Hospital Billing and Collection Practices |
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Sec. 531.701. Study concerning hospital billing and |
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collection practices. |
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(a) The Texas Health and Human Services Commission shall study |
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the effects of hospital and billing practices on the uninsured and |
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underinsured. |
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(b) By the use of a hospital questionnaire and such other |
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investigative tools including sample hospital audits, interviews, |
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public hearings and reports, the study shall address: |
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(i) the effects of hospital billing, including pricing and |
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discounting. practices by public health region as designated under |
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Texas Health & Safety Code, Section 121.007 upon the uninsured, the |
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underinsured, insurers, governmental payors, and other third-party |
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payors; |
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(ii) The effects of hospital billing, including pricing and |
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discounting, and collection practices upon the uninsured and |
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underinsured including any barriers to health care access and |
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economic consequences; and |
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(iii) The actions other jurisdictions have taken through |
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legislation or litigation to address hospital billing and |
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collection practices upon the uninsured and the underinsured. |
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(c) Any data presented in the study shall be indexed by hospital |
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organizational structure: for profit, nonprofit, and public. |
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(d) The study shall commence no later than November 15, 2009 and |
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produce a report on the study to be filed with the legislature no |
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later than December 15, 2010. At that date, the commission shall |
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publish the report on its website in a conspicuous location. |
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(e) The performance of the study may be delegated by the |
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commission to one or more working groups that may include public |
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members and representatives from the Texas Attorney General, Texas |
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Comptroller of Public Accounts and the Texas Department of State |
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Health Services. At least half of the public members appointed to |
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any working group must be individuals or representatives of |
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organizations that advocate on behalf of consumers on health care |
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issues. |
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(f) Public hearings shall be held throughout the state to receive |
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public testimony for inclusion in the report. At the commission's |
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request, a working group member may coordinate, convene, and |
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preside at a public hearing. Among other resources, the commission |
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may rely on donations of space, equipment, and personnel for the |
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public hearing. |
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(g) The commission or its delegate may retain public accountants |
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and such other experts considered reasonably necessary to perform |
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the study and may seek collaboration from the Texas Attorney |
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General, the Texas Comptroller of Public Accounts and the Texas |
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Department of State Health Services. |
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Sec. 531.702. Expiration of Subchaper. This Subchapter |
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expires on January 31, 2011. |
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SECTION 3. Subchapter D, Chapter 311, Health and Safety |
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Code is amended by adding Section 311.0471 to read as follows: |
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Sec. 311.0471. INVESTIGATION AND ENFORCEMENT. (a) Except |
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as otherwise provided, this section applies only to a hospital, as |
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that term is defined by Section 311.031. |
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(b) The attorney general shall investigate whether a |
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hospital has violated this Subchapter on receipt of a public |
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complaint. |
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(c) The attorney general may conduct any investigation |
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considered necessary regarding possible violations of this |
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Subchapter by a hospital, including: |
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(1) examination of the hospital's premises; |
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(2) on written request to the chief operating officer |
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of the hospital, examination of any record, book, document, |
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account, or paper necessary to investigate the alleged violation; |
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(3) requiring the hospital to file a statement or |
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report or answer interrogatories in writing relating to all |
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information relevant to the alleged violations; and |
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(4) subpoena examination under oath of any person who |
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possesses knowledge or information directly related to the alleged |
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violations. |
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(d) If the attorney general has reason to believe that a |
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hospital has violated this Subchapter, the attorney general may |
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bring action on behalf of the state against the hospital to obtain |
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temporary, preliminary, or permanent injunctive relief for any act, |
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policy, or practice by the hospital that violates this Subchapter. |
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Before bringing an action, the attorney general may permit the |
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hospital to submit a correction plan for the attorney general's |
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approval. |
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(e) The attorney general may seek a civil monetary penalty |
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not to exceed $1,000 per violation per day if a hospital, by pattern |
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or practice, knowingly violates this Subchapter. |
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(f) In an action filed under this Subchapter, the attorney |
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general may seek the recovery of court costs and legal fees. |
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(g) If a court grants a final order of relief against a |
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nonprofit hospital for a violation of this Subchapter, the |
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attorney general shall notify each taxing authority that has |
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granted the nonprofit hospital a tax exemption about the court's |
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decision. |
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(h) The attorney general shall establish a complaint |
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process through which the public may file complaints involving |
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violations of this Subchapter. The complaint process at a minimum |
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must include: |
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(1) a mail address, a toll-free telephone number, and |
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an e-mail address for receiving complaints; |
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(2) a public education campaign concerning the |
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obligations hospitals have to the public under this Subchapter; |
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(3) a public education campaign concerning the |
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attorney general's complaint process; and |
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(4) complaint forms and instructions to aid the public |
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in making complaints. |
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(i) The attorney general shall prepare and publicly |
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distribute, including posting in a conspicuous location on the |
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attorney general's website, an annual report that informs the |
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public of the attorney general's activities under this Subchapter |
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for the previous year. |
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SECTION 4. This Act takes effect September 1, 2009. |