By: Nelson S.B. No. 8

(In the Senate - Filed April 24, 2009; April 24, 2009, read first time and referred to Committee on Health and Human Services; May 5, 2009, reported adversely, with favorable Committee Substitute by the following vote: Yeas 9, Nays 0; May 5, 2009, sent to printer.)

COMMITTEE SUBSTITUTE FOR S.B. No. 8 By: Nelson

A BILL TO BE ENTITLED

AN ACT

relating to the administration, powers, and duties of the Texas Health Services Authority.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 182.001, Health and Safety Code, is amended to read as follows:

Sec. 182.001. PURPOSE. This chapter establishes the Texas Health Services Authority as a public-private collaborative to:

(1) implement the state-level health information technology functions identified by the Texas Health Information Technology Advisory Committee by serving as a catalyst for the development of a seamless electronic health information infrastructure to support the health care system in the state and to improve patient safety and quality of care; and

(2) make recommendations to improve the quality of health care funded by both public and private payors and to increase accountability and transparency.

SECTION 2. Section 182.002, Health and Safety Code, is amended by amending Subdivision (5) and adding Subdivisions (1-a), (3-a), (3-b), and (3-c) to read as follows:

(1-a) "Clinical integration" means a network of health care practitioners implementing an active and ongoing program to evaluate and modify practice patterns by the network's participants and create a high degree of interdependence and cooperation to control costs and ensure quality and operating in accordance with the antitrust laws of the United States and this state.

(3-a) "Global payments" means compensation paid to a health care practitioner or a health care facility for providing or arranging a defined set of covered health care services to participating persons for a specific period. The amount of compensation is based on a predetermined payment for each person for that period regardless of the specific services actually provided to persons in that period.

(3-b) "Health care facility" means a hospital, emergency clinic, outpatient clinic, birthing center, ambulatory surgical center, or other facility providing health care services.

(3-c) "Health care practitioner" means an individual who is licensed or otherwise authorized to provide health care services in this state.

(5) "Payor" ["Physician"] means:

(A) an insurer that writes health insurance policies [individual licensed to practice medicine in this state under the authority of Subtitle B, Title 3, Occupations Code];

(B) a preferred provider organization, health maintenance organization, or self-insurance plan [professional entity organized in conformity with Title 7, Business Organizations Code, and permitted to practice medicine under Subtitle B, Title 3, Occupations Code]; or

(C) any other person that provides, offers to provide, or administers hospital, outpatient, medical, or other health benefits to a person treated by a health care practitioner under a policy, plan, or contract [a partnership organized in conformity with Title 4, Business Organizations Code, composed entirely of individuals licensed to practice medicine under Subtitle B, Title 3, Occupations Code;

[(D) an approved nonprofit health corporation certified under Chapter 162, Occupations Code;

[(E) a medical school or medical and dental unit, as defined or described by Section 61.003, 61.501, or 74.601, Education Code, that employs or contracts with physicians to teach or provide medical services or employs physicians and contracts with physicians in a practice plan; or

[(F) an entity wholly owned by individuals licensed to practice medicine under Subtitle B, Title 3, Occupations Code].

SECTION 3. Subsection (a), Section 182.051, Health and Safety Code, is amended to read as follows:

(a) The corporation is established to:

(1) promote, implement, and facilitate the voluntary and secure electronic exchange of health information[;] and

[(2)] create incentives to promote, implement, and facilitate the voluntary and secure electronic exchange of health information; and

(2) research, develop, support, and promote recommended strategies, including strategies based on standards created by nationally recognized organizations, to improve the quality of health care in this state and to increase accountability and transparency through voluntary implementation of the recommendations by health care practitioners, health care facilities, and payors, including recommendations for:

(A) evidence-based best practice standards for health care facilities and health care practitioners;

(B) performance measures for health care practitioners;

(C) improved payment methodologies for payors; and

(D) streamlined administrative processes, including standardized claims.

SECTION 4. Subchapter B, Chapter 182, Health and Safety Code, is amended by adding Section 182.0515 to read as follows:

Sec. 182.0515. ADMINISTRATIVE ATTACHMENT. (a) The corporation is administratively attached to the Health and Human Services Commission.

(b) Notwithstanding any other law, the Health and Human Services Commission shall:

(1) provide administrative assistance, services, and materials to the corporation, including budget planning and purchasing;

(2) accept, deposit, and disburse money made available to the corporation;

(3) accept gifts and grants on behalf of the corporation from any public or private entity;

(4) pay the salaries and benefits of the staff of the corporation;

(5) reimburse expenses of the members of the board incurred in the performance of official duties;

(6) apply for and receive on behalf of the corporation any appropriations, gifts, or other money from the state or federal government or any other public or private entity, subject to limitations and conditions prescribed by legislative appropriation;

(7) provide the corporation with adequate computer equipment and support; and

(8) provide the corporation with adequate office space.

(c) If the board hires a chief executive officer under Section 182.059, the chief executive officer and any staff hired under that section are employees of the corporation and not employees of the Health and Human Services Commission.

SECTION 5. Subsections (a), (b), and (c), Section 182.053, Health and Safety Code, are amended to read as follows:

(a) The corporation is governed by a board of 15 [11] directors appointed as follows:

(1) five members appointed by the governor;

(2) five members appointed by the governor from a list of candidates prepared by the speaker of the house of representatives; and

(3) five members appointed by the lieutenant governor[, with the advice and consent of the senate].

(b) The following [governor shall also appoint at least two] ex officio, nonvoting members also serve on the board:

(1) the commissioner of [representing] the Department of State Health Services;

(2) the executive commissioner of the Health and Human Services Commission;

(3) the commissioner of insurance;

(4) the executive director of the Employees Retirement System of Texas;

(5) the executive director of the Teacher Retirement System of Texas; and

(6) the state Medicaid director of the Health and Human Services Commission.

(c) The governor and lieutenant governor shall appoint as voting board members individuals who represent consumers, clinical laboratories, health benefit plans, hospitals, regional health information exchange initiatives, pharmacies, physicians, or rural health providers, or who possess expertise in any other area the governor or lieutenant governor finds necessary for the successful operation of the corporation.

SECTION 6. Section 182.054, Health and Safety Code, is amended to read as follows:

Sec. 182.054. TERMS OF OFFICE. Appointed members of the board serve two-year terms and may continue to serve until a successor has been appointed by the appropriate appointing authority [governor].

SECTION 7. Section 182.058, Health and Safety Code, is amended by amending Subsection (a) and adding Subsections (c) and (d) to read as follows:

(a) The board may meet as often as necessary, but shall meet at least once each calendar quarter [twice a year].

(c) Board meetings are open to the public.

(d) The board shall provide notice of the meeting in accordance with Chapter 551, Government Code.

SECTION 8. Section 182.059, Health and Safety Code, is amended to read as follows:

Sec. 182.059. CHIEF EXECUTIVE OFFICER; MEDICAL ADVISOR; PERSONNEL. (a) The board may hire a chief executive officer. Under the direction of the board, the chief executive officer shall perform the duties required by this chapter or designated by the board.

(b) The board shall employ or contract with a medical advisor, who must be a physician licensed to practice medicine in this state.

(c) The chief executive officer may hire additional staff to carry out the responsibilities of the corporation.

SECTION 9. Subchapter B, Chapter 182, Health and Safety Code, is amended by adding Section 182.0595 to read as follows:

Sec. 182.0595. ADVISORY COMMITTEES. (a) The board shall establish the following advisory committees to assist the board in performing its functions under this chapter:

(1) an advisory committee on technology; and

(2) an advisory committee on evidence-based best practices and quality of care.

(b) The board may establish additional advisory committees that the board considers necessary to assist the board in performing its functions under this chapter.

(c) The board shall appoint to the advisory committees established under this section persons who:

(1) have significant expertise in the relevant areas, with at least one member of each committee having practical experience in the relevant area; and

(2) represent both the private and public sectors and groups likely to be affected by the implementation of the recommendations of the corporation.

(d) Members of the advisory committees serve without compensation but are entitled to reimbursement for the members' travel expenses as provided by Chapter 660, Government Code, and the General Appropriations Act.

(e) Chapter 2110, Government Code, does not apply to the size, composition, or duration of the advisory committees.

(f) Meetings of the advisory committees under this section are subject to Chapter 551, Government Code.

SECTION 10. Section 182.101, Health and Safety Code, is amended to read as follows:

Sec. 182.101. GENERAL POWERS AND DUTIES. (a) The corporation may:

(1) establish statewide health information exchange capabilities, including capabilities for electronic laboratory results, diagnostic studies, and medication history delivery, and, where applicable, promote definitions and standards for electronic interactions statewide;

(2) seek funding to:

(A) implement, promote, and facilitate the voluntary exchange of secure electronic health information between and among individuals and entities that are providing or paying for health care services or procedures; and

(B) create incentives to implement, promote, and facilitate the voluntary exchange of secure electronic health information between and among individuals and entities that are providing or paying for health care services or procedures;

(3) establish statewide health information exchange capabilities for streamlining health care administrative functions including:

(A) communicating point of care services, including laboratory results, diagnostic imaging, and prescription histories;

(B) communicating patient identification and emergency room required information in conformity with state and federal privacy laws;

(C) real-time communication of enrollee status in relation to health plan coverage, including enrollee cost-sharing responsibilities; and

(D) current census and status of health plan contracted providers;

(4) support regional health information exchange initiatives by:

(A) identifying data and messaging standards for health information exchange;

(B) administering programs providing financial incentives, including grants and loans for the creation and support of regional health information networks, subject to available funds;

(C) providing technical expertise where appropriate;

(D) sharing intellectual property developed under Section 182.105;

(E) waiving the corporation's fees associated with intellectual property, data, expertise, and other services or materials provided to regional health information exchanges operated on a nonprofit basis; and

(F) applying operational and technical standards developed by the corporation to existing health information exchanges only on a voluntary basis, except for standards related to ensuring effective privacy and security of individually identifiable health information; and

(5) [identify standards for streamlining health care administrative functions across payors and providers, including electronic patient registration, communication of enrollment in health plans, and information at the point of care regarding services covered by health plans; and

[(6)] support the secure, electronic exchange of health information through other strategies identified by the board.

(b) The corporation shall research, develop, support, and promote:

(1) evidence-based best practice standards for health care practitioners and health care facilities;

(2) strategies to require or encourage adherence to evidence-based best practice standards, including providing health care practitioners and health care facilities with the support tools and information necessary to promote adherence to evidence-based best practice standards;

(3) performance measures that may be used to evaluate the quality of care that a patient receives from a health care practitioner or at a health care facility;

(4) standards for reporting the results of performance measures under Subdivision (3), comparing health care practitioners and health care facilities based on the performance measures, and sharing this information among health care practitioners, health care facilities, and payors;

(5) recommendations for disseminating the results of the performance measures under Subdivision (3) to the public;

(6) standards for technology to collect information to measure medical outcomes, quality of care, and adherence to evidence-based best practice standards;

(7) strategies for use of existing resources that are available for the exchange of health care information;

(8) strategies for use by the state to facilitate the exchange of health care information, the interoperability of different information storage and transmission systems, and the standardization of health care information in the system;

(9) recommendations to encourage clinical integration and collaboration of health care practitioners to control costs and improve quality;

(10) alternative payment methodologies for payors of health care practitioners and health care facilities that improve efficiency and promote a higher quality of patient care and the use of evidence-based best practices, including:

(A) bundling payments for episodes of care and using global payments to health care practitioners and health care facilities;

(B) replacing payment methodologies that are based on number of patients seen or procedures performed; and

(C) promoting the use of new payment methodologies by both public and private payors;

(11) standards for streamlining health care administrative functions across payors, health care practitioners, and health care facilities, including electronic patient registration, communication of enrollment in health plans, and information at the point of care regarding services covered by health plans; and

(12) recommendations for streamlining health care administrative functions, including:

(A) communicating point of care services, including laboratory results, diagnostic imaging, and prescription histories;

(B) communicating patient identification and emergency room required information in conformity with state and federal privacy laws;

(C) real-time communication at the point of service of enrollee status in relation to health plan coverage, including enrollee cost-sharing responsibilities; and

(D) a current census and the status of health plan contracted health care practitioners and health care facilities.

(c) In performing the board's duties under Subsection (b), the board shall examine:

(1) existing standards, guidelines, strategies, and methodologies created by nationally recognized organizations; and

(2) existing standards, guidelines, strategies, and methodologies used in the federal Medicare program.

(d) The board shall develop recommendations on achieving maximum participation of health care practitioners, health care facilities, and payors in using the standards, guidelines, strategies, and methodologies developed under Subsection (b).

SECTION 11. Subchapter C, Chapter 182, Health and Safety Code, is amended by adding Section 182.1015 to read as follows:

Sec. 182.1015. STUDIES ON PAYMENT METHODOLOGIES. (a) The corporation shall conduct a study or contract for a study to be conducted to develop payment incentives to increase access to primary care. The study must evaluate proposals for changes to payment methodologies for implementation by multiple public and private payors and must consider payment methodologies that:

(1) reward primary health care practitioners for patient retention;

(2) encourage primary health care practitioners to spend an appropriate amount of time with each patient;

(3) reward primary health care practitioners for monitoring patients, including reminders to obtain follow-up care;

(4) provide incentives for having 24-hour availability of a primary health care practitioner in the practice and taking other action to reduce unnecessary emergency room visits; and

(5) improve access to primary care.

(b) The corporation shall conduct a study or contract for a study to be conducted to develop payment methodologies based on risk-adjusted episodes of care, including global payments, that create incentives for a higher quality of services and reduce unnecessary services. The study must:

(1) evaluate payment methodologies that:

(A) align incentives for health care practitioners and health care facilities;

(B) bundle payments based on episodes of care or provide global payments to address variation in cost while providing incentives for higher-quality care;

(C) allow for the adjustment of costs based on the risk factors of the patient, including age; and

(D) may be adopted by private and public payors; and

(2) identify high-cost, frequently performed procedures for which the cost would be most affected by a change in payment methodologies.

(c) The studies under Subsections (a) and (b) must:

(1) examine:

(A) payment methodologies created by nationally recognized organizations;

(B) payment methodologies that promote evidence-based best practices; and

(C) payment methodologies used by the federal Medicare system, including methodologies designed to increase provision of primary care services; and

(2) include recommendations on achieving maximum participation of health care practitioners, health care facilities, and payors in using the payment methodologies evaluated under those studies.

(d) The corporation shall submit to the legislature not later than January 1, 2011:

(1) a summary of the results of the studies conducted under this section; and

(2) legislative recommendations regarding the studies' findings, including methods to require or encourage as many payors as possible to use the payment methodologies recommended by the studies.

(e) This section expires September 1, 2011.

SECTION 12. Subsection (a), Section 182.102, Health and Safety Code, is repealed.

SECTION 13. (a) The term of a voting member of the board of directors of the Texas Health Services Authority serving immediately before the effective date of this Act expires on that date.

(b) The governor and lieutenant governor shall appoint voting members of the board of directors of the Texas Health Services Authority under Subsection (a), Section 182.053, Health and Safety Code, as amended by this Act, as soon as possible after the effective date of this Act. A person who is a voting member of the board of directors immediately before the effective date of this Act may be reappointed to the board.

SECTION 14. This Act takes effect September 1, 2009.

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