By: Patrick S.B. No. 848

(In the Senate - Filed February 22, 2011; March 1, 2011, read first time and referred to Committee on Health and Human Services; April 21, 2011, reported adversely, with favorable Committee Substitute by the following vote: Yeas 6, Nays 3; April 21, 2011, sent to printer.)

COMMITTEE SUBSTITUTE FOR S.B. No. 848 By: Patrick

A BILL TO BE ENTITLED

AN ACT

relating to ambulatory surgical centers and to the provision of services at those centers by certain designated physician groups.

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

SECTION 1. Section 243.002, Health and Safety Code, is amended by amending Subdivision (3) and adding Subdivisions (3-a), (3-b), and (5) to read as follows:

(3) "Department" means the [Texas] Department of State Health Services.

(3-a) "Designated physician group" means any business entity formed exclusively by one or more physicians licensed to practice medicine in this state, including a professional association, a professional corporation, a professional limited liability company, or a professional limited liability partnership, that has entered into a use agreement.

(3-b) "Facility" means the physical premises that the department determines constitute an ambulatory surgical center.

(5) "Use agreement" means a written executed agreement between a licensed ambulatory surgical center and a designated physician group under which the ambulatory surgical center allows the designated physician group to use its facility to provide ambulatory surgical center services on a part-time basis to the designated physician group's patients.

SECTION 2. The heading to Section 243.003, Health and Safety Code, is amended to read as follows:

Sec. 243.003. LICENSE REQUIRED; USE AGREEMENTS.

SECTION 3. Section 243.003, Health and Safety Code, is amended by amending Subsection (c) and adding Subsections (d) through (i) to read as follows:

(c) Except as provided by Subsection (d), a [A] license is not transferable or assignable.

(d) Except as provided by Subsection (e) and subject to Subsection (f), an ambulatory surgical center may share its license under a sublicense agreement with one or more designated physician groups that is entered into under the terms of a use agreement, if:

(1) the ambulatory surgical center:

(A) remains responsible for ensuring that the facility and all surgical and other ambulatory surgical center services provided in the facility by any designated physician group comply with this chapter and applicable department rules; and

(B) at least annually, provides the department with:

(i) a list of the designated physician groups with which the ambulatory surgical center has entered into use agreements; and

(ii) any other information that the department requires by rule about the designated physician groups or use agreements; and

(2) the designated physician group notifies each patient to whom the group provides ambulatory surgical center services at the facility that the group has a financial relationship through a use agreement with the ambulatory surgical center and of the impact of that agreement on the network status of the ambulatory surgical center services provided.

(e) A use agreement under Subsection (d) may not cover a transaction paid for under the Medicare or Medicaid program.

(f) A use agreement entered into under this section must comply with all applicable federal laws and regulations.

(g) Fees under a use agreement entered into under this chapter must be equal to the fair market value of the use of the facility under the agreement, consistent with Chapter 102, Occupations Code.

(h) Notwithstanding any other law, an insurer or other entity authorized under the Insurance Code or any other law to offer a health benefit plan is not required to contract or prohibited from contracting with a designated physician group that is operating under a use agreement.

(i) The department by rule shall prescribe minimum requirements for a use agreement entered into under this chapter.

SECTION 4. Section 843.002, Insurance Code, is amended by adding Subdivision (1-a) and amending Subdivision (24) to read as follows:

(1-a) "Ambulatory surgical center" means a facility licensed under Chapter 243, Health and Safety Code, and includes a designated physician group operating under a use agreement entered into under that chapter.

(24) "Provider" means:

(A) a person, other than a physician, who is licensed or otherwise authorized to provide a health care service in this state, including:

(i) a chiropractor, registered nurse, pharmacist, optometrist, registered optician, or acupuncturist; or

(ii) a pharmacy, hospital, ambulatory surgical center, or other institution or organization;

(B) a person who is wholly owned or controlled by a provider or by a group of providers who are licensed or otherwise authorized to provide the same health care service; or

(C) a person who is wholly owned or controlled by one or more hospitals and physicians, including a physician-hospital organization.

SECTION 5. Section 1301.001, Insurance Code, is amended by amending Subdivisions (1) and (4) and adding Subdivision (1-a) to read as follows:

(1) "Ambulatory surgical center" means a facility licensed under Chapter 243, Health and Safety Code, and includes a designated physician group operating under a use agreement entered into under that chapter.

(1-a) "Health care provider" means a practitioner, institutional provider, or other person or organization that furnishes health care services and that is licensed or otherwise authorized to practice in this state. The term does not include a physician.

(4) "Institutional provider" means an ambulatory surgical center, a hospital, a nursing home, or another [other] medical or health-related service facility that provides care for the sick or injured or other care that may be covered in a health insurance policy.

SECTION 6. Section 401.011, Labor Code, is amended by adding Subdivision (4-a) and amending Subdivision (20) to read as follows:

(4-a) "Ambulatory surgical center" means a facility licensed under Chapter 243, Health and Safety Code, and includes a designated physician group operating under a use agreement entered into under that chapter.

(20) "Health care facility" means a hospital, ambulatory surgical center, emergency clinic, outpatient clinic, or other facility providing health care.

SECTION 7. The change in law made by this Act applies only to a use agreement under Section 243.003, Health and Safety Code, as amended by this Act, that is entered into on or after the effective date of this Act. A use agreement entered into before the effective date of this Act is governed by the law in effect immediately before that date, and that law is continued in effect for that purpose.

SECTION 8. This Act takes effect September 1, 2011.

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