AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

Rural areas often lack adequate access to health care services as a result of financial burdens caused by the high-cost, low-revenue environment created by indigent care programs, high administrative costs, and meager Medicaid payments. This bill provides a mechanism by which rural areas could collect revenue to help cover health care costs.

 

H.B. 3185 creates the legal structure for a "local provider participation fund" in a county not served by a hospital district or a public hospital, with a population of less than 200,000, and with two municipalities with a population larger than 75,000. Created and maintained by the local commissioners court, the Local Provider Participation Fund will collect payments based on net patient revenue from each participating hospital in order to cover participating hospitals' collective costs. Some of these costs as described in the bill are subsidizing indigent care programs, paying administrative expenses, and funding Medicaid payment shortages.

 

H.B. 3185 amends the Health Code by adding Chapter 296 and authorizes the creation of a county health care provider participation program.

 

H.B. 3185 amends current law relating to the creation and operations of health care provider participation programs in certain counties.

 

RULEMAKING AUTHORITY

 

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1.  Amends Subtitle D, Title 4, Health and Safety Code, by adding Chapter 296, as follows:

 

CHAPTER 296.  COUNTY HEALTH CARE PROVIDER PARTICIPATION PROGRAM IN CERTAIN COUNTIES

 

SUBCHAPTER A.  GENERAL PROVISIONS

 

Sec. 296.001.  DEFINITIONS.  Defines "institutional health care provider," "paying hospital," and "program."

 

Sec. 296.002.  APPLICABILITY.  Provides that this chapter applies only to a county that:

 

(1)  is not served by a hospital district or a public hospital; and

 

(2)  has a population of less than 200,000 and contains two municipalities both with populations of 75,000 or more.

 

Sec. 296.003.  COUNTY HEALTH CARE PROVIDER PARTICIPATION PROGRAM; PARTICIPATION IN PROGRAM.  (a)  Provides that a county health care provider participation program authorizes a county to collect a mandatory payment from each institutional health care provider located in the county to be deposited in a local provider participation fund established by the county.  Provides that money in the fund may be used by the county to fund certain intergovernmental transfers and indigent care programs as provided by this chapter.

 

(b)  Authorizes the commissioners court to adopt an order authorizing a county to participate in the program, subject to the limitations provided by this chapter.

 

SUBCHAPTER B.  POWERS AND DUTIES OF COMMISSIONERS COURT

 

Sec. 296.051.  LIMITATION ON AUTHORITY TO REQUIRE MANDATORY PAYMENT.  Authorizes the commissioners court of a county to require a mandatory payment authorized under this chapter by an institutional health care provider in the county only in the manner provided by this chapter.

 

Sec. 296.052.  MAJORITY VOTE REQUIRED.  Prohibits the commissioners court of a county from authorizing the county to collect a mandatory payment authorized under this chapter without an affirmative vote of a majority of the members of the commissioners court.

 

Sec. 296.053.  RULES AND PROCEDURES. Authorizes the commissioners court to adopt rules relating to the administration of the mandatory payment after the commissioners court has voted to require a mandatory payment authorized under this chapter.

 

Sec. 296.054.  INSTITUTIONAL HEALTH CARE PROVIDER REPORTING; INSPECTION OF RECORDS.  (a)  Requires the commissioners court of a county that collects a mandatory payment authorized under this chapter to require each institutional health care provider to submit to the county a copy of any financial and utilization data required by and reported to the Department of State Health Services (DSHS) under Sections 311.032 (Department Administration of Hospital Reporting and Collection System) and 311.033 (Financial and Utilization Data Required) and any rules adopted by the executive commissioner of the Health and Human Services Commission (commissioner) (HHSC) to implement those sections.

 

(b)  Authorizes the commissioners court of a county that collects a mandatory payment authorized under this chapter to inspect the records of an institutional health care provider to the extent necessary to ensure compliance with the requirements of Subsection (a).

 

SUBCHAPTER C.  GENERAL FINANCIAL PROVISIONS

 

Sec. 296.101.  HEARING.  (a) Requires the commissioners court of a county that collects a mandatory payment authorized under this chapter to hold a public hearing each year on the amounts of any mandatory payments that the commissioners court intends to require during the year and how the revenue derived from those payments is to be spent.

 

(b) Requires the commissioners court of the county to publish notice of the hearing in a newspaper of general circulation in the county not later than the 10th day before the date of the hearing required under Subsection (a).

 

(c)  Entitles a representative of a paying hospital to appear at the time and place designated in the public notice and to be heard regarding any matter related to the mandatory payments authorized under this chapter.

 

Sec. 296.102.  DEPOSITORY.  (a)  Requires the commissioners court of each county that collects a mandatory payment authorized under this chapter by resolution to designate one or more banks located in the county as the depository for mandatory payments received by the county.  Provides that a bank designated as a depository serves for two years or until a successor is designated.

 

(b)  Requires that all income received by a county under this chapter, including the revenue from mandatory payments remaining after discounts and fees for assessing and collecting the payments are deducted, be deposited with the county depository in the county's local provider participation fund and be withdrawn only as provided by this chapter.

 

(c)  Requires that all funds under this chapter be secured in the manner provided for securing county funds.

 

Sec. 296.103.  LOCAL PROVIDER PARTICIPATION FUND; AUTHORIZED USES OF MONEY.  (a)  Requires that each county that collects a mandatory payment authorized under this chapter create a local provider participation fund.

 

(b)  Provides that the local provider participation fund of a county consists of:

 

(1)  all revenue received by the county attributable to mandatory payments authorized under this chapter, including any penalties and interest attributable to delinquent payments;

 

(2)  money received from HHSC as a refund of an intergovernmental transfer from the county to the state for the purpose of providing the nonfederal share of Medicaid supplemental payment program payments, provided that the intergovernmental transfer does not receive a federal matching payment; and

 

(3)  the earnings of the fund.

 

(c)  Provides that money deposited to the local provider participation fund may be used only to:

 

(1)  fund intergovernmental transfers from the county to the state to provide the nonfederal share of a Medicaid supplemental payment program authorized under the state Medicaid plan, the Texas Healthcare Transformation and Quality Improvement Program waiver issued under Section 1115 of the federal Social Security Act (42 U.S.C. Section 1315), or a successor waiver program authorizing similar Medicaid supplemental payment programs;

 

(2)  subsidize indigent programs;

 

(3)  pay the administrative expenses of the county solely for activities under this chapter;

 

(4)  refund a portion of a mandatory payment collected in error from a paying hospital; and

 

(5)  refund to paying hospitals the proportionate share of money received by the county from HHSC that is not used to fund the nonfederal share of Medicaid supplemental payment program payments.

 

(d)  Prohibits money in the local provider participation fund from being commingled with other county funds.

 

(e)  Prohibits an intergovernmental transfer of funds described by Subsection (c)(1) and any funds received by the county as a result of an intergovernmental transfer described by that subsection from being used by the county or any other entity to expand Medicaid eligibility under the Patient Protection and Affordable Care Act (Pub. L. No. 111-148) as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. No. 111-152).

 

SUBCHAPTER D.  MANDATORY PAYMENTS

 

Sec. 296.151.  MANDATORY PAYMENTS BASED ON PAYING HOSPITAL NET PATIENT REVENUE.  (a)  Authorizes the commissioners court of a county that collects a mandatory payment authorized under this chapter, except as provided by Subsection (e), to require an annual mandatory payment to be assessed on the net patient revenue of each institutional health care provider located in the county. Authorizes the commissioners court to provide for the mandatory payment to be assessed quarterly.  Provides that, in the first year in which the mandatory payment is required, the mandatory payment is assessed on the net patient revenue of an institutional health care provider as determined by the data reported to DSHS under Sections 311.032 and 311.033 in the fiscal year ending in 2013 or, if the institutional health care provider did not report any data under those sections in that fiscal year, as determined by the institutional health care provider's Medicare cost report submitted for the 2013 fiscal year or for the closest subsequent fiscal year for which the provider submitted the Medicare cost report.  Requires the county to update the amount of the mandatory payment on an annual basis.

 

(b)  Requires that the amount of a mandatory payment authorized under this chapter be uniformly proportionate with the amount of net patient revenue generated by each paying hospital in the county. Prohibits a mandatory payment authorized under this chapter from holding harmless any institutional health care provider, as required under 42 U.S.C. Section 1396b(w).

 

(c) Requires the commissioners court of a county that collects a mandatory payment authorized under this chapter to set the amount of the mandatory payment. Prohibits the amount of the mandatory payment required of each paying hospital from exceeding an amount that, when added to the amount of the mandatory payments required from all other paying hospitals in the county, equals an amount of revenue that exceeds six percent of the aggregate net patient revenue of all paying hospitals in the county.

 

(d) Requires the commissioners court of a county that collects a mandatory payment authorized under this chapter, subject to the maximum amount prescribed by Subsection (c), to set the mandatory payments in amounts that in the aggregate will generate sufficient revenue to cover the administrative expenses of the county for activities under this chapter, to fund the nonfederal share of a Medicaid supplemental payment program, and to pay for indigent programs, except prohibits the amount of revenue from mandatory payments used for administrative expenses of the county for activities under this chapter in a year from exceeding the lesser of four percent of the total revenue generated from the mandatory payment or $20,000.

 

(e) Prohibits a paying hospital from adding a mandatory payment required under this section as a surcharge to a patient.

 

Sec. 296.152. ASSESSMENT AND COLLECTION OF MANDATORY PAYMENTS. (a) Requires the county tax assessor-collector, except as provided by Subsection (b), to collect the mandatory payment authorized under this chapter. Requires the county tax assessor-collector to charge and deduct from mandatory payments collected for the county a fee for collecting the mandatory payment in an amount determined by the commissioners court of the county, not to exceed the county tax assessor-collector's usual and customary charges.

 

(b) Authorizes the commissioners court, if determined by the commissioners court to be appropriate, to contract for the assessment and collection of mandatory payments in the manner provided by Title 1 (Property Tax Code), Tax Code, for the assessment and collection of ad valorem taxes.

 

(c) Requires that revenue from a fee charged by a county tax assessor-collector for collecting the mandatory payment be deposited in the county general fund and, if appropriate, be reported as fees of the county tax assessor-collector.

 

Sec. 296.153.  INTEREST, PENALTIES, AND DISCOUNTS.  Provides that interest, penalties, and discounts on mandatory payments required under this chapter are governed by the law applicable to county ad valorem taxes.

 

Sec. 296.154.  PURPOSE; CORRECTION OF INVALID PROVISION OR PROCEDURE.  (a) Provides that the purpose of this chapter is to generate revenue by collecting from institutional health care providers a mandatory payment to be used to provide the nonfederal share of a Medicaid supplemental payment program.

 

(b) Authorizes the county, to the extent any provision or procedure under this chapter causes a mandatory payment authorized under this chapter to be ineligible

for federal matching funds, to provide by rule for an alternative provision or procedure that conforms to the requirements of the federal Centers for Medicare and Medicaid Services.

 

SECTION 2. Requires a state agency, if necessary for implementation of a provision of his Act, to request a waiver or authorization from a federal agency, and authorizes delay of implementation until such a waiver or authorization is granted.

 

SECTION 3.  Effective date: upon passage or September 1, 2015.