By: Raymond (Senate Sponsor - Zaffirini) H.B. No. 2590
         (In the Senate - Received from the House May 1, 2017;
  May 11, 2017, read first time and referred to Committee on Health &
  Human Services; May 22, 2017, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 8, Nays 0;
  May 22, 2017, sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR H.B. No. 2590 By:  Watson
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the administrative penalty, amelioration, and informal
  dispute resolution processes for providers participating in
  certain Medicaid waiver programs.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 161.088, Human Resources Code, as added
  by Chapters 826 (H.B. 4001) and 1200 (S.B. 1385), Acts of the 84th
  Legislature, Regular Session, 2015, is redesignated as Section
  161.089, Human Resources Code, and amended to read as follows:
         Sec. 161.089  [161.088].  ADMINISTRATIVE PENALTIES. (a)
  This section applies to the following waiver programs established
  under Section 1915(c), Social Security Act (42 U.S.C. Section
  1396n(c)), and administered by the commission [department] to serve
  persons with an intellectual or developmental disability:
               (1)  the home and community-based services (HCS) waiver
  program; and
               (2)  the Texas home living (TxHmL) waiver program.
         (b)  The commission [department] may assess and collect an
  administrative penalty against a provider who participates in a
  program to which this section applies for a violation of a law or
  rule relating to the program.  If the commission [department]
  assesses an administrative penalty against a provider for a
  violation of a law or rule, the commission [department] may not
  impose a payment hold against or otherwise withhold contract
  payments from the provider for the same violation of a law or rule.
         (c)  After consulting with appropriate stakeholders, the
  executive commissioner shall develop and adopt rules regarding the
  imposition of administrative penalties under this section.  The
  rules must:
               (1)  specify the types of violations that warrant
  imposition of an administrative penalty;
               (2)  establish a schedule of progressive
  administrative penalties in accordance with the relative type,
  frequency, and seriousness of a violation;
               (3)  prescribe reasonable amounts to be imposed for
  each violation giving rise to an administrative penalty, subject to
  Subdivision (4);
               (4)  authorize the imposition of an administrative
  penalty in an amount not to exceed $5,000 for each violation;
               (5)  provide that a provider commits a separate
  violation each day the provider continues to violate the law or
  rule;
               (6)  ensure standard and consistent application of
  administrative penalties throughout the state; and
               (7)  provide for an administrative appeals process to
  adjudicate claims and appeals relating to the imposition of an
  administrative penalty under this section that is in accordance
  with Chapter 2001, Government Code.
         (d)  [In specifying the types of violations that warrant
  imposition of an administrative penalty under Subsection (c), the
  executive commissioner shall specify the types of minor violations
  that allow a provider an opportunity to take corrective action
  before a penalty is imposed.
         [(e)]  In determining the types of violations that warrant
  imposition of an administrative penalty and in establishing the
  schedule of progressive administrative penalties and penalty
  amounts under Subsection (c), the executive commissioner must
  consider:
               (1)  the seriousness of a violation, including:
                     (A)  the nature, circumstances, extent, and
  gravity of the violation; and
                     (B)  the hazard to the health or safety of
  recipients resulting from the violation;
               (2)  the provider's history of previous violations;
               (3)  whether the provider:
                     (A)  had prior knowledge of the violation,
  including whether the provider identified the violation through the
  provider's internal quality assurance process; and
                     (B)  made any efforts to mitigate or correct the
  identified violation;
               (4)  the penalty amount necessary to deter future
  violations; and
               (5)  any other matter justice may require.
         (e)  Except as provided by Subsection (f), the executive
  commissioner by rule [(f)     In lieu of imposing an administrative
  penalty under this section, the department] shall provide to 
  [allow] a provider who has implemented a plan of correction [found
  to have committed a minor violation specified by rule in accordance
  with Subsection (d) to have] a reasonable period of time following
  [that is not less than 45 days after] the date the commission
  [department] sends notice to the provider of the violation to
  correct [take corrective action regarding] the violation before the
  commission may assess an administrative penalty.  The period may
  not be less than 45 days [department may not allow time for
  corrective action for any violation that is not a minor violation].
         (f)  The commission may assess an administrative penalty
  without providing a reasonable period of time to a provider to
  correct the violation if the violation:
               (1)  represents a pattern of violation that results in
  actual harm;
               (2)  is widespread in scope and results in actual harm;
               (3)  is widespread in scope and constitutes a potential
  for actual harm;
               (4)  constitutes an immediate threat to the health or
  safety of a recipient;
               (5)  substantially limits the provider's ability to
  provide care; or
               (6)  is a violation in which a provider:
                     (A)  wilfully interferes with the work of a
  representative of the commission or the enforcement of a law
  relating to a program to which this section applies;
                     (B)  fails to pay a penalty assessed by the
  commission under this section not later than the 10th day after the
  date the assessment of the penalty becomes final, subject to
  Section 161.0891; or
                     (C)  fails to submit a plan of correction not
  later than the 10th day after the date the provider receives a
  statement of the violation.
         (g)  Notwithstanding any other provision of this section, an
  administrative penalty ceases to be incurred on the date a
  violation is corrected.
         (h)  In this section:
               (1)  "Actual harm" means an observed, documented,
  measured, or diagnosed injury or outcome that causes a serious or
  significant impairment or reduction of a recipient's physical,
  mental, or emotional well-being, including death. The term does
  not include a physical, emotional, or financial injury that
  constitutes minor harm.
               (2)  "Immediate threat to the health or safety of a
  recipient" means a situation that caused, or is likely to cause,
  actual harm to a recipient.
               (3)  "Minor harm" means a physical, emotional, or
  financial injury that is:
                     (A)  temporary in duration and transient in
  effect, including:
                           (i)  a temporary change in mood; and
                           (ii)  a temporary reduction in self-esteem
  that does not have a permanent or prolonged effect on the
  recipient's behavior; or
                     (B)  limited in scope or impact, including:
                           (i)  an injury that does not represent a risk
  of self-harm, harm to others, or damage to property; and
                           (ii)  a financial loss that represents less
  than 10 percent of a recipient's financial resources or personal
  property.
               (4)  "Pattern of violation" means repeated, but not
  pervasive, failures of a provider to comply with a law relating to a
  program to which this section applies that:
                     (A)  result in a violation; and
                     (B)  are found throughout the services provided by
  the provider or that affect or involve the same recipients or
  provider employees or volunteers.
               (5)  "Recipient" means a person served by a program to
  which this section applies.
               (6)  "Widespread in scope" means a violation of a law
  relating to a program to which this section applies that:
                     (A)  is pervasive throughout the services
  provided by the provider; or
                     (B)  represents a systemic failure by the provider
  that affects or has the potential to affect a large portion of or
  all of the recipients.
         SECTION 2.  Subchapter D, Chapter 161, Human Resources Code,
  is amended by adding Sections 161.0891 and 161.0892 to read as
  follows:
         Sec. 161.0891.  AMELIORATION PROCESS. (a) In lieu of
  demanding payment of an administrative penalty assessed under
  Section 161.089, the commission may, in accordance with this
  section, allow the provider subject to the penalty to use, under the
  supervision of the commission, any portion of the amount of the
  penalty to ameliorate the violation or to improve services in the
  waiver program in which the provider participates.
         (b)  The commission shall offer amelioration to a provider
  under this section not later than the 10th day after the date the
  provider receives from the commission a final notification of the
  assessment of an administrative penalty that is sent to the
  provider after an informal dispute resolution process but before an
  administrative hearing.
         (c)  A provider to whom amelioration has been offered must
  file a plan for amelioration not later than the 45th day after the
  date the provider receives the offer of amelioration from the
  commission.  In submitting the plan, the provider must agree to
  waive the provider's right to an administrative hearing if the
  commission approves the plan.
         (d)  At a minimum, a plan for amelioration must:
               (1)  propose changes to the management or operation of
  the waiver program in which the provider participates that will
  improve services to or quality of care for recipients under the
  program;
               (2)  identify, through measurable outcomes, the ways in
  which and the extent to which the proposed changes will improve
  services to or quality of care for recipients under the waiver
  program;
               (3)  establish clear goals to be achieved through the
  proposed changes;
               (4)  establish a timeline for implementing the proposed
  changes; and
               (5)  identify specific actions necessary to implement
  the proposed changes.
         (e)  The commission may require that an amelioration plan
  propose changes that would result in conditions that exceed the
  requirements of a law or rule relating to the waiver program in
  which the provider participates.
         (f)  The commission shall approve or deny an amelioration
  plan not later than the 45th day after the date the commission
  receives the plan.  On approval of a provider's plan, the commission
  or the State Office of Administrative Hearings, as appropriate,
  shall deny a pending request for a hearing submitted by the
  provider.
         (g)  The commission may not offer amelioration to a provider:
               (1)  more than three times in a two-year period; or
               (2)  more than one time in a two-year period for the
  same or similar violation.
         Sec. 161.0892.  INFORMAL DISPUTE RESOLUTION. (a) The
  executive commissioner by rule shall establish an informal dispute
  resolution process in accordance with this section.  The process
  must provide for adjudication by an appropriate disinterested
  person of disputes relating to a proposed enforcement action or
  related proceeding of the commission against a provider
  participating in a waiver program described by Section 161.089.  
  The informal dispute resolution process must require:
               (1)  a provider participating in a waiver program
  described by Section 161.089 to request informal dispute resolution
  not later than the 10th calendar day after the date of notification
  by the commission of the violation of a law or rule relating to the
  program; and
               (2)  the commission to complete the process not later
  than the 30th calendar day after the date of receipt of a request
  from a provider for informal dispute resolution.
         (b)  As part of the informal dispute resolution process
  established under this section, the commission shall contract with
  an appropriate disinterested person who is a nonprofit organization
  to adjudicate disputes between a provider participating in a
  program described by Section 161.089 and the commission concerning
  a statement of violations prepared by the commission.  Section
  2009.053, Government Code, does not apply to the selection of an
  appropriate disinterested person under this subsection.  The person
  with whom the commission contracts shall adjudicate all disputes
  described by this subsection.
         (c)  The executive commissioner shall adopt rules to
  adjudicate claims in contested cases.
         (d)  The commission may not delegate its responsibility to
  administer the informal dispute resolution process established by
  this section to another state agency.
         SECTION 3.  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 necessary to implement
  the changes in law made by this Act.
         SECTION 4.  This Act takes effect September 1, 2017.
 
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