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A BILL TO BE ENTITLED
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AN ACT
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relating to contracts with private entities to operate state |
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hospitals for persons with mental illness. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 533, Health and Safety |
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Code, is amended by adding Section 533.050 to read as follows: |
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Sec. 533.050. PRIVATIZATION OF STATE MENTAL HOSPITAL; |
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CONSTRUCTION AND OPERATION OF REPLACEMENT FACILITY. (a) The |
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department shall contract with a private service provider to |
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operate a state mental hospital if: |
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(1) the executive commissioner determines that the |
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private service provider will operate the hospital at a cost that is |
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at least five percent less than the cost to the department to |
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operate the hospital; |
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(2) the executive commissioner approves the contract; |
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(3) the hospital, when operated under the contract, |
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treats a population with essentially the same characteristics and |
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acuity levels as the population treated at the hospital when |
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operated by the department; and |
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(4) the private service provider is required under the |
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contract to operate the hospital at a quality level at least equal |
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to the quality level achieved by the department when the department |
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operated the hospital, as measured by the hospital's most recent |
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applicable accreditation determination from The Joint Commission |
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on health care organization accreditation. |
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(b) The department shall report to the executive |
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commissioner regarding whether the department has received a |
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proposal by a private service provider to operate a state mental |
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hospital. The report must include an evaluation of the private |
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service provider's qualifications, experience, and financial |
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strength, a determination of whether the provider can operate the |
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hospital under the same standard of care as the department, and an |
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analysis of the projected savings under a proposed contract with |
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the provider. The savings analysis must include all department |
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costs to operate the hospital, including costs, such as employee |
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benefits, that are not appropriated to the department. |
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(c) A contract entered into under Subsection (a) must: |
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(1) provide that the department retains the right to |
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assume management of the hospital if contract terms are not met or |
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if the five percent cost savings requirement is not met; and |
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(2) establish specific goals for the provider to meet: |
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(A) in significantly reducing the use of |
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restraints and the seclusion of patients; |
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(B) in significantly reducing patient waiting |
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lists; |
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(C) in significantly reducing total length of |
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stay for patients, measured annually; |
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(D) in increasing access to mental health |
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inpatient services; and |
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(E) in reducing recidivism. |
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(d) The department shall monitor care of patients at a state |
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hospital operated by a contract authorized by this section. The |
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department shall develop and maintain information on activities |
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carried out under the contract without violating privacy or |
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confidentiality rules. The information developed under this |
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subsection must include: |
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(1) the number of incidents in which patients were |
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restrained or secluded; |
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(2) the number of incidents of serious assaults in the |
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hospital setting; |
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(3) the number of occurrences in the hospital setting |
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involving contacts with law enforcement personnel; |
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(4) individual and average lengths of stay, including |
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computation of lengths of stay according to the number of days a |
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patient is in the facility during each calendar year, regardless of |
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discharge and readmission; and |
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(5) client outcomes. |
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(e) The department may not enter into a contract under this |
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section with a private service provider unless the provider has a |
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documented and verified record of success in: |
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(1) providing mental health services over a five-year |
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period; and |
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(2) managing an inpatient mental health facility with |
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a population of at least 250 patients. |
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(f) If the department contracts with a private service |
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provider to operate a state mental hospital under Subsection (a) or |
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with a person to finance, design, construct, and operate a state |
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mental hospital under Subsection (h), the department, the |
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Governor's Office of Budget and Planning, and the Legislative |
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Budget Board shall identify sources of funding that must be |
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transferred to the department to fund the contract. |
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(g) The department may renew a contract under this section. |
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The conditions provided by this section apply to the renewal of the |
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contract. |
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(h) The department shall enter into an agreement with a |
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private entity to finance, design, construct, and operate a new |
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facility to replace one or more state hospitals. The term of the |
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agreement may not exceed 25 years. The agreement must provide for |
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the department to acquire the facility under a lease-purchase |
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agreement with a term not to exceed 25 years and authorize the |
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private entity to issue certificates of participation or other |
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appropriate securities to finance the construction of the facility. |
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The portions of the agreement that govern the provision of services |
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must meet the requirements for a contract entered into under |
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Subsection (a). Operational savings used to pay debt service |
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payments for financing a new facility shall be counted in |
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calculating whether the proposal meets the five percent savings |
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required by Subsection (a)(1). The department shall report to the |
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executive commissioner regarding whether the department has |
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received a proposal from a person to finance, design, construct, |
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and operate a facility under this subsection. The report must |
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include an evaluation of the proposal, including an evaluation of |
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the person's qualifications, experience, and financial strength, a |
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determination of whether the person can operate the new facility |
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under the same standard of care as the department, and an analysis |
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of the projected savings under the proposal. |
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(i) The department and each private entity that contracts |
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with the department under this section shall provide to the |
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legislature a report on the progress of activities under the |
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contract and performance of services under the contract. The |
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report must be provided to the legislature not later than November 1 |
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of each even-numbered year. |
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SECTION 2. Not later than October 13, 2017, the Department |
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of State Health Services shall issue a request for proposals for a |
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private service provider to contract with the department to |
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finance, design, construct, and operate a state hospital as |
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authorized by Section 533.050(h), Health and Safety Code, as added |
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by this Act. |
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SECTION 3. This Act takes effect September 1, 2017. |