By: Coleman, et al. (Senate Sponsor - Kolkhorst) H.B. No. 4289
         (In the Senate - Received from the House May 8, 2019;
  May 10, 2019, read first time and referred to Committee on Health &
  Human Services; May 17, 2019, reported favorably by the following
  vote:  Yeas 9, Nays 0; May 17, 2019, sent to printer.)
Click here to see the committee vote
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the authority of certain local governments to create
  and operate health care provider participation programs.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle D, Title 4, Health and Safety Code, is
  amended by adding Chapter 300 to read as follows:
  CHAPTER 300. HEALTH CARE PROVIDER PARTICIPATION PROGRAMS IN CERTAIN
  POLITICAL SUBDIVISIONS IN THIS STATE
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 300.0001.  PURPOSE. The purpose of this chapter is to
  authorize a hospital district, county, or municipality in this
  state to administer a health care provider participation program to
  provide additional compensation to certain hospitals located in the
  hospital district, county, or municipality by collecting mandatory
  payments from each of those hospitals to be used to provide the
  nonfederal share of a Medicaid supplemental payment program and for
  other purposes as authorized under this chapter.
         Sec. 300.0002.  DEFINITIONS. In this chapter:
               (1)  "Institutional health care provider" means a
  nonpublic hospital that provides inpatient hospital services.
               (2)  "Local government" means a hospital district,
  county, or municipality to which this chapter applies.
               (3)  "Paying hospital" means an institutional health
  care provider required to make a mandatory payment under this
  chapter.
               (4)  "Program" means a health care provider
  participation program authorized by this chapter.
         Sec. 300.0003.  APPLICABILITY. This chapter applies only
  to: 
               (1)  a hospital district that is not participating in a
  health care provider participation program authorized by another
  chapter of this subtitle; and
               (2)  a county or municipality that:
                     (A)  is not participating in a health care
  provider participation program authorized by another chapter of
  this subtitle; and
                     (B)  is not served by a hospital district or a
  public hospital. 
         Sec. 300.0004.  LOCAL JURISDICTION HEALTH CARE PROVIDER
  PARTICIPATION PROGRAM; ORDER REQUIRED FOR PARTICIPATION. The
  governing body of a local government may only adopt an order or
  ordinance authorizing that local government to participate in a
  health care provider participation program after an affirmative
  vote of the majority of the governing body.
  SUBCHAPTER B. POWERS AND DUTIES OF GOVERNING BODY
         Sec. 300.0051.  LIMITATION ON AUTHORITY TO REQUIRE MANDATORY
  PAYMENT. The governing body of a local government may require a
  mandatory payment authorized under this chapter by an institutional
  health care provider located in that hospital district, county, or
  municipality, as applicable, only in the manner provided by this
  chapter.
         Sec. 300.0052.  RULES AND PROCEDURES. The governing body of
  a local government may adopt rules relating to the administration
  of the health care provider participation program in the local
  government, including collection of the mandatory payments,
  expenditures, audits, and any other administrative aspects of the
  program.
         Sec. 300.0053.  INSTITUTIONAL HEALTH CARE PROVIDER
  REPORTING. If the governing body of a local government authorizes
  the local government to participate in a health care provider
  participation program under this chapter, the governing body shall
  require each institutional health care provider to submit to the
  local government a copy of any financial and utilization data
  required by and reported to the Department of State Health Services
  under Sections 311.032 and 311.033 and any rules adopted by the
  executive commissioner of the Health and Human Services Commission
  to implement those sections.
  SUBCHAPTER C. GENERAL FINANCIAL PROVISIONS
         Sec. 300.0101.  HEARING. (a) In each year that the
  governing body of a local government authorizes a health care
  provider participation program under this chapter, the governing
  body shall hold a public hearing on the amounts of any mandatory
  payments that the governing body intends to require during the year
  and how the revenue derived from those payments is to be spent.
         (b)  Not later than the fifth day before the date of the
  hearing required under Subsection (a), the governing body shall
  publish notice of the hearing in a newspaper of general circulation
  in the hospital district, county, or municipality, as applicable,
  and provide written notice of the hearing to the chief operating
  officer of each institutional health care provider located in the
  hospital district, county, or municipality, as applicable.
         (c)  A representative of a paying hospital is entitled 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. 300.0102.  LOCAL PROVIDER PARTICIPATION FUND;
  DEPOSITORY. (a) Each governing body of a local government that
  collects a mandatory payment authorized under this chapter shall
  create a local provider participation fund.
         (b)  If a governing body of a local government creates a
  local provider participation fund, the governing body shall
  designate one or more banks as a depository for the mandatory
  payments received by the local government.
         (c)  The governing body of a local government may withdraw or
  use money in the local provider participation fund of the local
  government only for a purpose authorized under this chapter.
         (d)  All funds collected under this chapter shall be secured
  in the manner provided for securing other funds of the local
  government.
         Sec. 300.0103.  LOCAL PROVIDER PARTICIPATION FUND;
  AUTHORIZED USES OF MONEY. (a) The local provider participation
  fund established by a local government under Section 300.0102
  consists of:
               (1)  all revenue received by the local government
  attributable to mandatory payments authorized under this chapter;
               (2)  money received from the Health and Human Services
  Commission as a refund of an intergovernmental transfer from the
  local government 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.
         (b)  Money deposited to the local provider participation
  fund of a local government may be used only to:
               (1)  fund intergovernmental transfers from the local
  government to the state to provide the nonfederal share of Medicaid
  payments for:
                     (A)  uncompensated care payments to nonpublic
  hospitals, if those payments are authorized under 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);
                     (B)  uniform rate enhancements for nonpublic
  hospitals in the Medicaid managed care service area in which the
  local government is located;
                     (C)  payments available under another waiver
  program authorizing payments that are substantially similar to
  Medicaid payments to nonpublic hospitals described by Paragraph (A)
  or (B); or
                     (D)  any reimbursement to nonpublic hospitals for
  which federal matching funds are available;
               (2)  subject to Section 300.0151(d), pay the
  administrative expenses of the local government in administering
  the program, including collateralization of deposits;
               (3)  refund all or a portion of a mandatory payment
  collected in error from a paying hospital;
               (4)  refund to paying hospitals a proportionate share
  of the money that the local government:
                     (A)  receives from the Health and Human Services
  Commission that is not used to fund the nonfederal share of Medicaid
  supplemental payment program payments; or
                     (B)  determines cannot be used to fund the
  nonfederal share of Medicaid supplemental payment program
  payments;
               (5)  transfer funds to the Health and Human Services
  Commission if the local government is required by law to transfer
  the funds to address a disallowance of federal matching funds with
  respect to payments, rate enhancements, and reimbursements for
  which the local government made intergovernmental transfers
  described by Subdivision (1); and
               (6)  reimburse the local government if the local
  government is required by the rules governing the uniform rate
  enhancement program described by Subdivision (1)(B) to incur an
  expense or forego Medicaid reimbursements from the state because
  the balance of the local provider participation fund is not
  sufficient to fund that rate enhancement program.
         (c)  Money in the local provider participation fund of a
  local government may not be commingled with other funds of the local
  government.
         (d)  Notwithstanding any other provision of this chapter,
  with respect to an intergovernmental transfer of funds described by
  Subsection (b)(1) made by the local government, any funds received
  by the state, local government, or other entity as a result of that
  transfer may not be used by the state, local government, or any
  other entity to:
               (1)  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); or
               (2)  fund the nonfederal share of payments to nonpublic
  hospitals available through the Medicaid disproportionate share
  hospital program or the delivery system reform incentive payment
  program.
  SUBCHAPTER D. MANDATORY PAYMENTS
         Sec. 300.0151.  MANDATORY PAYMENTS. (a) Except as provided
  by Subsection (e), if the governing body of a local government
  authorizes a health care provider participation program under this
  chapter, the governing body shall require an annual mandatory
  payment to be assessed on the net patient revenue of each
  institutional health care provider located in the hospital
  district, county, or municipality, as applicable.  The governing
  body of the local government shall provide that the mandatory
  payment is to be assessed at least annually, but not more often than
  quarterly.  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 located in the
  hospital district, county, or municipality, as applicable, as
  determined by the data reported to the Department of State Health
  Services under Sections 311.032 and 311.033 in the most recent
  fiscal year for which that data was reported. If the institutional
  health care provider did not report any data under those sections,
  the provider's net patient revenue is the amount of that revenue as
  contained in the provider's Medicare cost report submitted for the
  previous fiscal year or for the closest subsequent fiscal year for
  which the provider submitted the Medicare cost report.  The local
  government shall update the amount of the mandatory payment on an
  annual basis.
         (b)  The amount of a mandatory payment authorized under this
  chapter for a local government must be uniformly proportionate with
  the amount of net patient revenue generated by each paying hospital
  in the hospital district, county, or municipality, as applicable,
  as permitted under federal law. A health care provider
  participation program authorized under this chapter may not hold
  harmless any institutional health care provider, as required under
  42 U.S.C. Section 1396b(w).
         (c)  The governing body of a local government that authorizes
  a program under this chapter shall set the amount of the mandatory
  payment.  The aggregate amount of the mandatory payments required
  of all paying hospitals in the hospital district, county, or
  municipality, as applicable, may not exceed six percent of the
  aggregate net patient revenue from hospital services provided by
  all paying hospitals in the hospital district, county, or
  municipality, as applicable.
         (d)  Subject to Subsection (c), the governing body of a local
  government shall set the mandatory payments in amounts that in the
  aggregate will generate sufficient revenue to cover the
  administrative expenses of the local government for activities
  under this chapter and to fund an intergovernmental transfer
  described by Section 300.0103(b)(1). The annual amount of revenue
  from mandatory payments that shall be paid for administrative
  expenses for activities under this chapter by the local government
  may not exceed $150,000, plus the cost of collateralization of
  deposits, regardless of actual expenses.
         (e)  A paying hospital may not add a mandatory payment
  required under this section as a surcharge to a patient.
         (f)  A mandatory payment required by the governing body of a
  hospital district under this chapter is not a tax for purposes of
  the applicable provision of Article IX, Texas Constitution.
         Sec. 300.0152.  ASSESSMENT AND COLLECTION OF MANDATORY
  PAYMENTS. (a) A hospital district may designate an official of the
  district or contract with another person to assess and collect the
  mandatory payments authorized under this chapter.
         (b)  A county or municipality may collect or, using a
  competitive bidding process, contract for the assessment and
  collection of mandatory payments authorized under this chapter.
         (c)  The person charged by the local government with the
  assessment and collection of mandatory payments shall charge and
  deduct from the mandatory payments collected for the local
  government a collection fee in an amount not to exceed the person's
  usual and customary charges for like services.
         (d)  If the person charged with the assessment and collection
  of mandatory payments is an official of the local government, any
  revenue from a collection fee charged under Subsection (c) shall be
  deposited in the local government general fund and, if appropriate,
  shall be reported as fees of the local government.
         Sec. 300.0153.  CORRECTION OF INVALID PROVISION OR
  PROCEDURE. (a) This chapter does not authorize a local government
  to collect mandatory payments for the purpose of raising general
  revenue or any amount in excess of the amount reasonably necessary
  to fund the nonfederal share of a Medicaid supplemental payment
  program or Medicaid managed care rate enhancements for nonpublic
  hospitals and to cover the administrative expenses of the local
  government associated with activities under this chapter and other
  uses of the fund described by Section 300.0103(b).
         (b)  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, the local government may
  provide by rule for an alternative provision or procedure that
  conforms to the requirements of the federal Centers for Medicare
  and Medicaid Services.  A rule adopted under this section may not
  create, impose, or materially expand the legal or financial
  liability or responsibility of the local government or an
  institutional health care provider in the local hospital district,
  county, or municipality, as applicable, beyond the provisions of
  this chapter.  This section does not require the governing body of a
  local government to adopt a rule.
         (c)  The local government may only assess and collect a
  mandatory payment authorized under this chapter if a waiver
  program, uniform rate enhancement, or reimbursement described by
  Section 300.0103(b)(1) is available to the local government.
         Sec. 300.0154.  REPORTING REQUIREMENTS. (a) The governing
  body of each local government that authorizes a program under this
  chapter shall report information to the Health and Human Services
  Commission regarding the program on a schedule determined by the
  commission. 
         (b)  The information must include: 
               (1)  the amount of the mandatory payments required and
  collected in each year the program is authorized; 
               (2)  any expenditure of money attributable to mandatory
  payments collected under this chapter, including:
                     (A)  any contract with an entity for the
  administration or operation of a program authorized by this
  chapter; or
                     (B)  a contract with a person for the assessment
  and collection of a mandatory payment as authorized under Section
  300.0152; and
               (3)  the amount of money attributable to mandatory
  payments collected under this chapter that is used for any other
  purpose. 
         (c)  The executive commissioner of the Health and Human
  Services Commission shall adopt rules to administer this section. 
         Sec. 300.0155.  EXPIRATION OF AUTHORITY.  The authority of a
  local government to administer and operate a program under this
  chapter expires on September 1 following the second anniversary of
  the date the governing body of the local government adopted the
  order or ordinance authorizing the local government to participate
  in the program as provided by Section 300.0004. 
         Sec. 300.0156.  AUTHORITY TO REFUSE FOR VIOLATION.  The
  Health and Human Services Commission may refuse to accept money
  from a local provider participation fund established under this
  chapter if the commission determines that doing so may violate
  federal law.
         SECTION 2.  Subtitle D, Title 4, Health and Safety Code, is
  amended by adding Chapter 300A to read as follows:
  CHAPTER 300A. HEALTH CARE PROVIDER PARTICIPATION PROGRAM IN
  DISTRICTS COMPOSED OF CERTAIN LOCAL GOVERNMENTS
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 300A.0001.  PURPOSE. The purpose of this chapter is to
  authorize certain local governments to create a district to
  administer a health care provider participation program to provide
  additional compensation to certain hospitals in the district by
  collecting mandatory payments from each of those hospitals in the
  district to be used to provide the nonfederal share of a Medicaid
  supplemental payment program and for other purposes as authorized
  under this chapter.
         Sec. 300A.0002.  DEFINITIONS. In this chapter:
               (1)  "Board" means the board of directors of a
  district.
               (2)  "Director" means a member of the board.
               (3)  "District" means a health care provider
  participation district created under this chapter.
               (4)  "Institutional health care provider" means a
  nonpublic hospital that provides inpatient hospital services.
               (5)  "Local government" means a hospital district,
  county, or municipality to which this chapter applies.
               (6)  "Paying hospital" means an institutional health
  care provider required to make a mandatory payment under this
  chapter.
               (7)  "Program" means a health care provider
  participation program authorized by this chapter.
         Sec. 300A.0003.  APPLICABILITY. This chapter applies only
  to:
               (1)  a hospital district that:
                     (A)  is not participating in a health care
  provider participation program authorized by another chapter of
  this subtitle; and
                     (B)  has only one institutional health care
  provider located in the district; and
               (2)  a county or municipality that:
                     (A)  is not participating in a health care
  provider participation program authorized by another chapter of
  this subtitle;
                     (B)  is not served by a hospital district or a
  public hospital; and
                     (C)  has only one institutional health care
  provider located in the county or municipality.
  SUBCHAPTER B.  CREATION, OPERATION, AND DISSOLUTION OF DISTRICT
         Sec. 300A.0021.  CREATION BY CONCURRENT ORDERS. (a) A local
  government and one or more other local governments may create a
  district by adopting concurrent orders.
         (b)  A concurrent order to create a district must:
               (1)  be approved by the governing body of each creating
  local government;
               (2)  contain identical provisions; and
               (3)  define the boundaries of the district to be
  coextensive with the combined boundaries of each creating local
  government.
         Sec. 300A.0022.  POWERS. A district may authorize and
  administer a health care provider participation program in
  accordance with this chapter.
         Sec. 300A.0023.  BOARD OF DIRECTORS. (a) If three or more
  local governments create a district, the presiding officer of the
  governing body of each local government that creates the district
  shall appoint one director.
         (b)  If two local governments create a district:
               (1)  the presiding officer of the governing body of the
  most populous local government shall appoint two directors; and
               (2)  the presiding officer of the governing body of the
  other local government shall appoint one director.
         (c)  Directors serve staggered two-year terms, with as near
  as possible to one-half of the directors' terms expiring each year.
         (d)  A vacancy in the office of director shall be filled for
  the unexpired term in the same manner as the original appointment.
         (e)  The board shall elect from among its members a
  president. The president may vote and may cast an additional vote
  to break a tie.
         (f)  The board shall also elect from among its members a vice
  president.
         (g)  The board shall appoint a secretary, who need not be a
  director.
         (h)  Each officer of the board serves for a term of one year.
         (i)  The board shall fill a vacancy in a board office for the
  unexpired term.
         (j)  A majority of the members of the board voting must
  concur in a matter relating to the business of the district.
         Sec. 300A.0024.  QUALIFICATIONS FOR OFFICE. (a) To be
  eligible to serve as a director, a person must be a resident of the
  local government that appoints the person under Section 300A.0023.
         (b)  An employee of the district may not serve as a director.
         Sec. 300A.0025.  COMPENSATION. (a) Directors and officers
  serve without compensation but may be reimbursed for actual
  expenses incurred in the performance of official duties.
         (b)  Expenses reimbursed under this section must be:
               (1)  reported in the district's minute book or other
  district records; and
               (2)  approved by the board.
         Sec. 300A.0026.  AUTHORITY TO SUE AND BE SUED. The board may
  sue and be sued on behalf of the district.
         Sec. 300A.0027.  DISTRICT FINANCES. Subchapter F, Chapter
  287, other than Sections 287.129 and 287.130, applies to the
  district in the same manner that those provisions apply to a health
  services district created under Chapter 287. This section does not
  authorize the district to issue bonds.
         Sec. 300A.0028.  DISSOLUTION. A district shall be dissolved
  if the local governments that created the district adopt concurrent
  orders to dissolve the district and the concurrent orders contain
  identical provisions.
         Sec. 300A.0029.  ADMINISTRATION OF PROPERTY, DEBTS, AND
  ASSETS AFTER DISSOLUTION. (a) After dissolution of a district
  under Section 300A.0028, the board shall continue to control and
  administer any property, debts, and assets of the district until
  all funds have been disposed of and all district debts have been
  paid or settled.
         (b)  As soon as practicable after the dissolution of the
  district, the board shall transfer to each institutional health
  care provider in the district the provider's proportionate share of
  any remaining funds in any local provider participation fund
  created by the district under Section 300A.0102.
         (c)  If, after administering any property and assets, the
  board determines that the district's property and assets are
  insufficient to pay the debts of the district, the district shall
  transfer the remaining debts to the local governments that created
  the district in proportion to the funds contributed to the district
  by each local government, including a paying hospital in the local
  government.
         (d)  If, after complying with Subsections (b) and (c) and
  administering the property and assets, the board determines that
  unused funds remain, the board shall transfer the unused funds to
  the local governments that created the district in proportion to
  the funds contributed to the district by each local government,
  including a paying hospital in the local government.
         Sec. 300A.0030.  ACCOUNTING AFTER DISSOLUTION. After the
  district has paid all its debts and has disposed of all its assets
  and funds as prescribed by Section 300A.0029, the board shall
  provide an accounting to each local government that created the
  district.  The accounting must show the manner in which the assets
  and debts of the district were distributed.
  SUBCHAPTER C. HEALTH CARE PROVIDER PARTICIPATION PROGRAM; POWERS
  AND DUTIES OF DISTRICT BOARD
         Sec. 300A.0051.  HEALTH CARE PROVIDER PARTICIPATION
  PROGRAM. The board of a district may authorize the district to
  participate in a health care provider participation program on the
  affirmative vote of a majority of the board, subject to the
  provisions of this chapter.
         Sec. 300A.0052.  LIMITATION ON AUTHORITY TO REQUIRE
  MANDATORY PAYMENT. The board may require a mandatory payment
  authorized under this chapter by an institutional health care
  provider in the district only in the manner provided by this
  chapter.
         Sec. 300A.0053.  RULES AND PROCEDURES. The board may adopt
  rules relating to the administration of the health care provider
  participation program in the district, including collection of the
  mandatory payments, expenditures, audits, and any other
  administrative aspects of the program.
         Sec. 300A.0054.  INSTITUTIONAL HEALTH CARE PROVIDER
  REPORTING. If the board authorizes the district to participate in a
  health care provider participation program under this chapter, the
  board shall require each institutional health care provider located
  in the district to submit to the district a copy of any financial
  and utilization data required by and reported to the Department of
  State Health Services under Sections 311.032 and 311.033 and any
  rules adopted by the executive commissioner of the Health and Human
  Services Commission to implement those sections.
  SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS
         Sec. 300A.0101.  HEARING. (a) In each year that the board
  authorizes a health care provider participation program under this
  chapter, the board shall hold a public hearing on the amounts of any
  mandatory payments that the board intends to require during the
  year and how the revenue derived from those payments is to be spent.
         (b)  Not later than the fifth day before the date of the
  hearing required under Subsection (a), the board shall publish
  notice of the hearing in a newspaper of general circulation in each
  local government that creates the district and provide written
  notice of the hearing to the chief operating officer of each
  institutional health care provider in the district.
         (c)  A representative of a paying hospital is entitled to
  appear at the time and place designated in the public notice and be
  heard regarding any matter related to the mandatory payments
  authorized under this chapter.
         Sec. 300A.0102.  LOCAL PROVIDER PARTICIPATION FUND;
  DEPOSITORY. (a) If the board collects a mandatory payment
  authorized under this chapter, the board shall create a local
  provider participation fund in one or more banks designated by the
  district as a depository for the mandatory payments received by the
  district.
         (b)  The board may withdraw or use money in the local
  provider participation fund of the district only for a purpose
  authorized under this chapter.
         (c)  All funds collected under this chapter shall be secured
  in the manner provided for securing public funds.
         Sec. 300A.0103.  DEPOSITS TO FUND; AUTHORIZED USES OF MONEY.
  (a) The local provider participation fund established under
  Section 300A.0102 consists of:
               (1)  all revenue received by the district attributable
  to mandatory payments authorized under this chapter;
               (2)  money received from the Health and Human Services
  Commission as a refund of an intergovernmental transfer from the
  district 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.
         (b)  Money deposited to the local provider participation
  fund may be used only to:
               (1)  fund intergovernmental transfers from the
  district to the state to provide the nonfederal share of Medicaid
  payments for:
                     (A)  uncompensated care payments to nonpublic
  hospitals, if those payments are authorized under 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);
                     (B)  uniform rate enhancements for nonpublic
  hospitals in the Medicaid managed care service area in which the
  district is located;
                     (C)  payments available under another waiver
  program authorizing payments that are substantially similar to
  Medicaid payments to nonpublic hospitals described by Paragraph (A)
  or (B); or
                     (D)  any reimbursement to nonpublic hospitals for
  which federal matching funds are available;
               (2)  subject to Section 300A.0151(d), pay the
  administrative expenses of the district in administering the
  program, including collateralization of deposits;
               (3)  refund all or a portion of a mandatory payment
  collected in error from a paying hospital;
               (4)  refund to paying hospitals a proportionate share
  of the money that the district:
                     (A)  receives from the Health and Human Services
  Commission that is not used to fund the nonfederal share of Medicaid
  supplemental payment program payments; or
                     (B)  determines cannot be used to fund the
  nonfederal share of Medicaid supplemental payment program
  payments;
               (5)  transfer funds to the Health and Human Services
  Commission if the district is required by law to transfer the funds
  to address a disallowance of federal matching funds with respect to
  payments, rate enhancements, and reimbursements for which the
  district made intergovernmental transfers described by Subdivision
  (1); and
               (6)  reimburse the district if the district is required
  by the rules governing the uniform rate enhancement program
  described by Subdivision (1)(B) to incur an expense or forego
  Medicaid reimbursements from the state because the balance of the
  local provider participation fund is not sufficient to fund that
  rate enhancement program.
         (c)  Money in the local provider participation fund may not
  be commingled with other district funds or other funds of a local
  government that creates the district.
         (d)  Notwithstanding any other provision of this chapter,
  with respect to an intergovernmental transfer of funds described by
  Subsection (b)(1) made by the district, any funds received by the
  state, district, or other entity as a result of the transfer may not
  be used by the state, district, or any other entity to:
               (1)  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); or
               (2)  fund the nonfederal share of payments to nonpublic
  hospitals available through the Medicaid disproportionate share
  hospital program or the delivery system reform incentive payment
  program.
         Sec. 300A.0104.  ACCOUNTING OF FUNDS. The district shall
  maintain an accounting of the funds received from each local
  government that creates the district, including a paying hospital
  located in a hospital district, county, or municipality that
  created the district, as applicable.
  SUBCHAPTER E. MANDATORY PAYMENTS
         Sec. 300A.0151.  MANDATORY PAYMENTS BASED ON PAYING HOSPITAL
  NET PATIENT REVENUE. (a) Except as provided by Subsection (e), if
  the board authorizes a health care provider participation program
  under this chapter, the district shall require an annual mandatory
  payment to be assessed on the net patient revenue of each
  institutional health care provider located in the district. The
  board shall provide that the mandatory payment is to be assessed at
  least annually, but not more often than quarterly. 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 located in the district as determined by the
  data reported to the Department of State Health Services under
  Sections 311.032 and 311.033 in the most recent fiscal year for
  which that data was reported. If the institutional health care
  provider did not report any data under those sections, the
  provider's net patient revenue is the amount of that revenue as
  contained in the provider's Medicare cost report submitted for the
  previous fiscal year or for the closest subsequent fiscal year for
  which the provider submitted the Medicare cost report. The
  district shall update the amount of the mandatory payment on an
  annual basis.
         (b)  The amount of a mandatory payment authorized under this
  chapter must be uniformly proportionate with the amount of net
  patient revenue generated by each paying hospital in the district
  as permitted under federal law. A health care provider
  participation program authorized under this chapter may not hold
  harmless any institutional health care provider, as required under
  42 U.S.C. Section 1396b(w).
         (c)  The board shall set the amount of a mandatory payment
  authorized under this chapter. The aggregate amount of the
  mandatory payments required of all paying hospitals in the district
  may not exceed six percent of the aggregate net patient revenue from
  hospital services provided by all paying hospitals in the district.
         (d)  Subject to Subsection (c), the board shall set the
  mandatory payments in amounts that in the aggregate will generate
  sufficient revenue to cover the administrative expenses of the
  district for activities under this chapter and to fund an
  intergovernmental transfer described by Section 300A.0103(b)(1).
  The annual amount of revenue from mandatory payments that shall be
  paid for administrative expenses by the district for activities
  under this chapter may not exceed $150,000, plus the cost of
  collateralization of deposits, regardless of actual expenses.
         (e)  A paying hospital may not add a mandatory payment
  required under this section as a surcharge to a patient.
         (f)  For purposes of any hospital district that creates a
  district under this chapter, a mandatory payment assessed under
  this chapter is not a tax for hospital purposes for purposes of the
  applicable provision of Article IX, Texas Constitution.
         Sec. 300A.0152.  ASSESSMENT AND COLLECTION OF MANDATORY
  PAYMENTS. (a) The district may designate an official of the
  district or contract with another person to assess and collect the
  mandatory payments authorized under this chapter.
         (b)  The person charged by the district with the assessment
  and collection of mandatory payments shall charge and deduct from
  the mandatory payments collected for the district a collection fee
  in an amount not to exceed the person's usual and customary charges
  for like services.
         (c)  If the person charged with the assessment and collection
  of mandatory payments is an official of the district, any revenue
  from a collection fee charged under Subsection (b) shall be
  deposited in the district general fund and, if appropriate, shall
  be reported as fees of the district.
         Sec. 300A.0153.  CORRECTION OF INVALID PROVISION OR
  PROCEDURE; LIMITATION OF AUTHORITY. (a) This chapter does not
  authorize the district to collect mandatory payments for the
  purpose of raising general revenue or any amount in excess of the
  amount reasonably necessary to:
               (1)  fund the nonfederal share of a Medicaid
  supplemental payment program or Medicaid managed care rate
  enhancements for nonpublic hospitals; and
               (2)  cover the administrative expenses of the district
  associated with activities under this chapter and other uses of the
  fund described by Section 300A.0103(b).
         (b)  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, the board may provide by
  rule for an alternative provision or procedure that conforms to the
  requirements of the federal Centers for Medicare and Medicaid
  Services. A rule adopted under this section may not create, impose,
  or materially expand the legal or financial liability or
  responsibility of the district or an institutional health care
  provider in the district beyond the provisions of this chapter.
  This section does not require the board to adopt a rule.
         (c)  The district may only assess and collect a mandatory
  payment authorized under this chapter if a waiver program, uniform
  rate enhancement, or reimbursement described by Section
  300A.0103(b)(1) is available to the district.
         Sec. 300A.0154.  REPORTING REQUIREMENTS. (a) The board of a
  district that authorizes a program under this chapter shall report
  information to the Health and Human Services Commission regarding
  the program on a schedule determined by the commission.
         (b)  The information must include:
               (1)  the amount of the mandatory payments required and
  collected in each year the program is authorized;
               (2)  any expenditure of money attributable to mandatory
  payments collected under this chapter, including:
                     (A)  any contract with an entity for the
  administration or operation of a program authorized by this
  chapter; or
                     (B)  a contract with a person for the assessment
  and collection of a mandatory payment as authorized under Section
  300A.0152; and
               (3)  the amount of money attributable to mandatory
  payments collected under this chapter that is used for any other
  purpose.
         (c)  The executive commissioner of the Health and Human
  Services Commission shall adopt rules to administer this section.
         Sec. 300A.0155.  EXPIRATION OF AUTHORITY. The authority of
  a district to administer and operate a program under this chapter
  expires on September 1 following the second anniversary of the date
  the board of the district authorized the district to participate in
  the program as provided by Section 300A.0051.
         Sec. 300A.0156.  AUTHORITY TO REFUSE FOR VIOLATION. The
  Health and Human Services Commission may refuse to accept money
  from a local provider participation fund established under this
  chapter if the commission determines that doing so may violate
  federal law.
         SECTION 3.  As soon as practicable after the expiration of
  the authority of a local government to administer and operate a
  health care provider participation program under Chapter 300 or
  300A, Health and Safety Code, as added by this Act, the governing
  body of the local government shall transfer to each institutional
  health care provider in the boundaries of the local government that
  provider's proportionate share of any remaining funds in any local
  provider participation fund created by the local government under
  Chapter 300 or 300A, Health and Safety Code, as added by this Act.
         SECTION 4.  If before implementing any provision of this Act
  a state agency determines that a waiver or authorization from a
  federal agency is necessary for implementation of that provision,
  the agency affected by the provision shall request the waiver or
  authorization and may delay implementing that provision until the
  waiver or authorization is granted.
         SECTION 5.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution. If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2019.
 
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