By: Watson S.B. No. 1350
 
  (Hinojosa)
 
   
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the creation and operations of a health care provider
  participation program by a certain hospital district.
         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 298E to read as follows:
  CHAPTER 298E.  HEALTH CARE PROVIDER PARTICIPATION PROGRAM IN
  CERTAIN HOSPITAL DISTRICTS
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 298E.001.  DEFINITIONS. In this chapter:
               (1)  "Board" means the board of hospital managers of a
  district.
               (2)  "District" means a hospital district to which this
  chapter applies.
               (3)  "Institutional health care provider" means a
  hospital that is not owned and operated by a federal, state, or
  local government and provides inpatient hospital services.
               (4)  "Paying provider" means an institutional health
  care provider required to make a mandatory payment under this
  chapter.
               (5)  "Program" means a health care provider
  participation program authorized by this chapter.
         Sec. 298E.002.  APPLICABILITY.  This chapter applies only to
  a hospital district created in a county with a population of more
  than 800,000 that was not included in the boundaries of a hospital
  district before September 1, 2003.
         Sec. 298E.003.  HEALTH CARE PROVIDER PARTICIPATION PROGRAM;
  PARTICIPATION IN 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. 298E.004.  EXPIRATION. (a)  Subject to Section
  298E.153(d), the authority of a district to administer and operate
  a program under this chapter expires December 31, 2023.
         (b)  This chapter expires December 31, 2023.
  SUBCHAPTER B. POWERS AND DUTIES OF BOARD
         Sec. 298E.051.  LIMITATION ON AUTHORITY TO REQUIRE MANDATORY
  PAYMENT. The board of a district may require a mandatory payment
  authorized under this chapter by an institutional health care
  provider located in the district only in the manner provided by this
  chapter.
         Sec. 298E.052.  RULES AND PROCEDURES. The board of a
  district may adopt rules relating to the administration of the
  program, including collection of the mandatory payments,
  expenditures, audits, and any other administrative aspects of the
  program.
         Sec. 298E.053.  INSTITUTIONAL HEALTH CARE PROVIDER
  REPORTING. If the board of a district authorizes the district to
  participate in a 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 C. GENERAL FINANCIAL PROVISIONS
         Sec. 298E.101.  HEARING. (a)  In each year that the board of
  a district authorizes a 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 the
  district and provide written notice of the hearing to each
  institutional health care provider located in the district.
         Sec. 298E.102.  DEPOSITORY. (a)  If the board of a district
  requires a mandatory payment authorized under this chapter, the
  board shall designate one or more banks as a depository for the
  district's local provider participation fund.
         (b)  All funds collected by a district under this chapter
  shall be secured in the manner provided for securing other funds of
  the district.
         Sec. 298E.103.  LOCAL PROVIDER PARTICIPATION FUND;
  AUTHORIZED USES OF MONEY. (a)  If a district requires a mandatory
  payment authorized under this chapter, the district shall create a
  local provider participation fund.
         (b)  A district's local provider participation fund 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 under the
  program, provided that the intergovernmental transfer does not
  receive a federal matching payment; and
               (3)  the earnings of the fund.
         (c)  Money deposited to the local provider participation
  fund of a district 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 hospitals in
  the Medicaid managed care service area in which the district is
  located, 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 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 hospitals described by Paragraph (A) or (B);
  or
                     (D)  any reimbursement to hospitals for which
  federal matching funds are available;
               (2)  subject to Section 298E.151(d), pay the
  administrative expenses of the district in administering the
  program, including collateralization of deposits;
               (3)  refund a mandatory payment collected in error from
  a paying provider;
               (4)  refund to paying providers 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 legally required to transfer the
  funds to address a disallowance of federal matching funds with
  respect to programs 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.
         (d)  Money in the local provider participation fund of a
  district may not be commingled with other district funds.
         (e)  Notwithstanding any other provision of this chapter,
  with respect to an intergovernmental transfer of funds described by
  Subsection (c)(1) made by a district, any funds received by the
  state, district, or other entity as a result of that 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 hospitals
  available through the Medicaid disproportionate share hospital
  program or the delivery system reform incentive payment program.
  SUBCHAPTER D. MANDATORY PAYMENTS
         Sec. 298E.151.  MANDATORY PAYMENTS BASED ON PAYING PROVIDER
  NET PATIENT REVENUE. (a)  Except as provided by Subsection (e), if
  the board of a district authorizes a health care provider
  participation program under this chapter, the board may 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 may provide for the mandatory payment to be assessed
  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 as reported in the
  provider's Medicare cost report submitted for the most recent
  fiscal year for which the provider submitted a Medicare cost
  report. If the mandatory payment is required, the district shall
  update the amount of the mandatory payment on an annual basis.
         (b)  The amount of a mandatory payment assessed under this
  chapter by the board of a district must be uniformly proportionate
  with the amount of net patient revenue generated by each paying
  provider 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
  located in the district, as required under 42 U.S.C. Section
  1396b(w).
         (c)  If the board of a district requires a mandatory payment
  authorized under this chapter, the board shall set the amount of the
  mandatory payment, subject to the limitations of this chapter. The
  aggregate amount of the mandatory payments required of all paying
  providers in the district may not exceed six percent of the
  aggregate net patient revenue from hospital services provided by
  all paying providers in the district.
         (d)  Subject to Subsection (c), if the board of a district
  requires a mandatory payment authorized under this chapter, 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 298E.103(c)(1). The annual amount of revenue from
  mandatory payments that shall be paid for administrative expenses
  by the district is $150,000, plus the cost of collateralization of
  deposits, regardless of actual expenses.
         (e)  A paying provider may not add a mandatory payment
  required under this section as a surcharge to a patient.
         (f)  A mandatory payment assessed under this chapter is not a
  tax for hospital purposes for purposes of Section 4, Article IX,
  Texas Constitution, or Section 281.045 of this code.
         Sec. 298E.152.  ASSESSMENT AND COLLECTION OF MANDATORY
  PAYMENTS. (a)  A 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. 298E.153.  PURPOSE; CORRECTION OF INVALID PROVISION OR
  PROCEDURE; LIMITATION OF AUTHORITY. (a)  The purpose of this
  chapter is to authorize a district to establish a program to enable
  the district to collect mandatory payments from institutional
  health care providers to fund the nonfederal share of a Medicaid
  supplemental payment program or the Medicaid managed care rate
  enhancements for hospitals to support the provision of health care
  by institutional health care providers located in the district to
  district residents in need of health care.
         (b)  This chapter does not authorize a district 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 hospitals and to cover
  the administrative expenses of the district associated with
  activities under this chapter.
         (c)  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 of a district
  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.
         (d)  A 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
  298E.103(c)(1) is available to the district.
         SECTION 2.  As soon as practicable after the expiration of
  the authority of a hospital district to administer and operate a
  health care provider participation program under Chapter 298E,
  Health and Safety Code, as added by this Act, the board of hospital
  managers of the hospital district shall transfer to each
  institutional health care provider in the district that provider's
  proportionate share of any remaining funds in any local provider
  participation fund created by the district under Section 298E.103,
  Health and Safety Code, as added by this Act.
         SECTION 3.  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 4.  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.