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A BILL TO BE ENTITLED
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AN ACT
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relating to charity care provided by certain nonprofit hospitals |
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and hospital systems and the calculation of net patient revenue for |
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purposes of determining the charity care provided by those |
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entities; authorizing an administrative penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 311.045, Health and Safety Code, is |
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amended by adding Subsection (g) to read as follows: |
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(g) Notwithstanding Section 311.042(15), when calculating |
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net patient revenue for the purposes of Subsection (b)(1)(C) of |
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this section, a nonprofit hospital or hospital system shall include |
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the revenue of each of its facilities and practices offering |
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medical services that are located in this state and under the common |
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governance of a single corporate parent, regardless of the |
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facility's or practice's distance from the corporate parent, |
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excepting, as provided by Subsection (d) of this section, any |
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facility or practice that has been designated as a disproportionate |
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share hospital under the state Medicaid program. |
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SECTION 2. Subchapter D, Chapter 311, Health and Safety |
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Code, is amended by adding Section 311.0453 to read as follows: |
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Sec. 311.0453. CHARITY CARE SCREENING. (a) In this |
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section: |
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(1) "Charity program" means a hospital's or hospital |
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system's financial assistance and charity care program. |
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(2) "Commission" means the Health and Human Services |
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Commission. |
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(3) "Executive commissioner" means the executive |
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commissioner of the commission. |
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(b) This section applies only to: |
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(1) a nonprofit hospital that has not been designated |
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as a disproportionate share hospital under the state Medicaid |
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program; or |
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(2) with respect to a hospital system, a facility in |
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the system that has not been designated as a disproportionate share |
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hospital under the state Medicaid program. |
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(c) A nonprofit hospital or hospital system to which this |
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section applies shall inform each patient of the existence of, and |
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screen each patient for eligibility for, the hospital's or hospital |
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system's charity program in accordance with this section. |
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(d) A nonprofit hospital or hospital system may not attempt |
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to pursue collection of a patient's debt unless the hospital or |
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hospital system verifies and documents that the patient is not |
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eligible for the charity program described by Subsection (c). |
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(e) The executive commissioner by rule shall prescribe the |
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process a nonprofit hospital or hospital system must use to screen a |
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patient for eligibility for a charity program. The rules adopted |
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under this section must provide that a nonprofit hospital or |
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hospital system: |
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(1) may not send a billing statement to a patient |
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unless the hospital or hospital system has conducted the screening |
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required under Subsection (c); |
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(2) must apply on the initial billing statement sent |
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to a patient any charity care discount, health insurance coverage, |
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or other health benefit to which the patient is entitled; and |
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(3) must include on each billing statement provided to |
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a patient a notice stating: |
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(A) that the hospital or hospital system has a |
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charity program; |
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(B) the contact information for the office or |
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department of the hospital or hospital system that can provide |
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information about the charity program; and |
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(C) if applicable, the uniform resource locator |
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(URL) address of an Internet website maintained by the hospital or |
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hospital system where the patient can view the charity program. |
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(f) A patient may apply to receive charity care from a |
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nonprofit hospital or hospital system regardless of whether the |
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patient: |
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(1) was screened for eligibility for the hospital's or |
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hospital system's charity program and was determined to be |
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ineligible for charity care; or |
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(2) disagrees with the amount of the charity care |
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discount offered by the hospital or hospital system. |
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(g) If a nonprofit hospital or hospital system becomes aware |
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that the hospital or hospital system made an incorrect |
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determination regarding the appropriate amount of a charity care |
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discount to apply to a patient's account during the screening |
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required under Subsection (c) based on the information provided by |
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the patient at the time of the initial determination, the hospital |
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or hospital system shall: |
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(1) either: |
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(A) refund to the patient the difference between |
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the amount of the charity care discount the patient should have |
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received and the amount of the charity care discount the patient |
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actually received; or |
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(B) if the patient has not made a payment to the |
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hospital or hospital system, reduce the amount due on the patient's |
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account by an amount equal to the amount described by Paragraph (A); |
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and |
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(2) reimburse the patient for any other associated |
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reasonable costs, such as legal expenses and fees, incurred by the |
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patient in securing charity care. |
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(h) If a nonprofit hospital or hospital system sells a |
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patient's debt to a collection agency or authorizes a collection |
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agency to collect the patient's debt on behalf of the hospital or |
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hospital system and later becomes aware that the amount of the |
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patient's debt should be reduced under Subsection (g), the hospital |
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or hospital system shall notify the collection agency within a |
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reasonable period of time of the hospital's or hospital system's |
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determination and the correct amount of the debt. |
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(i) If the commission determines that a nonprofit hospital |
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or hospital system has failed to comply with a provision of this |
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section: |
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(1) on the first violation, the commission shall |
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institute a corrective action plan for the hospital or hospital |
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system and publish the plan on the commission's Internet website; |
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(2) on the second violation, the commission shall |
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provide written notice to the hospital or hospital system that, if |
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the hospital or hospital system fails to take action to correct the |
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failure to comply within the 90-day period following the date on |
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which the notice is provided, the commission may impose an |
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administrative penalty of not less than $250,000 on the hospital or |
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hospital system; and |
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(3) on the third violation, the commission shall |
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notify the attorney general of the hospital's or hospital system's |
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repeated failure to comply with the requirements of this section, |
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after which the attorney general shall investigate the matter and, |
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if appropriate, bring an action to declare the hospital or hospital |
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system ineligible for the tax exemptions described by Section |
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311.043(b). |
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SECTION 3. Section 311.045, Health and Safety Code, as |
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amended by this Act, applies only to a fiscal year of a hospital or |
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hospital system that begins on or after the effective date of this |
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Act. |
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SECTION 4. (a) Not later than December 1, 2025, the |
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executive commissioner of the Health and Human Services Commission |
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shall adopt the rules required by Section 311.0453, Health and |
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Safety Code, as added by this Act. |
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(b) Section 311.0453, Health and Safety Code, as added by |
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this Act, applies only to a patient that is screened for the |
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purposes described by that section on or after January 1, 2026. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2025. |