HBA-JRA, NMO H.B. 1398 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 1398 By: Coleman Public Health 7/26/1999 Enrolled BACKGROUND AND PURPOSE In 1985, the 69th Texas Legislature enacted the Indigent Health Care and Treatment Act to address the problem of medical indigence in Texas and to define the basic indigent health care responsibilities of counties, public hospitals, and hospital districts. In 1997, a joint interim charge was issued to the House Committees on Public Health and County Affairs to review the law and make recommendations. The committees' interim report concluded that changes in health care delivery, health care financing, and the population of this state, left some situations inadequately addressed. H.B. 1398 authorizes the Texas Department of Health (TDH) to administer and enforce the Indigent Health Care and Treatment Act, widens the scope of mandatory and optional indigent health care services, amends eligibility requirements, modifies state financial assistance to counties, provides for a tertiary care account, and establishes reporting requirements. This bill also requires TDH make a study relating to basic health care services and state assistance, and requires the commissioner of health and human services to establish a regional health care delivery system pilot program in a region of the state. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Department of Health in SECTIONS 1.05, 1.14, and 1.15 (Sections 61.011, 61.037, and 61.0395, Health and Safety Code), to the Texas Board of Health in SECTION 2.01 (Sections 46.002 and 46.004, Health and Safety Code), and to the commissioner of health and human services in SECTION 7.02 of this bill. SECTION BY SECTION ANALYSIS ARTICLE 1. DELIVERY OF INDIGENT HEALTH CARE BY COUNTIES, PUBLIC HOSPITALS, AND HOSPITAL DISTRICTS SECTION 1.01. Amends Section 61.002, Health and Safety Code, to delete the definition of "AFDC" and to redefine "mandated provider." Makes conforming changes. SECTION 1.02. Amends Section 61.004, Health and Safety Code, as follows: Sec. 61.004. New title: RESIDENCE OR ELIGIBILITY DISPUTE. Authorizes the provider of assistance or the governmental entity or hospital district, if a provider and a governmental entity or hospital district cannot agree on whether a person is eligible for assistance under this chapter, in addition to agreeing on the person's residence, to submit the matter to the Texas Department of Health (TDH) in accordance with the application, documentation, and verification procedures established by TDH under Section 61.006. Requires TDH to issue a final decision by the 45th, rather than the 21st, day after the appeal is filed. Makes a conforming change. SECTION 1.03. Amends Subchapter A, Chapter 61, Health and Safety Code, by adding Section 61.0045, as follows: Sec. 61.0045. INFORMATION NECESSARY TO DETERMINE ELIGIBILITY. (a) Authorizes any provider that delivers health care services to a patient who the provider suspects is an eligible resident of the service area of a county, hospital district, or public hospital under this chapter (Indigent Health Care and Treatment Act) to require the patient to provide any information necessary to establish that the patient is an eligible resident of the applicable service area, and authorize the release of any information relating to the patient to permit the provider to submit a claim to the applicable entity. (b) Requires a county, hospital district, or public hospital that receives information obtained under Subsection (a) to use the information to determining whether the patient to whom services were provided is an eligible resident of the service area of the applicable entity and, if so, requires the entity to pay the claim made by the provider in accordance with this chapter. (c) Authorizes that the application, documentation, and verification procedures established by TDH for counties under Section 61.006 include a standard format for obtaining information under Subsection (a) to facilitate eligibility and residence determinations. SECTION 1.04. Amends Sections 61.006 and 61.007, Health and Safety Code, as follows: Sec. 61.006. STANDARDS AND PROCEDURES. (a) Requires TDH to establish minimum eligibility, rather than eligibility, standards for counties to use in determining eligibility under this chapter. (b) Requires the minimum eligibility standards to incorporate a net income eligibility level equal to 25 percent of the federal poverty level based on the federal Office of Management and Budget (OMB) poverty index. Deletes language to make a conforming change. (b-1) Provides that the minimum eligibility standards, effective January 1, 2000, must incorporate a net income eligibility level equal to 22 percent of the federal poverty level based on the OMB poverty index. Provides that this subsection expires December 31, 2000. (b-2) Provides that the minimum eligibility standards must incorporate a net income eligibility level equal to 21 percent of the federal poverty level, notwithstanding Subsection (b). Provides that this subsection expires December 31, 2001. (c) Requires TDH to define the services and establish the payment standards for the categories of services listed in Section 61.0285 (Optional Health Care Services), Health and Safety Code, in addition to Section 61.028(a) (relating to mandatory health care services), Health and Safety Code, in accordance with DHS rules relating to the Temporary Assistance for Needy Families (TANF)-Medicaid program. Makes conforming changes. (d) Requires TDH to establish application, documentation, and verification procedures that are consistent with procedures used to determine eligibility in the TANF-Medicaid program. Deletes language relating to the simplification of standards to provide efficient county administration. Makes conforming changes. (e) Makes conforming changes. (f) Makes conforming changes. (g) Makes conforming changes. (h) Makes conforming changes. Sec. 61.007. INFORMATION PROVIDED BY APPLICANT. Makes conforming changes. SECTION 1.05. Amends Chapter 61, Health and Safety Code, by adding Section 61.011, as follows: Sec. 61.011. SERVICES BY STATE HOSPITAL OR CLINIC. Requires a state hospital or clinic to be entitled to payment for services rendered to an eligible resident under the provisions of this chapter applicable to other providers. Authorizes TDH to adopt rules as necessary to implement this section. SECTION 1.06. Amends Section 61.023(b), Health and Safety Code, to authorize a county, in addition to using a less restrictive standard of eligibility for residents than prescribed by Subsection (a), to credit toward eligibility for state assistance under this subchapter the services provided to each person who is an eligible resident under a standard that incorporates a net income eligibility level that is less than 50 percent of the federal poverty level. SECTION 1.07. Amends Section 61.025(d), Health and Safety Code, to make conforming changes. SECTION 1.08. Amends Section 61.028, Health and Safety Code, as follows: Sec. 61.028. New title: BASIC HEALTH CARE SERVICES. Requires a county to provide basic health care services designed to meet the needs of the community, in addition to other mandatory health care services. Makes conforming changes. SECTION 1.09. Amends Subchapter B, Chapter 61, Health and Safety Code, by adding Sections 61.0285, as follows: Sec. 61.0285. OPTIONAL HEALTH CARE SERVICES. (a) Authorizes a county, in accordance with TDH rules adopted under Section 61.006, Health and Safety Code, to provide certain other medically necessary services or supplies that the county determines to be cost-effective, in addition to mandatory services provided under Section 61.028, Health and Safety Code. (b) Provides that the county must notify TDH of the county's intent to provide services specified by Subsection (a). Authorizes the county, if the services are approved by TDH under Section 61.006, Health and Safety Code, or if TDH fails to notify the county of its disapproval before the 31st day after the date the county notifies TDH of its intent to provide the services, to credit the services toward eligibility for state assistance under this subchapter. (c) Authorizes a county to provide health care services that are not specified in Subsection (a) without actual or constructive approval of the department, but prohibits the county from crediting those services toward eligibility for state assistance. SECTION 1.10. Amends Section 61.031(b), Health and Safety Code, to require that notice of health care services provided be made by telephone not later than the 72nd hour, rather than as soon as possible, after the provider determines the patient's county of residence, and by mail postmarked not later than the fifth, rather than third, working day after the date on which the provider determines the patient's county of residence. SECTION 1.11. Amends Section 61.032(a), Health and Safety Code, to make conforming changes. SECTION 1.12. Amends Section 61.034(a), Health and Safety Code, as follows: Sec. 61.034. New title: PAYMENT STANDARDS FOR HEALTH CARE SERVICES. Deletes "mandatory" from the title. Makes conforming changes. SECTION 1.13. Amends Section 61.036(b), Health and Safety Code, to make conforming changes. SECTION 1.14. Amends Sections 61.037, 61.038, and 61.039, Health and Safety Code, as follows: Sec. 61.037. COUNTY ELIGIBILITY FOR STATE ASSISTANCE. Provides that a county must spend in a state fiscal year at least eight, rather than 10, percent of the county general revenue levy for that year to provide health care service to eligible county residents who qualify for assistance. Authorizes TDH to waive the requirement that a county meet the minimum expenditure level and provide that assistance under this chapter at a lower level determined by TDH if the county demonstrates that it is unable to satisfy the eight percent expenditure level for certain reasons. Requires TDH to adopt rules governing the circumstances under which a waiver is authorized to be granted and the procedures to be used by a county to apply for the waiver. Sets forth procedures regarding TDH determination of waiver and the submission of monthly financial reports by a county. Makes conforming changes. Sec. 61.038. DISTRIBUTION OF ASSISTANCE FUNDS. Provides that state funds provided under this section to a county must be equal to at least 90, rather than 80, percent of the actual payment for the health care services for the county's eligible residents during the remainder of the state fiscal year after the eight percent expenditure level is reached. Makes conforming changes. Sec. 61.039. FAILURE TO PROVIDE STATE ASSISTANCE. Makes a conforming change. SECTION 1.15. Amends Subchapter B, Chapter 61, Health and Safety Code, by adding Section 61.0395, as follows: Sec. 61.0395. LIMITED TO APPROPRIATED FUNDS. Prohibits the amount of assistance provide to counties under this chapter for a fiscal year from exceeding the appropriated amount. Requires TDH to adopt rules governing the distribution of state assistance under this chapter that establish a maximum annual allocation for each eligible county. Authorizes the rules to consider the relative populations of the service areas of eligible counties and other appropriate factors and to provide for the reallocation of all money that the county is not eligible to receive and the distribution of that money to other eligible counties. SECTION 1.16. Amends Section 61.041, Health and Safety Code, by amending Subsections (a) and (b) and adding Subsection (d), as follows: (a) Makes a conforming change. (b) Makes conforming changes. (d) Requires TDH to establish annual reporting requirements for each county that is required to provide indigent health care under this chapter but that is not required to report. Provides that a county satisfies the annual reporting requirement if the county submits information to TDH as required by law to obtain an annual distribution under the Agreement Regarding Disposition of Settlement Proceeds filed on July 24, 1998, in the United States District Court, Eastern District of Texas, in the case styled The State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91. SECTION 1.17. Amends Section 61.052, Health and Safety Code, to authorize a county that provides health care services to its eligible residents through a hospital established by a board of managers jointly appointed by a county and municipality and that establishes a proper income and resources standard to credit the services provided to all persons who are eligible under that standard toward eligibility for state assistance. Makes conforming changes. SECTION 1.18 Amends Section 61.054, Health and Safety Code, as follows: Sec. 61.054. New title: BASIC HEALTH CARE SERVICES PROVIDED BY A PUBLIC HOSPITAL. Requires a public hosptial to endeavor to provide the basic health care, rather than inpatient and outpatient hospital, services a county is required to provide under Section 61.028, except that a public hospital is required to coordinate the delivery of basic health care services to eligible residents and authorizes the hospital to provide any basic health care services the hospital was not providing on January 1, 1999, but only to the extent the hospital is financially able to do so. Makes conforming changes. SECTION 1.19. Amends Section 61.055, Health and Safety Code, as follows: Sec. 61.055. New title: BASIC HEALTH CARE SERVICE PROVIDED BY HOSPITAL DISTRICTS. Requires a hospital district to provide the basic health care services a county is required to provide under Section 61.028, Health and Safety Code, together with any other services required under the Texas Constitution and the statute creating the district, except that a hospital district is required to coordinate the delivery of basic health care services to eligible residents and authorizes the hospital to provide any basic health care services the hospital was not providing on January 1, 1999, but only to the extent the district is financially able to do so. Prohibits this section from being construed to discharge a hospital district from its obligation to provide the health care services required under the Texas Constitution and the statute creating the district. SECTION 1.20. Amends Section 61.058(b), Health and Safety Code, to make conforming changes. SECTION 1.21. Amends Section 61.059(a), Health and Safety Code, to make conforming changes. SECTION 1.22. Amends Section 61.062, Health and Safety Code, to make conforming changes. SECTION 1.23. Amends Section 61.064(a), Health and Safety Code, to make conforming changes. SECTION 1.24. Amends Subchapter C, Chapter 281, Health and Safety Code, by adding Section 281.0514, as follows: Sec. 281.0514. HARRIS COUNTY HOSPITAL DISTRICT; CONTRACT WITH CERTAIN HOSPITALS. Authorizes the Harris County Hospital District to contract for indigent health care services with at least one hospital that is located in the district, exempt from federal income tax under Section 501(a), and substantially devoted to providing hospital services to socially and economically disadvantaged individuals in the geographical area of the district. Subjects this section to Section 281.051(a). SECTION 1.25. Amends Section 531.047, Government Code, as added by Chapter 1251, Acts of the 75th Legislature, Regular Session, 1997, by amending Subsection (a) and adding Subsection (h), as follows: (a) Redefines "rural county" and "rural health facility." (h) Requires the commissioner to establish an advisory committee to assist TDH in developing policies for telemedical consultation under this section. SECTION 1.26. Amends Section 531.204(b), Government Code, to provide that the report of the Texas Integrated Enrollment Services (TIES) Legislative Oversight Committee must include an analysis of the feasibility of including indigent health care programs provided by counties, public hospitals, and hospital districts in the TIES, a schedule for inclusion of these programs, and a statement of how TIES may be structured to address the wide variation in information systems used by counties, public hospitals, and hospital districts. SECTION 1.27. Amends Chapter 26, Tax Code, by adding Section 26.0441, as follows: Sec. 26.0441. TAX RATE ADJUSTMENT FOR INDIGENT HEALTH CARE. Sets forth the procedure for tax rate adjustment for indigent health care. SECTION 1.28. Makes application of this Article prospective to January 1, 2000. SECTION 1.29. Requires TDH to study the feasibility of requiring or permitting a county, public hospital, and hospital district to issue a uniform identification card to eligible county resident or eligible service area resident, as appropriate, that identifies the resident as eligible for health care assistance under Chapter 61, Health and Safety Code. Requires TDH, not later than December 15, 2000, to report the results of its study to the governor, lieutenant governor, and the speaker of the house of representatives. SECTION 1.30. Provides that, for fiscal years 2000 and 2001, the rules adopted under Section 61.0395(b), Health and Safety Code, as added by this Act, must ensure that each county's annual allocation is equal to at least the average estimated annual amount of state assistance that the county would have been eligible to receive during each of the state fiscal years ending on August 31, 1997, August 31, 1998, and August 31, 1999, computed as if the eligibility threshold established by Section 61.037, Health and Safety Code, as amended by this Act, and the state match rate established by Section 61.038, Health and Safety Code, as amended by this Act, had applied during those fiscal years. ARTICLE 2. TERTIARY CARE SECTION 2.01. Amends Subtitle B, Title 2, Health and Safety Code, by adding Chapter 46, as follows: CHAPTER 46. TERTIARY MEDICAL CARE Sec. 46.001. DEFINITIONS. Defines "tertiary care facility," "tertiary medical services," "stabilization services," "unreimbursed stabilization services," and "unreimbursed tertiary medical service." Sec. 46.002. RULES. Authorizes the Texas Board of Health (board) to adopt rules to implement a system that encourages hospitals to provide tertiary medical services and stabilization services. Provides that the rules must address coordination of tertiary medical services and stabilization services in the delivery area; pre-hospital care management guidelines for triage, transfer, and transportation and evaluation of compliance with such guidelines; discrimination in transfer acceptance; and enforcement. Sec. 46.003. TERTIARY CARE ACCOUNT. Provides that the tertiary care account is an account in the state treasury. Authorizes the appropriation of money in the account only to TDH for the purposes of this chapter. Authorizes TDH to seek and accept gifts, grants, and donations from any public or private entity on behalf of the account. Provides that Section 403.095 (Use of Dedicated Revenue), Government Code, does not apply to the account. Requires that five percent of the total amount in the account, for each fiscal year, be held in reserve and authorizes its use only to pay for reimbursment of tertiary medical services and stablization services provided as a result of extraordinary emergencies occurring during that year. Prohibits more than five percent of the amount remaining from being used for the costs of administering the account. Requires the account to be allocated for payment to tertiary care facilities and level IV trauma centers for unreimbursed tertiary medical services and stabilization services except as provided above. Sec. 46.004. COLLECTION OF INFORMATION. Requires each tertiary care facility that seeks payment under this chapter to submit to TDH, in the manner and the time required by TDH, information that relates to the unreimbursed tertiary medical services provided to persons who reside outside the service area of the county, public hospital, or hospital district that is responsible for indigent health care under Chapter 61 in the area in which the tertiary care facility is located. Requires the board to adopt rules governing the collection of such information. Sec. 46.005. CERTIFICATION TO COMPTROLLER OF UNREIMBURSED TERTIARY MEDICAL SERVICES. (a) Requires TDH to certify to the comptroller for each tertiary care facility the cost of unreimbursed tertiary medical services provided by the facility to persons who reside outside the service area of the county, public, hospital, or hospital district that is responsible for indigent health care under Chapter 61 in the area in which the tertiary care facility is located. (b) Requires TDH, each year, to use at least 86 percent of the appropriated money in the tertiary account to compensate tertiary care facilities for unreimbursed tertiary medical services. (c) Requires TDH, each year, for a facility that was operated as a tertiary care facility during the previous year, to make an initial certification to the comptroller under Subsection (a) in an amount that equals 80 percent of the amount certified under this section for the facility in the previous year. Requires TDH to make a subsequent certification of the cost of additional unreimbursed tertiary medical services provided by the facility on receipt from the facility of the information required to be submitted under Section 46.004. (d) Requires the comptroller, each year, to pay a tertiary care facility the certified amount determined under Subsection (a) from the tertiary care account. (e) Requires TDH, if in any year the total cost of unreimbursed tertiary medical services certified under Subsection (a) for all tertiary care facilities exceeds the amount available for payment to the facilities under Section 46.003(e), less the amount allocation for stablization services, to allocate the amount available under Section 46.003(e) to each facility based on the percentages computed by dividing the cost of the facility's unreimbursed tertiary medical services by the total cost of all facilities' unreimbursed tertiary medical services. Requires the comptroller to pay each tertiary care facility based on this allocation. (f) Provides that the cost of each unreimbursed tertiary medical service provided, for the purposes of Section 46.006, is the average amount payable under Medicare reimbursement policies for that service. Sec. 46.006. CERTIFICATION TO COMPTROLLER OF UNREIMBURSED STABLIZATION SERVICES. (a) Requires TDH to certify to the comptroller for each tertiary care facility or level IV trauma facility the cost of unreimbursed services provided to persons who reside outside the service area of the entity responsible for indigent health care in the area in which the facility is located. (b) Prohibits TDH from using more than four percent, each year, of the appropriated money in the tertiary care account to compensate tertiary care facilities and level IV trauma facilities for unreimbursed stablization services. (c) Requires TDH, each year, to certify to the comptroller for a tertiary care facility or level IV trauma facility an amount that equals 80 percent of the amount certified for the facility in the previous year. Requires TDH to make a subsequent certification of the cost of additional unreimbursed stabilization services on receipt of the information required under Section 46.004. (d) Requires the comptroller, each year, to pay a tertiary care facility or level IV trauma facility the certified amount determined under Subsection (a) from the tertiary care account. (e) Requires TDH to allocate funds based on a specified formula if the total cost of unreimbursed stablization services for all tertiary care facilities or level IV trauma facilities exceeds the amount available in the tertiary care account. Requires the comptroller to pay each facility based on this allocation. (f) Provides that, for purposed of this section and Section 46.007, the cost of each service provided by a tertiary care facility or level IV trauma facility is the average amount payable under Medicare reimbursement policies for that service. Sec. 46.007. CERTIFICATION OF EMERGENCIES. Requires TDH, for the purposes of reimbursing extraordinary emergencies under this chapter, to certify an extraordinary emergency if an emergency is declared by the governor or the president of the U.S., or for another similar disaster TDH finds has resulted in an extraordinary cost to a tertiary care facility or level IV trauma facility. Requires TDH, if an extraordinary emergency is declared, to certify to the comptroller the amount of unreimbursed tertiary medical services incurred by a tertiary care facility or level IV trauma facility during the emergency. Requires the comptroller to pay the tertiary care facility or level IV trauma facility the certified amount from the tertiary care account. Requires TDH to allocate funds based on a specified formula if the total cost of unreimbursed stablization services for all tertiary care facilities or level IV trauma facilities exceeds the amount available in the tertiary care account. Requires the comptroller to pay each facility based on this allocation. SECTION 2.02 Amends Section 773.003, Health and Safety Code, by adding Subdivision (22), as follows: (22) Defines "trauma services." ARTICLE 3. MISCELLANEOUS PROVISIONS SECTION 3.01. Amends Subtitle C, Title 2, Health and Safety Code, by adding Chapter 64, as follows: CHAPTER 64. MISCELLANEOUS PROVISIONS Sec. 64.001. TEACHING HOSPITAL ACCOUNT. Provides that the TDH state-owned multi-categorical teaching hospital account is an account in the general revenue fund which may be appropriated only to TDH to provide funding for indigent health care. ARTICLE 4. DISSOLUTION OF HOSPITAL DISTRICTS SECTION 4.01. Amends Chapter 285, Health and Safety Code, by adding Subchapter K, as follows: SUBCHAPTER K. DISSOLUTION OF HOSPITAL DISTRICT Sec. 285.151. ASSETS TRANSFERRED ON DISSOLUTION. Requires a governmental entity to which the assets of a dissolved hospital district have been transferred to use all transferred assets to pay the outstanding debts and obligations of the district relating to the assets at the time of transfer and furnish medical and hospital care for indigent persons who reside in the territory within the jurisdiction of the governmental entity. ARTICLE 5. FEDERAL AUTHORIZATION FOR STATE MEDICAID PROGRAM SECTION 5.01. FEDERAL AUTHORIZATION. Sets forth legislative intent. ARTICLE 6. STUDY RELATING TO BASIC HEALTH CARE SERVICES AND STATE ASSISTANCE SECTION 6.01. STUDY. Requires TDH to study the provision of basic health care services by counties, hospital districts, and public hospitals under Chapter 61, Health and Safety Code, and the cost of providing those services. Requires TDH to study the threshold for eligibility for state assistance to a county established under Section 61.037 (County Eligibility for State Assistance), Health and Safety Code, and develop a threshold to replace the threshold established under that section that is stated as a formula that reflects a county's fiscal capacity, health care resources, and demographics. Requires TDH to study the financing of basic health care services by counties, hospital districts, and public hospitals under Chapter 61, Health and Safety Code. SECTION 6.02. REPORT. Requires TDH, not later than December 1, 2000, to submit a written report of the study conducted under this article to the governor, lieutenant governor, and the speaker of the house of representatives. Provides that the report must include the recommendations of the work group with the proposed eligibility threshold. SECTION 6.03. EXPIRATION. Provides that this article expires August 31, 2001. ARTICLE 7. PILOT PROGRAM FOR REGIONAL HEALTH CARE DELIVERY SYSTEM SECTION 7.01. DEFINITIONS. Defines "commissioner" and "pilot program." SECTION 7.02. PILOT PROGRAM. Requires the commissioner of health and human services (commissioner), not later than January 1, 2000, to establish a regional health care delivery system pilot program (pilot program) to coordinate the use of health care resources in a region of the state. Provides that the pilot program must address certain issues. Authorizes the commissioner to adopt rules as necessary to implement the pilot program. Authorizes that the rules provide an alternative funding structure to the funding structure established under Chapter 61, Health and Safety Code. Prohibits the commissioner from requiring a county, public hospital, hospital district, or other entity to participate in the pilot program SECTION 7.03. REPORT. Requires the commissioner, not later than January 1, 2003, to submit a written report relating to the pilot program to the governor, lieutenant governor, and the speaker of the house of representatives. Sets forth the required composition of the report. SECTION 7.04. EXPIRATION; TERMINATION OF PILOT PROGRAM. Provides that this section expires and the pilot program is terminated August 31, 2003. ARTICLE 8. EFFECTIVE DATE; EMERGENCY SECTION 8.01. Effective date: September 1, 1999. SECTION 8.02. Emergency clause.