HBA-DMH H.B. 975 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 975 By: Maxey Public Health 3/1/2001 Introduced BACKGROUND AND PURPOSE Nonprofit hospitals are required to submit a community benefits plan which includes a calculation of the hospital's unreimbursed costs in providing charity care. Under current law, unreimbursed costs are calculated using a hospital's audited financial statement. A Medicare cost report is a standardized statement to the federal government based on pure patient costs used to set Medicare reimbursement rates. This cost report includes patient care and capital expenses, but does not allow hospitals to include certain expenditures such as billed charges for which the hospital expects to receive payment. Using numbers from the Medicare cost report as a base for calculating unreimbursed costs for charity care allows for more accurate comparisons among hospitals. House Bill 975 requires nonprofit hospitals to report their charity care based on the Medicare cost report and also makes technical and clarifying changes. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 975 amends the Health and Safety Code to modify the calculation of costs and cost to charge ratios used for purposes of determining unreimbursed costs incurred in providing charity care and community benefits (Sec. 311.031). The bill specifies that state university public hospitals are required to prepare an annual report and provides that state university public hospitals are to be included in the annual report submitted to the attorney general and comptroller of public accounts by the Texas Department of Health (Secs. 311.0455 and 311.046). The bill amends the Tax Code to update statutory references and make technical changes (Sec. 11.18). EFFECTIVE DATE September 1, 2001.