Texas 2009 - 81st Regular

Texas House Bill HB3473 Compare Versions

Only one version of the bill is available at this time.

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1	1	81R9707 ALB-F
2	2	By: Coleman H.B. No. 3473
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to charity care.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. The legislature finds that:
10	10	(1) uninsured or underinsured individuals in this
11	11	state usually seek health care services at a health care facility
12	12	when the individuals are vulnerable and in an unfair bargaining
13	13	position;
14	14	(2) uninsured and underinsured individuals in this
15	15	state are often charged two to four times the reimbursement rate
16	16	sought by health care facilities from third party payors for the
17	17	same or similar health care services;
18	18	(3) medical debt is considered one of the leading
19	19	causes of personal bankruptcy and harms the commerce of this state;
20	20	and
21	21	(4) charging uninsured and underinsured individuals
22	22	disproportionately higher reimbursement rates than the rates
23	23	charged to third party payors for the same or similar health care
24	24	services is unconscionable, fosters bankruptcy, and is contrary to
25	25	this state's public policy of promoting fair business practices and
26	26	a healthy economy.
27	27	SECTION 2. Subchapter A, Chapter 311, Health and Safety
28	28	Code, is amended by adding Sections 311.0011 and 311.0012 to read as
29	29	follows:
30	30	Sec. 311.0011. DISCRIMINATION PROHIBITED. (a) In this
31	31	section:
32	32	(1) "Contractual allowances" has the meaning assigned
33	33	by Section 311.031.
34	34	(2) "Discount" means the contractual allowance
35	35	expressed as a percentage of the health care facility's established
36	36	rates.
37	37	(3) "Hospital" has the meaning assigned by Section
38	38	311.031.
39	39	(4) "Medically necessary health care services" means
40	40	an inpatient or outpatient hospital service, including
41	41	pharmaceuticals or supplies provided by a hospital to a patient,
42	42	that are covered under Medicare for beneficiaries with the same
43	43	clinical presentation as the uninsured or underinsured patient.
44	44	The term does not include:
45	45	(A) nonmedical services such as social and
46	46	vocational services; and
47	47	(B) elective cosmetic surgery, but not including
48	48	plastic surgery designed to correct disfigurement caused by injury,
49	49	illness, or congenital defect or deformity.
50	50	(5) "Underinsured individual" means an individual
51	51	seeking health care services who has third party coverage under a
52	52	public or private health insurance plan and whose out-of-pocket
53	53	expenses for health care services are estimated by a health care
54	54	facility to equal five percent or more of the applicant's after-tax
55	55	income.
56	56	(6) "Uninsured individual" means an individual
57	57	seeking health care services who lacks third party coverage from a
58	58	health insurer, a health care service plan, Medicare, or Medicaid
59	59	and whose injury is not compensable for purposes of workers'
60	60	compensation, automobile insurance, or other insurance as
61	61	determined and documented by a health care facility.
62	62	(b) A hospital may not deny medically necessary health care
63	63	services to an otherwise eligible individual based on the
64	64	individual's status as an uninsured or underinsured individual.
65	65	(c) A hospital may not discriminate against an uninsured or
66	66	underinsured individual for health care services through the
67	67	hospital's pricing policies, including discounts provided and
68	68	actual reimbursement rates charged. The price charged by a
69	69	hospital to an uninsured or underinsured individual for a medically
70	70	necessary health care service may not exceed the greater of:
71	71	(1) 125 percent of the hospital's Medicare
72	72	reimbursement rate for that service; or
73	73	(2) a reimbursement rate based on a discount that is
74	74	not less than 90 percent of the hospital's weighted average
75	75	contract allowance.
76	76	(d) The Department of State Health Services shall enforce
77	77	this section. The department may audit a hospital for
78	78	noncompliance and bring an enforcement action against the hospital.
79	79	The department shall investigate complaints made under this chapter
80	80	by members of the public.
81	81	(e) A person who files a complaint has a right to a hearing
82	82	under Chapter 2001, Government Code, including the right to
83	83	judicial review of the department's decision under the substantial
84	84	evidence rule.
85	85	(f) The executive commissioner of the Health and Human
86	86	Services Commission shall be a named defendant in a proceeding for
87	87	judicial review.
88	88	(g) An uninsured or underinsured individual may bring a
89	89	private cause of action for a violation of this section and has the
90	90	right to recover attorney's fees as part of the damages awarded.
91	91	(h) The attorney general may bring suit for injunctive
92	92	relief against any hospital that violates this section and may
93	93	recover refunds from the hospital on behalf of uninsured and
94	94	underinsured individuals charged prices in violation of this
95	95	section.
96	96	(i) The executive commissioner of the Health and Human
97	97	Services Commission may adopt rules to enforce this section.
98	98	Sec. 311.0012. INSTALLMENT PAYMENTS FOR QUALIFIED
99	99	PATIENTS. (a) In this section:
100	100	(1) "Family income" means the sum of a family's annual
101	101	earnings and cash benefits from all sources before taxes.
102	102	(2) "Hospital" has the meaning assigned by Section
103	103	311.031.
104	104	(3) "Medically necessary health care services" has the
105	105	meaning assigned by Section 311.0011.
106	106	(b) This section applies only to an individual whose family
107	107	income is not more than 600 percent of the federal poverty level and
108	108	whose estimated or actual charges for medically necessary health
109	109	care services provided by a hospital under this chapter exceed 20
110	110	percent of the individual's income after taxes.
111	111	(c) A hospital may not collect an amount equal to more than
112	112	20 percent of an individual's family income during a 12-month
113	113	period for medically necessary health care services provided by the
114	114	hospital to an individual described by Subsection (b). The
115	115	12-month period begins on the first day an individual is determined
116	116	to be covered by this section and receives medically necessary
117	117	health care services from the hospital.
118	118	(d) A hospital may adopt policies to exclude an individual
119	119	from the application of Subsection (c) if the individual owns
120	120	assets that exceed 200 percent of the greater of the estimated
121	121	charges for medically necessary health care services that have been
122	122	and will be provided to the individual or the incurred charges that
123	123	have been provided. The policies must provide that the hospital may
124	124	not count the following assets:
125	125	(1) the individual's homestead;
126	126	(2) personal property exempt from a creditor's claims
127	127	under Chapter 42, Property Code; or
128	128	(3) any amounts held in a pension or retirement plan,
129	129	except that distributions and payments from pension or retirement
130	130	plans may be included as income for the purposes of this section.
131	131	(e) This section does not apply to a hospital that does not
132	132	charge for services.
133	133	(f) The attorney general shall ensure compliance with this
134	134	section. The attorney general may audit a hospital's books and
135	135	records, may conduct any investigation considered necessary
136	136	regarding possible violations of this section by a hospital, may
137	137	bring suit against the hospital for violations of this section, and
138	138	may seek relief, including an injunction.
139	139	(g) Subsection (f) does not preclude the application of any
140	140	other compliance and enforcement provisions permitted under this
141	141	chapter.
142	142	SECTION 3. Sections 311.031(2) and (16), Health and Safety
143	143	Code, are amended to read as follows:
144	144	(2) "Charity care" means the unreimbursed cost, not
145	145	including bad debt expense, to a hospital of:
146	146	(A) providing, funding, or otherwise financially
147	147	supporting health care services on an inpatient or outpatient basis
148	148	to a person classified by the hospital as "financially indigent" or
149	149	"medically indigent"; and/or
150	150	(B) providing, funding, or otherwise financially
151	151	supporting health care services provided to financially indigent
152	152	persons through other nonprofit or public outpatient clinics,
153	153	hospitals, or health care organizations.
154	154	(16) "Unreimbursed costs" means the costs a hospital
155	155	incurs for providing services after subtracting payments received
156	156	from any source for such services including but not limited to the
157	157	following: third-party insurance payments; Medicare payments;
158	158	Medicaid payments; Medicare education reimbursements; state
159	159	reimbursements for education; payments from drug companies to
160	160	pursue research; grant funds for research; and disproportionate
161	161	share payments. For purposes of this definition, the term "costs"
162	162	shall be calculated by applying the hospital's Medicare cost ratio
163	163	[to charge ratios derived in accordance with generally accepted
164	164	accounting principles for hospitals] to billed charges. The
165	165	executive commissioner of the Health and Human Services Commission
166	166	by rule may supplement the Medicare cost ratio with additional
167	167	expenses and revenues that are reasonable and medically necessary
168	168	and subject to third-party insurer reimbursement. The calculation
169	169	of the cost to charge ratios shall be based on the most recently
170	170	completed and audited prior fiscal year of the hospital or hospital
171	171	system. Prior to January 1, 1996, for purposes of this definition,
172	172	charitable contributions and grants to a hospital, including
173	173	transfers from endowment or other funds controlled by the hospital
174	174	or its nonprofit supporting entities, shall not be subtracted from
175	175	the costs of providing services for purposes of determining
176	176	unreimbursed costs. After January 1, 1996, for purposes of this
177	177	definition, charitable contributions and grants to a hospital,
178	178	including transfers from endowment or other funds controlled by the
179	179	hospital or its nonprofit supporting entities, shall not be
180	180	subtracted from the costs of providing services for purposes of
181	181	determining the unreimbursed costs of charity care and
182	182	government-sponsored indigent health care.
183	183	SECTION 4. Section 311.032(a), Health and Safety Code, is
184	184	amended to read as follows:
185	185	(a) The department shall establish a uniform and
186	186	transparent reporting and collection system for hospital financial
187	187	and utilization data and for nonprofit hospital reporting of the
188	188	hospital's duties as required by Subchapter D. The department may
189	189	rely on the Internal Revenue Service Form 990, Schedule H, as
190	190	adopted in 2008, for the nonprofit hospital's reporting of data to
191	191	the extent not inconsistent with the requirements prescribed by
192	192	this chapter.
193	193	SECTION 5. Section 311.042(2), Health and Safety Code, is
194	194	amended to read as follows:
195	195	(2) "Community benefits" means the unreimbursed cost
196	196	to a hospital of providing charity care and [,]
197	197	government-sponsored indigent health care, and to the extent not
198	198	otherwise included in this subdivision, donations, education,
199	199	government-sponsored program services, research, and subsidized
200	200	health services provided in response to community health needs and
201	201	not for marketing purposes. "Community benefits" does not include
202	202	the cost to the hospital of paying any taxes or other governmental
203	203	assessments.
204	204	SECTION 6. Section 311.044, Health and Safety Code, is
205	205	amended by amending Subsections (a) and (c) and adding Subsection
206	206	(f) to read as follows:
207	207	(a) A nonprofit hospital shall develop:
208	208	(1) an organizational mission statement that
209	209	identifies the hospital's commitment to serving the health care
210	210	needs of the community; and
211	211	(2) a community benefits plan defined as an
212	212	operational plan for serving the community's health care needs in
213	213	coordination with local governmental and public health care
214	214	planning that sets out goals and objectives for providing community
215	215	benefits that include charity care and government-sponsored
216	216	indigent health care, as the terms community benefits, charity
217	217	care, and government-sponsored indigent health care are defined by
218	218	Sections 311.031 and 311.042, and that identifies the populations
219	219	and communities served by the hospital.
220	220	(c) The hospital shall include at least the following
221	221	elements in the community benefits plan:
222	222	(1) mechanisms to evaluate the plan's effectiveness,
223	223	including but not limited to a method for soliciting the views of
224	224	the communities served by the hospital;
225	225	(2) measurable objectives to be achieved within a
226	226	specified time frame; [and]
227	227	(3) a budget for the plan; and
228	228	(4) a list of the goals and objectives chosen by the
229	229	hospital, including a description of the process used to choose the
230	230	goals and objectives and an explanation of how the goals and
231	231	objectives are consistent with local governmental and public health
232	232	care planning.
233	233	(f) Before adopting a community benefits plan, the hospital
234	234	must hold at least one public hearing to provide for public input
235	235	into the community benefits planning process.
236	236	SECTION 7. Section 311.045(b), Health and Safety Code, is
237	237	amended to read as follows:
238	238	(b)(1) A nonprofit hospital or hospital system may elect to
239	239	provide community benefits, which include charity care and
240	240	government-sponsored indigent health care, according to any of the
241	241	following standards:
242	242	(A) [charity care and government-sponsored
243	243	indigent health care are provided at a level which is reasonable in
244	244	relation to the community needs, as determined through the
245	245	community needs assessment, the available resources of the hospital
246	246	or hospital system, and the tax-exempt benefits received by the
247	247	hospital or hospital system;
248	248	[(B)] charity care and government-sponsored
249	249	indigent health care are provided in an amount equal to at least 100
250	250	percent of the hospital's or hospital system's tax-exempt
251	251	benefits[, excluding federal income tax]; or
252	252	(B) [(C)] charity care and community benefits
253	253	are provided in a combined amount equal to at least five percent of
254	254	the hospital's or hospital system's net patient revenue, provided
255	255	that charity care and government-sponsored indigent health care are
256	256	provided in an amount equal to at least four percent of net patient
257	257	revenue.
258	258	(2) For purposes of satisfying Subdivision (1)(B)
259	259	[(1)(C)], a hospital or hospital system may not change its existing
260	260	fiscal year unless the hospital or hospital system changes its
261	261	ownership or corporate structure as a result of a sale or merger.
262	262	[(3) A nonprofit hospital that has been designated as
263	263	a disproportionate share hospital under the state Medicaid program
264	264	in the current fiscal year or in either of the previous two fiscal
265	265	years shall be considered to have provided a reasonable amount of
266	266	charity care and government-sponsored indigent health care and
267	267	shall be deemed in compliance with the standards in this
268	268	subsection.]
269	269	SECTION 8. Section 311.046, Health and Safety Code, is
270	270	amended by adding Subsections (d-1) and (f) to read as follows:
271	271	(d-1) The hospital shall include in the first bill sent to a
272	272	patient by the hospital a notice that includes a hospital contact
273	273	name and telephone number. The notice must be on the first page of
274	274	the bill or in an insert, must be written in at least 12-point type,
275	275	and shall inform the patient that:
276	276	(1) the hospital has a charity care program for
277	277	low-income patients;
278	278	(2) the patient may qualify; and
279	279	(3) the patient may contact the hospital for more
280	280	information or to apply for the program.
281	281	(f) Each hospital shall maintain a copy of the hospital's
282	282	current community benefits plan and most recently filed annual
283	283	report of the community benefits plan for public inspection and
284	284	copying at the hospital's admission office or other location
285	285	readily available to the public and shall post the plan and report
286	286	in a conspicuous and readily accessible location on the hospital's
287	287	website.
288	288	SECTION 9. Subchapter D, Chapter 311, Health and Safety
289	289	Code, is amended by adding Section 311.0462 to read as follows:
290	290	Sec. 311.0462. AGENCY WEBSITE PUBLICATION OF CHARITY
291	291	CARE-RELATED REPORTS. (a) In this section, "department" means the
292	292	Department of State Health Services.
293	293	(b) The department shall timely and annually post for public
294	294	access in a conspicuous location on the department's website:
295	295	(1) the most recent individual nonprofit hospital
296	296	reports concerning the nonprofit hospitals' charity care
297	297	obligations under this subchapter; and
298	298	(2) annual reports required under Sections 311.035 and
299	299	311.0455.
300	300	(c) The department shall:
301	301	(1) maintain an accessible archive of previously
302	302	posted reports described by Subsection (b); and
303	303	(2) post a link to the specific web page on the
304	304	attorney general's website that addresses nonprofit charity care.
305	305	(d) Reports described by:
306	306	(1) Subsection (b)(1) shall be indexed by hospital,
307	307	report, and year; and
308	308	(2) Subsection (b)(2) shall be indexed by report and
309	309	year.
310	310	SECTION 10. Subchapter D, Chapter 311, Health and Safety
311	311	Code, is amended by adding Section 311.0471 to read as follows:
312	312	Sec. 311.0471. INVESTIGATION AND ENFORCEMENT. (a) Except
313	313	as otherwise provided, this section applies only to a hospital, as
314	314	that term is defined by Section 311.031.
315	315	(b) The attorney general shall investigate whether a
316	316	hospital has violated this chapter on receipt of a public
317	317	complaint.
318	318	(c) The attorney general may conduct any investigation
319	319	considered necessary regarding possible violations of this chapter
320	320	by a hospital, including:
321	321	(1) examination of the hospital's premises;
322	322	(2) on written request to the chief operating officer
323	323	of the hospital, examination of any record, book, document,
324	324	account, or paper necessary to investigate the alleged violation;
325	325	(3) requiring the hospital to file a statement or
326	326	report or answer interrogatories in writing relating to all
327	327	information relevant to the alleged violations; and
328	328	(4) subpoena examination under oath of any person who
329	329	possesses knowledge or information directly related to the alleged
330	330	violations.
331	331	(d) If the attorney general has reason to believe that a
332	332	hospital has violated this chapter, the attorney general may bring
333	333	action on behalf of the state against the hospital to obtain
334	334	temporary, preliminary, or permanent injunctive relief for any act,
335	335	policy, or practice by the hospital that violates this chapter.
336	336	Before bringing an action, the attorney general may permit the
337	337	hospital to submit a correction plan for the attorney general's
338	338	approval.
339	339	(e) The attorney general may seek a civil monetary penalty
340	340	not to exceed $1,000 per violation per day if a hospital, by pattern
341	341	or practice, knowingly violates this chapter. In an action filed
342	342	under this chapter, the attorney general may seek the recovery of
343	343	court costs and legal fees.
344	344	(f) If a court grants a final order of relief against a
345	345	nonprofit hospital subject to this subchapter for a violation of
346	346	this chapter, the attorney general shall notify each taxing
347	347	authority that has granted the nonprofit hospital a tax exemption
348	348	about the court's decision.
349	349	(g) The attorney general shall establish a complaint
350	350	process through which the public may file complaints involving
351	351	violations of this chapter. The complaint process at a minimum must
352	352	include:
353	353	(1) a mail address, a toll-free telephone number, and
354	354	an e-mail address for receiving complaints;
355	355	(2) a public education campaign concerning the
356	356	obligations hospitals have to the public under this chapter;
357	357	(3) a public education campaign concerning the
358	358	attorney general's complaint process; and
359	359	(4) complaint forms and instructions to aid the public
360	360	in making complaints.
361	361	(h) The attorney general shall prepare and publicly
362	362	distribute, including posting in a conspicuous location on the
363	363	attorney general's website, an annual report that informs the
364	364	public of the attorney general's activities under this chapter for
365	365	the previous year.
366	366	SECTION 11. Sections 311.045(c) and (d), Health and Safety
367	367	Code, are repealed.
368	368	SECTION 12. This Act takes effect September 1, 2009.