By: Coleman H.B. No. 4502
A BILL TO BE ENTITLED
AN ACT
relating to charity care.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 311.031(2) and (16), Health and Safety
Code, are amended to read as follows:
(2) "Charity care" means the unreimbursed cost, not
including bad debt expense, to a hospital of:
(A) providing, funding, or otherwise financially
supporting health care services on an inpatient or outpatient basis
to a person classified by the hospital as "financially indigent" or
"medically indigent"; and/or
(B) providing, funding, or otherwise financially
supporting health care services provided to financially indigent
persons through other nonprofit or public outpatient clinics,
hospitals, or health care organizations.
(16) "Unreimbursed costs" means the costs a hospital
incurs for providing services after subtracting payments received
from any source for such services including but not limited to the
following: third-party insurance payments; Medicare payments;
Medicaid payments; Medicare education reimbursements; state
reimbursements for education; payments from drug companies to
pursue research; grant funds for research; and disproportionate
share payments. For purposes of this definition, the term "costs"
shall be calculated by applying the hospital's Medicare cost ratio
[to charge ratios derived in accordance with generally accepted
accounting principles for hospitals] to billed charges. The
executive commissioner of the Health and Human Services Commission
by rule may supplement the Medicare cost ratio with additional
expenses and revenues that are reasonable and medically necessary
and subject to third-party insurer reimbursement. The calculation
of the cost to charge ratios shall be based on the most recently
completed and audited prior fiscal year of the hospital or hospital
system. Prior to January 1, 1996, for purposes of this definition,
charitable contributions and grants to a hospital, including
transfers from endowment or other funds controlled by the hospital
or its nonprofit supporting entities, shall not be subtracted from
the costs of providing services for purposes of determining
unreimbursed costs. After January 1, 1996, for purposes of this
definition, charitable contributions and grants to a hospital,
including transfers from endowment or other funds controlled by the
hospital or its nonprofit supporting entities, shall not be
subtracted from the costs of providing services for purposes of
determining the unreimbursed costs of charity care and
government-sponsored indigent health care.
SECTION 2. Amend Texas Government Code, Chapter 531 to add a
new Subchapter Q to read as follows:
Subchapter Q. Study on Hospital Billing and Collection Practices
Sec. 531.701. Study concerning hospital billing and
collection practices.
(a) The Texas Health and Human Services Commission shall study
the effects of hospital and billing practices on the uninsured and
underinsured.
(b) By the use of a hospital questionnaire and such other
investigative tools including sample hospital audits, interviews,
public hearings and reports, the study shall address:
(i) the effects of hospital billing, including pricing and
discounting. practices by public health region as designated under
Texas Health & Safety Code, Section 121.007 upon the uninsured, the
underinsured, insurers, governmental payors, and other third-party
payors;
(ii) The effects of hospital billing, including pricing and
discounting, and collection practices upon the uninsured and
underinsured including any barriers to health care access and
economic consequences; and
(iii) The actions other jurisdictions have taken through
legislation or litigation to address hospital billing and
collection practices upon the uninsured and the underinsured.
(c) Any data presented in the study shall be indexed by hospital
organizational structure: for profit, nonprofit, and public.
(d) The study shall commence no later than November 15, 2009 and
produce a report on the study to be filed with the legislature no
later than December 15, 2010. At that date, the commission shall
publish the report on its website in a conspicuous location.
(e) The performance of the study may be delegated by the
commission to one or more working groups that may include public
members and representatives from the Texas Attorney General, Texas
Comptroller of Public Accounts and the Texas Department of State
Health Services. At least half of the public members appointed to
any working group must be individuals or representatives of
organizations that advocate on behalf of consumers on health care
issues.
(f) Public hearings shall be held throughout the state to receive
public testimony for inclusion in the report. At the commission's
request, a working group member may coordinate, convene, and
preside at a public hearing. Among other resources, the commission
may rely on donations of space, equipment, and personnel for the
public hearing.
(g) The commission or its delegate may retain public accountants
and such other experts considered reasonably necessary to perform
the study and may seek collaboration from the Texas Attorney
General, the Texas Comptroller of Public Accounts and the Texas
Department of State Health Services.
Sec. 531.702. Expiration of Subchaper. This Subchapter
expires on January 31, 2011.
SECTION 3. Subchapter D, Chapter 311, Health and Safety
Code is amended by adding Section 311.0471 to read as follows:
Sec. 311.0471. INVESTIGATION AND ENFORCEMENT. (a) Except
as otherwise provided, this section applies only to a hospital, as
that term is defined by Section 311.031.
(b) The attorney general shall investigate whether a
hospital has violated this Subchapter on receipt of a public
complaint.
(c) The attorney general may conduct any investigation
considered necessary regarding possible violations of this
Subchapter by a hospital, including:
(1) examination of the hospital's premises;
(2) on written request to the chief operating officer
of the hospital, examination of any record, book, document,
account, or paper necessary to investigate the alleged violation;
(3) requiring the hospital to file a statement or
report or answer interrogatories in writing relating to all
information relevant to the alleged violations; and
(4) subpoena examination under oath of any person who
possesses knowledge or information directly related to the alleged
violations.
(d) If the attorney general has reason to believe that a
hospital has violated this Subchapter, the attorney general may
bring action on behalf of the state against the hospital to obtain
temporary, preliminary, or permanent injunctive relief for any act,
policy, or practice by the hospital that violates this Subchapter.
Before bringing an action, the attorney general may permit the
hospital to submit a correction plan for the attorney general's
approval.
(e) The attorney general may seek a civil monetary penalty
not to exceed $1,000 per violation per day if a hospital, by pattern
or practice, knowingly violates this Subchapter.
(f) In an action filed under this Subchapter, the attorney
general may seek the recovery of court costs and legal fees.
(g) If a court grants a final order of relief against a
nonprofit hospital for a violation of this Subchapter, the
attorney general shall notify each taxing authority that has
granted the nonprofit hospital a tax exemption about the court's
decision.
(h) The attorney general shall establish a complaint
process through which the public may file complaints involving
violations of this Subchapter. The complaint process at a minimum
must include:
(1) a mail address, a toll-free telephone number, and
an e-mail address for receiving complaints;
(2) a public education campaign concerning the
obligations hospitals have to the public under this Subchapter;
(3) a public education campaign concerning the
attorney general's complaint process; and
(4) complaint forms and instructions to aid the public
in making complaints.
(i) The attorney general shall prepare and publicly
distribute, including posting in a conspicuous location on the
attorney general's website, an annual report that informs the
public of the attorney general's activities under this Subchapter
for the previous year.
SECTION 4. This Act takes effect September 1, 2009.