By: Menendez (Senate Sponsor - Uresti) H.B. No. 33
(In the Senate - Received from the House April 22, 2013;
April 24, 2013, read first time and referred to Committee on Health
and Human Services; May 13, 2013, reported favorably by the
following vote: Yeas 8, Nays 0; May 13, 2013, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to alternative methods of dispute resolution in certain
disputes between the Department of Aging and Disability Services
and an assisted living facility licensed by the department.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 247.051, Health and Safety Code, is
amended to read as follows:
Sec. 247.051. INFORMAL DISPUTE RESOLUTION. (a) The Health
and Human Services Commission by rule shall establish an informal
dispute resolution process to address disputes between a facility
and the department concerning a statement of violations prepared by
the department in accordance with this section. The process must
provide for adjudication by an appropriate disinterested person of
disputes relating to a statement of violations [a proposed
enforcement action or related proceeding under this chapter]. The
informal dispute resolution process must require:
(1) the assisted living facility to request informal
dispute resolution not later than the 10th day after the date of
notification by the department of the violation of a standard or
standards;
(2) the Health and Human Services Commission to
complete the process not later than the 90th [30th] day after the
date of receipt of a request from the assisted living facility for
informal dispute resolution; [and]
(3) that, not later than the 10th business day after
the date an assisted living facility requests an informal dispute
resolution, the department forward to the assisted living facility
a copy of all information that is referred to in the disputed
statement of violations or on which a citation is based in
connection with the survey, inspection, investigation, or other
visit, excluding:
(A) the name of any complainant, witness, or
informant;
(B) any information that would reasonably lead to
the identification of a complainant, witness, or informant;
(C) information obtained from or contained in the
records of the facility;
(D) information that is publicly available; or
(E) information that is confidential by law;
(4) the Health and Human Services Commission to give
full consideration to all factual arguments raised during the
informal dispute resolution process that:
(A) are supported by references to specific
information that the facility or department relies on to dispute or
support findings in the statement of violations; and
(B) are provided by the proponent of the argument
to the Health and Human Services Commission and the opposing party;
(5) that informal dispute resolution staff give full
consideration to the information provided by the assisted living
facility and the department;
(6) that ex parte communications concerning the
substance of any argument relating to a survey, inspection,
investigation, visit, or statement of violations under
consideration not occur between the informal dispute resolution
staff and the assisted living facility or the department; and
(7) that the assisted living facility and the
department be given a reasonable opportunity to submit arguments
and information supporting the position of the assisted living
facility or the department and to respond to arguments and
information presented against them.
(b) [any individual representing an assisted living
facility in an informal dispute resolution process to register with
the Health and Human Services Commission and disclose the
following:
[(A) the individual's employment history during
the preceding five years, including employment in regulatory
agencies of this state and other states;
[(B) ownership, including the identity of the
controlling person or persons, of the assisted living facility the
individual is representing before the Health and Human Services
Commission; and
[(C) the identity of other entities the
individual represents or has represented before the Health and
Human Services Commission during the preceding 24 months.
[(b) The Health and Human Services Commission shall adopt
rules to adjudicate claims in contested cases.
[(c)] The Health and Human Services Commission may not
delegate its responsibility to administer the informal dispute
resolution process established by this section to another state
agency.
(c) An assisted living facility requesting an informal
dispute resolution under this section must reimburse the department
for any costs associated with the department's preparation,
copying, and delivery of information requested by the facility.
(d) A statement of violations prepared by the department
following a survey, inspection, investigation, or visit is
confidential pending the outcome of the informal dispute resolution
process. Information concerning the outcome of a survey,
inspection, investigation, or visit may be posted on any website
maintained by the department while the dispute is pending if the
posting clearly notes each finding that is in dispute.
SECTION 2. Chapter 247, Health and Safety Code, is amended
by adding Subchapter E to read as follows:
SUBCHAPTER E. ARBITRATION
Sec. 247.081. SCOPE OF SUBCHAPTER. This subchapter applies
to any dispute between a facility licensed under this chapter and
the department relating to:
(1) renewal of a license under Section 247.023;
(2) suspension, revocation, or denial of a license
under Section 247.041;
(3) assessment of a civil penalty under Section
247.045; or
(4) assessment of an administrative penalty under
Section 247.0451.
Sec. 247.082. ELECTION OF ARBITRATION. (a) Except as
provided by Subsection (d), an affected facility may elect binding
arbitration of any dispute to which this subchapter applies.
Arbitration under this subchapter is an alternative to a contested
case hearing or to a judicial proceeding relating to the assessment
of a civil penalty.
(b) An affected facility may elect arbitration under this
subchapter by filing the election with the court in which the
lawsuit is pending and sending notice of the election to the
department and the office of the attorney general. The election
must be filed not later than the 10th day after the date on which the
answer is due or the date on which the answer is filed, whichever is
earlier. If a civil penalty is requested after the initial filing of
a Section 242.094 action through the filing of an amended or
supplemental pleading, an affected facility must elect arbitration
not later than the 10th day after the date on which the amended or
supplemental pleading is served on the affected facility or the
facility's counsel.
(c) The department may elect arbitration under this
subchapter by filing the election with the court in which the
lawsuit is pending and by notifying the facility of the election not
later than the date on which the facility may elect arbitration
under Subsection (b).
(d) Arbitration may not be used to resolve a dispute related
to an affected facility that has had an arbitration award levied
against it in the previous five years.
(e) If arbitration is not permitted under this subchapter or
the election of arbitration is not timely filed:
(1) the court shall dismiss the arbitration election
and retain jurisdiction of the lawsuit; and
(2) the State Office of Administrative Hearings shall
dismiss the arbitration and does not have jurisdiction over the
lawsuit.
(f) An election to engage in arbitration under this
subchapter is irrevocable and binding on the facility and the
department.
Sec. 247.083. ARBITRATION PROCEDURES. (a) The arbitration
shall be conducted by an arbitrator.
(b) The arbitration and the appointment of the arbitrator
shall be conducted in accordance with rules adopted by the chief
administrative law judge of the State Office of Administrative
Hearings. Before adopting rules under this subsection, the chief
administrative law judge shall consult with the department and
shall consider appropriate rules developed by any nationally
recognized association that performs arbitration services.
(c) The party that elects arbitration shall pay the cost of
the arbitration. The total fees and expenses paid for an arbitrator
for a day may not exceed $1,000.
(d) The State Office of Administrative Hearings may
designate a nationally recognized association that performs
arbitration services to conduct arbitrations under this subchapter
and may, after consultation with the department, contract with that
association for the arbitrations.
(e) On request by the department, the attorney general may
represent the department in the arbitration.
Sec. 247.084. ARBITRATOR QUALIFICATIONS. Each arbitrator
must be on an approved list of a nationally recognized association
that performs arbitration services or be otherwise qualified as
provided in the rules adopted under Section 247.083(b).
Sec. 247.085. ARBITRATOR SELECTION. The arbitrator shall
be appointed in accordance with the rules adopted under Section
247.083(b).
Sec. 247.086. ARBITRATOR DUTIES. The arbitrator shall:
(1) protect the interests of the department and the
facility;
(2) ensure that all relevant evidence has been
disclosed to the arbitrator, department, and facility; and
(3) render an order consistent with this chapter and
the rules adopted under this chapter.
Sec. 247.087. SCHEDULING OF ARBITRATION. (a) The
arbitrator conducting the arbitration shall schedule arbitration
to be held not later than the 90th day after the date the arbitrator
is selected and shall notify the department and the facility of the
scheduled date.
(b) The arbitrator may grant a continuance of the
arbitration at the request of the department or facility. The
arbitrator may not unreasonably deny a request for a continuance.
Sec. 247.088. EXCHANGE AND FILING OF INFORMATION. Not
later than the seventh day before the first day of arbitration, the
department and the facility shall exchange and file with the
arbitrator:
(1) all documentary evidence not previously exchanged
and filed that is relevant to the dispute; and
(2) information relating to a proposed resolution of
the dispute.
Sec. 247.089. ATTENDANCE. (a) The arbitrator may proceed
in the absence of any party or representative of a party who, after
notice of the proceeding, fails to be present or to obtain a
postponement.
(b) An arbitrator may not make an order solely on the
default of a party and shall require the party who is present to
submit evidence, as required by the arbitrator, before making an
award.
Sec. 247.090. TESTIMONY; RECORD. (a) The arbitrator may
require witnesses to testify under oath and shall require testimony
under oath if requested by the department or the facility.
(b) The department shall make an electronic recording of the
proceeding.
(c) An official stenographic record of the proceeding is not
required, but the department or the facility may make a
stenographic record. The party that makes the stenographic record
shall pay the expense of having the record made.
Sec. 247.091. EVIDENCE. (a) The department or the facility
may offer evidence and shall produce additional evidence as the
arbitrator considers necessary to understand and resolve the
dispute.
(b) The arbitrator is the judge of the relevance and
materiality of the evidence offered. Strict conformity to rules
applicable to judicial proceedings is not required.
Sec. 247.092. CLOSING STATEMENTS; BRIEFS. The department
and the facility may present closing statements, but the record
does not remain open for written briefs unless required by the
arbitrator.
Sec. 247.093. EX PARTE CONTACTS PROHIBITED. (a) Except as
provided by Subsection (b), the department and the facility may not
communicate with an arbitrator other than at an oral hearing unless
the parties and the arbitrator agree otherwise.
(b) Any oral or written communication, other than a
communication authorized under Subsection (a), from the parties to
an arbitrator shall be directed to the association that is
conducting the arbitration or, if there is no association
conducting the arbitration, to the State Office of Administrative
Hearings for transmittal to the arbitrator.
Sec. 247.094. ORDER. (a) The arbitrator may enter any
order that may be entered by the department, board, commissioner,
or court under this chapter in relation to a dispute described by
Section 247.081.
(b) The arbitrator shall enter the order not later than the
60th day after the last day of the arbitration.
(c) The arbitrator shall base the order on the facts
established at arbitration, including stipulations of the parties,
and on the law as properly applied to those facts.
(d) The order must:
(1) be in writing;
(2) be signed and dated by the arbitrator; and
(3) include a statement of the arbitrator's decision
on the contested issues and the department's and facility's
stipulations on uncontested issues.
(e) The arbitrator shall file a copy of the order with the
department and shall notify the department and the facility in
writing of the decision.
Sec. 247.095. EFFECT OF ORDER. An order of an arbitrator
under this subchapter is final and binding on all parties. Except
as provided by Section 247.097, there is no right to appeal.
Sec. 247.096. CLERICAL ERROR. For the purpose of
correcting a clerical error, an arbitrator retains jurisdiction of
the award until the 20th day after the date of the award.
Sec. 247.097. COURT VACATING ORDER. (a) On a finding
described by Subsection (b), a court shall:
(1) on application of a facility, vacate an
arbitrator's order with respect to an arbitration conducted at the
election of the department; or
(2) on application of the department, vacate an
arbitrator's order with respect to an arbitration conducted at the
election of a facility.
(b) A court shall vacate an arbitrator's order under
Subsection (a) only on a finding that:
(1) the order was procured by corruption, fraud, or
misrepresentation;
(2) the decision of the arbitrator was arbitrary or
capricious and against the weight of the evidence; or
(3) the order exceeded the jurisdiction of the
arbitrator under Section 247.094(a).
(c) If the order is vacated, the dispute shall be remanded
to the department for another arbitration proceeding.
(d) A suit to vacate an arbitrator's order must be filed not
later than the 30th day after:
(1) the date of the award; or
(2) the date the facility or department knew or should
have known of a basis for suit under this section, but in no event
later than the first anniversary of the date of the order.
(e) Venue for a suit to vacate an arbitrator's order is in
the county in which the arbitration was conducted.
Sec. 247.098. ENFORCEMENT OF CERTAIN ARBITRATION ORDERS FOR
CIVIL PENALTIES. (a) This section applies only to a suit for the
assessment of a civil penalty under Section 247.045 in which
binding arbitration has been elected under this subchapter as an
alternative to the judicial proceeding.
(b) On application of a party to the suit, the district
court in which the underlying suit has been filed shall enter a
judgment in accordance with the arbitrator's order unless, within
the time limit prescribed by Section 247.097(d)(2), a motion is
made to the court to vacate the arbitrator's order in accordance
with Section 247.097.
(c) A judgment filed under Subsection (b) is enforceable in
the same manner as any other judgment of the court. The court may
award costs for an application made under Subsection (b) and for any
proceedings held after the application is made.
(d) Subsection (b) does not affect the right of a party, in
accordance with Section 247.097 and within the time limit
prescribed by Section 247.097(d)(2), if applicable, to make a
motion to the court or initiate a proceeding in court as provided by
law to vacate the arbitrator's order or to vacate a judgment of the
court entered in accordance with the arbitrator's order.
SECTION 3. Section 531.058, Government Code, is amended by
amending Subsection (a) and adding Subsection (d) to read as
follows:
(a) The commission by rule shall establish an informal
dispute resolution process in accordance with this section. The
process must provide for adjudication by an appropriate
disinterested person of disputes relating to a proposed enforcement
action or related proceeding of the Texas Department of Human
Services under Section 32.021(d), Human Resources Code, or Chapter
242, 247, or 252, Health and Safety Code. The informal dispute
resolution process must require:
(1) an [the] institution or facility to request
informal dispute resolution not later than the 10th calendar day
after notification by the department of the violation of a standard
or standards; and
(2) the commission to complete the process not later
than:
(A) the 30th calendar day after receipt of a
request from an [the] institution or facility, other than an
assisted living facility, for informal dispute resolution; or
(B) the 90th calendar day after receipt of a
request from an assisted living facility for informal dispute
resolution[; and
[(3) any individual representing an institution or
facility in an informal dispute resolution process to register with
the commission and disclose the following:
[(A) the individual's employment history during
the preceding five years, including employment in regulatory
agencies of this state and other states;
[(B) ownership, including the identity of the
controlling person or persons, of the institution or facility the
individual is representing before the commission; and
[(C) the identity of other entities the
individual represents or has represented before the commission
during the previous 24 months].
(d) The commission shall use a negotiated rulemaking
process and engage a qualified impartial third party as provided by
Section 2009.053, with the goal of adopting rules that are fair and
impartial to all parties not later than January 1, 2015. This
subsection expires September 1, 2015.
SECTION 4. Section 247.051, Health and Safety Code, as
amended by this Act, and Section 247.081, Health and Safety Code, as
added by this Act, apply only to disputes described by those
sections, as amended or added, that occur on or after the effective
date of this Act. A dispute that occurs before the effective date
of this Act is governed by the law applicable to the dispute
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 5. This Act takes effect September 1, 2013.
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