By: Raymond (Senate Sponsor - Zaffirini) H.B. No. 2590
(In the Senate - Received from the House May 1, 2017;
May 11, 2017, read first time and referred to Committee on Health &
Human Services; May 22, 2017, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 8, Nays 0;
May 22, 2017, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR H.B. No. 2590 By: Watson
A BILL TO BE ENTITLED
AN ACT
relating to the administrative penalty, amelioration, and informal
dispute resolution processes for providers participating in
certain Medicaid waiver programs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 161.088, Human Resources Code, as added
by Chapters 826 (H.B. 4001) and 1200 (S.B. 1385), Acts of the 84th
Legislature, Regular Session, 2015, is redesignated as Section
161.089, Human Resources Code, and amended to read as follows:
Sec. 161.089 [161.088]. ADMINISTRATIVE PENALTIES. (a)
This section applies to the following waiver programs established
under Section 1915(c), Social Security Act (42 U.S.C. Section
1396n(c)), and administered by the commission [department] to serve
persons with an intellectual or developmental disability:
(1) the home and community-based services (HCS) waiver
program; and
(2) the Texas home living (TxHmL) waiver program.
(b) The commission [department] may assess and collect an
administrative penalty against a provider who participates in a
program to which this section applies for a violation of a law or
rule relating to the program. If the commission [department]
assesses an administrative penalty against a provider for a
violation of a law or rule, the commission [department] may not
impose a payment hold against or otherwise withhold contract
payments from the provider for the same violation of a law or rule.
(c) After consulting with appropriate stakeholders, the
executive commissioner shall develop and adopt rules regarding the
imposition of administrative penalties under this section. The
rules must:
(1) specify the types of violations that warrant
imposition of an administrative penalty;
(2) establish a schedule of progressive
administrative penalties in accordance with the relative type,
frequency, and seriousness of a violation;
(3) prescribe reasonable amounts to be imposed for
each violation giving rise to an administrative penalty, subject to
Subdivision (4);
(4) authorize the imposition of an administrative
penalty in an amount not to exceed $5,000 for each violation;
(5) provide that a provider commits a separate
violation each day the provider continues to violate the law or
rule;
(6) ensure standard and consistent application of
administrative penalties throughout the state; and
(7) provide for an administrative appeals process to
adjudicate claims and appeals relating to the imposition of an
administrative penalty under this section that is in accordance
with Chapter 2001, Government Code.
(d) [In specifying the types of violations that warrant
imposition of an administrative penalty under Subsection (c), the
executive commissioner shall specify the types of minor violations
that allow a provider an opportunity to take corrective action
before a penalty is imposed.
[(e)] In determining the types of violations that warrant
imposition of an administrative penalty and in establishing the
schedule of progressive administrative penalties and penalty
amounts under Subsection (c), the executive commissioner must
consider:
(1) the seriousness of a violation, including:
(A) the nature, circumstances, extent, and
gravity of the violation; and
(B) the hazard to the health or safety of
recipients resulting from the violation;
(2) the provider's history of previous violations;
(3) whether the provider:
(A) had prior knowledge of the violation,
including whether the provider identified the violation through the
provider's internal quality assurance process; and
(B) made any efforts to mitigate or correct the
identified violation;
(4) the penalty amount necessary to deter future
violations; and
(5) any other matter justice may require.
(e) Except as provided by Subsection (f), the executive
commissioner by rule [(f) In lieu of imposing an administrative
penalty under this section, the department] shall provide to
[allow] a provider who has implemented a plan of correction [found
to have committed a minor violation specified by rule in accordance
with Subsection (d) to have] a reasonable period of time following
[that is not less than 45 days after] the date the commission
[department] sends notice to the provider of the violation to
correct [take corrective action regarding] the violation before the
commission may assess an administrative penalty. The period may
not be less than 45 days [department may not allow time for
corrective action for any violation that is not a minor violation].
(f) The commission may assess an administrative penalty
without providing a reasonable period of time to a provider to
correct the violation if the violation:
(1) represents a pattern of violation that results in
actual harm;
(2) is widespread in scope and results in actual harm;
(3) is widespread in scope and constitutes a potential
for actual harm;
(4) constitutes an immediate threat to the health or
safety of a recipient;
(5) substantially limits the provider's ability to
provide care; or
(6) is a violation in which a provider:
(A) wilfully interferes with the work of a
representative of the commission or the enforcement of a law
relating to a program to which this section applies;
(B) fails to pay a penalty assessed by the
commission under this section not later than the 10th day after the
date the assessment of the penalty becomes final, subject to
Section 161.0891; or
(C) fails to submit a plan of correction not
later than the 10th day after the date the provider receives a
statement of the violation.
(g) Notwithstanding any other provision of this section, an
administrative penalty ceases to be incurred on the date a
violation is corrected.
(h) In this section:
(1) "Actual harm" means an observed, documented,
measured, or diagnosed injury or outcome that causes a serious or
significant impairment or reduction of a recipient's physical,
mental, or emotional well-being, including death. The term does
not include a physical, emotional, or financial injury that
constitutes minor harm.
(2) "Immediate threat to the health or safety of a
recipient" means a situation that caused, or is likely to cause,
actual harm to a recipient.
(3) "Minor harm" means a physical, emotional, or
financial injury that is:
(A) temporary in duration and transient in
effect, including:
(i) a temporary change in mood; and
(ii) a temporary reduction in self-esteem
that does not have a permanent or prolonged effect on the
recipient's behavior; or
(B) limited in scope or impact, including:
(i) an injury that does not represent a risk
of self-harm, harm to others, or damage to property; and
(ii) a financial loss that represents less
than 10 percent of a recipient's financial resources or personal
property.
(4) "Pattern of violation" means repeated, but not
pervasive, failures of a provider to comply with a law relating to a
program to which this section applies that:
(A) result in a violation; and
(B) are found throughout the services provided by
the provider or that affect or involve the same recipients or
provider employees or volunteers.
(5) "Recipient" means a person served by a program to
which this section applies.
(6) "Widespread in scope" means a violation of a law
relating to a program to which this section applies that:
(A) is pervasive throughout the services
provided by the provider; or
(B) represents a systemic failure by the provider
that affects or has the potential to affect a large portion of or
all of the recipients.
SECTION 2. Subchapter D, Chapter 161, Human Resources Code,
is amended by adding Sections 161.0891 and 161.0892 to read as
follows:
Sec. 161.0891. AMELIORATION PROCESS. (a) In lieu of
demanding payment of an administrative penalty assessed under
Section 161.089, the commission may, in accordance with this
section, allow the provider subject to the penalty to use, under the
supervision of the commission, any portion of the amount of the
penalty to ameliorate the violation or to improve services in the
waiver program in which the provider participates.
(b) The commission shall offer amelioration to a provider
under this section not later than the 10th day after the date the
provider receives from the commission a final notification of the
assessment of an administrative penalty that is sent to the
provider after an informal dispute resolution process but before an
administrative hearing.
(c) A provider to whom amelioration has been offered must
file a plan for amelioration not later than the 45th day after the
date the provider receives the offer of amelioration from the
commission. In submitting the plan, the provider must agree to
waive the provider's right to an administrative hearing if the
commission approves the plan.
(d) At a minimum, a plan for amelioration must:
(1) propose changes to the management or operation of
the waiver program in which the provider participates that will
improve services to or quality of care for recipients under the
program;
(2) identify, through measurable outcomes, the ways in
which and the extent to which the proposed changes will improve
services to or quality of care for recipients under the waiver
program;
(3) establish clear goals to be achieved through the
proposed changes;
(4) establish a timeline for implementing the proposed
changes; and
(5) identify specific actions necessary to implement
the proposed changes.
(e) The commission may require that an amelioration plan
propose changes that would result in conditions that exceed the
requirements of a law or rule relating to the waiver program in
which the provider participates.
(f) The commission shall approve or deny an amelioration
plan not later than the 45th day after the date the commission
receives the plan. On approval of a provider's plan, the commission
or the State Office of Administrative Hearings, as appropriate,
shall deny a pending request for a hearing submitted by the
provider.
(g) The commission may not offer amelioration to a provider:
(1) more than three times in a two-year period; or
(2) more than one time in a two-year period for the
same or similar violation.
Sec. 161.0892. INFORMAL DISPUTE RESOLUTION. (a) The
executive commissioner 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 commission against a provider
participating in a waiver program described by Section 161.089.
The informal dispute resolution process must require:
(1) a provider participating in a waiver program
described by Section 161.089 to request informal dispute resolution
not later than the 10th calendar day after the date of notification
by the commission of the violation of a law or rule relating to the
program; and
(2) the commission to complete the process not later
than the 30th calendar day after the date of receipt of a request
from a provider for informal dispute resolution.
(b) As part of the informal dispute resolution process
established under this section, the commission shall contract with
an appropriate disinterested person who is a nonprofit organization
to adjudicate disputes between a provider participating in a
program described by Section 161.089 and the commission concerning
a statement of violations prepared by the commission. Section
2009.053, Government Code, does not apply to the selection of an
appropriate disinterested person under this subsection. The person
with whom the commission contracts shall adjudicate all disputes
described by this subsection.
(c) The executive commissioner shall adopt rules to
adjudicate claims in contested cases.
(d) The commission may not delegate its responsibility to
administer the informal dispute resolution process established by
this section to another state agency.
SECTION 3. As soon as practicable after the effective date
of this Act, the executive commissioner of the Health and Human
Services Commission shall adopt the rules necessary to implement
the changes in law made by this Act.
SECTION 4. This Act takes effect September 1, 2017.
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