4 | 13 | | AN ACT |
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5 | 14 | | relating to merger agreements among certain hospitals; authorizing |
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6 | 15 | | fees. |
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7 | 16 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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8 | 17 | | SECTION 1. Subtitle F, Title 4, Health and Safety Code, is |
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9 | 18 | | amended by adding Chapter 314A to read as follows: |
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10 | 19 | | CHAPTER 314A. MERGER AGREEMENTS AMONG CERTAIN HOSPITALS |
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11 | 20 | | SUBCHAPTER A. GENERAL PROVISIONS |
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12 | 21 | | Sec. 314A.001. DEFINITIONS. In this chapter: |
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13 | 22 | | (1) "Attorney general" means the attorney general of |
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14 | 23 | | Texas or any assistant attorney general acting under the direction |
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15 | 24 | | of the attorney general of Texas. |
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16 | 25 | | (2) "Designated agency" means the state agency |
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17 | 26 | | designated by the governor under Section 314A.004. |
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18 | 27 | | (3) "Hospital" means a nonpublic general hospital that |
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19 | 28 | | is licensed under Chapter 241 and is not maintained or operated by a |
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20 | 29 | | political subdivision of this state. |
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21 | 30 | | (4) "Merger agreement" or "merger" means an agreement |
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22 | 31 | | among two or more hospitals for the consolidation by merger or other |
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23 | 32 | | acquisition or transfer of assets by which ownership or control |
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24 | 33 | | over substantially all of the stock, assets, or activities of one or |
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25 | 34 | | more previously licensed and operating hospitals is placed under |
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26 | 35 | | the control of another licensed hospital or hospitals or another |
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27 | 36 | | entity that controls the hospitals. |
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28 | 37 | | (5) "State agency" means a department, commission, |
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29 | 38 | | board, office, or other agency in the executive branch of state |
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30 | 39 | | government that is created by the constitution or a statute of this |
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31 | 40 | | state. |
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32 | 41 | | Sec. 314A.002. APPLICABILITY. This chapter applies only to |
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33 | 42 | | a merger agreement among hospitals each of which is located within a |
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34 | 43 | | county that: |
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35 | 44 | | (1) contains two or more hospitals; and |
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36 | 45 | | (2) has a population of: |
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37 | 46 | | (A) less than 100,000 and is not adjacent to a |
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38 | 47 | | county with a population of 250,000 or more; or |
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39 | 48 | | (B) more than 100,000 and less than 150,000 and |
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40 | 49 | | is not adjacent to a county with a population of 100,000 or more. |
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41 | 50 | | Sec. 314A.003. LEGISLATIVE FINDINGS AND PURPOSES; GRANT OF |
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42 | 51 | | ANTITRUST IMMUNITY. (a) The legislature finds that: |
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43 | 52 | | (1) a merger among hospitals may benefit the public by |
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44 | 53 | | maintaining or improving the quality, efficiency, and |
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45 | 54 | | accessibility of health care services offered to the public; and |
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46 | 55 | | (2) the benefits described by Subdivision (1) |
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47 | 56 | | resulting from the merger may outweigh any anticompetitive effects |
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48 | 57 | | of joining together competitors to address unique challenges in |
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49 | 58 | | providing health care services in rural areas. |
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50 | 59 | | (b) The legislature believes it is in the state's best |
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51 | 60 | | interest to supplant state and federal antitrust laws with a |
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52 | 61 | | process for regulatory approval and active supervision by the |
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53 | 62 | | designated agency as provided by this chapter. It is the intent of |
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54 | 63 | | the legislature that this chapter immunize from all federal and |
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55 | 64 | | state antitrust laws the execution of merger agreements approved |
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56 | 65 | | under this chapter and post-merger activities supervised under this |
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57 | 66 | | chapter. |
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58 | 67 | | (c) Nothing in this chapter affects antitrust immunity that |
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59 | 68 | | may be provided through another provision of state law. |
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60 | 69 | | Sec. 314A.004. DESIGNATION OF SUPERVISING STATE AGENCY. |
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61 | 70 | | (a) The governor shall designate an appropriate state agency, |
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62 | 71 | | other than the office of the attorney general, to: |
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63 | 72 | | (1) review and approve or deny applications submitted |
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64 | 73 | | under this chapter for certificates of public advantage; and |
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65 | 74 | | (2) supervise as provided by Subchapter C the |
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66 | 75 | | activities for which a certificate of public advantage is issued. |
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67 | 76 | | (b) After the governor designates a state agency under |
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68 | 77 | | Subsection (a), the governor may designate another appropriate |
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69 | 78 | | state agency under that subsection at any time. |
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70 | 79 | | (c) A change in the designation of a state agency made under |
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71 | 80 | | this section does not affect the validity of any action taken under |
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72 | 81 | | this chapter by a predecessor designated agency. |
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73 | 82 | | Sec. 314A.005. RULEMAKING. The designated agency shall |
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74 | 83 | | adopt rules for the administration and implementation of this |
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75 | 84 | | chapter. |
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76 | 85 | | SUBCHAPTER B. CERTIFICATE OF PUBLIC ADVANTAGE |
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77 | 86 | | Sec. 314A.051. REVIEW AND CERTIFICATION OF MERGER |
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78 | 87 | | AGREEMENTS REQUIRED. (a) Two or more hospitals may negotiate and |
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79 | 88 | | enter into a merger agreement, subject to approval by the |
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80 | 89 | | designated agency as provided by this subchapter. |
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81 | 90 | | (b) No merger agreement shall receive immunity under this |
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82 | 91 | | chapter unless the designated agency issues a certificate of public |
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83 | 92 | | advantage governing the merger agreement. |
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84 | 93 | | Sec. 314A.052. APPLICATION. (a) One or more parties to a |
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85 | 94 | | merger agreement may submit an application to the designated agency |
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86 | 95 | | for a certificate of public advantage governing the merger |
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87 | 96 | | agreement. The application must include a written copy of the |
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88 | 97 | | merger agreement and describe the nature and scope of the merger. |
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89 | 98 | | (b) If an applicant believes the documents or other |
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90 | 99 | | information required to be submitted with an application under |
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91 | 100 | | Subsection (a) contains proprietary information that is required to |
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92 | 101 | | remain confidential, the applicant shall: |
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93 | 102 | | (1) clearly identify the information; and |
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94 | 103 | | (2) submit duplicate applications, one application |
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95 | 104 | | that has complete information for the designated agency's use and |
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96 | 105 | | one redacted application that will be made available for public |
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97 | 106 | | release. |
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98 | 107 | | (c) A copy of the application and copies of all additional |
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99 | 108 | | related materials must be submitted to the attorney general and to |
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100 | 109 | | the designated agency at the same time. |
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101 | 110 | | Sec. 314A.053. APPLICATION FEE. (a) The designated agency |
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102 | 111 | | may assess a fee for filing an application under Section 314A.052 in |
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103 | 112 | | an amount not to exceed $75,000. The amount of the fee must be |
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104 | 113 | | sufficient to cover the reasonable costs of the designated agency |
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105 | 114 | | and attorney general in reviewing and approving or denying |
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106 | 115 | | applications under this subchapter. |
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107 | 116 | | (b) Fees collected under this section may be appropriated to |
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108 | 117 | | the designated agency for purposes of covering costs relating to |
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109 | 118 | | the implementation and administration of this chapter, including |
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110 | 119 | | the supervision of hospitals under this chapter. |
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111 | 120 | | Sec. 314A.054. REVIEW OF APPLICATION BY DESIGNATED AGENCY; |
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112 | 121 | | GRANT OR DENIAL OF APPLICATION. (a) The designated agency shall |
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113 | 122 | | review an application for a certificate of public advantage in |
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114 | 123 | | accordance with the standard prescribed by Section 314A.056(a)(1). |
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115 | 124 | | (b) The designated agency shall grant or deny the |
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116 | 125 | | application not later than the 120th day after the date of the |
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117 | 126 | | filing of the application. The designated agency's decision must: |
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118 | 127 | | (1) be in writing; |
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119 | 128 | | (2) specify the basis for the decision; and |
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120 | 129 | | (3) provide a copy of the decision to the applicants on |
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121 | 130 | | the date of the decision. |
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122 | 131 | | Sec. 314A.055. REVIEW OF APPLICATION BY ATTORNEY GENERAL. |
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123 | 132 | | (a) The attorney general shall review an application for a |
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124 | 133 | | certificate of public advantage and all supporting documents and |
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125 | 134 | | information provided by the applicants. On completion of the |
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126 | 135 | | review and subject to Subsection (b), the attorney general shall |
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127 | 136 | | advise the designated agency whether: |
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128 | 137 | | (1) the proposed merger agreement would likely benefit |
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129 | 138 | | the public by maintaining or improving the quality, efficiency, and |
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130 | 139 | | accessibility of health care services offered to the public; and |
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131 | 140 | | (2) the likely benefits resulting from the proposed |
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132 | 141 | | merger agreement outweigh any disadvantages attributable to a |
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133 | 142 | | reduction in competition that may result from the proposed merger. |
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134 | 143 | | (b) The attorney general shall review an application for a |
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135 | 144 | | certificate of public advantage as soon as practicable, taking into |
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136 | 145 | | consideration the deadline prescribed by Section 314A.054. |
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137 | 146 | | (c) If the attorney general advises the designated agency to |
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138 | 147 | | deny an application, the attorney general shall state the basis and |
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139 | 148 | | reasons for the recommended denial. |
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140 | 149 | | Sec. 314A.056. ISSUANCE OF CERTIFICATE OF PUBLIC ADVANTAGE. |
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141 | 150 | | (a) The designated agency, after reviewing the application and |
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142 | 151 | | consulting with the attorney general in accordance with Section |
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143 | 152 | | 314A.055, shall issue a certificate of public advantage for a |
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144 | 153 | | merger agreement if: |
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145 | 154 | | (1) the designated agency determines under the |
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146 | 155 | | totality of the circumstances that: |
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147 | 156 | | (A) the proposed merger would likely benefit the |
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148 | 157 | | public by maintaining or improving the quality, efficiency, and |
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149 | 158 | | accessibility of health care services offered to the public; and |
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150 | 159 | | (B) the likely benefits resulting from the |
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151 | 160 | | proposed merger agreement described by Paragraph (A) outweigh any |
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152 | 161 | | disadvantages attributable to a reduction in competition that may |
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153 | 162 | | result from the proposed merger; and |
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154 | 163 | | (2) the application: |
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155 | 164 | | (A) provides specific evidence showing that the |
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156 | 165 | | proposed merger would likely benefit the public as described by |
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157 | 166 | | Subdivision (1)(A); |
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158 | 167 | | (B) explains in detail how the likely benefits |
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159 | 168 | | resulting from the proposed merger agreement outweigh any |
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160 | 169 | | disadvantages attributable to a reduction in competition as |
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161 | 170 | | described by Subdivision (1)(B); and |
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162 | 171 | | (C) sufficiently addresses the factors listed in |
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163 | 172 | | Subsection (b) and any other factor the designated agency may |
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164 | 173 | | require based on the circumstances specific to the application. |
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165 | 174 | | (b) In making the determination under Subsection (a)(1), |
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166 | 175 | | the designated agency shall consider the effect of the merger |
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167 | 176 | | agreement on the following nonexclusive list of factors: |
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168 | 177 | | (1) the quality and price of hospital and health care |
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169 | 178 | | services provided to citizens of this state; |
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170 | 179 | | (2) the preservation of sufficient hospitals within a |
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171 | 180 | | geographic area to ensure public access to acute care; |
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172 | 181 | | (3) the cost efficiency of services, resources, and |
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173 | 182 | | equipment provided or used by the hospitals that are a party to the |
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174 | 183 | | merger agreement; |
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175 | 184 | | (4) the ability of health care payors to negotiate |
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176 | 185 | | payment and service arrangements with hospitals proposed to be |
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177 | 186 | | merged under the agreement; and |
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178 | 187 | | (5) the extent of any reduction in competition among |
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179 | 188 | | physicians, allied health professionals, other health care |
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180 | 189 | | providers, or other persons providing goods or services to, or in |
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181 | 190 | | competition with, hospitals. |
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182 | 191 | | (c) The designated agency may include terms or conditions of |
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183 | 192 | | compliance in connection with a certificate of public advantage |
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184 | 193 | | issued under this subchapter if necessary to ensure that the |
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185 | 194 | | proposed merger likely benefits the public as specified in |
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186 | 195 | | Subsection (a)(1). |
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187 | 196 | | Sec. 314A.057. RECORDS. The designated agency shall |
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188 | 197 | | maintain records of all merger agreements the designated agency has |
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189 | 198 | | approved under this chapter, including any terms or conditions of |
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190 | 199 | | issuing a certificate of public advantage that are imposed by the |
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191 | 200 | | designated agency. |
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192 | 201 | | Sec. 314A.058. TERMINATION OF CERTIFICATE OF PUBLIC |
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193 | 202 | | ADVANTAGE BY HOSPITAL. A hospital resulting from a merger |
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194 | 203 | | agreement approved under this chapter may voluntarily terminate its |
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195 | 204 | | certificate of public advantage by giving the designated agency |
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196 | 205 | | notice at least 30 days before the date of the termination. |
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197 | 206 | | Sec. 314A.059. ANNUAL REVIEW OF CERTIFICATE. (a) The |
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198 | 207 | | designated agency shall annually review an approved certificate of |
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199 | 208 | | public advantage. |
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200 | 209 | | (b) The attorney general may annually review an approved |
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201 | 210 | | certificate of public advantage. |
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202 | 211 | | (c) The designated agency may not complete its annual review |
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203 | 212 | | of an approved certificate of public advantage under this section |
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204 | 213 | | until: |
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205 | 214 | | (1) the attorney general informs the designated agency |
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206 | 215 | | whether the attorney general intends to conduct any review of the |
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207 | 216 | | certificate of public advantage as authorized under this section; |
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208 | 217 | | and |
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209 | 218 | | (2) if the attorney general informs the designated |
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210 | 219 | | agency of the attorney general's intent to conduct a review of an |
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211 | 220 | | entity's approved certificate of public advantage, the attorney |
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212 | 221 | | general has had the opportunity to conduct the review. |
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213 | 222 | | SUBCHAPTER C. SUPERVISION OF MERGED HOSPITALS UNDER APPROVED |
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214 | 223 | | MERGER AGREEMENT |
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215 | 224 | | Sec. 314A.101. SUPERVISION OF MERGED HOSPITALS. The |
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216 | 225 | | designated agency shall supervise in the manner provided by this |
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217 | 226 | | subchapter each hospital operating under a certificate of public |
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218 | 227 | | advantage issued under this chapter to ensure that the immunized |
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219 | 228 | | conduct of a merged entity furthers the purposes of this chapter. |
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220 | 229 | | Sec. 314A.102. RATE REVIEW. (a) A change in rates for |
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221 | 230 | | hospital services by a hospital operating under a certificate of |
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222 | 231 | | public advantage issued under this chapter may not take effect |
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223 | 232 | | without prior approval of the designated agency as provided by this |
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224 | 233 | | section. |
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225 | 234 | | (b) At least 90 days before the implementation of any |
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226 | 235 | | proposed change in rates for inpatient or outpatient hospital |
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227 | 236 | | services and, if applicable, at least 60 days before the execution |
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228 | 237 | | of a reimbursement agreement with a third party payor, a hospital |
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229 | 238 | | operating under a certificate of public advantage shall submit to |
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230 | 239 | | the designated agency: |
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231 | 240 | | (1) any proposed change in rates for inpatient and |
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232 | 241 | | outpatient hospital services; |
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233 | 242 | | (2) if applicable, any change in reimbursement rates |
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234 | 243 | | under a reimbursement agreement with a third party payor; |
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235 | 244 | | (3) for an agreement with a third party payor, other |
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236 | 245 | | than an agreement described by Subdivision (4) or in which rates are |
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237 | 246 | | set under the Medicare or Medicaid program, information showing: |
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238 | 247 | | (A) that the hospital and the third party payor |
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239 | 248 | | have agreed to the proposed rates; |
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240 | 249 | | (B) whether the proposed rates are less than the |
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241 | 250 | | corresponding amounts in the producer price index published by the |
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242 | 251 | | Bureau of Labor Statistics of the United States Department of Labor |
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243 | 252 | | relating to the hospital services for which the rates are proposed |
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244 | 253 | | or a comparable price index chosen by the designated agency if the |
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245 | 254 | | producer price index described by this paragraph is abolished; and |
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246 | 255 | | (C) if the proposed rates are above the |
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247 | 256 | | corresponding amounts in the producer price index as described by |
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248 | 257 | | Paragraph (B), a justification for proposing rates above the |
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249 | 258 | | corresponding amounts in the producer price index; |
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250 | 259 | | (4) to the extent allowed by federal law, for an |
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251 | 260 | | agreement with a managed care organization that provides or |
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252 | 261 | | arranges for the provision of health care services under the |
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253 | 262 | | Medicare or Medicaid program, information showing: |
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254 | 263 | | (A) whether the proposed rates are different from |
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255 | 264 | | rates under an agreement that was in effect before the date the |
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256 | 265 | | applicable merger agreement took effect; |
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257 | 266 | | (B) whether the proposed rates are different from |
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258 | 267 | | the rates most recently approved by the designated agency for the |
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259 | 268 | | applicable hospital, if the designated agency has previously |
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260 | 269 | | approved rates for the applicable hospital following the issuance |
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261 | 270 | | of the certificate of public advantage under this chapter that |
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262 | 271 | | governs the hospital; and |
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263 | 272 | | (C) if the proposed rates exceed rates described |
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264 | 273 | | by Paragraph (A) or (B), a justification for proposing rates in |
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265 | 274 | | excess of those rates; and |
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266 | 275 | | (5) any information concerning costs, patient volume, |
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267 | 276 | | acuity, payor mix, and other information requested by the |
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268 | 277 | | designated agency. |
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269 | 278 | | (c) After reviewing the proposed change in rates submitted |
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270 | 279 | | under Subsection (b), the designated agency shall approve or deny |
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271 | 280 | | the proposed rate change. The designated agency shall approve the |
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272 | 281 | | proposed rate change if the designated agency determines that: |
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273 | 282 | | (1) the proposed rate change likely benefits the |
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274 | 283 | | public by maintaining or improving the quality, efficiency, and |
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275 | 284 | | accessibility of health care services offered to the public; and |
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276 | 285 | | (2) the proposed rate does not inappropriately exceed |
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277 | 286 | | competitive rates for comparable services in the hospital's market |
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278 | 287 | | area. |
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279 | 288 | | (d) If the designated agency determines that the proposed |
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280 | 289 | | rate change does not satisfy Subsection (c)(1) or (2), the |
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281 | 290 | | designated agency shall deny or modify the proposed rate change. |
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282 | 291 | | (e) The designated agency shall notify the hospital in |
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283 | 292 | | writing of the agency's decision to approve, deny, or modify the |
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284 | 293 | | proposed rate change not later than the 30th day before the |
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285 | 294 | | implementation date of the proposed change. |
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286 | 295 | | Sec. 314A.103. ANNUAL REPORT. Each hospital operating |
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287 | 296 | | under a certificate of public advantage shall submit an annual |
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288 | 297 | | report to the designated agency. The report must include: |
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289 | 298 | | (1) information about the extent of the benefits |
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290 | 299 | | attributable to the issuance of the certificate of public |
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291 | 300 | | advantage; |
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292 | 301 | | (2) if applicable, information about the hospital's |
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293 | 302 | | actions taken: |
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294 | 303 | | (A) in furtherance of any commitments made by the |
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295 | 304 | | parties to the merger; or |
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296 | 305 | | (B) to comply with terms imposed by the |
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297 | 306 | | designated agency as a condition for approval of the merger |
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298 | 307 | | agreement; |
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299 | 308 | | (3) a description of the activities conducted by the |
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300 | 309 | | hospital under the merger agreement; |
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301 | 310 | | (4) information relating to the price, cost, and |
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302 | 311 | | quality of and access to health care for the population served by |
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303 | 312 | | the hospital; and |
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304 | 313 | | (5) any other information required by the designated |
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305 | 314 | | agency to ensure compliance with this chapter, including |
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306 | 315 | | information relating to compliance with any terms or conditions for |
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307 | 316 | | issuance of the certificate of public advantage. |
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308 | 317 | | Sec. 314A.104. CORRECTIVE ACTION PLAN. (a) The designated |
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309 | 318 | | agency shall require a hospital operating under a certificate of |
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310 | 319 | | public advantage to adopt a plan to correct a deficiency in the |
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311 | 320 | | hospital's activities if the designated agency determines that an |
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312 | 321 | | activity of the hospital: |
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313 | 322 | | (1) does not benefit the public as described by |
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314 | 323 | | Section 314A.056(a)(1)(A); or |
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315 | 324 | | (2) no longer meets the standard prescribed by Section |
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316 | 325 | | 314A.056(a)(1). |
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317 | 326 | | (b) The corrective action plan must include each provision |
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318 | 327 | | required by the designated agency and must be submitted at the |
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319 | 328 | | agency's direction. |
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320 | 329 | | Sec. 314A.105. SUPERVISION FEE. (a) The designated agency |
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321 | 330 | | may assess an annual supervision fee in an amount that is at least |
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322 | 331 | | $75,000 but not more than $200,000 against each hospital operating |
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323 | 332 | | under a certificate of public advantage under this chapter. The |
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324 | 333 | | amount of the fee imposed on hospitals under this subsection must be |
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325 | 334 | | based on the assessment by the designated agency of the amount |
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326 | 335 | | needed to cover the reasonable costs incurred by the designated |
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327 | 336 | | agency in supervising hospitals under this subchapter and in |
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328 | 337 | | implementing and administering this chapter. |
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329 | 338 | | (b) Fees collected under this section may be appropriated to |
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330 | 339 | | the designated agency for purposes of covering costs relating to |
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331 | 340 | | the implementation and administration of this chapter, including |
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332 | 341 | | the supervision of hospitals under this chapter. |
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333 | 342 | | SUBCHAPTER D. ENFORCEMENT AUTHORITY BY DESIGNATED AGENCY |
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334 | 343 | | Sec. 314A.151. INVESTIGATION; REVOCATION OF CERTIFICATE. |
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335 | 344 | | With respect to each hospital resulting from a merger agreement for |
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336 | 345 | | which the designated agency issued a certificate of public |
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337 | 346 | | advantage under this chapter, and to ensure that the hospital's |
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338 | 347 | | activities continue to benefit the public under the standard |
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339 | 348 | | prescribed by Section 314A.056(a)(1) and the purposes of this |
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340 | 349 | | chapter, the designated agency may: |
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341 | 350 | | (1) investigate the hospital's activities; and |
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342 | 351 | | (2) require the hospital to perform a certain action |
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343 | 352 | | or refrain from a certain action or revoke the hospital's |
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344 | 353 | | certificate of public advantage, if the designated agency |
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345 | 354 | | determines that: |
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346 | 355 | | (A) the hospital is not complying with this |
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347 | 356 | | chapter or a term or condition of compliance with the certificate of |
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348 | 357 | | public advantage governing the hospital's immunized activities; |
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349 | 358 | | (B) the designated agency's approval and |
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350 | 359 | | issuance of the certificate of public advantage was obtained as a |
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351 | 360 | | result of material misrepresentation; |
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352 | 361 | | (C) the hospital has failed to pay any fee |
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353 | 362 | | required under this chapter; or |
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354 | 363 | | (D) the benefits resulting from the approved |
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355 | 364 | | merger no longer outweigh the disadvantages attributable to the |
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356 | 365 | | reduction in competition resulting from the approved merger. |
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357 | 366 | | Sec. 314A.152. JUDICIAL REVIEW OF DESIGNATED AGENCY ACTION. |
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358 | 367 | | (a) A person aggrieved by a decision of the designated agency in |
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359 | 368 | | granting, denying, or refusing to act on an application for a |
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360 | 369 | | certificate of public advantage submitted under Subchapter B or |
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361 | 370 | | revoking a certificate of public advantage issued under this |
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362 | 371 | | chapter may appeal the final order by filing a petition for judicial |
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363 | 372 | | review in a district court of Travis County. |
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364 | 373 | | (b) The filing of a petition for judicial review of a |
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365 | 374 | | decision by the designated agency to revoke a certificate of public |
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366 | 375 | | advantage stays enforcement of the agency's decision. |
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367 | 376 | | (c) Not later than the 45th day after the date a person files |
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368 | 377 | | a petition for judicial review under this section, the designated |
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369 | 378 | | agency shall submit to the district court the original copy or a |
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370 | 379 | | certified copy of the entirety of the agency's record regarding the |
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371 | 380 | | decision under review. By stipulation of all parties, the record |
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372 | 381 | | may be shortened. The district court may require or permit later |
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373 | 382 | | corrections or additions to the record. The district court may |
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374 | 383 | | extend the period prescribed by this subsection for submitting the |
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375 | 384 | | agency's record to the court. |
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376 | 385 | | (d) The district court shall conduct the review sitting |
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377 | 386 | | without a jury. |
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378 | 387 | | (e) The district court may reverse a decision by the |
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379 | 388 | | designated agency regarding revocation of a certificate of public |
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380 | 389 | | advantage if the court finds that the decision is: |
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381 | 390 | | (1) in violation of a constitutional or statutory |
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382 | 391 | | provision; |
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383 | 392 | | (2) in excess of the agency's statutory authority; |
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384 | 393 | | (3) made through unlawful procedure; |
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385 | 394 | | (4) arbitrary or capricious or characterized by abuse |
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386 | 395 | | of discretion or clearly unwarranted exercise of discretion; or |
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387 | 396 | | (5) unsupported by substantial and material evidence |
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388 | 397 | | in light of the record as a whole. |
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389 | 398 | | (f) Under Subsection (e)(5), in determining the |
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390 | 399 | | substantiality of the evidence, the district court: |
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391 | 400 | | (1) shall consider other evidence that detracts from |
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392 | 401 | | the substantiality; and |
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393 | 402 | | (2) may not substitute its judgment for the judgment |
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394 | 403 | | of the designated agency on the weight of the evidence as to a |
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395 | 404 | | question of fact. |
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396 | 405 | | (g) The district court shall issue a written decision |
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397 | 406 | | setting forth the court's findings of fact and conclusions of law. |
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398 | 407 | | The designated agency shall add the court's decision to the agency's |
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399 | 408 | | record. |
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400 | 409 | | SUBCHAPTER E. ATTORNEY GENERAL INVESTIGATION AND ENFORCEMENT |
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401 | 410 | | AUTHORITY |
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402 | 411 | | Sec. 314A.201. CIVIL INVESTIGATIVE DEMAND. (a) The |
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403 | 412 | | attorney general, at any time after an application is filed under |
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404 | 413 | | Section 314A.052 and before the designated agency makes a |
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405 | 414 | | determination on the application, or in connection with the |
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406 | 415 | | agency's annual review of a certificate of public advantage under |
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407 | 416 | | Section 314A.059, may require by civil investigative demand the |
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408 | 417 | | attendance and testimony of witnesses and the production of |
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409 | 418 | | documents in Travis County or the county in which the applicants are |
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410 | 419 | | located for the purpose of investigating whether the merger |
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411 | 420 | | agreement satisfies or, after issuance of the certificate of public |
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412 | 421 | | advantage, continues to satisfy the standard prescribed by Section |
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413 | 422 | | 314A.056(a)(1). |
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414 | 423 | | (b) All nonpublic documents produced for and testimony |
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415 | 424 | | given to the attorney general under Subsection (a) are subject to |
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416 | 425 | | the prohibitions on disclosure and use under Section 15.10(i), |
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417 | 426 | | Business & Commerce Code. |
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418 | 427 | | (c) The attorney general may seek an order from the district |
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419 | 428 | | court compelling compliance with a civil investigative demand |
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420 | 429 | | issued under this section. |
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421 | 430 | | Sec. 314A.202. ACTION TO REVOKE CERTIFICATE OF PUBLIC |
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422 | 431 | | ADVANTAGE FOLLOWING CHANGED CIRCUMSTANCES. (a) If, following an |
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423 | 432 | | annual review of a certificate of public advantage, the attorney |
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424 | 433 | | general determines that as a result of changed circumstances the |
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425 | 434 | | benefits resulting from a certified merger agreement as described |
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426 | 435 | | by Section 314A.056(a)(1)(A) no longer outweigh any disadvantages |
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427 | 436 | | attributable to a reduction in competition resulting from the |
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428 | 437 | | merger agreement, the attorney general may bring an action in a |
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429 | 438 | | district court in Travis County seeking to revoke the certificate |
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430 | 439 | | of public advantage in accordance with the procedures prescribed by |
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431 | 440 | | this section. |
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432 | 441 | | (b) Except as provided by Subsection (c), in an action |
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433 | 442 | | brought under this section, the attorney general has the burden of |
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434 | 443 | | establishing by clear and convincing evidence that as a result of |
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435 | 444 | | changed circumstances the benefits resulting from the certified |
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436 | 445 | | merger agreement and the unavoidable costs of revoking the |
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437 | 446 | | certificate of public advantage are outweighed by disadvantages |
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438 | 447 | | attributable to a reduction in competition resulting from the |
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439 | 448 | | merger agreement. |
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440 | 449 | | (c) In any action brought under this section, if the |
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441 | 450 | | attorney general first establishes by clear and convincing evidence |
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442 | 451 | | that the designated agency's certification was obtained as a result |
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443 | 452 | | of material misrepresentation to the designated agency or the |
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444 | 453 | | attorney general or as the result of coercion, threats, or |
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445 | 454 | | intimidation directed toward any party to the merger agreement, |
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446 | 455 | | then the parties to the merger agreement bear the burden of |
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447 | 456 | | establishing by clear and convincing evidence that despite changed |
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448 | 457 | | circumstances the benefits resulting from the certified merger |
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449 | 458 | | agreement and the unavoidable costs of revoking the certificate of |
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450 | 459 | | public advantage are not outweighed by disadvantages attributable |
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451 | 460 | | to a reduction in competition resulting from the merger agreement. |
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452 | 461 | | SECTION 2. As soon as practicable after the effective date |
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453 | 462 | | of this Act, the governor shall designate a state agency under |
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454 | 463 | | Section 314A.004, Health and Safety Code, as added by this Act. |
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455 | 464 | | SECTION 3. This Act takes effect September 1, 2019. |
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