By: Watson S.B. No. 1350
(In the Senate - Filed February 28, 2019; March 7, 2019,
read first time and referred to Committee on Intergovernmental
Relations; April 23, 2019, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 6, Nays 0;
April 23, 2019, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1350 By: Alvarado
A BILL TO BE ENTITLED
AN ACT
relating to the creation and operations of a health care provider
participation program by a certain hospital district.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle D, Title 4, Health and Safety Code, is
amended by adding Chapter 298E to read as follows:
CHAPTER 298E. HEALTH CARE PROVIDER PARTICIPATION PROGRAM IN
CERTAIN HOSPITAL DISTRICTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 298E.001. DEFINITIONS. In this chapter:
(1) "Board" means the board of hospital managers of a
district.
(2) "District" means a hospital district to which this
chapter applies.
(3) "Institutional health care provider" means a
hospital that is not owned and operated by a federal, state, or
local government and provides inpatient hospital services.
(4) "Paying provider" means an institutional health
care provider required to make a mandatory payment under this
chapter.
(5) "Program" means a health care provider
participation program authorized by this chapter.
Sec. 298E.002. APPLICABILITY. This chapter applies only to
a hospital district created in a county with a population of more
than 800,000 that was not included in the boundaries of a hospital
district before September 1, 2003.
Sec. 298E.003. HEALTH CARE PROVIDER PARTICIPATION PROGRAM;
PARTICIPATION IN PROGRAM. The board of a district may authorize the
district to participate in a health care provider participation
program on the affirmative vote of a majority of the board, subject
to the provisions of this chapter.
Sec. 298E.004. EXPIRATION. (a) Subject to Section
298E.153(d), the authority of a district to administer and operate
a program under this chapter expires December 31, 2023.
(b) This chapter expires December 31, 2023.
SUBCHAPTER B. POWERS AND DUTIES OF BOARD
Sec. 298E.051. LIMITATION ON AUTHORITY TO REQUIRE MANDATORY
PAYMENT. The board of a district may require a mandatory payment
authorized under this chapter by an institutional health care
provider located in the district only in the manner provided by this
chapter.
Sec. 298E.052. RULES AND PROCEDURES. The board of a
district may adopt rules relating to the administration of the
program, including collection of the mandatory payments,
expenditures, audits, and any other administrative aspects of the
program.
Sec. 298E.053. INSTITUTIONAL HEALTH CARE PROVIDER
REPORTING. If the board of a district authorizes the district to
participate in a program under this chapter, the board shall
require each institutional health care provider located in the
district to submit to the district a copy of any financial and
utilization data required by and reported to the Department of
State Health Services under Sections 311.032 and 311.033 and any
rules adopted by the executive commissioner of the Health and Human
Services Commission to implement those sections.
SUBCHAPTER C. GENERAL FINANCIAL PROVISIONS
Sec. 298E.101. HEARING. (a) In each year that the board of
a district authorizes a program under this chapter, the board shall
hold a public hearing on the amounts of any mandatory payments that
the board intends to require during the year and how the revenue
derived from those payments is to be spent.
(b) Not later than the fifth day before the date of the
hearing required under Subsection (a), the board shall publish
notice of the hearing in a newspaper of general circulation in the
district and provide written notice of the hearing to each
institutional health care provider located in the district.
Sec. 298E.102. DEPOSITORY. (a) If the board of a district
requires a mandatory payment authorized under this chapter, the
board shall designate one or more banks as a depository for the
district's local provider participation fund.
(b) All funds collected by a district under this chapter
shall be secured in the manner provided for securing other funds of
the district.
Sec. 298E.103. LOCAL PROVIDER PARTICIPATION FUND;
AUTHORIZED USES OF MONEY. (a) If a district requires a mandatory
payment authorized under this chapter, the district shall create a
local provider participation fund.
(b) A district's local provider participation fund consists
of:
(1) all revenue received by the district attributable
to mandatory payments authorized under this chapter;
(2) money received from the Health and Human Services
Commission as a refund of an intergovernmental transfer under the
program, provided that the intergovernmental transfer does not
receive a federal matching payment; and
(3) the earnings of the fund.
(c) Money deposited to the local provider participation
fund of a district may be used only to:
(1) fund intergovernmental transfers from the
district to the state to provide the nonfederal share of Medicaid
payments for:
(A) uncompensated care payments to hospitals in
the Medicaid managed care service area in which the district is
located, if those payments are authorized under the Texas
Healthcare Transformation and Quality Improvement Program waiver
issued under Section 1115 of the federal Social Security Act (42
U.S.C. Section 1315);
(B) uniform rate enhancements for hospitals in
the Medicaid managed care service area in which the district is
located;
(C) payments available under another waiver
program authorizing payments that are substantially similar to
Medicaid payments to hospitals described by Paragraph (A) or (B);
or
(D) any reimbursement to hospitals for which
federal matching funds are available;
(2) subject to Section 298E.151(d), pay the
administrative expenses of the district in administering the
program, including collateralization of deposits;
(3) refund a mandatory payment collected in error from
a paying provider;
(4) refund to paying providers a proportionate share
of the money that the district:
(A) receives from the Health and Human Services
Commission that is not used to fund the nonfederal share of Medicaid
supplemental payment program payments; or
(B) determines cannot be used to fund the
nonfederal share of Medicaid supplemental payment program
payments;
(5) transfer funds to the Health and Human Services
Commission if the district is legally required to transfer the
funds to address a disallowance of federal matching funds with
respect to programs for which the district made intergovernmental
transfers described by Subdivision (1); and
(6) reimburse the district if the district is required
by the rules governing the uniform rate enhancement program
described by Subdivision (1)(B) to incur an expense or forego
Medicaid reimbursements from the state because the balance of the
local provider participation fund is not sufficient to fund that
rate enhancement program.
(d) Money in the local provider participation fund of a
district may not be commingled with other district funds.
(e) Notwithstanding any other provision of this chapter,
with respect to an intergovernmental transfer of funds described by
Subsection (c)(1) made by a district, any funds received by the
state, district, or other entity as a result of that transfer may
not be used by the state, district, or any other entity to:
(1) expand Medicaid eligibility under the Patient
Protection and Affordable Care Act (Pub. L. No. 111-148) as amended
by the Health Care and Education Reconciliation Act of 2010 (Pub. L.
No. 111-152); or
(2) fund the nonfederal share of payments to hospitals
available through the Medicaid disproportionate share hospital
program or the delivery system reform incentive payment program.
SUBCHAPTER D. MANDATORY PAYMENTS
Sec. 298E.151. MANDATORY PAYMENTS BASED ON PAYING PROVIDER
NET PATIENT REVENUE. (a) Except as provided by Subsection (e), if
the board of a district authorizes a health care provider
participation program under this chapter, the board may require an
annual mandatory payment to be assessed on the net patient revenue
of each institutional health care provider located in the district.
The board may provide for the mandatory payment to be assessed
quarterly. In the first year in which the mandatory payment is
required, the mandatory payment is assessed on the net patient
revenue of an institutional health care provider as reported in the
provider's Medicare cost report submitted for the most recent
fiscal year for which the provider submitted a Medicare cost
report. If the mandatory payment is required, the district shall
update the amount of the mandatory payment on an annual basis.
(b) The amount of a mandatory payment assessed under this
chapter by the board of a district must be uniformly proportionate
with the amount of net patient revenue generated by each paying
provider in the district as permitted under federal law. A health
care provider participation program authorized under this chapter
may not hold harmless any institutional health care provider
located in the district, as required under 42 U.S.C. Section
1396b(w).
(c) If the board of a district requires a mandatory payment
authorized under this chapter, the board shall set the amount of the
mandatory payment, subject to the limitations of this chapter. The
aggregate amount of the mandatory payments required of all paying
providers in the district may not exceed six percent of the
aggregate net patient revenue from hospital services provided by
all paying providers in the district.
(d) Subject to Subsection (c), if the board of a district
requires a mandatory payment authorized under this chapter, the
board shall set the mandatory payments in amounts that in the
aggregate will generate sufficient revenue to cover the
administrative expenses of the district for activities under this
chapter and to fund an intergovernmental transfer described by
Section 298E.103(c)(1). The annual amount of revenue from
mandatory payments that shall be paid for administrative expenses
by the district is $150,000, plus the cost of collateralization of
deposits, regardless of actual expenses.
(e) A paying provider may not add a mandatory payment
required under this section as a surcharge to a patient.
(f) A mandatory payment assessed under this chapter is not a
tax for hospital purposes for purposes of Section 4, Article IX,
Texas Constitution, or Section 281.045 of this code.
Sec. 298E.152. ASSESSMENT AND COLLECTION OF MANDATORY
PAYMENTS. (a) A district may designate an official of the
district or contract with another person to assess and collect the
mandatory payments authorized under this chapter.
(b) The person charged by the district with the assessment
and collection of mandatory payments shall charge and deduct from
the mandatory payments collected for the district a collection fee
in an amount not to exceed the person's usual and customary charges
for like services.
(c) If the person charged with the assessment and collection
of mandatory payments is an official of the district, any revenue
from a collection fee charged under Subsection (b) shall be
deposited in the district general fund and, if appropriate, shall
be reported as fees of the district.
Sec. 298E.153. PURPOSE; CORRECTION OF INVALID PROVISION OR
PROCEDURE; LIMITATION OF AUTHORITY. (a) The purpose of this
chapter is to authorize a district to establish a program to enable
the district to collect mandatory payments from institutional
health care providers to fund the nonfederal share of a Medicaid
supplemental payment program or the Medicaid managed care rate
enhancements for hospitals to support the provision of health care
by institutional health care providers located in the district to
district residents in need of health care.
(b) This chapter does not authorize a district to collect
mandatory payments for the purpose of raising general revenue or
any amount in excess of the amount reasonably necessary to fund the
nonfederal share of a Medicaid supplemental payment program or
Medicaid managed care rate enhancements for hospitals and to cover
the administrative expenses of the district associated with
activities under this chapter.
(c) To the extent any provision or procedure under this
chapter causes a mandatory payment authorized under this chapter to
be ineligible for federal matching funds, the board of a district
may provide by rule for an alternative provision or procedure that
conforms to the requirements of the federal Centers for Medicare
and Medicaid Services. A rule adopted under this section may not
create, impose, or materially expand the legal or financial
liability or responsibility of the district or an institutional
health care provider in the district beyond the provisions of this
chapter. This section does not require the board to adopt a rule.
(d) A district may only assess and collect a mandatory
payment authorized under this chapter if a waiver program, uniform
rate enhancement, or reimbursement described by Section
298E.103(c)(1) is available to the district.
SECTION 2. As soon as practicable after the expiration of
the authority of a hospital district to administer and operate a
health care provider participation program under Chapter 298E,
Health and Safety Code, as added by this Act, the board of hospital
managers of the hospital district shall transfer to each
institutional health care provider in the district that provider's
proportionate share of any remaining funds in any local provider
participation fund created by the district under Section 298E.103,
Health and Safety Code, as added by this Act.
SECTION 3. If before implementing any provision of this Act
a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2019.
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