Bill Text: TX SB267 | 2017-2018 | 85th Legislature | Comm Sub

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Bill Title: Relating to the licensing and regulation of hospitals in this state; increasing the amount of administrative penalties assessed or imposed against certain hospitals; authorizing the imposition of a fee.

Spectrum: Slight Partisan Bill (Democrat 4-2)

Status: (Engrossed - Dead) 2017-05-19 - Committee report sent to Calendars [SB267 Detail]

Download: Texas-2017-SB267-Comm_Sub.html

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By: Schwertner, et al. S.B. No. 267
(Price)

A BILL TO BE ENTITLED
AN ACT
relating to the licensing and regulation of hospitals in this
state; increasing the amount of administrative penalties assessed
or imposed against certain hospitals; authorizing the imposition of
a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 241.022(b), Health and Safety Code, is
amended to read as follows:
(b) The application must contain:
(1) the name and social security number of the sole
proprietor, if the applicant is a sole proprietor;
(2) the name and social security number of each
general partner who is an individual, if the applicant is a
partnership;
(3) the name and social security number of any
individual who has an ownership interest of more than five [25]
percent in the corporation, if the applicant is a corporation; and
(4) any other information that the department may
reasonably require.
SECTION 2. Subchapter B, Chapter 241, Health and Safety
Code, is amended by adding Section 241.0221 to read as follows:
Sec. 241.0221. CRIMINAL HISTORY BACKGROUND CHECK FOR
LICENSE APPLICANTS. (a) This section does not apply to a
governmental unit required to obtain a license under this chapter.
(b) The department shall conduct a criminal history
background check on each applicant for a license under this chapter
and, if the applicant is a partnership or corporation, each
individual named in the application under Section 241.022(b).
(c) The executive commissioner by rule shall:
(1) determine the manner by which an applicant or
individual is required to submit information for purposes of a
criminal history background check under this section; and
(2) establish criteria for determining whether an
applicant is eligible for a license under this chapter based on the
criminal history background check conducted under this section.
(d) The department may enter into an agreement with the
Department of Public Safety to conduct the criminal history
background check required under this section.
SECTION 3. Subchapter B, Chapter 241, Health and Safety
Code, is amended by adding Section 241.0261 to read as follows:
Sec. 241.0261. INFORMATION SHARING WITH OFFICE OF INSPECTOR
GENERAL. (a) The department in accordance with department rules
may share with the office of inspector general of the commission
information relating to an applicant for a hospital license under
this chapter or a hospital license holder.
(b) Any information shared by the department under this
section with the office of inspector general of the commission that
is confidential under Section 241.051 must remain confidential and
is not subject to disclosure under Chapter 552, Government Code.
(c) The executive commissioner shall adopt the rules
necessary to implement this section.
SECTION 4. Section 241.051, Health and Safety Code, is
amended by amending Subsection (a) and adding Subsections (a-1),
(a-2), and (a-3) to read as follows:
(a) The department shall conduct an [may make any]
inspection of each hospital licensed under this chapter as provided
by Subsections (a-1) and (a-2), and the department may make any
inspection, survey, or investigation [that] it considers
necessary. A representative of the department may enter the
premises of a hospital at any reasonable time to make an inspection,
a survey, or an investigation to assure compliance with or prevent a
violation of this chapter, the rules adopted under this chapter, an
order or special order of the commissioner, a special license
provision, a court order granting injunctive relief, or other
enforcement procedures. The department shall maintain the
confidentiality of hospital records as applicable under state or
federal law.
(a-1) The department shall adopt a schedule for the
inspection of each hospital licensed under this chapter so that 10
percent of the hospitals, or as near as possible to 10 percent, are
scheduled to be inspected each year. In scheduling a hospital for
inspection under this subsection, the department must consider an
accreditation, validation, or other full survey and must prioritize
the inspection of hospitals in accordance with risk factors the
department considers important, including:
(1) the date on which a hospital was last inspected;
(2) the number of deficiencies noted during the
previous inspection of a hospital; and
(3) the number of complaints received regarding a
hospital.
(a-2) Notwithstanding Subsection (a-1), the department
shall inspect a hospital licensed under this chapter at least once
every three years if the hospital:
(1) is not accredited by an accreditation body that is
approved by the Centers for Medicare and Medicaid Services; or
(2) does not meet the conditions of participation for
certification under Title XVIII of the Social Security Act (42
U.S.C. Section 1395 et seq.).
(a-3) The department may request a copy of a hospital's
latest accreditation survey at any time. The hospital shall comply
with the department's request.
SECTION 5. Subchapter C, Chapter 241, Health and Safety
Code, is amended by adding Section 241.0532 to read as follows:
Sec. 241.0532. EMERGENCY SUSPENSION. (a) The department
may issue an emergency order to suspend a license issued under this
chapter if the department has reasonable cause to believe that the
conduct of a license holder creates an immediate danger to public
health and safety. An emergency suspension is effective
immediately without a hearing on notice to the license holder.
(b) Before issuing an emergency order to suspend a license
under Subsection (a), the department must provide the license
holder the opportunity to respond to the department's findings.
(c) After the issuance of an emergency order under this
section, on written request of the license holder to the department
for a hearing, the department shall refer the matter to the State
Office of Administrative Hearings. An administrative law judge of
the office shall conduct a hearing not earlier than the 10th day or
later than the 30th day after the date the hearing request is
received by the department to determine if the emergency suspension
is to be continued, modified, or rescinded.
(d) The hearing and any appeal are governed by the
department's rules for a contested case hearing and Chapter 2001,
Government Code.
SECTION 6. Section 241.059, Health and Safety Code, is
amended by amending Subsections (b) and (c) and adding Subsections
(c-1), (c-2), and (c-3) to read as follows:
(b) In determining the amount of the penalty, the department
shall consider:
(1) the hospital's previous violations;
(2) the seriousness of the violation;
(3) any threat to the health, safety, or rights of the
hospital's patients;
(4) the demonstrated good faith of the hospital; [and]
(5) the effect of the penalty on the hospital's ability
to continue to provide services; and
(6) such other matters as justice may require.
(c) A [The] penalty assessed under this section may not
exceed:
(1) $10,000 [$1,000] for each violation, if the
hospital is a rural hospital with 75 beds or fewer; or
(2) $25,000 for each violation for all other
hospitals.
(c-1) Notwithstanding Subsection (c), [except that] the
penalty for a violation of Section 166.004 shall be $500.
(c-2) Each day of a continuing violation, other than a
violation of Section 166.004, may be considered a separate
violation.
(c-3) In this section, "rural hospital" means a hospital
that:
(1) is designated as a critical access hospital under
and in compliance with 42 U.S.C. Section 1395i-4;
(2) is classified as a rural referral center under 42
U.S.C. Section 1395ww(d)(5)(C)(i);
(3) is a sole community hospital, as defined by 42
U.S.C. Section 1395ww(d)(5)(D)(iii); or
(4) is located in a county with a population of 60,000
or less.
SECTION 7. Chapter 241, Health and Safety Code, is amended
by adding Subchapters D and D-1 to read as follows:
SUBCHAPTER D. TRUSTEES FOR HOSPITALS
Sec. 241.081. INVOLUNTARY APPOINTMENT. (a) The
department may request the attorney general to bring an action in
the name and on behalf of the state for the appointment of a trustee
to operate a hospital if:
(1) the hospital is operating without a license;
(2) the department has suspended or revoked the
hospital's license;
(3) license suspension or revocation procedures
against the hospital are pending and the department determines that
an immediate danger to public health and safety exists;
(4) the department determines that an emergency exists
that presents an immediate danger to public health and safety; or
(5) the hospital is closing and arrangements for
relocation of the patients to other licensed institutions have not
been made before closure.
(b) A trustee appointed under Subsection (a)(5) may only
ensure an orderly and safe relocation of the hospital's patients as
quickly as possible.
(c) After a hearing, a court shall appoint a trustee to take
charge of a hospital if the court finds that involuntary
appointment of a trustee is necessary.
(d) The court shall appoint as trustee an individual whose
background includes institutional medical administration.
(e) Venue for an action brought under this section is in
Travis County.
(f) A court having jurisdiction of a judicial review of the
matter may not order arbitration, whether on the motion of any party
or on the court's own motion, to resolve the legal issues of a
dispute involving the:
(1) appointment of a trustee under this section; or
(2) conduct with respect to which the appointment of a
trustee is sought.
Sec. 241.082. QUALIFICATIONS OF TRUSTEES. (a) A court may
appoint a person to serve as a trustee under this subchapter only if
the proposed trustee can demonstrate to the court that the proposed
trustee will be:
(1) present at the hospital as required to perform the
duties of a trustee; and
(2) available on call to appropriate staff at the
hospital, the department, and the court as necessary during the
time the trustee is not present at the hospital.
(b) A trustee shall report to the court in the event that the
trustee is unable to satisfy the requirements of Subsection (a)(1)
or (2).
(c) On the motion of any party or on the court's own motion,
the court may replace a trustee who is unable to satisfy the
requirements of Subsection (a)(1) or (2).
(d) A trustee's charges must separately identify personal
hours worked for which compensation is claimed. A trustee's claim
for personal compensation may include only compensation for
activities related to the trusteeship and performed in or on behalf
of the hospital.
Sec. 241.083. COMPENSATION; RELEASE OF FUNDS. (a) A
trustee appointed under this subchapter is entitled to reasonable
compensation as determined by the court. On the motion of any
party, the court shall review the reasonableness of the trustee's
compensation. The court shall reduce the amount if the court
determines that the compensation is not reasonable.
(b) The trustee may petition the court to order the release
to the trustee of any payment owed the trustee for care and services
provided to the patients if the payment has been withheld,
including a payment withheld by the commission at the
recommendation of the department.
(c) Withheld payments may include payments withheld by a
governmental agency or other entity during the appointment of the
trustee, such as payments:
(1) for Medicaid, Medicare, or insurance;
(2) by another third party; or
(3) for medical expenses borne by the patient.
(d) Payments withheld under 42 C.F.R. Section 455.23 or
Section 531.102(g), Government Code, are not subject to release
under this section.
Sec. 241.084. COMMUNICATIONS BY TRUSTEE. (a) Except as
provided by Subsection (b), a trustee appointed under this
subchapter shall provide periodic reports to the department and the
governing body of the hospital regarding:
(1) the status of the hospital following the emergency
order to suspend the hospital's license and during the period the
hospital is operated by the trustee; and
(2) each activity performed by the trustee on behalf
of the hospital.
(b) A trustee is not required to report to the governing
body of the hospital any information that may limit or impair the
authority or activities of the trustee.
Sec. 241.085. EXEMPTION. This subchapter does not apply to
a hospital owned, operated, or leased by a governmental entity.
SUBCHAPTER D-1. HOSPITAL PERPETUAL CARE ACCOUNT; FEE
Sec. 241.091. HOSPITAL PERPETUAL CARE ACCOUNT. (a) The
hospital perpetual care account is a dedicated account in the
general revenue fund.
(b) The account consists of:
(1) fees deposited to the credit of the account under
this subchapter; and
(2) money transferred or appropriated to the account
by the legislature.
(c) The executive commissioner shall administer the
account. Money in the account may be used only to pay for
department costs associated with:
(1) the storage of medical records by the department;
and
(2) any court-ordered appointment of a trustee to
operate a hospital as provided under Section 241.081, including the
payment of reasonable compensation to the trustee under Section
241.083.
Sec. 241.092. HOSPITAL PERPETUAL CARE FEE. (a) The
executive commissioner may impose and the department may collect a
fee from each hospital in an amount necessary to maintain a balance
of $5 million in the hospital perpetual care account at all times.
(b) The fee imposed under this section shall be deposited to
the credit of the hospital perpetual care account.
(c) The department shall suspend collection of the fee for
the duration of a period during which the balance of the hospital
perpetual care account is $5 million or more.
SECTION 8. (a) The executive commissioner of the Health
and Human Services Commission shall adopt the rules required by
Chapter 241, Health and Safety Code, as amended by this Act, not
later than May 1, 2018.
(b) The changes in law made by this Act apply only to an
application submitted under Section 241.022, Health and Safety
Code, as amended by this Act, or the assessment or imposition of an
administrative penalty under Section 241.059, Health and Safety
Code, as amended by this Act, for a violation that occurs on or
after the effective date of this Act. An application submitted
under Section 241.022 before the effective date of this Act or the
assessment or imposition of an administrative penalty under Section
241.059 for a violation that occurs before the effective date of
this Act is governed by the law in effect on the date the
application was submitted or the violation occurred, and that law
is continued in effect for that purpose.
(c) Notwithstanding Section 6(e)(2)(B), Chapter 615 (S.B.
1367), Acts of the 83rd Legislature, Regular Session, 2013, on
January 1, 2018, the commissioner of insurance shall transfer $5
million from the fund established under Subchapter F, Chapter 1508,
Insurance Code, to the hospital perpetual care account established
under Section 241.091, Health and Safety Code, as added by this Act.
SECTION 9. Section 241.0221, Health and Safety Code, as
added by this Act, applies only to an application for an original
license submitted on or after the effective date of this Act. An
application submitted before that date is governed by the law in
effect on the date the application was submitted, and the former law
is continued in effect for that purpose.
SECTION 10. As soon as practicable after the effective date
of this Act, the executive commissioner of the Health and Human
Services Commission shall adopt rules necessary to implement
Section 241.0221, Health and Safety Code, as added by this Act.
SECTION 11. 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, 2017.