84R3455 MEW-D
	By: Schwertner	S.B. No. 424

	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.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Sections 241.022(b) and (d), Health and Safety
	Code, are 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.
	(d)  The application must be accompanied by:
	(1)  a copy of the hospital's current patient transfer
	policy;
	(2)  a nonrefundable license fee;
	(3)  copies of the hospital's patient transfer
	agreements, unless the filing of copies has been waived by the
	hospital licensing director in accordance with the rules adopted
	under this chapter; [and]
	(4)  a copy of the most recent annual fire safety
	inspection report from the fire marshal in whose jurisdiction the
	hospital is located; and
	(5)  a copy of the surety bond required under Section
	241.0221.
	SECTION 2.  Subchapter B, Chapter 241, Health and Safety
	Code, is amended by adding Section 241.0221 to read as follows:
	Sec. 241.0221.  SURETY BOND FOR LICENSE. (a)  An applicant
	for issuance of, or a license holder applying for renewal of, a
	license issued under this chapter must provide the department with
	a surety bond in an amount sufficient to cover the costs associated
	with:
	(1)  the storage of medical records for 10 years if the
	hospital is closed; and
	(2)  any court-ordered appointment of a trustee to
	operate the hospital as provided under Section 241.081, including
	the payment of reasonable compensation to the trustee under Section
	241.083.
	(b)  This section does not apply to a hospital that is owned
	or directly operated by a governmental entity.
	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 Health and
	Human Services Commission information relating to an applicant for
	a hospital license under this chapter or a hospital license holder.
	(b)  The executive commissioner of the Health and Human
	Services Commission shall adopt the rules necessary to implement
	this section.
	SECTION 4.  Section 241.051(a), Health and Safety Code, is
	amended to read as follows:
	(a)  The department shall conduct an [may make any]
	inspection of each hospital licensed under this chapter at least
	once every three years, 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 of health, 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.
	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 the
	public health and safety. An emergency suspension is effective
	immediately without a hearing on notice to the license holder.
	(b)  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.
	(c)  The hearing and any appeal are governed by the
	department's rules for a contested case hearing and Chapter 2001,
	Government Code.
	SECTION 6.  Sections 241.059(b) and (c), Health and Safety
	Code, are amended to read as follows:
	(b)  In determining the amount of the penalty, the
	commissioner of health 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)  The penalty may not exceed $25,000 [$1,000] for each
	violation, except that the penalty for a violation of Section
	166.004 shall be $500. Each day of a continuing violation, other
	than a violation of Section 166.004, may be considered a separate
	violation.
	SECTION 7.  Chapter 241, Health and Safety Code, is amended
	by adding Subchapter D 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 imminent threat to the health and safety of the patients exists;
	(4)  the department determines that an emergency exists
	that presents an immediate threat to the health and safety of the
	patients; 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)  If possible, 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 Health and Human Services
	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.
	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, 2016.
	(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.
	SECTION 9.  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, 2015.