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  H.B. No. 1357
 
 
 
 
AN ACT
  relating to the regulation of freestanding emergency medical care
  facilities; providing an administrative penalty; creating an
  offense.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle B, Title 4, Health and Safety Code, is
  amended by adding Chapter 254 to read as follows:
  CHAPTER 254. FREESTANDING EMERGENCY MEDICAL CARE FACILITIES
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 254.001.  DEFINITIONS. In this chapter:
               (1)  "Department" means the Department of State Health
  Services.
               (2)  "Emergency care" has the meaning assigned by
  Sections 843.002 and 1301.155, Insurance Code.
               (3)  "Executive commissioner" means the executive
  commissioner of the Health and Human Services Commission.
               (4)  "Facility" means a freestanding emergency medical
  care facility.
               (5)  "Freestanding emergency medical care facility"
  means a facility, structurally separate and distinct from a
  hospital that receives an individual and provides emergency care,
  as defined by Subsection (2).
  [Section 254.002-254.050 reserved for expansion]
  SUBCHAPTER B. LICENSING
         Sec. 254.051.  LICENSE REQUIRED. (a)  Except as provided by
  Section 254.052, a person may not establish or operate a
  freestanding emergency medical care facility in this state without
  a license issued under this chapter.
         (b)  Except as provided by Section 254.052, a facility or
  person may not hold itself out to the public as a freestanding
  emergency medical care facility or use any similar term, as defined
  by department rule, that would give the impression that the
  facility or person is providing emergency care unless the facility
  or person holds a license issued under this chapter. The use of the
  term "emergency" or a similar term is also subject to Section
  254.152.
         (c)  Each separate facility location must have a separate
  license.
         (d)  A license issued under this chapter is not transferable
  or assignable.
         (e)  The executive commissioner by rule shall establish a
  classification for a facility that is in continuous operation 24
  hours per day and 7 days per week and a classification for a
  facility that is in operation 7 days per week and at least 12 hours
  per day.
         (f)  A facility that is not in continuous operation 24 hours
  per day and 7 days per week cannot be issued a license with a term
  that extends beyond August 31, 2013.
         Sec. 254.052.  EXEMPTIONS FROM LICENSING REQUIREMENT. The
  following facilities are not required to be licensed under this
  chapter:
               (1)  an office or clinic owned and operated by a
  manufacturing facility solely for the purposes of treating its
  employees and contractors;
               (2)  temporary emergency clinics in disaster areas;
               (3)  an office or clinic of a licensed physician,
  dentist, optometrist, or podiatrist;
               (4)  a licensed nursing home;
               (5)  a licensed hospital;
               (6)  a hospital that is owned and operated by this
  state;
               (7)  a facility located within or connected to a
  hospital described by Subsection (5) or (6);
               (8)  a facility that is owned or operated by a hospital
  described by Subsection (5) or (6) and is:
                     (A)  surveyed as a service of the hospital by an
  organization that has been granted deeming authority as a national
  accreditation program for hospitals by the Centers for Medicare and
  Medicaid Services; or
                     (B)  granted provider-based status by the Centers
  for Medicare and Medicaid Services; or
               (9)  a licensed ambulatory surgical center.
         Sec. 254.053.  LICENSE APPLICATION AND ISSUANCE. (a)  An
  applicant for a license under this chapter must submit an
  application to the department on a form prescribed by the
  department.
         (b)  Each application must be accompanied by a nonrefundable
  license fee in an amount set by the executive commissioner.
         (c)  The application must contain evidence that there is at
  least one physician and one nurse on the staff of the facility who
  are licensed by the appropriate state licensing board.
         (d)  The application must contain evidence that the facility
  meets the minimum standards and requirements specified in Section
  254.151.
         (e)  The department shall issue a license if, after
  inspection and investigation, it finds that the applicant and the
  facility meet the requirements of this chapter and the standards
  adopted under this chapter.
         (f)  The license fee must be paid annually on renewal of the
  license.
  [Sections 254.054-254.100 reserved for expansion]
  SUBCHAPTER C. EXECUTIVE COMMISSIONER AND DEPARTMENT POWERS AND
  DUTIES
         Sec. 254.101.  ADOPTION OF RULES. The executive
  commissioner shall adopt rules necessary to implement this chapter,
  including requirements for the issuance, renewal, denial,
  suspension, and revocation of a license to operate a facility.
         Sec. 254.102.  FEES. The executive commissioner shall set
  fees imposed by this chapter in amounts reasonable and necessary to
  defray the cost of administering this chapter.
         Sec. 254.103.  INSPECTIONS. The department may inspect a
  facility at reasonable times as necessary to ensure compliance with
  this chapter.
         Sec. 254.104.  FREESTANDING EMERGENCY MEDICAL CARE FACILITY
  LICENSING FUND. All fees collected under this chapter shall be
  deposited in the state treasury to the credit of the freestanding
  emergency medical care facility licensing fund and may be
  appropriated to the department only to administer and enforce this
  chapter.
  [Sections 254.105-254.150 reserved for expansion]
  SUBCHAPTER D. REGULATION OF FACILITIES
         Sec. 254.151.  MINIMUM STANDARDS. (a)  The executive
  commissioner shall adopt rules necessary to implement this chapter,
  including minimum standards for:
               (1)  the construction and design of the facility,
  including plumbing, heating, lighting, ventilation, and other
  design standards necessary to ensure the health and safety of
  patients;
               (2)  the number, qualifications, and organization of
  the professional staff and other personnel;
               (3)  the administration of the facility;
               (4)  the equipment essential to the health and welfare
  of the patients;
               (5)  the sanitary and hygienic conditions within the
  facility and its surroundings;
               (6)  the requirements for the contents, maintenance,
  and release of medical records;
               (7)  the minimal level of care and standards for denial
  of care;
               (8)  the provision of laboratory and radiological
  services;
               (9)  the distribution and administration of drugs and
  controlled substances;
               (10)  a quality assurance program for patient care;
               (11)  disclosure, if applicable, of the following:
                     (A)  the name and social security number of the
  sole proprietor, if the facility is a sole proprietor;
                     (B)  the name and social security number of each
  general partner who is an individual, if the facility is a
  partnership;
                     (C)  the name and social security number of any
  individual who has an ownership interest of more than 25 percent in
  the corporation, if the facility is a corporation; and
                     (D)  the name and license numbers of any
  physicians licensed by the Texas Medical Board who have a financial
  interest in the facility or any entity which has an ownership
  interest in the facility;
               (12)  transfer protocols for patients requiring
  advanced medical care at a hospital; and
               (13)  any other aspect of the operation of a facility
  that the executive commissioner considers necessary to protect the
  facility's patients and the public.
         (b)  In adopting the rules required under Subsection (a)
  concerning transfer protocols, the executive commissioner must
  consult with physicians who provide emergency care, medical
  consultant organizations, and organizations representing hospitals
  licensed in this state.
         (c)  The minimum standards under this section shall apply to
  facilities operating 24 hours a day and 7 days per week and
  facilities operating less than 24 hours a day and 7 days per week.
         Sec. 254.152.  FACILITIES NOT IN CONTINUOUS OPERATION.
  (a)  A facility that is not in continuous operation shall display a
  clearly visible sign that:
               (1)  indicates whether the facility is open or closed;
               (2)  provides information regarding the facility's
  operating hours; and
               (3)  provides clear instructions directing a patient to
  an emergency room in a licensed hospital or a freestanding
  emergency room classified as a facility that is in continuous
  operation within 10 miles of the facility that is not in continuous
  operation.
         (b)  A facility that is not in continuous operation may not
  advertise, market, or otherwise promote the services provided by
  the facility using the term "emergency" or any similar term defined
  by department rule.
         (c)  Notwithstanding Subsection (b), a facility that is not
  in continuous operation is not required to comply with Subsection
  (b) until the earlier of the second anniversary of the date the
  facility is issued a license under this chapter or September 1,
  2012. This subsection expires January 1, 2013.
         (d)  This section expires August 31, 2013.
         Sec. 254.153.  FACILITY CARE REQUIREMENTS. (a)  A facility
  shall provide to each facility patient, without regard to the
  individual's ability to pay, an appropriate medical screening,
  examination, and stabilization within the facility's capability,
  including ancillary services routinely available to the facility,
  to determine whether an emergency medical condition exists and any
  necessary stabilizing treatment.
         (b)  Before a facility accepts any patient for treatment or
  diagnosis, the facility shall enter into a referral, transmission,
  or admission agreement with a hospital licensed in this state.
         Sec. 254.154.  COMPLAINTS. A person may file a complaint
  with the department against a facility licensed under this chapter.
  [Sections 254.155-254.200 reserved for expansion]
  SUBCHAPTER E. ENFORCEMENT AND PENALTIES
         Sec. 254.201.  DENIAL, SUSPENSION, PROBATION, OR REVOCATION
  OF LICENSE. (a)  The department may deny, suspend, or revoke a
  license for a violation of this chapter or a rule adopted under this
  chapter.
         (b)  The denial, suspension, or revocation of a license by
  the department and the appeal from that action are governed by the
  procedures for a contested case hearing under Chapter 2001,
  Government Code.
         (c)  If the department finds that a facility is in repeated
  noncompliance with this chapter or rules adopted under this chapter
  but that the noncompliance does not endanger public health and
  safety, the department may schedule the facility for probation
  rather than suspending or revoking the facility's license. The
  department shall provide notice to the facility of the probation
  and of the items of noncompliance not later than the 10th day before
  the date the probation period begins. The department shall
  designate a period of not less than 30 days during which the
  facility remains under probation. During the probation period, the
  facility must correct the items that were in noncompliance and
  report the corrections to the department for approval.
         (d)  The department may suspend or revoke the license of a
  facility that does not correct items that were in noncompliance or
  that does not comply with this chapter or the rules adopted under
  this chapter within the applicable probation period.
         Sec. 254.202.  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.
         (b)  An emergency suspension under this section is effective
  immediately without a hearing on notice to the license holder.
         (c)  On written request of the license holder, the department
  shall conduct a hearing not earlier than the 10th day or later than
  the 30th day after the date the hearing request is received to
  determine if the emergency suspension is to be continued, modified,
  or rescinded.
         (d)  A hearing and any appeal under this section are governed
  by the department's rules for a contested case hearing and Chapter
  2001, Government Code.
         Sec. 254.203.  INJUNCTION. (a)  The department may petition
  a district court for a temporary restraining order to restrain a
  continuing violation of the standards or licensing requirements
  provided under this chapter if the department finds that the
  violation creates an immediate threat to the health and safety of
  the patients of a facility.
         (b)  A district court, on petition of the department and on a
  finding by the court that a person is violating the standards or
  licensing requirements provided under this chapter, may by
  injunction:
               (1)  prohibit a person from continuing a violation of
  the standards or licensing requirements provided under this
  chapter;
               (2)  restrain or prevent the establishment or operation
  of a facility without a license issued under this chapter; or
               (3)  grant any other injunctive relief warranted by the
  facts.
         (c)  The attorney general shall institute and conduct a suit
  authorized by this section at the request of the department.
         (d)  Venue for a suit brought under this section is in the
  county in which the facility is located or in Travis County.
         Sec. 254.204.  CRIMINAL PENALTY. (a)  A person commits an
  offense if the person violates Section 254.051.
         (b)  An offense under this section is a Class C misdemeanor.
         (c)  Each day of a continuing violation constitutes a
  separate offense.
         Sec. 254.205.  IMPOSITION OF ADMINISTRATIVE PENALTY.
  (a)  The department may impose an administrative penalty on a
  person licensed under this chapter who violates this chapter or a
  rule or order adopted under this chapter. A penalty collected under
  this section or Section 254.206 shall be deposited in the state
  treasury in the general revenue fund.
         (b)  A proceeding to impose the penalty is considered to be a
  contested case under Chapter 2001, Government Code.
         (c)  The amount of the penalty may not exceed $1,000 for each
  violation, and each day a violation continues or occurs is a
  separate violation for purposes of imposing a penalty. The total
  amount of the penalty assessed for a violation continuing or
  occurring on separate days under this subsection may not exceed
  $5,000.
         (d)  The amount shall be based on:
               (1)  the seriousness of the violation, including the
  nature, circumstances, extent, and gravity of the violation;
               (2)  the threat to health or safety caused by the
  violation;
               (3)  the history of previous violations;
               (4)  the amount necessary to deter a future violation;
               (5)  whether the violator demonstrated good faith,
  including when applicable whether the violator made good faith
  efforts to correct the violation; and
               (6)  any other matter that justice may require.
         (e)  If the department initially determines that a violation
  occurred, the department shall give written notice of the report by
  certified mail to the person.
         (f)  The notice under Subsection (e) must:
               (1)  include a brief summary of the alleged violation;
               (2)  state the amount of the recommended penalty; and
               (3)  inform the person of the person's right to a
  hearing on the occurrence of the violation, the amount of the
  penalty, or both.
         (g)  Within 20 days after the date the person receives the
  notice under Subsection (e), the person in writing may:
               (1)  accept the determination and recommended penalty
  of the department; or
               (2)  make a request for a hearing on the occurrence of
  the violation, the amount of the penalty, or both.
         (h)  If the person accepts the determination and recommended
  penalty or if the person fails to respond to the notice, the
  commissioner of state health services by order shall approve the
  determination and impose the recommended penalty.
         (i)  If the person requests a hearing, the commissioner of
  state health services shall refer the matter to the State Office of
  Administrative Hearings, which shall promptly set a hearing date
  and give written notice of the time and place of the hearing to the
  person. An administrative law judge of the State Office of
  Administrative Hearings shall conduct the hearing.
         (j)  The administrative law judge shall make findings of fact
  and conclusions of law and promptly issue to the commissioner of
  state health services a proposal for a decision about the
  occurrence of the violation and the amount of a proposed penalty.
         (k)  Based on the findings of fact, conclusions of law, and
  proposal for a decision, the commissioner of state health services
  by order may:
               (1)  find that a violation occurred and impose a
  penalty; or
               (2)  find that a violation did not occur.
         (l)  The notice of the order under Subsection (k) that is
  sent to the person in accordance with Chapter 2001, Government
  Code, must include a statement of the right of the person to
  judicial review of the order.
         Sec. 254.206.  PAYMENT AND COLLECTION OF ADMINISTRATIVE
  PENALTY; JUDICIAL REVIEW. (a)  Within 30 days after the date an
  order of the commissioner of state health services under Section
  254.205(k) that imposes an administrative penalty becomes final,
  the person shall:
               (1)  pay the penalty; or
               (2)  file a petition for judicial review of the
  commissioner's order contesting the occurrence of the violation,
  the amount of the penalty, or both.
         (b)  Within the 30-day period prescribed by Subsection (a), a
  person who files a petition for judicial review may:
               (1)  stay enforcement of the penalty by:
                     (A)  paying the penalty to the court for placement
  in an escrow account; or
                     (B)  giving the court a supersedeas bond approved
  by the court that:
                           (i)  is for the amount of the penalty; and
                           (ii)  is effective until all judicial review
  of the commissioner's order is final; or
               (2)  request the court to stay enforcement of the
  penalty by:
                     (A)  filing with the court a sworn affidavit of
  the person stating that the person is financially unable to pay the
  penalty and is financially unable to give the supersedeas bond; and
                     (B)  sending a copy of the affidavit to the
  executive commissioner by certified mail.
         (c)  If the commissioner of state health services receives a
  copy of an affidavit under Subsection (b)(2), the commissioner may
  file with the court, within five days after the date the copy is
  received, a contest to the affidavit. The court shall hold a
  hearing on the facts alleged in the affidavit as soon as practicable
  and shall stay the enforcement of the penalty on finding that the
  alleged facts are true. The person who files an affidavit has the
  burden of proving that the person is financially unable to pay the
  penalty or to give a supersedeas bond.
         (d)  If the person does not pay the penalty and the
  enforcement of the penalty is not stayed, the penalty may be
  collected. The attorney general may sue to collect the penalty.
         (e)  If the court sustains the finding that a violation
  occurred, the court may uphold or reduce the amount of the penalty
  and order the person to pay the full or reduced amount of the
  penalty.
         (f)  If the court does not sustain the finding that a
  violation occurred, the court shall order that a penalty is not
  owed.
         (g)  If the person paid the penalty and if the amount of the
  penalty is reduced or the penalty is not upheld by the court, the
  court shall order, when the court's judgment becomes final, that
  the appropriate amount plus accrued interest be remitted to the
  person within 30 days after the date that the judgement of the court
  becomes final. The interest accrues at the rate charged on loans to
  depository institutions by the New York Federal Reserve Bank. The
  interest shall be paid for the period beginning on the date the
  penalty is paid and ending on the date the penalty is remitted.
         (h)  If the person gave a supersedeas bond and the penalty is
  not upheld by the court, the court shall order, when the court's
  judgment becomes final, the release of the bond. If the person gave
  a supersedeas bond and the amount of the penalty is reduced, the
  court shall order the release of the bond after the person pays the
  reduced amount.
         SECTION 2.  Section 843.002, Insurance Code, is amended by
  amending Subdivision (7) and adding Subdivision (9-a) to read as
  follows:
               (7)  "Emergency care" means health care services
  provided in a hospital emergency facility, freestanding emergency
  medical care facility, or comparable emergency facility to evaluate
  and stabilize medical conditions of a recent onset and severity,
  including severe pain, that would lead a prudent layperson
  possessing an average knowledge of medicine and health to believe
  that the individual's condition, sickness, or injury is of such a
  nature that failure to get immediate medical care could:
                     (A)  place the individual's health in serious
  jeopardy;
                     (B)  result in serious impairment to bodily
  functions;
                     (C)  result in serious dysfunction of a bodily
  organ or part;
                     (D)  result in serious disfigurement; or
                     (E)  for a pregnant woman, result in serious
  jeopardy to the health of the fetus.
               (9-a)  "Freestanding emergency medical care facility" 
  means a facility licensed under Chapter 254, Health and Safety
  Code.
         SECTION 3.  Section 1271.155(b), Insurance Code, is amended
  to read as follows:
         (b)  A health care plan of a health maintenance organization
  must provide the following coverage of emergency care:
               (1)  a medical screening examination or other
  evaluation required by state or federal law necessary to determine
  whether an emergency medical condition exists shall be provided to
  covered enrollees in a hospital emergency facility or comparable
  facility;
               (2)  necessary emergency care shall be provided to
  covered enrollees, including the treatment and stabilization of an
  emergency medical condition; and
               (3)  services originated in a hospital emergency
  facility, freestanding emergency medical care facility, or
  comparable emergency facility following treatment or stabilization
  of an emergency medical condition shall be provided to covered
  enrollees as approved by the health maintenance organization,
  subject to Subsections (c) and (d).
         SECTION 4.  Section 1301.001, Insurance Code, is amended by
  adding Subdivision (12) to read as follows:
               (12)  "Freestanding emergency medical care facility"
  means a facility licensed under Chapter 254, Health and Safety
  Code.
         SECTION 5.  Section 1301.155, Insurance Code, is amended to
  read as follows:
         Sec. 1301.155.  EMERGENCY CARE. (a)  In this section,
  "emergency care" means health care services provided in a hospital
  emergency facility, freestanding emergency medical care facility,
  or comparable emergency facility to evaluate and stabilize a
  medical condition of a recent onset and severity, including severe
  pain, that would lead a prudent layperson possessing an average
  knowledge of medicine and health to believe that the person's
  condition, sickness, or injury is of such a nature that failure to
  get immediate medical care could result in:
               (1)  placing the person's health in serious jeopardy;
               (2)  serious impairment to bodily functions;
               (3)  serious dysfunction of a bodily organ or part;
               (4)  serious disfigurement; or
               (5)  in the case of a pregnant woman, serious jeopardy
  to the health of the fetus.
         (b)  If an insured cannot reasonably reach a preferred
  provider, an insurer shall provide reimbursement for the following
  emergency care services at the preferred level of benefits until
  the insured can reasonably be expected to transfer to a preferred
  provider:
               (1)  a medical screening examination or other
  evaluation required by state or federal law to be provided in the
  emergency facility of a hospital that is necessary to determine
  whether a medical emergency condition exists;
               (2)  necessary emergency care services, including the
  treatment and stabilization of an emergency medical condition; and
               (3)  services originating in a hospital emergency
  facility or freestanding emergency medical care facility 
  following  treatment or stabilization of an emergency medical
  condition.
         SECTION 6.  (a)  Not later than September 1, 2010, a
  freestanding emergency medical care facility must obtain a license
  as required by Chapter 254, Health and Safety Code, as added by this
  Act.
         (b)  Not later than March 1, 2010, the executive commissioner
  of the Health and Human Services Commission shall adopt rules as
  required by Chapter 254, Health and Safety Code, as added by this
  Act.
         (c)  The changes in law made by Sections 3, 4, and 5 of this
  Act apply only to a health insurance policy or evidence of coverage
  delivered, issued for delivery, or renewed on or after March 1,
  2010. A health insurance policy or evidence of coverage delivered,
  issued for delivery, or renewed before that date is governed by the
  law in effect immediately before that date, and that law is
  continued in effect for that purpose.
         SECTION 7.  (a)  Except as provided by Subsections (b) and
  (c) of this section, this Act takes effect September 1, 2009.
         (b)  Sections 254.201, 254.202, 254.203, 254.205, and
  254.206, Health and Safety Code, as added by this Act, and Sections
  843.002, 1271.155, 1301.001, and 1301.155, Insurance Code, as
  amended by this Act, take effect March 1, 2010.
         (c)  Section 254.204, Health and Safety Code, as added by
  this Act, takes effect September 1, 2010.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1357 was passed by the House on May
  11, 2009, by the following vote:  Yeas 145, Nays 0, 2 present, not
  voting; that the House refused to concur in Senate amendments to
  H.B. No. 1357 on May 29, 2009, and requested the appointment of a
  conference committee to consider the differences between the two
  houses; and that the House adopted the conference committee report
  on H.B. No. 1357 on May 31, 2009, by the following vote:  Yeas 141,
  Nays 0, 1 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 1357 was passed by the Senate, with
  amendments, on May 26, 2009, by the following vote:  Yeas 31, Nays
  0; at the request of the House, the Senate appointed a conference
  committee to consider the differences between the two houses; and
  that the Senate adopted the conference committee report on H.B. No.
  1357 on May 31, 2009, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor