S.B. No. 1387
 
 
 
 
AN ACT
  relating to the creation and operations of health care provider
  participation programs in certain municipalities.
         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 295 to read as follows:
  CHAPTER 295. MUNICIPAL HEALTH CARE PROVIDER PARTICIPATION PROGRAM
  IN CERTAIN MUNICIPALITIES
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 295.001.  DEFINITIONS. In this chapter:
               (1)  "Institutional health care provider" means a
  nonpublic hospital that provides inpatient hospital services.
               (2)  "Paying hospital" means an institutional health
  care provider required to make a mandatory payment under this
  chapter.
               (3)  "Program" means the municipal health care provider
  participation program authorized by this chapter.
         Sec. 295.002.  APPLICABILITY. This chapter applies only to
  a municipality that:
               (1)  is not served by a hospital district or a public
  hospital;
               (2)  is located on the Gulf of Mexico or on a channel,
  canal, bay, or inlet connected to the Gulf of Mexico; and
               (3)  has a population of more than 117,000 and less than
  145,000.
         Sec. 295.003.  MUNICIPAL HEALTH CARE PROVIDER PARTICIPATION
  PROGRAM; PARTICIPATION IN PROGRAM. (a)  A municipal health care
  provider participation program authorizes a municipality to
  collect a mandatory payment from each institutional health care
  provider located in the municipality to be deposited in a local
  provider participation fund established by the municipality. Money
  in the fund may be used by the municipality to fund certain
  intergovernmental transfers and indigent care programs as provided
  by this chapter.
         (b)  The governing body of a municipality may adopt an
  ordinance authorizing a municipality to participate in the program,
  subject to the limitations provided by this chapter.
  SUBCHAPTER B. POWERS AND DUTIES OF GOVERNING BODY OF MUNICIPALITY
         Sec. 295.051.  LIMITATION ON AUTHORITY TO REQUIRE MANDATORY
  PAYMENT.  The governing body of a municipality may require a
  mandatory payment authorized under this chapter by an institutional
  health care provider in the municipality only in the manner
  provided by this chapter.
         Sec. 295.052.  MAJORITY VOTE REQUIRED. The governing body
  of a municipality may not authorize the municipality to collect a
  mandatory payment authorized under this chapter without an
  affirmative vote of a majority of the members of the governing body.
         Sec. 295.053.  RULES AND PROCEDURES. After the governing
  body of a municipality has voted to require a mandatory payment
  authorized under this chapter, the governing body may adopt rules
  relating to the administration of the mandatory payment.
         Sec. 295.054.  INSTITUTIONAL HEALTH CARE PROVIDER
  REPORTING; INSPECTION OF RECORDS. (a)  The governing body of a
  municipality that collects a mandatory payment authorized under
  this chapter shall require each institutional health care provider
  to submit to the municipality 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.
         (b)  The governing body of a municipality that collects a
  mandatory payment authorized under this chapter may inspect the
  records of an institutional health care provider to the extent
  necessary to ensure compliance with the requirements of Subsection
  (a).
  SUBCHAPTER C. GENERAL FINANCIAL PROVISIONS
         Sec. 295.101.  HEARING. (a)  Each year, the governing body
  of a municipality that collects a mandatory payment authorized
  under this chapter shall hold a public hearing on the amounts of any
  mandatory payments that the governing body intends to require
  during the year and how the revenue derived from those payments is
  to be spent.
         (b)  Not later than the 10th day before the date of the
  hearing required under Subsection (a), the governing body of the
  municipality shall publish notice of the hearing in a newspaper of
  general circulation in the municipality.
         (c)  A representative of a paying hospital is entitled to
  appear at the time and place designated in the public notice and to
  be heard regarding any matter related to the mandatory payments
  authorized under this chapter.
         Sec. 295.102.  DEPOSITORY. (a)  The governing body of each
  municipality that collects a mandatory payment authorized under
  this chapter by resolution shall designate one or more banks
  located in the municipality as the depository for mandatory
  payments received by the municipality.  A bank designated as a
  depository serves for two years or until a successor is designated.
         (b)  All income received by a municipality under this
  chapter, including the revenue from mandatory payments remaining
  after discounts and fees for assessing and collecting the payments
  are deducted, shall be deposited with the designated depository in
  the municipality's local provider participation fund and may be
  withdrawn only as provided by this chapter.
         (c)  All funds under this chapter shall be secured in the
  manner provided for securing municipal funds.
         Sec. 295.103.  LOCAL PROVIDER PARTICIPATION FUND;
  AUTHORIZED USES OF MONEY. (a)  Each municipality that collects a
  mandatory payment authorized under this chapter shall create a
  local provider participation fund.
         (b)  The local provider participation fund of a municipality
  consists of:
               (1)  all revenue received by the municipality
  attributable to mandatory payments authorized under this chapter,
  including any penalties and interest attributable to delinquent
  payments;
               (2)  money received from the Health and Human Services
  Commission as a refund of an intergovernmental transfer from the
  municipality to the state for the purpose of providing the
  nonfederal share of Medicaid supplemental payment program
  payments, 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 may be used only to:
               (1)  fund intergovernmental transfers from the
  municipality to the state to provide the nonfederal share of a
  Medicaid supplemental payment program authorized under the state
  Medicaid plan, 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), or a successor waiver
  program authorizing similar Medicaid supplemental payment
  programs;
               (2)  subsidize indigent programs;
               (3)  pay the administrative expenses of the
  municipality solely for activities under this chapter;
               (4)  refund a portion of a mandatory payment collected
  in error from a paying hospital; and
               (5)  refund to paying hospitals the proportionate share
  of money received by the municipality from the Health and Human
  Services Commission that is not used to fund the nonfederal share of
  Medicaid supplemental payment program payments.
         (d)  Money in the local provider participation fund may not
  be commingled with other municipal funds.
         (e)  An intergovernmental transfer of funds described by
  Subsection (c)(1) and any funds received by the municipality as a
  result of an intergovernmental transfer described by that
  subsection may not be used by the municipality or any other entity
  to 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).
  SUBCHAPTER D. MANDATORY PAYMENTS
         Sec. 295.151.  MANDATORY PAYMENTS BASED ON PAYING HOSPITAL
  NET PATIENT REVENUE. (a)  Except as provided by Subsection (e),
  the governing body of a municipality that collects a mandatory
  payment authorized under this chapter may require an annual
  mandatory payment to be assessed on the net patient revenue of each
  institutional health care provider located in the municipality.  
  The governing body 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
  determined by the data reported to the Department of State Health
  Services under Sections 311.032 and 311.033 in the fiscal year
  ending in 2013 or, if the institutional health care provider did not
  report any data under those sections in that fiscal year, as
  determined by the institutional health care provider's Medicare
  cost report submitted for the 2013 fiscal year or for the closest
  subsequent fiscal year for which the provider submitted the
  Medicare cost report.  The municipality shall update the amount of
  the mandatory payment on an annual basis.
         (b)  The amount of a mandatory payment authorized under this
  chapter must be uniformly proportionate with the amount of net
  patient revenue generated by each paying hospital in the
  municipality. A mandatory payment authorized under this chapter
  may not hold harmless any institutional health care provider, as
  required under 42 U.S.C. Section 1396b(w).
         (c)  The governing body of a municipality that collects a
  mandatory payment authorized under this chapter shall set the
  amount of the mandatory payment.  The amount of the mandatory
  payment required of each paying hospital may not exceed an amount
  that, when added to the amount of the mandatory payments required
  from all other paying hospitals in the municipality, equals an
  amount of revenue that exceeds six percent of the aggregate net
  patient revenue of all paying hospitals in the municipality.
         (d)  Subject to the maximum amount prescribed by Subsection
  (c), the governing body of a municipality that collects a mandatory
  payment authorized under this chapter shall set the mandatory
  payments in amounts that in the aggregate will generate sufficient
  revenue to cover the administrative expenses of the municipality
  for activities under this chapter, to fund the nonfederal share of a
  Medicaid supplemental payment program, and to pay for indigent
  programs, except that the amount of revenue from mandatory payments
  used for administrative expenses of the municipality for activities
  under this chapter in a year may not exceed the lesser of four
  percent of the total revenue generated from the mandatory payment
  or $20,000.
         (e)  A paying hospital may not add a mandatory payment
  required under this section as a surcharge to a patient.
         Sec. 295.152.  ASSESSMENT AND COLLECTION OF MANDATORY
  PAYMENTS. (a)  Except as provided by Subsection (b), the municipal
  tax assessor-collector shall collect the mandatory payment
  authorized under this chapter.  The municipal tax
  assessor-collector shall charge and deduct from mandatory payments
  collected for the municipality a fee for collecting the mandatory
  payment in an amount determined by the governing body of the
  municipality, not to exceed the municipal tax assessor-collector's
  usual and customary charges.
         (b)  If determined by the governing body to be appropriate,
  the governing body may contract for the assessment and collection
  of mandatory payments in the manner provided by Title 1, Tax Code,
  for the assessment and collection of ad valorem taxes.
         (c)  Revenue from a fee charged by a municipal tax
  assessor-collector for collecting the mandatory payment shall be
  deposited in the municipal general fund and, if appropriate, shall
  be reported as fees of the municipal tax assessor-collector.
         Sec. 295.153.  INTEREST, PENALTIES, AND DISCOUNTS.  
  Interest, penalties, and discounts on mandatory payments required
  under this chapter are governed by the law applicable to municipal
  ad valorem taxes.
         Sec. 295.154.  PURPOSE; CORRECTION OF INVALID PROVISION OR
  PROCEDURE. (a)  The purpose of this chapter is to generate revenue
  by collecting from institutional health care providers a mandatory
  payment to be used to provide the nonfederal share of a Medicaid
  supplemental payment program.
         (b)  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 municipality may
  provide by rule for an alternative provision or procedure that
  conforms to the requirements of the federal Centers for Medicare
  and Medicaid Services.
         SECTION 2.  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 3.  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.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1387 passed the Senate on
  May 5, 2015, by the following vote:  Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1387 passed the House on
  May 13, 2015, by the following vote:  Yeas 145, Nays 0, two
  present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor