S.B. No. 7

	AN ACT
	relating to the administration, quality, and efficiency of health
	care, health and human services, and health benefits programs in
	this state; creating an offense; providing penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	ARTICLE 1.  ADMINISTRATION OF AND EFFICIENCY, COST-SAVING, AND
	FRAUD PREVENTION MEASURES FOR CERTAIN HEALTH AND HUMAN SERVICES AND
	HEALTH BENEFITS PROGRAMS
	SECTION 1.01.  (a)  Subchapter B, Chapter 531, Government
	Code, is amended by adding Sections 531.02417, 531.024171, and
	531.024172 to read as follows:
	Sec. 531.02417.  MEDICAID NURSING SERVICES ASSESSMENTS.
	(a)  In this section, "acute nursing services" means home health
	skilled nursing services, home health aide services, and private
	duty nursing services.
	(b)  If cost-effective, the commission shall develop an
	objective assessment process for use in assessing a Medicaid
	recipient's needs for acute nursing services. If the commission
	develops an objective assessment process under this section, the
	commission shall require that:
	(1)  the assessment be conducted:
	(A)  by a state employee or contractor who is a
	registered nurse who is licensed to practice in this state and who
	is not the person who will deliver any necessary services to the
	recipient and is not affiliated with the person who will deliver
	those services; and
	(B)  in a timely manner so as to protect the health
	and safety of the recipient by avoiding unnecessary delays in
	service delivery; and
	(2)  the process include:
	(A)  an assessment of specified criteria and
	documentation of the assessment results on a standard form;
	(B)  an assessment of whether the recipient should
	be referred for additional assessments regarding the recipient's
	needs for therapy services, as defined by Section 531.024171,
	attendant care services, and durable medical equipment; and
	(C)  completion by the person conducting the
	assessment of any documents related to obtaining prior
	authorization for necessary nursing services.
	(c)  If the commission develops the objective assessment
	process under Subsection (b), the commission shall:
	(1)  implement the process within the Medicaid
	fee-for-service model and the primary care case management Medicaid
	managed care model; and
	(2)  take necessary actions, including modifying
	contracts with managed care organizations under Chapter 533 to the
	extent allowed by law, to implement the process within the STAR and
	STAR + PLUS Medicaid managed care programs.
	(d)  Unless the commission determines that the assessment is
	feasible and beneficial, an assessment under Subsection (b)(2)(B)
	of whether a recipient should be referred for additional therapy
	services shall be waived if the recipient's need for therapy
	services has been established by a recommendation from a therapist
	providing care prior to discharge of the recipient from a licensed
	hospital or nursing home. The assessment may not be waived if the
	recommendation is made by a therapist who will deliver any services
	to the recipient or is affiliated with a person who will deliver
	those services when the recipient is discharged from the licensed
	hospital or nursing home.
	(e)  The executive commissioner shall adopt rules providing
	for a process by which a provider of acute nursing services who
	disagrees with the results of the assessment conducted under
	Subsection (b) may request and obtain a review of those results.
	Sec. 531.024171.  THERAPY SERVICES ASSESSMENTS. (a)  In
	this section, "therapy services" includes occupational, physical,
	and speech therapy services.
	(b)  After implementing the objective assessment process for
	acute nursing services in accordance with Section 531.02417, the
	commission shall consider whether implementing age- and
	diagnosis-appropriate objective assessment processes for assessing
	the needs of a Medicaid recipient for therapy services would be
	feasible and beneficial.
	(c)  If the commission determines that implementing age- and
	diagnosis-appropriate processes with respect to one or more types
	of therapy services is feasible and would be beneficial, the
	commission may implement the processes within:
	(1)  the Medicaid fee-for-service model;
	(2)  the primary care case management Medicaid managed
	care model; and
	(3)  the STAR and STAR + PLUS Medicaid managed care
	programs.
	(d)  An objective assessment process implemented under this
	section must include a process that allows a provider of therapy
	services to request and obtain a review of the results of an
	assessment conducted as provided by this section that is comparable
	to the process implemented under rules adopted under Section
	531.02417(e).
	Sec. 531.024172.  ELECTRONIC VISIT VERIFICATION SYSTEM.
	(a)  In this section, "acute nursing services" has the meaning
	assigned by Section 531.02417.
	(b)  If it is cost-effective and feasible, the commission
	shall implement an electronic visit verification system to
	electronically verify and document, through a telephone or
	computer-based system, basic information relating to the delivery
	of Medicaid acute nursing services, including:
	(1)  the provider's name;
	(2)  the recipient's name; and
	(3)  the date and time the provider begins and ends each
	service delivery visit.
	(b)  Not later than September 1, 2012, the Health and Human
	Services Commission shall implement the electronic visit
	verification system required by Section 531.024172, Government
	Code, as added by this section, if the commission determines that
	implementation of that system is cost-effective and feasible.
	SECTION 1.02.  (a)  Subsection (e), Section 533.0025,
	Government Code, is amended to read as follows:
	(e)  The commission shall determine the most cost-effective
	alignment of managed care service delivery areas. The commissioner
	may consider the number of lives impacted, the usual source of
	health care services for residents in an area, and other factors
	that impact the delivery of health care services in the area
	[Notwithstanding Subsection (b)(1), the commission may not provide
	medical assistance using a health maintenance organization in
	Cameron County, Hidalgo County, or Maverick County].
	(b)  Subchapter A, Chapter 533, Government Code, is amended
	by adding Sections 533.0027, 533.0028, and 533.0029 to read as
	follows:
	Sec. 533.0027.  PROCEDURES TO ENSURE CERTAIN RECIPIENTS ARE
	ENROLLED IN SAME MANAGED CARE PLAN. The commission shall ensure
	that all recipients who are children and who reside in the same
	household may, at the family's election, be enrolled in the same
	managed care plan.
	Sec. 533.0028.  EVALUATION OF CERTAIN STAR + PLUS MEDICAID
	MANAGED CARE PROGRAM SERVICES. The external quality review
	organization shall periodically conduct studies and surveys to
	assess the quality of care and satisfaction with health care
	services provided to enrollees in the STAR + PLUS Medicaid managed
	care program who are eligible to receive health care benefits under
	both the Medicaid and Medicare programs.
	Sec. 533.0029.  PROMOTION AND PRINCIPLES OF
	PATIENT-CENTERED MEDICAL HOMES FOR RECIPIENTS. (a)  For purposes
	of this section, a "patient-centered medical home" means a medical
	relationship:
	(1)  between a primary care physician and a child or
	adult patient in which the physician:
	(A)  provides comprehensive primary care to the
	patient; and
	(B)  facilitates partnerships between the
	physician, the patient, acute care and other care providers, and,
	when appropriate, the patient's family; and
	(2)  that encompasses the following primary
	principles:
	(A)  the patient has an ongoing relationship with
	the physician, who is trained to be the first contact for the
	patient and to provide continuous and comprehensive care to the
	patient;
	(B)  the physician leads a team of individuals at
	the practice level who are collectively responsible for the ongoing
	care of the patient;
	(C)  the physician is responsible for providing
	all of the care the patient needs or for coordinating with other
	qualified providers to provide care to the patient throughout the
	patient's life, including preventive care, acute care, chronic
	care, and end-of-life care;
	(D)  the patient's care is coordinated across
	health care facilities and the patient's community and is
	facilitated by registries, information technology, and health
	information exchange systems to ensure that the patient receives
	care when and where the patient wants and needs the care and in a
	culturally and linguistically appropriate manner; and
	(E)  quality and safe care is provided.
	(b)  The commission shall, to the extent possible, work to
	ensure that managed care organizations:
	(1)  promote the development of patient-centered
	medical homes for recipients; and
	(2)  provide payment incentives for providers that meet
	the requirements of a patient-centered medical home.
	(c)  Section 533.003, Government Code, is amended to read as
	follows:
	Sec. 533.003.  CONSIDERATIONS IN AWARDING CONTRACTS.
	(a)  In awarding contracts to managed care organizations, the
	commission shall:
	(1)  give preference to organizations that have
	significant participation in the organization's provider network
	from each health care provider in the region who has traditionally
	provided care to Medicaid and charity care patients;
	(2)  give extra consideration to organizations that
	agree to assure continuity of care for at least three months beyond
	the period of Medicaid eligibility for recipients;
	(3)  consider the need to use different managed care
	plans to meet the needs of different populations; [and]
	(4)  consider the ability of organizations to process
	Medicaid claims electronically; and
	(5)  in the initial implementation of managed care in
	the South Texas service region, give extra consideration to an
	organization that either:
	(A)  is locally owned, managed, and operated, if
	one exists; or
	(B)  is in compliance with the requirements of
	Section 533.004.
	(b)  The commission, in considering approval of a
	subcontract between a managed care organization and a pharmacy
	benefit manager for the provision of prescription drug benefits
	under the Medicaid program, shall review and consider whether the
	pharmacy benefit manager has been in the preceding three years:
	(1)  convicted of an offense involving a material
	misrepresentation or an act of fraud or of another violation of
	state or federal criminal law;
	(2)  adjudicated to have committed a breach of
	contract; or
	(3)  assessed a penalty or fine in the amount of
	$500,000 or more in a state or federal administrative proceeding.
	(d)  Section 533.005, Government Code, is amended by
	amending Subsection (a) and adding Subsection (a-1) to read as
	follows:
	(a)  A contract between a managed care organization and the
	commission for the organization to provide health care services to
	recipients must contain:
	(1)  procedures to ensure accountability to the state
	for the provision of health care services, including procedures for
	financial reporting, quality assurance, utilization review, and
	assurance of contract and subcontract compliance;
	(2)  capitation rates that ensure the cost-effective
	provision of quality health care;
	(3)  a requirement that the managed care organization
	provide ready access to a person who assists recipients in
	resolving issues relating to enrollment, plan administration,
	education and training, access to services, and grievance
	procedures;
	(4)  a requirement that the managed care organization
	provide ready access to a person who assists providers in resolving
	issues relating to payment, plan administration, education and
	training, and grievance procedures;
	(5)  a requirement that the managed care organization
	provide information and referral about the availability of
	educational, social, and other community services that could
	benefit a recipient;
	(6)  procedures for recipient outreach and education;
	(7)  a requirement that the managed care organization
	make payment to a physician or provider for health care services
	rendered to a recipient under a managed care plan not later than the
	45th day after the date a claim for payment is received with
	documentation reasonably necessary for the managed care
	organization to process the claim, or within a period, not to exceed
	60 days, specified by a written agreement between the physician or
	provider and the managed care organization;
	(8)  a requirement that the commission, on the date of a
	recipient's enrollment in a managed care plan issued by the managed
	care organization, inform the organization of the recipient's
	Medicaid certification date;
	(9)  a requirement that the managed care organization
	comply with Section 533.006 as a condition of contract retention
	and renewal;
	(10)  a requirement that the managed care organization
	provide the information required by Section 533.012 and otherwise
	comply and cooperate with the commission's office of inspector
	general and the office of the attorney general;
	(11)  a requirement that the managed care
	organization's usages of out-of-network providers or groups of
	out-of-network providers may not exceed limits for those usages
	relating to total inpatient admissions, total outpatient services,
	and emergency room admissions determined by the commission;
	(12)  if the commission finds that a managed care
	organization has violated Subdivision (11), a requirement that the
	managed care organization reimburse an out-of-network provider for
	health care services at a rate that is equal to the allowable rate
	for those services, as determined under Sections 32.028 and
	32.0281, Human Resources Code;
	(13)  a requirement that the organization use advanced
	practice nurses in addition to physicians as primary care providers
	to increase the availability of primary care providers in the
	organization's provider network;
	(14)  a requirement that the managed care organization
	reimburse a federally qualified health center or rural health
	clinic for health care services provided to a recipient outside of
	regular business hours, including on a weekend day or holiday, at a
	rate that is equal to the allowable rate for those services as
	determined under Section 32.028, Human Resources Code, if the
	recipient does not have a referral from the recipient's primary
	care physician; [and]
	(15)  a requirement that the managed care organization
	develop, implement, and maintain a system for tracking and
	resolving all provider appeals related to claims payment, including
	a process that will require:
	(A)  a tracking mechanism to document the status
	and final disposition of each provider's claims payment appeal;
	(B)  the contracting with physicians who are not
	network providers and who are of the same or related specialty as
	the appealing physician to resolve claims disputes related to
	denial on the basis of medical necessity that remain unresolved
	subsequent to a provider appeal; and
	(C)  the determination of the physician resolving
	the dispute to be binding on the managed care organization and
	provider;
	(16)  a requirement that a medical director who is
	authorized to make medical necessity determinations is available to
	the region where the managed care organization provides health care
	services;
	(17)  a requirement that the managed care organization
	ensure that a medical director and patient care coordinators and
	provider and recipient support services personnel are located in
	the South Texas service region, if the managed care organization
	provides a managed care plan in that region;
	(18)  a requirement that the managed care organization
	provide special programs and materials for recipients with limited
	English proficiency or low literacy skills;
	(19)  a requirement that the managed care organization
	develop and establish a process for responding to provider appeals
	in the region where the organization provides health care services;
	(20)  a requirement that the managed care organization
	develop and submit to the commission, before the organization
	begins to provide health care services to recipients, a
	comprehensive plan that describes how the organization's provider
	network will provide recipients sufficient access to:
	(A)  preventive care;
	(B)  primary care;
	(C)  specialty care;
	(D)  after-hours urgent care; and
	(E)  chronic care;
	(21)  a requirement that the managed care organization
	demonstrate to the commission, before the organization begins to
	provide health care services to recipients, that:
	(A)  the organization's provider network has the
	capacity to serve the number of recipients expected to enroll in a
	managed care plan offered by the organization;
	(B)  the organization's provider network
	includes:
	(i)  a sufficient number of primary care
	providers;
	(ii)  a sufficient variety of provider
	types; and
	(iii)  providers located throughout the
	region where the organization will provide health care services;
	and
	(C)  health care services will be accessible to
	recipients through the organization's provider network to a
	comparable extent that health care services would be available to
	recipients under a fee-for-service or primary care case management
	model of Medicaid managed care;
	(22)  a requirement that the managed care organization
	develop a monitoring program for measuring the quality of the
	health care services provided by the organization's provider
	network that:
	(A)  incorporates the National Committee for
	Quality Assurance's Healthcare Effectiveness Data and Information
	Set (HEDIS) measures;
	(B)  focuses on measuring outcomes; and
	(C)  includes the collection and analysis of
	clinical data relating to prenatal care, preventive care, mental
	health care, and the treatment of acute and chronic health
	conditions and substance abuse;
	(23)  subject to Subsection (a-1), a requirement that
	the managed care organization develop, implement, and maintain an
	outpatient pharmacy benefit plan for its enrolled recipients:
	(A)  that exclusively employs the vendor drug
	program formulary and preserves the state's ability to reduce
	waste, fraud, and abuse under the Medicaid program;
	(B)  that adheres to the applicable preferred drug
	list adopted by the commission under Section 531.072;
	(C)  that includes the prior authorization
	procedures and requirements prescribed by or implemented under
	Sections 531.073(b), (c), and (g) for the vendor drug program;
	(D)  for purposes of which the managed care
	organization:
	(i)  may not negotiate or collect rebates
	associated with pharmacy products on the vendor drug program
	formulary; and
	(ii)  may not receive drug rebate or pricing
	information that is confidential under Section 531.071;
	(E)  that complies with the prohibition under
	Section 531.089;
	(F)  under which the managed care organization may
	not prohibit, limit, or interfere with a recipient's selection of a
	pharmacy or pharmacist of the recipient's choice for the provision
	of pharmaceutical services under the plan through the imposition of
	different copayments;
	(G)  that allows the managed care organization or
	any subcontracted pharmacy benefit manager to contract with a
	pharmacist or pharmacy providers separately for specialty pharmacy
	services, except that:
	(i)  the managed care organization and
	pharmacy benefit manager are prohibited from allowing exclusive
	contracts with a specialty pharmacy owned wholly or partly by the
	pharmacy benefit manager responsible for the administration of the
	pharmacy benefit program; and
	(ii)  the managed care organization and
	pharmacy benefit manager must adopt policies and procedures for
	reclassifying prescription drugs from retail to specialty drugs,
	and those policies and procedures must be consistent with rules
	adopted by the executive commissioner and include notice to network
	pharmacy providers from the managed care organization;
	(H)  under which the managed care organization may
	not prevent a pharmacy or pharmacist from participating as a
	provider if the pharmacy or pharmacist agrees to comply with the
	financial terms and conditions of the contract as well as other
	reasonable administrative and professional terms and conditions of
	the contract;
	(I)  under which the managed care organization may
	include mail-order pharmacies in its networks, but may not require
	enrolled recipients to use those pharmacies, and may not charge an
	enrolled recipient who opts to use this service a fee, including
	postage and handling fees; and
	(J)  under which the managed care organization or
	pharmacy benefit manager, as applicable, must pay claims in
	accordance with Section 843.339, Insurance Code; and
	(24)  a requirement that the managed care organization
	and any entity with which the managed care organization contracts
	for the performance of services under a managed care plan disclose,
	at no cost, to the commission and, on request, the office of the
	attorney general all discounts, incentives, rebates, fees, free
	goods, bundling arrangements, and other agreements affecting the
	net cost of goods or services provided under the plan.
	(a-1)  The requirements imposed by Subsections (a)(23)(A),
	(B), and (C) do not apply, and may not be enforced, on and after
	August 31, 2013.
	(e)  Subchapter A, Chapter 533, Government Code, is amended
	by adding Section 533.0066 to read as follows:
	Sec. 533.0066.  PROVIDER INCENTIVES. The commission shall,
	to the extent possible, work to ensure that managed care
	organizations provide payment incentives to health care providers
	in the organizations' networks whose performance in promoting
	recipients' use of preventive services exceeds minimum established
	standards.
	(f)  Section 533.0071, Government Code, is amended to read as
	follows:
	Sec. 533.0071.  ADMINISTRATION OF CONTRACTS. The commission
	shall make every effort to improve the administration of contracts
	with managed care organizations.  To improve the administration of
	these contracts, the commission shall:
	(1)  ensure that the commission has appropriate
	expertise and qualified staff to effectively manage contracts with
	managed care organizations under the Medicaid managed care program;
	(2)  evaluate options for Medicaid payment recovery
	from managed care organizations if the enrollee dies or is
	incarcerated or if an enrollee is enrolled in more than one state
	program or is covered by another liable third party insurer;
	(3)  maximize Medicaid payment recovery options by
	contracting with private vendors to assist in the recovery of
	capitation payments, payments from other liable third parties, and
	other payments made to managed care organizations with respect to
	enrollees who leave the managed care program;
	(4)  decrease the administrative burdens of managed
	care for the state, the managed care organizations, and the
	providers under managed care networks to the extent that those
	changes are compatible with state law and existing Medicaid managed
	care contracts, including decreasing those burdens by:
	(A)  where possible, decreasing the duplication
	of administrative reporting requirements for the managed care
	organizations, such as requirements for the submission of encounter
	data, quality reports, historically underutilized business
	reports, and claims payment summary reports;
	(B)  allowing managed care organizations to
	provide updated address information directly to the commission for
	correction in the state system;
	(C)  promoting consistency and uniformity among
	managed care organization policies, including policies relating to
	the preauthorization process, lengths of hospital stays, filing
	deadlines, levels of care, and case management services; [and]
	(D)  reviewing the appropriateness of primary
	care case management requirements in the admission and clinical
	criteria process, such as requirements relating to including a
	separate cover sheet for all communications, submitting
	handwritten communications instead of electronic or typed review
	processes, and admitting patients listed on separate
	notifications; and
	(E)  providing a single portal through which
	providers in any managed care organization's provider network may
	submit claims; and
	(5)  reserve the right to amend the managed care
	organization's process for resolving provider appeals of denials
	based on medical necessity to include an independent review process
	established by the commission for final determination of these
	disputes.
	(g)  Subchapter A, Chapter 533, Government Code, is amended
	by adding Section 533.0073 to read as follows:
	Sec. 533.0073.  MEDICAL DIRECTOR QUALIFICATIONS. A person
	who serves as a medical director for a managed care plan must be a
	physician licensed to practice medicine in this state under
	Subtitle B, Title 3, Occupations Code.
	(h)  Subsections (a) and (c), Section 533.0076, Government
	Code, are amended to read as follows:
	(a)  Except as provided by Subsections (b) and (c), and to
	the extent permitted by federal law, [the commission may prohibit]
	a recipient enrolled [from disenrolling] in a managed care plan
	under this chapter may not disenroll from that plan and enroll
	[enrolling] in another managed care plan during the 12-month period
	after the date the recipient initially enrolls in a plan.
	(c)  The commission shall allow a recipient who is enrolled
	in a managed care plan under this chapter to disenroll from [in]
	that plan and enroll in another managed care plan:
	(1)  at any time for cause in accordance with federal
	law; and
	(2)  once for any reason after the periods described by
	Subsections (a) and (b).
	(i)  Subsections (a), (b), (c), and (e), Section 533.012,
	Government Code, are amended to read as follows:
	(a)  Each managed care organization contracting with the
	commission under this chapter shall submit the following, at no
	cost, to the commission and, on request, the office of the attorney
	general:
	(1)  a description of any financial or other business
	relationship between the organization and any subcontractor
	providing health care services under the contract;
	(2)  a copy of each type of contract between the
	organization and a subcontractor relating to the delivery of or
	payment for health care services;
	(3)  a description of the fraud control program used by
	any subcontractor that delivers health care services; and
	(4)  a description and breakdown of all funds paid to or
	by the managed care organization, including a health maintenance
	organization, primary care case management provider, pharmacy
	benefit manager, and [an] exclusive provider organization,
	necessary for the commission to determine the actual cost of
	administering the managed care plan.
	(b)  The information submitted under this section must be
	submitted in the form required by the commission or the office of
	the attorney general, as applicable, and be updated as required by
	the commission or the office of the attorney general, as
	applicable.
	(c)  The commission's office of investigations and
	enforcement or the office of the attorney general, as applicable,
	shall review the information submitted under this section as
	appropriate in the investigation of fraud in the Medicaid managed
	care program.
	(e)  Information submitted to the commission or the office of
	the attorney general, as applicable, under Subsection (a)(1) is
	confidential and not subject to disclosure under Chapter 552,
	Government Code.
	(j)  The heading to Section 32.046, Human Resources Code, is
	amended to read as follows:
	Sec. 32.046.  [VENDOR DRUG PROGRAM;] SANCTIONS AND PENALTIES
	RELATED TO THE PROVISION OF PHARMACY PRODUCTS.
	(k)  Subsection (a), Section 32.046, Human Resources Code,
	is amended to read as follows:
	(a)  The executive commissioner of the Health and Human
	Services Commission [department] shall adopt rules governing
	sanctions and penalties that apply to a provider who participates
	in the vendor drug program or is enrolled as a network pharmacy
	provider of a managed care organization contracting with the
	commission under Chapter 533, Government Code, or its subcontractor
	and who submits an improper claim for reimbursement under the
	program.
	(l)  Subsection (d), Section 533.012, Government Code, is
	repealed.
	(m)  Not later than December 1, 2013, the Health and Human
	Services Commission shall submit a report to the legislature
	regarding the commission's work to ensure that Medicaid managed
	care organizations promote the development of patient-centered
	medical homes for recipients of medical assistance as required
	under Section 533.0029, Government Code, as added by this section.
	(n)  The Health and Human Services Commission shall, in a
	contract between the commission and a managed care organization
	under Chapter 533, Government Code, that is entered into or renewed
	on or after the effective date of this Act, include the provisions
	required by Subsection (a), Section 533.005, Government Code, as
	amended by this section.
	(o)  Section 533.0073, Government Code, as added by this
	section, applies only to a person hired or otherwise retained as the
	medical director of a Medicaid managed care plan on or after the
	effective date of this Act.  A person hired or otherwise retained
	before the effective date of this Act is governed by the law in
	effect immediately before the effective date of this Act, and that
	law is continued in effect for that purpose.
	(p)  Subsections (a) and (c), Section 533.0076, Government
	Code, as amended by this section, apply only to a request for
	disenrollment from a Medicaid managed care plan under Chapter 533,
	Government Code, made by a recipient on or after the effective date
	of this Act.  A request made by a recipient before that date is
	governed by the law in effect on the date the request was made, and
	the former law is continued in effect for that purpose.
	SECTION 1.03.  (a)  Section 62.101, Health and Safety Code,
	is amended by adding Subsection (a-1) to read as follows:
	(a-1)  A child who is the dependent of an employee of an
	agency of this state and who meets the requirements of Subsection
	(a) may be eligible for health benefits coverage in accordance with
	42 U.S.C. Section 1397jj(b)(6) and any other applicable law or
	regulations.
	(b)  Sections 1551.159 and 1551.312, Insurance Code, are
	repealed.
	(c)  The State Kids Insurance Program operated by the
	Employees Retirement System of Texas is abolished on the effective
	date of this Act.  The Health and Human Services Commission shall:
	(1)  establish a process in cooperation with the
	Employees Retirement System of Texas to facilitate the enrollment
	of eligible children in the child health plan program established
	under Chapter 62, Health and Safety Code, on or before the date
	those children are scheduled to stop receiving dependent child
	coverage under the State Kids Insurance Program; and
	(2)  modify any applicable administrative procedures
	to ensure that children described by this subsection maintain
	continuous health benefits coverage while transitioning from
	enrollment in the State Kids Insurance Program to enrollment in the
	child health plan program.
	SECTION 1.04.  (a)  Subchapter B, Chapter 31, Human
	Resources Code, is amended by adding Section 31.0326 to read as
	follows:
	Sec. 31.0326.  VERIFICATION OF IDENTITY AND PREVENTION OF
	DUPLICATE PARTICIPATION. The Health and Human Services Commission
	shall use appropriate technology to:
	(1)  confirm the identity of applicants for benefits
	under the financial assistance program; and
	(2)  prevent duplicate participation in the program by
	a person.
	(b)  Chapter 33, Human Resources Code, is amended by adding
	Section 33.0231 to read as follows:
	Sec. 33.0231.  VERIFICATION OF IDENTITY AND PREVENTION OF
	DUPLICATE PARTICIPATION IN SNAP. The department shall use
	appropriate technology to:
	(1)  confirm the identity of applicants for benefits
	under the supplemental nutrition assistance program; and
	(2)  prevent duplicate participation in the program by
	a person.
	(c)  Section 531.109, Government Code, is amended by adding
	Subsection (d) to read as follows:
	(d)  Absent an allegation of fraud, waste, or abuse, the
	commission may conduct an annual review of claims under this
	section only after the commission has completed the prior year's
	annual review of claims.
	(d)  If H.B. No. 710, Acts of the 82nd Legislature, Regular
	Session, 2011, does not become law, Section 31.0325, Human
	Resources Code, is repealed.
	(e)  If H.B. No. 710, Acts of the 82nd Legislature, Regular
	Session, 2011, becomes law, Section 31.0326, Human Resources Code,
	as added by this section, has no effect.
	(f)  If H.B. No. 710, Acts of the 82nd Legislature, Regular
	Session, 2011, becomes law, Section 33.0231, Human Resources Code,
	as added by that Act, is repealed.
	SECTION 1.05.  (a)  Section 242.033, Health and Safety Code,
	is amended by amending Subsection (d) and adding Subsection (g) to
	read as follows:
	(d)  Except as provided by Subsection (f), a license is
	renewable every three [two] years after:
	(1)  an inspection, unless an inspection is not
	required as provided by Section 242.047;
	(2)  payment of the license fee; and
	(3)  department approval of the report filed every
	three [two] years by the licensee.
	(g)  The executive commissioner by rule shall adopt a system
	under which an appropriate number of licenses issued by the
	department under this chapter expire on staggered dates occurring
	in each three-year period. If the expiration date of a license
	changes as a result of this subsection, the department shall
	prorate the licensing fee relating to that license as appropriate.
	(b)  Subsection (e-1), Section 242.159, Health and Safety
	Code, is amended to read as follows:
	(e-1)  An institution is not required to comply with
	Subsections (a) and (e) until September 1, 2014 [2012].  This
	subsection expires January 1, 2015 [2013].
	(c)  Subtitle B, Title 4, Health and Safety Code, is amended
	by adding Chapter 260A to read as follows:
	CHAPTER 260A. REPORTS OF ABUSE, NEGLECT, AND EXPLOITATION OF
	RESIDENTS OF CERTAIN FACILITIES
	Sec. 260A.001.  DEFINITIONS. In this chapter:
	(1)  "Abuse" means:
	(A)  the negligent or wilful infliction of injury,
	unreasonable confinement, intimidation, or cruel punishment with
	resulting physical or emotional harm or pain to a resident by the
	resident's caregiver, family member, or other individual who has an
	ongoing relationship with the resident; or
	(B)  sexual abuse of a resident, including any
	involuntary or nonconsensual sexual conduct that would constitute
	an offense under Section 21.08, Penal Code (indecent exposure), or
	Chapter 22, Penal Code (assaultive offenses), committed by the
	resident's caregiver, family member, or other individual who has an
	ongoing relationship with the resident.
	(2)  "Department" means the Department of Aging and
	Disability Services.
	(3)  "Executive commissioner" means the executive
	commissioner of the Health and Human Services Commission.
	(4)  "Exploitation" means the illegal or improper act
	or process of a caregiver, family member, or other individual who
	has an ongoing relationship with the resident using the resources
	of a resident for monetary or personal benefit, profit, or gain
	without the informed consent of the resident.
	(5)  "Facility" means:
	(A)  an institution as that term is defined by
	Section 242.002; and
	(B)  an assisted living facility as that term is
	defined by Section 247.002.
	(6)  "Neglect" means the failure to provide for one's
	self the goods or services, including medical services, which are
	necessary to avoid physical or emotional harm or pain or the failure
	of a caregiver to provide such goods or services.
	(7)  "Resident" means an individual, including a
	patient, who resides in a facility.
	Sec. 260A.002.  REPORTING OF ABUSE, NEGLECT, AND
	EXPLOITATION. (a)  A person, including an owner or employee of a
	facility, who has cause to believe that the physical or mental
	health or welfare of a resident has been or may be adversely
	affected by abuse, neglect, or exploitation caused by another
	person shall report the abuse, neglect, or exploitation in
	accordance with this chapter.
	(b)  Each facility shall require each employee of the
	facility, as a condition of employment with the facility, to sign a
	statement that the employee realizes that the employee may be
	criminally liable for failure to report those abuses.
	(c)  A person shall make an oral report immediately on
	learning of the abuse, neglect, or exploitation and shall make a
	written report to the department not later than the fifth day after
	the oral report is made.
	Sec. 260A.003.  CONTENTS OF REPORT. (a)  A report of abuse,
	neglect, or exploitation is nonaccusatory and reflects the
	reporting person's belief that a resident has been or will be
	abused, neglected, or exploited or has died of abuse or neglect.
	(b)  The report must contain:
	(1)  the name and address of the resident;
	(2)  the name and address of the person responsible for
	the care of the resident, if available; and
	(3)  other relevant information.
	(c)  Except for an anonymous report under Section 260A.004, a
	report of abuse, neglect, or exploitation under Section 260A.002
	should also include the address or phone number of the person making
	the report so that an investigator can contact the person for any
	necessary additional information. The phone number, address, and
	name of the person making the report must be deleted from any copy
	of any type of report that is released to the public, to the
	facility, or to an owner or agent of the facility.
	Sec. 260A.004.  ANONYMOUS REPORTS OF ABUSE, NEGLECT, OR
	EXPLOITATION. (a)  An anonymous report of abuse, neglect, or
	exploitation, although not encouraged, shall be received and acted
	on in the same manner as an acknowledged report.
	(b)  An anonymous report about a specific individual that
	accuses the individual of abuse, neglect, or exploitation need not
	be investigated.
	Sec. 260A.005.  TELEPHONE HOTLINE; PROCESSING OF REPORTS.
	(a)  The department shall operate the department's telephone
	hotline to:
	(1)  receive reports of abuse, neglect, or
	exploitation; and
	(2)  dispatch investigators.
	(b)  A report of abuse, neglect, or exploitation shall be
	made to the department's telephone hotline or to a local or state
	law enforcement agency. A report made relating to abuse, neglect,
	or exploitation or another complaint described by Section
	260A.007(c)(1) shall be made to the department's telephone hotline
	and to the law enforcement agency described by Section 260A.017(a).
	(c)  Except as provided by Section 260A.017, a local or state
	law enforcement agency that receives a report of abuse, neglect, or
	exploitation shall refer the report to the department.
	Sec. 260A.006.  NOTICE. (a)  Each facility shall
	prominently and conspicuously post a sign for display in a public
	area of the facility that is readily available to residents,
	employees, and visitors.
	(b)  The sign must include the statement:  CASES OF SUSPECTED
	ABUSE, NEGLECT, OR EXPLOITATION SHALL BE REPORTED TO THE TEXAS
	DEPARTMENT OF AGING AND DISABILITY SERVICES BY CALLING (insert
	telephone hotline number).
	(c)  A facility shall provide the telephone hotline number to
	an immediate family member of a resident of the facility upon the
	resident's admission into the facility.
	Sec. 260A.007.  INVESTIGATION AND REPORT OF DEPARTMENT.
	(a)  The department shall make a thorough investigation after
	receiving an oral or written report of abuse, neglect, or
	exploitation under Section 260A.002 or another complaint alleging
	abuse, neglect, or exploitation.
	(b)  The primary purpose of the investigation is the
	protection of the resident.
	(c)  The department shall begin the investigation:
	(1)  within 24 hours after receipt of the report or
	other allegation, if the report of abuse, neglect, exploitation, or
	other complaint alleges that:
	(A)  a resident's health or safety is in imminent
	danger;
	(B)  a resident has recently died because of
	conduct alleged in the report of abuse, neglect, exploitation, or
	other complaint;
	(C)  a resident has been hospitalized or been
	treated in an emergency room because of conduct alleged in the
	report of abuse, neglect, exploitation, or other complaint;
	(D)  a resident has been a victim of any act or
	attempted act described by Section 21.02, 21.11, 22.011, or 22.021,
	Penal Code; or
	(E)  a resident has suffered bodily injury, as
	that term is defined by Section 1.07, Penal Code, because of conduct
	alleged in the report of abuse, neglect, exploitation, or other
	complaint; or
	(2)  before the end of the next working day after the
	date of receipt of the report of abuse, neglect, exploitation, or
	other complaint, if the report or complaint alleges the existence
	of circumstances that could result in abuse, neglect, or
	exploitation and that could place a resident's health or safety in
	imminent danger.
	(d)  The department shall adopt rules governing the conduct
	of investigations, including procedures to ensure that the
	complainant and the resident, the resident's next of kin, and any
	person designated to receive information concerning the resident
	receive periodic information regarding the investigation.
	(e)  In investigating the report of abuse, neglect,
	exploitation, or other complaint, the investigator for the
	department shall:
	(1)  make an unannounced visit to the facility to
	determine the nature and cause of the alleged abuse, neglect, or
	exploitation of the resident;
	(2)  interview each available witness, including the
	resident who suffered the alleged abuse, neglect, or exploitation
	if the resident is able to communicate or another resident or other
	witness identified by any source as having personal knowledge
	relevant to the report of abuse, neglect, exploitation, or other
	complaint;
	(3)  personally inspect any physical circumstance that
	is relevant and material to the report of abuse, neglect,
	exploitation, or other complaint and that may be objectively
	observed;
	(4)  make a photographic record of any injury to a
	resident, subject to Subsection (n); and
	(5)  write an investigation report that includes:
	(A)  the investigator's personal observations;
	(B)  a review of relevant documents and records;
	(C)  a summary of each witness statement,
	including the statement of the resident that suffered the alleged
	abuse, neglect, or exploitation and any other resident interviewed
	in the investigation; and
	(D)  a statement of the factual basis for the
	findings for each incident or problem alleged in the report or other
	allegation.
	(f)  An investigator for an investigating agency shall
	conduct an interview under Subsection (e)(2) in private unless the
	witness expressly requests that the interview not be private.
	(g)  Not later than the 30th day after the date the
	investigation is complete, the investigator shall prepare the
	written report required by Subsection (e). The department shall
	make the investigation report available to the public on request
	after the date the department's letter of determination is
	complete. The department shall delete from any copy made available
	to the public:
	(1)  the name of:
	(A)  any resident, unless the department receives
	written authorization from a resident or the resident's legal
	representative requesting the resident's name be left in the
	report;
	(B)  the person making the report of abuse,
	neglect, exploitation, or other complaint; and
	(C)  an individual interviewed in the
	investigation; and
	(2)  photographs of any injury to the resident.
	(h)  In the investigation, the department shall determine:
	(1)  the nature, extent, and cause of the abuse,
	neglect, or exploitation;
	(2)  the identity of the person responsible for the
	abuse, neglect, or exploitation;
	(3)  the names and conditions of the other residents;
	(4)  an evaluation of the persons responsible for the
	care of the residents;
	(5)  the adequacy of the facility environment; and
	(6)  any other information required by the department.
	(i)  If the department attempts to carry out an on-site
	investigation and it is shown that admission to the facility or any
	place where the resident is located cannot be obtained, a probate or
	county court shall order the person responsible for the care of the
	resident or the person in charge of a place where the resident is
	located to allow entrance for the interview and investigation.
	(j)  Before the completion of the investigation, the
	department shall file a petition for temporary care and protection
	of the resident if the department determines that immediate removal
	is necessary to protect the resident from further abuse, neglect,
	or exploitation.
	(k)  The department shall make a complete final written
	report of the investigation and submit the report and its
	recommendations to the district attorney and, if a law enforcement
	agency has not investigated the report of abuse, neglect,
	exploitation, or other complaint, to the appropriate law
	enforcement agency.
	(l)  Within 24 hours after receipt of a report of abuse,
	neglect, exploitation, or other complaint described by Subsection
	(c)(1), the department shall report the report or complaint to the
	law enforcement agency described by Section 260A.017(a). The
	department shall cooperate with that law enforcement agency in the
	investigation of the report or complaint as described by Section
	260A.017.
	(m)  The inability or unwillingness of a local law
	enforcement agency to conduct a joint investigation under Section
	260A.017 does not constitute grounds to prevent or prohibit the
	department from performing its duties under this chapter. The
	department shall document any instance in which a law enforcement
	agency is unable or unwilling to conduct a joint investigation
	under Section 260A.017.
	(n)  If the department determines that, before a
	photographic record of an injury to a resident may be made under
	Subsection (e), consent is required under state or federal law, the
	investigator:
	(1)  shall seek to obtain any required consent; and
	(2)  may not make the photographic record unless the
	consent is obtained.
	Sec. 260A.008.  CONFIDENTIALITY. A report, record, or
	working paper used or developed in an investigation made under this
	chapter and the name, address, and phone number of any person making
	a report under this chapter are confidential and may be disclosed
	only for purposes consistent with rules adopted by the executive
	commissioner. The report, record, or working paper and the name,
	address, and phone number of the person making the report shall be
	disclosed to a law enforcement agency as necessary to permit the law
	enforcement agency to investigate a report of abuse, neglect,
	exploitation, or other complaint in accordance with Section
	260A.017.
	Sec. 260A.009.  IMMUNITY. (a)  A person who reports as
	provided by this chapter is immune from civil or criminal liability
	that, in the absence of the immunity, might result from making the
	report.
	(b)  The immunity provided by this section extends to
	participation in any judicial proceeding that results from the
	report.
	(c)  This section does not apply to a person who reports in
	bad faith or with malice.
	Sec. 260A.010.  PRIVILEGED COMMUNICATIONS. In a proceeding
	regarding the abuse, neglect, or exploitation of a resident or the
	cause of any abuse, neglect, or exploitation, evidence may not be
	excluded on the ground of privileged communication except in the
	case of a communication between an attorney and client.
	Sec. 260A.011.  CENTRAL REGISTRY. (a)  The department shall
	maintain in the city of Austin a central registry of reported cases
	of resident abuse, neglect, or exploitation.
	(b)  The executive commissioner may adopt rules necessary to
	carry out this section.
	(c)  The rules shall provide for cooperation with hospitals
	and clinics in the exchange of reports of resident abuse, neglect,
	or exploitation.
	Sec. 260A.012.  FAILURE TO REPORT; CRIMINAL PENALTY. (a)  A
	person commits an offense if the person has cause to believe that a
	resident's physical or mental health or welfare has been or may be
	further adversely affected by abuse, neglect, or exploitation and
	knowingly fails to report in accordance with Section 260A.002.
	(b)  An offense under this section is a Class A misdemeanor.
	Sec. 260A.013.  BAD FAITH, MALICIOUS, OR RECKLESS REPORTING;
	CRIMINAL PENALTY. (a)  A person commits an offense if the person
	reports under this chapter in bad faith, maliciously, or
	recklessly.
	(b)  An offense under this section is a Class A misdemeanor.
	(c)  The criminal penalty provided by this section is in
	addition to any civil penalties for which the person may be liable.
	Sec. 260A.014.  RETALIATION AGAINST EMPLOYEES PROHIBITED.
	(a)  In this section, "employee" means a person who is an employee
	of a facility or any other person who provides services for a
	facility for compensation, including a contract laborer for the
	facility.
	(b)  An employee has a cause of action against a facility, or
	the owner or another employee of the facility, that suspends or
	terminates the employment of the person or otherwise disciplines or
	discriminates or retaliates against the employee for reporting to
	the employee's supervisor, an administrator of the facility, a
	state regulatory agency, or a law enforcement agency a violation of
	law, including a violation of Chapter 242 or 247 or a rule adopted
	under Chapter 242 or 247, or for initiating or cooperating in any
	investigation or proceeding of a governmental entity relating to
	care, services, or conditions at the facility.
	(c)  The petitioner may recover:
	(1)  the greater of $1,000 or actual damages, including
	damages for mental anguish even if an injury other than mental
	anguish is not shown, and damages for lost wages if the petitioner's
	employment was suspended or terminated;
	(2)  exemplary damages;
	(3)  court costs; and
	(4)  reasonable attorney's fees.
	(d)  In addition to the amounts that may be recovered under
	Subsection (c), a person whose employment is suspended or
	terminated is entitled to appropriate injunctive relief,
	including, if applicable:
	(1)  reinstatement in the person's former position; and
	(2)  reinstatement of lost fringe benefits or seniority
	rights.
	(e)  The petitioner, not later than the 90th day after the
	date on which the person's employment is suspended or terminated,
	must bring suit or notify the Texas Workforce Commission of the
	petitioner's intent to sue under this section. A petitioner who
	notifies the Texas Workforce Commission under this subsection must
	bring suit not later than the 90th day after the date of the
	delivery of the notice to the commission. On receipt of the notice,
	the commission shall notify the facility of the petitioner's intent
	to bring suit under this section.
	(f)  The petitioner has the burden of proof, except that
	there is a rebuttable presumption that the person's employment was
	suspended or terminated for reporting abuse, neglect, or
	exploitation if the person is suspended or terminated within 60
	days after the date on which the person reported in good faith.
	(g)  A suit under this section may be brought in the district
	court of the county in which:
	(1)  the plaintiff resides;
	(2)  the plaintiff was employed by the defendant; or
	(3)  the defendant conducts business.
	(h)  Each facility shall require each employee of the
	facility, as a condition of employment with the facility, to sign a
	statement that the employee understands the employee's rights under
	this section. The statement must be part of the statement required
	under Section 260A.002. If a facility does not require an employee
	to read and sign the statement, the periods under Subsection (e) do
	not apply, and the petitioner must bring suit not later than the
	second anniversary of the date on which the person's employment is
	suspended or terminated.
	Sec. 260A.015.  RETALIATION AGAINST VOLUNTEERS, RESIDENTS,
	OR FAMILY MEMBERS OR GUARDIANS OF RESIDENTS. (a) A facility may
	not retaliate or discriminate against a volunteer, resident, or
	family member or guardian of a resident because the volunteer,
	resident, resident's family member or guardian, or any other
	person:
	(1)  makes a complaint or files a grievance concerning
	the facility;
	(2)  reports a violation of law, including a violation
	of Chapter 242 or 247 or a rule adopted under Chapter 242 or 247; or
	(3)  initiates or cooperates in an investigation or
	proceeding of a governmental entity relating to care, services, or
	conditions at the facility.
	(b)  A volunteer, resident, or family member or guardian of a
	resident who is retaliated or discriminated against in violation of
	Subsection (a) is entitled to sue for:
	(1)  injunctive relief;
	(2)  the greater of $1,000 or actual damages, including
	damages for mental anguish even if an injury other than mental
	anguish is not shown;
	(3)  exemplary damages;
	(4)  court costs; and
	(5)  reasonable attorney's fees.
	(c)  A volunteer, resident, or family member or guardian of a
	resident who seeks relief under this section must report the
	alleged violation not later than the 180th day after the date on
	which the alleged violation of this section occurred or was
	discovered by the volunteer, resident, or family member or guardian
	of the resident through reasonable diligence.
	(d)  A suit under this section may be brought in the district
	court of the county in which the facility is located or in a
	district court of Travis County.
	Sec. 260A.016.  REPORTS RELATING TO DEATHS OF RESIDENTS OF
	AN INSTITUTION. (a)  In this section, "institution" has the
	meaning assigned by Section 242.002.
	(b)  An institution shall submit a report to the department
	concerning deaths of residents of the institution. The report must
	be submitted not later than the 10th day after the last day of each
	month in which a resident of the institution dies. The report must
	also include the death of a resident occurring within 24 hours after
	the resident is transferred from the institution to a hospital.
	(c)  The institution must make the report on a form
	prescribed by the department. The report must contain the name and
	social security number of the deceased.
	(d)  The department shall correlate reports under this
	section with death certificate information to develop data relating
	to the:
	(1)  name and age of the deceased;
	(2)  official cause of death listed on the death
	certificate;
	(3)  date, time, and place of death; and
	(4)  name and address of the institution in which the
	deceased resided.
	(e)  Except as provided by Subsection (f), a record under
	this section is confidential and not subject to the provisions of
	Chapter 552, Government Code.
	(f)  The department shall develop statistical information on
	official causes of death to determine patterns and trends of
	incidents of death among residents and in specific institutions.
	Information developed under this subsection is public.
	(g)  A licensed institution shall make available historical
	statistics on all required information on request of an applicant
	or applicant's representative.
	Sec. 260A.017.  DUTIES OF LAW ENFORCEMENT; JOINT
	INVESTIGATION. (a)  The department shall investigate a report of
	abuse, neglect, exploitation, or other complaint described by
	Section 260A.007(c)(1) jointly with:
	(1)  the municipal law enforcement agency, if the
	facility is located within the territorial boundaries of a
	municipality; or
	(2)  the sheriff's department of the county in which the
	facility is located, if the facility is not located within the
	territorial boundaries of a municipality.
	(b)  The law enforcement agency described by Subsection (a)
	shall acknowledge the report of abuse, neglect, exploitation, or
	other complaint and begin the joint investigation required by this
	section within 24 hours after receipt of the report or complaint.
	The law enforcement agency shall cooperate with the department and
	report to the department the results of the investigation.
	(c)  The requirement that the law enforcement agency and the
	department conduct a joint investigation under this section does
	not require that a representative of each agency be physically
	present during all phases of the investigation or that each agency
	participate equally in each activity conducted in the course of the
	investigation.
	Sec. 260A.018.  CALL CENTER EVALUATION; REPORT. (a)  The
	department, using existing resources, shall test, evaluate, and
	determine the most effective and efficient staffing pattern for
	receiving and processing complaints by expanding customer service
	representatives' hours of availability at the department's
	telephone hotline call center.
	(b)  The department shall report the findings of the
	evaluation described by Subsection (a) to the House Committee on
	Human Services and the Senate Committee on Health and Human
	Services not later than September 1, 2012.
	(c)  This section expires October 31, 2012.
	(d)  Chapter 2, Code of Criminal Procedure, is amended by
	adding Article 2.271 to read as follows:
	Art. 2.271.  INVESTIGATION OF CERTAIN REPORTS ALLEGING
	ABUSE, NEGLECT, OR EXPLOITATION. Notwithstanding Article 2.27, on
	receipt of a report of abuse, neglect, exploitation, or other
	complaint of a resident of a nursing home, convalescent home, or
	other related institution or an assisted living facility, under
	Section 260A.007(c)(1), Health and Safety Code, the appropriate
	local law enforcement agency shall investigate the report as
	required by Section 260A.017, Health and Safety Code.
	(e)  Subchapter A, Chapter 242, Health and Safety Code, is
	amended by adding Section 242.018 to read as follows:
	Sec. 242.018.  COMPLIANCE WITH CHAPTER 260A. (a)  An
	institution shall comply with Chapter 260A and the rules adopted
	under that chapter.
	(b)  A person, including an owner or employee of an
	institution, shall comply with Chapter 260A and the rules adopted
	under that chapter.
	(f)  Subsection (a), Section 242.042, Health and Safety
	Code, is amended to read as follows:
	(a)  Each institution shall prominently and conspicuously
	post for display in a public area of the institution that is readily
	available to residents, employees, and visitors:
	(1)  the license issued under this chapter;
	(2)  a sign prescribed by the department that specifies
	complaint procedures established under this chapter or rules
	adopted under this chapter and that specifies how complaints may be
	registered with the department;
	(3)  a notice in a form prescribed by the department
	stating that licensing inspection reports and other related reports
	which show deficiencies cited by the department are available at
	the institution for public inspection and providing the
	department's toll-free telephone number that may be used to obtain
	information concerning the institution;
	(4)  a concise summary of the most recent inspection
	report relating to the institution;
	(5)  notice that the department can provide summary
	reports relating to the quality of care, recent investigations,
	litigation, and other aspects of the operation of the institution;
	(6)  notice that the Texas Board of Nursing Facility
	Administrators can provide information about the nursing facility
	administrator;
	(7)  any notice or written statement required to be
	posted under Section 242.072(c);
	(8)  notice that informational materials relating to
	the compliance history of the institution are available for
	inspection at a location in the institution specified by the sign;
	[and]
	(9)  notice that employees, other staff, residents,
	volunteers, and family members and guardians of residents are
	protected from discrimination or retaliation as provided by
	Sections 260A.014 and 260A.015; and
	(10)  a sign required to be posted under Section
	260A.006(a) [242.133 and 242.1335].
	(g)  Subsection (b), Section 242.0665, Health and Safety
	Code, is amended to read as follows:
	(b)  Subsection (a) does not apply:
	(1)  to a violation that the department determines:
	(A)  results in serious harm to or death of a
	resident;
	(B)  constitutes a serious threat to the health or
	safety of a resident; or
	(C)  substantially limits the institution's
	capacity to provide care;
	(2)  to a violation described by Sections
	242.066(a)(2)-(7);
	(3)  to a violation of Section 260A.014 [242.133] or
	260A.015 [242.1335]; or
	(4)  to a violation of a right of a resident adopted
	under Subchapter L.
	(h)  Subsections (a) and (b), Section 242.848, Health and
	Safety Code, are amended to read as follows:
	(a)  For purposes of the duty to report abuse or neglect
	under Section 260A.002 [242.122] and the criminal penalty for the
	failure to report abuse or neglect under Section 260A.012
	[242.131], a person who is conducting electronic monitoring on
	behalf of a resident under this subchapter is considered to have
	viewed or listened to a tape or recording made by the electronic
	monitoring device on or before the 14th day after the date the tape
	or recording is made.
	(b)  If a resident who has capacity to determine that the
	resident has been abused or neglected and who is conducting
	electronic monitoring under this subchapter gives a tape or
	recording made by the electronic monitoring device to a person and
	directs the person to view or listen to the tape or recording to
	determine whether abuse or neglect has occurred, the person to whom
	the resident gives the tape or recording is considered to have
	viewed or listened to the tape or recording on or before the seventh
	day after the date the person receives the tape or recording for
	purposes of the duty to report abuse or neglect under Section
	260A.002 [242.122] and of the criminal penalty for the failure to
	report abuse or neglect under Section 260A.012 [242.131].
	(i)  Subchapter A, Chapter 247, Health and Safety Code, is
	amended by adding Section 247.007 to read as follows:
	Sec. 247.007.  COMPLIANCE WITH CHAPTER 260A. (a)  An
	assisted living facility shall comply with Chapter 260A and the
	rules adopted under that chapter.
	(b)  A person, including an owner or employee of an assisted
	living facility, shall comply with Chapter 260A and the rules
	adopted under that chapter.
	(j)  Subsection (a), Section 247.043, Health and Safety
	Code, is amended to read as follows:
	(a)  The department shall conduct an investigation in
	accordance with Section 260A.007 after receiving a report [a
	preliminary investigation of each allegation] of abuse,
	exploitation, or neglect of a resident of an assisted living
	facility [to determine if there is evidence to corroborate the
	allegation. If the department determines that there is evidence to
	corroborate the allegation, the department shall conduct a thorough
	investigation of the allegation].
	(k)  Subsection (b), Section 247.0452, Health and Safety
	Code, is amended to read as follows:
	(b)  Subsection (a) does not apply:
	(1)  to a violation that the department determines
	results in serious harm to or death of a resident;
	(2)  to a violation described by Sections
	247.0451(a)(2)-(7) or a violation of Section 260A.014 or 260A.015;
	(3)  to a second or subsequent violation of:
	(A)  a right of the same resident under Section
	247.064; or
	(B)  the same right of all residents under Section
	247.064; or
	(4)  to a violation described by Section 247.066, which
	contains its own right to correct provisions.
	(l)  Section 48.003, Human Resources Code, is amended to read
	as follows:
	Sec. 48.003.  INVESTIGATIONS IN NURSING HOMES, ASSISTED
	LIVING FACILITIES, AND SIMILAR FACILITIES. (a)  This chapter does
	not apply if the alleged or suspected abuse, neglect, or
	exploitation occurs in a facility licensed under Chapter 242 or
	247, Health and Safety Code.
	(b)  Alleged or suspected abuse, neglect, or exploitation
	that occurs in a facility licensed under Chapter 242 or 247, Health
	and Safety Code, is governed by Chapter 260A [Subchapter B, Chapter
	242], Health and Safety Code.
	(m)  Subchapter E, Chapter 242, Health and Safety Code, is
	repealed.
	(n)  The executive commissioner of the Health and Human
	Services Commission shall adopt the rules required under Subsection
	(g), Section 242.033, Health and Safety Code, as added by this
	section, as soon as practicable after the effective date of this
	Act, but not later than December 1, 2012.
	(o)  The repeal by this Act of Section 242.131, Health and
	Safety Code, does not apply to an offense committed under that
	section before the effective date of this Act. An offense committed
	before the effective date of this Act is governed by that section as
	it existed on the date the offense was committed, and the former law
	is continued in effect for that purpose. For purposes of this
	subsection, an offense was committed before the effective date of
	this Act if any element of the offense occurred before that date.
	(p)  The repeal by this Act of Sections 242.133 and 242.1335,
	Health and Safety Code, does not apply to a cause of action that
	accrues before the effective date of this Act. A cause of action
	that accrues before the effective date of this Act is governed by
	Section 242.133 or 242.1335, Health and Safety Code, as applicable,
	as the section existed at the time the cause of action accrued, and
	the former law is continued in effect for that purpose.
	(q)  The change in law made by this Act by the repeal of
	Subchapter E, Chapter 242, Health and Safety Code, does not apply to
	a disciplinary action under Subchapter C, Chapter 242, Health and
	Safety Code, for conduct that occurred before the effective date of
	this Act. Conduct that occurs before the effective date of this Act
	is governed by the law as it existed on the date the conduct
	occurred, and the former law is continued in effect for that
	purpose.
	(r)  The Department of Aging and Disability Services shall
	implement Chapter 260A, Health and Safety Code, as added by this
	Act, using only existing resources and personnel.
	(s)  The Department of Aging and Disability Services shall
	ensure that the services provided on the effective date of this Act
	are at least as comprehensive as the services provided on the day
	before the effective date of this Act.
	SECTION 1.06.  (a)  Section 161.081, Human Resources Code,
	as effective September 1, 2011, is amended to read as follows:
	Sec. 161.081.  LONG-TERM CARE MEDICAID WAIVER PROGRAMS:
	STREAMLINING AND UNIFORMITY. (a)  In this section, "Section
	1915(c) waiver program" has the meaning assigned by Section
	531.001, Government Code.
	(b)  The department, in consultation with the commission,
	shall streamline the administration of and delivery of services
	through Section 1915(c) waiver programs.  In implementing this
	subsection, the department, subject to Subsection (c), may consider
	implementing the following streamlining initiatives:
	(1)  reducing the number of forms used in administering
	the programs;
	(2)  revising program provider manuals and training
	curricula;
	(3)  consolidating service authorization systems;
	(4)  eliminating any physician signature requirements
	the department considers unnecessary;
	(5)  standardizing individual service plan processes
	across the programs; [and]
	(6)  if feasible:
	(A)  concurrently conducting program
	certification and billing audit and review processes and other
	related audit and review processes;
	(B)  streamlining other billing and auditing
	requirements;
	(C)  eliminating duplicative responsibilities
	with respect to the coordination and oversight of individual care
	plans for persons receiving waiver services; and
	(D)  streamlining cost reports and other cost
	reporting processes; and
	(7)  any other initiatives that will increase
	efficiencies in the programs.
	(c)  The department shall ensure that actions taken under
	Subsection (b) [this section] do not conflict with any requirements
	of the commission under Section 531.0218, Government Code.
	(d)  The department and the commission shall jointly explore
	the development of uniform licensing and contracting standards that
	would:
	(1)  apply to all contracts for the delivery of Section
	1915(c) waiver program services;
	(2)  promote competition among providers of those
	program services; and
	(3)  integrate with other department and commission
	efforts to streamline and unify the administration and delivery of
	the program services, including those required by this section or
	Section 531.0218, Government Code.
	(b)  Subchapter D, Chapter 161, Human Resources Code, is
	amended by adding Section 161.082 to read as follows:
	Sec. 161.082.  LONG-TERM CARE MEDICAID WAIVER PROGRAMS:
	UTILIZATION REVIEW. (a)  In this section, "Section 1915(c) waiver
	program" has the meaning assigned by Section 531.001, Government
	Code.
	(b)  The department shall perform a utilization review of
	services in all Section 1915(c) waiver programs. The utilization
	review must include, at a minimum, reviewing program recipients'
	levels of care and any plans of care for those recipients that
	exceed service level thresholds established in the applicable
	waiver program guidelines.
	SECTION 1.07.  Subchapter D, Chapter 161, Human Resources
	Code, is amended by adding Section 161.086 to read as follows:
	Sec. 161.086.  ELECTRONIC VISIT VERIFICATION SYSTEM. If it
	is cost-effective, the department shall implement an electronic
	visit verification system under appropriate programs administered
	by the department under the Medicaid program that allows providers
	to electronically verify and document basic information relating to
	the delivery of services, including:
	(1)  the provider's name;
	(2)  the recipient's name;
	(3)  the date and time the provider begins and ends the
	delivery of services; and
	(4)  the location of service delivery.
	SECTION 1.08.  (a)  Subdivision (1), Section 247.002, Health
	and Safety Code, is amended to read as follows:
	(1)  "Assisted living facility" means an establishment
	that:
	(A)  furnishes, in one or more facilities, food
	and shelter to four or more persons who are unrelated to the
	proprietor of the establishment;
	(B)  provides:
	(i)  personal care services; or
	(ii)  administration of medication by a
	person licensed or otherwise authorized in this state to administer
	the medication; [and]
	(C)  may provide assistance with or supervision of
	the administration of medication; and
	(D)  may provide skilled nursing services for the
	following limited purposes:
	(i)  coordination of resident care with
	outside home and community support services agencies and other
	health care professionals;
	(ii)  provision or delegation of personal
	care services and medication administration as described by this
	subdivision;
	(iii)  assessment of residents to determine
	the care required; and
	(iv)  for periods of time as established by
	department rule, delivery of temporary skilled nursing treatment
	for a minor illness, injury, or emergency.
	(b)  Section 247.004, Health and Safety Code, as effective
	September 1, 2011, is amended to read as follows:
	Sec. 247.004.  EXEMPTIONS. This chapter does not apply to:
	(1)  a boarding home facility as defined by Section
	260.001;
	(2)  an establishment conducted by or for the adherents
	of the Church of Christ, Scientist, for the purpose of providing
	facilities for the care or treatment of the sick who depend
	exclusively on prayer or spiritual means for healing without the
	use of any drug or material remedy if the establishment complies
	with local safety, sanitary, and quarantine ordinances and
	regulations;
	(3)  a facility conducted by or for the adherents of a
	qualified religious society classified as a tax-exempt
	organization under an Internal Revenue Service group exemption
	ruling for the purpose of providing personal care services without
	charge solely for the society's professed members or ministers in
	retirement, if the facility complies with local safety, sanitation,
	and quarantine ordinances and regulations; or
	(4)  a facility that provides personal care services
	only to persons enrolled in a program that:
	(A)  is funded in whole or in part by the
	department and that is monitored by the department or its
	designated local mental retardation authority in accordance with
	standards set by the department; or
	(B)  is funded in whole or in part by the
	Department of State Health Services and that is monitored by that
	department, or by its designated local mental health authority in
	accordance with standards set by the department.
	(c)  Subsection (b), Section 247.067, Health and Safety
	Code, is amended to read as follows:
	(b)  Unless otherwise prohibited by law, a [A] health care
	professional may be employed by an assisted living facility to
	provide at the facility to the facility's residents services that
	are authorized by this chapter and that are within the
	professional's scope of practice [to a resident of an assisted
	living facility at the facility].  This subsection does not
	authorize a facility to provide ongoing services comparable to the
	services available in an institution licensed under Chapter 242.  A
	health care professional providing services under this subsection
	shall maintain medical records of those services in accordance with
	the licensing, certification, or other regulatory standards
	applicable to the health care professional under law.
	SECTION 1.09.  (a)  Subchapter B, Chapter 531, Government
	Code, is amended by adding Sections 531.086 and 531.0861 to read as
	follows:
	Sec. 531.086.  STUDY REGARDING PHYSICIAN INCENTIVE PROGRAMS
	TO REDUCE HOSPITAL EMERGENCY ROOM USE FOR NON-EMERGENT CONDITIONS.
	(a)  The commission shall conduct a study to evaluate physician
	incentive programs that attempt to reduce hospital emergency room
	use for non-emergent conditions by recipients under the medical
	assistance program. Each physician incentive program evaluated in
	the study must:
	(1)  be administered by a health maintenance
	organization participating in the STAR or STAR + PLUS Medicaid
	managed care program; and
	(2)  provide incentives to primary care providers who
	attempt to reduce emergency room use for non-emergent conditions by
	recipients.
	(b)  The study conducted under Subsection (a) must evaluate:
	(1)  the cost-effectiveness of each component included
	in a physician incentive program; and
	(2)  any change in statute required to implement each
	component within the Medicaid fee-for-service payment model.
	(c)  Not later than August 31, 2013, the executive
	commissioner shall submit to the governor and the Legislative
	Budget Board a report summarizing the findings of the study
	required by this section.
	(d)  This section expires September 1, 2014.
	Sec. 531.0861.  PHYSICIAN INCENTIVE PROGRAM TO REDUCE
	HOSPITAL EMERGENCY ROOM USE FOR NON-EMERGENT CONDITIONS.  (a)  If
	cost-effective, the executive commissioner by rule shall establish
	a physician incentive program designed to reduce the use of
	hospital emergency room services for non-emergent conditions by
	recipients under the medical assistance program.
	(b)  In establishing the physician incentive program under
	Subsection (a), the executive commissioner may include only the
	program components identified as cost-effective in the study
	conducted under Section 531.086.
	(c)  If the physician incentive program includes the payment
	of an enhanced reimbursement rate for routine after-hours
	appointments, the executive commissioner shall implement controls
	to ensure that the after-hours services billed are actually being
	provided outside of normal business hours.
	(b)  Section 32.0641, Human Resources Code, is amended to
	read as follows:
	Sec. 32.0641.  RECIPIENT ACCOUNTABILITY PROVISIONS;
	COST-SHARING REQUIREMENT TO IMPROVE APPROPRIATE UTILIZATION OF
	[COST SHARING FOR CERTAIN HIGH-COST MEDICAL] SERVICES.  (a)  To [If
	the department determines that it is feasible and cost-effective,
	and to] the extent permitted under and in a manner that is
	consistent with Title XIX, Social Security Act (42 U.S.C. Section
	1396 et seq.) and any other applicable law or regulation or under a
	federal waiver or other authorization, the executive commissioner
	of the Health and Human Services Commission shall adopt, after
	consulting with the Medicaid and CHIP Quality-Based Payment
	Advisory Committee established under Section 536.002, Government
	Code, cost-sharing provisions that encourage personal
	accountability and appropriate utilization of health care
	services, including a cost-sharing provision applicable to
	[require] a recipient who chooses to receive a nonemergency [a
	high-cost] medical service [provided] through a hospital emergency
	room [to pay a copayment, premium payment, or other cost-sharing
	payment for the high-cost medical service if:
	[(1)     the hospital from which the recipient seeks
	service:
	[(A)     performs an appropriate medical screening
	and determines that the recipient does not have a condition
	requiring emergency medical services;
	[(B)  informs the recipient:
	[(i)     that the recipient does not have a
	condition requiring emergency medical services;
	[(ii)     that, if the hospital provides the
	nonemergency service, the hospital may require payment of a
	copayment, premium payment, or other cost-sharing payment by the
	recipient in advance; and
	[(iii)     of the name and address of a
	nonemergency Medicaid provider who can provide the appropriate
	medical service without imposing a cost-sharing payment; and
	[(C)     offers to provide the recipient with a
	referral to the nonemergency provider to facilitate scheduling of
	the service; and
	[(2)     after receiving the information and assistance
	described by Subdivision (1) from the hospital, the recipient
	chooses to obtain emergency medical services   despite having access
	to medically acceptable, lower-cost medical services].
	(b)  The department may not seek a federal waiver or other
	authorization under this section [Subsection (a)] that would:
	(1)  prevent a Medicaid recipient who has a condition
	requiring emergency medical services from receiving care through a
	hospital emergency room; or
	(2)  waive any provision under Section 1867, Social
	Security Act (42 U.S.C. Section 1395dd).
	[(c)     If the executive commissioner of the Health and Human
	Services Commission adopts a copayment or other cost-sharing
	payment under Subsection (a), the commission may not reduce
	hospital payments to reflect the potential receipt of a copayment
	or other payment from a recipient receiving medical services
	provided through a hospital emergency room.]
	(c)  If H.B. No. 2245, Acts of the 82nd Legislature, Regular
	Session, 2011, becomes law, Sections 531.086 and 531.0861,
	Government Code, as added by that Act, are repealed.
	SECTION 1.10.  Subchapter B, Chapter 531, Government Code,
	is amended by adding Section 531.024131 to read as follows:
	Sec. 531.024131.  EXPANSION OF BILLING COORDINATION AND
	INFORMATION COLLECTION ACTIVITIES. (a)  If cost-effective, the
	commission may:
	(1)  contract to expand all or part of the billing
	coordination system established under Section 531.02413 to process
	claims for services provided through other benefits programs
	administered by the commission or a health and human services
	agency;
	(2)  expand any other billing coordination tools and
	resources used to process claims for health care services provided
	through the Medicaid program to process claims for services
	provided through other benefits programs administered by the
	commission or a health and human services agency; and
	(3)  expand the scope of persons about whom information
	is collected under Section 32.042, Human Resources Code, to include
	recipients of services provided through other benefits programs
	administered by the commission or a health and human services
	agency.
	(b)  Notwithstanding any other state law, each health and
	human services agency shall provide the commission with any
	information necessary to allow the commission or the commission's
	designee to perform the billing coordination and information
	collection activities authorized by this section.
	SECTION 1.11.  (a)  Subsections (b), (c), and (d), Section
	531.502, Government Code, are amended to read as follows:
	(b)  The executive commissioner may include the following
	federal money in the waiver:
	(1)  [all] money provided under the disproportionate
	share hospitals or [and] upper payment limit supplemental payment
	program, or both [programs];
	(2)  money provided by the federal government in lieu
	of some or all of the payments under one or both of those programs;
	(3)  any combination of funds authorized to be pooled
	by Subdivisions (1) and (2); and
	(4)  any other money available for that purpose,
	including:
	(A)  federal money and money identified under
	Subsection (c);
	(B)  gifts, grants, or donations for that purpose;
	(C)  local funds received by this state through
	intergovernmental transfers; and
	(D)  if approved in the waiver, federal money
	obtained through the use of certified public expenditures.
	(c)  The commission shall seek to optimize federal funding
	by:
	(1)  identifying health care related state and local
	funds and program expenditures that, before September 1, 2011
	[2007], are not being matched with federal money; and
	(2)  exploring the feasibility of:
	(A)  certifying or otherwise using those funds and
	expenditures as state expenditures for which this state may receive
	federal matching money; and
	(B)  depositing federal matching money received
	as provided by Paragraph (A) with other federal money deposited as
	provided by Section 531.504, or substituting that federal matching
	money for federal money that otherwise would be received under the
	disproportionate share hospitals and upper payment limit
	supplemental payment programs as a match for local funds received
	by this state through intergovernmental transfers.
	(d)  The terms of a waiver approved under this section must:
	(1)  include safeguards to ensure that the total amount
	of federal money provided under the disproportionate share
	hospitals or [and] upper payment limit supplemental payment program
	[programs] that is deposited as provided by Section 531.504 is, for
	a particular state fiscal year, at least equal to the greater of the
	annualized amount provided to this state under those supplemental
	payment programs during state fiscal year 2011 [2007], excluding
	amounts provided during that state fiscal year that are retroactive
	payments, or the state fiscal years during which the waiver is in
	effect; and
	(2)  allow for the development by this state of a
	methodology for allocating money in the fund to:
	(A)  be used to supplement Medicaid hospital
	reimbursements under a waiver that includes terms that are
	consistent with, or that produce revenues consistent with,
	disproportionate share hospital and upper payment limit principles
	[offset, in part, the uncompensated health care costs incurred by
	hospitals];
	(B)  reduce the number of persons in this state
	who do not have health benefits coverage; and
	(C)  maintain and enhance the community public
	health infrastructure provided by hospitals.
	(b)  Section 531.504, Government Code, is amended to read as
	follows:
	Sec. 531.504.  DEPOSITS TO FUND. (a)  The comptroller shall
	deposit in the fund:
	(1)  [all] federal money provided to this state under
	the disproportionate share hospitals supplemental payment program
	or [and] the hospital upper payment limit supplemental payment
	program, or both, other than money provided under those programs to
	state-owned and operated hospitals, and all other non-supplemental
	payment program federal money provided to this state that is
	included in the waiver authorized by Section 531.502; and
	(2)  state money appropriated to the fund.
	(b)  The commission and comptroller may accept gifts,
	grants, and donations from any source, and receive
	intergovernmental transfers, for purposes consistent with this
	subchapter and the terms of the waiver.  The comptroller shall
	deposit a gift, grant, or donation made for those purposes in the
	fund.  Any intergovernmental transfer received, including
	associated federal matching funds, shall be used, if feasible, for
	the purposes intended by the transferring entity and in accordance
	with the terms of the waiver.
	(c)  Section 531.508, Government Code, is amended by adding
	Subsection (d) to read as follows:
	(d)  Money from the fund may not be used to finance the
	construction, improvement, or renovation of a building or land
	unless the construction, improvement, or renovation is approved by
	the commission, according to rules adopted by the executive
	commissioner for that purpose.
	(d)  Subsection (g), Section 531.502, Government Code, is
	repealed.
	SECTION 1.12.  (a)  Subtitle I, Title 4, Government Code, is
	amended by adding Chapter 536, and Section 531.913, Government
	Code, is transferred to Subchapter D, Chapter 536, Government Code,
	redesignated as Section 536.151, Government Code, and amended to
	read as follows:
	CHAPTER 536. MEDICAID AND CHILD HEALTH PLAN PROGRAMS:
	QUALITY-BASED OUTCOMES AND PAYMENTS
	SUBCHAPTER A.  GENERAL PROVISIONS
	Sec. 536.001.  DEFINITIONS. In this chapter:
	(1)  "Advisory committee" means the Medicaid and CHIP
	Quality-Based Payment Advisory Committee established under Section
	536.002.
	(2)  "Alternative payment system" includes:
	(A)  a global payment system;
	(B)  an episode-based bundled payment system; and
	(C)  a blended payment system.
	(3)  "Blended payment system" means a system for
	compensating a physician or other health care provider that
	includes at least one or more features of a global payment system
	and an episode-based bundled payment system, but that may also
	include a system under which a portion of the compensation paid to a
	physician or other health care provider is based on a
	fee-for-service payment arrangement.
	(4)  "Child health plan program," "commission,"
	"executive commissioner," and "health and human services agencies"
	have the meanings assigned by Section 531.001.
	(5)  "Episode-based bundled payment system" means a
	system for compensating a physician or other health care provider
	for arranging for or providing health care services to child health
	plan program enrollees or Medicaid recipients that is based on a
	flat payment for all services provided in connection with a single
	episode of medical care.
	(6)  "Exclusive provider benefit plan" means a managed
	care plan subject to 28 T.A.C. Part 1, Chapter 3, Subchapter KK.
	(7)  "Freestanding emergency medical care facility"
	means a facility licensed under Chapter 254, Health and Safety
	Code.
	(8)  "Global payment system" means a system for
	compensating a physician or other health care provider for
	arranging for or providing a defined set of covered health care
	services to child health plan program enrollees or Medicaid
	recipients for a specified period that is based on a predetermined
	payment per enrollee or recipient, as applicable, for the specified
	period, without regard to the quantity of services actually
	provided.
	(9)  "Health care provider" means any person,
	partnership, professional association, corporation, facility, or
	institution licensed, certified, registered, or chartered by this
	state to provide health care.  The term includes an employee,
	independent contractor, or agent of a health care provider acting
	in the course and scope of the employment or contractual
	relationship.
	(10)  "Hospital" means a public or private institution
	licensed under Chapter 241 or 577, Health and Safety Code,
	including a general or special hospital as defined by Section
	241.003, Health and Safety Code.
	(11)  "Managed care organization" means a person that
	is authorized or otherwise permitted by law to arrange for or
	provide a managed care plan.  The term includes health maintenance
	organizations and exclusive provider organizations.
	(12)  "Managed care plan" means a plan, including an
	exclusive provider benefit plan, under which a person undertakes to
	provide, arrange for, pay for, or reimburse any part of the cost of
	any health care services. A part of the plan must consist of
	arranging for or providing health care services as distinguished
	from indemnification against the cost of those services on a
	prepaid basis through insurance or otherwise. The term does not
	include a plan that indemnifies a person for the cost of health care
	services through insurance.
	(13)  "Medicaid program" means the medical assistance
	program established under Chapter 32, Human Resources Code.
	(14)  "Physician" means a person licensed to practice
	medicine in this state under Subtitle B, Title 3, Occupations Code.
	(15)  "Potentially preventable admission" means an
	admission of a person to a hospital or long-term care facility that
	may have reasonably been prevented with adequate access to
	ambulatory care or health care coordination.
	(16)  "Potentially preventable ancillary service"
	means a health care service provided or ordered by a physician or
	other health care provider to supplement or support the evaluation
	or treatment of a patient, including a diagnostic test, laboratory
	test, therapy service, or radiology service, that may not be
	reasonably necessary for the provision of quality health care or
	treatment.
	(17)  "Potentially preventable complication" means a
	harmful event or negative outcome with respect to a person,
	including an infection or surgical complication, that:
	(A)  occurs after the person's admission to a
	hospital or long-term care facility; and
	(B)  may have resulted from the care, lack of
	care, or treatment provided during the hospital or long-term care
	facility stay rather than from a natural progression of an
	underlying disease.
	(18)  "Potentially preventable event" means a
	potentially preventable admission, a potentially preventable
	ancillary service, a potentially preventable complication, a
	potentially preventable emergency room visit, a potentially
	preventable readmission, or a combination of those events.
	(19)  "Potentially preventable emergency room visit"
	means treatment of a person in a hospital emergency room or
	freestanding emergency medical care facility for a condition that
	may not require emergency medical attention because the condition
	could be, or could have been, treated or prevented by a physician or
	other health care provider in a nonemergency setting.
	(20)  "Potentially preventable readmission" means a
	return hospitalization of a person within a period specified by the
	commission that may have resulted from deficiencies in the care or
	treatment provided to the person during a previous hospital stay or
	from deficiencies in post-hospital discharge follow-up.  The term
	does not include a hospital readmission necessitated by the
	occurrence of unrelated events after the discharge.  The term
	includes the readmission of a person to a hospital for:
	(A)  the same condition or procedure for which the
	person was previously admitted;
	(B)  an infection or other complication resulting
	from care previously provided;
	(C)  a condition or procedure that indicates that
	a surgical intervention performed during a previous admission was
	unsuccessful in achieving the anticipated outcome; or
	(D)  another condition or procedure of a similar
	nature, as determined by the executive commissioner after
	consulting with the advisory committee.
	(21)  "Quality-based payment system" means a system for
	compensating a physician or other health care provider, including
	an alternative payment system, that provides incentives to the
	physician or other health care provider for providing high-quality,
	cost-effective care and bases some portion of the payment made to
	the physician or other health care provider on quality of care
	outcomes, which may include the extent to which the physician or
	other health care provider reduces potentially preventable events.
	Sec. 536.002.  MEDICAID AND CHIP QUALITY-BASED PAYMENT
	ADVISORY COMMITTEE. (a)  The Medicaid and CHIP Quality-Based
	Payment Advisory Committee is established to advise the commission
	on establishing, for purposes of the child health plan and Medicaid
	programs administered by the commission or a health and human
	services agency:
	(1)  reimbursement systems used to compensate
	physicians or other health care providers under those programs that
	reward the provision of high-quality, cost-effective health care
	and quality performance and quality of care outcomes with respect
	to health care services;
	(2)  standards and benchmarks for quality performance,
	quality of care outcomes, efficiency, and accountability by managed
	care organizations and physicians and other health care providers;
	(3)  programs and reimbursement policies that
	encourage high-quality, cost-effective health care delivery models
	that increase appropriate provider collaboration, promote wellness
	and prevention, and improve health outcomes; and
	(4)  outcome and process measures under Section
	536.003.
	(b)  The executive commissioner shall appoint the members of
	the advisory committee. The committee must consist of physicians
	and other health care providers, representatives of health care
	facilities, representatives of managed care organizations, and
	other stakeholders interested in health care services provided in
	this state, including:
	(1)  at least one member who is a physician with
	clinical practice experience in obstetrics and gynecology;
	(2)  at least one member who is a physician with
	clinical practice experience in pediatrics;
	(3)  at least one member who is a physician with
	clinical practice experience in internal medicine or family
	medicine;
	(4)  at least one member who is a physician with
	clinical practice experience in geriatric medicine;
	(5)  at least one member who is or who represents a
	health care provider that primarily provides long-term care
	services;
	(6)  at least one member who is a consumer
	representative; and
	(7)  at least one member who is a member of the Advisory
	Panel on Health Care-Associated Infections and Preventable Adverse
	Events who meets the qualifications prescribed by Section
	98.052(a)(4), Health and Safety Code.
	(c)  The executive commissioner shall appoint the presiding
	officer of the advisory committee.
	Sec. 536.003.  DEVELOPMENT OF QUALITY-BASED OUTCOME AND
	PROCESS MEASURES. (a)  The commission, in consultation with the
	advisory committee, shall develop quality-based outcome and
	process measures that promote the provision of efficient, quality
	health care and that can be used in the child health plan and
	Medicaid programs to implement quality-based payments for acute and
	long-term care services across all delivery models and payment
	systems, including fee-for-service and managed care payment
	systems. The commission, in developing outcome measures under this
	section, must consider measures addressing potentially preventable
	events.
	(b)  To the extent feasible, the commission shall develop
	outcome and process measures:
	(1)  consistently across all child health plan and
	Medicaid program delivery models and payment systems;
	(2)  in a manner that takes into account appropriate
	patient risk factors, including the burden of chronic illness on a
	patient and the severity of a patient's illness;
	(3)  that will have the greatest effect on improving
	quality of care and the efficient use of services; and
	(4)  that are similar to outcome and process measures
	used in the private sector, as appropriate.
	(c)  The commission shall, to the extent feasible, align
	outcome and process measures developed under this section with
	measures required or recommended under reporting guidelines
	established by the federal Centers for Medicare and Medicaid
	Services, the Agency for Healthcare Research and Quality, or
	another federal agency.
	(d)  The executive commissioner by rule may require managed
	care organizations and physicians and other health care providers
	participating in the child health plan and Medicaid programs to
	report to the commission in a format specified by the executive
	commissioner information necessary to develop outcome and process
	measures under this section.
	(e)  If the commission increases physician and other health
	care provider reimbursement rates under the child health plan or
	Medicaid program as a result of an increase in the amounts
	appropriated for the programs for a state fiscal biennium as
	compared to the preceding state fiscal biennium, the commission
	shall, to the extent permitted under federal law and to the extent
	otherwise possible considering other relevant factors, correlate
	the increased reimbursement rates with the quality-based outcome
	and process measures developed under this section.
	Sec. 536.004.  DEVELOPMENT OF QUALITY-BASED PAYMENT
	SYSTEMS. (a)  Using quality-based outcome and process measures
	developed under Section 536.003 and subject to this section, the
	commission, after consulting with the advisory committee, shall
	develop quality-based payment systems for compensating a physician
	or other health care provider participating in the child health
	plan or Medicaid program that:
	(1)  align payment incentives with high-quality,
	cost-effective health care;
	(2)  reward the use of evidence-based best practices;
	(3)  promote the coordination of health care;
	(4)  encourage appropriate physician and other health
	care provider collaboration;
	(5)  promote effective health care delivery models; and
	(6)  take into account the specific needs of the child
	health plan program enrollee and Medicaid recipient populations.
	(b)  The commission shall develop quality-based payment
	systems in the manner specified by this chapter. To the extent
	necessary, the commission shall coordinate the timeline for the
	development and implementation of a payment system with the
	implementation of other initiatives such as the Medicaid
	Information Technology Architecture (MITA) initiative of the
	Center for Medicaid and State Operations, the ICD-10 code sets
	initiative, or the ongoing Enterprise Data Warehouse (EDW) planning
	process in order to maximize the receipt of federal funds or reduce
	any administrative burden.
	(c)  In developing quality-based payment systems under this
	chapter, the commission shall examine and consider implementing:
	(1)  an alternative payment system;
	(2)  any existing performance-based payment system
	used under the Medicare program that meets the requirements of this
	chapter, modified as necessary to account for programmatic
	differences, if implementing the system would:
	(A)  reduce unnecessary administrative burdens;
	and
	(B)  align quality-based payment incentives for
	physicians and other health care providers with the Medicare
	program; and
	(3)  alternative payment methodologies within the
	system that are used in the Medicare program, modified as necessary
	to account for programmatic differences, and that will achieve cost
	savings and improve quality of care in the child health plan and
	Medicaid programs.
	(d)  In developing quality-based payment systems under this
	chapter, the commission shall ensure that a managed care
	organization or physician or other health care provider will not be
	rewarded by the system for withholding or delaying the provision of
	medically necessary care.
	(e)  The commission may modify a quality-based payment
	system developed under this chapter to account for programmatic
	differences between the child health plan and Medicaid programs and
	delivery systems under those programs.
	Sec. 536.005.  CONVERSION OF PAYMENT METHODOLOGY. (a)  To
	the extent possible, the commission shall convert hospital
	reimbursement systems under the child health plan and Medicaid
	programs to a diagnosis-related groups (DRG) methodology that will
	allow the commission to more accurately classify specific patient
	populations and account for severity of patient illness and
	mortality risk.
	(b)  Subsection (a) does not authorize the commission to
	direct a managed care organization to compensate physicians and
	other health care providers providing services under the
	organization's managed care plan based on a diagnosis-related
	groups (DRG) methodology.
	Sec. 536.006.  TRANSPARENCY. The commission and the
	advisory committee shall:
	(1)  ensure transparency in the development and
	establishment of:
	(A)  quality-based payment and reimbursement
	systems under Section 536.004 and Subchapters B, C, and D,
	including the development of outcome and process measures under
	Section 536.003; and
	(B)  quality-based payment initiatives under
	Subchapter E, including the development of quality of care and
	cost-efficiency benchmarks under Section 536.204(a) and efficiency
	performance standards under Section 536.204(b);
	(2)  develop guidelines establishing procedures for
	providing notice and information to, and receiving input from,
	managed care organizations, health care providers, including
	physicians and experts in the various medical specialty fields, and
	other stakeholders, as appropriate, for purposes of developing and
	establishing the quality-based payment and reimbursement systems
	and initiatives described under Subdivision (1); and
	(3)  in developing and establishing the quality-based
	payment and reimbursement systems and initiatives described under
	Subdivision (1), consider that as the performance of a managed care
	organization or physician or other health care provider improves
	with respect to an outcome or process measure, quality of care and
	cost-efficiency benchmark, or efficiency performance standard, as
	applicable, there will be a diminishing rate of improved
	performance over time.
	Sec. 536.007.  PERIODIC EVALUATION. (a)  At least once each
	two-year period, the commission shall evaluate the outcomes and
	cost-effectiveness of any quality-based payment system or other
	payment initiative implemented under this chapter.
	(b)  The commission shall:
	(1)  present the results of its evaluation under
	Subsection (a) to the advisory committee for the committee's input
	and recommendations; and
	(2)  provide a process by which managed care
	organizations and physicians and other health care providers may
	comment and provide input into the committee's recommendations
	under Subdivision (1).
	Sec. 536.008.  ANNUAL REPORT. (a)  The commission shall
	submit an annual report to the legislature regarding:
	(1)  the quality-based outcome and process measures
	developed under Section 536.003; and
	(2)  the progress of the implementation of
	quality-based payment systems and other payment initiatives
	implemented under this chapter.
	(b)  The commission shall report outcome and process
	measures under Subsection (a)(1) by health care service region and
	service delivery model.
	[Sections 536.009-536.050 reserved for expansion]
	SUBCHAPTER B. QUALITY-BASED PAYMENTS RELATING TO MANAGED CARE
	ORGANIZATIONS
	Sec. 536.051.  DEVELOPMENT OF QUALITY-BASED PREMIUM
	PAYMENTS; PERFORMANCE REPORTING.  (a)  Subject to Section
	1903(m)(2)(A), Social Security Act (42 U.S.C. Section
	1396b(m)(2)(A)), and other applicable federal law, the commission
	shall base a percentage of the premiums paid to a managed care
	organization participating in the child health plan or Medicaid
	program on the organization's performance with respect to outcome
	and process measures developed under Section 536.003, including
	outcome measures addressing potentially preventable events.
	(b)  The commission shall make available information
	relating to the performance of a managed care organization with
	respect to outcome and process measures under this subchapter to
	child health plan program enrollees and Medicaid recipients before
	those enrollees and recipients choose their managed care plans.
	Sec. 536.052.  PAYMENT AND CONTRACT AWARD INCENTIVES FOR
	MANAGED CARE ORGANIZATIONS. (a)  The commission may allow a
	managed care organization participating in the child health plan or
	Medicaid program increased flexibility to implement quality
	initiatives in a managed care plan offered by the organization,
	including flexibility with respect to financial arrangements, in
	order to:
	(1)  achieve high-quality, cost-effective health care;
	(2)  increase the use of high-quality, cost-effective
	delivery models; and
	(3)  reduce potentially preventable events.
	(b)  The commission, after consulting with the advisory
	committee, shall develop quality of care and cost-efficiency
	benchmarks, including benchmarks based on a managed care
	organization's performance with respect to reducing potentially
	preventable events and containing the growth rate of health care
	costs.
	(c)  The commission may include in a contract between a
	managed care organization and the commission financial incentives
	that are based on the organization's successful implementation of
	quality initiatives under Subsection (a) or success in achieving
	quality of care and cost-efficiency benchmarks under Subsection
	(b).
	(d)  In awarding contracts to managed care organizations
	under the child health plan and Medicaid programs, the commission
	shall, in addition to considerations under Section 533.003 of this
	code and Section 62.155, Health and Safety Code, give preference to
	an organization that offers a managed care plan that successfully
	implements quality initiatives under Subsection (a) as determined
	by the commission based on data or other evidence provided by the
	organization or meets quality of care and cost-efficiency
	benchmarks under Subsection (b).
	(e)  The commission may implement financial incentives under
	this section only if implementing the incentives would be
	cost-effective.
	[Sections 536.053-536.100 reserved for expansion]
	SUBCHAPTER C. QUALITY-BASED HEALTH HOME PAYMENT SYSTEMS
	Sec. 536.101.  DEFINITIONS. In this subchapter:
	(1)  "Health home" means a primary care provider
	practice or, if appropriate, a specialty care provider practice,
	incorporating several features, including comprehensive care
	coordination, family-centered care, and data management, that are
	focused on improving outcome-based quality of care and increasing
	patient and provider satisfaction under the child health plan and
	Medicaid programs.
	(2)  "Participating enrollee" means a child health plan
	program enrollee or Medicaid recipient who has a health home.
	Sec. 536.102.  QUALITY-BASED HEALTH HOME PAYMENTS.
	(a)  Subject to this subchapter, the commission, after consulting
	with the advisory committee, may develop and implement
	quality-based payment systems for health homes designed to improve
	quality of care and reduce the provision of unnecessary medical
	services. A quality-based payment system developed under this
	section must:
	(1)  base payments made to a participating enrollee's
	health home on quality and efficiency measures that may include
	measurable wellness and prevention criteria and use of
	evidence-based best practices, sharing a portion of any realized
	cost savings achieved by the health home, and ensuring quality of
	care outcomes, including a reduction in potentially preventable
	events; and
	(2)  allow for the examination of measurable wellness
	and prevention criteria, use of evidence-based best practices, and
	quality of care outcomes based on the type of primary or specialty
	care provider practice.
	(b)  The commission may develop a quality-based payment
	system for health homes under this subchapter only if implementing
	the system would be feasible and cost-effective.
	Sec. 536.103.  PROVIDER ELIGIBILITY.  To be eligible to
	receive reimbursement under a quality-based payment system under
	this subchapter, a health home provider must:
	(1)  provide participating enrollees, directly or
	indirectly, with access to health care services outside of regular
	business hours;
	(2)  educate participating enrollees about the
	availability of health care services outside of regular business
	hours; and
	(3)  provide evidence satisfactory to the commission
	that the provider meets the requirement of Subdivision (1).
	[Sections 536.104-536.150 reserved for expansion]
	SUBCHAPTER D.  QUALITY-BASED HOSPITAL REIMBURSEMENT SYSTEM
	Sec. 536.151 [531.913].  COLLECTION AND REPORTING OF
	CERTAIN [HOSPITAL HEALTH] INFORMATION [EXCHANGE]. (a)  [In this
	section, "potentially preventable readmission" means a return
	hospitalization of a person within a period specified by the
	commission that results from deficiencies in the care or treatment
	provided to the person during a previous hospital stay or from
	deficiencies in post-hospital discharge follow-up.   The term does
	not include a hospital readmission necessitated by the occurrence
	of unrelated events after the discharge.   The term includes the
	readmission of a person to a hospital for:
	[(1)     the same condition or procedure for which the
	person was previously admitted;
	[(2)     an infection or other complication resulting from
	care previously provided;
	[(3)     a condition or procedure that indicates that a
	surgical intervention performed during a previous admission was
	unsuccessful in achieving the anticipated outcome; or
	[(4)     another condition or procedure of a similar
	nature, as determined by the executive commissioner.
	[(b)]  The executive commissioner shall adopt rules for
	identifying potentially preventable readmissions of child health
	plan program enrollees and Medicaid recipients and potentially
	preventable complications experienced by child health plan program
	enrollees and Medicaid recipients.  The [and the] commission shall
	collect [exchange] data from [with] hospitals on
	present-on-admission indicators for purposes of this section.
	(b) [(c)]  The commission shall establish a [health
	information exchange] program to provide a [exchange] confidential
	report to [information with] each hospital in this state that
	participates in the child health plan or Medicaid program regarding
	the hospital's performance with respect to potentially preventable
	readmissions and potentially preventable complications.  To the
	extent possible, a report provided under this section should
	include potentially preventable readmissions and potentially
	preventable complications information across all child health plan
	and Medicaid program payment systems.  A hospital shall distribute
	the information contained in the report [received from the
	commission] to physicians and other health care providers providing
	services at the hospital.
	(c)  A report provided to a hospital under this section is
	confidential and is not subject to Chapter 552.
	Sec. 536.152.  REIMBURSEMENT ADJUSTMENTS.  (a)  Subject to
	Subsection (b), using the data collected under Section 536.151 and
	the diagnosis-related groups (DRG) methodology implemented under
	Section 536.005, the commission, after consulting with the advisory
	committee, shall to the extent feasible adjust child health plan
	and Medicaid reimbursements to hospitals, including payments made
	under the disproportionate share hospitals and upper payment limit
	supplemental payment programs, in a manner that may reward or
	penalize a hospital based on the hospital's performance with
	respect to exceeding, or failing to achieve, outcome and process
	measures developed under Section 536.003 that address the rates of
	potentially preventable readmissions and potentially preventable
	complications.
	(b)  The commission must provide the report required under
	Section 536.151(b) to a hospital at least one year before the
	commission adjusts child health plan and Medicaid reimbursements to
	the hospital under this section.
	[Sections 536.153-536.200 reserved for expansion]
	SUBCHAPTER E.  QUALITY-BASED PAYMENT INITIATIVES
	Sec. 536.201.  DEFINITION.  In this subchapter, "payment
	initiative" means a quality-based payment initiative established
	under this subchapter.
	Sec. 536.202.  PAYMENT INITIATIVES; DETERMINATION OF
	BENEFIT TO STATE. (a)  The commission shall, after consulting with
	the advisory committee, establish payment initiatives to test the
	effectiveness of quality-based payment systems, alternative
	payment methodologies, and high-quality, cost-effective health
	care delivery models that provide incentives to physicians and
	other health care providers to develop health care interventions
	for child health plan program enrollees or Medicaid recipients, or
	both, that will:
	(1)  improve the quality of health care provided to the
	enrollees or recipients;
	(2)  reduce potentially preventable events;
	(3)  promote prevention and wellness;
	(4)  increase the use of evidence-based best practices;
	(5)  increase appropriate physician and other health
	care provider collaboration; and
	(6)  contain costs.
	(b)  The commission shall:
	(1)  establish a process by which managed care
	organizations and physicians and other health care providers may
	submit proposals for payment initiatives described by Subsection
	(a); and
	(2)  determine whether it is feasible and
	cost-effective to implement one or more of the proposed payment
	initiatives.
	Sec. 536.203.  PURPOSE AND IMPLEMENTATION OF PAYMENT
	INITIATIVES. (a)  If the commission determines under Section
	536.202 that implementation of one or more payment initiatives is
	feasible and cost-effective for this state, the commission shall
	establish one or more payment initiatives as provided by this
	subchapter.
	(b)  The commission shall administer any payment initiative
	established under this subchapter.  The executive commissioner may
	adopt rules, plans, and procedures and enter into contracts and
	other agreements as the executive commissioner considers
	appropriate and necessary to administer this subchapter.
	(c)  The commission may limit a payment initiative to:
	(1)  one or more regions in this state;
	(2)  one or more organized networks of physicians and
	other health care providers; or
	(3)  specified types of services provided under the
	child health plan or Medicaid program, or specified types of
	enrollees or recipients under those programs.
	(d)  A payment initiative implemented under this subchapter
	must be operated for at least one calendar year.
	Sec. 536.204.  STANDARDS; PROTOCOLS. (a)  The executive
	commissioner shall:
	(1)  consult with the advisory committee to develop
	quality of care and cost-efficiency benchmarks and measurable goals
	that a payment initiative must meet to ensure high-quality and
	cost-effective health care services and healthy outcomes; and
	(2)  approve benchmarks and goals developed as provided
	by Subdivision (1).
	(b)  In addition to the benchmarks and goals under Subsection
	(a), the executive commissioner may approve efficiency performance
	standards that may include the sharing of realized cost savings
	with physicians and other health care providers who provide health
	care services that exceed the efficiency performance standards.
	The efficiency performance standards may not create any financial
	incentive for or involve making a payment to a physician or other
	health care provider that directly or indirectly induces the
	limitation of medically necessary services.
	Sec. 536.205.  PAYMENT RATES UNDER PAYMENT INITIATIVES.  The
	executive commissioner may contract with appropriate entities,
	including qualified actuaries, to assist in determining
	appropriate payment rates for a payment initiative implemented
	under this subchapter.
	(b)  The Health and Human Services Commission shall convert
	the hospital reimbursement systems used under the child health plan
	program under Chapter 62, Health and Safety Code, and medical
	assistance program under Chapter 32, Human Resources Code, to the
	diagnosis-related groups (DRG) methodology to the extent possible
	as required by Section 536.005, Government Code, as added by this
	section, as soon as practicable after the effective date of this
	Act, but not later than:
	(1)  September 1, 2013, for reimbursements paid to
	children's hospitals; and
	(2)  September 1, 2012, for reimbursements paid to
	other hospitals under those programs.
	(c)  Not later than September 1, 2012, the Health and Human
	Services Commission shall begin providing performance reports to
	hospitals regarding the hospitals' performances with respect to
	potentially preventable complications as required by Section
	536.151, Government Code, as designated and amended by this
	section.
	(d)  Subject to Subsection (b), Section 536.004, Government
	Code, as added by this section, the Health and Human Services
	Commission shall begin making adjustments to child health plan and
	Medicaid reimbursements to hospitals as required by Section
	536.152, Government Code, as added by this section:
	(1)  not later than September 1, 2012, based on the
	hospitals' performances with respect to reducing potentially
	preventable readmissions; and
	(2)  not later than September 1, 2013, based on the
	hospitals' performances with respect to reducing potentially
	preventable complications.
	SECTION 1.13.  (a)  The heading to Section 531.912,
	Government Code, is amended to read as follows:
	Sec. 531.912.  COMMON PERFORMANCE MEASUREMENTS AND
	PAY-FOR-PERFORMANCE INCENTIVES FOR [QUALITY OF CARE HEALTH
	INFORMATION EXCHANGE WITH] CERTAIN NURSING FACILITIES.
	(b)  Subsections (b), (c), and (f), Section 531.912,
	Government Code, are amended to read as follows:
	(b)  If feasible, the executive commissioner by rule may
	[shall] establish an incentive payment program for [a quality of
	care health information exchange with] nursing facilities that
	choose to participate.  The [in a] program must be designed to
	improve the quality of care and services provided to medical
	assistance recipients.  Subject to Subsection (f), the program may
	provide incentive payments in accordance with this section to
	encourage facilities to participate in the program.
	(c)  In establishing an incentive payment [a quality of care
	health information exchange] program under this section, the
	executive commissioner shall, subject to Subsection (d), adopt
	common [exchange information with participating nursing facilities
	regarding] performance measures to be used in evaluating nursing
	facilities that are related to structure, process, and outcomes
	that positively correlate to nursing facility quality and
	improvement.  The common performance measures:
	(1)  must be:
	(A)  recognized by the executive commissioner as
	valid indicators of the overall quality of care received by medical
	assistance recipients; and
	(B)  designed to encourage and reward
	evidence-based practices among nursing facilities; and
	(2)  may include measures of:
	(A)  quality of care, as determined by clinical
	performance ratings published by the federal Centers for Medicare
	and Medicaid Services, the Agency for Healthcare Research and
	Quality, or another federal agency [life];
	(B)  direct-care staff retention and turnover;
	(C)  recipient satisfaction, including the
	satisfaction of recipients who are short-term and long-term
	residents of facilities, and family satisfaction, as determined by
	the Nursing Home Consumer Assessment of Health Providers and
	Systems survey relied upon by the federal Centers for Medicare and
	Medicaid Services;
	(D)  employee satisfaction and engagement;
	(E)  the incidence of preventable acute care
	emergency room services use;
	(F)  regulatory compliance;
	(G)  level of person-centered care; and
	(H)  direct-care staff training, including a
	facility's [level of occupancy or of facility] utilization of
	independent distance learning programs for the continuous training
	of direct-care staff.
	(f)  The commission may make incentive payments under the
	program only if money is [specifically] appropriated for that
	purpose.
	(c)  The Department of Aging and Disability Services shall
	conduct a study to evaluate the feasibility of expanding any
	incentive payment program established for nursing facilities under
	Section 531.912, Government Code, as amended by this section, by
	providing incentive payments for the following types of providers
	of long-term care services, as defined by Section 22.0011, Human
	Resources Code, under the medical assistance program:
	(1)  intermediate care facilities for persons with
	mental retardation licensed under Chapter 252, Health and Safety
	Code; and
	(2)  providers of home and community-based services, as
	described by 42 U.S.C. Section 1396n(c), who are licensed or
	otherwise authorized to provide those services in this state.
	(d)  Not later than September 1, 2012, the Department of
	Aging and Disability Services shall submit to the legislature a
	written report containing the findings of the study conducted under
	Subsection (c) of this section and the department's
	recommendations.
	SECTION 1.14.  Section 780.004, Health and Safety Code, is
	amended by amending Subsection (a) and adding Subsection (j) to
	read as follows:
	(a)  The commissioner:
	(1)  [,] with advice and counsel from the chairpersons
	of the trauma service area regional advisory councils, shall use
	money appropriated from the account established under this chapter
	to fund designated trauma facilities, county and regional emergency
	medical services, and trauma care systems in accordance with this
	section; and
	(2)  after consulting with the executive commissioner
	of the Health and Human Services Commission, may transfer to an
	account in the general revenue fund money appropriated from the
	account established under this chapter to maximize the receipt of
	federal funds under the medical assistance program established
	under Chapter 32, Human Resources Code, and to fund provider
	reimbursement payments as provided by Subsection (j).
	(j)  Money in the account described by Subsection (a)(2) may
	be appropriated only to the Health and Human Services Commission to
	fund provider reimbursement payments under the medical assistance
	program established under Chapter 32, Human Resources Code,
	including reimbursement enhancements to the statewide dollar
	amount (SDA) rate used to reimburse designated trauma hospitals
	under the program.
	SECTION 1.15.  Subchapter B, Chapter 531, Government Code,
	is amended by adding Sections 531.0696 and 531.0697 to read as
	follows:
	Sec. 531.0696.  CONSIDERATIONS IN AWARDING CERTAIN
	CONTRACTS. The commission may not contract with a managed care
	organization, including a health maintenance organization, or a
	pharmacy benefit manager if, in the preceding three years, the
	organization or pharmacy benefit manager, in connection with a bid,
	proposal, or contract with the commission, was subject to a final
	judgment by a court of competent jurisdiction resulting in a
	conviction for a criminal offense under state or federal law:
	(1)  related to the delivery of an item or service;
	(2)  related to neglect or abuse of patients in
	connection with the delivery of an item or service;
	(3)  consisting of a felony related to fraud, theft,
	embezzlement, breach of fiduciary responsibility, or other
	financial misconduct; or
	(4)  resulting in a penalty or fine in the amount of
	$500,000 or more in a state or federal administrative proceeding.
	Sec. 531.0697.  PRIOR APPROVAL AND PROVIDER ACCESS TO
	CERTAIN COMMUNICATIONS WITH CERTAIN RECIPIENTS.  (a)  This section
	applies to:
	(1)  the vendor drug program for the Medicaid and child
	health plan programs;
	(2)  the kidney health care program;
	(3)  the children with special health care needs
	program; and
	(4)  any other state program administered by the
	commission that provides prescription drug benefits.
	(b)  A managed care organization, including a health
	maintenance organization, or a pharmacy benefit manager, that
	administers claims for prescription drug benefits under a program
	to which this section applies shall, at least 10 days before the
	date the organization or pharmacy benefit manager intends to
	deliver a communication to recipients collectively under a program:
	(1)  submit a copy of the communication to the
	commission for approval; and
	(2)  if applicable, allow the pharmacy providers of
	recipients who are to receive the communication access to the
	communication.
	SECTION 1.16.  (a)  Subchapter A, Chapter 61, Health and
	Safety Code, is amended by adding Section 61.012 to read as follows:
	Sec. 61.012.  REIMBURSEMENT FOR SERVICES. (a)  In this
	section, "sponsored alien" means a person who has been lawfully
	admitted to the United States for permanent residence under the
	Immigration and Nationality Act (8 U.S.C. Section 1101 et seq.) and
	who, as a condition of admission, was sponsored by a person who
	executed an affidavit of support on behalf of the person.
	(b)  A public hospital or hospital district that provides
	health care services to a sponsored alien under this chapter may
	recover from a person who executed an affidavit of support on behalf
	of the alien the costs of the health care services provided to the
	alien.
	(c)  A public hospital or hospital district described by
	Subsection (b) must notify a sponsored alien and a person who
	executed an affidavit of support on behalf of the alien, at the time
	the alien applies for health care services, that a person who
	executed an affidavit of support on behalf of a sponsored alien is
	liable for the cost of health care services provided to the alien.
	(b)  Section 61.012, Health and Safety Code, as added by this
	section, applies only to health care services provided by a public
	hospital or hospital district on or after the effective date of this
	Act.
	SECTION 1.17.  Subchapter B, Chapter 531, Government Code,
	is amended by adding Sections 531.024181 and 531.024182 to read as
	follows:
	Sec. 531.024181.  VERIFICATION OF IMMIGRATION STATUS OF
	APPLICANTS FOR CERTAIN BENEFITS WHO ARE QUALIFIED ALIENS.
	(a)  This section applies only with respect to the following
	benefits programs:
	(1)  the child health plan program under Chapter 62,
	Health and Safety Code;
	(2)  the financial assistance program under Chapter 31,
	Human Resources Code;
	(3)  the medical assistance program under Chapter 32,
	Human Resources Code; and
	(4)  the nutritional assistance program under Chapter
	33, Human Resources Code.
	(b)  If, at the time of application for benefits under a
	program to which this section applies, a person states that the
	person is a qualified alien, as that term is defined by 8 U.S.C.
	Section 1641(b), the commission shall, to the extent allowed by
	federal law, verify information regarding the immigration status of
	the person using an automated system or systems where available.
	(c)  The executive commissioner shall adopt rules necessary
	to implement this section.
	(d)  Nothing in this section adds to or changes the
	eligibility requirements for any of the benefits programs to which
	this section applies.
	Sec. 531.024182.  VERIFICATION OF SPONSORSHIP INFORMATION
	FOR CERTAIN BENEFITS RECIPIENTS; REIMBURSEMENT. (a)  In this
	section, "sponsored alien" means a person who has been lawfully
	admitted to the United States for permanent residence under the
	Immigration and Nationality Act (8 U.S.C. Section 1101 et seq.) and
	who, as a condition of admission, was sponsored by a person who
	executed an affidavit of support on behalf of the person.
	(b)  If, at the time of application for benefits, a person
	stated that the person is a sponsored alien, the commission may, to
	the extent allowed by federal law, verify information relating to
	the sponsorship, using an automated system or systems where
	available, after the person is determined eligible for and begins
	receiving benefits under any of the following benefits programs:
	(1)  the child health plan program under Chapter 62,
	Health and Safety Code;
	(2)  the financial assistance program under Chapter 31,
	Human Resources Code;
	(3)  the medical assistance program under Chapter 32,
	Human Resources Code; or
	(4)  the nutritional assistance program under Chapter
	33, Human Resources Code.
	(c)  If the commission verifies that a person who receives
	benefits under a program listed in Subsection (b) is a sponsored
	alien, the commission may seek reimbursement from the person's
	sponsor for benefits provided to the person under those programs to
	the extent allowed by federal law, provided the commission
	determines that seeking reimbursement is cost-effective.
	(d)  If, at the time a person applies for benefits under a
	program listed in Subsection (b), the person states that the person
	is a sponsored alien, the commission shall make a reasonable effort
	to notify the person that the commission may seek reimbursement
	from the person's sponsor for any benefits the person receives
	under those programs.
	(e)  The executive commissioner shall adopt rules necessary
	to implement this section, including rules that specify the most
	cost-effective procedures by which the commission may seek
	reimbursement under Subsection (c).
	(f)  Nothing in this section adds to or changes the
	eligibility requirements for any of the benefits programs listed in
	Subsection (b).
	SECTION 1.18.  Subchapter B, Chapter 32, Human Resources
	Code, is amended by adding Section 32.0314 to read as follows:
	Sec. 32.0314.  REIMBURSEMENT FOR DURABLE MEDICAL EQUIPMENT
	AND SUPPLIES. The executive commissioner of the Health and Human
	Services Commission shall adopt rules requiring the electronic
	submission of any claim for reimbursement for durable medical
	equipment and supplies under the medical assistance program.
	SECTION 1.19.  (a)  Subchapter A, Chapter 531, Government
	Code, is amended by adding Section 531.0025 to read as follows:
	Sec. 531.0025.  RESTRICTIONS ON AWARDS TO FAMILY PLANNING
	SERVICE PROVIDERS. (a)  Notwithstanding any other law, money
	appropriated to the Department of State Health Services for the
	purpose of providing family planning services must be awarded:
	(1)  to eligible entities in the following order of
	descending priority:
	(A)  public entities that provide family planning
	services, including state, county, and local community health
	clinics and federally qualified health centers;
	(B)  nonpublic entities that provide
	comprehensive primary and preventive care services in addition to
	family planning services; and
	(C)  nonpublic entities that provide family
	planning services but do not provide comprehensive primary and
	preventive care services; or
	(2)  as otherwise directed by the legislature in the
	General Appropriations Act.
	(b)  Notwithstanding Subsection (a), the Department of State
	Health Services shall, in compliance with federal law, ensure
	distribution of funds for family planning services in a manner that
	does not severely limit or eliminate access to those services in any
	region of the state.
	(b)  Section 32.024, Human Resources Code, is amended by
	adding Subsection (c-1) to read as follows:
	(c-1)  The department shall ensure that money spent for
	purposes of the demonstration project for women's health care
	services under former Section 32.0248, Human Resources Code, or a
	similar successor program is not used to perform or promote
	elective abortions, or to contract with entities that perform or
	promote elective abortions or affiliate with entities that perform
	or promote elective abortions.
	SECTION 1.20.  Subchapter B, Chapter 32, Human Resources
	Code, is amended by adding Section 32.074 to read as follows:
	Sec. 32.074.  ACCESS TO PERSONAL EMERGENCY RESPONSE SYSTEM.
	(a)  In this section, "personal emergency response system" has the
	meaning assigned by Section 781.001, Health and Safety Code.
	(b)  The department shall ensure that each Medicaid
	recipient enrolled in a home and community-based services waiver
	program that includes a personal emergency response system as a
	service has access to a personal emergency response system, if
	necessary, without regard to the recipient's access to a landline
	telephone.
	SECTION 1.21.  Chapter 33, Human Resources Code, is amended
	by adding Section 33.029 to read as follows:
	Sec. 33.029.  CERTAIN ELIGIBILITY RESTRICTIONS.
	Notwithstanding any other provision of this chapter, an applicant
	for or recipient of benefits under the supplemental nutrition
	assistance program is not entitled to and may not receive or
	continue to receive any benefit under the program if the applicant
	or recipient is not legally present in the United States.
	SECTION 1.22.  If before implementing any provision of this
	article 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.
	ARTICLE 2.  LEGISLATIVE FINDINGS AND INTENT; COMPLIANCE WITH
	ANTITRUST LAWS
	SECTION 2.01.  (a)  The legislature finds that it would
	benefit the State of Texas to:
	(1)  explore innovative health care delivery and
	payment models to improve the quality and efficiency of health care
	in this state;
	(2)  improve health care transparency;
	(3)  give health care providers the flexibility to
	collaborate and innovate to improve the quality and efficiency of
	health care; and
	(4)  create incentives to improve the quality and
	efficiency of health care.
	(b)  The legislature finds that the use of certified health
	care collaboratives will increase pro-competitive effects as the
	ability to compete on the basis of quality of care and the
	furtherance of the quality of care through a health care
	collaborative will overcome any anticompetitive effects of joining
	competitors to create the health care collaboratives and the
	payment mechanisms that will be used to encourage the furtherance
	of quality of care. Consequently, the legislature finds it
	appropriate and necessary to authorize health care collaboratives
	to promote the efficiency and quality of health care.
	(c)  The legislature intends to exempt from antitrust laws
	and provide immunity from federal antitrust laws through the state
	action doctrine a health care collaborative that holds a
	certificate of authority under Chapter 848, Insurance Code, as
	added by Article 4 of this Act, and that collaborative's
	negotiations of contracts with payors. The legislature does not
	intend or authorize any person or entity to engage in activities or
	to conspire to engage in activities that would constitute per se
	violations of federal antitrust laws.
	(d)  The legislature intends to permit the use of alternative
	payment mechanisms, including bundled or global payments and
	quality-based payments, among physicians and other health care
	providers participating in a health care collaborative that holds a
	certificate of authority under Chapter 848, Insurance Code, as
	added by Article 4 of this Act.  The legislature intends to
	authorize a health care collaborative to contract for and accept
	payments from governmental and private payors based on alternative
	payment mechanisms, and intends that the receipt and distribution
	of payments to participating physicians and health care providers
	is not a violation of any existing state law.
	ARTICLE 3.  TEXAS INSTITUTE OF HEALTH CARE QUALITY AND EFFICIENCY
	SECTION 3.01.  Title 12, Health and Safety Code, is amended
	by adding Chapter 1002 to read as follows:
	CHAPTER 1002.  TEXAS INSTITUTE OF HEALTH CARE QUALITY AND
	EFFICIENCY
	SUBCHAPTER A.  GENERAL PROVISIONS
	Sec. 1002.001.  DEFINITIONS. In this chapter:
	(1)  "Board" means the board of directors of the Texas
	Institute of Health Care Quality and Efficiency established under
	this chapter.
	(2)  "Commission" means the Health and Human Services
	Commission.
	(3)  "Department" means the Department of State Health
	Services.
	(4)  "Executive commissioner" means the executive
	commissioner of the Health and Human Services Commission.
	(5)  "Health care collaborative" has the meaning
	assigned by Section 848.001, Insurance Code.
	(6)  "Health care facility" means:
	(A)  a hospital licensed under Chapter 241;
	(B)  an institution licensed under Chapter 242;
	(C)  an ambulatory surgical center licensed under
	Chapter 243;
	(D)  a birthing center licensed under Chapter 244;
	(E)  an end stage renal disease facility licensed
	under Chapter 251; or
	(F)  a freestanding emergency medical care
	facility licensed under Chapter 254.
	(7)  "Institute" means the Texas Institute of Health
	Care Quality and Efficiency established under this chapter.
	(8)  "Potentially preventable admission" means an
	admission of a person to a hospital or long-term care facility that
	may have reasonably been prevented with adequate access to
	ambulatory care or health care coordination.
	(9)  "Potentially preventable ancillary service" means
	a health care service provided or ordered by a physician or other
	health care provider to supplement or support the evaluation or
	treatment of a patient, including a diagnostic test, laboratory
	test, therapy service, or radiology service, that may not be
	reasonably necessary for the provision of quality health care or
	treatment.
	(10)  "Potentially preventable complication" means a
	harmful event or negative outcome with respect to a person,
	including an infection or surgical complication, that:
	(A)  occurs after the person's admission to a
	hospital or long-term care facility; and
	(B)  may have resulted from the care, lack of
	care, or treatment provided during the hospital or long-term care
	facility stay rather than from a natural progression of an
	underlying disease.
	(11)  "Potentially preventable event" means a
	potentially preventable admission, a potentially preventable
	ancillary service, a potentially preventable complication, a
	potentially preventable emergency room visit, a potentially
	preventable readmission, or a combination of those events.
	(12)  "Potentially preventable emergency room visit"
	means treatment of a person in a hospital emergency room or
	freestanding emergency medical care facility for a condition that
	may not require emergency medical attention because the condition
	could be, or could have been, treated or prevented by a physician or
	other health care provider in a nonemergency setting.
	(13)  "Potentially preventable readmission" means a
	return hospitalization of a person within a period specified by the
	commission that may have resulted from deficiencies in the care or
	treatment provided to the person during a previous hospital stay or
	from deficiencies in post-hospital discharge follow-up.  The term
	does not include a hospital readmission necessitated by the
	occurrence of unrelated events after the discharge.  The term
	includes the readmission of a person to a hospital for:
	(A)  the same condition or procedure for which the
	person was previously admitted;
	(B)  an infection or other complication resulting
	from care previously provided; or
	(C)  a condition or procedure that indicates that
	a surgical intervention performed during a previous admission was
	unsuccessful in achieving the anticipated outcome.
	Sec. 1002.002.  ESTABLISHMENT; PURPOSE. The Texas Institute
	of Health Care Quality and Efficiency is established to improve
	health care quality, accountability, education, and cost
	containment in this state by encouraging health care provider
	collaboration, effective health care delivery models, and
	coordination of health care services.
	[Sections 1002.003-1002.050 reserved for expansion]
	SUBCHAPTER B.  ADMINISTRATION
	Sec. 1002.051.  APPLICATION OF SUNSET ACT. The institute is
	subject to Chapter 325, Government Code (Texas Sunset Act).  Unless
	continued in existence as provided by that chapter, the institute
	is abolished and this chapter expires September 1, 2017.
	Sec. 1002.052.  COMPOSITION OF BOARD OF DIRECTORS.  (a)  The
	institute is governed by a board of 15 directors appointed by the
	governor.
	(b)  The following ex officio, nonvoting members also serve
	on the board:
	(1)  the commissioner of the department;
	(2)  the executive commissioner;
	(3)  the commissioner of insurance;
	(4)  the executive director of the Employees Retirement
	System of Texas;
	(5)  the executive director of the Teacher Retirement
	System of Texas;
	(6)  the state Medicaid director of the Health and
	Human Services Commission;
	(7)  the executive director of the Texas Medical Board;
	(8)  the commissioner of the Department of Aging and
	Disability Services;
	(9)  the executive director of the Texas Workforce
	Commission;
	(10)  the commissioner of the Texas Higher Education
	Coordinating Board; and
	(11)  a representative from each state agency or system
	of higher education that purchases or provides health care
	services, as determined by the governor.
	(c)  The governor shall appoint as board members health care
	providers, payors, consumers, and health care quality experts or
	persons who possess expertise in any other area the governor finds
	necessary for the successful operation of the institute.
	(d)  A person may not serve as a voting member of the board if
	the person serves on or advises another board or advisory board of a
	state agency.
	Sec. 1002.053.  TERMS OF OFFICE. (a)  Appointed members of
	the board serve staggered terms of four years, with the terms of as
	close to one-half of the members as possible expiring January 31 of
	each odd-numbered year.
	(b)  Board members may serve consecutive terms.
	Sec. 1002.054.  ADMINISTRATIVE SUPPORT.  (a)  The institute
	is administratively attached to the commission.
	(b)  The commission shall coordinate administrative
	responsibilities with the institute to streamline and integrate the
	institute's administrative operations and avoid unnecessary
	duplication of effort and costs.
	(c)  The institute may collaborate with, and coordinate its
	administrative functions, including functions related to research
	and reporting activities with, other public or private entities,
	including academic institutions and nonprofit organizations, that
	perform research on health care issues or other topics consistent
	with the purpose of the institute.
	Sec. 1002.055.  EXPENSES. (a)  Members of the board serve
	without compensation but, subject to the availability of
	appropriated funds, may receive reimbursement for actual and
	necessary expenses incurred in attending meetings of the board.
	(b)  Information relating to the billing and payment of
	expenses under this section is subject to Chapter 552, Government
	Code.
	Sec. 1002.056.  OFFICER; CONFLICT OF INTEREST. (a)  The
	governor shall designate a member of the board as presiding officer
	to serve in that capacity at the pleasure of the governor.
	(b)  Any board member or a member of a committee formed by the
	board with direct interest, personally or through an employer, in a
	matter before the board shall abstain from deliberations and
	actions on the matter in which the conflict of interest arises and
	shall further abstain on any vote on the matter, and may not
	otherwise participate in a decision on the matter.
	(c)  Each board member shall:
	(1)  file a conflict of interest statement and a
	statement of ownership interests with the board to ensure
	disclosure of all existing and potential personal interests related
	to board business; and
	(2)  update the statements described by Subdivision (1)
	at least annually.
	(d)  A statement filed under Subsection (c) is subject to
	Chapter 552, Government Code.
	Sec. 1002.057.  PROHIBITION ON CERTAIN CONTRACTS AND
	EMPLOYMENT. (a)  The board may not compensate, employ, or contract
	with any individual who serves as a member of the board of, or on an
	advisory board or advisory committee for, any other governmental
	body, including any agency, council, or committee, in this state.
	(b)  The board may not compensate, employ, or contract with
	any person that provides financial support to the board, including
	a person who provides a gift, grant, or donation to the board.
	Sec. 1002.058.  MEETINGS.  (a)  The board may meet as often
	as necessary, but shall meet at least once each calendar quarter.
	(b)  The board shall develop and implement policies that
	provide the public with a reasonable opportunity to appear before
	the board and to speak on any issue under the authority of the
	institute.
	Sec. 1002.059.  BOARD MEMBER IMMUNITY. (a)  A board member
	may not be held civilly liable for an act performed, or omission
	made, in good faith in the performance of the member's powers and
	duties under this chapter.
	(b)  A cause of action does not arise against a member of the
	board for an act or omission described by Subsection (a).
	Sec. 1002.060.  PRIVACY OF INFORMATION. (a)  Protected
	health information and individually identifiable health
	information collected, assembled, or maintained by the institute is
	confidential and is not subject to disclosure under Chapter 552,
	Government Code.
	(b)  The institute shall comply with all state and federal
	laws and rules relating to the protection, confidentiality, and
	transmission of health information, including the Health Insurance
	Portability and Accountability Act of 1996 (Pub. L. No. 104-191)
	and rules adopted under that Act, 42 U.S.C. Section 290dd-2, and 42
	C.F.R. Part 2.
	(c)  The commission, department, or institute or an officer
	or employee of the commission, department, or institute, including
	a board member, may not disclose any information that is
	confidential under this section.
	(d)  Information, documents, and records that are
	confidential as provided by this section are not subject to
	subpoena or discovery and may not be introduced into evidence in any
	civil or criminal proceeding.
	(e)  An officer or employee of the commission, department, or
	institute, including a board member, may not be examined in a civil,
	criminal, special, administrative, or other proceeding as to
	information that is confidential under this section.
	Sec. 1002.061.  FUNDING. (a)  The institute may be funded
	through the General Appropriations Act and may request, accept, and
	use gifts, grants, and donations as necessary to implement its
	functions.
	(b)  The institute may participate in other
	revenue-generating activity that is consistent with the
	institute's purposes.
	(c)  Except as otherwise provided by law, each state agency
	represented on the board as a nonvoting member shall provide funds
	to support the institute and implement this chapter.  The
	commission shall establish a funding formula to determine the level
	of support each state agency is required to provide.
	(d)  This section does not permit the sale of information
	that is confidential under Section 1002.060.
	[Sections 1002.062-1002.100 reserved for expansion]
	SUBCHAPTER C.  POWERS AND DUTIES
	Sec. 1002.101.  GENERAL POWERS AND DUTIES. The institute
	shall make recommendations to the legislature on:
	(1)  improving quality and efficiency of health care
	delivery by:
	(A)  providing a forum for regulators, payors, and
	providers to discuss and make recommendations for initiatives that
	promote the use of best practices, increase health care provider
	collaboration, improve health care outcomes, and contain health
	care costs;
	(B)  researching, developing, supporting, and
	promoting strategies to improve the quality and efficiency of
	health care in this state;
	(C)  determining the outcome measures that are the
	most effective measures of quality and efficiency:
	(i)  using nationally accredited measures;
	or
	(ii)  if no nationally accredited measures
	exist, using measures based on expert consensus;
	(D)  reducing the incidence of potentially
	preventable events; and
	(E)  creating a state plan that takes into
	consideration the regional differences of the state to encourage
	the improvement of the quality and efficiency of health care
	services;
	(2)  improving reporting, consolidation, and
	transparency of health care information; and
	(3)  implementing and supporting innovative health
	care collaborative payment and delivery systems under Chapter 848,
	Insurance Code.
	Sec. 1002.102.  GOALS FOR QUALITY AND EFFICIENCY OF HEALTH
	CARE; STATEWIDE PLAN. (a)  The institute shall study and develop
	recommendations to improve the quality and efficiency of health
	care delivery in this state, including:
	(1)  quality-based payment systems that align payment
	incentives with high-quality, cost-effective health care;
	(2)  alternative health care delivery systems that
	promote health care coordination and provider collaboration;
	(3)  quality of care and efficiency outcome
	measurements that are effective measures of prevention, wellness,
	coordination, provider collaboration, and cost-effective health
	care; and
	(4)  meaningful use of electronic health records by
	providers and electronic exchange of health information among
	providers.
	(b)  The institute shall study and develop recommendations
	for measuring quality of care and efficiency across:
	(1)  all state employee and state retiree benefit
	plans;
	(2)  employee and retiree benefit plans provided
	through the Teacher Retirement System of Texas;
	(3)  the state medical assistance program under Chapter
	32, Human Resources Code; and
	(4)  the child health plan under Chapter 62.
	(c)  In developing recommendations under Subsection (b), the
	institute shall use nationally accredited measures or, if no
	nationally accredited measures exist, measures based on expert
	consensus.
	(d)  The institute may study and develop recommendations for
	measuring the quality of care and efficiency in state or federally
	funded health care delivery systems other than those described by
	Subsection (b).
	(e)  In developing recommendations under Subsections (a) and
	(b), the institute may not base its recommendations solely on
	actuarial data.
	(f)  Using the studies described by Subsections (a) and (b),
	the institute shall develop recommendations for a statewide plan
	for quality and efficiency of the delivery of health care.
	[Sections 1002.103-1002.150 reserved for expansion]
	SUBCHAPTER D.  HEALTH CARE COLLABORATIVE GUIDELINES AND SUPPORT
	Sec.  1002.151.  INSTITUTE STUDIES AND RECOMMENDATIONS
	REGARDING HEALTH CARE PAYMENT AND DELIVERY SYSTEMS.  (a)  The
	institute shall study and make recommendations for alternative
	health care payment and delivery systems.
	(b)  The institute shall recommend methods to evaluate a
	health care collaborative's effectiveness, including methods to
	evaluate:
	(1)  the efficiency and effectiveness of
	cost-containment methods used by the collaborative;
	(2)  alternative health care payment and delivery
	systems used by the collaborative;
	(3)  the quality of care;
	(4)  health care provider collaboration and
	coordination;
	(5)  the protection of patients;
	(6)  patient satisfaction; and
	(7)  the meaningful use of electronic health records by
	providers and electronic exchange of health information among
	providers.
	[Sections 1002.152-1002.200 reserved for expansion]
	SUBCHAPTER E.  IMPROVED TRANSPARENCY
	Sec. 1002.201.  HEALTH CARE ACCOUNTABILITY; IMPROVED
	TRANSPARENCY.  (a)  With the assistance of the department, the
	institute shall complete an assessment of all health-related data
	collected by the state, what information is available to the
	public, and how the public and health care providers currently
	benefit and could potentially benefit from this information,
	including health care cost and quality information.
	(b)  The institute shall develop a plan:
	(1)  for consolidating reports of health-related data
	from various sources to reduce administrative costs to the state
	and reduce the administrative burden to health care providers and
	payors;
	(2)  for improving health care transparency to the
	public and health care providers by making information available in
	the most effective format; and
	(3)  providing recommendations to the legislature on
	enhancing existing health-related information available to health
	care providers and the public, including provider reporting of
	additional information not currently required to be reported under
	existing law, to improve quality of care.
	Sec. 1002.202.  ALL PAYOR CLAIMS DATABASE.  (a)  The
	institute shall study the feasibility and desirability of
	establishing a centralized database for health care claims
	information across all payors.
	(b)  The study described by Subsection (a) shall:
	(1)  use the assessment described by Section 1002.201
	to develop recommendations relating to the adequacy of existing
	data sources for carrying out the state's purposes under this
	chapter and Chapter 848, Insurance Code;
	(2)  determine whether the establishment of an all
	payor claims database would reduce the need for some data
	submissions provided by payors;
	(3)  identify the best available sources of data
	necessary for the state's purposes under this chapter and Chapter
	848, Insurance Code, that are not collected by the state under
	existing law;
	(4)  describe how an all payor claims database may
	facilitate carrying out the state's purposes under this chapter and
	Chapter 848, Insurance Code;
	(5)  identify national standards for claims data
	collection and use, including standardized data sets, standardized
	methodology, and standard outcome measures of health care quality
	and efficiency; and
	(6)  estimate the costs of implementing an all payor
	claims database, including:
	(A)  the costs to the state for collecting and
	processing data;
	(B)  the cost to the payors for supplying the
	data; and
	(C)  the available funding mechanisms that might
	support an all payor claims database.
	(c)  The institute shall consult with the department and the
	Texas Department of Insurance to develop recommendations to submit
	to the legislature on the establishment of the centralized claims
	database described by Subsection (a).
	SECTION 3.02.  Chapter 109, Health and Safety Code, is
	repealed.
	SECTION 3.03.  On the effective date of this Act:
	(1)  the Texas Health Care Policy Council established
	under Chapter 109, Health and Safety Code, is abolished; and
	(2)  any unexpended and unobligated balance of money
	appropriated by the legislature to the Texas Health Care Policy
	Council established under Chapter 109, Health and Safety Code, as
	it existed immediately before the effective date of this Act, is
	transferred to the Texas Institute of Health Care Quality and
	Efficiency created by Chapter 1002, Health and Safety Code, as
	added by this Act.
	SECTION 3.04.  (a)  The governor shall appoint voting
	members of the board of directors of the Texas Institute of Health
	Care Quality and Efficiency under Section 1002.052, Health and
	Safety Code, as added by this Act, as soon as practicable after the
	effective date of this Act.
	(b)  In making the initial appointments under this section,
	the governor shall designate seven members to terms expiring
	January 31, 2013, and eight members to terms expiring January 31,
	2015.
	SECTION 3.05.  (a)  Not later than December 1, 2012, the
	Texas Institute of Health Care Quality and Efficiency shall submit
	a report regarding recommendations for improved health care
	reporting to the governor, the lieutenant governor, the speaker of
	the house of representatives, and the chairs of the appropriate
	standing committees of the legislature outlining:
	(1)  the initial assessment conducted under Subsection
	(a), Section 1002.201, Health and Safety Code, as added by this Act;
	(2)  the plans initially developed under Subsection
	(b), Section 1002.201, Health and Safety Code, as added by this Act;
	(3)  the changes in existing law that would be
	necessary to implement the assessment and plans described by
	Subdivisions (1) and (2) of this subsection; and
	(4)  the cost implications to state agencies, small
	businesses, micro businesses, payors, and health care providers to
	implement the assessment and plans described by Subdivisions (1)
	and (2) of this subsection.
	(b)  Not later than December 1, 2012, the Texas Institute of
	Health Care Quality and Efficiency shall submit a report regarding
	recommendations for an all payor claims database to the governor,
	the lieutenant governor, the speaker of the house of
	representatives, and the chairs of the appropriate standing
	committees of the legislature outlining:
	(1)  the feasibility and desirability of establishing a
	centralized database for health care claims;
	(2)  the recommendations developed under Subsection
	(c), Section 1002.202, Health and Safety Code, as added by this Act;
	(3)  the changes in existing law that would be
	necessary to implement the recommendations described by
	Subdivision (2) of this subsection; and
	(4)  the cost implications to state agencies, small
	businesses, micro businesses, payors, and health care providers to
	implement the recommendations described by Subdivision (2) of this
	subsection.
	SECTION 3.06.  (a)  The Texas Institute of Health Care
	Quality and Efficiency under Chapter 1002, Health and Safety Code,
	as added by this Act, with the assistance of and in coordination
	with the Texas Department of Insurance, shall conduct a study:
	(1)  evaluating how the legislature may promote a
	consumer-driven health care system, including by increasing the
	adoption of high-deductible insurance products with health savings
	accounts by consumers and employers to lower health care costs and
	increase personal responsibility for health care; and
	(2)  examining the issue of differing amounts of
	payment in full accepted by a provider for the same or similar
	health care services or supplies, including bundled health care
	services and supplies, and addressing:
	(A)  the extent of the differences in the amounts
	accepted as payment in full for a service or supply;
	(B)  the reasons that amounts accepted as payment
	in full differ for the same or similar services or supplies;
	(C)  the availability of information to the
	consumer regarding the amount accepted as payment in full for a
	service or supply;
	(D)  the effects on consumers of differing amounts
	accepted as payment in full; and
	(E)  potential methods for improving consumers'
	access to information in relation to the amounts accepted as
	payment in full for health care services or supplies, including the
	feasibility and desirability of requiring providers to:
	(i)  publicly post the amount that is
	accepted as payment in full for a service or supply; and
	(ii)  adhere to the posted amount.
	(b)  The Texas Institute of Health Care Quality and
	Efficiency shall submit a report to the legislature outlining the
	results of the study conducted under this section and any
	recommendations for potential legislation not later than January 1,
	2013.
	(c)  This section expires September 1, 2013.
	ARTICLE 4.  HEALTH CARE COLLABORATIVES
	SECTION 4.01.  Subtitle C, Title 6, Insurance Code, is
	amended by adding Chapter 848 to read as follows:
	CHAPTER 848.  HEALTH CARE COLLABORATIVES
	SUBCHAPTER A.  GENERAL PROVISIONS
	Sec. 848.001.  DEFINITIONS. In this chapter:
	(1)  "Affiliate" means a person who controls, is
	controlled by, or is under common control with one or more other
	persons.
	(2)  "Health care collaborative" means an entity:
	(A)  that undertakes to arrange for medical and
	health care services for insurers, health maintenance
	organizations, and other payors in exchange for payments in cash or
	in kind;
	(B)  that accepts and distributes payments for
	medical and health care services;
	(C)  that consists of:
	(i)  physicians;
	(ii)  physicians and other health care
	providers;
	(iii)  physicians and insurers or health
	maintenance organizations; or
	(iv)  physicians, other health care
	providers, and insurers or health maintenance organizations; and
	(D)  that is certified by the commissioner under
	this chapter to lawfully accept and distribute payments to
	physicians and other health care providers using the reimbursement
	methodologies authorized by this chapter.
	(3)  "Health care services" means services provided by
	a physician or health care provider to prevent, alleviate, cure, or
	heal human illness or injury.  The term includes:
	(A)  pharmaceutical services;
	(B)  medical, chiropractic, or dental care; and
	(C)  hospitalization.
	(4)  "Health care provider" means any person,
	partnership, professional association, corporation, facility, or
	institution licensed, certified, registered, or chartered by this
	state to provide health care services.  The term includes a hospital
	but does not include a physician.
	(5)  "Health maintenance organization" means an
	organization operating under Chapter 843.
	(6)  "Hospital" means a general or special hospital,
	including a public or private institution licensed under Chapter
	241 or 577, Health and Safety Code.
	(7)  "Institute" means the Texas Institute of Health
	Care Quality and Efficiency established under Chapter 1002, Health
	and Safety Code.
	(8)  "Physician" means:
	(A)  an individual licensed to practice medicine
	in this state;
	(B)  a professional association organized under
	the Texas Professional Association Act (Article 1528f, Vernon's
	Texas Civil Statutes) or the Texas Professional Association Law by
	an individual or group of individuals licensed to practice medicine
	in this state;
	(C)  a partnership or limited liability
	partnership formed by a group of individuals licensed to practice
	medicine in this state;
	(D)  a nonprofit health corporation certified
	under Section 162.001, Occupations Code;
	(E)  a company formed by a group of individuals
	licensed to practice medicine in this state under the Texas Limited
	Liability Company Act (Article 1528n, Vernon's Texas Civil
	Statutes) or the Texas Professional Limited Liability Company Law;
	or
	(F)  an organization wholly owned and controlled
	by individuals licensed to practice medicine in this state.
	(9)  "Potentially preventable event" has the meaning
	assigned by Section 1002.001, Health and Safety Code.
	Sec. 848.002.  EXCEPTION:  DELEGATED ENTITIES. (a)  This
	section applies only to an entity, other than a health maintenance
	organization, that:
	(1)  by itself or through a subcontract with another
	entity, undertakes to arrange for or provide medical care or health
	care services to enrollees in exchange for predetermined payments
	on a prospective basis; and
	(2)  accepts responsibility for performing functions
	that are required by:
	(A)  Chapter 222, 251, 258, or 1272, as
	applicable, to a health maintenance organization; or
	(B)  Chapter 843, Chapter 1271, Section 1367.053,
	Subchapter A, Chapter 1452, or Subchapter B, Chapter 1507, as
	applicable, solely on behalf of health maintenance organizations.
	(b)  An entity described by Subsection (a) is subject to
	Chapter 1272 and is not required to obtain a certificate of
	authority or determination of approval under this chapter.
	Sec. 848.003.  USE OF INSURANCE-RELATED TERMS BY HEALTH CARE
	COLLABORATIVE. A health care collaborative that is not an insurer
	or health maintenance organization may not use in its name,
	contracts, or literature:
	(1)  the following words or initials:
	(A)  "insurance";
	(B)  "casualty";
	(C)  "surety";
	(D)  "mutual";
	(E)  "health maintenance organization"; or
	(F)  "HMO"; or
	(2)  any other words or initials that are:
	(A)  descriptive of the insurance, casualty,
	surety, or health maintenance organization business; or
	(B)  deceptively similar to the name or
	description of an insurer, surety corporation, or health
	maintenance organization engaging in business in this state.
	Sec. 848.004.  APPLICABILITY OF INSURANCE LAWS. (a)  An
	organization may not arrange for or provide health care services to
	enrollees on a prepaid or indemnity basis through health insurance
	or a health benefit plan, including a health care plan, as defined
	by Section 843.002, unless the organization as an insurer or health
	maintenance organization holds the appropriate certificate of
	authority issued under another chapter of this code.
	(b)  Except as provided by Subsection (c), the following
	provisions of this code apply to a health care collaborative in the
	same manner and to the same extent as they apply to an individual or
	entity otherwise subject to the provision:
	(1)  Section 38.001;
	(2)  Subchapter A, Chapter 542;
	(3)  Chapter 541;
	(4)  Chapter 543;
	(5)  Chapter 602;
	(6)  Chapter 701;
	(7)  Chapter 803; and
	(8)  Chapter 804.
	(c)  The remedies available under this chapter in the manner
	provided by Chapter 541 do not include:
	(1)  a private cause of action under Subchapter D,
	Chapter 541; or
	(2)  a class action under Subchapter F, Chapter 541.
	Sec. 848.005.  CERTAIN INFORMATION CONFIDENTIAL.
	(a)  Except as provided by Subsection (b), an application, filing,
	or report required under this chapter is public information subject
	to disclosure under Chapter 552, Government Code.
	(b)  The following information is confidential and is not
	subject to disclosure under Chapter 552, Government Code:
	(1)  a contract, agreement, or document that
	establishes another arrangement:
	(A)  between a health care collaborative and a
	governmental or private entity for all or part of health care
	services provided or arranged for by the health care collaborative;
	or
	(B)  between a health care collaborative and
	participating physicians and health care providers;
	(2)  a written description of a contract, agreement, or
	other arrangement described by Subdivision (1);
	(3)  information relating to bidding, pricing, or other
	trade secrets submitted to:
	(A)  the department under Sections 848.057(a)(5)
	and (6); or
	(B)  the attorney general under Section 848.059;
	(4)  information relating to the diagnosis, treatment,
	or health of a patient who receives health care services from a
	health care collaborative under a contract for services; and
	(5)  information relating to quality improvement or
	peer review activities of a health care collaborative.
	Sec. 848.006.  COVERAGE BY HEALTH CARE COLLABORATIVE NOT
	REQUIRED. (a)  Except as provided by Subsection (b) and subject to
	Chapter 843 and Section 1301.0625, an individual may not be
	required to obtain or maintain coverage under:
	(1)  an individual health insurance policy written
	through a health care collaborative; or
	(2)  any plan or program for health care services
	provided on an individual basis through a health care
	collaborative.
	(b)  This chapter does not require an individual to obtain or
	maintain health insurance coverage.
	(c)  Subsection (a) does not apply to an individual:
	(1)  who is required to obtain or maintain health
	benefit plan coverage:
	(A)  written by an institution of higher education
	at which the individual is or will be enrolled as a student; or
	(B)  under an order requiring medical support for
	a child; or
	(2)  who voluntarily applies for benefits under a state
	administered program under Title XIX of the Social Security Act (42
	U.S.C. Section 1396 et seq.), or Title XXI of the Social Security
	Act (42 U.S.C. Section 1397aa et seq.).
	(d)  Except as provided by Subsection (e), a fine or penalty
	may not be imposed on an individual if the individual chooses not to
	obtain or maintain coverage described by Subsection (a).
	(e)  Subsection (d) does not apply to a fine or penalty
	imposed on an individual described in Subsection (c) for the
	individual's failure to obtain or maintain health benefit plan
	coverage.
	[Sections 848.007-848.050 reserved for expansion]
	SUBCHAPTER B.  AUTHORITY TO ENGAGE IN BUSINESS
	Sec. 848.051.  OPERATION OF HEALTH CARE COLLABORATIVE. A
	health care collaborative that is certified by the department under
	this chapter may provide or arrange to provide health care services
	under contract with a governmental or private entity.
	Sec. 848.052.  FORMATION AND GOVERNANCE OF HEALTH CARE
	COLLABORATIVE. (a)  A health care collaborative is governed by a
	board of directors.
	(b)  The person who establishes a health care collaborative
	shall appoint an initial board of directors. Each member of the
	initial board serves a term of not more than 18 months. Subsequent
	members of the board shall be elected to serve two-year terms by
	physicians and health care providers who participate in the health
	care collaborative as provided by this section. The board shall
	elect a chair from among its members.
	(c)  If the participants in a health care collaborative are
	all physicians, each member of the board of directors must be an
	individual physician who is a participant in the health care
	collaborative.
	(d)  If the participants in a health care collaborative are
	both physicians and other health care providers, the board of
	directors must consist of:
	(1)  an even number of members who are individual
	physicians, selected by physicians who participate in the health
	care collaborative;
	(2)  a number of members equal to the number of members
	under Subdivision (1) who represent health care providers, one of
	whom is an individual physician, selected by health care providers
	who participate in the health care collaborative; and
	(3)  one individual member with business expertise,
	selected by unanimous vote of the members described by Subdivisions
	(1) and (2).
	(d-1)  If a health care collaborative includes
	hospital-based physicians, one member of the board of directors
	must be a hospital-based physician.
	(e)  The board of directors must include at least three
	nonvoting ex officio members who represent the community in which
	the health care collaborative operates.
	(f)  An individual may not serve on the board of directors of
	a health care collaborative if the individual has an ownership
	interest in, serves on the board of directors of, or maintains an
	officer position with:
	(1)  another health care collaborative that provides
	health care services in the same service area as the health care
	collaborative; or
	(2)  a physician or health care provider that:
	(A)  does not participate in the health care
	collaborative; and
	(B)  provides health care services in the same
	service area as the health care collaborative.
	(g)  In addition to the requirements of Subsection (f), the
	board of directors of a health care collaborative shall adopt a
	conflict of interest policy to be followed by members.
	(h)  The board of directors may remove a member for cause. A
	member may not be removed from the board without cause.
	(i)  The organizational documents of a health care
	collaborative may not conflict with any provision of this chapter,
	including this section.
	Sec. 848.053.  COMPENSATION ADVISORY COMMITTEE; SHARING OF
	CERTAIN DATA. (a)  The board of directors of a health care
	collaborative shall establish a compensation advisory committee to
	develop and make recommendations to the board regarding charges,
	fees, payments, distributions, or other compensation assessed for
	health care services provided by physicians or health care
	providers who participate in the health care collaborative. The
	committee must include:
	(1)  two members of the board of directors, of which one
	member is the hospital-based physician member, if the health care
	collaborative includes hospital-based physicians; and
	(2)  if the health care collaborative consists of
	physicians and other health care providers:
	(A)  a physician who is not a participant in the
	health care collaborative, selected by the physicians who are
	participants in the collaborative; and
	(B)  a member selected by the other health care
	providers who participate in the collaborative.
	(b)  A health care collaborative shall establish and enforce
	policies to prevent the sharing of charge, fee, and payment data
	among nonparticipating physicians and health care providers.
	(c)  The compensation advisory committee shall make
	recommendations to the board of directors regarding all charges,
	fees, payments, distributions, or other compensation assessed for
	health care services provided by a physician or health care
	provider who participates in the health care collaborative.
	(d)  Except as provided by Subsections (e) and (f), the board
	of directors and the compensation advisory committee may not use or
	consider a government payor's payment rates in setting the charges
	or fees for health care services provided by a physician or health
	care provider who participates in the health care collaborative.
	(e)  The board of directors or the compensation advisory
	committee may use or consider a government payor's payment rates
	when setting the charges or fees for health care services paid by a
	government payor.
	(f)  This section does not prohibit a reference to a
	government payor's payment rates in agreements with health
	maintenance organizations, insurers, or other payors.
	(g)  After the compensation advisory committee submits a
	recommendation to the board of directors, the board shall formally
	approve or refuse the recommendation.
	(h)  For purposes of this section, "government payor"
	includes:
	(1)  Medicare;
	(2)  Medicaid;
	(3)  the state child health plan program; and
	(4)  the TRICARE Military Health System.
	Sec. 848.054.  CERTIFICATE OF AUTHORITY AND DETERMINATION OF
	APPROVAL REQUIRED. (a)  An organization may not organize or
	operate a health care collaborative in this state unless the
	organization holds a certificate of authority issued under this
	chapter.
	(b)  The commissioner shall adopt rules governing the
	application for a certificate of authority under this subchapter.
	Sec. 848.055.  EXCEPTIONS. (a)  An organization is not
	required to obtain a certificate of authority under this chapter if
	the organization holds an appropriate certificate of authority
	issued under another chapter of this code.
	(b)  A person is not required to obtain a certificate of
	authority under this chapter to the extent that the person is:
	(1)  a physician engaged in the delivery of medical
	care; or
	(2)  a health care provider engaged in the delivery of
	health care services other than medical care as part of a health
	maintenance organization delivery network.
	(c)  A medical school, medical and dental unit, or health
	science center as described by Section 61.003, 61.501, or 74.601,
	Education Code, is not required to obtain a certificate of
	authority under this chapter to the extent that the medical school,
	medical and dental unit, or health science center contracts to
	deliver medical care services within a health care collaborative.
	This chapter is otherwise applicable to a medical school, medical
	and dental unit, or health science center.
	(d)  An entity licensed under the Health and Safety Code that
	employs a physician under a specific statutory authority is not
	required to obtain a certificate of authority under this chapter to
	the extent that the entity contracts to deliver medical care
	services and health care services within a health care
	collaborative. This chapter is otherwise applicable to the entity.
	Sec. 848.056.  APPLICATION FOR CERTIFICATE OF AUTHORITY.
	(a)  An organization may apply to the commissioner for and obtain a
	certificate of authority to organize and operate a health care
	collaborative.
	(b)  An application for a certificate of authority must:
	(1)  comply with all rules adopted by the commissioner;
	(2)  be verified under oath by the applicant or an
	officer or other authorized representative of the applicant;
	(3)  be reviewed by the division within the office of
	attorney general that is primarily responsible for enforcing the
	antitrust laws of this state and of the United States under Section
	848.059;
	(4)  demonstrate that the health care collaborative
	contracts with a sufficient number of primary care physicians in
	the health care collaborative's service area;
	(5)  state that enrollees may obtain care from any
	physician or health care provider in the health care collaborative;
	and
	(6)  identify a service area within which medical
	services are available and accessible to enrollees.
	(c)  Not later than the 190th day after the date an applicant
	submits an application to the commissioner under this section, the
	commissioner shall approve or deny the application.
	(d)  The commissioner by rule may:
	(1)  extend the date by which an application is due
	under this section; and
	(2)  require the disclosure of any additional
	information necessary to implement and administer this chapter,
	including information necessary to antitrust review and oversight.
	Sec. 848.057.  REQUIREMENTS FOR APPROVAL OF APPLICATION.
	(a)  The commissioner shall issue a certificate of authority on
	payment of the application fee prescribed by Section 848.152 if the
	commissioner is satisfied that:
	(1)  the applicant meets the requirements of Section
	848.056;
	(2)  with respect to health care services to be
	provided, the applicant:
	(A)  has demonstrated the willingness and
	potential ability to ensure that the health care services will be
	provided in a manner that:
	(i)  increases collaboration among health
	care providers and integrates health care services;
	(ii)  promotes improvement in quality-based
	health care outcomes, patient safety, patient engagement, and
	coordination of services; and
	(iii)  reduces the occurrence of potentially
	preventable events;
	(B)  has processes that contain health care costs
	without jeopardizing the quality of patient care;
	(C)  has processes to develop, compile, evaluate,
	and report statistics on performance measures relating to the
	quality and cost of health care services, the pattern of
	utilization of services, and the availability and accessibility of
	services; and
	(D)  has processes to address complaints made by
	patients receiving services provided through the organization;
	(3)  the applicant is in compliance with all rules
	adopted by the commissioner under Section 848.151;
	(4)  the applicant has working capital and reserves
	sufficient to operate and maintain the health care collaborative
	and to arrange for services and expenses incurred by the health care
	collaborative;
	(5)  the applicant's proposed health care collaborative
	is not likely to reduce competition in any market for physician,
	hospital, or ancillary health care services due to:
	(A)  the size of the health care collaborative; or
	(B)  the composition of the collaborative,
	including the distribution of physicians by specialty within the
	collaborative in relation to the number of competing health care
	providers in the health care collaborative's geographic market; and
	(6)  the pro-competitive benefits of the applicant's
	proposed health care collaborative are likely to substantially
	outweigh the anticompetitive effects of any increase in market
	power.
	(b)  A certificate of authority is effective for a period of
	one year, subject to Section 848.060(d).
	Sec. 848.058.  DENIAL OF CERTIFICATE OF AUTHORITY. (a)  The
	commissioner may not issue a certificate of authority if the
	commissioner determines that the applicant's proposed plan of
	operation does not meet the requirements of Section 848.057.
	(b)  If the commissioner denies an application for a
	certificate of authority under Subsection (a), the commissioner
	shall notify the applicant that the plan is deficient and specify
	the deficiencies.
	Sec. 848.059.  CONCURRENCE OF ATTORNEY GENERAL. (a)  If the
	commissioner determines that an application for a certificate of
	authority filed under Section 848.056 complies with the
	requirements of Section 848.057, the commissioner shall forward the
	application, and all data, documents, and analysis considered by
	the commissioner in making the determination, to the attorney
	general. The attorney general shall review the application and the
	data, documents, and analysis and, if the attorney general concurs
	with the commissioner's determination under Sections 848.057(a)(5)
	and (6), the attorney general shall notify the commissioner.
	(b)  If the attorney general does not concur with the
	commissioner's determination under Sections 848.057(a)(5) and (6),
	the attorney general shall notify the commissioner.
	(c)  A determination under this section shall be made not
	later than the 60th day after the date the attorney general receives
	the application and the data, documents, and analysis from the
	commissioner.
	(d)  If the attorney general lacks sufficient information to
	make a determination under Sections 848.057(a)(5) and (6), within
	60 days of the attorney general's receipt of the application and the
	data, documents, and analysis the attorney general shall inform the
	commissioner that the attorney general lacks sufficient
	information as well as what information the attorney general
	requires. The commissioner shall then either provide the
	additional information to the attorney general or request the
	additional information from the applicant. The commissioner shall
	promptly deliver any such additional information to the attorney
	general. The attorney general shall then have 30 days from receipt
	of the additional information to make a determination under
	Subsection (a) or (b).
	(e)  If the attorney general notifies the commissioner that
	the attorney general does not concur with the commissioner's
	determination under Sections 848.057(a)(5) and (6), then,
	notwithstanding any other provision of this subchapter, the
	commissioner shall deny the application.
	(f)  In reviewing the commissioner's determination, the
	attorney general shall consider the findings, conclusions, or
	analyses contained in any other governmental entity's evaluation of
	the health care collaborative.
	(g)  The attorney general at any time may request from the
	commissioner additional time to consider an application under this
	section.  The commissioner shall grant the request and notify the
	applicant of the request.  A request by the attorney general or an
	order by the commissioner granting a request under this section is
	not subject to administrative or judicial review.
	Sec. 848.060.  RENEWAL OF CERTIFICATE OF AUTHORITY AND
	DETERMINATION OF APPROVAL. (a)  Not later than the 180th day
	before the one-year anniversary of the date on which a health care
	collaborative's certificate of authority was issued or most
	recently renewed, the health care collaborative shall file with the
	commissioner an application to renew the certificate.
	(b)  An application for renewal must:
	(1)  be verified by at least two principal officers of
	the health care collaborative; and
	(2)  include:
	(A)  a financial statement of the health care
	collaborative, including a balance sheet and receipts and
	disbursements for the preceding calendar year, certified by an
	independent certified public accountant;
	(B)  a description of the service area of the
	health care collaborative;
	(C)  a description of the number and types of
	physicians and health care providers participating in the health
	care collaborative;
	(D)  an evaluation of the quality and cost of
	health care services provided by the health care collaborative;
	(E)  an evaluation of the health care
	collaborative's processes to promote evidence-based medicine,
	patient engagement, and coordination of health care services
	provided by the health care collaborative;
	(F)  the number, nature, and disposition of any
	complaints filed with the health care collaborative under Section
	848.107; and
	(G)  any other information required by the
	commissioner.
	(c)  If a completed application for renewal is filed under
	this section:
	(1)  the commissioner shall conduct a review under
	Section 848.057 as if the application for renewal were a new
	application, and, on approval by the commissioner, the attorney
	general shall review the application under Section 848.059 as if
	the application for renewal were a new application; and
	(2)  the commissioner shall renew or deny the renewal
	of a certificate of authority at least 20 days before the one-year
	anniversary of the date on which a health care collaborative's
	certificate of authority was issued.
	(d)  If the commissioner does not act on a renewal
	application before the one-year anniversary of the date on which a
	health care collaborative's certificate of authority was issued or
	renewed, the health care collaborative's certificate of authority
	expires on the 90th day after the date of the one-year anniversary
	unless the renewal of the certificate of authority or determination
	of approval, as applicable, is approved before that date.
	(e)  A health care collaborative shall report to the
	department a material change in the size or composition of the
	collaborative.  On receipt of a report under this subsection, the
	department may require the collaborative to file an application for
	renewal before the date required by Subsection (a).
	[Sections 848.061-848.100 reserved for expansion]
	SUBCHAPTER C.  GENERAL POWERS AND DUTIES OF HEALTH CARE
	COLLABORATIVE
	Sec. 848.101.  PROVIDING OR ARRANGING FOR SERVICES. (a)  A
	health care collaborative may provide or arrange for health care
	services through contracts with physicians and health care
	providers or with entities contracting on behalf of participating
	physicians and health care providers.
	(b)  A health care collaborative may not prohibit a physician
	or other health care provider, as a condition of participating in
	the health care collaborative, from participating in another health
	care collaborative.
	(c)  A health care collaborative may not use a covenant not
	to compete to prohibit a physician from providing medical services
	or participating in another health care collaborative in the same
	service area.
	(d)  Except as provided by Subsection (f), on written consent
	of a patient who was treated by a physician participating in a
	health care collaborative, the health care collaborative shall
	provide the physician with the medical records of the patient,
	regardless of whether the physician is participating in the health
	care collaborative at the time the request for the records is made.
	(e)  Records provided under Subsection (d) shall be made
	available to the physician in the format in which the records are
	maintained by the health care collaborative. The health care
	collaborative may charge the physician a fee for copies of the
	records, as established by the Texas Medical Board.
	(f)  If a physician requests a patient's records from a
	health care collaborative under Subsection (d) for the purpose of
	providing emergency treatment to the patient:
	(1)  the health care collaborative may not charge a fee
	to the physician under Subsection (e); and
	(2)  the health care collaborative shall provide the
	records to the physician regardless of whether the patient has
	provided written consent.
	Sec. 848.102.  INSURANCE, REINSURANCE, INDEMNITY, AND
	REIMBURSEMENT. A health care collaborative may contract with an
	insurer authorized to engage in business in this state to provide
	insurance, reinsurance, indemnification, or reimbursement against
	the cost of health care and medical care services provided by the
	health care collaborative.  This section does not affect the
	requirement that the health care collaborative maintain sufficient
	working capital and reserves.
	Sec. 848.103.  PAYMENT BY GOVERNMENTAL OR PRIVATE ENTITY.
	(a)  A health care collaborative may:
	(1)  contract for and accept payments from a
	governmental or private entity for all or part of the cost of
	services provided or arranged for by the health care collaborative;
	and
	(2)  distribute payments to participating physicians
	and health care providers.
	(b)  Notwithstanding any other law, a health care
	collaborative that is in compliance with this code, including
	Chapters 841, 842, and 843, as applicable, may contract for,
	accept, and distribute payments from governmental or private payors
	based on fee-for-service or alternative payment mechanisms,
	including:
	(1)  episode-based or condition-based bundled
	payments;
	(2)  capitation or global payments; or
	(3)  pay-for-performance or quality-based payments.
	(c)  Except as provided by Subsection (d), a health care
	collaborative may not contract for and accept payment from a
	governmental or private entity on a prepaid, capitation, or
	indemnity basis unless the health care collaborative is licensed as
	a health maintenance organization or insurer. The department shall
	review a health care collaborative's proposed payment methodology
	in contracts with governmental or private entities to ensure
	compliance with this section.
	(d)  A health care collaborative may contract for and accept
	compensation on a prepaid or capitation basis from a health
	maintenance organization or insurer.
	Sec. 848.104.  CONTRACTS FOR ADMINISTRATIVE OR MANAGEMENT
	SERVICES. A health care collaborative may contract with any
	person, including an affiliated entity, to perform administrative,
	management, or any other required business functions on behalf of
	the health care collaborative.
	Sec. 848.105.  CORPORATION, PARTNERSHIP, OR ASSOCIATION
	POWERS. A health care collaborative has all powers of a
	partnership, association, corporation, or limited liability
	company, including a professional association or corporation, as
	appropriate under the organizational documents of the health care
	collaborative, that are not in conflict with this chapter or other
	applicable law.
	Sec. 848.106.  QUALITY AND COST OF HEALTH CARE SERVICES.
	(a)  A health care collaborative shall establish policies to
	improve the quality and control the cost of health care services
	provided by participating physicians and health care providers that
	are consistent with prevailing professionally recognized standards
	of medical practice. The policies must include standards and
	procedures relating to:
	(1)  the selection and credentialing of participating
	physicians and health care providers;
	(2)  the development, implementation, monitoring, and
	evaluation of evidence-based best practices and other processes to
	improve the quality and control the cost of health care services
	provided by participating physicians and health care providers,
	including practices or processes to reduce the occurrence of
	potentially preventable events;
	(3)  the development, implementation, monitoring, and
	evaluation of processes to improve patient engagement and
	coordination of health care services provided by participating
	physicians and health care providers; and
	(4)  complaints initiated by participating physicians,
	health care providers, and patients under Section 848.107.
	(b)  The governing body of a health care collaborative shall
	establish a procedure for the periodic review of quality
	improvement and cost control measures.
	Sec. 848.107.  COMPLAINT SYSTEMS.  (a)  A health care
	collaborative shall implement and maintain complaint systems that
	provide reasonable procedures to resolve an oral or written
	complaint initiated by:
	(1)  a patient who received health care services
	provided by a participating physician or health care provider; or
	(2)  a participating physician or health care provider.
	(b)  The complaint system for complaints initiated by
	patients must include a process for the notice and appeal of a
	complaint.
	(c)  A health care collaborative may not take a retaliatory
	or adverse action against a physician or health care provider who
	files a complaint with a regulatory authority regarding an action
	of the health care collaborative.
	Sec. 848.108.  DELEGATION AGREEMENTS.  (a)  Except as
	provided by Subsection (b), a health care collaborative that enters
	into a delegation agreement described by Section 1272.001 is
	subject to the requirements of Chapter 1272 in the same manner as a
	health maintenance organization.
	(b)  Section 1272.301 does not apply to a delegation
	agreement entered into by a health care collaborative.
	(c)  A health care collaborative may enter into a delegation
	agreement with an entity licensed under Chapter 841, 842, or 883 if
	the delegation agreement assigns to the entity responsibility for:
	(1)  a function regulated by:
	(A)  Chapter 222;
	(B)  Chapter 841;
	(C)  Chapter 842;
	(D)  Chapter 883;
	(E)  Chapter 1272;
	(F)  Chapter 1301;
	(G)  Chapter 4201;
	(H)  Section 1367.053; or
	(I)  Subchapter A, Chapter 1507; or
	(2)  another function specified by commissioner rule.
	(d)  A health care collaborative that enters into a
	delegation agreement under this section shall maintain reserves and
	capital in addition to the amounts required under Chapter 1272, in
	an amount and form determined by rule of the commissioner to be
	necessary for the liabilities and risks assumed by the health care
	collaborative.
	(e)  A health care collaborative that enters into a
	delegation agreement under this section is subject to Chapters 404,
	441, and 443 and is considered to be an insurer for purposes of
	those chapters.
	Sec. 848.109.  VALIDITY OF OPERATIONS AND TRADE PRACTICES OF
	HEALTH CARE COLLABORATIVES. The operations and trade practices of
	a health care collaborative that are consistent with the provisions
	of this chapter, the rules adopted under this chapter, and
	applicable federal antitrust laws are presumed to be consistent
	with Chapter 15, Business & Commerce Code, or any other applicable
	provision of law.
	Sec. 848.110.  RIGHTS OF PHYSICIANS; LIMITATIONS ON
	PARTICIPATION.  (a)  Before a complaint against a physician under
	Section 848.107 is resolved, or before a physician's association
	with a health care collaborative is terminated, the physician is
	entitled to an opportunity to dispute the complaint or termination
	through a process that includes:
	(1)  written notice of the complaint or basis of the
	termination;
	(2)  an opportunity for a hearing not earlier than the
	30th day after receiving notice under Subdivision (1);
	(3)  the right to provide information at the hearing,
	including testimony and a written statement; and
	(4)  a written decision that includes the specific
	facts and reasons for the decision.
	(b)  A health care collaborative may limit a physician or
	group of physicians from participating in the health care
	collaborative if the limitation is based on an established
	development plan approved by the board of directors. Each
	applicant physician or group shall be provided with a copy of the
	development plan.
	[Sections 848.111-848.150 reserved for expansion]
	SUBCHAPTER D.  REGULATION OF HEALTH CARE COLLABORATIVES
	Sec. 848.151.  RULES.  The commissioner and the attorney
	general may adopt reasonable rules as necessary and proper to
	implement the requirements of this chapter.
	Sec. 848.152.  FEES AND ASSESSMENTS.  (a)  The commissioner
	shall, within the limits prescribed by this section, prescribe the
	fees to be charged and the assessments to be imposed under this
	section.
	(b)  Amounts collected under this section shall be deposited
	to the credit of the Texas Department of Insurance operating
	account.
	(c)  A health care collaborative shall pay to the department:
	(1)  an application fee in an amount determined by
	commissioner rule; and
	(2)  an annual assessment in an amount determined by
	commissioner rule.
	(d)  The commissioner shall set fees and assessments under
	this section in an amount sufficient to pay the reasonable expenses
	of the department and attorney general in administering this
	chapter, including the direct and indirect expenses incurred by the
	department and attorney general in examining and reviewing health
	care collaboratives.  Fees and assessments imposed under this
	section shall be allocated among health care collaboratives on a
	pro rata basis to the extent that the allocation is feasible.
	Sec. 848.153.  EXAMINATIONS.  (a)  The commissioner may
	examine the financial affairs and operations of any health care
	collaborative or applicant for a certificate of authority under
	this chapter.
	(b)  A health care collaborative shall make its books and
	records relating to its financial affairs and operations available
	for an examination by the commissioner or attorney general.
	(c)  On request of the commissioner or attorney general, a
	health care collaborative shall provide to the commissioner or
	attorney general, as applicable:
	(1)  a copy of any contract, agreement, or other
	arrangement between the health care collaborative and a physician
	or health care provider; and
	(2)  a general description of the fee arrangements
	between the health care collaborative and the physician or health
	care provider.
	(d)  Documentation provided to the commissioner or attorney
	general under this section is confidential and is not subject to
	disclosure under Chapter 552, Government Code.
	(e)  The commissioner or attorney general may disclose the
	results of an examination conducted under this section or
	documentation provided under this section to a governmental agency
	that contracts with a health care collaborative for the purpose of
	determining financial stability, readiness, or other contractual
	compliance needs.
	[Sections 848.154-848.200 reserved for expansion]
	SUBCHAPTER E.  ENFORCEMENT
	Sec. 848.201.  ENFORCEMENT ACTIONS. (a)  After notice and
	opportunity for a hearing, the commissioner may:
	(1)  suspend or revoke a certificate of authority
	issued to a health care collaborative under this chapter;
	(2)  impose sanctions under Chapter 82;
	(3)  issue a cease and desist order under Chapter 83; or
	(4)  impose administrative penalties under Chapter 84.
	(b)  The commissioner may take an enforcement action listed
	in Subsection (a) against a health care collaborative if the
	commissioner finds that the health care collaborative:
	(1)  is operating in a manner that is:
	(A)  significantly contrary to its basic
	organizational documents; or
	(B)  contrary to the manner described in and
	reasonably inferred from other information submitted under Section
	848.057;
	(2)  does not meet the requirements of Section 848.057;
	(3)  cannot fulfill its obligation to provide health
	care services as required under its contracts with governmental or
	private entities;
	(4)  does not meet the requirements of Chapter 1272, if
	applicable;
	(5)  has not implemented the complaint system required
	by Section 848.107 in a manner to resolve reasonably valid
	complaints;
	(6)  has advertised or merchandised its services in an
	untrue, misrepresentative, misleading, deceptive, or unfair manner
	or a person on behalf of the health care collaborative has
	advertised or merchandised the health care collaborative's
	services in an untrue, misrepresentative, misleading, deceptive,
	or untrue manner;
	(7)  has not complied substantially with this chapter
	or a rule adopted under this chapter;
	(8)  has not taken corrective action the commissioner
	considers necessary to correct a failure to comply with this
	chapter, any applicable provision of this code, or any applicable
	rule or order of the commissioner not later than the 30th day after
	the date of notice of the failure or within any longer period
	specified in the notice and determined by the commissioner to be
	reasonable; or
	(9)  has or is utilizing market power in an
	anticompetitive manner, in accordance with established antitrust
	principles of market power analysis.
	Sec. 848.202.  OPERATIONS DURING SUSPENSION OR AFTER
	REVOCATION OF CERTIFICATE OF AUTHORITY. (a)  During the period a
	certificate of authority of a health care collaborative is
	suspended, the health care collaborative may not:
	(1)  enter into a new contract with a governmental or
	private entity; or
	(2)  advertise or solicit in any way.
	(b)  After a certificate of authority of a health care
	collaborative is revoked, the health care collaborative:
	(1)  shall proceed, immediately following the
	effective date of the order of revocation, to conclude its affairs;
	(2)  may not conduct further business except as
	essential to the orderly conclusion of its affairs; and
	(3)  may not advertise or solicit in any way.
	(c)  Notwithstanding Subsection (b), the commissioner may,
	by written order, permit the further operation of the health care
	collaborative to the extent that the commissioner finds necessary
	to serve the best interest of governmental or private entities that
	have entered into contracts with the health care collaborative.
	Sec. 848.203.  INJUNCTIONS.  If the commissioner believes
	that a health care collaborative or another person is violating or
	has violated this chapter or a rule adopted under this chapter, the
	attorney general at the request of the commissioner may bring an
	action in a Travis County district court to enjoin the violation and
	obtain other relief the court considers appropriate.
	Sec. 848.204.  NOTICE.  The commissioner shall:
	(1)  report any action taken under this subchapter to:
	(A)  the relevant state licensing or certifying
	agency or board; and
	(B)  the United States Department of Health and
	Human Services National Practitioner Data Bank; and
	(2)  post notice of the action on the department's
	Internet website.
	Sec. 848.205.  INDEPENDENT AUTHORITY OF ATTORNEY GENERAL.
	(a)  The attorney general may:
	(1)  investigate a health care collaborative with
	respect to anticompetitive behavior that is contrary to the goals
	and requirements of this chapter; and
	(2)  request that the commissioner:
	(A)  impose a penalty or sanction;
	(B)  issue a cease and desist order; or
	(C)  suspend or revoke the health care
	collaborative's certificate of authority.
	(b)  This section does not limit any other authority or power
	of the attorney general.
	SECTION 4.02.  Paragraph (A), Subdivision (12), Subsection
	(a), Section 74.001, Civil Practice and Remedies Code, is amended
	to read as follows:
	(A)  "Health care provider" means any person,
	partnership, professional association, corporation, facility, or
	institution duly licensed, certified, registered, or chartered by
	the State of Texas to provide health care, including:
	(i)  a registered nurse;
	(ii)  a dentist;
	(iii)  a podiatrist;
	(iv)  a pharmacist;
	(v)  a chiropractor;
	(vi)  an optometrist; [or]
	(vii)  a health care institution; or
	(viii)  a health care collaborative
	certified under Chapter 848, Insurance Code.
	SECTION 4.03.  Subchapter B, Chapter 1301, Insurance Code,
	is amended by adding Section 1301.0625 to read as follows:
	Sec. 1301.0625.  HEALTH CARE COLLABORATIVES. (a)  Subject
	to the requirements of this chapter, a health care collaborative
	may be designated as a preferred provider under a preferred
	provider benefit plan and may offer enhanced benefits for care
	provided by the health care collaborative.
	(b)  A preferred provider contract between an insurer and a
	health care collaborative may use a payment methodology other than
	a fee-for-service or discounted fee methodology. A reimbursement
	methodology used in a contract under this subsection is not subject
	to Chapter 843.
	(c)  A contract authorized by Subsection (b) must specify
	that the health care collaborative and the physicians or providers
	providing health care services on behalf of the collaborative will
	hold an insured harmless for payment of the cost of covered health
	care services if the insurer or the health care collaborative do not
	pay the physician or health care provider for the services.
	(d)  An insurer issuing an exclusive provider benefit plan
	authorized by another law of this state may limit access to only
	preferred providers participating in a health care collaborative if
	the limitation is consistent with all requirements applicable to
	exclusive provider benefit plans.
	SECTION 4.04.  Subtitle F, Title 4, Health and Safety Code,
	is amended by adding Chapter 316 to read as follows:
	CHAPTER 316.  ESTABLISHMENT OF HEALTH CARE COLLABORATIVES
	Sec. 316.001.  AUTHORITY TO ESTABLISH HEALTH CARE
	COLLABORATIVE. A public hospital created under Subtitle C or D or a
	hospital district created under general or special law may form and
	sponsor a nonprofit health care collaborative that is certified
	under Chapter 848, Insurance Code.
	SECTION 4.05.  Section 102.005, Occupations Code, is amended
	to read as follows:
	Sec. 102.005.  APPLICABILITY TO CERTAIN ENTITIES. Section
	102.001 does not apply to:
	(1)  a licensed insurer;
	(2)  a governmental entity, including:
	(A)  an intergovernmental risk pool established
	under Chapter 172, Local Government Code; and
	(B)  a system as defined by Section 1601.003,
	Insurance Code;
	(3)  a group hospital service corporation; [or]
	(4)  a health maintenance organization that
	reimburses, provides, offers to provide, or administers hospital,
	medical, dental, or other health-related benefits under a health
	benefits plan for which it is the payor; or
	(5)  a health care collaborative certified under
	Chapter 848, Insurance Code.
	SECTION 4.06.  Subdivision (5), Subsection (a), Section
	151.002, Occupations Code, is amended to read as follows:
	(5)  "Health care entity" means:
	(A)  a hospital licensed under Chapter 241 or 577,
	Health and Safety Code;
	(B)  an entity, including a health maintenance
	organization, group medical practice, nursing home, health science
	center, university medical school, hospital district, hospital
	authority, or other health care facility, that:
	(i)  provides or pays for medical care or
	health care services; and
	(ii)  follows a formal peer review process
	to further quality medical care or health care;
	(C)  a professional society or association of
	physicians, or a committee of such a society or association, that
	follows a formal peer review process to further quality medical
	care or health care; [or]
	(D)  an organization established by a
	professional society or association of physicians, hospitals, or
	both, that:
	(i)  collects and verifies the authenticity
	of documents and other information concerning the qualifications,
	competence, or performance of licensed health care professionals;
	and
	(ii)  acts as a health care facility's agent
	under the Health Care Quality Improvement Act of 1986 (42 U.S.C.
	Section 11101 et seq.); or
	(E)  a health care collaborative certified under
	Chapter 848, Insurance Code.
	SECTION 4.07.  Not later than September 1, 2012, the
	commissioner of insurance and the attorney general shall adopt
	rules as necessary to implement this article.
	SECTION 4.08.  As soon as practicable after the effective
	date of this Act, the commissioner of insurance shall designate or
	employ staff with antitrust expertise sufficient to carry out the
	duties required by this Act.
	ARTICLE 5.  PATIENT IDENTIFICATION
	SECTION 5.01.  Subchapter A, Chapter 311, Health and Safety
	Code, is amended by adding Section 311.004 to read as follows:
	Sec. 311.004.  STANDARDIZED PATIENT RISK IDENTIFICATION
	SYSTEM. (a)  In this section:
	(1)  "Department" means the Department of State Health
	Services.
	(2)  "Hospital" means a general or special hospital as
	defined by Section 241.003.  The term includes a hospital
	maintained or operated by this state.
	(b)  The department shall coordinate with hospitals to
	develop a statewide standardized patient risk identification
	system under which a patient with a specific medical risk may be
	readily identified through the use of a system that communicates to
	hospital personnel the existence of that risk. The executive
	commissioner of the Health and Human Services Commission shall
	appoint an ad hoc committee of hospital representatives to assist
	the department in developing the statewide system.
	(c)  The department shall require each hospital to implement
	and enforce the statewide standardized patient risk identification
	system developed under Subsection (b) unless the department
	authorizes an exemption for the reason stated in Subsection (d).
	(d)  The department may exempt from the statewide
	standardized patient risk identification system a hospital that
	seeks to adopt another patient risk identification methodology
	supported by evidence-based protocols for the practice of medicine.
	(e)  The department shall modify the statewide standardized
	patient risk identification system in accordance with
	evidence-based medicine as necessary.
	(f)  The executive commissioner of the Health and Human
	Services Commission may adopt rules to implement this section.
	ARTICLE 6.  REPORTING OF HEALTH CARE-ASSOCIATED INFECTIONS
	SECTION 6.01.  Section 98.001, Health and Safety Code, as
	added by Chapter 359 (S.B. 288), Acts of the 80th Legislature,
	Regular Session, 2007, is amended by adding Subdivisions (8-a) and
	(10-a) to read as follows:
	(8-a)  "Health care professional" means an individual
	licensed, certified, or otherwise authorized to administer health
	care, for profit or otherwise, in the ordinary course of business or
	professional practice.  The term does not include a health care
	facility.
	(10-a)  "Potentially preventable complication" and
	"potentially preventable readmission" have the meanings assigned
	by Section 1002.001, Health and Safety Code.
	SECTION 6.02.  Subsection (c), Section 98.102, Health and
	Safety Code, as added by Chapter 359 (S.B. 288), Acts of the 80th
	Legislature, Regular Session, 2007, is amended to read as follows:
	(c)  The data reported by health care facilities to the
	department must contain sufficient patient identifying information
	to:
	(1)  avoid duplicate submission of records;
	(2)  allow the department to verify the accuracy and
	completeness of the data reported; and
	(3)  for data reported under Section 98.103 [or
	98.104], allow the department to risk adjust the facilities'
	infection rates.
	SECTION 6.03.  Section 98.103, Health and Safety Code, as
	added by Chapter 359 (S.B. 288), Acts of the 80th Legislature,
	Regular Session, 2007, is amended by amending Subsection (b) and
	adding Subsection (d-1) to read as follows:
	(b)  A pediatric and adolescent hospital shall report the
	incidence of surgical site infections, including the causative
	pathogen if the infection is laboratory-confirmed, occurring in the
	following procedures to the department:
	(1)  cardiac procedures, excluding thoracic cardiac
	procedures;
	(2)  ventricular [ventriculoperitoneal] shunt
	procedures; and
	(3)  spinal surgery with instrumentation.
	(d-1)  The executive commissioner by rule may designate the
	federal Centers for Disease Control and Prevention's National
	Healthcare Safety Network, or its successor, to receive reports of
	health care-associated infections from health care facilities on
	behalf of the department.  A health care facility must file a report
	required in accordance with a designation made under this
	subsection in accordance with the National Healthcare Safety
	Network's definitions, methods, requirements, and procedures.  A
	health care facility shall authorize the department to have access
	to facility-specific data contained in a report filed with the
	National Healthcare Safety Network in accordance with a designation
	made under this subsection.
	SECTION 6.04.  Section 98.1045, Health and Safety Code, as
	added by Chapter 359 (S.B. 288), Acts of the 80th Legislature,
	Regular Session, 2007, is amended by adding Subsection (c) to read
	as follows:
	(c)  The executive commissioner by rule may designate an
	agency of the United States Department of Health and Human Services
	to receive reports of preventable adverse events by health care
	facilities on behalf of the department.  A health care facility
	shall authorize the department to have access to facility-specific
	data contained in a report made in accordance with a designation
	made under this subsection.
	SECTION 6.05.  Subchapter C, Chapter 98, Health and Safety
	Code, as added by Chapter 359 (S.B. 288), Acts of the 80th
	Legislature, Regular Session, 2007, is amended by adding Sections
	98.1046 and 98.1047 to read as follows:
	Sec. 98.1046.  PUBLIC REPORTING OF CERTAIN POTENTIALLY
	PREVENTABLE EVENTS FOR HOSPITALS.  (a)  In consultation with the
	Texas Institute of Health Care Quality and Efficiency under Chapter
	1002, the department, using data submitted under Chapter 108, shall
	publicly report for hospitals in this state risk-adjusted outcome
	rates for those potentially preventable complications and
	potentially preventable readmissions that the department, in
	consultation with the institute, has determined to be the most
	effective measures of quality and efficiency.
	(b)  The department shall make the reports compiled under
	Subsection (a) available to the public on the department's Internet
	website.
	(c)  The department may not disclose the identity of a
	patient or health care professional in the reports authorized in
	this section.
	Sec. 98.1047.  STUDIES ON LONG-TERM CARE FACILITY REPORTING
	OF ADVERSE HEALTH CONDITIONS. (a)  In consultation with the Texas
	Institute of Health Care Quality and Efficiency under Chapter 1002,
	the department shall study which adverse health conditions commonly
	occur in long-term care facilities and, of those health conditions,
	which are potentially preventable.
	(b)  The department shall develop recommendations for
	reporting adverse health conditions identified under Subsection
	(a).
	SECTION 6.06.  Section 98.105, Health and Safety Code, as
	added by Chapter 359 (S.B. 288), Acts of the 80th Legislature,
	Regular Session, 2007, is amended to read as follows:
	Sec. 98.105.  REPORTING SYSTEM MODIFICATIONS.  Based on the
	recommendations of the advisory panel, the executive commissioner
	by rule may modify in accordance with this chapter the list of
	procedures that are reportable under Section 98.103 [or 98.104].
	The modifications must be based on changes in reporting guidelines
	and in definitions established by the federal Centers for Disease
	Control and Prevention.
	SECTION 6.07.  Subsections (a), (b), and (d), Section
	98.106, Health and Safety Code, as added by Chapter 359 (S.B. 288),
	Acts of the 80th Legislature, Regular Session, 2007, are amended to
	read as follows:
	(a)  The department shall compile and make available to the
	public a summary, by health care facility, of:
	(1)  the infections reported by facilities under
	Section [Sections] 98.103 [and 98.104]; and
	(2)  the preventable adverse events reported by
	facilities under Section 98.1045.
	(b)  Information included in the departmental summary with
	respect to infections reported by facilities under Section
	[Sections] 98.103 [and 98.104] must be risk adjusted and include a
	comparison of the risk-adjusted infection rates for each health
	care facility in this state that is required to submit a report
	under Section [Sections] 98.103 [and 98.104].
	(d)  The department shall publish the departmental summary
	at least annually and may publish the summary more frequently as the
	department considers appropriate. Data made available to the
	public must include aggregate data covering a period of at least a
	full calendar quarter.
	SECTION 6.08.  Subchapter C, Chapter 98, Health and Safety
	Code, as added by Chapter 359 (S.B. 288), Acts of the 80th
	Legislature, Regular Session, 2007, is amended by adding Section
	98.1065 to read as follows:
	Sec.  98.1065.  STUDY OF INCENTIVES AND RECOGNITION FOR
	HEALTH CARE QUALITY.  The department, in consultation with the
	Texas Institute of Health Care Quality and Efficiency under Chapter
	1002, shall conduct a study on developing a recognition program to
	recognize exemplary health care facilities for superior quality of
	health care and make recommendations based on that study.
	SECTION 6.09.  Section 98.108, Health and Safety Code, as
	added by Chapter 359 (S.B. 288), Acts of the 80th Legislature,
	Regular Session, 2007, is amended to read as follows:
	Sec. 98.108.  FREQUENCY OF REPORTING.  (a)  In consultation
	with the advisory panel, the executive commissioner by rule shall
	establish the frequency of reporting by health care facilities
	required under Sections 98.103[, 98.104,] and 98.1045.
	(b)  Except as provided by Subsection (c), facilities
	[Facilities] may not be required to report more frequently than
	quarterly.
	(c)  The executive commissioner may adopt rules requiring
	reporting more frequently than quarterly if more frequent reporting
	is necessary to meet the requirements for participation in the
	federal Centers for Disease Control and Prevention's National
	Healthcare Safety Network.
	SECTION 6.10.  Subsection (a), Section 98.109, Health and
	Safety Code, as added by Chapter 359 (S.B. 288), Acts of the 80th
	Legislature, Regular Session, 2007, is amended to read as follows:
	(a)  Except as provided by Sections 98.1046, 98.106, and
	98.110, all information and materials obtained or compiled or
	reported by the department under this chapter or compiled or
	reported by a health care facility under this chapter, and all
	related information and materials, are confidential and:
	(1)  are not subject to disclosure under Chapter 552,
	Government Code, or discovery, subpoena, or other means of legal
	compulsion for release to any person; and
	(2)  may not be admitted as evidence or otherwise
	disclosed in any civil, criminal, or administrative proceeding.
	SECTION 6.11.  Section 98.110, Health and Safety Code, as
	added by Chapter 359 (S.B. 288), Acts of the 80th Legislature,
	Regular Session, 2007, is amended to read as follows:
	Sec. 98.110.  DISCLOSURE AMONG CERTAIN AGENCIES.
	(a)  Notwithstanding any other law, the department may disclose
	information reported by health care facilities under Section
	98.103[, 98.104,] or 98.1045 to other programs within the
	department, to the Health and Human Services Commission, [and] to
	other health and human services agencies, as defined by Section
	531.001, Government Code, and to the federal Centers for Disease
	Control and Prevention, or any other agency of the United States
	Department of Health and Human Services, for public health research
	or analysis purposes only, provided that the research or analysis
	relates to health care-associated infections or preventable
	adverse events.  The privilege and confidentiality provisions
	contained in this chapter apply to such disclosures.
	(b)  If the executive commissioner designates an agency of
	the United States Department of Health and Human Services to
	receive reports of health care-associated infections or
	preventable adverse events, that agency may use the information
	submitted for purposes allowed by federal law.
	SECTION 6.12.  Section 98.104, Health and Safety Code, as
	added by Chapter 359 (S.B. 288), Acts of the 80th Legislature,
	Regular Session, 2007, is repealed.
	SECTION 6.13.  Not later than December 1, 2012, the
	Department of State Health Services shall submit a report regarding
	recommendations for improved health care reporting to the governor,
	the lieutenant governor, the speaker of the house of
	representatives, and the chairs of the appropriate standing
	committees of the legislature outlining:
	(1)  the initial assessment in the study conducted
	under Section 98.1065, Health and Safety Code, as added by this Act;
	(2)  based on the study described by Subdivision (1) of
	this subsection, the feasibility and desirability of establishing a
	recognition program to recognize exemplary health care facilities
	for superior quality of health care;
	(3)  the recommendations developed under Section
	98.1065, Health and Safety Code, as added by this Act; and
	(4)  the changes in existing law that would be
	necessary to implement the recommendations described by
	Subdivision (3) of this subsection.
	ARTICLE 7.  INFORMATION MAINTAINED BY DEPARTMENT OF STATE HEALTH
	SERVICES
	SECTION 7.01.  Section 108.002, Health and Safety Code, is
	amended by adding Subdivisions (4-a) and (8-a) and amending
	Subdivision (7) to read as follows:
	(4-a)  "Commission" means the Health and Human Services
	Commission.
	(7)  "Department" means the [Texas] Department of State
	Health Services.
	(8-a)  "Executive commissioner" means the executive
	commissioner of the Health and Human Services Commission.
	SECTION 7.02.  Chapter 108, Health and Safety Code, is
	amended by adding Section 108.0026 to read as follows:
	Sec. 108.0026.  TRANSFER OF DUTIES; REFERENCE TO COUNCIL.
	(a)  The powers and duties of the Texas Health Care Information
	Council under this chapter were transferred to the Department of
	State Health Services in accordance with Section 1.19, Chapter 198
	(H.B. 2292), Acts of the 78th Legislature, Regular Session, 2003.
	(b)  In this chapter or other law, a reference to the Texas
	Health Care Information Council means the Department of State
	Health Services.
	SECTION 7.03.  Subsection (h), Section 108.009, Health and
	Safety Code, is amended to read as follows:
	(h)  The department [council] shall coordinate data
	collection with the data submission formats used by hospitals and
	other providers. The department [council] shall accept data in the
	format developed by the American National Standards Institute
	[National Uniform Billing Committee (Uniform Hospital Billing Form
	UB 92) and HCFA-1500] or its successor [their successors] or other
	nationally [universally] accepted standardized forms that
	hospitals and other providers use for other complementary purposes.
	SECTION 7.04.  Section 108.013, Health and Safety Code, is
	amended by amending Subsections (a) through (d), (g), (i), and (j)
	and adding Subsections (k) through (n) to read as follows:
	(a)  The data received by the department under this chapter
	[council] shall be used by the department and commission [council]
	for the benefit of the public.  Subject to specific limitations
	established by this chapter and executive commissioner [council]
	rule, the department [council] shall make determinations on
	requests for information in favor of access.
	(b)  The executive commissioner [council] by rule shall
	designate the characters to be used as uniform patient identifiers.
	The basis for assignment of the characters and the manner in which
	the characters are assigned are confidential.
	(c)  Unless specifically authorized by this chapter, the
	department [council] may not release and a person or entity may not
	gain access to any data obtained under this chapter:
	(1)  that could reasonably be expected to reveal the
	identity of a patient;
	(2)  that could reasonably be expected to reveal the
	identity of a physician;
	(3)  disclosing provider discounts or differentials
	between payments and billed charges;
	(4)  relating to actual payments to an identified
	provider made by a payer; or
	(5)  submitted to the department [council] in a uniform
	submission format that is not included in the public use data set
	established under Sections 108.006(f) and (g), except in accordance
	with Section 108.0135.
	(d)  Except as provided by this section, all [All] data
	collected and used by the department [and the council] under this
	chapter is subject to the confidentiality provisions and criminal
	penalties of:
	(1)  Section 311.037;
	(2)  Section 81.103; and
	(3)  Section 159.002, Occupations Code.
	(g)  Unless specifically authorized by this chapter, the
	department [The council] may not release data elements in a manner
	that will reveal the identity of a patient. The department
	[council] may not release data elements in a manner that will reveal
	the identity of a physician.
	(i)  Notwithstanding any other law and except as provided by
	this section, the [council and the] department may not provide
	information made confidential by this section to any other agency
	of this state.
	(j)  The executive commissioner [council] shall by rule[,
	with the assistance of the advisory committee under Section
	108.003(g)(5),] develop and implement a mechanism to comply with
	Subsections (c)(1) and (2).
	(k)  The department may disclose data collected under this
	chapter that is not included in public use data to any department or
	commission program if the disclosure is reviewed and approved by
	the institutional review board under Section 108.0135.
	(l)  Confidential data collected under this chapter that is
	disclosed to a department or commission program remains subject to
	the confidentiality provisions of this chapter and other applicable
	law. The department shall identify the confidential data that is
	disclosed to a program under Subsection (k). The program shall
	maintain the confidentiality of the disclosed confidential data.
	(m)  The following provisions do not apply to the disclosure
	of data to a department or commission program:
	(1)  Section 81.103;
	(2)  Sections 108.010(g) and (h);
	(3)  Sections 108.011(e) and (f);
	(4)  Section 311.037; and
	(5)  Section 159.002, Occupations Code.
	(n)  Nothing in this section authorizes the disclosure of
	physician identifying data.
	SECTION 7.05.  Section 108.0135, Health and Safety Code, is
	amended to read as follows:
	Sec. 108.0135.  INSTITUTIONAL [SCIENTIFIC] REVIEW BOARD
	[PANEL].  (a)  The department [council] shall establish an
	institutional [a scientific] review board [panel] to review and
	approve requests for access to data not contained in [information
	other than] public use data. The members of the institutional
	review board must [panel shall] have experience and expertise in
	ethics, patient confidentiality, and health care data.
	(b)  To assist the institutional review board [panel] in
	determining whether to approve a request for information, the
	executive commissioner [council] shall adopt rules similar to the
	federal Centers for Medicare and Medicaid Services' [Health Care
	Financing Administration's] guidelines on releasing data.
	(c)  A request for information other than public use data
	must be made on the form prescribed [created] by the department
	[council].
	(d)  Any approval to release information under this section
	must require that the confidentiality provisions of this chapter be
	maintained and that any subsequent use of the information conform
	to the confidentiality provisions of this chapter.
	SECTION 7.06.  Chapter 108, Health and Safety Code, is
	amended by adding Section 108.0131 to read as follows:
	Sec. 108.0131.  LIST OF PURCHASERS OR RECIPIENTS OF DATA.
	The department shall post on the department's Internet website a
	list of each entity that purchases or receives data collected under
	this chapter.
	SECTION 7.07.  (a)  If S.B. No. 156, Acts of the 82nd
	Legislature, Regular Session, 2011, does not become law, effective
	September 1, 2014, Subdivisions (5) and (18), Section 108.002,
	Section 108.0025, and Subsection (c), Section 108.009, Health and
	Safety Code, are repealed.
	(b)  If S.B. No. 156, Acts of the 82nd Legislature, Regular
	Session, 2011, becomes law, effective September 1, 2014,
	Subdivision (18), Section 108.002, Section 108.0025, and
	Subsection (c), Section 108.009, Health and Safety Code, are
	repealed.
	ARTICLE 8.  ADOPTION OF VACCINE PREVENTABLE DISEASES POLICY BY
	HEALTH CARE FACILITIES
	SECTION 8.01.  The heading to Subtitle A, Title 4, Health and
	Safety Code, is amended to read as follows:
	SUBTITLE A.  FINANCING, CONSTRUCTING, REGULATING, AND INSPECTING
	HEALTH FACILITIES
	SECTION 8.02.  Subtitle A, Title 4, Health and Safety Code,
	is amended by adding Chapter 224 to read as follows:
	CHAPTER 224.  POLICY ON VACCINE PREVENTABLE DISEASES
	Sec. 224.001.  DEFINITIONS. In this chapter:
	(1)  "Covered individual" means:
	(A)  an employee of the health care facility;
	(B)  an individual providing direct patient care
	under a contract with a health care facility; or
	(C)  an individual to whom a health care facility
	has granted privileges to provide direct patient care.
	(2)  "Health care facility" means:
	(A)  a facility licensed under Subtitle B,
	including a hospital as defined by Section 241.003; or
	(B)  a hospital maintained or operated by this
	state.
	(3)  "Regulatory authority" means a state agency that
	regulates a health care facility under this code.
	(4)  "Vaccine preventable diseases" means the diseases
	included in the most current recommendations of the Advisory
	Committee on Immunization Practices of the Centers for Disease
	Control and Prevention.
	Sec. 224.002.  VACCINE PREVENTABLE DISEASES POLICY
	REQUIRED. (a)  Each health care facility shall develop and
	implement a policy to protect its patients from vaccine preventable
	diseases.
	(b)  The policy must:
	(1)  require covered individuals to receive vaccines
	for the vaccine preventable diseases specified by the facility
	based on the level of risk the individual presents to patients by
	the individual's routine and direct exposure to patients;
	(2)  specify the vaccines a covered individual is
	required to receive based on the level of risk the individual
	presents to patients by the individual's routine and direct
	exposure to patients;
	(3)  include procedures for verifying whether a covered
	individual has complied with the policy;
	(4)  include procedures for a covered individual to be
	exempt from the required vaccines for the medical conditions
	identified as contraindications or precautions by the Centers for
	Disease Control and Prevention;
	(5)  for a covered individual who is exempt from the
	required vaccines, include procedures the individual must follow to
	protect facility patients from exposure to disease, such as the use
	of protective medical equipment, such as gloves and masks, based on
	the level of risk the individual presents to patients by the
	individual's routine and direct exposure to patients;
	(6)  prohibit discrimination or retaliatory action
	against a covered individual who is exempt from the required
	vaccines for the medical conditions identified as
	contraindications or precautions by the Centers for Disease Control
	and Prevention, except that required use of protective medical
	equipment, such as gloves and masks, may not be considered
	retaliatory action for purposes of this subdivision;
	(7)  require the health care facility to maintain a
	written or electronic record of each covered individual's
	compliance with or exemption from the policy; and
	(8)  include disciplinary actions the health care
	facility is authorized to take against a covered individual who
	fails to comply with the policy.
	(c)  The policy may include procedures for a covered
	individual to be exempt from the required vaccines based on reasons
	of conscience, including a religious belief.
	Sec. 224.003.  DISASTER EXEMPTION. (a)  In this section,
	"public health disaster" has the meaning assigned by Section
	81.003.
	(b)  During a public health disaster, a health care facility
	may prohibit a covered individual who is exempt from the vaccines
	required in the policy developed by the facility under Section
	224.002 from having contact with facility patients.
	Sec. 224.004.  DISCIPLINARY ACTION. A health care facility
	that violates this chapter is subject to an administrative or civil
	penalty in the same manner, and subject to the same procedures, as
	if the facility had violated a provision of this code that
	specifically governs the facility.
	Sec. 224.005.  RULES. The appropriate rulemaking authority
	for each regulatory authority shall adopt rules necessary to
	implement this chapter.
	SECTION 8.03.  Not later than June 1, 2012, a state agency
	that regulates a health care facility subject to Chapter 224,
	Health and Safety Code, as added by this Act, shall adopt the rules
	necessary to implement that chapter.
	SECTION 8.04.  Notwithstanding Chapter 224, Health and
	Safety Code, as added by this Act, a health care facility subject to
	that chapter is not required to have a policy on vaccine preventable
	diseases in effect until September 1, 2012.
	ARTICLE 9.  TEXAS EMERGENCY AND TRAUMA CARE EDUCATION
	PARTNERSHIP PROGRAM
	SECTION 9.01.  Chapter 61, Education Code, is amended by
	adding Subchapter HH to read as follows:
	SUBCHAPTER HH. TEXAS EMERGENCY AND TRAUMA CARE EDUCATION
	PARTNERSHIP PROGRAM
	Sec. 61.9801.  DEFINITIONS. In this subchapter:
	(1)  "Emergency and trauma care education partnership"
	means a partnership that:
	(A)  consists of one or more hospitals in this
	state and one or more graduate professional nursing or graduate
	medical education programs in this state; and
	(B)  serves to increase training opportunities in
	emergency and trauma care for doctors and registered nurses at
	participating graduate medical education and graduate professional
	nursing programs.
	(2)  "Participating education program" means a
	graduate professional nursing program as that term is defined by
	Section 54.221 or a graduate medical education program leading to
	board certification by the American Board of Medical Specialties
	that participates in an emergency and trauma care education
	partnership.
	Sec. 61.9802.  PROGRAM:  ESTABLISHMENT; ADMINISTRATION;
	PURPOSE. (a)  The Texas emergency and trauma care education
	partnership program is established.
	(b)  The board shall administer the program in accordance
	with this subchapter and rules adopted under this subchapter.
	(c)  Under the program, to the extent funds are available
	under Section 61.9805, the board shall make grants to emergency and
	trauma care education partnerships to assist those partnerships to
	meet the state's needs for doctors and registered nurses with
	training in emergency and trauma care by offering one-year or
	two-year fellowships to students enrolled in graduate professional
	nursing or graduate medical education programs through
	collaboration between hospitals and graduate professional nursing
	or graduate medical education programs and the use of the existing
	expertise and facilities of those hospitals and programs.
	Sec. 61.9803.  GRANTS:  CONDITIONS; LIMITATIONS. (a)  The
	board may make a grant under this subchapter to an emergency and
	trauma care education partnership only if the board determines
	that:
	(1)  the partnership will meet applicable standards for
	instruction and student competency for each program offered by each
	participating education program;
	(2)  each participating education program will, as a
	result of the partnership, enroll in the education program a
	sufficient number of additional students as established by the
	board;
	(3)  each hospital participating in an emergency and
	trauma care education partnership will provide to students enrolled
	in a participating education program clinical placements that:
	(A)  allow the students to take part in providing
	or to observe, as appropriate, emergency and trauma care services
	offered by the hospital; and
	(B)  meet the clinical education needs of the
	students; and
	(4)  the partnership will satisfy any other requirement
	established by board rule.
	(b)  A grant under this subchapter may be spent only on costs
	related to the development or operation of an emergency and trauma
	care education partnership that prepares a student to complete a
	graduate professional nursing program with a specialty focus on
	emergency and trauma care or earn board certification by the
	American Board of Medical Specialties.
	Sec. 61.9804.  PRIORITY FOR FUNDING. In awarding a grant
	under this subchapter, the board shall give priority to an
	emergency and trauma care education partnership that submits a
	proposal that:
	(1)  provides for collaborative educational models
	between one or more participating hospitals and one or more
	participating education programs that have signed a memorandum of
	understanding or other written agreement under which the
	participants agree to comply with standards established by the
	board, including any standards the board may establish that:
	(A)  provide for program management that offers a
	centralized decision-making process allowing for inclusion of each
	entity participating in the partnership;
	(B)  provide for access to clinical training
	positions for students in graduate professional nursing and
	graduate medical education programs that are not participating in
	the partnership; and
	(C)  specify the details of any requirement
	relating to a student in a participating education program being
	employed after graduation in a hospital participating in the
	partnership, including any details relating to the employment of
	students who do not complete the program, are not offered a position
	at the hospital, or choose to pursue other employment;
	(2)  includes a demonstrable education model to:
	(A)  increase the number of students enrolled in,
	the number of students graduating from, and the number of faculty
	employed by each participating education program; and
	(B)  improve student or resident retention in each
	participating education program;
	(3)  indicates the availability of money to match a
	portion of the grant money, including matching money or in-kind
	services approved by the board from a hospital, private or
	nonprofit entity, or institution of higher education;
	(4)  can be replicated by other emergency and trauma
	care education partnerships or other graduate professional nursing
	or graduate medical education programs; and
	(5)  includes plans for sustainability of the
	partnership.
	Sec. 61.9805.  GRANTS, GIFTS, AND DONATIONS. In addition to
	money appropriated by the legislature, the board may solicit,
	accept, and spend grants, gifts, and donations from any public or
	private source for the purposes of this subchapter.
	Sec. 61.9806.  RULES. The board shall adopt rules for the
	administration of the Texas emergency and trauma care education
	partnership program. The rules must include:
	(1)  provisions relating to applying for a grant under
	this subchapter; and
	(2)  standards of accountability consistent with other
	graduate professional nursing and graduate medical education
	programs to be met by any emergency and trauma care education
	partnership awarded a grant under this subchapter.
	Sec. 61.9807.  ADMINISTRATIVE COSTS. A reasonable amount,
	not to exceed three percent, of any money appropriated for purposes
	of this subchapter may be used to pay the costs of administering
	this subchapter.
	SECTION 9.02.  As soon as practicable after the effective
	date of this article, the Texas Higher Education Coordinating Board
	shall adopt rules for the implementation and administration of the
	Texas emergency and trauma care education partnership program
	established under Subchapter HH, Chapter 61, Education Code, as
	added by this Act.  The board may adopt the initial rules in the
	manner provided by law for emergency rules.
	ARTICLE 10. INSURER CONTRACTS REGARDING CERTAIN BENEFIT PLANS
	SECTION 10.01.  Section 1301.006, Insurance Code, is amended
	to read as follows:
	Sec. 1301.006.  AVAILABILITY OF AND ACCESSIBILITY TO HEALTH
	CARE SERVICES. (a)  An insurer that markets a preferred provider
	benefit plan shall contract with physicians and health care
	providers to ensure that all medical and health care services and
	items contained in the package of benefits for which coverage is
	provided, including treatment of illnesses and injuries, will be
	provided under the health insurance policy in a manner ensuring
	availability of and accessibility to adequate personnel, specialty
	care, and facilities.
	(b)  A contract between an insurer that markets a plan
	regulated under this chapter and an institutional provider may not,
	as a condition of staff membership or privileges, require a
	physician or other practitioner to enter into a preferred provider
	contract.
	ARTICLE 11.  COVERED SERVICES OF CERTAIN HEALTH CARE PRACTITIONERS
	SECTION 11.01.  Section 1451.109, Insurance Code, is amended
	to read as follows:
	Sec. 1451.109.  SELECTION OF CHIROPRACTOR. (a)  An insured
	may select a chiropractor to provide the medical or surgical
	services or procedures scheduled in the health insurance policy
	that are within the scope of the chiropractor's license.
	(b)  If physical modalities and procedures are covered
	services under a health insurance policy and within the scope of the
	license of a chiropractor and one or more other type of
	practitioner, a health insurance policy issuer may not:
	(1)  deny payment or reimbursement for physical
	modalities and procedures provided by a chiropractor if:
	(A)  the chiropractor provides the modalities and
	procedures in strict compliance with state law; and
	(B)  the health insurance policy issuer allows
	payment or reimbursement for the same physical modalities and
	procedures performed by another type of practitioner that an
	insured may select under this subchapter;
	(2)  make payment or reimbursement for particular
	covered physical modalities and procedures within the scope of a
	chiropractor's license contingent on treatment or examination by a
	practitioner that is not a chiropractor; or
	(3)  establish other limitations on the provision of
	covered physical modalities and procedures that would prohibit an
	insured from seeking the covered physical modalities and procedures
	from a chiropractor to the same extent that the insured may obtain
	covered physical modalities and procedures from another type of
	practitioner.
	(c)  Nothing in this section requires a health insurance
	policy issuer to cover particular services or affects the ability
	of a health insurance policy issuer to determine whether specific
	procedures for which payment or reimbursement is requested are
	medically necessary.
	(d)  This section does not apply to:
	(1)  workers' compensation insurance coverage as
	defined by Section 401.011, Labor Code;
	(2)  a self-insured employee welfare benefit plan
	subject to the Employee Retirement Income Security Act of 1974 (29
	U.S.C. Section 1001 et seq.);
	(3)  the child health plan program under Chapter 62,
	Health and Safety Code, or the health benefits plan for children
	under Chapter 63, Health and Safety Code; or
	(4)  a Medicaid managed care program operated under
	Chapter 533, Government Code, or a Medicaid program operated under
	Chapter 32, Human Resources Code.
	SECTION 11.02.  The changes in law made by this article to
	Section 1451.109, Insurance Code, apply only to a health insurance
	policy that is delivered, issued for delivery, or renewed on or
	after the effective date of this Act.  A policy delivered, issued
	for delivery, or renewed before the effective date of this Act is
	governed by the law as it existed immediately before the effective
	date of this Act, and that law is continued in effect for that
	purpose.
	ARTICLE 12. INTERSTATE HEALTH CARE COMPACT
	SECTION 12.01.  Title 15, Insurance Code, is amended by
	adding Chapter 5002 to read as follows:
	CHAPTER 5002.  INTERSTATE HEALTH CARE COMPACT
	Sec. 5002.001.  EXECUTION OF COMPACT. This state enacts the
	Interstate Health Care Compact and enters into the compact with all
	other states legally joining in the compact in substantially the
	following form:
	Whereas, the separation of powers, both between the branches of the
	Federal government and between Federal and State authority, is
	essential to the preservation of individual liberty;
	Whereas, the Constitution creates a Federal government of limited
	and enumerated powers, and reserves to the States or to the people
	those powers not granted to the Federal government;
	Whereas, the Federal government has enacted many laws that have
	preempted State laws with respect to Health Care, and placed
	increasing strain on State budgets, impairing other
	responsibilities such as education, infrastructure, and public
	safety;
	Whereas, the Member States seek to protect individual liberty and
	personal control over Health Care decisions, and believe the best
	method to achieve these ends is by vesting regulatory authority
	over Health Care in the States;
	Whereas, by acting in concert, the Member States may express and
	inspire confidence in the ability of each Member State to govern
	Health Care effectively; and
	Whereas, the Member States recognize that consent of Congress may
	be more easily secured if the Member States collectively seek
	consent through an interstate compact;
	NOW THEREFORE, the Member States hereto resolve, and by the
	adoption into law under their respective State Constitutions of
	this Health Care Compact, agree, as follows:
	Sec. 1.  Definitions.  As used in this Compact, unless the context
	clearly indicates otherwise:
	"Commission" means the Interstate Advisory Health Care Commission.
	"Effective Date" means the date upon which this Compact shall
	become effective for purposes of the operation of State and Federal
	law in a Member State, which shall be the later of:
	a)  the date upon which this Compact shall be adopted
	under the laws of the Member State, and
	b)  the date upon which this Compact receives the
	consent of Congress pursuant to Article I, Section 10,
	of the United States Constitution, after at least two
	Member States adopt this Compact.
	"Health Care" means care, services, supplies, or plans related to
	the health of an individual and includes but is not limited to:
	(a)  preventive, diagnostic, therapeutic, rehabilitative,
	maintenance, or palliative care and counseling, service,
	assessment, or procedure with respect to the physical or mental
	condition or functional status of an individual or that affects the
	structure or function of the body, and
	(b)  sale or dispensing of a drug, device, equipment, or other item
	in accordance with a prescription, and
	(c)  an individual or group plan that provides, or pays the cost of,
	care, services, or supplies related to the health of an individual,
	except any care, services, supplies, or plans provided by the
	United States Department of Defense and United States Department of
	Veterans Affairs, or provided to Native Americans.
	"Member State" means a State that is signatory to this Compact and
	has adopted it under the laws of that State.
	"Member State Base Funding Level" means a number equal to the total
	Federal spending on Health Care in the Member State during Federal
	fiscal year 2010.  On or before the Effective Date, each Member
	State shall determine the Member State Base Funding Level for its
	State, and that number shall be binding upon that Member State.
	"Member State Current Year Funding Level" means the Member State
	Base Funding Level multiplied by the Member State Current Year
	Population Adjustment Factor multiplied by the Current Year
	Inflation Adjustment Factor.
	"Member State Current Year Population Adjustment Factor" means the
	average population of the Member State in the current year less the
	average population of the Member State in Federal fiscal year 2010,
	divided by the average population of the Member State in Federal
	fiscal year 2010, plus 1.  Average population in a Member State
	shall be determined by the United States Census Bureau.
	"Current Year Inflation Adjustment Factor" means the Total Gross
	Domestic Product Deflator in the current year divided by the Total
	Gross Domestic Product Deflator in Federal fiscal year 2010.  Total
	Gross Domestic Product Deflator shall be determined by the Bureau
	of Economic Analysis of the United States Department of Commerce.
	Sec. 2.  Pledge.  The Member States shall take joint and separate
	action to secure the consent of the United States Congress to this
	Compact in order to return the authority to regulate Health Care to
	the Member States consistent with the goals and principles
	articulated in this Compact.  The Member States shall improve
	Health Care policy within their respective jurisdictions and
	according to the judgment and discretion of each Member State.
	Sec. 3.  Legislative Power.  The legislatures of the Member States
	have the primary responsibility to regulate Health Care in their
	respective States.
	Sec. 4.  State Control.  Each Member State, within its State, may
	suspend by legislation the operation of all federal laws, rules,
	regulations, and orders regarding Health Care that are inconsistent
	with the laws and regulations adopted by the Member State pursuant
	to this Compact.  Federal and State laws, rules, regulations, and
	orders regarding Health Care will remain in effect unless a Member
	State expressly suspends them pursuant to its authority under this
	Compact.  For any federal law, rule, regulation, or order that
	remains in effect in a Member State after the Effective Date, that
	Member State shall be responsible for the associated funding
	obligations in its State.
	Sec. 5.  Funding.
	(a)  Each Federal fiscal year, each Member State shall have the
	right to Federal monies up to an amount equal to its Member State
	Current Year Funding Level for that Federal fiscal year, funded by
	Congress as mandatory spending and not subject to annual
	appropriation, to support the exercise of Member State authority
	under this Compact.  This funding shall not be conditional on any
	action of or regulation, policy, law, or rule being adopted by the
	Member State.
	(b)  By the start of each Federal fiscal year, Congress shall
	establish an initial Member State Current Year Funding Level for
	each Member State, based upon reasonable estimates.  The final
	Member State Current Year Funding Level shall be calculated, and
	funding shall be reconciled by the United States Congress based
	upon information provided by each Member State and audited by the
	United States Government Accountability Office.
	Sec. 6.  Interstate Advisory Health Care Commission.
	(a)  The Interstate Advisory Health Care Commission is
	established.  The Commission consists of members appointed by each
	Member State through a process to be determined by each Member
	State.  A Member State may not appoint more than two members to the
	Commission and may withdraw membership from the Commission at any
	time.  Each Commission member is entitled to one vote.  The
	Commission shall not act unless a majority of the members are
	present, and no action shall be binding unless approved by a
	majority of the Commission's total membership.
	(b)  The Commission may elect from among its membership a
	Chairperson.  The Commission may adopt and publish bylaws and
	policies that are not inconsistent with this Compact.  The
	Commission shall meet at least once a year, and may meet more
	frequently.
	(c)  The Commission may study issues of Health Care regulation that
	are of particular concern to the Member States.  The Commission may
	make non-binding recommendations to the Member States.  The
	legislatures of the Member States may consider these
	recommendations in determining the appropriate Health Care
	policies in their respective States.
	(d)  The Commission shall collect information and data to assist
	the Member States in their regulation of Health Care, including
	assessing the performance of various State Health Care programs and
	compiling information on the prices of Health Care.  The Commission
	shall make this information and data available to the legislatures
	of the Member States.  Notwithstanding any other provision in this
	Compact, no Member State shall disclose to the Commission the
	health information of any individual, nor shall the Commission
	disclose the health information of any individual.
	(e)  The Commission shall be funded by the Member States as agreed
	to by the Member States.  The Commission shall have the
	responsibilities and duties as may be conferred upon it by
	subsequent action of the respective legislatures of the Member
	States in accordance with the terms of this Compact.
	(f)  The Commission shall not take any action within a Member State
	that contravenes any State law of that Member State.
	Sec. 7.  Congressional Consent.  This Compact shall be effective on
	its adoption by at least two Member States and consent of the United
	States Congress.  This Compact shall be effective unless the United
	States Congress, in consenting to this Compact, alters the
	fundamental purposes of this Compact, which are:
	(a)  To secure the right of the Member States to regulate Health
	Care in their respective States pursuant to this Compact and to
	suspend the operation of any conflicting federal laws, rules,
	regulations, and orders within their States; and
	(b)  To secure Federal funding for Member States that choose to
	invoke their authority under this Compact, as prescribed by Section
	5 above.
	Sec. 8.  Amendments.  The Member States, by unanimous agreement,
	may amend this Compact from time to time without the prior consent
	or approval of Congress and any amendment shall be effective
	unless, within one year, the Congress disapproves that amendment.
	Any State may join this Compact after the date on which Congress
	consents to the Compact by adoption into law under its State
	Constitution.
	Sec. 9.  Withdrawal; Dissolution.  Any Member State may withdraw
	from this Compact by adopting a law to that effect, but no such
	withdrawal shall take effect until six months after the Governor of
	the withdrawing Member State has given notice of the withdrawal to
	the other Member States.  A withdrawing State shall be liable for
	any obligations that it may have incurred prior to the date on which
	its withdrawal becomes effective.  This Compact shall be dissolved
	upon the withdrawal of all but one of the Member States.
	SECTION 12.02.  This article takes effect immediately if
	this Act 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 article takes effect on the 91st day after
	the last day of the legislative session.
	ARTICLE 13.  MEDICAID PROGRAM AND ALTERNATE METHODS OF PROVIDING
	HEALTH SERVICES TO LOW-INCOME PERSONS
	SECTION 13.01.  Subtitle I, Title 4, Government Code, is
	amended by adding Chapter 537 to read as follows:
	CHAPTER 537.  MEDICAID REFORM WAIVER
	Sec. 537.001.  DEFINITIONS. In this chapter:
	(1)  "Commission" means the Health and Human Services
	Commission.
	(2)  "Executive commissioner" means the executive
	commissioner of the Health and Human Services Commission.
	Sec. 537.002.  FEDERAL AUTHORIZATION FOR MEDICAID REFORM.
	(a)  The executive commissioner shall seek a waiver under Section
	1115 of the federal Social Security Act (42 U.S.C. Section 1315) to
	the state Medicaid plan.
	(b)  The waiver under this section must be designed to
	achieve the following objectives regarding the Medicaid program and
	alternatives to the program:
	(1)  provide flexibility to determine Medicaid
	eligibility categories and income levels;
	(2)  provide flexibility to design Medicaid benefits
	that meet the demographic, public health, clinical, and cultural
	needs of this state or regions within this state;
	(3)  encourage use of the private health benefits
	coverage market rather than public benefits systems;
	(4)  encourage people who have access to private
	employer-based health benefits to obtain or maintain those
	benefits;
	(5)  create a culture of shared financial
	responsibility, accountability, and participation in the Medicaid
	program by:
	(A)  establishing and enforcing copayment
	requirements similar to private sector principles for all
	eligibility groups;
	(B)  promoting the use of health savings accounts
	to influence a culture of individual responsibility; and
	(C)  promoting the use of vouchers for
	consumer-directed services in which consumers manage and pay for
	health-related services provided to them using program vouchers;
	(6)  consolidate federal funding streams, including
	funds from the disproportionate share hospitals and upper payment
	limit supplemental payment programs and other federal Medicaid
	funds, to ensure the most effective and efficient use of those
	funding streams;
	(7)  allow flexibility in the use of state funds used to
	obtain federal matching funds, including allowing the use of
	intergovernmental transfers, certified public expenditures, costs
	not otherwise matchable, or other funds and funding mechanisms to
	obtain federal matching funds;
	(8)  empower individuals who are uninsured to acquire
	health benefits coverage through the promotion of cost-effective
	coverage models that provide access to affordable primary,
	preventive, and other health care on a sliding scale, with fees paid
	at the point of service; and
	(9)  allow for the redesign of long-term care services
	and supports to increase access to patient-centered care in the
	most cost-effective manner.
	SECTION 13.02.  (a)  In this section:
	(1)  "Commission" means the Health and Human Services
	Commission.
	(2)  "FMAP" means the federal medical assistance
	percentage by which state expenditures under the Medicaid program
	are matched with federal funds.
	(3)  "Illegal immigrant" means an individual who is not
	a citizen or national of the United States and who is unlawfully
	present in the United States.
	(4)  "Medicaid program" means the medical assistance
	program under Chapter 32, Human Resources Code.
	(b)  The commission shall actively pursue a modification to
	the formula prescribed by federal law for determining this state's
	FMAP to achieve a formula that would produce an FMAP that accounts
	for and is periodically adjusted to reflect changes in the
	following factors in this state:
	(1)  the total population;
	(2)  the population growth rate; and
	(3)  the percentage of the population with household
	incomes below the federal poverty level.
	(c)  The commission shall pursue the modification as
	required by Subsection (b) of this section by providing to the Texas
	delegation to the United States Congress and the federal Centers
	for Medicare and Medicaid Services and other appropriate federal
	agencies data regarding the factors listed in that subsection and
	information indicating the effects of those factors on the Medicaid
	program that are unique to this state.
	(d)  In addition to the modification to the FMAP described by
	Subsection (b) of this section, the commission shall make efforts
	to obtain additional federal Medicaid funding for Medicaid services
	required to be provided to illegal immigrants in this state. As
	part of that effort, the commission shall provide to the Texas
	delegation to the United States Congress and the federal Centers
	for Medicare and Medicaid Services and other appropriate federal
	agencies data regarding the costs to this state of providing those
	services.
	(e)  This section expires September 1, 2013.
	SECTION 13.03.  (a)  The Medicaid Reform Waiver Legislative
	Oversight Committee is created to facilitate the reform waiver
	efforts with respect to Medicaid.
	(b)  The committee is composed of eight members, as follows:
	(1)  four members of the senate, appointed by the
	lieutenant governor not later than October 1, 2011; and
	(2)  four members of the house of representatives,
	appointed by the speaker of the house of representatives not later
	than October 1, 2011.
	(c)  A member of the committee serves at the pleasure of the
	appointing official.
	(d)  The governor shall designate a member of the committee
	as the presiding officer.
	(e)  A member of the committee may not receive compensation
	for serving on the committee but is entitled to reimbursement for
	travel expenses incurred by the member while conducting the
	business of the committee as provided by the General Appropriations
	Act.
	(f)  The committee shall:
	(1)  facilitate the design and development of the
	Medicaid reform waiver required by Chapter 537, Government Code, as
	added by this article;
	(2)  facilitate a smooth transition from existing
	Medicaid payment systems and benefit designs to a new model of
	Medicaid enabled by the waiver described by Subdivision (1) of this
	subsection;
	(3)  meet at the call of the presiding officer; and
	(4)  research, take public testimony, and issue reports
	requested by the lieutenant governor or speaker of the house of
	representatives.
	(g)  The committee may request reports and other information
	from the Health and Human Services Commission.
	(h)  The committee shall use existing staff of the senate,
	the house of representatives, and the Texas Legislative Council to
	assist the committee in performing its duties under this section.
	(i)  Chapter 551, Government Code, applies to the committee.
	(j)  The committee shall report to the lieutenant governor
	and speaker of the house of representatives not later than November
	15, 2012. The report must include:
	(1)  identification of significant issues that impede
	the transition to a more effective Medicaid program;
	(2)  the measures of effectiveness associated with
	changes to the Medicaid program;
	(3)  the impact of Medicaid changes on safety net
	hospitals and other significant traditional providers; and
	(4)  the impact on the uninsured in Texas.
	(k)  This section expires September 1, 2013, and the
	committee is abolished on that date.
	SECTION 13.04.  This article takes effect immediately if
	this Act 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 article takes effect on the 91st day after
	the last day of the legislative session.
	ARTICLE 14.  AUTOLOGOUS STEM CELL BANK FOR RECIPIENTS OF BLOOD AND
	TISSUE COMPONENTS WHO ARE THE LIVE HUMAN DONORS OF THE ADULT STEM
	CELLS
	SECTION 14.01.  Title 12, Health and Safety Code, is amended
	by adding Chapter 1003 to read as follows:
	CHAPTER 1003. AUTOLOGOUS STEM CELL BANK FOR RECIPIENTS OF BLOOD AND
	TISSUE COMPONENTS WHO ARE THE LIVE HUMAN DONORS OF THE ADULT STEM
	CELLS
	Sec. 1003.001.  ESTABLISHMENT OF ADULT STEM CELL BANK.
	(a)  If the executive commissioner of the Health and Human Services
	Commission determines that it will be cost-effective and increase
	the efficiency or quality of health care, health and human
	services, and health benefits programs in this state, the executive
	commissioner by rule shall establish eligibility criteria for the
	creation and operation of an autologous adult stem cell bank.
	(b)  In adopting the rules under Subsection (a), the
	executive commissioner shall consider:
	(1)  the ability of the applicant to establish,
	operate, and maintain an autologous adult stem cell bank and to
	provide related services; and
	(2)  the demonstrated experience of the applicant in
	operating similar facilities in this state.
	(c)  This section does not affect the application of or apply
	to Chapter 162.
	ARTICLE 15. STATE FUNDING FOR CERTAIN MEDICAL PROCEDURES
	SECTION 15.01.  The heading to Subchapter M, Chapter 285,
	Health and Safety Code, is amended to read as follows:
	SUBCHAPTER M. REGULATION [PROVISION] OF SERVICES
	SECTION 15.02.  Subchapter M, Chapter 285, Health and Safety
	Code, is amended by adding Section 285.202 to read as follows:
	Sec. 285.202.  USE OF TAX REVENUE FOR ABORTIONS; EXCEPTION
	FOR MEDICAL EMERGENCY.  (a)  In this section, "medical emergency"
	means:
	(1)  a condition exists that, in a physician's good
	faith clinical judgment, complicates the medical condition of the
	pregnant woman and necessitates the immediate abortion of her
	pregnancy to avert her death or to avoid a serious risk of
	substantial impairment of a major bodily function; or
	(2)  the fetus has a severe fetal abnormality.
	(a-1)  In Subsection (a), a "severe fetal abnormality" means
	a life threatening physical condition that, in reasonable medical
	judgment, regardless of the provision of life saving medical
	treatment, is incompatible with life outside the womb.
	(a-2)  In Subsection (a-1), "reasonable medical judgment"
	means a medical judgment that would be made by a reasonably prudent
	physician, knowledgeable about the case and the treatment
	possibilities with respect to the medical conditions involved.
	(b)  Except in the case of a medical emergency, a hospital
	district created under general or special law that uses tax revenue
	of the district to finance the performance of an abortion may not
	receive state funding.
	(c)  A physician who performs an abortion in a medical
	emergency at a hospital or other health care facility owned or
	operated by a hospital district that receives state funds shall:
	(1)  include in the patient's medical records a
	statement signed by the physician certifying the nature of the
	medical emergency; and
	(2)  not later than the 30th day after the date the
	abortion is performed, certify to the Department of State Health
	Services the specific medical condition that constituted the emergency.
	(d)  The statement required under Subsection (c)(1) shall be
	placed in the patient's medical records and shall be kept by the
	hospital or other health care facility where the abortion is
	performed until:
	(1)  the seventh anniversary of the date the abortion
	is performed; or
	(2)  if the pregnant woman is a minor, the later of:
	(A)  the seventh anniversary of the date the
	abortion is performed; or
	(B)  the woman's 21st birthday.
	ARTICLE 16.  IMPLEMENTATION; EFFECTIVE DATE
	SECTION 16.01.  It is the intent of the legislature that the
	Health and Human Services Commission take any action the commission
	determines is necessary and appropriate, including expedited and
	emergency action, to ensure the timely implementation of the
	relevant provisions of this bill and the corresponding assumptions
	reflected in H.B. No. 1, 82nd Legislature, Regular Session, 2011
	(General Appropriations Act), by September 1, 2011, or the
	effective date of this Act, whichever is later, including the
	adoption of administrative rules, the preparation and submission of
	any required waivers or state plan amendments, and the preparation
	and execution of any necessary contract changes or amendments.
	SECTION 16.02.  Except as otherwise provided by this Act,
	this Act takes effect on the 91st day after the last day of the
	legislative session.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I hereby certify that S.B. No. 7 passed the Senate on
	June 3, 2011, by the following vote:  Yeas 31, Nays 0;
	June 13, 2011, Senate refused to concur in House amendments and
	requested appointment of Conference Committee; June 15, 2011,
	House granted request of the Senate; June 27, 2011, Senate adopted
	Conference Committee Report by the following vote:  Yeas 21,
	Nays 9.
	______________________________
	Secretary of the Senate
	I hereby certify that S.B. No. 7 passed the House, with
	amendments, on June 9, 2011, by the following vote:  Yeas 89,
	Nays 41, one present not voting; June 15, 2011, House granted
	request of the Senate for appointment of Conference Committee;
	June 27, 2011, House adopted Conference Committee Report by the
	following vote:  Yeas 96, Nays 48, one present not voting.
	______________________________
	Chief Clerk of the House
	Approved:
	______________________________
	Date
	______________________________
	Governor