H.B. No. 4700

	AN ACT
	relating to the creation and operations of a health care provider
	participation program by the Nacogdoches County Hospital District.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle D, Title 4, Health and Safety Code, is
	amended by adding Chapter 298H to read as follows:
	CHAPTER 298H. NACOGDOCHES COUNTY HOSPITAL DISTRICT HEALTH CARE
	PROVIDER PARTICIPATION PROGRAM
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 298H.001.  DEFINITIONS. In this chapter:
	(1)  "Board" means the board of directors of the
	district.
	(2)  "District" means the Nacogdoches County Hospital
	District.
	(3)  "Institutional health care provider" means a
	nonpublic hospital located in the district that provides inpatient
	hospital services.
	(4)  "Paying provider" means an institutional health
	care provider required to make a mandatory payment under this
	chapter.
	(5)  "Program" means the health care provider
	participation program authorized by this chapter.
	Sec. 298H.002.  APPLICABILITY. This chapter applies only to
	the Nacogdoches County Hospital District.
	Sec. 298H.003.  HEALTH CARE PROVIDER PARTICIPATION PROGRAM;
	PARTICIPATION IN PROGRAM. (a) The board may authorize the district
	to participate in a health care provider participation program on
	the affirmative vote of a majority of the board, subject to the
	provisions of this chapter.
	(b)  The board may not authorize the district to participate
	in a health care provider participation program under Chapter 300
	or 300A.
	Sec. 298H.004.  EXPIRATION. (a)  Subject to Section
	298H.153(d), the authority of the district to administer and
	operate a program under this chapter expires December 31, 2027.
	(b)  This chapter expires December 31, 2027.
	SUBCHAPTER B. POWERS AND DUTIES OF BOARD
	Sec. 298H.051.  LIMITATION ON AUTHORITY TO REQUIRE MANDATORY
	PAYMENT. The board may require a mandatory payment authorized
	under this chapter by an institutional health care provider located
	in the district only in the manner provided by this chapter.
	Sec. 298H.052.  RULES AND PROCEDURES. The board may adopt
	rules relating to the administration of the program, including
	collection of the mandatory payments, expenditures, audits, and
	other administrative aspects of the program.
	Sec. 298H.053.  INSTITUTIONAL HEALTH CARE PROVIDER
	REPORTING. If the board authorizes the district to participate in a
	program under this chapter, the board may require each
	institutional health care provider to submit to the district a copy
	of any financial and utilization data reported in the provider's
	Medicare cost report submitted for the most recent fiscal year for
	which the provider submitted the Medicare cost report.
	SUBCHAPTER C. GENERAL FINANCIAL PROVISIONS
	Sec. 298H.101.  HEARING. (a) In each year that the board
	authorizes a program under this chapter, the board shall hold a
	public hearing on the amounts of any mandatory payments that the
	board intends to require during the year and how the revenue derived
	from those payments is to be spent.
	(b)  Not later than the fifth day before the date of the
	hearing required under Subsection (a), the board shall publish
	notice of the hearing in a newspaper of general circulation in the
	district.
	(c)  A representative of a paying provider is entitled to
	appear at the public hearing and be heard regarding any matter
	related to the mandatory payments authorized under this chapter.
	Sec. 298H.102.  DEPOSITORY.  (a)  If the board requires a
	mandatory payment authorized under this chapter, the board shall
	designate one or more banks as a depository for the district's local
	provider participation fund.
	(b)  All funds collected under this chapter shall be secured
	in the manner provided for securing other district funds.
	Sec. 298H.103.  LOCAL PROVIDER PARTICIPATION FUND;
	AUTHORIZED USES OF MONEY.  (a)  If the district requires a
	mandatory payment authorized under this chapter, the district shall
	create a local provider participation fund.
	(b)  The local provider participation fund consists of:
	(1)  all revenue received by the district attributable
	to the mandatory payments authorized under this chapter;
	(2)  money received from the Health and Human Services
	Commission as a refund of an intergovernmental transfer under the
	program, provided that the intergovernmental transfer does not
	receive a federal matching payment; and
	(3)  the earnings of the fund.
	(c)  Money deposited to the local provider participation
	fund of the district may be used only to:
	(1)  fund intergovernmental transfers from the
	district to the state to provide the nonfederal share of Medicaid
	supplemental payments for:
	(A)  uncompensated care payments to nonpublic
	hospitals, if those payments are authorized under the Texas
	Healthcare Transformation and Quality Improvement Program waiver
	issued under Section 1115 of the federal Social Security Act (42
	U.S.C. Section 1315);
	(B)  rate enhancements for nonpublic hospitals in
	the Medicaid managed care service area in which the district is
	located;
	(C)  payments available under another waiver
	program authorizing payments that are substantially similar to
	Medicaid payments to nonpublic hospitals described by Paragraph (A)
	or (B); or
	(D)  any reimbursement to nonpublic hospitals for
	which federal matching funds are available;
	(2)  subject to Section 298H.151(d), pay the
	administrative expenses of the district in administering the
	program, including collateralization of deposits;
	(3)  refund a mandatory payment collected in error from
	a paying provider;
	(4)  refund to paying providers a proportionate share
	of the money that the district:
	(A)  receives from the Health and Human Services
	Commission that is not used to fund the nonfederal share of Medicaid
	supplemental payments or rate enhancements described by
	Subdivision (1); or
	(B)  determines cannot be used to fund the
	nonfederal share of Medicaid supplemental payments or rate
	enhancements described by Subdivision (1); and
	(5)  transfer funds to the Health and Human Services
	Commission if the district is legally required to transfer the
	funds to address a disallowance of federal matching funds with
	respect to Medicaid supplemental payments for which the district
	made intergovernmental transfers described by Subdivision (1).
	(d)  Money in the local provider participation fund may not
	be commingled with other district funds.
	(e)  Notwithstanding any other provision of this chapter,
	with respect to an intergovernmental transfer of funds described by
	Subsection (c)(1) made by the district, any funds received by the
	state, district, or other entity as a result of that transfer may
	not be used by the state, district, or other entity to expand
	Medicaid eligibility under the Patient Protection and Affordable
	Care Act (Pub. L. No. 111-148) as amended by the Health Care and
	Education Reconciliation Act of 2010 (Pub. L. No. 111-152).
	SUBCHAPTER D. MANDATORY PAYMENTS
	Sec. 298H.151.  MANDATORY PAYMENTS BASED ON PAYING PROVIDER
	NET PATIENT REVENUE. (a) If the board authorizes a health care
	provider participation program under this chapter, the board may
	require a mandatory payment to be assessed, either annually or
	periodically throughout the year at the discretion of the board, on
	the net patient revenue of each institutional health care provider
	located in the district.  The board shall provide an institutional
	health care provider written notice of each assessment under this
	subsection, and the provider has 30 calendar days following the
	date of receipt of the notice to make the assessed mandatory
	payment.  In the first year in which the mandatory payment is
	required, the mandatory payment is assessed on the net patient
	revenue of an institutional health care provider, as determined by
	the provider's Medicare cost report submitted for the most recent
	fiscal year for which the provider submitted the Medicare cost
	report.  If the mandatory payment is required, the district shall
	periodically update the amount of the mandatory payment.
	(b)  The amount of a mandatory payment authorized under this
	chapter must be determined in a manner that ensures the revenue
	generated qualifies for federal matching funds under federal law,
	consistent with 42 U.S.C. Section 1396b(w).
	(c)  If the board requires a mandatory payment authorized
	under this chapter, the board shall set the amount of the mandatory
	payment, subject to the limitations of this chapter. The aggregate
	amount of the mandatory payments required of all paying providers
	in the district may not exceed six percent of the aggregate net
	patient revenue from hospital services provided in the district.
	(d)  Subject to Subsection (c), if the board requires a
	mandatory payment authorized under this chapter, the board shall
	set the mandatory payments in amounts that in the aggregate will
	generate sufficient revenue to cover the administrative expenses of
	the district for activities under this chapter and to fund an
	intergovernmental transfer described by Section 298H.103(c)(1).
	The annual amount of revenue from the mandatory payments used by the
	district may not exceed $150,000, plus the cost of
	collateralization of deposits, regardless of actual expenses.
	(e)  A paying provider may not add a mandatory payment
	required under this section as a surcharge to a patient.
	(f)  A mandatory payment assessed under this chapter is not a
	tax for hospital purposes for purposes of Section 9, Article IX,
	Texas Constitution, or Section 1069.301, Special District Local
	Laws Code.
	Sec. 298H.152.  ASSESSMENT AND COLLECTION OF MANDATORY
	PAYMENTS.  (a)  The district may designate an official of the
	district or contract with another person to assess and collect the
	mandatory payments authorized under this chapter.
	(b)  The person charged by the district with the assessment
	and collection of the mandatory payments may not charge the
	district a fee for assessing and collecting the payments unless the
	district authorizes the fee in writing.
	(c)  If the person charged with the assessment and collection
	of the mandatory payments is an official of the district, any
	revenue from a fee authorized under Subsection (b) shall be
	deposited in the district general fund and, if appropriate, shall
	be reported as fees of the district.
	Sec. 298H.153.  PURPOSE; CORRECTION OF INVALID PROVISION OR
	PROCEDURE; LIMITATION OF AUTHORITY.  (a)  The purpose of this
	chapter is to authorize the district to establish a program to
	enable the district to collect the mandatory payments from
	institutional health care providers to fund the nonfederal share of
	a Medicaid supplemental payment program or the Medicaid managed
	care rate enhancements for nonpublic hospitals to support the
	provision of health care by institutional health care providers to
	district residents in need of health care.
	(b)  This chapter does not authorize the district to collect
	the mandatory payments for the purpose of raising general revenue
	or any amount in excess of the amount reasonably necessary to:
	(1)  fund the nonfederal share of a Medicaid
	supplemental payment program or the Medicaid managed care rate
	enhancements for nonpublic hospitals; and
	(2)  cover the administrative expenses of the district
	associated with activities under this chapter and other uses of the
	fund described by Section 298H.103(c).
	(c)  To the extent any provision or procedure under this
	chapter causes a mandatory payment authorized under this chapter to
	be ineligible for federal matching funds, the board may provide by
	rule for an alternative provision or procedure that conforms to the
	requirements of the federal Centers for Medicare and Medicaid
	Services.  A rule adopted under this section may not create,
	impose, or materially expand the legal or financial liability or
	responsibility of the district or an institutional health care
	provider in the district beyond the provisions of this
	chapter.  This section does not require the board to adopt a rule.
	(d)  The district may only assess and collect a mandatory
	payment authorized under this chapter if a waiver program, rate
	enhancement, or reimbursement described by Section 298H.103(c)(1)
	is available for nonpublic hospitals located in the district.
	SECTION 2.  This Act takes effect immediately if it receives
	a vote of two-thirds of all the members elected to each house, as
	provided by Section 39, Article III, Texas Constitution. If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2023.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 4700 was passed by the House on April
	28, 2023, by the following vote:  Yeas 117, Nays 26, 2 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 4700 was passed by the Senate on May
	16, 2023, by the following vote:  Yeas 30, Nays 1.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor