H.B. No. 3459

	AN ACT
	relating to the creation and operations of a health care provider
	participation program by the Harris 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 299 to read as follows:
	CHAPTER 299. HARRIS COUNTY HOSPITAL DISTRICT HEALTH CARE PROVIDER
	PARTICIPATION PROGRAM
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 299.001.  DEFINITIONS. In this chapter:
	(1)  "Board" means the board of hospital managers of
	the district.
	(2)  "District" means the Harris 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. 299.002.  APPLICABILITY.  This chapter applies only to
	the Harris County Hospital District.
	Sec. 299.003.  HEALTH CARE PROVIDER PARTICIPATION PROGRAM;
	PARTICIPATION IN PROGRAM. 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.
	Sec. 299.004.  EXPIRATION.  (a)  Subject to Section
	299.153(d), the authority of the district to administer and operate
	a program under this chapter expires December 31, 2021.
	(b)  This chapter expires December 31, 2021.
	SUBCHAPTER B. POWERS AND DUTIES OF BOARD
	Sec. 299.051.  LIMITATION ON AUTHORITY TO REQUIRE MANDATORY
	PAYMENT.  The board may require a mandatory payment authorized
	under this chapter by an institutional health care provider in the
	district only in the manner provided by this chapter.
	Sec. 299.052.  RULES AND PROCEDURES. The board may adopt
	rules relating to the administration of the program, including
	collection of the mandatory payments, expenditures, audits, and any
	other administrative aspects of the program.
	Sec. 299.053.  INSTITUTIONAL HEALTH CARE PROVIDER
	REPORTING. If the board authorizes the district to participate in a
	program under this chapter, the board shall require each
	institutional health care provider to submit to the district a copy
	of any financial and utilization data as reported in the provider's
	Medicare cost report submitted for the previous fiscal year or for
	the closest subsequent fiscal year for which the provider submitted
	the Medicare cost report.
	SUBCHAPTER C. GENERAL FINANCIAL PROVISIONS
	Sec. 299.101.  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 and provide written notice of the hearing to each
	institutional health care provider 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. 299.102.  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. 299.103.  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 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
	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)  uniform 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 299.151(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 attributable to mandatory payments collected under
	this chapter that the district:
	(A)  receives from the Health and Human Services
	Commission that is not used to fund the nonfederal share of Medicaid
	supplemental payment program payments; or
	(B)  determines cannot be used to fund the
	nonfederal share of Medicaid supplemental payment program
	payments; 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 programs 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 the transfer may not
	be used by the state, district, or any other entity to:
	(1)  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); or
	(2)  fund the nonfederal share of payments to nonpublic
	hospitals available through the Medicaid disproportionate share
	hospital program or the delivery system reform incentive payment
	program.
	SUBCHAPTER D. MANDATORY PAYMENTS
	Sec. 299.151.  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 pay the assessment. 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 previous fiscal year or for the closest
	subsequent fiscal year for which the provider submitted the
	Medicare cost report.  If the mandatory payment is required, the
	district shall update the amount of the mandatory payment on an
	annual basis and may update the amount on a more frequent basis.
	(b)  The amount of a mandatory payment authorized under this
	chapter must be uniformly proportionate with the amount of net
	patient revenue generated by each paying provider in the district
	as permitted under federal law. A health care provider
	participation program authorized under this chapter may not hold
	harmless any institutional health care provider, as required under
	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 four percent of the aggregate net
	patient revenue from hospital services provided by all paying
	providers 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 299.103(c)(1).
	The annual amount of revenue from mandatory payments used for
	administrative expenses by the district for activities under this
	chapter is $600,000, 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 4, Article IX,
	Texas Constitution, or Section 281.045.
	Sec. 299.152.  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 mandatory payments shall charge and deduct from
	the mandatory payments collected for the district a collection fee
	in an amount not to exceed the person's usual and customary charges
	for like services.
	(c)  If the person charged with the assessment and collection
	of mandatory payments is an official of the district, any revenue
	from a collection fee charged under Subsection (b) shall be
	deposited in the district general fund and, if appropriate, shall
	be reported as fees of the district.
	Sec. 299.153.  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 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
	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 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 299.103(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, uniform
	rate enhancement, or reimbursement described by Section
	299.103(c)(1) is available to the district.
	SECTION 2.  As soon as practicable after the expiration of
	the authority of the Harris County Hospital District to administer
	and operate a health care provider participation program under
	Chapter 299, Health and Safety Code, as added by this Act, the board
	of hospital managers of the Harris County Hospital District shall
	transfer to each institutional health care provider in the district
	that provider's proportionate share of any remaining funds in any
	local provider participation fund created by the district under
	Section 299.103, Health and Safety Code, as added by this Act.
	SECTION 3.  If before implementing any provision of this Act
	a state agency determines that a waiver or authorization from a
	federal agency is necessary for implementation of that provision,
	the agency affected by the provision shall request the waiver or
	authorization and may delay implementing that provision until the
	waiver or authorization is granted.
	SECTION 4.  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, 2019.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 3459 was passed by the House on April
	17, 2019, by the following vote:  Yeas 122, Nays 17, 2 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 3459 was passed by the Senate on May
	10, 2019, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor