HBA-GUM C.S.H.B. 3302 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3302 By: Coleman Public Health 5/7/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, private community health centers (centers) are not licensed by this state. Instead, each center signs an attestation statement for the Health Care Financing Administration (HCFA) stating that they are providing the services required under the Public Health Services Act (42 U.S.C., 300x-2) and the Social Security Act (42 U.S.C., 1395x(ff)). Because these centers are not licensed, HCFA may choose to close them, and the centers are able only to subcontract with local mental health authorities for partial hospitalization services which are reimbursable under Medicare Part B. In 1996, centers were accused of fraud and abuse. The Texas Association for Behavioral Healthcare and the Texas Association for Ambulatory Behavioral Healthcare were established in 1997 to deal with the allegations. C.S.H.B. 3302 requires private community health centers to be licensed by the Texas Health Department. This bill requires the Texas Board of Health to adopt rules necessary for the issuance, renewal, denial, suspension, and revocation of a license to operate a center. This bill also sets forth the standards and requirements for a license, and provides civil, criminal, and administrative penalties for operating a center without a license. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Board of Health in SECTION 1 (Sections 253.004 and 253.017, Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subtitle B, Title 4, Health and Safety Code, by adding Chapter 253, as follows: CHAPTER 253. BEHAVIORAL HEALTH CARE CENTERS SUBCHAPTER A. GENERAL PROVISIONS Sec. 253.001. DEFINITIONS. Defines "board," "center," "department," and "partial hospitalization services." Sec. 253.002. APPLICABILITY. Provides that this chapter does not apply to a community center established under Subchapter A (Community Centers), Chapter 534; a state mental health facility or other program operated by the Texas Department of Mental Health and Mental Retardation (MHMR) or a federal agency; a private mental health facility licensed under Chapter 577 (Private Mental Hospitals and Other Mental Health Facilities) or a hospital licensed under Chapter 241 (Hospitals); or an individual provider of behavioral or mental health care services. Sec. 253.003. APPLICABILITY OF OTHER LAW. Provides that Subchapter A, Chapter 534, does not apply to a center licensed under this chapter. Sec. 253.004. RULES. Requires the Texas Board of Health (board) to adopt rules necessary to implement this chapter. Authorizes the board to adopt rules for the issuance of a temporary or probationary license to operate a center. SUBCHAPTER B. LICENSING, FEES, AND INSPECTION Sec. 253.011. LICENSE REQUIRED. Prohibits a person from operating a center unless the person holds a license issued under this chapter. Sec. 253.012. LICENSE APPLICATION. Provides that an applicant for a license under this chapter must submit an application in accordance with board rules, and a nonrefundable license fee in an amount set by the board, to the Texas Department of Health (TDH). Sec. 253.013. ISSUANCE OF LICENSE. Requires TDH to issue a license to an applicant if it finds that the applicant and the center meet the requirements and rules adopted under this chapter. Authorizes a license issued under this chapter to be transferred or assigned only if TDH approves the transfer or assignment in writing. Sec. 253.014. LICENSE POSTING. Requires a person who holds a license issued under this chapter to post the license in a conspicuous place at the center for which it is issued. Sec. 253.015. LICENSE FEES. Requires the board to impose fees for licensure under this chapter in amounts reasonable and necessary to defray the cost of administering this chapter. Sec. 253.016. INSPECTIONS. Authorizes TDH to inspect a center and its records to ensure compliance with this chapter and rules adopted under this chapter. Sec. 253.017. GENERAL STANDARDS. Requires the board by rule to adopt minimum standards applicable to a center as enumerated by this section. Provides that this chapter does not authorize the board to establish the qualifications of a licensed practitioner, or permit a person who is not authorized to provide mental health services to provide those services in this state. Sec. 253.018. MENTAL HEALTH CARE STANDARDS. (a) Provides that the care and treatment of a client receiving mental health services in a center licensed under this chapter are governed by standards adopted by MHMR to the same extent as if the standards adopted by MHMR were rules adopted by the board under this chapter. (b) Requires MHMR to enforce the standards provided by Subsection (a). Provides that a violation of a standard is subject to the same consequence as a violation of a rule adopted by the board under this chapter. Provides that MHMR is not required to enforce a standard if the enforcement violates a federal law, rule, or regulation. Sec. 258.019. NOTICE IN ADVERTISING AND CONTRACTS FOR SERVICES. (a) Provides that this section applies only to a center licensed under this chapter that does not have a contract with MHMR, a local mental health authority designated under Section 533.035 (Local Mental Health and Mental Retardation Authorities), or a community center established under Chapter 534 (Community Services). (b) Requires a center to include in its advertising or written contracts notice that it is a private facility and not affiliated with the state mental health and mental retardation system. SUBCHAPTER C. ENFORCEMENT Sec. 253.031. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE. Authorizes TDH to deny, suspend, or revoke a license for a violation of this chapter or a rule adopted under this chapter. Provides that except as provided by Section 253.032, the denial, suspension, or revocation of a license and an appeal from that action are governed by the procedures for a contested case hearing under Chapter 2001 (Administrative Procedure), Government Code. Sec. 253.032. EMERGENCY SUSPENSION ORDER. (a) Authorizes TDH to issue an emergency order to suspend a license without a hearing, if TDH has reasonable cause to believe that the conduct of a license holder creates an immediate danger to the health and safety of a client or the public. (b) Provides that an emergency suspension is effective immediately on notice to the license holder. (c) Requires TDH, on written request of the holder of a license suspended under this section, to conduct a hearing to determine whether there is cause to continue the suspension. Provides that the hearing must be held between the 10th day and the 30th day after the date the request is received. Sec. 253.033. INJUNCTION. (a) Authorizes TDH to petition a district court for a temporary restraining order to restrain a continuing violation of the standards or licensing requirements under this chapter, if TDH finds that the violation creates an immediate threat to the health and safety of the public or of a client of a center. (b) Authorizes a district court, on petition of TDH and on finding that a violation of Subchapter B is being committed, to prohibit a person from continuing the violation; restrain or prevent the establishment or operation of a center without a license under this chapter; or grant other injunctive relief warranted by the facts. (c) Requires the attorney general to institute and conduct a suit authorized by this section at the request of TDH. (d) Provides that venue for a suit brought under this section is in the county in which the center is located or in Travis County. Sec. 253.034. CIVIL PENALTY. (a) Provides that a person who violates this chapter or a rule adopted under this chapter is liable for a civil penalty between $100 and $500 for each violation if TDH determines that the violation threatens the health and safety of a client or the public. Provides that each day of a continuing violation constitutes a separate ground for recovery. Authorizes the attorney general to sue to collect the penalty. Sec. 253.035. CRIMINAL PENALTY. Provides that a person commits a Class C misdemeanor if the person operates a facility under Subchapter D without a license. Provides that each day of a continuing violation constitutes a separate offense. Sec. 253.036. ADMINISTRATIVE PENALTY. Authorizes the board to impose an administrative penalty in an amount not to exceed $5,000 against a person who violates this chapter or a rule adopted under this chapter. Provides that each day a violation continues or occurs is a separate violation for the purpose of imposing a penalty. Requires the board to impose a penalty subject to the limitation provided by this section and in accordance to Section 241.060 (Administrative Penalty for Mental Health, Chemical Dependency, or Rehabilitation Services) as if the person had violated Chapter 241 (Hospitals) or a rule adopted under that chapter. SUBCHAPTER D. SERVICES Sec. 253.051. PARTIAL HOSPITALIZATION SERVICES. (a) Authorizes a center licensed under this chapter to provide partial hospitalization services to a client who exhibits an acute psychiatric or psychological condition, or an acute exacerbation of a severe and persistent mental disorder. (b) Provides that the partial hospitalization services provided must be reasonable and necessary for the diagnosis or active treatment of the client's condition, and reasonably expected to improve or maintain the client's condition and functional level to prevent relapse or hospitalization. (c) Provides that the partial hospitalization services may include certain specified therapy services, diagnostic services, or education or training. (d) Authorizes a client to be admitted for partial hospitalization services only by an order of a physician trained in the diagnosis and treatment of psychiatric illness following the physician's evaluation of the client in person and furnished under the supervision of a physician. SECTION 2. Amends Section 250.001(3), Health and Safety Code, to include a center that provides behavioral or mental health care services and licensed under Chapter 253 in the definition of "facility." SECTION 3. Provides that a private behavioral or mental health care center is not required to be licensed under Chapter 253, Health and Safety Code, as added by this Act, before January 1, 2000. Requires the board to adopt rules as necessary to implement Chapter 253, Health and Safety Code, on or before January 1, 2000. SECTION 4. Effective date: September 1, 1999. SECTION 5. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies SECTION 1 (Subtitle B, Title 4, Health and Safety Code), as follows: In proposed Section 253.001 (Definitions), the substitute further defines "center," and adds a definition of "partial hospitalization services." In proposed Section 253.002 (Applicability), the substitute specifies that proposed Chapter 253 (Behavioral Health Care Centers) does not apply to a state mental health facility or other program operated by the Texas Department of Mental Health and Mental Retardation (MHMR) or federal agency; and includes a provision that Chapter 253 does not apply to a private mental health facility licensed under Chapter 577 (Private Mental Hospitals and Other Mental Health Facilities) or a hospital licensed under Chapter 241 (Hospitals). The substitute modifies proposed Section 253.011 (License Required) to make nonsubstantive and conforming changes. The substitute modifies proposed Section 253.013 (Issuance of License) to delete proposed text providing that MHMR is required to issue a license under this section after inspection and investigation. The substitute also modifies that section to authorize a license issued under Chapter 253 to be transferred or assigned only if MHMR approves the transfer or assignment in writing, rather than providing that such a license is not transferable or assignable and is valid only for operation of the center for which it is issued; and deletes proposed text providing that if the holder of a license transfers a majority of ownership interest in the center for which it is issued or transfers responsibility for its operation to another person, the license is void. The substitute modifies proposed Section 253.017 (General Standards) to specify that the rules the Texas Board of Health (board) is required to adopt are minimum standards applicable to a mental health care center, and that the rules regarding the number, qualifications and duties of the professional staff are applicable physicians and nurses. The substitute also adds language to require the board to adopt rules regarding a quality assurance program for the care of clients, fire prevention, and safety and sanitary conditions, rather than sanitary and hygienic conditions. In Subsection (b) of Section 253.017 the substitute provides that Chapter 253, rather than that section, does not authorize to the board to take certain specified actions regarding the qualifications and licensing of a practitioner. The substitute adds Section 253.018 (Mental Health Care Standards) to provide that the care and treatment of a client in a center licensed under Chapter 253 are governed by standards adopted by MHMR to the same extent as if the standards adopted by MHMR were rules adopted by the board under Chapter 253. Section 253.018 also requires MHMR to enforce the standards provided by that section, and provides that a violation of a standard is subject to the same consequence as a violation of a rule adopted by the board under Chapter 253, and that MHMR is not required to enforce a standard if the enforcement violates a federal law, rule, or regulation. The substitute adds Section 253.019 (Notice in Advertising and Contracts for Services) to require a center that does not have a contract with MHMR, a local mental health authority designated under Section 533.035 (Local Mental Health and Mental Retardation Authorities), or a community center established under Chapter 534 (Community Services), to include in its advertising or written contracts for services a notice providing that the mental health care center is a private facility licensed by the state, and that the facility is not affiliated with MHMR. In proposed Section 253.051 (Partial Hospitalization Services) the substitute deletes the administration of drugs or biologicals from the services authorized to be included in partial hospitalization services; specifies that a client may be admitted for partial hospitalization services only by the order of a physician trained in the diagnosis and treatment of psychiatric illness; and makes nonsubstantive changes. The substitute deletes proposed Section 253.052 (Other Services) which set forth the person to whom a center may provide outpatient services, including specialized services, and authorized a center to provide psychosocial rehabilitation services, 24-hour emergency mental health services, and screening services for admission to an MHMR facility.