HBA-MPM H.B. 2423 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2423
By: Hawley
Public Health
6/29/2001
Enrolled



BACKGROUND AND PURPOSE 

Provisions of the Federal Balanced Budget Refinement Act of 1999 allow a
hospital in an urban county to be reclassified as a rural hospital if the
hospital meets specific criteria.  Under Medicare payment policies, the
designation of a hospital as rural or urban can affect payment amounts.
For some Texas hospitals, reclassification of a hospital as a rural
hospital may result in increased Medicare payments to that hospital. A
hospital seeking reclassification from urban to rural must apply with the
regional office of the federal Health Care Financing Administration (HCFA)
and must include documentation satisfying one of the criteria for
reclassification.  While the determination is ultimately made by HCFA, a
state may designate an area as a rural area or certain hospitals as rural
hospitals through state legislation or regulations.  Allowing hospitals to
apply for reclassification directly through the state provides Texas
hospitals with the opportunity to take advantage of more favorable Medicare
payment rates in a more timely manner.  House Bill 2423 establishes a
procedure through the Center for Rural Initiatives by which a hospital may
obtain a rural classification.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Center for Rural Initiatives in
SECTION 1 (Section 531.055, Government Code) of this bill. 

ANALYSIS

House Bill 2423 amends the Health and Safety Code to require the Center for
Rural Initiatives (center) to adopt rules that establish a procedure for
designating a hospital as a rural hospital in order for the hospital to
qualify for funding assistance under federal law that establishes a
prospective payment system for the operating costs of inpatient hospital
services furnished to certain Medicare beneficiaries.  The bill requires
the center to designate a hospital as a rural hospital at the hospital's
request if it meets the requirements under the center's rule. 

EFFECTIVE DATE

September 1, 2001.