HBA-MSH C.S.S.B. 37 77(R)    BILL ANALYSIS


Office of House Bill AnalysisC.S.S.B. 37
By: Zaffirini
Human Services
3/2/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Under current law, when a new owner applies for a license to operate a
nursing facility already in operation in Texas the new owner may be
required to meet all the qualifications for a license before the Texas
Department of Human Services (DHS) will grant a nursing facility license.
If the facility has deficiencies, DHS has the authority to withhold
Medicaid reimbursements until the deficiencies are corrected. These
requirements discourage prospective buyers of nursing facilities and burden
new owners of facilities that are already experiencing financial
difficulties.  C.S.S.B. 37 requires DHS to issue a temporary license so
that new owners have more time to correct deficiencies, before receiving a
standard license.       

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

C.S.S.B. 37 amends the Health and Safety Code to set forth provisions
regarding a temporary change of ownership license (temporary license) for a
nursing facility. The bill provides that the temporary license is issued to
an applicant who proposes to become the new operator of a nursing facility
on the date the application is filed. The bill sets forth procedures for
the investigation of the new operator and the issuance of the temporary
license. The bill requires the Department of Human Services (DHS) to issue
or deny a temporary license no later than the 30th day after the date of
receipt of the completed application. After DHS issues a temporary license,
DHS is required to conduct an inspection or survey of the nursing facility
as soon as reasonably possible. During the time between the issuance of the
temporary license and the inspection or survey of the facility, DHS is
prohibited from placing a hold on vendor payments to the temporary license
holder. 

If the facility meets the requirements and passes inspection, DHS is
required to issue a standard license. If the facility fails to meet the
requirements for the issuance and renewal of a standard license or fails
inspection, DHS is authorized to place a hold on vendor payments to the
temporary license holder and take other appropriate actions. If the
applicant meets the requirements and passes an initial inspection or a
subsequent inspection before the temporary license expires, the standard
license is considered effective on the date requested in the application
for a temporary license. The temporary license expires on the 91st day
after the date the temporary license was issued.  

EFFECTIVE DATE

September 1, 2001. This Act applies only in relation to an application for
a change of ownership license submitted on or after January 1, 2002.  

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute differs from the original by requiring DHS to issue or deny
a temporary license no later than  the 30th day after the date of receipt
of the completed application. The substitute also provides for the
effective date of the standard license if an applicant meets the
requirements and passes inspection before the temporary license expires.