Relating to charity care provided by certain nonprofit hospitals and hospital systems and the calculation of net patient revenue for purposes of determining the charity care provided by those entities; authorizing an administrative penalty.

89(R) HB 3708 - House Committee Report version - Bill Text

89R26079 SRA-F

By: Oliverson, Frank

H.B. No. 3708

Substitute the following for H.B. No. 3708:

By: VanDeaver

C.S.H.B. No. 3708

A BILL TO BE ENTITLED

AN ACT

relating to charity care provided by certain nonprofit hospitals

and hospital systems and the calculation of net patient revenue for

purposes of determining the charity care provided by those

entities; authorizing an administrative penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 311.045, Health and Safety Code, is

amended by adding Subsection (g) to read as follows:

(g)

Notwithstanding Section 311.042(15), when calculating

net patient revenue for the purposes of Subsection (b)(1)(C) of

this section, a nonprofit hospital or hospital system shall include

the revenue of each of its facilities and practices offering

medical services that are located in this state and under the common

governance of a single corporate parent, regardless of the

facility's or practice's distance from the corporate parent,

excepting, as provided by Subsection (d) of this section, any

facility or practice that has been designated as a disproportionate

share hospital under the state Medicaid program.

SECTION 2. Subchapter D, Chapter 311, Health and Safety

Code, is amended by adding Section 311.0453 to read as follows:

Sec.

311.0453.

CHARITY CARE SCREENING. (a)

In this

section:

(1)

"Charity program" means a hospital's or hospital

system's financial assistance and charity care program.

(2)

"Commission" means the Health and Human Services

Commission.

(3)

"Executive commissioner" means the executive

commissioner of the commission.

(b) This section applies only to:

(1)

a nonprofit hospital that has not been designated

as a disproportionate share hospital under the state Medicaid

program; or

(2)

with respect to a hospital system, a facility in

the system that has not been designated as a disproportionate share

hospital under the state Medicaid program.

(c)

A nonprofit hospital or hospital system to which this

section applies shall inform each patient of the existence of, and

screen each patient for eligibility for, the hospital's or hospital

system's charity program in accordance with this section.

(d)

A nonprofit hospital or hospital system may not attempt

to pursue collection of a patient's debt unless the hospital or

hospital system verifies and documents that the patient is not

eligible for the charity program described by Subsection (c).

(e)

The executive commissioner by rule shall prescribe the

process a nonprofit hospital or hospital system must use to screen a

patient for eligibility for a charity program.

The rules adopted

under this section must provide that a nonprofit hospital or

hospital system:

(1)

may not send a billing statement to a patient

unless the hospital or hospital system has conducted the screening

required under Subsection (c);

(2)

must apply on the initial billing statement sent

to a patient any charity care discount, health insurance coverage,

or other health benefit to which the patient is entitled; and

(3)

must include on each billing statement provided to

a patient a notice stating:

(A)

that the hospital or hospital system has a

charity program;

(B)

the contact information for the office or

department of the hospital or hospital system that can provide

information about the charity program; and

(C)

if applicable, the uniform resource locator

(URL) address of an Internet website maintained by the hospital or

hospital system where the patient can view the charity program.

(f)

A patient may apply to receive charity care from a

nonprofit hospital or hospital system regardless of whether the

patient:

(1)

was screened for eligibility for the hospital's or

hospital system's charity program and was determined to be

ineligible for charity care; or

(2)

disagrees with the amount of the charity care

discount offered by the hospital or hospital system.

(g)

If a nonprofit hospital or hospital system becomes aware

that the hospital or hospital system made an incorrect

determination regarding the appropriate amount of a charity care

discount to apply to a patient's account during the screening

required under Subsection (c) based on the information provided by

the patient at the time of the initial determination, the hospital

or hospital system shall:

(1) either:

(A)

refund to the patient the difference between

the amount of the charity care discount the patient should have

received and the amount of the charity care discount the patient

actually received; or

(B)

if the patient has not made a payment to the

hospital or hospital system, reduce the amount due on the patient's

account by an amount equal to the amount described by Paragraph (A);

and

(2)

reimburse the patient for any other associated

reasonable costs, such as legal expenses and fees, incurred by the

patient in securing charity care.

(h)

If a nonprofit hospital or hospital system sells a

patient's debt to a collection agency or authorizes a collection

agency to collect the patient's debt on behalf of the hospital or

hospital system and later becomes aware that the amount of the

patient's debt should be reduced under Subsection (g), the hospital

or hospital system shall notify the collection agency within a

reasonable period of time of the hospital's or hospital system's

determination and the correct amount of the debt.

(i)

If the commission determines that a nonprofit hospital

or hospital system has failed to comply with a provision of this

section:

(1)

on the first violation, the commission shall

institute a corrective action plan for the hospital or hospital

system and publish the plan on the commission's Internet website;

(2)

on the second violation, the commission shall

provide written notice to the hospital or hospital system that, if

the hospital or hospital system fails to take action to correct the

failure to comply within the 90-day period following the date on

which the notice is provided, the commission may impose an

administrative penalty of not less than $250,000 on the hospital or

hospital system; and

(3)

on the third violation, the commission shall

notify the attorney general of the hospital's or hospital system's

repeated failure to comply with the requirements of this section,

after which the attorney general shall investigate the matter and,

if appropriate, bring an action to declare the hospital or hospital

system ineligible for the tax exemptions described by Section

311.043(b).

SECTION 3. Section 311.045, Health and Safety Code, as

amended by this Act, applies only to a fiscal year of a hospital or

hospital system that begins on or after the effective date of this

Act.

SECTION 4. (a) Not later than December 1, 2025, the

executive commissioner of the Health and Human Services Commission

shall adopt the rules required by Section 311.0453, Health and

Safety Code, as added by this Act.

(b) Section 311.0453, Health and Safety Code, as added by

this Act, applies only to a patient that is screened for the

purposes described by that section on or after January 1, 2026.

SECTION 5. 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, 2025.