Bill Caption

Relating to the licensing and regulation of prescribed pediatric extended care centers.

Fiscal Notes

Estimated Two-year Net Impact to General Revenue Related Funds for SB492, Committee Report 2nd House, Substituted: an impact of $0 through the biennium ending August 31, 2015. In addition to the effects of the bill described in the tables below, the bill has an indeterminate implication for Medicaid client services. The bill could result in a cost or a savings to Medicaid client services, but the effect is dependent both on client choices and Health and Human Services Commission action. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

Bill Analysis

Summary: SB 492 would create Chapter 248A (chapter), under Texas Health and Safety Code, that would require operators of prescribed pediatric extended care centers (care center) to obtain a license from the Department of Aging and Disability Services (DADS). SB 492 would:

• Require separate licenses for the operation of multiple care centers, and prohibit care centers from operating on the same premises as a child care facility established under Chapter 42, Human Resources Code, or any other facility licensed by the Department of State Health Services or Texas Department of Health.
• Make licenses last for two years.
• Allow DADS to assess up to $500 in fines for not properly renewing a license.
• Require the executive commissioner of the Health and Human Services Commission (executive commissioner) to adopt rules to implement the chapter and set licensing fees at a reasonable level to cover the costs of implementing the chapter.
• Permit DADS to inspect these care centers and take corrective actions for any violations.
• Mandate centers only admit minors that are medically or technologically dependent, referred by a physician, whose parents or legal guardians have consented to their admission, and are admitting themselves voluntarily.
• Restrict the amount of services a care center can provide to 12 hours per patient in a 24 hour period and limit those services to those that are regulated by the chapter and by executive commissioner rule.
• Allow DADS to revoke a license for, among other things, a felony conviction of any employee required to undergo a background check required by this chapter, the use of drugs or liquor that affects the license holder’s professional competence, or any violation of this chapter or a rule or standard adopted under this chapter. Allow DADS to put a care center on probation for repeated non-compliance if that non-compliance does not endanger a minor.
• Allow DADS to issue an “emergency suspension” of a license if DADS has reasonable cause to believe the care center creates an immediate danger to a minor it serves or to the public, and make the suspension effective immediately without a hearing on notice to the care center.
• Allow DADS to petition district courts for injunctions to stop a care center from violating this chapter or rules established pursuant to this chapter.
• Impose a civil penalty of $500 or a Class B misdemeanor on a person for each violation of this chapter.
• Allow the commissioner of DADS to impose an administrative penalty of $500 for any violation.
• Allow license holders to appeal for a hearing before the commissioner of DADS.
• Give the commissioner of DADS authority to, at a hearing, decide whether a violation occurred.

Analysis: SB 492 would allow DADS to create a new type of provider for services that are already eligible for Medicaid reimbursement. By authorizing Pediatric Extended Care Centers, the state would allow a new deliver model for an already provided service. Based on the experience of numerous other states, it is reasonable to conclude that this new delivery model will lead to lower costs for the patients receiving these services. Currently these services are provided in home which means each nurse can only attend to one patient. By allowing the care to be provided at a stand-alone facility, each nurse will be able to care for multiple patients.

While this legislation is good in that it will allow a service model that is currently prohibited in Texas and may lead to lower costs, the regulatory scheme that would accompany the new service model is somewhat onerous. We agree that Medicaid reimbursable service providers should have proper oversight to prevent against fraud, abuse, and overutilization. However, some of the regulatory burdens are excessive. Elsewhere this session we have supported allowing practitioners with multiple offices to have one license that covers all the offices - it would make sense to allow that for PECCs as well. It is also somewhat heavy handed to allow a license to be revoked based on a felony conviction of any employee regardless of whether the conviction had anything to do with the facility or services provided. The licensing and regulation provisions could be made less stringent without compromising the integrity of the service model. We are neutral on SB 492.