Vote Recommendation | Economic Freedom | Property Rights | Personal Responsibility | Limited Government | Individual Liberty |
---|---|---|---|---|---|
Neutral | Neutral | Neutral | Neutral | Neutral | Neutral |
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
OAG indicates there would be technology costs associated with implementing provisions of the bill. It is assumed the cost to OAG could be absorbed.
At the local government level, there may be increased costs for hospital staffing due to inspections, surveys, and investigations.
5/22/15 Update:
This bill is substantively
the same as when we reported on it in its original chamber. We continue to remain neutral on SB 424. The second chamber sponsor is Representative Zerwas.
Original chamber analysis
below:
The Texas Department
of Health Services is charged with regulating and inspecting certain licensed
private hospitals in the state of Texas. This bill makes some changes to
hospital ownership reporting requirements, changes some inspection
requirements, provides for emergency license suspension in some extreme circumstances,
raises the penalty for violations, and provides for a trustee to run a hospital
whose license has been revoked.
Current law requires
that licensed private hospitals report to the department certain information
pertaining to anyone who has an ownership interest of 25% or greater. This bill
extends those reporting requirements to anyone who has an ownership stake of at
least 5%.
Current law permits the department to conduct
periodic inspections of licensed hospitals. This legislation would require such inspections of at least 10%
of the hospitals annually. It further provides that any licensed hospital that
is not accredited by an accrediting organization approved by the Centers for
Medicare and Medicaid Services (such as the Joint Accreditation Commission) must
be inspected at least once every three years. The bill sets risk-based criteria
to prioritize which hospitals should be inspected.
The bill also grants
new authority for the department to suspend a hospital’s license if the
department has “reasonable cause to believe that the conduct of a license
holder creates an immediate danger to public health and safety”. The committee
substitute added further language to require the department to notify the
licensee and gives an opportunity for the license holder to dispute the
findings. The bill further requires that the State Office of Administrative Hearings
conduct a hearing at the license holder’s request in order to determine if the
suspension was valid.
The law currently provides
for hospitals to be fined up to $1,000 per violation per day. This legislation
would increase that to $10,000 per violation per day for rural hospitals with
75 beds or fewer and up to $25,000 per violation per day for all other licensed
hospitals.
Finally, the bill
provides for a trustee regime to be put in place to operate a hospital after
its license has been revoked or which is in the process of closing.
This bill appears
designed to serve as a “preventative maintenance” bill primarily for private
hospitals that do not participate in an approved accreditation program or do not meet
the standards required for certification. It appears that the goal is to set up
an inspection regimen, coupled with a penalty structure to incentivize quick
fixes to any violations, to keep hospitals operating within required health and
safety standards rather than have those hospitals fall into such a state of
neglect that they are required to be closed.
The intentions of the bill
are sound, and the state clearly has existing authority to regulate these
hospitals. The likely result of this legislation is that hospitals which
otherwise would have been closed due to noncompliance will be put on a
correction course through more frequent inspections.
This legislation
essentially tinkers with existing regulatory authority rather than creating new
authority, except for the emergency suspension provision which is new. Had the
committee substitute not added the notification, rebuttal, and hearing
requirements we would likely have opposed the bill on due process grounds.
The increase in the
amount of fines seems steep – perhaps too steep – but does bring the penalty
structure more in line with other licensed healthcare providers such as nursing
homes.
By giving new
authority to suspend licenses, and by substantively increasing penalties for
violations, this legislation can rightly be said to increase the scope of
government. On the other hand, the result of this bill would likely keep open
rural hospitals that would otherwise be closed; thereby preserving choice and competition
in the market place.
Due to these
conflicting principles, we are neutral on SB 424.