Health and Safety Code
SUBTITLE F. POWERS AND DUTIES OF HOSPITALS
CHAPTER 311. POWERS AND DUTIES OF HOSPITALS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 311.001. Special Hospital Requirements for Graduate of Foreign Medical
School Prohibited.
(a) A hospital may not, as a condition to beginning a hospital
internship or residency, require a United States citizen who
resides in this state and who holds a diploma from a medical
school outside the United States that is listed in the World
Directory of Medical Schools published by the World Health
Organization to:
(1) take an examination other than an examination required by the
Texas State Board of Medical Examiners to be taken by a graduate
of a medical school in the United States before allowing that
graduate to begin an internship or residency;
(2) complete a period of internship or graduate clinical
training; or
(3) be certified by the Educational Council for Foreign Medical
Graduates.
(b) This section applies only to a hospital that:
(1) is licensed by this state;
(2) is operated by this state or a political subdivision of this
state; or
(3) receives direct or indirect state financial assistance.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 311.002. Itemized Statement of Billed Services.
(a) Not later than the 10th business day after the date of the
hospital discharge of a person who receives hospital services,
the hospital shall have available an itemized statement of the
billed services provided to the person.
(b) Before a person is discharged from a hospital, the hospital
shall inform the person of the availability of the statement.
(c) To be entitled to receive a statement, a person must
request the statement not later than one year after the date on
which the person is discharged from the hospital. The hospital
shall provide the statement to the person not later than the 10th
day after the date on which the person requests the statement.
(d) A hospital shall provide an itemized statement of billed
services to a third party payor who is actually or potentially
responsible for paying all or part of the billed services
provided to a patient and who has received a claim for payment of
those services. To be entitled to receive a statement, the third
party payor must request the statement from the hospital and must
have received a claim for payment. The request must be made not
later than one year after the date on which the payor received
the claim for payment. The hospital shall provide the statement
to the payor not later than the 10th day after the date on which
the payor requests the statement. If a third party payor
receives a claim for payment of part but not all of the billed
services, the third party payor may request an itemized statement
of only the billed services for which payment is claimed or to
which any deduction or copayment applies.
(e) If a person, including a third party payor, requests more
than two copies of the statement, the hospital may charge a
reasonable fee for the third and subsequent copies provided to
that person. The fee may not exceed the hospital's cost to copy,
process, and deliver the copy to the person.
(f) The Texas Department of Health or other appropriate
licensing agency may enforce this section by injunction or by any
other appropriate remedy, including suspending, revoking, or
refusing to renew a hospital's license.
(g) In this section, "hospital" includes:
(1) a treatment facility licensed under Chapter 464; and
(2) a mental health facility licensed under Chapter 577.
(h) This section does not apply to a hospital maintained or
operated by the federal government.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Amended by Acts 1993, 73rd Leg., ch. 903, Sec. 2.01, eff. Aug.
30, 1993.
Sec. 311.0025. Audits of Billing.
(a) A hospital, treatment facility, mental health facility, or
health care professional may not submit to a patient or a third
party payor a bill for a treatment that the hospital, facility,
or professional knows was not provided or knows was improper,
unreasonable, or medically or clinically unnecessary.
(b) If the appropriate licensing agency receives a complaint
alleging a violation of Subsection (a), the agency may audit the
billings and patient records of the hospital, treatment facility,
mental health facility, or health care professional.
(c) A hospital, treatment facility, mental health facility, or
health care professional that violates Subsection (a) is subject
to disciplinary action, including denial, revocation, suspension,
or nonrenewal of the license of the hospital, facility, or
professional. Disciplinary action taken under this section is in
addition to any other civil, administrative, or criminal penalty
provided by law.
(d) In this section:
(1) "Health care professional" means an individual licensed,
certified, or regulated by a health care regulatory agency who
is eligible for reimbursement for treatment ordered or rendered
by that professional.
(2) "Hospital" means a hospital licensed under Chapter 241.
(3) "Mental health facility" means a mental health facility
licensed under Chapter 577.
(4) "Treatment facility" means a treatment facility licensed
under Chapter 464.
Added by Acts 1993, 73rd Leg., ch. 903, Sec. 2.02, eff. Aug. 30,
1993.
Sec. 311.003. Reimbursement for Infant Transport to Hospital Neonatal
Intensive Care Unit.
(a) A hospital that agrees to admit an infant into its level
III neonatal intensive care unit shall pay for the part of the
cost of transporting the infant to the hospital from any location
in this state that the hospital administrator determines cannot
be paid:
(1) by a member of the infant's immediate family or other
person legally responsible for the infant's support through
personal means; or
(2) by insurance or another benefit system that pays for
transportation for that purpose.
(b) A hospital is entitled to receive state reimbursement for
funds spent by the hospital under Subsection (a).
(c) The Texas Department of Health shall administer the state
funds for reimbursement under this section, and may spend not
more than $100,000 each fiscal year from earned federal funds or
private donations to implement this section.
(d) The Texas Board of Health shall adopt rules that establish
qualifications for reimbursement and provide procedures for
applying for reimbursement.
(e) In this section, "level III neonatal intensive care unit"
means a neonatal care unit that complies with standards adopted
by the American Academy of Pediatrics.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
SUBCHAPTER B. EMERGENCY SERVICES
Sec. 311.021. Definition.
In this subchapter, "emergency services" means services that are
usually and customarily available at a hospital and that must be
provided immediately to:
(1) sustain a person's life;
(2) prevent serious permanent disfigurement or loss or impairment
of the function of a body part or organ; or
(3) provide for the care of a woman in active labor or, if the
hospital is not equipped for that service, to provide necessary
treatment to allow the woman to travel to a more appropriate
facility without undue risk of serious harm.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 311.022. Discrimination Prohibited in Denial of Services; Criminal
Penalties.
(a) An officer, employee, or medical staff member of a general
hospital may not deny emergency services because a person cannot
establish the person's ability to pay for the services or because
of the person's race, religion, or national ancestry if:
(1) the services are available at the hospital; and
(2) the person is diagnosed by a licensed physician as
requiring those services.
(b) An officer or employee of a general hospital may not deny a
person in need of emergency services access to diagnosis by a
licensed physician on the hospital staff because the person
cannot establish the person's ability to pay for the services or
because of the person's race, religion, or national ancestry.
(c) In addition, the person needing emergency services may not
be subjected to arbitrary, capricious, or unreasonable
discrimination based on age, sex, physical condition, or economic
status.
(d) An officer, employee, or medical staff member of a general
hospital commits an offense if that person recklessly violates
this section. An offense under this subsection is a Class B
misdemeanor, except that if the offense results in permanent
injury, permanent disability, or death, the offense is a Class A
misdemeanor.
(e) An officer, employee, or medical staff member of a general
hospital commits an offense if that person intentionally or
knowingly violates this section. An offense under this
subsection is a Class A misdemeanor, except that if, as a direct
result of the offense, a person denied emergency services dies,
the offense is a felony of the third degree.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 311.023. No Liability for Failure to Provide Emergency Services After
Good Faith Effort.
An employee of a general hospital that does not have physician
services available at the time of an emergency is not in
violation of Section 311.022 if, after a reasonable good faith
effort, a physician fails to provide or delegate the provision of
medical services as required by state statutes.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 311.024. Payment for Services Required.
This subchapter does not relieve a person of that person's
obligation to pay for services provided by a hospital if the
person can pay for those services.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
SUBCHAPTER C. HOSPITAL DATA REPORTING AND COLLECTION SYSTEM
Sec. 311.031. Definitions.
In this subchapter:
(1) "Board" means the Texas Board of Health.
(2) "Charity care" means the unreimbursed cost to a hospital of:
(A) providing, funding, or otherwise financially supporting
health care services on an inpatient or outpatient basis to a
person classified by the hospital as "financially indigent" or
"medically indigent"; and/or
(B) providing, funding, or otherwise financially supporting
health care services provided to financially indigent persons
through other nonprofit or public outpatient clinics, hospitals,
or health care organizations.
(3) "Contractual allowances" means the difference between revenue
at established rates and amounts realizable from third-party
payors under contractual agreements.
(4) "Department" means the Texas Department of Health.
(5) "Donations" means the unreimbursed costs of providing cash
and in-kind services and gifts, including facilities, equipment,
personnel, and programs, to other nonprofit or public outpatient
clinics, hospitals, or health care organizations.
(6) "Education-related costs" means the unreimbursed cost to a
hospital of providing, funding, or otherwise financially
supporting educational benefits, services, and programs
including:
(A) education of physicians, nurses, technicians, and other
medical professionals and health care providers;
(B) provision of scholarships and funding to medical schools,
colleges, and universities for health professions education;
(C) education of patients concerning diseases and home care in
response to community needs; and
(D) community health education through informational programs,
publications, and outreach activities in response to community
needs.
(7) "Financially indigent" means an uninsured or underinsured
person who is accepted for care with no obligation or a
discounted obligation to pay for the services rendered based on
the hospital's eligibility system.
(8) "Government-sponsored indigent health care" means the
unreimbursed cost to a hospital of providing health care services
to recipients of Medicaid and other federal, state, or local
indigent health care programs, eligibility for which is based on
financial need.
(9) "Health care organization" means a nonprofit or public
organization that provides, funds, or otherwise financially
supports health care services provided to financially indigent
persons.
(10) "Hospital" means:
(A) a general or special hospital licensed under Chapter 241;
(B) a private mental hospital licensed under Chapter 577; and
(C) a treatment facility licensed under Chapter 464.
(11) "Hospital eligibility system" means the financial criteria
and procedure used by a hospital to determine if a patient is
eligible for charity care. The system shall include income
levels and means testing indexed to the federal poverty
guidelines; provided, however, that a hospital may not establish
an eligibility system which sets the income level eligible for
charity care lower than that required by counties under Section
61.023 or higher, in the case of the financially indigent, than
200 percent of the federal poverty guidelines. A hospital may
determine that a person is financially or medically indigent
pursuant to the hospital's eligibility system after health care
services are provided.
(12) "Hospital system" means a system of local nonprofit
hospitals under the common governance of a single corporate
parent that are located within a radius of not more than 125
linear miles of the corporate parent.
(13) "Medically indigent" means a person whose medical or
hospital bills after payment by third-party payors exceed a
specified percentage of the patient's annual gross income,
determined in accordance with the hospital's eligibility system,
and the person is financially unable to pay the remaining bill.
(14) "Research-related costs" means the unreimbursed cost to a
hospital of providing, funding, or otherwise financially
supporting facilities, equipment, and personnel for medical and
clinical research conducted in response to community needs.
(15) "Subsidized health services" means those services provided
by a hospital in response to community needs for which the
reimbursement is less than the hospital's cost for providing the
services and which must be subsidized by other hospital or
nonprofit supporting entity revenue sources. Subsidized health
services may include but are not limited to:
(A) emergency and trauma care;
(B) neonatal intensive care;
(C) free-standing community clinics; and
(D) collaborative efforts with local government or private
agencies in preventive medicine, such as immunization programs.
(16) "Unreimbursed costs" means the costs a hospital incurs for
providing services after subtracting payments received from any
source for such services including but not limited to the
following: third-party insurance payments; Medicare payments;
Medicaid payments; Medicare education reimbursements; state
reimbursements for education; payments from drug companies to
pursue research; grant funds for research; and disproportionate
share payments. For purposes of this definition, the term
"costs" shall be calculated by applying the cost to charge ratios
derived in accordance with generally accepted accounting
principles for hospitals to billed charges. The calculation of
the cost to charge ratios shall be based on the most recently
completed and audited prior fiscal year of the hospital or
hospital system. Prior to January 1, 1996, for purposes of this
definition, charitable contributions and grants to a hospital,
including transfers from endowment or other funds controlled by
the hospital or its nonprofit supporting entities, shall not be
subtracted from the costs of providing services for purposes of
determining unreimbursed costs. After January 1, 1996, for
purposes of this definition, charitable contributions and grants
to a hospital, including transfers from endowment or other funds
controlled by the hospital or its nonprofit supporting entities,
shall not be subtracted from the costs of providing services for
purposes of determining the unreimbursed costs of charity care
and government-sponsored indigent health care.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Amended by Acts 1993, 73rd Leg., ch. 360, Sec. 1, eff. Sept. 1,
1993; Acts 1993, 73rd Leg., ch. 705, Sec. 6.01, eff. Sept. 1,
1993; Acts 1995, 74th Leg., ch. 781, Sec. 1, eff. Sept. 1, 1995.
Sec. 311.032. Department Administration of Hospital Reporting and
Collection System.
(a) The department shall establish a uniform reporting and
collection system for hospital financial and utilization data.
(b) The board shall adopt necessary rules consistent with this
subchapter to govern the reporting and collection of data.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Amended by Acts 1995, 74th Leg., ch. 726, Sec. 2, eff. Sept. 1,
1995.
Sec. 311.033. Financial and Utilization Data Required.
(a) A hospital shall submit to the department financial and
utilization data for that hospital, including data relating to
the hospital's:
(1) total gross revenue, including:
(A) Medicare gross revenue;
(B) Medicaid gross revenue;
(C) other revenue from state programs;
(D) revenue from local government programs;
(E) local tax support;
(F) charitable contributions;
(G) other third party payments;
(H) gross inpatient revenue; and
(I) gross outpatient revenue;
(2) total deductions from gross revenue, including:
(A) contractual allowance; and
(B) any other deductions;
(3) charity care;
(4) bad debt expense;
(5) total admissions, including:
(A) Medicare admissions;
(B) Medicaid admissions;
(C) admissions under a local government program;
(D) charity care admissions; and
(E) any other type of admission;
(6) total discharges;
(7) total patient days;
(8) average length of stay;
(9) total outpatient visits;
(10) total assets;
(11) total liabilities;
(12) estimates of unreimbursed costs of subsidized health
services reported separately in the following categories:
(A) emergency care and trauma care;
(B) neonatal intensive care;
(C) free-standing community clinics;
(D) collaborative efforts with local government or
private agencies in preventive medicine, such as
immunization programs; and
(E) other services that satisfy the definition of
"subsidized health services" contained in Section
311.031(13);
(13) donations;
(14) total cost of reimbursed and unreimbursed research;
(15) total cost of reimbursed and unreimbursed education
separated into the following categories:
(A) education of physicians, nurses, technicians, and
other medical professionals and health care providers;
(B) scholarships and funding to medical schools,
colleges, and universities for health professions education;
(C) education of patients concerning diseases and home
care in response to community needs;
(D) community health education through informational
programs, publications, and outreach activities in response
to community needs; and
(E) other educational services that satisfy the
definition of "education-related costs" under Section
311.031(6).
(b) The data must be based on the hospital's most recent
audited financial records.
(c) The data must be submitted in the form and at the time
established by the department.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Amended by Acts 1993, 73rd Leg., ch. 360, Sec. 2, eff. Sept. 1,
1993.
Sec. 311.0335. Mental Health and Chemical Dependency Data.
(a) A hospital that provides mental health or chemical
dependency services shall submit to the department financial and
utilization data relating to the mental health and chemical
dependency services provided by the hospital, including data for
inpatient and outpatient services relating to:
(1) patient demographics, including race, ethnicity, age,
gender, and county of residence;
(2) admissions;
(3) discharges, including length of inpatient treatment;
(4) specific diagnoses and procedures according to criteria
prescribed by the Diagnostic and Statistical Manual of Mental
Disorders, 3rd Edition, Revised, or a later version prescribed
by the department;
(5) total charges and the components of the charges;
(6) payor sources; and
(7) use of mechanical restraints.
(b) The data must be submitted in the form and at the time
established by the department.
Added by Acts 1993, 73rd Leg., ch. 705, Sec. 6.02, eff. Sept. 1,
1993.
Sec. 311.035. Use of Data.
(a) The department shall use the data collected under this
subchapter to publish an annual report regarding:
(1) the amount of charity care, bad debt, and other
uncompensated care hospitals provide;
(2) the use of hospital services by indigent patients; and
(3) the effect of indigent care services on hospitals.
(b) Repealed by Acts 1995, 74th Leg., ch. 726, Sec. 5(1), eff.
Sept. 1, 1995.
(c) The department shall enter into an interagency agreement
with the Texas Department of Mental Health and Mental
Retardation, Texas Commission on Alcohol and Drug Abuse, and
Texas Department of Insurance relating to the mental health and
chemical dependency data collected under Section 311.0335. The
agreement shall address the collection, analysis, and sharing of
the data by the agencies.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Amended by Acts 1993, 73rd Leg., ch. 705, Sec. 6.03, eff. Sept.
1, 1993; Acts 1995, 74th Leg., ch. 726, Secs. 3, 5(1), eff. Sept.
1, 1995.
Sec. 311.036. Data Verification.
(a) Before the department may publish the report required by
Section 311.035 or provide data to the public in any other
manner, the department shall give each hospital a copy of the
preliminary report or provide the hospital an opportunity in some
other manner to verify the data relating to that hospital.
(b) If a hospital does not submit corrected data before the
31st day after the date on which the hospital receives the
preliminary report or other data, the department shall presume
that the data is correct.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 311.037. Confidential Data; Criminal Penalty.
(a) The following data reported or submitted to the department
under this subchapter is confidential:
(1) data regarding a specific patient; or
(2) financial data regarding a provider or facility
submitted to the department before September 1, 1987. All
financial data regarding a provider or facility submitted after
September 1, 1987, are no longer confidential.
(b) Before the department may disclose confidential data under
this subchapter, the department must remove any information that
identifies a specific patient.
(c) A person commits an offense if the person:
(1) discloses, distributes, or sells confidential data
obtained under this subchapter; or
(2) violates Subsection (b).
(d) An offense under Subsection (c) is a Class B misdemeanor.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Amended by Acts 1993, 73rd Leg., ch. 360, Sec. 3, eff. Sept. 1,
1993.
Sec. 311.039. Exemption.
A hospital may, but is not required to, provide the data
required by Section 311.033 if the hospital:
(1) is exempt from state franchise, sales, ad valorem, or
other state or local taxes; and
(2) does not seek or receive reimbursement for providing
health care services to patients from any source, including:
(A) the patient or any person legally obligated to
support the patient;
(B) a third party payor; or
(C) Medicaid, Medicare, or any other federal, state, or
local program for indigent health care.
Added by Acts 1997, 75th Leg., ch. 261, Sec. 15, eff. Sept. 1,
1997.
SUBCHAPTER D. DUTIES OF NONPROFIT HOSPITALS
Sec. 311.041. Policy Statement.
It is the purpose of this subchapter to clarify and set forth the
duties and responsibilities of nonprofit hospitals for providing
community benefits that include charity care.
Added by Acts 1993, 73rd Leg., ch. 360, Sec. 4, eff. Sept. 1,
1993.
Sec. 311.042. Definitions.
In this subchapter:
(1) "Charity care" means those amounts defined as charity
care in Section 311.031(2).
(2) "Community benefits" means the unreimbursed cost to a
hospital of providing charity care, government-sponsored
indigent health care, donations, education,
government-sponsored program services, research, and subsidized
health services. Community benefits does not include the cost
to the hospital of paying any taxes or other governmental
assessments.
(3) "Contributions" means the dollar value of cash donations
and the fair market value at the time of donation of in-kind
donations to the hospital from individuals, organizations, or
other entities. Contributions does not include the value of a
donation designated or otherwise restricted by the donor for
purposes other than charity care.
(4) "Donations" means those amounts defined as donations in
Section 311.031(5).
(5) "Education-related costs" means those amounts defined as
education-related costs in Section 311.031(6).
(6) "Government-sponsored indigent health care" means those
amounts defined as government-sponsored indigent health care in
Section 311.031(8).
(7) "Government-sponsored program unreimbursed costs" means
the unreimbursed cost to the hospital of providing health care
services to the beneficiaries of Medicare, the Civilian Health
and Medical Program of the Uniformed Services, and other
federal, state, or local government health care programs.
(8) "Net patient revenue" is an accounting term and shall be
calculated in accordance with generally accepted accounting
principles for hospitals.
(9)(A) "Nonprofit hospital" means a hospital that is:
(i) eligible for tax-exempt bond financing;
or
(ii) exempt from state franchise, sales, ad
valorem, or other state or local taxes; and
(iii) organized as a nonprofit corporation or
a charitable trust under the laws of this state or any other
state or country.
(B) For purposes of this subchapter, a "nonprofit
hospital" shall not include a hospital that:
(i) is exempt from state franchise, sales, ad
valorem, or other state or local taxes;
(ii) does not receive payment for providing
health care services to any inpatients or outpatients from any
source including but not limited to the patient or any person
legally obligated to support the patient, third-party payors,
Medicare, Medicaid, or any other federal, state, or local
indigent care program; payment for providing health care services
does not include charitable donations, legacies, bequests, or
grants or payments for research; and
(iii) does not discriminate on the basis of
inability to pay, race, color, creed, religion, or gender in its
provision of services; or
(iv) is located in a county with a population
under 50,000 where the entire county or the population of the
entire county has been designated as a Health Professionals
Shortage Area.
(10) "Nonprofit supporting entities" means nonprofit
entities created by the hospital or its parent entity to
further the charitable purposes of the hospital and that are
owned or controlled by the hospital or its parent entity.
(11) "Research-related costs" means those amounts defined as
research-related costs in Section 311.031(12).
(12) "Tax-exempt benefits" means all of the following,
calculated in accordance with standard accounting principles
for hospitals for tax purposes using the applicable statutes,
rules, and regulations regarding the calculation of these
taxes:
(A) the dollar amount of federal, state, and local taxes
foregone by a nonprofit hospital and its nonprofit
supporting entities. For purposes of this definition
federal, state, and local taxes include income, franchise,
ad valorem, and sales taxes;
(B) the dollar amount of contributions received by a
nonprofit hospital and its nonprofit supporting entities;
and
(C) the value of tax-exempt bond financing received by a
nonprofit hospital and its nonprofit supporting entities.
(13) "Subsidized health services" means those amounts
defined as subsidized health services in Section 311.031(13).
(14) "Unreimbursed costs" means costs as defined in Section
311.031(14).
(15) "Hospital system" means a system of local nonprofit
hospitals under the common governance of a single corporate
parent that are located within a radius of not more than 125
linear miles of the corporate parent.
Added by Acts 1993, 73rd Leg., ch. 360, Sec. 4, eff. Sept. 1,
1993; Acts 1995, 74th Leg., ch. 781, Sec. 2, eff. Sept. 1, 1995.
Sec. 311.043. Duty of Nonprofit Hospitals to Provide Community Benefits.
(a) A nonprofit hospital shall provide health care services to
the community and shall comply with all federal, state, and local
government requirements for tax exemption in order to maintain
such exemption. These health care services to the community
shall include charity care and government-sponsored indigent
health care and may include other components of community
benefits as both terms are defined in Sections 311.031 and
311.042.
(b) In order to qualify as a charitable organization under
Sections 11.18(d)(1), 151.310(a)(2) and (e), and 171.063(a)(1),
Tax Code, and to satisfy the requirements of this subchapter, a
nonprofit hospital shall provide community benefits, which
include charity care and government-sponsored indigent health
care, in an amount that satisfies the requirements of Section
311.045. A determination of the amount of charity care and
government-sponsored indigent health care provided by a hospital
shall be based on the most recently completed and audited prior
fiscal year of the hospital.
(c) Reductions in the amount of community benefits, which
includes charity care and government-sponsored indigent health
care, provided by a nonprofit hospital shall be considered
reasonable when the financial reserves of the hospital are
reduced to such a level that the hospital would be in violation
of any applicable bond covenants, when necessary to prevent the
hospital from endangering its ability to continue operations, or
if the hospital, as a result of a natural or other disaster, is
required substantially to curtail its operations.
(d) A hospital's admissions policy must provide for the
admission of financially indigent and medically indigent persons
pursuant to its charity care requirements as set forth in this
subchapter.
Added by Acts 1993, 73rd Leg., ch. 360, Sec. 4, eff. Sept. 1,
1993.
Sec. 311.044. Community Benefits Planning by Nonprofit Hospitals.
(a) A nonprofit hospital shall develop:
(1) an organizational mission statement that identifies the
hospital's commitment to serving the health care needs of the
community; and
(2) a community benefits plan defined as an operational plan
for serving the community's health care needs that sets out
goals and objectives for providing community benefits that
include charity care and government-sponsored indigent health
care, as the terms community benefits, charity care, and
government-sponsored indigent health care are defined by
Sections 311.031 and 311.042, and that identifies the
populations and communities served by the hospital.
(b) When developing the community benefits plan, the hospital
shall consider the health care needs of the community as
determined by community-wide needs assessments. For purposes of
this subsection, "community" means the primary geographic area
and patient categories for which the hospital provides health
care services; provided, however, that the primary geographic
area shall at least encompass the entire county in which the
hospital is located.
(c) The hospital shall include at least the following elements
in the community benefits plan:
(1) mechanisms to evaluate the plan's effectiveness,
including but not limited to a method for soliciting the views
of the communities served by the hospital;
(2) measurable objectives to be achieved within a specified
time frame; and
(3) a budget for the plan.
(d) In determining the community-wide needs assessment required
by Subsection (b), a nonprofit hospital shall consider consulting
with and seeking input from representatives of the following
entities or organizations located in the community as defined by
Subsection (b):
(1) the local health department;
(2) the public health region under Chapter 121;
(3) the public health district;
(4) health-related organizations, including a health
professional association or hospital association;
(5) health science centers;
(6) private business;
(7) consumers;
(8) local governments; and
(9) insurance companies and managed care organizations with
an active market presence in the community.
(e) Representatives of a nonprofit hospital shall consider
meeting with representatives of the entities and organizations
listed in Subsection (d) to assess the health care needs of the
community and population served by the nonprofit hospital.
Added by Acts 1993, 73rd Leg., ch. 360, Sec. 4, eff. Sept. 1,
1993. Amended by Acts 1997, 75th Leg., ch. 1101, Sec. 1, eff.
Sept. 1, 1997.
Sec. 311.045. Community Benefits and Charity Care Requirements.
(a) A nonprofit hospital or hospital system shall annually
satisfy the requirements of this subchapter and of Sections
11.18(d)(1), 151.310(a)(2) and (e), and 171.063(a)(1), Tax Code,
to provide community benefits which include charity care and
government-sponsored indigent health care by complying with one
or more of the standards set forth in Subsection (b). The
hospital or hospital system shall file a statement with the
Bureau of State Health Data and Policy Analysis at the
department, with the chief appraiser of the local appraisal
district, and with the comptroller's office no later than the
120th day after the hospital's or hospital system's fiscal year
ends, stating which of the standards in Subsection (b) have been
satisfied, provided, however, that the first report shall be
filed no later than the 120th day after the end of the hospital's
or hospital system's fiscal year ending during 1994. For
hospitals in a hospital system, the corporate parent may elect to
satisfy the charity care requirements of this subchapter for each
of the hospitals within the system on a consolidated basis.
(b)(1) A nonprofit hospital or hospital system may elect to
provide community benefits, which include charity care and
government-sponsored indigent health care, according to any of
the following standards:
(A) charity care and government-sponsored indigent
health care are provided at a level which is reasonable in
relation to the community needs, as determined through the
community needs assessment, the available resources of the
hospital or hospital system, and the tax-exempt benefits
received by the hospital or hospital system;
(B) charity care and government-sponsored indigent
health care are provided in an amount equal to at least 100
percent of the hospital's or hospital system's tax-exempt
benefits, excluding federal income tax; or
(C) charity care and community benefits are provided in
a combined amount equal to at least five percent of the
hospital's or hospital system's net patient revenue,
provided that charity care and government-sponsored indigent
health care are provided in an amount equal to at least four
percent of net patient revenue.
(2) For purposes of satisfying Subdivision (1)(C), a
hospital or hospital system may not change its existing fiscal
year unless the hospital or hospital system changes its
ownership or corporate structure as a result of a sale or
merger.
(3) A nonprofit hospital that has been designated as a
disproportionate share hospital under the state Medicaid
program in the current fiscal year or in either of the previous
two fiscal years shall be considered to have provided a
reasonable amount of charity care and government-sponsored
indigent health care and shall be deemed in compliance with the
standards in this subsection.
(c) The providing of charity care and government-sponsored
indigent health care in accordance with Subsection (b)(1)(A)
shall be guided by the prudent business judgment of the hospital
which will ultimately determine the appropriate level of charity
care and government-sponsored indigent health care based on the
community needs, the available resources of the hospital, the
tax-exempt benefits received by the hospital, and other factors
that may be unique to the hospital, such as the hospital's volume
of Medicare and Medicaid patients. These criteria shall not be
determinative factors, but shall be guidelines contributing to
the hospital's decision, along with other factors which may be
unique to the hospital. The standards set forth in Subsections
(b)(1)(B) and (b)(1)(C) shall also not be considered
determinative of the amount of charity care and
government-sponsored indigent health care that will be considered
reasonable under Subsection (b)(1)(A).
(d) For purposes of this section, a hospital that satisfies
Subsection (b)(1)(A) or (b)(3) shall be excluded in determining a
hospital system's compliance with the standards provided by
Subsection (b)(1)(B) or (b)(1)(C).
(e) In any fiscal year that a hospital or hospital system,
through unintended miscalculation, fails to meet any of the
standards in Subsection (b), the hospital or hospital system
shall not lose its tax-exempt status without the opportunity to
cure the miscalculation in the fiscal year following the fiscal
year the failure is discovered by both meeting one of the
standards and providing an additional amount of charity care and
government-sponsored indigent health care that is equal to the
shortfall from the previous fiscal year. A hospital or hospital
system may apply this provision only once every five years.
Added by Acts 1993, 73rd Leg., ch. 360, Sec. 4, eff. Sept. 1,
1993. Amended by Acts 1995, 74th Leg., ch. 781, Sec. 3, eff.
Sept. 1, 1995; Acts 1997, 75th Leg., ch. 260, Sec. 1, eff. Jan.
1, 1998.
Sec. 311.0455. Annual Report by the Department.
(a) The department shall submit to the attorney general and
comptroller not later than July 1 of each year a report listing
each nonprofit hospital or hospital system that did not meet the
requirements of Section 311.045 during the preceding fiscal year.
(b) The department shall submit to the attorney general and the
comptroller not later than November 1 of each year a report
containing the following information for each nonprofit hospital
or hospital system during the preceding fiscal year:
(1) the amount of charity care, as defined by Section
311.031, provided;
(2) the amount of government-sponsored indigent health care,
as defined by Section 311.031, provided;
(3) the amount of community benefits, as defined by Section
311.042, provided;
(4) the amount of net patient revenue, as defined by Section
311.042, and the amount constituting four percent of net
patient revenue;
(5) the dollar amount of the hospital's or hospital system's
charity care and community benefits requirements met;
(6) a computation of the percentage by which the amount
described by Subdivision (5) is above or below the dollar
amount of the hospital's or hospital system's charity care and
community benefits requirements;
(7) the amount of tax-exempt benefits, as defined by Section
311.042, provided, if the hospital is required to report
tax-exempt benefits under Section 311.045(b)(1)(A) or
(b)(1)(B); and
(8) the amount of charity care expenses reported in the
hospital's or hospital system's audited financial statement.
(c) The department shall make the report required by Subsection
(b) available to the public and shall issue a press release
concerning the availability of the report.
(d) For purposes of Subsection (b), "nonprofit hospital"
includes the following if the hospital is not located in a county
with a population under 50,000 where the entire county or the
population of the entire county has been designated as a Health
Professionals Shortage Area:
(1) a Medicaid disproportionate share hospital; or
(2) a public hospital that is owned or operated by a
political subdivision or municipal corporation of the state,
including a hospital district or authority.
Added by Acts 1997, 75th Leg., ch. 260, Sec. 2, eff. Jan. 1,
1998.
Sec. 311.046. Annual Report of Community Benefits Plan.
(a) A nonprofit hospital shall prepare an annual report of the
community benefits plan and shall include in the report at least
the following information:
(1) the hospital's mission statement;
(2) a disclosure of the health care needs of the community
that were considered in developing the hospital's community
benefits plan pursuant to Section 311.044(b);
(3) a disclosure of the amount and types of community
benefits, including charity care, actually provided. Charity
care shall be reported as a separate item from other community
benefits;
(4) a statement of its total operating expenses computed in
accordance with generally accepted accounting principles for
hospitals from the most recent completed and audited prior
fiscal year of the hospital; and
(5) a completed worksheet that computes the ratio of cost to
charge for the fiscal year referred to in Subdivision (4) and
that includes the same requirements as Worksheet 1-A adopted by
the department in August 1994 for the 1994 "Annual Statement of
Community Benefits Standards".
(b) A nonprofit hospital shall file the annual report of the
community benefits plan with the Bureau of State Health Data and
Policy Analysis at the department. The report shall be filed no
later than April 30 of each year. In addition to the annual
report, a completed worksheet as required by Subsection (a)(5)
shall be filed no later than 10 working days after the date the
hospital files its Medicare cost report.
(c) A nonprofit hospital shall prepare a statement that
notifies the public that the annual report of the community
benefits plan is public information; that it is filed with the
department; and that it is available to the public on request
from the department. The statement shall be posted in prominent
places throughout the hospital, including but not limited to the
emergency room waiting area and the admissions office waiting
area. The statement shall also be printed in the hospital
patient guide or other material that provides the patient with
information about the admissions criteria of the hospital.
(d) Each hospital shall provide, to each person who seeks any
health care service at the hospital, notice, in appropriate
languages, if possible, about the charity care program and how to
apply for charity care. Such notice shall also be conspicuously
posted in the general waiting area, the waiting area for
emergency services, in the business office, and in such other
locations as the hospital deems likely to give notice of the
charity care program.
(e) For purposes of this section, "nonprofit hospital" includes
the following if the hospital is not located in a county with a
population under 50,000 where the entire county or the population
of the entire county has been designated as a Health
Professionals Shortage Area:
(1) a Medicaid disproportionate share hospital; or
(2) a public hospital that is owned or operated by a
political subdivision or municipal corporation of the state,
including a hospital district or authority.
Added by Acts 1993, 73rd Leg., ch. 360, Sec. 4, eff. Sept. 1,
1993. Amended by Acts 1997, 75th Leg., ch. 260, Sec. 3, eff.
Jan. 1, 1998.
Sec. 311.047. Penalties.
The department may assess a civil penalty against a nonprofit
hospital that fails to make a report of the community benefits
plan as required under this subchapter. The penalty may not
exceed $1,000 for each day a report is delinquent after the date
on which the report is due. No penalty may be assessed against a
hospital under this subsection until 10 business days have
elapsed after written notification to the hospital of its failure
to file a report.
Added by Acts 1993, 73rd Leg., ch. 360, Sec. 4, eff. Sept. 1,
1993.
Sec. 311.048. Rights and Remedies.
The rights and remedies provided for in this subchapter shall
not limit, affect, change, or repeal any other statutory or
common-law rights or remedies available to the state or a
nonprofit hospital.
Added by Acts 1993, 73rd Leg., ch. 360, Sec. 4, eff. Sept. 1,
1993