CHAPTER 311. POWERS AND DUTIES OF HOSPITALS
HEALTH AND SAFETY CODE
TITLE 4. HEALTH FACILITIES
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) Each
hospital shall develop, implement, and enforce a written policy
for the billing of hospital services and supplies. The policy
must include:
(1) a periodic review of the itemized statements required by
Subsection (b); and
(2) a procedure for handling complaints relating to billed
services.
(b) Not later than the 30th business day after the date of the
hospital discharge of a person who receives hospital services,
the hospital shall provide on request an itemized statement of
the billed services provided to the person. The itemized
statement must:
(1) be printed in a conspicuous manner;
(2) list the date services and supplies were provided;
(3) state whether:
(A) a claim has been submitted to a third party payor; and
(B) a third party payor has paid the claim;
(4) if payment is not required, state that payment is not
required:
(A) in a typeface that is bold-faced, capitalized, underlined,
or otherwise set out from surrounding written material; or
(B) by other reasonable means so as to be conspicuous that
payment is not required; and
(5) contain the telephone number of the facility to call for an
explanation of acronyms, abbreviations, and numbers used to
describe the services provided or supplies used or any other
questions regarding the bill.
(c) Before a person is discharged from a hospital, the hospital
shall inform the person of the availability of the statement.
(d) 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 30th day
after the date on which the person requests the statement.
(e) 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 30th 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.
(f) 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.
(g) The Texas Department of Health or other appropriate
licensing agency may enforce this section by assessing an
administrative penalty, obtaining an injunction, or providing any
other appropriate remedy, including suspending, revoking, or
refusing to renew a hospital's license.
(h) In this section, "hospital" includes:
(1) a treatment facility licensed under Chapter 464; and
(2) a mental health facility licensed under Chapter 577.
(i) 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; Acts 1999, 76th Leg., ch. 610, Sec. 2, eff. Sept. 1,
1999.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
997, Sec. 5, eff. September 1, 2007.
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.
(e) A licensing agency may not take disciplinary action against
a hospital, treatment facility, mental health facility, or health
care professional for unknowing and isolated billing errors.
Added by Acts 1993, 73rd Leg., ch. 903, Sec. 2.02, eff. Aug. 30,
1993. Amended by Acts 1999, 76th Leg., ch. 1271, Sec. 1, eff.
Sept. 1, 1999.
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.
(d) A hospital that does not submit to the department the data
required under this section is subject to civil penalties under
Section 104.043.
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.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
797, Sec. 11, eff. June 19, 2009.
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, Sec. 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. COMMUNITY BENEFITS AND CHARITY CARE
Sec. 311.041. POLICY STATEMENT. It is the purpose of this
subchapter to clarify and set forth the duties, responsibilities,
and benefits that apply to hospitals for providing community
benefits that include charity care.
Added by Acts 1993, 73rd Leg., ch. 360, Sec. 4, eff. Sept. 1,
1993. Amended by Acts 2003, 78th Leg., ch. 204, Sec. 22.01, eff.
Sept. 1, 2003.
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
and the chief appraiser of the local appraisal district 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.
(f) A nonprofit hospital or hospital system under contract with
a local county to provide indigent health care services under
Chapter 61 may credit unreimbursed costs from direct care
provided to an eligible county resident toward meeting the
nonprofit hospital's or system's charity care and
government-sponsored indigent health care requirement.
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; Acts 2001, 77th Leg., ch. 654, Sec. 1, eff. Sept. 1,
2001; Acts 2001, 77th Leg., ch. 1263, Sec. 78, eff. Sept. 1,
2001.
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. 311.0456. ELIGIBILITY AND CERTIFICATION FOR LIMITED
LIABILITY. (a) In this section:
(1) "Department" means the Department of State Health Services.
(2) "Nonprofit hospital" has the meaning assigned by Section
311.042(9)(A).
(b) This section applies only to a nonprofit hospital or
hospital system that is certified by the department under
Subsection (d).
(c) To be eligible for certification under Subsection (d), a
nonprofit hospital or hospital system must provide:
(1) charity care in an amount equal to at least eight percent of
the net patient revenue of the hospital or hospital system during
the most recent fiscal year of the hospital or system; and
(2) at least 40 percent of the charity care provided in the
county in which the hospital is located.
(d) To be certified under this subsection, a nonprofit hospital
or hospital system must submit a written request for
certification to the department not later than May 31 of each
year stating that the hospital or system is eligible for
certification. The department must determine eligibility for
certification not later than December 31 of the year in which the
department receives the request by checking the report submitted
by the hospital or system under Section 311.033 and the statement
of community benefits and charity care submitted by the nonprofit
hospital or hospital system under Section 311.045. If a report
under Section 311.033 is not available for all hospitals in a
county in which a nonprofit hospital meeting the requirement of
Subsection (c)(1) is requesting certification, the department
shall determine the eligibility of the hospital or hospital
system using other sources of verified charity care information
available at the time of certification. The department shall
certify that the hospital or hospital system has met the
requirements for certification. The certification issued under
this subsection to a nonprofit hospital or hospital system takes
effect on December 31 of that year and expires on the anniversary
of that date.
(e) For the purposes of Subsection (b), a corporation certified
by the Texas State Board of Medical Examiners as a nonprofit
organization under Section 162.001, Occupations Code, whose sole
member is a qualifying hospital or hospital system is considered
a nonprofit hospital or hospital system.
(f) Notwithstanding any other law, the liability of a nonprofit
hospital or hospital system for noneconomic damages as defined by
Section 41.001, Civil Practice and Remedies Code, for a cause of
action that accrues during the period that the hospital or system
is certified under this section is subject to the limitations
specified by Section 101.023(b), Civil Practice and Remedies
Code, and Subsection (c) of that section does not apply. This
subsection establishes the total combined limit of liability of
the nonprofit hospital or hospital system and any employee,
officer, or director of the hospital or system for noneconomic
damages for each person and each single occurrence, as described
by Section 101.023(b), Civil Practice and Remedies Code.
Added by Acts 2003, 78th Leg., ch. 204, Sec. 22.02, eff. Sept. 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
376, Sec. 1, eff. June 17, 2005.
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, including
the charity care and eligibility policies of the program, and how
to apply for charity care. Such notice shall also be
conspicuously posted in the general waiting area, in 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 and policies. Each hospital shall
annually publish notice of the hospital's charity care program
and policies in a local newspaper of general circulation in the
county. Each notice under this subsection must be written in
language readily understandable to the average reader.
(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; Acts 2001, 77th Leg., ch. 654, Sec. 2, eff. Sept. 1,
2001.
Sec. 311.0461. INFORMATIONAL MANUAL. The department shall
annually publish a manual that lists each nonprofit hospital in
this state with a brief summary of the charity care policies and
community benefits that the nonprofit hospital provides.
Added by Acts 2001, 77th Leg., ch. 654, Sec. 3, eff. Sept. 1,
2001.
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.