2009 Texas Legislative Session – The Highlights

1. 2009 Texas Legislative Session – The Highlights Dan Stultz, M.D., FACP, FACHE President/CEO Texas Hospital Association dstultz@tha.org www.tha.org

2. 2009 Texas Legislature - Themes • Filed 7,404 bills – THA tracked 1,202 • “Bad blood” over voter ID bill in Senate • Slow start in the House • New Speaker of the House • New committee chairmen/members • Rep. Lois Kolkhorst – Public Health • Initial $10 billion shortfall projected • Federal stimulus funds saved the day • Rainy Day Fund intact

3. Impact of Stimulus Package in Texas • Allowed Texas to balance budget without penalizing our economy • Texas “spent” all but $550 million of $16 billion available (unemployment insurance) • Texas Health and Human Services: - $1.5 billion Medicaid shortfall for ’09 - $1.5 billion growth in caseload, costs • $150 million to repair UTMB • $9 billion in “escrow” for 2011 (Rainy Day Fund)

4. State Budget • Healthy Texas - reinsurance pool to help small businesses ($35 million) • Largest-ever investment in nursing education ($30 million in new funds – total $49.7 million) • $75 million per year in trauma funds • Community Mental Health Crisis services ($109.4 million) • No Medicaid rate cuts for doctors, hospitals • Smokeless tobacco tax: physician loan repayment program, margin tax exemption

5. State Budget - Riders • Children’s hospitals’ Medicaid UPL program • Cost-based reimbursement for rural hospitals • Study on the need for additional trauma facilities • THHSC update of Medicaid SDA amounts • $107 million “savings” from Medicaid initiatives • D-FW integrated model of Medicaid managed care for ABD (preserves UPL payments) • DSH and UPL reporting requirements

6. State Budget - Supplemental • House Bill 4586 - $2.36 billion • Used funds from 2009 FMAP enhancement • $150 million for repairs to UTMB Galveston • $2 million each for M.D. Anderson and the UNT Health Science Center at Fort Worth to costs related to Ike • $6 million from the Designated Trauma and EMS Account to the UT Health Science Center at Houston for increased uncompensated trauma care due to UTMB’s closure

7. Affordable, Accessible Health Coverage • S.B. 78 - TexLink to Health Coverage Program at TDI to improve awareness, education and technical assistance about health care coverage options • S. B. 6 - Healthy Texas reinsurance pool for small employers (added to S.B. 78) • H.B. 2064 - Texas Health Insurance Risk Pool subsidies (200-300% poverty) • H.B. 103 - Large universities must offer health coverage to students (20,000+ students)

8. Physician Employment • 31 bills were filed that would have allowed the employment of physicians by hospitals • S.B. 1500 would have allowed employment by hospitals in counties of less than 50,000 or sole community or CAHs • H.B. 3485 was amended to allow hospitals in counties of less than 50,000 operated by a government entity to employ physicians • Dallas County Hospital District (S.B. 1705)

9. Rural Hospital Issues • H.B. 2154 – authorizes a change in the tax on smokeless tobacco to fund physician loan repayment in medically underserved areas • H.B. 1924 – allows a nurse in rural hospitals to withdraw drugs when the pharmacists is not on duty or the pharmacy is closed

10. Nursing Staffing and Practice • S.B. 476 – places existing flexible nurse staffing requirements currently in the hospital licensing rules in statute • Standing nurse staffing committee • Prohibits mandatory overtime, with some exceptions • H.B. 1489 – union-backed ratio bill died in cmte. • S.B. 1415 – additional disciplinary options for BON for minor violations • S.B. 3961 – codifies BON administrative rules

11. Nurse Education Funding • State budget invests a total of $49.7 million – an increase of $35 million • Nursing Workforce Shortage Coalition • Creates new mechanism for up-front funding • H.B. 4471 – complements funding in S.B. 1 • authorizes the THECB to offer grants to nursing schools with graduation rates of less than 70 percent

12. Driver Responsibility Program • Several attempts were made to repeal or seriously undermine the program which provides funding for uncompensated trauma care • Ultimately, H.B. 2730 (DPS Sunset Bill) was amended with a provision to protect indigent drivers from excessive fines or surcharges – not effective until Sept. 1, 2011

13. Hospital Business Practices • H.B. 2256 – establishes a dispute resolution process for out-of-network claims by facility-based physicians in excess of $1,000 • H.B. 4029 – sets a maximum retrieval / processing fee of $75 for digital or EMRs (hospitals not required to reformat) • Killed numerous pieces of legislation related to information provided to TPAs, billing disclosures, debt collection & hospital liens

14. Patient Safety and Quality • H.B. 1218 – became a vehicle for S.B. 7 provisions • THHSC health information exchange • Quality-based confidential exchange of readmission information with no immediate reimbursement impact • S.B. 203 – reporting the causation pathogen for certain hospital acquired infections + S.B. 7 provisions added • preventable adverse events added to health-care associated infection reporting system • Never event reimbursement denials or reductions same as CMS for hospital-acquired conditions

15. Emergency / Law Enforcement • H.B. 1357 – requires licensure of freestanding emergency medical facilities • H.B. 2626 – brings Texas into compliance with the federal Violence Against Women Act • S.B. 328 – liability protections for hospital professionals drawing a blood sample for law enforcement; not subject to disciplinary action; not considered a “patient” under EMTALA

16. The Best Offense Is a Good Defense • Bad bills THA kept from passing • No material modifications to the Texas Advance Directives Law • Changes to charity care averted • Attempts to weaken tort reform failed • Bills weakening the enforcement authority of the Texas Medical Board died • Dilution of ER coverage requirements failed

17. Missed Opportunities • CHIP Expansion / Buy-in • 12-month continuous Medicaid • Restoration of Adult Medically Needy Pgm. • Texas Department of Insurance sunset – protect health care consumers • Regulation of PPOs • More transparency for health plans (where your premium dollar goes, coverage cancellation oversight, consumer “labeling”)

18. Questions? Dan Stultz, M.D., FACHE, FACP President/CEO Texas Hospital Association dstultz@tha.org 512/465-1012