By: Sheffield, Zerwas, Miller, White, H.B. No. 2766       Raymond, et al.     A BILL TO BE ENTITLED   AN ACT       relating to the creation and administration of a reinvestment   allowance for certain long-term care facilities.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 242, Health and Safety Code, is amended   by adding Subchapter P to read as follows:   SUBCHAPTER P.  REINVESTMENT ALLOWANCE          Sec. 242.701.  DEFINITIONS. In this subchapter:                (1)  "Gross receipts" means the gross inpatient revenue   received by a facility from services provided to facility   residents. Gross receipts exclude revenue from nonresident care,   including beauty and barber services, vending facilities,   interest, charitable contributions, the sale of meals, and   outpatient services.                (2)  "Non-Medicare patient day" means a day on which   the primary payer for a facility resident is not Medicare Part A or   a Medicare Advantage or special needs plan.          Sec. 242.702.  APPLICABILITY.  This subchapter does not   apply to:                (1)  a state-owned veterans nursing facility; or                (2)  a facility that provides on a single campus a   combination of services, which may include independent living   services, licensed assisted living services, or licensed nursing   facility care services, and that either:                      (A)  holds a certificate of authority to operate a   continuing care retirement community under Chapter 246; or                       (B)  had during the previous 12 months a combined   number of patient days of service provided to independent living   and assisted living residents, excluding services provided to   persons occupying facility beds in a licensed nursing facility,   that exceeded the number of patient days of service provided to   nursing facility residents.          Sec. 242.703.   REINVESTMENT ALLOWANCE; COMPUTATION. (a)   The commission shall impose a reinvestment allowance on each   facility licensed under this chapter. The reinvestment allowance   is:                (1)  the product of the amount established under   Subsection (b) multiplied by the number of a facility's   non-Medicare patient days calculated under Section 242.704;                (2)  payable monthly; and                (3)  in addition to other amounts imposed under this   chapter.          (b)  The executive commissioner shall establish for each   non-Medicare patient day an amount for use in calculating the   reinvestment allowance sufficient to produce annual revenues from   all facilities not to exceed the maximum amount that may be assessed   within the indirect guarantee threshold provided under 42 C.F.R.   Section 433.68(f)(3)(i).          (c)  The commission shall determine the amount described by   Subsection (b) using non-Medicare patient days and gross receipts:                (1)  reported to the commission; and                (2)  covering a period of at least six months.          (d)  A facility may not list the reinvestment allowance as a   separate charge on a resident's billing statement or otherwise   directly or indirectly attempt to charge the reinvestment allowance   to a resident.          Sec. 242.704.  PATIENT DAYS. For each calendar day, a   facility shall determine the number of non-Medicare patient days by   adding:                (1)  the number of non-Medicare residents occupying a   bed in the facility immediately before midnight of that day plus the   number of residents admitted that day, less the number of residents   discharged that day, except a resident is included in the count   under this subdivision if:                      (A)  the resident is admitted and discharged on   the same day; or                      (B)  the resident is discharged that day because   of the resident's death; and                (2)  the number of beds that are on hold that day and   that have been placed on hold for a period not to exceed three   consecutive calendar days during which a resident is:                      (A)  in the hospital; or                      (B)  on therapeutic home leave.          Sec. 242.705.  COLLECTION AND REPORTING. (a) The   commission shall collect the reinvestment allowance.          (b)   Not later than the 25th day after the last day of a   month, each facility shall:                (1)  file with the commission a report stating the   total non-Medicare patient days for the month; and                (2)  pay the reinvestment allowance.          Sec. 242.706.  RULES; ADMINISTRATIVE PENALTY. (a) The   executive commissioner shall adopt rules to administer this   subchapter, including rules related to imposing and collecting the   reinvestment allowance.          (b)  Notwithstanding Section 242.066, an administrative   penalty assessed under that section for a violation of this   subchapter may not exceed the greater of:                (1)   one-half of the amount of the facility's   outstanding reinvestment allowance; or                (2)  $20,000.          (c)  An administrative penalty assessed for a violation of   this subchapter is in addition to the facility's outstanding   reinvestment allowance.          Sec. 242.707.  NURSING FACILITY REINVESTMENT ALLOWANCE   TRUST FUND. (a) The nursing facility reinvestment allowance trust   fund is established as a trust fund to be held by the comptroller   outside of the state treasury and administered by the commission as   trustee. Interest and income from the assets of the trust fund   shall be credited to and deposited in the trust fund. The commission   may use money in the fund only as provided by Section 242.708.          (b)  The commission shall remit the reinvestment allowance   collected under this subchapter and federal matching funds received   by this state to the comptroller for deposit in the trust fund.          Sec. 242.708.  REIMBURSEMENT OF FACILITIES. (a) The   commission may use money in the nursing facility reinvestment   allowance trust fund, including any federal matching funds, only   for the following purposes:                (1)  paying any commission cost to develop and   administer systems for managing the reinvestment allowance;                (2)  reimbursing the Medicaid share of the reinvestment   allowance as an allowable cost in the Medicaid daily rate; and                (3)  increasing reimbursement rates paid under the   state Medicaid program to facilities.          (b)  The commission shall allocate 50 percent of the money   described by Subsection (a)(3) for increased reimbursement rate   payments based on the total rating of the Centers for Medicare and   Medicaid Services five-star quality rating system.          (c)  The commission shall devise a formula by which amounts   received under this subchapter increase the reimbursement rates   paid to facilities under the state Medicaid program, including a   phase-in of the program described by Subsection (b) beginning on   September 1, 2018.  The commission must include in the formula   consideration of the total rating described by Subsection (b).          (d)  Money in the nursing facility reinvestment allowance   trust fund may not be used to expand Medicaid eligibility under the   Patient Protection and Affordable Care Act (Pub. L. No. 111-148) as   amended by the Health Care and Education Reconciliation Act of 2010   (Pub. L. No. 111-152).          Sec. 242.709.  INVALIDITY; FEDERAL FUNDS. If any provision   of or procedure under this subchapter is held invalid by a final   court order that is not subject to appeal, or if the commission   determines that the imposition of the reinvestment allowance and   the expenditure of amounts collected as prescribed by this   subchapter will not entitle the state to receive federal matching   funds under the Medicaid program or will be inconsistent with the   objectives described by Section 537.002(b)(7), Government Code,   the commission shall:                (1)  stop collection of the reinvestment allowance; and                (2)  not later than the 30th day after the date   collection is stopped, return to each facility, in proportion to   the total amount paid by the facility, any money deposited to the   credit of the nursing facility reinvestment allowance trust fund   but not spent.          Sec. 242.710.  AUTHORITY TO ACCOMPLISH PURPOSES OF   SUBCHAPTER. The executive commissioner by rule may adopt a   definition, a method of computation, or a rate that differs from   those expressly provided by or expressly authorized by this   subchapter to the extent the difference is necessary to accomplish   the purposes of this subchapter.          Sec. 242.711.  ANNUAL REPORT. Not later than January 1 of   each year, the commission shall prepare and deliver to the   governor, the lieutenant governor, and the speaker of the house of   representatives a report relating to the status of the nursing   facility reinvestment allowance program, including fees collected,   federal funding applied for and received, quality-based payments   made, information on the overall quality of care in the Texas   nursing home system, whether quality-based payments are   contributing to quality improvements, and any other relevant   information necessary for assessing the effectiveness of the   nursing facility reinvestment allowance program. The report should   include any information associated with the role of the comptroller   and the Medicaid managed care participating plans. The report must   be posted on the commission's Internet website.          Sec. 242.712.  PROGRAM EVALUATION. Not later than November   1, 2020, the commission shall prepare and deliver to the governor,   the lieutenant governor, and the speaker of the house of   representatives a report that assesses whether and to what degree   payments associated with quality-based care are resulting in   improvements to overall nursing home quality.          Sec. 242.713.  EXPIRATION. This subchapter expires August   31, 2021.          SECTION 2.  (a) As soon as practicable after the effective   date of this Act, the executive commissioner of the Health and Human   Services Commission shall:                (1)  adopt the rules necessary to implement Subchapter   P, Chapter 242, Health and Safety Code, as added by this Act; and                (2)  notwithstanding Section 242.703, Health and   Safety Code, as added by this Act, establish the amount of the   initial reinvestment allowance imposed under Subchapter P, Chapter   242, Health and Safety Code, as added by this Act, based on   available revenue and patient day information.          (b)  The amount of the initial reinvestment allowance   established under Subsection (a) of this section remains in effect   until the Health and Human Services Commission obtains the   information necessary to set the amount of the reinvestment   allowance under Section 242.703, Health and Safety Code, as added   by this Act.          SECTION 3.  If before implementing any provision of this Act   a state agency determines that a waiver or authorization from a   federal agency is necessary for implementation of that provision,   the agency affected by the provision shall request the waiver or   authorization and may delay implementing that provision until the   waiver or authorization is granted.          SECTION 4.  Notwithstanding any other law, a reinvestment   allowance may not be imposed under Section 242.703, Health and   Safety Code, as added by this Act, or collected under Section   242.705, Health and Safety Code, as added by this Act, until an   amendment to the state Medicaid plan that increases the rates paid   to long-term care facilities licensed under Chapter 242, Health and   Safety Code, for providing services under the state Medicaid   program is approved by the Centers for Medicare and Medicaid   Services or another applicable federal government agency.          SECTION 5.  The Health and Human Services Commission shall   retroactively compensate long-term care facilities licensed under   Chapter 242, Health and Safety Code, at the increased rate for   services provided under the state Medicaid program:                (1)  beginning on the date the state Medicaid plan   amendment is approved by the Centers for Medicare and Medicaid   Services or another applicable federal government agency; and                (2)  only for the period for which the reinvestment   allowance has been imposed and collected pursuant to the approval   described by Subdivision (1).          SECTION 6.  The Health and Human Services Commission shall   discontinue the reinvestment allowance imposed under Subchapter P,   Chapter 242, Health and Safety Code, as added by this Act, if the   commission reduces Medicaid reimbursement rates, including rates   that increased due to funds from the nursing facility reinvestment   allowance trust fund or federal matching funds, below the rates in   effect on September 1, 2017.          SECTION 7.  This Act takes effect immediately if it receives   a vote of two-thirds of all the members elected to each house, as   provided by Section 39, Article III, Texas Constitution.  If this   Act does not receive the vote necessary for immediate effect, this   Act takes effect September 1, 2017.