H.B. No. 2590         AN ACT       relating to the administrative penalty, amelioration, and informal   dispute resolution processes for providers participating in   certain Medicaid waiver programs.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 161.088, Human Resources Code, as added   by Chapters 826 (H.B. 4001) and 1200 (S.B. 1385), Acts of the 84th   Legislature, Regular Session, 2015, is redesignated as Section   161.089, Human Resources Code, and amended to read as follows:          Sec. 161.089  [161.088].  ADMINISTRATIVE PENALTIES. (a)   This section applies to the following waiver programs established   under Section 1915(c), Social Security Act (42 U.S.C. Section   1396n(c)), and administered by the commission [department] to serve   persons with an intellectual or developmental disability:                (1)  the home and community-based services (HCS) waiver   program; and                (2)  the Texas home living (TxHmL) waiver program.          (b)  The commission [department] may assess and collect an   administrative penalty against a provider who participates in a   program to which this section applies for a violation of a law or   rule relating to the program.  If the commission [department]   assesses an administrative penalty against a provider for a   violation of a law or rule, the commission [department] may not   impose a payment hold against or otherwise withhold contract   payments from the provider for the same violation of a law or rule.          (c)  After consulting with appropriate stakeholders, the   executive commissioner shall develop and adopt rules regarding the   imposition of administrative penalties under this section.  The   rules must:                (1)  specify the types of violations that warrant   imposition of an administrative penalty;                (2)  establish a schedule of progressive   administrative penalties in accordance with the relative type,   frequency, and seriousness of a violation;                (3)  prescribe reasonable amounts to be imposed for   each violation giving rise to an administrative penalty, subject to   Subdivision (4);                (4)  authorize the imposition of an administrative   penalty in an amount not to exceed $5,000 for each violation;                (5)  provide that a provider commits a separate   violation each day the provider continues to violate the law or   rule;                (6)  ensure standard and consistent application of   administrative penalties throughout the state; and                (7)  provide for an administrative appeals process to   adjudicate claims and appeals relating to the imposition of an   administrative penalty under this section that is in accordance   with Chapter 2001, Government Code.          (d)  [In specifying the types of violations that warrant   imposition of an administrative penalty under Subsection (c), the   executive commissioner shall specify the types of minor violations   that allow a provider an opportunity to take corrective action   before a penalty is imposed.          [(e)]  In determining the types of violations that warrant   imposition of an administrative penalty and in establishing the   schedule of progressive administrative penalties and penalty   amounts under Subsection (c), the executive commissioner must   consider:                (1)  the seriousness of a violation, including:                      (A)  the nature, circumstances, extent, and   gravity of the violation; and                      (B)  the hazard to the health or safety of   recipients resulting from the violation;                (2)  the provider's history of previous violations;                (3)  whether the provider:                      (A)  had prior knowledge of the violation,   including whether the provider identified the violation through the   provider's internal quality assurance process; and                      (B)  made any efforts to mitigate or correct the   identified violation;                (4)  the penalty amount necessary to deter future   violations; and                (5)  any other matter justice may require.          (e)  Except as provided by Subsection (f), the executive   commissioner by rule [(f)     In lieu of imposing an administrative   penalty under this section, the department] shall provide to    [allow] a provider who has implemented a plan of correction [found   to have committed a minor violation specified by rule in accordance   with Subsection (d) to have] a reasonable period of time following   [that is not less than 45 days after] the date the commission   [department] sends notice to the provider of the violation to   correct [take corrective action regarding] the violation before the   commission may assess an administrative penalty.  The period may   not be less than 45 days [department may not allow time for   corrective action for any violation that is not a minor violation].          (f)  The commission may assess an administrative penalty   without providing a reasonable period of time to a provider to   correct the violation if the violation:                (1)  represents a pattern of violation that results in   actual harm;                (2)  is widespread in scope and results in actual harm;                (3)  is widespread in scope and constitutes a potential   for actual harm;                (4)  constitutes an immediate threat to the health or   safety of a recipient;                (5)  substantially limits the provider's ability to   provide care; or                (6)  is a violation in which a provider:                      (A)  wilfully interferes with the work of a   representative of the commission or the enforcement of a law   relating to a program to which this section applies;                      (B)  fails to pay a penalty assessed by the   commission under this section not later than the 10th day after the   date the assessment of the penalty becomes final, subject to   Section 161.0891; or                      (C)  fails to submit a plan of correction not   later than the 10th day after the date the provider receives a   statement of the violation.          (g)  Notwithstanding any other provision of this section, an   administrative penalty ceases to be incurred on the date a   violation is corrected.          (h)  In this section:                (1)  "Actual harm" means a negative outcome that   compromises a recipient's physical, mental, or emotional   well-being.                (2)  "Immediate threat to the health or safety of a   recipient" means a situation that causes, or is likely to cause,   serious injury, harm, or impairment to or the death of a recipient.                (3)  "Pattern of violation" means repeated, but not   pervasive, failures of a provider to comply with a law relating to a   program to which this section applies that:                      (A)  result in a violation; and                      (B)  are found throughout the services provided by   the provider or that affect or involve the same recipients or   provider employees or volunteers.                (4)  "Recipient" means a person served by a program to   which this section applies.                (5)  "Widespread in scope" means a violation of a law   relating to a program to which this section applies that:                      (A)  is pervasive throughout the services   provided by the provider; or                      (B)  represents a systemic failure by the provider   that affects or has the potential to affect a large portion of or   all of the recipients.          SECTION 2.  Subchapter D, Chapter 161, Human Resources Code,   is amended by adding Sections 161.0891 and 161.0892 to read as   follows:          Sec. 161.0891.  AMELIORATION PROCESS. (a) In lieu of   demanding payment of an administrative penalty assessed under   Section 161.089, the commission may, in accordance with this   section, allow the provider subject to the penalty to use, under the   supervision of the commission, any portion of the amount of the   penalty to ameliorate the violation or to improve services in the   waiver program in which the provider participates.          (b)  The commission shall offer amelioration to a provider   under this section not later than the 10th day after the date the   provider receives from the commission a final notification of the   assessment of an administrative penalty that is sent to the   provider after an informal dispute resolution process but before an   administrative hearing.          (c)  A provider to whom amelioration has been offered must   file a plan for amelioration not later than the 45th day after the   date the provider receives the offer of amelioration from the   commission.  In submitting the plan, the provider must agree to   waive the provider's right to an administrative hearing if the   commission approves the plan.          (d)  At a minimum, a plan for amelioration must:                (1)  propose changes to the management or operation of   the waiver program in which the provider participates that will   improve services to or quality of care for recipients under the   program;                (2)  identify, through measurable outcomes, the ways in   which and the extent to which the proposed changes will improve   services to or quality of care for recipients under the waiver   program;                (3)  establish clear goals to be achieved through the   proposed changes;                (4)  establish a timeline for implementing the proposed   changes; and                (5)  identify specific actions necessary to implement   the proposed changes.          (e)  The commission may require that an amelioration plan   propose changes that would result in conditions that exceed the   requirements of a law or rule relating to the waiver program in   which the provider participates.          (f)  The commission shall approve or deny an amelioration   plan not later than the 45th day after the date the commission   receives the plan.  On approval of a provider's plan, the commission   or the State Office of Administrative Hearings, as appropriate,   shall deny a pending request for a hearing submitted by the   provider.          (g)  The commission may not offer amelioration to a provider:                (1)  more than three times in a two-year period;                (2)  more than one time in a two-year period for the   same or similar violation; or                (3)  for a violation that resulted in hazard to the   health or safety of a recipient, including serious harm or death, or   that substantially limits the provider's ability to provide care.          (h)  This section expires September 1, 2023.          Sec. 161.0892.  INFORMAL DISPUTE RESOLUTION. (a) The   executive commissioner by rule shall establish an informal dispute   resolution process in accordance with this section.  The process   must provide for adjudication by an appropriate disinterested   person of disputes relating to a proposed enforcement action or   related proceeding of the commission against a provider   participating in a waiver program described by Section 161.089.     The informal dispute resolution process must require:                (1)  a provider participating in a waiver program   described by Section 161.089 to request informal dispute resolution   not later than the 10th calendar day after the date of notification   by the commission of the violation of a law or rule relating to the   program; and                (2)  the commission to complete the process not later   than the 30th calendar day after the date of receipt of a request   from a provider for informal dispute resolution.          (b)  As part of the informal dispute resolution process   established under this section, the commission shall contract with   an appropriate disinterested person to adjudicate disputes between   a provider participating in a waiver program described by Section   161.089 and the commission concerning a statement of violations   prepared by the commission.  Section 2009.053, Government Code,   does not apply to the selection of an appropriate disinterested   person under this subsection.  The person with whom the commission   contracts shall adjudicate all disputes described by this   subsection.          (c)  The executive commissioner shall adopt rules to   adjudicate claims in contested cases.          (d)  The commission may not delegate its responsibility to   administer the informal dispute resolution process established by   this section to another state agency.          SECTION 3.  As soon as practicable after the effective date   of this Act, the executive commissioner of the Health and Human   Services Commission shall adopt the rules necessary to implement   the changes in law made by this Act.          SECTION 4.  This Act takes effect September 1, 2017.       ______________________________ ______________________________      President of the Senate Speaker of the House                   I certify that H.B. No. 2590 was passed by the House on April   27, 2017, by the following vote:  Yeas 144, Nays 0, 3 present, not   voting; and that the House concurred in Senate amendments to H.B.   No. 2590 on May 26, 2017, by the following vote:  Yeas 144, Nays 1,   1 present, not voting.     ______________________________   Chief Clerk of the House               I certify that H.B. No. 2590 was passed by the Senate, with   amendments, on May 24, 2017, by the following vote:  Yeas 31, Nays   0.     ______________________________   Secretary of the Senate      APPROVED: __________________                   Date                       __________________                 Governor