25 TAC §13.17
The Texas Department of Health (department) adopts an amendment
to §13.17 concerning duties of nonprofit hospitals. Section 13.17 is
adopted with changes to the proposed text as published in the December 21,
2001 issue of the
Texas Register
(26 TexReg
10481).
The amendment implements Chapter 654 (House Bill 2419) of the Session Laws
(77th Legislature 2001), which amended the Health and Safety Code, Chapter
311. The amendment establishes requirements for nonprofit hospitals in the
areas of reporting on charity care policies and community benefits, providing
charity care and eligibility policies to each individual seeking care at the
hospital, and publishing public notices in the newspaper. It also establishes
a mechanism for certain nonprofit hospitals to receive charity care credit
for taking care of county indigent patients.
The proposed rules were reviewed by the Hospital Data Advisory Committee
members. No comments were received from the committee members.
No comments were received concerning the proposed rules during the public
comment period. However, the department made the following changes to the
rules due to staff comments to improve clarity and correct the name of the
bureau.
Change: Concerning §13.17(c)(1) relating to notifying the hospitals
in writing regarding their reporting obligations, the department will notify
the nonprofit hospitals that they are required to file an expanded annual
statement of the community benefits standard form that will include the hospital's
summary of information on charity care policy and community benefits.
Change: Concerning proposed §13.17(d)(5) relating to the reporting
by the nonprofit hospitals, the department deleted subparagraphs (A)-(E) as
these are existing language in §13.17(a)(3) on the annual report of the
community benefits plan and moved subparagraphs (F)-(L) to new §13.17(b)(1)
since the requirements are part of the annual statement of community benefits
standard. Subsequent paragraphs were renumbered. This will remove duplication
and improve clarity. The department also deleted proposed subparagraph (c)(5)(M)
and added new subparagraph (b)(1)(H) since the summary is part of the annual
statement. The summary received from each hospital will be used by the department
to prepare the annual informational manual required by House Bill 2419.
Change: Concerning §13.17(b)(4) and (9), the references to paragraph
(2) are renumbered as (3) and the reference to paragraph (7) is renumbered
as (8) because of the addition of §13.17(b)(1). Concerning §13.17(f)
and (g), the reference to subsection (d) is changed to (c) and the reference
to subsection (d)(5)(M) is changed to subsection (b)(1)(H) and clarifying
language is added.
Change: Proposed §13.17(c) concerning annual reporting of charity
care policy and community benefits is deleted and is located in new §13.17
(b)(1)(H). Subsequent subsections are renumbered.
Change: Concerning §13.17(c)(4) and §13.17(d) relating to the
name of the bureau at the department in charge of collection and reporting,
the name is changed to Office of Health Information and Analysis from the
Office of Policy and Planning.
Change: Concerning §13.17(b)(10), the reference to the Tax Code §171.063(a)(4)
is changed to §171.063(h). Concerning §13.17(b)(10)(B), the reference
to Tax Code, §171.063(a) is changed to Health and Safety Code, §311.045.
These changes reflect amendments to Tax Code made by 77th Legislature.
Change: Concerning §13.17(b)(9), changes are made in singular/plural
usage to reflect appropriate grammatical form.
This section is adopted under the Health and Safety Code, §104.042(a)
which authorizes the board to adopt rules relating to the collection and dissemination
of data from health care facilities necessary to facilitate health planning
and resource development; §311.032(b) which mandates the adoption of
rules on the collection and reporting of hospital financial and utilization
data; and §12.001 which provides the board with the authority to adopt
rules for the performance of every duty imposed by law on the board, the department
and the Commissioner of Health.
§13.17.Duties of Nonprofit Hospitals under Health and Safety Code, Chapter 311.
(a)
Annual report of the community benefits plan.
(1)
The annual report of the community benefits plan may be
filed with the department on a hospital or hospital system basis.
(2)
A nonprofit hospital or hospital system shall file an annual
report of the community benefits plan with the department no later than April
30 of the following year.
(3)
The nonprofit hospital's or hospital system's annual report
of the community benefits plan must include, at a minimum:
(A)
the hospital's or hospital system's mission statement;
(B)
a disclosure of the health care needs of the community
that were considered in developing the community benefits plan;
(C)
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;
(D)
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
(E)
a completed worksheet that computes the ratio of cost to
charge for the fiscal year referred to in subparagraph (D) of this paragraph
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 Standard".
(4)
In addition to the annual report of the community benefits
plan, a nonprofit hospital or hospital system shall file a completed worksheet
as required by paragraph (3)(E) of this subsection no later than ten working
days after the date the hospital or hospital system files its Medicare cost
report.
(b)
Annual statement of community benefits standard.
(1)
Each nonprofit hospital or hospital system shall report
the following information to the department as part of the annual statement:
(A)
the amount of charity care provided;
(B)
the amount of government-sponsored indigent health care
provided;
(C)
the amount of community benefits provided;
(D)
the amount of net patient revenue and the amount constituting
4.0% of net patient revenue;
(E)
the dollar amount of the hospital's or hospital system's
charity care and community benefits requirements met;
(F)
the amount of tax-exempt benefits provided, if the hospital
is required to report tax-exempt benefits under subsection (b)(3)(A) or (B)
of this section;
(G)
the amount of charity care expenses reported in the hospital's
or hospital system's audited financial statement; and
(H)
a brief summary of the charity care policy and community
benefits provided by each hospital unless the hospital is a public hospital
or for-profit hospital participating in the Medicaid disproportionate share
program.
(2)
The annual statement of community benefits standard may
be filed with the department on a hospital or hospital system basis.
(3)
A nonprofit hospital or hospital system is required to
file an annual statement with the department no later than 120 days after
the hospital's or hospital system's fiscal year ends; however, the department
will accept the annual statement as part of the acceptance of the annual report
of the community benefits plan. The annual statement filed under this subsection
shall be based on the most recently completed and audited prior fiscal year
of the hospital and shall state which of the standards for providing community
benefits has been satisfied. A nonprofit hospital or hospital system may elect
to provide community benefits 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, and other factors that may be unique to the
hospital or hospital system, such as the hospital's or hospital system's volume
of Medicare and Medicaid patients;
(B)
charity care and government-sponsored indigent health care
are provided in an amount equal to at least 100% 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 5.0% 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 4.0% of net patient revenue.
(4)
For purposes of satisfying paragraph (3)(C) of this subsection,
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.
(5)
A nonprofit hospital or hospital system shall use the annual
statement of community benefits standard form and accompanying worksheets
developed by the department for reporting under this section. Hospitals electing
to report on a system basis shall consolidate the individual hospital information
into a single annual statement of community benefits standard form for the
system. A separate set of worksheets shall be completed for each individual
hospital included in the system.
(6)
The department will accept written revisions of the annual
statement of community benefits standard for 30 days after the filing date.
(7)
The department may request missing or incomplete data by
written or telephone request. Nonprofit hospitals or hospital systems shall
complete all requested follow up in the time frame specified by the department.
(8)
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 deemed in compliance
with these standards.
(9)
A hospital that satisfies paragraph (3)(A) or (8) of this
subsection shall be excluded in determining a hospital system's compliance
with the standards provided in paragraphs (3)(B) and (C) of this subsection.
(10)
Under the Tax Code, §171.063(h), a requirement that
a nonprofit hospital provide charity care and community benefits in order
to be exempt from franchise tax may be satisfied by a donation of money to
the Texas Healthy Kids Corporation established by the Health and Safety Code,
Chapter 109, provided that:
(A)
the money is donated to be used for a purpose described
by the Health and Safety Code, §109.033(c); and
(B)
not more than 10% of the charity care required under any
provision of the Health and Safety Code, §311.045, may be satisfied by
the donation.
(11)
A nonprofit hospital or hospital system under contract
with a local county to provide indigent health care services under Health
and Safety Code, Chapter 61 may credit unreimbursed costs from direct care
provided to an eligible county resident toward meeting the nonprofit hospital's
or hospital system's charity care and government-sponsored indigent health
care requirement.
(c)
Reporting.
(1)
The department shall notify nonprofit hospitals in writing
that the annual report of a community benefits plan and the statement of community
benefits standard which includes a brief summary of charity care policy and
community benefits must be filed in accordance with these rules.
(2)
Nonprofit hospitals changing to a hospital system reporting
basis shall report for a continuous period of time.
(3)
All hospitals or hospital systems shall report as required
under this title if the hospital or hospital system, for the previous fiscal
year, reported as a nonprofit hospital or hospital system under §13.15
of this title (relating to Survey Forms and Methods of Reporting Data).
(4)
All hospitals or hospital systems shall report any change
of ownership which may affect the nonprofit status of the hospital or hospital
system to the Office of Health Information and Analysis, formerly known as
the Bureau of State Health Data and Policy Analysis, at the department within
60 days of the effective date of the change.
(d)
Posting of sign. Nonprofit hospitals shall prepare a statement
notifying 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 on request from the Office of Health Information and Analysis, formerly
known as the Bureau of State Health Data and Policy Analysis, Texas Department
of Health, 1100 West 49th Street, Austin, Texas 78756. The statement must
indicate the report's availability date and be posted in prominent places
throughout the hospital, including, but not limited to, the waiting areas
of the emergency room and the admissions office. Nonprofit hospitals shall
also print the statement in the patient guide or other materials that provide
the patient with information about the hospital's admissions criteria.
(e)
Charity care notice. 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.
(f)
Exemptions. A nonprofit hospital is exempt from the reporting
requirement in subsection (c) of this section if the hospital is located in
a county with a population under 50,000 and in which the entire county or
the population of the entire county has been designated as a "health professional
shortage area" during the current or any previous fiscal year and has continued
to maintain that designation.
(g)
For purposes of this section only (excluding subsection
(b)(1)(H) of this section), a nonprofit hospital shall include a nonprofit
hospital as defined in §13.13 of this title and:
(1)
a Medicaid disproportionate share hospital; or
(2)
a public hospital that is owned or operated by a political
subdivision of municipal corporation of the state, including a hospital district
or authority.
This agency hereby certifies that the adoption has been
reviewed by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of
the Secretary of State on March 25, 2002.
TRD-200201824
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: April 14, 2002
Proposal publication date: December 21, 2001
For further information, please call: (512) 458-7236