The Executive Commissioner of the Health and Human Services Commission on behalf of the Department of State Health Services (department) proposes amendments to §§61.1, 61.2, 61.4, 61.6, 61.7, 61.9, 61.13, and 61.14, and the repeal of §61.15, concerning the Kidney Health Care Program.

BACKGROUND AND PURPOSE

These amendments are necessary to restructure access to program pharmacy benefits and to incorporate the provisions of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA). The department proposes cost sharing of expenses for program recipients who are eligible for enrollment in Medicare Part D and payment of co-insurance amounts for eligible program recipients with Medicare Part B immunosuppressant drug coverage.

In addition, the department is amending the rules to conform to the changes in departmental structure and terminology, and to improve clarity and consistency in existing language.

SECTION-BY-SECTION SUMMARY

Amendments to §61.1 add definitions and improve clarity of language and conform to current terminology. Amendments to §61.2 state eligibility requirements for Medicare Part D cost sharing. Amendments to §61.4 improve consistency and clarity of language. Amendments to §61.6 provide the structure for new benefits and restate and clarify existing benefits for covered travel. Amendments to §§61.7, 61.9, 61.13, and 61.14 improve clarity of language and conform to current terminology. Section 61.15 is being repealed as redundant, because federal and state law, as well as department policy, already specifically prohibit discrimination in each of the areas addressed by §61.15.

FISCAL NOTE

Sam B. Cooper, III, Unit Manager, Purchased Health Services Unit, Specialized Health Services Section, has determined that for each fiscal year of the first five years the sections are in effect, there will be no net fiscal implications to the state as a result of administering the sections as proposed. KHC drug expenditures for FY 2006 are estimated at $15,150,023 under the current rules, and if appropriations for drug purchases are increased by 11.1% annually to meet the projected increased cost of drugs for KHC clients, the program's drug costs for will be $16,831,675 in FY 2007; $18,699,991 in FY 2008; $20,775,690 in FY 2009; $23,081,791 in FY 2010; and $25,643,870 in FY 2011. Implementation of the proposed rule changes will result in projected client drug costs of $12,162,618 for FY 2006; $11,157,829 for FY 2007; $12,072,162 for FY 2008; $13,079,554 for FY 2009; $14,190,038 for FY 2010; and $15,414,751 for FY 2011. These projected costs are based on estimated cost sharing amounts, which will not be finalized by Centers for Medicare and Medicaid Services until the fall of 2005. Realized savings will be directed into the program to sustain overall client benefits. The program will maintain current levels of prescription drug benefits available to program recipients, and will be able to assure that program recipients are financially able to participate in the Medicare Part D program while still receiving an uninterrupted supply of the medications necessary to treat their end-stage renal disease, a chronic condition. There will be no fiscal implications for local governments as a result of administering the sections as proposed because local governments will not participate or pay any program costs under the proposed sections.

MICRO-BUSINESS AND SMALL BUSINESS IMPACT ANALYSIS

Mr. Cooper has also determined that there will be no effect on small businesses and micro-businesses required to comply with the sections as proposed. The small and micro-businesses potentially affected in this category would be pharmacies enrolled as program providers. Those pharmacies and others that may enroll in the future will continue to receive reimbursement for providing drug benefits to program recipients. The only change anticipated would be the source of funding due to the incorporation of the provisions established by the MMA. There are no anticipated economic costs to persons who are required to comply with the sections as proposed. There is no anticipated negative impact on local employment.

PUBLIC BENEFIT

Mr. Cooper has determined that for each year of the first five years the sections are in effect, the public will benefit from the adoption of these sections. The public benefit anticipated as a result of enforcing the sections will be coordination of benefits across available funding sources to maximize available benefits to program recipients while more efficiently utilizing state funding.

REGULATORY ANALYSIS

TAKINGS IMPACT ASSESSMENT

PUBLIC COMMENT

Comments on the proposal may be submitted to Donna Calvery, Kidney Health Care Program, Purchased Health Services Unit, Department of State Health Services, Mail Code 1938, 1100 West 49th Street, Austin, Texas 78756, (512) 458-7150 or kidneynet@dshs.state.tx.us. Comments will be accepted for 30 days following publication of this proposal in the Texas Register .

PUBLIC HEARING

A public hearing to receive comments on the proposal is scheduled for July 14, 2005, at 9:00 a.m., at the Department of State Health Services Headquarters, 1100 West 49th Street, Room K-100, Austin, Texas 78756. For more information, contact Donna Calvery at 1-800-222-3986 or kidneynet@dshs.state.tx.us.

25 TAC §§61.1, 61.2, 61.4, 61.6, 61.7, 61.9, 61.13, 61.14

STATUTORY AUTHORITY

The amendments are proposed under Health and Safety Code, §42.003(c), which authorizes the executive commissioner of the Health and Human Services Commission to adopt rules necessary to provide adequate kidney care and treatment for the citizens of this state. Government Code, §531.0055(e), and Health and Safety Code, §1001.075, also authorize the Executive Commissioner of the Health and Human Services Commission to adopt rules and policies necessary for the operation and provision of health and human services by the department and for the administration of Chapter 1001, Health and Safety Code.

The proposed amendments affect Health and Safety Code, Chapter 42.

§61.1.General.

(a) (No change.)

[ ~~(b)~~ Delegation of Authority. Under the Texas Health and Safety Code, Chapter 11, §11.013, the Board of Health (board) delegates to the Commissioner of Health (commissioner), or to the person acting as commissioner in the commissioner's absence, the authority to administer KHC, exclusive of rulemaking authority.]

(b) [ ~~(c)~~ ] Definitions. The following words and terms when used in this chapter shall have the following meanings, unless the context clearly indicates otherwise.

(1) Access surgery--The surgical procedure which creates or maintains the access site necessary to perform dialysis.

(2) Action--A denial, termination, suspension or reduction of KHC-covered services or eligibility.

(3) Allowable amount--The maximum amount that KHC will pay or reimburse for a covered benefit or service.

(4) Applicant--An individual who has submitted an application for KHC benefits through a participating outpatient dialysis facility or hospital and has not received a final determination of eligibility.

~~[ ~~(5)~~ Board--The Texas Board of Health or its successor.]~~

(5) [ ~~(6)~~ ] Claim--A request for payment or reimbursement of services.

(6) [ ~~(7)~~ ] CMS--The Centers for Medicare and Medicaid Services, formerly known as the Health Care Financing Administration.

(7) Co-insurance--A cost-sharing arrangement in which a covered person is responsible for paying a specified percentage of the charge for a covered service or product.

(8) Commissioner--The commissioner of the [ ~~Texas~~ ] Department of State Health Services [ ~~, or his successor~~ ].

(9) Co-pay/Co-payment--A cost-sharing arrangement in which a covered person is responsible for paying a specified or fixed charge for a covered service or product.

~~[(9) Co-pay--The portion of the allowable amount for which a KHC recipient is responsible.]~~

(10) CRNA--Certified Registered Nurse Anesthetist.

~~[(10) Covered services--Drugs, transportation, pharmaceutical products, medical care, treatment, services or equipment which have been approved by KHC for payment.]~~

(11) Department--The [ ~~Texas~~ ] Department of State Health Services [ ~~, or its successor~~ ].

(12) End-Stage Renal Disease (ESRD)--The final stage of renal impairment which is usually irreversible and permanent and requires dialysis and/or kidney transplant to reduce uremic symptoms and/or prevent the death of the patient.

(13) EOB--A form, in paper or electronic format, which provides an explanation of benefits. It is used to explain a payment or denial of a claim.

(14) Fair hearing--The informal hearing process the department follows under §§1.51 - 1.55 of this title (relating to Fair Hearing Procedures).

(15) Final decision--A decision that is made by a decision maker after conducting a fair hearing under §§1.51 - 1.55 of this title (relating to Fair Hearing Procedures).

~~[ ~~(16)~~ HCFA--The Health Care Financing Administration, now known as the Centers for Medicare and Medicaid Services.]~~

(16) [ ~~(17)~~ ] Interim approval--The status given by KHC to an outpatient dialysis facility, free standing or hospital based, which has applied for participation as a KHC provider but has not executed an agreement with KHC.

(17) [ ~~(18)~~ ] KHC--The Kidney Health Care program.

~~[ ~~(19)~~ Medical benefits--Any inpatient or outpatient medical treatment or procedure approved by KHC as a covered service.]~~

(18) [ ~~(20)~~ ] Participating provider--Any individual or entity with KHC approval to furnish covered services to KHC recipients including:

(A) outpatient dialysis facilities;

(B) out-of-state outpatient dialysis facilities;

(D) out-of-state hospitals and ASCs;

(E) military or Veterans Administration hospitals located in Texas which have a renal unit approved by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) or the American Osteopathic Association (AOA);

(F) pharmacies approved as Texas Medicaid providers and licensed to operate within the United States and its territories, including mail order pharmacies;

(G) physicians and Certified Registered Nurse Anesthetists (CRNAs); or

(H) out-of-state physicians and CRNAs.

(19) [ ~~(21)~~ ] Recipient--An individual who is eligible to receive KHC benefits.

(20) [ ~~(22)~~ ] Suspended benefits--Eligibility for benefits or claims which are denied and/or held pending satisfaction of a KHC request or requirement.

[ ~~(23)~~ TDCI--The Texas Drug Code Index. This list of drugs by National Drug Code includes drugs and drug products approved by the department for payment as a benefit of KHC. Not all drugs listed on the TDCI are covered by KHC; however, all drugs covered by KHC are included on the TDCI.]

§61.2.Recipient Requirements.

(a) - (b) (No change.)

(c) A KHC recipient's [ ~~recipient may have their KHC~~ ] benefits may be modified or suspended for any of the following reasons:

(1) - (3) (No change.)

(4) failure to provide authorization for Medicare premium payments by KHC as specified in §61.6 of this title (relating to Limitations and Benefits Provided), if not eligible for Medicare premium-free hospitalization; [ or ]

(5) failure to enroll in Medicare Part D benefits and apply for Low Income Subsidy under the Medicare Prescription Drug Improvement and Modernization Act of 2003, if the recipient is potentially eligible for these benefits; or

(6) [ ~~(5)~~ ] failure to notify/verify KHC of changes in the following:

(A) permanent home address;

(B) treatment status;

(D) location of treatment.

(d) - (g) (No change.)

§61.4.Applications.

Persons meeting the eligibility requirements set forth in §61.2(a)(1), (2), (3), (4), and (6) of this title (relating to Recipient Requirements) must make an application for benefits through a Kidney Health Care (KHC) participating outpatient dialysis facility or hospital.

(1) Complete application. A complete application is required before any eligibility determination will be made. A complete application shall consist of all of the following:

(A) - (D) (No change.)

(E) applicant financial data. Acceptable data to establish the applicant's financial qualifications shall be submitted with the application. The applicant or the person(s) legally obligated to support the applicant may [ ~~attach any of the following documents to~~ ] verify income by providing either of the following :

(i) a [ A ] copy of the first page of [ ~~either~~ ] the federal [ ~~applicant's, or the person(s) legally obligated to support the applicant's, IRS~~ ] individual income tax return [ ~~form~~ ] for the most recent [ ~~recently completed~~ ] tax year ; or [ ~~an estimated or declared income for the current tax year on the Application for Benefits.~~ ]

(ii) a statement of estimated or declared income for the current tax year.

~~[ ~~(ii)~~ Applicants who do not file a federal income tax return may submit documentation of financial assistance, income, or retirement benefits.]~~

(2) (No change.)

(3) Eligibility date for KHC benefits. The KHC eligibility date will be the date KHC receives a complete application. If KHC benefits are terminated, the eligibility date for any subsequent benefit period will be the date on which KHC receives a subsequent completed application for KHC benefits. [ ~~Exception: The eligibility date for in-center dialysis patients for transportation services will be the first day of the month following the KHC eligibility effective date.~~ ]

(4) (No change.)

§61.6.Limitations and Benefits Provided.

(a) Benefits payable by KHC [ ~~Kidney Health Care (KHC)~~ ] are as follows:

(1) KHC allowable outpatient [ ~~out-patient~~ ] drugs and drug products included on the Texas Drug Code Index (TDCI) (a list of KHC allowable drugs is available upon request from KHC, [ ~~Texas~~ ] Department of State Health Services , 1100 West 49th Street, Austin, Texas 78756);

(2) covered transportation based on the recipient's treatment modality, as follows: [ ; ]

(A) from the first day of the month following the KHC eligibility effective date for in-center dialysis recipients; or

(B) from the KHC effective date for transplant and home peritoneal dialysis recipients;

(3) (No change.)

(4) outpatient [ ~~out-patient~~ ] chronic maintenance dialysis treatments;

(5) inpatient [ ~~in-patient~~ ] chronic maintenance dialysis treatments (excluding treatment for emergency/acute dialysis); [ ~~and~~ ]

(6) Medicare Part A and B premiums . [ ~~, if qualified.~~ ] To qualify for this benefit, recipients:

(A) - (C) (No change.)

(7) Medicare Part B immunosuppressive drug co-insurance amounts. To qualify for this benefit, recipients:

(A) cannot be eligible for Medicaid to pay for their Medicare co-insurance amounts;

(B) shall be eligible for KHC drug benefits; and

(8) Limited Medicare Part D out-of-pocket expenses, which include premiums, deductibles, and co-insurance amounts. To qualify for this benefit, recipients:

(A) cannot be eligible for Low Income Subsidy from Medicare that covers full premium and deductible amounts;

(B) shall be eligible for KHC drug benefits; and

(b) - (c) (No change.)

~~[ ~~(d)~~ Recipients eligible for immunosuppressive drug (ISD) coverage under Medicare are not eligible to receive KHC ISD coverage.]~~

(d) [ ~~(e)~~ ] Recipients eligible for drug coverage under a private/group health insurance plan are not eligible to receive KHC drug benefits. A recipient that has exhausted drug coverage under a private/group health insurance plan may be eligible to receive drug benefits from KHC.

(e) [ ~~(f)~~ ] Access surgery benefits are payable only if the services were performed on or after the date Texas residency was established and not more than 180 days prior to the recipient's KHC eligibility effective date.

(f) [ ~~(g)~~ ] KHC medical benefits are payable during the Medicare three-month qualifying period to recipients who do not have Medicare coverage. Benefits are payable for services received on or after the KHC eligibility effective date. The three-month qualifying period shall be calculated from the first day of the month the recipient begins chronic maintenance dialysis. If a recipient becomes eligible for Medicare during the three-month period, KHC medical benefits shall not be payable from the date of Medicare eligibility.

(g) [ ~~(h)~~ ] Limited medical benefits are available beyond the qualifying period for eligible recipients who have applied for and have been denied Medicare coverage based on end-stage renal disease (ESRD). Recipients shall submit a copy of an official Social Security Administration Medicare denial notification (based on chronic renal disease) to the department. Transplant patients who have been successfully transplanted for three years or more are not eligible for limited medical benefits.

(h) [ ~~(i)~~ ] Recipients eligible for hospital and medical benefits from Medicare, the Veterans Administration, the military, or other government programs which cover the treatment of ESRD are not eligible to receive KHC medical benefits.

(i) [ ~~(j)~~ ] Recipients eligible for hospital and medical benefits from private/group health insurance which covers the treatment of ESRD are not eligible for KHC medical benefits.

(j) [ ~~(k)~~ ] KHC is the payor of last resort. All third parties must be billed prior to KHC. The Commissioner may waive this requirement in individually considered cases where its enforcement will deny services to a class of ESRD patients because of conflicting state or federal laws or regulations, under the Texas Health and Safety Code, [ ~~Chapter 42,~~ ] §42.009.

(k) [ ~~(l)~~ ] If budgetary limitations exist, the department may:

(1) restrict or categorize covered services. Categories will be prioritized based upon medical necessity, other third party eligibility and projected third party payments for the different treatment modalities, caseloads, and demands for services. Caseloads and demands for services may be based on current and/or projected data. In the event covered services must be reduced, they will be reduced in a manner that takes into consideration medical necessity and other third party coverage. The department may change covered services by adding or deleting specific services, entire categories or by making changes proportionally across a category or categories, or by a combination of these methods; and/or

(2) establish a waiting list of eligible applicants. Appropriate information will be collected from each applicant who is placed on a waiting list. The information will be used to facilitate contacting the applicant when benefits become available and to allow efficient enrollment of the applicant for benefits.

§61.7.Claims Submission and Payment Rates.

(a) (No change.)

(b) Claims for medical benefits shall be submitted to KHC [ ~~Kidney Health Care (KHC)~~ ] by the participating provider who rendered the service(s) to the KHC recipient.

§61.9.Participating Providers.

(a) The following criteria must be met for a facility, pharmacy, or other provider to qualify for participation in KHC [ ~~Kidney Health Care (KHC)~~ ].

(1) Outpatient dialysis facilities shall execute an agreement with KHC, and shall meet the following criteria:

(A) - (B) (No change.)

(D) - (E) (No change.)

(2) - (3) (No change.)

(4) Pharmacies, including mail order pharmacies, shall enter into an agreement to participate in KHC through the Health and Human Services Commission Pharmacy Contracts and Rebates unit or designated contractor.

(5) - (8) (No change.)

(b) Effective dates for participation in KHC are as follows:

(1) (No change.)

(2) The effective date of all pharmacy agreements shall be determined by the Health and Human Services Commission Pharmacy Contracts and Rebates unit or designated contractor.

(3) (No change.)

§61.13.Forms.

Forms approved by the department [ ~~Texas Department of Health (department)~~ ] for use in KHC [ ~~the Bureau of Kidney Health Care (KHC)~~ ] will be provided to applicants and participating providers, as necessary.

§61.14.Confidentiality of Information.

(a) All information required by this chapter to be submitted may be verified at the discretion of the department [ ~~Texas Department of Health (department)~~ ] and without notice to the applicant or recipient of benefits of KHC [ ~~the Kidney Health Care program (KHC)~~ ], or to the providers of KHC services. This information is confidential to the extent authorized by law.

(b) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 3, 2005.

TRD-200502246

Cathy Campbell

Director, Legal Services

Department of State Health Services

Earliest possible date of adoption: July 17, 2005

For further information, please call: (512) 458-7236

25 TAC §61.15

(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Department of State Health Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeal is proposed under Health and Safety Code, §42.003(c), which authorizes the executive commissioner of the Health and Human Services Commission to adopt rules necessary to provide adequate kidney care and treatment for the citizens of this state. Government Code, §531.0055(e), and Health and Safety Code, §1001.075, also authorize the Executive Commissioner of the Health and Human Services Commission to adopt rules reasonably necessary for the department to administer its regulatory and administrative functions.

The proposed repeal affects Health and Safety Code, Chapter 42.

§61.15.Nondiscrimination Statement.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 3, 2005.

TRD-200502247

Cathy Campbell

Director, Legal Services

Department of State Health Services

Earliest possible date of adoption: July 17, 2005

For further information, please call: (512) 458-7236

Chapter 121. HOSPITAL CERTIFICATION AND CONSULTATION

Subchapter A. FEDERAL LAWS AND REGULATIONS ON HEALTH INSURANCE FOR THE AGED AND DISABLED

25 TAC §121.1 , §121.2

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Department of State Health Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Executive Commissioner of the Health and Human Services Commission on behalf of the Department of State Health Services (department) proposes the repeal of §121.1 and §121.2, concerning the cross reference to federal laws and regulations governing health insurance for the Aged and Disabled.

BACKGROUND AND PURPOSE

The repeal is necessary to remove an outdated chapter that was originally promulgated in January of 1976. The original cross reference to these federal provisions, set forth in the rules, is no longer applicable. The rules, in their current form, serve only to cross reference federal laws and regulations pertaining to the regulatory activities of the department and the former Department of Human Services, now Department of Aging and Disability Services. There is no legal requirement for the cross reference to continue and thus repeal is needed. Further, the reference to the department in the rules cites the Department of Health Resources, which is an outdated reference. Some of the referenced regulations have been recodified or no longer exist. Repeal of these sections is necessary to align the department's rules more accurately with programs currently housed at the department.

SECTION-BY-SECTION SUMMARY

The repeal of §121.1 and §121.2 is necessary to align the department's rules with the programs that currently exist under the department's jurisdiction. Those sections that are the subject of this repeal represent only a cross reference to federal provisions of a program that are no longer applicable to the department.

FISCAL NOTE

Cathy B. Campbell, General Counsel, Office of General Counsel, has determined that for each year of the first five-year period that the repeals will be in effect, there will be no fiscal implications to state or local government as a result of repealing the sections as proposed.

SMALL AND MICRO-BUSINESS IMPACT ANALYSIS

Ms. Campbell has also determined that there are no anticipated economic costs to small businesses, micro-businesses, or persons, because the rules are no longer necessary and business practices will not be altered in order to comply with the proposed repeal of the sections. There will be no impact on local employment.

PUBLIC BENEFIT

In addition, Ms. Campbell has also determined that for each year of the first five years the repeal of the sections is in effect, the public benefit anticipated as a result of the repeal is more accurate representation of department programs and provisions governing those programs in department rules.

REGULATORY ANALYSIS

TAKINGS IMPACT ASSESSMENT

The department has determined that the proposed repeals do not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, do not constitute a taking under Government Code, §2007.043.

PUBLIC COMMENT

Comments on the proposal may be submitted to Lisa Hernandez, Deputy General Counsel, Office of General Counsel, Department of State Health Services, 1100 West 49th Street, Austin, Texas 78756, (512) 458-7111, extension 6587. Comments will be accepted for 30 days following publication of the proposal in the Texas Register .

STATUTORY AUTHORITY

The proposed repeal is authorized by Texas Government Code, §531.0055, and Health and Safety Code, §1001.075, which authorize the Executive Commissioner of the Health and Human Services Commission to adopt rules and policies necessary for the operation and provision of health and human services by the department and for the administration of Chapter 1001, Health and Safety Code.

The proposed repeal affects the Health and Safety Code, Chapter 1001; and Government Code, Chapter 531.

§121.1.Federal Laws on Health Insurance for the Aged and Disabled.

§121.2.Federal Regulations on Health Insurance for the Aged and Disabled.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 1, 2005.

TRD-200502231

Cathy Campbell

General Counsel

Department of State Health Services

Earliest possible date of adoption: July 17, 2005

For further information, please call: (512) 458-7236

Chapter 135. AMBULATORY SURGICAL CENTERS

The Executive Commissioner of the Health and Human Services Commission on behalf of the Department of State Health Services (department) proposes amendments to §§135.1-135.4, 135.9, 135.10, 135.14, 135.18 - 135.25, 135.41, 135.42 and 135.52, the repeal of §§135.11, 135.15, and 135.26, and new §§135.11, 135.15, 135.26 and 135.29, concerning the regulation of ambulatory surgical centers.

BACKGROUND AND PURPOSE

The amendments, repeals, and new sections are proposed in accordance with Health and Safety Code (HSC), Chapter 243, which charges the department with the responsibility to license ambulatory surgical centers. The amendments, repeals, and new sections are necessary to comply with Government Code, Chapter 2054, Subchapter K, which requires the department to participate in an electronic system for occupational licensing transactions (Texas Online); Acts, 2003, 78th Legislature, Regular Session, Chapter 198, (House Bill 2292), §2.42, added Health and Safety Code, §12.0111, which requires the department to charge a fee sufficient to cover the cost of administering and enforcing the licensing program; and Health and Safety Code, §12.0112, which requires that the term for licenses issued or renewed after January 1, 2005, will be two years, Texas Government Code, Chapter 2005, which requires state agencies to adopt procedural rules for processing permit applications; and as a response to a request by stakeholders for clarification of certain provisions of the rules.

SECTION-BY-SECTION SUMMARY

The amendments to §§135.1, 135.14 and 135.18 - 135.22, 135.25, and 135.41 update and correct references within the sections. The proposed amendment to §135.2 adds definitions for "premises" and "extended observation", updates and clarifies the definitions of "advanced practice nurse", "ambulatory surgical center", "available", "licensed vocational nurse" and "registered nurse", and deletes the definition of "director" which is deemed unnecessary. The amendment to §135.3 clarifies that the fee for a one-year license is doubled when a license is issued for a two-year period. Department rules for the issuance of two-year licenses beginning January 1, 2005, became effective on April 4, 2004. Wording is also added to the section concerning the department's authorization to collect subscription and convenience fees, in amounts to be determined by the Texas Online Authority, to recover costs associated with application and renewal application processing. The amendment to §135.4 requires the ASC governing body to adopt, implement and enforce policies relating to accurate billing for services and supplies and for compliance with the Texas Insurance Code. The amendment to §135.9 requires an evaluation of nutritional needs when a patient is in the ASC more than eight hours. The amendment to §135.10 adds a requirement for an emergency call system. The amendment to §135.23 clarifies the physical location or premises the ASC license covers. The amendment to §135.24 is to make the enforcement section language the same as other facility licensing rules. The amendment of §135.42 allows flammable germicides to be used for preoperative surgical skin preparation under specified conditions, establishes a requirement for the ASC to report surgical suite fires to the department within two business days and to implement a corrective action plan within 30 days. The amendment to §135.52 updates language to reflect current terminology used in other guidelines and standards and updates references for patient spaces.

The sections proposed for repeal address anesthesia and surgical services, nursing services, and reporting of incidents. The proposed new §§135.11, 135.15 and 135.26 reflect reorganization of existing sections and contain new language to clarify the requirements for providing anesthesia and surgical services, nursing services, and reporting requirements. New §135.11 identifies anesthesia that a hospital's governing body may approve for use in the ASC including the equipment and supply needs for each; requires compliance with the American Society of Anesthesiologists guidelines and standards; and requires that a physician shall be on call and able to respond physically or by telephone within 30 minutes until all patients have been discharged. New §135.15 requires a registered nurse with certification in basic cardiac life support to be on duty and on the premises whenever patients are in the facility, and establishes staffing requirements for the particular anesthesia to be administered. New §135.26 establishes specific incidents that must be reported to the department within 10 business days, and data that the ASC must provide annually on a form prescribed by the department. New §135.29 provides time periods for processing application for initial and renewal licenses.

FISCAL NOTE

Cindy Bednar, Manager, Facility Licensing Group, has determined that for each year of the first five years the sections are in effect, there will be no fiscal implications to state or local government as a result of administering the sections as proposed.

SMALL AND MICRO-BUSINESS IMPACT ANALYSIS

Ms. Bednar has determined that there will be costs to small businesses, micro-businesses or persons who are required to comply with the sections as proposed. These costs will be related to the department's collection of subscription and convenience fees from applicants and licensees, in amounts to be determined by the Texas Online Authority. There will be no anticipated impact on local employment.

PUBLIC BENEFIT

In addition, Ms. Bednar has also determined that for each year of the first five years the sections are in effect, the public benefit anticipated as a result of enforcing or administering the sections will be to allow greater flexibility for patients to receive services in ambulatory surgical centers while maintaining minimum standards for safe patient care.

REGULATORY ANALYSIS

TAKINGS IMPACT ASSESSMENT

The department has determined that the proposed amendments, repeals, and new sections do not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, do not constitute a taking under Government Code, §2007.043.

PUBLIC COMMENT

Comments on the proposal may be submitted to Cindy Bednar, Manager, Facility Licensing Group, Department of State Health Services, 1100 West 49th Street, Austin, Texas 78756, (512) 834-6648 or by email to Cindy.Bednar@dshs.state.tx.us. Comments will be accepted for 30 days following publication of this proposal in the Texas Register .

Subchapter A. OPERATING REQUIREMENTS FOR AMBULATORY SURGICAL CENTERS

25 TAC §§135.1 - 135.4, 135.9 - 135.11, 135.14, 135.15, 135.18 - 135.26, 135.29

STATUTORY AUTHORITY

The proposed amendments and new sections are authorized under Health and Safety Code, §243.009, concerning rules and minimum standards to protect and promote the public health and welfare by providing for the issuance, renewal, denial, suspension, and revocation of each license; Health and Safety Code, §12.0111, which requires the department to charge fees for issuing or renewing a license; §12.0112, which requires the term of each license issued to be two years; and Government Code, §531.0055, and Health and Safety Code, §1001.075, which authorize the Executive Commissioner of the Health and Human Services Commission to adopt rules and policies necessary for the operation and provision of health and human services by the department and for the administration of Chapter 1001, Health and Safety Code.

The proposed amendments and new sections affect the Health and Safety Code, Chapters 243 and 1001; and Government Code, Chapter 531.

§135.1.Scope and Purpose.

(a) The purpose of these sections is to implement Health and Safety Code, Chapter 243 which requires ambulatory surgical centers to be licensed by the [ ~~Texas~~ ] Department of State Health Services .

(b) - (c) (No change.)

§135.2.Definitions.

The following words and terms, when used in these sections, shall have the following meanings, unless the context clearly indicates otherwise.

(1) - (3) (No change.)

(4) Advanced Practice Nurse (APN)--A registered [ ~~professional~~ ] nurse, currently licensed in the State of Texas, who has been approved by the Board of Nurse Examiners for the State of Texas (board) to practice as an advanced practice nurse based on completing an advanced educational program of study acceptable to the board. The term includes a nurse practitioner, nurse-midwife, nurse anesthetist, and a clinical nurse specialist [ is prepared for advanced nursing practice by virtue of knowledge and skills obtained in an advanced educational program of study acceptable to the board, who meets requirements of Rule 221 and/or Rule 222 as defined by the Texas Board of Nurse Examiners, and has received authorization to practice as an APN in Texas ].