HB4408 - Relating to required reporting of information on the ownership and control of certain health care entities; providing a civil penalty; authorizing a fee.

  89R8830 LRM-F     By: Dean H.B. No. 4408       A BILL TO BE ENTITLED   AN ACT   relating to required reporting of information on the ownership and   control of certain health care entities; providing a civil penalty;   authorizing a fee.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subtitle I, Title 4, Government Code, as   effective April 1, 2025, is amended by adding Chapter 550A to read   as follows:   CHAPTER 550A. REQUIRED REPORTING ON OWNERSHIP AND CONTROL OF   HEALTH CARE ENTITIES   SUBCHAPTER A. GENERAL PROVISIONS           Sec. 550A.0001.  DEFINITIONS. In this chapter:                 (1)     "Health care entity" means a health care provider,   health care facility, provider organization, pharmacy benefit   manager, or health carrier that offers a health benefit plan in this   state.                 (2)     "Health care facility" means a facility licensed   to provide health care services, including:                       (A)     a hospital or other inpatient facility for   providing health care services;                       (B)     a health system consisting of jointly owned   or managed health care entities;                       (C)     a skilled nursing facility licensed under   Chapter 242, Health and Safety Code;                       (D)     an ambulatory surgical center licensed under   Chapter 243, Health and Safety Code;                       (E)     a freestanding emergency medical care   facility licensed under Chapter 254, Health and Safety Code;                       (F)     a general residential operation licensed   under Chapter 42, Human Resources Code, that provides treatment   services;                       (G)  a diagnostic, laboratory, or imaging center;                       (H)     an outpatient clinic licensed in this state   to provide health care services; or                       (I)     a rehabilitation center or other therapeutic   center licensed in this state to provide health care services.                 (3)     "Health care provider" means an individual   qualified or licensed to perform or provide health care services in   this state.                 (4)  "Health care services" means:                       (A)     services provided for the care, prevention,   diagnosis, treatment, cure, or relief of a medical, dental, or   behavioral health condition, including:                             (i)     inpatient, outpatient, habilitative,   rehabilitative, dental, palliative, therapeutic, supportive, home   health, or behavioral services provided by a health care entity;                             (ii)     retail and specialty pharmacy   services, including drugs, devices, and medical supplies provided   by a pharmacy; and                             (iii)     performance of functions to refer,   arrange, or coordinate health care services;                       (B)     equipment used to provide services described   by Paragraph (A), including durable medical equipment and   diagnostic, infusion, and surgical devices; and                       (C)     technology associated with the provision of   services and equipment described by Paragraphs (A) and (B),   including telehealth services, telemedicine medical services,   electronic health records, software, claims processors, and   utilization systems.                 (5)     "Health carrier" has the meaning assigned by   Section 1507.002, Insurance Code.                 (6)     "Management services organization" means an   organization or entity that contracts with a health care provider   or provider organization to perform management or administrative   services relating to, supporting, or facilitating the provision of   health care services.                 (7)     "Material change transaction" means a transaction   that entails a material change to ownership, operations, or   governance structure involving health plans, health insurers,   hospitals or hospital systems, physician organizations, health   care providers, health care facilities, pharmacy benefit managers,   and other health care entities.                 (8)     "Pharmacy benefit manager" has the meaning   assigned by Section 4151.151, Insurance Code.                 (9)     "Provider organization" means an incorporated or   unincorporated corporation, partnership, business trust,   association, or organized group of persons that is in the business   of health care service delivery or management and that represents   at least one health care provider in contracting with a health   carrier for the payment of health care services. The term includes   a physician organization, physician-hospital organization,   independent practice association, provider network, accountable   care organization, management services organization, or other   organization that contracts with a health carrier for the payment   of health care services.           Sec.   550A.0002.     APPLICABILITY OF CHAPTER TO MATERIAL CHANGE   TRANSACTIONS; EXCEPTIONS. (a)     This chapter applies to a material   change transaction, whether occurring as a single transaction or a   series of related transactions within a consecutive five-year   period, involving a health care entity in this state that has:                 (1)     a total of assets and annual revenue, including   in-state and out-of-state assets and revenue, in an amount equal to   at least $10 million; or                 (2)     for a new health care entity, anticipated annual   revenue in an amount equal to at least $10 million, including   in-state and out-of-state revenue.           (b)     This chapter applies to the following material change   transactions:                 (1)     a corporate merger that includes one or more   health care entities;                 (2)     an acquisition of one or more health care   entities, including insolvent health care entities;                 (3)     a contract resulting in a health care entity's   change of control;                 (4)     the formation of a partnership, joint venture,   accountable care organization, parent organization, or management   services organization for the purpose of administering contracts   with health carriers, third-party administrators, pharmacy benefit   managers, or health care providers;                 (5)     the sale, purchase, lease, affiliation, or   transfer of control of a health care entity's board of directors or   governing body;                 (6)     a real estate sale or lease agreement involving a   material amount of health care entity assets; or                 (7)     as determined by rules adopted by the secretary of   state:                       (A)  the closure of a health care facility;                       (B)     the significant reduction or discontinuation   of any essential health care service provided by a provider   organization or health care facility; or                       (C)     any clinical or contractual affiliations   that would eliminate or significantly reduce essential health care   services.           (c)  This chapter does not apply to the following:                 (1)     a clinical affiliation of health care entities   formed solely to collaborate on clinical trials;                 (2)  a graduate medical education program;                 (3)     an offer of employment to, or the hiring of, not   more than one physician; or                 (4)     a transaction, including a corporate   restructuring, in which a health care entity directly, or   indirectly through one or more intermediaries, currently controls,   is controlled by, or is under common control with, all other parties   to the transaction.           Sec.   550A.0003.     CONTROL; CHANGE OF CONTROL. (a)     A person   is considered to have control of a health care entity if the person,   directly or indirectly, through ownership, contractual agreement,   or otherwise, has the ability to:                 (1)     vote more than 10 percent of any class of voting   shares of the health care entity; or                 (2)     direct the actions or policies of the health care   entity.           (b)     A change of control of a health care entity requires a   contract or arrangement in which another person acquires direct or   indirect control over the operations of a health care entity wholly   or in substantial part.   SUBCHAPTER B.   TRANSPARENCY REPORTING IN OWNERSHIP AND   CONTROL OF HEALTH CARE ENTITIES           Sec.   550A.0101.     REQUIRED INFORMATION REGARDING OWNERSHIP   AND CONTROL OF HEALTH CARE ENTITIES. Except as provided by Section   550A.0102, each health care entity shall report to the secretary of   state annually and on the execution of a material change   transaction, in the form and manner the secretary of state   requires, the following information:                 (1)  the legal name of the health care entity;                 (2)  the business address of the health care entity;                 (3)     the locations of the health care entity's   operations;                 (4)     the applicable business identification numbers of   the health care entity, including:                       (A)  the taxpayer identification number;                       (B)  the national provider identifier number;                  &#xA0 [Text truncated for display. Full text available on Congress.gov.]