Rehab Facility License Bill Keeps State Findings Out Of Most Lawsuits

The text as introduced · 12,274 words

89R639 MPF-D

By: West
S.B. No. 699

A BILL TO BE ENTITLED

AN ACT

relating to the licensing and regulation of inpatient

rehabilitation facilities; imposing fees; providing civil and

administrative penalties; creating criminal offenses.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. This Act shall be known as the Eddie Bernice

Johnson Inpatient Rehabilitation Facility Regulatory Act of 2025.

SECTION 2. Section 166.004(a), Health and Safety Code, is

amended to read as follows:

(a) In this section, "health care provider" means:

(1) a hospital;

(2) an institution licensed under Chapter 242,

including a skilled nursing facility;

(3) a home and community support services agency;

(4) an assisted living facility; [ and ]

(5) a special care facility ; and

(6) an inpatient rehabilitation facility licensed

under Chapter 260E .

SECTION 3. Section 241.003(15), Health and Safety Code, is

amended to read as follows:

(15) "Special hospital" means an establishment , other

than an inpatient rehabilitation facility licensed under Chapter

260E, that:

(A) offers services, facilities, and beds for use

for more than 24 hours for two or more unrelated individuals who are

regularly admitted, treated, and discharged and who require

services more intensive than room, board, personal services, and

general nursing care;

(B) has clinical laboratory facilities,

diagnostic X-ray facilities, treatment facilities, or other

definitive medical treatment;

(C) has a medical staff in regular attendance;

and

(D) maintains records of the clinical work

performed for each patient.

SECTION 4. Section 260A.001(5), Health and Safety Code, is

amended to read as follows:

(5) "Facility" means:

(A) an institution as that term is defined by

Section 242.002;

(B) an assisted living facility as that term is

defined by Section 247.002; [ and ]

(C) a prescribed pediatric extended care center

as that term is defined by Section 248A.001 ; and

(D) an inpatient rehabilitation facility

licensed under Chapter 260E .

SECTION 5. Subtitle B, Title 4, Health and Safety Code, is

amended by adding Chapter 260E to read as follows:

CHAPTER 260E. INPATIENT REHABILITATION FACILITIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 260E.0101. DEFINITIONS. In this chapter:

(1) "Assisted living facility" means a facility

licensed under Chapter 247.

(2) "Commission" means the Health and Human Services

Commission.

(3) "Controlling person" means a person described by

Section 260E.0102.

(4) "Executive commissioner" means the executive

commissioner of the commission.

(5) "Hospital" means a hospital licensed under Chapter

241.

(6) "Inpatient rehabilitation facility" means a

freestanding establishment or unit within an acute care hospital or

assisted living facility that primarily provides an intensive

rehabilitation program for patients and has the capacity to provide

three hours of intense rehabilitation services per day to patients

admitted to the facility.

Sec. 260E.0102. CONTROLLING PERSON. (a) A person is a

controlling person of an inpatient rehabilitation facility if the

person has the ability, acting alone or in concert with others, to

directly or indirectly influence, direct, or cause the direction of

the management, expenditure of money, or policies of the facility

or other person affiliated with the facility.

(b) For purposes of this chapter, "controlling person"

includes:

(1) a management company, landlord, or other business

entity that operates, or enters into a contract with another person

for the operation of, an inpatient rehabilitation facility;

(2) any person who is a controlling person of a

management company or other business entity that operates the

facility or enters into a contract with another person for the

operation of the facility; and

(3) any other individual who, because of a personal,

familial, or other relationship with the owner, manager, landlord,

tenant, or health care provider of the facility, is in a position of

actual control or authority with respect to the facility, without

regard to whether the individual is formally named as an owner,

manager, director, officer, provider, consultant, contractor, or

employee of the facility.

(c) Notwithstanding this section, for purposes of this

chapter, a controlling person of an inpatient rehabilitation

facility or of a management company or other business entity

described by Subsection (b)(1) that is a publicly traded

corporation or is controlled by a publicly traded corporation means

an officer or director of the corporation. The term does not

include a shareholder or lender of the corporation.

(d) A controlling person described by Subsection (b)(3)

does not include an individual, including an employee, lender,

secured creditor, or landlord, who does not exercise any influence

or control, whether formal or actual, over the operation of an

inpatient rehabilitation facility.

(e) The executive commissioner may adopt rules to define the

ownership interests and other relationships that qualify a person

as a controlling person of an inpatient rehabilitation facility.

Sec. 260E.0103. ADMISSIBILITY OF CERTAIN EVIDENCE IN CIVIL

ACTIONS. (a) The following information is not admissible as

evidence in a civil action:

(1) a commission determination that an inpatient

rehabilitation facility is in violation of this chapter or a rule

adopted under this chapter; or

(2) the assessment against or payment by the facility

of a penalty assessed under this chapter.

(b) This section does not apply in an enforcement action in

which this state or an agency or political subdivision of this state

is a party.

(c) Notwithstanding this section, evidence described by

Subsection (a) is admissible as evidence in a civil action only if:

(1) the evidence relates to a material violation of

this chapter or a rule adopted under this chapter or assessment of a

monetary penalty with respect to:

(A) the particular incident and the particular

individual whose personal injury is the basis of the civil action

claim; or

(B) a commission determination directly

involving substantially similar conduct that occurred at the

inpatient rehabilitation facility in the year preceding the date of

the particular incident on which the civil action claim is based;

(2) the evidence of a material violation has been

affirmed by a final adjudicated and unappealable commission order

after formal appeal; and

(3) the record is otherwise admissible under the Texas

Rules of Evidence.

SUBCHAPTER B. LICENSING, FEES, AND INSPECTIONS

Sec. 260E.0201. LICENSE REQUIRED. A person, acting

severally or jointly with any other person, may not establish,

conduct, or maintain an inpatient rehabilitation facility in this

state unless the person holds a license issued under this chapter.

Sec. 260E.0202. APPLICATION FOR LICENSE OR LICENSE RENEWAL.

(a) An applicant for a license or license renewal shall submit to

the commission in the form and manner the commission requires a

complete application accompanied by the license fee.

(b) An applicant for a license or license renewal shall

provide with the application evidence that affirmatively

establishes the applicant's ability to comply with:

(1) minimum standards of medical care, rehabilitation

care, nursing care, and financial condition; and

(2) any other applicable state or federal standards.

(c) In reviewing an application under this section, the

commission shall evaluate the background and qualifications of:

(1) the applicant;

(2) a partner, officer, director, or managing employee

of the applicant;

(3) a person who owns or who controls the owner of the

premises in which the inpatient rehabilitation facility operates or

is to operate; and

(4) a controlling person with respect to the inpatient

rehabilitation facility for which the application is submitted.

(d) For purposes of the evaluation required by Subsection

(c), the commission shall require an applicant to file a sworn

affidavit of a satisfactory compliance history and any other

information the commission requires to substantiate a satisfactory

compliance history relating to each inpatient rehabilitation

facility the applicant or a person described by Subsection (c)

operated in this state or outside of this state at any time

preceding the date the application is submitted. The executive

commissioner by rule shall determine the requirements for a

satisfactory compliance history. The commission may:

(1) consider and evaluate the compliance history of

the applicant and each person described by Subsection (c) for any

period during which the applicant or person operated an inpatient

rehabilitation facility in this state or outside this state; and

(2) require the applicant to provide information

relating to the financial history of the applicant and each person

described by Subsection (c) for an inpatient rehabilitation

facility the applicant or person operated outside this state at any

time preceding the date the application is submitted.

(e) Information the commission obtains under this section

regarding an applicant's financial history is confidential and may

not be disclosed to the public.

Sec. 260E.0203. ISSUANCE AND RENEWAL OF LICENSE. (a) After

the commission receives an application for a license or license

renewal and the fee, the commission shall issue to the applicant a

license if, after inspection and investigation, the commission

determines that:

(1) the applicant and each person described by Section

260E.0202(c) satisfy the requirements under this chapter and rules

or standards adopted under this chapter; and

(2) the inpatient rehabilitation facility for which

the application is submitted complies with this chapter and rules

or standards adopted under this chapter.

(b) Except as provided by Subsection (g), a license for an

inpatient rehabilitation facility may be renewed every three years

after:

(1) an inspection is completed;

(2) the applicant submits a completed application that

complies with Section 260E.0202 and pays the required license fee;

and

(3) the applicant submits to the commission and the

commission approves a report that complies with commission rules

specifying:

(A) the date the report must be submitted;

(B) the information the report must contain; and

(C) the form of the report.

(c) Except as provided by Subsection (d), the commission may

issue a license only:

(1) to the person named in an application and for the

premises of an inpatient rehabilitation facility specified in the

application; and

(2) for the maximum number of beds specified in the

application.

(d) The commission may issue one license for multiple

inpatient rehabilitation facilities if:

(1) each building in which patients receive services

from the facilities included in the license are subject to the

control and direction of the same governing body;

(2) each building in which patients receive services

are within a 30-mile radius of the applicant's primary physical

address;

(3) the organized medical staff of each facility

included in the license are integrated;

(4) each facility employs the same chief executive

officer who:

(A) reports directly to the governing body; and

(B) has administrative authority to exercise

control and surveillance over all administrative activities of the

facility;

(5) each facility employs the same chief medical

officer who:

(A) reports directly to the governing body; and

(B) is responsible for all medical staff

activities of the facility;

(6) each facility building included in the license

that is geographically separate from other buildings of the same

facility contains at least one inpatient nursing unit, unless only

diagnostic, laboratory services, or a combination of diagnostic and

laboratory services are provided to facility patients in the

building; and

(7) each facility included in the license complies

with the emergency services standards for a special hospital, as

that term is defined by Section 241.003.

(e) The commission may waive the requirement under

Subsection (d)(7) for an inpatient rehabilitation facility if

another facility included in the license:

(1) complies with the emergency services standards for

a general hospital, as that term is defined by Section 241.003; and

(2) is in close geographic proximity to the facility.

(f) The executive commissioner by rule shall establish

procedures for granting a waiver under Subsection (e). The rules

must require the commission to determine that granting the waiver:

(1) will facilitate the creation or operation of the

inpatient rehabilitation facility seeking the waiver; and

(2) is in the best interest of the individuals served

or to be served by the facility.

(g) An initial license issued for an inpatient

rehabilitation facility under this chapter is a probationary

license and is valid only until the first anniversary of the date of

issuance. On expiration of the probationary license, the

commission shall issue a regular license only if:

(1) the commission determines the license holder and

each person described by Section 260E.0202(c) satisfy the

requirements established under this chapter and rules or standards

adopted under this chapter;

(2) an inspection is completed;

(3) the license holder pays the license fee; and

(4) the license holder submits and the commission

approves the report required under Subsection (b)(3).

(h) The executive commissioner by rule shall adopt a system

under which an appropriate number of licenses the commission issues

under this chapter expire on staggered dates occurring in each

three-year period. If the expiration date of a license changes as a

result of this subsection, the commission shall prorate the license

fee for that license as appropriate.

(i) A license may not be transferred or assigned without the

commission's written approval.

(j) A license holder shall post the license in a conspicuous

place on the premises of the inpatient rehabilitation facility.

Sec. 260E.0204. LIST OF FACILITIES WITH EXCELLENT OPERATING

RECORDS; CHANGE OF OWNERSHIP; EXPEDITED LICENSE ISSUANCE. (a) The

commission shall maintain a current list of license holders for

inpatient rehabilitation facilities in this state that the

commission determines have excellent operating records based on the

information available to the commission. The executive

commissioner by rule shall establish specific criteria for the

commission's use in determining whether to include a license holder

on the list.

(b) The commission shall establish a procedure under which a

license holder included on the list described by Subsection (a) who

submits to the commission an application for a change of ownership

to operate an existing inpatient rehabilitation facility may obtain

a license for that facility on an expedited basis. The procedure

may allow a license holder to submit to the commission an affidavit

demonstrating the license holder satisfies the criteria necessary

for inclusion on the list and the requirements under Subsection

(c).

(c) An applicant for an expedited license under this section

must satisfy each applicable requirement that an applicant for a

license renewal must satisfy under this chapter, including Section

260E.0202(c), and rules adopted under this chapter. A requirement

relating to inspections or to an accreditation review applies only

to inpatient rehabilitation facilities operated by an applicant at

the time the applicant submits the application for a change of

ownership.

Sec. 260E.0205. TEMPORARY LICENSE FOR CHANGE OF OWNERSHIP.

(a) For purposes of this section, a temporary license is a 90-day

license for a temporary change of ownership issued to an applicant

who proposes to become the new operator of an inpatient

rehabilitation facility existing on the date the application is

submitted.

(b) After receiving an application for a temporary change of

ownership, the commission shall issue a temporary license to the

applicant if, after investigation, the commission determines the

applicant and each person described by Section 260E.0202(c)

satisfy:

(1) the requirements under Section 260E.0202(b); and

(2) the commission's requirements for the background

and qualifications of the persons described by Sections

260E.0202(c) and (d).

(c) Except as provided by Subsection (d), the commission may

not issue a temporary license to an applicant before the 31st day

after the date the commission receives both:

(1) the application for a temporary change of

ownership; and

(2) written notice from the current license holder of

the inpatient rehabilitation facility for which the application is

submitted of that license holder's intent to transfer operation of

the facility to the applicant beginning on a date the applicant

specifies.

(d) The executive commissioner by rule shall establish

criteria under which the commission may waive the 30-day

requirement or the notification requirement under Subsection (c).

The criteria may include a forcible entry and detainer, death,

divorce, or any other event that affects a current license holder's

ownership of an inpatient rehabilitation facility.

(e) After the commission receives an application for a

temporary change of ownership or written notice under Subsection

(c), the commission may place a hold on payments to the current

license holder for an inpatient rehabilitation facility in an

amount not to exceed the average of the monthly vendor payments paid

to the facility, as the commission determines. The commission:

(1) shall disburse the payments not later than the

120th day after the date the final reporting requirements are

satisfied and any resulting informal reviews or formal appeals are

resolved; and

(2) may reduce the amount disbursed by the amount the

former license holder owes to the commission under a Medicaid

contract or license.

(f) The executive commissioner by rule shall define the

factors constituting a change of ownership for an inpatient

rehabilitation facility. In adopting the rules, the executive

commissioner shall consider:

(1) the proportion of ownership interest being

transferred to another person;

(2) the addition or removal of a stockholder, partner,

owner, or other controlling person;

(3) the reorganization of a license holder into a

different type of business entity; and

(4) the death or incapacity of a stockholder, partner,

or owner.

(g) The executive commissioner may adopt rules requiring a

license holder to notify the commission of any change, including a

change that does not constitute a change of ownership, as that term

is defined by commission rules. This section does not prohibit the

commission from acting under Section 260E.0301 or any other

provision of this chapter.

(h) The commission shall issue or deny a temporary license

not later than the 31st day after the date the commission receives a

completed application for a temporary change of ownership. The

effective date of a temporary license issued under this section is

the date requested in the application unless:

(1) the commission does not receive the application

and written notice described by Subsection (c) at least 30 days

before that date; and

(2) the commission did not waive those requirements in

accordance with Subsection (d).

(i) If the commission does not receive an application for a

temporary change of ownership and written notice under Subsection

(c) at least 30 days before the effective date requested in the

application and the commission did not waive those requirements in

accordance with Subsection (d), the effective date of the temporary

license is the 31st day after the date the commission receives both

the application and the notice.

(j) Except as provided by Subsection (k), after the

commission issues a temporary license to an applicant, the

commission shall, as soon as reasonably possible, conduct an

inspection or survey of the inpatient rehabilitation facility for

which the license is issued in accordance with Section 260E.0213.

During the period between the date a temporary license is issued and

the date the facility is inspected or surveyed under Section

260E.0213 or desk reviewed under Subsection (k), the commission may

not place a hold on vendor payments to the temporary license holder.

(k) The executive commissioner by rule shall establish

criteria under which the commission may substitute a desk review of

an inpatient rehabilitation facility's compliance with applicable

requirements for the on-site inspection or survey under Subsection

(j).

(l) After the commission conducts an inspection or survey

under Subsection (j) or a desk review under Subsection (k) of an

inpatient rehabilitation facility, the commission shall issue a

license under Section 260E.0203 to the temporary license holder if

the facility passes the inspection, survey, or desk review and the

applicant meets the requirements under that section. If the

facility fails to pass the inspection, survey, or desk review or the

temporary license holder fails to meet the requirements under that

section, the commission may:

(1) place a hold on vendor payments to the temporary

license holder; and

(2) take any other action authorized by this chapter.

(m) If a license holder meets the requirements under Section

260E.0203 and the inpatient rehabilitation facility passes an

initial or subsequent inspection, a survey, or a desk review before

the temporary license expires, the license issued under Section

260E.0203 is considered effective on the date the commission

determines under Subsection (h) or (i).

(n) A temporary license issued under this section expires on

the 90th day after the effective date of the license established

under Subsection (h) or (i).

Sec. 260E.0206. LICENSE FEES. (a) The commission shall

charge each inpatient rehabilitation facility a license fee for an

initial license or a license renewal.

(b) The executive commissioner by rule shall adopt the

license fees in amounts as prescribed by Section 12.0111 and in

accordance with a schedule under which the fee amount is determined

by the number of beds in an inpatient rehabilitation facility. A

minimum license fee may be established.

(c) The amount of a license fee adopted under this chapter

must be based on the estimated cost to and effort expended by the

commission to issue or renew the license.

(d) All license fees collected shall be deposited in the

state treasury to the credit of the commission to administer and

enforce this chapter.

(e) Notwithstanding Subsection (d), to the extent money

received from the license fees collected under this chapter exceeds

the commission's costs, the commission may use the money to

administer Chapter 324 and similar laws that require the commission

to provide information related to inpatient rehabilitation care to

the public. The executive commissioner may not consider the costs

of administering Chapter 324 or similar laws in establishing the

amount of a license fee.

Sec. 260E.0207. GRADING OF FACILITIES. (a) The executive

commissioner may adopt by rule and publish and the commission may

enforce minimum standards relating to the grading of an inpatient

rehabilitation facility to identify the facilities that provide

above the minimum level of services and personnel as the executive

commissioner establishes.

(b) An inpatient rehabilitation facility recognized with a

superior grade, as the executive commissioner determines by rule,

shall prominently display the grade in an area of the facility that

is accessible to the public.

(c) As an incentive to obtain the superior grade, an

inpatient rehabilitation facility may advertise the facility's

grade, except the facility may not advertise a superior grade that

has been revoked.

(d) The commission may not award a superior grade to an

inpatient rehabilitation facility that, during the year preceding

the grading inspection, violated a state or federal law or rule

relating to:

(1) the health, safety, or welfare of the facility's

patients;

(2) patient funds;

(3) the confidentiality of a patient's records;

(4) the financial practices of the facility; or

(5) the control of medication in the facility.

(e) The commission shall revoke an inpatient rehabilitation

facility's superior grade if the facility:

(1) does not meet the criteria established for a

superior grade; or

(2) violates a state or federal law or rule described

by Subsection (d).

Sec. 260E.0208. RULES; MINIMUM STANDARDS. (a) The

executive commissioner by rule shall establish and the commission

shall enforce rules and minimum standards to implement this

chapter, including rules and minimum standards relating to quality

of life, quality of care, and patients' rights.

(b) In adopting rules, the executive commissioner shall:

(1) consider the conditions of participation for

certification under Title XVIII of the Social Security Act (42

U.S.C. Section 1395 et seq.) and the Joint Commission's standards;

and

(2) attempt to achieve consistency with those

conditions and standards.

(c) The rules and standards the executive commissioner

adopts under this chapter:

(1) may be more stringent than the standards imposed

by federal law for certification for participation in the state

Medicaid program; and

(2) may not be less stringent than the Medicaid

certification standards and regulations imposed under the Omnibus

Budget Reconciliation Act of 1987 (OBRA), Pub. L. No. 100-203, for

an inpatient rehabilitation facility that is a unit of a nursing

facility or an assisted living facility.

(d) To implement Sections 260E.0202(c) and (d), the

executive commissioner by rule shall adopt minimum standards for

the background and qualifications of each person described by

Section 260E.0202(c). The commission may not issue or renew a

license if a person described by Section 260E.0202(c) does not meet

the minimum standards adopted under this section.

(e) In addition to other standards or rules required by this

chapter, the executive commissioner shall adopt and publish and the

commission shall enforce minimum standards relating to:

(1) the construction of an inpatient rehabilitation

facility, including plumbing, heating, lighting, ventilation, and

other housing conditions, to ensure the patients' health, safety,

comfort, and protection from fire hazard;

(2) the regulation of the number and qualification of

all personnel, including management and nursing personnel,

responsible for any part of the care provided to patients;

(3) requirements for in-service education of all

employees who have any contact with patients;

(4) training on the care of individuals with

Alzheimer's disease and related disorders for employees who work

with those individuals;

(5) sanitary and related conditions in a facility and

the facility's surroundings, including water supply, sewage

disposal, food handling, and general hygiene, to ensure the

patients' health, safety, and comfort;

(6) the nutritional needs of each patient according to

good nutritional practice or the recommendations of the health care

provider attending the patient;

(7) equipment essential to the patients' health and

welfare;

(8) the use and administration of medication in

conformity with applicable law and rules;

(9) care and treatment of patients and any other

matter related to patient health, safety, and welfare;

(10) licensure of facilities;

(11) compliance with other state and federal laws

affecting the health, safety, and rights of patients;

(12) compliance with nursing peer review under

Subchapter I, Chapter 301, Occupations Code, and Chapter 303,

Occupations Code, and the rules of the Texas Board of Nursing

relating to peer review; and

(11) implementation of this chapter.

(f) The executive commissioner shall adopt and publish and

the commission shall enforce minimum standards requiring

appropriate training in geriatric care for each individual who

provides services to geriatric patients in an inpatient

rehabilitation facility and who holds a license or certificate

issued by a state agency that authorizes the individual to provide

the services. The minimum standards may require each licensed or

certified individual to complete an appropriate program of

continuing education or in-service training, as determined by

commission rule, on a schedule determined by commission rule.

(g) To administer the surveys for provider certification

provided for by federal law and rules, the commission shall

identify each area of care subject to both federal certification

and state licensing requirements. For each area of care subject to

the same standard under both federal certification and state

licensing requirements, an inpatient rehabilitation facility in

compliance with the federal certification standard is considered to

be in compliance with the same state licensing requirement.

(h) The minimum standards the executive commissioner adopts

under this section must require each inpatient rehabilitation

facility, as part of an existing training program, to provide each

registered nurse, licensed vocational nurse, nurse aide, and

nursing assistant who provides nursing services in the facility at

least one hour of training each year in caring for persons with

dementia.

(i) The commission by order may waive or modify a

requirement under this chapter or a minimum standard the commission

adopts by rule under this section for a particular inpatient

rehabilitation facility if the commission determines the waiver or

modification will facilitate the creation or operation of the

facility and the waiver or modification is in the best interests of

the individuals served or to be served by the facility.

(j) The executive commissioner by rule shall establish

procedures and criteria for issuing a waiver or modification order

under Subsection (i). The criteria must include at a minimum an

assessment of the appropriateness of the waiver or modification

compared to the best interests of the individuals served or to be

served by the facility.

(k) If the commission orders a waiver or modification under

Subsection (i), the commission shall document the waiver or

modification order in the licensing record of the inpatient

rehabilitation facility granted the waiver or modification. The

executive commissioner by rule shall specify the type and

specificity of the documentation that must be included in the

licensing record.

(l) An inpatient rehabilitation facility must contain an

emergency treatment room but is not required to have an emergency

department.

Sec. 260E.0209. PATIENT TRANSFERS. (a) The executive

commissioner shall adopt rules on:

(1) the transfer of patients between inpatient

rehabilitation facilities that have not executed a transfer

agreement; and

(2) services not included in a transfer agreement.

(b) The rules the executive commissioner adopts under

Subsection (a) must:

(1) ensure a patient transfer between inpatient

rehabilitation facilities is accomplished in accordance with

facility policies resulting in medically appropriate transfers

from health care provider to health care provider and from facility

to facility by providing that:

(A) the facility receiving the patient is

notified before the patient transfer and confirms the patient meets

the facility's admissions criteria relating to appropriate bed,

provider, and other services necessary to treat the patient;

(B) the patient is stabilized before and during

the patient transfer using medically appropriate life support

measures that a reasonable and prudent health care provider

exercising ordinary care in the same or a similar locality would

use;

(C) appropriate personnel and equipment are used

for the patient transfer in accordance with the care a reasonable

and prudent health care provider exercising ordinary care in the

same or a similar locality would use for the transfer;

(D) all necessary records for the patient's

continuing care are transferred to the facility receiving the

patient; and

(E) the patient transfer is not predicated on

arbitrary, capricious, or unreasonable discrimination because of

race, religion, national origin, age, sex, physical condition, or

economic status;

(2) ensure an inpatient rehabilitation facility may

not transfer a patient who is experiencing an emergency medical

condition that has not been stabilized unless:

(A) the patient or a legally responsible person

acting on the patient's behalf, after being informed of the

facility's obligations under this section and of the risk of

transfer, in writing requests transfer to another facility;

(B) a licensed physician signs a certification,

which includes a summary of the risks and benefits based on the

information available at the time of transfer, that the medical

benefits reasonably expected from the provision of appropriate

medical treatment at another facility outweigh the increased risks

to the patient and, in the case of a pregnant patient in labor, to

the unborn child from effecting the transfer; or

(C) if a licensed physician is not physically

present in the emergency treatment room or department at the time a

patient is transferred, a qualified medical professional signs a

certification described by Paragraph (B) after a licensed

physician, in consultation with the professional, makes the

determination described by that paragraph and subsequently

countersigns the certificate;

(3) require a public inpatient rehabilitation

facility to accept a patient transfer of an eligible patient if the

facility has appropriate facilities, services, and staff available

for providing care to the patient;

(4) require an inpatient rehabilitation facility to

take all reasonable steps to secure the informed refusal of a

patient, or of a person acting on the patient's behalf, to a

transfer or to related examination and treatment; and

(5) recognize any contractual, statutory, or

regulatory obligations that may exist between a patient and a

designated or mandated health care provider as those obligations

apply to the transfer of emergency or nonemergency patients.

Sec. 260E.0210. FIRE SAFETY REQUIREMENTS. (a) The

executive commissioner shall adopt rules necessary to specify the

edition of the Life Safety Code of the National Fire Protection

Association to be used in establishing the life safety requirements

for an inpatient rehabilitation facility licensed under this

chapter.

(b) The executive commissioner shall adopt the edition of

the Life Safety Code of the National Fire Protection Association

for fire safety as designated by federal law and rules for an

inpatient rehabilitation facility or portion of a facility

constructed after September 1, 1993, and for a facility or portion

of a facility operating or approved for construction on or before

September 1, 1993.

(c) The executive commissioner may not require more

stringent fire safety standards than those required by federal law

and rules. The rules adopted under this section may not prevent an

inpatient rehabilitation facility licensed under this chapter from

voluntarily conforming to fire safety standards that are compatible

with, equal to, or more stringent than those the executive

commissioner adopts.

(d) An inpatient rehabilitation facility that exists on

September 1, 2025, may continue the facility's use or occupancy

that existed on that date if the facility complies with fire safety

standards and ordinances in effect on that date.

(e) Notwithstanding this section, a municipality may enact

additional and more stringent fire safety standards applicable to

new construction on or after September 1, 2025.

(f) The executive commissioner shall adopt rules to

implement an expedited inspection process to allow an applicant for

an initial license or a license renewal to obtain a life safety code

and physical plant inspection not later than the 15th day after the

date the applicant submits the request. The commission may charge a

fee to recover the cost of the expedited inspection. The rules must

allow the commission to charge different fee amounts based on the

size of the inpatient rehabilitation facility.

Sec. 260E.0211. REGISTRATION WITH TEXAS INFORMATION AND

REFERRAL NETWORK. (a) An inpatient rehabilitation facility

licensed under this chapter shall register with the Texas

Information and Referral Network under Section 526.0004,

Government Code, to assist this state in identifying individuals

needing assistance if an area is evacuated because of a disaster or

other emergency.

(b) An inpatient rehabilitation facility is not required to

identify individual patients who may require assistance in an

evacuation or to register individual patients with the Texas

Information and Referral Network for evacuation assistance.

(c) An inpatient rehabilitation facility shall notify each

patient and the patient's next of kin or guardian regarding the

steps necessary to register for evacuation assistance with the

Texas Information and Referral Network.

Sec. 260E.0212. REQUIRED POSTING OF CERTAIN DOCUMENTS. (a)

Each inpatient rehabilitation facility shall prominently and

conspicuously post for display in a public area of the facility that

is readily available to patients, employees, and visitors:

(1) the license issued under this chapter;

(2) a sign the commission prescribes specifying

complaint procedures established under this chapter or rules

adopted under this chapter and the steps necessary to register a

complaint with the commission;

(3) a notice in a form the commission prescribes

stating that licensing inspection reports and other related reports

detailing deficiencies the commission cites are available at the

facility for public inspection and providing the commission's

toll-free telephone number to be used to obtain information

concerning the facility;

(4) a concise summary of the most recent inspection

report relating to the facility;

(5) notice of the availability of commission summary

reports relating to the quality of care, recent investigations,

litigation, and other aspects of the facility's operation;

(6) notice that the commission, if applicable, can

provide information about the facility administrator;

(7) any notice or written statement required to be

posted under Section 260E.0314(c);

(8) notice that informational materials relating to

the facility's compliance history are available for inspection at a

location in the facility specified by the sign;

(9) notice that employees, other staff, patients,

volunteers, and family members and guardians of patients are

protected from discrimination or retaliation as provided by

Sections 260A.014 and 260A.015; and

(10) a sign requiring reporting of suspected abuse,

neglect, and exploitation as described by Section 260A.006(a).

(b) The notice required by Subsection (a)(8) must also be

posted at each door providing ingress to and egress from an

inpatient rehabilitation facility. The facility shall ensure the

informational materials described by that subsection:

(1) are maintained in a well-lighted accessible

location; and

(2) include a statement in the form the commission

requires of the facility's record of compliance with this chapter

and the rules and standards adopted under this chapter that is

updated not less than twice a month and that reflects the record of

compliance during the year preceding the date the statement is last

updated.

(c) The notice required by Subsection (a)(9) must be posted

in English and a second language as required by commission rule.

(d) The commission shall post detailed compliance

information regarding each inpatient rehabilitation facility the

commission licenses, including the information a facility is

required to post under Subsection (b), on the commission's Internet

website. The commission shall update the information every month

to provide the most recent compliance information on each facility.

Sec. 260E.0213. INSPECTIONS. (a) The commission or the

commission's representative may conduct any inspection, including

an unannounced inspection or follow-up inspection, survey, or

investigation that the commission considers necessary and may enter

the premises of an inpatient rehabilitation facility at reasonable

times to conduct an inspection, survey, or investigation in

accordance with commission rules.

(b) The commission is entitled to access books, records, and

other documents maintained by or on behalf of an inpatient

rehabilitation facility to the extent necessary to enforce this

chapter and the rules adopted under this chapter.

(c) A license holder or an applicant for a license is

considered to have consented to entry and inspection of the

inpatient rehabilitation facility by a representative of the

commission in accordance with this chapter.

(d) The commission shall establish procedures to preserve

all relevant evidence of conditions found during an inspection,

survey, or investigation that the commission reasonably believes

threaten the health and safety of a patient, including photography

and photocopying of relevant documents, including a license

holder's notes, a physician's orders, and pharmacy records, for use

in any legal proceeding.

(e) When photographing a patient, the commission:

(1) shall respect the privacy of the patient to the

greatest extent possible; and

(2) may not disclose the patient's identity to the

public.

(f) An inpatient rehabilitation facility, an officer or

employee of the facility, and a patient's attending physician are

not civilly liable for surrendering confidential or private

material under this section, including physician's orders,

pharmacy records, notes and memoranda of a state office, and

patient files.

(g) The commission shall establish in clear and concise

language a form to summarize each inspection report and complaint

investigation report.

(h) The executive commissioner shall establish proper

procedures to ensure that copies of all forms and reports under this

section are made available to consumers, service recipients, and

the relatives of service recipients as the executive commissioner

considers proper.

Sec. 260E.0214. UNANNOUNCED INSPECTIONS. (a) The

commission shall annually conduct at least one unannounced

inspection of each inpatient rehabilitation facility.

(b) If an inpatient rehabilitation facility is a unit within

an assisted living facility, for at least one unannounced annual

inspection of the facility, the commission shall invite at least

one individual as a citizen advocate from:

(1) the AARP;

(2) the Texas Senior Citizen Association;

(3) the commission's Certified Long-term Care

Ombudsman; or

(4) another statewide organization for the elderly.

(c) The commission shall randomly select a number of

inpatient rehabilitation facilities for unannounced inspections to

be conducted between 5 p.m. and 8 a.m. in a percentage amount the

commission determines sufficient to ensure continuous compliance.

The inspections must be cursory to avoid to the greatest extent

feasible any disruption of the patients.

(d) The commission may require additional inspections.

Sec. 260E.0215. FOLLOW-UP INSPECTIONS. (a) The commission

or the commission's representative may conduct a follow-up

inspection of an inpatient rehabilitation facility after

conducting an inspection, survey, or investigation of the facility

under Section 260E.0213 or 260E.0214 to:

(1) evaluate and monitor the determinations of the

initial inspection, survey, or investigation; and

(2) ensure the commission is citing and punishing

deficiencies consistently across the state.

(b) If an inpatient rehabilitation facility corrects a

deficiency cited during a follow-up inspection within the time

specified by commission rule, the commission may not impose

additional punitive actions for the deficiency.

Sec. 260E.0216. REPORTING OF VIOLATIONS. (a) The

commission or the commission's representative conducting an

inspection, survey, or investigation under Section 260E.0213 or

260E.0214 shall:

(1) list each violation of a law or rule on a form the

commission designs for inspections; and

(2) identify the specific law or rule an inpatient

rehabilitation facility violates.

(b) If the commission or the commission's representative

conducting an inspection, survey, or investigation under Section

260E.0213 or 260E.0214 identifies a violation that constitutes

immediate jeopardy to the health or safety of a patient:

(1) the commission shall immediately notify the

inpatient rehabilitation facility's management of the violation;

and

(2) a commission representative shall remain in or be

accessible to the facility until the commission receives the

facility's plan of removal related to the violation.

(c) At the conclusion of an inspection, survey, or

investigation under Section 260E.0213 or 260E.0214, the commission

or the commission's representative conducting the inspection,

survey, or investigation shall discuss the violations with the

inpatient rehabilitation facility's management in an exit

conference. The commission or the commission's representative

shall leave a written list of the violations with the facility at

the time of the exit conference. If the commission or the

commission's representative discovers any additional violations

during the review of field notes or preparation of the official

final list, the commission or the commission's representative shall

give the facility an additional exit conference regarding the

additional violations. An additional exit conference must be held

in person and may not be held by telephone, e-mail, or facsimile

transmission.

(d) An inpatient rehabilitation facility that receives

notice of a violation under this section shall submit a plan to

correct the violations to the regional director of the public

health region in which the facility is located not later than the

10th working day after the date the facility receives the final

official statement of violations.

Sec. 260E.0217. DISCLOSURE OF UNANNOUNCED INSPECTIONS;

CRIMINAL PENALTY. (a) Except as expressly provided by this

chapter, a person commits an offense if the person intentionally

discloses to an unauthorized person the date, time, or any other

information about an unannounced inspection of an inpatient

rehabilitation facility before the inspection occurs.

(b) In this section, "unauthorized person" does not

include:

(1) the commission;

(2) the office of the attorney general;

(3) an ombudsman or representative of the commission;

(4) a representative of an agency or organization when

a Medicare or Medicaid survey is made concurrently with a licensing

inspection; or

(5) any other person or entity authorized by law to

make an inspection or to accompany an inspector.

(c) An offense under this section is a third degree felony.

(d) A person convicted under this section is not eligible

for state employment.

Sec. 260E.0218. OPEN HEARING. (a) The commission shall

hold an open hearing in a licensed inpatient rehabilitation

facility if the commission has taken a punitive action against the

facility in the preceding 12 months or if the commission receives a

complaint from an ombudsman, advocate, patient, or relative of a

patient relating to a serious or potentially serious problem in the

facility and the commission has reasonable cause to believe the

complaint is valid. The commission is not required to hold more

than one open meeting for a particular inpatient rehabilitation

facility in each year.

(b) The commission shall give notice of the time, place, and

date of a hearing under this section to:

(1) the inpatient rehabilitation facility at which the

meeting will be held;

(2) a patient or the designated closest living

relative or legal guardian of a patient, as applicable, who

received rehabilitation services from the facility during the 12

months preceding the date of the meeting; and

(3) appropriate state or federal agencies that work

with the facility.

(c) The commission may exclude an inpatient rehabilitation

facility's administrators and personnel from a hearing held under

this section.

(d) The commission shall notify the inpatient

rehabilitation facility at which a meeting under this section is

held of any complaints received at the hearing and, without

identifying the source of the complaints, provide a summary of the

complaints to the facility.

(e) The commission shall determine and implement a

mechanism to confidentially notify a complainant of the results of

the complaint investigation.

SUBCHAPTER C. GENERAL ENFORCEMENT

Sec. 260E.0301. DENIAL, SUSPENSION, OR REVOCATION OF

LICENSE. (a) In this section:

(1) "Abuse" has the meaning assigned by Section

260A.001.

(2) "Immediate threat to health and safety" means a

situation in which immediate corrective action is necessary because

an inpatient rehabilitation facility's noncompliance with one or

more requirements has caused, or is likely to cause, serious

injury, harm, impairment, or death to a patient.

(3) "Neglect" has the meaning assigned by Section

260A.001.

(b) The commission, after providing notice and opportunity

for a hearing to a license holder or license applicant, may deny,

suspend, or revoke a license if the commission determines the

license holder, applicant, or a person described by Section

260E.0202(c) has:

(1) violated this chapter or a rule, standard, or

order adopted or license issued under this chapter in either a

repeated or substantial manner; or

(2) committed an act described by Section

260E.0306(a)(2), (3), (4), (5), or (6).

(c) Except as provided by Subsection (d), the executive

commissioner shall revoke a license under Subsection (b) if the

commission determines that:

(1) the license holder has committed in a 24-month

period three violations described by Subsection (b) that constitute

an immediate threat to health and safety related to the abuse or

neglect of a patient; and

(2) each of the violations described by Subdivision

(1) is reported in connection with a separate survey, inspection,

or investigation visit that occurred on separate entrance and exit

dates.

(d) The executive commissioner may not revoke a license

under Subsection (c) based on a violation described by Subsection

(c)(1) if:

(1) the violation and the determination of immediate

threat to health and safety are not included on the written list of

violations left with the facility at the time of the initial exit

conference under Section 260E.0216(c) for a survey, inspection, or

investigation;

(2) the violation is not included on the final

statement of violations described by Section 260E.0216; or

(3) the violation has been reviewed under the informal

dispute resolution process established by Section 526.0202,

Government Code, and a determination was made that:

(A) the violation should be removed from the

license holder's record; or

(B) the violation is reduced in severity so that

the violation is no longer cited as an immediate threat to health

and safety related to the abuse or neglect of a patient.

(e) The status of a person as an applicant for a license or a

license holder is preserved until final disposition of the

contested matter, except as the court having jurisdiction of a

judicial review of the matter may order in the public interest for

the welfare and safety of the patients.

(f) In a license revocation case under Subsection (c), to

ensure the health and safety of inpatient rehabilitation facility

patients, the commission may:

(1) assist with obtaining a new operator for the

facility; or

(2) assist with the relocation of patients to another

facility.

(g) A court having jurisdiction of a judicial review of the

matter may not order arbitration, whether on motion of any party or

on the court's own motion, to resolve a dispute involving the

denial, suspension, or revocation of a license under this section

or the conduct with respect to which the denial, suspension, or

revocation of the license is sought.

(h) The executive commissioner may stay a license

revocation required by Subsection (c) if the executive commissioner

determines the stay would not jeopardize the health and safety of

the inpatient rehabilitation facility patients or place the

patients at risk of abuse or neglect. The executive commissioner by

rule shall establish criteria under which a license revocation may

be stayed under this subsection. The executive commissioner shall

follow negotiated rulemaking procedures prescribed by Chapter

2008, Government Code, for the adoption of rules establishing the

criteria. The criteria established must authorize the executive

commissioner to stay a license revocation of a facility for which

the commission has deployed a rapid response team under Section

255.004, if the facility has cooperated with the rapid response

team and demonstrated improvement in quality of care, as determined

by the rapid response team.

Sec. 260E.0302. EMERGENCY SUSPENSION OR CLOSING ORDER. (a)

The commission shall suspend an inpatient rehabilitation

facility's license or order an immediate closing of part of the

facility if:

(1) the commission determines the facility is

operating in violation of the standards prescribed by this chapter;

and

(2) the violation creates an immediate threat to the

health and safety of a patient.

(b) The executive commissioner by rule shall provide for the

placement of patients during an inpatient rehabilitation

facility's suspension or closing to ensure their health and safety.

(c) An order suspending a license or closing a part of an

inpatient rehabilitation facility under this section is

immediately effective on the date on which the license holder

receives written notice or a later date specified in the order.

(d) An order suspending a license or ordering the immediate

closure of a part of an inpatient rehabilitation facility is valid

until the 10th day following the effective date of the order.

(e) A court having jurisdiction of a judicial review of the

matter may not order arbitration, whether on motion of any party or

on the court's own motion, to resolve a dispute involving an

emergency suspension or closing order under this section or the

conduct with respect to which the emergency suspension or closing

order is sought.

Sec. 260E.0303. INJUNCTION. (a) The commission may

petition a district court for:

(1) a temporary restraining order to restrain a person

from a violation or threatened violation of the standards

prescribed by this chapter or any other law affecting inpatient

rehabilitation facility patients if the commission reasonably

believes the violation or threatened violation creates an immediate

threat to the health and safety of a patient; and

(2) an injunction to restrain a person from a

violation or threatened violation of the standards prescribed by

this chapter or any other law affecting facility patients if the

commission reasonably believes the violation or threatened

violation creates a threat to the health and safety of a patient.

(b) A district court, on petition of the commission, may by

injunction:

(1) prohibit a person from violating the standards or

licensing requirements prescribed by this chapter;

(2) restrain or prevent the establishment, conduct,

management, or operation of an inpatient rehabilitation facility

without a license issued under this chapter; or

(3) grant the injunctive relief warranted by the facts

on a finding by the court that a person is violating or threatening

to violate the standards or licensing requirements prescribed by

this chapter.

(c) The attorney general, on the commission's request,

shall bring and conduct in the name of this state an action

authorized by this section.

(d) An action for a temporary restraining order or other

injunctive relief must be brought in the county in which the alleged

violation occurs or is threatened to occur.

Sec. 260E.0304. LICENSE REQUIREMENT; CRIMINAL PENALTY. (a)

A person commits an offense if the person violates Section

260E.0201.

(b) An offense under this section is punishable by a fine of

not more than $1,000 for the first offense and not more than $500

for each subsequent offense.

(c) Each day of a continuing violation after conviction

constitutes a separate offense.

Sec. 260E.0305. CIVIL PENALTY. (a) In this section,

"affiliate" means:

(1) with respect to a partnership other than a limited

partnership, each partner of the partnership;

(2) with respect to a corporation:

(A) an officer;

(B) a director;

(C) a stockholder who owns, holds, or has the

power to vote at least 10 percent of any class of securities issued

by the corporation, regardless of whether the power is of record or

beneficial; and

(D) a controlling individual;

(3) with respect to an individual:

(A) each partnership and each partner in the

partnership in which the individual or any other affiliate of the

individual is a partner; and

(B) each corporation or other business entity in

which the individual or another affiliate of the individual is:

(i) an officer;

(ii) a director;

(iii) a stockholder who owns, holds, or has

the power to vote at least 10 percent of any class of securities

issued by the corporation, regardless of whether the power is of

record or beneficial; and

(iv) a controlling individual;

(4) with respect to a limited partnership:

(A) a general partner; and

(B) a limited partner who is a controlling

individual;

(5) with respect to a limited liability company:

(A) an owner who is a manager as described by the

Texas Limited Liability Company Law, as described by Section

1.008(e), Business Organizations Code; and

(B) each owner who is a controlling individual;

and

(6) with respect to any other business entity, a

controlling individual.

(b) A person who violates or causes a violation of this

chapter or a rule adopted under this chapter is liable for a civil

penalty of not less than $1,000 or more than $20,000 for each act of

violation if the commission determines the violation threatens the

health and safety of a patient.

(c) In determining the amount of a penalty to be awarded

under this section, the trier of fact shall consider:

(1) the seriousness of the violation;

(2) the history of violations committed by the person

or the person's affiliate, employee, or controlling person;

(3) the amount necessary to deter future violations;

(4) the efforts made to correct the violation;

(5) any misrepresentation made to the commission or to

another person regarding:

(A) the quality of services rendered or to be

rendered to patients;

(B) the compliance history of the inpatient

rehabilitation facility or any facilities owned or controlled by an

owner or controlling person of the facility; or

(C) the identity of an owner or controlling

person of the facility;

(6) the culpability of the person who committed the

violation; and

(7) any other matter that should, as a matter of

justice or equity, be considered.

(d) Each day of a continuing violation constitutes a

separate ground for recovery under this section.

(e) Any party to an action brought under this section may

request a jury.

(f) If a person who is liable under this section fails to pay

any amount the person is obligated to pay under this section, this

state may seek satisfaction from any owner, other controlling

person, or affiliate of the person found liable. The owner, other

controlling person, or affiliate may be found liable in the same

action or in another action on a showing by this state that the

amount to be paid has not been paid or otherwise legally discharged.

The executive commissioner by rule may establish a method for

satisfying an obligation imposed under this section from an

insurance policy, letter of credit, or other contingency fund.

(g) On the commission's request, the attorney general may

bring an action in a district court to collect a civil penalty under

this section. The attorney general may recover reasonable expenses

incurred in bringing an action under this section, including court

costs, reasonable attorney's fees, investigative costs, witness

fees, and deposition costs.

(h) A payment submitted to satisfy an obligation under this

section is not an allowable cost for reimbursement under Medicaid.

(i) A civil penalty awarded under this section constitutes a

fine, penalty, or forfeiture payable to and for the benefit of a

government unit and is not compensation for actual pecuniary loss.

Sec. 260E.0306. ADMINISTRATIVE PENALTY. (a) The

commission may assess an administrative penalty against a person

who:

(1) violates this chapter or a rule, standard, or

order adopted or license issued under this chapter;

(2) makes a false statement, that the person knows or

should know is false, of a material fact:

(A) on an application for an initial license or

license renewal or in an attachment to the application; or

(B) with respect to a matter under investigation

by the commission;

(3) refuses to allow a representative of the

commission to inspect:

(A) a book, record, or file required to be

maintained by an inpatient rehabilitation facility; or

(B) any portion of the premises of a facility;

(4) wilfully interferes with the work of a

representative of the commission or the enforcement of this

chapter;

(5) wilfully interferes with a representative of the

commission preserving evidence of a violation of this chapter or a

rule, standard, or order adopted or license issued under this

chapter;

(6) fails to pay a penalty assessed by the commission

under this chapter not later than the 10th day after the date the

assessment of the penalty becomes final; or

(7) fails to notify the commission of a change of

ownership before the effective date of the change of ownership.

(b) Except as provided by Subsection (f) and Section

260E.0308(d), the penalty may not exceed $10,000 a day for each

violation.

(c) Each day of a continuing violation constitutes a

separate violation.

(d) The executive commissioner shall establish gradations

of penalties in accordance with the relative seriousness of the

violation.

(e) In determining the amount of a penalty, the commission

shall consider any matter that justice may require, including:

(1) the gradations of penalties established under

Subsection (d);

(2) the seriousness of the violation, including the

nature, circumstances, extent, and gravity of the prohibited act

and the hazard or potential hazard created by the act to the health

or safety of the public;

(3) the history of previous violations;

(4) deterrence of future violations; and

(5) efforts to correct the violation.

(f) The penalty for a violation of Section 260E.0314(c) may

not exceed $1,000 a day for each violation.

(g) The persons against whom an administrative penalty may

be assessed under Subsection (a) include:

(1) an applicant for a license under this chapter;

(2) a license holder;

(3) a partner, officer, director, or managing employee

of a license holder or applicant; and

(4) a controlling person.

(h) A penalty assessed under Subsection (a)(6) is in

addition to the penalty previously assessed and not timely paid.

(i) The commission shall develop and use a system to record

and track the scope and severity of each violation of this chapter

or a rule, standard, or order adopted under this chapter for the

purpose of assessing an administrative penalty for the violation or

taking some other enforcement action against the appropriate

inpatient rehabilitation facility to deter future violations. The

system:

(1) must be comparable to the system used by the

Centers for Medicare and Medicaid Services to categorize the scope

and severity of violations for a facility; and

(2) may be modified, as appropriate, to reflect

changes in industry practice or changes made to the system used by

the Centers for Medicare and Medicaid Services.

Sec. 260E.0307. VIOLATION OF LAW RELATING TO ADVANCE

DIRECTIVES. (a) The commission shall assess an administrative

penalty under this subchapter against an inpatient rehabilitation

facility that violates Section 166.004.

(b) Notwithstanding Sections 260E.0305(b) and (c):

(1) a penalty assessed in accordance with this section

must be $500; and

(2) a separate penalty may not be assessed for a

separate day of a continuing violation.

(c) Section 260E.0308 does not apply to a penalty assessed

in accordance with this section.

Sec. 260E.0308. RIGHT TO CORRECT. (a) In this section:

(1) "Actual harm" means a negative outcome that

compromises a patient's physical, mental, or emotional well-being.

(2) "Immediate threat to the health or safety of a

patient" means a situation that causes, or is likely to cause,

serious injury, harm, or impairment to or the death of a patient.

(3) "Pattern of violation" means repeated, but not

pervasive, failures of an inpatient rehabilitation facility to

comply with this chapter or a rule, standard, or order adopted under

this chapter that:

(A) result in a violation; and

(B) are found throughout the services provided by

the facility or that affect or involve the same patients or facility

employees.

(4) "Widespread in scope" means a violation of this

chapter or a rule, standard, or order adopted under this chapter

that:

(A) is pervasive throughout the services

provided by the inpatient rehabilitation facility; or

(B) represents a systemic failure by the facility

affecting or having the potential to affect a large portion of or

all of the facility patients.

(b) The commission may not collect an administrative

penalty against an inpatient rehabilitation facility under this

subchapter if, not later than the 45th day after the date the

facility receives notice under Section 260E.0309(c), the facility

corrects the violation.

(c) Subsection (b) does not apply:

(1) to a violation that the commission determines:

(A) represents a pattern of violation that

results in actual harm;

(B) is widespread in scope and results in actual

harm;

(C) is widespread in scope, constitutes a

potential for actual harm, and relates to:

(i) patients' rights;

(ii) treatment of patients;

(iii) patient behavior and inpatient

rehabilitation facility practices;

(iv) quality of care;

(v) medication errors;

(vi) standard menus and nutritional

adequacy;

(vii) physician visits;

(viii) infection control;

(ix) life safety from fire; or

(x) emergency preparedness and response;

(D) constitutes an immediate threat to the health

or safety of a patient; or

(E) substantially limits the facility's capacity

to provide care;

(2) to a violation described by Section

260E.0306(a)(2), (3), (4), (5), (6), or (7);

(3) to a violation of Section 260A.014 or 260A.015; or

(4) to a second or subsequent violation of Section

326.002 that occurs before the second anniversary of the date of the

first violation.

(d) An inpatient rehabilitation facility that corrects a

violation under Subsection (b) must maintain the correction. If

the facility fails to maintain the correction until at least the

first anniversary of the correction date, the commission may assess

an administrative penalty under this subchapter for the subsequent

violation. A penalty assessed under this subsection shall be equal

to three times the amount of the penalty assessed but not collected

under Subsection (b). The commission is not required to provide the

facility an opportunity to correct the subsequent violation under

this section.

Sec. 260E.0309. REPORT RECOMMENDING ADMINISTRATIVE

PENALTY. (a) The commission may issue a preliminary report stating

the facts on which the commission concludes that a violation of this

chapter or a rule, standard, or order adopted or license issued

under this chapter has occurred if the commission has:

(1) examined the possible violation and facts

surrounding the possible violation; and

(2) concluded that a violation has occurred.

(b) The report may recommend a penalty under Section

260E.0311 and the amount of the penalty.

(c) Not later than the 10th day after the date on which the

report is issued, the commission shall give written notice of the

report to the person charged with the violation. The notice must

include:

(1) a brief summary of the charges;

(2) a statement of the recommended penalty amount;

(3) a statement of whether the violation is subject to

correction under Section 260E.0308 and, if the violation is subject

to correction under that section, a statement of:

(A) the date on which the inpatient

rehabilitation facility must file with the commission a plan of

correction to be approved by the commission; and

(B) the date on which the plan of correction must

be completed to avoid assessment of the penalty; and

(4) a statement that the person charged has a right to

a hearing on the occurrence of the violation, the amount of the

penalty, or both.

(d) Not later than the 20th day after the date on which the

notice under Subsection (c) is sent, the person charged may:

(1) provide to the commission written consent to the

commission's report, including the recommended penalty;

(2) submit a written request for a hearing; or

(3) if the violation is subject to correction under

Section 260E.0308, submit a plan of correction to the commission

for approval.

(e) If the violation is subject to correction under Section

260E.0308 and the person reports to the commission that the

violation has been corrected, the commission shall inspect the

correction or take another step necessary to confirm the violation

has been corrected and shall notify the person that:

(1) the correction is satisfactory and that a penalty

is not assessed; or

(2) the correction is not satisfactory and that a

penalty is recommended.

(f) Not later than the 20th day after the date on which a

notice under Subsection (e)(2) is sent, the person charged may:

(1) provide to the commission written consent to the

commission's report, including the recommended penalty; or

(2) submit a written request for a hearing.

(g) If the person charged with the violation consents to the

administrative penalty the commission recommends, does not timely

respond to a notice sent under Subsection (c) or (e), or fails to

correct the violation to the commission's satisfaction, the

commission shall assess the recommended administrative penalty.

(h) If the commission assesses the recommended penalty, the

commission shall give written notice to the person charged of the

decision and the person shall pay the penalty.

Sec. 260E.0310. HEARINGS ON ADMINISTRATIVE PENALTIES. (a)

An administrative law judge of the State Office of Administrative

Hearings shall order a hearing and the commission shall give notice

of the hearing if a person charged under Section 260E.0309(c)

requests a hearing.

(b) The hearing must be held before an administrative law

judge.

(c) The administrative law judge shall make findings of fact

and conclusions of law regarding the occurrence of a violation of

this chapter or a rule or order adopted or license issued under this

chapter.

(d) Based on the findings of fact and conclusions of law,

the administrative law judge by order shall find:

(1) a violation has occurred and assess an

administrative penalty; or

(2) a violation has not occurred.

(e) Proceedings under this section are subject to Chapter

2001, Government Code.

Sec. 260E.0311. NOTICE AND PAYMENT OF ADMINISTRATIVE

PENALTY; INTEREST; REFUND. (a) The commission shall provide

notice of the decision taken under Section 260E.0310(d) to the

person charged. If the commission determines a violation has

occurred and assesses an administrative penalty, the commission

shall provide to the person charged written notice of:

(1) the determination;

(2) the amount of the penalty;

(3) the rate of interest payable with respect to the

penalty and the date on which interest begins to accrue;

(4) whether payment of the penalty or other action

under Section 260E.0313 is required; and

(5) the person's right to judicial review of the order.

(b) Not later than the 30th day after the date on which the

commission's order becomes final, the person charged with the

penalty shall:

(1) pay the full amount of the penalty; or

(2) file a petition for judicial review contesting the

occurrence of the violation, the amount of the penalty, the failure

to correct the violation to the commission's satisfaction, or all

of the above.

(c) Notwithstanding Subsection (b), the commission may

permit the person to pay the penalty in installments or may require

the person to use the amount of the penalty under the commission's

supervision in accordance with Section 260E.0313.

(d) If the person does not pay the penalty within the 30-day

period:

(1) the penalty is subject to interest; and

(2) the commission may refer the matter to the

attorney general for collection of the penalty and interest.

(e) If a penalty is reduced or not assessed, the commission

shall:

(1) remit to the person charged the appropriate amount

of any penalty payment plus accrued interest; or

(2) execute a release of the supersedeas bond if one

has been posted.

(f) Accrued interest on amounts remitted by the commission

under Subsection (e)(1) must be paid:

(1) at a rate equal to the rate charged on loans to

depository institutions by the New York Federal Reserve Bank; and

(2) for the period beginning on the date the penalty is

paid under Subsection (b) and ending on the date the penalty is

remitted.

(g) Interest under Subsection (d) must be paid:

(1) at a rate equal to the rate charged on loans to

depository institutions by the New York Federal Reserve Bank; and

(2) for the period beginning on the date the notice of

the commission's order is received by the person and ending on the

date the penalty is paid.

Sec. 260E.0312. APPLICATION OF OTHER LAW. The commission

may not assess more than one monetary penalty under this chapter and

Chapter 32, Human Resources Code, for a violation arising out of the

same act or failure to act, except as provided by Section

260E.0308(d). The commission may assess the greater of a monetary

penalty under this chapter or a monetary penalty under Chapter 32,

Human Resources Code, for the same act or failure to act.

Sec. 260E.0313. AMELIORATION OF VIOLATION. (a) In this

section, "immediate jeopardy to health and safety" means a

situation in which immediate corrective action is necessary because

an inpatient rehabilitation facility's noncompliance with one or

more requirements has caused, or is likely to cause, serious

injury, harm, impairment, or death to a patient receiving care in

the facility.

(b) In lieu of demanding payment of an administrative

penalty assessed under Section 260E.0306, the commission may, in

accordance with this section, allow the person to use, under the

commission's supervision, any portion of the penalty to ameliorate

the violation or to improve services, other than administrative

services, in the inpatient rehabilitation facility affected by the

violation.

(c) The commission shall offer amelioration to a person for

a charged violation if the commission determines that the violation

does not constitute immediate jeopardy to the health and safety of a

facility patient.

(d) The commission may not offer amelioration to a person

if:

(1) the person has been charged with a violation that

is subject to correction under Section 260E.0308; or

(2) the commission determines the charged violation

constitutes immediate jeopardy to the health and safety of an

inpatient rehabilitation facility patient.

(e) The commission shall offer amelioration to a person

under this section not later than the 10th day after the date the

person receives from the commission a final notice of assessment of

administrative penalty that is sent to the person after an informal

dispute resolution process but before an administrative hearing

under Section 260E.0310.

(f) A person to whom the commission offers amelioration

shall file a plan for amelioration not later than the 45th day after

the date the person receives the amelioration offer. In submitting

the plan, the person must agree to waive the person's right to an

administrative hearing under Section 260E.0310 if the commission

approves the plan.

(g) At a minimum, a plan for amelioration must:

(1) propose changes to the management or operation of

the inpatient rehabilitation facility that will improve services to

or quality of care of facility patients;

(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 of facility patients;

(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.

(h) A plan for amelioration may include proposed changes to:

(1) improve staff recruitment and retention;

(2) offer or improve rehabilitation services for

patients; and

(3) improve the overall quality of care for patients.

(i) The commission may require an amelioration plan to

propose changes that would result in conditions exceeding the

requirements of this chapter or the rules adopted under this

chapter.

(j) 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 person's plan, the commission

shall deny a pending request for a hearing submitted by the person

under Section 260E.0309(d).

(k) The commission may not offer amelioration to a person:

(1) more than three times in a two-year period; or

(2) more than one time in a two-year period for the

same or similar violation.

Sec. 260E.0314. OTHER REMEDIES. (a) If the commission

finds that an inpatient rehabilitation facility has committed an

act for which a civil penalty may be imposed under Section

260E.0305, the commission may, as appropriate under the

circumstances, order the facility to immediately suspend

admissions.

(b) A suspension of admissions ordered under Subsection (a)

is effective on the date a representative of the inpatient

rehabilitation facility receives notice of the order and of the

manner in which the order may be appealed. Not later than the 14th

day after the date the suspension becomes effective, the commission

must provide an opportunity for a hearing with respect to an appeal

of the order.

(c) During the period that an inpatient rehabilitation

facility is ordered to suspend admissions, the facility shall post

a notice of the suspension on all doors providing ingress to and

egress from the facility. The notice must be posted in the form the

commission requires.

(d) A person commits an offense if the person knowingly:

(1) violates Subsection (c); or

(2) removes a notice posted under Subsection (c)

before the inpatient rehabilitation facility is allowed to admit

patients.

(e) An offense under Subsection (d) is a Class C

misdemeanor.

(f) A court having jurisdiction of a judicial review of the

matter may not order arbitration, whether on motion of any party or

on the court's own motion, to resolve a dispute involving an order

suspending admissions under this section or the conduct with

respect to which the order suspending admissions is sought.

SECTION 6. (a) As soon as practicable after the effective

date of this Act but not later than January 1, 2026, the executive

commissioner of the Health and Human Services Commission shall

adopt rules as required by this Act.

(b) Notwithstanding Chapter 260E, Health and Safety Code,

as added by this Act, a person is not required to hold a license

under that chapter until September 1, 2026.

SECTION 7. This Act takes effect September 1, 2025.