The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Chapter 104--Provisions relating to the data collection responsibilities of the Department of State Health Services as the state health planning and development agency found within the Health and Safety Code, Title 2. (2) Chapter 311--Provisions relating to the powers and duties of hospitals found within the Health and Safety Code, Title 4. (3) Charity care--The unreimbursed cost to a hospital of providing, funding, or otherwise financially supporting health care services on an inpatient or outpatient basis to a person classified by the hospital as financially or medically indigent and/or providing, funding or otherwise financially supporting health care services provided to financially indigent persons through other nonprofit or public outpatient clinics, hospitals or health care organizations. (4) Community benefits--The unreimbursed cost to a hospital of providing charity care, government-sponsored indigent health care, donations, education, government-sponsored program services, research, and subsidized health services. Community benefits do not include the cost to the hospital of paying any taxes or other governmental assessments. (5) Department--The Department of State Health Services. (6) Donations--The unreimbursed costs of providing cash and in-kind services and gifts, including facilities, equipment, personnel, and programs, to other nonprofit or public outpatient clinics, hospitals, or health care organizations. (7) Education-related cost--The unreimbursed cost to a hospital of providing, funding, or otherwise financially supporting educational benefits, services, and programs including education of medical professionals and health care providers; scholarships and funding to medical schools, colleges, and universities for health professions education; education of patients concerning diseases and home care in response to community needs; and community health education through informational programs, publications, and outreach activities in response to community needs. (8) Financially indigent--An uninsured or underinsured person who is accepted for care with no obligation or a discounted obligation to pay for the services rendered based on the hospital's eligibility system. (9) Government sponsored indigent health care--The unreimbursed cost to a hospital of providing health care services to recipients of Medicaid and other federal, state, or local indigent health care programs, eligibility for which is based on financial need. (10) Government-sponsored program unreimbursed costs--The unreimbursed cost to the hospital of providing health care services to the beneficiaries of Medicare, the Civilian Health and Medical Program of the Uniformed Services, and other federal, state, or local government health care programs. (11) Health care facility--Regardless of ownership, a public or private hospital, skilled nursing facility, intermediate care facility, ambulatory surgical facility, family planning clinic which performs ambulatory surgical procedures, rural health initiative clinic, urban health initiative clinic, kidney disease treatment facility, inpatient rehabilitation facility, and other facilities as defined by federal law, but does not include the office of physicians or practitioners of the healing arts singly or in groups in the conduct of their profession. (12) Health care organization--A nonprofit or public organization that provides, funds, or otherwise financially supports health care services provided to financially indigent persons. (13) Hospital--A general or special hospital licensed under the Health and Safety Code, Chapter 241; a private mental hospital licensed under the Health and Safety Code, Chapter 577; and a treatment facility licensed under the Health and Safety Code, Chapter 464. (14) Hospital eligibility system--The financial criteria and procedure used by a hospital to determine if a patient is eligible for charity care. The system shall include income levels and means testing indexed to the federal poverty guidelines; provided, however, that a hospital may not establish an eligibility system which sets the income level eligible for charity care lower than that required by counties under §61.023 or higher, in the case of the financially indigent, than 200% of the federal poverty guidelines. A hospital may determine that a person is financially or medically indigent pursuant to the hospital's eligibility system after health care services are provided. (15) Hospital system--A system of local nonprofit hospitals under the common governance of a single corporate parent that are located within a radius of not more than 125 linear miles of the corporate parent. (16) Medically indigent--A person whose medical or hospital bills after payment by third-party payors exceed a specified percentage of the patient's annual gross income, determined in accordance with the hospital's eligibility system, and the person is financially unable to pay the remaining bill. (17) Net patient revenue--An accounting term that shall be calculated in accordance with generally accepted accounting principles for hospitals. (18) Nonprofit hospital-- (A) A hospital that is organized as a nonprofit corporation or a charitable trust under the laws of this state or any other state or country and is: (i) eligible for tax-exempt bond financing; or (ii) exempt from state franchise, sales, ad valorem, or other state or local taxes. For purposes of determining whether a hospital is "organized" as a nonprofit corporation or charitable trust, the department will look at the entity which holds the hospital license issued by the department; that is the entity which must be organized as a nonprofit corporation or charitable trust. (B) A "nonprofit hospital" shall not include a hospital that: (i) is exempt from state franchise, sales, ad valorem, or other state or local taxes; (ii) does not receive payment for providing health care services to any inpatients or outpatients from any source including, but not limited to, the patient or any person legally obligated to support the patient, third-party payers, Medicare, Medicaid, or any other federal, state, or local indigent care program; payment for providing health care services does not include charitable donations, legacies, bequests, or grants or payments for research; and (iii) does not discriminate on the basis of inability to pay, race, color, creed, religion, or gender in its provision of services. (C) A "nonprofit hospital" does not include a hospital that is located in a county with a population under 50,000 where the entire county or the population of the entire county has been designated as a health professional shortage area. A "nonprofit hospital" includes a hospital that is located in a county with a population under 50,000 population where only a subpopulation, partial geographic area or a facility is designated as a health professional shortage area. (19) Patient data--Information derived from individual, acute care, inpatient, and outpatient discharge abstract records. (20) Subsidized health services--Services provided by a hospital in response to community needs for which the reimbursement is less than the hospital's cost for providing the services and which must be subsidized by other hospital or nonprofit supporting entity revenue sources. Subsidized health services include, but are not limited to, emergency and trauma care, neonatal intensive care, freestanding community clinics, and collaborative efforts with local government or private agencies in preventive medicine. (21) Survey--The annual data collection effort conducted by the department to implement the provisions of Health and Safety Code, Chapters 104 and 311. (22) Tax exempt benefits--All of the following, calculated in accordance with standard accounting principles for hospitals for tax purposes using the applicable statutes, rules and regulations regarding the calculation of these taxes: (A) the dollar amount of federal, state, and local taxes foregone by a nonprofit hospital and its nonprofit supporting entities. For purposes of this definition federal, state, and local taxes include income, franchise, ad valorem, and sales taxes; (B) the dollar amount of contributions received by a nonprofit hospital and its nonprofit supporting entities; and (C) the value of tax-exempt bond financing received by a nonprofit hospital and its nonprofit supporting entities. (23) Unreimbursed costs--The costs a hospital incurs for providing services after subtracting payments received from any source for such services including but not limited to the following: third-party insurance payments; Medicare payments; Medicaid payments; Medicare education reimbursements; state reimbursements for education; payments from drug companies to pursue research; grant funds for research; and disproportionate share payments. For purposes of this definition, the term "costs" shall be calculated by applying the cost to charge ratios derived in accordance with generally accepted accounting principles for hospitals to billed charges. The calculation of the cost to charge ratios shall be based on the most recently completed and audited prior fiscal year of the hospital or hospital system. For purposes of this definition, charitable contributions and grants to a hospital, including transfers from endowment or other funds controlled by the hospital or its nonprofit supporting entities, shall not be subtracted from the costs of providing services for purposes of determining the unreimbursed costs of charity care and government-sponsored indigent health care.
Source Note: The provisions of this §13.13 adopted to be effective February 23, 1994, 19 TexReg 921; amended to be effective February 28, 1996, 21 TexReg 1282; amended to be effective May 10, 1998, 23 TexReg 4269; amended to be effective February 8, 2001, 26 TexReg 1141; amended to be effective December 4, 2007, 32 TexReg 8827