DAN MORALES

ATTORNEY GENERAL 

## QBffice of tfp $ZM.mwp Qhneral Qtate of IEexae January 31,1992 Honorable Bob Bullock Lieutenant Governor ofTexas P.0. Box 12068 Austin, Texas 7871l-2868 Honorable Mike Moncrief Chairman Interim Committee on Health and Human Services Texas State Senate P.0. Box 12068 Austin Texas 7871l-2968 Opinion No.DM-85 Re: Authority of the Texas Department of Health and the Texas Department of Mental Health and Mental Retardation to inspect private psychiatric facilities (RQ-269)

Gentlemen: You request an opinion on the authority ofthe Texas Department ofMental Health and Mental Retardation (TDMHMR) and the Texas Department ofHealth (TDH) to inspect private psychiatric facilities to ensure compliance with state law and standards. The sixquestions you ask require us to consider several provisions relevant tohospital licensing, regulation, and inspection. These are asfollows:

Health & Safety Code ch. 222, subch. B, which places certain limits on the inspection ofhealth care facilities bystate agencies; Health & Safety Code ch. 241, the Texas Hospital Licensing Law; Health & Safety Code ch. 571; (nonsubstantive recodification of general provisions of Texas Mental Health Code, formerly codified atV.T.C.S. arts. 5547-l through 5547-21); Health & Safety Code ch. 577 (nonsubstantive recodification of Texas Mental Health Code provisions on licensing private mental hospitals, formerly codified at V.T.C.S. arts. 5547-88 through 5547-99).

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In addition, some ofthese statutes refer to titles XVIII a&l XIX ofthe Social Security Act, the federal laws that respectively establish the medicare and medicaid programs. Medicare provides for health insurance for aged and disabled persons, 42 U.S.C. 0 1395etseq., while medicaid provides for grants to the states for medical assistance programs for needy individuals, 42USC. 9 1396etseq.; 59TEX.JUR. 3d PublicAid and We&zre34 (1988). The Department ofHuman Services isthe state agency designated to administer the medical assistance program. Hum. Res. Code ch.32;59TEX.JUR. 3d,supra,$17. You inquire about the authority ofTDH and TDMHMR to inspect certain hospitals that have already obtained a license. You state that TDMHMR and TDH have construed subchapter Bofchapter 222 as significantly limiting their authority to inspect hospitals and other facilities subject to itsprovisions. They rely primarily on section 222.024 ofthe Health and Safety Code, which provides asfollows:

(a) A hospital licensed bythe Texas Department ofHealth or the Texas Department of Mental Health and Mental Retardation is not subject to additional licensing inspections under Chapter 241 (Texas Hospital Licensing Law) or bythe licensing agency while the hospital maintains: (1) certification under Title XVIII of the Social Security Act (42U.S.C. Section 1395et seq.); or (2) accreditation from the Joint Commission on Accreditation of Health Organizations, the American Osteopathic Association, or other national accreditation organization for the offered services. (b) An agency licensing a hospital exempt from a licensing inspection under Subsection (a) shall issue a renewal license to the hospital if the hospital annually remits any applicable fees and submits a copy of the most recent inspection results report from the certification or accreditation body. Section 222.024 thus deals with “licensing inspections” and the procedure for renewing licenses ofhospitals either certified as a medicare provider’ or accredited

‘To retain certitication asa medicare provider, ahospital must be inspected every 12months. 42C.F.R. $5488.3,48&u).

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by a private accrediting association. 2 According to your letter, TDMHMR reads section 222.024 as providing that, if a hospital licensed under chapter 577 is medicare certified or accredited by an appropriate national organization, TDMHMR may enter and inspect itto enforce state law or standards only based on a complaint. TDH contends that subchapter B deprives it of the authority to conduct an inspection ofahospital the agency licenses, with orwithout a complaint, after the hospital obtains an initial license under chapter 241, if the hospital is medicare certified or accredited byan appropriate national organization. The argument isalso raised that the words “additional licensing inspections,” in section 222.024 refer to all inspections bythe regulatory agencies for any purpose, including an inspection to evaluate the hospital’s compliance with laws and rules conducted at atime when the license isnot up for renewal. This argument isbased on the view that acompliance inspection isessentially an inspection for compliance with the conditions oflicensing. Ifviolations are discovered, the hospital’s license might be suspended or revoked. Thus, compliance inspections could certainly affect ahospital’s licensing status. You believe, however, that “additional licensing inspections” refers only to those inspections required asacondition precedent to granting an initial or renewal license, and does not refer to inspections made to enforce state law and standards. The answers to your specific questions depend in large part on how the phrase

“additional licensing inspections” in section 222.024 isconstrued. An examination of the prior versions ofthis provision willhelp usascertain itsmeaning. When the predecessor ofsection 222.024 was first adopted in 1977,itread in part: All hospitals licensed by..

.[TDH] which have been certified under Title XVIII ofthe Social Security Act.

..,or which have obtained accreditation from the Joint Commission on Accreditation of Hospitals or. ..the American Osteopathic Association shall not be subject to licensing inspections under the Texas Hospital Licensing Lawbythe agency so long as such certification or accreditation ismaintained. Such hospitals shall

*Institutions accredited ashospitals by the Joint Commission on Accreditation of Healthcare Organizations or the American Osteopathic Association are deemed to meet all of the Medicare conditions ofparticipation for hospitals, except conditions referenced insection 488.5oftitle 42ofthe Code ofFederal Regulations. 42C.F.R. 9488.5.

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only be required to annually remit the statutory licensing fees in order tobe issued alicense bythe licensing agency. Acts 1977,65th Leg., ch.387,s 4(a), at 1055. Thus, the restriction initially applied only to one agency and only to licensing inspections under one statute. After the above provision was adopted, TDH could not act under the Texas Hospital Licensing Law to inspect a hospital as a condition of licensing or license renewal if the hospital was appropriately accredited or certified. See Health & Safety Code 5$241.023(a) (licensing of hospitals), 241.051 (inspection of hospitals). A hospital would no longer be subject to two annual inspection procedures --one for licensing as a Texas hospital, and the other for certification for medicare. The purpose clause ofthe 1977enactment demonstrates the legislature’s intent toprevent such duplicate inspections:

The purpose of this Act is to require that state agencies, including the Texas Department of Health Resources [TDH], the Department of Public Welfare, and those agencies with which each contracts, who perform surveys, inspections, and investigations of health care facilities, do not duplicate their procedures or subject such health care facilities to duplicitous rules and regulations. Id. $1 (now codified as Health and Safety Code section 222.021). The purpose of the legislation is to prevent duplicative inspections, not to remove all authority to inspect.The predecessor of section 222.024 was amended in 1983. Agencies other than TDH had acquired responsibility for licensing hospitals, and coordination among these agencies was necessary to prevent duplication of effort. Seegenerally House Comm. on Public Health, Bill Analysis, H.B. 2271, 68th Leg. (1983). The amended provision applied to hospitals licensed by TDH, TDMHMR, or by the Texas Commission on Alcoholism, nowproviding that hospitals with the appropriate accreditation or medicare certification would “not be subject to additional licensing inspections under the Texas Hospital Licensing Law..

.or by the licensing agency so long as such certification or accreditation is maintained.” Acts 1983, 68th Leg., ch. 1025, !$1,at 5458. Thus, the three named agencies could not perform “licensing inspections” of hospitals in addition to those necessary for the hospital to be certified for medicare or accredited bythe accrediting associations.

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Other provisions of chapter 222, subchapter B, implement the legislative purpose of ensuring “that agencies that perform inspections of health care facilities

...do not duplicate their procedures or subject health care facilities to duplicative rules.” Subchapter B implements this purpose in various ways. See Health & Safety Code 58222.023(b) (a state agency is to accept an on-site inspection by another state agency if it substantially complies with first agency’s inspection requirement),3 222.025(a) (Texas Department of Human Services, TDMHMR, and TDH to establish procedures to eliminate or reduce duplication of functions in certifying or licensing hospitals, nursing homes, or other facilities under their jurisdiction for payments under medicare and medicaid programs), 222.025(b) (TDH to coordinate licensing or certification procedures). The prohibition in section 222.024 against the performance of “additional licensing inspections” must be read in the context ofthe rest ofthe statute, which isdirected at coordinating the activities of two or more agencies that have some jurisdiction over .the same hospital.

“Inspection” is defined for purposes of subchapter B as including “a survey, inspection, investigation, or other procedure necessary for a state agency to carry out an obligation imposed by federal and state law, rules, and regulations.” Id. 3222.022(b). This definition contemplates that an inspection may be performed to carry out any of the obligations imposed on the regulatory agency by federal and state law, rules, and regulations. Section 222.024 involves amuch narrower class of inspections than the class identified in the definition. “Licensing” has been defined as “the issuance of permits evidencing the licensee’s legal right to do what would otherwise be unlawful.” Lipsey v. TerarDep’t ofHealth, 727 S.W.2d 61, 65 (Tex. App.--Austin 1987, writ refd n.r.e.). Issuance of such permits is only one of the obligations imposed on state agencies by federal and state laws, rules, and regulations concerning health care facilities, and itisthe only obligation affected by section 222.024. Its provision for license renewal on submission of the most recent inspection report shows that it refers to the annual inspection undertaken to determine ifthe license shall be continued for another year. Ifsection 222.024 were read to bar all inspections byTDH and TDMHMR, they would be unable to discover and correct problems that might arise at any time during the year. Unsafe conditions in a hospital might persist undetected until the license wasup for renewal. The hospital would be accountable for compliance with the law only during the annual inspection for license renewal. Ifthe legislature had
3Whether an on-site inspection substantially complies with another agency’s inspection requirements isaquestion offact. Attorney General Opinion JM-652 (1987).

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intended to place such a drastic limit on the enforcement power of TDH and TDMHMR, we believe it would have done so expressly. We conclude that

“additional licensing inspections” refers only to inspections required as a condition ofreceiving or renewing alicense entitling the licensee to operate ahospital. Your questions one through four are asfollows: 1. During the period after a hospital governed by Chapter 241 obtains its initial license, is TDH authorized to conduct a random, unannounced inspection or program evaluation of the hospital to ensure compliance with state laws or TDH standards? 2. During the period after a hospital governed by.Chapter 577 obtains itsinitial license, isTDMHMR authorized to conduct a random, unannounced inspection or program evaluation of the hospital to ensure compliance with state laws ‘or TDMHMR standards? 3. During the period after a hospital governed by Chapter 241 obtains its initial license, is TDH authorized to conduct an inspection or program evaluation of the hospital based on a complaint ofaviolation ofstate laworTDH standards? 4. During the period after a hospital governed by Chapter 577 obtains itsinitial license, isTDMHMR authorized to conduct an inspection or program evaluation of the hospital based on a complaint ofaviolation ofstate laworTDH standards? These questions inquire about hospitals that have already obtained an initial license. Thus, the inspections you inquire about are not licensing inspections. Section 222.024 of the Health and Safety Code, and its restrictions as to licensing inspections of hospitals certified for medicare participation or accredited by a national accrediting organization, is not relevant to these questions. You also ask about program evaluations. We assume that a program evaluation means an evaluation ofthe delivery ofaparticular category ofhospital services, rather than of the hospital operation in its entirety. Defined in this way, “program evaluation” would be atype ofinspection.

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Chapter 241 ofthe Health and Safety Code, administered byTDH, governs the licensing ofhospitals. Its purpose is “toprotect and promote the public health and welfare by providing for the development, establishment, and enforcement of certain standards in the construction, maintenance, and operation of hospitals.” Health & Safety Code 5241.002; seeid $241.003(4), (6) (11) (defining “hospital”). It does not apply to a facility licensed under chapter 577 ofthe Health and Safety Code (formerly articles 5547-88 through 5547-99, V.T.C.S.), or to one maintained or operated by the federal government, the state, or an agency of the federal or state government. Id. $241.004. Licensing procedures are set out at sections 241.021 through 241.025, in subchapter B of chapter 241. Section 241.026 provides that the Board of Health, with the advice ofthe Hospital Licensing Advisory Council, shall adopt and enforce rules and minimum standards to further the purposes ofchapter 241. ‘The rules and minimum standards may relate only to”the following subjects:

(1) minimum requirements for staffing by physicians and nurses; (2) hospital services relating topatient care; and (3) fire prevention, safety, and sanitary provisions ofhospitals. Id. 3241.026(a). In addition, the board’s standards may not exceed the minimum standards for certification under title XVIII of the Social Security Act. Id. 9241.026(b); seealso id.$241.027 (minimum standards forpatient transfers). Enforcement provisions are found in subchapter C. Section 241.051 provides the following: An officer, employee, or agent ofthe department may enter

and inspect a hospital at any reasonable time to assure compliance with orprevent aviolation ofthis chapter. This authority to enter and inspect exists “atany reasonable time,” not merely when the hospital’s license isissued or renewed. The department may begin action under the enforcement provisions when the hospital’s noncompliance is discovered, and need not wait until its license isup for renewal. Thus, the department “may deny, suspend, or revoke a hospital’s license” if the hospital has failed substantially to comply with chapter 241or rules adopted thereunder. Id. Q241.053(a)( 1)(emphasis

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added). It may also seek a “temporary restraining order to restrain a continuing violation ifthe department finds that the violation creates an immediate threat to the health and safety ofthe patients ofa hospital.” Id. $I 241.054(c) (emphasis added). The provisions authorizing inspection and enforcement enable TDH to act when action isneeded toprotect the health and safety ofpatients. We answer your first and third questions in the affirmative. During the period after ahospital governed bychapter 241has obtained itsinitial license, TDH is authorized by section 241.051 to conduct a random, unannounced inspection of such a hospital to ensure compliance with state laws or TDH standards, and to inspect such ahospital inresponse to acomplaint ofaviolation ofstate law or TDH standards. Ofcourse, the inspection must be made at a reasonable time, and TDH must determine that making the inspection isnecessary to carry out its duties under chapter 241 or other relevant state and federal laws, rules, and regulations. See id. 

### 55222.023,241.054. We will now address your second and fourth questions, concerning the authority ofTDMHMR to inspect hospitals governed by chapter 577 ofthe Health and Safety Code. Chapter 577ispart ofthe Texas Mental Health Code, adopted in 1957. Acts 1957,55th Leg., ch. 243, at 505;see also Acts 1983,68th Leg., ch. 47, at 211 (substantive revision ofTexas Mental Health Code). The Texas Mental Health Code, originally codified as articles 5547-l through 5547-103, V.T.C.S., has been recodified astitle 7,subtitle C,ofthe Health and Safety Code. See Health & Safety Code chs.571-77. Itspurpose is,inpart, asfollows:

The purpose of this subtitle [Texas Mental Health Code] is to provide to each person having severe mental illness access to humane care and treatment by: (1) facilitating treatment inan appropriate setting;

. . . .(7) safeguarding the person’s legal rights so as to advance and not impede the therapeutic and protective purposes ofinvoluntary care; and (8) safeguarding the rights of the person who voluntarily requests inpatient care.



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Id Q571.002. The provisions ofthe Mental Health Code are relevant to both courtordered and voluntary hospitalization. See Health & Safety Code chs. 572 (Voluntary Inpatient Mental Health Services), 574 (Court-Ordered Mental Health Services). Chapter 577 provides that no’person or political subdivision may operate a mental hospital without a license issued byTDMHMR or TDH. Health & Safety Code 5577.001(a); see also id. 5s 577.001(b), 577.009 (referring to mental health facilities licensed by TDMHMR or TDH). A mental hospital is defined as a hospital: (A) operated primarily to provide inpatient care and treatment forpersons with mental illness; or (B) operated by a federal agency4 that is equipped to provide inpatient care and treatment for persons with mental illness. Id. Q571.002(13).5 Section 577.005 states that TDMHMR “shall conduct an investigation as considered necessary after receiving the proper license application.” This investigation is a “licensing inspection” of the kind referred to in section 222.024. The Board of Mental Health and Mental Retardation “shall adopt rules and standards the board considers necessary and appropriate to ensure the proper care and treatment of patients in a private mental hospital or mental health facility required to obtain a license under this chapter.” Id. 5577.010; seeid. §571.003(12) (defining mental health facility). TDMHMR may also require a license holder to make reports and to keep records that “the department considers necessary to ensure compliance with this subtitle and the department’s rules and standards.” Id. 8577.011. Section 577.013 provides for investigations as needed to determine whether hospitals are complying with the lawand the department’s standards:

(a) The department may make investigations it considers

4Amental health facility operated byTDMHMR or afederal agency isexempt from licensing under chapter577.HealthSrSafety Code0577.02. sA “general hospital,” in contrast to a mental hospital, is a hospital operated primarily to diagnose, care for, and treat physically illpersons. Health SrSafety Code 0571.002(7).


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necessary and proper to obtain compliance with this subtitle and the department’s rules and standards. (b) An agent ofthe department may at any reasonable time enter the premises ofaprivate mental hospital or mental health facility licensed under this chapter to: (1) inspect the facilities and conditions; (2) observe the hospital’s or facility’s care and treatment program; and (3) question the employees ofthe hospital or facility. (c) An agent of the department may examine or transcribe any records or documents relevant to the investigation. The department or its agent may administer oaths, receive evidence, and examine witnesses in conducting an investigation. Id. 5577.014; see aLso.id. $5577.015 (department’s subpoena power), 577.016 (department may deny, szupend, orrevoke a license for noncompliance with laws or department rules). Thus, during the period after a hospital governed by chapter 577 obtains its initial license, TDMHMR has authority to conduct a random, unannounced inspection to ensure compliance with state laws and its standards, or to do so in response to a complaint about aviolation ofstate lawor the department’s regulations. Your fifth question is in three parts. The first part, question 5(a), is as follows: Does Chapter 571 authorize TDMHMR to adopt standards with

which private psychiatric facilities located within hospitals subject toChapter 241would be required to comply? Chapter 571defines “mental health facility” to include:

(C) that identifiable part of a general hospital in which diagnosis, treatment, and careforpersons with mental illness is provided.

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Id 5571.003( 12)(emphasis added). Section 571.006 authorizes the department to:

(1) adopt rules as necessary for the proper and efficient treatment ofpersons with mental illness; (2) prescribe the form and content of applications, certificates, records, and reports provided for under this subtitle; (3) require reports from a facility administrator relating to the admission, examination, diagnosis, release, or discharge of anypatient; (4) regularly visit each mentalhealthfacilityto review the commitment procedure for each new patient after the last visit; and (5) visit a mentalhealthfaciliv to investigate a complaint made by a patient or by a person on behalf of a patient. (Emphasis added.) Since a“mental health facility” includes apsychiatric facility located within ageneral hospital, TDMHMR has authority under chapter 571 to adopt rules setting out standards for the “proper and efficient treatment of persons with mental illness” applicable to such psychiatric facilities. Question 5(b) isasfollows: If the answer to (a) is “yes,” does Chapter 571 authorize TDMHMR to enter and inspect such a facility in response to a complaint to determine whether a violation of state law or TDMHMR standards occurred or regularly to review the facility’s commitment procedures? Section 571.006(4) and (5) authorize the department to “visit” mental health facilities for the above purposes. In this context, “visit” means to inspect. See WEBSTER'S NEW INTERNATIONAL DICTIONARY 2557 (3d ed. 1966). Thus, TDMHMR has authority to enter and inspect a psychiatric facility in a private hospital to review the commitment procedure on a regular basis or to investigate a complaint.

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Question 5(c) isasfollows: If the answer to (b) is “yes,” is either TDH or TDMHMR authorized to impose sanctions or take other enforcement action against such a facility if a violation of state law or TDMHMR standards is found? If either or both agencies have such authority, what sanctions may the agency or agencies impose and what other enforcement actions may that agency take? Private psychiatric facilities located within a hospital licensed by TDH under chapter 241 of the Health and Safety Code are not subject to sanctions that TDMHMR may apply to licensed mental hospitals. See Health & Safety Code 8577.016 (denial, suspension, or revocation of license for substantial failure to comply with department rules or the Texas Mental Health Code). We find no authority in chapter 571 for TDMHMR to impose sanctions or take other administrative action against a facility inspected pursuant to section 571.006. Criminal penalties are provided by section 571.020 for certain conduct causing the unwarranted commitment of a person to a mental health facility, and for knowing violation ofthe Texas Mental Health Code. In addition, .the limitations of liability found in section 571.019 show that the legislature had in mind that individuals harmed by violation of the Mental Health Code could sue the responsible parties for damages. SeeJames v.Brown, 637 S.W.2d 914 (Tex. 1982) (suit for negligent misdiagnosis-medical malpractice in connection with involuntary hospitalization); Ramsay v.SantaRosaMedical Center,498 S.W.2d 741 (Tex. Civ. App.-San Antonio 1973, writ refd n.r.e.), cert. denied, 417 U.S. 938 (1974) (denial of freedom to communicate with persons outside hospital). As already stated in answer to your questions on the inspection of hospitals under chapter 241, TDH may enforce the provisions of that chapter and its rules and standards adopted thereunder by denying, suspending, or revoking a hospital’s license, Health & Safety Code 9241.053, or seeking injunctive relief, id. $241.054. However, TDH may not enforce TDMHMR standards adopted under section 571.006, unless ithas adopted those standards asits own. Section 241.026(a), which authorizes TDH to adopt rules and minimum standards relating to staffing by physicians and nurses, hospital services relating to patient care, and fire prevention, safety, and sanitary provisions of hospitals, is broad enough to authorize the adoption ofspecific standards for the care ofthe mentally ill. Whether TDH would have authority to adopt any particular standard adopted byTDMHMR would have tobe decided on acase-by-case basis.

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Your final question isasfollows: 6. IsTDH authorized to adopt and enforce standards regarding patient care, treatment and rights governing those portions of general hospitals licensed under Chapter 241 which provide treatments to persons with mental illness? Ifthe answer is“yes,” would such standards be considered to exceed the minimum Medicare standards in violation of Section 241.026(b) if Medicare statutes or rules adopted under those statutes are silent regarding the matters governed bysuch TDH standards? We have already stated, in answer to question 5(c), that TDH would have authority under section 241.026(a) to adopt standards regarding patient care applicable to the portions of general hospitals that treat persons with mental illness. Whether a particular standard could be adopted under the rule-making authority in section 241.026(a) would have to be decided on acase-by-case basis. Valid standards could be enforced pursuant to sections 241.053 and 241.054. Your final inquiry, which concerns section 241.026(b), cannot be answered as a matter of law on the basis of the information provided. Whether a particular standard would exceed the minimum standards for certification for Medicare would have to be decided on a case-by-case basis, and would require a comparison ofthe language and effect ofa particular rule to the relevant provisions of title XVIII of the Social Security Act and the rules promulgated thereunder. Accordingly, we are unable to advise you onyour last inquiry.

SUMMARY Section 222.024(a) of the Health and Safety Code, which places limits on “additional licensing inspections” of a hospital licensed by TDH or TDMHMR, applies only to inspections required as a condition for receiving or renewing a license. It does not prohibit those agencies from conducting inspections to ensure compliance with state lawsor agency standards. Chapter 571 of the Health and Safety Code authorizes TDMHMR to adopt certain standards applicable to the part ofa general hospital in which diagnosis, treatment, and care for persons with mental illness isprovided. TDMHMR may enter such facilities to review the commitment procedure or to

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investigate, a complaint, but ithas no authority to enforce those standards against general hospitals. TDH could enforce the TDMHMR standards if it were to adopt them as its own pursuant to section 241.026(a). Whether it may do so with respect to aparticular standard can only be answered on a caseby-case basis.,

DAN MORALES Attorney General ofTexas WILL PRYOR. First Assistant Attorney General MARY KELLER Deputy Assistant Attorney General JUDGE ZOLLIE STEAKLEY (Ret.) Special Assistant Attorney General RENEA HICKS Special Assistant Attorney General MADELEINE B.JOHNSON Chair, Opinion Committee Prepared bySusan L.Garrison Assistant Attorney General

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