§ Transfers the responsibilities of the Treatment Methods Advisory Committee to the Texas Board of Mental Health and Mental Retardation.

§ Requires the board to report annually to the governor, lieutenant governor, speaker of the house, the Senate Health and Human Services Committee and the house Public Health Committee regarding its findings and recommendations on treatment methods used in mental health facilities.

§ Authorizes a former mental health patient, who was unnecessarily admitted to a mental health facility between January 1, 1986 and December 31, 1993, to bring suit for an order that all records related to the individual's admission or treatment at certain mental health facilities be sealed or destroyed.

§ Prohibits former mental patients who successfully petition a court for an order from filing a lawsuit against a facility or health care provider related to an event or activity that formed the basis of a record subject to the court's order.

§ Prohibits the admissibility of a finding made under this chapter against any party in litigation to establish liability for damages, expenses, or other relief as an alleged result of any treatment or admission.

§ Creates an offense if a person who knows about the admission and the court order intentionally releases, disseminates, or publishes a record or index reference subject to that order or knowingly fails to destroy, seal, or present to the court a record.

§ Provides that this does not prohibit an attorney or insurer of a provider or patient from retaining or communicating confidentially about a privileged document to discuss an actual or potential claim or issue.

§ Authorizes an adult who is not incapacitated to execute a declaration for mental health treatment, and requires a physician or other health care provider to act in accordance with the declaration when the person has been found to be incapacitated.

§ Provides that certain health care providers are not subject to criminal or civil liability and have not engaged in professional misconduct for an act or omission, if done in good faith under the terms of a declaration for mental health treatment.

§ Provides that certain providers, plans, or insurers may not charge different rates, require a person to execute a declaration, or refuse care or discharge a person because the person has executed a declaration for mental health treatment.

§ Provides for the development, establishment, and enforcement of standards relating to services provided to individuals residing in intermediate care facilities for the mentally retarded (ICF-MR). Provides for the construction, maintenance, and operation of facilities which promote quality in the delivery of services and treatment for these individuals.

§ Provides an exemption from these standards for certain church-operated facilities providing services to individuals with mental retardation or related conditions.

§ Authorizes the Texas Department of Human Services (DHS) to accept and use any federal money for administrative expenses.

Quality of Care

§ Prohibits ICF-MR facilities from restricting a resident or employee from communicating in the person's native language with another resident or employee to acquire or provide care, training, or treatment.

§ Requires each ICF-MR facility to implement and enforce standards for rights of residents.

§ Requires DHS to adopt rules related to the administration and implementation of ICF-MR facilities. Requires DHS to consult and coordinate, whenever possible, with other state and local agencies.

§ Requires ICF-MR facilities to notify DHS within 30 days and pay a $20 administrative fee upon hiring a new administrator.

§ Prohibits ICF-MR facilities from receiving monetary or other remuneration from a person or agency that furnishes services or materials to the facility or its residents for a fee.

§ Authorizes the Texas Board of Human Services (board) to adopt, publish, and enforce minimum standards for ICF-MR facilities.

§ Requires ICF-MR facilities to comply with adopted fire safety requirements.

§ Requires DHS to adopt rules relating to the administration of medication in ICF-MR facilities. Requires an annual medical examination for each resident. Authorizes facilities to maintain a supply of controlled substances.

§ Authorizes ICF-MR facilities to provide respite care for an individual diagnosed with mental retardation or related condition without regard to whether the individual is eligible to receive intermediate care services under federal law. Authorizes the board to adopt rules on respite care provided by ICF-MR facilities.

Licensing

§ Requires a person or governmental unit to be licensed in order to establish, conduct, or maintain an ICF-MR facility. Sets forth license requirements.

§ Requires ICF-MR facilities to post in a readily available public area the facility license, a sign specifying complaint procedures, notice of availability of the inspection and related reports at the facility, and a summary of the most recent inspection report.

§ Authorizes DHS or its designee to make any inspection, survey, or investigation that it considers necessary and enter the premises of a ICF-MR facility at any reasonable time in accordance with board rules.

§ Makes it a Class B misdemeanor for a person who discloses an unannounced inspection.

§ Requires DHS to provide a validation team to ensure that licensing surveys are done fairly and consistently throughout the state.

Enforcement

§ Requires DHS to suspend an ICF-MR facility's license or order an immediate closing of part of the facility if certain conditions are found to exist. Requires the board, by rule, to provide for the placement of residents.

§ Authorizes DHS to obtain a temporary restraining if a violation of the standards creates an immediate threat to the residents.

§ Establishes criminal penalties for violating license requirements, civil penalties for violating rules which threaten the health and safety of a resident, and administrative penalties for violating rules established through statute or by DHS.

§ Establishes guidelines for the appointment of a trustee to assume the operations of an ICF-MR facility. Establishes entitlement of a trustee to a reasonable fee as determined by the court.

§ Authorizes DHS to collect an additional fee to provide emergency assistance to ICF-MR facilities. Requires a facility receiving emergency assistance to reimburse DHS, including interest.

§ Requires ICF-MR facilities to provide notification to residents and each resident's nearest relative, in the event of a temporary or permanent closing, whether voluntary or involuntary, within a reasonable time before the closing.

Abuse and Neglect

§ Requires a person, including an owner or employee of an ICF-MR facility, to report a case of abuse or neglect if he or she has cause to believe it is occurring. Establishes a criminal penalty if a person knowingly fails to report a case of abuse or neglect. Authorizes the submission of anonymous reports. Provides immunity from civil or criminal liability for a person who reports an act of abuse or neglect, unless it is done in bad faith, maliciously, or recklessly.

§ Requires DHS to maintain a central registry, in Austin, of reported cases of resident abuse or neglect.

§ Requires DHS to make an investigation and report after receiving either the oral or written report of abuse or neglect. Requires information used or developed in an investigation to be kept confidential.

§ Prohibits ICF-MR facilities from retaliating against an employee or resident for reporting a case of abuse or neglect. Establishes requirements for bringing suit against a facility and penalties for facilities which are found to have retaliated against an employee or resident.

§ Requires ICF-MR facilities to report to DHS the death of a facility resident. Requires DHS to collect data and develop a report to determine patterns and trends among persons with mental retardation or related conditions and in specific facilities. Requires facilities to make certain historical statistics available to all applicants.

§ Requires the signed copy of the consent form to be made part of the patient's clinical record.

§ For a patient 65 years of age or older, requires a hospital, facility, or physician administering the procedure to comply with additional requirements before the therapy is performed.

§ Provides that the Licensed Professional Counselor Act does not apply to persons certified to perform counseling services consistent with state law, their training, and any code of ethics and who do not use the title or hold themselves out as licensed counselors.

§ Requires applicants under the Licensed Professional Counselor Act to meet certain work requirements for licensure.

§ Requires the county or district attorney to provide whether inpatient or outpatient care will be recommended for court-ordered mental health services, before the hearing, if a request is made.

§ Requires filing of a statement, if outpatient treatment is recommended, on the availability of the proposed mental health services through either the local mental health authority or another mental health services provider and if sufficient resources to provide the necessary services are available.

§ Sets forth requirements under which a judge may order temporary or extended inpatient mental health services or outpatient mental health services.

§ Requires certain group health benefit plans to provide treatment coverage of a serious mental illness for at least 45 inpatient days and 60 outpatient visits each calendar.

§ Prohibits a health benefit plan from including a lifetime limit on the number of inpatient days or outpatient visits covered under the plan.

§ Requires the same amount of limits, deductibles, and coinsurance factors for serious mental illness as for physical illness.

§ Authorizes a health benefit plan to refuse coverage for serious mental illness if a small employer rejects the coverage.

§ Provides that requirements on health benefit plans do not include providing coverage for treatment resulting from the use of a controlled substance or marihuana.

§ Requires the Texas State Board of Examiners of Psychologists to adopt rules on the activities and services that may be provided by a provisional license holder and certificate holders.

§ Provides regulations regarding the monitoring of community mental health and mental retardation centers and local mental retardation authorities.

§ Authorizes the Texas Department of Mental Health and Mental Retardation (MHMR), by a case-rate or capitated arrangement, to disburse to a local mental health and mental retardation authority (local authority) federal and state funds to be spent for community mental health and mental retardation services and chemical dependency services.

§ Requires the Texas Board of Mental Health and Mental Retardation to direct the MHMR commissioner to appoint a committee to develop a plan, by September 1, 1998, to make provisions regarding the number, selection of members, and scope of responsibilities of local authorities.

§ Requires MHMR to prescribe procedures for financial and program audits of community centers and to evaluate the fiscal impact of the financial and program audits and submit reports to the legislature by December 1, l999.

§ Requires MHMR to review the program quality and program performance results of each local authority in accordance with a risk assessment and evaluation system appropriate to contract agreements.