(a) Reasons for enforcement action.
  (1) The Department of State Health Services (department) may deny, suspend, or revoke an ambulatory surgical center's (ASC's) license in accordance with Health and Safety Code (HSC), §243.011 if the applicant or licensee:
    (A) fails to comply with any provision of the Act;
    (B) fails to comply with any provision of this chapter or any other applicable laws;
    (C) fails to comply with a special license condition;
    (D) fails to comply with an order of the commissioner or another enforcement procedure under the statute;
    (E) has a history of noncompliance with the rules adopted under this chapter relating to patient health, safety, and rights which reflects more than nominal noncompliance;
    (F) has aided, committed, abetted, or permitted the commission of an illegal act;
    (G) fails to provide an adequate application or renewal information;
    (H) fails to timely pay assessed administrative penalties in accordance with the Act;
    (I) fails to comply with applicable requirements within a designated probation period;
    (J) fails to submit an acceptable plan of correction for cited deficiencies; or
    (K) if the facility is participating under Title XVIII, and the Centers for Medicare and Medicare Services terminates the ASC's Medicare provider agreement.
  (2) The department may suspend or revoke an existing valid license or disqualify a person from receiving a license because of a person's conviction of a felony or misdemeanor, if the crime directly relates to the duties and responsibilities of the ownership or operation of an ambulatory surgical center.
    (A) In determining whether a criminal conviction directly relates, the department shall consider the provisions of Occupations Code, Chapter 53.
    (B) The following felonies and misdemeanors directly relate because these criminal offenses indicate an ability or a tendency for the person to be unable to own or operate an ambulatory surgical center:
      (i) a misdemeanor violation of the statute;
      (ii) a misdemeanor or felony involving moral turpitude;
      (iii) a conviction relating to deceptive business practices;
      (iv) a misdemeanor of practicing any health-related profession without a required license;
      (v) a conviction under any federal or state law relating to drugs, dangerous drugs, or controlled substances;
      (vi) an offense under the Penal Code, Title 5, involving a patient or a client of any health care facility, a home and community support services agency, or a health care professional;
      (vii) a misdemeanor or felony offense under various titles of the Penal Code, as follows:
        (I) Title 4 concerning offenses of attempting or conspiring to commit any of the offenses in this subsection;
        (II) Title 5 concerning offenses against the person;
        (III) Title 7 concerning offenses against property;
        (IV) Title 9 concerning offenses against public order and decency; or
        (V) Title 10 concerning offenses against public health, safety, and morals; and
      (viii) other misdemeanors and felonies which indicate an inability or tendency for the person to be unable to own or operate an ambulatory surgical center.
    (C) Upon a licensee's felony conviction, felony probation revocation, revocation of parole, or revocation of mandatory supervision, the license shall be revoked.
  (3) If the department proposes to deny, suspend, or revoke a license, the department shall give the applicant written notification of the reasons for the proposed action and offer the applicant an opportunity for a hearing. The applicant may request a hearing within 30 days after the date the applicant receives notice. The request shall be in writing and submitted to the department as instructed in the notice of violation letter. A hearing shall be conducted pursuant to the Government Code, Chapter 2001, Administrative Procedure Act, and §§1.21, 1.23, 1.25, and 1.27 of this title (relating to Formal Hearing Procedures). If a hearing is not requested in writing within 30 days after receiving notice of the proposed action, the applicant is deemed to have waived the opportunity for a hearing and the proposed action shall be taken.
  (4) If the department finds that a violation of the standards or licensing requirements prescribed by the Act creates an immediate threat to the health and safety of patients of an ASC, the department may petition the district court for a temporary restraining order to restrain continuing violations.
  (5) The provisions of Occupations Code, Chapter 53, Consequences of Criminal Conviction, apply to an ASC.
  (6) If a person violates the licensing requirements or the standards prescribed by the Act, the department may petition the district court for an injunction to prohibit the person from continuing the violation or to restrain or prevent the establishment or operation of an ASC without a license issued under the Act.
(b) Emergency suspension of a license. The department may issue an emergency order to suspend a license issued under this chapter, if the department has reasonable cause to believe that the conduct of a license holder creates an immediate danger to the public health and safety.
  (1) An emergency suspension is effective immediately without a hearing on notice to the license holder.
  (2) On written request of the license holder, the department shall conduct a hearing not earlier than the 10th day or later than the 30th day after the date the hearing request is received to determine if the emergency suspension is to be continued, modified, or rescinded. The hearing and any appeal are governed by the department's rules for a contested case hearing and Government Code, Chapter 2001.
(c) Probation. In lieu of denying, suspending or revoking the license under subsection (a) of this section, the department may schedule the ASC for a probation period of not less than thirty days, if the ASC's noncompliance does not endanger the health and safety of the public.
  (1) The department shall provide notice of the probation to the ASC not later than the 10th day before the date the probation begins. The notice shall include the items of noncompliance that resulted in placing the ASC on probation, and shall designate the period of the probation.
  (2) During the probationary period, the ASC shall correct the items of noncompliance and provide a written report to the department that describes the corrective actions taken.
  (3) The department may verify the corrective actions through an on-site inspection.
(d) Administrative penalty. The department may impose an administrative penalty on a person licensed under this chapter who violates the Act, this chapter, or order adopted under this chapter.
  (1) A penalty collected under this section shall be deposited in the state treasury in the general revenue fund.
  (2) A proceeding to impose the penalty is considered to be a contested case under Government Code, Chapter 2001.
  (3) The amount of the penalty may not exceed $1,000 for each violation, and each day a violation continues or occurs is a separate violation for purposes of imposing a penalty. The total amount of the penalty assessed for a violation continuing or occurring on separate days under this paragraph may not exceed $5,000.
  (4) In determining the amount of an administrative penalty assessed under this section, the department shall consider:
    (A) the seriousness of the violation, including the nature, circumstances, extent, and gravity of the violation;
    (B) the threat to health or safety caused by the violation;
    (C) the history of previous violations;
    (D) the amount necessary to deter a future violation;
    (E) whether the violator demonstrated good faith, including when applicable whether the violator made good faith efforts to correct the violation; and
    (F) any other matter that justice may require.
  (5) If the department initially determines that a violation occurred, the department shall give written notice of the report by certified mail to the person alleged to have committed the violation following the survey exit date. The notice shall include:
    (A) a brief summary of the alleged violation;
    (B) a statement of the amount of the recommended penalty; and
    (C) a statement of the person's right to a hearing on the occurrence of the violation, the amount of the penalty, or both.
  (6) Within 20 days after the date the person receives the notice under paragraph (5) of this subsection, the person in writing may:
    (A) accept the determination and recommended penalty of the department; or
Cont'd...
(B) make a request for a hearing on the occurrence of the violation, the amount of the penalty, or both.
  (7) If the person accepts the determination and recommended penalty or if the person fails to respond to the notice, the commissioner or the commissioner's designee by order shall approve the determination and impose the recommended penalty.
  (8) If the person requests a hearing, the commissioner shall refer the matter to the State Office of Administrative Hearings (SOAH). The hearing shall be conducted in accordance with Government Code, Chapter 2001, and all applicable SOAH and department rules.
  (9) Based on the proposal for decision made by the administrative law judge under paragraph (8) of this subsection, the commissioner by order may find that a violation occurred and impose a penalty, or may find that a violation did not occur. The commissioner or the commissioner's designee shall give notice of the commissioner's order under paragraph (7) of this subsection to the person alleged to have committed the violation in accordance with Government Code, Chapter 2001. The notice shall include:
    (A) a statement of the right of the person to judicial review of the order;
    (B) separate statements of the findings of fact and conclusions of law; and
    (C) the amount of any penalty assessed.
  (10) Within 30 days after the date an order of the commissioner under paragraph (7) of this subsection that imposes an administrative penalty becomes final, the person shall:
    (A) pay the penalty; or
    (B) appeal the penalty by filing a petition for judicial review of the commissioner's order contesting the occurrence of the violation, the amount of the penalty, or both.
  (11) Within the 30-day period prescribed by paragraph (10) of this subsection, a person who files a petition for judicial review may:
    (A) stay enforcement of the penalty by:
      (i) paying the penalty to the court for placement in an escrow account; or
      (ii) giving the court a supersedeas bond that is approved by the court for the amount of the penalty, and that is effective until all judicial review of the commissioner's order is final; or
    (B) request the court to stay enforcement of the penalty by:
      (i) filing with the court a sworn affidavit of the person stating that the person is financially unable to pay the penalty and is financially unable to give the supersedeas bond; and
      (ii) sending a copy of the affidavit to the commissioner by certified mail.
    (C) If the commissioner receives a copy of an affidavit under subparagraph (B) of this paragraph, the commissioner may file with the court, within five days after the date the copy is received, a contest to the affidavit. In accordance with Health and Safety Code, §243.016(c), the court shall hold a hearing on the facts alleged in the affidavit as soon as practicable and shall stay the enforcement of the penalty on finding that the alleged facts are true. The person who files an affidavit has the burden of proving that the person is financially unable to pay the penalty or to give a supersedeas bond.
  (12) If the person does not pay the penalty and the enforcement of the penalty is not stayed, the department may refer the matter to the attorney general for collection of the penalty. As provided by the Health and Safety Code, §243.016(d), the attorney general may sue to collect the penalty.
  (13) A decision by the court is governed by Health and Safety Code, §243.016(e) and (f), and provides the following.
    (A) If the court sustains the finding that a violation occurred, the court may uphold or reduce the amount of the penalty and order the person to pay the full or reduced amount of the penalty.
    (B) If the court does not sustain the finding that a violation occurred, the court shall order that a penalty is not owed.
  (14) The remittance of penalty and interest is governed by Health and Safety Code, §243.016(g) and provides the following.
    (A) If the person paid the penalty and if the amount of the penalty is reduced or the penalty is not upheld by the court, the court shall order, when the court's judgment becomes final, that the appropriate amount plus accrued interest be remitted to the person within 30 days after the date that the judgment of the court becomes final.
    (B) The interest accrues at the rate charged on loans to depository institutions by the New York Federal Reserve Bank.
    (C) The interest shall be paid for the period beginning on the date the penalty is paid and ending on the date the penalty is remitted.
  (15) The release of supersedeas bond is governed by Health and Safety Code, §243.016(h), and provides the following.
    (A) If the person gave a supersedeas bond and the court does not uphold the penalty, the court shall order, when the court's judgment becomes final, the release of the bond.
    (B) If the person gave a supersedeas bond and the amount of the penalty is reduced, the court shall order the release of the bond after the person pays the reduced amount.

Source Note: The provisions of this §135.24 adopted to be effective June 18, 2009, 34 TexReg 3948