Bill Text: TX HB18 | 2025-2026 | 89th Legislature | Enrolled

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Bill Title: Relating to the establishment and administration of certain programs and services providing health care services to rural counties.

Sponsorship: Moderate Partisan Bill (Republican 15-4)

Status: (Passed) 2025-06-20 - Effective immediately [HB18 Detail]

Download: Texas-2025-HB18-Enrolled.html

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H.B. No. 18

AN ACT
relating to the establishment and administration of certain
programs and services providing health care services to rural
counties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. This Act may be cited as the Rural Health
Stabilization and Innovation Act.
SECTION 2. Sections 526.0301(b) and (c), Government Code,
are amended to read as follows:
(b) The strategic plan must include:
(1) a proposal for using at least one of the following
methods to ensure access to hospital services in the rural areas of
this state:
(A) an enhanced cost reimbursement methodology
for the payment of rural hospitals participating in the Medicaid
managed care program in conjunction with a supplemental payment
program for rural hospitals to cover costs incurred in providing
services to recipients;
(B) a hospital rate enhancement program
applicable only to rural hospitals;
(C) a reduction of punitive actions under
Medicaid that require reimbursement for Medicaid payments made to a
rural hospital provider, a reduction of the frequency of payment
reductions under Medicaid made to rural hospitals, and an
enhancement of payments made under merit-based programs or similar
programs for rural hospitals;
(D) a reduction of state regulatory-related
costs related to the commission's review of rural hospitals; or
(E) in accordance with rules the Centers for
Medicare and Medicaid Services adopts, the establishment of a
minimum fee schedule that applies to payments made to rural
hospitals by Medicaid managed care organizations; [and]
(2) target dates for achieving goals related to the
proposal described by Subdivision (1); and
(3) a rural hospital financial needs assessment and
financial vulnerability index quantifying the likelihood that a
rural hospital, during the next two-year period, will be able to:
(A) maintain the types of patient services the
hospital currently offers at the same level of service;
(B) meet the hospital's current financial
obligations; and
(C) remain operational.
(c) Not later than December [November] 1 of each
even-numbered year, the State Office of Rural Hospital Finance
established under Section 526.0304 [commission] shall submit a
report regarding the [commission's] development and implementation
of the strategic plan to:
(1) the legislature;
(2) the governor; and
(3) the Legislative Budget Board.
SECTION 3. Subchapter G, Chapter 526, Government Code, is
amended by adding Sections 526.0304 and 526.0305 to read as
follows:
Sec. 526.0304. STATE OFFICE OF RURAL HOSPITAL FINANCE. The
commission shall establish and maintain the State Office of Rural
Hospital Finance within the commission to provide technical
assistance for rural hospitals and health care systems in rural
areas of this state that participate or are seeking to participate
in state or federal financial programs, including Medicaid.
Sec. 526.0305. TEXAS RURAL HOSPITAL OFFICERS ACADEMY. (a)
In this section:
(1) "Institution of higher education" has the meaning
assigned by Section 61.003, Education Code.
(2) "Rural county" means a county with a population of
68,750 or less.
(3) "Rural hospital" has the meaning assigned by
Section 548.0351.
(b) To the extent money is appropriated to the commission
for the purpose, the commission shall contract with at least two but
not more than four institutions of higher education to administer
an academy to provide professional development and continuing
education programs for the officers of rural hospitals and other
health care providers located in rural counties. The academy must
offer at least 100 hours of coursework each year that consists of
courses and technical training on matters that impact the financial
stability of rural hospitals and rural health care systems,
including:
(1) relevant state and federal regulations;
(2) relevant state and federal financial programs;
(3) business administration, including revenue
maximization;
(4) organizational management; and
(5) other topics applicable to the financial stability
of rural hospitals and rural health care systems.
(b-1) The commission shall establish an interagency
advisory committee to oversee the development of the academy's
curriculum. The advisory committee is composed of the following
members appointed by the executive commissioner:
(1) a representative of the commission;
(2) a representative of two or more institutions of
higher education;
(3) a representative of the Department of State Health
Services;
(4) a representative of the Texas Department of
Insurance;
(5) a representative of the state auditor's office;
(6) a representative of a rural hospital; and
(7) a representative of any state agency the executive
commissioner determines is appropriate.
(b-2) The advisory committee established under Subsection
(b-1) is abolished on the earlier of:
(1) the date the advisory committee adopts a
curriculum; or
(2) September 1, 2027.
(b-3) This subsection and Subsections (b-1) and (b-2)
expire September 1, 2028.
(c) The commission shall establish criteria for the
screening and selection of applicants for admission to an academy
and include the criteria in each contract entered into under
Subsection (b). An institution of higher education that receives a
contract to administer an academy under Subsection (b) shall notify
the commission when the institution completes the applicant
selection process and provide information to the commission
regarding the qualifications of the applicants.
(d) Participation in an academy is limited to individuals
who are responsible for, or who anticipate becoming responsible
for, the financial stability of a rural hospital or rural health
care system in this state.
(e) An institution of higher education that receives a
contract to administer an academy under Subsection (b):
(1) shall accept new participants for the academy each
year;
(2) shall offer to reimburse academy participants for
travel and related expenses; and
(3) may not claim or charge a participant for
admission to or participation in the academy or any associated
services.
SECTION 4. Chapter 526, Government Code, as effective April
1, 2025, is amended by adding Subchapter G-1 to read as follows:
SUBCHAPTER G-1. GRANT PROGRAMS FOR RURAL HOSPITALS, HOSPITAL
DISTRICTS, AND HOSPITAL AUTHORITIES
Sec. 526.0321. DEFINITIONS. In this subchapter:
(1) "Hospital district" means a hospital district
created under the authority of Sections 4 through 11, Article IX,
Texas Constitution.
(2) "Office" means the State Office of Rural Hospital
Finance established under Section 526.0304.
(3) "Rural county" means a county with a population of
68,750 or less.
(4) "Rural hospital" has the meaning assigned by
Section 548.0351.
(5) "Rural hospital authority" means a hospital
authority located in a rural county.
(6) "Rural hospital district" means a hospital
district located in a rural county.
(7) "Rural hospital organization" means a statewide
nonprofit organization that provides services to rural hospitals.
Sec. 526.0322. FINANCIAL STABILIZATION GRANT PROGRAM. (a)
The commission shall establish a financial stabilization grant
program to award grants to support and improve the financial
stability of rural hospitals, rural hospital districts, and rural
hospital authorities that are determined to be at a moderate or high
risk of financial instability.
(b) The determination of whether a grant applicant is at a
moderate or high risk of financial instability shall be made using
the hospital financial needs assessment and financial
vulnerability index developed as part of the strategic plan
required under Section 526.0301.
(b-1) Notwithstanding Subsection (b), for a grant
application received before December 1, 2026, the office shall
determine whether the applicant is at a moderate or high risk of
financial instability by evaluating data published by the
commission regarding the financial stability of rural hospitals,
rural hospital districts, and rural hospital authorities. This
subsection expires September 1, 2027.
(c) The office shall develop a formula to allocate the money
available to the commission for grants under this section to rural
hospitals, rural hospital districts, and rural hospital
authorities that are determined to be at a moderate or high risk of
financial instability. The formula may consider:
(1) the degree of financial vulnerability of the
applicant as determined using the hospital financial needs
assessment and financial vulnerability index developed under
Section 526.0301;
(2) whether the applicant is the sole provider of
hospital services in the county in which the applicant is located;
(3) whether a hospital is located within 35 miles of
the applicant's facilities; and
(4) any other factors the office determines are
relevant to assessing the financial stability of rural hospitals,
rural hospital districts, and rural hospital authorities.
Sec. 526.0323. EMERGENCY HARDSHIP GRANT PROGRAM. (a) The
commission shall establish an emergency hardship grant program.
(b) The office may award emergency hardship grants to rural
hospitals, rural hospital districts, and rural hospital
authorities that have experienced:
(1) a man-made or natural disaster resulting in a loss
of assets; or
(2) an unforeseeable or unmitigable circumstance
likely to result in:
(A) the closure of the entity's facilities during
the 180-day period beginning on the date the entity submits an
application for a grant under this section; or
(B) an inability to fund payroll expenditures for
the entity's staff during the 180-day period beginning on the date
the entity submits an application for a grant under this section.
Sec. 526.0324. INNOVATION GRANT PROGRAM. (a) The
commission shall establish an innovation grant program to provide
support to rural hospitals, rural hospital districts, and rural
hospital authorities that undertake initiatives:
(1) to provide access to health care and improve the
quality of health care provided to residents of a rural county;
(2) that are likely to improve the financial stability
of the grant recipient; and
(3) that are estimated to become sustainable and be
maintained without additional state funding after the award of a
grant under this section.
(b) In awarding grants under this section, the office shall
prioritize initiatives focused on improving health care facilities
or services for:
(1) women who are pregnant or recently gave birth;
(2) individuals under the age of 20;
(3) older adults residing in a rural county; or
(4) individuals who are uninsured.
Sec. 526.0325. RURAL HOSPITAL SUPPORT GRANT PROGRAM. The
commission shall establish a rural hospital support grant program
to award support grants to rural hospitals, rural hospital
districts, rural hospital authorities, and rural hospital
organizations to improve the financial stability, continue the
operations, and support the long-term viability of the grant
recipient.
Sec. 526.0326. GENERAL GRANT PROVISIONS. (a) Chapter 783
does not apply to the solicitation of applicants for a grant under
this subchapter.
(b) To the extent practicable, the office shall award a
grant under this subchapter not later than the 180th day after the
date the office receives the recipient's grant application.
(c) A Medicaid provider's receipt of a grant under this
subchapter does not affect any legal or contractual duty of the
provider to comply with any applicable Medicaid requirements.
(d) The office shall administer the grant programs
established under this subchapter.
(e) The office may award a grant under this subchapter only
in accordance with the terms of a contract between the office and
the grant recipient. The contract must include provisions under
which the office is granted sufficient control to ensure that:
(1) the grant funds are spent in a manner that is
consistent with the public purpose of providing adequate access to
quality health care; and
(2) both this state and the grant recipient are
benefited by the award of the grant.
(f) The office shall develop an application process and
eligibility and selection criteria for persons applying for a grant
under this subchapter.
(g) A grant recipient may not use the proceeds of a grant
awarded under this subchapter to:
(1) reimburse an expense or pay a cost that another
source, including Medicaid, is obligated to reimburse or pay by law
or under a contract; or
(2) supplant, or be used as a substitute for, money
awarded to the recipient from a non-Medicaid federal funding
source, including a federal grant.
Sec. 526.0327. LIMITATION ON CONTROL OF FUNDS BY HOSPITAL
SYSTEM. (a) For purposes of this section:
(1) "Control" includes the ability to make decisions
regarding the time and manner in which to spend grant money awarded
under this subchapter.
(2) "Hospital system" means a system of two or more
hospitals under the common governance of a single corporate parent.
(b) To ensure that grant money awarded under this subchapter
is used for the benefit of residents of rural counties, money
awarded to a hospital that is part of a hospital system:
(1) may not be retained or otherwise controlled by:
(A) the corporate parent of the hospital system;
or
(B) the hospital system; and
(2) must be under the control of an individual who is
present on the premises of the hospital, or an administrative
office of the hospital that is located within five miles of the
hospital, at least two days per week.
Sec. 526.0328. APPROPRIATION CONTINGENCY. The commission
is required to implement a provision of this subchapter only if the
legislature appropriates money specifically for that purpose.
SECTION 5. Section 532.0155, Government Code, is amended by
amending Subsection (b) and adding Subsection (g) to read as
follows:
(b) To the extent allowed by federal law [and subject to
limitations on appropriations], the executive commissioner by rule
shall adopt a prospective reimbursement methodology for the payment
of rural hospitals participating in Medicaid that ensures the rural
hospitals are reimbursed on an individual basis for providing
inpatient and general outpatient services to recipients by using
the hospitals' most recent cost information concerning the costs
incurred for providing the services. The commission shall
calculate the prospective cost-based reimbursement rates once
every two years.
(g) To the extent allowed by federal law, the executive
commissioner, in addition to the cost-based reimbursement rate
calculated by the executive commissioner under Subsection (b),
shall develop and calculate an add-on reimbursement rate for rural
hospitals that have a department of obstetrics and gynecology. The
executive commissioner shall calculate the rate required by this
subsection annually.
SECTION 6. Section 548.0351, Government Code, is amended by
adding Subdivisions (6-a) and (6-b) to read as follows:
(6-a) "Rural health clinic" has the meaning assigned
by Section 113.0001, Health and Safety Code.
(6-b) "Rural hospital" means a health care facility
licensed under Chapter 241, Health and Safety Code, that:
(A) is located in a county with a population of
68,750 or less; or
(B) has been designated by the Centers for
Medicare and Medicaid Services as a critical access hospital, rural
referral center, or sole community hospital and:
(i) is not located in a metropolitan
statistical area; or
(ii) if the hospital has 100 or fewer beds,
is located in a metropolitan statistical area.
SECTION 7. Section 548.0352, Government Code, is amended to
read as follows:
Sec. 548.0352. ESTABLISHMENT OF PEDIATRIC
TELE-CONNECTIVITY RESOURCE PROGRAM FOR RURAL TEXAS. The commission
with any necessary assistance of pediatric tele-specialty
providers shall establish a pediatric tele-connectivity resource
program for rural Texas to award grants to rural hospitals and rural
health clinics [nonurban health care facilities] to connect the
hospitals and clinics [the facilities] with pediatric specialists
and pediatric subspecialists who provide telemedicine medical
services or with an institution of higher education that is a member
of the Texas Child Mental Health Care Consortium established under
Chapter 113, Health and Safety Code.
SECTION 8. Section 548.0353, Government Code, is amended to
read as follows:
Sec. 548.0353. USE OF PROGRAM GRANT. A rural hospital or
rural health clinic [nonurban health care facility] awarded a grant
under this subchapter may use grant money to:
(1) purchase equipment necessary for implementing a
telemedicine medical service;
(2) modernize the hospital's or clinic's [facility's]
information technology infrastructure and secure information
technology support to ensure an uninterrupted two-way video signal
that is compliant with the Health Insurance Portability and
Accountability Act of 1996 (Pub. L. No. 104-191);
(3) pay a service fee to a pediatric tele-specialty
provider under an annual contract with the provider; or
(4) pay for other activities, services, supplies,
facilities, resources, and equipment the commission determines
necessary for the hospital or clinic [facility] to use a
telemedicine medical service.
SECTION 9. Section 548.0354, Government Code, is amended to
read as follows:
Sec. 548.0354. SELECTION OF PROGRAM GRANT RECIPIENTS. (a)
The commission [with any necessary assistance of pediatric
tele-specialty providers] may select [an] eligible rural hospitals
and rural health clinics [nonurban health care facility] to receive
a grant under this subchapter.
(b) To be eligible for a grant, a rural hospital or rural
health clinic [nonurban health care facility] must maintain [have:
[(1) a quality assurance program that measures the
compliance of the facility's health care providers with the
facility's medical protocols;
[(2) on staff at least one full-time equivalent
physician who has training and experience in pediatrics and one
individual who is responsible for ongoing nursery and neonatal
support and care;
[(3) a designated neonatal intensive care unit or an
emergency department;
[(4) a commitment to obtaining neonatal or pediatric
education from a tertiary facility to expand the facility's depth
and breadth of telemedicine medical service capabilities; and
[(5) the capability of maintaining] records and
produce [producing] reports that measure the effectiveness of a
[the] grant received by the hospital or clinic under this
subchapter [facility would receive].
(c) To the extent practicable, the commission shall award a
program grant to a grant recipient not later than the 180th day
after the date the commission receives the recipient's program
grant application under this section.
(d) Chapter 783 does not apply to the solicitation of
applicants for a program grant award under this subchapter.
SECTION 10. Section 548.0357, Government Code, is amended
to read as follows:
Sec. 548.0357. BIENNIAL REPORT. Not later than December 1
of each even-numbered year, the commission shall submit a report to
the governor and members of the legislature regarding the
activities of the program and grant recipients under the program,
including the results and outcomes of grants awarded under this
subchapter. The commission may combine the report required by this
section with the report submitted by the State Office of Rural
Hospital Finance under Section 526.0301.
SECTION 11. Section 113.0001, Health and Safety Code, is
amended by adding Subdivisions (4), (5), and (6) to read as follows:
(4) "Rural health clinic" means a rural health clinic,
as defined by 42 C.F.R. Section 491.2, that is:
(A) accredited by an accreditation organization,
a participant in the federal Medicare program, or both; and
(B) located in a county that does not contain a
general hospital or special hospital, as those terms are defined by
Section 241.003.
(5) "Rural hospital" has the meaning assigned by
Section 548.0351, Government Code.
(6) "Rural hospital organization" has the meaning
assigned by Section 526.0321, Government Code.
SECTION 12. Chapter 113, Health and Safety Code, is amended
by adding Subchapter D-1 to read as follows:
SUBCHAPTER D-1. RURAL PEDIATRIC MENTAL HEALTH CARE ACCESS PROGRAM
Sec. 113.0181. MENTAL HEALTH CARE ACCESS PROGRAM FOR RURAL
HOSPITALS AND RURAL HEALTH CLINICS. (a) Using the network of
comprehensive child psychiatry access centers established under
Section 113.0151, the consortium shall establish or expand provider
consultation programs to assist health care practitioners
providing services at rural hospitals or rural health clinics to:
(1) identify and assess the behavioral health needs of
pediatric and perinatal patients seeking services at the hospital
or clinic; and
(2) identify necessary mental health care services to
improve access to mental health care services for pediatric and
perinatal patients seeking services at the hospital or clinic.
(b) The consortium, in collaboration with a rural hospital
organization, shall develop a plan to establish, under the
authority provided in Section 113.0151(b) and not later than
September 1, 2026, telemedicine or telehealth programs to identify
and assess behavioral health needs and provide access to mental
health care services for pediatric patients seeking services at
rural hospitals or rural health clinics. The plan may include
limitations on the hours of the day during which services provided
by the telemedicine or telehealth programs are available. The plan
shall provide access to mental health care services for pediatric
patients seeking services at the rural hospital or rural health
clinic at the same or a substantially similar level as the mental
health care services provided to students attending school in a
school district for which the consortium has made available mental
health care services under this chapter.
(c) On or after September 1, 2026, and subject to available
appropriations, the consortium shall establish a program
establishing or expanding telemedicine or telehealth programs to
identify and assess behavioral health needs and provide access to
mental health care services for pediatric patients seeking services
at rural hospitals or rural health clinics.
Sec. 113.0182. CONSENT REQUIRED FOR SERVICES TO MINOR. (a)
A person may provide mental health care services to a child younger
than 18 years of age through a program established under this
subchapter only if the person obtains the written consent of the
parent or legal guardian of the child or, if the parent or legal
guardian is not known or available, the adult with whom the child
primarily resides.
(b) The consortium shall develop and post on the
consortium's Internet website a model form for a person to provide
consent under this section.
(c) Written consent obtained under Subsection (a) is not
valid if the consent authorizes the provision of a mental health
care service to a child that affirms the child's perception of the
child's gender if that perception is inconsistent with the child's
biological sex.
SECTION 13. Section 113.0251, Health and Safety Code, is
amended to read as follows:
Sec. 113.0251. BIENNIAL REPORT. Not later than December 1
of each even-numbered year, the consortium shall prepare and submit
to the governor, the lieutenant governor, the speaker of the house
of representatives, [and] the standing committee of each house of
the legislature with primary jurisdiction over behavioral health
issues, and the Legislative Budget Board and post on its Internet
website a written report that outlines:
(1) the activities and objectives of the consortium;
(2) the health-related institutions of higher
education listed in Section 113.0052(1) that receive funding by the
executive committee;
(3) the rural hospitals and rural health clinics to
which the program established under Section 113.0181 provided
mental health access services;
(4) the cost to maintain the mental health care access
program established under Subchapter D-1; and
(5) [(3)] any legislative recommendations based on
the activities and objectives described by Subdivision (1).
SECTION 14. The following provisions of the Government Code
are repealed:
(1) Section 548.0351(1); and
(2) Section 548.0356.
SECTION 15. If before implementing any provision of this
Act a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 16. (a) Not later than December 1, 2025, the Health
and Human Services Commission shall contract with institutions of
higher education to administer an academy under Section 526.0305,
Government Code, as added by this Act.
(b) Not later than January 1, 2026, the executive
commissioner of the Health and Human Services Commission shall
appoint the members of the interagency advisory committee as
required by Section 526.0305, Government Code, as added by this
Act.
SECTION 17. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2025.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 18 was passed by the House on April
24, 2025, by the following vote: Yeas 119, Nays 24, 4 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 18 on May 28, 2025, by the following vote: Yeas 115, Nays 18, 1
present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 18 was passed by the Senate, with
amendments, on May 25, 2025, by the following vote: Yeas 26, Nays
5.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor