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

89(R) HB 18 - Enrolled version - Bill Text

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